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2003, 07-10 Special Joint BOCC MeetingAGENDA CITY HALL AT REDWOOD PLAZA 11707 East Sprague Avenue, First Floor Spokane Valley, Washington Thursday July 10, 2003 1. Sewer fund reserves 2. Financial modeling for wastewater improvements 3. Subsidies for sewer rates and charges 4. Options for adjusting future rates and charges SPECIAL JOINT MEETING SPOKANE COUNTY BOARD OF COUNTY COMMISSIONERS AND SPOKANE VALLEY CITY COUNCIL 5:30 — 6:30 p.m. COUNCIL REQUESTS ALL ELECTRONIC DEVICES BE TURNED OFF WHILE IN ATTENDANCE AT THE COUNCIL MEETING The purpose of the meeting is for the Board and Council to consider taking action on the following items: Nu public testimony will be accepted on the items listed above. The Board and Council muv ask staff to make presentations and /or respond to any questions they might hose on the above items. SEE OVER 07/08/2003 TUE 17:02 FAI 01001 /001 NO. 3-0641 IN THE MATTER OF SETTING A PUBLIC MEETLVG TO DISCUSS VARIOUS MATTERS OF INTEREST RELATED TO WASTEWATER MANAGEMENT BETWEEN THE BOARD OF COUNTY COMMISSIONERS OF SPOKANE COUNTY AND THE CITY COUNCIL OF THE CITY OF SPOKANE VALLEY NOTICE LS HEREBY GIVEN by the Board of County Commissioners of Spokane Comity ( "Board ") and Qty Council of the City of Spokane Valley ( "Council ") that a special meeting will be held by the Board and Council on Thurrday, Jul' 10, 2003, commenting at 5:30 P.M. and running until approximately 6:30 P.M. at the City of Spokane Valley Council Chambers, Redwood Plaza. 11707 East Sprague Ave., City of Spokane, WA The propose of the public meeting will be for the Baud and Council to consider tiling action on the following items: Page Iof1 BEFORE THE BOARD OF COUNTY COMMISSIONERS OF SPOKANE COUNTY. WASHINGTON (I) Sewer fund reserves, (2) Financial modeling for wastewater improvements. (3) Subsidies for sewer rates and charges. and (4) Options for adjusting future rates and charges. The terminology " action" as used herein shall mean deliberate, dis uaa. consider, review, evaluate, make a collective decision or take a vote by each of the legislative bodies cc the above listed items Any person may appear at the time, place and date set forth herein above and observe the actions) of the Board and Counct7. No public testimony will be accepted an the Item lined above. The Board and Council may ask staff to make presentations and/or respond to any questions they might have on the above items. ATTEST' VICKY M. DALTON Clerk of the Board DATED THIS CW day of NOTICE OF SPECIAL MEETING SK Clair SEE OVER .Spakaaa, W.nsh, croeur Ii12 . • 1 9 U. E C L (.1,14 • - • Astew. ter, p F thi rgiiiiiii I :tnn - 1:r 1. ea • -" • . •-• • • • 4 .1i1)f6 Says, ikohrToilwh . orri ujrj noL given Lo. inr1 king rasycorniblirriciii,S;but'i I . , eoni0.1Icd exprtzs my fipprrriatiOa Cur jmite ••, „ • ni wie 243, i" I)i Tux I Ly in Fray e.Lin't be derIml[J dbnC.,1"4upt rny - .••• ; Yes' ▪ •Le.ritirn8 it lalc.cFs lake P •'•• • aviri for ma i yCars rn. n n . o ly i./4.11.15HO hut iSc3bEidei L'Ved d ictalorships . . . , • • with a ree'or'd oppleSthin, [ e.a y atl nide ri 6cligerent policics Of bur Kiri' Presidnt Hush e id& disgusting; r4filaiiing ,Of Llerisis'aggreasiveyai poky undef Pa[riulisM and 'Ube I ion was using pinni Litudes? ul,'1' Pride guettL • ;161nECE.i0 mugh 411, and a itysiairil. beim p 12/1",' • al6oRohlansi 1:20cA -••• •• •• • L. • ' Feel sorly for II he mil 4 rickirqs 194: a wind iidiikguidjng le*2 . 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'I Li LI E 0 0 0 0 0 Wastewater Financing City of Spokane Valley Spokane County 0 July 10, 2003 fl 1 rn ❑1 ❑ n PI D AGENDA • Sewer Customer Base • Sewer Fund Reserves • Cost of Service Rates • Sewer Financing Model • Sales Tax & REET Revenues • Alternatives for Rates & Charges • Capital Facilities Rates • Questions and Discussion EXISTING SEWED CUSTOMERS ERU's Paying Monthly Sewer Service Fees Percentage Unincorporated 9,100 26.5 Spokane Valley 25,224 73.5 Total 34,324 100.0 EXISTING SEWED CUSTOMERS FUTURE SEWER CUSTOMERS ERU's Within Septic Tank Elimination Program percentage Unincorporated 1,687 13.7 Spokane Valley 10,607 86.3 Total 12,294 100.0 FUTURE SEWER CUSTOMERS APA Funds Sales Tax Extended Grant General Facilities Charges $1,885 per ERU W1TP Charges $4.00 per month per ERU DRAFT January 24 2003/Prepared by Kevin R. Cooke GENERALIZED REVENUE FLOW CHART FOR SPOKANE COUNTY SEWER PROGRAM YEAR 2003 CFR Revenues Road Funds $3065 per ERU Full Width Paving Surplus Revenues & GFC Subsidy (APA & Sales Tax) Surplus Revenues (VWVTP Charges) 4 REET Funds Sewer Service Fees ($20.50 per month per ERU) HISTORICAL ANNUAL REVENUES o APPLIED TO SEWER SUBSIDIES n 0 0 n El n 0 L -_ Sales Tax $515,000 from unincorporated areas • $2,400,000 from Spokane Valley areas Real Estate Excise Tax (BEET) • $1,202,000 Anticipated Reduction of Revenues, 2003 -2010 • Sales Tax - -$23.3 million • BEET - -$6.6 million ❑ ❑ 1 1 n D SEWER FUND RESERVES Estimated January 1, 2003 • Fund 403 -Sewer Construction -$16.4 million • Fund436-APAFees-$9.1 million • Fund438-GFC's-$lO.l million • Fund EO 1 -WWTP Charges-$3. 1 million • Fund 401 - Operations -$7.7 million FUND 403 -SEWER CONSTRUCTION a • Fund Balance -$16.4 million � • Used to pay CFR subsidy o • Primary revenue source -Sales Tax Allocation 0 0 n n �n n a it n ❑ fl ❑ U C' FUND 436 -APA FEES • Fund Balance -$9.1 million • Transferred into Fund 403, as needed • Sole revenue source-APA Fees • Sunsets in 2005, Unless Reauthorized FUND 438 -GFC's ■ Fund Balance -$10.1 million ■ Used to pay for new wastewater treatment plant capacity, upgrades to existing plants, and major conveyance facilities ■ Sole revenue source - General Facilities Charges n ❑ n n ❑ 0 a 1 n FUND E01-WWTP CHARGES • Fund Balance -$3.1 million • Used to pay for upgrades at SAWTP • Sole Revenue Source-Monthly WWTP Charge ( 1 n u u o Projected Use of Existing Reserves � ■ Projected CFR Subsidy 2003 -2010 0 Estimated at $30 -35 million 11 u E n n EJ II D D D ❑ D D D n Li PROJECTED WASTEWATER EXPENDITURES -20 Years • Sewer Construction Program $113.3 million • Upgrades at SAWTP • New Treatment Plant Total 20-Year Costs $ 26.6 million $143.4 million $283.3 million ❖ Costs inflated at 2.5 % per year to projected year of expenditure n n u 1 GFC Overview 1. Net Value of Existing Assets Available to Service Growth $12,179,737 2. Planned Capital Improvements Applicable to GFC $125,429,650 3. Growth ERUs Applicable to GFC 45,822 4. Calculation of Charge Current Assets Available to Serve Growth $12,179,737 Capital Improvements to Serve Growth $125,429,650 Assumed Reduction from Future Reserves ($24,083,538) Total Assets Applicable to Charge $113,525,849 divided by Net Growth ERU's Applicable to GFC 45,822 5. GFC /ERU $2,478 Li GFC Impacts • Remaining reserves after completion of the STEP program, if any, will be used toward treatment plant construction • The current GFC has been calculated assuming $24 million in remaining reserves • POTENTIAL IMPACTS TO o CHARGES OR RATES 1. Increase General Facilities Charges from $2,510 up to $3,028 OR Increase Wastewater Treatment Plant Charges ❑ from $4.00 per month up to $7.70 per month OR o 3 . Adopt a blend of increases to Charges and Rates 1 ° [Note that if the GFC increases, the CFR increases as well.] Wastewater financing QUESTIONS AND DISCUSSION City of Spokane Valley Spokane County July 10, 2003 Fl u n Capital Facilities Ra CFR) Computational Method D ❑ ❑ n ❑ L C 11 Total Sewer Project Costs (minus) State Extended Grant = Subtotal (minus) County Participation @ 40 = Subtotal (plus) General Facilities Charges = Total Sewer Costs Distributed to ERU's (divided by) Total ERU's in the Sewer Projects = CFR Cost of Service Rate Making CAPITAL FINANCING EVALUATION RESIDENTIAL CUSTOMER RATE REVENUE REQUIREMENT 1 ALLOCATE COSTS BY FUNCTION ALLOCATE COSTS TO CUSTOMER CLASSES MULTI- FAMILY RATE DESIGN VOLUME DEFINE OPERATING NEEDS COMMERCIAL July 10, 2003 Spokane Public Facilities District I)irectors 720 West Mallon Avenue Spokane, Washington 99201 Very y yours, FRANCINE M. BOXER Spokane County Chief :Executive Officer Enclosure Cc: Mike DeVleming, Mayor w /enc. Diana Wilhite, Deputy Mayor w /enc. Steve Taylor, w/enc. Gary Schimmels, w /enc. Rich Munson, w/enc. Mike Flanigan, w /enc. Dick Denenny, w/enc OFFICE OF COUNTY COMMISSIONERS FRAI.+CiNE M. BOXER CHIEF EXECIMvE OFFICER Re: Interloc al Agreement for Development of Regional Center Projects Dear Chairman Williams, Vice -Chair McFarland, Directors Cross, Lafleur and Skaggs: The Board of County Commissioners ( "Board"), by majority vote, executed the enclosed "Interlocal Agreement for Development of Regional Center Projects" at a duly advertised and continued Special Meeting this moming This document contains revisions to Sections 1.2, 1.3 and 2.7. The :Board directed that a certified copy be transmitted immediately to the Public Facilities District ( "District") as well as to the City of Spokane Valley. The Board requested that the District advise it in advance of the date(s) and time(s) of any public meeting(s) at which it will consider or discuss Sections 1.2, 1.3 and 2.7 of the transmitted document. The Board also requested that it be afforded an opportunity to speak at such public meeting(s). The Board is more than willing to meet in a duly advertised public meeting with the District Directors and the City of Spokane Valley Council to address any concerns which the .District Directors may have with respect to revisions made in the transmitted document. 1116 WFSr BROADWAY AVENUE • SPOKANE. WA 99260.0100 • (509) 477 -2265 • FAX: (509) 477 -2274 • fboxergspokanewunty_org 3 0658 COUNTY REDLINE "PLAN C" DRAFT OF JULY 11 0, 2003; ©RTION 2• INTERLOCAL AGREEMENT FOR DEVELOPMENT OF REGIONAL CENTER PROJECTS YSPOKAit1 ;11Vp1.21MUNICIPAI.ISPOKANL COUNTY' S9.SM LTGO 2003CMI1BB06S•JBB- COUJITY REDLINE INTERLOCAL AGREIsME,KP (7- 10.03).DOC TABLE OF CONTENTS Page SECTION 1 DEFINITIONS 34 SECTION 2 DEVELOPMENT AND FINANCING OF THE CONVENTION CENTER PROJ.ECT...$8-7 2.1 Development of the Convention Center Project 887 2.2 Timeline for Development of Convention Center Project 8 2.3 Site Acquisition, Development and Ownership 8 2.4 District Insurance for the Convention Center Project 998 2.5 Local Matching Contributions for Regional Center Projects 99g 2.6 Financing of Convention Center Project 9 2.7 Application of Regional Tax Revenues 10 2.8 Future Convention Center Project Expansion 11 2.9 Convention Center Project Operation 11 SECTION 3 DEVELOPMENT AND FINANCING OF THE FAIR & EXPO CENTER PROJECT ..1144 3.1 Development of the Fair & Expo Center Project 11 3.2 Timeline for Development of Fair & Expo Center Project 111.2 1 3.3 Site Acquisition, Development and Ownership of Fair & Expo Center Project 121211 3.4 Financing of Fair & Expo Center Project 12 3.5 Fair & Expo Center Payments 13 3.6 County Insurance for the Fair & Expo Center Project 14 SECTION 4 DEVELOPMENT AND FINANCING OF THE MIRABEAU POINT PROJECT 1414 4.1 Development of the Mirabeau Point Project 14 4.2 Timeline for Development of Mirabeau Point Project 144 -544 4.3 Site Acquisition, Development and Ownership of Mirabeau Point Project 15 4.4 Financing of Mirabeau Point Project 154414 4.5 Mirabeau Point Payments 16 4.6 Valley City Insurance for the Mirabeau Point Project 17 SECTION 5 MISCELLANEOUS 174-&1 5.1 Administrator of Joint Undertaking 171 -814 5.2 Supplemental Agreements 171817 5.3 Effectiveness of Agreement 171-84-7 5.4 Assignment 18- 1-84.7 -i- \ISPOKANB IWOU M1INICI PAL>SPOKANE COUNTY\S93M LT00 :003 Q.M1BII965•JD&COUNI'Y REDLINE IWI'ERLOCAI. AC R.EEN4ENT (7- 10- 03), 5.5 Third Party Beneficiaries 18 5.6 Actions Contesting Agreement 18 5.7 Entire Agreement, Amendments and Waiver 181-9-1 -8 5:8 Governing Law; Venue 181918 5.9 Captions 18+94-8 5.10 Notices 19 5.11 Specific Approvals 20 5.12 Severability 2024.20 5.13 Counterparts 202448 5.14 Time is of the Essence 20? -ii- SLSPOKANE UNICIPAL SPOKANE COIJTTYkS9.5M LTGO 2(03C\M JBROtS- JBEI.COUNfY RJ:DUNE INTEALOCAL AOAEEME.YT (7.10-04DOC RECITALS "PLAN C" DRAFT OF JUNE 27, 2003 INTERLOCAL AGREEMENT FOR DEVELOPMENT OF REGIONAL CENTER PROJECTS This Interlocal Agreement for Development of Regional Center Projects ( "Agreement ") is entered into this day of July, 2003, by and among the SPOKANE PUBLIC FACILITIES DISTRICT (the "District "), a municipal corporation duly organized and existing under the laws of the State; SPOKANE COUNTY, WASHINGTON (the "County "), a class A county duly organized and existing under the laws of the state of Washington (the "State "); and the CiTY OF SPOKANE VALLEY (the "Valley City"), a municipal corporation duly organized and existing under the laws of the State. The entities executing this Agreement are each referred to below as a "Party," and are collectively referred to as the "Parties." Unless otherwise defined in this Agreement, each capitalized term used in this Agreement shall have the meaning given in Article I1. A. The District is authorized under RCW 36.100.030(1) to "acquire, construct, own, remodel, maintain, equip, reequip, repair and operate sports facilities, entertainment facilities, convention facilities or regional centers as defined in RCW 35.57.020, together with contiguous parking facilities." 13. RCW 36.100.040 provides that a public facilities district may submit an authorizing proposition to the voters of the district to impose an excise tax on the sale of or charge made for the furnishing of lodging by a hotel, rooming house, tourist court, motel or trailer camp, and the granting of any similar license to use real property on premises having more than 40 lodging units the proceeds of which excise tax must be used for the acquisition, design, construction, remodeling, maintenance, equipping, reequipping, repairing and operation of its public facilities. C. RCW 82.14.048 provides that a public facilities district may submit an authorizing proposition to the voters of the district to impose a sales and use tax at a rate not to exceed 2/10 of 1% of the selling price in the case of a sales tax, or value of the article used, in the case of a use tax, the proceeds of which sales and use tax shall be used for the financing, design, acquisition, construction, equipping, operating, maintaining, remodeling, repairing and reequipping of its public facilities. D. RCW 82.14.390 authorizes the governing body of a public facilities district created before July 31, 2002, that commences construction of a new regional center, or improvement or rehabilitation of an existing regional center, before January 1, 2004, to impose a sales and use tax, with the rate of such sales and use tax not to exceed 0.033 percent of the selling price in the case of a sales tax or value of the article used in the case of a use tax, which sales and use tax shall expire when the bonds issued for the construction of the regional center and the related parking facilities are retired, but not more than 25 years after the tax is first collected. 1 VSPOKANEIIVOL2MUNICIPAL \SPDXANE COUNr($9.5M LTGO 2COIMUBB05S- JDII•COUKTY REDLINE INTERLOCAL AGRFSMENT (7.10.03).DOC E. The Board of Directors of the District has determined that it is in the best interests of the residents and inhabitants of the District for the District to undertake and accomplish three regional center projects within its boundaries, i.e., the Convention Center Project, the Fair & Expo Center Project and the Mirabeau Point Project (collectively, the "Regional Center Projects "). F. The District submitted proposals to its qualified electors, and on May 21, 2002, those qualified electors approved proposals to expand its powers and to extend its existing sales and use tax and existing hotel /motel tax to enable the District to undertake and accomplish the Regional Center Projects. G. The District has determined that the amount required to be funded from Regional Tax Revenues (defined hereinafter) to undertake and accomplish the Regional Center Projects, including expenses incidental thereto, does not exceed $96,000,000. H. The Parties intend to jointly develop the Regional Center Projects, in accordance with this Agreement, as multipurpose facilities meeting the definition of "regional centers" under RCW 35.57.020, "multi- purpose community centers" under RCW 35.59.010, and, in the case of the Convention Center Project and the Fair & Expo Center Project, "tourism - related facilities" under RCW 67.28.080. The Regional Center Projects are intended to directly serve the County, the District and the Valley City, and their respective residents, as well as serving a broader population in the region and the State. The Valley City, the County and the District desire to work cooperatively under RCW 36.100.030(2), chapter 35.59 RCW, chapter 39.34 RCW and chapter 67.28 RCW so that the District can obtain sufficient financing to accomplish the Regional Center Projects consistent with the terms of this Agreement. I. 13y the District Bond Resolution, the District has approved or will approve the issuance and sale of its Sales/Use Tax and Hotel/Motel Tax Bonds, 2003, in an aggregate principal amount of not to exceed $77,000,000 to finance a portion of the costs of undertaking and accomplishing the Convention Center Project. J. By the County Bond Resolution, the County has approved or will approve the issuance and sale of its limited tax general obligation bonds as portions of two separate series in an aggregate principal amount of not to exceed $12,000,000 to provide financing for a portion of the costs of undertaking and accomplishing the Fair & Expo Center Project. K. By the Valley City Bond Ordinance, the Valley City has approved or will approve the issuance and sale of its limited tax general obligation bonds in an aggregate principal amount of not to exceed $7,000,000 to provide financing for a portion of the costs of undertaking and accomplishing the Mirabeau Point Project. L. The County and the Valley City each are authorized pursuant to chapter 35.59 RCW, either individually or jointly with another municipality such as the District, to acquire, lease, construct, add to, improve, replace, repair, maintain, operate and regulate the use of multi- purpose community centers, and are further authorized by chapter 35.59 RCW to participate in the financing of, and to appropriate and/or expend any available public money for, multi - purpose -2 CSPOKANEIlVOL2IMUXICIPALISPOKANI !COUNIIAS9.SMLTGO2003C' UFiROAS-3 RR- COUNiYREDLINEINIrRL (CAI.AGREEMENT(7.1 community centers. RCW 67.28.120 provides that any municipality (including any city or county) may, individually or jointly with any other municipality or person, acquire and operate tourism - related facilities. RCW 36.100.030(2) provides that a public facilities district may enter into agreements under chapter 39.34 RCW for the joint provision and operation of facilities, including regional centers, and may enter into contracts under chapter 39.34 RCW where any party to the contract provides and operates such facilities for the other party or parties to the contract. Chapter 39.34 RCW further enables the Parties to carry out collectively any activities that they are individually permitted to pursue under applicable law. M. The County, the District and the Valley City have negotiated this Agreement under which (i) the District will carry out the Convention Center Project; (ii) the County and the District will jointly develop the Fair & Expo Center Project under the County's lead, with the District providing financial assistance in the form of intergovernmental payments (the "Fair & Expo Center Payments "); and (iii) the Valley City and the District will jointly develop the Mirabeau Point Project under the Valley City's lead, with the District providing financial assistance in the form of intergovernmental payments (the "Mirabeau Point Payments "). N. The District, by Resolution No. 03 -03 adopted on July 1, 2003, has authorized the execution of this Agreement on behalf of the District. O. The County, by Resolution No. adopted on , 2003, has authorized the execution of this Agreement on behalf of the County. P. The Valley City, by Ordinance No. passed on , 2003, has authorized the execution of this Agreement on behalf of the Valley City. NOW, THEREFORE, in consideration of the mutual representations, covenants, promises and agreements hereinafter contained, the District, the County and the Valley City mutually represent, covenant, acknowledge and agree as follows: SECTION 1 DEFINITIONS. AGREEMENT Unless otherwise defined in this Agreement, each of the following terms shall have the meaning set forth in this Section 1. 1.1 Acquisition, acquiring or acquire shall include purchase, securing, lease, receipt by gift or grant, condemnation, transfer or other acquirement, or any combination thereof. 1.2 .Arena Reimbursement Obligation means the aggregate amount of any District funds, other than Regional Tax Revenues, plus interest at the Intergovernmental Rate on the amounts so used, loaned or advanced calculated monthly but not compounded, until fully repaid from Regional Tax Revenues in accordance with Section 2.7 of this Agreement, that are used or ex ended by the District rior to January I 2018: 1 for the purposes of making debt service payments on principal amount of not to exceed 577,000,000 of any District bonds (inclusive of the District Bonds) that are issued for the purpose of financing capital improvements for the -3 1LSPOKANE DVOLZMUNICIPAUSPOKANR COL NTYIS9.SM LTGO 2003C\MJDD06S4BB-COUNTY REDLINE INTERLOCAL AGREEMENT (7.I0.03).DOC Convention Center Project, or (ii) for the purposes of making Intergovernmental Payments as may be necessary at such times and in such amounts as are called for by this Agreement. The "Arena Reimbursement Obligation" shall not constitute the advancing of funds by the Distric -t at any time to meet Convention Center Project operation and maintenance expenses for which no other District funds are available before January 1, 2018, which shall instead constitute an Arena O.)eratin • Loss Reimbursement Obli ation as defined below. lrcrra Rcir)rb¢usentent 011igatten -+ eans -- the- aggregtte--amettnt-ef- any -D strict funds, other than Regienal=l'ax -Revers , _ . . 9 -iet-for the- purposes -of firing. constru tin-g froanoing-ancl-etheRvise-supporting the Regional- Genter Projects, ineludif g- iut •�- z,ot -1 ,iied -te making er.€und loans for the ceflstntt ien- or- i -mprev at-of the- Genventiext Center - Project, paying debt serViae on the et- fiends, anel a ing Entergovemnen tents, or advancing ssary-- Convention Center opemting-and- mnintenanee expenses -fef w o-oth - - ' , - :st- atthe-lnte g th used leaned -or advanced rn pa- d -fre«, b onni Tax Revenues in aeeordatiee-wi-th-rSeetiereement 1.3 Arena Operating Loss Reimbursement Obligation means the aggregate amount of any District funds, other than Regional Tax Revenues, plus interest at the Intergovernmental Rate on the amounts so used, loaned or advanced calculated monthly but not compounded, until fitlly repaid from Regional Tax Revenues in accordance with Section 2.7 of this Agreement, if at ail ex ended by the District rior to Januar 1. 2018 for the ui.oses of advancing su.sort to the C:onvention Center Project in satisfaction of Convention Center Project operation and maintenance expenses or losses for which no other District funds are available. 1.43 Bond Fund means the Spokane Public Facilities District Bond Fund established by District Bond Resolution No. 01 -02. 1.45 Business Day means any day other than: (a) a Saturday or Sunday, (b) a day on which commercial banks in the County are authorized or obligated to close, or (c) a day on which the offices of the County are closed. 1.56 Code means the internal Revenue Code of 1986, as amended, together with corresponding and applicable final or temporary regulations and revenue rulings issued or amended with respect thereto by the United States Treasury Department or the Internal Revenue Service. 1.67 Convention Center Project means a Regional Center Project consisting of the Acquisition of an interest in, construction of improvements to and the expansion of the real property located in the City of Spokane, commonly known as the Spokane Convention Center, all as more particularly described in Exhibit A, attached and incorporated herein by reference and as described in the Spokane Center Development Agreements. The Convention Center Project constitutes both a "regional center" as that term is used in RCW 36.100.030(1) and RCW 35.57.020 and a "tourism- related facility" as that term is used in RCW 67.28.080. 1.78 County means Spokane County, Washington. -4- @sPo KAsEnvOL7iMUNiCiPAI)SPOKANE COLT r'$9.5M LT GO 200:101 a1M65- nnI-COU TY REDLINE INTEALOCAL AGREEMENT ( DOC 1.89 County Bonds mean (i) $6,445,000 in principal amount of the County's $19,205,000 Limited Tax General Obligation and Refunding Bonds, Series 2003A, authorized by the County for improvements to the Fair & Expo Center pursuant to Resolution No. 3 -0471, adopted by the County's Board of County Commissioners on May 20, 2003, and (ii) $5,555,000 in principal amount of the County's Limited Tax General Obligation Bonds, Series 2003C, to be issued by the County. 1.910 County Bond Resolution means, collectively, Resolution No. 3 -0471 of the County adopted on May 20, 2003, and such other resolution of the County authorizing, among other matters, the issuance and sale of the County Bonds. 1. -1-011 Develop or Development includes any one or more of the following: acquisition of, construction of, ownership of, remodeling, maintaining, equipping, re- equipping, repairing, financing, and operating the Regional Center Projects as specified herein and undertaken by the Parties as agreed to in this Agreement according to the powers conferred upon the Parties under chapters 35.57, 35.59, 36.100, 39.34 and 67.28 RCW and RCW 82.14.390. 1.4-1-12 District means the Spokane Public Facilities District, a municipal corporation duly organized and existing under the laws of the State 1. -1-213 District Bond Reserve Insurance means any policy of reserve insurance, surety bond or other similar instrument obtained by the District to satisfy the District Bond Reserve Requirement in lieu of a deposit of cash and investments in the Reserve Fund to satisfy the District Bond Reserve Requirement in accordance with the District Bond Resolution. 1.14 District Bond Reserve Requirement means the debt service reserve requirement for the District Series 2003A Bonds established by the .District Bond Resolution. 1.1-415 District Bond Resolution means one or more resolutions of the District authorizing, among other matters, the issuance and sale of the District Bonds. 1.4416 District Bonds means the District's Sales/Use Tax and Hotel/Motel Tax Bonds, 2003, issued in one or more series, in an aggregate principal amount of not to exceed $77,000,000, authorized by the District Bond Resolution. 1.1-617 District Lodging Tax means the two percent (2 %) excise tax imposed by the District on the sale of or charge made for the furnishing of lodging under the authority of RCW 36.100.040, as such tax has been extended beyond 2017 by District Resolution No. 02 -03 with the approval by a majority of the voters of the District voting thereon at a special election held on May 21, 2002. 1.4718 District Sales & Use Tax means the one -tenth of one percent (0.1 %) sales and use I tax imposed by the District under the authority of RCW 82.14.048, as extended beyond 2017 by District Resolution No. 02 -02 with the approval by a majority of the voters of the District voting thereon at a special election held on May 21, 2002. -5- t'BPOKANEtWOL MIJKICIPADSPOKAl.E COU)TY■S ?.SM LTGO 200.3CNIB906S.JBI3.COUN7Y REDLINE IYTERLOCAL AGREEMF2 T (740 DX 1. -1.819 District State Credit Sales & Use Tax means the thirty -three one thousandths of I one percent (0.033 %) sales and use tax imposed by the District under the authority of RCW 82.14.390 and District Resolution No. 01 -06. 1. -1-920 Fair & Expo Center Project means a Regional Center Project consisting of the construction of improvements to the real property located in the County, commonly known as the Spokane County Fair & Exposition Center, all as more particularly described in Exhibit A, attached and incorporated herein by reference. The Fair &'Expo Center Project constitutes both a "regional center" as that term is used in RCW 36.100.030(1) and 35.57.020 and a "tourism - related facility" as that term is used in RCW 67.28.080. 1.2021 Fair & Expo Center Payments means the scheduled intergovernmental payments required to be paid by the District to the County in respect of the Fair & Expo Center Project pursuant to Section 3.5 of this Agreement as set forth in Exhibit C -1 attached hereto and incorporated herein by this reference, together with all compensatory payments required to be paid by the District to the County pursuant to Section 3.5 of this Agreement. 1.2-1 -22 Intergovernmental Payments means the Fair & Expo Center Payments and the I Mirabeau Point Payments. 1.2223 Intergovernmental Payment Schedule means the schedule attached as Exhibit C, I showing dates and amounts of Intergovernmental Payments required to be made by the District pursuant to this Agreement. 1.2324 Intergovernmental Rate means a variable interest rate equal to the average rate of return on local government funds invested in the County's Local Governmental Investment Pool, calculated monthly in accordance with the County's standard procedures, or, if the County's Local Government Investment Pool ceases to exist, a variable rate equal to the average rate of return on local government funds invested in the Local Government Investment Pool held and administered by the Office of State Treasurer, calculated monthly in accordance with its standard procedures. When used to determine compensatory amounts included in Intergovernmental Payments, interest included in Arena Reimbursement Obligations, or for any other purpose of this Agreement, the Intergovermnental Rate shall be applied on the basis of the actual number of days elapsed during a 365 /366 -day year. 1.2425 Mirabeau Point Project means a Regional Center Project consisting of the construction of improvements to the real property located in the Valley City, commonly known as Mirabeau Point, all as more particularly described in Exhibit A, attached hereto and incorporated herein by reference. The Mirabeau Point Project constitutes a "regional center" as that term is used in RCW 36.100.030(1) and 35.57.020 and a "multi - purpose community center" as that term is used in RCW 35.59.010. 1.2426 Mirabeau Point Payments means the scheduled intergovernmental payments 1 required to be paid by the District to the Valley City in respect of the Mirabeau Point Project pursuant to Section 4.5 of this Agreement as set forth in Exhibit C -2 attached hereto and incorporated herein by this reference, together with all compensatory payments required to be -6- 1 \SPOKANEIWOL21MU:ICIPAL\SPOKANE COu rY..P.51413GO 200101\ UEBMS.IBB•COIINPY REDLINE INrERLOCAL AGRFFME•r (7- I0.03), paid by the District to the Valley City pursuant to Section 4.5 of this Agreement, except that the Regional Tax Revenues constituting Mirabeau Point Payments shall not include any portion of District Lodging Tax revenues. 1.302 NRMSIRs means nationally recognized municipal securities information repositories, as designated by the SEC. 1.2-728 Outstanding means, with respect to the District Bonds, the County Bonds and the Valley City Bonds, any obligation that has not yet been paid, redeemed or legally defeased. 1.4.829 Party means any one of the parties to this Agreement, collectively, the Parties. 1.2930 Project Fund means the Convention Center Project Fund established by the District Bond Resolution. 1.3031 Regional Center Project means any one of the Convention Center Project, the Fair & Expo Center Project and the Mirabeau Point Project (collectively, the Regional Center Projects), each of which constitutes a "regional center" as that term is used in RCW 35.57.020. 1.34-32 Regional Tax Revenues means, collectively, all proceeds of the District State Credit Sales & Use Tax, received on and after March 1, 2003, and all proceeds of the District Lodging Tax and the District Sales & Use Tax received by or available to the District from and after the earlier of (i) January 1, 2018, and (ii) the date on which all indebtedness incurred by the District in connection with the Spokane Veterans Memorial Arena is retired and/or legally defeased. 1.3233 Reserve Fund means the Spokane Public Facilities District Reserve Fund established by District Resolution No. 01 -02. 1.3334 SEC means the United States Securities and Exchange Commission. 1.3435 Spokane Center Development Agreements means, collectively, the Interlocal Cooperation Agreement, Property Transfer Agreement, and Lease, each executed and delivered by The City of Spokane and the District effective , 2003. 1.336 Treasurer means the County Treasurer. 1.3437 Valley City means the City of Spokane Valley, Washington. 1.3735 Valley City Bond Ordinance means the ordinance passed by the Valley City authorizing, among other matters, the issuance and sale of the Valley City Bonds. 1.3539 Valley City Bonds means an issue of Valley City limited tax general obligation bonds authorized by the Valley City Bond Ordinance to be issued in an aggregate principal amount of not to exceed $7,000,000 to finance a portion of the cost of the Mirabeau Point Project. -7- v SPOKANE IWOLitUMCIPALLSP0KANE C0U?TY1293M LTOO 2003c Miaa0QS- JBB.COUNTY REDLINE INTERLOCAL AGREEMENT (7-10.03) DOC SECTION 2 DEVELOPMENT AND FINANCING OF THE CONVENTION CENTER PROJECT 442.1 Development of the Convention Center Project. The District and the City of Spokane have entered into the Spokane Center Development Agreements for the principal purpose of making provision for the design, acquisition, construction, equipping, financing, and operation by the District of the Convention Center Project on a cooperative basis. In accordance with the Spokane Center Development Agreements and this Agreement, the District, on behalf and for the benefit of itself and Spokane, will commence construction of the Convention Center Project on or before January 1, 2004, and thereafter proceed with due diligence to completion of the Convention Center Project. The District, on behalf and for the benefit of itself and Spokane, will be the lead agency with the primary responsibility for the development of the Convention Center Project as a "regional center" (as defined by RCW 35.57.020), as a "multi- purpose community center" (as defined by RCW 35.59.010) and as a "tourism- related facility" (as defined by RCW 67.28.080), and shall finance, acquire, design, construct, own, lease, operate and maintain the Convention Center Project, all subject to the limitations set forth in the Spokane Center Development Agreements and this Agreement. The Convention Center Project shall be developed and have the features substantially as described in Exhibit A and the Spokane Center Development Agreements. 4-22.2 Timeline for Development of Convention Center Project. The District, on behalf and for the benefit of itself and the City of Spokane, intends to commence construction of the Convention Center Project by carrying out the. demolition of certain existing structures, commencement of parking improvements related thereto, or other construction activity prior to December 31, 2003. The Convention Center Project is expected to be completed and placed in service on or about September 1, 2006. The estimated timeline for financing and construction of the Convention Center is set forth in Exhibit B. The dates set forth in Exhibit B are target dates for action by the District. The failure of the District to meet the dates set forth in the timeline for financing and construction of the Convention Center shall have no effect on the other provisions of this Agreement. - 1-42.3 Site Acquisition, Development and Ownership. 1.142.3.1 Pursuant to the Spokane Center Development Agreements, the City of Spokane and the District have agreed to acquire all additional real property necessary to serve as a site for the Convention Center Project, and the City of Spokane has agreed to exercise its eminent domain authority, if necessary, to acquire that additional real property in accordance with the Spokane Center Development Agreements. Title to Convention Center Project will be held by the City of Spokane and the District as provided in the Spokane Center Development Agreements. 2.3.2 The District, on behalf and for the benefit of itself and the City of Spokane, will acquire the approvals necessary and shall take such other actions as may be required to develop the Convention Center Project consistent with the Spokane Center Development Agreements. -8- VS,POKANEI WOL:IMUNICIPALISPOKAN2i COUMTY\S ?.SM I.TCA 2003CIMJLKI3O6SJIIL4COUI.TY REDLINE f7.TERLOCAL ACKEEMENT 47- 10.04 IX)C 2.3.3 The District shall periodically provide reports to thc other Parties on the design, construction and operation of the Convention Center. 4- +42.3.4 The District shall have full and complete control over the development of the Convention Center Project, subject to the terms of the Spokane Center Development Agreements and this Agreement. In addition, the District shall have full and complete control over the operations of the Convention Center Project, subject to the terms of the Spokane Center Development Agreements. 4 -42.4 District Insurance for the Convention Center Project. The District agrees to acquire and maintain insurance in thc form and amounts required by the Spokane Center Development Agreements and otherwise as are consistent with the coverage of comparable Convention Center facilities. - 1_-42.5 Local Matching Contributions for Regional Center Projects. As required by RCW 82.14.390(4), the Parties have provided and will provide funds for the Regional Center Projects from other public or private sources, including but not limited to cash, in -kind contributions, and land donated and used for the siting of the Regional Center Projects, equal to at least 33 percent of the amount collected by the District under the District State Credit Sales & Use Tax (collectively, the "Local Match "). The Local Match includes and is anticipated to include at least the following: (i) proceeds of the voter - approved District Sales & Use Tax, (ii) proceeds of the voter - approved District Lodging Tax, (iii) land, existing improvements and personal property contributed by the City of Spokane for use as the site of the Convention Center Project; and (iv) land contributed by the County and/or the Valley City for use as the site of the Mirabeau Point Project. The City's transfer of the Spokane Center to the District will be accomplished pursuant to the Spokane Center Development Agreements. 142.6 Financing of Convention Center Project. The District shall be solely responsible to finance the Convention Center Project with proceeds of the District Bonds and other legally available funds allocated by the District for that purpose. The District shall have no obligation to provide funds for the Convention Center Project other than as expressly provided by the Spokane Center Development Agreements and this Agreement. The County and the Valley City shall have no obligation to provide funds for the development of the Convention Center Project. In order to enable the District Lodging Tax and District Sales & Use Tax to be used to provide debt service on any and all obligations issued on a parity with the District's Hotel/Motel Tax and Sales/Use Tax Refunding Bonds, Series 2001A (AMT) and Series 2001B (Non- Alv1T), the District shall, in conjunction with the issuance of the District Bonds, at its sole cost and expense, exercise its option to purchase the facilities financed by that certain 1995 Financing Lease Agreement dated as of June 5, 1995, by and between the District and the City of Spokane, thereby enabling the City of Spokane to carry out the defeasance and redemption of its outstanding Leased Revenue Bonds, Series 1995 (Multi- Purpose Arena Project). 4- 142.6.1 The District Bonds shall be issued and sold pursuant to the District Bond Resolution in one or more series in an aggregate principal amount not exceeding 577,000,000, shall be District Series 2003 Bonds; shall be payable from and secured by a pledge of Regional Tax Revenues and other revenues of the District; shall be payable on [June 1] -9- %SPDXANEIWOIYzMuUUCIPA POKANECOUN1YSS951dL1' G© 2u0'! C\\U BBOSS&f BB- COUN (7-10.0» DOC (interest only) and [December 1] (principal and interest) of each year; shall finally mature no later than June 1, 2033; and shall have such other terms as provided in the District Bond Resolution. 1.1.22.6.2 The District may issue refunding bonds at any time in its sole discretion, without the consent of any other Party, for the purpose of refunding its outstanding obligations, including District Bonds. The Parties recognize and agree that the District Bonds will be issued on a parity of lien with the District's Hotel/Motel Tax and Sales/Use Tax Refunding Bonds, Series 2001A (AMT) and Series 2001E (Non -AMT). The District may issue additional parity bonds as long as it complies with the parity bond requirements set forth in [District Resolution No. 01 -02 and] the District Bond Resolution. The District may also, without the consent of any other Party, utilize such interfund loans as it deems necessary and appropriate to carry out the financing of the Regional Center Projects and to make Intergovernmental .Payments. 1.1.32.6.3 The District shall covenant in the District Bond Resolution to maintain the tax exemption for the District Bonds, and shall provide to the other Parties copies of annual financial information and operating data and any material event notices filed by the District with NRMSIRs pursuant to its continuing disclosure undertaking under S13C Rule 15c2- 12 in respect of the District Bonds. 2.6.4 The Parties recognize that Regional Tax Revenues (as defined for the purposes of this Agreement) may not be sufficient in every calendar year to pay in full all of the District's obligations in respect of the cost of acquiring and constructing the Convention Center Project, paying debt service on the District Bonds, making Intergovernmental Payments, and otherwise supporting the Regional Center Projects, but that the District has other available funds that the District will use to meet those obligations. Any use by the District of any of its funds, other than Regional Tax Revenues, for the Regional Center Projects shall create and constitute an Arena Reimbursement Obligation in a like amount that shall be repaid from Regional Tax Revenues in accordance with Section 2.7 of this Agreement. - 1-2.7 Application of Regional Tax Revenues. The District promptly upon their receipt shall deposit all Regional Tax Revenues into its Regional Center Projects Revenue Fund and use and apply those Regional Tax Revenues (and the District directs the Treasurer on behalf of the District to cause the Regional Tax Revenues to be used and applied) only for the following purposes and in the following order of priority: First, to make payments into the Bond Fund as necessary to pay all regularly scheduled payments (including mandatory sinking fund payments) of principal of and interest on the District Bonds as required by the District Bond Resolution and to pay debt service on bonds issued on a parity of lien with the District Bonds; Second, to make payments into the Reserve Fund as necessary to maintain a balance therein equal to the District Bond Reserve Requirement and/or to reimburse the provider of District Bond Reserve Insurance for draws thereon as required by the District Bond Resolution and resolutions authorizing the issuance of parity bonds; 10- VSPOK Ah'EIWOLM1At1CIPAL■SPORANE COUNfY49.$M LTGO 2003MUbn06s -mR- COUNTY REDLINE IN1TRLOCAL AG1U EMENT (7-140300E Third, to pay the Fair 84. Expo Center Payments and the llrlirabeau Point Payments, pari passu in proportion to the respective amounts thereof then due and payable (including shortfall payments and compensatory payments under Sections 3.5 and 4.5); Fourth, to pay Arena Reimbursement Obligations (but not to iay any Arena Operating Loss Reimbursement Obligation); and Fifth, only upon payment in full of all Arena Reimbursement Obligations, twelve ninety - sixths (12196) to the County, seven ninety- sixths (7/96) to the Valley City and seventy -seven ninety - sixths (77/96) to the District. The District may address_ tlrc repayment of the Arena orating LOSS Reimbursement Obligation, if at -all, horn tile seventy - severe ninety- sixths 77196) allocation provided for in the rcvious sentence. Any Regional Tax Revenues distributed under "Fifth," above, shall be used by the County and by the Valley City, respectively, solely for lawful Regional Center Project purposes, consistent with applicable law and with the resolutions of the District imposing the taxes constituting the Regional Tax Revenues. 82.8 Future Convention Center .Project Expansion. The District may at any future time proceed with Development of additions to or subsequent phases of the Convention Center, but none of the other Parties shall be obligated with respect to the .financing of such future improvements. If some or all of the Parties agree to participate in the development of such additions, the respective Parties may enter into an addendum to this Agreement governing the rights and obligations of those Parties with respect to the design, construction and operation of the additional improvements. --l9 ,9 Convention Center Project Owation. The District shall operate the Convention I Center in a businesslike manner and provide a level of service equivalent to or better than the services provided by comparable public facilities in the state. The Convention Center shall be available for use by the general public at rates established by the District- So long as District State Credit Sales & Use Taxes are being collected and applied to the repayment of the Bonds, the District shall operate the Convention Center Project as a "regional center project" as that term is defined in RCW 35- 57.020. SECTION 3 DEVELOPMENT AND FINANCING OF THE F.A.r t & EXPO CENTER PROJECT -11 Sports./',. oLmilumbeirAustvKANE C-043NrY49.9.1 LTGO 2V9}umKi3o6S - FD0. RJIY )LNRral ERLOCALAGREEMF,'F+ (7- Iw03).1Y6C #43.1 Development of the Fair & Expo Center Project. The County, on behalf and for the benefit of the County and the .District, shall be the lead agency with the primary re- sponsibility for the development of the Fair & Expo Center Project as a "regional center" (as defined by RCW 35- 57.020) and as a "tourism- related facility" (as defined by RCW 7- 28.080), and shall Finance, acquire, design, construct, own, operate and maintain the .Fair & Expo Center Project, and otherwise administer its development and operation, for the benefit of and in cooperation with the 'District, all subject to the limitations set forth herein. 443.2 Timeline for Development of Fair & 'Expo Center Projt, The County, on behalf and for the benefit of the County and the District, commenced construction of the Fair & Expo Center Project on or about February 15, 2003. The County therefore represents and warrants to the District that construction of the Fair & Expo Center Project commenced before January 1, 2004. The activity that constituted commencement of construction of the Fair & Expo Center Project was the commencement by the County's contractors of the construction of a new grandstand at the Fair & Expo Center that is presently scheduled for completion on or about September 1, 2003. 4-33.3 Site Acquisition. Development and Ownership of Fair & Expo Center Project. 1- 1- 13.3.1 The County has acquired and now owns all real property necessary to carry out the Fair & Expo Center Project. 3.3.2 The County shall, on behalf of itself and the District, acquire the approvals necessary and shall take such other actions as may be required to enable the site to be suitable for use as a Fair & Expo Center Project. 3.3.3 The County shall provide the District with periodic reports on the design, construction and operation of the Fair & Expo Center Project, at least quarterly during construction and at least annually thereafter. •I443.3.4 The County shall have full and complete control over the development the Fair & Expo Center Project, and shall own and operate thc Fair & Expo Center Project for and on behalf of itself and the District. In addition, the County shall have full and complete control over the operation and management of the Fair & Expo Center, subject to the terms of this Agreement. All of the District's legally cognizable ownership interest in the Fair & Expo Center, if any, shall terminate and revert to the County upon the termination of the District's obligation to make Fair & Expo Center Payments to the County. 1.1.53.15 The District and the County each find that the Fair & Expo Center Project is a viable project construction of which has commenced before January 1, 2004. The County agrees to provide, by and through the Fair & Expo Center Project, services to all the residents of the County, which necessarily includes services to the residents of the other Parties to this_Agreement. 1-43.4 Financing of Fair & Expo Center Project. The County shall issue the County Bonds to finance the Fair & Expo Center Project. The County Bonds shall be payable from and secured by a pledge of the full faith and credit of the County (within the constitutional and statutory tax limitations provided by law without a vote of the electors of thc County); shall be payable on June 1 (interest only) and December 1 (principal and interest) of each year; shall finally mature no later than June 1, [2033]; and shall have such other terms as provided in the County Bond Resolution. The District acknowledges and agrees that, although the County Bonds will be limited tax general obligation bonds pledging the full faith and credit of the County (within the constitutional and statutory tax limitations provided by law without a vote of the electors of the County), the County at its sole option may (but is not required to) apply the proceeds of the Fair & Expo Center Payments to the payment of the County Bonds. The County Bonds and any disclosure documents related to the County Bonds shall contain the following statement (or substantially similar language): "The [County Bonds] are not obligations of the -12- USPG) ANE IWOLMUT9CI PALISPOKANE COUNTY49.3M LTGO 2003MLIBFl■65J1113-COUNTY AEDLFNE rNPNRLOCAL AGREEMENT (7.10.03). DOG Spokane Public Facilities District, the City of Spokane, the City of Spokane Valley, the State of Washington or any other political subdivision of the State of Washington other than the County. All liabilities incurred by the County with respect to the [County Bonds] shall be satisfied exclusively from the tax revenues, credit and other legally available sources of the County and no owner of the [County Bonds] or other person shall have any right of action against or recourse to the Spokane Public Facilities District, the City of Spokane, the City of Spokane Valley, the State of Washington or any other political subdivision of the State of Washington, or any of their respective assets, credit, revenues or services on account of any debts, obligations or liabilities relating to the [County Bonds]." Furthermore, the District acknowledges that its obligation to make the Fair &. Expo Center Payments as required by Section 15 of this Agreement and described in the Intergovernmental Payment Schedule may be material to the offer and sale of the County Bonds, and may be disclosed to potential purchasers and purchasers of those County Bonds. At the County's request, the District will make an appropriate continuing disclosure undertaking in respect of the County Bonds to the same extent as if the District were treated as an "obligated person" (within the meaning of SEC Rule 15c2 -12) in respect of the County Bonds. The County shall covenant in the County Bond Resolution to maintain the tax exemption for the County Bonds, and shall provide to the District copies of annual financial information and operating data and any material event notices filed by the County with NRMSIRs pursuant to its continuing disclosure undertaking under SEC Rule 15c2-12 in respect of the County Bonds. 443.5 Fair & Expo Center Payments. The District shall make Fair & Expo Center Payments to the County in respect of the Fair & Expo Center Project on the payment dates and in the amounts set forth in the Intergovernmental Payment Schedule attached as Exhibit C -1 to this Agreement. The Fair & Expo Center Payments shown on the Intergovernmental Payment Schedule reflect amounts corresponding to expected debt service on the County Bonds. Upon the issuance of the County Bonds, Exhibit C -1 shall be replaced with an adjusted schedule approved by the District, acting reasonably, to ensure, assuming Intergovernmental Payments to the County and the Valley City are used for debt service purposes, that the amounts of the Intergovernmental Payments are compatible with the debt service requirements of all three Parties. The District and the County recognize that the amounts on Exhibit C -1 reflect in some years amounts that are greater than 12/96 of the expected Regional Tax Revenues in those years, and in other years reflect amounts that are less than 12/96 of the expected Regional Tax Revenues; however, the District is willing to allocate more than 12/96 in certain years to accommodate the County in structuring the County Bonds, recognizing that less than 12/96 may be allocated to the County in other years. The County may use and apply the Fair & Expo Center Payments for any purpose in support of the Fair & Expo Center Project, including the design, acquisition, construction, equipping, financing, operating, maintaining, repairing, remodeling, and re- equipping of the Fair & Expo Center Project. The District shall make the Fair & Expo Center Payments solely from Regional Tax Revenues available for that purpose in accordance with the provisions of Section 2.7 of this Agreement. The County and the District recognize and agree that the actual amount of Regional Tax Revenues available to the District to make Fair & Expo Center Payments on any particular date set forth in the Intergovernmental Payment Schedule may differ from the amount required to be paid on that date. So long as other District revenues, together with Regional Tax Revenues (if and to the extent any are required), pledged to the District Bonds and other obligations of the District issued on a parity with the District Bonds are sufficient to pay and secure the District Bonds and such parity obligations in -13- YSPOKAXF.lWOLTIMI UIPA1.1SPOKAN8 COW TY1S9.SM LTOO 2003CCMTDBOSS.J13I1-COUNTY Rff)UNE INTERLOCAL AGREEA1I r (74O.O3) DOC accordance with the District Bond Resolution or other authorizing resolution, the District agrees to allocate and use Regional Tax Revenues to make Fir & Expo Payments when due in an amount equal to the lesser of the amounts shown on the Intergovernmental Payment Schedule or 12.119's o.f the Regional Tax Revenues available to the District on the applicable due date; provided, that any resulting shortfall in 'Regional Tax Revenues available to be allocated and used by the District to fully satisfy debt service requirements of the District Bonds shall be an Arena Reimbursement Obligation. If the District does not have Regional Tax 'Revenues sufficient to pay Fair & Expo Center Payments in full on any date as set forth in the Intergovernmental Payment Schedule, the District shall remain obligated to pay the remaining balance due but not paid on that date (the "Fair Ge. Expo Center Payment shortfall "), which shall be paid to the County on the next scheduled payment date from Regional Tax Revenues available to the District for that purpose in accordance with the provisions of Section 2.7 of this Agreement, plus an additional compensatory payment equal to the amount of interest that the County would have earned if the amount of the Fair & .Expo Center Payment shortfall had been invested in the County's Local Government investment Pool at the Intergovernmental Rate from its originally scheduled payment date until the Fair 8z. Expo Payment shortfall is paid in full. All unpaid Fair & Expo Center Payments shall be paid in full no Later than December 31, 2033, and the District pledges to use all means and resources then legally available to the District to make that payment when due. 43.6 County Insurance for the Fair & Ex o Center Pro`ect, The County agrees to acquire and maintain insurance in form and amounts as are consistent with the coverage of comparable Fair & Expo Center facilities and undertakings related to said facilities as contemplated under this Agreement and to name the District as an additional named insured thereunder. SECTION 4 DEVELOPMENT AND FINANCING OF THE MIRA8EA1 J POINT PROJECT -14- 1'SPOKAN[AVOL ?1i)NICIPAIASMKANE COLi7Cl' 'i 9.SM LTGO 2W103.useo63 1lli3-Cw1INTY WAIVE FMTERL DCAL AGR M5NT ( ).Doc 444. E Development of the Mirabeau Point Project_ The Valley City, on behalf and for the benefit of the Valley City and the District, shall commence construction of the Mirabeau Point .Project before January 1, 2004. The Valley City, on behalf and for the benefit of the Valley City and the District, shall be the lead agency with the primary responsibility for the development of the Miraheau Point Project as a "regional center" (as defined by 1W 35.57.020) and `multi- purpose community center" (as defined by R W 35.59.010), and shall finance, acquire, design, construct, own, operate and maintain the Mirabeau Point Project, and otherwise administer its development and operation, for the benefit of and in cooperation with the District, all subject to the limitations set forth herein. 4 24.2. Timeline for Development of Mirabeau Point Project. The Valley City, on behalf and for the benefit of the Valley City and the District, shall commence construction of the Mirabeau Point .Project before January 1, 2004. The Mirabeau Point Project is expected to be completed and placed in service on or before January 1, 2005. The estimated timeline for financing and construction of the Mirabeau Point Project is set forth in Exhibit B. The Parties acknowledge that the dates set forth in Exhibit B are target dates for action by the Valley City. However the date of commencement of construction is critical to the financing of the •Mirabeau Point Project and achieving the development schedule for the construction of the Mirabeau Point Project. The failure of the Valley City to meet the dates set forth in the timeline for financing and construction of the Mirabcau Point Project shall have no effect on the other provisions of this Agreement, provided that construction of the Mirabeau Point Project commences before January 1, 2004, as evidenced by a certificate executed by the City Manager of the Valley City and the architect for the Mirabeau Point Project delivered to the District stating facts and circumstances clearly demonstrating that such construction has commenced. If the Valley City fails to commence construction of the Mirabeau Point Project before January 1, 2004, the District's obligation to make the Mirabeau Point Payments pursuant to this Agreement shall terminate. 4 -34.3 Site Acquisition, Development and Ownership of Mirabeau Point Project. 1.1.1.4.11 The Valley City is proceeding to acquire from the County all real property necessary to carry out the Mirabeau Point Project, and will have acquired ownership of such real property prior to commencement of constriction of the Mirabeau Point Project. 4.3.2 The Valley City, on behalf and for the benefit of the Valley City and the District, shall acquire the approvals necessary and shall take such other actions as may be required to enable the site to be suitable for use as the Mirabeau Point Project. 4.3.3 The Valley City shall periodically provide reports to the District on the design, construction and operation of the Mirabeau Point Project, at least quarterly during construction and at least annually thereafter. -4- 1-44.3.4 The Valley City shall have full and complete control over the development the Mirabeau Point Project, and shall own and operate the Mirabeau Point Project for and on behalf of itself and the District. The Valley City shall have full and complete control* over the operation and management of the Mirabeau Point Project, subject to the terms of this Agreement. All of the District's legally cognizable ownership interest, if any, in-the Mirabeau Point Project shall terminate and revert to the Valley City upon the termination of the District's obligation to make Mirabeau Point Payments. 1.1.54.3.5 The District and the Valley City each find that the Mirabeau Point Project is a viable project that is likely to commence construction before January 1, 2004. The Valley City agrees that the general public shall have access to Mirabeau Point Project services, which are expected to provide a regional benefit to the residents of the District and the Valley City. 4-44.4 Financing of Mirabeau Point Project. The Valley City shall issue the Valley City Bonds to finance a portion of the cost of the Mirabeau Point Project. The Valley City Bonds shall be payable from and secured by a pledge of the full faith and credit of the Valley City (within the constitutional and statutory tax limitations provided by law without a vote of the electors of the Valley City); shall be payable on June 1 (interest only) and December 1 (principal and interest) of each year; shall finally mature no later than June 1, 2033; and shall have such other terms as provided in the Valley City Bond Ordinance. The District acknowledges and agrees that, although the Valley City Bonds will be limited tax general obligation bonds pledging -15 S1SPOKAXLI IVOL2IMUNICIPAUSPOKANE COU•ryls9,3M LTGO 2003M118EO65- JBB -Cn1MY REDUNE INTER LOCAL AGREEMENT (7.I043).DOC the .full faith and credit of the Valley City (within the constitutional and statutory tax limitations provided by law without a vote of the electors of the Valley City), the Valley City may at its sole option (but is not required to) apply the proceeds of the Mirabeau Point Payments to the payment of the Valley City Bonds- The Valley City Bonds and any disclosure documents related to the Valley City Bonds shall contain the following statement (or substantially similar language): The [Valley City Bonds] are not obligations of the Spokane Public Facilities District, Spokane County, the City of Spokane, the State of Washington or any other political subdivision of the State of Washington other than the City. All liabilities incurred by the City with respect to the [Valley City Bonds] shall be satisfied exclusively from the tax revenues, credit and other legally available sources of the City and no owner of the [Valley City Bonds] or other person shall have any right of action against or recourse to the Spokane Public Facilities District, Spokane County, the City of Spoke, the State of Washington or any other political subdivision of the State of Washington, or any of their respective assets, credit, revenues or services on account of any debts, obligations or ] iabilities relating to the [Valley City Bonds] -" Furthermore, the District acknowledges that its obligation to make the Mirabeau Point Payments as required by Section 4.5 of this Agreement and described in the Intergovernmental Payment Schedule may be material to the offer and sale of the Valley City Bonds, and may be disclosed to potential purchasers and purchasers of those Valley City Bonds. At • the City's request, the District will make an appropriate continuing disclosure undertaking in respect of the Valley City Bonds to the same extent as if the District were treated as an "obligated person" (within the meaning of SEC Rule 15c -12) in respect of the Valley City Bonds. The Valley City shall covenant in the Valley City Bond Resolution to maintain the tax exemption for the Valley City Bonds, and shall provide to the other Parties copies of annual financial information and operating data and any material event notices filed by the Valley City with N1RMSIR.s pursuant to its continuing disclosure undertaking under SEC Rule 15c2 -12 in respect of the Valley City Bonds. 14, Mirabeau Point Payments. The District shall make Mirabeau Point Payments to the Valley City in respect of the Mirabeau Point Project on the payment dates and in the amounts set forth in the Intergovernr ental Payment Schedule attached as Exhibit C-2 to this Agreement. The Mirabeau Point Payments shown on the intergovernmental Payment Schedule reflect amounts corresponding to expected debt service on the Valley City Bonds. Upon the issuance of the Valley City Bonds, Exhibit C -2 shall be replaced with an adjusted schedule approved by the District, acting reasonably, to ensure, assuming Jntergoverninental Payments to the County and the Valley City are used for debt service purposes, that the amounts of the Intergovernmental Payments are compatible with the debt service requirements of all three Parties. The District and the Valley City recognize that the amounts on Exhibit C -2 reflect in some years amounts that are greater than 7/96 of the expected Regional Tax Revenues in those years, and in other years reflect amounts that are less than 7/96 of the expected Re Tax Revenues; however, the District is willing to allocate more than 7/96 in certain years to accommodate the Valley City in structuring the County Bonds, recognizing that less than 7/96 may be allocated to the Valley City in other years. The Valley City may use and apply the Mirabeau Point Payments for any purpose in support of the lvlirabeau Point Project, including the design, acquisition, construction, equipping, financing, operating, maintaining, repairing, remodeling, and rcequipping of the Mirabeau Point .Project. The District shall make the . Mirabeau Point Payments solely from Regional Tax Revenues available for that purpose in accordance with the provisions of Section 2.7 of this Agrecrne.nt. The Valley City and the District recognize and agree that the -16- lLSP014h.`aTsIWOLT.h1UNICIP.a LISPOIA N1 ,COIJr+"CASE1.51 LTCO2033034.11DB: •JUD.COLrNnR }D'.J l} N1 tIOc L..k EMF3YrrT 11 -041OC actual arriount of Regional Tax Revenues available to the District to make Mirabeau Point Payments on any particular date set forth in the intergovernmental Payment Schedule may differ from the amount required to be paid on that date, So long as other District revenues, together with Regional Tax Revenues (if and to the extent any are required), pledged to the District Bonds and other obligations of the District issued on a parity with the District Bonds are sufficient to pay and secure the District Bonds and such parity obligations in accordance with the District Bond Resolution or other authorizing resolution, the District agrees to allocate and use Regional Tax Revenues to make Mirabeau Point Payments when due in an amount equal to the lesser of the amounts shown on the intergovernmental Payment Schedule or 7 /19's of the regional Tax Revenues available to the District on the applicable due date; provided, that any resulting shortfall in Regional Tax Revenues available to be allocated and used by the District to fully satisfy debt service requirements of the District Bonds shall be an Arena Reimbursement Obligation, If the District does not have Regional Tax Revenues sufficient to pay Mirabeau Point Payments in full on any date as set forth in the Intergovernmental Payment Schedule, the .District shall remain obligated to pay the remaining balance due but not paid on that date (the "Mirabeau Point Payment shortfall "), which shall be paid to the Valley City on the next scheduled payment date from Regional Tax revenues available to the District for that purpose in accordance with the provisions of Section 2,7 of this Agreement, plus an additional compensatory payment equal to the amount of interest that the Valley City would have earned if the amount of the Mirabeau Point Payment shortfall had been invested in the County's Local Government Investment 'Pool at the Intergovernmental .Rate from its originally scheduled payment date until the Mirabeau Point Payment shortfall is paid in full. All unpaid Mirabeau Point Payments shall be paid in full no later than December 31, 2033, and the District pledges to use all means and resources then legally available to the District to make that payment when due. 1-.6 Valley City Insurance for the Mirabeau Point Protet. The Valley City agrees to acquire and maintain insurance in form and amounts as are consistent with the coverage of comparable regional center facilities and undertakings related to said facilities as contemplated under this Agreement and to name the District as an additional named insured thereunder. SECTION 5 MISCELLANEOUS 445.1 Administrator of Joint Undertaking. For purposes of RCW 39.34.030(4)(a), the Executive Director of the District shall serve as the administrator responsible for administering the joint and cooperative undertaking among the Parties to this Agreement. There shall be no "joint board" as that term is used in RCW 39.34.0300)(a). X5.2 Supplemental A reements, The Parties agree to complete and execute all supplemental documents necessary or appropriate to fully implement the terms of this Agreement_ X5.3 Effectiveness of Agreement_ This Agreement shall be effective with respect to each Party upon execution by that Party and filing of the executed Agreement with the Spokane County Auditor as requited by the provisions of RCW 39.34.040 This Agreement and shall continue in .full force and effect until such time as all of the District Bonds and other obligations -17- wiPOKAN 3_ iSVOf_ 7.3.{ +10ERAL4SC4KAHE COUNTV69.5M LTco vi 4v.iii - BEr- COLATT"f REDLINE U TtabOCAL.GRLEM] T (7.14.47) .60[ issued or incurred by the District in connection with the development of the Regional Center Projects, the County Bonds and the Valley City Bonds, are fully paid, retired and satisfied. 4=45.4 Assignment. No Party shall assign any of its rights or delegate any of its duties under this Agreement without the express written approval of all other Parties. - 1-55.5 Third Party Beneficiaries. Except as expressly provided by this Agreement, the Parties shall not be obligated or liable by virtue of this Agreement to any third party. The Parties may amend this Agreement by mutual agreement without the consent of any other third party or the holders of the District Bonds, the County Bonds or the Valley City Bonds; provided, however that while the District Bonds are Outstanding, no amendment by the Parties shall impair or diminish the County's limited guaranty of the District Bonds hereunder, and while the County Bonds or the Valley City Bonds are Outstanding, no amendment by the Parties shall impair or diminish the District's obligations to make Intergovernmental Payment hereunder. 4-665.6 Actions Contesting Agreement. 5.6.1 Each Party shall appear and defend any action or legal proceeding brought to determine or contest: (i) the validity of this Agreement; (ii) the legal authority of any Party to undertake the activities contemplated by this Agreement; or (iii) the legal authority to perform any of the Parties' respective obligations under this Agreement. Each party shall be responsible for its own expenses including without limitation legal expenses, in connection with any such proceeding. 5.6.2 If all Parties are not named as parties to the action, the Party named shall give all other Parties prompt notice of the action and provide the all Parties with an opportunity to intervene. Each Party shall bear any costs and expenses taxed by the court against it. 4-5.7 Entire Agreement, Amendments and Waiver. This Agreement contains the entire agreement and understanding of the Parties with respect to the subject matter hereof, and supersedes all prior or contemporaneous oral or written understandings, agreements, promises, or other undertakings by and among the Parties. This Agreement may not be modified or amended, nor any rights thereunder waived, other than by a written instrument executed by all Parties, nor shall any waiver of any right or remedy of any Party be valid unless in writing and signed by such Party. No course of dealing by or among the Parties or any delay in exercising any rights hereunder shall operate as a waiver of any rights of any Party. Nothing herein shall be deemed to amend or supersede, or be deemed amended or superseded by, any provision of any other agreement between the Parties with respect to the Regional Center Projects. 4 -85.8 Governing Law: Venue. This Agreement shall be governed by and construed in accordance with the laws of the State. The venue of any suit or arbitration arising under this Agreement shall be in Spokane County, Washington, and if a suit, in Spokane County Superior Court. -1 8 - CSPOKANEAVOLTIMUNIC IPALISPORANECOI T Y4 9,S MLTGO2003CUA JIIB06S. 3DII. COUNTYREDLINEINTERI .00ALAGREEMENT(7- 10-03►IXX: 4 -:95.9 Captions. The article and section captions used in this Agreement are for convenience only and shall not control and affect the meaning or construction of any of the provisions of this Agreement. - 15.10 Notices. All notices or other communications given hereunder shall be deemed given on: (i) the day such notices or other communications are received when sent by personal delivery; or (ii) the third day following the day on which the same have been mailed by first -class mail, postage prepaid, addressed to the Parties at the addresses set forth below for the Parties, or at such other address as any Party shall from time to time designate by notice in writing to the Parties: COUNTY: DISTRICT: Spokane County Chair of the Board of County Commissioners West 1116 Broadway Spokane, WA 99260 Copy to: Office of the County Prosecuting Attorney Attn: Chief Civil Deputy 1115 W. Broadway Spokane, WA 99260 -0270 FAX: (509) 477 -3672 Spokane Public Facilities District Chair of the Board of Directors 720 West Mallon Avenue Spokane, WA 99201 Copy to: Spokane Public Facilities District Executive Director /General Manager 720 West Mallon Avenue Spokane, WA 99201 FAX: (509) 324 -7050 CITY OF SPOKANE VALLEY: City of Spokane Valley 11707 E. Sprague Avenue, Suite 106 Spokane Valley, WA 99206 Copies to: City of Spokane Valley City Attorney Mr. Stanley Schwartz 422 W. Riverside Drive, Suite 1100 Spokane, WA 99201 City of Spokane Valley City Manager 11707 E. Sprague Avenue, Suite 106 Spokane Valley, WA 99206 -19- v GO.UNTYLS9.5M LTGO 20.3 UB806S- JOB- COUXrY REDLINE INTERLOCAL AGREEMENT (1.I0 - 04DOC Such names and addresses may be changed by written notice pursuant to this provision. 4A-1-5.1 1 Specific Approvals. 4A-1. 5.11.1 Unless specifically otherwise provided for herein, all consents, approvals and other decisions of the County hereunder shall be binding only if made in writing and approved by resolution of the Board of Spokane County Conunissioners. No approval, consent, or decision of the County for purposes of this Agreement shall be effective for purposes of any other agreement or instrument to which the County is a party or beneficiary, or for any regulatory or other purpose. 1.1.25.11.2 Unless specifically otherwise provided for herein, all consents, approvals and other decisions of the District hereunder shall be binding only if made in writing and approved by resolution of the District's Board. No approval, consent, or decision of the District for purposes of this Agreement shall be effective for purposes of any other agreement or instrument to which the District is a party or beneficiary, or for any regulatory or other purpose. 1.1.35.11.3 Unless specifically otherwise provided for herein, all consents, approvals and other decisions of the Valley City hereunder shall be binding only if made in writing and approved by ordinance of the Council of Valley City. No approval, consent, or decision of the Valley City for purposes of this Agreement shall be effective for purposes of any other agreement or instrument to which the Valley City is a party or beneficiary, or for any regulatory or other purpose. .11-2.5. 1 2 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without affecting or invalidating the remainder of this Agreement. 1- 15.13 Counterparts. This Agreement may be executed in counterparts, and each such counterpart shall be deemed to be an original instrument. All such counterparts together will constitute one and the same Agreement. 1- 445.14 Time is of the Essence. It is hereby agreed that time is of the essence in the performance of all covenants and conditions to be kept and perfomred under the terms of this Agreement. -20- USPOKANE IWOLISMUNICIPAI)SPOKANE COUNTY' S9.3M LTGO 20O3CULJ1lBOSS.]EII•COUNTY REDI.INI INTEALOCAI. AGREEMENT (7.I0.03).DOC IN WITNESS WHEREOF, the Parties have executed this Agreement by their duly authorized officers and representatives this /O of July, 2003: COUNTY: SPOKANE COUNTY, WASHINGTON BY THE BOARD OF COMMISSIONERS SPOKANE COUNTY, WASHINGTON John Roskelley, Chair arris, Vicc -Chair M"Kate c aslin, Commissioner ATTEST: a Daniela Erickson, Deputy Clerk of the Board of County Commissioners PkP.so . JUL'4 Ii 2a.0 -21 RSM3KANE1WOLAMUNICIPAL'SPOKANE C)OUNPv $9.5M LTGO zoo3amminnas_mazouNTy REDLI.YE INI'ERLOCAL AG REEMEJ(t ( DOC DISTRICT: SPOKANE COUNTY PUBLIC FACILITIES DISTRICT Bill Williams, Jr., Chair Trish McFarland, Vice -Chair Shaun Cross, Director Rick LaFleur, Director Erik E. Skaggs, Director ATTEST: Kevin J. Twohig, Executive Director -22- VSPOKANE INVOLL1.IUNICIPALZPOKANI COUNTYd9.5M LTOO 200301MJDDO6S4BD- COUNTY REDLINE INTERLOCAL AGREEMENT 17. 1O43).DOC VALLEY CITY: CITY OF SPOKANE VALLEY, WASHINGTON Michael DeVleming, Mayor ATTEST: , City Clerk -23- VSPOKANE 11VOL11A11JN1CIPAL'SPOKANE COUNTY 1 39.5M LTGO 2003CIAU811c S- 1B21•COUNTY REDLINE INrERLOCAI. AGREI'.MENT (7- IDO3).DOC EXHIBIT A REGIONAL CENTER PROJECT DESCRIPTIONS A -1 kspoccAgEnvotzmurriCIPAusPoKANE CouNTYIS9.5.4 UPGO NMY3cti4388065- JBB•COUXIT REDLINE INTERLOCAL AGRJ I MENT (7 10.031.DOC EXHIBIT B TIMELINE FOR FINANCING AND CONSTRUCTION OF THE REGIONAL CENTER PROJECTS B -1 PSPORANEIWOU\MUNICIPAUSPOKANE COtJYPY LTGO20D3C.WI2BOCS4 IYCOUYTY REDLINE INrERLOCAL AGREEMENT 1740 DOC Date 12/01/03 06/01/04 12/01/04 06/01/05 12/01 /05 06/01/06 12/01/06 06/01/07 12/01/07 06/01/08 12/01/08 06/01/09 12/01/09 06/01/10 12/01/10 06 /01 /11 12 /01 /11 06/01/12 12/01/12 06/01/13 12/01/13 06/01/14 12/01/14 06/01/15 12/01/15 06/01/16 12/01 /16 06/01/17 12/01/17 06/01/18 12/01/18 Semiannual Payment EXHIBIT C C -i FAIR & EXPO CENTER PAYMENTS Date 06/01/19 12/01/19 06/01/20 12/01/20 06/01/21 12 /01 /21 06/01/22 12/01/22 06/01/23 12/01/23 06/01/24 12/01/24 06/01/25 12/01/25 06/01/26 12/01/26 06/01 /27 12/01/27 06/01/28 12/01/28 06/01/29 12/01/29 06/01/30 12/01/30 06/01/31 12/01/31 06/01/32 12/01/32 06/01/33 12/01/33 C -1 NSPOKANERYOL24MUNICIPAI1SPOKANE COUNPYNS9.5M LTGO 2001LL UPEO S-IIIO- COUNTY REDLINE It•TfERLOCAL AGREEMENT (7-10-03) ,DOC Semiannual Payment Date C -2 MIRABEAU POINT PAYMENTS Semiannual Payment Date 12/01/03 06/01/19 06/01/04 12/01/19 12/01/04 06/01/20 06/01/05 12/01/20 12/01/05 06/01/21 06/01 /06 12/01/21 12/01/06 06/01/22 06/01/07 12/01/22 12/01/07 06/01/23 06/01/08 12/01/23 12/01/08 06/01/24 06/01/09 12/01/24 12/01/09 06/01/25 06/01/10 • 12/01/25 12/01 /10 06/01/26 06/01/11 12/01/26 12/01/11 06/01/27 06/01/12 12/01/27 12/01/12 06/01/28 06/01/13 12/01/28 12/01/13 06/01/29 06/01/14 12/01/29 12/01 /14 06/01/30 06/01/15 12/01/30 12/01 /15 06/01/31 06/01/16 12/01/31 12/01/16 06/01/32 06/01/17 12/01/32 12/01/17 06/01/33 06/01 /18 12/01 /33 12/01/18 C -2 '.L SPI)KAN6 1tVOL2V4UNICtPALLSPORANE COIJNTY\f9.5M LTG() 200.SC1.WF11S06SJDB- COUrrrY REDLINE IXTERLOCAL AGREEME73f (7.10.03).DOC Semiannual Payment