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Home My WebLink About06/16/2021 CITY COUNCIL AGENDA PACKET______________________________________________________________ CITY COUNCIL 345 6th Street, Suite 100, Bremerton, WA 98337 - Phone (360) 473-5280 * * *A M E N D E D * * * WEDNESDAY, JUNE 16, 2021 CITY COUNCIL Virtual/Live Stream MEETING AGENDA To help reduce the spread of COVID-19, the City Council is conducting a virtual meeting. The Chambers will be closed, and all Council Members and staff will be participating in the meeting remotely. The public is invited to view and/or participate in the Council Meeting through one of the following options:  To stream online only (via BKAT Feed, with no interaction possible): https://bremerton.vod.castus.tv/vod/?live=ch1&nav=live  To Join the Zoom Meeting, members of the public are invited to click the link below: https://us02web.zoom.us/j/86346950457?pwd=NUJMeGM4Q1pIWVVFM2FrM1Y1TFZlUT09  Or One tap mobile: US: +12532158782,,86346950457#,,,,*408318# or +16699006833,,86346950457#,,,,*408318#  Or Telephone: Dial (for higher quality, dial a number based on your current location): US: +1 253 215 8782 or +1 669 900 6833 or +1 346 248 7799 or +1 301 715 8592 Webinar ID: 863 4695 0457 Passcode: 408318 Public questions or comments may be submitted ahead of time to City.Council@ci.bremerton.wa.us 1. CALL TO ORDER: 5:30 P.M. 2. MAYOR'S REPORT 3. PUBLIC RECOGNITION 4. CONSENT AGENDA A. Claims & Checks Register B. Minutes of Meeting – June 2, 2021 C. Minutes of Study Session – June 9, 2021 D. Local Agency Contract with Miles Resources, LLC for the 6th Street Phase II Pavement Preservation Project; and related Budget Adjustment E. Contract with Insituform Technologies, LLC for 2021 Sewer Rehabilitation F. Utility Services Agreement with NAVFAC NW for Puget Sound Naval Shipyard/Naval Base Kitsap-Bremerton G. Professional Services Agreement with Systems Design West, LLC for Ambulance Billing Service H. Interlocal Agreement with South Puget Sound Fire Coordinating Group for Wildfire Personnel Training and Certification Continued on next page… 5. PUBLIC HEARING A. Public Hearing and Resolution No. 3339 to adopt the 2022 CDBG/HOME Policy Plan 6. GENERAL BUSINESS A. Approve promotion of Chris Mottner as the Internal Services Manager at Band 16, Rate 8 of the 2021 Management, Professional, Confidential and Fiduciary Salary Plan Item pulled B. Ordinance No. 5424 amending Ordinance No. 5408 relating to the City of Bremerton Fiscal Year 2021 Budget C. Affiliation Agreement with Central Washington University for Training of Health Care Professionals D. Ordinance No. 5425 amending Sections 1.02.020 and 2.50.040(b) of the Bremerton Municipal Code, establishing Juneteenth as a legal holiday for the City of Bremerton 7. COUNCIL MEMBER REPORTS 8. ADJOURNMENT OF CITY COUNCIL BUSINESS MEETING Photo courtesy of Port of Bremerton MAYOR’S REPORT June 16, 2021 SR 303 Corridor Study http://www.bremertonwa.gov/1247/SR-303-Corridor-Plan Major elements of long-term plan Improve commuter traffic, pedestrian and bike access, and transit for safety, livability and economic growth: •Intelligent signal technology at traffic signals to manage commuter traffic surges and local growth. •Roundabouts at key locations where they make a significant contribution to traffic operations, pedestrian accessibility, and safety. •10 foot sidewalks with landscaped buffer north of the Warren Avenue bridge. •More amenities for active transportation including mid-block pedestrian crossings, and bike facilities adjacent to the corridor. •Median control for corridor north of bridge. Plan Implementation: •The plan elements were broken down into projects that were then organized by priority. •Early and mid phases address immediate needs for the corridor like signal timing and pedestrian improvements. •Later phases include capacity and transit projects that will be needed as the area grows. Next Steps: •The City sought funding from 2021 legislature for intelligent signal technology for traffic management but did not receive funding this year; will continue to pursue funding sources •The City has received funding to design pedestrian improvements to the Warren Avenue Bridge and will pursue funding for project construction. •The City will pursue other funding resources for early and mid phases; plan for resources for future phases. The full plan may be viewed on our website: http://www.bremertonwa.gov/SR-303-Corridor-Plan To the right you see Templafy taskbar with access to your content Are you offline? Click New Slide in ribbon and select a layout With Templafy you get access to presentations, slides and picturesJoint Compatibility Transportation Plan Project Overview Bremerton has unique traffic and parking issues due to Naval Base Kitsap -Bremerton (NBK-BR), such as: •traffic surges at shift changes •limited parking both inside and outside fence line •older infrastructure that is car focused •forecasted population growth City and NBK-BR are partnering through a U.S. Dept. of Defense grant to create a plan that will address these challenges •$750,000 Project •18-month study period Project Goals •Examine existing and future need for all transportation modes serving NBK-BR •Develop solutions to resolve deficits •Evaluate options to mitigate transportation and parking demands •Develop a prioritized implementation plan Project Schedule 2021-2022 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Dec Jan Feb Mar Apr May Jun Survey results, open house input, issues, needs, preliminary project list, selection method Screening results, design refinements, new information Findings, preliminary preferred alternatives 3 4 Share Results & Refine Options/ Alternatives Public Open House 2 Community Sounding Board 2 5 Public Open House 1 Public Open House Kick-off 1 Public Open House 3 Final Report More Information Katie Ketterer City of Bremerton Project Manager 360-473-5334 Katie.Ketterer@ci.bremerton.wa.us www.bremertonwa.gov/jctp City of Bremerton New Business Applications 2021 2020 2019 January 44 67 60 February 37 63 33 March 45 43 74 April 47 27 36 May 40 32 54 June 40 36 July 37 63 August 39 59 September 28 56 October 72 52 November 30 45 December 29 44 TOTAL 213 507 612 City of Bremerton Business Closures 2021 2020 2019 January 59 91 124 February 38 38 75 March 11 24 15 April 61 18 20 May 147 61 25 June 5 28 July 10 28 August 6 37 September 265 51 October 16 33 November 37 17 December 58 90 TOTAL 316 629 543 City of Bremerton Business Assistance We recently provided funding to the Kitsap Small Business Development Center (SBDC) operated in conjunction with Western Washington University to support and help Bremerton’s new and existing businesses. They provide: Marketing Assistance Strategic Planning Business Counseling and Advice Start-up Support Industries Served Accommodation & Food Services Agriculture, Forestry, Fishing & Hunting Arts & Entertainment Construction Educational Services Health Care & Social Assistance Manufacturing & Producing Professional, Scientific & Technical Services Service Establishments Retail Trade Technology Services SBDC Contact: Jaime Forsyth, Certified Business Advisor WWU Small Business Development Center 700 NE Lincoln Rd, Poulsbo, WA 98370 kitsapsbdc@wwu.edu | (360) 447-8788 Permit Activity –May 2014-2021 Permits Approved by Year 2016-2021 $75,658,083 (Total Approved) + $90,057,815 (Pending) = $165,715, 898 in the Queue Construction is valued at just under $166 million for both permits already approved and in the review queue. We're more than half way to last year's total with still a lot of permits in the queue, putting us more than $22 million over last year. Sales Tax Trends 2021 Sales Tax Report In 2021, we are currently (through May) out performing budget by $563,067. Downtown Business and Employee Parking Survey July 2021 1. Is your business physically located between Burwell Street and 11th Street and between Washington Avenue and Warren Avenue? 2. Does your business require physical interaction with customers? a. If so what percentage of your business operations require physical interaction with customers? 10-25% 25-50% 50-75% 75-100% 3. Do you currently use the 405 Washington Avenue Garage at the Downtown Business and Employee Parking rate? a. If not, why not? 4. What are your business hours? 5. How many employees do you have? 6. How many of your employees need off-site parking? Downtown Business and Employee Parking Survey July 2021 Do you have more questions? Comments? Or would like to suggest a question for the survey? Please contact the City of Bremerton Parking Program Manager Melinda Monroe, phone: 360-473-5306 email: melinda.monroe@ci.bremerton.wa.us THANK YOU! Quincy Square Update The City of Bremerton brought the Quincy Square proposal to Congress and we’ve asked for federal funding to complete the project before the end of 2022. Rep. Derek Kilmer requested the funding for Quincy Square. We’re looking forward to working with him and Senators Murray and Cantwell to bring this project across the finish line. AGENDA BILL CITY OF BREMERTON CITY COUNCIL SUBJECT: Study Session Date: N/A Claims & Check Register COUNCIL MEETING Date: June 16, 2021 Department: Legal Services Presenter: Angela Hoover Phone: (360) 473-5323 SUMMARY: Approval of the following checks and electronic fund transfers: 1. Check Numbers 393948-394121 and Electronic Fund Transfers V33207-V33292 in the grand total amount of $3,103,685.64 2. Regular Payroll for pay period ending May 31, 2021 in the amount of $908,833.83 ATTACHMENTS: FISCAL IMPACTS (Include Budgeted Amount): STUDY SESSION AGENDA: ☒ Limited Presentation ☐ Full Presentation STUDY SESSION ACTION: ☒ Consent Agenda ☐ General Business ☐ Public Hearing RECOMMENDED MOTION: Move to approve the consent agenda as presented. COUNCIL ACTION: Approve Deny Table Continue No Action Form Updated 01/02/2018 4A AGENDA BILL CITY OF BREMERTON CITY COUNCIL SUBJECT: Minutes of Meeting – June 2, 2021 Study Session Date: N/A COUNCIL MEETING Date: June 16, 2021 Department: City Council Presenter: Council President Phone: (360) 473-5280 SUMMARY: The Minutes of Meeting held on June 2, 2021 are attached. ATTACHMENTS: Meeting Minutes FISCAL IMPACTS (Include Budgeted Amount): None STUDY SESSION AGENDA: ☒ N/A STUDY SESSION ACTION: ☒ Consent Agenda ☐ General Business ☐ Public Hearing RECOMMENDED MOTION: Move to approve the June 2, 2021 Meeting Minutes as presented. COUNCIL ACTION: Approve Deny Table Continue No Action Form Updated 11/3/17 4B 2 CITY COUNCIL VIRTUAL MEETING MINUTES Wednesday, June 2, 2021 A virtual meeting of the City Council of the City of Bremerton was called to order Wednesday, June 2, 2021, at 5:30 PM with Council President Kevin Gorman presiding. Council Members present were Eric Younger, Mike Simpson, Michael Goodnow, Lori Wheat, and Pat Sullivan. Council Vice President Leslie Daugs was absent. Also present were City Attorney Roger Lubovich; City Clerk Angela Hoover; Legislative Office Manager Lori Smith; and IT Manager Dave Sorensen. President Gorman read a statement that per an amending proclamation issued by Governor Inslee extending the “Stay Home – Stay Healthy” order to help reduce the spread of COVID-19, the Council Meetings are allowed to be conducted virtually until the order is rescinded. MAYOR’S REPORT  Congratulated Class of 2021 graduates of Renaissance High School;  Shared Permit Activity data, expressing his excitement that revenue from these projects may be setting records this year; and  Encouraged the public to continue wearing masks and to please get vaccinated. PUBLIC RECOGNITION Comments were provided by Anna Mockler and Jerri Ekman… CONSENT AGENDA 4A – Claims & Check Register: Check Numbers 393795 through 393947 and Electronic Fund Transfers V33138 through V33206 in the grand total amount of $2,121,036.58; Regular Payroll (Pay Outs) for pay period ending May 15, 2021 in the amount of $4,186.27; and Retiree Payroll for pay period ending May 31, 2021 in the amount of $50,378.17 4B – Minutes of Meeting – May 19, 2021 4C – Minutes of Study Session – May 26, 2021 4D – Renewal of Pollution Liability Insurance with Hartford Insurance Company There were no questions or comments from the public… 5:41 M/S/C/U (Sullivan/Younger) Move to approve the CONSENT AGENDA as presented. GENERAL BUSINESS 5A – ACCEPT SURFACE TRANSPORTATION GRANT FROM THE PUGET SOUND REGIONAL COUNCIL; AND APPROVE WSDOT LOCAL AGENCY AGREEMENT FOR THE WEST KITSAP WAY PLANNING STUDY: Project Manager Katie Ketterer summarized that the City has been awarded a federal Surface Transportation Program grant via the Puget Sound Regional Council (PSRC) to conduct a transportation planning study for Kitsap Way from SR 3 to Chico Way. West Kitsap Way was originally constructed as State Route 21 in the early 1900s, it has concrete pavement in poor condition and lacks pedestrian and bicycle infrastructure. The study will determine, through a public process, updated road geometry, channelization and a 5-10% level of design for the future reconstruction of the roadway. The total project budget is $606,000 and the grant requires a 13.5% match of local funds. Grant documents are WSDOT standard forms, with terms and conditions specific to the federal fund source. The grant request was submitted as a 2023/2024 project but was not selected in the original round of grant awards. However, the project has been selected from the contingency list and funded in 2021 due to regional rebalancing of the PSRC budget. Questions from the public were provided by Ki’aha Long; with responses provided by Ms. Ketterer... City Council Reg. Mtg. Minutes Wednesday, June 2, 2021 Page 2 of 4 5:46 Motion was made by Younger; and seconded by Goodnow… Questions and comments were provided by Younger, Goodnow, Gorman, and Simpson; with responses provided by Ms. Ketterer… 5:52 M/S/C/U (Younger/Goodnow) Move to accept the Surface Transportation Program grant and to approve the Local Agency Agreement for the West Kitsap Way Planning Study and authorize the Mayor to finalize and execute the agreement with substantially the same terms and conditions as presented. 5B – GOODS & SERVICES AGREEMENT WITH AT-WORK COMMERCIAL ENTERPRISE, LLC FOR LANDSCAPE MAINTENANCE & SERVICES: Facilities Manager Chris Mottner explained that the Public Works Department is seeking to award the Goods & Services Agreement to At- Work Commercial Enterprise, LLC. for Landscape Maintenance and Services for a term of five years with an additional two year negotiated extension that may be offered and negotiated by both parties. Questions from the public were provided by Anna Mockler; with responses provided by Mr. Mottner… 5:59 Motion was made by Sullivan; and seconded by Simpson… Questions and comments were provided by Sullivan and Simpson; with responses provided by Mr. Mottner… 6:01 M/S/C/U (Sullivan/Simpson) Move to approve the Goods & Services Agreement between At- Work Commercial Enterprise, LLC and the City of Bremerton for Landscape Maintenance and Services and authorize the Mayor to finalize and execute the agreement with substantially the same terms and conditions as presented. PUBLIC HEARINGS 6A – PUBLIC HEARING ON ORDINANCE NO. 5422 TO AMEND TITLE 20 OF THE BREMERTON MUNICIPAL CODE RELATED TO BOUNDARY LINE ADJUSTMENTS AND LOT SIZE AVERAGING: Senior Planner Kelli Lambert explained through a Power Point Presentation that the action before Council is to conduct a Public Hearing and adopt an Ordinance amending BMC Title 20 related to two topics Boundary Line Adjustments and Lot Size Averaging. Boundary Line Adjustment (BLA): A BLA is the process for adjusting property lines between legally created lots. The proposal is for the City to codify a process for lot adjustments as Bremerton is the only City in the County that does not regulate BLAs. This ordinance is important because it will ensure that lot lines that are being adjusted are in conformance with City codes and therefore lot adjustments will not cause conflicts for current and future property owners. The proposed code is similar to other local jurisdictions (Poulsbo and Port Orchard). This proposed code was sent to representatives from the Kitsap Building Association and the Kitsap Relator Group for review/comments. Lot Size Averaging: This allows for individual lots located within a development to be smaller than typically permitted, provided the average of all lots within a subdivision do not exceed the maximum allowed density. The proposal code allows averaging in the R-10 and R-18 zones. If these provisions are adopted, there will be added flexibility when subdividing, and in some cases will allow more logical lot line boundaries and more opportunity to achieve the density of the underlying zone. This proposed ordinance does not increase the allowed density in subdivisions, that will remain the same. President Gorman explained the purpose of this Public Hearing is to accept public comment… With no questions or comments from the public, President Gorman closed the hearing to the public, and opened discussion to the Council… City Council Reg. Mtg. Minutes Wednesday, June 2, 2021 Page 3 of 4 6:10 Motion was made by Younger; and seconded by Wheat… Comments were provided by Wheat, Simpson, Goodnow, and Gorman… 6:19 M/S/C (Younger/Wheat) Move to pass Ordinance No. 5422 as recommended by the Planning Commission to amend Bremerton Municipal Code Section Title 20 related to Boundary Line Adjustment and Lot Size Averaging. Voted in favor of Motion: Sullivan, Wheat, Goodnow, Younger, Gorman Voted opposed to Motion: Simpson Motion carried: 5-Yes; 1-No 6B – PUBLIC HEARING ON ORDINANCE NO. 5423 TO AMEND SECTION 20.46.040 OF THE BREMERTON MUNICIPAL CODE RELATED TO MANUFACTURED HOMES: Senior Planner Kelli Lambert explained through a Power Point Presentation that the action before Council is to conduct a Public Hearing and adopt an Ordinance amending Bremerton Municipal Code (BMC) Title 20 to amend the minimum size allowed for manufactured homes (BMC 20.46.040(a)(2)). The BMC requires a minimum width of 24’ of a manufactured home (two 12’ sections), the ordinance would allow the placement of manufactured homes that are 19’ wide (two 9.5 sections) or greater. The Council has previously held a Study Session on this topic on May 22, 2019 but was pulled prior to public hearing as there was discussion about a potential amending motion that Staff was unsure was allowed by State Law. The request was to amend the code to require all manufactured homes have front door access facing the street. Per Washington State Law, the City cannot create code for all manufactured homes that is not also required for site-built housing. The City does not require any design standards for single-family residences to have front doors oriented to the street, this cannot be required for all manufactured homes. This potential code amendment has been included in the City of Bremerton Infill Toolkit as another small code change that could assist with the creation of more housing in the City. The Planning Commission previously unanimously recommended this code amendment be adopted on April 22, 2019, and they re-affirmed their recommendation following an additional Public Hearing on April 19, 2021. President Gorman explained the purpose of this Public Hearing is to accept public comment… Comments from the public were provided by Jeff Coughlin, Robert Larsen, and Anna Mockler… With no further questions or comments, President Gorman closed the hearing to the public, and opened discussion to the Council… 6:29 Motion was made by Sullivan; and seconded by Wheat… Comments were provided by Sullivan, Wheat, and Simpson… 6:33 M/S/C/U (Sullivan/Wheat) Move to pass Ordinance No. 5423 to amend BMC 20.46.040 entitled Manufactured Homes. COUNCIL MEMBER REPORTS Lori Wheat was pleased to now be fully vaccinated, but would still be mindful of following CDC Guidelines by continuing to wear a mask in public. Michael Goodnow mentioned that June was Pride Month; was glad he was able to say goodbye to City employee Milenka Hawkins-Bates to wish her well on her retirement; and announced that in place of its regular meeting, the Race Equity Advisory Committee will be partnering with the Kitsap Economic Development Alliance for a Virtual Kitsap Black Indigenous People of Color Business (BIPOC) Forum on Thursday, June 10 beginning at 6:00 PM. City Council Reg. Mtg. Minutes Wednesday, June 2, 2021 Page 4 of 4 Mike Simpson acknowledged events tied to Memorial Day, including ceremonies held to remember Medal of Honor Recipients interred at Ivy Green Cemetery and for “D” Day; was pleased that the community is nearing herd immunity in response to COVID-19; referred to a recent ruling by Montana’s 9th Circuit of Appeals and encouraged the Mayor and Legal to review policies to ensure we’re not violating the 14th Amendment of the Constitution. Eric Younger encouraged District 7 Residents to attend the Virtual Oyster Bay Sewer Upgrades Project Community Meeting on Monday, June 7 beginning at 6:00 PM. President Gorman provided a reminder that meetings will continue to be held remotely until further notice, including the Study Session next Wednesday on June 9, 2021 beginning at 5:00 PM; and also reminded everyone to please remain hydrated during this hot weather! With no further business, President Gorman adjourned the Council Meeting at 6:44 PM. Prepared and Submitted by: ______________________________ LORI SMITH Legislative Office Manager APPROVED by the City Council on the 16th day of June, 2021. ________________________________________ KEVIN GORMAN, City Council President Attest: ________________________________________ ANGELA HOOVER, City Clerk KG:AH:ls:cg AGENDA BILL CITY OF BREMERTON CITY COUNCIL SUBJECT: Minutes of Study Session – June 9, 2021 Study Session Date: N/A COUNCIL MEETING Date: June 16, 2021 Department: City Council Presenter: Council President Phone: (360) 473-5280 SUMMARY: The Minutes of Study Session held on June 9, 2021 are attached. ATTACHMENTS: Study Session Minutes FISCAL IMPACTS (Include Budgeted Amount): None STUDY SESSION AGENDA: ☒ N/A STUDY SESSION ACTION: ☒ Consent Agenda ☐ General Business ☐ Public Hearing RECOMMENDED MOTION: Move to approve the June 9, 2021 Study Session Minutes as presented. COUNCIL ACTION: Approve Deny Table Continue No Action Form Updated 11/3/17 4C 22C CITY COUNCIL STUDY SESSION MINUTES Wednesday, June 9, 2021 A virtual Study Session of the City Council of the City of Bremerton was called to order on Wednesday, June 9, 2021 at 5:00 PM, with Council President Kevin Gorman presiding. Council Members present were Eric Younger, Mike Simpson, Lori Wheat, Leslie Daugs, and Pat Sullivan. Council Member Michael Goodnow is absent. Lori Smith, Legislative Office Manager, and IT Manager Dave Sorensen were present to provide staff support. President Gorman established that to help reduce the spread of COVID-19, the City Council is conducting the Study Session via a Zoom webinar. He further established that the Study Session was open for the public to listen in, but there would be no opportunities for input; no action is anticipated; and the content of these items is subject to change. If approved by the Council, items will be placed on the June 16, 2021 City Council Meeting Agenda… A. INFORMATION BRIEFING Overview of Puget Sound Energy’s Goal of “Being a Beyond Net Zero Carbon Company by 2045”; and “COVID-19 Bill Assistance Program” with Sr. Government Affairs Representative Matthew Mauer; and Melissa Troy from Puget Sound Energy Information Only B. BRIEFINGS on AGENDA BILL ITEMS 1. Local Agency Contract with Miles Resources, LLC for 6th Street Phase II Pavement Preservation Project Consent Agenda 2. Approve promotion of Chris Mottner as the Internal Services Manager at Band 16, Rate 8 of the 2021 Management, Professional, Confidential and Fiduciary Salary Plan General Business 3. Contract with Insituform Technologies, LLC for the 2021 Sewer Rehabilitation Project Consent Agenda 4. Utility Services Agreement with NAVFAC Northwest for Puget Sound Naval Shipyard/Naval Base Kitsap-Bremerton Consent Agenda President Gorman called a break from 6:48 to 6:55 PM… 5. Proposed Public Hearing and Resolution to adopt the 2022 CDBG/HOME Policy Plan Public Hearing 6. Ordinance amending Ordinance No. 5408 relating to the City of Bremerton Fiscal Year 2021 Budget General Business 7. Affiliation Agreement with Central Washington University for Training of Health Care Professionals General Business 8. Professional Services Agreement with Systems Design West, LLC for Ambulance Billing Service Consent Agenda 9. Interlocal Agreement with South Puget Sound Fire Coordination Group for Wildfire Personnel Training and Certification Consent Agenda 10. Ordinance amending Sections 1.02.020 and 2.50.040(b) of the Bremerton Municipal Code; and establishing Juneteenth as a legal holiday for the City of Bremerton General Business A. GENERAL COUNCIL BUSINESS City Council Study Session Minutes Wednesday, June 9, 2021 Page 2 of 2 o Other General Council Business was briefly discussed. President Gorman reminded the public that all meetings will be held remotely until further notice, including the next regular Council Meeting on Wednesday, June 16, 2021 at 5:30 PM. With no further business, the Study Session was adjourned at 7:50 PM. Prepared and Submitted by: ______________________________ LORI SMITH Legislative Office Manager APPROVED by the City Council on the 16th day of June, 2021. ______________________________ KEVIN GORMAN, Council President ATTEST: ______________________________ ANGELA HOOVER, City Clerk KG:AH:ls:cg AGENDA BILL CITY OF BREMERTON CITY COUNCIL SUBJECT: Study Session Date: June 9, 2021 Local Agency Contract with Miles Resources, LLC for the 6th Street Phase II Pavement Preservation Project; and related Budget Adjustment COUNCIL MEETING Date: June 16, 2021 Department: PW & Utilities Presenter: Shane Weber Phone: (360) 473-2354 SUMMARY: Bids were opened for the project on June 2, 2021 and 3 bids were received. Miles Resources LLC, is the lowest responsive, responsible bidder with their bid totaling $1,704,900.30, including sales tax. The Washington State Department of Transportation is required to concur with the City’s recommendation to award the contract, and the City is currently awaiting that concurrence . The contract is in WSDOT standard format as required for Federal Aid Projects. The complete contract is available for review in the Engineering Office. The project includes pavement grinding and overlay, pavement markings, ADA curb ramp upgrades, watermain replacement, signal replacement, and other related street improvements between Warren Avenue and Pacific Avenue. ATTACHMENTS: 1) Site Plan; 2) Bid Tabulation; 3) Contract; 4) Fiscal Summary; 5) PSRC Funding Award Letter FISCAL IMPACTS (Include Budgeted Amount): This project is included in the transportation capital budget but requires additional revenue. The budgeted amount in the 2021 Capital Improvement Program is $1,440,440. Due to increased cost, a 2021 budget adjustment to $2,050,000 is required. The additional budget will be from a combination of fund sources. See the attached summary for the revenue details. STUDY SESSION AGENDA: ☒ Limited Presentation ☐ Full Presentation STUDY SESSION ACTION: ☒ Consent Agenda ☐ General Business ☐ Public Hearing RECOMMENDED MOTION: Move to award contract with Miles Resources LLC for the 6th Street Phase II Pavement Preservation Project in the amount of $1,704,900.30, including sales tax and move to increase the 2021 project budget to $2,050,000; and authorize the Mayor to finalize and execute the agreement with substantially the same terms and conditions as presented. COUNCIL ACTION: Approve Deny Table Continue No Action Form Updated 01/02/2018 4D 6TH STPARK AVE. WARREN AVE. PACIFIC AVE.7TH STREET8TH STREET8TH STREETBROADWAY AVENUE6TH STREET9TH STREET7TH STREET8TH STREETCOGEAN AVENUE MCKENZIE AVENUE8TH STREET(UNION STREET)4TH STREET5TH STREET6TH STREETPARK AVENUE PACIFIC AVENUE PLEASANT AVENUE HIGHLAND AVENUE WASHINGTON AVENUE2ND STREET1ST STREET(FRONT STREET)W A S H I N G T O N AVE N U E BURWELL ST.BURWELL STREET4TH ST.5TH ST.6TH ST.WARREN AVE.PUGET SOUND NAVAL SHIPYARDEND OF PROJECTEND OF PROJECTOFSHEETVERT.HORIZ.SCALECITY OF BREMERTONREVISIONSDEPARTMENT OF PUBLIC WORKS & UTILITIESENGINEERING DIVISIONIF NOT SCALE ACCORDINGLYONE INCH AT FULL SCALE1/2"01"PN:6TH STREET PRESERVATION PROJECTVICINITY MAP11 BID TITLE: SECOND LOW BIDDER - Sound Pacific $ 1,740,439.73 THIRD LOW BIDDER - Northwest Cascade $ 1,827,037.75 DATE OPENED: RECORDED BY: $ 1,508,235.00 ENGINEER ESTIMATE (INC SALES TAX) APPARENT LOW BIDDER - Miles Resources $ 1,704,900.30 SUMMARY Miles Resources LLC Yes $1,704,900.30 Sound Pacific Construction LLC Yes $1,740,439.73 Northwest Cascade Inc. Yes $1,827,037.75 CITY OF BREMERTON BID TABULATION BOND BASE BID SALES TAX TOTALNAME OF BIDDER OPENED BY: 6/2/2021 TIME OPENED: 6th Street Phase II Pavement Preservation - Warren Ave to Pacific Ave 1:00 PM Angela Hoover Angela Hoover 6th Street Preservation Phase II (Warren to Pacific Ave) 57 May 5, 2021 Local Agency Contract Local Agency Contract (WSDOT Form 272-006a) 6th Street Preservation Phase II (Warren to Pacific Ave) 58 May 5, 2021 Local Agency Contract 2021 6th Street Preservation Phase II Fiscal Summary June 2021 FISCAL SUMMARY 2021 6th Street Preservation Phase II The 6th Street Phase II project is budgeted in the 2021 Capital Improvement Plan for $1,440,440. The total estimated cost to complete the construction of the project was updated to include the bid cost and is now estimated at $2,050,000. The additional funding sources are proposed as follows: Fund Source 2021 CIP Current Amount ($) Increase ($) Revised Amount ($) FHWA Grant $740,379 $385,358* $1,125,737 REET $135,876 $85,000** $220,876 Water Fund $564,185 $140,000*** $594,185 Total 1,440,440 $610,358 $2,050,000 (rounded) *Supplemental federal aid grant received by PSRC, see award notice attached. ** Required as match for supplemental federal aid received by PSRC. ***Re-allocated funding from WT00032 – Anderson Creek – Dam #1 and Dam #2 Removal Project June 3, 2021 The Honorable Greg Wheeler City of Bremerton 345 6th Street, Suite 100 Bremerton, WA 98337 Dear Mayor Wheeler Congratulations! I’m pleased to let you know that the City of Bremerton is receiving $909,548 in PSRC funding for the following projects: PROJECT AWARD AMOUNT FUNDING DEADLINE Kitsap Way - Northlake Way to SR 3 $524,190 July 15, 2021 6th Street Preservation Phase 2 $385,358 increase to 2021 award due July 15, 2021 Funding was approved by the Puget Sound Regional Council’s Executive Board in April and May. Supplemental Federal Highway Administration funds became available this year to award to projects on PSRC’s adopted contingency lists from the last major project competition. Addi- tionally, PSRC is directing funds to “ready to go” projects from the contingency lists to meet our “use it or lose it” regional project delivery target for 2021. Securing federal transportation funding for communities in the region is one of the key roles of the PSRC. Our project selection process is merit-based and helps identify the highest priority projects that will improve local and regional mobility and help achieve our long-range Regional Transportation Plan. As the region continues to work on maintaining and improving our transportation infrastructure, we are grateful for partners like you working to enhance mobility, support a resilient economy, and sustain a healthy environment and quality of life for people in the region. Thank you for your leadership and for the excellent work by your staff during a difficult year. I look forward to continuing to partner with you on efforts to help the region thrive now and into the future. Sincerely, Josh Brown Executive Director Puget Sound Regional Council cc: Tom Knuckey, Public Works Director AGENDA BILL CITY OF BREMERTON CITY COUNCIL SUBJECT: Contract with Insituform Technologies, LLC for 2021 Sewer Rehabilitation Study Session Date: June 9, 2021 COUNCIL MEETING Date: June 16, 2021 Department: PW&U - Engineering Presenter: William Davis Phone: (360) 473-2312 SUMMARY: The project will rehabilitate approximately 6,500 lineal feet of sanitary sewer using the cure-in-place-pipe (CIPP) method and reinstate approximately 115 side sewers. The pipes range in size from 10-inch to 24-inch diameter. One (1) bid was submitted, which was opened on June 2, 2021. The lowest responsive, responsible bidder was Insituform Technologies, Inc, who submitted a bid in the amount of $1,082,988.03 including sales tax. ATTACHMENTS: 1. Contract; 2. Vicinity Map; and 3. Bid Tabulation. 4) Fiscal Summary. FISCAL IMPACTS (Include Budgeted Amount): The budget amount in the 2021 Wastewater Capital Budget for this project was $700,000. The overall project cost is now estimated at $1,200,000. The additional money to fund the project will be coming from three different projects in the 2021 Sewer Capital Budget, which is described in the Fiscal Summary. STUDY SESSION AGENDA: ☒ Limited Presentation ☐ Full Presentation STUDY SESSION ACTION: ☒ Consent Agenda ☐ General Business ☐ Public Hearing RECOMMENDED MOTION: Move to award the contract for the 2021 Sewer Rehabilitation to Insituform Technologies, Inc in the amount of $1,082,988.03 (which includes sales tax) and authorize the Mayor to finalize and execute the agreement with substantially the same terms and conditions as presented. COUNCIL ACTION: Approve Deny Table Continue No Action Form Updated 01/02/2018 4E City of Bremerton May 2021 2021 Sewer Rehabilitation CF-1 CONTRACT (Page 1 of 3) THIS AGREEMENT is dated the day of in the year 2021 by and between City of Bremerton (hereinafter called CITY) and (hereinafter called CONTRACTOR). CITY and CONTRACTOR, in consideration of the mutual covenants hereinafter set forth, agree as follows: ARTICLE 1. WORK. CONTRACTOR shall complete the WORK as specified or indicated in the CITY's Contract Documents entitled 2021 Sewer Rehabilitation ARTICLE 2. CONTRACT TIMES. The WORK shall obtain Substantial Completion by October 1, 2021. Time is of the essence as to each and every deadline set forth in this agreement. This provision has been specifically negotiated. ARTICLE 3. LIQUIDATED DAMAGES. CITY and the CONTRACTOR recognize that time is of the essence for this Agreement and that the CITY will suffer financial loss if the WORK is not completed within the time specified in Article 2 herein, plus any extensions thereof allowed in accordance with Section 1-08.8 of the Standard Specifications which may be modified by the Special Provisions. They also recognize the delays, expense, and difficulties involved in proving in a legal proceeding the actual loss suffered by the CITY if the WORK is not completed on time. Accordingly, instead of requiring any such proof, the CONTRACTOR shall pay the CITY liquidated damages in the amount of $1000 per day after the date of Substantial Completion. ARTICLE 4. CONTRACT PRICE. CITY shall pay CONTRACTOR for completion of the WORK in accordance with the Contract Documents in the amount set forth in the Bid Proposal, which shall include sales tax as provided in Section 1-07.2(2) of the Special Provisions. ARTICLE 5. PAYMENT PROCEDURES. CONTRACTOR shall submit Applications for Payment in accordance with Section 1-09.9 of the Standard Specifications which may be modified by the Special Provisions. Applications for Payment will be processed by ENGINEER as provided in the Special Provisions _____________________ Contractor Initials Insituform Technologies, LLC City of Bremerton May 2021 2021 Sewer Rehabilitation CF-2 CONTRACT (Page 2 of 3) ARTICLE 6. CONTRACT DOCUMENTS. The Contract Documents which comprise the entire agreement between CITY and CONTRACTOR concerning the WORK consist of this Contract and the following which are either attached or incorporated herein by reference: -Notice Inviting Bids, -Bidders Checklist, -Bid Proposal including the Proposal Forms, Information Required of Bidder, Bid Bond, and allrequired certificates and affidavits, -Performance Bond, -Payment Bond, -Standard Specifications, -Amendments to the Standard Specifications, -Appendices, -Special Provisions, -Contract Plans, -Addenda numbers _____ to _____, inclusive. -Change Orders which may be delivered or issued after Effective Date of the Agreement and arenot attached hereto.There are no Contract Documents other than those listed in this Article 6. The Contract Documents may only be amended by Change Order as provided in Section 1-04.4 of the Standard Specifications which may be modified by the Special Provisions. ARTICLE 7. INDEMNIFICATION. The CONTRACTOR and CITY acknowledge and agree that they have negotiated the following in accordance with the requirements of RCW 4.24.115 and the CONTRACTOR specifically waives his immunity under industrial insurance under Title 51 RCW. To the fullest extent permitted by Laws and Regulations, the CONTRACTOR shall indemnify, defend, and hold harmless the CITY, ENGINEER, their consultants, sub consultants, and the officers, directors, employees, and agents of each and any of them, against and from any and all claims, injuries, damages, losses or suits, including all legal costs and attorney fees, all claims and liability arising under, by reason of, related, or incidental to the Contract Documents or any performance of the WORK, but not from the sole negligence or willful misconduct of the CITY and/or the ENGINEER as further defined in the Contract Documents. The provisions of this section shall survive the termination of the contract. _____________________ Contractor Initial CONTRACT City of Bremerton May 2021 2021 Sewer Rehabilitation CF-3 (Page 3 of 3) ARTICLE 8. ASSIGNMENT No assignment by a party hereto of any rights under or interests in the Contract Documents will be binding on another party hereto without the written consent of the party sought to be bound; and specifically but without limitation monies that may become due and monies that are due may not be assigned without such consent (except to the extent that the effect of this restriction may be limited by law), and unless specifically stated to the contrary in any written consent to an assignment, no assignment will release or discharge the assignor from any duty or responsibility under the Contract Documents. The CITY, in its sole discretion, may refuse to allow the CONTRACTOR to assign any or all of its duties, rights and/or responsibilities under the Agreement, except with regards to an assignment of funds for security purposes. In the case of an assignment for security purposes the CITY may condition its approval to the extent it deems necessary to assure that there will be adequate funds to complete the WORK and to pay a subcontractors and suppliers. CITY and CONTRACTOR each binds itself, its partners, successors, assigns and legal representatives to the other party hereto, its partners, successors, assigns and legal representatives in respect of all covenants, agreements and obligations contained in the Contract Documents. IN WITNESS WHEREOF, CITY and CONTRACTOR have caused this Agreement to be executed the day and year first above written. CITY : City of Bremerton CONTRACTOR (Signature) (Signature) By Greg Wheeler, Mayor By (Printed name) (Printed name) [CORPORATE SEAL] Attest Attest Address for giving notices Address for giving notices License No. Approved as to Form: Agent for service of process: (Signature) City Attorney (Title) Insituform Technologies, LLC VICINITY MAP FOR 2021 SEWER REHABILITATION 2021 Sewer Rehabilitation Fiscal Summary June 2021 FISCAL SUMMARY 2021 SEWER REHABILITATION The project 2021 Sewer Rehabilitation is budgeted in the Sewer Capital Improvement Plan through item WW00003 - CIPP Rehabilitation of Sewers for $700,000. One bid was received, from Insituform, which was opened on June 2, 2021. The bid was for $1,082,988.03. The overall project estimate is increased to $1,200,000, as shown below. COST ITEM AMOUNT Construction (Insituform) $1,082,988 City Costs for Design and Bidding $24,252 City Inspection and CM (projected) $35,200 AIMS cleaning/video contract $57,970 TOTAL ESTIMATED PROJECT (rounded) $1,200,000 In order to fund the project, the budget will need to be increased from $700,000 to $1,200,000, which is an increase of $500,000. The additional $500,000 will be allocated from the following Sewer CIP line items. Project ID and Title Amount WW00017 – Asset Management Implementation $50,000 WW00042 – WWTP & Pump Station Improvement Program $100,000 TR00001 – E. 11th Street and Perry Avenue Reconstruction $350,000 TOTAL $500,000 AGENDA BILL CITY OF BREMERTON CITY COUNCIL SUBJECT: Study Session Date: June 9, 2021 Utility Services Agreement with NAVFAC NW for Puget Sound Naval Shipyard/Naval Base Kitsap-Bremerton COUNCIL MEETING Date: June 16, 2021 Department: PW&U Presenter: Tom Knuckey Phone: (360) 473-2376 SUMMARY: The City has worked with the Navy to develop a successor contract to the ten-year utilities contract for PSNS and NBK-Bremerton. The current contract expired 7/30/2018 and has been under interim extensions which expire on August 2, 2021. The new ten-year contract term will begin with execution and extend to 2031. The new contract is generally similar to the past contract, with highlights and substantive changes outlined in the attached Council Summary. ATTACHMENTS: (1) Council Summary; (2) Summary of Negotiations; (3) Contract # N44255-21-C- 1004 COB contract number #4757 FISCAL IMPACTS (Include Budgeted Amount: Based on the assumed consumption rates listed in the contract, revenue for the water utility is estimated at $2,190,638/yr., Wastewater revenue is estimated at $2,632,687/yr., and Stormwater revenue is estimated at $57,488/yr. All rates are subject to annual escalation during the life of the contract. STUDY SESSION AGENDA: ☒ Limited Presentation ☐ Full Presentation STUDY SESSION ACTION: ☒ Consent Agenda ☐ General Business ☐ Public Hearing RECOMMENDED MOTION: Move to approve the PSNS/NBK-Bremerton Utility Services Agreement between the City of Bremerton and NAVFAC Northwest; and authorize the Mayor to finalize and execute the agreement with substantially the same terms and conditions as presented. COUNCIL ACTION: Approve Deny Table Continue No Action Form Updated 01/02/2018 4F COUNCIL SUMMARY UTILITY SERVICE CONTRACT FOR NBK-BREMERTON BACKGROUND This Utility Service Agreement with the US Navy is for Water and Wastewater service for NBK-Bremerton only. Separate agreements are in-place for Jackson Park, the Navy Hospital, and other miscellaneous locations. Utility service agreements with the Navy are executed in ten-year terms; the last agreement was executed in 2008 and expired On July 31, 2018. Upon expiration of the contract, the Navy exercised its unilateral option to continue service beyond the contract term. The current expiration date is August 2, 2021. Until the new contract is executed, rates are frozen at 2018 levels. On January 14, 2021, the Navy approved a claim from the City and paid $414,049 to reimburse lost revenue from the frozen rates between August 1, 2018, and August 31, 2020. Following execution of this new contract, the City will submit a second claim to compensate for lost revenue due to the frozen rates for the period of September 1, 2020 to the effective date of the new contract. In 2017, the City engaged FCS Group to provide a cost-of-service study to establish the base rates, and to assist in contract negotiations. Negotiations have been on-going and concluded on July 10, 2020 with all technical issues associated with calculating cost- based rates mutually agreed upon and resolved. The FCS cost-of-service study used for these negotiations was the same methodology established for the 2008 contract. Specifically, the principle is to calculate the appropriate level of revenue that must be collected to recover costs, then calculate a rate structure that equitably collects those revenues. The calculation , including distribution between customer classes, is further explained in the “Summary of Negotiations” document which is attached to this Agenda Bill.’ HIGHLIGHTS OF THE NEW CONTRACT The new contract rate structure is based on the cost-of-service study presented in the Summary of Negotiations. Highlights from the new contract are as follows:  The new ten-year contract term will begin as soon as executed and extend to 2031.  The new water service rates have a flat fee of $91,277 per month and variable rate of $1.83/HCF, resulting in total anticipated annual revenue of $2,190,638 for 2021. In the new contract, revenue is generated equally from both the flat fee and variable rates, which is an improvement over the previous contract.  The new wastewater flat fee is $109,695/month and $4.70/HCF, resulting in total anticipated annual revenue of $2,632,687 for 2021. Similar to Water, revenue approximately equal from both the flat fee and variable rates.  Rate increases follow methodology established with the 2008 contract; specifically, rate increases are tied directly to the weighted average of rate increases applied to all non- Navy customers for Water and Wastewater, respectively.  Significant discussion entailed regarding the frozen rates after the contract expired, and so the City and Navy have documented an agreement in principle that rate increases should apply during any time gap between the termination of this new contract and execution of a subsequent contract. The contract documentation additionally memorializes the need to initiate negotiations early (2-years prior to contract termination).  Impacts of Salinity from the Navy will be treated independently from this contract.  Similar to Salinity impacts, the City notified the Navy of a likely need to renegotiate rates and cost of service when the State of Washington enacts new discharge limitation permit requirements to reduce nutrient discharges to the Puget Sound. City of Bremerton Summary of U.S. Navy Contract Negotiations for Water and Wastewater Service FINAL REPORT October 2020 Washington 7525 166th Avenue NE, Ste. D215 Redmond, WA 98052 425.867.1802 Oregon 4000 Kruse Way Pl., Bldg. 1, Ste 220 Lake Oswego, OR 97035 503.841.6543 Colorado 1320 Pearl St, Ste 120 Boulder, CO 80302 719.284.9168 www.fcsgroup.com Firm Headquarters Redmond Town Center 7525 166th Ave NE, Ste. D-215 Redmond, Washington 98052 Established 1988 Washington | 425.867.1802 Oregon | 503.841.6543 Colorado | 719.284.9168 October 7, 2020 Thomas Knuckey, P.E. Director of Public Works and Utilities 100 Oyster Bay Ave. N. Bremerton WA 98312 Subject: Summary of U.S. Puget Sound Naval Shipyard Contract Negotiations for Water and Wastewater Service Dear Mr. Knuckey: The City of Bremerton (City) and U.S. Puget Sound Naval Shipyard (Navy ) entered a ten-year contract to provide water and Wastewater service (Navy Contract N44255 -08-C-3005) on August 1, 2008. The contract was set to continue through July 31, 2018 and constitutes the basis for development of the rates paid by the Navy during that contract term. Upon expiration of the contract, t he Navy exercised its unilateral option to continue service beyond the contact term. A follow up cost of service study is to be completed upon contract renewal to establish the base rates for the next contract period. In addition, the extensive 2008 contract negotiations established a mutually acceptable methodology to use at the time of future contract negotiations. To the extent possible, the update used the methodology prescribed in the 2008 contract. This report will summarize the cost of service study update used to establish the base year water and wastewater service rates for the Navy under the new contract. Negotiations with the Navy were completed on July 10, 2020 and all technical issues associated with calculating cost -based rates were mutually agreed upon and resolved. Sincerely , Angie Sanchez Virnoche Principal City of Bremerton October 2020 Summary of U.S. Navy Contract Negotiations for Water and Wastewater Service page i www.fcsgroup.com TABLE OF CONTENTS Section I. Introduction ................................................................................................................................. 1 I.A. Rate Setting Principles and Methodology ........................................................................................................ 1 I.A.1. Revenue Requirement ............................................................................................................................... 1 I.A.2. Cost Allocation .......................................................................................................................................... 2 I.A.3. Rate Design .............................................................................................................................................. 2 Section II. Water COS Rate Study ............................................................................................................... 3 II.A. Asset Functional Allocation & Classification .................................................................................................... 3 II.B. Revenue Requirement ................................................................................................................................... 5 II.B.1. Operating and Maintenance ................................................................................................................... 5 II.B.2. Depreciation.......................................................................................................................................... 6 II.B.3. Return on Investment ............................................................................................................................ 6 II.C. Allocation Factors .......................................................................................................................................... 8 II.D. Navy Water Cost of Service ........................................................................................................................... 9 II.E. Water Rates................................................................................................................................................. 10 Section III. Wastewater COS Rate Study ................................................................................................ 11 III.A. Asset Functional Allocation & Classification .................................................................................................. 11 III.B. Revenue Requirement ................................................................................................................................. 13 III.B.1. Operating and Maintenance ................................................................................................................. 13 III.B.2. Depreciation........................................................................................................................................ 13 III.B.3. Return on Investment .......................................................................................................................... 14 III.C. Allocation Factors ........................................................................................................................................ 16 III.D. Navy Wastewater Cost of Service ................................................................................................................. 17 III.E. Wastewater Rates ........................................................................................................................................ 17 Section IV. Other Key Issues .................................................................................................................. 18 IV.A. Salinity Surcharge ........................................................................................................................................ 18 IV.B. Initiation of Negotiations ............................................................................................................................... 18 IV.C. Future Adjustment for Water and Wastewater Rates ..................................................................................... 18 City of Bremerton October 2020 Summary of U.S. Navy Contract Negotiations for Water and Wastewater Service page ii www.fcsgroup.com IV.D. Rate Adjustments Beyond Contract Term ..................................................................................................... 19 IV.E. Lump Sum Payment ..................................................................................................................................... 19 IV.F. Re-Opener Clause ....................................................................................................................................... 19 Technical Appendix – Water .......................................................................................................................... 20 Technical Appendix – Wastewater ................................................................................................................. 21 City of Bremerton October 2020 Summary of U.S. Navy Contract Negotiations for Water and Wastewater Service page iii www.fcsgroup.com LIST OF EXHIBITS Exhibit 1: Water Asset Functionalization ............................................................................................................. 3 Exhibit 2: Water Asset Cost Classification ........................................................................................................... 4 Exhibit 3: Classification of Water Operating & Maintenance Costs ..................................................................... 6 Exhibit 4: Classification of Water System Depreciation ....................................................................................... 6 Exhibit 5: Classification of Water System Net Rate Base .................................................................................... 7 Exhibit 6: Wastewater Asset Functionalization .................................................................................................. 11 Exhibit 7: Wastewater Asset Cost Classification ............................................................................................... 12 Exhibit 8: Classification of Wastewater Operating & Maintenance Costs .......................................................... 13 Exhibit 9: Classification of Wastewater System Depreciation ............................................................................ 14 Exhibit 10: Classification of Wastewater System Net Rate Base ......................................................................... 15 LIST OF TABLES Table 1: Comparison of Cash Basis and Utility Basis Methodology ...................................................... 2 Table 2: Summary of Navy Water Cost of Service ............................................................................................. 9 Table 3: Summary of Navy Water Fixed and Variable Charges ....................................................................... 10 Table 4: Summary of Navy Wastewater Cost of Service .................................................................................. 17 Table 5: Summary of Navy Wastewater Fixed and Variable Charges ............................................................. 17 City of Bremerton October 2020 Summary of U.S. Navy Contract Negotiations for Water and Wastewater Service page 1 www.fcsgroup.com Section I. INTRODUCTION The City of Bremerton (City) retained FCS GROUP to develop a follow -up cost of service (COS) rate study in advance of the upcoming U.S. Navy (Navy) water and wastewater service contract renewal. The cost of service study was prepared using the existing 2008 contract methodology as the basis for establishing cost -based rates for the Navy. I.A. RATE SETTING PRINCIPLES AND METHODOLOGY The methods used to establish user rates are based on principles that are generally accepted and widely followed throughout the industry. These principles are designed to produce rates that equitably recover costs from customers by calculating the appropriate lev el of revenue to be collected from ratepayers and establishing a rate structure to equitably collect those revenues. The primary analyses of the cost of service rate study are listed below: ⚫ Revenue Requirement . This analysis calculates the total revenue requirement to fully fund each utility on a standalone basis . ⚫ Cost Allocation . This analysis equitably distributes the revenue requirement among c ustomer groups based on their proportional demand and use of each system. ⚫ Rate Design . This analysis develops rate structures that generate sufficient revenue to equitably recover each system’s revenue requirement. I.A.1. Revenue Requirement There are two main generally accepted methods for calculating utility revenue requirements – “cash basis” and “utility basis.” The “cash basis” is used most commonly to set revenue requirements for retail customers as it parallels the budgeting process of most municipalities , with the objective being that the revenues must be sufficient to recover all cash requirements of the utility. The “utility basis” approach is commonly used for contract customers as it recognizes unique customer service requirements a nd allows for the separation of eligible facilities required to provide service. This approach recovers applicable operating and maintenance (O&M) costs, plus a capital cost recovery based on the original cost of capital investment committed to the custome r’s service. The “capital cost recovery” includes two components: depreciation of eligible fixed asset value as useful life is consumed and a rate of return on the net investment or book value of eligible assets in service to the customer. With the utility basis, debt service costs are not part of the revenue requirement; instead, the capital cost is recovered over time by depreciation and the return on investment. Table 1 summarizes the two methods. The analysis completed for the City maintains parity betw een the cash basis used for retail customer rate -setting and the utility basis method used for the Navy. City of Bremerton October 2020 Summary of U.S. Navy Contract Negotiations for Water and Wastewater Service page 2 www.fcsgroup.com Table 1: Comparison of Cash Basis and Utility Basis Methodology Cash Basis Utility Basis + O&M Expenses + O&M Expenses + Taxes/Transfer Payments + Taxes/Transfer Payments + Rate Financed Capital + Depreciation Expense + Debt Service (Principal + Interest) + Return on Investment = Total Revenue Requirement = Total Revenue Requirement I.A.2. Cost Allocation The purpose of cost allocation is to provide a rational basis for distributing the full costs of each utility service to customers or customer groups in proportion to the demands they place on the system. The key analytical steps of the cost allocation process are as follows: ⚫ Asset Functionalization . The assets of each system are assigned to major functions of service : » Water: s ource of supply, treatment, storage, pumping, transmission, distribution, hydrants, meters, services and general plant » Wastewater: treatment, collection, pumping and general plant ⚫ Cost Classification. Within each asset function, costs are separated into cost categories that can be allocated among customers by a measurable cost -defining service characteristic. Water and wastewater classification categories are listed below. Costs wholly attributed to specific customers can be directly assigned to those customer s or customer groups : » Water: commodity (average water demands), capacity (peak water demands), customer (billing and customer service) meters & services (reading and servicing meters), fire protection and direct assignment » Wastewater: flow (sewer collection and plant inflow ), strength (influent sewage stren gth), customer and direct assignment ⚫ Cost Allocation . Cost categories are then allocated among customers or customer groups based on their unique service demands, as defined by system planning documents, industry standards, and recorded user history (e.g. billing data and/or service requirement requests ). The results identify the cost to provide service to each identified customer or customer group. I.A.3. Rate Design The principal objective of rate design is to develop a rate structure that generate s sufficient revenues for the system which are reasonably commensurate with the cost of providing service. Fixed and variable charges are designed to recover the cost of service for each customer or customer group, as determined by the revenue requirement a nd cost allocation process. For equity to be maintained, economic theory suggest that a price of a commodity should roughly equal its cost. Through refinement of cost allocation techniques and tailored rate designs customers are provided a more accurate price signal of what the service costs to produce and deliver . City of Bremerton October 2020 Summary of U.S. Navy Contract Negotiations for Water and Wastewater Service page 3 www.fcsgroup.com Section II. WATER COS RATE STUDY The City of Bremerton provides potable water service to the Navy at three 10 -inch meter delivery points located at 1 st and Pacific, Charleston Gate and 1 st and Rainer Avenue. The Navy has updated its service requirement requests as part of this contract update to include average daily demand of 1.20 million gallons per day (MGD) and a max day demand of 3.5 0 MGD. The Navy has also indicated that by 2028 the average daily demand and max day demand requirements are expected to increase to 1.32 MGD and 3.85 MGD, respectively. The Navy’s w ater service requirements specify a maximum fire flow demand of 7,750 gallons per minute (gpm) for a duration of four hours. The requirements as stated define the water service requirements of the Navy and are used to allocate costs as part of the water cost of service rate study update. II.A. ASSET FUNCTIONAL ALLOCATION & CLASSIFICATION The City’s assets or “plant” in service are reviewed to identify what infrastructure assets are in use and relate d to providing water service. The first step is to organize assets into functions of service , which is largely accomplished by a uniform system of accounts. As stated previously, the water utility functions of service include source of supply, treatment, storage, pumping, transmission, distribution, hydrants, meters, services and general plant. Exhibit 1 summarizes the original asset cost and accumulated depreciation allocated to each function of serv ice. Exhibit 1: Water Asset Functionalization The functions of service are then allocated to functional cost categories based on documented system requirements, including engineering criteria, (e.g. average demand, peak demand) and industry standard practices based on the relationship of eac h function of asset to their use of the system. Assets are classified into cost categories that can be allocated among customers or customer groups according to known or assumed cost “causation”. The cost classification categorie s for the water system include: ⚫ Commodity costs relate to average annual water demands. Function of Service Original Cost Accumulated Depreciation Net Asset Value Source of Supply 7,648,781$ 4,337,991$ 3,310,790$ Treatment 4,622,460 939,089 3,683,371 Storage 6,925,417 3,736,797 3,188,620 Transmission 2,217,633 710,388 1,507,245 Pumping 4,872,084 2,233,044 2,639,041 Distribution Mains 2"-6"5,051,160 2,542,144 2,509,015 Mains 8"-12"21,798,963 7,118,687 14,680,276 Mains 16" - 36"12,319,647 4,350,827 7,968,820 Hydrants 2,689,288 1,036,451 1,652,837 Services 3,909,232 1,893,102 2,016,130 Fire Services 382,021 175,587 206,434 Meters 3,008,649 1,031,402 1,977,247 General Plant 18,996,429 8,497,641 10,498,788 Total Assets 94,441,765$ 38,603,151$ 55,838,614$ City of Bremerton October 2020 Summary of U.S. Navy Contract Negotiations for Water and Wastewater Service page 4 www.fcsgroup.com ⚫ Capacity costs relate to meeting peak water demand requirements. ⚫ Customer costs are associated with establishing, maintaining and serving water customers and include administrative, billin g and customer service costs. ⚫ Meters & Services costs relate to installation, maintenance and repair of meters and services. ⚫ Fire Protection costs relate to the ability of the system to provide adequate capacity and water flo w corresponding to minimum fire safety standards . Over 2,000 system asset s as of year-end 2016 are grouped by major function of service. The major functions are then classified to the major c ost categories based on the approach used in the 2008 Navy Contract, updated when appropriate to adhere to current industry standard practices. Exhibit 2 summarizes the assumptions used to classify both original asset cost and accumulated depreciation . Exhibit 2: Water Asset Cost Classification The approach used to assign each function of service to the cost categories is as follows: ⚫ Source of supply is allocated based on the ratio of recorded 2017 average day demand of 5.86 million gallons per day (MGD) to recorded 2017 peak day demand of 14.10 MGD. Result – 42% commodity and 58% capacity ⚫ Treatment is allocated 100 percent to commodity or average water use. ⚫ Storage is allocated based on the City’s fire flow storage requirement (4,000 gallons per minute for 240 minutes) identified in Table 8 -5 of the 2012 Water System Plan (WSP) compared to the total combined storage capacity of the Main System and West 517 Zone system (33.20 million gallons) identified in Chapter 1.5.3 of the WSP. Result – 97% capacity and 3% to fire ⚫ Transmission is allocated 100 percent to capacity or peak use . ⚫ Pumping is allocated 100 percent to capacity or peak use . ⚫ Distribution mains are allocated among three cost categories – customer, capacity and fire. The customer allocation is based on the share of total d istribution replacement c osts made up by the Source of Supply 42%58% Treatment 100% Storage 97%3% Transmission 100% Pumping 100% Distribution Mains 2"-6"49%27%24% Mains 8"-12"49%27%24% Mains 16" - 36"49%27%24% Hydrants 100% Services 100% Fire Services 100% Meters 100% General Plant % Asset Classification 10.38%46.34%3.28%12.21%1.81%9.17%15.20%1.61% As All Other Plant Fire w/o NavyCustomerCustomer w/o Navy FireMeters & ServicesFunctionCapacity (Peak Use) Commodity (Average Use) Capacity w/o Navy City of Bremerton October 2020 Summary of U.S. Navy Contract Negotiations for Water and Wastewater Service page 5 www.fcsgroup.com cost of replacing the entire system with 2 -inch diameter pipe, recognizing that at a minimum, a system of 2 -inch pipe is required to provide average water demands. The capacity allocation is based on the total share of distribution repl acement costs if all 8 -inch and larger pipe was replaced with 6 -inch pipe, recognizing that 8 -inch and larger distribution pipe has been upsized to meet fire flow requirements . The remaining share of distribution costs are allocated to fire protection. The City’s distribution main analysis separated mains into 2” – 6”; 8” – 12” and 16” – 36”. In keeping with the 2008 contract the following classification approach is applied. » Mains 2”-6” are not allocated to the Navy as the prior Agreement recognized that the Navy is served through three 10” meters and does not benefit from any pipe smaller than 8 -inches. » Mains 8” and greater are eligible for allocation to the Navy . Result – 27% customer, 49% capacity and 24% fire of eligible distribution main assets ⚫ Hydrants and fire services are allocated 100 percent to fire . ⚫ Services and meters are allocated 100 percent to meters & services . The resulting total asset allocation is referred to as the “% asset classification” and is used to classify operating costs which cannot be more specifically assigned to one or more cost categories. II.B. REVENUE REQUIREMENT The water system revenue requirement is developed using the utility basis rate-setting approach. This approach recovers operating an d maintenance costs, plus a capital cost recovery based on the original cost of capital investment committed to the customer’s service. The “capital cost recovery” includes two components: depreciation of eligible fixed asset value as useful life is consumed and a return on investment to offset debt interest costs an d provide owner equity return. II.B.1. Operating and Maintenance Water system operating and maintenance costs are based on the 2020 detailed line -item fund 401 Water Utility expenditure budget. Expenditures are categorized based on the City’s budget departments and include: administration, water resources, water distribution, forestry, customer service and taxes. Similar to the classification of the City’s asset functions, c ommon practice in the allocation of O&M is to assign expenses to the cost category or categories that primarily drive each line item or budgetary grouping . The following summarizes the key O&M allocation assumptions: ⚫ Water Administration is allocated based on the % asset classification . ⚫ Water Resources is allocated based on the allocation of source of supply assets . ⚫ Natural gas/electricity costs are allocated 100 percent to commodity or total average water use. ⚫ Water Distribution is allocated based on the % asset classification . ⚫ Forestry is allocated based on the allocation of source of supply assets. ⚫ Customer Service is allocated 100 percent to customer. ⚫ Taxes are allocated 100 percent to the revenue category, which is used to allocate costs based on each customer or customer group’s share of total rate revenue. Exhibit 3 summarizes the assumptions used to classify the water utility’s operating costs. City of Bremerton October 2020 Summary of U.S. Navy Contract Negotiations for Water and Wastewater Service page 6 www.fcsgroup.com Exhibit 3: Classification of Water Operating & Maintenance Costs With O&M costs classified into cost categories , allocation factors are applied to each cost category that will ultimately determine the Navy allocated portion of O&M expenses. It is important to note that as a result of negotiations, the agreed upon allocation factor applied to the capacity portion of O&M costs is based on the Navy’s actual recorded peak water demands , rather than the maximum day demand service requirement . II.B.2. Depreciation Depreciation is the recovery of the original cost of system assets on an annual basis over the life of the assets. It is a non -cash expense intended to recognize the consumption of utility assets over their useful lives. Depreciation is calculated using the straight -line method on the total system assets , excluding assets contributed by developers or funded by other outside sources. This method takes the value of an asset and reduces it uniformly over each period until it reaches the end of its useful life. The utility basis methodology includes depreciation expense as a source of capital funding that can partially offset the cost s of system repair, replacement or principal payments on outstanding debt. Exhibit 4: Classification of Water System Depreciation It is important to note that as a result of negotiations, the capacity portion of water system depreciation is allocated to the Navy based on reserved peak demand capacity (the maximum day demand service requirement). The depreciation component represents the fixed infrastructure required to deliver the stated c apacity needs of the customer , which are not impacted by annual variations in water use . II.B.3. Return on Investment Return on investment is intended to provide a reasonable return to the City’s customers on the investment that they have made in facilities provi ding service. As the owner of the water system, the City has raised the capital necessary to pay for the infrastructure providing service. The utility basis rate-setting approach therefore allows the City to earn compensation in the form of a return on investment charged to outside city and contract customers . Return for a public utility is used as a source of funds to meet outstanding debt obligations and for reinvestment in the system. Taxes (State/City)100.00% Administration (As Plant)10.38%46.34%3.28%12.21%1.81%9.17%15.20%1.61% Water Resources (As Supply)42.00%58.00% Natural Gas/Electricity 100.00% Water Distribution (As Plant)10.38%46.34%3.28%12.21%1.81%9.17%15.20%1.61% Natural Gas/Electricity 100.00% Forestry (As Supply)42.00%58.00% Electricity 100.00% Customer Service (All Customer)100.00% Small Tools, Equip, Furn 100.00% % Classification 19.82%36.10%1.30%7.79%0.72%3.65%6.04%0.64%23.94% Classification of O&M Commodity (Average Use) Capacity (Peak Use) Capacity w/o Navy RevenueCustomerCustomer w/o Navy Meters & Services Fire Fire w/o Navy % Classification 10.38%46.34%3.28%12.21%1.81%9.17%15.20%1.61%0.00% RevenueCustomerCustomer w/o Navy Meters & Services Fire Fire w/o NavyClassification of Depreciation Commodity (Average Use) Capacity (Peak Use) Capacity w/o Navy City of Bremerton October 2020 Summary of U.S. Navy Contract Negotiations for Water and Wastewater Service page 7 www.fcsgroup.com The return on i nvestment component of the cost of service is determined by multiplying the rate base allocated to each customer or customer group by an agreed upon rate of return. II.B.3.a Rate Base Rate base is determined by identifying the value of system assets used by the ut ility in providing service , adding cash working capital and making appropriate deductions for contributed assets and accumulated depreciation . The detailed asset values, accumulated depreciation and contributions were based on City asset records as of year-end 2016. Cash working capital has three components, and they are allocated as described below: ⚫ One-eighth of O&M expen ditures is allocated based on the overall allocation of O&M. ⚫ Prepayments are allocated based on the overall allocation of O&M. ⚫ Inventories are allocated as plant -in-service. O&M expenditures are detailed in the City’ 2020 budget, while prepayments and inventories c ome from the City’s 2017 comprehensive annual financial report. For the purpose of establishing a fair return for the City on t heir rate base, it is inappropriate to include assets that the City did not pay for. Contributions in aid of construction , net of accumulated depreciation, are subtracted from the rate base. Prior to 2008 a contract had segregated O&M payments from capita l payments. It was acknowledged in the 2008 Agreement that these payments , referred to then as “net Navy capital charges”, were simply the equivalent of a rate -funded capital payment and not a “true” contribution in aid of construction. Therefore, it was a greed in 2008 that these charges would be removed from the total value of contributions . This update continues t o use the Agreement methodology, amortizing these charges at 2.44% per year until the charges have been fully amortized. The net rate base calculation is total water plant -in-service, plus cash working capital, less accumulated depreciation and net contributions in aid of construction. Net rate base is multiplied by the agreed upon rate of return to determine the total return on investment. Exhibit 5: Classification of Water System Net Rate Base It is important to note that as a result of negotiations, the capacity portion of water net rate base is allocated to the Navy based on reserved peak demand capacity. Similar to the depreciation component, rat e base represents fix ed infrastructure required to deliver the stated capacity needs of the customer , which are not impacted by annual variations in water use . II.B.3.b Rate of Return The 2008 Agreement establishes the rate of return as the cost of debt plus a risk premium. Specific conditional tests assure that the resulting rate of return from the formula does not create or lead to unintended consequences. The current agreement maintains these conditional tests. “The rate of return allowed under this contract shall be the City’s cost of debt plus a risk premium. The rate of return will be reviewed in any cost of service study prepared by the City for its utilities throughout the life of this contract. The rate of return shall meet the following tests: % Classification 11.41%44.44%2.67%13.38%1.47%8.68%16.08%1.31%0.56% RevenueCustomerCustomer w/o Navy Meters & Services Fire Fire w/o NavyClassification of Rate Base Commodity (Average Use) Capacity (Peak Use) Capacity w/o Navy City of Bremerton October 2020 Summary of U.S. Navy Contract Negotiations for Water and Wastewater Service page 8 www.fcsgroup.com 1. It shall be the greater of: a) The City’s cost of embedded debt plus x%, or b) The City’s current Cost of borrowing plus x% 2. It shall always be greater than or equal to the rate of return for in-City retail customers (owner customers) but less than or equal to the rate of return for outside City customers. 3. It shall always be greater than or equal to zero The City’s cost of borrowing shall be the numerical (simple) average of at least three rece nt debt issues (within the previous 90 days if possible) in the marketplace for municipal entities with simi lar terms and credit ratings. The City’s “cost of embedded debt” shall be the weighted average of all non -subsidized outstanding debt for the combin e utilities. These indexes shall be submitted to the Navy for review and comment prior to use in a future COSA prepared by the City.” During the negotiation process, the risk premium was a topic of considerable discussion. This value has ranged historic ally from 3.5% to the current 2008 Agreement of 2.5%. The Navy ’s position is that they are a low-risk customer , and they proposed a lower rate during negotiations. In contrast the City believes the Navy to be a high -risk customer , with financial harm direc tly experienced by the City’s utilities from a direct loss of water revenue due to the significant reduction in water use beginning in 2012 with no explanation or notice , to the inability to collect revenue on par with increased costs due to the freezing of rate increases during contract negotiations. As a result of these negotiations, the City and Navy agreed to a 1.5% risk premium to be added to the City’s cost of debt. The City’s cost of embedded debt is 3.79%, which is greater than the cost of borro wing of 3.42%. Adding the City’s cost of debt to the 1.5% risk premium results in a total rate of return equal to 5.29%. II.C. ALLOCATION FACTORS The allocation factors used to allocate each cost category to customers under the methodology previously discussed a re detailed in the Water Technical Appendix . Allocation factors are used to allocate O&M, depreciation and net rate base to all water customers including the Navy. Allocation factors divide cost categories among customer s based on each customer’s share of a measurable cost - defining service characteristic. The following allocation factors were used to equitably distribute water costs to customers : ⚫ Commodity costs are allocated based on each customer’s share of t otal system annual water use. For the Navy, 2019 annual water use of 599,332 hundred cubic fee t (CCF) constitutes a 20.88% share of total water use. ⚫ Actual Capacity costs are allocated based on the share of each customer’s measured peak month use to the total system peak month. Navy peak month use for 2019 was identified as 1.82 million gallons per day (MGD) or 15.15% of 2019 system peak month use. The actual capacity allocation is used to allocate the capacity portion of O&M costs to the Navy. ⚫ Reserved Capacity costs are allocated based on the peak capacity reserved to deliver maximum service requirements. This allocation factor recognizes that the system is designed and sized to meet peak capacity needs that are not impacted by annual variation in use . The 2028 system peak day of 16.03 MGD is sourced from Table 2-5 of the 2012 WSP. The Navy’s stated 2028 City of Bremerton October 2020 Summary of U.S. Navy Contract Negotiations for Water and Wastewater Service page 9 www.fcsgroup.com maximum day requirements indicate a 3.85 MGD requirement or 22.58% of the system total. The reserved capacity allocation is used to allocate the capac ity portion of depreciation and rate base to the Navy. ⚫ Customer costs are allocated based on measures related to the n umber of customer accounts served by the system. Three separate customer allocation factors are recognized – “actual customer ” bases the allocation on the number of billing units or customer meters served by the system. Two other customer allocation factors – “weighted” and “meters & services ” – attempt to reflect the disproportionate costs associated with serving water users with large meters. The weighted customer factor is for accounting costs and recognizes the additional time that it may take to read a meter and process a bill for a larger, more complex customer. The meters & services allocation factor reflects the difference in costs associated with servicing, maintaining and replacing larger meter s. With only three meters, the Navy constitutes a small portion of customer costs and they are allocated 0.49% or less for each customer allocation factor . ⚫ Fire Protection costs are allocated based on the fire flow requirement for each customer or customer class. The factor considers both fire flow in gallons per minute (gpm) and duration. The Navy’s service requirements indicate a maximum requirement of 7,750 gpm for a duration of 240 minutes, representing 0.01% of total system fire requirements. ⚫ Revenue costs are allocate d based on each customer or customer group’s share of total system rate revenue. 2019 Navy billed revenue ($1,831,708) represents 15.20% of total system revenue. The classified O&M, depreciation and rate base are allocated based on the allocation factors identified above to determine the total allocated costs by customer or customer group. II.D. NAVY WATER COST OF SERVICE The Navy cost of service is calculated by bringing together the allocable O&M expenses, depreciation and return on investment. Table 2 summarizes the Navy water cost of service. Table 2 : Summary of Navy Water Cost of Service Based on the mutually agreed upon methodology, the updated Navy water cost of service to begin the new contract period is $2.19 million. The detailed exhibits can be found in the Water Technical Appendix. O&M Expenses 1,697,902$ Depreciation 271,827 Total O&M plus Depreciation 1,969,729 Allocated Rate Base 4,176,757$ % Rate of Return 5.29% Return On Investment 220,909 Total Navy Cost of Service $ 2,190,638 Cost Components Total Navy Water Costs City of Bremerton October 2020 Summary of U.S. Navy Contract Negotiations for Water and Wastewater Service page 10 www.fcsgroup.com II.E. W ATER RATES The cost of service for the Navy establishes the to tal annual revenue to be collected for water service. The revenue is collected through a rate structure composed of a fixed charge and a variable charge. The previous Agreement recovered the water cost of service based on a 30% fixed, 70% variable split. During the negotiations, the City and Navy agreed to shift more costs to the fixed component for revenue stability and to bring the water rate structure in line with the sewer rates. The agreed upon methodology collects the cost of service 50% from the fixed charge and 50% from the variable charge. The resulting rates are a fixed monthly charge of $91,277 and a variable charge of $1.83 per CCF of water use. Table 3: Summary of Navy Water Fixed and Variable Charges Fixed Monthly Charges 1,095,319$ 91,277$ Variable Charge per CCF 1,095,319 599,332 1.83$ Total $ 2,190,638 [1] Split 50% fixed charge and 50% variable charge [2] CCF = hundred cubic feet. Represents 2019 Navy usage Calculated Charge levelCalculated Water Charges Target Revenue [1] Billing Units CCF [2] City of Bremerton October 2020 Summary of U.S. Navy Contract Negotiations for Water and Wastewater Service page 11 www.fcsgroup.com Section III. WASTEWATER COS RATE STUDY The City of Bremerton provides sewage disposal and treatment to the Navy . Sewage flow volume is measure d through City of Bremerton meters located at 1 st street and 416 S. Cambrian. The Navy has updated its wastewater service requirement requests for each metering point, including: ⚫ 1st street not to exceed daily average flow of 300 gallons per minute (gpm) or 0.43 MGD and a peak discharge of 500 gpm ⚫ Cambrian not to exceed daily average flow of 1,800 gallons per minute (gpm) or 2.59 MGD and a peak discharge of 2,500 gpm The total requirements for the combined metering points are a not to exceed daily average flow of 3.02 MGD and a peak discharge of 3,000 gpm . The requirements as stated define the wastewater service requirements of the Navy and will be used to allocate costs as part of the wastewater cost of service rate study update. III.A. ASSET FUNCTIONAL ALLOCATION & CLASSIFICATION The City’s wastewater assets in service are reviewed to identify what infra structure assets are in use and relate d to providing wastewater service. The first step is to organize assets into functions of service , which is largely accomplished by a uniform system of accounts. As stated previously, the wastewater utility functions o f service include treatment, collection, pumping and general plant. Exhibit 6 summarizes the original asset cost and accumulated depreciation allocated to each function of service. Exhibit 6: Wastewater Asset Functionalization The functions of service are then allo cated to functional cost categories based on documented system requirements, including engineering criteria, (e.g. average d aily flow, peak flow) and industry standard practices based on the relationship of eac h function of asset to their use of the system. Assets are classified into cost categories that can be allocated among customers or customer groups according to known or assumed cost “causation”. The cost classification categories for the wastewater system include: ⚫ Flow costs relate to the collection of customer sewer flows to be treated at the Wastewater Treatment Plant (WWTP). ⚫ Strength costs reflect the strength of sewage processed, in terms of biochemical oxygen demand (BOD) and total suspended solids (TSS). BOD is the parameter used to c haracterize the organic strength of sewage. TSS is the parameter that measures the amount of particles suspended in water that will not pass through a filter and require treatment. Function of Service Original Cost Accumulated Depreciation Net Asset Value Collection 51,549,403$ 18,271,241$ 33,278,162$ Collection Laterals 3,018,737 1,523,219 1,495,519 Treatment 47,249,172 26,751,478 20,497,694 Pumping 25,096,890 11,458,327 13,638,563 General Plant 4,334,537 1,861,367 2,473,170 Total Assets 131,248,739$ 59,865,631$ 71,383,108$ City of Bremerton October 2020 Summary of U.S. Navy Contract Negotiations for Water and Wastewater Service page 12 www.fcsgroup.com ⚫ Customer costs are associated with establishing, maintaining, and serving wastewater customers and include administrative, billin g and customer service costs. ⚫ Direct Assignment is used to categorize assets that may be clearly identified or associated with a specific customer or group of customers. Over 1,600 system assets as of year-end 2016 are grouped by major function of service. The major functions are then classified to the major cost categories based on the approach used in the 2008 Navy Contract, updated when appropriate to adhere to current industry standard practices. Exhibit 7 summarizes the assumptions used to classify both original asset cost and accumulated depreciation . Exhibit 7: Wastewater Asset Cost Classification The approach used to assign each function of service to the cost categories is as follows: ⚫ Collection is allocated 100 percent to flow with Navy. ⚫ Collection laterals are allocated 100 percent to flow without Navy. During 2008 contract negotiations both parties agreed that the Navy does not benefit from collection laterals and should not be allo cated any of these assets. Result – no allocation to Navy ⚫ Treatment is allocated using two separate methodologies. The first, treatment (capacity) maintains the current contract classification of 50 percent treatment without Navy, 15.5 percent BOD without Navy, 15 percent TSS without Navy and a 19.5 percent direct allocation to the Navy. The direct allocation to the Navy is traced back to the 1989 Navy Cost Share of the sewer treatment plant representing the Navy’s reserved portion of WWTP capacity. This allocation is validated by the updated service requirements requested by the Navy , which total 3.02 MGD or 19.5 percent of the total WWTP West Capacity of 15.5 MGD. A second treatment allocation, treatment (a ctual), was requested by the Navy for use in allocating costs related to annual sewer flows, rather than reserved capacity. The treatment (actual) direct allocation to the Navy, 12.1 percent, is based on the share of total flow treated at the WWTP West in 2019 (4.73 MGD) constituted by the Navy’s 2019 flow (0.57 MGD). Result – 19.5% direct treatment plant allocation to the Navy for capacity related allocations, 12.1% direct treatment plant allocation to the Navy for actual flow related allocations ⚫ Pumping is allocated 100 percent to flow with Navy. The resulting total asset allocation is referred to as the “% asset classification ” and is used to classify operating costs which cannot be more specifically assigned to one or more cost categories. Collection 100.0% Collection Laterals 100.0% Treatment (Capacity)50.0%15.5%15.0%19.5% Treatment (Actual)54.6%16.9%16.4%12.1% Pumping 100.0% General Plant % Asset Classification (Capacity)60.39%20.99%0.00%5.77%0.00%5.58%7.26% % Asset Classification (Actual)60.39%22.70%0.00%6.30%0.00%6.10%4.52% As All Other Plant TSS w/o Navy Direct NavyFunctionFlow w/ Navy Flow w/o Navy BOD w/ Navy BOD w/o Navy TSS w/ Navy City of Bremerton October 2020 Summary of U.S. Navy Contract Negotiations for Water and Wastewater Service page 13 www.fcsgroup.com III.B. REVENUE REQUIR EMENT The wastewater system revenue requirement is developed using the utility basis rate -setting approach. This approach recovers applicable operating and maintenance costs, plus a capital cost recovery based on the original cost of capital investment com mitted to the customer’s service. The “capital cost recovery” includes two components: depreciation of eligible fixed asset value as useful life is consumed and a return on investment to offset debt interest costs an d provide owner equity return. III.B.1. Operating and Maintenance Wastewater system O&M is based on the 2020 detailed line item fund 4 51 Wastewater Utility expenditure budget. Expenditures are categorized based on the City’s budget departments and include: administration, sewer system, wastewater treatment plant, customer service and taxes. Similar to the classification of the City’s asset functions, common practice in the allocation of O&M is to allocate expenses to the cost category or categories that primarily drive each line item or budgetary grouping. The following summarizes the key O&M allocation assumptions: ⚫ Sewer Administration is allocated based on the “% actual” asset classification allocation. ⚫ Sewer System is allocated based on the “% actual” asset classification . ⚫ Wastewater Treatment Plant is allocated based on the “% actual” asset classification . ⚫ Electricity as 100 percent to flow with Navy. ⚫ Customer Service wages and benefits, as well as postage costs, are allocated 100 percent to customer , with all other customer service costs all ocated as “% actual” asset classification . Exhibit 8 summarizes the assumptions used to classify the wastewater utility’s operating costs. Exhibit 8: Classification of Wastewater Operating & Maintenance Costs With O&M classified into cost categories , allocation factors are applied to each cost category that will ultimately determine the Navy allocated portion of O&M expenses. It is important to note that as a result of negotiations the agreed upon allocation factor applied to the flow portion of O&M costs is based on the Navy’s actual recorded sewer flow , rather than the not to exceed average daily flow service requirement . III.B.2. Depreciation Depreciation is the recovery of the original cost of system assets on an annual basis over th e life of the assets. It is a non -cash expense intended to recognize the consumption of utility assets over their Taxes (State/City)100.00% Administration (As Plant)60.39%22.70%6.30%6.10%4.52% Sewer System (As Plant)60.39%22.70%6.30%6.10%4.52% WWTP (As Plant)60.39%22.70%6.30%6.10%4.52% Electricity 100.00% Customer Service (All Customer)100.00% Other (i.e. supplies, equipment)60.39%22.70%6.30%6.10%0.00%0.00%4.52% % Classification 43.53%14.46%0.00%4.01%0.00%3.88%1.75%29.48%2.88% Direct NavyBOD w/o Navy TSS w/ Navy TSS w/o Navy Customer RevenueClassification of O&M Flow w/ Navy Flow w/o Navy BOD w/ Navy City of Bremerton October 2020 Summary of U.S. Navy Contract Negotiations for Water and Wastewater Service page 14 www.fcsgroup.com useful lives. Depreciation is calculated using the straight -line method on the total system assets, excluding assets contributed by developers or funded by other outside sources . This method takes the value of an asset and reduces it uniformly over each period until it reaches the end of its useful life. The utility basis methodology includes depreciation expense as a source of capital funding that can partially offset the cost of system repair, replacement or principal payments on outstanding debt. Exhibit 9: Classification of Wastewater System Depreciation It is important to note that as a result of negotiations, the agreed upon allocation factor s applied to depreciation are based on the plant -in-service allocation using reserved capacity for treatment assets . The depreciation component represents fix ed infrastructure required to deliver the stated capacity needs of the customer, which are not impacted by annual variation in sewer flow . III.B.3. Return on Investment Return on investment is intended to provide a reasonable return to the City’s customers on the investment that they have made in facilities providing service. As the owner of the wastewater system, the City has raised the capital necessary to pay for the infrastructure providing service. The utility basis rate -setting approach therefore allows the City to earn compensation in the form of a return on investment charged to outside city and contract cust omers. Return for a public utility is used as a source of funds to meet outstanding debt obligations and for reinvestment in the system. The return on investment component of the cost of service is determined by multiplying the rate base allocated to ea ch customer or customer group by an agreed upon rate of return. III.B.3.a Rate Base Rate base is determined by identifying the value of system assets used by the utility in providing service , adding cash working capital and making appropriate deductions for contrib uted assets and accumulated depreciation . The detailed asset values, accumulated depreciation and contributions are based on City asset records as of year -end 2016. Cash working capital has three components, and they are allocated as described below: ⚫ One-eighth of O&M expenditures is allocated based on the overall allocation of O&M. ⚫ Prepayments are allocated based on the overall allocation of O&M. ⚫ Inventories are allocated as plant -in-service. O&M expenditures are detailed in the City’ 2020 budget, whi le prepayments and inventories come from the City’s 2017 comprehensive annual financial report. For the purpose of establishing a fair return for the City on their rate base, it is inappropriate to include assets that the City did not pay for. Contribution s in aid of construction , net of accumulated depreciation , are subtracted from the rate base. Prior to 2008 a contract had segregated O&M payments from capital payments. It was acknowledged in the 2008 Agreement that these payments, referred to in the Agreement as “net Navy capital charges”, were simply the equivalent of a rate funded capital payment and not a “true” contribution in aid of construction. Therefore, it was agreed in 2008 that these charges would be removed from the total value of contribu tions. In addition to the net Navy capital charges, the Navy also made % Classification 60.39%20.99%0.00%5.77%0.00%5.58%0.00%0.00%7.26% Classification of Depreciation Flow w/ Navy Flow w/o Navy BOD w/ Navy BOD w/o Navy TSS w/ Navy TSS w/o Navy Customer Revenue Direct Navy City of Bremerton October 2020 Summary of U.S. Navy Contract Negotiations for Water and Wastewater Service page 15 www.fcsgroup.com direct contributions for the construction of the WWTP. Because this is considered a “true” capital contribution, it is treated as a contribution in aid of construction and is directly a llocated to the Navy, therefore reducing the Navy’s allocated rate base . This update continues to use the Agreement methodology, amortizing both net Navy capital charges and the WWTP contributions at 2.56% per year until the charges and contributions have been fully amortized. The net rate base calculation is total wastewater plant -in-service, plus cash working capital, less accumulated depreciation and net contributions in aid of construction. Net rate base is multiplied by the agreed upon rate of return to determine the total return on investment. Exhibit 10: Classification of Wastewater System Net Rate Base It is important to note that as a result of negotiations, the flow portion of wastewater net rate base is allocated to the Navy based on reserved flow capacit y. Similar to the depreciation component, rate base represents fix ed infrastructure required to deliver the stated capacity needs of the customer , which are not impacted by annual variations in sewer flow . III.B.3.b Rate of Return The 2008 Agreement establishes the rate of return as the cost of debt plus a risk premium. Specific conditional tests assure that the resulting rate of return from the formula does not create or lead to unintended consequences. The current agreement maintains these conditional tests. “The rate of return allowed under this contract shall be the City’s cost of debt plus a risk premium. The rate of return will be reviewed in any cost of service study prepared by the City for its utilities throughout the life of this contract. The rate of retu rn shall meet the following tests: 1. It shall be the greater of: a) The City’s cost of embedded debt plus x%, or b) The City’s current Cost of borrowing plus x% 2. It shall always be greater than or equal to the rate of return for in -City retail customers (owner customers) but less than or equal to the rate of return for outside City customers. 3. It shall always be greater than or equal to zero The City’s cost of borrowing shall be the numerical (simple) average of at least three recent debt issues (within th e previous 90 days if possible) in the marketplace for municipal entities with simi lar terms and credit ratings. The City’s “cost of embedded debt” shall be the weighted average of all non -subsidized outstanding debt for the combine ut ilities. These indexes shall be submitted to the Navy for review and comment prior to use in a future COSA prepared by the City.” During the negotiation process, the risk premium was a topic of considerable discussion. This value has ranged historically from 3.5% to the cur rent 2008 Agreement of 2.5%. The Navy’s position is that they are a low -risk customer, and they proposed a lower rate during negotiations. In contrast the City believes the Navy to be a high -risk customer, with financial harm directly experienced by the City’s utilities from a direct loss of water revenue due to the significant reduction in water use % Classification 68.94%17.41%0.00%4.71%0.00%4.56%0.03%0.48%3.85% RevenueTSS w/ Navy TSS w/o Navy Customer Direct NavyBOD w/o NavyClassification of Rate Base Flow w/ Navy Flow w/o Navy BOD w/ Navy City of Bremerton October 2020 Summary of U.S. Navy Contract Negotiations for Water and Wastewater Service page 16 www.fcsgroup.com beginning in 2012 with no explanation or notice, and the inability to collect revenue on par with increased costs due to the freezing of rate increases during contract negotiations. As a result of these negotiations, the City and Navy agreed to a 1.5% risk premium to be added to the City’s cost of debt. The City’s cost of embedded debt is 3.79%, which is greater than the cost of borrowing of 3.42%. Adding the City’s cost of debt to the 1.5% risk premium results in a total rate of return equal to 5.29%. III.C. ALLOCATION FACTORS The allocation factors used to allocate costs to customers under the methodology previously discussed are detailed in the Wastewate r Technical Appendix. Allocation factors are used to allocate O&M, depreciation and net rate base to all wastewater customers including the Navy. Allocation factors divide cost categories among customers based on each customer’s share of a measurable cost - defining service characteristic. The following allocation factors were used to equitably distribute wastewater costs to customers: ⚫ Actual Flow costs are allocated based on each customer’s share of total wastewater treatment plant influent flow, including i nflow & infiltration (I&I). No I&I is assigned to the Navy. 2019 Navy annual sewer flow of 0.57 MGD constitutes a 12.13% share of the 4.73 MGD of influent flow at the WWTP West for 2019. ⚫ Reserved Capacity Flow costs are allocated based on the peak flow capacity reserved to deliver maximum service requirements. This allocation factor recognizes that the system is designed and sized to meet peak capacity needs that are not impacted by annual variation in flow . Based on Table 1 -1 of the 2014 Wastewater Compreh ensive Plan Update, the WWTP West has a permit limit maximum month daily average flow capacity of 15.5 MGD . The Navy requested service requirements indicate a maximum daily average flow of 3.02 MGD or 19.48% of WWTP West capacity. ⚫ Strength costs are allocated based on estimated BOD and TSS loadings for each customer. The Navy does not receive a share of allocated BOD and TSS costs. Rather, the Navy receives a direct allocation of the total treatment plant representing the Navy’s reserved plant capacit y per contract, which considers strength as well as flow. ⚫ Customer costs are allocated based on measures related to the number of customer accounts served by the system . Two separate customer allocation factors are recognized – “actual customer ” bases the allocation on the number of billing units while “customer weighted ” attempts to reflect the disproportionate costs associated with serving larger w astewater users. The weighted customer factor is used for accounting costs and recognizes the additional time that it may take to read a meter and process a bill for a larger, more complex custome r. The Navy constitutes a small portion of customer costs and they are allocated 0.39% or less for each customer allocation factor. ⚫ Revenue costs are allocated based on each customer or customer group’s share of total system rate revenue. 2019 Navy billed revenue ($2,167,003) represents 14.47% of total system revenue. ⚫ Direct Assignment costs are costs that may be clearly identified or associated with a specific customer or group of customers. As stated previously, 12.13% of flow-related O&M costs and 19.50% of flow-related depreciation and rate base is allocated directly to the Navy. The classified O&M, depreciation and rate base is allocated based on the allocati on factors identified above to determine the total allocated costs by customer or customer group. City of Bremerton October 2020 Summary of U.S. Navy Contract Negotiations for Water and Wastewater Service page 17 www.fcsgroup.com III.D. NAVY WASTEWATER COST OF SERVICE The Navy cost of service is calculated by bringing together the allocable O&M expenses, depreciation and return on investme nt. Table 4 summarizes the Navy wastewater cost of service. Table 4: Summary of Navy Wastewater Cost of Service Based on the mutually agreed upon methodology, the updated Navy w astewater cost of service to begin the new contract period is $2.6 million. The detailed exhibits can be found in the W astewater Technical Appendix. III.E. W ASTEWATER RATES The cost of service for the Navy establishes the total annual revenue to be collected for wastewater service. The revenue is collected through a rate structure comp osed of a fixed charge and variable charge. Consistent with the 2008 Agreement, the wastewater cost of service is collected 50% from the fixed charge and 50% from the variable charge. The resulting rates are a fixed monthly charge of $109,695 and a variable charge of $4.70 per CCF of metered flow. Table 5: Summary of Navy Wastewater Fixed and Variable Charges O&M Expenses 1,526,187$ Depreciation 702,856 Total O&M plus Depreciation 2,229,044 Allocated Rate Base 7,631,732$ % Rate of Return 5.29% Return On Investment 403,643 Total Navy Cost of Service $ 2,632,687 Cost Components Total Navy Wastewater Costs Fixed Monthly Charges 1,316,343$ 109,695$ Variable Charge per CCF 1,316,343 280,068 4.70$ Total $ 2,632,687 [1] Split 50% fixed charge and 50% variable charge [2] CCF = hundred cubic feet. Represents 2019 billed flow Calculated Charge level Calculated Wastewater Charges Target Revenue [1] Billing Units CCF [2] City of Bremerton October 2020 Summary of U.S. Navy Contract Negotiations for Water and Wastewater Service page 18 www.fcsgroup.com Section IV. OTHER KEY ISSUES In addition to agreeing upon the overall amount of revenue to collect from the Navy for water and wastewater service, several other key issues were discussed during the negotiation process . Each issue was either satisfactorily a greed upon by the parties or, if necessary, both sides outlined additional attention/study that will be required to resolve the issue . This section will discuss some of these key issues raised during the negotiations. IV.A. SALINITY SURCHARGE The City would like to invoke CFR 552.243-71 "Equitable Adjustments" as part of 48 CFR 52.243-5 "Changes and Changed Conditions" in order to recover the ongoing cost of influent sewage salinity issues as it is now a problem for the City that has real financial implications. During negotiations, there w as a commitment by both parties to complete studies, however, there has been no set time schedule established and it remains to be seen when a satisfactory resolution will be reached. Meanwhile, the City experiences ongoing service issues and ultimately incurs costs. Both parties have agreed that sewage salinity is an issue and that the issue will be treated independently from the contract negotiations. Contract language shall be included to allow for the possibility of a salinity surcharge in the future. IV.B. INITIATION OF NEGOTIATIONS Due to the time it has taken to resolve current negotiations and the four -year duration of negotiations for the 2008 contract, both parties agree that the contract documentation should memorialize that negotiations be initiated earlier (2 years prior to contract termination). This will minimize the potential for a gap between the termination of the new contact and the execution of the next contract. IV.C. FUTURE ADJUSTMENT FOR WATER AND W ASTEWATER RATES The 2008 Agreement Attach ment J.2. prescribed how future rate adjustments would be applied to the Navy. It is proposed that this process continue in the future , and the key language to be continued is as follows: A. RATIONALE: (1) The parties have agreed to an approach for annually escal ating or reducing rates that tie to city of Bremerton rate changes. This method ensures an equitable treatment for all customers of the City and provides transparency of costs to the Navy. (2) The parties have agreed that any future rate changes applied to th e Navy accounts for contract line items 0001 (water) and 0002 (wastewater) shall be tied directly to the weighted City of Bremerton October 2020 Summary of U.S. Navy Contract Negotiations for Water and Wastewater Service page 19 www.fcsgroup.com average of rate increases applied to all Non -Navy customers for water and/or wastewater, respectively. This approach guarantees that the Navy’s rates will adjust as the City’s rates adjust as a whole. IV.D. RATE ADJUSTMENTS BEYOND CONTRACT TERM The Navy has exercised its unilateral option to continue service beyond the term of the contract. However, the City is required to freeze any rate adjustments once the contract term ends. The rate freeze is of sole benefit to the Navy and results in revenues from the Navy that do not keep pace with the cost of service. The City’s utilities are functionally not -for-profit businesses and so the net effect of the rate freeze is that as the City raises retail rates, the other city ratepayers (the residents and businesses of Bremerton) will increasingly subsidize the Navy for its service. The parties agree to invoke and include CFR 552.243 -71 Section g.2 to memorialize in the contract documentation an agreement in principle, that rate increases should apply to the Navy’s rates during any gap between the termination of the new contract and t he execution of the following contract as this qualifies as performance beyond the completion date. IV.E. LUMP SUM PAYMENT The current contract rate freeze upon the contract term ending has resulted in a shortfall of water and wastewater revenue for the City. During this time, continued water and wastewater service was provided by the City to the Navy , with rates charged to th e Navy frozen at 2017 levels. The City has calculated the revenue shortfall consistent with the methodology outlined in Attachment J.2 and J.3 of the 2008 contract as if the contract term had not expired in July 2018. This cumulative shortfall from the rate freeze is estimated to be nearly $1 million dollars through 2020. Both parties agree that the City will submit a claim for consideration separate from the contract negotiations. IV.F. RE-OPENER CLAUSE The City acknowledges that FAR 52.241 -8 allows either party to request a change in conditions of service , including a rate change. In an effort to remain transparent, the City would like to highlight that in addition to any rate changes built into the contract such as Attachment J.2 of the 2008 contact, there will likely be a need to renegotiate the rates and cost of service under FAR 52.241 -8 when the State of Washington Department of Ecology enacts new discharge limitation permit requirements for enhanced treatment to reduce nutrient discharges to the Puget Sound. Both parties agree to memorialize in the contact documentation that the City expects a need to re - open negotiations in the future to address these or other new permit requirements. City of Bremerton October 2020 Summary of U.S. Navy Contract Negotiations for Water and Wastewater Service page 20 TECHNICAL APPENDIX – WATER City of Bremerton Navy Water Rate Calculation A-1 Allocation of Fixed Asset Original Cost and Accumulated Depreciation Commodity Capacity Capacity w/o Navy Actual Customer Actual Customer w/o Navy Customer Weighted Meters & Services Fire Fire w/o Navy Revenue As All Others Source of Supply 7,648,781$ 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00% Treatment 4,622,460 100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00% Storage 6,925,417 0.00%97.00%0.00%0.00%0.00%0.00%0.00%3.00%0.00%0.00%0.00%100.00% Transmission 2,217,633 0.00%100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00% Pumping 4,872,084 0.00%100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00% Distribution Mains 2"-6" 2 5,051,160 0.00%0.00%49.00%0.00%27.00%0.00%0.00%0.00%24.00%0.00%0.00%100.00% Mains 8"-12"21,798,963 0.00%49.00%0.00%27.00%0.00%0.00%0.00%24.00%0.00%0.00%0.00%100.00% Mains 16" - 36"12,319,647 0.00%49.00%0.00%27.00%0.00%0.00%0.00%24.00%0.00%0.00%0.00%100.00% Hydrants 2,689,288 0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%0.00%0.00%0.00%100.00% Services 3,909,232 0.00%0.00%0.00%0.00%0.00%0.00%100.00%0.00%0.00%0.00%0.00%100.00% Fire Services 382,021 0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%0.00%0.00%0.00%100.00% Meters 3,008,649 0.00%0.00%0.00%0.00%0.00%0.00%100.00%0.00%0.00%0.00%0.00%100.00% General Plant 3 18,996,429 0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%100.00% Total Utility Plant 94,441,765$ 7,834,948$ 34,961,784$ 2,475,068$ 9,212,025$ 1,363,813$ -$ 6,917,881$ 11,467,538$ 1,212,278$ -$ 18,996,429$ 94,441,765$ Functions of Service 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%100.00% Allocation of "As All Others"1,972,767$ 8,803,050$ 623,199$ 2,319,502$ 343,395$ -$ 1,741,858$ 2,887,419$ 305,240$ -$ (18,996,429)$ -$ 94,441,765$ 9,807,715$ 43,764,833$ 3,098,267$ 11,531,526$ 1,707,208$ -$ 8,659,739$ 14,354,957$ 1,517,519$ -$ -$ 94,441,765$ 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00% Less: Accumulated Depreciation 1 Source of Supply 4,337,991$ 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00% Treatment 939,089 100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00% Storage 3,736,797 0.00%97.00%0.00%0.00%0.00%0.00%0.00%3.00%0.00%0.00%0.00% Transmission 710,388 0.00%100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00% Pumping 2,233,044 0.00%100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00% Distribution Mains 2"-6"2,542,144 0.00%0.00%49.00%0.00%27.00%0.00%0.00%0.00%24.00%0.00%0.00% Mains 8"-12"7,118,687 0.00%49.00%0.00%27.00%0.00%0.00%0.00%24.00%0.00%0.00%0.00% Mains 16" - 36"4,350,827 0.00%49.00%0.00%27.00%0.00%0.00%0.00%24.00%0.00%0.00%0.00% Hydrants 1,036,451 0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%0.00%0.00%0.00% Services 1,893,102 0.00%0.00%0.00%0.00%0.00%0.00%100.00%0.00%0.00%0.00%0.00% Fire Services 175,587 0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%0.00%0.00%0.00% Meters 1,031,402 0.00%0.00%0.00%0.00%0.00%0.00%100.00%0.00%0.00%0.00%0.00% General Plant 8,497,641 9.17%48.84%4.14%10.29%2.28%0.00%9.71%13.54%2.03%0.00%0.00% Total Accumulated Depreciation 38,603,151$ 3,540,383$ 18,854,663$ 1,597,251$ 3,970,869$ 880,118$ -$ 3,749,981$ 5,227,559$ 782,327$ -$ -$ 55,838,614$ 6,267,331$ 24,910,170$ 1,501,017$ 7,560,657$ 827,091$ -$ 4,909,758$ 9,127,398$ 735,192$ -$ -$ 11.22%44.61%2.69%13.54%1.48%0.00%8.79%16.35%1.32%0.00%0.00% 1 Original cost of assets and accumulated depreciation from City fixed asset schedule as of 12/31/2016 2 The City and Navy agreed that the Navy does not benefit from 2"-6" water mains and should not be allocated any of these facilities 3 General plant is allocated as all other plant in service Net Plant in Service Plant in Service 1 Total Plant in Service TotalTotal Functions of Service Prepared by FCS GROUP (425) 867-1802 Technical Appendix - Water Rate Calculation 1 City of Bremerton Navy Water Rate Calculation A-2 Allocation of Source of Supply Assets Average Day 1 5.86 mgd Peak Day 2 14.10 mgd Commodity 42% Capacity 58% 1 2017 recorded average day demand (ADD) 2 2017 recorded maximum day demand (MDD) A-3 Allocation of Storage Assets Fire Flow Requirements 1 240 minutes 4,000 gpm 0.96 MG Storage Capacity 2 33.20 MG Public Fire Protection 3% Capacity 97% 1 Table 8-5 of 2012 Water System Plan - total system fire flow requirement 2 Section 1.5.3 of 2012 Water System Plan - total combined storage capacity of Main System and West 517 Zone System Allocation of Source of Supply Demand (mgd) MGAllocation of Storage Duration Gallons per Minute Prepared by FCS GROUP (425) 867-1802 Technical Appendix - Water Rate Calculation 2 City of Bremerton Navy Water Rate Calculation A-4 Allocation of Distribution Mains <=2 in 68,291 LF 3,850 LF 72,141 LF 67$ 4,833,447$ 3-in 10,139 LF 0 LF 10,139 LF 101 1,018,970 4-in 132,203 LF 2,316 LF 134,519 LF 134 18,025,546 6-in 421,300 LF 4,580 LF 425,880 LF 201 85,601,880 8-in 519,998 LF 31,336 LF 551,334 LF 268 147,757,512 10-in 43,276 LF 3,536 LF 46,812 LF 335 15,682,020 12-in 185,917 LF 13,525 LF 199,442 LF 402 80,175,684 Total Distribution Mains 1,381,124 LF 59,143 LF 1,440,267 LF 353,095,059$ Customer 5 2-in replacement cost of Distribution system 96,497,889$ 27.0% Capacity 6 Cost of 6-in and smaller pipe 109,479,843$ 49.0% Cost of 8-in and larger pipe at 6-in cost 160,315,188$ Fire Protection 7 1 - Commodity and Capacity share 24.0% 1 Mains larger than 12-in are considered Transmission only, and their costs are allocated solely to the Transmission function 2 Table 5-4 of 2012 Water System Plan - City of Bremerton Main System Pipe Inventory 3 Table 5-5 of 2012 Water System Plan - City of Bremerton West 517 Zone System Pipe Inventory 4 City Engineer's estimates 5 Customer is allocated the share of total Distribution replacement costs made up by the cost of replacing the entire system with 2-in pipe, recognizing that the minimum size required to provide average demand is 2-in 6 Capacity is allocated the total share of Distribution replacement costs if all 8-in and larger pipe was replaced with 6-in pipe, recognizing that 8-in and larger pipe has been upsized to meet fire flow requirements 7 Fire Protection is allocated the remaining cost share of the Distribution system Length (West 517 Zone System) 3 Replacement Cost per LF 4 Replacement Cost (Total System) Total SystemAllocation of Distribution Mains 1 Length (Main System) 2 Prepared by FCS GROUP (425) 867-1802 Technical Appendix - Water Rate Calculation 3 City of Bremerton Navy Water Rate Calculation A-5 Allocation of Operating Expenses and Depreciation Commodity Capacity Capacity w/o Navy Actual Customer Actual Customer w/o Navy Customer Weighted Meters & Services Fire Fire w/o Navy Revenue As All Others Taxes 3 State Taxes 669,300$ 0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%0.00%100.00%All to Revenue City Taxes 2,394,883 0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%0.00%100.00%All to Revenue Administration Salaries & Wages Regular 183,900$ 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Overtime pay 500 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Personnel Benefits 46,540 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Medical & Dental Benefits 25,500 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Office & Operating Supply 25,000 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Fuel Consumed 725 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Small tools, EQ & Furniture 5,000 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Computer Related Items 2,000 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Food & Beverage 500 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Professional Services Ext 85,000 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Other Services 250 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Telecommunications 200 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Telecommunications IFD 1,670 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Postage 1,000 0.00%0.00%0.00%100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%All Actual Customer Travel 5,000 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Training 4,500 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Advertising 1,000 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Equipment Rential 2,000 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Information Tech - IFD 22,631 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Equipment Repair - IFD 8,996 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Miscellaneous 5,000 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Dues & Subscriptions 2,000 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Water Resources Salaries & Wages Regular 1,002,827$ 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Salaries & Wages Extra Help 10,500 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Stand By 34,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Overtime Pay 40,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Personnel Benefits 264,974 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Medical & Dental Benefits 184,710 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Office & Operating Supply 250,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Utility Inventory 3,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Fuel Consumed 16,656 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Items Purchased for Inventory 2,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Small Tools, EQ & Furniture 50,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Computer Related Items 10,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Food & Beverage 200 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Professional Services Ext 150,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Professional Services IFD 7,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Other Services 15,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Intergovernmental Service 40,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Telecommunications 15,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Telecommunications IFD 3,674 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Postage 3,500 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Travel 5,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Training 10,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Equipment Rental 3,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Natural Gas 2,000 100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%All to Commodity Electricity 350,000 100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%All to Commodity Water / Sewer / Stormwater 1,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Information Tech - IFD 57,320 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Equipment Repair & Maint 50,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Equipment Repair - IFD 41,801 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Other Improvements 5,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Structures & Grounds 60,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Miscellaneous 5,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Dues & Subscriptions 5,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Allocation Basis 2Operating Expenses 1 Total Total Functions of Service Prepared by FCS GROUP (425) 867-1802 Technical Appendix - Water Rate Calculation 4 City of Bremerton Navy Water Rate Calculation A-5 Allocation of Operating Expenses and Depreciation Commodity Capacity Capacity w/o Navy Actual Customer Actual Customer w/o Navy Customer Weighted Meters & Services Fire Fire w/o Navy Revenue As All Others Allocation Basis 2Operating Expenses 1 Total Total Functions of Service Water Distribution Salaries & Wages Regular 1,360,168$ 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Salaries & Wages Extra Help 84,000 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Stand By 27,000 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Overtime Pay 20,000 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Personnel Benefits 368,974 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Medical & Dental Benefits 309,184 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Office & Operating Supply 100,000 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Utility Inventory (80,000) 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Fuel Consumed 62,102 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Items Purchased For Inventory 180,000 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Small Tools, EQ & Furn 25,000 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Computer Related Items 6,000 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Professional Services Ext 6,000 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Professional Services IFD 1,130,989 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Other Services 3,000 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Intergovernmental Services 630 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Telecommunications 18,000 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Telecommunications IFD 1,002 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Travel 4,000 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Training 5,000 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Equipment Rental 5,000 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Equipment - Interfund 355,597 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Interfund Insurance Prem 156,777 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Natural Gas 1,000 100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%All to Commodity Electricity 15,000 100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%All to Commodity Water / Sewer / Stormwater 800 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Garbage / Waste Disposal 2,000 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Information Tech - IFD 103,167 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Equipment Repair & Maint 7,500 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Equipment Repair - IFD 113,903 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Other Improvements 75,000 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Structures & Grounds 170,000 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Miscellaneous 5,000 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Dues & Subscriptions 33,400 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Forestry Salaries & Wages Regular 351,400$ 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Salaries & Wages Ex Help 28,600 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Overtime Pay 65,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Personnel Benefits 94,300 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Medical & Dental Benefits 87,400 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Office & Operating Supply 40,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Utility Inventory 500 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Fuel Consumed 14,495 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Items Purch For Inventory 1,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Small Tools, Eq & Furn 10,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Computer Related Items 5,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Professional Services Ext 100,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Professional Services IFD 5,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Other Services 290,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Intergovernmental Services 10,500 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Telecommunications 4,500 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Telecommunications Ifd 835 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Postage 100 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Travel 3,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Training 20,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Equipment Rental 6,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Equipment - Interfund 50,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Electricity 2,000 100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%All to Commodity Water/Sewer/Stormwater 1,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Garbage/Waste Disposal 1,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Information Tech− Ifd 15,325 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Equipment Repair & Maint 10,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Equipment Repair − Ifd 56,319 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Structures & Grounds 275,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Miscellaneous 10,000 42.00%58.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Source of Supply Prepared by FCS GROUP (425) 867-1802 Technical Appendix - Water Rate Calculation 5 City of Bremerton Navy Water Rate Calculation A-5 Allocation of Operating Expenses and Depreciation Commodity Capacity Capacity w/o Navy Actual Customer Actual Customer w/o Navy Customer Weighted Meters & Services Fire Fire w/o Navy Revenue As All Others Allocation Basis 2Operating Expenses 1 Total Total Functions of Service Water Customer Service Salaries & Wages Regular 179,800$ 0.00%0.00%0.00%100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%All to Actual Customer Overtime Pay 10,000 0.00%0.00%0.00%100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%All to Actual Customer Personnel Benefits 47,100 0.00%0.00%0.00%100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%All to Actual Customer Medical & Dental Benefits 31,500 0.00%0.00%0.00%100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%All to Actual Customer Office & Operating Supply 25,000 0.00%0.00%0.00%100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%All to Actual Customer Small Tools, Eq & Furn 500 0.00%0.00%0.00%0.00%0.00%0.00%100.00%0.00%0.00%0.00%0.00%100.00%All to Meters annd Services Computer Related Items 1,500 0.00%0.00%0.00%100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%All to Actual Customer Other Services 12,000 0.00%0.00%0.00%100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%All to Actual Customer Postage 50,000 0.00%0.00%0.00%100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%All to Actual Customer Travel 1,500 0.00%0.00%0.00%100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%All to Actual Customer Training 3,000 0.00%0.00%0.00%100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%All to Actual Customer Equipment Rental 750 0.00%0.00%0.00%0.00%0.00%100.00%0.00%0.00%0.00%0.00%0.00%100.00%All to Customer Weighted Information Tech− Ifd 11,307 0.00%0.00%0.00%100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%All to Actual Customer Miscellaneous 1,000 0.00%0.00%0.00%100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%All to Actual Customer Depreciation Expense 4 2,143,774$ 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Total Operating Expenses 14,943,455$ 2,759,945$ 5,614,242$ 237,217$ 1,257,612$ 130,711$ 750$ 663,528$ 1,099,079$ 116,188$ 3,064,183$ -$ 14,943,455$ Functions of Service 18.47%37.57%1.59%8.42%0.87%0.01%4.44%7.35%0.78%20.51%100.00% Allocation of "As All Others"-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 14,943,455$ 2,759,945$ 5,614,242$ 237,217$ 1,257,612$ 130,711$ 750$ 663,528$ 1,099,079$ 116,188$ 3,064,183$ -$ 14,943,455$ 100.00%18.47%37.57%1.59%8.42%0.87%0.01%4.44%7.35%0.78%20.51%0.00%100.00% 1 Operating expenses sourced from detailed 2020 Water Expenditure Budget 2 Operating expenses allocated based on the utility function(s) most likely driving that cost 3 Taxes allocated based on 2019 actual water revenue 4 2017 Depreciation Expense Total Operating Expenses Prepared by FCS GROUP (425) 867-1802 Technical Appendix - Water Rate Calculation 6 City of Bremerton Navy Water Rate Calculation A-6 Calculation of Net Contributions in aid of Construction Pre-2004 1 18,626,794$ 11,750,269$ -$ -$ 2004 2,096,462 1,551,382 - - 2005 - - 190,813 145,018 2006 176,913 137,992 189,192 147,570 2007 961,302 769,042 67,659 54,127 2008 4,114,136 3,373,592 - - 2009 639,690 537,339 29,114 24,456 2010 126,778 109,029 198,010 170,289 2011 776,669 683,469 - - 2012 647,699 582,929 6,210,419 5,589,377 2013 356,678 328,143 (9,779) (8,997) 2014 571,154 536,885 - - 2015 167,800 161,088 17,869 17,154 2016 163,495 160,225 - - 2017 550,436 550,436 - - Total 29,976,006$ 21,231,820$ 6,893,297$ 6,138,994$ 1 Pre-2004 contributions depreciated equal to percentage of total distribution system depreciated 2 Other contributions include grants and loan forgiveness A-7 Calculation of Net Navy Capital Charges Net Navy capital charges 1996 5,091,931$ 2,609,105$ 2,482,826$ Total 5,091,931$ 2,609,105$ 2,482,826$ 1 Depreciated by 2.44% of original cost per year based on 2008 Agreement methodology System Acceptances Other Contributions 2 Original Cost Net Value Net ValueTotal Depreciation 1 Original Contract AmountDescriptionYear Original Cost Net ValueYear Prepared by FCS GROUP (425) 867-1802 Technical Appendix - Water Rate Calculation 7 City of Bremerton Navy Water Rate Calculation A-8 Allocation of Net Rate Base Commodity Capacity Capacity w/o Navy Actual Customer Actual Customer w/o Navy Customer Weighted Meters & Services Fire Fire w/o Navy Revenue As All Others Net Plant in Service 55,838,614$ 6,267,331$ 24,910,170$ 1,501,017$ 7,560,657$ 827,091$ -$ 4,909,758$ 9,127,398$ 735,192$ -$ -$ Plus: Cash Working Capital 1/8 O&M Expense 1,599,960$ 18.47%37.57%1.59%8.42%0.87%0.01%4.44%7.35%0.78%20.51%0.00%100.00%As O&M Expenses Prepayments - 18.47%37.57%1.59%8.42%0.87%0.01%4.44%7.35%0.78%20.51%0.00%100.00%As O&M Expenses Inventories (materials and supplies) 1 733,619 10.38%46.34%3.28%12.21%1.81%0.00%9.17%15.20%1.61%0.00%0.00%100.00%As Plant in Service Total Cash Working Capital 2,333,579$ 371,687$ 941,067$ 49,465$ 224,226$ 27,256$ 80$ 138,311$ 229,184$ 24,228$ 328,075$ -$ Less: Net Contributions in Aid of Construction 2 27,370,814$ 0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%100.00%As All Others Plus: Net Navy Capital Charges 3 (2,482,826) 0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%100.00%As All Others Net Total Contributions 24,887,988$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 24,887,988$ Total Net Plant in Service 6,639,018$ 25,851,237$ 1,550,482$ 7,784,883$ 854,347$ 80$ 5,048,069$ 9,356,583$ 759,420$ 328,075$ (24,887,988)$ Functions of Service 11.41%44.44%2.67%13.38%1.47%0.00%8.68%16.08%1.31%0.56% Allocation of "As All Others"(2,840,392)$ (11,060,014)$ (663,347)$ (3,330,630)$ (365,518)$ (34)$ (2,159,731)$ (4,003,056)$ (324,905)$ (140,361)$ 24,887,988$ 33,284,205$ 3,798,626$ 14,791,222$ 887,135$ 4,454,253$ 488,829$ 46$ 2,888,338$ 5,353,527$ 434,515$ 187,714$ -$ 11.41%44.44%2.67%13.38%1.47%0.00%8.68%16.08%1.31%0.56%0.00% 1 2018 Comprehensive Annual Financial Report 2 Net book value of contributions in aid of construction is deducted from rate base 3 Net navy capital charges are deducted from contributions in aid to reflect that this capital payment was to compensate the City for capital costs, is not a "true" capital contribution and should not be used to reduce rate base Net Rate Base Net Rate Base Total Allocation BasisTotal Functions of Service Prepared by FCS GROUP (425) 867-1802 Technical Appendix - Water Rate Calculation 8 City of Bremerton Navy Water Rate Calculation A-9 Allocation of Commodity Costs to Customers Losses 2 8.30% Retail Inside 1,499,007 ccf 124,389 ccf 1,623,396 ccf 52.23% Retail Outside 771,846 ccf 64,048 ccf 835,894 ccf 26.89% PSNS 599,332 ccf 49,733 ccf 649,065 ccf 20.88% Firelines 0 ccf 0 ccf 0.00% Total 2,870,185 ccf 238,171 ccf 3,108,356 ccf 100.00% 1 Class use provided by City for calendar year 2019 3,108,356 ccf 2017 Actual Production 2 Losses calculated to reach 2017 actual production A-10 Allocations of Capacity Costs to Customers Used to Allocate O&M Retail Inside 3.07 mgd 6.57 mgd 8.22 mgd 54.73%8.22 mgd 64.42% Retail Outside 1.58 mgd 2.79 mgd 3.49 mgd 23.26%3.49 mgd 27.38% PSNS 1.23 mgd 1.82 mgd 2.27 mgd 15.15%0.00% Firelines 3 6.86%8.19% Total 5.88 mgd 11.17 mgd 13.99 mgd 100.00%11.72 mgd 100.00% 1 Class peak month water use 13.99 mgd 2019 Comp Plan Max Day 2 Peak day use estimated based on share of peak month 3 Firelines allocated share of capacity costs based on system fire flow requirement of 4000 gal/min x 240 min Used to Allocate Rate Base and Depreciation Retail Inside 6.57 mgd 8.55 mgd 50.13%8.55 mgd 64.64% Retail Outside 2.79 mgd 3.63 mgd 21.30%3.63 mgd 27.47% PSNS 3.85 mgd 22.58%0.00% Firelines 2 5.99%7.88% Total 16.03 mgd 100.00%12.18 mgd 100.00% 1 Class peak month water use 16.03 mgd 2028 Comp Plan Max Day 2 Firelines allocated share of capacity costs based on system fire flow requirement of 4000 gal/min x 240 min 3 Max day demand based on Navy requirements, system peak day from Table 2-5 of 2012 Bremerton Water System Plan %Peak Day w/o Navy Peak Day w/o Navy %% Allocation of Commodity Costs Allocated Production % Allocation of Capacity Costs 2019 Peak Month Peak Day Use 2 %Peak Month Use 1 Average Day Use Allocation of Capacity Costs Reserved Capacity Peak Month Use 1 Peak Day Use 3 Total Usage 1 Prepared by FCS GROUP (425) 867-1802 Technical Appendix - Water Rate Calculation 9 City of Bremerton Navy Water Rate Calculation A-11 Allocations of Customer Costs to Customers Allocation Billing Units 1 Retail Inside 11,981 63.68%11,981 63.69% Retail Outside 6,466 34.36%6,466 34.37% PSNS 3 0.02%0.00% Firelines 366 1.94%366 1.94% Total 18,816 100.00%18,813 100.00% 1 Billing units provided by City as of 12/31/2017 Allocation Billing Units Retail Inside 11,981 1.0 11,981 64.05% Retail Outside 6,466 1.0 6,466 34.57% PSNS 3 25.0 75 0.40% Firelines 366 0.5 183 0.98% Total 18,816 18,705 100.00% 1 Weighting factors consistent with previous Agreement Allocation Billing Units Retail Inside 11,981 100$ 1,198,117$ 64.63% Retail Outside 6,466 100 646,608 34.88% PSNS 3 3,000 9,000 0.49% Firelines 366 - 0.00% Total 18,816 1,853,725 100.00% 1 M&S costs consistent with previous Agreement Allocation of Meters & Services Costs Meter Cost 1 Meters & Services % % Allocation of Customer Costs - Actual %Customer w/o Navy % Allocation of Customer Costs - Weighted Weighting Factor 1 Weighted Customer Prepared by FCS GROUP (425) 867-1802 Technical Appendix - Water Rate Calculation 10 City of Bremerton Navy Water Rate Calculation A-12 Allocation of Fire Protection Costs to Customers Allocation Billing Units Retail Inside 11,981 4,000 gpm 240 min 11,501,923 64.94%11,501,923 64.95% Retail Outside 6,466 4,000 gpm 240 min 6,207,440 35.05%6,207,440 35.05% PSNS 3 2,583 gpm 240 min 1,860 0.01%0.00% Firelines 366 - 0.00%0.00% Total 18,816 17,711,223 100.00%17,709,363 100.00% 1 Retail fire flow based on highest requirement for any zone, Navy fire flow based on highest requirement for any building A-13 Allocation of Revenue Costs to Customers Allocation Revenue 1 Retail Inside 5,656,643$ 46.94%5,656,643$ 55.35% Retail Outside 4,175,667 34.65%4,175,667 40.86% PSNS 1,831,708 15.20%0.00% Firelines 387,033 3.21%387,033 3.79% Total 12,051,052$ 100.00%10,219,344$ 100.00% 1 2019 actual billed revenue by class Fire Flow Requirement w/o Navy %% Allocation of Revenue Related Costs %Revenue Without Navy % Allocation of Fire Protection Costs Fire Flow 1 Duration 1 Fire Flow Requirement (kgal) Prepared by FCS GROUP (425) 867-1802 Technical Appendix - Water Rate Calculation 11 City of Bremerton Navy Water Rate Calculation A-14 Summary of O&M, Depreciation and Rate Base Allocations to Customers Commodity Capacity Capacity w/o Navy Actual Customer Actual Customer w/o Navy Customer Weighted Meters & Services Fire Fire w/o Navy Revenue Retail Inside 52.23%54.73%64.42%63.68%63.69%64.05%64.63%64.94%64.95%46.94% Retail Outside 26.89%23.26%27.38%34.36%34.37%34.57%34.88%35.05%35.05%34.65% PSNS 20.88%15.15%0.00%0.02%0.00%0.40%0.49%0.01%0.00%15.20% Firelines 0.00%6.86%8.19%1.94%1.94%0.98%0.00%0.00%0.00%3.21% Total 100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00% Commodity Capacity Capacity w/o Navy Actual Customer Actual Customer w/o Navy Customer Weighted Meters & Services Fire Fire w/o Navy Revenue Functionalized Operating Expenses 12,799,681$ 2,537,316$ 4,620,805$ 166,888$ 995,853$ 91,959$ 750$ 466,957$ 773,230$ 81,741$ 3,064,183$ Retail Inside 6,950,203$ 1,325,160$ 2,529,025$ 107,516$ 634,116$ 58,565$ 480$ 301,808$ 502,146$ 53,089$ 1,438,297$ Retail Outside 3,701,261 682,331 1,074,874 45,696 342,224 31,607 259 162,882 271,002 28,652 1,061,734 PSNS 1,697,902 529,825 699,824 - 159 - 3 2,267 81 - 465,743 Firelines 450,315 - 317,082 13,676 19,353 1,787 7 - - - 98,410 Total 12,799,681$ 2,537,316$ 4,620,805$ 166,888$ 995,853$ 91,959$ 750$ 466,957$ 773,230$ 81,741$ 3,064,183$ Commodity Capacity Capacity w/o Navy Actual Customer Actual Customer w/o Navy Customer Weighted Meters & Services Fire Fire w/o Navy Revenue Retail Inside 52.23%50.13%64.64%63.68%63.69%64.05%64.63%64.94%64.95%46.94% Retail Outside 26.89%21.30%27.47%34.36%34.37%34.57%34.88%35.05%35.05%34.65% PSNS 20.88%22.58%0.00%0.02%0.00%0.40%0.49%0.01%0.00%15.20% Firelines 0.00%5.99%7.88%1.94%1.94%0.98%0.00%0.00%0.00%3.21% Total 100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00% Commodity Capacity Capacity w/o Navy Actual Customer Actual Customer w/o Navy Customer Weighted Meters & Services Fire Fire w/o Navy Revenue Functionalized Depreciation Expense 2,143,774$ 222,629$ 993,437$ 70,329$ 261,759$ 38,753$ -$ 196,571$ 325,849$ 34,447$ -$ Retail Inside 1,212,108$ 116,272$ 497,982$ 45,463$ 166,677$ 24,680$ -$ 127,050$ 211,611$ 22,373$ -$ Retail Outside 588,960 59,869 211,650 19,323 89,953 13,319 - 68,567 114,204 12,074 - PSNS 271,827 46,488 224,309 - 42 - - 954 34 - - Firelines 70,878 - 59,495 5,543 5,087 753 - - - - - Total 2,143,774$ 222,629$ 993,437$ 70,329$ 261,759$ 38,753$ -$ 196,571$ 325,849$ 34,447$ -$ Commodity Capacity Capacity w/o Navy Actual Customer Actual Customer w/o Navy Customer Weighted Meters & Services Fire Fire w/o Navy Revenue Retail Inside 52.23%50.13%64.64%63.68%63.69%64.05%64.63%64.94%64.95%46.94% Retail Outside 26.89%21.30%27.47%34.36%34.37%34.57%34.88%35.05%35.05%34.65% PSNS 20.88%22.58%0.00%0.02%0.00%0.40%0.49%0.01%0.00%15.20% Firelines 0.00%5.99%7.88%1.94%1.94%0.98%0.00%0.00%0.00%3.21% Total 100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00% Commodity Capacity Capacity w/o Navy Actual Customer Actual Customer w/o Navy Customer Weighted Meters & Services Fire Fire w/o Navy Revenue Functionalized Rate Base 33,284,205$ 3,798,626$ 14,791,222$ 887,135$ 4,454,253$ 488,829$ 46$ 2,888,338$ 5,353,527$ 434,515$ 187,714$ Retail Inside 18,833,230$ 1,983,903$ 7,414,434$ 573,476$ 2,836,277$ 311,315$ 29$ 1,866,818$ 3,476,658$ 282,210$ 88,111$ Retail Outside 9,216,389 1,021,521 3,151,248 243,736 1,530,702 168,013 16 1,007,497 1,876,307 152,305 65,042 PSNS 4,176,757 793,203 3,339,727 - 710 - 0 14,023 562 - 28,532 Firelines 1,057,828 - 885,812 69,922 86,563 9,501 0 - - - 6,029 Total 33,284,205$ 3,798,626$ 14,791,222$ 887,135$ 4,454,253$ 488,829$ 46$ 2,888,338$ 5,353,527$ 434,515$ 187,714$ Functions of Service TotalAllocation of Rate Base Functions of Service Functions of Service Summary of Customer Class Allocations Operating Expenses Allocation of Operating Expenses Total Allocation of Depreciation Expense Total Functions of Service Summary of Customer Class Allocations Depreciation Expense Functions of Service Summary of Customer Class Allocations Rate Base Functions of Service Prepared by FCS GROUP (425) 867-1802 Technical Appendix - Water Rate Calculation 12 City of Bremerton Navy Water Rate Calculation A-15 Calculation of Rate of Return on Rate Base Wastewater 287,160$ 7,505,193$ Water 158,450 4,255,412 Combined Cost of Debt 1 445,610$ 11,760,605$ 3.79%1.50%5.29% Cost of Borrowing 2 3.42%1.50%4.92% 5.29% 1 Weighted average of all non-subsidized outstanding debt for the combined utilities 2 Numerical average of at least three recent debt issues for municipal entities with similar terms and credit ratings, provided by DA Davidson Municipal Advisors TotalCalculation of Navy Rate of Return 2019 Interest (Non-Subsidized Debt) 2019 Outstanding Principal (Non-Subsidized Debt)Cost of Debt Risk Premium Prepared by FCS GROUP (425) 867-1802 Technical Appendix - Water Rate Calculation 13 City of Bremerton Navy Water Rate Calculation A-16 Calculation of Net Revenue Requirement 2019 Rate Revenue 1,831,708$ Less: O&M and Depreciation 1,969,729 Net Income (138,021)$ Rate Base 4,176,757$ % Rate of Return 5.29% Return On Rate Base 220,909$ Total Net Revenue Requirement 2,190,638$ $ Difference over Existing Rates 358,930 % Difference over Existing Rates 19.6% Net Revenue Requirement PSNS Prepared by FCS GROUP (425) 867-1802 Technical Appendix - Water Rate Calculation 14 City of Bremerton October 2020 Summary of U.S. Navy Contract Negotiations for Water and Wastewater Service page 21 TECHNICAL APPENDIX – WASTEWA TER City of Bremerton Navy Wastewater Rate Calculation B-1 Allocation of Fixed Asset Original Cost and Accumulated Depreciation, Treatment Allocated on Navy Reserved Treatment Capacity Flow- Collection w/ Navy Flow- Collection w/o Navy Flow- Treatment w/ Navy Flow- Treatment w/o Navy BOD w/o Navy TSS w/o Navy Customer Customer Weighted Revenue Direct Navy As All Others Collection 51,549,403$ 100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00% Collection Laterals 2 3,018,737 0.00%100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00% Treatment 47,249,172 0.00%0.00%0.00%50.00%15.50%15.00%0.00%0.00%0.00%19.50%0.00%100.00% Pumping 25,096,890 100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00% General Plant 3 4,334,537 0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%100.00% Total Utility Plant 131,248,739$ 76,646,293$ 3,018,737$ -$ 23,624,586$ 7,323,622$ 7,087,376$ -$ -$ -$ 9,213,589$ 4,334,537$ 131,248,739$ Functions of Service 60.39%2.38%0.00%18.61%5.77%5.58%0.00%0.00%0.00%7.26%100.00% Allocation of "As All Others"2,617,722$ 103,100$ -$ 806,857$ 250,126$ 242,057$ -$ -$ -$ 314,674$ (4,334,537)$ -$ 131,248,739$ 79,264,016$ 3,121,837$ -$ 24,431,443$ 7,573,747$ 7,329,433$ -$ -$ -$ 9,528,263$ -$ 131,248,739$ 60.39%2.38%0.00%18.61%5.77%5.58%0.00%0.00%0.00%7.26%0.00%100.00% Less: Accumulated Depreciation 1 Collection 18,271,241$ 100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00% Collection Laterals 1,523,219 0.00%100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00% Treatment 26,751,478 0.00%0.00%0.00%50.00%15.50%15.00%0.00%0.00%0.00%19.50%0.00%100.00% Pumping 11,458,327 100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00% General Plant 1,861,367 51.25%2.63%0.00%23.06%7.15%6.92%0.00%0.00%0.00%8.99%0.00%100.00% Total Accumulated Depreciation 59,865,631$ 30,683,594$ 1,572,099$ -$ 13,804,969$ 4,279,540$ 4,141,491$ -$ -$ -$ 5,383,938$ -$ 71,383,108$ 48,580,421$ 1,549,738$ -$ 10,626,475$ 3,294,207$ 3,187,942$ -$ -$ -$ 4,144,325$ -$ 68.06%2.17%0.00%14.89%4.61%4.47%0.00%0.00%0.00%5.81%0.00% 1 Original cost of assets and accumulated depreciation from City fixed asset schedule as of 12/31/2016 2 The City and Navy agreed that the Navy does not benefit from collection laterals and should not be allocated any of these facilities 3 General plant allocated as all other plant in service Net Plant in Service Plant in Service 1 Total Functions of Service Total Total Plant in Service Prepared by FCS GROUP (425) 867-1802 Technical Appendix - Wastewater Rate Calculation 1 City of Bremerton Navy Wastewater Rate Calculation B-2 Allocation of Fixed Asset Original Cost and Accumulated Depreciation, Treatment Allocated on Actual Flow Flow- Collection w/ Navy Flow- Collection w/o Navy Flow- Treatment w/ Navy Flow- Treatment w/o Navy BOD w/o Navy TSS w/o Navy Customer Customer Weighted Revenue Direct Navy As All Others Collection 51,549,403$ 100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00% Collection Laterals 2 3,018,737 0.00%100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00% Treatment 47,249,172 0.00%0.00%0.00%54.57%16.92%16.37%0.00%0.00%0.00%12.13%0.00%100.00% Pumping 25,096,890 100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00% General Plant 3 4,334,537 0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%100.00% Total Utility Plant 131,248,739$ 76,646,293$ 3,018,737$ -$ 25,786,024$ 7,993,667$ 7,735,807$ -$ -$ -$ 5,733,673$ 4,334,537$ 131,248,739$ Functions of Service 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%100.00% Allocation of "As All Others"2,617,722$ 103,100$ -$ 880,677$ 273,010$ 264,203$ -$ -$ -$ 195,824$ (4,334,537)$ -$ 131,248,739$ 79,264,016$ 3,121,837$ -$ 26,666,701$ 8,266,677$ 8,000,010$ -$ -$ -$ 5,929,497$ -$ 131,248,739$ 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00% Less: Accumulated Depreciation 1 Collection 18,271,241$ 100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00% Collection Laterals 1,523,219 0.00%100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00% Treatment 26,751,478 0.00%0.00%0.00%54.57%16.92%16.37%0.00%0.00%0.00%12.13%0.00%100.00% Pumping 11,458,327 100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00% General Plant 1,861,367 51.25%2.63%0.00%25.17%7.80%7.55%0.00%0.00%0.00%5.60%0.00%100.00% Total Accumulated Depreciation 59,865,631$ 30,683,594$ 1,572,099$ -$ 15,068,000$ 4,671,080$ 4,520,400$ -$ -$ -$ 3,350,458$ -$ 71,383,108$ 48,580,421$ 1,549,738$ -$ 11,598,702$ 3,595,598$ 3,479,611$ -$ -$ -$ 2,579,039$ -$ 68.06%2.17%0.00%16.25%5.04%4.87%0.00%0.00%0.00%3.61%0.00% 1 Original cost of assets and accumulated depreciation from City fixed asset schedule as of 12/31/2016 2 The City and Navy agreed that the Navy does not benefit from collection laterals and should not be allocated any of these facilities 3 General plant allocated as all other plant in service Net Plant in Service Plant in Service 1 Total Functions of Service Total Total Plant in Service Prepared by FCS GROUP (425) 867-1802 Technical Appendix - Wastewater Rate Calculation 2 City of Bremerton Navy Wastewater Rate Calculation B-3 Allocation of Operating Expenses and Depreciation Flow-Collection w/ Navy Flow-Collection w/o Navy Flow-Treatment w/ Navy Flow-Treatment w/o Navy BOD w/o Navy TSS w/o Navy Customer Customer Weighted Revenue Direct Navy As All Others Taxes 3 State Taxes 313,746$ 0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%0.00%0.00%100.00%As Revenue City Taxes 3,307,408 0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%0.00%0.00%100.00%As Revenue Administration Salaries & Wages Regular 187,550$ 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Overtime Pay 1,500 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Personnel Benefits 48,730 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Medical & Dental Benefits 27,025 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Office & Operating Supply 5,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Small Tools, Equipment, & Furniture 500 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Computer Related Items 1,500 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Food and Beverage 500 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Professional Services Ext 85,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Intergovernmental Service 1,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Postage 700 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Travel 1,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Training 500 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Equipment Rental 500 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Information Tech− Ifd 10,421 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Miscellaneous 2,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Sewer System Salaries & Wages Regular 542,100$ 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Stand By 11,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Overtime Pay 8,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Personnel Benefits 137,200 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Medical & Dental Benefits 118,800 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Office & Operating Supply 35,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Utility Inventory 5,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Fuel Consumed 19,246 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Small Tools, Eq & Furn 25,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Computer Related Items 2,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Professional Services Ext 5,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Professional Services Ifd 1,032,976 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Other Services 1,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Telecommunications 2,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Telecommunications Ifd 1,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Postage 500 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Travel 1,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Training 1,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Land and Building - IFD 43,776 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Equipment Rental 5,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Equipment − Interfund 312,997 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Interfund Insurance Prem 390,264 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Garbage/Waste Disposal 6,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Information Tech− Ifd 61,802 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Equipment Repair & Maint 10,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Equipment Repair − Ifd 33,499 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Other Improvements 100,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Miscellaneous 5,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Dues & Subscriptions 30,500 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Allocation Basis 2Operating Expenses 1 Total Functions of Service Total Prepared by FCS GROUP (425) 867-1802 Technical Appendix - Wastewater Rate Calculation 3 City of Bremerton Navy Wastewater Rate Calculation B-3 Allocation of Operating Expenses and Depreciation Flow-Collection w/ Navy Flow-Collection w/o Navy Flow-Treatment w/ Navy Flow-Treatment w/o Navy BOD w/o Navy TSS w/o Navy Customer Customer Weighted Revenue Direct Navy As All Others Allocation Basis 2Operating Expenses 1 Total Functions of Service Total WWTP Salaries & Wages Regular 1,538,200$ 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Stand By 74,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Overtime Pay 80,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Personnel Benefits 399,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Medical & Dental Benefits 283,700 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Office & Operating Supply 655,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Utility Inventory 1,500 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Fuel Consumed 23,803 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Items Purch For Inventory 70,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Small Tools, Eq & Furn 140,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Computer Related Items 72,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Food & Beverage 2,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Professional Services Ext 265,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Other Services 5,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Intergovernmental Service 42,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Telecommunications 120,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Telecommunications Ifd 3,674 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Postage 7,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Travel 15,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Training 40,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Equipment Rental 20,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Equipment - Interfund 100,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Natural Gas 25,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Electricity 620,000 0.00%0.00%100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%As Flow w/ Navy Water/Sewer/Stormwater 75,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Garbage/Waste Disposal 47,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Information Tech− Ifd 79,441 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Equipment Repair & Maint 135,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Equipment Repair − Ifd 39,076 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Structures & Grounds 75,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Miscellaneous 15,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Dues & Subscriptions 6,500 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Customer Service Salaries & Wages Regular 107,800$ 0.00%0.00%0.00%0.00%0.00%0.00%100.00%0.00%0.00%0.00%0.00%100.00%All to Customer Overtime Pay 10,000 0.00%0.00%0.00%0.00%0.00%0.00%100.00%0.00%0.00%0.00%0.00%100.00%All to Customer Personnel Benefits 28,200 0.00%0.00%0.00%0.00%0.00%0.00%100.00%0.00%0.00%0.00%0.00%100.00%All to Customer Medical & Dental Benefits 18,800 0.00%0.00%0.00%0.00%0.00%0.00%100.00%0.00%0.00%0.00%0.00%100.00%All to Customer Office & Operating Supply 25,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Small Tools, Eq & Furn 500 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Computer Related Items 1,500 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Professional Services Ext 12,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Postage 50,000 0.00%0.00%0.00%0.00%0.00%0.00%100.00%0.00%0.00%0.00%0.00%100.00%All to Customer Travel 1,500 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Training 3,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Equipment Rental 750 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Information Tech− Ifd 6,730 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Miscellaneous 1,000 60.39%2.38%0.00%20.32%6.30%6.10%0.00%0.00%0.00%4.52%0.00%100.00%As Plant in Service (Actual) Depreciation Expense 4 3,694,103$ 60.39%2.38%0.00%18.61%5.77%5.58%0.00%0.00%0.00%7.26%0.00%100.00%As Plant in Service (Capacity) Total Operating Expenses 15,976,017$ 6,957,221$ 274,012$ 620,000$ 2,277,697$ 706,086$ 683,309$ 214,800$ -$ 3,621,154$ 621,738$ -$ 15,976,017$ Functions of Service 43.55%1.72%3.88%14.26%4.42%4.28%1.34%0.00%22.67%3.89%100.00% Allocation of "As All Others"-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 15,976,017$ 6,957,221$ 274,012$ 620,000$ 2,277,697$ 706,086$ 683,309$ 214,800$ -$ 3,621,154$ 621,738$ -$ 15,976,017$ 100.00%43.55%1.72%3.88%14.26%4.42%4.28%1.34%0.00%22.67%3.89%0.00%100.00% 1 Operating expenses sourced from detailed 2020 Wastewater Expenditure Budget 2 Operating expenses allocated based on the utility function(s) most likely driving that cost 3 Taxes allocated based on 2019 actual wastewater revenue 4 2017 Depreciation Expense Total Operating Expenses Prepared by FCS GROUP (425) 867-1802 Technical Appendix - Wastewater Rate Calculation 4 City of Bremerton Navy Wastewater Rate Calculation B-4 Calculation of Net Contributions in aid of Construction Pre-2004 1 33,483,077$ 21,337,173$ -$ -$ 2004 55,757 41,260 - - 2005 - - 167,068 126,972 2006 67,758 52,851 644,654 502,830 2007 946,857 757,485 1,194,615 955,692 2008 512,590 420,324 1,062,420 871,185 2009 748,743 628,944 935,986 786,228 2010 80,729 69,427 4,487 3,859 2011 453,954 399,479 - - 2012 400,176 360,159 - - 2013 1,130,179 1,039,764 772,383 710,592 2014 - - - - 2015 319,900 307,104 - - 2016 - - - - 2017 1,272,894 1,272,894 - - Total 39,472,613$ 26,686,865$ 4,781,613$ 3,957,357$ 1 Pre-2004 contributions depreciated equal to percentage of total collection system depreciated 2 Other contributions include grants and loan forgiveness B-5 Calculation of Net Navy Capital Charges Net Navy capital charges 1996 5,600,796$ 3,009,812$ 2,590,984$ Navy contribution to the WWTP 1996 3,179,199 1,708,470 1,470,729 Total 8,779,995$ 4,718,282$ 4,061,713$ 1 Depreciated by 2.56% of original cost per year based on 2008 Agreement methodology System Acceptances Other Contributions 2 Original Cost Net ValueOriginal Cost Net ValueYear Description Year Original Contract Amount Total Depreciation 1 Net Value Prepared by FCS GROUP (425) 867-1802 Technical Appendix - Wastewater Rate Calculation 5 City of Bremerton Navy Wastewater Rate Calculation B-6 Allocation of Net Rate Base Flow- Collection w/ Navy Flow- Collection w/o Navy Flow- Treatment w/ Navy Flow- Treatment w/o Navy BOD w/o Navy TSS w/o Navy Customer Customer Weighted Revenue Direct Navy As All Others Net Plant in Service 71,383,108$ 48,580,421$ 1,549,738$ -$ 10,626,475$ 3,294,207$ 3,187,942$ -$ -$ -$ 4,144,325$ -$ Plus: Cash Working Capital 1/8 O&M Expense 1,535,239$ 43.55%1.72%3.88%14.26%4.42%4.28%1.34%0.00%22.67%3.89%0.00%100.00%As O&M Expenses Prepayments - 43.55%1.72%3.88%14.26%4.42%4.28%1.34%0.00%22.67%3.89%0.00%100.00%As O&M Expenses Inventories (materials and supplies) 1 577,021 60.39%2.38%0.00%18.61%5.77%5.58%0.00%0.00%0.00%7.26%0.00%100.00%As Plant in Service Total Cash Working Capital 2,112,260$ 1,017,040$ 40,056$ 59,580$ 326,289$ 101,150$ 97,887$ 20,642$ -$ 347,980$ 101,637$ -$ Less: Net Contributions in Aid of Construction 2 30,644,222$ 0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%100.00%As All Others Less: Navy Capital Contributions 3 1,470,729 0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%0.00%100.00%Direct Navy Plus: Net Navy Capital Charges 4 (2,590,984) 0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%100.00%100.00%As All Others Net Total Contributions 29,523,967$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 1,470,729$ 28,053,238$ Total Net Plant in Service 49,597,461$ 1,589,794$ 59,580$ 10,952,763$ 3,395,357$ 3,285,829$ 20,642$ -$ 347,980$ 2,775,233$ (28,053,238)$ Functions of Service 68.86%2.21%0.08%15.21%4.71%4.56%0.03%0.00%0.48%3.85% Allocation of "As All Others"(19,317,964)$ (619,217)$ (23,206)$ (4,266,047)$ (1,322,474)$ (1,279,814)$ (8,040)$ -$ (135,537)$ (1,080,939)$ 28,053,238$ 43,971,401$ 30,279,498$ 970,577$ 36,374$ 6,686,717$ 2,072,882$ 2,006,015$ 12,602$ -$ 212,444$ 1,694,293$ -$ 68.86%2.21%0.08%15.21%4.71%4.56%0.03%0.00%0.48%3.85%0.00% 1 2018 Comprehensive Annual Financial Report 2 Net book value of contributions in aid of construction is deducted from rate base 3 Contributions in aid of contruction assigned to the Navy include the amortized amount for the Navy's capital contribution to the WWTP and WWTP improvements = Navy's "true" capital contribution 4 Net navy capital charges are deducted from contributions in aid to reflect that this capital payment was to compensate the City for capital costs, is not a "true" capital contribution and should not be used to reduce rate base Net Rate Base Net Rate Base Total Functions of Service Allocation BasisTotal Prepared by FCS GROUP (425) 867-1802 Technical Appendix - Wastewater Rate Calculation 6 City of Bremerton Navy Wastewater Rate Calculation B-7 Allocations of Flow Costs to Customers Used to Allocate O&M 5.86 mgd I&I 2 38% Inside City Single Family 408,962 ccf 330,080 ccf 126,515 456,594 ccf 0.94 mgd 1.65 mgd 34.78%1.65 mgd 39.58% Multi Family 317,564 ccf 256,311 ccf 98,240 354,551 ccf 0.73 mgd 1.28 mgd 27.01%1.28 mgd 30.74% Commercial I 169,625 ccf 136,907 ccf 52,474 189,381 ccf 0.39 mgd 0.68 mgd 14.43%0.68 mgd 16.42% Commercial II 29,760 ccf 24,020 ccf 9,206 33,226 ccf 0.07 mgd 0.12 mgd 2.53%0.12 mgd 2.88% Commercial III 53,801 ccf 43,424 ccf 16,644 60,067 ccf 0.12 mgd 0.22 mgd 4.58%0.22 mgd 5.21% Outside City Single Family 39,402 ccf 31,802 ccf 12,189 43,991 ccf 0.09 mgd 0.16 mgd 3.35%0.16 mgd 3.81% Multi Family 7,920 ccf 6,392 ccf 2,450 8,842 ccf 0.02 mgd 0.03 mgd 0.67%0.03 mgd 0.77% Commercial I 5,226 ccf 4,218 ccf 1,617 5,835 ccf 0.01 mgd 0.02 mgd 0.44%0.02 mgd 0.51% Commercial II 202 ccf 163 ccf 62 226 ccf 0.00 mgd 0.00 mgd 0.02%0.00 mgd 0.02% Commercial III 671 ccf 542 ccf 208 749 ccf 0.00 mgd 0.00 mgd 0.06%0.00 mgd 0.06% PSNS Main 280,068 ccf 280,068 ccf 280,068 ccf 0.57 mgd 0.57 mgd 12.13%0.00% Total 1,313,201 ccf 1,113,926 ccf 319,605 1,433,531 ccf 2.94 mgd 4.73 mgd 100.00%4.16 mgd 100.00% 1 Class flows provided by City for calendar year 2017 for retail, 2019 for Navy 2019 Actual Flow at Treatment Plant 4.73 mgd 2 Navy not allocated I&I because flow is metered 3 Retail flow statistics adjusted to 2019 actual treated flow Used to Allocate Rate Base and Depreciation I&I 38% Inside City Single Family 330,080 ccf 126,515 456,594 ccf 0.94 mgd 4.94 mgd 31.87%4.94 mgd 39.58% Multi Family 256,311 ccf 98,240 354,551 ccf 0.73 mgd 3.84 mgd 24.75%3.84 mgd 30.74% Commercial I 136,907 ccf 52,474 189,381 ccf 0.39 mgd 2.05 mgd 13.22%2.05 mgd 16.42% Commercial II 24,020 ccf 9,206 33,226 ccf 0.07 mgd 0.36 mgd 2.32%0.36 mgd 2.88% Commercial III 43,424 ccf 16,644 60,067 ccf 0.12 mgd 0.65 mgd 4.19%0.65 mgd 5.21% Outside City Single Family 31,802 ccf 12,189 43,991 ccf 0.09 mgd 0.48 mgd 3.07%0.48 mgd 3.81% Multi Family 6,392 ccf 2,450 8,842 ccf 0.02 mgd 0.10 mgd 0.62%0.10 mgd 0.77% Commercial I 4,218 ccf 1,617 5,835 ccf 0.01 mgd 0.06 mgd 0.41%0.06 mgd 0.51% Commercial II 163 ccf 62 226 ccf 0.00 mgd 0.00 mgd 0.02%0.00 mgd 0.02% Commercial III 542 ccf 208 749 ccf 0.00 mgd 0.01 mgd 0.05%0.01 mgd 0.06% PSNS Main 280,068 ccf 3.02 mgd 3.02 mgd 19.48%0.00% Total 1,113,926 ccf 319,605 1,153,463 ccf 5.38 mgd 15.50 mgd 100.00%12.48 mgd 100.00% 1 Navy flow based on not to exceed daily average flow service requirement WWTP Max Month Capacity 15.50 mgd retail classes allocated share of remaining capacity Allocation of Flow Costs Reserved Capacity 2019 Flow Adjusted Flow without Navy %Adjusted Flow without Navy Total Flow with I&I (ccf) Annual Flow (mgd) Flow Adjusted to Max Month 1 % %Allocation of Flow Costs 2019 Flow Total Flow with I&I (ccf) Annual Flow (mgd) Flow Adjusted to Actual 3 %2017 Flow 1 Adjusted to 2019 Flow Prepared by FCS GROUP (425) 867-1802 Technical Appendix - Wastewater Rate Calculation 7 City of Bremerton Navy Wastewater Rate Calculation B-8 Allocations of Customer Costs to Customers Allocation Billing Units 1 Inside City Single Family 8,060 44.08%1.0 8,060 41.80% Multi Family 8,472 46.33%1.0 8,472 43.94% Commercial I 675 3.69%2.0 1,350 7.00% Commercial II 57 0.31%2.5 143 0.74% Commercial III 115 0.63%2.0 231 1.20% Outside City Single Family 694 3.80%1.0 694 3.60% Multi Family 161 0.88%1.0 161 0.84% Commercial I 43 0.24%2.0 86 0.45% Commercial II 1 0.01%2.5 3 0.01% Commercial III 4 0.02%2.0 8 0.04% PSNS Main 3 0.02%25.0 75 0.39% Total 18,286 100.00%19,282 100.00% 1 Billing unit counts provided by City as of 12/31/2017 2 Weighting factors consistent with previous Agreement B-9 Allocation of Revenue Costs to Customers Inside City Single Family 5,005,766$ 5,165,830$ 34.48%5,165,830$ 40.32% Multi Family 4,367,252 4,506,898 30.09%4,506,898 35.17% Commercial I 1,161,042 1,198,167 8.00%1,198,167 9.35% Commercial II 253,517 261,624 1.75%261,624 2.04% Commercial III 390,777 403,272 2.69%403,272 3.15% Outside City Single Family 678,777 962,499$ 6.43%962,499$ 7.51% Multi Family 133,307 189,028 1.26%189,028 1.48% Commercial I 76,284 108,171 0.72%108,171 0.84% Commercial II 2,760 3,914 0.03%3,914 0.03% Commercial III 9,770 13,854 0.09%13,854 0.11% PSNS Main 2,199,437 2,167,003 14.47%0.00% Total 14,278,690$ 14,980,261$ 100.00%12,813,258$ 100.00% 1 2019 actual billed revenue for Navy, all others adjusted from 2017 to reach total revenue billed in 2019 Allocation of Customer Costs %Weighting Factor 2 Weighted Customer % Revenue Without Navy %2017 Revenue 2019 Revenue 1Allocation of Revenue Related Costs % Prepared by FCS GROUP (425) 867-1802 Technical Appendix - Wastewater Rate Calculation 8 City of Bremerton Navy Wastewater Rate Calculation B-10 Summary of O&M, Depreciation and Rate Base Allocations to Customers Flow-Collection w/ Navy Flow-Collection w/o Navy Flow-Treatment w/ Navy Flow-Treatment w/o Navy BOD w/o Navy TSS w/o Navy Customer Customer Weighted Revenue Direct Navy Inside City Single Family 34.78%39.58%34.78%39.58%33.99%33.99%44.08%41.80%34.48%0.00% Multi Family 27.01%30.74%27.01%30.74%26.39%26.39%46.33%43.94%30.09%0.00% Commercial I 14.43%16.42%14.43%16.42%19.74%19.74%3.69%7.00%8.00%0.00% Commercial II 2.53%2.88%2.53%2.88%6.80%6.80%0.31%0.74%1.75%0.00% Commercial III 4.58%5.21%4.58%5.21%8.38%8.38%0.63%1.20%2.69%0.00% Outside City Single Family 3.35%3.81%3.35%3.81%3.27%3.27%3.80%3.60%6.43%0.00% Multi Family 0.67%0.77%0.67%0.77%0.66%0.66%0.88%0.84%1.26%0.00% Commercial I 0.44%0.51%0.44%0.51%0.61%0.61%0.24%0.45%0.72%0.00% Commercial II 0.02%0.02%0.02%0.02%0.05%0.05%0.01%0.01%0.03%0.00% Commercial III 0.06%0.06%0.06%0.06%0.10%0.10%0.02%0.04%0.09%0.00% PSNS Main 12.13%0.00%12.13%0.00%0.00%0.00%0.02%0.39%14.47%100.00% Total 100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00% Flow-Collection w/ Navy Flow-Collection w/o Navy Flow-Treatment w/ Navy Flow-Treatment w/o Navy BOD w/o Navy TSS w/o Navy Customer Customer Weighted Revenue Direct Navy Functionalized Operating Expenses 12,281,914$ 4,726,270$ 186,146$ 620,000$ 1,590,054$ 492,917$ 477,016$ 214,800$ -$ 3,621,154$ 353,558$ Inside City Single Family 4,235,688$ 1,643,847$ 73,685$ 215,643$ 629,417$ 167,544$ 162,140$ 94,685$ -$ 1,248,728$ -$ Multi Family 3,434,846 1,276,467 57,217 167,449 488,750 130,100 125,903 99,514 - 1,089,445 - Commercial I 1,551,882 681,818 30,562 89,442 261,063 97,289 94,151 7,926 - 289,631 - Commercial II 316,366 119,622 5,362 15,692 45,802 33,528 32,447 671 - 63,242 - Commercial III 517,280 216,256 9,694 28,369 82,803 41,327 39,994 1,354 - 97,482 - Outside City Single Family 519,480$ 158,379$ 7,099$ 20,776$ 60,642$ 16,142$ 15,622$ 8,156$ -$ 232,663$ -$ Multi Family 103,600 31,835 1,427 4,176 12,189 3,245 3,140 1,895 - 45,693 - Commercial I 65,298 21,006 942 2,756 8,043 2,997 2,901 505 - 26,148 - Commercial II 2,671 812 36 107 311 228 220 12 - 946 - Commercial III 8,615 2,697 121 354 1,033 515 499 47 - 3,349 - PSNS Main 1,526,187$ 573,532$ -$ 75,237$ -$ -$ -$ 35$ -$ 523,826$ 353,558$ Total 12,281,914$ 4,726,270$ 186,146$ 620,000$ 1,590,054$ 492,917$ 477,016$ 214,800$ -$ 3,621,154$ 353,558$ Summary of Customer Class Allocations Operating Expenses Functions of Service Allocation of Operating Expenses Functions of Service Total Prepared by FCS GROUP (425) 867-1802 Technical Appendix - Wastewater Rate Calculation 9 City of Bremerton Navy Wastewater Rate Calculation B-10 Summary of O&M, Depreciation and Rate Base Allocations to Customers Flow-Collection w/ Navy Flow-Collection w/o Navy Flow-Treatment w/ Navy Flow-Treatment w/o Navy BOD w/o Navy TSS w/o Navy Customer Customer Weighted Revenue Direct Navy Inside City Single Family 31.87%39.58%31.87%39.58%33.99%33.99%44.08%41.80%34.48%0.00% Multi Family 24.75%30.74%24.75%30.74%26.39%26.39%46.33%43.94%30.09%0.00% Commercial I 13.22%16.42%13.22%16.42%19.74%19.74%3.69%7.00%8.00%0.00% Commercial II 2.32%2.88%2.32%2.88%6.80%6.80%0.31%0.74%1.75%0.00% Commercial III 4.19%5.21%4.19%5.21%8.38%8.38%0.63%1.20%2.69%0.00% Outside City Single Family 3.07%3.81%3.07%3.81%3.27%3.27%3.80%3.60%6.43%0.00% Multi Family 0.62%0.77%0.62%0.77%0.66%0.66%0.88%0.84%1.26%0.00% Commercial I 0.41%0.51%0.41%0.51%0.61%0.61%0.24%0.45%0.72%0.00% Commercial II 0.02%0.02%0.02%0.02%0.05%0.05%0.01%0.01%0.03%0.00% Commercial III 0.05%0.06%0.05%0.06%0.10%0.10%0.02%0.04%0.09%0.00% PSNS Main 19.48%0.00%19.48%0.00%0.00%0.00%0.02%0.39%14.47%100.00% Total 100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00% Flow-Collection w/ Navy Flow-Collection w/o Navy Flow-Treatment w/ Navy Flow-Treatment w/o Navy BOD w/o Navy TSS w/o Navy Customer Customer Weighted Revenue Direct Navy Functionalized Depreciation Expense 3,694,103$ 2,230,950$ 87,867$ -$ 687,643$ 213,169$ 206,293$ -$ -$ -$ 268,181$ Inside City Single Family 1,160,608$ 711,049$ 34,782$ -$ 272,201$ 72,457$ 70,120$ -$ -$ -$ -$ Multi Family 901,227 552,138 27,008 - 211,367 56,264 54,449 - - - - Commercial I 505,040 294,921 14,426 - 112,901 42,074 40,717 - - - - Commercial II 102,614 51,743 2,531 - 19,808 14,500 14,032 - - - - Commercial III 169,096 93,542 4,576 - 35,809 17,873 17,296 - - - - Outside City Single Family 111,820$ 68,507$ 3,351$ -$ 26,226$ 6,981$ 6,756$ -$ -$ -$ -$ Multi Family 22,476 13,770 674 - 5,271 1,403 1,358 - - - - Commercial I 15,560 9,086 444 - 3,478 1,296 1,254 - - - - Commercial II 697 351 17 - 134 98 95 - - - - Commercial III 2,109 1,167 57 - 447 223 216 - - - - PSNS Main 702,856$ 434,675$ -$ -$ -$ -$ -$ -$ -$ -$ 268,181$ Total 3,694,103$ 2,230,950$ 87,867$ -$ 687,643$ 213,169$ 206,293$ -$ -$ -$ 268,181$ Allocation of Depreciation Expense Total Functions of Service Summary of Customer Class Allocations Depreciation Expense Functions of Service Prepared by FCS GROUP (425) 867-1802 Technical Appendix - Wastewater Rate Calculation 10 City of Bremerton Navy Wastewater Rate Calculation B-10 Summary of O&M, Depreciation and Rate Base Allocations to Customers Flow-Collection w/ Navy Flow-Collection w/o Navy Flow-Treatment w/ Navy Flow-Treatment w/o Navy BOD w/o Navy TSS w/o Navy Customer Customer Weighted Revenue Direct Navy Inside City Single Family 31.87%39.58%31.87%39.58%33.99%33.99%44.08%41.80%34.48%0.00% Multi Family 24.75%30.74%24.75%30.74%26.39%26.39%46.33%43.94%30.09%0.00% Commercial I 13.22%16.42%13.22%16.42%19.74%19.74%3.69%7.00%8.00%0.00% Commercial II 2.32%2.88%2.32%2.88%6.80%6.80%0.31%0.74%1.75%0.00% Commercial III 4.19%5.21%4.19%5.21%8.38%8.38%0.63%1.20%2.69%0.00% Outside City Single Family 3.07%3.81%3.07%3.81%3.27%3.27%3.80%3.60%6.43%0.00% Multi Family 0.62%0.77%0.62%0.77%0.66%0.66%0.88%0.84%1.26%0.00% Commercial I 0.41%0.51%0.41%0.51%0.61%0.61%0.24%0.45%0.72%0.00% Commercial II 0.02%0.02%0.02%0.02%0.05%0.05%0.01%0.01%0.03%0.00% Commercial III 0.05%0.06%0.05%0.06%0.10%0.10%0.02%0.04%0.09%0.00% PSNS Main 19.48%0.00%19.48%0.00%0.00%0.00%0.02%0.39%14.47%100.00% Total 100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00% Flow-Collection w/ Navy Flow-Collection w/o Navy Flow-Treatment w/ Navy Flow-Treatment w/o Navy BOD w/o Navy TSS w/o Navy Customer Customer Weighted Revenue Direct Navy Functionalized Rate Base 43,971,401$ 30,279,498$ 970,577$ 36,374$ 6,686,717$ 2,072,882$ 2,006,015$ 12,602$ -$ 212,444$ 1,694,293$ Inside City Single Family 14,158,640$ 9,650,687$ 384,200$ 11,593$ 2,646,913$ 704,580$ 681,852$ 5,555$ -$ 73,260$ -$ Multi Family 11,002,911 7,493,878 298,336 9,002 2,055,360 547,115 529,467 5,838 - 63,915 - Commercial I 6,087,361 4,002,812 159,354 4,808 1,097,859 409,134 395,936 465 - 16,992 - Commercial II 1,204,891 702,277 27,958 844 192,615 140,998 136,450 39 - 3,710 - Commercial III 2,017,663 1,269,596 50,543 1,525 348,215 173,796 168,189 79 - 5,719 - Outside City Single Family 1,370,668$ 929,809$ 37,016$ 1,117$ 255,020$ 67,884$ 65,694$ 479$ -$ 13,650$ -$ Multi Family 275,463 186,896 7,440 225 51,260 13,645 13,205 111 - 2,681 - Commercial I 188,572 123,323 4,910 148 33,824 12,605 12,198 30 - 1,534 - Commercial II 8,209 4,767 190 6 1,307 957 926 1 - 56 - Commercial III 25,291 15,834 630 19 4,343 2,168 2,098 3 - 196 - PSNS Main 7,631,732$ 5,899,618$ -$ 7,087$ -$ -$ -$ 2$ -$ 30,732$ 1,694,293$ Total 43,971,401$ 30,279,498$ 970,577$ 36,374$ 6,686,717$ 2,072,882$ 2,006,015$ 12,602$ -$ 212,444$ 1,694,293$ Allocation of Rate Base Total Functions of Service Summary of Customer Class Allocations Rate Base Functions of Service Prepared by FCS GROUP (425) 867-1802 Technical Appendix - Wastewater Rate Calculation 11 City of Bremerton Navy Wastewater Rate Calculation B-11 Calculation of Rate of Return on Rate Base Water 158,450$ 4,255,412$ Wastewater 287,160 7,505,193 Combined Cost of Debt 1 445,610$ 11,760,605$ 3.79%1.50%5.29% Cost of Borrowing 2 3.42%1.50%4.92% 5.29% 1 Weighted average of all non-subsidized outstanding debt for the combined utilities 2 Numerical average of at least three recent debt issues for municipal entities with similar terms and credit ratings, provided by DA Davidson Municipal Advisors TotalCalculation of Navy Rate of Return 2019 Interest (Non-Subsidized Debt) 2019 Outstanding Principal (Non-Subsidized Debt)Cost of Debt Risk Premium Prepared by FCS GROUP (425) 867-1802 Technical Appendix - Wastewater Rate Calculation 12 City of Bremerton Navy Wastewater Rate Calculation B-12 Calculation of Net Revenue Requirement 2019 Revenue 2,167,003$ Less: O&M and Depreciation 2,229,044 Net Income (62,041)$ Rate Base 7,631,732$ % Rate of Return 5.29% Return On Rate Base 403,643$ Total Net Revenue Requirement 2,632,687$ $ Difference over Existing Rates 465,684 % Difference over Existing Rates 21.5% Net Revenue Requirement PSNS Prepared by FCS GROUP (425) 867-1802 Technical Appendix - Wastewater Rate Calculation 13 CODE (Hour) PAGE(S) until local time X A X B X C D EX X G F X H RATING PAGE OF PAGES 7. ISSUED BY (Date) 16-Apr-2018 IMPORTANT - Award will be made on this Form, or on Standard Form 26, or by other authorized official written notice. Previous Edition is Unusable 33-134 STANDARD FORM 33 (REV. 9-97) Prescribed by GSA FAR (48 CFR) 53.214(c) 127 (If other than Item 7) 15A. NAME 16. NAME AND TITLE OF PERSON AUTHORIZED TOAND ADDRESS SIGN OFFER (Type or print) OF OFFEROR AMENDMENT NO. DATE 15B. TELEPHONE NO (Include area code)17.SIGNATURE 360-473-5315 15C. CHECK IF REMITTANCE ADDRESS IS DIFFERENT FROM ABOVE - ENTER SUCH ADDRESS IN SCHEDULE. 18.OFFER DATE CITY OF BREMERTON DEPARTMENT PUB WORKS UTILITIES 100 OYSTER BAY AVE N BREMERTON WA 98312-3455 1. THIS CONTRACT IS A RATED ORDER UNDER DPAS (15 CFR 700) 2. CONTRACT NO. N4425521C1004 N44255 8. ADDRESS OFFER TO See Item 7 9.Sealed offers in original and copies for furnishing the supplies or services in the Schedule will be received at the place specified in Item 8, or if handcarried, in the depository located in CAUTION - LATE Submissions, Modifications, and Withdrawals: See Section L, Provision No. 52.214-7 or 52.215-1. All offers are subject to all terms and conditions contained in this solicitation. 10. FOR INFORMATION CALL: A. NAME (NO COLLECT CALLS) 11.T ABLE OF CONTENTS SOLICITATION/ CONTRACT FORM SUPPLIES OR SERVICES AND PRICES/ COSTS 1 2 - 5 X I CONTRACT CLAUSES DESCRIPTION/ SPECS./ WORK STATEMENT X PACKAGING AND MARKING 6 - 8 J LIST OF ATTACHMENTS INSPECTION AND ACCEPTANCE DELIVERIES OR PERFORMANCE 9 10 K REPRESENTATIONS, CERTIFICATIONS AND OTHER STATEMENTS OF OFFERORS CONTRACT ADMINISTRATION DATA 11 - 12 SPECIAL CONTRACT REQUIREMENTS OFFER (Must be fully completed by offeror)13 M L INSTRS., CONDS., AND NOTICES TO OFFERORS EVALUATION FACTORS FOR AWARD NOTE: Item 12 does not apply if the solicitation includes the provisions at 52.214-16, Minimum Bid Acceptance Period. is inserted by the offeror) from the date for receipt of offers specified above, to furnish any or all items upon which prices are offered at the price set opposite each item, delivered at the designated point(s), within the time specified in the schedule. 13.DISCOUNT FOR PROMPT PAYMENT (See Section I, Clause No. 52.232-8) 14.ACKNOWLEDGMENT OF AMENDMENTS(T he offeror acknowledges receipt of amendments AMENDMENT NO. DATE to the SOLICITATION for offerors and related documents numbered and dated): 04DN7 FACILITY 12.In compliance with the above, the undersigned agrees, if this offer is accepted within calendar days (60 calendar days unless a different period SOLICITATION, OFFER AND AWARD X (X)SEC.DESCRIPTION (X)SEC.DESCRIPTION PAGE(S) PART I - THE SCHEDULE 26. NAME OF CONTRACTING OFFICER (Type or print)27. UNITED STATES OF AMERICA 28. AWARD DATE EMAIL:TEL:(Signature of Contracting Officer) CODE CODE B. TELEPHONE (Include area code)C.E-MAIL ADDRESS AWARD (To be completed by Government) 19. ACCEPTED AS TO ITEMS NUMBERED 20. AMOUNT 21. ACCOUNTING AND APPROPRIATION $0.04 EST 22. AUTHORITY FOR USING OTHER THAN FULL AND OPEN COMPETITION: X 10 U.S.C. 2304(c)( )1 41 U.S.C. 253(c)( )(4 copies unless otherwise specified) 23.SUBMIT INVOICES TO ADDRESS SHOWN IN ITEM 24. ADMINISTERED BY (If other than Item 7)CODE 25. PAYMENT WILL BE MADE BY CODE N68732DFAS CLEVELAND ACCOUNTS PAYABLE PO BOX 998022 CLEVELAND OH 44199-8022 PART IV - REPRESENTATIONS AND INSTRUCTIONS PART III - LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACHMENTS 14 - 26 PART II - CONTRACT CLAUSES NAVFAC NORTHWEST 1101 TAUTOG CIRCLE SILVERDALE WA 98315-1101 FAX: TEL: FAX: TEL: NOTE: In sealed bid solicitations "offer" and "offeror" mean "bid" and "bidder". SOLICITATION 27 6. REQUISITION/PURCHASE NO.5. DATE ISSUED4. TYPE OF SOLICITATION SEALED BID (IFB) NEGOTIATED (RFP) [ ] [ ] 3. SOLICITATION NO. See Item 7 N4425521C1004 Page 2 of 27 Section B - Supplies or Services and Prices RATE STRUCTURE B. 1 RATE STRUCTURE. The base period water and sewer (CLIN’s 0001 and 0002) rates shall be in accordance with the mutually negotiated structures and formulas as found in Attachment J.1, Summary of Navy Contract Negotiations for Water and Wastewater Service, October 2020. As found in Attachment J.1, the rate design used to establish the base period rate for CLIN 0001, Water Service, assumed a 50% fixed component and a 50% variable component. The rate design used to establish the base period rate for CLIN 0002, Wastewater Treatment, assumed a 50% fixed component and a 50% variable component. The actual ratio of fixed to variable revenues is a function of the Navy’s volumetric use, which may vary over time during the contract term. Water and sewer rates established for the base period of subject contract are described below. Since CLIN’s 0003 and 0004 are based upon the City’s published rates, current year rates will apply to them. Following each CLIN below is a description of the rate: CLIN 0001: Price for metered water shall be a fixed monthly charge of $91,277/month and a volumetric charge of $1.83/hundred cubic feet (hcf). The volumetric charge is applied to the total of all billable units upon approval of the invoices. CLIN 0002: Price for metered sewage shall be a fixed monthly charge of 109,695 and a volumetric charge of $4.70/hundred cubic feet (hcf). The volumetric charge is applied to the total of all billable units upon approval of the invoices. CLIN 0003: Price for metered water and sewer service shall be in accordance with the City of Bremerton (City) Retail Water Rates, within-city for 2” meter and Commercial I within-city wastewater rate based on measured flow through 2” meter, which became effective on 1 January 2021. See attachment J.3. CLIN 0004: Price for stormwater charges will be based upon 250 (Impervious Hard Surface Units) IHSU’s at the City of Bremerton Retail Stormwater Rates for Commercial I which became effective on 1 January 2021. See attachment J.3. . B.2 CLIN 0002. CITY ACCOUNT #1300090. DEDUCTIONS FOR CITY WATER FLOW INTO NAVY SEWAGE SYSTEM PRIOR TO EXIT OF NAVY WASTEWATER DISCHARGE THROUGH CITY METER LOCATED AT 143 1ST STREET (EAST END OF BNC). The parties mutually agree to the following deductions: (1) The City has installed a water meter that measures full flow from the Naval Museum and Fountain Room. This measured flow will be deducted from CLIN 0002 on each monthly invoice for City Account #1300090. (2) The City has installed a water meter to measure flow from the Harborside public restrooms. This measured flow will be deducted from CLIN 0002 on each monthly invoice for City Account #1300090. (3) The City shall deduct an estimated water discharge from the Harborside Fountain Park pump room overflow. The parties mutually agree that a monthly average of 18 hundred cubic feet (hcf) shall be deducted from CLIN 0002 on each monthly invoice for City Account #1300090 to account for Fountain Park Discharge. B.3 CLIN 0002. ACCOUNT #1300100. ADDITION OF ESTIMATED SEWAGE FLOW FROM THE NAVY’S MONTGOMERY AVENUE GUARD SHACK INTO CITY’S WASTEWATER STREAM (WEST END OF BNC). The parties mutually agree that sewage flow produced from the Montgomery Avenue Guard N4425521C1004 Page 3 of 27 Shack is estimated at approximately 3 hcf per month. Therefore, the parties agree to add this amount to each monthly invoice for City Account #13000100. B.4 FUTURE RATE ADJUSTMENTS. CLIN 0001 and CLIN 0002: Any adjustment of CLIN 0001 and 0002 rates beyond calendar year 2021 shall be accomplished in accordance with the mutually negotiated rationale and formulas as found in attachment J.2, contract N44255-21-C-1004, Methodology For Adjustment of Water and Wastewater Rates. The parties agree that the baseline usage provided at the beginning of the contract by the City of Bremerton shall not change during the entire contract term. Only rates and revenues as developed and incorporated into Attachment J.2 may change for purposes of future adjustments. The baseline usages for water and wastewater, respectively, are found in Attachment J.2 under the water and wastewater spreadsheets titled “Base Year Calculations”. The City shall provide any revised rates and revenues for Navy review in accordance with Attachment J.2 no less than 30 days prior to the effective date of any such adjustments. It is anticipated that future rate adjustments will normally become effective 01 January. CLIN’s 0003 and 0004: Adjustment of CLIN 0003 and 0004 rates beyond calendar year 2021 shall be in accordance with amended City of Bremerton Commercial 1 rates as may be codified through revisions to Appendix A to City of Bremerton Municipal Code 15.06, Assessments, Rates, Fees and Charges. It is anticipated that future rate adjustments will normally become effective 01 January. All adjustments to CLINs 0001, 0002, 0003, and 0004 are subject to the provisions of FAR Clause 52.241- 8, “Change in Rates or Terms and Conditions of Service for Unregulated Services. Any rate adjustments beyond the ten-year term will be done on a subsequent contract. To the maximum extent practicable for CLIN’s 0001 and 0002, the follow-on contract may allow for similarly calculated rate adjustments within the same timeframes as rates have historically been revised. REST OF PAGE LEFT INTENTIONALLY BLANK N4425521C1004 Page 4 of 27 ITEM NO SUPPLIES/SERVICES QUANTITY UNIT UNIT PRICE AMOUNT 0001 1 Each $0.01 $0.01 EST Potable Water - NBK Bremerton FFP Provide potable water to Naval Base Kitsap - Bremerton Naval Complex, Bremerton, Washington. Water flow volume shall be measured through City of Bremerton meter located at 1st and Pacific; City of Bremerton meter located at Charleston Gate; and City of Bremerton meter located at lst and Rainier Avenue. City of Bremerton utility accounts 1300030, 1300040, and 1300050 apply to this CLIN. CLIN 0001 rate design was negotiated at a mutually agreed Cost of Service Study. CLIN 0001 estimated component rates for 2021 are found in contract provision B1 Rate Structure. FOB: Destination PSC CD: S114 NET AMT $0.01 (EST.) ITEM NO SUPPLIES/SERVICES QUANTITY UNIT UNIT PRICE AMOUNT 0002 1 Each $0.01 $0.01 EST Sewage Service - NBK Bremerton FFP Provide sewage disposal and treatment for Bremerton Naval Complex, Bremerton, Washington. Sewage flow volume will be measured through City of Bremerton meter located at 143 lst Street; and City of Bremerton meter located at 416 S. Cambrian Avenue. City of Bremerton utility accounts 1300090, 1300100, and 1300120 apply to this CLIN. CLIN 0002 rate design is based on mutually negotiated cost of service study. CLIN 0002 component rates for 2021 are found at contract provision B.1, Rate Structure. Deductions from account 1300090 to address City water flow into Navy sewage system shall be applied as described in contract provision B.2. Addition of Navy sewage flow from Mongomery Guard Shack into City sewer system shall be applied to account 1300010 as described in contract provision B.3. FOB: Destination PSC CD: S119 NET AMT $0.01 (EST.) N4425521C1004 Page 5 of 27 ITEM NO SUPPLIES/SERVICES QUANTITY UNIT UNIT PRICE AMOUNT 0003 1 Each $0.01 $0.01 EST Water and Sewer Bldg 981 - NBK Bremerton FFP Provide potable water and sewage service for Building 981, Pass and ID, Bremerton Naval Complex (BNC), Bremerton, Washington. Water flow volume is measured through City of Bremerton water meter. City of Bremerton utility account 4655650 applies to this CLIN. Price for metered water shall be based on City of Bremerton within city 2" meters size as found in City of Bremerton Municipal Code Retail Water Service Rates. Price for sewage is based on City of Bremerton Commercial 1 within city rates as found in City of Bremerton Municipal Code for Retail Wastewater Service. Sewer flow is equivalent to water flow for the CLIN. FOB: Destination PSC CD: S119 NET AMT $0.01 (EST.) ITEM NO SUPPLIES/SERVICES QUANTITY UNIT UNIT PRICE AMOUNT 0004 1 Each $0.01 $0.01 EST Stormwater Services - NBK Bremerton FFP Provide stormwater services to add the Navy property located on Montgomery Avenue that directly contributes stormwater to a City-owned and maintained stormwater collection system. The monthly rate will be based on the amount of impervious surface units (ISU) contributing run-off to the City collection system. One ISU is equivalent to 2,500 square feet. The applicable Retail Stormwater Rate for this charge is the City's Comercial I found in the City's Municipal Ordinance, Attachment J.3.. The parties agree that 250 ISU's are applicable to the Navy property located on Montgomery Ave. The stormwater charges for this area will be added to the City of Bremerton utility account #2409670. FOB: Destination PSC CD: S119 NET AMT $0.01 (EST.) N4425521C1004 Page 6 of 27 Section C - Descriptions and Specifications STATEMENT OF SERVICES C.1 GENERAL REQUIREMENTS. The City of Bremerton (City) shall provide all labor, supervision, tools, equipment, and transportation necessary to deliver the services required under this contract. C.2 PREMISES TO BE SERVED. The premises to be served are collectively known as the Naval Base Kitsap (NBK), Bremerton Complex. For purposes of this contract, the NBK Bremerton facilities to be served consist of: Naval Base Kitsap (NBK) Bremerton 120 South Dewey Street Bremerton, WA 98314-5020 Puget Sound Navy Shipyard (PSNS)/ Intermediate Maintenance Facility (IMF) 1400 Farragut Avenue Bremerton, WA 98314-5001 The facilities to be provided water and sewer service under CLIN’s 0001, 0002, 0003 and 0004 are detailed in two Department of Navy, Facilities Engineering Systems Command NW drawings (as may be further revised): Naval Base Kitsap, Bremerton, WA, “Sanitary Sewer, CHT & Pressure Sewer Systems, Bremerton Naval Complex, PWD Drawing No. 57849, revised April 12, 2017,” and Naval Base Kitsap, Bremerton, WA, “Utility Map, Freshwater Distribution System, Bremerton Naval Complex, PWD Drawing No. 53935, revised April 7, 2017.” Subject to appropriate security reviews and approvals, copies of these drawings will be provided by the Navy to the City of Bremerton upon request. C.3 ESTIMATED SERVICE. Estimated annual water consumption: CLIN 0001 – 650,000 hundred cubic feet (hcf) CLIN 0003 - 50 hundred cubic feet (hcf) Estimated annual sewage capacity requirements: CLIN 0002 – 300,000 hundred cubic feet (hcf) Estimated stormwater charges: CLIN 0004 – 250 Impermeable Hard Surface Units (IHSU’s) C.4 POINT OF CONNECTION/LOCATION. Water service: Water shall be delivered at the following meter locations: 1. First Street and Pacific Avenue 2. Charleston Gate 3. First Street and Rainier Avenue 4. State Highway 304, Pass and ID Building #981 N4425521C1004 Page 7 of 27 Sewer Service: the City shall receive sewage at the following points of delivery: 1. 416 S. Cambrian Avenue (upstream of the City’s Cambrian Avenue flow metering vault (MS4) located on the site of the City’s pump station WB-3 2. 143 First Street (at the City’s First Street flow metering vault (MS5) 3. State Highway 304, Pass and ID Building #981 Stormwater Service: The City receives stormwater at various points near 100 Montgomery Avenue S., Active Duty Parking Garage. Attachment J.4, Water and Wastewater Utility Location, Accounts and Meters, Bremerton Naval Complex, is provided as further reference. Should the City replace any meter providing water or wastewater services to the Navy, the City shall notify the Contracting Officer of such replacement, including the new meter number, within 30 days of initiation of use of the replacement meter. The Contracting Officer shall revise, through modification to the contract, the applicable meter numbers cited in Section B, Section C, and Attachment J.4 of this contract. C.5 DESCRIPTION OF SERVICE. (a) WATER: The City shall provide at its expense all necessary facilities and permits required to connect the City of Bremerton water distribution system to the Government water system at the points of delivery specified in this contract for the purpose of providing reliable water service to NBK Bremerton and PSNS/IMF. The City shall take all reasonable efforts to continuously provide sufficient potable water to support a current-year average day demand of 1.2 million gallons per day (MGD) with an estimated maximum day demand of 3.5 MGD. Growth projections estimate those numbers to increase to 1.32 MGD, and 3.85 MGD, respectively, by 2028. The City shall take all reasonable efforts to provide sufficient potable water to support a maximum fire flow demand of 7,750 GPM for a duration of 4 hours. Water shall be measured through three 10” meters. The water supplied will be clear, potable, and safe for human consumption and in accordance with the applicable standards as promulgated by, and as may be revised by, Federal, state, and local agencies having regulatory authority. (b) SEWER: The City shall provide at its expense all necessary facilities and permits required to receive, carry, treat, and dispose of sewage from NBK Bremerton and PSNS/IMF at the points of delivery specified in this contract. The City shall receive, carry, treat, and dispose of sewage in a manner, and by such means, as will not constitute a hazard to the public health. The City shall operate its sewage facilities in conformity with applicable laws, rules, and regulations as promulgated by, and as may be revised by, Federal, state, and local agencies having regulatory authority. The average daily sewer volume is estimated to be 0.59 MGD, with an estimated peak daily volume of 2.0 MGD. The amount of sewage discharged by the Navy to the City for treatment, reclamation, or disposal through the Cambrian Avenue discharge points shall not exceed a peak discharge rate of 2,500 GPM, nor a total daily volume of 2.59 MGD. The amount of sewage discharged to the City for treatment, reclamation, or disposal through the First Street discharge point shall not exceed a peak discharge rate of 500 GPM, nor a total daily volume of 0.43 MGD. Flow shall be measured through two 6” meters and one 10” meter. . (c) STORMWATER N4425521C1004 Page 8 of 27 The City shall provide at its expense all necessary facilities and permits required to receive, carry, and dispose of stormwater from the Parking Structure described above at the southern end of Montgomery Avenue via various stormwater drains near the facility. The City shall receive, carry, and dispose of the stormwater in a manner, and by such means, as will not constitute a hazard to the public health. C.6 The Navy hereby grants to the City of Bremerton a revocable permit to enter the service location for any work related to the requirements under this contract. Authorized representatives of the City will be allowed access to the facility at suitable times to perform the obligations of the utility service contract. It is expressly understood that the Navy may limit or restrict the right of access herein granted in any manner considered to be necessary for the national security. City personnel requiring base access will obtain appropriate badging and identification as may be required by the Government. C.7 OPERATIONAL COORDINATION MEETINGS. The parties agree that an operational coordination meeting will be held between the City and Navy no less than every six months during the term of the contract. More frequent meetings may be scheduled as appropriate. The purpose of these meetings is to facilitate increased communication and coordination among the parties on such issues as significant changes to operational procedures, planned outages or flushing operations, maintenance requirements, review of key technical criteria or data associated with utility operations, upgrade or replacement of equipment or infrastructure, conservation initiatives, and other issues that may substantially impact the quality or level of service requirements. The meetings will be scheduled by the Utilities Program Manager of Naval Facilities Engineering Systems Command Northwest – Bremerton (NAVFACNW – Bremerton) and will be co-chaired by the Utilities Program Manager of NAVFACNW Bremerton and the City of Bremerton Public Works Director or their designated representatives. C.8 CONTACT AND NOTIFICATION LISTS. The parties agree that a contact and notification list of key personnel for the Navy and City shall be maintained. This list of personnel is found at Attachment J.5, Key Utility Personnel Contact List, Bremerton Naval Complex and City of Bremerton. This list will be revised as necessary but no less than once every six months. Update of this list will be a part of the agenda for the bi-annual Operational Coordination Meetings. C.9 TERM. This contract shall continue in effect for a period of 10 years beginning 3 May 2021 or until terminated at the option of the Government by giving written notice not less than 30 days in advance of the effective date of termination. N4425521C1004 Page 9 of 27 Section E - Inspection and Acceptance INSPECTION AND ACCEPTANCE TERMS Supplies/services will be inspected/accepted at: CLIN INSPECT AT INSPECT BY ACCEPT AT ACCEPT BY 0001 N/A N/A N/A Government 0002 N/A N/A N/A Government 0003 N/A N/A N/A Government 0004 N/A N/A N/A Government N4425521C1004 Page 10 of 27 Section F - Deliveries or Performance DELIVERY INFORMATION CLIN DELIVERY DATE QUANTITY SHIP TO ADDRESS DODAAC / CAGE 0001 POP 03-MAY-2021 TO 02-MAY-2031 N/A N/A FOB: Destination 0002 POP 03-MAY-2021 TO 02-MAY-2031 N/A N/A FOB: Destination 0003 POP 03-MAY-2021 TO 02-MAY-2031 N/A N/A FOB: Destination 0004 POP 03-MAY-2021 TO 02-MAY-2031 N/A N/A FOB: Destination N4425521C1004 Page 11 of 27 Section G - Contract Administration Data INVOICING INSTRUCTIONS G.1 PAYMENTS. The City shall be paid by the designated disbursing office for services furnished under the contract at the rates specified. All bills for regular monthly service shall be paid according to the Prompt Payment Act. The Government shall be entitled to any discounts customarily applicable to payment of bills by all customers of the City under like conditions of service. The Government shall notify the City, in writing, within 30 days following receipt of any disputed billing. The Government may pay the disputed billings in full under protest, pending a negotiated resolution pursuant to an appropriate audit, if required, and in accordance with the Disputes Clause of the contract. G. 2 INVOICES. Invoices for water and sewage service provided under CLINS 0001, 0002, and 0003 shall contain statements of the meter readings at the beginning and end of the billing period, including the consumption during the billing period. For CLIN 0004, it is agreed that the Navy is responsible for 250 IHSU’s on a monthly basis. Invoices will also clearly state the negotiated rate(s) or City rate applied to the appropriate CLINs. The invoice shall contain the Navy contract number, N44255-21-C-1004; the individual city utility account; and applicable meter numbers. The fixed and volumetric components of the appropriate rate(s) shall be clearly identified for each account. Deductions and Additions to CLIN 0002 in accordance with contract provisions B.2 and B.3 shall be clearly identified. Water and sewage billing shall be on a monthly basis. Submit invoices to: Utility Invoice Processing Center (Insert Government Account Number) Box 159 9226 THIRD AVENUE NORFOLK, VA 23511-2313 Utility Account Number GOVERNMENT ACCOUNT NUMBER Contract No. Service Location Sevice 1300030 NW_43_FW_00011 N44255-21-C-1004 1st and Pacific Water 1300040 NW_43_FW_0012 N44255-21-C-1004 Charleston Gate Water 1300050 NW_43_FW_00007 N44255-21-C-1004 1st Street & Rainier Ave. Water 1300090 NW_43_SE_00006 N44255-21-C-1004 143 1st Avenue - MS5 Sewage 1300100 NW_43_SE_00004 N44255-21-C-1004 416 S. Cambrian Avenue – MS4 Sewage 1300120 NW_43_SE_00007 N44255-21-C-1004 416 S. Cambrian Avenue – MS4 Sewage 4655650 NW_43_SE_NM_BR_002 N44255-21-C-1004 State Highway 304 Pass & ID Bldg 981 Sewage 4655650 NW_43_FW_NM_BR_002 N44255-21-C-1004 State Highway 304 Pass & ID Bldg 981 Water 2409670 NW_43_FW_NM_M1_013 N44255-21-C-1004 100 S. Montgomery St. Stormwater N4425521C1004 Page 12 of 27 G.3 OTHER COMMUNICATION. All other communication regarding this contract shall be addressed as follows: Utility Service Provider City of Bremerton Attn: Contracts Administrator - Finance Department 345 6th Street Suite 100 Bremerton, WA 98337 Government: Department of Navy Naval Facilities Engineering Systems Command Northwest Attention: Utilities Contracts 1101 Tautog Circle Silverdale, WA 98315-1101 G.4. ACCOUNTING AND APPROPRIATION DATA. The Certifying Official shall cite funding for recurring services on each invoice. Nonrecurring services will normally be procured through contract modification and shall be separately invoiced. G.5 ACCOUNTING PROCEDURES. The City shall comply with the requirements of the latest revised Office of Management and Budget (OMB) Circular A-87, “Cost Principles for State, Local, and Indian Tribe Governments”. Compliance with OMB Circular A-87 will be monitored through Navy review of the periodic reports generated by the Budgeting, Accounting, and Reporting System (BARS) of the Washington State Auditor’s Office. G.6 RATE CHANGES. The City shall notify the Navy of any applicable rate changes as far in advance as is reasonable. Changes in rates or terms and conditions of service are subject to the provisions of FAR Clause 52.241-8, “Change in Rates or Terms and Conditions of Service for Unregulated Services (Feb 1995). PAYMENT INSTRUCTIONS DFARS PGI SECTION 207.7108 Department of Defense Federal Acquisition Supplement Procedures, Guidance, and Information https://www.acq.osd.mil/dpap/dars/pgi/pgi_htm/current/PGI204_71.htm#payment_instructions N4425521C1004 Page 13 of 27 Section H - Special Contract Requirements SPECIAL CONTRACT REQUIREMENTS H.1 SEWAGE SAMPLING. The City shall comply with all applicable federal, state, and local requirements for sewage monitoring and sampling. The City, at a minimum, shall conduct sewage sampling on a monthly basis. Copies of reports of sampling analyses shall be provided to NBK Bremerton, Code 106. H.2 ANNUAL RATE REVIEWS. Annual rate reviews may be conducted by the Government in accordance with the Federal Acquisition Regulation (FAR) Part 41.401, “Monthly and Annual Review”. Notwithstanding mutually negotiated rates for this contract, these annual rate reviews may constitute grounds for rate redetermination in accordance with the requirements of FAR Part 41.401. H.3 METERS. The parties agree that the City shall furnish, install, maintain, repair, calibrate, and read all meters associated with the City’s performance requirements under this contract in accordance with FAR Clause 52.241-6, Service Provisions. The parties agree that in the event any meter is determined through inspection, testing, or other means to not be operable or otherwise not in compliance, the City shall either repair or replace such meter within 60 days. Should such repair or replacement not be feasible, the parties shall negotiate a mutually agreeable estimate of flow to be used for billing purposes. Estimated flow calculations must be negotiated within 60 days from date meter has been determined to be noncompliant or inoperable. H.4 COST OF SERVICE STUDY. The parties agree that the Summary of U.S. Navy Contract Negotiations for Water and Wastewater Service, Attachment J.1, constitutes the basis for development of the 2021 base year rates for this contract. It is further contemplated that a follow-up cost of service study from the City will be completed and available for mutual review by the parties no later than two (2) years from the end of this contract term. N4425521C1004 Page 14 of 27 Section I - Contract Clauses CLAUSES INCORPORATED BY REFERENCE 52.202-1 Definitions NOV 2013 52.203-3 Gratuities APR 1984 52.203-5 Covenant Against Contingent Fees MAY 2014 52.203-6 Restrictions On Subcontractor Sales To The Government SEP 2006 52.203-7 Anti-Kickback Procedures MAY 2014 52.203-8 Cancellation, Rescission, and Recovery of Funds for Illegal or Improper Activity MAY 2014 52.203-10 Price Or Fee Adjustment For Illegal Or Improper Activity MAY 2014 52.203-12 Limitation On Payments To Influence Certain Federal Transactions OCT 2010 52.203-17 Contractor Employee Whistleblower Rights and Requirement To Inform Employees of Whistleblower Rights APR 2014 52.204-4 Printed or Copied Double-Sided on Postconsumer Fiber Content Paper MAY 2011 52.204-7 System for Award Management OCT 2016 52.204-19 Incorporation by Reference of Representations and Certifications. DEC 2014 52.204-25 Prohibition on Contracting for Certain Telecommunications and Video Surveillance Services or Equipment. AUG 2019 52.219-8 Utilization of Small Business Concerns NOV 2016 52.222-3 Convict Labor JUN 2003 52.222-21 Prohibition Of Segregated Facilities APR 2015 52.222-26 Equal Opportunity SEP 2016 52.222-50 Combating Trafficking in Persons MAR 2015 52.223-18 Encouraging Contractor Policies To Ban Text Messaging While Driving AUG 2011 52.225-13 Restrictions on Certain Foreign Purchases JUN 2008 52.225-25 Prohibition on Contracting with Entities Engaging in Certain Activities or Transactions Relating to Iran-- Representation and Certifications. AUG 2018 52.232-1 Payments APR 1984 52.232-11 Extras APR 1984 52.232-25 Prompt Payment JAN 2017 52.232-33 Payment by Electronic Funds Transfer--System for Award Management JUL 2013 52.232-39 Unenforceability of Unauthorized Obligations JUN 2013 52.233-3 Protest After Award AUG 1996 52.233-4 Applicable Law for Breach of Contract Claim OCT 2004 52.237-2 Protection Of Government Buildings, Equipment, And Vegetation APR 1984 52.237-3 Continuity Of Services JAN 1991 52.241-2 Order of Precedence - Utilities FEB 1995 52.241-4 Change in Class of Service FEB 1995 52.241-5 Contractor's Facilities FEB 1995 52.241-11 Multiple Service Locations FEB 1995 52.242-13 Bankruptcy JUL 1995 52.244-6 Subcontracts for Commercial Items AUG 2019 52.249-2 Termination For Convenience Of The Government (Fixed- Price) APR 2012 52.249-8 Default (Fixed-Price Supply & Service) APR 1984 N4425521C1004 Page 15 of 27 52.253-1 Computer Generated Forms JAN 1991 252.203-7001 Prohibition On Persons Convicted of Fraud or Other Defense- Contract-Related Felonies DEC 2008 252.204-7003 Control Of Government Personnel Work Product APR 1992 252.209-7004 Subcontracting With Firms That Are Owned or Controlled By The Government of a Country that is a State Sponsor of Terrorism OCT 2015 252.223-7006 Prohibition On Storage, Treatment, and Disposal of Toxic or Hazardous Materials SEP 2014 252.225-7048 Export-Controlled Items JUN 2013 252.241-7001 Government Access DEC 1991 252.243-7002 Requests for Equitable Adjustment DEC 2012 CLAUSES INCORPORATED BY FULL TEXT 52.222-26 EQUAL OPPORTUNITY (SEPT 2016) ALTERNATE I (FEB 1999) Notice. The following terms of this clause are waived for this contract: NA . (a) Definitions. As used in this clause-- Compensation means any payments made to, or on behalf of, an employee or offered to an applicant as remuneration for employment, including but not limited to salary, wages, overtime pay, shift differentials, bonuses, commissions, vacation and holiday pay, allowances, insurance and other benefits, stock options and awards, profit sharing, and retirement. Compensation information means the amount and type of compensation provided to employees or offered to applicants, including, but not limited to, the desire of the Contractor to attract and retain a particular employee for the value the employee is perceived to add to the Contractor's profit or productivity; the availability of employees with like skills in the marketplace; market research about the worth of similar jobs in the relevant marketplace; job analysis, descriptions, and evaluations; salary and pay structures; salary surveys; labor union agreements; and Contractor decisions, statements and policies related to setting or altering employee compensation. Essential job functions means the fundamental job duties of the employment position an individual holds. A job function may be considered essential if-- (1) The access to compensation information is necessary in order to perform that function or another routinely assigned business task; or (2) The function or duties of the position include protecting and maintaining the privacy of employee personnel records, including compensation information. Gender identity has the meaning given by the Department of Labor's Office of Federal Contract Compliance Programs, and is found at www.dol.gov/ofccp/LGBT/LGBT_FAQs.html. Sexual orientation has the meaning given by the Department of Labor's Office of Federal Contract Compliance Programs, and is found at www.dol.gov/ofccp/LGBT/LGBT_FAQs.html. United States means the 50 States, the District of Columbia, Puerto Rico, the Northern Mariana Islands, American Samoa, Guam, the U.S. Virgin Islands, and Wake Island. (b)(1) If, during any 12-month period (including the 12 months preceding the award of this contract), the Contractor has been or is awarded nonexempt Federal contracts and/or subcontracts that have an aggregate value in excess of N4425521C1004 Page 16 of 27 $10,000, the Contractor shall comply with this clause, except for work performed outside the United States by employees who were not recruited within the United States. Upon request, the Contractor shall provide information necessary to determine the applicability of this clause. (2) If the Contractor is a religious corporation, association, educational institution, or society, the requirements of this clause do not apply with respect to the employment of individuals of a particular religion to perform work connected with the carrying on of the Contractor's activities (41 CFR 60-1.5). (c) (1) The Contractor shall not discriminate against any employee or applicant for employment because of race, color, religion, sex, sexual orientation, gender identity, or national origin. However, it shall not be a violation of this clause for the Contractor to extend a publicly announced preference in employment to Indians living on or near an Indian reservation, in connection with employment opportunities on or near an Indian reservation, as permitted by 41 CFR 60-1.5. (2) The Contractor shall take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, sex, sexual orientation, gender identity, or national origin. This shall include, but not be limited to, (i) employment, (ii) upgrading, (iii) demotion, (iv) transfer, (v) recruitment or recruitment advertising, (vi) layoff or termination, (vii) rates of pay or other forms of compensation, and (viii) selection for training, including apprenticeship. (3) The Contractor shall post in conspicuous places available to employees and applicants for employment the notices to be provided by the Contracting Officer that explain this clause. (4) The Contractor shall, in all solicitations or advertisements for employees placed by or on behalf of the Contractor, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, sexual orientation, gender identity, or national origin. (5)(i) The Contractor shall not discharge or in any other manner discriminate against any employee or applicant for employment because such employee or applicant has inquired about, discussed, or disclosed the compensation of the employee or applicant or another employee or applicant. This prohibition against discrimination does not apply to instances in which an employee who has access to the compensation information of other employees or applicants as a part of such employee's essential job functions discloses the compensation of such other employees or applicants to individuals who do not otherwise have access to such information, unless such disclosure is in response to a formal complaint or charge, in furtherance of an investigation, proceeding, hearing, or action, including an investigation conducted by the employer, or is consistent with the Contractor's legal duty to furnish information. (ii) The Contractor shall disseminate the prohibition on discrimination in paragraph (c)(5)(i) of this clause, using language prescribed by the Director of the Office of Federal Contract Compliance Programs (OFCCP), to employees and applicants by— (A) Incorporation into existing employee manuals or handbooks; and (B) Electronic posting or by posting a copy of the provision in conspicuous places available to employees and applicants for employment. (6) The Contractor shall send, to each labor union or representative of workers with which it has a collective bargaining agreement or other contract or understanding, the notice to be provided by the Contracting Officer advising the labor union or workers' representative of the Contractor's commitments under this clause, and post copies of the notice in conspicuous places available to employees and applicants for employment. (7) The Contractor shall comply with Executive Order 11246, as amended, and the rules, regulations, and orders of the Secretary of Labor. N4425521C1004 Page 17 of 27 (8) The Contractor shall furnish to the contracting agency all information required by Executive Order 11246, as amended, and by the rules, regulations, and orders of the Secretary of Labor. The Contractor shall also file Standard Form 100 (EEO-1), or any successor form, as prescribed in 41 CFR part 60-1. Unless the Contractor has filed within the 12 months preceding the date of contract award, the Contractor shall, within 30 days after contract award, apply to either the regional Office of Federal Contract Compliance Programs (OFCCP) or the local office of the Equal Employment Opportunity Commission for the necessary forms. (9) The Contractor shall permit access to its premises, during normal business hours, by the contracting agency or the OFCCP for the purpose of conducting on-site compliance evaluations and complaint investigations. The Contractor shall permit the Government to inspect and copy any books, accounts, records (including computerized records), and other material that may be relevant to the matter under investigation and pertinent to compliance with Executive Order 11246, as amended, and rules and regulations that implement the Executive Order. (10) If the OFCCP determines that the Contractor is not in compliance with this clause or any rule, regulation, or order of the Secretary of Labor, this contract may be canceled, terminated, or suspended in whole or in part and the Contractor may be declared ineligible for further Government contracts, under the procedures authorized in Executive Order 11246, as amended. In addition, sanctions may be imposed and remedies invoked against the Contractor as provided in Executive Order 11246, as amended; in the rules, regulations, and orders of the Secretary of Labor; or as otherwise provided by law. (11) The Contractor shall include the terms and conditions of this clause in every subcontract or purchase order that is not exempted by the rules, regulations, or orders of the Secretary of Labor issued under Executive Order 11246, as amended, so that these terms and conditions will be binding upon each subcontractor or vendor. (12) The Contractor shall take such action with respect to any subcontract or purchase order as the Director of OFCCP may direct as a means of enforcing these terms and conditions, including sanctions for noncompliance; provided, that if the Contractor becomes involved in, or is threatened with, litigation with a subcontractor or vendor as a result of any direction, the Contractor may request the United States to enter into the litigation to protect the interests of the United States. (d) Notwithstanding any other clause in this contract, disputes relative to this clause will be governed by the procedures in 41 CFR part 60-1. (End of clause) 52.222-35 EQUAL OPPORTUNITY FOR VETERANS (OCT 2015) ALTERNATE I (JUL 2014) Notice: The following term(s) of this clause are waived for this contract: -------------------NA . (a) Definitions. As used in this clause-- ``Active duty wartime or campaign badge veteran,'' ``Armed Forces service medal veteran,'' ``disabled veteran,'' ``protected veteran,'' ``qualified disabled veteran,'' and ``recently separated veteran'' have the meanings given at FAR 22.1301. (b) Equal opportunity clause. The Contractor shall abide by the requirements of the equal opportunity clause at 41 CFR 60-300.5(a), as of March 24, 2014. This clause prohibits discrimination against qualified protected veterans, and requires affirmative action by the Contractor to employ and advance in employment qualified protected veterans. N4425521C1004 Page 18 of 27 (c) Subcontracts. The Contractor shall insert the terms of this clause in subcontracts of $100,000 or more unless exempted by rules, regulations, or orders of the Secretary of Labor. The Contractor shall act as specified by the Director, Office of Federal Contract Compliance Programs, to enforce the terms, including action for noncompliance. Such necessary changes in language may be made as shall be appropriate to identify properly the parties and their undertakings. (End of clause) 52.232-40 PROVIDING ACCELERATED PAYMENTS TO SMALL BUSINESS SUBCONTRACTORS (DEC 2013) (a) Upon receipt of accelerated payments from the Government, the Contractor shall make accelerated payments to its small business subcontractors under this contract, to the maximum extent practicable and prior to when such payment is otherwise required under the applicable contract or subcontract, after receipt of a proper invoice and all other required documentation from the small business subcontractor. (b) The acceleration of payments under this clause does not provide any new rights under the Prompt Payment Act. (c) Include the substance of this clause, including this paragraph (c), in all subcontracts with small business concerns, including subcontracts with small business concerns for the acquisition of commercial items. (End of clause) 52.233-1 DISPUTES. (MAY 2014) -- ALTERNATE I (DEC 1991) (a) This contract is subject to 41 U.S.C. chapter 71, Contract Disputes. (b) Except as provided in 41 U.S.C. chapter 71, all disputes arising under or relating to this contract shall be resolved under this clause. (c) Claim, as used in this clause, means a written demand or written assertion by one of the contracting parties seeking, as a matter of right, the payment of money in a sum certain, the adjustment or interpretation of contract terms, or other relief arising under or relating to this contract. However, a written demand or written assertion by the Contractor seeking the payment of money exceeding $100,000 is not a claim under 41 U.S.C. chapter 71 until certified. A voucher, invoice, or other routine request for payment that is not in dispute when submitted is not a claim under 41 U.S.C. chapter 71. The submission may be converted to a claim under 41 U.S.C. chapter 71, by complying with the submission and certification requirements of this clause, if it is disputed either as to liability or amount or is not acted upon in a reasonable time. (d)(1) A claim by the Contractor shall be made in writing and, unless otherwise stated in this contract, submitted within 6 years after accrual of the claim to the Contracting Officer for a written decision. A claim by the Government against the Contractor shall be subject to a written decision by the Contracting Officer. (2) (i) Contractors shall provide the certification specified in subparagraph (d)(2)(iii) of this clause when submitting any claimexceeding $100,000. (ii) The certification requirement does not apply to issues in controversy that have not been submitted as all or part of a claim. N4425521C1004 Page 19 of 27 (iii) The certification shall state as follows: "I certify that the claim is made in good faith; that the supporting data are accurate and complete to the best of my knowledge and belief; that the amount requested accurately reflects the contract adjustment for which the Contractor believes the Government is liable; and that I am authorized to certify the claim on behalf of the Contractor. (3) The certification may be executed by any person authorized to bind the Contractor with respect to the claim. (e) For Contractor claims of $100,000 or less, the Contracting Officer must, if requested in writing by the Contractor, render a decision within 60 days of the request. For Contractor-certified claims over $100,000, the Contracting Officer must, within 60 days, decide the claim or notify the Contractor of the date by which the decision will be made. (f) The Contracting Officer's decision shall be final unless the Contractor appeals or files a suit as provided in 41 U.S.C. chapter 71. (g) If the claim by the Contractor is submitted to the Contracting Officer or a claim by the Government is presented to the Contractor, the parties, by mutual consent, may agree to use ADR. If the Contractor refuses an offer for alternative disputes resolution, the Contractor shall inform the Contracting Officer, in writing, of the Contractor's specific reasons for rejecting the request. When using arbitration conducted pursuant to 5 U.S.C. 575-580, or when using any other ADR technique that the agency elects to handle in accordance with the ADRA, any claim, regardless of amount, shall be accompanied by the certification described in subparagraph (d)(2)(iii) of this clause, and executed in accordance with subparagraph (d)(3) of this clause. (h) The Government shall pay interest on the amount found due and unpaid from (1) the date the Contracting Officer receives the claim (certified, if required); or (2) the date that payment otherwise would be due, if that date is later, until the date of payment. With regard to claims having defective certifications, as defined in (FAR) 48 CFR 33.201, interest shall be paid from the date that the Contracting Officer initially receives the claim. Simple interest on claims shall be paid at the rate, fixed by the Secretary of the Treasury as provided in the Act, which is applicable to the period during which the Contracting Officer receives the claim and then at the rate applicable for each 6- month period as fixed by the Treasury Secretary during the pendency of the claim. (i) The Contractor shall proceed diligently with performance of this contract, pending final resolution of any request for relief, claim, appeal, or action arising under or relating to the contract, and comply with any decision of the Contracting Officer. (End of clause) 52.241-3 SCOPE AND DURATION OF CONTRACT (FEB 1995) (a) For the period 10 years commencing upon contract award the Contractor agrees to furnish and the Government agrees to purchase water, sewer and storm water utility service in accordance with the applicable tariff(s), rules, and regulations as approved by the applicable governing regulatory body and as set forth in the contract. (b) It is expressly understood that neither the Contractor nor the Government is under any obligation to continue any service under the terms and conditions of this contract beyond the expiration date. (c) The Contractor shall provide the Government with one complete set of rates, terms, and conditions of service which are in effect as of the date of this contract and any subsequently approved rates. (d) The Contractor shall be paid at the applicable rate(s) under the tariff and the Government shall be liable for the minimum monthly charge, if any, specified in this contract commencing with the period in which service is initially furnished and continuing for the term of this contract. Any minimum monthly charge specified in this contract shall be equitably prorated for the periods in which commencement and termination of this contract become effective. N4425521C1004 Page 20 of 27 (End of clause) 52.241-6 SERVICE PROVISIONS (FEB 1995) (a) Measurement of service. (1) All service furnished by the Contractor shall be measured by suitable metering equipment of standard manufacture, to be furnished, installed, maintained, repaired, calibrated, and read by the Contractor at its expense. When more than a single meter is installed at a service location, the readings thereof may be billed conjunctively, if appropriate. In the event any meter fails to register (or registers incorrectly) the service furnished, the parties shall agree upon the length of time of meter malfunction and the quantity of service delivered during such period of time. An appropriate adjustment shall be made to the next invoice for the purpose of correcting such errors. However, any meter which registers not more than 3 percent slow or fast shall be deemed correct. (2) The Contractor shall read all meters at periodic intervals of approximately 30 days or in accordance with the policy of the cognizant regulatory body or applicable bylaws. All billings based on meter readings of less than 28 days shall be prorated accordingly. (b) Meter test. (1) The Contractor, at its expense, shall periodically inspect and test Contractor-installed meters at intervals not exceeding 5 year(s) The Government has the right to have representation during the inspection and test. (2) At the written request of the Contracting Officer, the Contractor shall make additional tests of any or all such meters in the presence of Government representatives. The cost of such additional tests shall be borne by the Government if the percentage of errors is found to be not more than 3% percent slow or fast. (3) No meter shall be placed in service or allowed to remain in service which has an error in registration in excess of 3% percent under normal operating conditions. (c) Change in volume or character. Reasonable notice shall be given by the Contracting Officer to the Contractor regarding any material changes anticipated in the volume or characteristics of the utility service required at each location. (d) Continuity of service and consumption. The Contractor shall use reasonable diligence to provide a regular and uninterrupted supply of service at each service location, but shall not be liable for damages, breach of contract or otherwise, to the Government for failure, suspension, diminution, or other variations of service occasioned by or in consequence of any cause beyond the control of the Contractor, including but not limited to acts of God or of the public enemy, fires, floods, earthquakes, or other catastrophe, strikes, or failure or breakdown of transmission or other facilities. If any such failure, suspension, diminution, or other variation of service shall aggregate more than 24 hour(s) during any billing period hereunder, an equitable adjustment shall be made in the monthly billing specified in this contract (including the minimum monthly charge) (End of clause) 52.241-8 CHANGE IN RATES OR TERMS AND CONDITIONS OF SERVICE FOR UNREGULATED SERVICES (FEB 1995) (a) This clause applies to the extent that services furnished hereunder are not subject to regulation by a regulatory body. (b) After 6 months , either party may request a change in rates or terms and conditions of service, unless otherwise provided in this contract. Both parties agree to enter in negotiations concerning such changes upon receipt N4425521C1004 Page 21 of 27 of a written request detailing the proposed changes and specifying the reasons for the proposed changes. (c) The effective date of any change shall be as agreed to by the parties. The Contractor agrees that throughout the life of this contract the rates so negotiated will not be in excess of published and unpublished rates charged to any other customer of the same class under similar terms and conditions of use and service. (d) The failure of the parties to agree upon any change after a reasonable period of time shall be a dispute under the Disputes clause of this contract. (e) Any changes to rates, terms, or conditions as a result of such negotiations shall be made a part of this contract by the issuance of a contract modification. (End of clause) 52.243-1 CHANGES--FIXED-PRICE (AUG 1987) - ALTERNATE I (APR 1984) (a) The Contracting Officer may at any time, by written order, and without notice to the sureties, if any, make changes within the general scope of this contract in any one or more of the following: (1) Description of services to be performed. (2) Time of performance (i.e., hours of the day, days of the week, etc.). (3) Place of performance of the services. (b) If any such change causes an increase or decrease in the cost of, or the time required for, performance of any part of the work under this contract, whether or not changed by the order, the Contracting Officer shall make an equitable adjustment in the contract price, the delivery schedule, or both, and shall modify the contract. (c) The Contractor must assert its right to an adjustment under this clause within 30 days from the date of receipt of the written order. However, if the Contracting Officer decides that the facts justify it, the Contracting Officer may receive and act upon a proposal submitted before final payment of the contract. (d) If the Contractor’s proposal includes the cost of property made obsolete or excess by the change, the Contracting Officer shall have the right to prescribe the manner of the disposition of the property. (e) Failure to agree to any adjustment shall be a dispute under the Disputes clause. However, nothing in this clause shall excuse the Contractor from proceeding with the contract as changed. (End of clause) 52.252-2 CLAUSES INCORPORATED BY REFERENCE (FEB 1998) This contract incorporates one or more clauses by reference, with the same force and effect as if they were given in full text. Upon request, the Contracting Officer will make their full text available. Also, the full text of a clause may be accessed electronically at this/these address(es): https://www.acquisition.gov/?q=browsefar https://www.acquisition.gov/dfars N4425521C1004 Page 22 of 27 (End of clause) 252.204-7012 SAFEGUARDING COVERED DEFENSE INFORMATION AND CYBER INCIDENT REPORTING (OCT 2016) (a) Definitions. As used in this clause-- Adequate security means protective measures that are commensurate with the consequences and probability of loss, misuse, or unauthorized access to, or modification of information. Compromise means disclosure of information to unauthorized persons, or a violation of the security policy of a system, in which unauthorized intentional or unintentional disclosure, modification, destruction, or loss of an object, or the copying of information to unauthorized media may have occurred. Contractor attributional/proprietary information means information that identifies the contractor(s), whether directly or indirectly, by the grouping of information that can be traced back to the contractor(s) (e.g., program description, facility locations), personally identifiable information, as well as trade secrets, commercial or financial information, or other commercially sensitive information that is not customarily shared outside of the company. Controlled technical information means technical information with military or space application that is subject to controls on the access, use, reproduction, modification, performance, display, release, disclosure, or dissemination. Controlled technical information would meet the criteria, if disseminated, for distribution statements B through F using the criteria set forth in DoD Instruction 5230.24, Distribution Statements on Technical Documents. The term does not include information that is lawfully publicly available without restrictions. Covered contractor information system means an unclassified information system that is owned, or operated by or for, a contractor and that processes, stores, or transmits covered defense information. Covered defense information means unclassified controlled technical information or other information, as described in the Controlled Unclassified Information (CUI) Registry at http://www.archives.gov/cui/registry/category- list.html, that requires safeguarding or dissemination controls pursuant to and consistent with law, regulations, and Governmentwide policies, and is-- (1) Marked or otherwise identified in the contract, task order, or delivery order and provided to the contractor by or on behalf of DoD in support of the performance of the contract; or (2) Collected, developed, received, transmitted, used, or stored by or on behalf of the contractor in support of the performance of the contract. Cyber incident means actions taken through the use of computer networks that result in a compromise or an actual or potentially adverse effect on an information system and/or the information residing therein. Forensic analysis means the practice of gathering, retaining, and analyzing computer-related data for investigative purposes in a manner that maintains the integrity of the data. Information system means a discrete set of information resources organized for the collection, processing, maintenance, use, sharing, dissemination, or disposition of information. Malicious software means computer software or firmware intended to perform an unauthorized process that will have adverse impact on the confidentiality, integrity, or availability of an information system. This definition includes a virus, worm, Trojan horse, or other code-based entity that infects a host, as well as spyware and N4425521C1004 Page 23 of 27 some forms of adware. Media means physical devices or writing surfaces including, but is not limited to, magnetic tapes, optical disks, magnetic disks, large-scale integration memory chips, and printouts onto which covered defense information is recorded, stored, or printed within a covered contractor information system. Operationally critical support means supplies or services designated by the Government as critical for airlift, sealift, intermodal transportation services, or logistical support that is essential to the mobilization, deployment, or sustainment of the Armed Forces in a contingency operation. Rapidly report means within 72 hours of discovery of any cyber incident. Technical information means technical data or computer software, as those terms are defined in the clause at DFARS 252.227-7013, Rights in Technical Data--Noncommercial Items, regardless of whether or not the clause is incorporated in this solicitation or contract. Examples of technical information include research and engineering data, engineering drawings, and associated lists, specifications, standards, process sheets, manuals, technical reports, technical orders, catalog-item identifications, data sets, studies and analyses and related information, and computer software executable code and source code. (b) Adequate security. The Contractor shall provide adequate security on all covered contractor information systems. To provide adequate security, the Contractor shall implement, at a minimum, the following information security protections: (1) For covered contractor information systems that are part of an information technology (IT) service or system operated on behalf of the Government, the following security requirements apply: (i) Cloud computing services shall be subject to the security requirements specified in the clause 252.239-7010, Cloud Computing Services, of this contract. (ii) Any other such IT service or system (i.e., other than cloud computing) shall be subject to the security requirements specified elsewhere in this contract. (2) For covered contractor information systems that are not part of an IT service or system operated on behalf of the Government and therefore are not subject to the security requirement specified at paragraph (b)(1) of this clause, the following security requirements apply: (i) Except as provided in paragraph (b)(2)(ii) of this clause, the covered contractor information system shall be subject to the security requirements in National Institute of Standards and Technology (NIST) Special Publication (SP) 800-171, ``Protecting Controlled Unclassified Information in Nonfederal Information Systems and Organizations'' (available via the internet at http://dx.doi.org/10.6028/NIST.SP.800-171) in effect at the time the solicitation is issued or as authorized by the Contracting Officer. (ii)(A) The Contractor shall implement NIST SP 800-171, as soon aspractical, but not later than December 31, 2017. For all contracts awarded prior to October 1, 2017, the Contractor shall notify the DoD Chief Information Officer (CIO), via email at osd.dibcsia@mail.mil, within 30 days of contract award, of any security requirements specified by NIST SP 800-171 not implemented at the time of contract award. (B) The Contractor shall submit requests to vary from NIST SP 800-171 in writing to the Contracting Officer, for consideration by the DoD CIO. The Contractor need not implement any security requirement adjudicated by an authorized representative of the DoD CIO to be nonapplicable or to have an alternative, but equally effective, security measure that may be implemented in its place. (C) If the DoD CIO has previously adjudicated the contractor's requests indicating that a requirement is not applicable or that an alternative security measure is equally effective, a copy of that approval shall be provided to the Contracting Officer when requesting its recognition under this contract. N4425521C1004 Page 24 of 27 (D) If the Contractor intends to use an external cloud service provider to store, process, or transmit any covered defense information in performance of this contract, the Contractor shall require and ensure that the cloud service provider meets security requirements equivalent to those established by the Government for the Federal Risk and Authorization Management Program (FedRAMP) Moderate baseline (https://www.fedramp.gov/resources/documents/) and that the cloud service provider complies with requirements in paragraphs (c) through (g) of this clause for cyber incident reporting, malicious software, media preservation and protection, access to additional information and equipment necessary for forensic analysis, and cyber incident damage assessment. (3) Apply other information systems security measures when the Contractor reasonably determines that information systems security measures, in addition to those identified in paragraphs (b)(1) and (2) of this clause, may be required to provide adequate security in a dynamic environment or to accommodate special circumstances (e.g., medical devices) and any individual, isolated, or temporary deficiencies based on an assessed risk or vulnerability. These measures may be addressed in a system security plan. (c) Cyber incident reporting requirement. (1) When the Contractor discovers a cyber incident that affects a covered contractor information system or the covered defense information residing therein, or that affects the contractor's ability to perform the requirements of the contract that are designated as operationally critical support and identified in the contract, the Contractor shall-- (i) Conduct a review for evidence of compromise of covered defense information, including, but not limited to, identifying compromised computers, servers, specific data, and user accounts. This review shall also include analyzing covered contractor information system(s) that were part of the cyber incident, as well as other information systems on the Contractor's network(s), that may have been accessed as a result of the incident in order to identify compromised covered defense information, or that affect the Contractor's ability to provide operationally critical support; and (ii) Rapidly report cyber incidents to DoD at http://dibnet.dod.mil. (2) Cyber incident report. The cyber incident report shall be treated as information created by or for DoD and shall include, at a minimum, the required elements at http://dibnet.dod.mil. (3) Medium assurance certificate requirement. In order to report cyber incidents in accordance with this clause, the Contractor or subcontractor shall have or acquire a DoD-approved medium assurance certificate to report cyber incidents. For information on obtaining a DoD-approved medium assurance certificate, see http://iase.disa.mil/pki/eca/Pages/index.aspx. (d) Malicious software. When the Contractor or subcontractors discover and isolate malicious software in connection with a reported cyber incident, submit the malicious software to DoD Cyber Crime Center (DC3) in accordance with instructions provided by DC3 or the Contracting Officer. Do not send the malicious software to the Contracting Officer. (e) Media preservation and protection. When a Contractor discovers a cyber incident has occurred, the Contractor shall preserve and protect images of all known affected information systems identified in paragraph (c)(1)(i) of this clause and all relevant monitoring/packet capture data for at least 90 days from the submission of the cyber incident report to allow DoD to request the media or decline interest. (f) Access to additional information or equipment necessary for forensic analysis. Upon request by DoD, the Contractor shall provide DoD with access to additional information or equipment that is necessary to conduct a forensic analysis. N4425521C1004 Page 25 of 27 (g) Cyber incident damage assessment activities. If DoD elects to conduct a damage assessment, the Contracting Officer will request that the Contractor provide all of the damage assessment information gathered in accordance with paragraph (e) of this clause. (h) DoD safeguarding and use of contractor attributional/proprietary information. The Government shall protect against the unauthorized use or release of information obtained from the contractor (or derived from information obtained from the contractor) under this clause that includes contractor attributional/proprietary information, including such information submitted in accordance with paragraph (c). To the maximum extent practicable, the Contractor shall identify and mark attributional/proprietary information. In making an authorized release of such information, the Government will implement appropriate procedures to minimize the contractor attributional/proprietary information that is included in such authorized release, seeking to include only that information that is necessary for the authorized purpose(s) for which the information is being released. (i) Use and release of contractor attributional/proprietary information not created by or for DoD. Information that is obtained from the contractor (or derived from information obtained from the contractor) under this clause that is not created by or for DoD is authorized to be released outside of DoD-- (1) To entities with missions that may be affected by such information; (2) To entities that may be called upon to assist in the diagnosis, detection, or mitigation of cyber incidents; (3) To Government entities that conduct counterintelligence or law enforcement investigations; (4) For national security purposes, including cyber situational awareness and defense purposes (including with Defense Industrial Base (DIB) participants in the program at 32 CFR part 236); or (5) To a support services contractor (``recipient'') that is directly supporting Government activities under a contract that includes the clause at 252.204-7009, Limitations on the Use or Disclosure of Third-Party Contractor Reported Cyber Incident Information. (j) Use and release of contractor attributional/proprietary information created by or for DoD. Information that is obtained from the contractor (or derived from information obtained from the contractor) under this clause that is created by or for DoD (including the information submitted pursuant to paragraph (c) of this clause) is authorized to be used and released outside of DoD for purposes and activities authorized by paragraph (i) of this clause, and for any other lawful Government purpose or activity, subject to all applicable statutory, regulatory, and policy based restrictions on the Government's use and release of such information. (k) The Contractor shall conduct activities under this clause in accordance with applicable laws and regulations on the interception, monitoring, access, use, and disclosure of electronic communications and data. (l) Other safeguarding or reporting requirements. The safeguarding and cyber incident reporting required by this clause in no way abrogates the Contractor's responsibility for other safeguarding or cyber incident reporting pertaining to its unclassified information systems as required by other applicable clauses of this contract, or as a result of other applicable U.S. Government statutory or regulatory requirements. (m) Subcontracts. The Contractor shall-- (1) Include this clause, including this paragraph (m), in subcontracts, or similar contractual instruments, for operationally critical support, or for which subcontract performance will involve covered defense information, including subcontracts for commercial items, without alteration, except to identify the parties. The Contractor shall determine if the information required for subcontractor performance retains its identity as covered defense information and will require protection under this clause, and, if necessary, consult with the Contracting Officer; and (2) Require subcontractors to-- N4425521C1004 Page 26 of 27 (i) Notify the prime Contractor (or next higher-tier subcontractor) when submitting a request to vary from a NIST SP 800-171 security requirement to the Contracting Officer, in accordance with paragraph (b)(2)(ii)(B) of this clause; and (ii) Provide the incident report number, automatically assigned by DoD, to the prime Contractor (or next higher-tier subcontractor) as soon as practicable, when reporting a cyber incident to DoD as required in paragraph (c) of this clause. (End of clause) N4425521C1004 Page 27 of 27 Section J - List of Documents, Exhibits and Other Attachments CONTRACT ATTACHMENTS The following documents are appended to the contract and do not increase or alter the page count shown throughout the rest of contract document. J.1 Summary of U.S. Navy Contract Negotiations for Water and Wastewater Service October 2020 (This attachment will be sent as a separate file) J.2 Methodology For Adjustment Water and Wastewater Rates (Only the “Summary & Rate Adjustment” sheet is in this document, the actual spreadsheet will be sent as a separate File.) J.3 Bremerton Municipal Code Assessments, Rates, Fees, and Charges, Effective January 1, 2021. J.4 Water and Wastewater Utility Locations, Accounts, and Metering For Naval Base Kitsap - Bremerton J.5 Key Utility Personnel Contact List, Bremerton Naval Complex and City of Bremerton, 10 March 2021 N44255-21-C-1004 Attachment J.2 1 Methodology for Adjustment of Water and Wastewater Rates A. RATIONALE: (1) The parties have agreed to an approach for annually escalating or reducing rates that tie to City of Bremerton rate changes. This method ensures an equitable treatment for all customers of the City and provides transparency of costs to the Navy. (2) The parties have agreed that any future rate changes applied to the Navy accounts for contract line items (CLIN’s) 0001 (water) and 0002 (wastewater) shall be tied directly to the weighted average of rate increases applied to all Non-Navy customers for water and/or wastewater, respectively. For purposes of calculating rate increases to the Navy, the Non-Navy baseline customer classes and billable units will remain fixed through the life of the contract. Only the Non-Navy revenues generated for the Non-Navy customer classes will vary from year to year based on the rate increases applied by the City through revisions to the applicable City ordnances. As an example, the Non-Navy revenue from rates in Year 1 will be compared to the Non- Navy revenue from rates in Year 2. The Navy rates will be increased by the overall weighted percent increase to all Non-Navy customer classes from Year 1 to Year 2. The next year, the Non-Navy revenue from rates in Year 2 will be compared to the Non-Navy revenue from rates for Year 3. The Navy rates will be increased by the overall weighted percent increase to all Non-Navy classes from Year 2 to 3. This methodology will continue through the life of the contract. The number and types of customer classes and the billable usage used each year for the classes will always remain unchanged from Year 1. This approach guarantees that the Navy’s rates will adjust as the City’s rates adjust as a whole. The Navy notes that this approach will need to be modified if the City significantly changes its rate structure during the contract term. Example of such a rate structure changes would include adding an additional rate block or shifting to seasonal rates. If this should occur, the City will be required to propose how the adjustment should be handled during the rate transition year. The Navy and the City will then negotiate a change to the adjustment formula for the next applicable year based on the City’s revised rate structure. N44255-21-C-1004 Attachment J.2 2 Methodology for Adjustment of Water and Wastewater Rates B. METHODOLOGY. (1) In order to verify the weighted average escalator between any given year and any year +1 of the contract, it is necessary to input the rates and charges approved by the Bremerton City Council into the spreadsheet found in Attachment J.2 (Please note that the actual spreadsheet is attached as a separate file from this document.) The revised rates and charges are multiplied by the baseline usage to calculate the revenue for any year +1. (2) The parties agree that the baseline usage provided at the beginning of the contract by the City of Bremerton shall not change during the entire contract term. The baseline usages for water and wastewater, respectively, are found in Attachment J.2 under the water and wastewater spreadsheets titled “Base Year Calculations ”. (3) The formula for the percentage change in rate and charges for any year +1 is to divide the revenue in year + 1 by the revenue from the previous year. The formula for these calculations are found in the Attachment J.2 spreadsheet titled “Summary & Rate Adjustment”. Attachment J.2 also contains template spreadsheets for Years 2 through 10 for water and wastewater. These spreadsheets contain all formulas necessary to build calculations once the City has provided the new rates. These spreadsheets for water and wastewater are titled “Water/Wastewater Calculation”, starting with year 1 and following for each respective year 2 through 10. While escalations have been assumed, the same calculation principles would apply to reductions. The spreadsheets have been developed to show the impact of different sets of rate increases and the spreadsheet entitled “Rate Increases” shows the different rate increase scenarios. (4) The City will provide any revised rates and revenues for Navy review in accordance with Attachment J.2 no less than 30 days prior to the effective date of any such adjustments. It is anticipated that future rate adjustments will normally become effective 01 January. N44255-21-C-1004ATTACHMENT J.2METHODOLOGY FOR ADJUSTMENT OF WATER AND WASTEWATER RATESWater WastewaterFixed Volumetric Fixed VolumetricYear 1 - 2021 Base Yr 9,426,272$ 11,201,856$ 91,277$ 1.83$ 109,695$ 4.70$ Year 2 - 20229,426,272$ 11,201,856$ 91,277$ 1.83$ 109,695$ 4.70$ Escalation Percentage0.00% 0.00%Year 3 - 20239,426,272$ 11,201,856$ 91,277$ 1.83$ 109,695$ 4.70$ Escalation Percentage0.00% 0.00%Year 4 - 20249,426,272$ 11,201,856$ 91,277$ 1.83$ 109,695$ 4.70$ Escalation Percentage0.00% 0.00%Year 5 - 20259,426,272$ 11,201,856$ 91,277$ 1.83$ 109,695$ 4.70$ Escalation Percentage0.00% 0.00%Year 6 - 20269,426,272$ 11,201,856$ 91,277$ 1.83$ 109,695$ 4.70$ Escalation Percentage0.00% 0.00%Year 7 - 20279,426,272$ 11,201,856$ 91,277$ 1.83$ 109,695$ 4.70$ Escalation Percentage0.00% 0.00%Year 8 - 20289,426,272$ 11,201,856$ 91,277$ 1.83$ 109,695$ 4.70$ Escalation Percentage0.00% 0.00%Year 9 - 20299,426,272$ 11,201,856$ 91,277$ 1.83$ 109,695$ 4.70$ Escalation Percentage0.00% 0.00%Year 10 - 20309,426,272$ 11,201,856$ 91,277$ 1.83$ 109,695$ 4.70$ Escalation Percentage0.00% 0.00%Determination of Rate Adjustment %RatesCLIN 0001 - WATER CLIN 0002 - SEWAGE N44255-21-C-1004 Attachment J.3 N44255-21-C-1004 Attachment J.4 3 May 2021 WATER, WASTEWATER AND STORMWATER UTILITY LOCATION, ACCOUNTS & METERS NAVAL BASE KITSAP, BREMERTON ACCOUNT ACCOUNT METER METER NAME/LOCATION NUMBER NUMBER SIZE COMMODITY First and Pacific Ave (59E – Dwg 53935) 13-00030 71268530 10” Water Charleston Gate (27N – Dwg 53935) 13-00040 71269508 10” Water First St and Rainier Ave (29D – Dwg 53935) 13-00050 71268529 10” Water 143 First St/MS5 (61F – Dwg 57849) 13-00090 05454370 6” Sewage 416 S. Cambrian Ave/MS4 (24O – Dwg 57849) 13-00100 9B05771600 10” Sewage 416 S. Cambrian Ave/MS4 (24O – Dwg 57849) 13-00120 01835454 6” Sewage State HWY 304/Pass and ID (24S – Dwg 57849) 46-55650 NA NA Sewage State HWY 304/Pass and ID (24S – Dwg 57849) 46-55650 72340082 2” Water 100 S. Montgomery (26L – Dwg 57849) 2409670 NA NA Stormwater N44255-21-C-1004 Attachment J.5 3 May 2021 City of Bremerton Public Works & Utilities Contacts Thomas Knuckey Director, Public Works & Utilities Email: thomas.knuckey@ci.bremerton.wa.us (360) 473-2376 – Office Cami Apfelbeck Water Utility Manager Email: Cami.Apfelbeck@ci.bremerton.wa.us (360) 473-2315 – Office Ted Danielson Water Operations Supervisor Email: Ted.Danielson@ci.bremerton.wa.us (360) 473-5929 – Office Bob Zurbrugg Water Maintenance Email: Robert.Zurbrugg@ci.bremerton.wa.us (360) 473-5249 - Office Darrel Clauson Sewer and Stormwater Maintenance Email: darrell.clauson@ci.bremerton.wa.us 360-473-5327 - Office Eric Burris Wastewater Treatment Plant Manager Email: Eric.Burris@ci.bremerton.wa.us (360) 473-5448 – Office Wayne Hamilton Distribution Manager Email: Wayne.Hamilton@ci.bremerton.wa.us (360) 473-5207 – Office 2 Naval Base Kitsap - Bremerton Public Works Shop & Utilities Program Contacts Emergency Dispatcher (Mechanical) (360) 476-2325 – Office Operations (360) 476-2629 – Office Ted Williams Utility Maintenance Manager (360) 476-4124 – Office 360-340-4097 - cell Michael Austria Utility Maintenance Supervisor Email: michael.austria@navy.mil (360) 476-2319 – Office (360) 337-0332 – Cell Jeremy Kirsch Utilities Operations General Foreman 120 S. Dewey St. Bldg. 900 Bremerton, WA 98314 Email: jeremy.kirsch@navy.mil (360) 476-7560 – Office 360-340-2847 - cell Tom Ingham Mechanical Utility Engineer Email: thomas.ingham@navy.mil (360) 476-0912 – Office AGENDA BILL CITY OF BREMERTON CITY COUNCIL SUBJECT: Study Session Date: June 9, 2021 Professional Services Agreement with Systems Design West, LLC for Ambulance Billing Service COUNCIL MEETING Date: June 16, 2021 Department: Fire Presenter: Pat McGanney, Fire Chief Phone: (360) 473-5380 SUMMARY: This is an agreement between the City of Bremerton and Systems Design West, LLC to provide ambulance billing service. The original agreement was in 1999, last renewed in 2017 (Contract #5769). The compensation will increase from $21.50 to $22.50 per transport starting January 1, 2022. ATTACHMENTS: Professional Services Agreement FISCAL IMPACTS (Include Budgeted Amount): (Include Budgeted Amount): $38,900 for the 2022 budget. No change to the 2021 budget of $36,900. STUDY SESSION AGENDA: ☒ Limited Presentation ☐ Full Presentation STUDY SESSION ACTION: ☒ Consent Agenda ☐ General Business ☐ Public Hearing RECOMMENDED MOTION: Move to approve the Professional Services Agreement with Systems Design West, LLC; and authorize the Mayor to finalize and execute the agreement with substantially the same terms and conditions as presented. COUNCIL ACTION: Approve Deny Table Continue No Action Form Updated 01/02/2018 4G AGENDA BILL CITY OF BREMERTON CITY COUNCIL SUBJECT: Interlocal Agreement with South Puget Sound Fire Coordinating Group or Wildfire Personnel Training and Certification Study Session Date: June 9, 2021 COUNCIL MEETING Date: June 16, 2021 Department: Fire Presenter: Pat McGanney, Chief Phone: (360) 473-5380 SUMMARY: This agreement is between the City of Bremerton and the South Puget Sound Fire Coordinating Group, for wildfire personnel training and certification. ATTACHMENTS: South Puget Sound Fire Coordinating Group Interlocal Agreement FISCAL IMPACTS (Include Budgeted Amount): There is no financial impact STUDY SESSION AGENDA: ☒ Limited Presentation ☐ Full Presentation STUDY SESSION ACTION: ☒ Consent Agenda ☐ General Business ☐ Public Hearing RECOMMENDED MOTION: Move to approve the South Puget Sound Fire Coordinating Group Interlocal Agreement with the City of Bremerton; and authorize the Mayor to finalize and execute the agreement with substantially the same terms and conditions as presented. COUNCIL ACTION: Approve Deny Table Continue No Action Form Updated 01/02/2018 4H AGENDA BILL CITY OF BREMERTON CITY COUNCIL SUBJECT: Study Session Date: June 9, 2021 Public Hearing and Resolution No. 3339 to adopt the 2022 CDBG/HOME Policy Plan COUNCIL MEETING Date: June 16, 2021 Department: DCD-Block Grant Presenter: Sarah Achaoui Phone: (360) 473-5375 SUMMARY: The action before Council is adoption of the 2022 Policy Plan. The Policy Plan is a document which is updated yearly which sets parameters for the management of our HUD entitlement grant awards and provides specific information about the policies and regulations for the use of HUD CDBG and HOME funds. This plan was released on May 28th for public comment, and to date there have been no comments made. This is a component of our annual process and no departures from what we’ve done in the past years. ATTACHMENTS: 1. Staff Memo; 2. Resolution No. 3339 and Exhibit A-2022 Policy Plan FISCAL IMPACTS (Include Budgeted Amount): No fiscal impacts to the City. STUDY SESSION AGENDA: ☒ Limited Presentation ☐ Full Presentation STUDY SESSION ACTION: ☐ Consent Agenda ☐ General Business ☒ Public Hearing RECOMMENDED MOTION: Move to approve Resolution No. 3339 adopting the 2022 CDBG/HOME Policy Plan. COUNCIL ACTION: Approve Deny Table Continue No Action Form Updated 01/02/2018 5A To: Bremerton City Council From: Sarah Achaoui Date: June 16, 2021 Re: Public Hearing to adopt the 2022 Policy Plan What is the Policy Plan? The Policy plan is a document which is updated yearly which sets parameters for the management of our HUD entitlement grant awards, provides specific information about the policies and regulations for the use of HUD Block grant and HOME funds. Policy Changes for 2022 1. City of Bremerton HOME funding will used to increase affordable housing stock. 2. City of Bremerton has transitioned from Fluid Review to SM Apply. This transition will make the application process more simplified and streamlined for applicants and reviewers. Important components of the Policy Plan Funding Priorities To stay consistent with the past year(s) the funding priorities for CDBG funds are as follows: Capital Projects which can demonstrate a benefit to low/moderate income residents, City-wide Economic Development projects, City-wide projects which create, develop, support or preserve units of affordable housing, and Public Facility and Infrastructure projects. FY 2021 Income Limits All projects will utilize the HUD FY 2021 Income Limits. As a statutory requirement these income limits which are based off the Bremerton-Silverdale MSA must be used. When FY 2022 Income Limits are posted by HUD we will ensure all applicants for funding as well as recipients of funding receive the new limits. Public Comment A 15-day public comment period commenced March 28th, ending June 14th. DEPARTMENT OF COMMUNITY DEVELOPMENT MEMORANDUM 1 2022 CDBG/HOME Policy Plan RESOLUTION NO. 3339 A RESOLUTION of the City Council of the City of Bremerton, Washington, adopting the 2022 City of Bremerton CDBG/HOME Policy Plan. WHEREAS, the City of Bremerton (City) is an entitlement community which receives a Community Development Block Grant (CDBG) each year from the Department of Housing and Urban Development (HUD), and also receives funding from HUD's Home Investment Partnerships (HOME) fund via an inter-local agreement with Kitsap County; and WHEREAS, the Department of Community Development Block Grant staff estimates a 2022 CDBG allocation of $450,000 with 20% set-aside for administration; and WHEREAS, the Department of Community Development Block Grant staff estimates a 2022 HOME allocation of $179,600, 10% of which will be set-aside for administration, and 15% for Community Housing Development Organization projects; and WHEREAS, all projects must meet both a Consolidated Plan Funding Priority as well as a Council Priority, both of which are detailed in the Policy Plan; and WHEREAS, all funding will be allocated competitively to eligible applicants for projects that fit the requirements set forth in the CDBG regulations at 24 CFR part 570 and HOME regulations at 24 CFR part 92; and WHEREAS, the Department of Community Development Block Grant staff advertised in the Kitsap Sun and posted on the City's website on Friday, May 28th a 30-day written public comment period commencing May 28th, ending June 14, 2021, and open for public comment in a public hearing on June 16th; and WHEREAS, comments received will be shared with the City Council; NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF BREMERTON, WASHINGTON, DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. The recitals and findings of fact set forth in this resolution are hereby incorporated as if fully set forth herein. SECTION 2. The 2022 CDBG/HOME Policy Plan attached hereto as Exhibit A is hereby adopted. 2 2022 CDBG/HOME Policy Plan SECTION 3. Severability. If any one or more sections, subsections, or sentences of this Resolution are held to be unconstitutional or invalid, such decision shall not affect the validity of the remaining portion of this Resolution and the same shall remain in full force and effect. SECTION 4. Effective Date. This Resolution shall take effect and be in force immediately upon its passage. PASSED by the City Council of the City of Bremerton, Washington this _____ day of _____________, 2021. ____________________________________ KEVIN GORMAN, Council President APPROVED AS TO FORM: ATTEST: __________________________________ ____________________________________ ROGER A. LUBOVICH, City Attorney ANGELA HOOVER, City Clerk City of Bremerton Community Development Block Grant 2022 CDBG/HOME POLICY PLAN CDBG/HOME POLICY PLAN Contents Executive Summary…………………………………………………………………1 Community Development Block Grant Program………………………………1 CDBG Funding……………………………………………………………………….2 HOME Funding……………………………………………………………………….7 Allocation Process…………………………………………………………………..8 Policies & Regulations for Use of Funds........................................................9 Citizen Participation Plan…………………………………………………….........17 Consolidated Plan…………………………………………………………………17 Appendix A – Citizen Participation Plan Appendix B- Funding Process Appendix C – CDBG Eligibility Requirements & Program Rules Appendix D - HOME Eligibility Requirements & Program Rules Appendix E – Conflict of Interest Policy Appendix F – Glossary CDBG/HOME Policy Plan 2022 1 Executive Summary The 2022 City of Bremerton CDBG/HOME Policy Plan provides guidance for applicants applying for 2022 funds on things such as eligibility, overview of the funding allocation process, regulatory requirements and local policy decisions. The allocation of CDBG and HOME funds are guided by the Strategic Plan which is a part of the Consolidated Plan. Kitsap County and the City of Bremerton have prepared a Consolidated Plan for 2021-2025 in order to implement our community’s federal program funds. The purpose of the plan is to evaluate community needs and set goals for the five year plan period. Through a Community Needs Assessment, Housing Market Analysis and with community and stakeholder input, the City of Bremerton has developed a Strategic Plan. The City of Bremerton’s Strategic Plan outlines the priorities and goals which guide the allocation of funds over the five year period. The funds allocated for the 2022 grant application cycle will be included in the Year 2, Action Plan associated with the 2021-2025 Consolidated Plan. The priorities identified for the five year period are as follows: •Capital projects in the City which demonstrate Low/Mod benefit •Infrastructure and Capital improvements projects •Projects which improve and preserve affordabl housing; •Expand economic opportunities for very-low, low, and moderate income Bremerton residents; •The City will reevaluate funding priorities during each program year with the release of its Policy Plan and NOFA. Policy Changes for 2022: 1. City of Bremerton HOME Funding priority will be for increasing affordable housing stock. 2. The NOFA will be for CDBG, housing rehabilitation, economic development microenterprise assistance, and public facilities and infrastructure that meet the priorities outlined above and contained in the Consolidated Plan. COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM WHAT IS THE COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM? The Community Development Block Grant Program is a source of funds used in the local community to provide decent housing, suitable living environments and economic opportunities primarily for low and moderate income households. The City of Bremerton is designated as an Entitlement Community by the Department of Housing and Urban Development (HUD) and receives federal funds in the form of Community Development Block Grant (CDBG). Kitsap County and the City of Bremerton together form a consortium and receive an allocation of HOME Investment Partnership Program (HOME) funds. Through an interlocal agreement between the County and the City a percentage (as determined by HUD) of the annual allocation of HOME funds is designated for the City and the remaining CDBG/HOME Policy Plan 2022 2 designated for the County. As the City of Bremerton is designated as a separate Entitlement Community and therefore the City receives its own CDBG funds directly. CDBG funds are allocated annually through the City in Requests for Funding Proposals. HOME funds are allocated annually through a competitive grant process coordinated by Kitsap County. Projects funded are included in the annual Action Plan submitted to HUD. Projects funded must address needs identified in the Consolidated Plan, which is updated every five years. CDBG FUNDS WHAT ARE CDBG FUNDS? The Community Development Block Grant (CDBG) program is a flexible program that provides communities with funding to address a wide range of unique community development needs. The program is authorized by Title I of the Community Development Act of 1974. Funds are used to assist in the development of decent housing, create suitable living environments, and expand economic opportunities primarily for persons of low and moderate income. All projects funded with CDBG must meet one of the three national objectives: 1. Principally benefit low and very low income households; 2. Reduce or prevent slum and blight; or, 3. Meet an urgent need (emergency or natural disaster) WHO IS AN ELIGIBLE APPLICANT/RECIPIENT? Eligible applicant/recipients include: City or County governments Public and private nonprofit organizations (501(c)3) Section 301(d) small business investment companies Local development corporations Private for-profit organizations may implement certain capital, economic development and microenterprise activities (please contact the Block Grant Administrator to confirm if your activity is eligible). Faith based organizations (restrictions may apply to ensure equal employment opportunity) Additionally, applicants must: Demonstrate an active governing body or board of directors or other applicable leadership within your organization with skills and experience to provide leadership and direction to the agency. Demonstrate the legal, financial, and programmatic ability to administer the proposed program/project; and, Meet the City requirements for contracting agencies such as insurance requirements, audit and financial requirements. CDBG/HOME Policy Plan 2022 3 FUNDING PRIORITIES All Projects MUST meet one of the following Consolidated Plan funding priorities: Capital projects which can demonstrate benefit to low/moderate income residents; Improve, create new units of, and preserve affordable housing; Expand economic opportunities for very-low, low, and moderate income Bremerton residents; For the 2022 Program Year the following priorities for use of funds will be: Capital Projects which can demonstrate a benefit to low/moderate income residents City-Wide Economic Development projects City-Wide projects which create, develop, support, or preserve units of affordable housing. Public Facility and Infrastructure projects WHAT ARE ELIGIBLE ACTIVITIES? Please contact CDBG staff to ensure your project is both an eligible activity and meets a national objective. Note: The above lists are not comprehensive. For a complete list of eligible or ineligible activities refer to CDBG regulations in 24 CFR 570.201 and 570.207 Beneficiaries of projects receiving CDBG funds must have incomes below 80% of the area median income. LMI Housing National Objective If a grantee wishes to qualify a housing rehabilitation, acquisition or construction activity under the LMI national objective, the housing national objective must be used. LMI area, LMI limited clientele or LMI job creation may not be used.  A LMI household must occupy a structure with one unit. Two-unit structures must have at least one unit occupied by a LMI household. If the structure contains three or more units, at least 51 percent must be LMI occupied.  When housing rehabilitation or new construction single family housing activities are conducted by a CDFI or as part of a HUD-approved Neighborhood Revitalization Strategy multiple units (e.g. scattered site housing) may be aggregated for the purposes of meeting the LMI benefit national objective. CDBG/HOME Policy Plan 2022 Rental Housing (both new construction and rehabilitation) activities that provide or improve permanent residential structures can only qualify as benefitting LMI households under the Housing criteria of the LMI benefit national objective, which deals with the occupancy of units by LMI households.  The general rule is that 51 percent of the units in each assisted structure are to be occupied by LMI households. However, when rental housing activities are carried out by a CDFI or as part of an approved NRSA, multiple units (e.g. scattered site housing) may be aggregated for the purposes of meeting the LMI benefit National Objective. Rental Rates In order to meet the LMI housing national objective, rents in CDBG-assisted rental projects must be set at levels which are affordable to LMI persons. Grantees are required to adopt and make public their standards for determining “affordable rents” The generally accepted affordability standard is that households pay no more than 30 percent of income for rent and utilities. However, use of this standard is not required by CDBG regulations. Grantees may want to establish rent limits or ceilings based on local LMI limits and bedroom sizes. However, each project must be undertaken in such a manner as to ensure that rents are truly affordable to LMI persons. HOW MUCH MONEY IS AVAILABLE? CDBG programs are federally funded through the Department of Housing and Urban Development. Funding levels are determined by HUD after the Federal Budget is finalized, which often occurs after the program year has begun. The City of Bremerton estimates funding levels in order to start the grant application process; therefore, funding amounts shown in the table below are estimates. If HUD allocates a different amount to these programs than what was estimated, actual funding awards will be increased or decreased to accommodate the discrepancy. The estimated funds below are based on 2020 allocations and historic funding trends. The following table (on next page) shows an overall view of the total estimated amount of funds available in this application cycle by the application type and funding sources. Please note that the City of Bremerton is basing this estimate on an amount of $400,000. There is no designated amount for application type, applicants are encouraged to apply for the amount of funding they need to complete a project. Please note that projects with multiple sources of funding will be more competitive than projects that are utilizing CDBG as their only funding source. WHAT IS THE DISTRIBUTION OF CDBG FUNDS? The CDBG program allows certain set-asides to further specific program goals. The City has set additional funding targets to help meet local objectives. The following is the distribution for the City of Bremerton: 4 CDBG/HOME Policy Plan 2022 5 CDBG Planning & Administration – 20% max City-Wide Economic Development Projects Capital Projects which can demonstrate a low/moderate income benefit Appendix C provides additional information designed to assist you in defining the eligibility and national objective that your activity meets and the type of information you will need to provide in your application. $450,000 $5,000 Estimated 2022 Entitlement Estimated 2022 Program Income 2022 Total $455,000 $98,000 2022 Funding Available for Grant Administration (20% of Entitlement + Program Income) 2022 Funding Available for Grant Applications $392,000 15% available for economic development programs (if a public service activity): $73,500 Total Remaining for Capital Projects: $318,500 *prioritization of capital projects will be for: affordable housing projects, weatherization and minor home repair, and projects which create suitable living environments. HOME FUNDS WHAT ARE HOME FUNDS? The HOME Program was created by the National Affordable Housing Act of 1990 (NAHA). The Housing and Community Development Act of 1992 and the Multifamily Property Disposition Act of 1994 made important changes to the Program. The intent of the HOME Program is to: Expand the supply of decent, safe, sanitary, and affordable housing; CDBG/HOME Policy Plan 2022 6 Strengthen the abilities of state and local governments to provide housing; Expand the capacity of nonprofit community based housing development organizations; and, Leverage private sector participation in financing affordable housing. Beneficiaries of HOME funds – homebuyers, homeowners or tenants – must have incomes below 80% of the area median income. The HOME program also requires a match of 25% or greater in other non-federal funds for projects. WHAT ARE ELIGIBLE ACTIVITIES? The Eligible activities are defined in the HOME program regulations at 24 CFR 92.205. A list of some of the activities follows: Rehabilitation of residential property where property is fully repaired New construction of residential property Acquisition of residential property Rental assistance payments to tenants Relocation associated with an eligible HOME project A small part (up to 5%) of the annual HOME allocation may be used to help pay the operating expenses of designated Community Housing Development Organizations (CHDOs) within the guidelines established by HUD The following activities are generally not eligible for HOME funding: Project reserve accounts, except for the initial 18 months of a HOME assisted new construction project Emergency home repair programs Public housing units Commercial properties Shelters, unless they meet Section 8 Housing Quality Standards and otherwise can be considered rental housing Project based tenant assistance Note: The above lists are not comprehensive. For a complete list of eligible or ineligible activities refer to HOME regulations in 24 CFR 92.205 What are the HOME priorities for the City of Bremerton? Preservation of affordable housing; Increasing affordable housing opportunities for low to moderate Bremerton residents; Rehabilitation of older housing stock to increase affordable housing opportunities. Acquisition with or without rehabilitation of rental housing units Rehabilitation of rental housing units Site-Acquisition and new construction of new rental housing units. CDBG/HOME Policy Plan 2022 HOW MUCH MONEY IS AVAILABLE? Priorities: Projects which create or support affordable housing Rental projects must serve households at or below 80% AMI. HOME assisted units must serve households at or below 60% AMI, with 20% serving at or below 50% AMI. HOME funds will be allocated via a separate process than CDBG funds. This process will be in coordination with Kitsap County of whom the City of Bremerton participates as a part of the Kitsap County HOME Consortium, however, the City will determine any prioritization of its own percentage of HOME funds. ALLOCATION PROCESS HOW ARE FUNDS ALLOCATED? The City of Bremerton, as a member of the Kitsap County HOME consortium will issue a joint RFP for use of City HOME funds. The RFP, issued jointly with the City of Bremerton, will be for HOME funded affordable housing and include both County and City HOME funds. Homebuyer assistance will be a lower priority and funding for new construction of homeowner housing will not be available. City of Bremerton HOME funds will be prioritized for rental and homeowner projects including acquisition, new construction, rehabilitation and homebuyer assistance. The City independent from the County will create a Competitive Funding Application for CDBG funds based on its priorities for use of funds which is separate from the process used for HOME funds. The request for funding proposals will be released in August and a city-driven process will be used to determine funding allocations for CDBG. This process is detailed in the Citizen Participation Plan (Appendix A). The public is encouraged to participate in the process and its end product: the submission of an annual Action Plan to the Department of Housing and Urban Development. HOW CAN MY ORGANIZATION APPLY? For the 2022 program year the application cycle will begin with the release of the Policy Plan in June and the commencement of a 15 day public comment period. At the end of the comment period, upon approval of the Policy Plan by the Bremerton City Council, the RFP for use of HOME funds will be made available. The City’s CDBG funding applications will be released in approximately July/August 2021. Interested organizations can find the funding application and all associated information on the City web site at http://www.ci.bremerton.wa.us/display.php?id=864. The schedule for the annual application cycle, including the due date for applications, is also available on the web site. Interested organizations may also contact Block Grant staff to request to be placed on the City interested parties list to receive automatic notices about these programs. 7 CDBG/HOME Policy Plan 2022 8 WHEN WILL FUNDS BE AVAILABLE? Funds for the programs taking place in the January 1 – December 31 program year are generally not available until mid-summer of the program year. Timing is dependent on federal budget approval—which is often delayed—and how quickly HUD is then able to allocate funds to local jurisdictions. The City will not execute contracts with subrecipients until we have a contract from HUD. Once contracts are executed CDBG and HOME funds can only be disbursed on a reimbursement basis. POLICIES & REGULATIONS FOR USE OF FUNDS CDBG and HOME funds are Federal funds. Use of Federal funds may affect the way your agency does business. If you are applying for Federal funds for the first time, you are strongly encouraged to familiarize yourself with the requirements. A Guidebook for recipients of CDBG and HOME funds can be found on the City web site at: http://www.bremertonwa.gov/213/Subrecipient-CDBG-HOME-Guidebook. You may also contact the City Block Grant Staff for additional assistance. All new applicants for 2021, and applicants who are unfamiliar with Fluid Review will be required to attend a Technical Assistance session on July 24th beginning at 10:00 am in the Mayor’s Conference room on the 6th floor of the Norm Dicks Government Center. If necessary, we may need to conduct the meeting virtually. Details will be provided closer to the date of the TA Session. A.GENERAL REQUIREMENTS 1. Consistency with applicable City, County, and/or State Codes and Policies To be considered for funding, projects must be consistent with adopted codes and other applicable policies, plans and standards Agencies that are currently receiving County or City CDBG or HOME funds, who are applying for funds, must be in compliance with all terms of their current agreement(s) and must not have outstanding audit findings, monitoring findings or concerns related to prior year’s funding. 2.Contract Retainage for Federal Compliance City will withhold up to 10% of the award amount included in the written subrecipient agreement until all federal compliance requirements are met. All construction contracts between a subrecipient (ie: your agency) and contractor shall have 10% of payment retained until fulfillment of federal compliance is documented. 3.Definition of Income Most CDBG and HOME funded projects use income to determine who is eligible for services or housing. Per HUD, income must be defined in one of two ways under the CDBG and HOME programs; subrecipients must select one method which it will use for the duration of each program/project (rental housing projects must use the Part 5 definition): CDBG/HOME Policy Plan 2022 9 Annual income as defined in 24 CFR 5.609, referred to as “Part 5 annual income”, or; Adjusted gross income as defined for reporting purposes under the IRS Form 1040 long form (not IRS Forms 1040A or 1040EZ). For more information on determining income see the Technical Guide for Determining Income and Allowances for these programs. This guide and can be downloaded from: http://archives.hud.gov/offices/cpd/affordablehousing/modelguides/1780.pdf 4. Project/Activity Delivery Costs The City does not currently take project/activity delivery costs. 100% of funds will go to each project that is awarded funds. 5.Commitment and Timely Expenditure of Funds In order to meet regulatory requirements the City and County have established the following policies for CDBG and HOME funded projects: CDBG: Job Training-Public Service Contracts: Organizations awarded CDBG funds for public service or micro enterprise programs must be ready to enter into a written agreement with the City during the award year and funds must be fully disbursed by Dec. 31st of that same year. Capital Awards: o 1. Organizations with an award of CDBG funds for a capital project must enter into written agreement (contract) in the award year. If there are extenuating circumstances beyond the organizations control and adequate progress is being made to resolve the issues, an additional year for execution of the written agreement will be granted to the organization. o 2. The project must begin drawing grant funds within one year of the contract execution date. o 3. The project must be completed within 2 years of the contract execution date and meet milestones included in the written agreement, including the schedule for completion. o 4. The Agreement will not be amended to extend the term. Organizations unable to meet these requirements will lose their funding; funds will be re- allocated to another eligible project. The contract term may be considered for extension if there are extenuating circumstances beyond the organizations control and adequate progress is being made. o 5. In no circumstance can a project take more than 5 years to complete. HOME: HOME regulations require commitment of funds within 24 months. Due to this requirement City of Bremerton and Kitsap County (who is the contracting agency) requires the project HOME funds be ready to commit no later than 18 months from HUD’s Funding Agreement execution date. If after 18 months all project funding has not been secured, the conditional commitment will be canceled and the funds will be re- CDBG/HOME Policy Plan 2022 10 allocated. Staff will work with agencies during this time period to ensure the project is moving forward and can meet the timeline. Organizations awarded HOME funds must have all other funding sources committed (documented with letters of commitment) and all HOME requirements for environmental review and project underwriting completed before funds can be committed. Commitment is defined as having a fully executed written agreement with Kitsap County (the contracting agency for City HOME funds) and funds committed in HUD’s Integrated Disbursement Information System (IDIS). A conditional commitment of funds will be made for projects that do not have all project funds committed at the time of the funding recommendation. HOME funds require project completion no later than four years from HUD’s Funding Agreement execution date. Projects using HOME funds to acquire vacant land must be under construction within 12 months of the commitment date. Organizations must begin drawing funds within one year of the contract execution date (date the contract was executed) and at least annually thereafter. Organizations unable to meet these requirements will lose their funding; funds will be reallocated to another eligible project. Rental properties will be required to be leased up within six (6) months of project completion. Homeowner properties will be required to be sold within nine (9) months of project completion. For additional expenditure criteria and deadlines for use of 2022(and any prior years CHDO’s will be found in the Affordable Housing RFP for use of City of Bremerton HOME funds). 6. On-going Restrictions for CDBG & HOME Funded Capital Projects Recipient of CDBG funds must agree to restrict the use of the property, which was acquired and/or improved using CDBG funds, to the intended purpose for which the funds were awarded. Projects awarded HOME funds are subject to an affordability period which places certain restrictions on occupancy, resale, and rent for rental properties. The City may require a recorded document to be attached to the property to ensure the appropriate provisions are secured. See Appendix C for CDBG eligibility requirements. B.HOME FUNDING - SPECIFIC REQUIREMENTS 1.For more information on specific rules and requirements of the HOME program, including determining whether your project is eligible, please see Appendix D. C.CDBG FUNDING - SPECIFIC REQUIREMENTS 1.For more information on specific rules and requirements of CDBG, including meeting a National Objective, please see Appendix C CDBG Eligibility & Program Requirements. CDBG/HOME Policy Plan 2022 11 D.FINANCIAL MANAGEMENT 1. Uniform Administrative Requirements Agencies must comply with 2 CFR 200 Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards. Agencies that do not meet the audit threshold for mandatory audits are encouraged to obtain an annual audit if their operating budget is $100,000 or greater. Smaller agencies are encouraged to obtain at least a third-party annual financial review. Block Grant Staff will review financial information closely for all agencies submitting application. 2.Audit Requirements Private non-profit agencies expending $750,000 or more in federal funds annually (whether CDBG / HOME alone or CDBG / HOME in conjunction with other federal funds) must have an annual audit conducted by an independent auditor in accordance with OMB Circular A-133 Compliance Supplement. Agencies are responsible to meet this audit requirement. Agencies that do not meet the $750,000 threshold mandatory A-133 audit are encouraged to obtain an annual audit if their operating budget is $100,000 or greater. Smaller agencies are encouraged to obtain at least a third-party annual financial review. Block Grant staff will review financial information closely for all agencies submitting application. E.PROCUREMENT Any subrecipient using CDBG or HOME funds to purchase goods or services must have a formalized written procurement procedure in place prior to contracting for any goods or services. Procurement requirements are contained in 2 CFR Part 200. Additional information on procurement requirements can be found in Section E of the CDBG/HOME Guidebook on the City of Bremerton Block Grant Program Website. F.ENVIRONMENTAL REVIEW 1. Environmental Review (24 CFR Part 58) All CDBG/HOME projects must have a National Environmental Policy Act (NEPA) compliant environmental review process completed before any funds, including funds committed from other sources, can be spent on the project. Additional information on environmental review requirements can be found in Section F of the CDBG/HOME Guidebook on the City of Bremerton Block Grant Program web sites. The costs associated with conducting a NEPA compliant environmental review for Capital CDBG and HOME funded projects may be charged to the grant award as project costs (HOME) or activity delivery costs (CDBG). Cost will vary depending on the level of CDBG/HOME Policy Plan 2022 12 review and complexity of the project and include staff time, cost of publishing required legal ads and printing costs. The cost of any studies required to complete the environmental review (i.e. Phase I Environmental Site Assessment, Geotechnical. Report, Cultural Site Assessment, etc.) will be in addition to the costs associated with preparation of the NEPA environmental review and will be the responsibility of the subrecipient. G.EQUAL OPPORTUNITY & ACCESSIBILITY 1. Fair Housing and Equal Opportunity All CDBG/HOME projects must comply with all of the following Federal laws, executive orders and regulations pertaining to fair housing and equal opportunity: a.Title VI of the Civil Rights Act of 1964: No person may be excluded from participation in, denied the benefits of, or subjected to discrimination under any program or activity receiving Federal assistance on the basis of race, color or national origin (24 CFR Part 1). b.The Fair Housing Act: Prohibits discrimination in the sale or rental of housing, the financing of housing or the provision of brokerage services against any person on the basis of race, color, religion, sex, national origin, handicap or familial status (24 CFR Part 100-115). c. Equal Opportunity in Housing: Prohibits discrimination against individuals on the basis of race, color, religion, sex or national origin in the sale, rental, leasing or other disposition of residential property, or in the use or occupancy of housing assisted with Federal funds (24 CFR Part 107). d. Age Discrimination Act of 1975: Prohibits age discrimination in programs receiving Federal financial assistance (24 CFR Part 146). e. For more information on eliminating discrimination visit www.hud.gov/offices/fheo/progdesc/title8.cfm 2. Handicapped Accessibility CDBG and HOME funded projects are subject to the following regulations governing the accessibility of Federally-assisted buildings, facilities and programs. a. Americans with Disabilities Act: Provides comprehensive civil rights to individuals with disabilities in the areas of employment, public accommodations, state and local government services and telecommunications. The Act requires certain buildings or other facilities that receive Federal funds to be designed, constructed or altered in accordance with standards that insure accessibility to and use by physically handicapped people. b.Section 504: Section 504 of the Rehabilitation Act of 1973 prohibits discrimination in federally assisted programs on the basis of handicap. Additional information on equal opportunity and accessibility can be found in Section G of the CDBG/HOME Guidebook on the City of Bremerton Block Grant Program web sites. H.LABOR STANDARDS & CONSTRUCTION 1. Equal Opportunity for Employment and Contracting CDBG/HOME Policy Plan 2022 13 CDBG and HOME funded projects are subject to the following regulations governing employment and contracting opportunities. a.Equal Employment Opportunity: Prohibits discrimination against any employee or applicant for employment because of race, color, religion, sex or national origin. Provisions to effectuate this prohibition must be included in all construction contracts exceeding $10,000 (41 CFR Part 60). b. Section 3 of the Housing and Urban Development Act of 1968: Requires that, to the greatest extent feasible, opportunities for training and employment arising from CDBG or HOME funded projects will be provided to low-income persons residing in the program service area. c. Minority/Women’s Business Enterprise: Outreach to minorities and women in contracting for services (24 CFR 85.36(e)). 2.Labor Requirements CDBG and HOME projects must comply with certain regulations on wage and labor standards. Pursuant to the Davis-Bacon Act, federal wage rates apply to most (but not all) construction projects over $2,000. Applications that involve construction must consider Davis-Bacon wage rates in the budget. The costs associated with the review of Certified Payrolls and compliance with DBRA requirements may be charged to the grant award as project costs (HOME) or activity delivery costs (CDBG). Cost will vary depending on the complexity of the project a. Davis-Bacon and Related Acts: Ensures that mechanics and laborers employed in construction work under federally assisted contracts are paid the Federal prevailing wage for the locality. b.Contract Work Hours and Safety Standards Act: Provides that mechanics and laborers employed on federally assisted construction jobs are paid time and one-half for work in excess of 40 hours per week. c. Copeland (Anti-Kickback) Act: Governs the deductions from paychecks that are allowable. More information on Davis Bacon requirements can be found in Section I of the CDBG/HOME Guidebook City of Bremerton Block Grant Program web site. 3.Lead-Based Paint Hazard (24 CFR Part 35) Housing built before 1978, assisted with HOME or CDBG funds, is subject to the Lead- Based Paint Poisoning Prevention Act. The law imposes requirements related to: Disclosure of known hazards and what has been done to reduce them; Treatment, relocation during treatment, and ongoing inspection of units. Project feasibility is an important consideration for housing with lead-based paint. Recipients of CDBG or HOME funds will need to be aware of the potential for additional time and cost associated with lead-based paint hazards. Information on Lead-Based Paint requirements can be found in Section I of the CDBG/HOME Guidebook on the City of Bremerton Block Grant Program web site. 4.Compliance with Codes & Standards for Rehabilitation and New Construction a.All capital projects funded with CDBG or HOME must comply with local building and fire codes. b.All HOME funded Rehabilitation projects must comply with the Rehabilitation Standards adopted by the City of Bremerton Block Grant Program. c.All rental housing units purchased and/or rehabilitated with CDBG or HOME must pass a Uniform Physical Conditions Standards inspection. CDBG/HOME Policy Plan 2022 14 d. All housing must comply with the applicable accessibility requirements for persons with disabilities. I.REPORTING & MONITORING All programs and projects funded with CDBG or HOME funds will be required to submit quarterly reports. Reports will be provided by the Block Grant Program and may be submitted electronically. Annual on-site monitoring is conducted by staff for all open contracts. A monitoring checklist is used by staff to review compliance with the requirements of the written agreement and federal regulations. Agencies will be contacted at the end of the program year to schedule the monitoring visit. J.ACQUISITION & RELOCATION 1. Uniform Relocation Assistance & Real Property Acquisition (49 CFR Part 24) These regulations apply to any federally-assisted project involving acquisition, demolition or rehabilitation. Proposals for CDBG and HOME funded projects that are likely to cause displacement of people or businesses are discouraged. Any project that is likely to cause displacement must include relocation assistance payments in the budget and be consistent with the Federal Uniform Relocation Act. Projects which trigger this regulation must follow the Anti-displacement and Relocation Assistance Plan which can be provided to you by request. If your project includes acquisition, rehabilitation or demolition you are strongly urged to discuss the requirements with Block Grant staff before entering into any legally binding agreements. 2. Minimizing the Loss of Low and Very Low Income Dwelling Units (24 CFR Part 42) Any CDBG/HOME proposal that would directly result in any occupied or vacant occupiable low and very low income dwelling units being (1) demolished, or (2) converted to a use other than as low and very low income housing must include a realistic plan to provide replacement housing within three years of the commencement of the demolition or rehabilitation relating to conversion. Projects which trigger this regulation must follow the Anti-displacement and Relocation Assistance Plan which can be accessed by making a request to City Block Grant staff. CITIZEN PARTICIPATION PLAN HUD requires a Citizen Participation Plan be adopted by jurisdictions receiving CDBG and HOME funds. The plan details the process used by the City in development of the Consolidated Plan and annual application cycle which results in the Action Plan submission to HUD. The City of Bremerton Block Grant Program Citizen Participation Plan can be found in Appendix A. CONSOLIDATED PLAN CDBG/HOME Policy Plan 2022 15 WHAT IS THE CONSOLIDATED PLAN? The Consolidated Plan rolls the planning, application and performance reporting requirements of several programs run by HUD into one process and one document. In our community the Consolidated Plan covers CDBG (Community Development Block Grants) and HOME (grant for affordable housing) programs jointly for the City of Bremerton and Kitsap County. The plan covers a 5-year period submittal of the 2022 action plan will be for year two. The Consolidated Plan requires a jurisdiction to identify all of its housing and community development needs, and then develop a long-term strategy for meeting those needs. A key part of the strategy is setting priorities. The Plan identifies priority housing needs, non-homeless special needs, homeless needs, economic development and community development needs. The Consolidated Plan also indicates what programs and resources will be used over the 5-year planning period. The plan contains objectives and strategies to address the identified needs and estimates the resources needed to fund activities to address the different needs. WHAT ARE THE KEY PARTS OF THE PLAN? A. Housing & Community Development Needs Assessment This is the part of the Plan that has U.S. Census Bureau information and other information which presents a picture of the jurisdiction. People are the focus of the “Needs” section of the plan. The emphasis is on the human side of housing and community development including the needs of homeless people, people with special needs and those who are low-income. B. The Housing Market Analysis This part of the Plan describes the physical “bricks and mortar,” side of housing – the supply side of housing. It looks at what housing exists. When the housing conditions in this part of the plan are lined up with human needs in the previous part of the plan, a clear picture of what must be done should emerge. C. The Strategic Plan The Strategy is the part of the Consolidated Plan where the County and City sets out how it intends to use its CDBG and HOME funds from HUD’s Department of Community Planning and Development over the next five years. The strategy must declare what priority the local government will give to the various housing and community development needs identified earlier in the Consolidated Plan; the activities designed to respond to those needs; and the different geographic areas where needs exist. D. Annual Action Plan The Action Plan is the one-year plan a jurisdiction must have to show how it is carrying out its long-term Strategic Plan. It shows how the jurisdiction will spend its CDBG and HOME money in the upcoming year. The City of Bremerton use an annual application process through which funds are competitively awarded. CDBG/HOME Policy Plan 2022 16 Note: The full text of the Consolidated Plan is available on the City of Bremerton web sites and also available upon request. GLOSSARY A Glossary of terms has been included in Appendix F. Appendix A Appendix A Citizen Participation Plan (Updated 2/26/21) Appendix A CITY OF BREMERTON CITIZEN PARTICIPATION PLAN Introduction The City of Bremerton receives both Community Development Block Grant (CDBG) and HOME Investment Partnership (HOME) funds. The City receives its own CDBG funds as an entitlement, and HOME funds through its membership in a Consortium with Kitsap County. The City of Bremerton is committed to assuring opportunities for citizen involvement in decisions concerning activities taking place within the community. Each year the City of Bremerton is eligible to receive CDBG and HOME funds. There are specific rules and regulations governing the allocation and use of the funds, including provisions for citizen involvement in decision making. In order to facilitate citizen involvement, the City has adopted a Citizen Participation Plan. Purpose The purpose of the Citizen Participation Plan is to provide an on-going mechanism to ensure widespread citizen participation whereby all citizens have an opportunity to fully express their needs and wishes for community improvement. Special efforts will be made to encourage participation by: Low- and moderate-income persons, particularly those living in blighted areas. Residents of predominately low- and moderate-income neighborhoods. Minorities and non-English speaking persons, as well as persons with disabilities. This plan provides opportunities for representation of all of the citizens of the City of Bremerton by allowing them to have a voice in the decision-making process and giving them greater power and control over activities taking place within their community. Annual Allocation Process / Action Plan Submission The City of Bremerton as an entitlement jurisdiction will conduct a competitive annual process to determine allocation of CDBG and HOME funds. The public is encouraged to participate in the process and its end product—the submission of an annual Action Plan to HUD. A.Notice of Funding Availability & Application Annually generally in the spring or early summer a legal ad will be published in the newspaper of record to announce funding availability and provide an opportunity for comment on the CDBG/HOME Policy Plan. This notice will begin a 30-day comment period on the Policy Plan (including the Citizen Participation Plan) and include the date and time of public hearings to take citizen comments. Notifications will also be sent to any agency or organization who requests to be placed on our interested parties email list. Appendix A Upon approval of the Policy Plan by the Bremerton City Council, information about the Request for Funding Proposals and mandatory technical assistance session for first time applicants will be available by request in writing to: City of Bremerton, Community Development Block Grant 345 6th Street, Suite 100, Bremerton, WA 98337-1873 http://www.bremertonwa.gov/209/Consolidated-Planning or by contacting Sarah Achaoui by email at: sarah.achaoui@ci.bremerton.wa.us or by phone at: 360-473-5375 B.Technical Assistance Techincal assistance information for potential applicants for funding will be found in Appendix B. At any time, any citizen may contact the City Block Grant staff for technical assistance, help with an application or general information in relation to programs described in this Plan. The Department will help citizens understand CDBG and HOME funded programs, the procedures for submitting proposals, the Citizen Participation Plan and other program requirements so they can effectively participate in CDBG and/or HOME programs and the funding process. Conflict of Interest a.No member of the Project Review Committee (PRC) shall be beneficially interested, directly or indirectly, in any grant applications which may be made by, through or under the recommendation of the PRC, in whole or in part, or which may be made for the benefit of his or her office, or accept, directly or indirectly, any compensation, gratuity or reward in connection with such contract from any other person beneficially interested therein (from RCW 42.23.030). b.No member of the PRC shall engage in any activity, including participation in the selection, award, or administration of a grant award or contract if a conflict of interest, real or apparent, exists. c.Additional information on Remote Interest can be found in the full Conflict of Interest Policy under Appendix D. C.Funding Recommendations & Action Plan Organizations submitting applications will be notified whether or not the Project Review Committee (PRC) has recommended their proposal for funding. The City Council will consider the staff recommendation, will hold a public hearing on the proposal, will take public testimony and will adopt the funding package. Notifications will include the date, time and place of the public hearings. All projects approved for funding will be included in the City’s Action Plan. A summary of each Action Plan will be published in the newspaper of record and on the City’s website. The summaries will describe the contents and purpose of the Action Plans, and include a list of locations where copies of the entire proposed Appendix A plans may be examined. Citizens will be provided a period of 30 days to review and comment on the plans. Comments or views of citizens will be considered, and a summary of any comments or views not accepted and the reasons therefore, will be attached to the final Action Plan which will be submitted to HUD. The City of Bremerton will submit the Action Plan, including the projects proposed to be funded, to HUD no later than November 15th of each calendar year, unless HUD instructs the City not to submit until an appropriations bill has been enacted and HUD has notified the City of Bremerton of our actual allocation amounts. Five Year Consolidated Plan The Consolidated Plan is the result of a process set forth by the Department of Housing and Urban Development (HUD) to provide a planning and application process for the CDBG and HOME programs within a single document. The Kitsap County HOME Consortium is required to submit the Consolidated Plan for the HOME participating jurisdiction (which consists of Kitsap County and the City of Bremerton). The Consolidated Plan is available online at: http://www.bremertonwa.gov/209/Consolidated-Planning (scroll down for a link to the documents) A printed copy may be requested from the City of Bremerton Block Grant Divisions There are a number of specific elements in the 5-Year Consolidated Plan, including: Needs Assessment: an assessment of housing needs (primarily of low and moderate income people) and needs of homeless people; Housing Market Analysis: an analysis of the City of Bremerton’s and Kitsap County's housing market; Strategic Plan: a discussion of the City of Bremerton’s and Kitsap County's priority needs to establish goals and objectives for implementing strategies which address housing and community development activities; Citizen Participation Plan (Updated within the annually updated Policy Plan) Annual Action Plan: describes the activities that will be undertaken to address priority needs utilizing HOME and CDBG grant funds during the upcoming program year (Submitted Annually); and Consolidated Annual Performance and Evaluation Report (CAPER): describes how funds were used in activities that provided benefits to low and moderate income individuals and families during the previous program year. (Submitted Annually) Governments, service providers, citizens, and non-profit/for-profit agencies are encouraged to identify needs and priorities, assist in the development of strategies, and to participate in the annual allocation process. The following are specific opportunities for citizens to participate in the development of the information to be incorporated in the Consolidated Plan, which is updated every five years: 1. At least one community meeting will be held to obtain the views of citizens, public agencies, and other interested parties concerning housing and community development needs, including non-housing community development needs and priorities during development of the plan. Appendix A 2. The City of Bremerton will coordinate with the Bremerton Housing Authority (BHA) to encourage participation of residents of public and assisted housing and other low- income residents of targeted revitalization areas, in the process of developing and implementing the Consolidated Plan. 3. Agencies working with low- and moderate-income persons, particularly those living in blighted areas and residents of predominately low- and moderate-income neighborhoods, minorities, non-English speaking persons, and persons with disabilities will be contacted to encourage participation in the development of the Consolidated Plan. Amendments to the Annual Action Plan Citizens will be notified and have an opportunity to comment on any substantial amendments proposed to the Annual Action Plan. Substantial Amendments will be published in the City’s newspaper of record and be subject to a 30-day public comment period to allow for comment prior to implementation of the proposed amendment. For any amendments made as a result of the COVID-19 Pandemic and as a response to use of any CDBG-CV funding the City will utilize a 5 day public comment period as outlined by HUD. Substantial Amendments may be forwarded for review by the appropriate PRC prior to submission to the Bremerton City Council for final approval. Comments or views of citizens will be considered at the public hearing, and a summary of any comments or views not accepted and the reasons therefore, will be attached to the substantial amendment of the final Action Plan which will be submitted to HUD. Substantial amendments include: Changes in the use of CDBG or HOME funds from one eligible activity to another Adding a new activity A substantial change to the purpose, scope, location or beneficiaries of the project as defined in the application for funds and approved by the PRC. CDBG or HOME activities awarded funds which have a substantial change in the purpose, scope, beneficiaries, location or budget will be evaluated by Block Grant Staff and may be required to submit a new application for funding in the next application cycle. Projects not expending their full CDBG or HOME award will not trigger a substantial amendment. These funds will be re-obligated to new projects during the following year’s regular application cycle. Minor Changes: Any request for a change in the amount to be expended on a program or project budget line item, or a minor change to the purpose, scope, location or beneficiaries of the project as defined in the application for funds, shall not be considered a Substantial Change requiring citizen notification and Annual Action Plan amendment; however, prior written approval of these changes must be obtained from the appropriate Block Grant Administrator. Appendix A Minor project changes may need to be formalized as an amendment to the sub- recipient Agency’s contract with the City. The Agency will submit a written request for change to the Block Grant Administrator stating the specific reasons for the requested increase or decrease in funding, or change in purpose, scope, location or beneficiaries. All requests will be reviewed, and approved or denied by the Block Grant Administrator. Performance Reports 1. The City of Bremerton Block Grant Division will prepare and submit a Consolidated Annual Performance and Evaluation Report (CAPER) to HUD no later than March 31st of each year for the previous calendar year. 2.The CAPER will be made available for public review. Notice will be published in the newspaper of record and copies will be available on the City’s website: City of Bremerton: http://www.bremertonwa.gov/198/Federal-Grants---CDBG scroll down to the year and CAPER file desired. 3. Citizens will be provided a period of at least 15 days to review and comment on the CAPER. Comments or views of citizens will be considered in the report, and a summary of any comments or views not accepted and the reasons therefore, will be attached to the CAPER and submitted to HUD. Public Hearings By law, public hearings are required in order to obtain the public’s view and to provide the public with the City’s responses to public questions and proposals. Annually a public hearing will be held in spring for the approval of the next year’s Policy Plan. A second hearing is held in November to review the proposed use of funds and adopt the Annual Action Plan. Notification of the public hearings and of comment periods will be published in the newspaper of record and will afford citizens, public agencies, and other interested parties a reasonable opportunity to examine the proposed plans and to submit comments. City of Bremerton public hearings will be held during Bremerton City Council meetings, which are held every first and third Wednesday of the month, at 5:30 pm in the meeting chambers of the Norm Dicks Government Center. Bremerton City Council agenda may be obtained at http://www.ci.bremerton.wa.us/155/City-Council. Public Comments Interested persons may submit comments in writing during the public comment periods, or orally at the public hearings. Written comments should be directed to: Appendix A Sarah Achaoui Community Development Block Grant Administrator City of Bremerton 345 6th Street, Suite 100 Bremerton, WA 98337 Complaints All written citizen complaints will be referred to the appropriate person(s) or agencies for action. Under normal circumstances, the Block Grant Division will respond to the person making the complaint within 15 days. All complaints and responses will be kept on file. Resources Newspaper of Record: Notification will be placed in the following newspaper under Legal Notices at least ten days before a public meeting is held concerning a program described in this plan: City of Bremerton Block Grant – The Kitsap Sun Notices may also be published on City website: City of Bremerton Block Grant Program: http://www.bremertonwa.gov/198/Federal-Grants---CDBG The notice will indicate when and where the public meeting will be held. Meetings are often held at the following location: Norm Dicks Government Center, 1st Floor Meeting Chambers 345 6th Street Bremerton, WA 98337 Appendix B Appendix B Funding Process Appendix B Introduction The City of Bremerton is an entitlement community, and uses a competitive application process to find the best subrecipients to implement programs and activities around the City. The City has an independent funding process for its CDBG funds based on the prioritization of the City Council and utilizes a Project Review Committee to assist in making funding determinations. However the City still participates with the Housing and Homelessness Program (which administers Homeless Housing (HHGP), Affordable Housing (AHGP), and Consolidated Homeless Grant (CHG) Program) which has a combined funding & application process. These funds typically go to projects and programs which benefit the Homeless. This combined process includes a single application for funds, a single Grant Recommendation Committee (GRC) process and funding recommendation for use of HOME funds and Homeless Housing Grant Program. Funding recommendations are approved by the Kitsap Board of Commissioners for County CDBG/HOME funds and by the Bremerton City Council for City CDBG/HOME funds. For the 2022 application process the City of Bremerton will use the fluid review online system. This system will allow for a more streamlined application and review process. Applicants will no longer be required to provide paper copies of the application. Applications will be made available in a format accessible to persons with disabilities upon request. Application submittal instructions and due date are included in the Notice of Funding Availability (NOFA). The NOFA will be published on June 23, 2021. Applications must be submitted online and require access to the internet. 2022 Program Year Funding Specifics: The 2022 Program Year will have two competitive funding applications for: •City-Wide Economic Development which includes job training programs; •Capital Projects in the City which can demonstrate low/mod clientele or area wide benefit. •Public Facility and Infrastructure Projects. Specific funding amounts for these applications and RFP will be detailed in the Notice of Funding availability which will be released to the public on June 23, 2021. Application Review & Project Review Committee Recommendation Process Appendix B On June 23, 2021 the City will publish a Notice of Funding Availability. Within this document will be information about the two funding applications which have the following priorities: -Capital Projects in the City which can demonstrate a low/mod clientele or area wide benefit. Projects can include affordable housing, weatherization and minor home repair or projects which create suitable living environments for Bremerton residents and -City-wide economic development projects including job training programs. The Grant Recommendation Committee (GRC) will be used to review applications for HOME funds through the coordinated grant process. The City of Bremerton uses a separate Project Review Committee to review applications for CDBG funds. The Project Review Committee must adhere to the Conflict of Interest Policy in Appendix C. Applications will be initially reviewed by Block Grant Staff to determine compliance with technical requirements including eligibility for CDBG and/or HOME funds. Applications which are found not eligible for CDBG, HOME, Homeless Grant Program or Affordable Housing funds, will be disqualified and the applicant will be notified. Eligible applications will be reviewed and evaluated by staff for organizational and financial capacity, will be interviewed by the Project Review Committee, and a recommendation will be provided by the Project Review Committee and forwarded to City Council. The Council will review all recommendations, and select the projects for funding based how they address needs & objectives identified in the 2021-2025 Consolidated Plan. The details of the multi-level review process are listed below: Stage 1: Qualification Review Applications are reviewed for potential disqualification using the following process: 1.Applications are reviewed for completeness, soundness, and eligibility against the following criteria. Applications meeting one or more will be disqualified. At least two different staff members must agree that an application should be disqualified. a.Amount requested is not consistent among narrative questions, Sources of Financing form, budget form, and/or applicant information; b.Missing or blank attachments or forms or using old versions of forms; c.Project or applicant organization is not eligible for any of the funding sources; d.Project does not meet a priority identified in the City of Bremerton Consolidated Plan (2021-2025) or does not meet a Bremerton City Council funding priority. e.Wrong application type is submitted for project. Appendix B 2. Applicants will be notified of the results of the Stage 1 Review via email, either: a. Application is moving to Stage 2 and the applicant will be contacted to schedule an interview; or b. Application is disqualified and the basis for disqualification is provided. Stage 2: Review and Scoring Applications are reviewed and scored for organizational capacity, financial soundness, and project priority. 1. Staff members review and score all areas of the application utilizing scoring criteria specific to each application type. 2. Project Review Committee (PRC) members make funding recommendations using the following process: a. Review, evaluate, and score each application using review and scoring guides specific to each application type; b. Conduct interview with each applicant and score applicant interviews; interview length will depend on application type. CDBG Economic Development will have interviews consisting of the following: o 20 minutes in length which includes 10 minute agency presentation and 10 minute question/answer. Capital applications will have interviews consisting of the following: o 35 minutes in length which includes 15 minute agency presentation and 20 minute question/answer. c. Assign a priority ranking and recommend funding awards to applications. Stage 3: Funding Awards The funding recommendations go through a multi-step process, prior to finalizing the award amount. 1.Project Review Committee (PRC) – All Stage 2 applications will have a final score comprised of the staff application review score, PRC application review score, and PRC interview score. The PRC will use the finalized score of applications to assist in making the funding recommendations and contingencies. 2.City of Bremerton City Council- The City Council receives the recommendations from the Project Review Committee, holds a public comment period and a public hearing, and makes awards and contingencies. 3.Federal CDBG and HOME funds- Applications awarded CDBG and HOME funds must be included in an Action Plan associated with the 2021-2025 Consolidated Appendix B Plan and submitted to HUD for approval. The Action Plan cannot be finalized until the City of Bremerton receives the federal award amounts from HUD. 4. Final Awards – Funding recommendations were made based on estimated funds. Once the actual amounts are known awards will be adjusted based on the contingency set by the PRC’s and approved by the Bremerton City Council. Project Review Committee The Project Review Committee (PRC) will be formed consisting of three City of Bremerton staff members (Director-Department of Community Development, Assistant Finance Director, Community Development Project Assistant), one member from City Council, one representative from the Planning Commission and two citizens at large. (If a representative from the Planning Commission is unavailable, another citizen representative will serve in their place). The role of this committee is to read all applications and complete independent, scored reviews, review projects for community need and benefit, review evaluations, conduct interviews, and discuss, rank and recommend projects for funding. The appointees to this committee are appointed by the Mayor and confirmed by Bremerton City Council. The PRC will provide recommendations to City Council and the Council will have the opportunity to approve all the final recommendations. Applicant interviews will be conducted with the PRC. Applicants will have the opportunity to present their project and the PRC will have an opportunity to ask questions. At the conclusion of the interviews the PRC will formulate a funding recommendation for approval by the City of Bremerton City Council. Appointments for PRC members are made annually. PRC members are appointed to serve a two year term and can be re-appointed to serve successive terms and/or additional terms. Technical Assistance All applicants for funding who have never received City CDBG funding before, or have never used the fluid review system will be required to attend the technical assistance session. During the session, staff will provide information to citizens concerning who can apply for funds, funds expected to be available, the range of activities that may be undertaken, priorities for funding, application submission requirements including technical assistance in filling out the application, the application deadline, and how decisions concerning funding will be made. There will also be a workshop on how to use the Fluid Review system. Appendix B In addition to the mandatory Technical Assistance described above, City Block Grant staff is also available by appointment for one-on-one Technical Assistance to provide guidance to citizens and organizations regarding specific project considerations. Please contact Block Grant staff to set up an appointment. At any time, any citizen may contact the City Block Grant staff for technical assistance, help with an application or general information in relation to programs described in this Plan. The Department will help citizens understand CDBG and HOME funded programs, the procedures for submitting proposals, the Citizen Participation Plan and other program requirements so they can effectively participate in CDBG and/or HOME programs and the funding process. This technical assistance session, for CDBG applicants will be held on July 24, 2021, from 10:00 am-12:00 pm at the Norm Dicks Government Center in the Mayor’s Conference room. It may be necessary that this meeting take place virtually. This will be determined closer to the meeting date. Appendix C Appendix C CDBG Eligibility Requirements & Program Rules Appendix C CDBG NATIONAL OBJECTIVES AND ELIGIBILITY REQUIREMENTS Every CDBG activity must meet a national objective and must be eligible in order to be funded, and each CDBG applicant must be able to demonstrate eligibility based on data collected. The following information is provided to assist you in defining the eligibility and national objective that your activity meets and the type of information you will need to gather from the population you serve to provide to the City Block Grant office. Specific regulations that govern the CDBG program are available the Block Grant office. What are the National Objectives? (Benefit Criteria) An eligible CDBG activity must either I. Principally benefit low and very low income A. Area Benefit – a.Activity which is available to benefit all the residents of an area which is primarily residential. b. At least 51% of beneficiaries are low or very low income persons/households. c. Applicants will be responsible for defining the service area and City staff will check to ensure that it meets the Low Moderate Income (LMI) criteria. B. Limited Clientele 1. At least 51% of beneficiaries are low or very low income persons/households a. Presumed Benefit b. Agency Requires Client Information c. Income Eligibility Requirement (Direct Benefit) d. Nature/location 2. Removal of Architectural Barriers 3. Assistance to Owners of Microenterprises 4. Employment Support Services C. Housing Activities (Residential) a. 51% of units must be occupied by low-and moderate-income households. b. Affordable rents must be maintained for 5 years D. Job Creation or Retention - Economic Development a. Must be located in a predominantly Low/Moderate (L/M) income neighborhood and serve the L/M income residents; or Appendix C b. Involve facilities designed for use predominantly by L/M income persons; or c. Involve the employment of persons, the majority of whom are L/M income persons. II. Reduce or Eliminate Blight III. Meet an Urgent Need A. Urgent Need would be a natural disaster or federally declared disaster. NOTE: The vast majority of CDBG activities funded are designed to benefit low and very low income persons and households. How Does A Project Meet a National Objective? I. Principally benefit low and very low income To meet this national objective, an applicant must document that the proposed project will benefit predominantly low and very low income persons or households. A low income person/household is one whose annual income does not exceed 80% of area median income -- a very low income person/household is one whose annual income does not exceed 50% of the area median income. HUD Income Limits for Bremerton are included in the Application each year. There are several different ways that CDBG activities can benefit low and very low income persons: A. AREA BENEFIT This criteria allows a project located in principally residential area to meet a National Objective by demonstrating that, based on the demographics of a project’s defined service area, at least 51% of the residents are low or very low income. Certain activities are a natural fit for area benefit, as they serve a geographic area, such as parks, neighborhood facilities, community centers and streets/sidewalks. Please contact the City Block Grant office for maps and more information on documenting your service area and determining eligibility under Area Benefit. Appendix C Applicants must: Attach a map with the boundaries of the project's service area delineated (the surrounding geographic area in which all or most of the people benefiting from the project reside). Explain why that particular geographic area is the service area for the project; Indicate on the map residential and commercial areas within the service area boundary; and Provide documentation that 51%(City) or more of the residents within the service area are low and very low income persons/households utilizing the most recent census data as provided by HUD. Please contact the City or Block Grant office for maps and more information on documenting your service area. B. LIMITED CLIENTELE An activity which benefits a limited clientele, at least 51% of whom are low or very low income persons/households. There are four types of activities in this category: 1. Presumed Benefit -- An activity may benefit one of the following groups who are presumed by HUD to be principally low and very low income: abused children, battered spouses, elderly persons, handicapped persons, homeless persons, illiterate persons, migrant farm workers and persons living with HIV/AIDS. Applicants must: Demonstrate that the facility or service is designed for and used predominantly by one of the groups identified above. Demonstrate that your clientele meets HUD’s definition for the presumed group you serve, for example, homeless individuals must meet HUD’s definition and documentation requirements at https://www.onecpd.info/resources/documents/HomelessDefinition_Re cordkeepingRequirementsandCriteria.pdf 2.Require documentation on family size and income in order to show that at least 51 percent of the clientele are low income – This means your program can serve low and moderate income clientele if at least 51% of your clientele are low income. Agencies must keep information on client income and family size which can document whether or not 51% or more of the clientele are persons whose family income does not exceed low and moderate income limits for Kitsap County. Note: Income qualification criteria from other programs (such as state Appendix C poverty guidelines) may be substituted provided those criteria are at least as restrictive as the HUD income limits. Applicants must: Provide documentation of the total number of clients/households served in 2021 (if this is an existing service); State what percent of the clients/households served in 2021 were low or very low income (or met criteria that are stricter); Provide a copy of the income qualification criteria that were used to screen clients and to determine the percent that were low and very low income; Provide a copy of the client intake form highlighting the questions regarding family size and income levels; and Agree to maintain documentation of the client's incomes for the CDBG contract period. 3. Income Eligibility Requirements (Direct Benefit) -- This means that the agency uses income screening to limit the benefits of the CDBG funded activity to only those persons who are low and very low income. For example, a housing counseling program would screen potential clients and use the CDBG funds to pay for the counseling only of those who are income eligible. Applicants must: Screen clients by family size and income; Provide a copy of the income qualification criteria that were used to screen clients to determine low and very low income status; Provide a copy of the client intake form highlighting the questions regarding family size and income levels; and Describe how the program/project would limit the benefits of the CDBG funded activity exclusively to low and very low income persons/households. 4. Nature/Location of Activity Allows Conclusion of Primarily Low and Very Low Income Benefit -- This means that the activity is of such a nature and in such a location that it may be concluded that the clientele will be primarily low and very low income; for example, free childcare in an assisted housing project. Applicants must: Appendix C Explain how the nature, and if applicable, the location of the proposed project, establishes that it is used primarily for low and very low income persons. In addition to the four activities described above, the following activities may qualify under the limited clientele national objective. •Removal of Architectural Barriers A project which removes material or architectural barriers which restrict the mobility and accessibility of elderly or handicapped persons to publicly owned and privately owned non-residential buildings, facilities and improvements, and the common areas of residential structures containing more than one dwelling unit is considered a limited clientele activity. Note: This refers to the removal of existing barriers. It does not apply to new construction. •Assistance to Owners of Microenterprises When assistance is to be provided to a microenterprise (a commercial enterprise that has five or fewer employees, one or more of whom owns the enterprise) the owner must qualify as low or moderate income. Note: for microenterprise projects under the limited clientele national objective justification, the low income threshold applies only to the owner, there are no income requirements for the workers the owner employs. •Employment Support Services. If CDBG assistance is only provided for training or supportive services (peer support programs, counseling, child care, transportation, and other similar services) to assist business(es), the percentage of low and moderate income persons assisted may be less than 51% if the proportion of the total cost borne by CDBG funds is no greater than the proportion of the total number of persons assisted who are low or moderate income. For example: A new business moves into town and begins an on-site day care program for workers. The total cost of the day care is $10,000. There are 40 children, 3 of which meet qualifications as low and moderate income. The maximum amount chargeable to the CDBG program is $750.00. ($10,000/40 =$250 X 3 = $750). Applicants must: Maintain data documenting the total cost of the service, Screen clients by family size and income; and provide a copy of the client intake form highlighting the questions regarding family size and income levels; Appendix C C. Housing Activities These are activities providing or improving permanent residential structures which are or will be occupied by low and very low income households. It does not include group homes or shelters for the homeless, which are considered limited clientele activities. Applicants must: Maintain a copy of the written agreement with each landlord or developer receiving CDBG assistance indicating the total number of dwelling units in each multi-unit structure assisted and the number of those units which will be occupied by low and moderate income households after assistance. 51% of these units must be available to low/moderate income. Maintain records on the total cost of the activity, including both CDBG and non-CDBG funds. Screen households for family size and income eligibility. For rental housing, maintain records on rent charged (or to be charged) after assistance for each dwelling unit in each structure assisted. Affordable rents must be maintained for a period of five years after CDBG assistance. D. Job Creation or Retention Activities These are economic development activities which are designed to create or retain permanent jobs, where at least 51% of the jobs, computed on a full-time equivalent basis, can be documented to employ low and very low income persons for the geographic area where it is located. There are very specific elements of this national objective. Please contact the Community Development staff to discuss your project prior to submitting an application. CDBG FUNDING - SPECIFIC REQUIREMENTS 1. Reversion of Assets / Change-of-Use of CDBG Assisted Property All recipients must agree to restrict the use of the property, which was acquired and/or improved using CDBG funds, to the intended purpose for which the funds were awarded. The restriction will be based on the dollars invested and follow the guidelines in the chart Appendix C below. This is to ensure compliance with HUD requirements and to ensure continued public benefit. Activity Dollar Threshold* Minimum Years Restricted Rehabilitation or Acquisition of existing facilities or housing (including homeownership assistance) Less than $15,000 $15,000 - $40,000 Greater than $40,000 5 Years 10 Years 15 Years New Construction or Acquisition of land for new construction Any $ amount 20 Years * Dollar threshold is per facility, or if housing, per unit for single family housing Reversion of assets provisions require agency to transfer to the City any CDBG funds on hand at the time of expiration of the subrecipient agreement, any accounts receivable attributable to the use of CDBG funds, and any nonexpendable personal property that was purchased with CDBG funds 2. Restriction on Assessments CDBG funds may not be used for public improvement projects where a portion of the projects is to be financed by assessments to area property owners, unless the project is structured such that CDBG funds are used to pay the assessments of all low and very low income property owners. The analysis of incomes of affected persons must be done ahead of time and submitted as part of the application for CDBG funds. 3. Guidelines for Economic Development Projects (24 CFR 570.209) City will utilize the guidelines provided at 24 CFR 570.209 relative to project costs and financial requirements and standards for evaluating public benefit. 4. Supplanting (24 CFR 570.207) Federal regulations prohibit using CDBG funds to supplant (replace or substitute for) local funds for public services or ongoing responsibilities of general local government. The intent of this federal regulation is to prevent local government from using the availability of federal CDBG dollars as an excuse to reduce local funding commitments. Appendix D Appendix D Conflict of Interest Policy Appendix D Conflict of Interest Policy City of Bremerton Project Review Committee From time to time, community volunteers who are appointed to the Project Review Committee (PRC) have prior experience with one of the applicants or programs requesting grant funding. The following guidelines are intended to clarify what should happen in these cases to avoid real or perceived conflict of interest. 1) Conflict of Interest: a. No member of the PRC shall be beneficially interested, directly or indirectly, in any grant applications which may be made by, through, or under the recommendation of the PRC, in whole or in part, or which may be made for the benefit of his or her office, or accept directly or indirectly, any compensation, gratuity or reward in connection with such contract from any other person beneficially interested therein (from RCW 42.23.030) b. No member of the PRC shall engage in any activity, including participation in the selection, award, or administration of a grant award or contract if a conflict of interest, real or apparent, exists. 2) Remote Interest a. A PRC member is not interested in a contract, within the meaning of 1.a. above, if the member only has a “remote interest” in the contract and the extent of the interest is disclosed to the PRC and Staff at the beginning of the review process and is noted in the official minutes prior to the recommendation of the contract. (from RCW 42.23.040). i. As used in this section “remote interest” means: 1. That of a non-salaried officer of a non-profit corporation; 2. That of an employee or agent of a contracting party where the compensation of such employee or agent consists entirely of fixed wages or salary; 3. That of a landlord or tenant of a contracting party; 4. That of a holder of less than one percent of the shares of a corporation or cooperative which is a contracting party. Appendix D ii. Even if the PRC member’s interest is only remote, the member cannot influence or attempt to influence any other PRC member in the award of a contract they are remotely interested in. For purposes of this provision, influence or attempt to influence includes any of the following: 1. Scoring the grant application; 2. Discussing the grant application with other PRC members; 3. Joining the audience, acting on behalf of the applicant or interacting in any manner with members of the PRC. 4. PRC members should physically leave the room when the remaining PRC members discuss the matter. This removes any potential claim that the PRC member has attempted to exert undue influence over the other PRC members. 3. Potential Bias by Prior Association A. A PRC Member may have a “potential bias by prior association” if they have had an interest in the past, but do not meet these definitions during the time they are serving on the PRC, or who have personal prior experience with an applicant including serving as a board member in the past, being employed in the past, or being a current or past volunteer. In the event of a potential bias by prior association: i. The PRC member should disclose to the PRC and staff the nature of their prior association at the beginning of the application review process. 4. Conflicts Disclosed The staff should advise PRC members before the process begins that members need to disclose, in advance, any remote interest, potential bias by prior association that they have, or relatives serving as staff to any applicants. It is recommended that the disclosures be done in writing. 5. Voting and Recommendations a.The PRC member should recuse themselves from voting on any recommendation that would include applications in which they have a remote interest in or with whom they have a potential bias by prior association. b. If the final recommendations of the PRC are consolidated into a single motion, then the PRC member may participate in the vote so long as their Appendix D participation in the discussion does not influence or attempt to influence the outcome with respect to the applicant in which they have a remote interest in or with whom they have a potential bias by prior association. c. Occasionally members of the City Council will sit on the Board of Directors of organizations which are proposed to receive funding. In this instance, the Council member with the conflict of interest will state their conflict, leave the Dias, and return when voting has been completed. Because the votes are passed as one resolution, the Council member with the conflict will not be allowed to vote on the resolution as a whole. 6. Alternate PRC If there are two or more PRCs in a funding cycle or process, and a member has a conflict of interest, remote interest, or potential bias by prior association with an application that one of the PRCs is reviewing, that member may serve on a different PRC without reservation or restriction. Appendix F Appendix F Glossary Appendix F GLOSSARY Administrative Expenses. Those expenses directly associated with the recipient’s general administration of the CDBG or HOME programs, such as salaries, supplies, equipment, accounting, phones, audits, benefits, travel and indirect costs. Affordability. Affordability is achieved when a household’s rent or mortgage payment, plus utilities, does not exceed 30% of the monthly income for the targeted income group as adjusted for household size. Annual Action Plan: This document allocates one year’s funding to specific projects and activities for the CDBG and HOME programs. It is submitted annually to HUD, 45 days prior to the start of the City’s and County’s fiscal year or no later than November 15 and is developed in accordance with federal regulations (24 CFR Part 91). Architectural Barriers. Restrict mobility and accessibility of elderly or individuals with disabilities. Benefit Criteria. A CDBG activity must either principally benefit low or very low income persons, reduce or prevent slums and blight or meet a recent urgent need. These three objectives are the Benefit Criteria. Cash Flow. Gross income minus vacancy rate, operating expenses, reserves, debt service and taxes. Grant Recommendation Committee (GRC). A group of eight citizens meeting specific qualifications, who develop funding recommendations for City of Bremerton HOME funds. Citizen Participation Plan: This plan is prepared to facilitate and encourage public participation and involvement in the Consolidated Plan process and the City’s CDBG and HOME program, especially by low- and moderate-income persons. The plan identifies the public participation requirements as identified by federal regulations (24 CFR Part 91). Committed Funds. Funds committed to a project by a project funding source. The award amount, terms and uses of the committed funds are documented in a letter to the applicant. A copy of this award letter is included with the application for CDBG/HOME funds. Conditional Funds. Funds committed, with conditions, to a project by a project funding source. The conditions of the commitment, amount, terms, and uses are documented in a letter to the applicant. A copy of the letter is included with the application for CDBG/HOME funds. Appendix F Consolidated Annual Performance Evaluation Report (CAPER): This document reports on the progress in carrying out the Consolidated Plan and Annual Action Plan. The report is prepared annually by both the City and County in accordance with federal regulations (24 CFR Part 91). It is due to HUD no later than 90 days after the end of the program year or March 31. Consolidated Plan: This document serves as the City’s and County’s application for CDBG and HOME funds. It sets forth the priorities and strategies to address the needs of primarily low- and moderate-income persons and areas in the county. It typically covers a five-year time period. It is submitted to HUD 45 days prior to the start of the program year or no later than November 15 and is developed in accordance with federal regulations (24 CFR Part 91). Consultant Fees. Fees paid to a third party developer consultant for costs associated with implementation of a project. Entitlement Community. A local jurisdiction that receives an allocation of Community Development Block Grant funds directly from HUD. All participating jurisdictions are entitlement communities; however, not all entitlement communities are participating jurisdictions. Household: all persons occupying a housing unit. The occupants may be a family, as defined in 24 CFR 5.403; two or more families living together; or any other group of related or unrelated persons who share living arrangements, regardless of actual or perceived, sexual orientation, gender identity, or marital status. Housing. Housing includes permanent housing units for sale or rent including; manufactured housing, permanent housing for disabled homeless persons, transitional housing, single-room occupancy housing, and group homes. Housing does not include emergency shelters or facilities such as nursing homes, convalescent homes, hospitals, residential treatment facilities, correctional facilities, halfway houses, housing for students or dormitories. Interlocal Agreement. Agreements made to ensure the cooperation of units of local government which form consortiums for the purpose of obtaining funding. Low- and Moderate-Income Households (LMI): These are households earning less than 80% of the area median income (AMI). They are broken down into the following income designations: Extremely Low-Income: households with incomes less than 30% of the area median family income adjusted for household size. Low-Income: households with incomes between 31% and 50% of the area median income, adjusted for household size. Moderate-Income: households with incomes between 51% and 80% of the area median income, adjusted for household size. Appendix F Low- and Moderate-Income Area Neighborhood (LMA): In general, this is defined as census tracts or block groups where a minimum of 51% of the residents have low or moderate incomes (i.e. not exceeding 80% of the area median income). Median Family Income: HUD releases income limits annually for its programs. Income limits are calculated using American Community Survey and Census data. Data for Kitsap County is based on the Bremerton-Silverdale Metropolitan Statistical Area (MSA). Incomes are indexed by household size. Neighborhood Revitalization Strategy Area: A specific neighborhood targeted by the City and approved by HUD. Communities with approved NRSA’s receive enhanced flexibility in undertaking economic development, housing, and public service activities with their CDBG funds. The City currently does not have an approved NRSA at this time. Operating Support. Financial assistance used to supplement the day-to-day operations of a project. Participating Jurisdiction. This term refers to cities, counties and consortia which receive an allocation of federal HOME funds directly from HUD. Persons with Disabilities. This term means a household composed of one or more persons, at least one of whom is an adult, who has a disability. A person is considered to have a disability if the person has a physical, mental, emotional or developmental impairment that is expected to be of long-continued and indefinite duration and substantially impedes his or her ability to live independently. Program Year: The program year for the City CDBG and HOME programs is January 1 through December 31, which is the same as the City’s fiscal year. Project Delivery Costs: Costs directly related to managing the project to the point of completion normally paid to a third party. Project Review Committee. This committee, made up of City of Bremerton staff, a member of the City of Bremerton City Council, Planning Commissioner and two citizen volunteers, evaluate, rank, and make funding recommendations to the Bremerton City Council for use of CDBG funds. Project Soundness. The feasibility, sensibility, and effectiveness of the project to meet a defined community need and the organizational strength and capacity to bring the project to completion. Proposed Funds. Funds which have been or will be requested from a potential project funding source. Relocation Expenses. Those costs paid to households or businesses when temporary or permanent relocation becomes necessary. Appendix F Single family housing: one to four-family residence, condominium unit, cooperative unit, combination of manufactured housing and lot, or manufactured housing lot. Single room occupancy (SRO) housing: housing (consisting of single- room dwelling units) that is the primary residence of its occupant or occupants. The unit must contain either food preparation or sanitary facilities (and may contain both). Special Needs Housing. Housing for special needs populations who require special housing-related services. This is also referred to as supportive housing. Special Needs Population. This population of people includes elderly and frail elderly; persons with mental, physical or developmental disabilities; persons with HIV/AIDS; persons with alcohol or drug addiction; victims of domestic violence; persons discharged from institutions (prison, jail, mental hospital, foster care). Transitional housing: housing that is designed to provide housing and appropriate supportive services to person, including (but not limited to) deinstitutionalized individuals with disabilities, homeless individuals with disabilities, and homeless families with children. It has as its purpose facilitating the movement of individuals and families to independent living within a time period that is set. Uniform Physical Condition Standards (UPCS): Uniform national standards established by HUD pursuant to 24 CFR 5.703 for housing that is decent, safe, sanitary, and in good repair. Standards are established for inspectable items for each of the following areas: site, building exterior, building systems, dwelling units, and common areas. AGENDA BILL CITY OF BREMERTON CITY COUNCIL SUBJECT: Study Session Date: June 9, 2021 Approve promotion of Chris Mottner as the Internal Services Manager at Band 16, Rate 8 of the 2021 Management, Professional, Confidential and Fiduciary Salary Plan COUNCIL MEETING Date: June 16, 2021 Department: PW&U Presenter: Tom Knuckey Phone: (360) 473-2376 SUMMARY: Chris Mottner has been the Facilities/Inventory Supervisor since 1996 and has been employed by the City in a variety of Utilities and Facilities positions since 1979. On May 19th, Council created the Internal Services Manager position; during presentations leading up to the creation, the PW&U Director indicated his intent to promote Chris to this new position at Rate 8. BMC Chapter 2.50.032(c)(3) requires Council approval when an employee is promoted, and it is proposed that their salary be set higher than the next rate which he or she was receiving at the former band. Mr. Mottner’s teamster compensation includes longevity pay, standby pay and overtime; to match his current composite compensation it is requested Council approve his salary at Rate 8 of Band 16. ATTACHMENTS: (1) Council Summary; (2) Letter of Engagement; and (3) Power Point Presentation FISCAL IMPACTS (Include Budgeted Amount): Annual salary is $120,585.36; a budget adjustment is not required. STUDY SESSION AGENDA: ☐ Limited Presentation ☒ Full Presentation STUDY SESSION ACTION: ☐ Consent Agenda ☒ General Business ☐ Public Hearing RECOMMENDED MOTION: Move to authorize placement of Mr. Mottner’s salary at Rate 8 of Band 16 of the Management, Professional, Confidential, and Fiduciary Salary Plan. COUNCIL ACTION: Approve Deny Table Continue No Action Form Updated 01/02/2018 6A Item pulled Request to Approve Promotion of Chris Mottner as the Internal Services Manager at Rate 8, Band 16 Council Summary Considerations to promote Chris Mottner at Rate 8 (top step):  Chris has worked for the City since 1979 (42-years), and has been the Facilities and Inventory Supervisor since 1996 (25-years). In this position he effectively functions as a manager. Chris is the most qualified candidate for the newly created Internal Services Manager position. The intent to hire Chris to the new position at Rate 8 was communicated to Council when the position was created.  If Chris had been in a management position the entire time he has been functioning as a manager, he would be at top step.  If Chris was an external candidate applying for this position, we would not be able to ask him what his current compensation is; we would only be allowed to ask him what salary he required to take the position. If Chris were an external candidate and stated that he required Rate 8, we would hire him at that level based on his qualifications.  As a manager, Chris will continue to work significant overtime; however, it will be uncompensated. Further he will no longer be compensated for Standby although he will be expected to respond to emergency call outs. Finally, as a manager he will accrue one less vacation day each year.  The new Internal Services Manager will perform some duties currently being performed by the Facilities and Inventory Supervisor. The workload of the Supervisor will reduce somewhat with Chris in the new manager position, and so the overtime requirement for the Supervisor should be reduced. Salary Considerations: Tom Knuckey, PE Director of Public Works & Utilities 100 Oyster Bay Avenue Bremerton, WA 98312 Telephone: 360-473-2376 thomas.knuckey@ci.bremerton.wa.us May 20, 2021 Chris Mottner RE: Letter of Engagement Dear Chris: It is with great pleasure that I confirm your appointment to the position of Internal Services Manager. Your position is exempt and included in the Management and Professional classifications under BMC 2.50 as follows: Position: Internal Services Manager Department: Public Works & Utilities Effective Date: July 1, 2021 Rate of Pay: $10,048.78 (Band 16, Rate 8) (Pending City Council Approval) Appointment/Removal: Director of Public Works and Utilities Supervisor: Director of Public Works and Utilities Benefits: Pursuant to BMC Chapter 2.50 Vacation: 25 days (200 hours) prorated for 2021 You are an “at will” employee and may be terminated by the City without cause at any time with thirty (30) days’ notice. You may be terminated for cause, without notice, and no severance pay shall be paid. This letter shall constitute your terms and conditions of employment with the City and there are no other written or oral agreements that have not been set forth in this letter of engagement or covered by Chapter 2.50 of the Bremerton Municipal Code (copy attached). Please sign on the next page indicating your acceptance of our offer of employment as outlined above and return it to Debbie Klinefelter in the Human Resources Office at 345 6th Street, Suite 100 Bremerton, WA 98337. Sincerely, Tom Knuckey, PE Director of Public Works & Utilities cc: Debbie Klinefelter, Human Resources Analyst ……………………………………………………………………………………………………… ACCEPTANCE OF JOB OFFER: I, Chris Mottner, hereby accept the appointment to position of Internal Services Manager, effective July 1, 2021 under the terms and conditions as set forth in this Letter of Engagement. SIGNATURE:______________________________________ DATE: _______________ Chris Mottner Lead Facilities Service Specialist Internal Services Manager Facilities / Inventory Supervisor Automotive Equip. Tech. Supervisor Electronics Technician Utilities Service Specialist Senior (3 positions) Utilities Service Specialist (3 positions) Automotive Eqpt Technician (3 positions) Journey Level Electrician (3 positions) INTERNAL SERVICES DIVISION AGENDA BILL CITY OF BREMERTON CITY COUNCIL SUBJECT: Ordinance No. amending Ordinance No. 5408 relating to the City of Bremerton Fiscal Year 2021 Budget Study Session Date: June 9, 2021 COUNCIL MEETING Date: June 16, 2021 Department: Financial Services Presenter: Karen Wikle Phone: (360) 473-5296 SUMMARY: Each year the City assesses its current fiscal year budget for any needed adjustments. Adjustments are recommended for the following reasons: to adjust the estimated beginning fund balances to actual, to account for unanticipated/unexpected conditions, to incorporate 2020 carryover items, and to adjust for previously approved Council motions/resolutions etc. The attached ordinance and supporting documents outlines the various reasons for the current proposed budget amendment. ATTACHMENTS: Ordinance No.to Amend Ordinance No. 5408 adopting the 2021 Budget Exhibit A Exhibit B 2021 Mid-Year Budget Adjustment Memo Detail fund listing identifying proposed line item and budget control category adjustments FISCAL IMPACTS (Include Budgeted Amount): The net adjustment for all City Funds for the Fiscal Year 2021 is $17,287,292 for a total expenditure appropriation of $209,449,428. STUDY SESSION AGENDA: ☒Limited Presentation ☐Full Presentation STUDY SESSION ACTION: ☐ Consent Agenda ☐General Business ☐Public Hearing RECOMMENDED MOTION: Move to pass Ordinance No. amending Ordinance No. 5408 relating to the City of Bremerton Fiscal Year 2021 Budget; and further authorize identified staffing adjustments. COUNCIL ACTION: Approve Deny Table Continue No Action Form Updated 01/02/2018 6B 5424 x 5424 5424 1 2021 Mid-Year Budget Amendment ORDINANCE NO. ___ AN ORDINANCE of the City Council of the City of Bremerton, Washington, amending Ordinance No. 5408 relating to the City of Bremerton Fiscal Year 2021 Budget. WHEREAS, the City Council passed the Fiscal Year 2021 City Budget Ordinance No. 5408 on November 18, 2020; and WHEREAS, the City Council has previously amended the budget by various motions and resolutions subsequent to November 18, 2020 which require a formal amendment by ordinance; and WHEREAS, all of the funds of the City of Bremerton require amendment to adjust beginning fund balances; and WHEREAS, several City Departments and Funds are experiencing or anticipate additional expenses due to factors such as costs related to provision of contracted services and changed allocations of staff time; and WHEREAS, several City Departments and Funds require adjustment to revenues to reflect activity in 2021 or timing changes from that which was anticipated in the 2021 budget; and WHEREAS, certain reclassifications of revenues and expenditures are required to properly reflect budget categories in a manner consistent with actuals in accordance with BMC 3.02.010; and WHEREAS, each of these actions has an impact on the City of Bremerton’s Fiscal Year 2021 Annual Budget resulting in the need to amend this Budget document; NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF BREMERTON, WASHINGTON, DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1. Ordinance No. 5408 establishing the City of Bremerton’s 2021 Budget is hereby amended as follows; 1) regular revenues and unencumbered fund balances of $209,449,428, the total for each fund as set forth in Exhibit A, attached hereto and incorporated herein by this reference, and 2) in accordance with BMC 3.02.010, expenditures and ending fund balances of $209,449,428 as set forth in Exhibit A, and authoring staffing adjustments as set forth in Exhibit B, attached hereto and incorporated herein by this reference. 5424 2 2021 Mid-Year Budget Amendment SECTION 2. That the totals for the funds noted in Exhibit A are hereby appropriated for the fiscal year 2021. SECTION 3. Severability. If any one or more sections, subsections, or sentences of this Ordinance are held to be unconstitutional or invalid, such decision shall not affect the validity of the remaining portion of this Ordinance and the same shall remain in full force and effect. SECTION 4. Effective Date. This ordinance shall take effect and be in force ten (10) days from and after its passage, approval and publication as provided by law. PASSED by the City Council the___________ day of ____________________, 2021 _________________________________ KEVIN GORMAN, Council President Approved this ________ day of ________________________, 2021 ________________________________ GREG WHEELER, Mayor ATTEST: APPROVED AS TO FORM: __________________________________ ________________________________ ANGELA HOOVER, City Clerk ROGER A. LUBOVICH, City Attorney PUBLISHED the________ day of ______________________, 2021 EFFECTIVE the_________day of ______________________, 2021 ORDINANCE NO. ______ BEG LIC.INTER-CHARGES FINES 2021 FUND AND GOV'T FOR AND OTHER TOTAL FUND BAL.TAXES PERMITS REVENUE SERVICE FORFEITS REVENUE BUDGET General Fund General Government: City Council 0 0 0 155,561 0 0 155,561 Executive 0 0 0 132,319 0 0 132,319 Financial Services 0 0 0 806,344 0 0 806,344 Legal 0 0 0 616,530 0 0 616,530 Human Resources 0 0 0 287,803 0 0 287,803 Community Development 2,935,000 1,285,750 9,400 694,000 50,000 0 4,974,150 Municipal Court 0 0 20,500 210,800 209,400 10,400 451,100 City Auditor 0 0 0 36,291 0 0 36,291 Law Enforcement 0 7,000 192,826 143,600 1,500 500 345,426 Fire/Emergency Medical 2,086,406 1,200 841,104 650,200 3,000 0 3,581,910 Police & Fire Pension 0 0 76,236 0 0 0 76,236 General Facilities 0 0 0 180,019 0 596,600 776,619 Parks 0 0 0 125,500 0 52,000 177,500 Engineering 0 64,000 0 2,183,027 0 0 2,247,027 Non-Departmental 28,511,788 30,600 839,130 104,371 732,000 198,000 30,415,889 Beginning Fund Balance 15,076,727 67,900 156,825 15,301,452 Total General Fund 15,076,727 33,533,194 1,388,550 2,047,096 6,326,365 995,900 1,014,325 60,382,157 Special Revenue Funds: Street 892,182 800,000 0 837,923 115,000 0 756,500 3,401,605 Contingency Reserve 1,518,452 0 0 0 0 0 144,800 1,663,252 Lodging Tax 309,374 470,000 0 0 0 0 4,000 783,374 Parking System 883,974 0 0 0 0 355,500 1,294,831 2,534,305 Comm. Dev. Block Grant 137,658 0 0 841,000 25,500 0 80,500 1,084,658 Abatement Revolving Fund 339,710 0 0 0 0 25,000 500 365,210 Police Special Projects 415,736 0 0 0 0 5,000 3,500 424,236 Public Access Television 723,148 0 274,000 0 125,607 0 47,000 1,169,755 Gift & Donations Fund 89,536 0 0 0 0 0 2,100 91,636 Trial Improvement 98,739 0 0 18,000 0 0 600 117,339 One Percent for Arts 12,820 0 0 0 0 0 1,700 14,520 Conference Center Oper 140,440 0 0 0 1,023,438 0 356,000 1,519,878 Total Spec. Rev. Funds 5,561,771 1,270,000 274,000 1,696,923 1,289,545 385,500 2,692,031 13,169,770 Debt Service Fund: 2010 UTGO (40,176)900,000 0 0 0 0 1,000 860,824 Government Center LTGO 86,007 0 0 0 0 0 331,000 417,007 2015 Public Safety Bond 85,830 550,000 0 0 0 0 750 636,580 2019 Refunding LTGO 225,736 330,000 0 3,000 0 0 147,600 706,336 Total Debt Service Fund 357,397 1,780,000 0 3,000 0 0 480,350 2,620,747 Capital Improvement Funds: General Govt Capital Improv.3,408,575 1,650,000 0 0 0 0 40,000 5,098,575 Park Facilities Construction 301,520 0 0 1,014,400 0 0 258,150 1,574,070 Residential Street & Sidewalk Fund 2,568,216 1,091,301 125,000 10,000 0 0 115,000 3,909,517 Transportation Projects Fund 1,425,956 491,301 0 8,671,972 0 0 1,225,544 11,814,773 Fire Public Safety Capital 915,241 0 0 0 0 0 0 915,241 Affordable Housing Capital Fund 3,098 0 0 0 0 0 100,000 103,098 Total Capital Improv. Funds 8,622,606 3,232,602 125,000 9,696,372 0 0 1,738,694 23,415,274 Total General Gov't Funds 29,618,501 39,815,796 1,787,550 13,443,391 7,615,910 1,381,400 5,925,400 99,587,948 2021 REVENUE - ALL FUNDS BEG LIC.INTER-CHARGES FINES 2021 FUND AND GOV'T FOR AND OTHER TOTAL FUND BAL.TAXES PERMITS REVENUE SERVICE FORFEITS REVENUE BUDGET 2021 REVENUE - ALL FUNDS Enterprise Funds: Water Utility 4,454,909 0 0 0 14,945,857 20,000 533,000 19,953,766 Water Capital 11,345,123 0 0 0 0 0 3,605,600 14,950,723 Wastewater Utility 3,808,456 102,000 0 0 16,394,038 18,000 23,000 20,345,494 Wastewater Capital 3,374,292 0 0 0 0 0 9,996,019 13,370,311 Stormwater Utility 1,238,630 0 0 0 4,905,506 7,000 82,500 6,233,636 Stormwater Capital 5,671,750 0 0 0 0 0 4,062,929 9,734,679 Utility Debt Reserve 1,719,347 0 0 0 0 0 22,000 1,741,347 Gold Mountain Golf Complex 940,524 0 0 0 4,734,564 0 24,271 5,699,359 Total Enterprise Funds 32,553,032 102,000 0 0 40,979,965 45,000 18,349,319 92,029,316 Internal Service Funds: Risk Management 2,732,927 0 0 0 0 0 2,207,829 4,940,756 Employment Security 187,368 0 0 0 0 0 4,000 191,368 Accumulated Leave Liability 449,606 0 0 0 0 0 582,500 1,032,106 ER&R Operations & Maint.111,511 0 0 0 1,788,869 0 4,350 1,904,730 ER&R Equipment Reserve 4,641,715 0 0 0 0 0 2,171,933 6,813,648 Information Services 1,183,557 0 0 0 1,766,000 0 0 2,949,557 Total Internal Service Funds 9,306,683 0 0 0 3,554,869 0 4,970,612 17,832,164 Total Business Type Funds 41,859,715 102,000 0 0 44,534,834 45,000 23,319,931 109,861,480 Total All Funds 71,478,216 39,917,796 1,787,550 13,443,391 52,150,744 1,426,400 29,245,331 209,449,428 Beginning Fund Balance $71,478,216 34% Taxes $39,917,796 19% Licenses & Permits $1,787,550 1% Intergovernmental $13,443,391 6% Charges for Service $52,150,744 25% Fines & Forfeits $1,426,400 1%Other Revenue $29,245,331 14% Revenue Sources -All Funds 1/0/1900 2021 SUPPLIES &DEBT CAPITAL ENDING TOTAL FUND PERSONNEL SERVICES SERVICE OUTLAY TRANSFERS FUND BAL.BUDGET General Fund General Government: City Council 345,200 63,365 0 0 0 408,565 Executive 273,500 74,022 0 0 0 347,522 Financial Services 1,259,300 358,603 0 0 0 1,617,903 Legal Department 1,577,250 245,915 0 0 0 1,823,165 Human Resources 502,500 253,385 0 0 0 755,885 Community Development 1,902,700 941,680 0 0 75,000 2,919,380 Municipal Court 983,000 544,581 0 0 0 1,527,581 City Auditor 88,400 6,915 0 0 0 95,315 Law Enforcement 10,896,925 1,951,857 0 0 0 12,848,782 Fire/Emergency Medical 10,718,900 1,802,511 0 0 0 12,521,411 Police & Fire Pension 1,479,400 407,000 0 0 0 1,886,400 General Facilities 537,000 887,975 0 540,000 0 1,964,975 General Parks 2,227,800 847,334 0 0 132,700 3,207,834 Engineering 2,739,900 351,752 0 0 0 3,091,652 Non-Departmental 199,200 3,767,634 0 0 1,150,800 5,117,634 Ending Fund Balance 10,248,153 10,248,153 Total General Fund 35,730,975 12,504,529 0 540,000 1,358,500 10,248,153 60,382,157 Special Revenue Funds: Street 1,077,951 1,825,523 0 0 0 498,131 3,401,605 Contingency Reserve 0 0 0 0 1,663,252 1,663,252 Lodging Tax 0 350,000 0 0 250,000 183,374 783,374 Parking System 0 1,130,771 542,708 0 70,000 790,826 2,534,305 Comm. Dev. Block Grant 153,200 718,245 0 0 75,550 137,663 1,084,658 Abatement Revolving Fund 0 241,100 0 0 0 124,110 365,210 Police Special Projects 0 203,868 0 0 0 220,368 424,236 Public Access Television 410,200 53,875 0 30,000 0 675,680 1,169,755 Gift & Donations Fund 0 17,000 0 0 0 74,636 91,636 Trial Improvement 0 27,500 0 0 0 89,839 117,339 One Percent for Arts 0 9,000 0 0 0 5,520 14,520 Conference Center Oper 0 1,227,104 32,168 0 0 260,606 1,519,878 Total Spec. Rev. Funds 1,641,351 5,803,986 574,876 30,000 395,550 4,724,007 13,169,770 Debt Service Fund: 2010 UTGO 0 0 856,088 0 0 4,736 860,824 Government Center LTGO 0 0 331,113 0 0 85,894 417,007 2015 Public Safety Bond 0 0 500,550 0 0 136,030 636,580 2019 Refunding LTGO 0 0 530,844 0 0 175,492 706,336 Total Debt Service Fund 0 0 2,218,595 0 0 402,152 2,620,747 Capital Improvement Funds: General Govt Capital Improv.0 0 0 0 2,142,544 2,956,031 5,098,575 Park Facilities Construction 0 0 0 1,304,150 0 269,920 1,574,070 Residential Street & Sidewalk Fund 238,200 824,228 0 376,000 0 2,471,089 3,909,517 Transportation Projects Fund 0 1,160,000 0 9,683,548 0 971,225 11,814,773 Fire Public Safety Capital 0 442,163 0 472,078 1,000 (0)915,241 Affordable Housing Capital Fund 0 100,000 0 0 0 3,098 103,098 Total Capital Improv. Funds 238,200 2,526,391 0 11,835,776 2,143,544 6,671,363 23,415,274 Total General Gov't Funds 37,610,526 20,834,906 2,793,471 12,405,776 3,897,594 22,045,675 99,587,948 2021 EXPENDITURES - ALL FUNDS 1/0/1900 2021 SUPPLIES &DEBT CAPITAL ENDING TOTAL FUND PERSONNEL SERVICES SERVICE OUTLAY TRANSFERS FUND BAL.BUDGET 2021 EXPENDITURES - ALL FUNDS Enterprise Funds: Water Utility 5,008,150 7,580,526 923,346 0 2,585,500 3,856,244 19,953,766 Water Capital 0 135,000 0 6,707,085 0 8,108,638 14,950,723 Wastewater Utility 3,526,350 8,929,961 2,094,871 0 2,775,500 3,018,812 20,345,494 Wastewater Capital 0 450,000 0 10,591,865 0 2,328,446 13,370,311 Stormwater Utility 1,572,400 2,561,624 223,655 0 780,500 1,095,457 6,233,636 Stormwater Capital 0 200,000 0 5,217,195 0 4,317,484 9,734,679 Utility Debt Reserve 0 0 0 0 0 1,741,347 1,741,347 Gold Mountain Golf Complex 0 4,219,240 432,195 0 0 1,047,924 5,699,359 Total Enterprise Funds 10,106,900 24,076,351 3,674,067 22,516,145 6,141,500 25,514,353 92,029,316 Internal Service Funds: Risk Management 565,000 2,082,829 0 0 0 2,292,927 4,940,756 Employment Security 80,000 0 0 0 0 111,368 191,368 Accumulated Leave Liability 588,700 0 0 0 0 443,406 1,032,106 ER&R Operations & Maint 578,900 1,211,469 0 0 0 114,361 1,904,730 ER&R Equipment Reserves 0 688,613 0 1,163,095 0 4,961,940 6,813,648 Information Services 918,600 871,596 0 0 0 1,159,361 2,949,557 Total Internal Service Funds 2,731,200 4,854,507 0 1,163,095 0 9,083,362 17,832,164 Total Business Type Funds 12,838,100 28,930,858 3,674,067 23,679,240 6,141,500 34,597,715 109,861,480 Total All Funds 50,448,626 49,765,764 6,467,538 36,085,016 10,039,094 56,643,390 209,449,428 Personnel $50,448,626 24%Supplies & Services $49,765,764 24% Debt Service $6,467,538 3% Capital Outlay $36,085,016 17% Transfers $10,039,094 5% Ending Fund Balance $56,643,390 27% Expenditures -All Funds Department Position Action Authorized Staffing Per 2021 Budget 376.53 Regular FTEs Public Works - Engineering - Development Engineer- Civil Engineer II 1.00 Public Works - Engineering - Development Inspector, Engineering Tech IV 1.00 Public Works - Engineering - Transportation Project Manager 1.00 Public Works - Utility/Maint- Internal Services Manager 1.00 Public Works - Utility Maint/Water - Temp Contract for Bremerton Government Center Owners Assoc.1.00 Community Development - Building Inspector/Plans Examiner II 1.00 Legal - Civil - Legal Assistant I 1.00 Legal - Prosecution - Legal Assistant I 1.00 Sub-Total 8.00 Part-Time & Seasonal FTE by Department Legal - Regular Part-Time to Regular Full-Time -0.37 Public Works - Utility Maint/Water - Temp Contract for Bremerton Government Center Owners Assoc.0.45 Sub-Total 0.08 Amended 2021 Authorized Staffing 384.61 FTE Change City of Bremerton Authorized Staffing Exhibit B Amended by Ordinance No. ___ 2021 Budget Amended as Adopted by 2021 Fund No.Ord No. 5408 Net Adjustments Budget 001 General Fund City Council 408,565$ -$ 408,565$ Executive 347,522 - 347,522 Financial Services 1,617,903 - 1,617,903 Legal 1,641,515 111,000 1,752,515 Human Resources 755,885 - 755,885 Community Development 2,837,380 82,000 2,919,380 Municipal Court 1,527,581 - 1,527,581 City Auditor 95,315 - 95,315 Law Enforcement 12,775,572 73,210 12,848,782 Fire/Emergency Services 12,086,411 435,000 12,521,411 Police/Fire Pension 1,886,400 - 1,886,400 General Facilities 1,938,475 26,500 1,964,975 Parks & Recreation 3,207,834 - 3,207,834 Engineering 3,051,152 111,150 3,162,302 Non-Department 5,117,634 - 5,117,634 Ending Fund Balance 8,414,203 1,833,950 10,248,153 Total General Fund 57,709,347$ 2,672,810$ 60,382,157$ 102 Street 3,300,980 100,625 3,401,605 103 Contingency Reserve 1,658,941 4,311 1,663,252 104 Lodging Tax 705,147 78,227 783,374 105 Parking System 2,583,296 (48,991) 2,534,305 106 Community Dev. Block Grant 1,318,050 (233,392) 1,084,658 108 Abatement Revolving 319,319 45,891 365,210 110 Police Special Projects 366,090 58,146 424,236 113 Public Access Television 1,140,959 28,796 1,169,755 114 Gift & Donation Fund 86,733 4,903 91,636 116 Trial Improvement 102,406 14,933 117,339 117 One Percent For Arts 21,257 (6,737) 14,520 120 Conference Center Operating 1,559,736 (39,858) 1,519,878 203 2010 LTGO - - - 204 2010 UTGO/LTGO (B)1,054,531 (193,707) 860,824 205 Government Center LTGO 416,419 588 417,007 206 2015 Public Safety Bond 638,731 (2,151) 636,580 207 2019 Refunding LTGO 706,266 70 706,336 308 General Gov't Capital Improvement 4,356,968 741,607 5,098,575 310 Park Facilities Construction 1,405,261 168,809 1,574,070 314 Residential Street Capital 3,664,500 245,017 3,909,517 315 Transportation Capital Projects 11,223,064 591,709 11,814,773 316 Fire Public Safety 792,163 123,078 915,241 318 Affordable Housing Capital 102,343 755 103,098 401 Water Utility 17,578,625 2,375,141 19,953,766 404 Water Capital 12,295,308 2,655,415 14,950,723 407 Golf Mountain Golf 5,514,090 185,269 5,699,359 451 Wastewater Utility 18,684,085 1,661,409 20,345,494 454 Wastewater Capital 10,224,138 3,146,173 13,370,311 481 Stormwater Utility 5,602,651 630,985 6,233,636 484 Stormwater Capital 8,938,185 796,494 9,734,679 499 Utility Debt Reserve 1,738,336 3,011 1,741,347 503 Risk Management 5,081,604 (140,848) 4,940,756 506 Employment Security 161,977 29,391 191,368 507 Accumulated Leave Liability 853,439 178,667 1,032,106 509 ER&R - Operations & Maintenance 1,799,283 105,447 1,904,730 510 ER&R - Reserves 5,855,177 958,471 6,813,648 511 Information Services 2,602,731 346,826 2,949,557 Total All funds 192,162,136$ 17,287,292$ 209,449,428$ CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GENERAL FUND For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $10,241,852 $10,241,852 $- Retail Sales 9,300,000 9,300,000 - Other 13,991,342 13,991,342 - Licenses and Permits 1,388,550 1,388,550 - Intergovernmental 1,979,196 2,047,096 67,900 Charges for Services 6,326,365 6,326,365 - Fines and Forfeitures 995,900 995,900 - Miscellaneous 316,500 316,500 - Transfers In & Other Financing 541,000 697,825 156,825 Total Revenues 45,080,705 45,305,430 224,725 EXPENDITURES Personnel Expenses 35,434,800 35,649,975 215,175 Supplies, Services, and Taxes 11,961,844 12,585,529 623,685 Capital Expenditures 540,000 540,000 - Debt Service - - - Transfers Out 1,358,500 1,358,500 - Total Expenditures 49,295,144 50,134,004 838,860 CHANGES IN FUND BALANCE Net change in fund balances (4,214,439) (4,828,574) (614,135) Fund Balances-beginning 12,628,642 15,076,727 2,448,085 Fund Balances-ending $8,414,203 $10,248,153 $1,833,950 GENERAL FUND EXPENDITURES BY DEPARTMENT City Council $408,565 $408,565 $- Executive 347,522 347,522 - Financial Services 1,617,903 1,617,903 - Legal Department 1,641,515 1,752,515 111,000 Human Resources 755,885 755,885 - Community Development 2,837,380 2,919,380 82,000 Municipal Court 1,527,581 1,527,581 - City Auditor 95,315 95,315 - Police Department 12,775,572 12,848,782 73,210 Fire Department 12,086,411 12,521,411 435,000 Police & Fire Pension 1,886,400 1,886,400 - General Facilities 1,938,475 1,964,975 26,500 Parks & Recreation 3,207,834 3,207,834 - Engineering 3,051,152 3,162,302 111,150 Non-Departmental 5,117,634 5,117,634 - Total Expenditures $49,295,144 $50,134,004 $838,860 Per the City's Financial Goals and Policies, the target ending fund balance is 8.5% of annual expenditures excluding capital. The target fund balance for the 2021 budget, as amended, is $4,215,490. The actual ending fund balance after the proposed amendments is $10,248,153 which is higher than the target amount by $6,032,663. The 2021 budget as proposed, includes an ending fund balance which exceeds the target, and is increased from the previously adopted budget by $1,833,950. The financial planning goal is to maintain an ending fund balance recommended by the Government Finance Officers Association (GFOA) of 16.67%, or $8,267,320. The proposed budget with amendments, exceeds this recommendation by $1,980,833. FUND 001 CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GENERAL FUND For the Year Ended December 31, 2021 Budget Adjustments: Revenue - Increase Intergovernmental in Police for Kitsap County (Mental Health Tax)67,900 Revenue - Increase Transfers In in Engineering for Development Engineer, Civil Engineer II 60,750 Revenue - Increase Transfers In in Engineering for Development Inspector, Engineering Tech IV 60,750 Revenue - Increase Transfers In in Engineering for Transportation Project Manager 35,325 Expenditure - Reallocate personnel in Police to professional services for Kitsap Mental Health contract - Expenditure - Increase personnel in Police for Behavioral Health Navigator (33,425) Expenditure - Increase personnel in Community Development for Building Inspector/Plans Examiner II (82,000) Expenditure - Increase personnel in Engineering for Development Inspector and Engineer (40,500) Expenditure - Increase personnel in Legal-Civil for Legal Assistant I (67,000) Expenditure - Increase personnel in Legal-Prosecution for P/T to FTE Legal Assistant I (44,000) Expenditure - Increase personnel in General Facililties for Internal Services Manager (26,500) Expenditure - Increase personnel in Engineering for Transportation Project Manager (70,650) Expenditure - Carry over Type 6 Wildland Fire Truck (160,000) Expenditure - Carry over Medic Unit (275,000) Expenditure - Carry over for Police Vehicles (39,785) Net adjustment to ending fund balance required $(614,135) Items Previously Approved by Council or Finance Committee New Items Not Previously Approved by Council FUND 001 CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE STREET FUND For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $- $- $- Sales - - - Other 800,000 800,000 - Licenses and Permits - - - Intergovernmental (fuel tax)837,923 837,923 - Charges for Services 115,000 115,000 - Fines and Forfeitures - - - Miscellaneous 14,000 14,000 - Transfers in & Other Revenue 742,500 742,500 - Total Revenues 2,509,423 2,509,423 - EXPENDITURES Personnel Expenses 1,077,951 1,077,951 - Supplies, Services, and Taxes 1,747,303 1,825,523 78,220 Capital Expenditures - - - Debt Service - - - Transfers Out - - - Total Expenditures 2,825,254 2,903,474 78,220 CHANGES IN FUND BALANCE Net change in fund balances (315,831) (394,051) (78,220) Fund Balances-beginning 791,557 892,182 100,625 Fund Balances-ending $475,726 $498,131 $22,405 Budget Adjustments: Expenditure - Carry over for prior year vehicles (78,220) Net adjustment to ending fund balance required $(78,220) New Items Not Previously Approved by Council Items Previously Approved by Council FUND 102 CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE CONTINGENCY RESERVE FUND For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $- $- $- Sales - - - Other - - - Licenses and Permits - - - Intergovernmental - - - Charges for Services - - - Fines and Forfeitures - - - Miscellaneous 15,000 15,000 - Transfers-in & Other Revenue 129,800 129,800 - Total Revenues 144,800 144,800 - EXPENDITURES Personnel Expenses - - - Supplies, Services, and Taxes - - - Capital Expenditures - - - Debt Service - - - Transfers Out - - - Total Expenditures - - - CHANGES IN FUND BALANCE Net change in fund balances 144,800 144,800 - Fund Balances-beginning 1,514,141 1,518,452 4,311 Fund Balances-ending $1,658,941 $1,663,252 $4,311 Budget Adjustments: Net adjustment to ending fund balance required $- Items Previously Approved by Council New Items Not Previously Approved by Council FUND 103 CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE LODGING TAX FUND For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $- $- $- Sales - - - Other (hotel/motel tax)470,000 470,000 - Licenses and Permits - - - Intergovernmental - - - Charges for Services - - - Fines and Forfeitures - - - Miscellaneous 4,000 4,000 - Transfers in - - - Total Revenues 474,000 474,000 - EXPENDITURES Personnel Expenses - - - Supplies, Services, and Taxes 350,000 350,000 - Capital Expenditures - - - Debt Service - - - Transfers Out 250,000 250,000 - Total Expenditures 600,000 600,000 - CHANGES IN FUND BALANCE Net change in fund balances (126,000) (126,000) - Fund Balances-beginning 231,147 309,374 78,227 Fund Balances-ending $105,147 $183,374 $78,227 Budget Adjustments: Net adjustment to ending fund balance required $- Items Previously Approved by Council New Items Not Previously Approved by Council FUND 104 CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE PARKING SYSTEM FUND For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $- $- $- Sales - - - Other - - - Licenses and Permits - - - Intergovernmental - - - Charges for Services - - - Fines and Forfeitures 355,500 355,500 - Miscellaneous 1,294,831 1,294,831 - Transfers in & Other Revenue - - - Total Revenues 1,650,331 1,650,331 - EXPENDITURES Personnel Expenses - - - Supplies, Services, and Taxes 1,130,771 1,130,771 - Capital Expenditures - - - Debt Service 542,708 542,708 - Transfers Out 70,000 70,000 - Total Expenditures 1,743,479 1,743,479 - CHANGES IN FUND BALANCE Net change in fund balances (93,148) (93,148) - Fund Balances-beginning 932,965 883,974 (48,991) Fund Balances-ending $839,817 $790,826 $(48,991) Budget Adjustments: Revenue-technical correction in Miscellaneous Commuter Parking Permits to L.T. Facility Lease - Net adjustment to ending fund balance required $- New Items Not Previously Approved by Council New Items Previously Approved by Council FUND 105 CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE COMMUNITY DEVELOPMENT BLOCK GRANT For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $- $- $- Sales - - - Other - - - Licenses and Permits - - - Intergovernmental 841,000 841,000 - Charges for Services 25,500 25,500 - Fines and Forfeitures - - - Miscellaneous 5,500 5,500 - Transfers in 75,000 75,000 - Total Revenues 947,000 947,000 - EXPENDITURES Personnel Expenses 153,200 153,200 - Supplies, Services, and Taxes 718,245 718,245 - Capital Expenditures - - - Debt Service - - - Transfers Out 75,550 75,550 - Total Expenditures 946,995 946,995 - CHANGES IN FUND BALANCE Net change in fund balances 5 5 - Fund Balances-beginning 371,050 137,658 (233,392) Fund Balances-ending $371,055 $137,663 $(233,392) Budget Adjustments: Net adjustment required to the ending fund balance $- Items Previously Approved by Council Items Not Previously Approved by Council FUND 106 CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE ABATEMENT REVOLVING FUND For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $- $- $- Sales - - - Other - - - Licenses and Permits - - - Intergovernmental - - - Charges for Services - - - Fines and Forfeitures 25,000 25,000 - Miscellaneous 500 500 - Transfers in - - - Total Revenues 25,500 25,500 - EXPENDITURES Personnel Expenses - - - Supplies, Services, and Taxes 241,100 241,100 - Capital Expenditures - - - Debt Service - - - Transfers Out - - - Total Expenditures 241,100 241,100 - CHANGES IN FUND BALANCE Net change in fund balances (215,600) (215,600) - Fund Balances-beginning 293,819 339,710 45,891 Fund Balances-ending $78,219 $124,110 $45,891 Budget Adjustments: Net adjustment to ending fund balance required $- Items Previously Approved by Council New Items Not Previously Approved by Council FUND 108 CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE POLICE SPECIAL PROJECTS FUND For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $- $- $- Sales - - - Other - - - Licenses and Permits - - - Intergovernmental - - - Charges for Services - - - Fines and Forfeitures 5,000 5,000 - Miscellaneous 3,500 3,500 - Transfers in - - - Total Revenues 8,500 8,500 - EXPENDITURES Personnel Expenses - - - Supplies, Services, and Taxes 203,868 203,868 - Capital Expenditures - - - Debt Service - - - Transfers Out - - Total Expenditures 203,868 203,868 - CHANGES IN FUND BALANCE Net change in fund balances (195,368) (195,368) - Fund Balances-beginning 357,590 415,736 58,146 Fund Balances-ending $162,222 $220,368 $58,146 Budget Adjustments: Net adjustment to ending fund balance required $- New Items Not Previously Approved by Council Items Previously Approved by Council FUND 110 CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE PUBLIC ACCESS TELEVISION OPERATIONS FUND For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $- $- $- Sales - - - Other (city PEG fees)- - - Licenses and Permits 274,000 274,000 - Intergovernmental - - - Charges for Services 125,607 125,607 - Fines and Forfeitures - - - Miscellaneous 47,000 47,000 - Transfers in & Other - - - Total Revenues 446,607 446,607 - EXPENDITURES Personnel Expenses 410,200 410,200 - Supplies, Services, and Taxes 53,875 53,875 - Capital Expenditures 30,000 30,000 - Debt Service - - - Transfers Out - - - Total Expenditures 494,075 494,075 - CHANGES IN FUND BALANCE Net change in fund balances (47,468) (47,468) - Fund Balances-beginning 694,352 723,148 28,796 Fund Balances-ending $646,884 $675,680 $28,796 Budget Adjustments: . Net adjustment to ending fund balance required $- Items Previously Approved by Council Items Not Previously Approved by Council FUND 113 CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GIFT AND DONATION FUND For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $- $- $- Sales - - - Other - - - Licenses and Permits - - - Intergovernmental - - - Charges for Services - - - Fines and Forfeitures - - - Miscellaneous 2,100 2,100 - Transfers in - - - Total Revenues 2,100 2,100 - EXPENDITURES Personnel Expenses - - - Supplies, Services, and Taxes 17,000 17,000 - Capital Expenditures - - - Debt Service - - - Transfers Out - - - Total Expenditures 17,000 17,000 - CHANGES IN FUND BALANCE Net change in fund balances (14,900) (14,900) - Fund Balances-beginning 84,633 89,536 4,903 Fund Balances-ending $69,733 $74,636 $4,903 Budget Adjustments: Net adjustment to ending fund balance required $- Items Previously Approved by Council New Items Not Previously Approved by Council FUND 114 CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE TRIAL IMPROVEMENT FUND For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $- $- $- Sales - - - Other - - - Licenses and Permits - - - Intergovernmental 18,000 18,000 - Charges for Services - - - Fines and Forfeitures - - - Miscellaneous 600 600 - Transfers in - - - Total Revenues 18,600 18,600 - EXPENDITURES Personnel Expenses - - - Supplies, Services, and Taxes 27,500 27,500 - Capital Expenditures - - - Debt Service - - - Transfers Out - - - Total Expenditures 27,500 27,500 - CHANGES IN FUND BALANCE Net change in working capital (8,900) (8,900) - Fund Balances-beginning 83,806 98,739 14,933 Fund Balances-ending $74,906 $89,839 $14,933 Budget Adjustments: Net adjustment to ending fund balance required $- Items Not Previously Approved by Council Items Previously Approved by Council FUND 116 CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE ONE PERCENT FOR ARTS FUND 1For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $- $- $- Sales - - - Other - - - Licenses and Permits - - - Intergovernmental - - - Charges for Services - - - Fines and Forfeitures - - - Miscellaneous 1,700 1,700 - Transfers in - - - Total Revenues 1,700 1,700 - EXPENDITURES Personnel Expenses - - - Supplies, Services, and Taxes 9,000 9,000 - Capital Expenditures - - - Debt Service - - - Transfers Out - - - Total Expenditures 9,000 9,000 - CHANGES IN FUND BALANCE Net change in working capital (7,300) (7,300) - Fund Balances-beginning 19,557 12,820 (6,737) Fund Balances-ending $12,257 $5,520 $(6,737) Budget Adjustments: Net adjustment to ending fund balance required $- Items Previously Approved by Council New Items Not Previously Approved by Council FUND 117 CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE CONFERENCE CENTER OPERATIONS For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $- $- $- Sales - - - Other - - - Licenses and Permits - - - Intergovernmental - - - Charges for Services 1,023,438 1,023,438 - Fines and Forfeitures - - - Miscellaneous 2,500 2,500 - Transfers In & Other Revenue 353,500 353,500 - Total Revenues 1,379,438 1,379,438 - EXPENDITURES Personnel Expenses - - - Supplies, Services, and Taxes 1,227,104 1,227,104 - Capital Expenditures - - - Debt Service 4,390 4,390 - Transfers Out 27,778 27,778 - Total Expenditures 1,259,272 1,259,272 - CHANGES IN FUND BALANCE Net change in fund balances 120,166 120,166 - Fund Balances-beginning 180,298 140,440 (39,858) Fund Balances-ending $300,464 $260,606 $(39,858) Budget Adjustments: Net adjustment to ending fund balance required $- Items Previously Approved by Council New Items Not Previously Approved by Council FUND 120 CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE 2010 UTGO/LTGO (B) For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $900,000 $900,000 $- Sales - - - Other - - - Licenses and Permits - - - Intergovernmental - - - Charges for Services - - - Fines and Forfeitures - - - Miscellaneous 1,000 1,000 - Transfers in - - - Total Revenues 901,000 901,000 - EXPENDITURES Personnel Expenses - - - Supplies, Services, and Taxes - - - Capital Expenditures - - - Debt Service 856,088 856,088 - Transfers Out - - - Total Expenditures 856,088 856,088 - CHANGES IN FUND BALANCE Net change in fund balances 44,912 44,912 - Fund Balances-beginning 153,531 (40,176) (193,707) Fund Balances-ending $198,443 $4,736 $(193,707) Budget Adjustments: Net adjustment to ending fund balance required $- Items Previously Approved by Council New Items Not Previously Approved by Council FUND 204 CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GOVERNMENT CENTER LTGO For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $- $- $- Sales - - - Other - - - Licenses and Permits - - - Intergovernmental - - - Charges for Services - - - Fines and Forfeitures - - - Miscellaneous 1,000 1,000 - Transfers in & Other Revenue 330,000 330,000 - Total Revenues 331,000 331,000 - EXPENDITURES Personnel Expenses - - - Supplies, Services, and Taxes - - - Capital Expenditures - - - Debt Service 331,113 331,113 - Transfers Out - - - Total Expenditures 331,113 331,113 - CHANGES IN FUND BALANCE Net change in fund balances (113) (113) - Fund Balances-beginning 85,419 86,007 588 Fund Balances-ending $85,306 $85,894 $588 Budget Adjustments: Net adjustment to ending fund balance required $- Items Previously Approved by Council New Items Not Previously Approved by Council FUND 205 CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE 2015 PUBLIC SAFETY BOND FUND For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $550,000 $550,000 $- Sales - - - Other - - - Licenses and Permits - - - Intergovernmental - - - Charges for Services - - - Fines and Forfeitures - - - Miscellaneous 750 750 - Transfers in & Other Revenue - - - Total Revenues 550,750 550,750 - EXPENDITURES Personnel Expenses - - - Supplies, Services, and Taxes - - - Capital Expenditures - - - Debt Service 500,550 500,550 - Transfers Out - - - Total Expenditures 500,550 500,550 - CHANGES IN FUND BALANCE Net change in fund balances 50,200 50,200 - Fund Balances-beginning 87,981 85,830 (2,151) Fund Balances-ending $138,181 $136,030 $(2,151) Budget Adjustments: Net adjustment to ending fund balance required $- Items Previously Approved by Council New Items Not Previously Approved by Council FUND 206 CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE 2019 REFUNDING LTGO For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $- $- $- Sales 330,000 330,000 - Other - - - Licenses and Permits - - - Intergovernmental 3,000 3,000 - Charges for Services - - - Fines and Forfeitures - - - Miscellaneous 2,600 2,600 - Transfers in & Other Revenue 145,000 145,000 - Total Revenues 480,600 480,600 - EXPENDITURES Personnel Expenses - - - Supplies, Services, and Taxes - - - Capital Expenditures - - - Debt Service 530,844 530,844 - Transfers Out - - - Total Expenditures 530,844 530,844 - CHANGES IN FUND BALANCE Net change in fund balances (50,244) (50,244) - Fund Balances-beginning 225,666 225,736 70 Fund Balances-ending $175,422 $175,492 $70 Budget Adjustments: Net adjustment to ending fund balance required $- Items Previously Approved by Council New Items Not Previously Approved by Council FUND 207 CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GENERAL GOVERNMENT CAPITAL IMPROVEMENT FUND For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $- $- $- Sales - - - Other (Real Estate Excise Taxes)1,650,000 1,650,000 - Licenses and Permits - - - Intergovernmental - - - Charges for Services - - - Fines and Forfeitures - - - Miscellaneous 40,000 40,000 - Transfers in & Other Revenue - - - Total Revenues 1,690,000 1,690,000 - EXPENDITURES Personnel Expenses - - - Supplies, Services, and Taxes - - - Capital Expenditures - - - Debt Service - - - Transfers Out 2,126,544 2,142,544 16,000 Total Expenditures 2,126,544 2,142,544 16,000 CHANGES IN FUND BALANCE Net change in fund balances (436,544) (452,544) (16,000) Fund Balances-beginning 2,666,968 3,408,575 741,607 Fund Balances-ending $2,230,424 $2,956,031 $725,607 Budget Adjustments: Expenditure - Increase transfers out to trans capital projects for 10% match HSIP grant. (16,000) Net adjustment required to the ending fund balance $(16,000) Items Previously Approved by Council Items Previously Approved by Council FUND 308 CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE PARK FACILITIES CONSTRUCTION FUND For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $- $- $- Sales - - - Other - - - Licenses and Permits - - - Intergovernmental 1,014,400 1,014,400 - Charges for Services - - - Fines and Forfeitures - - - Miscellaneous 49,900 49,900 - Transfers in & Other Revenue 208,250 208,250 - Total Revenues 1,272,550 1,272,550 - EXPENDITURES Personnel Expenses - - - Supplies, Services, and Taxes - - - Capital Expenditures 1,304,150 1,304,150 - Debt Service - - - Transfers Out - - - Total Expenditures 1,304,150 1,304,150 - CHANGES IN FUND BALANCE Net change in fund balances (31,600) (31,600) - Fund Balances-beginning 132,711 301,520 168,809 Fund Balances-ending $101,111 $269,920 $168,809 Budget Adjustments: Net adjustment required to the ending fund balance $- Items Previously Approved by Council Items Not Previously Approved by Council FUND 310 CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE RESIDENTIAL STREET CAPITAL 1For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $- $- $- Sales - - - Other 1,091,301 1,091,301 - Licenses and Permits 125,000 125,000 - Intergovernmental 10,000 10,000 - Charges for Services - - - Fines and Forfeitures - - - Miscellaneous 15,000 15,000 - Transfers in 100,000 100,000 - Total Revenues 1,341,301 1,341,301 - EXPENDITURES Personnel Expenses 238,200 238,200 - Supplies, Services, and Taxes 824,228 824,228 - Capital Expenditures 376,000 376,000 - Debt Service - - - Transfers Out - - - Total Expenditures 1,438,428 1,438,428 - CHANGES IN FUND BALANCE Net change in fund balances (97,127) (97,127) - Fund Balances-beginning 2,323,199 2,568,216 245,017 Fund Balances-ending $2,226,072 $2,471,089 $245,017 Budget Adjustments: Net adjustment to ending fund balance required $- Items Previously Approved by Council New Items Not Previously Approved by Council FUND 314 CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE TRANSPORTATION CAPITAL PROJECTS For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $- $- $- Sales - - - Other 491,301 491,301 - Licenses and Permits - - - Intergovernmental 8,569,972 8,655,972 86,000 Charges for Services - - - Fines and Forfeitures - - - Miscellaneous 145,000 145,000 - Transfers in 1,080,544 1,096,544 16,000 Total Revenues 10,286,817 10,388,817 102,000 EXPENDITURES Personnel Expenses - - - Supplies, Services, and Taxes 1,060,000 1,160,000 100,000 Capital Expenditures 9,683,548 9,683,548 - Debt Service - - - Transfers Out - - - Total Expenditures 10,743,548 10,843,548 100,000 CHANGES IN FUND BALANCE Net change in fund balances (456,731) (454,731) 2,000 Fund Balances-beginning 936,247 1,425,956 489,709 Fund Balances-ending $479,516 $971,225 $491,709 Budget Adjustments: Revenue - Increase Intergovernmental in for 10% HSIP grant. 16,000 Revenue - Increase Intergovernmental for West Kitsap Way Recon/Rechannel Study 86,000 Expenditure - Increase Supplies in Services for West Kitsap Way Recon/Rechannel Study match (100,000) Net adjustment required to the ending fund balance $2,000 Items Previously Approved by Council Items Not Previously Approved by Council FUND 315 CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE FIRE PUBLIC SAFETY CAPITAL For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $- $- $- Sales - - - Other - - - Licenses and Permits - - - Intergovernmental - - - Charges for Services - - - Fines and Forfeitures - - - Miscellaneous - - - Transfers in & Other Revenue - - - Total Revenues - - - EXPENDITURES Personnel Expenses - - - Supplies, Services, and Taxes 442,163 442,163 - Capital Expenditures 349,000 472,078 123,078 Debt Service - - - Transfers Out 1,000 1,000 - Total Expenditures 792,163 915,241 123,078 CHANGES IN FUND BALANCE Net change in fund balances (792,163) (915,241) (123,078) Fund Balances-beginning 792,163 915,241 123,078 Fund Balances-ending $- $(0) $(0) Budget Adjustments: Expenditure - Increase capital expenditures (carry forward)(123,078) Net adjustment required to the ending fund balance $(123,078) Items Not Previously Approved by Council Items Previously Approved by Council FUND 316 CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE AFFORDABLE HOUSING CAPITAL FUND For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $- $- $- Sales - - - Other - - - Licenses and Permits - - - Intergovernmental - - - Charges for Services - - - Fines and Forfeitures - - - Miscellaneous - - - Transfers in 100,000 100,000 - Total Revenues 100,000 100,000 - EXPENDITURES Personnel Expenses - - - Supplies, Services, and Taxes 100,000 100,000 - Capital Expenditures - - - Debt Service - - - Transfers Out - - - Total Expenditures 100,000 100,000 - CHANGES IN FUND BALANCE Net change in working capital - - - Fund Balances-beginning working capital 2,343 3,098 755 Fund Balances-ending working capital $2,343 $3,098 $755 Budget Adjustments: Net adjustment required to the ending fund balance $0 New Items Not Previously Approved by Council Items Previously Approved by Council FUND 318 City of Bremerton 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE WATER UTILITY For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $- $- $- Sales - - - Other - - - Licenses and Permits - - - Intergovernmental - - - Charges for Services 14,945,857 14,945,857 - Fines and Forfeitures 20,000 20,000 - Miscellaneous 533,000 533,000 - Transfers in & Other Revenue - - - Total Revenues 15,498,857 15,498,857 - EXPENDITURES Personnel Expenses 4,981,600 5,008,150 26,550 Supplies, Services, and Taxes 7,580,526 7,580,526 - Capital Expenditures - - - Debt Service 923,346 923,346 - Transfers Out 2,545,000 2,585,500 40,500 Total Expenditures 16,030,472 16,097,522 67,050 CHANGES IN WORKING CAPITAL BALANCE Net change in working capital (531,615) (598,665) (67,050) Fund Balances-beginning working capital 2,079,768 4,454,909 2,375,141 Fund Balances-ending working capital $1,548,153 $3,856,244 $2,308,091 Budget Adjustments: Expenditure - Increase transfers out for Development Inspector and Engineer (40,500) Expenditure - Increase personnel in Water Operations for Internal Services Manager (26,550) Net adjustment required to the ending fund balance $(67,050) Items Previously Approved by Council New Items Not Previously Approved by Council FUND 401 CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE WATER CAPITAL For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $- $- $- Sales - - - Other - - - Licenses and Permits - - - Intergovernmental - - - Charges for Services - - - Fines and Forfeitures - - - Miscellaneous 1,060,600 1,060,600 - Transfers in & Other Revenue 2,545,000 2,545,000 - Total Revenues 3,605,600 3,605,600 - EXPENDITURES Personnel Expenses - - - Supplies, Services, and Taxes 135,000 135,000 - Capital Expenditures 6,707,085 6,707,085 - Debt Service - - - Transfers Out - - - Total Expenditures 6,842,085 6,842,085 - CHANGES IN WORKING CAPITAL BALANCE Net change in working capital (3,236,485) (3,236,485) - Fund Balances-beginning working capital 8,689,708 11,345,123 2,655,415 Fund Balances-ending working capital $5,453,223 $8,108,638 $2,655,415 Budget Adjustments: Net adjustment required to the ending fund balance $- Items Previously Approved by Council New Items Not Previously Approved by Council FUND 404 CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GOLD MOUNTAIN GOLF COMPLEX For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $- $- $- Sales - - - Other - - - Licenses and Permits - - - Intergovernmental - - - Charges for Services 4,734,564 4,734,564 - Fines and Forfeitures - - - Miscellaneous 24,271 24,271 - Transfers in - - - Total Revenues 4,758,835 4,758,835 - EXPENDITURES Personnel Expenses - - - Supplies, Services, and Taxes 4,219,240 4,219,240 - Capital Expenditures - - - Debt Service 432,195 432,195 - Transfers Out - - - Total Expenditures 4,651,435 4,651,435 - CHANGES IN FUND BALANCE Net change in working capital 107,400 107,400 - Fund Balances-beginning working capital 755,255 940,524 185,269 Fund Balances-ending working capital $862,655 $1,047,924 $185,269 Budget Adjustments: Net adjustment required to the ending fund balance $- Items Previously Approved by Council Items Not Previously Approved by Council FUND 407 CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE WASTEWATER UTILITY For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $- $- $- Sales 90,000 90,000 - Other 12,000 12,000 - Licenses and Permits - - - Intergovernmental - - - Charges for Services 16,394,038 16,394,038 - Fines and Forfeitures 18,000 18,000 - Miscellaneous 23,000 23,000 - Transfers in & Other Revenue - - - Total Revenues 16,537,038 16,537,038 - EXPENDITURES Personnel Expenses 3,517,500 3,526,350 8,850 Supplies, Services, and Taxes 8,800,976 8,929,961 128,985 Capital Expenditures - - - Debt Service 2,094,871 2,094,871 - Transfers Out 2,735,000 2,775,500 40,500 Total Expenditures 17,148,347 17,326,682 178,335 CHANGES IN FUND BALANCE Net change in working capital (611,309) (789,644) (178,335) Fund Balances-beginning working capital 2,147,047 3,808,456 1,661,409 Fund Balances-ending working capital $1,535,738 $3,018,812 $1,483,074 Budget Adjustments: Expenditure - Increase transfers out for Development Inspector and Engineer (40,500) Expenditure - Increase personnel in Wastewater Admin for Internal Services Manager (8,850) Expenditure - Carryover for Fleet for Prior year vehicle (128,985) Net adjustment required to the ending fund balance $(178,335) Items Previously Approved by Council New Items Not Previously Approved by Council FUND 451 CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE WASTEWATER CAPITAL For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $- $- $- Sales - - - Other - - - Licenses and Permits - - - Intergovernmental - - - Charges for Services - - - Fines and Forfeitures - - - Miscellaneous 260,600 260,600 - Transfers in & Other Revenue 7,735,000 9,735,419 2,000,419 Total Revenues 7,995,600 9,996,019 2,000,419 EXPENDITURES Personnel Expenses - - - Supplies, Services, and Taxes 450,000 450,000 - Capital Expenditures 8,591,446 10,591,865 2,000,419 Debt Service - - - Transfers Out - - - Total Expenditures 9,041,446 11,041,865 2,000,419 CHANGES IN FUND BALANCE Net change in working capital (1,045,846) (1,045,846) - Fund Balances-beginning working capital 2,228,538 3,374,292 1,145,754 Fund Balances-ending working capital $1,182,692 $2,328,446 $1,145,754 Budget Adjustments: Revenue-Increase Transfers In for Interfund Loan Oyster Bay Beach Sewer Upgrades project 2,000,419 Expenditure-Increase Capital Expenditures for Oyster Bay Beach Sewer Upgrades project (2,000,419) Net adjustment required to the ending fund balance $- Items Previously Approved by Council New Items Not Previously Approved by Council FUND 454 CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE STORMWATER UTILITY For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $- $- $- Sales - - - Other - - - Licenses and Permits - - - Intergovernmental - - - Charges for Services 4,905,506 4,905,506 - Fines and Forfeitures 7,000 7,000 - Miscellaneous 7,500 7,500 - Transfers in & Other Revenue 75,000 75,000 - Total Revenues 4,995,006 4,995,006 - EXPENDITURES Personnel Expenses 1,555,700 1,572,400 16,700 Supplies, Services, and Taxes 2,561,624 2,561,624 - Capital Expenditures - - - Debt Service 223,655 223,655 - Transfers Out 740,000 780,500 40,500 Total Expenditures 5,080,979 5,138,179 57,200 CHANGES IN FUND BALANCE Net change in working capital (85,973) (143,173) (57,200) Fund Balances-beginning working capital 607,645 1,238,630 630,985 Fund Balances-ending working capital $521,672 $1,095,457 $573,785 Budget Adjustments: Expenditure - Increase transfers out for Development Inspector and Engineer (40,500) Expenditure - Increase personnel in Storm Water Utility for Internal Services Manager (8,850) Expenditure - Increase personnel in Engineering for Transportation Project Manager (7,850) Net adjustment required to the ending fund balance $(57,200) New Items Not Previously Approved by Council Items Previously Approved by Council FUND 481 CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE STORMWATER CAPITAL For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $- $- $- Sales - - - Other - - - Licenses and Permits - - - Intergovernmental - - - Charges for Services - - - Fines and Forfeitures - - - Miscellaneous 1,355,961 1,355,961 - Transfers in & Other Revenue 2,706,968 2,706,968 - Total Revenues 4,062,929 4,062,929 - EXPENDITURES Personnel Expenses - - - Supplies, Services, and Taxes 200,000 200,000 - Capital Expenditures 5,217,195 5,217,195 - Debt Service - - - Transfers Out - - - Total Expenditures 5,417,195 5,417,195 - CHANGES IN FUND BALANCE Net change in working capital (1,354,266) (1,354,266) - Fund Balances-beginning working capital 4,875,256 5,671,750 796,494 Fund Balances-ending working capital $3,520,990 $4,317,484 $796,494 Budget Adjustments: Net adjustment required to the ending fund balance $- Items Previously Approved by Council New Items Not Previously Approved by Council FUND 484 CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE UTILITY DEBT RESERVE For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $- $- $- Sales - - - Other - - - Licenses and Permits - - - Intergovernmental - - - Charges for Services - - - Fines and Forfeitures - - - Miscellaneous 22,000 22,000 - Transfers in and other - - - Total Revenues 22,000 22,000 - EXPENDITURES Personnel Expenses - - - Supplies, Services, and Taxes - - - Capital Expenditures - - - Debt Service - - - Transfers Out - - - Total Expenditures - - - CHANGES IN FUND BALANCE Net change in working capital 22,000 22,000 - Fund Balances-beginning working capital 1,716,336 1,719,347 3,011 Fund Balances-ending working capital $1,738,336 $1,741,347 $3,011 Budget Adjustments: Net adjustment to ending fund balance required $- Items Previously Approved by Council New Items Not Previously Approved by Council FUND 499 CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE RISK MANAGEMENT INTERNAL SERVICE FUND For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $- $- $- Sales - - - Other - - - Licenses and Permits - - - Intergovernmental - - - Charges for Services - - - Fines and Forfeitures - - - Miscellaneous 2,207,829 2,207,829 - Transfers in - - - Total Revenues 2,207,829 2,207,829 - EXPENDITURES Personnel Expenses 390,000 565,000 175,000 Supplies, Services, and Taxes 1,812,829 2,082,829 270,000 Capital Expenditures - - - Debt Service - - - Transfers Out - - - Total Expenditures 2,202,829 2,647,829 445,000 CHANGES IN FUND BALANCE Net change in working capital 5,000 (440,000) (445,000) Fund Balances-beginning working capital 2,873,775 2,732,927 (140,848) Fund Balances-ending working capital $2,878,775 $2,292,927 $(585,848) Budget Adjustments: Expenditure-Increase supplies under services in Risk Admin for increase in insurance premiums (270,000) Expenditure-Increase personnel in Workers Compensation Srvs for increase in medical costs (175,000) Net adjustment required to the ending fund balance $(445,000) Items Previously Approved by Council New Items Not Previously Approved by Council FUND 503 CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE EMPLOYMENT SECURITY For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $- $- $- Sales - - - Other - - - Licenses and Permits - - - Intergovernmental - - - Charges for Services - - - Fines and Forfeitures - - - Miscellaneous 4,000 4,000 - Transfers in - - - Total Revenues 4,000 4,000 - EXPENDITURES Personnel Expenses 80,000 80,000 - Supplies, Services, and Taxes - - - Capital Expenditures - - - Debt Service - - - Transfers Out - - - Total Expenditures 80,000 80,000 - CHANGES IN FUND BALANCE Net change in working capital (76,000) (76,000) - Fund Balances-beginning working capital 157,977 187,368 29,391 Fund Balances-ending working capital $81,977 $111,368 $29,391 Budget Adjustments: Net adjustment to ending fund balance required $- Items Previously Approved by Council New Items Not Previously Approved by Council FUND 506 CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE ACCUMULATED LEAVE LIABILITY For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $- $- $- Sales - - - Other - - - Licenses and Permits - - - Intergovernmental - - - Charges for Services - - - Fines and Forfeitures - - - Miscellaneous 582,500 582,500 - Transfers in - - - Total Revenues 582,500 582,500 - EXPENDITURES Personnel Expenses 588,700 588,700 - Supplies, Services, and Taxes - - - Capital Expenditures - - - Debt Service - - - Transfers Out - - - Total Expenditures 588,700 588,700 - CHANGES IN FUND BALANCE Net change in working capital (6,200) (6,200) - Fund Balances-beginning working capital 270,939 449,606 178,667 Fund Balances-ending working capital $264,739 $443,406 $178,667 Budget Adjustments: Net adjustment to ending fund balance required $- Items Previously Approved by Council New Items Not Previously Approved by Council FUND 507 CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE EQUIPMENT RENTAL RESERVE - OPERATIONS AND MAINTENANCE For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $- $- $- Sales - - - Other - - - Licenses and Permits - - - Intergovernmental - - - Charges for Services 1,788,869 1,788,869 - Fines and Forfeitures - - - Miscellaneous 4,350 4,350 - Transfers in & Other Financing - - - Total Revenues 1,793,219 1,793,219 - EXPENDITURES Personnel Expenses 578,900 578,900 - Supplies, Services, and Taxes 1,211,469 1,211,469 - Capital Expenditures - - - Debt Service - - - Transfers Out - - - Total Expenditures 1,790,369 1,790,369 - CHANGES IN FUND BALANCE Net change in working capital 2,850 2,850 - Fund Balances-beginning working capital 6,064 111,511 105,447 Fund Balances-ending working capital $8,914 $114,361 $105,447 Budget Adjustments: Net adjustment to ending fund balance required $- New Items Not Previously Approved by Council Items Previously Approved by Council FUND 509 CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE EQUIPMENT RENTAL RESERVE - RESERVES For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $- $- $- Sales - - - Other - - - Licenses and Permits - - - Intergovernmental - - - Charges for Services - - - Fines and Forfeitures - - - Miscellaneous 60,000 60,000 - Transfers in & Other 1,429,943 2,111,933 681,990 Total Revenues 1,489,943 2,171,933 681,990 EXPENDITURES Personnel Expenses - - - Supplies, Services, and Taxes 6,623 688,613 681,990 Capital Expenditures 1,163,095 1,163,095 - Debt Service - - - Transfers Out & Other - - - Total Expenditures 1,169,718 1,851,708 681,990 CHANGES IN FUND BALANCE Net change in working capital 320,225 320,225 - Fund Balances-beginning working capital 4,365,234 4,641,715 276,481 Fund Balances-ending working capital $4,685,459 $4,961,940 276,481 Budget Adjustments: Revenue - Increase other revenue for capital contributions to purchases for Fire (carryover)435,000 Expenditure - Increase capital - vehicles for purchases for Fire (carryover)(435,000) Revenue - Increase other revenue for capital contributions to purchases for Public Works-Wastewater (carryover)207,205 Expenditure - Increase capital - vehicles for purchases for Public Works (carryover)(207,205) Revenue - Increase other revenue for capital contributions to purchases for Police (carryover)39,785 Expenditure - Increase capital - vehicles for purchases for Police (carryover)(39,785) Net adjustment required to the ending fund balance $0 Items Previously Approved by Council New Items Not Previously Approved by Council FUND 510 CITY OF BREMERTON 2021 ANTICIPATED REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE INFORMATION SERVICES For the Year Ended December 31, 2021 Proposed Adj Required Adopted Amended From The Budget Budget Adopted Budget 2021 2021 2021 REVENUES Taxes Property $- $- $- Sales - - - Other - - - Licenses and Permits - - - Intergovernmental - - - Charges for Services 1,766,000 1,766,000 - Fines and Forfeitures - - - Miscellaneous - - - Transfers in - - - Total Revenues 1,766,000 1,766,000 - EXPENDITURES Personnel Expenses 918,600 918,600 - Supplies, Services, and Taxes 845,596 871,596 26,000 Capital Expenditures - - - Debt Service - - - Transfers Out - - - Total Expenditures 1,764,196 1,790,196 26,000 CHANGES IN FUND BALANCE Net change in working capital 1,804 (24,196) (26,000) Fund Balances-beginning working capital 836,731 1,183,557 346,826 Fund Balances-ending working capital $838,535 $1,159,361 $320,826 Budget Adjustments: Expenditure- Purchase Microsoft AZURE Active Directory (26,000) Net adjustment required to the ending fund balance $(26,000) Items Not Previously Approved by Council Items Previously Approved by Council FUND 511 1 l Memorandum To: City Council Mayor Greg Wheeler From: Karen Wikle, Budget Analyst Re: 2021 Mid-Year Budget Amendment, Ordinance No. ___ Date: June 9, 2021 The city adopted the 2021 budget by Ordinance No. 5408 on November 18, 2020. Each year the City assesses its current fiscal year budget and addresses any needed adjustments that have come to the attention of the staff in Financial Services. Adjustments for both revenue and expenditures are brought forward for the following reasons: to adjust the estimated beginning fund balances to actual, to account for subsequent unanticipated/unexpected conditions, to account for previously approved projects that were underway in 2020 that were not concluded and require carryover expenditure authority, to reallocate revenue and expenditure line items within budget control categories with zero net increase, and to formally account for various council motions/resolutions previously approved to date during 2021. Enclosed is the mid-year budget amendment ordinance and detailed supporting schedules. Noteworthy items not previously approved by Council, and/or are significant, are as follows: General Fund  The actual beginning fund balance was higher than anticipated by $2,448,085. The additional reserves came from $224,725 in additional revenue and a $2,223,360 savings in expenditures throughout all departments within the General Fund.  A $215,175 increase in personnel costs from various departments based on Council approval of additional FTE’s.  A $474,785 expenditure for carry over from fiscal year 2020, Type 6 Wildland Fire Truck and Medic Unit for Fire as well as Police vehicles for Police. Other Funds  Transportation Capital Projects Fund includes an increase in Intergovernmental revenue by $86,000 and an increase in expenditure services by $100,000 for the West Kitsap Way Recon/Rechannel Study.  Due to an increase in available funding, the Wastewater Capital fund includes an increase in loan revenue of $2,000,419 as well as capital expenditures of $2,000,419 for Oyster Bay Beach Sewer Upgrades project. 2  The Risk Management Fund includes an additional $445,000 in expenditure appropriations due to unforeseen and unexpected medical expenses and increased insurance premiums.  The Equipment Rental Reserve-Reserves Fund includes an additional $681,990 in capital expenditures for carry over rom fiscal year 2020. The expenditure is funded by the General Fund, as stated above as well as funding from the Street Fund of $78,220 and Wastewater Utility Fund of $128,985. Budget adjustments are necessary to properly reflect the nature and extent of revenues and expenditures of the various City funds and departments. The attached ordinance and supporting schedules (by fund) include adjustments by budget control category for both revenues and expenditures with a City-wide appropriation, including fund balance, of $209,449,428. AGENDA BILL CITY OF BREMERTON CITY COUNCIL SUBJECT: Affiliation Agreement with Central Washington University for Training of Health Care Professionals Study Session Date: June 9, 2021 COUNCIL MEETING Date: June 16, 2021 Department: Fire Presenter: Pat McGanney Phone: (360) 473-5381 SUMMARY: The purpose of this agreement is for the Bremerton Fire Department to commit to training health care professionals, to provide desirable clinical learning experiences and facilities for Central Washington University Healthcare students. ATTACHMENTS: Affiliation Agreement FISCAL IMPACTS (Include Budgeted Amount): None STUDY SESSION AGENDA: ☒ Limited Presentation ☐ Full Presentation STUDY SESSION ACTION: ☒ Consent Agenda ☐ General Business ☐ Public Hearing RECOMMENDED MOTION: Move to approve the Affiliation Agreement with Central Washington University; and authorize the Mayor to finalize and execute the agreement with substantially the same terms and conditions as presented. COUNCIL ACTION: Approve Deny Table Continue No Action Form Updated 01/02/2018 6C Affiliation Agreement Page 1 AFFILIATION AGREEMENT BETWEEN CENTRAL WASHINGTON UNIVERSITY AND CITY OF BREMERTON This Agreement is made and entered into between Central Washington University (“School”), located at 400 E. University Way, Ellensburg, Washington, 98926-7480, and City of Bremerton (“Training Site”), located at 911 Park Avenue, Bremerton, WA 98337. The purpose of this Agreement is for Training Site to provide desirable learning experiences (“the education program”) for School’s students who are enrolled in School’s educational/clinical programs. In consideration of the mutual covenants and agreements contained herein, School and Training Site agree as follows: I. GENERAL PROVISIONS A.School and Training Site agree that contemporaneous with or following execution of this Agreement and within the scope of its provisions, School may develop letter agreements with Training Site to formalize operational details of the education program. These details include, but are not limited to, the following: •Beginning dates and length of experience (to be mutually agreed upon at least one month before the beginning of the education program); •Number of students eligible to participate in the education program; •Specific days, hours and locations for the education program; •Specific learning objectives and performance expectations for students; •Specific allocation of responsibilities for the faculty Liaison, education Supervisor, and Preceptors, if any, referenced elsewhere in this Agreement; •Deadlines and format for student progress reports and evaluation forms. Any such letter agreements will be considered to be attachments to this Agreement, will be binding when signed by authorized representatives of each party, and may be modified by subsequent letter agreements signed by authorized representatives of each party. B.School and Training Site will jointly plan the education program and jointly evaluate students. Exchange of information will be maintained by on-site visits when practical and by letter or telephone in other instances. C.School and Training Site will instruct their respective faculty, staff, and students participating in the education program to maintain confidentiality of student and patient information as required by law and by the policies and procedures of School and Training Site. D.There will be no payment of charges or fees between School and Training Site. 15177 Affiliation Agreement Page 2 E.There will be no discrimination against any program participant or applicant covered under this Agreement because of race, color, religion, national origin, age, handicap, status as a Vietnam era or disabled veteran, sex, or sexual orientation, nor will School or Training Site engage in such discrimination in their employment or personnel policies. II. SCHOOL’S RESPONSIBILITIES A.School will provide information to Training Site concerning its curriculum and the professional and academic credentials of its faculty for the students at Training Site. School will designate an appropriately qualified and credentialed faculty member to coordinate and act as the Liaison with Training Site. School will be responsible for instruction and administration of the students’ academic education program. School will notify Training Site in writing of any change or proposed change of its Liaison. School will have the final responsibility for grading students. B.School’s faculty will meet with the Training Site education Supervisor Preceptors, if any, at the beginning and end of the education program to discuss and evaluate the education program. These meetings will take place in person if practicable, otherwise by telephone conference. School is responsible for arranging and planning the meetings. C.School will provide the names and information pertaining to relevant education and training for all students enrolled in the education program at least four weeks before the beginning date of the education program. School is responsible for supplying any additional information required by Training Site as set forth in this Agreement, prior to the arrival of students. School will notify Training Site in writing of any change or proposed change in a student’s status. D.School will obtain evidence of current immunizations against diphtheria, tetanus, poliomyelitis, measles (rubeola), mumps, rubella (or a positive rubella titer), and of hepatitis B immunity status, documented by a protective titer, for those students who will be in contact with patients/clients. For each student born after 1956, School will maintain on file records of positive titer or of post-1967 immunization for rubella and rubeola. At the time of immunization, students with no history of exposure to chickenpox will be advised to get an immune titer. School will require yearly PPD testing or follow-up as recommended if the students are PPD- positive or have had BCG. School will provide information to Training Site regarding student status concerning the above requirements. E.School will assign to Training Site only those students who have satisfactorily completed the prerequisite didactic portion of the curriculum and who have evidence of completion of a CPR course based on American Heart Association or American Red Cross guidelines and related to the age group(s) with whom they will be working. F.School shall ask each student who may be placed in Training Site to obtain his/her criminal history background record from the Washington State Patrol, pursuant to RCW Affiliation Agreement Page 3 43.43.834 and RCW 43.43.838, to release a copy of that record to the School, and to authorize the School to transmit that record or copy thereof to Training Site. Before the start of training, School will provide Training Site with the names of any students who have failed to provide the requested records, or who refuse to authorize the release of records to Training Site. The students will be informed that, whether or not they agree to obtain the record and agree to release it to School and Training Site, Training Site may conduct the background inquiry directly and the Training Site may refuse placement of a student who does not provide the requested records or who has a record of prior criminal conduct. Training Site understands and agrees that any information forwarded to it by School has been procured through this process. School does not certify the veracity of the records provided and, furthermore, the obligation to conduct appropriate background checks and the liability for non-compliance therewith remains the responsibility of Training Site. G.School will comply with and ensure to the extent possible that students comply with the policies and procedures established by Training Site. School will notify each student of his/her status and responsibilities pursuant to this Agreement. H.School will encourage each student participating in the education program to acquire comprehensive health and accident insurance that will provide continuous coverage of such student during his or her participation in the education program. School will inform students that they are responsible for their own health needs, health care costs, and health insurance coverage. III.TRAINING SITE’S RESPONSIBILITIES A.Training Site will provide students with a desirable education experience within the scope of services provided by Training Site. Training Site will designate in writing Preceptors, if any, to be responsible for the education program, and will designate in writing one person as the education Supervisor, who will maintain contact with the School-designated Liaison to assure mutual participation in and review of the education program and student progress. Training Site will submit in writing to School the professional and academic credentials for the Preceptors and education Supervisor. Training Site will notify School in writing of any change or proposed change of the Preceptors or education Supervisor. B.Training Site will provide students with access to sources of information necessary for the education program, within Training Site’s policies and procedures and commensurate with patients’ rights, including library resources and reference materials. C.Training Site will make available to students basic supplies and equipment necessary for care of patients/clients and the education program. Within the limitation of facilities, Training Site will make available office and conference space for students and, if applicable, School faculty. Affiliation Agreement Page 4 D.Training Site will submit required reports on each student’s performance and will provide an evaluation to School on forms provided by School. E.Training Site retains full responsibility for the care of patients/clients, and will maintain the quality of patient care without relying on the students’ training activities for staffing purposes. F.Training Site will have the right to take immediate temporary action to correct a situation where a student’s actions endanger patient care. As soon as possible thereafter, Training Site’s education Supervisor will notify School of the action taken. All final resolutions of the student’s academic status in such situations will be made solely by School after reviewing the matter and considering whatever written factual information Training Site provides for School; however, Training Site reserves the right to terminate the use of its facilities by a particular student where necessary to maintain its operation free of disruption and to ensure quality of patient care. G.On any day when a student is participating in the education program at its facilities, Training Site will provide to such student necessary emergency health care or first aid for accidents occurring in its facilities. The student will be responsible for the costs of any and all care. H.Except as provided in this Agreement, Training Site will have no obligation to furnish medical or surgical care to any student. IV.STUDENTS’ STATUS AND RESPONSIBILITIES A.Students will have the status of learners and will not replace Training Site personnel. Any service rendered by students is incidental to the educational purpose of the education program. B.Students are required to adhere to the standards, policies, and regulations of Training Site during their education program. C.Students will wear appropriate attire and name tags, and will conform to the standards and practices established by School during their education program at Training Site. D.Students assigned to Training Site will be and will remain students of School, and will in no sense be considered employees of Training Site. Training Site does not and will not assume any liability under any law relating to Worker’s Compensation on account of any School student’s performing, receiving training, or traveling pursuant to this Agreement. Students will not be entitled to any monetary or other remuneration for services performed by them at Training Site, nor will Training Site otherwise have any monetary obligation to School or its students by virtue of this Agreement. Affiliation Agreement Page 5 V.LIABILITY COVERAGE PROVISIONS A.Each party to this Agreement shall be responsible for its own acts or omissions and for those of its officers, employees, and agents. Neither party shall be responsible for the acts or omissions of persons or entities not a party to this Agreement. B.School, an agency of the State of Washington, warrants that it is self-insured against liability claims in accordance with the risk management and tort claims statutes, including chapter 4.92 RCW and RCW 43.19.760 et seq. The tort claims procedure, RCW 4.92.100 et seq., provides the fundamental remedy for all tort liability claims against School and its officers, employees, and agents acting as such, and all such claims must be filed and processed as provided therein. School shall make general liability insurance and medical professional liability coverage available for purchase by its students. School shall provide students who purchase insurance through it with proof of insurance. In addition, the limits of the liability policy shall be at the minimum of One Million Dollars ($1,000,000) per occurrence and Three Million Dollars ($3,000,000) in the aggregate per school annual aggregate. Students shall provide Clinical Facility with proof of insurance prior to placement. Students will not be accepted without proof of required insurance. C.Training Site maintains commercial general liability insurance coverage with a minimum of $1,000,000 per occurrence. Through that coverage, Training Site provides liability coverage for its employees, officers, and agents in the performance of this Agreement, and further provides the means for defense and payment of claims that may arise against such individuals. VI.TERM A.This Agreement shall be effective as of the latest date shown below (Effective Date) for a term of three (3) years ("Initial Term”), and shall renew every three years commencing from the Effective Date; PROVIDED THAT the parties review this Agreement and memorialize their intent to renew the Agreement for a subsequent three year period – such renewal being memorialized prior to the expiration of the current three year term. There shall be a maximum of two renewal periods. The Initial Term and any Renewal Term will be collectively referred to herein as “Term”. School and Company will jointly plan student placement in advance of each year’s beginning, taking into account the needs of the school for clinical placement, maximum number of students for whom Company can provide a desirable clinical education experience, and the needs of other disciplines or schools requesting clinical placements. B.This agreement may be canceled by written notice 60 days prior to termination; however, such termination shall not become effective for the students then enrolled in the education program if such termination prevents completion of their requirements for completion of the education program. Affiliation Agreement Page 6 VII. PROVISIONS REGARDING BLOOD-BORNE PATHOGENS A.School certifies that it has trained each student it sends to Training Site in universal precautions and transmission of blood-borne pathogens and that it will send to Training Site only students who have been trained in and have practiced using universal precautions. School has recommended the Hepatitis B (HBV) screening to all education program students before assignment to Training Site. Students may waive the HBV series, but are required to have a TB screening and be up-to-date on all other immunizations. Training Site will provide personal protection equipment that is appropriate for the tasks assigned to School’s students. B.In the event a student sustains a needle-stick injury or other substantial exposure to bodily fluids of another or other potentially infectious material while participating in the education program at Training Site, Training Site agrees to provide the following services: •Emergency medical care following the injury; •Initiation of HBV, Hepatitis C (HCV) and HIV protocol; •HIV counseling and appropriate testing. The student will be responsible for the costs of any and all care, testing, counseling, and obtaining necessary follow-up care. C.The source patient’s HBV, HCV and HIV status will be determined by Training Site in the usual manner to the extent possible. VIII.MISCELLANEOUS PROVISIONS A.Entire Agreement. This Agreement constitutes the entire agreement between the parties, and supersedes all prior oral or written agreements, commitments, or understandings concerning the matters provided for herein. B.Amendment. This Agreement may be modified only by a subsequent written Agreement executed by the parties. The provisions in this Agreement may not be modified by any attachment or letter agreement as described elsewhere in this Agreement. C.Order of Precedence. Any conflict or inconsistency in this Agreement and its attachments will be resolved by giving the documents precedence in the following order: 1.This Agreement; 2.Attachments to this Agreement in reverse chronological order. D.Governing Law. The parties’ rights or obligations under this Agreement will be construed in accordance with, and any claim or dispute relating thereto will be governed by, the laws of the State of Washington. Affiliation Agreement Page 7 E.Notices. All notices, demands, requests, or other communications required to be given or sent by School or Training Site, will be in writing and will be mailed by first-class mail, postage prepaid, or transmitted by hand delivery or facsimile, addressed as follows: (a)To School: Central Washington University 400 E. University Way Ellensburg, WA 98926-7480 (b)To Training Site: City of Bremerton 911 Park Avenue Bremerton, WA 98337 Each party may designate a change of address by notice in writing. All notices, demands, requests, or communications that are not hand-delivered will be deemed received three (3) days after deposit in the U.S. mail, postage prepaid; or upon confirmation of successful facsimile transmission. F.Survival. School and Training Site expressly intend and agree that the liability coverage provisions of this Agreement will survive the termination of this Agreement for any reason. G.Severability. If any provision of this Agreement, or of any other agreement, document or writing pursuant to or in connection with this Agreement, shall be held to be wholly or partially invalid or unenforceable under applicable law, said provision will be ineffective to that extent only, without in any way affecting the remaining parts or provisions of said agreement. H.Waiver. Neither the waiver by any of the parties hereto of a breach of or a default under any of the provisions of this Agreement, nor the failure of either of the parties, on one or more occasions, to enforce any of the provisions of this Agreement or to exercise any right or privilege hereunder, will thereafter be construed as a waiver of any subsequent breach or default of a similar nature, or as a waiver of any of such provisions, rights or privileges hereunder. I.Inspection. Training Site will permit, on reasonable notice and request, the inspection of clinical and related facilities by agencies charged with responsibility for accreditation of School. Affiliation Agreement Page 8 J.HIPAA. School voluntarily provides students with training on the requirements of the Health Insurance Portability and Accountability Act (HIPAA). Training Site will provide additional training on Training Site’s specific HIPAA policies and procedures. School will direct its students and faculty to comply with the policies and procedures of Training Site. No protected healthcare information (PHI) is anticipated to be exchanged between Training Site and School. Solely for the purpose of defining students’ role in relation to the use and disclosure of Training Site’s PHI, students acting pursuant to this Agreement are defined as members of Training Site’s workforce. However, School’s students and faculty shall not be considered to be employees of Training Site. CENTRAL WASHINGTON UNIVERSITY CITY OF BREMERTON By: By: Title: Title: Date: Date: LH 6/1/21 AGENDA BILL CITY OF BREMERTON CITY COUNCIL SUBJECT: Study Session Date: June 9, 2021 Ordinance No. 5425 amending Sections 1.02.020 and 2.50.040(b) of the Bremerton Municipal Code, establishing Juneteenth as a legal holiday for the City of Bremerton COUNCIL MEETING Date: June 16, 2021 Department: Executive Presenter: Mayor Greg Wheeler Phone: (360) 473-5266 SUMMARY: Washington State Legislature recently passed House Bill 1016, effective July 25, 2021, establishing the nineteenth day of June, recognized as Juneteenth, as a state legal holiday in remembrance for the day news of the Emancipation Proclamation and the end of the Civil War reached Galveston, Texas and all enslaved persons were released from bondage. In order to recognize this day, the City Council desires to amend the Bremerton Municipal Code to establish Juneteenth as a legal holiday for the City. ATTACHMENTS: Ordinance No. 5425 FISCAL IMPACTS (Include Budgeted Amount): One additional holiday for all regular full-time and regular part-time employees. STUDY SESSION AGENDA: ☒ Limited Presentation ☐ Full Presentation STUDY SESSION ACTION: ☒ Consent Agenda ☐ General Business ☐ Public Hearing RECOMMENDED MOTION: Move to approve Ordinance No. 5425 establishing Juneteenth as a legal City holiday. COUNCIL ACTION: Approve Deny Table Continue No Action Form Updated 01/02/2018 6D Page 1 of 3 Juneteenth ORDINANCE NO. ________ AN ORDINANCE of the City Council of the City of Bremerton, Washington, amending Section 1.02.020 of the Bremerton Municipal Code entitled “Legal Holidays” and Subsection 2.50.040(b) of the Bremerton Municipal Code entitled “Holiday Time,” to establish Juneteenth as a legal holiday for the City. WHEREAS, the State Legislature recently passed House Bill 1016, effective July 25, 2021, establishing the nineteenth day of June, recognized as Juneteenth, as a state legal holiday in remembrance for the day news of the Emancipation Proclamation and the end of the Civil War reached Galveston, Texas and all enslaved persons were released from bondage; and WHEREAS, in order to recognize this day, the City Council desires to amend provisions of the Bremerton Municipal Code to establish Juneteenth as a legal holiday for the City; NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF BREMERTON, WASHINGTON, DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1. Section 1.02.020 of the Bremerton Municipal Code entitled "Legal Holidays" is hereby amended to read as follows: 1.02.020 LEGAL HOLIDAYS (a)The following holidays are adopted as legal holidays for the City: The first day of January (New Year’s Day); the third Monday of January (Martin Luther King, Jr.’s Birthday); the third Monday of February (President’s Day); the last Monday of May (Memorial Day); the nineteenth day of June (Juneteenth); the fourth day of July (Independence Day); the first Monday in September (Labor Day); the eleventh day in November (Veteran’s Day); the fourth Thursday and Friday in November (Thanksgiving holiday); the twenty-fifth day of December (Christmas Day); and any other day designated by public proclamation of the Chief Executive of the State as a legal holiday or as a day of thanksgiving. (b)Whenever a legal holiday falls upon a Sunday, the following Monday shall be a legal holiday, and whenever any legal holiday falls upon a Saturday, the preceding Friday shall be a legal holiday. SECTION 2. Subsection 2.50.040(b) of the Bremerton Municipal Code entitled “Holiday Time” is hereby amended to read as follows: (b)Holiday Time. Managers and professional staff shall receive a full day of time off without loss of compensation for each holiday observed by the City on the day the City observes the holiday and one additional floating holiday. Holidays observed by the City are: New Year’s Day Martin Luther King’s Birthday 5425 Page 2 of 3 Juneteenth President’s Day Memorial Day Juneteenth Independence Day Labor Day Veteran’s Day Thanksgiving Day Day after Thanksgiving Christmas In addition, similar time off without loss of compensation is granted for any other holiday which the City Council takes specific official action to observe. SECTION 3. Juneteenth – Effective Date. Consistent with House Bill 1016, Juneteenth shall first be recognized as a City holiday June 19, 2022. SECTION 4. Corrections. The City Clerk and codifiers of this ordinance are authorized to make necessary corrections to this ordinance including, but not limited to, the correction of scrivener, clerical, typographical, and spelling errors, references, ordinance numbering, section/subsection numbers and any references thereto. SECTION 5. Severability. If any one or more sections, subsections, or sentences of this ordinance are held to be unconstitutional or invalid, such decision shall not affect the validity of the remaining portion of this ordinance and the same shall remain in full force and effect. SECTION 6. Effective Date. This ordinance shall take effect and be in force ten (10) days from and after its passage, approval and publication as provided by law. PASSED by the City Council the___________ day of ____________________, 2021. _________________________________ KEVIN GORMAN, Council President Approved this ________ day of ________________________, 2021. _________________________________ GREG WHEELER, Mayor Page 3 of 3 Juneteenth ATTEST: APPROVED AS TO FORM: __________________________________ _________________________________ ANGELA HOOVER, City Clerk ROGER A. LUBOVICH, City Attorney PUBLISHED the ________ day of ______________________, 2021. EFFECTIVE the ________ day of ______________________, 2021. ORDINANCE NO. ________. R:\Legal\Legal\Ordinances\Executive\2021.05.24 Ordinance - Juneteenth - Final 5-28-21.docx From:Nora Carlson To:City Council Subject: Date: Citizen Comments - Supports Juneteenth Holiday (Nora Carlson) Monday, June 14, 2021 6:29:14 AM Dear Bremerton City Council, I was hoping to submit a written comment for the Bremerton City Council meeting on Wednesday, June 16th as I cannot make it in person. I believe that Juneteenth (June 19th) should be made into an official City holiday. This is a monumental moment in American history and should be remembered, learned about, memorialised, and celebrated for the freedom and resilience it represents. Its historic significance should be recognised as such with an official City holiday. Thank you and if I need to send this comment elsewhere please let me know. Be joyous Nora Carlson From: Roy Runyon <sealance2449@gmail.com> Sent: Wednesday, June 9, 2021 11:42 PM To: City Council <City.Council@ci.bremerton.wa.us>; City.council@bremerton.ci.wa.us Subject: Juneteenth proposed City of Bremerton holiday CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe. To Whom It May Concern, I support publicly recognizing Juneteenth as a special day for its significance as the de facto end of slavery in the United States. However, I do NOT support making Juneteenth an official City of Bremerton holiday. The loss of another productive work day by the city government in service to the citizens, taxpayers and businesses of Bremerton is inconscionable in light of the economic and social impacts of the government imposed shutdown of much of our economy and cultural life due to Covid-19. In addition, another lost day of government service represents a direct cost to the people footing the bill of paying for the City of Bremerton government and getting fewer results. Furthermore, I find it scandalous that Greg Wheeler, in seeking another term as mayor, seeks to shut down our municipal government another day to pander to several special interest groups and reward them for supporting his re-election effort. Vote NO on making Juneteenth an official City of Bremerton holiday. By doing so, you reaffirm that we have as noted by President Abraham Lincoln in his Gettysburg Address, "a government of, by and for the People." Regards, Roy Runyon Citizen, Taxpayer, Veteran, Historian From:Jim McDonald To:City Council Subject:June 19th Date:Tuesday, June 8, 2021 8:58:45 PM CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe. Dear Council Members, While I support the creation of June 19th as a National Holiday or even a State Holiday. I do not support this effort at the City level. The Council should focus their efforts on lobbying our State and Federal elected officials instead of taking unilateral action. If the City stands alone, it will have no meaning. People will wonder why the City offices are closed when everyone else in the City, County, and State are open. R, Jim McDonald Bremerton