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2014, 07-08 Regular Meeting AGENDA SPOKANE VALLEY CITY COUNCIL REGULAR MEETING FORMAL FORMAT MEETING Tuesday,July 8,2014 6:00 p.m. Spokane Valley City Hall Council Chambers 11707 E Sprague Avenue Council Requests Please Silence Your Cell Phones During Council Meeting CALL TO ORDER: INVOCATION: Pastor Matthew Larson,Advent Lutheran Church PLEDGE OF ALLEGIANCE: ROLL CALL: APPROVAL OF AGENDA: INTRODUCTION OF SPECIAL GUESTS AND PRESENTATIONS: n/a COMMITTEE,BOARD,LIAISON SUMMARY REPORTS: MAYOR'S REPORT: PUBLIC COMMENTS: This is an opportunity for the public to speak on any subject except those on this agenda as action items. (Action items include public hearings, and those items under NEW BUSINESS. Public Comments will be taken on those items at the time those items are discussed.) When you come to the podium, please state your name and city residence for the record and limit remarks to three minutes. 1. CONSENT AGENDA: Consists of items considered routine which are approved as a group. Any member of Council may ask that an item be removed from the Consent Agenda to be considered separately. Proposed Motion:I move to approve the Consent Agenda. a.Approval of claim vouchers on July 8,2014 Request for Council Action Form,Totaling: $1,703,458.08 b.Approval of Payroll for Pay Period Ending June 30,2014: $437,469.11 c.Approval of June 24, Special Council Meeting Minutes d.Approval of June 24,2014 Regular Formal Council Meeting Minutes NEW BUSINESS: 2.First Reading Proposed Ordinance 14-007,Refunding 2003 Bonds—Mark Calhoun [public comment] 3. Proposed Resolution 14-007,Local Government Investment Pool—Mark Calhoun [public comment] 4.Motion Consideration: Browns Park Master Plan—Mike Stone [public comment] 5.Motion Consideration: Highway Safety Improvement Program Grant—Sean Messner [public comment] PUBLIC COMMENTS: This is an opportunity for the public to speak on any subject except those on this agenda as action items. (Action items include public hearings, and those items under NEW BUSINESS. Public Comments will be taken on those items at the time those items are discussed.)When you come to the podium, please state your name and city residence for the record and limit remarks to three minutes. Council Agenda 07-08-14 Formal Format Meeting Page 1 of 2 ADMINISTRATIVE REPORTS: 6.North Spokane Corridor Project—Eric Guth, and Keith Metcalf of WA. State Dept. of Transportation 7. Spokane Transit Authority Interlocal Agreement for Fiber—Eric Guth 8.McMillan Road—Gabe Gallinger,Erik Lamb 9.Marijuana Regulations Proposed Amendment—Christina Janssen,Erik Lamb 10.Advance Agenda—Mayor Grafos INFORMATION ONLY 11. Transportation Improvement(TIB) Call for Projects 12. Wa. State Dept of Transportation Interlocal,Traffic Operation and Maintenance 13. Parks and Recreation First Quarterly Report 14.Noel Telecommunication Franchise CITY MANAGER COMMENTS ADJOURNMENT General Meeting Schedule (meeting schedule is always subject to change) Regular Council meetings are generally held every Tuesday beginning at 6:00 p.m. The Formal meeting formats are generally held the 2'1 and 4th Tuesdays. Formal meeting have time allocated for general public comments as well as comments after each action item. The Study Session formats(the less formal meeting) are generally held the 1St 3'1 and 5th Tuesdays. Study Session formats DO NOT have time allocated for general public comments; but if action items are included,comments are permitted after those specific action items. NOTICE: Individuals planning to attend the meeting who require special assistance to accommodate physical, hearing, or other impairments, please contact the City Clerk at (509) 921-1000 as soon as possible so that arrangements may be made. Council Agenda 07-08-14 Formal Format Meeting Page 2 of 2 CITY OF SPOKANE VALLEY Request for Council Action Meeting Date: July 8, 2014 Department Director Approval: El Check all that apply: ® consent ❑ old business ❑ new business ❑ public hearing AGENDA ITEM TITLE: Approval of the Following Vouchers: VOUCHER LIST VOUCHER NUMBERS TOTAL AMOUNT _ _ 06/19/2014 6, 4815, 4816, 4818, 4819, 32532 $70,347.96 06/19/2014 32533-32580 $397,221.71 06/26/2014 32581-32619 $137,897.50 06/27/2014 32620-32658 $786,166.58 06/27/2014 5744-5751 $1,190.00 07/02/2014 32659-32663 $9,878.50 07/02/2014 4817,4832-4835; 4848; 32664-32666 $300,755.83 GRAND TOTAL: S1,703,458.08 Explanation of Fund Numbers found on Voucher Lists #001 - General Fund Other Funds 001.011.000.511 City Council 101 —Street Fund 001.013.000.513. City Manager 103 —Paths &Trails 001.013.015.515. Legal 105 —Hotel/Motel Tax 001.016.000. Public Safety 120—CenterPlace Operating Reserve 001,018.013.513. Deputy City Manager 121 —Service Level Stabilization Reserve 001.018.014.514. Finance 122--Winter Weather Reserve 001.018.016.518. Human Resources 123 —Civic Facilities Replacement 001.032.000. Public Works 204—Debt Service 001.058.050.558. Comm.Develop.-Administration 301 —Capital Projects (1st'/4%REET) 001.058.055.558. Comm. Develop.—Develop.Eng. 302—Special Capital Proj (2"d '/4%REET) 001.058.056.558. Community Develop.-Planning 303 --Street Capital Projects 001.058.057.558. Community Develop.-Building 304—Mirabeau Point Project 001.076.000.576. Parks &Rec—Administration 307—Capital Grants 001.076.300.576. Parks &Rec-Maintenance 309—Parks Capital Grants 001.076.301.571. Parks &Rec-Recreation 310—Civic Bldg Capital Projects 001.076.302.576. Parks &Rec-Aquatics 311 —Pavement Preservation 001.076.304.575. Parks &Rec- Senior Center 312—Capital Reserve 001.076.305.571. Parks &Rec-CenterPlace 402--Stormwater Management 001.090.000.511. General Gov't-Council related 403 —Aquifer Protection Area 001.090.000.514. General Gov't-Finance related 501 —Equipment Rental &Replacement 001.090.000.517. General Gov't-Employee supply 502—Risk Management 001.090.000.518. General Gov't-Centralized Services 001.090.000.519. General Gov't-Other Services 001.090.000.540. General Gov't-Transportation 001.090.000.550. General Gov't-Natural & Economic 001.090.000.560. General Gov't-Social Services 001.090.000.594. General Gov't-Capital Outlay 001.090.000.595. General Gov't-Pavement Preservation RECOMMENDED ACTION OR MOTION: Move to approve attached claim vouchers. [Approved as part of the Consent Agenda, or may be removed and discussed separately.] STAFF CONTACT: Mark Calhoun, Finance Director ATTACHMENTS: Voucher Lists vchlist Voucher List Page: 1 0611912014 8:34:50AM Spokane Valley Bank code: apbank Voucher Date Vendor Invoice Fund/Dept Description/Account Amount 6 6/2012014 003256 DISCOVERY BENEFITS INC,HRA PLAN Ben55174 001.231.28.00 HEALTH REIMBURSEMENT ACCOUNT: 500.00 Total: 500.00 4815 5/20/2014 000048 VANTAGE TRANSFER AGENTS,401A PLAN Ben55176 001.231.14.00 401A:PAYMENT 29,852.68 Total: 29,852.68 4816 6/20/2014 000682 EFTPS Ben55178 001.231.11.00 FEDERAL TAXES:PAYMENT 31,477.64 Total: 31,477.64 4818 6/20/2014 000145 VANTAGEPOINT TRANSFER AGENTS,457 PL./ Ben55180 001.231.18.00 457 DEFERRED COMPENSATION:PAY! 6,320.43 Total: 6,320.43 4819 6/20/2014 000162 VANTAGE TRANSFER AGENTS,401A EXEC P1 Ben55182 001.231.14.00 401 EXEC PLAN:PAYMENT 1,127.26 Total: 1,127.26 32532 6/20/2014 002227 IDAHO TAX COMMISSION Ben55172 001.231.50.03 IDAHO STATE TAX BASE: PAYMENT 1,069.95 Total: 1,069.95 6 Vouchers for bank code: apbank Bank total: 70,347.96 6 Vouchers in this report Total vouchers: 70,347.96 Page: 1 vchtist Voucher List Page: 06/19/2014 2:49:58PM Spokane Valley Bank code : apbank Voucher Date Vendor Invoice Fund/Dept Description/Account Amount 32533 6/19/2014 001308 ALLEN, HENRY EXPENSE 001.058.055.558 EXPENSE REIMBURSEMENT 421.15 Total : 421.15 32534 6/19/2014 002206 BARLOW, LORI EXPENSE 001.058.056.558 EXPENSE REIMBURSEMENT 109.76 Total : 109.76 32535 6/19/2014 003090 BIG R STORES 416223 101.042.000.542 FINANCE CHARGE FOR MAY STATI 0.50 Total : 0.50 32536 6/19/2014 003300 CAPITAL ONE COMMERCIAL MAY 2014 001.076.305.575 SUPPLIES: CENTERPLACE, GENEF 469.59 Total : 469.59 32537 6/19/2014 003723 CARROLL,EILEEN J. 45202.0804 303.303.149.595 PORTION OF PARCEL PURCHASEE 500.00 Total : 500.00 32538 6/19/2014 000572 CARTER, CAROL EXPENSE 001.076.305.575 EXPENSE REIMBURSEMENT 48.60 EXPENSE 001.076.305.575 EXPENSE REIMBURSEMENT 141.86 Total : 190.46 32539 6/19/2014 003564 CB&I ENVIRONMENTAL&, INFRASTRUC 819245-R8-00501 001.090.000.513 PROFESSIONAL SERVICES 7,765.87 Total : 7,765.87 32540 6/19/2014 002419 CLARKS TIRES &AUTOMOTIVE 42675 001.076.000.576 06770D: OIL CHANGE 28.71 Total : 28.71 32541 6/19/2014 003720 COMMERCIAL CAPITAL FUNDING GRP CSV REFUND 001.000.000.321 REIMBURSE CSV ENDORSEMENT 13.00 Total : 13.00 32542 6/19/2014 000683 DAVID EVANS&ASSOCIATES 343178 311.000.187.595 0187-TRAFFIC ENGINEERING SEF 4,096.54 Total : 4,096.54 32543 6/19/2014 000734 DEPT OF TRANSPORTATION RE-313-ATB40513110 303.303.155.595 SULLIVAN RD W BRIDGE REPLACE 323.68 Total : 323.68 32544 6/19/2014 000912 DEX MEDIA WEST JUNE 2014 001.076.305.575 ADVERTISING CENTERPLACE 206.55 Total : 206.55 Page: -.9'e-- vchlist Voucher List Page: 3 -2.- 06/1912014 2'06/1912014 2:49:58PM Spokane Valley Bank code : apbank Voucher Date Vendor Invoice Fund/Dept Description/Account Amount 32545 6/19/2014 003724 DIAL, ROY D.AND BEVERLY J. 45202.0917 303.303.149.595 PORTION OF PARCEL PURCHASE 300.00 Total : 300.00 32546 6/19/2014 001447 FREE PRESS PUBLISHING INC 41936 311.000.202.595 LEGAL PUBLICATION 120.00 41978 303.303.155.595 LEGAL PUBLICATION 176.00 41999 303.303.156.595 LEGAL PUBLICATION 176.00 42040 311.000.187.595 LEGAL PUBLICATION 161.60 42074 001.013.000.513 LEGAL PUBLICATION 112.80 42076 001.058.056.558 LEGAL PUBLICATION 105.60 42081 001.013.000.513 LEGAL PUBLICATION 28.90 42082 001.058.056.558 LEGAL PUBLICATION 85.85 42083 001.058.056.558 LEGAL PUBLICATION 64.60 42084 001.058.056.558 LEGAL PUBLICATION 68.00 Total : 1,099.35 32547 6/19/2014 002568 GRANICUS INC 55384 001.011.000.511 BROADCASTING SERVICES-COUP 719.59 Total : 719.59 32548 6/19/2014 000002 H & H BUSINESS SYSTEMS INC. 272558 001.058.050.558 COPIER COSTS 161.38 272559 001.058.050.558 COPIER COSTS 56.57 273145 001.058.057.558 COPIER COSTS 9.82 273146 001.058.057.558 COPIER COSTS 5.36 273544 001,018.014.514 COPIER COSTS 171.41 273545 001.018.014.514 COPIER COSTS 67.15 273546 001.018.016.518 COPIER COSTS 52.64 273547 001.018.016.518 COPIER COSTS 32.57 273552 001.032.000.543 COPIER COSTS 297.39 273553 001.032.000.543 COPIER COSTS 84.18 273554 001.013.000.513 COPIER COSTS 408.53 273555 001.013.000.513 COPIER COSTS 77.77 273558 001.013.015.515 COPIER COSTS 60.76 273559 001.013.015.515 COPIER COSTS 19.91 273568 001.058.057.558 COPIER COSTS 378.08 273569 001.058.057.558 COPIER COSTS 47.40 273574 001.011.000.511 COPIER COSTS 255.77 273575 001.011.000.511 COPIER COSTS 42.55 273612 001.076.000.576 COPIER COSTS 573.51 Page: vchlist Voucher List Page: r "0611912014 2:49:58PM Spokane Valley Bank code: apbank Voucher Date Vendor Invoice Fund/Dept Description/Account Amount 32548 6/19/2014 000002 H& H BUSINESS SYSTEMS INC. (Continued) 273613 001.076.000.576 COPIER COSTS 20.82 273628 001.058.057.558 COPIER COSTS 12.17 Total : 2,835.74 32549 6/1912014 001296 H.D. FOWLER CO INC 3597673 101.042.000.542 SUPPLIES: PW 84.71 3598224 101.042.000.542 SUPPLIES: PW 36.52 Total : 121.23 32550 6/19/2014 003722 HOMESTEAD CONSTRUCTION INC 45202.0807 303.303.149.595 PORTION OF PARCEL PURCHASE[ 300.00 Total : 300.00 32551 6/19/2014 001728 HP FINANCIAL SERVICES CO 600416158 001.090.000.548 SCHEDULE 572CD0E5 PROPERTY 400.60 600416343 001.090.000.548 SCHEDULE 572D81 DD PROPERTY 554.40 600416352 001.090.000.548 SCHEDULE 572DA494 PROPERTY 849.76 600416353 001.090.000.548 SCHEDULE 572DD016 PROPERTY 1,146.04 Total : 2,950.80 32552 6/19/2014 003718 INLAND PUBLICATIONS INC 30904 001.076.301.571 DISTRIBUTION OF IN RACK PUBLI( 400.00 Total : 400.00 32553 6/19/2014 003697 INTEGRA 12061482 001.090.000.586 INTERNET/FIBER INSTALL SCRAP 56,728.46 Total: 56,728.46 32554 6/19/2014 001635 ISS FACILITY EVENT SERVICES 706568 001.076.305.575 EVENT SERVICES @ CENTERPLA( 158.03 719537 001.076.305.575 EVENT SERVICES @ CENTERPLA( 89.55 741105 001.076.305.575 EVENT SERVICES @ CENTERPLA( 294.98 Total : 542.56 32555 6/19/2014 000012 JOURNAL OF BUSINESS INC. INV002911503 303.303.155.595 LEGAL PUBLICATION 360.00 Total : 360.00 32556 6/19/2014 000910 MANTZ, GLORIA EXPENSE 001.058.055.558 EXPENSE REIMBURSEMENT 67.03 Total : 67.03 32557 6/19/2014 002259 MENKE JACKSON BEYER LLP 492 303.303.060.595 PROFESSIONAL SERVICES 835.30 499 001.013.015.515 PROFESSIONAL SERVICES 2,051.00 511 001.013.015.515 PROFESSIONAL SERVICES 37.21 Page: /3 —~ vchlist Vouches List Page: 3! ,-4-- 06/19/2014 4'06/19/2014 2:49:58P1111 Spokane Valley Bank code : apbank Voucher Date Vendor Invoice Fund/Dept Description/Account Amount 32557 6/19/2014 002259 002259 MENKE JACKSON BEYER LLP (Continued) Total : 2,923.51 32558 6/19/2014 000662 NATL BARRICADE&SIGN CO 83508 303.303.181.595 SUPPLIES: CIP 0181 3,016.43 Total : 3,016A3 32559 6/19/2014 000239 NORTHWEST BUSINESS STAMP INC. 92443 001.018.016.518 SLOTTED NAME BADGE 39.68 92454 001.018.016.518 SLOTTED NAME BADGE 16.85 92464 001.018.016.518 SLOTTED NAME BADGE 16.85 Total : 73.38 32560 6/19/2014 000652 OFFICE DEPOT INC. 715427453001 001.032.000.543 SUPPLIES: PW 45.62 715643885001 001.076.000.576 SUPPLIES: PARKS AND REC 63.89 715777595001 001.032.000.543 SUPPLIES: PW 1.78 715777644001 001.032.000.543 SUPPLIES: PW 98.13 Total : 209.42 32561 6/19/2014 003587 PACE, ED EXPENSE 001.011.000.511 EXPENSE REIMBURSEMENT 128.80 Total : 128.80 32562 6/19/2014 002424 PITNEY BOWES GLOBAL 1428301-JN14 001.090.000.518 POSTAGE METER RENTAL 275.00 Total : 275.00 32563 6/19/2014 001860 PLATT ELECTIRCAL SUPPLY E410149 001.076.305.575 SUPPLIES: CP 182.64 E417745 001.076.305.575 SUPPLIES: CP 102.23 E424340 001.076.305.575 CREDIT MEMO RETURNED SUPPL -16.85 Total : 268.02 32564 6/19/2014 001089 POE ASPHALT PAVING INC. 44147 101.042.000.542 2014 STREET AND STORMWATER 262,991.76 Total : 262,991.76 32565 6/19/2014 000415 ROSAUERS FOOD &DRUG CENTER 697251 001.076.301.571 DAY CAMP SUPPLIES: FIR 17.59 Total : 17.59 32566 6/19/2014 003721 S&U PROPERTIES LLC,WASHINGTON, 145164.0565 303.303.149.595 PORTION OF PARCEL PURCHASE[ 1,900.00 Total : 1,900.00 32567 6/19/2014 003225 SEATTLE DAILY JOURNAL, OF COMMER 3288490 303.303.155.595 LEGAL PUBLICATIONS 437.00 Page: vchlist Voucher List Page: 4- ..,-- 06/19/2014 2:49:58PM Spokane Valley Bank code: apbank Voucher Date Vendor Invoice Fund/Dept Description/Account Amount 32567 6/19/2014 003225 003225 SEATTLE DAILY JOURNAL, OF COM (Continued) Total : 437.00 32568 6/19/2014 001892 SKILLINGS CONNOLLY INC 8926 303.303.156.595 RIGHT OF WAY ACQUISITION SERA 2,049.60 Total : 2,049.60 32569 6/19/2014 003726 SPECIALTY ENVIRONMENTAL 11291 IN 303.303.156.595 PROFESSIONAL SERVICES 1,309.84 Total : 1,309.84 32570 6/19/2014 000323 SPOKANE CO UTILITIES JUNE 2014 001.076.302.576 SPOKANE CO SEWER CHRGS:JUl 1,530.30 Total : 1,530.30 32571 6/19/2014 002540 SPOKANE HOUSE OF HOSE INC. 311925 101.000.000.542 CREDIT MEMO SUPPLIES: PW -50.91 372677 101.042.000.542 SUPPLIES: PW 41.84 376859 101.042.000.542 SUPPLIES: PW 30.59 Total : 21.52 32572 6/19/2014 000093 SPOKESMAN-REVIEW 393801 001.013.000.513 ADVERTISING FOR ACCOUNT 423E 3,218.41 395415 001.013.000.513 ADVERTISING ACCOUNT 9013993 I 119.97 Total : 3,338.38 32573 6/19/2014 000065 STAPLES ADVANTAGE 3232948730 001.018.013.513 SUPPLIES: FRONT OFFICE 18.16 Total : 18.16 32574 6/19/2014 003719 SWANSON CONCRETE CSV REFUND 001.000.000.321 REIMBURSE CSV ENDORSEMENT 13.00 Total : 13.00 32575 6/19/2014 000335 TIRE-RAMA 8080029340 001.058.057.558 40208D: OIL CHANGE AND SERVIC 83.40 Total : 83.40 32576 6/19/2014 003725 UNITED STATES POSTAL SERVICE 45211.0409 303.303.149.595 PORTION OF PARCEL PURCHASE[ 2,200.00 Total : 2,200.00 32577 6/19/2014 000100 WABO INC. 28867 001.058.057.558 ANNUAL BUSINESS MEETING-D. F 95.00 Total : 95.00 32578 6/19/2014 000140 WALT'S MAILING SERVICE LTD 41235 311.000.187.595 POSTAGE SERVICE FOR SPRAGUI 725.98 Total : 725.98 Page: vchlist Voucher List Page: 2 „..6'- 06/19/2014 2:49:58PM Spokane Valley Bank code: apbank Voucher Date Vendor Invoice Fund/Dept Description/Account Amount 32579 6/19/2014 000787 WMS AQUATICS 16203 001.076.302.576 PARK ROAD POOL TANK PAINTING 32,066.50 Total : 32,066.50 32580 6/19/2014 001885 ZAYO GROUP LLC MAY2014 001.090.000.518 HIGH SPEED INTERNET 569.14 MAY 2014 B 101.042.000.542 DARK FIBER LEASE 409.41 Total : 978.55 48 Vouchers for bank code : apbank Bank total : 397,221.71 48 Vouchers in this report Total vouchers: 397,221.71 I,the undersigned,do certify under penalty of perjury, that the materials have been furnished,the services rendered, or the labor performed as described herein and that the claim is just,due and an unpaid obligation against the City of Spokane Valley,and that I am authorized to authenticate and certify said claim. Finance Director Date Council member reviewed: Mayor Date Council Member Date Page: rB� vchlist Voucher List Page: Z 06/26/2014 10:10:47AM Spokane Valley Bank code: apbank Voucher Date Vendor Invoice FundlDept Description/Account Amount 32581 6/26/2014 000921 ATO Z RENTAL&SALES INC 169774-1 001.076.305.575 NAPKIN RENTAL FOR CP 32.61 Total : 32.61 32582 6/26/2014 003705 AILANA IMAGES INC 152 001.076.305.575 GOOGLE BUSINESS"SEE INSIDE" 975.00 Total : 975.00 32583 6/26/2014 001081 ALSCO LSP01471844 00t016.000.521 FLOOR MAT SERVICE AT PRECINC 20.39 LSP01477676 001.016.000.521 FLOOR MAT SERVICE AT PRECINC 20.39 Total : 40.78 32584 6/26/2014 000334 ARGUS JANITORIAL LLC INV010365 001.016.000.521 PRECINCT JANITORIAL SERVICES 2,386.87 Total : 2,386.87 32585 6/26/2014 000030 AVISTA 410069444 101.042.000.542 UTILITIES: PW MASTER AVISTA 25,317.63 June 2014 001.076.300.576 UTILITIES: PARKS MASTER AVISTA 8,549.47 Total : 33,867.10 32586 6/26/2014 001026 BIG BROTHERS-BIG SISTERS 001-2014 001.090.000.560 2014 OUTSIDE AGENCY SOC SER, 1,500.00 Total : 1,500.00 32587 6/26/2014 000918 BLUE RIBBON LINEN SUPPLY INC 9545655 001.076.305.575 LINEN SERVICE AND SUPPLY ATC 153.64 9547631 001.076.305.575 LINEN SERVICE AND SUPPLY AT C 212.69 9549602 001.076.305.575 LINEN SERVICE AND SUPPLY AT C 195.82 S0038694 001.076.305.575 LINEN SERVICE AND SUPPLY AT C 20.63 S0082565 001.076.305.575 LINEN SERVICE AND SUPPLY AT C 129.07 S0082669 001.076.305.575 LINEN SERVICE AND SUPPLY AT C 82.50 S0082698 001.076.305.575 LINEN SERVICE AND SUPPLY AT C 20.63 Total : 814.98 32588 6/26/2014 003461 BUMPERS BOWLING LLC Check 62228 001.076.301.571 SUMMER DAY CAMP FIELD TRIP 6/ 847.86 Total : 847.86 32589 6/26/2014 003609 EVERGREEN SAFETY COUNCIL 2014-2015 001.018.016.518 MEMBERSHIP DUES 299.00 Total : 299.00 32590 6/26/2014 001911 GLOVER MANSION&, RED ROCK CATEF CP1279 001.076.305.575 EVENT SERVICES AT CENTERPLA' 30.00 Page: vchlist Voucher List Page: --1-"" 0612612014 10:10:47AM Spokane Valley Bank code : apbank Voucher Date Vendor Invoice Fund/Dept Description/Account Amount 32590 6/26/2014 001911 001911 GLOVER MANSION&, RED ROCK CI (Continued) Total : 30.00 32591 6/26/2014 000741 HONEY BUCKETS 1-926621 00t076.300.576 HONEY BUCKET RENTAL: PARKS 208.00 1-939865 00t076.300.576 HONEY BUCKET RENTAL: PARKS 158.00 Total : 366.00 32592 6/26/2014 002607 HUB SPORTS CENTER 2014 105.000.000.557 2014 LODGING TAX GRANT REIMB 6,000.00 3676 001.076.301.571 FIRST AID CLASS FOR RECREATIC 495.00 Total : 6,495.00 32593 6/26/2014 000388 IRVIN WATER DIST.#6 May 2014 101.042.000.542 UTILITIES: PW 142.50 Total : 142.50 32594 6/26/2014 001635 ISS FACILITY EVENT SERVICES 749904 001.076.305.575 EVENT SERVICES AT CENTERPLAc 179.10 750559 001.076.305.575 EVENT SERVICES AT CENTERPLAc 215.97 751492 001.076.305.575 EVENT SERVICES AT CENTERPLAi 94.82 Total : 489.89 32595 6/26/2014 000265 JACKSON, MIKE Expenses 001.013.000.513 EXPENSE REIMBURSEMENT 23.00 Total : 23.00 32596 6/26/2014 003367 KIMMEL ATHLETIC SUPPLY CO. INC 0329889 001.076.301.571 CAMPER AND STAFF SHIRTS FOR 1,666.72 Total : 1,666.72 32597 6/26/2014 001944 LANCER LTD 0446032 001.076.305.575 TOTE BAGS FOR CENTERPLACE 1,485.69 Total : 1,485.69 32598 6/26/2014 000252 LOWE'S BUSINESS ACCOUNT June 2014 001.076.300.576 OPERATING SUPPLIES:PARKS, CF 318.34 Total : 318.34 32599 6/26/2014 001130 MPLC 503903695 001.076.305.575 LICENSE FOR MOTION PICTURE 554.98 Total : 554.98 32600 6/26/2014 001832 MT HOOD SOLUTIONS 990678 001.076.305.575 CLEANING SUPPLIES FOR CENTEI 1,353.37 Total : 1,353.37 32601 6/26/2014 001035 NDM TECHNOLOGIES INC 5905 001.076.305.575 WORK ON FLAT SCREEN AT CP 494.59 Page: vchlist Voucher List Page: /G ..Z---- 06/26/2014 ..a06/26/2014 10:10:47AM Spokane Valley Bank code: apbank Voucher Date Vendor Invoice Fund/Dept Description/Account Amount 32601 6/26/2014 001035 001035 NDM TECHNOLOGIES INC (Continued) Total : 494.59 32602 6/26/2014 000193 NORTHWEST CHRISTIAN SCHOOL INC July 2014 001.090.000.518 CITY HALL RENT 34,000.00 Total : 34,000.00 32603 6/26/2014 000652 OFFICE DEPOT INC. 1686977868 001.013.000.513 SUPPLIES: COUNCIL WORKSHOP 19.83 1687532482 001.018.016.518 SUPPLIES: HR 7.60 1688953218 001.011.000.511 SUPPLIES: COUNCIL WORKSHOP 29.39 Total : 56.82 32604 6/26/2014 001860 PLATT ELECTIRCAL SUPPLY E490116 001.076.305.575 SUPPLIES FOR CENTERPLACE 21.10 Total : 21.10 32605 6/26/2014 000119 PLESE PRINTING 1330055374 001.076.302.576 SWIMMING LESSON REGISTRATIC 467.57 Total : 467.57 32606 6/26/2014 000019 PURRFECT LOGOS INC. 33441 309.000.203.594 PUBLIC HEARING BANNER 138.05 33467 001.076.000.576 POLO SIRTS FOR CENTERPLACE 50.83 33468 001.076.305.575 POLO SHIRTS FOR CENTERPLACE 76.63 Total : 265.51 32607 6/26/2014 000415 ROSAUERS FOOD&DRUG CENTER 04-56072 001.076.301.571 DAY CAMP SUPPLIES 152.75 Total : 152.75 32608 6/26/2014 000405 SPOKANE VALLEY PARTNERS June 2014 001.090.000.560 2014 SOC SER GRANT REIMBURSI 17,916.58 Total : 17,916.58 32609 6/26/2014 001083 STANDARD PLBG HEATING CONTROLS 52052 001.016.000.521 MAY 2014: MONTHLY MAINTENANC 587.80 Total : 587.80 32610 6/26/2014 001895 TAYLOR ENGINEERING INC #1 - Project 14-032 001.076.000.576 PROFESSIONAL SERVICES 2,100.00 Total : 2,100.00 32611 6/26/2014 001472 TESTAMERICA LABORATORIES 59009365 001.076.300.576 TC/PC ANALYSIS:PARKS 27.00 59009374 001.076.300.576 TC/PC ANALYSIS: PARKS 27.00 59009376 001.076.300.576 TC/PC ANALYSIS: PARKS 108.00 Total : 162.00 Page: vchlist Voucher List Page: / 06/26/2014 10:10:47AM Spokane Valley Bank code: apbank Voucher Date Vendor Invoice Fund/Dept Description/Account Amount 32612 6/26/2014 002092 THOMPSON, CHRIS Expenses 001.018.013.513 EXPENSE REIMBURSEMENT 12.26 Total : 12.26 32613 6/26/2014 000723 US HEALTH WORKS 0547823-WA 001.018.016.518 PHYSICAL FOR NEW HIRE 160.00 Total : 160.00 32614 6/26/2014 000295 VALLEYFEST 1049 001.076.301.571 HEALTHY KIDS DAY OBSTACLE CC 92.44 Total : 92.44 32615 6/26/2014 000167 VERA WATER& POWER May 2014 101.042.000.542 UTILITIES: MAY 2014 3,068.73 Total: 3,068.73 32616 6/26/2014 003175 VISIT SPOKANE 6080 105.000.000.557 2014 LODGING TAX GRANT REIMB 24,137.11 Total : 24,137.11 32617 6/26/2014 000413 WEST COAST CASH REGISTER 68612 001076.302.576 CASH REGISTER SERVICE AND RE 161.91 68633 001.076.302.576 CASH REGISTER SERVICE AND RE 97.83 Total : 259.74 32618 6/26/2014 000347 WORLEY, STEVE Expenses 001.032.000.543 EXPENSE REIMBURSEMENT 5.00 Total : 5.00 32619 6/26/2014 003128 YWCA OF SPOKANE C11232516/C11244364 001.090.000.560 2014 SOC SER GRANT REIMBURSI 247.81 Total : 247.81 39 Vouchers for bank code: apbank Bank total : 137,897.50 39 Vouchers in this report Total vouchers: 137,897.50 Page: vchlist Voucher List Page:/2 4------ 06/27/2014 06/27/2014 1:08:11PM Spokane Valley Bank code: apbank Voucher Date Vendor Invoice Fund/Dept Description/Account Amount 32620 6/27/2014 003078 ALLWEST TESTING& ENGINEERING 74160 311.000.180.595 MATERIALS TESTING FOR 14-033 2,005.00 Total : 2,005.00 32621 6/27/2014 003076 AMSDEN, ERICA EXPENSE 001.032.000.543 EXPENSE REIMBURSMENT 23.52 Total : 23.52 32622 6/27/2014 000030 AVISTA 589355632 403.000.173.594 CONTRIBUTION IN AID OF CONST 7,834.80 Total : 7,834.80 32623 6/27/2014 002206 BARLOW, LORI 2ND PICTURE 001.018.016.518 "PICTURE IT"WELLNESS CAMPAIC 15.00 Total : 15.00 32624 6/27/2014 001816 BENTHIN&ASSOCIATES 2161 311.000.179.595 0179-SURVEY SVCS 2,300.00 Total : 2,300.00 32625 6/27/2014 003510 BIG SKY DEVELOPMENT INC PAY APP 4 402.223.40.00 RETAINAGE RELEASE FOR CONTF 15,173.72 Total : 15,173.72 32626 6/27/2014 003577 CATHERINE LINDNER, DUSTIN NETTING CIP 0156 303.303.156.595 RENTAL SUPPLIMENT ASSISTANCE 12,516.00 Total : 12,516.00 32627 6/2712014 000734 DEPT OF TRANSPORTATION RE-313-ATB40610123 303.303.156.595 MANSFIELD AVE CONNECTION 107.70 Total : 107.70 32628 6/27/2014 001926 FARR, SARAH EXPENSE 001.018.014.514 EXPENSE REIMBURSEMENT 61.60 Total : 61.60 32629 6/27/2014 001447 FREE PRESS PUBLISHING INC 42077 303.000.196.595 LEGAL PUBLICATION 112.00 42109 001.013.000.513 LEGAL PUBLICATION 68.15 42116 001.013.000.513 LEGAL PUBLICATION 34.85 42117 001.013.000.513 LEGAL PUBLICATION 39.95 Total: 254.95 32630 6/27/2014 002520 HUSKY INTERNATIONAL TRUCKS 102634 101.000.000.542 SUPPLIES: PW 361.27 103238 101.000.000.542 SUPPLIES: PW 102.42 • 103243 101.000.000.542 SUPPLIES:PW 51.21 103933 101.000.000.542 SUPPLIES: PW 392.96 Page: vchlist Voucher List Page: / 3 -2-- 06/27/2014 06127/2014 1:08:11PM Spokane Valley Bank code: apbank Voucher Date Vendor Invoice Fund/Dept DescriptionlAccount Amount 32630 6/27/2014 002520 HUSKY INTERNATIONAL TRUCKS (Continued) 103936 101.000.000.542 SUPPLIES: PW 76.84 CM103238 101.000.000.542 CREDIT MEMO SUPPLIES: PW -51.21 CM96978 101.000.000.542 CREDIT MEMO SUPPLIES: PW -258.27 Total : 675.22 32631 6/27/2014 000161 IIMC 21848 001.013.000.513 2015 MUNICIPAL CLERKS'C. KOUI 85.00 8688 001.013.000.513 2015 MUNICIPAL CLERKS'C. BAINE 185.00 Total : 270.00 32632 6/27/2014 000313 INLAND ASPHALT COMPANY INC. PAY APP 1 311.000.179.595 0179-ARGONNE RD&SPRAGUE: 242,919.68 Total : 242,919.68 32633 6/27/2014 000265 JACKSON, MIKE JUNE 2014 001.013.000.513 AUTO ALLOWANCE 300.00 Total : 300.00 32634 6/27/2014 002466 KENWORTH SALES COMPANY 120782 101.000.000.542 SUPPLIES: PW 133.82 120812 101.000.000.542 SUPPLIES: PW 15.15 120958 101.000.000.542 CREDIT MEMO SUPPLIES: PW -4.00 Total : 144.97 32635 6/27/2014 001104 MCCAIN INC. INV0175553 101.042.204.595 0204-SIGNAL EQUIPMENT 2,150.09 INV0176641 101.042.204.595 0204-SIGNAL EQUIPMENT 1,052.22 Total : 3,202.31 32636 6/27/2014 002203 NAPAAUTO PARTS MAY2014 101.000.000.542 SUPPLIES: PW 64.12 Total : 64.12 32637 6/27/2014 001295 NORTH CODE ENFORCERS INV041814 001.058.057.558 EGRESS TRAINING-HAPPENY, GU 190.00 Total : 190.00 32638 6/27/2014 003730 NORTHERN LIGHTS PAINTING CO CSV ENDORCEMENT 001.000.000.321 CSV ENDORCEMENT REFUND 6.50 Total : 6.50 32639 6/27/2014 000239 NORTHWEST BUSINESS STAMP INC. 92520 001.018.016.518 SLOTTED NAME BADGES 28.26 Total : 28.26 32640 6/27/2014 000307 OFFICE OF THE STATE TREASURER MAY 2014 001.016.000.586 STATE REMITTANCE 46,458.20 Page: vchlst Voucher List Page: /7 06(27/2014 1:08:11 PM Spokane Valley Dank code : apbank Voucher Date Vendor Invoice Fund/Dept Description/Account Amount 32640 6/27/2014 000307 000307 OFFICE OF THE STATE TREASUREF (Continued) Total : 46,458.20 32641 6/27/2014 000881 OXARC R274753 101.042.000.542 CYLINDER RENTAL FOR PUBLIC VI 93.85 Total : 93.85 32642 6/27/2014 000675 RAMAX PRINTING&AWARDS 25598 001.058.057.558 WALL HOLDERS 64.68 25722 001.018.014.514 NAME PLATES 29.35 Total : 94.03 32643 6/27/2014 000709 SENSKE LAWN&TREE CARE INC. 6136149 101.042.000.542 2014 EMERGENCY TRAFFIC CONT 169.57 Total : 169.57 32644 6/27/2014 003583 SHACKELFORD, CAREY CEP 0156 303.303.156.595 RENTAL SUPPLEMENT VOUCHER, 16,422.00 Total : 16,422.00 32645 6/27/2014 000172 SPOKANE CO ENGINEERS CEP 0155 303.303.155.595 RECORDING FEE:TERMINATION L 74.00 Total : 74.00 32646 6/27/2014 000308 SPOKANE CO PROSECUTING ATTY MAY 2014 001.016.000.586 CRIME VICTIMS COMPENSATION F 697.53 Total : 697.53 32647 6/27/2014 000001 SPOKANE CO TREASURER 110100039 303.303.181.595 ENGINEERING AND ROADS INVOIC 47,930.03 51502164 001.016.000.523 HOUSING INVOICE MAY 2014 122,049.00 CFDA#20.601 001.016.000.521 TARGET ZERO TEAM 3,436.85 CFDA#20.602 001.016.000.521 SEATBELT PATROLS FOR 5/19-6/11 1,646.70 Total : 175,062.58 32648 6/27/2014 002540 SPOKANE HOUSE OF HOSE INC. 373879 101.000.000.542 SUPPLIES: PW 40.04 Total : 40.04 32649 6/27/2014 000862 SPOKANE ROCK PRODUCTS INC. PAY APP 3 311.000.180.595 0180-CARNAHAN, INDIANA, SPRA 251,540.01 Total : 251,540.01 32650 6/27/2014 001875 STRATA INCORPORATED SP140141-[N 403.000.173.594 MATERIALS TESTING 1,886.25 Total : 1,886.25 32651 6/27/2014 002185 URS CORPORATION 5909572 001.058.158.558 PROFESSIONAL SERVICES 1,510.05 Page: whilst Voucher List Page: /5--r4----- 06/27/2014 1:08:11 PM Spokane Valley Bank code : apbank Voucher Date Vendor Invoice Fund/Dept Description/Account Amount 32651 6/27/2014 002185 002185 URS CORPORATION (Continued) Total : 1,510.05 32652 6/27/2014 002188 VALLEY BEST-WAY BLDG SUPPLY 613903 001.032.000.543 SUPPLIES: PW 31.09 Total : 31.09 32653 6/27/2014 003206 VAN NESS FELDMAN LLP 111989 001.013.015.515 PROFESSIONAL SERVICES 3,021.72 Total : 3,021.72 32654 6/27/2014 000087 VERIZON WIRELESS 9727097137 001.016.000.521 AIR CARD FOR POLICE CHIEF 40.05 Total: 40.05 32655 6/27/2014 000100 WABO INC. 28899 001.018.016.518 JOB POSTING ADVERTISEMENT 50.00 Total : 50.00 32656 6/27/2014 000140 WALT'S MAILING SERVICE LTD 41548 311.000.186.595 POSTAGE SERVICES FOR ADAMS 219.26 Total : 219.26 32657 6/27/2014 003729 WATERSTOP INC CSV ENDORCEMENT 001.000.000.321 CSV ENDORCEMENT REFUND 13.00 Total : 13.00 32658 6/27/2014 003728 WEDA 6527 001.058.056.558 2014 ECONOMIC DEVASSOC M. B, 650.00 Total : 650.00 39 Vouchers for bank code: apbank Bank total : 786,166.58 39 Vouchers in this report Total vouchers : 786,166.58 Page: vchlist Voucher List Page:46 ,1"--- 06/27/2014 2:21:06P1411 Spokane Valley Bank code: pk-ref Voucher Date Vendor Invoice Fund/Dept Description/Account Amount 5744 6/27/2014 003733 ALLBEE, KIMBERLY PARKS REFUND 001.237.10.99 DAMAGE DEPOSIT DISCOVERY PL 52.00 Total : 52.00 5745 6/27/2014 003624 DEHN,SHELLY PARKS REFUND 001.237.10.99 SUMMER CAMP REFUND 286.00 Total : 286.00 5746 6/27/2014 003060 HELBLING,JUN PARKS REFUND 001.237.10.99 DAMAGE DEPOSIT VALLEY MISSIC 52.00 Total : 52.00 5747 6/27/2014 003731 KVINGE,TERENE PARKS REFUND 001.237.10.99 SUMMER DAY CAMP REFUND 325.00 Total : 325.00 5748 6/27/2014 003732 MADSEN, KATHERINE PARKS REFUND 001.237.10.99 SUMMER CAMP REFUND 109.00 Total : 109.00 5749 6/27/2014 003734 MOORE, SHAUN PARKS REFUND 001.237.10.99 DAMAGE DEPOSIT FOR MIRABEAI 52.00 Total : 52.00 5750 6/27/2014 003735 RESER, SUNNY PARKS REFUND 001.237.10.99 SUMMER CAMP REFUND 104.00 Total : 104.00 5751 6/27/2014 003066 SPOKANE DANCE PARKS REFUND 001.237.10.99 DAMAGE DEPOSIT GREAT ROOM 210.00 Total : 210.00 8 Vouchers for bank code: pk-ref Bank total: 1,190.00 8 Vouchers in this report Total vouchers : 1,190.00 Page: vchlist Voucher List Page:/2 —1- 07/0212014 8:15:08AM Spokane Valley Bank code : apbank Voucher Date Vendor Invoice FundlDept Description/Account Amount 32659 7/2/2014 001606 BANNER BANK 2199 MAY 2014 001.011.000.511 NATIONAL LEAGUE OF CITIES 1,825.00 2199 MAY2014 001.011.000.511 ALASKA AIRLINES 1,790.00 2199 MAY 2014 001.011.000.511 GREATER SPOKANE VALLEY CHAD 48.00 Total : 3,663.00 32660 7/2/2014 001606 BANNER BANK 2321 MAY 2014 001.013.000.513 GO AIRPORT SHUTTLE 33.00 2321 MAY 2014 001.013.000.513 HILTON HOTELS 1,411.60 Total : 1,444.60 32661 7/2/2014 001606 BANNER BANK 2207 MAY 2014 001.058.056.558 BROWN PAPER TICKETS 72.23 2207 MAY 2014 001.058.050.558 GREATER SPOKANE VALLEY CHAD 25.00 2207 MAY 2014 001.058.055.558 GREAT WOLF LODGE 26118 2207 MAY 2014 001.058.055.558 PRICELINECOM 1,093.25 2207 MAY 2014 001.058.050.558 SHERATON HOTEL 1,243.97 2207 MAY 2014 001.058.057.558 BEN WEESE&ASSOCIATES 1,170.00 2207 MAY 2014 001.058.050.558 BANNER BANK 31.04 Total : 3,897.27 32662 7/2/2014 001606 BANNER BANK 2784 MAY2014 001.076.305.575 ORIENTAL TRADING COMPANY 110.74 2784 MAY 2014 001.076.305.575 AIRPORT LIMOUSINE PLUS 184.00 2784 MAY 2014 001.076.305.575 GREATER SPOKANE VALLEY CHAP 25.00 2784 MAY 2014 001.016.000.521 GTS INTERIOR SUPPLY 173.37 2784 MAY 2014 001.076.301.571 WAYFAIR SUPPLY 66.16 2784 MAY 2014 001.076.302.576 123RF_COM 20.00 2784 MAY 2014 001.076.300.576 UNITED AIRLINES 25.00 2784 MAY 2014 001.076.305.575 WALMART 7.15 2784 MAY 2014 001.076.305.575 CELEBRATE EXPRESS 46.83 2784 MAY 2014 001.076.305.575 ORIENTAL TRADING CO 46.83 2784 MAY 2014 001.076.305.575 ORIENTAL TRADING COMPANY 80.75 2784 MAY 2014 001.076.302.576 BANNER BANK 0.16 Total : 785.99 32663 7/2/2014 001606 BANNER BANK 7511 MAY 2014 101.042.000.542 ROSAUERS FOOD& DRUG CENTE 32.96 7511 MAY 2014 001.018.013.513 ALLLIED FIRE&SECURITY 19.68 7511 MAY 2014 001.018.013.513 VALLEYFEST 35.00 Page: vchlist Voucher List Page: / 07102/2014 8:15:08AM Spokane Valley Bank code: apbank Voucher Date Vendor Invoice Fund/Dept Description/Account Amount 32663 712/2014 001606 001606 BANNER BANK (Continued) Total : 87.64 5 Vouchers for bank code : apbank Bank total : 9,878.50 5 Vouchers in this report Total vouchers : 9,878.50 I,the undersigned,do certify under penalty of perjury, that the materials have been furnished,the services rendered,or the labor performed as described herein and that the claim is just,due and an unpaid obligation against the City of Spokane Valley,and that I am authorized to authenticate and certify said claim. Finance Director Date Council member reviewed: Mayor Date Council Member Date Page: -�2 vchlist Voucher List Page: / 07/0212014 10:48:58AM Spokane Valley Bank code: apbank Voucher Date Vendor Invoice Fund/Dept DescriptionlAccount Amount 4817 7/3/2014 000165 DEPT OF RETIREMENT SYSTEMS Ben55431 001.231.15.00 PERS: PAYMENT 73,663.08 Total: 73,663.08 4832 7/3/2014 000048 VANTAGE TRANSFER AGENTS,401A PLAN Ben55433 001.231.14.00 401A: PAYMENT 31,224.92 Total: 31,224.92 4833 7/3/2014 000682 EFTPS Ben55435 001.231.11.00 FEDERAL TAXES: PAYMENT 35,460.71 Total: 35,460.71 4834 7/3/2014 000145 VANTAGEPOINT TRANSFER AGENTS,457 FL/ Ben55437 001.231.18.00 457 DEFERRED COMPENSATION: PAYI 6,371.38 Total: 6,371.38 4835 7/3/2014 000162 VANTAGE TRANSFER AGENTS,401A EXEC PL Ben55439 001.231.14.00 401 EXEC PLAN: PAYMENT 1,127.26 Total: 1,127.26 4848 7/3/2014 000682 EFTPS Ben55445 001.231.11.00 FEDERAL TAXES: PAYMENT 964.82 Total: 964.82 32664 7/3/2014 000120 AWC Ben55427 311.231.16.00 HEALTH PLANS: PAYMENT 112,993.33 Ben55441 001.231.16.00 HEALTH PLANS(COUNCIL): PAYMENT 10,197.09 Total: 123,190.42 32665 7/3/2014 000164 LABOR&INDUSTRIES Ben55425 001.231.17.00 LABOR&INDUSTRIES: PAYMENT 26.031.43 Ben55443 001.231.17.00 LABOR&INDUSTRIES: PAYMENT 231.35 Total: 26,262.78 32666 7/3/2014 000699 WA COUNCIL CO/CITY EMPLOYEES Ben55429 001.231.21.00 UNION DUES: PAYMENT 2,490.46 Total: 2,490.46 9 Vouchers for bank code: apbank Bank total: 300,755.83 9 Vouchers in this report Total vouchers: 300,755.83 Page: CITY OF SPOKANE VALLEY Request for Council Action Meeting Date: 07-08-2014 Department Director Approval : ❑ Item: Check all that apply: ® consent ❑ old business ❑ new business ❑ public hearing ❑ information ❑ admin. report ❑ pending legislation AGENDA ITEM TITLE: Payroll for Period Ending June 30, 2014 GOVERNING LEGISLATION: PREVIOUS COUNCIL ACTION TAKEN: BACKGROUND: OPTIONS: Budget/Financial impacts: Employees Council Total Gross: $ 273,446.24 $ 5,475.00 $278,921.24 Benefits: $ 149,336.70 $ 9,211.17 $158,547.87 Total payroll $ 422,782.94 $ 14,686.17 $437,469.11 RECOMMENDED ACTION OR MOTION: Move to Approve above payroll. [Approved as part of the Consent Agenda, or may be removed and discussed separately.] STAFF CONTACT: Raba Nimri DRAFT MINUTES City of Spokane Valley City Council Executive Session Tuesday,June 24,2014 Attendance: Councilmembers: Staff: Dean Grafos, Mayor Mike Jackson,City Manager Arne Woodard,Deputy Mayor Cary Driskell, City Attorney Bill Bates,Councilmember Chuck Hafner, Councilmember Rod Higgins, Councilmember Ed Pace,Councilmember Ben Wick, Councilmember Mayor Grafos called the meeting to order at 5:00 p.m. ROLL CALL: City Clerk Bainbridge called the roll; all Councilmembers were present. EXECUTIVE SESSION: It was moved by Deputy Mayor Woodard, seconded and unanimously agreed to adjourn into executive session for approximately sixty minutes to discuss potential litigation and that no action will be taken upon return to open session. [RCW 42.30.110(1)(i))J. Council adjourned into executive session at 5:01 p.m. At 5:46 p.m., Mayor Grafos declared Council out of executive session, at which time it was moved by Deputy Mayor Woodard, seconded and unanimously agreed to adjourn. Dean Grafos,Mayor ATTEST: Christine Bainbridge,City Clerk Council Minutes:06-24-2014 Page 1 of 1 Approved by Council: DRAFT MINUTES City of Spokane Valley City Council Regular Meeting Formal Meeting Format Tuesday,June 24, 2014 Mayor Grafos called the meeting to order at 6:00 p.m. Attendance: City Staff: Dean Grafos,Mayor Mike Jackson,City Manager Arne Woodard,Deputy Mayor Cary Driskell, City Attorney Bill Bates, Councilmember Mark Calhoun,Finance Director Chuck Hafner, Councilmember Erik Lamb,Deputy City Attorney Rod Higgins, Councilmember John Hohman, Community Development Dir. Ed Pace, Councilmember Eric Guth,Public Works Director Ben Wick,Councilmember Mike Stone,Parks&Rec Director Sean Messner, Senior Traffic Engineer Carolbelle Branch,Public Information Officer Chris Bainbridge,City Clerk INVOCATION: In the absence of a pastor,Mayor Grafos asked for a few moments of silence. PLEDGE OF ALLEGIANCE: Council, Staff,and audience rose for the Pledge of Allegiance. ROLL CALL: City Clerk Bainbridge called the roll; all Councilmembers were present. APPROVAL OF AGENDA: It was moved by Deputy Mayor Woodard, seconded and unanimously agreed to approve the amended agenda. INTRODUCTION OF SPECIAL GUESTS AND PRESENTATIONS: n/a COMMITTEE,BOARD,LIAISON SUMMARY REPORTS: Councilmember Hafner: said he attended the AWC (Association of Washington Cities) conference workshops on various topics such as communication and finance. Councilmember Pace: reported that he attended an STA Special Board meeting on their "moving forward" plan; went to the AWC Conference and mentioned that some cities have a "council/buddy" program with high school students paired with Councilmembers as the student works toward fulfilling some of their government credits; went to the SCRAPS Leash Cutting as well as the Honor Flight fundraiser and car show; and attended a neighborhood watch meeting. Councilmember Higgins: said he also attended the AWC Conference. Councilmember Bates: said this was his first year to attend an AWC Conference and said they had many good workshops and appreciated the contacts he made throughout the conference; said he and Councilmember Hafner attended a SCOPE Board of Directors meeting and learned that approximately twenty-five to thirty people want to start another SCOPE station. Councilmember Wick: explained that as a member on the SRTC (Spokane Regional Transportation Council), he participated in a bus tour and spent a couple hours driving through our city and identifying some of our projects connected with our funding requests, and said he talked about the Pines Underpass and other projects, including Bridging the Valley; said in reference to budget issues, that he heard from people in a "Leadership Think Tank" who encourage elected officials to interact with legislators to give them the message that the State can't keep taking away funding, and said cities were encouraged to keep legislator scorecards to keep track of how funding issues are being voted upon; said he was part of the Minutes Regular Council Meeting 06-24--2014 Page 1 of 6 Approved by Council: DRAFT Center of Quality Communities Scholarship Award and helped select a student who lives in Liberty Lake and attends Central Valley High School, as this year's recipient; he noted Spokane Valley was awarded a Well-City Award in recognition of our city's staff taking on the physical fitness challenge, and said part of that award includes a 2% rebate on the benefits package, which saves about $25,000 annually, and in connection with wellness, said he did a 1.5 mile run prior to the conference; he said an ad hoc committee was created to focus on rail movements throughout the state and they met for the first time to examine that transportation system. Deputy Mayor Woodard: said he also went to the AWC Conference, and since there were no mobile workshops in Spokane Valley, he made his own by getting some people together in his car and giving them a tour of Spokane Valley and Liberty Lake; said he attended the SCRAPS Leash Cutting and commented on how beautiful that building is; as a member of the Housing and Development Committee, said he heard a report on projects which were voted on in January and February, and that it appears we will have funding for the three or four additional multi-family housing projects throughout the County, and that one of those projects is located on 4th and Appleway, and he mentioned that over the last twenty years,that Committee has distributed about$89 million into housing and homelessness. MAYOR'S REPORT: Mayor Grafos said he went to the AWC Conference, and the SCRAPS Leash Cutting and said we are fortunate to have such a beautiful facility as well as the numerous volunteers who give of their time and energy to make that facility a success. PUBLIC COMMENTS: Mayor Grafos invited public comments. Mr. Mike King of Spokane Valley, said that not too long ago, Council approved an amendment to the Use Matrix for professional office buildings with multi-family zoning, and said that it appears that professions such as CPA, other legal professions, and dental and medical businesses were not included and he requested Council review that issue.Mr.Jackson said staff will check into that and report to Council. 1. Administrative Report: Mark Calhoun,Erik Lamb Limited Tax General Obligation (LTGO)Bonds, 2003 Refunding Per his June 24, 2014 Request for Council Action form,Finance Director Calhoun explained the proposal to refund the 2003 Limited Tax General Obligation Bonds,which he said is similar to refinancing a home when interest rates drop; he spoke about the bonds which were initially issued in 2003; talked about market rates for new bonds, and explained the savings we could experience in this transactions; he said the money saved would mean we could use more REET funds to put toward other construction projects; he said the process will culminate with Council considering an ordinance adoption, and that figures can change daily based on what happens in the market. Mr. Calhoun then introduced Mr. David Trageser, with D.A. Davidson & Co. Underwriter; Ms. Angela Trout, Bond Counsel; and Ms. Lindsay Sovde, financial advisor with the company Piper Jaffray. Mr. Trageser explained some of the highlights on his handout, including the schedule on page 1, sources and uses of funds on page 2, prior debt service shown on page 3, CenterPlace's portion shown on page 4, and the City's portion on page 5, and said the rates are about 2% lower now. Ms. Sovde said that her role is to work as the City's financial advisor to look out for the City's best interest throughout this transaction, and review all the documents and on the day of pricing; and said she would be working with Mr. Trageser,who will help us get the lowest rates possible on the bond sale. Ms. Trout said she her role is to prepare the ordinance and other bond documents and provide an opinion as to the validity of the bonds, and she encouraged Council to read the materials and provide any comment or questions. Mr. Jackson noted that the first reading of the ordinance is scheduled for July 8, the second reading is scheduled for July 15, and that Council will also have opportunities at those meetings to comment and/or ask questions. Council thanked Mr. Trageser, Ms. Sovde and Ms. Trout for coming to tonight's Council meeting. Minutes Regular Council Meeting 06-24--2014 Page 2 of 6 Approved by Council: DRAFT 2.PUBLIC HEARING: Browns Park Proposed Master Plan—Mike Stone Mayor Grafos opened the public hearing at 6:42 p.m. and invited Mr. Stone to the podium. After Mr. Stone's PowerPoint presentation giving some of the highlights of the proposed plan, Mayor Grafos invited public comment. 1. Ms. Meredith Coupland, Spokane Valley: spoke in favor of the plan; said she is a volleyball enthusiast and connected with the Regional Volleyball Association; said they are a non-profit organization and part of their plan is to grow within their geographic boundaries, said volleyball is growing, as last year there were 90 participants and this year over 450; said they want the neighborhood to join them and having more courts would allow for more people to participate; said they have to abide by regulations and would like the neighborhood to support them; said they are excited about the planned park improvements. 2. Ms. Danette Garcia, Spokane Valley: said she is concerned with the cost of the improvements as well as the maintenance cost including restroom maintenance and asked how it would be financed; voiced concerns about security and people loitering in the park and parking lots; said she has seen loitering even during daylight hours; said she was unclear if the courts and facility would be open to the public; parking and traffic was also a concern and she said that Pines and 32nd is a traffic hazard and more parking across the street would be another problem. 3. Ms. Lindsay Walter, Medical Lake: is also connected with the Regional Volleyball Association; and shared information about people signing the petition to support the proposed additions; said expansion is a great idea and improving and adding courts would be beneficial and it all would be available for the public's use as well,not just the use of those associated with the Volleyball Association. 4. Mr. Jeff Schlect, Ponderosa Neighborhood: spoke in support of the plan and encouraged its swift adoption; spoke about his children who compete competitively; said it is a wonderful experience but there's not a lot of available space; said the sport is good for all ages; that in past events, about 40% of those participating came a significant distance, which means it would be an economical benefit to the community. 5. Mr. Wade Benson: said he is the head Volleyball Coach at Eastern Washington University and he spoke in favor of the plan; said that sand volleyball has become a spectator sport and also has a large effect in the college realm; spoke of scholarship possibilities for participants; and said they would be looking to rent space at Browns Park for their events; adding that a lot of money could be made in just having people come here overnight for these events. 6. Ms. Kawal Chester, Spokane Valley: said she has children who participate in the sport and that it is a wonderful sport; kids frequently use the area for pick-up games; that the use of outdoor courts is very economical compared with the cost of indoor courts; and said it would be nice to have the facility. 7. Ms. Seanna Bodholt, Spokane Valley: said she is a volleyball mom and supports the plan; sand her daughter has been participating in Wade Benson's program and some of the tournaments have had to turn kids away due to lack of space; said this is an amazingly growing sport; there are only four courts and they are in use most evenings. 8. Mr. Kyle Twohig: said he is the adult program coordinator for volleyball; that he and his friends have worked to have the courts they have today, and they also work to maintain them; said the first day when they strung up the nets, some of the local neighbors offered to help and play, and said that was encouraging to have happen; said the first two years they didn't have to turn people away, but now that the juniors have showed up, there are about 80 people trying to sign up to play; said they need numerous courts to run an event and the limiting factor is needing more than single courts in one place. 9. Ms. Chaunte Nevers, Spokane Valley: said she has a few concerns, mostly traffic and safety issues; said there are a lot of inexperienced teen drivers and a lot of teens who walk across the street to get to the park; said she attended the March meeting and appreciates that there will be separated areas; said they have their homeowners association meetings at the park so it needs multiple uses; she also questioned the financial aspect and asked if players would be required to pay fees to use the sand courts; said she would like to see funding options or plans, feels this is a great opportunity for a lot of people; and she wants to make sure everyone will be able to use the park. Minutes Regular Council Meeting 06-24--2014 Page 3 of 6 Approved by Council: DRAFT 10. Ms. Shirley McKinney, Spokane Valley: said she lives three houses away; that she also went to the March meeting and there were some negative comments at that time, such as traffic issues; said no one addressed that it will eliminate the baseball diamond which is used by a lot of people during the summer; and again said that no one addressed funding at the March meeting. 11. Mr. Tyler Davis, Spokane: spoke in favor of the plan and read his prepared letter explaining his personal experience with volleyball; said this is a social activity and the expansion of the park would likely provide that opportunity for thousands of people. There were no further public comments. During Council discussion, Deputy Mayor Woodard said he feels this is needed,but the question remains whether Browns Park is the right place; Councilmember Hafner mentioned that every generation has a park use need, and that he is not opposed to the expansion, but wants to make sure we have parks for the general public as well, and said he is aware of the traffic and safety issues. Councilmember Pace said he feels this would be a favorable outcome for everyone. Councilmember Wick said that we must have a master plan in order to be considered for grants, and he mentioned the previous Lodging Tax Advisory Committee allocation to the Volleyball Association and said that process could be a future funding potential. Councilmember Bates thanked everyone for attending tonight and giving Council an idea of some of the concerns; said this is a tremendous concept and need, acknowledged that there are traffic issues; said there is an obligation to keep the park as a city park,mentioned there is no baseball diamond there, but said there are other issues to consider such as fmancing and maintenance. Mayor Grafos also thanked the public for coming tonight; said he is undecided; that it is a great concept, but he too questioned if that park is the right location, as well as acknowledged there are other issues to consider. Mayor Grafos closed the public hearing at 7:35 p.m., and called for a ten-minute recess. The meeting reconvened at 7:45 p.m. 3. CONSENT AGENDA: Consists of items considered routine which are approved as a group. Any member of Council may ask that an item be removed from the Consent Agenda to be considered separately. Proposed Motion:I move to approve the Consent Agenda. a. Approval of claim vouchers on June 24, 2014 Request for Council Action Form, Totaling: $1,080,496.18 b.Approval of Payroll for Pay Period Ending June 15,2014: $300,441.58 c.Approval of June 3,2014 Study Session Council Meeting Minutes d.Approval of June 10,2014 Regular Formal Council Meeting Minutes It was moved by Deputy Mayor Woodard, seconded and unanimously agreed to approve the Consent Agenda. NEW BUSINESS: 4. Resolution 14-005 Amending 2014 Transportation Improvement Plan—Eric Guth It was moved by Deputy Mayor Woodard and seconded to approve Resolution No. 14-005 adopting the Amended 2014 TIP as presented. After Mr. Guth gave a brief overview of the proposed changes,and said that there have been no changes since Council previously reviewed the amendment,Mayor Grafos invited public comment. No comments were offered. Vote by Acclamation: In Favor: Unanimous. Opposed: None. Motion carried. 5. Resolution 14-006 Adopting 2015-2020 Six Year Transportation Improvement Plan—Eric Guth It was moved by Deputy Mayor Woodard and seconded to approve Resolution No. 14-006 adopting the 2015-2020 Six-Year TIP as presented. After Mr. Guth gave a brief overview and said that there have been no changes since Council previously reviewed the Plan,Mayor Grafos invited public comment. No comments were offered. Vote by Acclamation:In Favor: Unanimous. Opposed:None. Motion carried. Minutes Regular Council Meeting 06-24--2014 Page 4 of 6 Approved by Council: DRAFT 6.Motion Consideration: Bid Award Sullivan Road West Bridge Replacement Eric Guth Previously removed from the agenda 7.Motion Consideration: Bid Award Sprague Resurfacing,Vista to Herald—Eric Guth It was moved by Deputy Mayor Woodard and seconded to award the Sprague Street Preservation Project, CIP #0187 to Spokane Rock Products in the amount of$962,566.49, and to authorize the City Manager to finalize and execute the construction contract. Public Works Director Guth explained that the June 20 bid opening had four bidders,and that Spokane Rock Products was the lowest responsible bidder, and that the engineer's estimate was over one million dollars. Mayor Grafos invited public comment;no comments were offered. Vote by Acclamation:In Favor: Unanimous. Opposed:None. Motion carried 8.Motion Consideration: Bid Award 8th Ave Reconstruct;McKinnon to Fancher—Eric Guth It was moved by Deputy Mayor Woodard and seconded to aware the 8th Avenue Reconstruction- McKinnon Road to Fancher Road Project to the lowest responsible bidder, Spokane Rock Products, in the amount of$231,865.51, and authorize the City Manager to finalize and execute the construction contract. Public Works Director Guth explained that the June 20 bid opening had four bidders, all within budget and competitive with each other, but that Spokane Rock Products was the lowest responsible bidder. Mayor Grafos invited public comment; no comments were offered. Vote by Acclamation: In Favor: Unanimous Opposed:None.Motion carried 9.Motion Consideration: Mayoral Appointment of Planning Commissioner—Mayor Grafos It was moved by Deputy Mayor Woodard and seconded to confirm the Mayor's recommended appointment of Sam Wood to the Planning Commission to complete the unexpired term of the recently vacated position, which term expires December 31, 2016. Mayor Grafos said the decision was difficult as all applicants were qualified and had college degrees. Mayor Grafos invited public comment. Ms. Heather Graham said she was one of the applicants, and that her comments are not "sour grapes" but an observation that this appointment leaves only one female on the Planning Commission, that the demographics have not changed, and she asked Council to keep in mind that women seem to be a bit under-represented on the Commission, and that she looks forward to hearing Mr. Wood's comments as she attends further meetings. There were no further public comments. Vote by Acclamation: In Favor: Unanimous. Opposed:None. Motion carried. PUBLIC COMMENTS: Mayor Grafos invited general public comments;no comments were offered. ADMINISTRATIVE REPORTS: 10. Highway Safety Improvement Grant Program— Sean Messner As noted on his Request for Council Action form, Mr. Messner explained that the Washington State Department of Transportation (WSDOT) issued a 2014 Call for Projects for allocation of Federal Highway Safety Improvement Program (HSIP) funds for safety projects and as he explained the program per his PowerPoint presentation; said applications are due to WSDOT by July 16, 2014, and asked Council to let him know if they have any other safety proposals. There was some discussion about other possible projects, such as the intersection of 27th and Pines,but Mr. Messner said that although that is an awkward intersection, the crash data is surprisingly low. The question came up about the pylons on 16th near Pines Road and whether they had an impact on lessening accidents, and Mr. Messner said he would research that issue. The subject of changing Broadway to one less lane was briefly discussed, and Mr. Messner mentioned that he has seen significant congestion at Broadway and Pines, and at Broadway and Park,which he said is a function of how that signal operates. 11. Local Government Investment Pool—Mark Calhoun As noted in his June 24, 2014 Request for Council Action form, Mr. Calhoun explained the process of participating in the State Treasurer's Local Government Investment Pool (LGIP), and of the need for an Minutes Regular Council Meeting 06-24--2014 Page 5 of 6 Approved by Council: DRAFT updated resolution,with language crafted by that office, that authorizes our continued participation in the LGIP. Council concurred to move this forward to consider approval of the Resolution at the next meeting. 12.Advance Agenda—Mayor Grafos none Councilmember Pace asked about adding something concerning enabling small business startups, like the BBQ place on Pines. City Manager Jackson said staff is aware of that issue and it is resolved; he also mentioned that the Chamber of Commerce is actively involved in providing assistance to businesses as they start-up; he said we must adhere to City Code and State Regulations as well; that there are always variables with each new business enterprise; that staff watches for matters that could be resolved by a change to our Code, and if any such issues are discovered, they are brought forward to Council. Deputy Mayor Woodard added that a good time to address these might be as Council starts to go through the overall review of the Comprehensive Plan, and Mr.Jackson agreed. INFORMATION ONLY The (13) Department Monthly Reports, and (14) McMillan Road items were for information only and were not reported or discussed. CITY MANAGER COMMENTS Mr. Jackson asked Council's preference concerning Browns Park Master Plan and whether they preferred a motion or an administrative report at the next meeting. After brief discussion,it was determined to keep the scheduled motion for the next meeting, and that additional discussion on the topic could be held at that time. It was moved by Deputy Mayor Woodard, seconded and unanimously agreed to adjourn. The meeting adjourned at 8:47 p.m. ATTEST: Dean Grafos,Mayor Christine Bainbridge, City Clerk Minutes Regular Council Meeting 06-24--2014 Page 6 of 6 Approved by Council: CITY OF SPOKANE VALLEY Request for Council Action Meeting Date: July 8, 2014 Department Director Approval: Check all that apply: [' consent ❑ old business ® new business [' public hearing [' information ❑ admin. report [' pending legislation [' executive session AGENDA ITEM TITLE: First Reading Ordinance #14-007 Refunding of 2003 Limited Tax General Obligation (LTGO) Bonds. GOVERNING LEGISLATION: RCW 35A.40, 35.37, 39.36, 39.46, and 39.53; Variety of Federal tax and securities laws. PREVIOUS COUNCIL ACTION TAKEN: An Administrative Report on this topic was delivered to Council on June 24, 2014. No action was taken at that time. BACKGROUND: In 2003 the City of Spokane Valley issued $9,430,000 of LTGO Bonds (the "2003 LTGO Bonds") for the purpose of constructing CenterPlace and making necessary road and street improvements surrounding the facility. • The road and street improvements portion of the project accounted for $2,430,000 of bonds issued at rates ranging from 2% to 5% that are to be repaid in 20 annual installments running from 2004 to 2023. The City makes the annual payment on this portion of the bond issue with first and second quarter percent real estate excise tax (REET) revenues. The outstanding balance on this portion of the bond issue is currently $1,445,000. • The CenterPlace portion of the project accounted for $7,000,000 of bonds issued at rates ranging from 2% to 5% that are to be repaid in 30 annual installments running from 2004 to 2033. The City makes the annual payment on this portion of the bond issue with distributions we receive semi-annually from the Spokane Public Facilities District. The outstanding balance on this portion of the bond issue is currently $5,990,000. Since the issuance of the 2003 LTGO Bonds, market rates for new bond issues have fluctuated up and down but we now find that rates are very favorable for a refunding. A bond refunding is where the City will issue new LTGO refunding bonds at a lower interest rate than the 2003 LTGO Bonds. The proceeds of the new LTGO refunding bonds (the "2014 LTGO Refunding Bonds") will be used to retire the 2003 LTGO Bonds, thereby saving the City the difference in interest costs. The concept here is similar to refinancing a home mortgage to take advantage of lower interest rates and reduce a monthly payment. It is important to keep in mind that the interest rate a municipality pays on a bond issue is determined not by the issuer, but by the market, and that market conditions are always changing. Consequently, a computation of potential savings that are run based upon market conditions that exist today will yield different results tomorrow. With that said, if the present value of savings on a new bond issue exceeds 5%, then most municipalities will move towards a refunding. P:IClerklAgendaPackets for Weblagendapacket 2014, 07-081Item 2 RCA Bond refunding.docx Based upon preliminary figures run on June 18, 2014 by our bond underwriter D.A. Davidson, the savings from a refunding would be as follows: • For the road and street portion of the 2003 LTGO Bonds there would be a total savings in payments of $190,115.69 that would be realized over the 9 year period 2014 through 2023, which discounts back to a present value savings of $170,779.82 or 11.81% (substantially greater than the minimum 5% savings we are looking for). The savings would not benefit the General Fund, but would instead reduce the amount of REET revenues dedicated to bond payments by approximately $21,000 per year which would in turn allow for more REET money to be used for street related capital projects. • For the CenterPlace portion of the 2003 LTGO Bonds there would be a total savings in payments of $1,242,220.66 that would be realized over the 19 year period 2014 through 2033, which discounts back to a present value savings of $979,279.93 or 16.35% (again, substantially greater than the minimum 5% savings we are looking for). The savings would not benefit the General Fund but would instead reduce the amount of money the Spokane PFD gives the City each year to make this portion of the bond payment. • Collectively, there would be a total savings in payments of $1,432,336.35 that would be realized over the 19 year period 2014 through 2033 (approximately $75,000 per year), which discounts back to a present value savings of$1,150,059.76 or 15.47%. To effect a refunding, the City Council will consider and adopt a bond ordinance authorizing the refunding of the 2003 LTGO Bonds through the issuance, sale, and delivery of the 2014 LTGO Refunding Bonds, and further authorize the City Manager (or his designee) to execute all other necessary documents to issue the 2014 LTGO Refunding Bonds, provided that certain financial parameters are met. In this case, the Bond Ordinance provides that City will not issue the refunding bonds until there is at least a net 5% savings over the 2003 LTGO Bonds. Other documents include, but are not limited to the "official statement" (which can be thought of as the prospectus) that details the 2014 LTGO Refunding Bonds to potential investors, the bond purchase contract wherein the City will agree to sell the 2014 LTGO Refunding Bonds to the underwriter, and other necessary securities and tax documents. When issuing municipal bonds the expertise of a number of individuals is required including: 1. Bond Counsel, who render an opinion on the validity of the bond offering, the security for the offering, and whether and to what extent interest on the bonds is exempt from income and other taxation. The opinion of bond counsel provides assurance both to issuers and to investors who purchase the bonds that all legal and tax requirements relevant to the matters covered by the opinion are met. Bond counsel also prepare the bond ordinance. The City has selected Orrick, Herrington & Sutcliffe LLP as bond counsel. 2. The Bond Underwriter, who markets the City's bonds to potential investors as well as provide ideas and suggestions with respect to structure and timing of the bond issue. The Bond Underwriter ultimately purchases the City's bonds on behalf of the investors. In this refunding the underwriter is also preparing the preliminary and final official statements. Since the Bond Underwriter is purchasing the City's bonds, it does not have a fiduciary duty to the City. The City has selected D.A. Davidson as underwriter. 3. The Financial Advisor, who under Federal securities laws has a required fiduciary duty to the City. The Financial Advisor provides ongoing advice with respect to the structure and timing of the bond issue, reviews documents for financial aspects (such as parameters), and assists the City with receiving a rating for the bonds. The Financial Advisor works with the Bond Underwriter on the day of pricing to ensure that the rates proposed by the Underwriter are fair and reasonable given the bond market. The City has selected Piper Jaffray as the financial advisor. P:IClerklAgendaPackets for Weblagendapacket 2014, 07-081Item 2 RCA Bond refunding.docx All of the participants are only paid in the event the 2014 LTGO Refunding Bonds are issued and are paid out of the proceeds of the 2014 LTGO Refunding Bonds, so the costs for such services do not impact the City's General Fund. OPTIONS: Council could choose to leave the 2003 LTGO Bonds in place or take advantage of the anticipated future reductions in annual bond repayments through the approval of Ordinance #14-007 and the official statement. RECOMMENDED ACTION OR MOTION: Move to advance Ordinance #14-007 to a second reading. BUDGET/FINANCIAL IMPACTS: Costs related to the bond issue would be folded into the 2014 LTGO Refunding Bond issue amount and consequently the City would incur no out-of- pocket expenses. Issue related expenses would include: • Underwriter fee (D.A. Davidson) • Bond counsel (Orrick, Herrington & Suttcliffe) • Bond rating (Moody's) • Financial advisor (Piper Jaffray) • Official Statement printing and distribution. Beginning with the December 1, 2014 bond payment and in all subsequent years, the City would experience reduced bond payments and the Spokane PFD would be able to reduce their annual distribution to the City for their portion of the CenterPlace bonds accordingly. STAFF CONTACT: Mark Calhoun and Erik Lamb ATTACHMENTS: • Bond Ordinance • Escrow Deposit Agreement • Continuing Disclosure Certificate • Preliminary Official Statement P:IClerklAgendaPackets for Weblagendapacket 2014, 07-081Item 2 RCA Bond refunding.docx ORDINANCE NO. 14-007 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SPOKANE VALLEY, OF SPOKANE COUNTY, WASHINGTON, AUTHORIZING THE SALE, ISSUANCE AND DELIVERY OF NOT TO EXCEED $7,900,000 AGGREGATE PRINCIPAL AMOUNT OF ITS CITY OF SPOKANE VALLEY, WASHINGTON, LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS, 2014, TO CURRENTLY REFUND ALL OR A PORTION OF THE CITY'S LIMITED TAX GENERAL OBLIGATION BONDS, 2003; PROVIDING FOR PAYMENT OF THE PRINCIPAL AND INTEREST ON THE BONDS BY ANNUAL LEVIES OF TAXES; FIXING THE DATE, FORM, CERTAIN TERMS AND COVENANTS OF SUCH 2014 BONDS; DELEGATING TO THE AUTHORIZED REPRESENTATIVE OF THE CITY THE AUTHORITY TO ESTABLISH CERTAIN TERMS OF THE BONDS WITHIN THE PARAMETERS OF THIS ORDINANCE; ADOPTING A REFUNDING PLAN; AUTHORIZING THE EXECUTION OF AN ESCROW AGREEMENT; AUTHORIZING THE PURCHASE OF CERTAIN GOVERNMENT OBLIGATIONS; PROVIDING FOR THE CALL, PAYMENT AND REDEMPTION OF THE REFUNDED BONDS; PROVIDING FOR THE REGISTRATION AND AUTHENTICATION OF THE BONDS; DESIGNATING A BOND REGISTRAR; CREATING AND ADOPTING CERTAIN FUNDS AND ACCOUNTS AND PROVIDING FOR DEPOSITS THEREIN; COVENANTING TO COMPLY WITH CERTAIN FEDERAL TAX AND SECURITIES LAWS; AND PROVIDING FOR OTHER MATTERS PROPERLY RELATING THERETO. CITY OF SPOKANE VALLEY Spokane County,Washington LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS,2014 PRINCIPAL AMOUNT OF NOT TO EXCEED $7,900,000 BE IT ORDAINED by the Mayor and the Members of the City Council of the City of Spokane Valley, of Spokane County, Washington, as follows: WHEREAS, the City of Spokane Valley (the "City"), of Spokane County, Washington, is a duly incorporated and existing municipal corporation organized and operating under the Constitution and laws of the State of Washington; WHEREAS, the City is authorized and empowered by RCW 35A.40, 35.37, 39.36, 39.46 and 39.53 to authorize, issue, sell and deliver its limited tax general obligation refunding bonds to refinance the costs of acquisition, construction and installation of improvements and betterments to City facilities; 1 WHEREAS, the City previously issued its Limited Tax General Obligation Bonds, 2003, currently outstanding in the aggregate principal amount of $7,435,000 (the "2003 Bonds"), pursuant to Ordinance No. 03-084 (the "2003 Ordinance"), enacted by the City Council of the City (the "Council") on October 28, 2003, for the purpose of financing, in part, the acquisition, construction and equipping of a regional community center at Mirabeau Point, related capital facilities and street improvements (the"Project"), and to pay the costs of issuing the 2003 Bonds; WHEREAS, the 2003 Bonds maturing on and after December 1, 2014, are subject to redemption at the option of the City on or after December 1, 2013, in whole or in part at any time (within one or more maturities to be selected by the City) at a price of 100 percent of the principal amount thereof, plus accrued interest, if any, to the date fixed for redemption; WHEREAS, to effect debt service savings, the City desires to defease, redeem and retire all or a portion of the outstanding 2003 Bonds (such refunded 2003 Bonds, the "Refunded Bonds") in accordance with the provisions of the 2003 Ordinance, if such defeasance, redemption and retirement can be achieved at the desired savings level; WHEREAS, after due consideration, the Council has determined that it will be financially advantageous to the City to effect such a refunding plan and subject to achieving the desired debt services savings, the Council has determined to issue, sell and deliver its City of Spokane Valley, Washington, Limited Tax General Obligation Refunding Bonds, 2014, in an aggregate principal amount not to exceed $7,900,000 (the "Bonds" or the "Refunding Bonds") for the purposes of (i) funding the defeasance and redemption of the Refunded Bonds and to acquire with such Bond proceeds and other available money of the City Government Obligations that bear interest and mature at such times as necessary to pay interest, when due, on the Refunded Bonds, and to redeem such Refunded Bonds on the date fixed for redemption and (ii) paying costs of issuing the Bonds; WHEREAS, the Council desires and hereby delegates to the Authorized Representative (as defined herein) of the City, within certain parameters, certain duties and obligations with respect to the issuance, sale and delivery of the Bonds authorized herein, including the selection of Refunded Bonds to be defeased and redeemed with proceeds of the Bonds; WHEREAS, the City wishes to designate the Washington State Fiscal Agent as the Bond Registrar for the City for the Bonds; WHEREAS, the Council has determined it to be in the best interest of the City to negotiate the sale of the Bonds with D.A. Davidson & Co. (the "Underwriter") and to execute a bond purchase agreement with the Underwriter in connection with the sale of the Bonds; WHEREAS, the Council wishes to authorize the preparation, distribution and use by the Underwriter of a preliminary official statement (the "Preliminary Official Statement") and an official statement (the "Official Statement") in connection with the marketing and sale of the Bonds; and WHEREAS, the City wishes to ensure compliance with (i) the requirements of the Internal Revenue Code of 1986, as amended (the "Code"), and the applicable regulations 2 associated with the Bonds and any future issuance of tax-bonds issued by the City and (ii) the City's continuing disclosure undertakings with respect to the Bonds and any other bonds that may be issued by the City, and wishes to establish and maintain one or more policies with respect to post-issuance compliance procedures (the"Post-Issuance Compliance Procedures"). NOW, THEREFORE, the City Council of the City of Spokane Valley, Washington ordains as follows: Section 1: Definitions As used in this Ordinance, capitalized terms shall have the meanings provided in this Section. Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders, and vice versa. Words imparting the singular number shall include the plural numbers and vice versa,unless the context shall otherwise indicate. 2003 Bonds means the City of Spokane Valley, Washington, Limited Tax General Obligation Bonds, 2003, authorized and issued pursuant to the 2003 Ordinance. 2003 Ordinance means Ordinance No. 03-084 of the City, enacted by the Council on October 28, 2003, and pursuant to which the 2003 Bonds were authorized. Authorized Representative means the City Manager or such other City employee as may be designated in writing by the City Manager, acting either singly or collectively. Bond Fund means the City's "City of Spokane Valley Limited Tax General Obligation Refunding Bond — Debt Service Fund" created by the 2003 Ordinance and continued by this Ordinance. Bond Purchase Contract means the written bond purchase contract between the Underwriter and the City to purchase the Bonds from the City. Bond Register means the registration records of the City, maintained by the Bond Registrar, on which shall appear the names and addresses of the Registered Owners of the Bonds. Bond Registrar means the Washington State Fiscal Agent acting in the capacity as registrar, authenticating agent, paying agent and transfer agent of the Bonds, or its successors in functions, as now or hereafter designated. Bonds means the herein-authorized series of limited tax general obligations bonds designated as "City of Spokane Valley, Washington, Limited Tax General Obligation Refunding Bonds, 2014." City means the City of Spokane Valley, of Spokane County, Washington, a duly incorporated and existing City organized and operating under the laws of the State acting by and through its employees, officers and the Council. 3 City Clerk or Clerk shall mean the de facto or de jure City Clerk or other officer of the City who is the custodian of the seal of the City and of the records of the proceedings of the City and the Council, or his/her successor in function, if any. City Manager shall mean the City Manager of the City, appointed by the Council, or his/her successor in function, if any. Code means the Internal Revenue Code of 1986, as amended, and any Treasury Regulations promulgated thereunder. Commission means the Securities & Exchange Commission. Costs of Issuance, when used with respect to the Bonds, means all costs necessary or attributable to the issuance of the Bonds and which include, but are not limited to, legal fees and expenses, fees and expenses of any financial advisors, cost of audits, costs related to the defeasance and refunding of the Refunded Bonds, advertising and printing expenses, fees and expenses of the fiduciaries, costs of Bond ratings, the initial fees, expenses and other amounts payable to any depositary, or any other person whose services are required with respect to the issuance of the Bonds and the defeasance and refunding of the Refunded Bonds, discounts to the underwriters or other purchasers of the Bonds incurred in the issuance and sale of the Bonds. Council means the City Council of the City, as the same shall be duly and regularly constituted from time to time. DTC means The Depository Trust Company, a limited-purpose trust company organized under the laws of the state of New York, which will act as securities depository for the Bonds, or any successor or substitute depository for the Bonds. EMMA means the MSRB's Electronic Municipal Market Access system, which shall receive all required filings under the Rule at http://emma.msrb.org, or such other municipal securities information repository which may be designated by the Commission or the MSRB from time to time. Escrow Account means the City's "Limited Tax General Obligation Refunding Bonds, 2014 Escrow Account" created by Section 17 of this Ordinance and held by the Escrow Agent to accomplish the refunding of the Refunded Bonds. Escrow Agent means U.S. Bank National Association, appointed herein by the Council to perform the duties of escrow agent described herein and under the Escrow Agreement with respect to the Refunded Bonds. Escrow Agreement means the Escrow Agreement to be executed and delivered by the City and the Escrow Agent as described in Section 16 herein with respect to the Refunded Bonds. Finance Director shall mean the Finance Director of the City, or his or his/her successor in functions, if any. 4 Financial Advisor means Piper Jaffray & Co., Seattle, Washington, the City's financial advisor with respect to the issuance of the Bonds. Government Obligations means cash or any "government obligation," as defined in chapter 39.53 RCW,pledged solely for the redemption of the Refunded Bonds, and referred to in Sections 15 and 17 hereof. Letter of Representations means the Blanket Issuer Letter of Representations, dated November 18, 2003, from the City to DTC. Mayor shall mean the de facto or de jure Mayor of the City, or any presiding officer or titular head of the City or his/her successor in functions, if any. MSRB means the Municipal Securities Rulemaking Board, or any successor to its functions. Net Proceeds when used with reference to the Bonds, shall mean the principal amount of the Bonds, plus accrued interest, if any, and original issue premium, if any, and less original issue discount, if any. Official Statement shall mean the final official statement prepared and delivered in connection with the marketing and sale of the Bonds. Operating Reserve Account shall mean the "City of Spokane Valley CenterPlace Operating Reserve Account"created by the 2003 Ordinance. Ordinance means this Ordinance No. 14-007, enacted by the Council on , 2014, authorizing the sale, issuance and delivery of the Bonds. Outstanding means, when used with reference to the Bonds, as of any particular date, all Bonds that have been issued, executed, authenticated and delivered except: (1) Bonds canceled because of payment prior to their stated dates of maturity; and (2) any Bond (or portion thereof) deemed to have been paid pursuant to Section 10 of this Ordinance. Participants means those broker-dealers, banks and other financial institutions from time to time for which DTC holds the Bonds as securities depository. Preliminary Official Statement shall mean the preliminary official statement of the City prepared and delivered in connection with the marketing and sale of the Bonds. Project means acquisition, construction and equipping of a regional community center at Mirabeau Point,related capital facilities and street improvements, as originally financed, in part, with proceeds of the 2003 Bonds, and to be refinanced with the Bonds. Refunded Bonds means all or any portion of the 2003 Bonds designated as such by an Authorized Representative to be refunded and retired using proceeds of the 2014 Bonds. 5 Registered Owner shall mean the person or persons whose names and addresses shall appear on the Bond Register maintained by the Bond Registrar, as the owner or owners of the Bonds. Rule means the Commission's Rule 15c2-12 under the Securities & Exchange Act of 1934, as the same may be amended from time to time. State means the State of Washington. Term Bonds, if any, shall be any Bond, the payment of the principal of which is to be subject to mandatory redemption payments, as identified in the Bond Purchase Contract. Underwriter means D.A. Davidson & Co., Seattle, Washington, as underwriter of the Bonds. Section 2: Interpretation For all purposes of this Ordinance, except as otherwise expressly provided or unless the context otherwise requires: (A) Internal References. All references in this Ordinance to designated "Sections" and other subdivisions are to the designated sections and other subdivisions of this Ordinance. The words "herein," "hereof," "hereto," "hereby," "hereunder" and other words of similar import refer to this Ordinance as a whole and not to any particular section or other subdivision. (B) Persons. Words importing persons shall include firms, associations, partnerships (including limited partnerships), trusts, corporations and other legal entities, including public boards, as well as natural persons. Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders, and vice-versa. Words imparting the singular number shall include the plural number and vice-versa unless the context shall otherwise indicate. (C) Headings. Any headings preceding the texts of the several sections of this Ordinance and the table of contents shall be solely for convenience of reference and shall not constitute a part of this Ordinance, nor shall they affect its meaning, construction or effect. (D) Writing Requirement. Every "notice," "certificate," "consent" or similar action hereunder by the City shall, unless the form thereof is specifically provided, be in writing signed by an authorized representative of the City. (E) Time. In the computation of a period of time from a specified date to a later specified date, the word "from" means "from and including" and each of the words "to" and "until"means "to but excluding." (F) Redemption. Words importing the redemption or redeeming of a Bond or the calling of a Bond for redemption do not include or connote the payment of such Bond at its stated maturity or the purchase of such Bond. 6 (G) Payment Terms. References to the payment of the Bonds shall be deemed to include references to the payment of interest thereon. Section 3: Description of the Bonds Limited tax general obligation bonds of the City, designated as the "City of Spokane Valley, Washington, Limited Tax General Obligation Refunding Bonds, 2014," are hereby authorized to be sold, issued, executed and delivered by negotiated sale pursuant to the laws of the State of Washington, including but not limited to RCW 35A.40, 35.37, 39.36, 39.46 and 39.53. The Bonds shall be dated the date of their initial delivery; shall be in an aggregate principal amount not to exceed $7,900,000; and shall mature not later than December 1, 2033. Interest on the Bonds shall be paid semiannually on each June 1 and December 1, commencing on December 1, 2014, until their respective dates of maturity or redemption. Interest shall be calculated on the basis of a 360-day year consisting of twelve 30-day months. The Bonds shall be subject to redemption prior to maturity as provided in the Bond Purchase Contract. Each Bond shall be issued in fully registered form in authorized denominations of$5,000 and any integral multiple thereof within a single maturity and interest rate and shall be numbered separately in such manner and with any additional designation as the Bond Registrar deems necessary for purposes of identification. The Bonds shall be in substantially the form set forth in Exhibit A attached hereto and by this reference made part of this Ordinance, and shall be executed, authenticated, numbered and registered as provided in Sections 3, 4 and 5 of this Ordinance. Section 4: Execution and Authentication of the Bonds (A) Execution of the Bonds. Without unreasonable delay, the City shall cause definitive Bonds to be prepared, executed, and delivered, which Bonds shall be typewritten and printed on safety paper. The Bonds shall be executed on behalf of the City by the manual signature of the City Manager, shall be attested by the manual signature of the City Clerk and shall have the seal of the City impressed or imprinted thereon. (B) Authentication of the Bonds. The executed Bonds shall then be delivered to the Bond Registrar for authentication. The Bonds shall be numbered separately in the manner and with any additional designation as the Bond Registrar deems necessary for purposes of identification. Only those Bonds that bear a Certificate of Authentication substantially in the form set forth in Exhibit A attached hereto and manually executed by an authorized representative of the Bond Registrar shall be valid or obligatory for any purpose or entitled to the benefits of this Ordinance. Such Certificate of Authentication shall be conclusive evidence that the Bonds so authenticated have been duly executed, authenticated and delivered hereunder and are entitled to the benefits of this Ordinance. (C) Validity of Signatures. In case any of the officers who shall have signed or attested any of the Bonds shall cease to be such officer or officers of the City before the Bonds 7 so signed or attested shall have been authenticated or delivered by the Bond Registrar, or issued by the City, such Bonds may nevertheless be authenticated, delivered and issued, and, upon such authentication, delivery and issue, shall be as binding upon the City as though those who signed and attested the same had continued to be such officers of the City. Any Bond may also be signed and attested on behalf of the City by such persons as at the actual date of execution of such Bond shall be the proper officers of the City although at the original date of such Bond any such person shall not have been such officer of the City. (D) Temporary Bonds. Until the definitive Bonds are prepared, if deemed necessary by the Authorized Representative, the City may utilize a temporary Bond which shall be typewritten, and which shall be delivered to the Underwriter in lieu of definitive Bonds, but subject to the same provisions, limitations and conditions as the definitive Bonds. Such temporary Bond shall be dated as of the date of the Bonds, shall be in the denomination of not to exceed $7,900,000; shall be numbered T-1; shall be substantially of the tenor of such definitive Bonds, but with such omissions, insertions and variations as may be appropriate to temporary bonds; and shall be manually signed by the City Manager and the City Clerk and shall have the seal of the City impressed or imprinted thereon. The Finance Director shall be the Bond Registrar in the event and for so long as a temporary Bond is utilized. Section 5: Bond Registrar,Authenticating Agent,Paying Agent and Transfer Agent The Washington State Fiscal Agent is hereby appointed as the Bond Registrar, authenticating agent, paying agent and transfer agent with respect to the Bonds, subject to the terms and conditions of this Section 5. (A) Delegated Duties. The Bond Registrar is hereby authorized and directed, on behalf of the City, to authenticate and deliver Bonds initially issued or transferred or exchanged in accordance with the provisions of the Bonds and this Ordinance and to carry out all of the Bond Registrar's powers and duties under this Ordinance and the Washington State Fiscal Agency Agreement between the Washington State Finance Committee and the Bond Registrar (as the same may be amended or readopted from time to time). (B) Bond Register. The Bonds shall be issued only in registered form as to both principal and interest. The Bond Registrar shall keep, or cause to be kept, at its designated corporate trust office the Bond Register which shall at all times be open to inspection by the City. (C) Fees and Costs. Subject to the terms of the Washington State Fiscal Agency Agreement referred to above, the City shall pay to the Bond Registrar from time to time reasonable compensation for all services rendered under this Ordinance together with reasonable expenses, charges, fees of counsel, accountants and consultants and other disbursements, including those of its attorneys, agents and employees, incurred in good faith in and about the performance of their powers and duties under this Ordinance. (D) Representations. The Bond Registrar shall be responsible for its representations contained in the Bond Registrar's Certificate of Authentication on the Bonds. 8 (E) Ownership Rights. The Bond Registrar may become the Registered Owner of Bonds with the same rights it would have if it were not the Bond Registrar, and, to the extent permitted by law, may act as depositary for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Registered Owners of the Bonds. Section 6: Book-Entry System Authorized (A) The Bonds shall be initially issued in the form of a separate, single-certificated, fully registered Bond for each maturity, in the aggregate principal amount of such maturity. Upon initial issuance, the ownership of each Bond shall be registered in the Bond Register in the name of Cede & Co., as nominee of DTC, the securities depository for the Bonds. Except as provided in subsection(D) of this Section 6, all of the Bonds shall be registered in the Bond Register in the name of Cede& Co., as nominee of DTC. (B) With respect to Bonds registered in the Bond Register in the name of Cede& Co., as nominee of DTC, the City and the Bond Registrar shall have no responsibility or obligation to any Participant or to any person on behalf of which a Participant holds an interest in the Bonds. Without limiting the immediately preceding sentence, the City and the Bond Registrar shall have no responsibility or obligation with respect to: (1) the accuracy of the records of DTC, Cede & Co. or any Participant with respect to any ownership interest in the Bonds, (2) the delivery to any Participant or any other person, other than a Registered Owner, of any notice with respect to the Bonds, including any notice of redemption, or (3) the payment to any Participant or any other person, other than a Registered Owner, of any amount with respect to principal of, premium, if any, or interest on the Bonds. The City and the Bond Registrar may treat and consider the Registered Owner of each Bond as the absolute owner of such Bond for the purpose of payment of principal, premium, if any, and interest with respect to such Bond, for the purpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfers with respect to such Bond, and for all other purposes whatsoever. The Bond Registrar shall pay all principal of, premium, if any, and the interest on the Bonds as provided herein, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to payment of principal of, premium, if any, and interest on the Bonds to the extent of the sums so paid. No person other than a Registered Owner shall receive a certificated Bond evidencing the obligation of the City to make payments of principal, premium, if any, and interest pursuant to this Ordinance. Upon delivery by DTC to the Bond Registrar of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the provisions herein with respect to the transfer and payment of the Bonds, the phrase "Cede & Co." in this Ordinance shall refer to such new nominee of DTC. (C) The City heretofore has delivered a Letter of Representations to the Bond Registrar and DTC. The delivery of the Letter of Representations shall not in any way limit the provisions of subsection B of this Section 6 or in any other way impose upon the City any obligation whatsoever with respect to persons having interests in the Bonds other than the Registered Owner. The Bond Registrar shall take all action necessary for all representations of the City in the Letter of Representations with respect to the Bond Registrar, to at all times be complied with. 9 (D) (1) DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving notice to the City and to the Bond Registrar, and discharging its responsibilities with respect thereto under applicable law. (2) The City, in its sole discretion and without the consent of any other person, may terminate the services of DTC with respect to the Bonds if the City determines that: (a) DTC is unable to discharge its responsibilities with respect to the Bonds or (b) a continuation of the requirement that all of the Bonds be registered in the Bond Register in the name of Cede & Co., or any other nominee of DTC, is not in the best interest of the beneficial owners of the Bonds. (3) Upon termination of the services of DTC with respect to the Bonds pursuant to subsection (D)(2)(b) of this Section 6, or upon the discontinuance or termination of the services of DTC with respect to the Bonds pursuant to subsection (D)(1) or subsection (D)(2)(a) of this Section 6 after which no substitute securities depository willing to undertake the functions of DTC hereunder can be found that, in the opinion of the City, is willing and able to undertake such functions upon reasonable and customary terms, the City shall deliver certificated Bonds at the expense of the City, as described in this Ordinance, and the Bonds shall no longer be restricted to being registered in the Bond Register in the name of Cede& Co. as nominee of DTC, but may be registered in the names that the Registered Owners transferring or exchanging Bonds shall designate, in accordance with the provisions of this Ordinance. (E) Notwithstanding any other provision of this Ordinance to the contrary, so long as any Bond is registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal or premium, if any, and interest on such Bond and all notices with respect to such Bond shall be made and given, respectively, in the manner provided in the Letter of Representations. Section 7: Place,Manner and Medium of Payment (A) Payment Medium. Both principal of and interest on the Bonds are payable in lawful money of the United States to the Registered Owners thereof. (B) Payment of Interest. Payment of each installment of interest shall be made to the Registered Owner whose name appears on the Bond Register at the close of business on the fifteenth day of the calendar month preceding the interest payment date. Each installment of interest shall be paid by check or draft of the Bond Registrar mailed to such Registered Owner on the due date at the address appearing on the Bond Register, or at such other address as may be furnished in writing by such Registered Owner to the Bond Registrar. Interest installments may be paid by wire transfer to a Registered Owner of at least $1,000,000 in principal amount of the Bonds, upon written request of such Registered Owner submitted to the Bond Registrar at least 15 days prior to the interest payment date; provided, the costs of such wire transfer shall be paid by such Registered Owner. (C) Payment of Principal. Principal of each Bond shall be payable to the Registered Owner, upon presentation and surrender of the Bonds on or after the date of maturity or the date 10 of prior redemption, whichever occurs first, at the designated corporate trust office of the Bond Registrar. Upon the payment of the Bonds at maturity or the date of prior redemption of any Bond being redeemed, each check or other transfer of money issued for such purpose shall bear the CUSIP number, if any, and identify by issue and maturity the Bonds being paid with the proceeds of such check or other transfer. (D) Interest on Delinquent Amounts. If any Bond is not redeemed when properly presented at its maturity date, the City shall pay interest on that Bond at the same rate provided in the Bond from and after its maturity date until the principal of and interest on that Bond is paid in full or until sufficient money for its payment in full is on deposit in the Bond Fund and the Bond has been called for payment by giving notice to the Registered Owner of that unpaid Bond. (E) Ownership of Bonds. The City and the Bond Registrar may deem and treat the Registered Owner of each Bond as the absolute owner of such Bond for the purpose of receiving payments of principal and interest due on such Bond and for all other purposes, and neither the City nor the Bond Registrar shall be affected by any notice to the contrary. (F) Unclaimed Money. Pursuant to RCW 43.80.160 (as it now reads or is hereafter amended or recodified), an Authorized Representative shall submit a written request to the Bond Registrar that the Bond Registrar return to the City all money previously remitted to the Bond Registrar for the payment of the Bonds that has not been distributed by the Bond Registrar as of one year after the final maturity of all of the Bonds. The Authorized Representative shall deposit such money into a separate account to be held solely for the benefit of the Registered Owners of Bonds which have not been presented for payment, and which shall be used solely for paying the principal of such Bonds and the interest which had accrued thereon to the date of maturity. Interest earnings on the money in such account may be deposited into the Bond Fund to pay the principal of and interest on any Bonds that are Outstanding. Section 8: Transfer and Exchange of the Bonds (A) Transfer of Bonds. Each Bond shall be transferable by the Registered Owner thereof in person, or by its attorney duly authorized in writing, upon due completion of the assignment form appearing thereon and upon surrender of such Bond at the designated corporate trust office of the Bond Registrar for cancellation and issuance of a new Bond registered in the name of the transferee, in exchange therefor. (B) Exchange of Bonds. Each Bond shall be exchangeable by the Registered Owner thereof in person, or by its attorney duly authorized in writing, for one or more new Bonds, upon surrender of such Bond at the designated corporate trust office of the Bond Registrar for cancellation. (C) Authentication and Delivery of New Bonds. Whenever a Bond shall be surrendered for transfer or exchange, the Bond Registrar shall authenticate and deliver to the transferee or exchangee, in exchange therefor, a new fully registered Bond or Bonds of any authorized denomination or denominations, of the same maturity and interest rate as, and for the aggregate principal amount of, the Bond being surrendered. Notwithstanding the foregoing 11 sentence, the Bond Registrar is not required to transfer or exchange any Bond during the 15 days preceding any principal or interest payment date, or the date on which notice of redemption of a Bond is to be given, or after such notice has been given. (D) Payment of Fees and Costs. The Bond Registrar shall require the payment by the Registered Owner requesting such transfer or exchange of any tax, fee or governmental charge required to be paid with respect to such transfer or exchange. Section 9: Mutilated,Destroyed,Lost or Stolen Bonds (A) Issuance of Substitute Bonds. If any Bond shall become mutilated, destroyed, lost or stolen, the affected Registered Owner shall be entitled to the issuance of a substitute Bond only as follows: (1) In the case of a lost, stolen or destroyed Bond, the Registered Owner shall: (a) provide notice of the loss, theft or destruction to the City and the Bond Registrar within a reasonable time after the Registered Owner receives notice of the loss, theft or destruction; (b) request the issuance of a substitute Bond; (c) provide evidence, satisfactory to the City and the Bond Registrar, of the ownership and the loss, theft or destruction of the affected Bond; and (d) file in the offices of the City and the Bond Registrar a written affidavit specifically alleging on oath that such Registered Owner is the proper owner, payee or legal representative of such owner or payee of the Bond that has been lost, stolen or destroyed, giving the date the Bond was issued, the number, principal amount and series of such Bond, and stating that the Bond has been lost, stolen or destroyed, and has not been paid and has not been received by such Registered Owner; (2) In the case of a mutilated Bond, the Registered Owner shall surrender the Bond to the Bond Registrar for cancellation; and (3) In all cases, the Registered Owner shall provide indemnity against any and all claims arising out of or otherwise related to the issuance of substitute Bonds pursuant to this Section 9 satisfactory to the City and the Bond Registrar. Upon compliance with the foregoing, a new Bond of like tenor and denomination, bearing the same number as the mutilated, destroyed, lost or stolen Bond, and with the word "DUPLICATE" stamped or printed plainly on its face, shall be executed by the City, authenticated by the Bond Registrar and delivered to the Registered Owner, all at the expense of the Registered Owner to whom the substitute Bond is delivered. Notwithstanding the foregoing, the Bond Registrar shall not be required to authenticate and deliver any substitute Bond for a Bond which has been called for redemption or which has matured or is about to mature and, in any such case, the principal or redemption price and interest then due or becoming due shall be paid by the Bond Registrar in accordance with the terms of the mutilated, destroyed, lost or stolen Bond without substitution therefor. (B) Notation on the Bond Register. Upon the issuance and authentication of any substitute Bond under the provisions of this Section 9, the Bond Registrar shall enter upon the 12 Bond Register a notation that the original Bond was cancelled and a substitute Bond was issued therefor. (C) Rights of Registered Owners of Substitute Bonds. Every substituted Bond issued pursuant to this Section 9 shall constitute an additional contractual obligation of the City and shall be entitled to all the benefits of this Ordinance equally and proportionately with any and all other Bonds duly issued hereunder unless the Bond alleged to have been destroyed, lost or stolen shall be at any time enforceable by a bona fide purchaser for value without notice. In the event the Bond alleged to have been destroyed, lost or stolen shall be enforceable by anyone, the City may recover the substitute Bond from the Registered Owner to whom it was issued or from anyone taking under the Registered Owner except a bona fide purchaser for value without notice. (D) Exclusive Rights. All Bonds shall be held and owned upon the express condition that the foregoing provisions are exclusive with respect to the replacement or payment of mutilated, destroyed, lost or stolen Bonds, and shall preclude any and all other rights or remedies, notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement or payment of negotiable instruments or of investment or other securities without their surrender. Section 10: Defeasance of the Bonds In the event that money and/or government obligations (as defined from time to time in RCW 39.53.010) maturing or having guaranteed redemption prices at the option of the owner at such time or times and bearing interest to be earned thereon in such amounts as are sufficient, together with any resulting cash balances, to redeem and retire part or all of the Bonds in accordance with their terms, are hereafter irrevocably set aside in a special account and pledged to effect such redemption and retirement, then no further payments need be made into the Bond Fund or any account therein for the payment of the principal of and interest on the certain Bonds so provided for, and such Bonds and interest accrued thereon shall no longer be deemed to be Outstanding hereunder. If the principal or redemption price of any Bonds becoming due, at maturity or otherwise, together with all interest accruing thereon to the due date, has been paid or provision therefor made in accordance with this Section 10, all interest on such Bonds shall cease to accrue on the due date and all liability of the City with respect to such Bonds shall likewise cease, except as hereinafter provided. Thereafter the Registered Owners of such Bonds shall be restricted exclusively to the funds so deposited for any claim of whatsoever nature with respect to such Bonds, and the Bond Registrar shall hold such funds in trust for such Registered Owners uninvested and without interest. Section 11: Cancellation of Surrendered Bonds Bonds surrendered to the Bond Registrar for payment, redemption, transfer or exchange, as well as Bonds surrendered by the City for cancellation, shall be canceled immediately by the Bond Registrar and returned to the City. Such Bonds thereafter shall be destroyed pursuant to RCW 43.80.130 (as it now reads or is hereafter amended or recodified), the Washington State Fiscal Agency Agreement, or both. 13 Section 12: Issuance, Sale and Delivery of the Bonds Authorized The issuance, sale and delivery of the Bonds to the Underwriter is hereby authorized and approved. The terms of said sale, including any premium or discount, and the terms of the Bonds, including the optional and mandatory redemption provisions for the Bonds, that may be approved by the Authorized Representative, on behalf of the City, will be set forth in the Bond Purchase Contract, substantially in the form filed with the City, with such changes thereto as shall be approved by the Authorized Representative executing such Bond Purchase Contract. The Authorized Representative is hereby authorized, empowered and directed, on behalf of the City, to negotiate, enter into, execute, deliver and approve the final terms of and provisions the Bond Purchase Contract, subject to the limitations and requirements of this Ordinance, including the following limitations: (A) the principal amount of the Bonds maturing on each maturity date, provided the aggregate principal amount of the Bonds does not exceed$7,900,000; (B) the interest rate on the Bonds does not exceed a total interest cost of 4.25% per annum; (C) the date or dates upon which the Bonds shall mature, provided the Bonds shall mature not later than December 1, 2033; (D) as further described in Section 15, the aggregate net present value savings with respect to all Refunded Bonds to be realized as a result of the refunding of the Refunded Bonds, after the payment of the costs of issuance of the Bonds, is at least five percent (5%) of the aggregate principal amount of the Refunded Bonds; (E) the yield and price for each maturity of the Bonds, which price shall be not less than 98 percent nor more than 120 percent of the principal amount of the Bonds; (F) the Bond Purchase Contract is reviewed and approved by the Financial Advisor for the City; and (G) the Bond Purchase Contract is executed prior to December 31, 2014 and the closing of the Bonds shall occur on or before January 31, 2015. The Council hereby finds that the determinations made in this Ordinance are the determnations set forth in RCW 39.46.040, and as such, the Council has fully and properly authorized the issuance, sale and delivery of the Bonds. The Authorized Representative is authorized to negotiate, enter into, execute, deliver and approve final terms and provisions on behalf of the City any and all certificates, agreements or other documents necessary or appropriate to implement the intent and purpose of this Ordinance, and, along with other proper City officials are hereby further authorized, empowered and directed to do everything necessary for the prompt execution and delivery of the Bonds to the Underwriter or other purchaser(s) and for the proper application and use of the proceeds of the sale thereof. 14 Section 13: Pledge of Full Faith and Credit of the City The Bonds are limited tax general obligations of the City and, as such, the full faith, credit of the City are hereby pledged for their payment, within the appropriate constitutional and statutory limitations pertaining to non-voted general obligations. The officers now or hereafter charged by law with the duty of levying taxes for the payment of the Bonds and the interest thereon shall, in the manner provided by law, make annual tax levies upon all of the taxable property within the City sufficient, together with other legally available funds, to meet the annual payments of principal and semiannual payments of interest maturing and accruing on the Bonds as set forth herein, having always in mind the constitutional and statutory tax limitations pertaining to non-voted general obligations. Section 14: Redemption of Bonds Prior to Maturity (A) Redemption. The Bonds may be subject to redemption prior to their stated dates of maturity at the times and prices and in the manner specified in the Bond Purchase Contract, subject to the approval of the Authorized Representative in consultation with the City's Financial Advisor, Bond Counsel and the Underwriter. (B) Partial Redemption. In accordance with the preceding paragraph, portions of the principal amount of any Bond, in installments of$5,000 or any integral multiple of$5,000, may also be redeemed. If less than all the principal amount of any Bond is redeemed, upon surrender of such Bond at the designated corporate trust office of the Bond Registrar there shall be issued to the Registered Owner, without charge therefor, for the then unredeemed balance of the principal amount thereof, a new Bond or Bonds, at the option of the Registered Owner, with like maturity and interest rate, in any denomination authorized by this Ordinance. (C) Notice of Redemption. Unless waived by the Registered Owner of any Bond to be redeemed, notice of any such redemption shall be sent by the Bond Registrar by first-class mail, postage prepaid, not less than 20 nor more than 60 days prior to the date fixed for redemption to the Registered Owner of each Bond to be redeemed at the address shown on the Bond Register, or at such other address as may be furnished in writing by such Registered Owner to the Bond Registrar. Such notice of redemption given hereunder shall include the following information: (a) the date fixed for redemption; (b) the redemption price; (c) if less than all Bonds Outstanding are to be redeemed, the identification (and, in the case of partial redemption, the respective principal amounts) of the Bonds to be redeemed; (d) notification that on the date fixed for redemption the redemption price shall become due and payable upon each such Bond or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after such date; (e) the place where such Bonds are to be surrendered for payment of the redemption price, which place of payment shall be the designated corporate trust office of the Bond Registrar; (f) the CUSIP numbers, if any, of all Bonds being redeemed; (g) the date of issue of the Bonds as originally issued; (h) the rate of interest borne by each Bond being redeemed; (i) the maturity date of each Bond being redeemed; and (j) any other descriptive information needed to identify accurately the Bonds being redeemed. The requirements of this subsection (C) shall be deemed to be complied with when notice is mailed as herein provided, regardless of whether it is actually received by the Registered Owner of any Bond to be redeemed. 15 (D) Conditional Notice. Any notice given pursuant to this Section 14 may be rescinded by written notice given to the Bond Registrar no later than two (2) business days prior to the date specified for redemption. The Bond Registrar shall give notice of such rescission as soon thereafter as practicable, and to the same Registered Owners, as notice of such redemption was given pursuant to this Section 14. (E) Notice of Redemption to DTC. For so long as DTC is the securities depository for the Bonds, the Bond Registrar shall send redemption and defeasance notices to DTC in the manner required by the Letter of Representations and DTC's operational procedures as then in effect. (F) Effect of Redemption. When so called for redemption, such Bonds shall cease to accrue interest on the date fixed for redemption, provided funds for redemption are on deposit at the place of payment at that time, and such Bonds shall not be deemed to be outstanding as of such dated fixed for redemption. (G) Additional Redemption Notice. In addition to the notice required by subsection (C) above, further notice may be given by the Bond Registrar at least 30 days before the date fixed for redemption by first-class mail, postage prepaid to: (a) all registered securities depositories then in the business of holding substantial amounts of obligations such as the Bonds, such depositories now being DTC; and to (b) one or more national information services that disseminate notices of redemption of obligations such as the Bonds (such as EMMA), any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if notice thereof is given as prescribed in subsection (C). (I) Open Market Purchase and Cancellation. The City reserves the right to purchase any of the Bonds on the open market at any time at any price. To the extent the City purposes Term Bonds on the open market, the City may reduce, at its discretion, the amount of any mandatory sinking fund deposit or deposits by an aggregate principal amount equal to the principal amount of the Term Bonds so purchased. Any Bonds so purchased or redeemed shall be cancelled. Section 15: Plan of Refunding (A) Designation of the Refunded Bonds. The Authorized Representative is hereby authorized, empowered, on behalf of the City, to select for defeasance and redemption all or any portion of the 2003 Bonds set forth in the table below, such 2003 Bonds to be designated the Refunded Bonds, provided that the aggregate net present value savings with respect to all Refunded Bonds to be realized as a result of the refunding of the Refunded Bonds, after the payment of the costs of issuance of the Bonds, is at least five percent (5%) of the aggregate principal amount of the Refunded Bonds. 16 2003 Bonds Payment Date Principal Interest CUSIP Nos. December 1, 2014 $ 270,000 4.00% 849063AL6 December 1, 2015 285,000 4.00 849063AM4 December 1, 2016 300,000 4.00 849063AN2 December 1, 2017 315,000 4.15 849063AP7 December 1, 2018 360,000 4.25 849063AQ5 December 1, 2019 395,000 5.00 849063AR3 December 1, 2020 440,000 5.00 849063AS1 December 1, 2021 485,000 5.00 849063AT9 December 1, 2022 525,000 5.00 849063AU6 December 1, 2023 580,000 5.00 849063AV4 December 1, 2025* 940,000 5.00 849063AW2 December 1, 2033* 2,540,000 5.00 849063AX0 *Term Bonds. (B) Payments on the Refunded Bonds. The City shall, at such time as the Bonds are delivered, irrevocably deposit Government Obligations in a sufficient amount to pay the interest on the Refunded Bonds to and including the date the Refunded Bonds are to be refunded and retired, and to refund and retire the Refunded Bonds on such date, at the price of par. Any amounts necessary to pay and retire the Refunded Bonds that are not provided for in full by the purchase and deposit of the Government Obligations shall be provided for by an irrevocable deposit of cash from the proceeds of the Bonds or from other legally available money of the City. (C) Notice of Redemption. Upon the issuance of the Refunding Bonds and the funding the Escrow Account, as described in Section 17, of this Ordinance, the Escrow Agent is hereby directed to give notice of the redemption of the Refunded Bonds in substantially the form set forth in the Escrow Agreement and in the manner required by the 2003 Ordinance. Section 16: The Escrow Agent; Escrow Agreement The City hereby appoints U.S. Bank National Association to serve as Escrow Agent with respect to the Refunded Bonds. The Authorized Representative is hereby authorized, empowered and directed to execute and deliver an Escrow Agreement for the Refunded Bonds in substantially the form on file with the City, with such changes thereto as shall be approved by the Authorized Representative executing such Escrow Agreement. Section 17: The Escrow Account (A) Creation of the Escrow Account. The Escrow Agent is hereby authorized and directed to establish a special account for the City designated the "Limited Tax General Obligation Bonds, 2003 Escrow Account," or such other designation conforming to accounting principles and banking practices. (B) Deposits into the Escrow Account. The net proceeds of the Bonds allocable to the defeasance and redemption of the Refunded Bonds other than: (1) accrued interest, if any, 17 received from the sale of the Bonds, which shall be deposited into the Bond Fund; (2) amounts paid to the Underwriter as Underwriter's discount, which shall be retained by the Underwriter and (3) amounts, if any, received due to rounding the principal amount of the Bonds to the next denomination of$5,000 and to pay for any contingencies,which shall be deposited into the Bond Fund; shall be deposited into the Escrow Account and used to acquire Government Obligations and to pay the costs of issuing the Bonds on the issue date of the Bonds. Such Government Obligations, together with any cash balance remaining after the Government Obligations are purchased and the costs of issuing the Bonds have been paid, shall be irrevocably deposited into the Escrow Account. The Government Obligations and money to be deposited into the Escrow Account shall be held by the Escrow Agent in trust. All Government Obligations, all proceeds thereof, and all money credited to the Escrow Account shall be deemed so credited to and held in the Escrow Account notwithstanding the fact that such Government Obligations, proceeds and money therein are held by the Escrow Agent in trust for the owners of the Refunded Bonds. (C) Irrevocable Pledge of Amounts in the Escrow Account. The City hereby irrevocably pledges, at such time as the Bonds are delivered, the Government Obligations and amounts on deposit in the Escrow Account to pay the interest on the Refunded Bonds up to and including the date the Refunded Bonds are to be refunded and retired, and to refund and retire the Refunded Bonds on such date at the price of par. Such Government Obligations are hereby irrevocably pledged to be set aside to effect such payment, redemption and retirement. (D) Use of Money in the Escrow Account. The Escrow Agent, on behalf of the City, is hereby authorized and directed to use the proceeds of the Bonds, together with other legally available money of the City, to purchase Government Obligations in the amounts, of the type, bearing interest and maturing in such amounts as are necessary to make the payments described in Section 15 of this Ordinance. The investment income from and maturing principal of the Government Obligations and money to be deposited into the Escrow Account shall be transmitted to the Washington State Fiscal Agent, as Bond Registrar for the City, for the sole purpose of paying the principal of and interest on the Refunded Bonds as herein provided. (E) Surplus Money. Any money remaining on deposit in the Escrow Account after the payment in full of the Refunded Bonds and the costs of issuing the Bonds, as herein set forth, shall be transferred by the Escrow Agent to the City and deposited into the Bond Fund. (F) Verification Report. Prior to the delivery of the Bonds, the City shall receive an opinion of a nationally recognized firm of independent certified public accountants or from a nationally recognized financial advisor, stating, in substance, that the money and Government Obligations to be deposited with the Escrow Agent for the payment of the Refunded Bonds will discharge and satisfy the City's obligations under the 2003 Ordinance to make payments on the Refunded Bonds. Such opinion will not be required in the event the City deposits sufficient funds at closing to provide for all debt service payments, without taking into account interest earnings thereon. Section 18: The Bond Fund (A) Continuation of the Bond Fund. There was created under the 2003 Ordinance, and shall continue to be maintained so long as the Bonds remain Outstanding, by the Finance 18 Director, a fund separate and distinct from all other funds of the City known as the "LTGO Debt Service Fund" (the "Bond Fund"), which shall be drawn upon for the sole purpose of paying when due the principal of and interest on the Bonds and all other limited tax general obligations bonds of the City. The proceeds of the taxes levied and collected pursuant to Section 13 hereof, together with other legally available money, shall be deposited in the Bond Fund immediately upon their collection, and thereafter held in the Bond Fund until withdrawn for the purposes of this Section 18. Any accrued interest paid to the City as Bond proceeds shall be deposited into the Bond Fund. The Finance Director is hereby authorized and directed to pay to the Bond Registrar, in its capacity as the City's paying agent, all payments of principal and interest on the Bonds in sufficient time for such payments to be made. (B) Maintenance and Investment of Money in the Bond Fund. The Bond Fund shall be maintained by the Finance Director until the principal of and interest on the Bonds, and all other limited tax general obligations of the City, have been fully paid. Money in the Bond Fund may be invested as permitted by law and the investment policy of the City, which investments shall mature prior to the date on which such money shall be needed for required interest or principal payments. All interest earned and income derived by virtue of such investments shall remain in the Bond Fund and be used to meet the required deposits therein. Section 19: Operating Reserve Account There was created under the 2003 Ordinance and shall continue to be maintained, so long as the Bonds remain Outstanding, by the Finance Director a fund known as the "City of Spokane Valley CenterPlace Operating Reserve Account" (herein called the "Operating Reserve Account"), in which the City covenanted in the 2003 Ordinance to maintain a balance of the $300,000. Moneys in the Operating Reserve Account shall be available for use in the payment of expenses associated with the Project, including but not limited to operation and maintenance expenses, debt service and capital repairs. If the City makes a draw on the funds in the Operating Reserve Account, it shall at the same time file a plan for the replenishment of the funds withdrawn. The City covenants to use all reasonable efforts to follow such a plan for replenishment. Section 20: Tax Exemption and Non-Arbitrage Covenants (A) Compliance with the Code for the Bonds. The City covenants to comply with each requirement of the Code necessary to maintain the exclusion of interest on the Bonds from gross income for federal income tax purposes. In furtherance of the covenant contained in the preceding sentence, the City covenants to comply with the provisions of the Tax Certificate executed by the City on the date of initial issuance and delivery of the Bonds, as such Tax Certificate may be amended from time to time. (B) Necessary Payments. The City covenants to make any and all payments required to be made to the United States Department of the Treasury in connection with the Bonds pursuant to Section 148(f) of the Code. 19 (C) Survival of Tax Covenants. Notwithstanding any other provision of this Ordinance to the contrary, so long as necessary to maintain the exclusion from gross income of interest on the Bonds for federal income tax purposes, the covenants contained in this Section 20 shall survive the payment of the Bonds and the interest thereon, including any payment or defeasance thereof pursuant to Section 10 of this Ordinance. (D) Remedies. Notwithstanding any other provision of this Ordinance to the contrary, (1) upon the City's failure to observe or refusal to comply with the above covenants, the Registered Owners, or any trustee acting on their behalf, shall be entitled to the rights and remedies provided to the Registered Owners under this Ordinance with respect to enforcement of the above covenants, and (2) neither the holder or registered owner of bonds of any series other than the Bonds, nor any trustee acting on their behalf, shall be entitled to exercise any right or remedy provided to the Registered Owners under this Ordinance based upon the City's failure to observe, or refusal to comply with, the above covenants of this Section 20. Section 21: Bonds Designated as "Qualified Tax-Exempt Obligations" The Bonds are hereby designated as "qualified tax-exempt obligations" as defined in Section 265(b) of the Code. The City covenants that it shall not designate more than $10,000,000 of tax-exempt obligations during the calendar year 2014. The City does not reasonably anticipate that it will issue in the aggregate more than $10,000,000 principal amount of tax-exempt obligations during the calendar year 2014. Section 22: Preliminary Official Statement; Official Statement (A) Preliminary Official Statement. The Preliminary Official Statement relating to the Bonds, in substantially the form presented to and considered at this meeting and which is on file with the Clerk, shall be and hereby is authorized and approved and shall be delivered to the Underwriter with such changes therein from such form as shall be deemed appropriate an in the best interests of the City, upon consultation with counsel, by the Authorized Representative, such approval to be evidenced conclusively by the delivery of the Preliminary Official Statement to the Underwriter, as so added to or changed. The Underwriter is hereby authorized to distribute the Preliminary Official Statement in connection with the offer and sale of the Bonds. Prior to the distribution of the Preliminary Official Statement, the Authorized Representative shall be and is hereby authorized, empowered and directed to deem the Preliminary Official Statement final for purposes of Rule 15c2-12 of the Securities and Exchange Commission, such action to be conclusively evidenced by delivery of each Preliminary Official Statement to the Underwriter. (B) Official Statement. The Authorized Representative shall be and is hereby authorized, empowered and directed to execute and deliver a final Official Statement with such changes therein from the Preliminary Official Statement as such officer shall deem appropriate and in the best interests of the City, as conclusively evidenced by his or her execution thereof. The Underwriter is hereby authorized to distribute the Official Statements in connection with the offer and sale of the Bonds. 20 (C) Preparation of Preliminary Official Statement and Official Statement. The Underwriter is hereby authorized to prepare the Preliminary Official Statement and the final Official Statement for the Bonds. Section 23: Undertaking to Provide Continuing Disclosure The Authorized Representative of the City shall be and is hereby authorized, empowered and directed to execute and deliver upon the issuance, sale and delivery of the Bonds a Continuing Disclosure Certificate in substantially the form attached hereto as Exhibit B, with such changes thereto as shall be approved by the Authorized Representative executing such Continuing Disclosure Certificate. Section 24: Amendments to Ordinance (A) Amendments Not Requiring Registered Owner Consent. The Council may adopt at any time ordinances supplemental hereto, which ordinances thereafter shall become a part of this Ordinance, for any one or more of all of the following purposes: (1) to add to or delete from the covenants and agreements of the City in this Ordinance, or to surrender any right or power reserved to the City herein, provided such additions or deletions shall not adversely affect, in any material respect, the interests of the Registered Owners of any Bonds; and (2) to cure, correct or supplement any ambiguous or defective provision contained in this Ordinance, provided such supplemental ordinance shall not adversely affect, in any material respect, the interests of the Registered Owners of the Bonds. Any such supplemental ordinance may be adopted without the consent of the Registered Owners of any Bonds at any time Outstanding, notwithstanding any of the provisions of subsection(B) of this Section 24. (B) Amendments Requiring Registered Owner Consent. With the consent of the Registered Owners of not less than 65 percent in aggregate principal amount of the Bonds at the time Outstanding, the Council may adopt an ordinance or ordinances supplemental hereto for the purpose of adding any provisions to, or changing in any manner, or eliminating any of the provisions of this Ordinance or of any supplemental ordinance; provided, however, that no such supplemental ordinance shall: (1) extend the fixed maturity of any Bonds, or reduce the rate of interest thereon, or extend the time of payments of interest from their due date, or reduce the amount of the principal thereof, or alter the redemption provisions pertaining thereto,without the consent of the Registered Owner of each Bond so affected; or(2) reduce the aforesaid percentage of Registered Owners required to approve any such supplemental ordinance, without the consent of the Registered Owners of all of the Bonds then Outstanding. It shall not be necessary for the consent of Registered Owners under this subsection (B) to approve the particular form of any proposed supplemental ordinance, but it shall be sufficient if such consent shall approve the substance thereof. (C) Effect of Supplemental Ordinances. Upon the adoption of any supplemental ordinance pursuant to the provisions of this Section 24, this Ordinance shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations of the City under this Ordinance and all Registered Owners of Bonds Outstanding hereunder shall thereafter be determined, exercised and enforced thereunder, subject in all respects to such 21 modification and amendments, and all terms and conditions of any such supplemental ordinance shall be deemed to be part of the terms and conditions of this Ordinance for any and all purposes. (D) Notations; Replacement Bonds. Bonds executed and delivered after the execution of any supplemental ordinance adopted pursuant to the provisions of this Section 24 may have a notation as to any matter provided for in such supplemental ordinance, and if such supplemental ordinance shall so provide, new Bonds so modified as to conform in the opinion of the Council to any modification of this Ordinance contained in any such supplemental ordinance, may be prepared and delivered without cost to the Registered Owners of any affected Bonds then Outstanding, upon surrender for cancellation of such Bonds in equal aggregate principal amounts. Section 25: Authority to Obtain Municipal Bond Insurance If deemed desirable, the Authorized Representative is hereby authorized and empowered to obtain municipal bond insurance policy to secure the payment of the principal of and interest on the Bonds and to negotiate, enter into, execute and deliver, on behalf of the City, specific instruments, documents, agreements or certificates that may be reasonably necessary to secure such municipal bond insurance policy. Section 26: Post-Issuance Compliance Procedures The Authorized Representative is hereby authorized and empowered to cause the preparation of and to adopt, execute and deliver on behalf of the City Post-Issuance Compliance Procedures to ensure compliance with the requirements of the Code and any other applicable regulations, as well as with the City's continuing disclosure undertakings, with respect to the Bonds and to any other bonds issued by the City. Section 27: Ratification All actions not inconsistent with the provisions of this Ordinance heretofore taken by the Council and its employees with respect to the redemption of the Refunded Bonds and the issuance, sale and delivery of the Bonds, are hereby in all respects ratified, approved and confirmed. Section 28: General Authorization. The Authorized Officers and other officers, agents and employees of the City are hereby authorized and directed in the name of and on behalf of the City to take any and all steps, and to execute any and all certificates, documents, agreements, notices and consents which any of them may deem necessary or appropriate in order to accomplish the lawful issuance, sale and delivery of the Bonds. Section 29: Contract; Severability The covenants contained in this Ordinance and in the Bonds shall constitute a contract between the City and the holder of each and every Bond. All the covenants promises and 22 agreements in this Ordinance contained by or on behalf of the City, or by or on behalf of the Bond Registrar, shall bind and inure to the benefit of their respective successors and assigns, whether so expressed or not. If any one or more of the covenants or agreements provided in this Ordinance to be performed on the part of the City shall be declared by any court of competent jurisdiction to be contrary to law, then such covenants or agreements, shall be null and void and shall be deemed separable from the remaining covenants and agreements in this Ordinance and shall in no way affect the validity of the other provisions of this Ordinance or of any Bonds. Section 30: Repealer All ordinances or resolutions or parts thereof in conflict herewith are, to the extent of such conflict,hereby repealed, and shall have no further force or effect. Section 31: No Personal Recourse No recourse shall be had for any claim based on this Ordinance or the Bonds against any Council member or the City, nor any officer or employee, past, present or future, of the City or of any successor body as such, either directly or through the City or any such successor body, under any constitutional provision, statute or rule of law or by the enforcement of any assessment or penalty or otherwise. [Remainder of page intentionally blank] 23 Section 31: Effective Date This Ordinance shall be in full force and effect five days after publication of this Ordinance or summary thereof in the official newspaper of the City of Spokane Valley as provided by law. Passed by the City Council this day of July, 2014. Dean Grafos, Mayor ATTEST: City Clerk, Christine Bainbridge Approved as to Form: Orrick, Herrington& Sutcliffe LLP Special Counsel to the City Date of Publication: Effective Date: 24 * * * * * * * * * * * * * * * * * * * * * CERTIFICATE I, the undersigned City Clerk of the City of Spokane Valley, of Spokane County, Washington, HEREBY CERTIFY that the foregoing ordinance is a full, true and correct copy of an ordinance duly adopted at a regular meeting of the City Council of said City duly and regularly held at the regular meeting place thereof on July 15, 2014, of which meeting all members of such Council had due notice and at which a majority thereof was present; and that at such meeting such ordinance was adopted by the following vote: AYES, and in favor thereof: NAYS: ABSENT: ABSTAIN: I FURTHER CERTIFY that I have carefully compared the same with the original Ordinance on file and of record in my office; that such Ordinance is a full, true and correct copy of the original Ordinance adopted at such meeting; and that such Ordinance has not been amended, modified or rescinded since the date of its adoption, and is now in full force and effect. IN WITNESS WHEREOF, I have set my hand and affixed the official seal of such City on [ ], 2014. City Clerk ( SEAL ) 25 EXHIBIT A FORM OF BOND No. $ UNITED STATES OF AMERICA STATE OF WASHINGTON COUNTY OF SPOKANE CITY OF SPOKANE VALLEY,WASHINGTON LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS,2014 The City has designated the Bonds as "Qualified Tax-Exempt Obligations" Unless this Bond is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), to the Registrar for registration of transfer, exchange, or payment, and any Bond issued is registered in the name of Cede & Co., or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co., or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the Registered Owner hereof Cede & Co., has an interest herein. INTEREST RATE: MATURITY DATE: CUSIP NO.: The CITY OF SPOKANE VALLEY, of Spokane County, Washington (the "City"), a duly incorporated and existing city under and by virtue of the Constitution and laws of the State of Washington (the "State"), hereby acknowledges itself indebted and for valued received promises to pay to: CEDE & CO. or registered assigns, on the Maturity Date set forth above, the principal sum of: [ ] AND NO/100 DOLLARS and to pay interest thereon from the City of Spokane Valley Limited Tax General Obligation Refunding Bond — Debt Service Fund (the "Bond Fund") from , 2014, or from the most recent date to which interest has been paid or duly provided for, whichever is later, at the Interest Rate per annum set forth above, payable commencing on December 1, 2014, and semiannually thereafter on each June 1 and December 1, to the Maturity Date set forth above or to the date of prior redemption, whichever occurs first. Interest shall be calculated on the basis of a 360-day year consisting of twelve 30-day months. Any capitalized term used in this Bond and not otherwise A-1 defined herein shall have the same meaning as in the Ordinance No. 14-007, adopted by the City Council of the City (the "Council") on , 2014 (the "Ordinance"). The principal of and interest on this Bond are payable in lawful money of the United States of America to the Registered Owner hereof, whose name and address shall appear on the registration books of the City (the "Bond Register") maintained by the Washington State Fiscal Agent in New York, New York (the "Bond Registrar"). Interest shall be paid to the Registered Owner whose name appears on the Bond Register at the close of business on the fifteenth day of the calendar month preceding the interest payment date, and shall be paid by check or draft of the Bond Registrar mailed to such Registered Owner on the due date at the address appearing on the Bond Register, or at such other address as may be furnished in writing by such Registered Owner to the Bond Registrar. Interest installments may be paid by wire transfer to a Registered Owner of at least $1,000,000 in principal amount of the Bonds, upon written request of such Registered Owner submitted to the Bond Registrar at least 15 days prior to the interest payment date; provided the costs of such wire transfer shall be paid by such Registered Owner. Principal of this Bond shall be paid to the Registered Owner upon presentation and surrender of this Bond on or after the Maturity Date set forth above or date of prior redemption of this Bond, whichever occurs first, at the designated corporate trust office of the Registrar. The City and the Bond Registrar may deem and treat the Registered Owner of this Bond as the absolute owner of this Bond for the purpose of receiving payments of principal and interest due on this Bond and for all other purposes, and neither the City nor the Bond Registrar shall be affected by any notice to the contrary. Reference is hereby made to the Additional Provisions of this Bond set forth on page 3 hereof, and such Additional Provisions shall for all purposes have the same effect as if set forth in this space. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Ordinance until the Certificate of Authentication hereon is manually signed by the Bond Registrar. IT IS HEREBY CERTIFIED, RECITED AND DECLARED that this Bond and the series of which it is one, is issued pursuant to and in strict compliance with the Constitution and the laws of the State now in force and the ordinances and resolutions of the City, specifically the Ordinance; and that all acts, conditions and things required to be done precedent to and in the issuance of this Bond have happened, been done and been performed; and that the issuance of this Bond and the Bonds of this series does not exceed any constitutional, statutory or other limitation upon the amount of bonded indebtedness the City may incur. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] A-2 IN WITNESS WHEREOF, the City of Spokane Valley, of Spokane County, Washington, has caused this Bond to be executed by the manual signature of its City Manager, attested by the manual signature of its City Clerk, and impressed with its seal on , 2014. CITY OF SPOKANE VALLEY, Spokane County, Washington (Manual Signature) City Manager ATTEST: (Manual Signature) City Clerk (S E A L) CERTIFICATE OF AUTHENTICATION Date of Authentication: This Bond is one of the City of Spokane Valley, Washington Limited Tax General Obligation Refunding Bonds, 2014, dated , 2014, and described in the within- mentioned Ordinance. WASHINGTON STATE FISCAL AGENT, as Bond Registrar By Authorized Officer A-3 ADDITIONAL PROVISIONS This Bond is one of a duly authorized series of Bonds of like date, tenor and effect, except for variations required to state denominations, redemption provisions, numbers, interest rates, and dates of maturity, aggregating the principal sum of $ . The Bonds are issued in fully registered form in denominations of$5,000 each or any integral multiple thereof within a single maturity, and mature on December 1 of the years 20 through 20 , inclusive and in the year 20 . Capitalized terms used in this Bond shall have the meanings given to them in the Ordinance. The Bonds are issued by the City pursuant to and in full compliance with the Constitution and the laws of the State now in force, particularly RCW 35A.40, 35.37, 39.36, 39.46 and 39.53, and proceedings duly adopted and authorized by the Council, more particularly the Ordinance, for the purpose of(i) funding the defeasance and redemption of the City's Limited Tax General Obligation Bonds, 2003 (the"Refunded Bonds") and (ii)paying costs of issuing the Bonds, all as more particularly described in the Ordinance. The Bonds are limited tax general obligations of the City, and, as such, the full faith, credit and resources of the City have been irrevocably pledged for the punctual and full payment of the principal and interest on the Bonds within the appropriate constitutional and statutory tax limitations pertaining to non-voted general obligations. The officers now or hereafter charged by law with the duty of levying taxes for the payment of such Bonds shall make annual levies upon all of the taxable property within the City, which, together with other legally available money, shall be sufficient in amount to meet the annual payments of principal and the semiannual payments of interest maturing and accruing on the Bonds. [REDEMPTION PROVISIONS TO COME] Notice of any such redemption, unless waived by the Registered Owner of any Bond to be redeemed, shall be sent by the Bond Registrar by first-class mail, postage prepaid, not less than 20 nor more than 60 days prior to the date fixed for redemption, to the Registered Owner of each Bond to be redeemed, at the address shown on the Bond Register, or at such other address as may be furnished in writing by such Registered Owner to the Bond Registrar. Such requirements shall be deemed to be complied with when notice is mailed as herein provided, regardless of whether or not it is actually received by the Registered Owner of any Bond to be redeemed. When so called for redemption, the Bonds shall cease to accrue interest on the specified dated fixed for redemption,provided money for redemption is on deposit at the place of payment at that time, and shall not be deemed to be Outstanding as of such date fixed for redemption. The City retains the right to rescind the redemption notice and the related redemption of Bonds by giving a notice of rescission to the affected Registered Owners at any time up to I ] days prior to the scheduled dated fixed for redemption. Any notice of redemption that is so rescinded shall be of no effect, and the Bonds for which the notice of redemption has been rescinded shall remain outstanding. The City has reserved the right to purchase the Bonds on the open market at any time and at any price. To the extent the City purchases the Term Bonds on the open market, the City may, A-4 at its discretion, reduce the amount of any mandatory sinking fund deposit or deposits by an aggregate principal amount equal to the principal amount of the Term Bonds so purchased. Any Bonds so purchased or redeemed shall be cancelled. This Bond is transferable or exchangeable by the Registered Owner hereof in person, or by its attorney duly authorized in writing, upon due completion of the Assignment appearing hereon and upon presentation and surrender of this Bond at the designated corporate trust office of the Bond Registrar. Upon such transfer or exchange, a new Bond or Bonds of any authorized denomination, of the same maturity and interest rate, and for the same aggregate principal amount of the Bond being surrendered will be issued to the transferee or exchangee, in exchange therefor. The Registrar is not required to transfer or exchange any Bond during the 15 days preceding any principal or interest payment date, or the date on which notice of redemption of a Bond is to be given or after such notice has been given. Reference is hereby made to the Ordinance for the covenants and declarations of the City and other terms and conditions under which this Bond and the Bonds of this series have been issued. The covenants contained herein and in the Ordinance, as they may apply to this Bond, may be discharged by making provision, at any time, for the payment of the principal of and interest on this Bond in the manner provided in the Ordinance. LEGAL OPINION I, the undersigned City Clerk of the City of Spokane Valley, of Spokane County, Washington, DO HEREBY CERTIFY that the legal opinion of Orrick, Herrington & Stucliffe LLP, of Portland, Oregon, which opinion was dated the date of delivery of the Bonds described therein, was delivered to me on said date, and is now part of the permanent records of the City. CITY OF SPOKANE VALLEY, Spokane County, Washington (Manual Signature) City Clerk A-5 The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common UNIF GIFT MIN ACT-under Uniform Transfer to Minors Act TEN ENT - as tenants by the entireties (Custodian) (Minor) JT TEN - as joint tenants with right of survivorship and not as tenants in common (State) Additional abbreviations may also be used although not in the above list. ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto Name of Transferee: Address: Tax Identification No.: the within Bond and hereby irrevocably constitutes and appoints to transfer such Bond on the books kept for registration thereof with full power of substitution in the premises. Registered Owner NOTE: The signature on this Assignment must correspond with the name of the Registered Owner as it appears upon the face of the within Bond in every particular, without alteration or enlargement or any change whatsoever. Dated: SIGNATURE GUARANTEED: Bank, Trust Company or Member Firm of the New York Stock Exchange Authorized Officer A-6 EXHIBIT B FORM OF CONTINUING DISCLOSURE CERTIFICATE B-1 SUMMARY OF ORDINANCE NO. 14-007 FOR PUBLICATION CITY OF SPOKANE VALLEY SPOKANE COUNTY,WASHINGTON $7,900,000 LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS,2014 The title of Ordinance No. 14-007, adopted by the City Council of the City of Spokane Valley, Washington, on , 2014, is as follows: AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SPOKANE VALLEY, OF SPOKANE COUNTY, WASHINGTON, AUTHORIZING THE SALE, ISSUANCE AND DELIVERY OF NOT TO EXCEED $7,900,000 AGGREGATE PRINCIPAL AMOUNT OF ITS CITY OF SPOKANE VALLEY, WASHINGTON, LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS, 2014, TO CURRENTLY REFUND ALL OR A PORTION OF THE CITY'S LIMITED TAX GENERAL OBLIGATION BONDS, 2003; PROVIDING FOR PAYMENT OF THE PRINCIPAL AND INTEREST ON THE BONDS BY ANNUAL LEVIES OF TAXES; FIXING THE DATE, FORM, CERTAIN TERMS AND COVENANTS OF SUCH 2014 BONDS; DELEGATING TO THE AUTHORIZED REPRESENTATIVE OF THE CITY THE AUTHORITY TO ESTABLISH CERTAIN TERMS OF THE BONDS WITHIN THE PARAMETERS OF THIS ORDINANCE; ADOPTING A REFUNDING PLAN; AUTHORIZING THE EXECUTION OF AN ESCROW AGREEMENT; AUTHORIZING THE PURCHASE OF CERTAIN GOVERNMENT OBLIGATIONS; PROVIDING FOR THE CALL, PAYMENT AND REDEMPTION OF THE REFUNDED BONDS; PROVIDING FOR THE REGISTRATION AND AUTHENTICATION OF THE BONDS; DESIGNATING A BOND REGISTRAR; CREATING AND ADOPTING CERTAIN FUNDS AND ACCOUNTS AND PROVIDING FOR DEPOSITS THEREIN; COVENANTING TO COMPLY WITH CERTAIN FEDERAL TAX AND SECURITIES LAWS; AND PROVIDING FOR OTHER MATTERS PROPERLY RELATING THERETO. A copy of the entire Ordinance is on file with the City Clerk and available for review during normal office hours. CITY OF SPOKANE VALLEY, Spokane County Washington , City Clerk ( SEAL ) B-2 OHS DRAFT DISTRIBUTED: 06/16/14 ESCROW DEPOSIT AGREEMENT between THE CITY OF SPOKANE VALLEY, WASHINGTON the City and U.S. BANK NATIONAL ASSOCIATION as Escrow Agent Relating To The Current Refunding and Defeasance of: City of Spokane Valley, Washington Limited Tax General Obligation Bonds, 2003 Dated , 2014 ORRICK, HERRINGTON & SUTCLIFFE LLP ESCROW DEPOSIT AGREEMENT THIS ESCROW DEPOSIT AGREEMENT (the "Agreement"), dated , 2014, is by and between the City of Spokane Valley, Washington (the "City") and U.S. Bank National Association, having corporate trust offices in Seattle, Washington, and being qualified to accept and administer the trusts hereby created as escrow agent (the "Escrow Agent"). WITNESSETH: WHEREAS, in accordance with the provisions of Ordinance No. 14- (the "2014 Ordinance"), enacted by the City Council of the City (the "City Council") on 2014, and pursuant to the applicable provisions of the Revised Code of Washington ("RCW") 35A.40, 35.37, 39.36, 39.46 and 39.53, the City has determined to defease and refund all of its outstanding Limited Tax General Obligation Bonds, 2003 (the "Refunded Bonds"), as more specifically described in Exhibit A hereto; WHEREAS, the Refunded Bonds were issued pursuant to Ordinance No. 03-084, enacted by the City Council on October 28, 2003 (the "2003 Ordinance"); WHEREAS, the Refunded Bonds maturing on or after December 14, 2014 are subject to redemption at the option of the City on or after December 1, 2013, in whole or in part at any time at a redemption price equal to the principal amount of the 2003 Bonds called for redemption (the "Redemption Price"), together with accrued interest thereon to the date fixed for redemption, if any; WHEREAS, the City intends to redeem the Refunded Bonds on , 2014 (the "Redemption Date"); WHEREAS, the City has issued its $ Limited Tax General Obligation Refunding Bonds, 2014 (the "2014 Refunding Bonds") to defease and redeem the Refunded Bonds; WHEREAS, The Bank of New York Mellon, in its capacity as the Fiscal Agent for the State of Washington, is the Bond Registrar for the 2003 Bonds (the "Bond Registrar"); WHEREAS, the Escrow Agent has reviewed copies of the 2003 Ordinance and this Agreement and is willing to serve as Escrow Agent hereunder; WHEREAS, the Escrow Agent has received a report from Grant Thornton LLP, a certified public accounting firm (the "Verification Agent"), dated , 2014 (the "Verification Report") showing that the moneys and/or Government Obligations (as defined below) on deposit with the Escrow Agent will be sufficient to pay when due the redemption price and interest due on all Refunded Bonds on the Redemption Date as described herein; and Page 1 —ESCROW DEPOSIT AGREEMENT WHEREAS, pursuant to this Agreement, proceeds of the 2014 Refunding Bonds, together with other available funds of the City, in an amount sufficient to pay on the Redemption Date the Redemption Price and accrued interest thereon to the Redemption Date [and to pay costs of issuing the 2014 Refunding Bonds] shall be received by the Escrow Agent and applied as provided herein; NOW, THEREFORE, the City and the Escrow Agent hereby agree as follows: ARTICLE I DEFINITIONS AND INTERPRETATION 1.01 Definitions. Capitalized terms not otherwise defined herein shall have the meanings set forth in the 2003 Ordinance. Unless the context clearly indicates otherwise, the following terms shall have the meanings assigned to them below when they arc used in this Agreement: "Business Day" means, any day that is not a Saturday, Sunday, legal holiday or a day on which the offices of banks in Washington or New York are authorized or required by law or executive order to remain closed and which shall not be a day on which the New York Stock Exchange is closed. "Escrow Fund" means the fund established pursuant to Section 2.01(a) of this Agreement. "Escrowed Securities" means the Government Obligations described in Exhibit B. "Government Obligations" means noncallable direct obligations of, or obligations the timely payment of the principal of and interest on which is fully guaranteed by, the United States of America, as provided in Section 39.53 RCW, not subject to redemption prior to maturity except by the holder thereof. 1.02 Interpretation. The titles and headings of the articles and sections of this Agreement have been inserted for convenience and reference only and are not to be considered a part hereof and shall not in any way modify or restrict the terms hereof. This Agreement and all of the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein and to achieve the intended purpose of providing for the defeasance and refunding of the Refunded Bonds in accordance with applicable law. ARTICLE II ESTABLISHMENT, FUNDING AND USE OF ESCROW FUND 2.0I Establishment of Escrow Fund. (a) There is hereby created and established with the Escrow Agent a special and irrevocable escrow account designated the "City of Spokane Valley, Washington Limited Tax General Obligation Bond, 2003 Escrow Fund" (the "Escrow Fund"). Page 2—ESCROW DEPOSIT AGREEMENT (b) Proceeds from the sale of the 2014 Refunding Bonds, together with other available funds of the City, that are to be used to defease and redeem the Refunded Bonds shall be held in trust by and in the custody of the Escrow Agent wholly segregated from all other securities, investments or moneys on deposit with the Escrow Agent. The Escrow Fund will contain moneys and Government Obligations to be applied as provided herein, which will be in an amount sufficient to refund and redeem the Refunded Bonds on the Redemption Date. 2.02 Funding of Escrow Fund. On the date of this Agreement, the Escrow Agent has received [(i)] $ [(consisting of $ in proceeds derived from the sale of the 2014 Refunding Bonds[ and $ derived from a release of amounts in the Bond Fund)] for deposit to the Escrow Fund for the purpose of refunding and redeeming the Refunded Bonds described in Exhibit A hereto [(ii) and $ [(consisting of $ in proceeds derived from the sale of the 2014 Refunding Bonds and $ derived from other available funds of the City) to be held by the Escrow Agent uninvested in cash and separate and apart from the Escrow Fund to be applied to pay costs of issuing the 2014 Refunding Bonds]. 2.03 Sufficiency of Escrow Fund. The City represents that the successive receipts of the principal of and interest on the Escrowed Securities will assure that the cash balance on deposit from time to time in the Escrow Fund will be at all times sufficient to provide moneys at the time and in the amount required to pay and redeem the Refunded Bonds on the Redemption Date. If, for any reason, at any time, the cash balances on deposit or scheduled to be on deposit in the Escrow Fund shall be insufficient to make the payments in the amounts and at the times shown in the Verification Report, the City shall timely deposit in the Escrow Fund, from any funds that are Iawfully available therefor, additional funds in the amounts required to make such payments. Notice of any such insufficiency shall be given by the Escrow Agent to the City promptly upon determination of such insufficiency and not less than five (5) Business Days prior to such payment date, in accordance with Section 6.08 of this Agreement, but the Escrow Agent shall not in any manner be liable or responsible for any insufficiency of funds in the Escrow Fund or the City's failure to make additional deposits thereto. ARTICLE III DEPOSIT OF MONEYS AND ESCROWED SECURITIES; INVESTMENTS 3.01 Deposit and Use of Funds. The Escrow Agent has deposited the amounts set forth in Section 2.02[(i)] above to the Escrow Fund, $ of which shall be applied on the date hereof to purchase the Escrowed Securities and $ of which shall be held in the Escrow Fund uninvested in cash. With the exception of excess moneys described in Section [ ], and pending application as provided in this Agreement, amounts on deposit in the Escrow Fund are hereby pledged and assigned solely to the payment of the Redemption Price of the Refunded Bonds on, and accrued interest thereon to, the Redemption Date, which amounts shall be held in trust by the Escrow Agent for the owners and holders of the Refunded Bonds. [CONFIRM] On or before the Redemption Date, the Escrow Agent shall transfer sufficient funds from balances held in the Escrow Fund to the Bond Registrar for the payment of Redemption Price of the Refunded Bonds and the accrued interest thereon to the Redemption Date. Page 3 —ESCROW DEPOSIT AGREEMENT [The amount set forth in Section 2.02(ii) above are to be applied to pay costs of issuing the 2014 Refunding Bonds described in Schedule 1. By signing this Agreement the Escrow Agent acknowledges (i) receipt of the amounts as set forth in Section 2.02 and (ii) receipt of the initial Escrowed Securities described in this Section 3.01 for deposit to the Escrow Fund. Pursuant to the Section 10 of the 2003 Ordinance, the Escrow Agent hereby acknowledges receipt of cash and/or Escrowed Securities in amounts sufficient to redeem and retire all Refunded Bonds, as confirmed by the Verification Report, provided to the Escrow Agent. 3.02 Investments. Except for the initial investment of the Escrowed Securities pursuant to this Article III, the Escrow Agent shall not have any power or duty to invest or reinvest any money or proceeds of Escrowed Securities held hereunder, or to make substitutions of the Escrowed Securities, or to sell, transfer, or otherwise dispose of the Escrowed Securities. 3,03 Irrevocable Escrow. The Escrow Fund created hereby shall be irrevocable, and the Escrow Agent is hereby appointed to act for the benefit of the holders of the Refunded Bonds, who are hereby granted and exclusive lien on the Escrow Fund and the moneys and investments from time to time therein. ARTICLE IV NOTICES OF REDEMPTION AND DEFEASANCE OF THE REFUNDED BONDS 4.01 Call for Redemption. The City hereby irrevocably calls for redemption on the Redemption Date all of the outstanding Refunded Bonds at the Redemption Price, together with accrued interest thereon to the Redemption Date, as more fully described in Exhibit A attached hereto. 4.02 Notice of Redemption. Pursuant to Section 6(B) of the 2003 Ordinance, the City has provided written direction to the Bond Registrar that it wishes to exercise its option to redeem the Refunded Bonds and giving direction to the Bond Registrar to provide irrevocable notice of redemption to the registered owners of the Refunded Bonds and to provide such additional notices to all applicable parties, at the applicable times, as set forth in the 2003 Ordinance. The Bond Registrar has acknowledged receipt of such written direction and notices of redemption for the Refunded Bonds referenced above shall be delivered on the date of delivery of the 2014 Refunding Bonds. Pursuant to the Certificate of the City Regarding Bond Insurance executed by City in connection with the issuance of the Refunded Bonds (the "City Certificate"), the City will also provide notice of the redemption of the Redeemed Bonds to National Public Finance Guarantee, as the successor to MBIA Insurance Corporation, as insurer of the Refunded Bonds. 4.03 Notice of Defeasance. The Escrow Agent shall send notice of the defeasance of the Refunded Bonds, in substantially the form attached hereto as Exhibit C, to The Depository Trust Company, as the registered owner of the Refunded Bonds, promptly after this Agreement is executed. Page 4—ESCROW DEPOSIT AGREEMENT 4.04 Submission of Notices to MSRB. The City will give notice of the defeasance and notice of the redemption of the Refunded Bonds to the Municipal Securities Rulemaking Board (the "MSRB"), through the Electronic Municipal Market Access ("EMMA") continuing disclosure service on or about the same dates as those notices given to the registered owners of the Refunded Bonds by the Escrow Agent and the Bond Registrar, as applicable. 4.05 Excess Moneys to the City. Any moneys remaining in the Escrow Fund after payment of the Refunded Bonds in accordance with this Agreement shall be transferred to the City. ARTICLE V CONCERNING THE ESCROW AGENT 5.01 Representations. The Escrow Agent hereby represents that it has all necessary power and authority to enter into this Agreement and undertake the obligations and responsibilities imposed upon it herein, and that it will carry out all of its obligations hereunder. 5.02 Duties of Escrow Agent. In consideration of its fee, the Escrow Agent agrees to establish the Escrow Fund [and to make disbursements to the Bond Registrar], all as herein provided. All disbursements made by the Escrow Agent shall be made only to the extent that the Escrow Agent has received sufficient proceeds, deposits and income in accordance with the terms of this Agreement. The City agrees to and shall pay to the Escrow Agent its out-of-pocket expenses, and its reasonable fees and expenses for additional action taken pursuant to this Agreement at the request of the City. Such expenses shall include the fees of any independent consultants, including, without limitation, attorneys, regardless of whether formal legal proceedings are required and, if required, on trial and appeal therefrom or in any bankruptcy proceeding or in any arbitration proceeding, from any moneys of the City lawfully available therefor. However, in no event shall the Escrow Agent have any lien whatsoever upon any of the moneys in the Escrow Fund for the payment of such fees and expenses. The City hereby assumes liability for, and hereby agrees, to the extent permitted by law, to indemnify, protect, save and keep harmless the Escrow Agent and its respective directors, officers, employees, attorneys, agents, servants, successors and assigns from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements (including legal fees and disbursements, regardless of whether formal legal proceedings are required, and, if required, on trial and appeal therefrom or in any bankruptcy proceeding or in any arbitration proceeding) of whatsoever kind and nature which may be imposed on, incurred by, or asserted against, at any time, the Escrow Agent (whether or not also indemnified against by the City or any other person under any other agreement or instrument) and in any way relating to or arising out of the execution and delivery of this Agreement, the establishment of the Escrow Fund, the acceptance of the moneys and Escrowed Securities or the proceeds thereof and any payment, transfer or other application of moneys or Escrowed Securities by the Escrow Agent in accordance with the provisions of this Agreement, or as may arise by reason of any act, omission or error of the Escrow Agent made in good faith in the conduct of its duties; provided, however, that the City shall not be required to indemnify the Escrow Agent against its own negligence or misconduct. In no event shall the City be liable to any person by reason of the Page 5—ESCROW DEPOSIT AGREEMENT transactions contemplated hereby other than to the Escrow Agent as set forth herein. The indemnities contained in this Section shall survive the termination of this Agreement. The Escrow Agent shall be under no obligation to inquire into or be in any way responsible for the performance or nonperformance by the City of any of its obligations, or to protect any of the City's rights under any bond proceeding or any of the City's other contracts with or franchises or privileges from any state, county, municipality or other governmental agency or with any person. The Escrow Agent shall not be liable for any act done or step taken or omitted by it, or for any mistake of fact or law, or for anything which it may do or refrain from doing, except for its negligence, misconduct, or its default in the performance of any obligation imposed upon it hereunder. The Escrow Agent shall not be liable or responsible for any loss resulting from any investment made pursuant to this Agreement and in full compliance with the provisions hereof. 5,03 Records. The Escrow Agent will keep books of record and account in which complete and accurate entries shall be made of all transactions relating to the receipts, disbursements, allocations and application of the money and Escrowed Securities deposited to the Escrow Fund and all proceeds thereof, and such books shall be available for inspection during business hours and after reasonable notice. 5.04 Escrow Agent not Directly Liable. None of the provisions contained in this Agreement shall require the Escrow Agent to use or advance its own funds or otherwise incur direct financial liability in the performance of any of its duties or the exercise of any of its rights or powers hereunder. The Escrow Agent shall be under no liability for interest on any funds or other property received by it hereunder except as herein expressly provided. ARTICLE VI MISCELLANEOUS 6.01 Escrow Inviolate. No Bond Registrar or Escrow Agent fees or other charges of any nature may be paid from the escrowed money prior to defeasance and redemption of all Refunded Bonds. The City agrees that it will pay any and all such fees from its other legally available funds as such payments become due prior to such defeasance and redemption. 6.02 Time for Payment. The Escrow Agent shall make payments out of the Escrow Fund to the Bond Registrar in sufficient time to permit the Bond Registrar to pay the redemption price on the Refunded Bonds without default on the Redemption Date. After all sums required for the payment of principal of and interest on the Refunded Bonds have been paid to the Bond Registrar as herein provided, the Escrow Agent shall transfer any remaining moneys to the City as provided herein. 6.03 Irrevocable Escrow for Benefit of Bondowners. The Escrow Agent and the City recognize that the holders from time to time of the Refunded Bonds defeased or called for redemption have a beneficial and vested interest in the moneys to be held by the Escrow Agent as herein provided and in the provisions of this Agreement. It is therefore recited, understood Page 6—ESCROW DEPOSIT AGREEMENT and agreed that this Agreement shall not be subject to revocation or amendment until its provisions have been fully executed. 6.04 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington. 6.05 Brokerage Confirmations. The City acknowledges that regulations of the Comptroller of the Currency grants the City the right to receive brokerage confirmations of the security transactions as they occur. To the extent permitted by law, the City specifically waives compliance with 12 CFR 12 and hereby notifies the Escrow Agent hereunder, that no brokerage confirmations need be sent relating to security transactions as they occur. 6.06 Notices. Any notice, request, communication or other paper shall be sufficiently given and shall be deemed given when faxed, or delivered or mailed, by registered or certified mail, postage prepaid or sent by telegram as follows: If to the City: City of Spokane Valley, Washington 11707 East Sprague Avenue, Suite 106 Spokane Valley, WA 99206 Attn: Finance Director Telephone: 509-720-5040 E-Mail: mealhoun@spokanevalley.org spokanevalley.or•g With a copy to: Douglas E. Goe, Esq. Orrick, Herrington & Sutcliffe LLP 1120 NW Couch Street, Suite 200 Portland, OR 97209 Telephone: 503-943-4810 E-Mail: dgoe@orlick.com If to the Escrow Agent: U.S. Bank National Association 1420 5th Avenue, 7th Floor PD-WA-T7CT Seattle, WA 98101 Attn: Carolyn Morrison Telephone: 206-344-4678 E-Mail: carolyn.morrison a usbank.com The City and the Escrow Agent may designate any further different addresses to which subsequent notices, requests, communications or other papers shall be sent. 6.07 Severability. If any one or more of the covenants or agreements provided in this Agreement on the part of the City or the Escrow Agent to be performed should be determined by a court of competent jurisdiction to be contrary to law, such covenant or agreement shall be deemed and construed to be severable from the remaining covenants and agreements herein contained and shall in no way affect the validity of the remaining provisions of this Agreement. Page 7—ESCROW DEPOSIT AGREEMENT 6.08 Counterparts. This Agreement may be executed and delivered in several counterparts, all or any of which shall be regarded for all purposes as one original and shall constitute and be but one and the same instrument. 6.09 Amendment, This Agreement shall not be amended except to cure any ambiguity or formal defect or omission in this Agreement. No amendment shall be effective unless the same shall be in writing and signed by the parties thereto. No such amendment shall be made unless a prior written opinion of a nationally recognized bond counsel is rendered which opines that the amendment shall not adversely affect the rights of the holder or holders of the 2014 Refunding Bonds or the Refunded Bonds. 6.10 Successor Escrow Agent, Any corporation or association into which the Escrow Agent may be merged or with which it may be consolidated, or any corporation or association resulting from any merger or consolidation to which the Escrow Agent shall be a party, or any corporation or association succeeding to the corporate trust business of the Escrow Agent, shall be the successor of the Escrow Agent hereunder without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding. If a successor Escrow Agent is appointed, the successor Escrow Agent must be in place and the escrowed assets transferred over to the new Escrow Agent before the original Escrow Agent may be replaced. [SIGNATURE PAGE FOLLOWS] Page 8—ESCROW DEPOSIT AGREEMENT IN WITNESS WHEREOF, the parties hereto have each caused this Escrow Deposit Agreement to be executed by their duly authorized officers as of the date first above written. CITY OF SPOKANE VALLEY, WASHINGTON By: City Manager U.S. BANK NATIONAL ASSOCIATION, as Escrow Agent By: Authorized Officer SIGNATURE PAGE—ESCROW DEPOSIT AGREEMENT EXHIBIT A DESCRIPTION OF REFUNDED BONDS Maturity Principal Interest Redemption Date Amount Rate Redemption Date Price CUSIP December 1, 2014 $ 270,000 4.00% August 23, 2014 100% 849063AL6 December 1, 2015 285,000 4.00 August 23,2014 100 849063AM4 December 1, 2016 300,000 4.00 August 23, 2014 100 849063AN2 December 1, 2017 315,000 4.15 August 23, 2014 100 849063AP7 December 1, 2018 360,000 4.25 August 23, 2014 100 849063AQ5 December 1, 2019 395,000 5,00 August 23, 2014 100 849063AR3 December 1, 2020 440,000 5.00 August 23, 2014 100 849063AS 1 December 1, 2021 485,000 5.00 August 23, 2014 100 849063AT9 December 1, 2022 525,000 5.00 August 23, 2014 100 849063AU6 December 1,2023 580,000 5.00 August 23, 2014 100 849063AV4 December 1, 2025* 940,000 5.00 August 23, 2014 100 849063AW2 December 1, 2033* 2,540,000 5.00 August 23, 2014 100 849063AX0 Term Bonds EXHIBIT A—DESCRIPTION OF REFUNDED BONDS EXHIBIT B ESCROW DEPOSIT [SEE ATTACHED SLG SUBSCRIPTION] CASH DEPOSITS TO BE HELD UNIVESTED: $ EXHIBIT B -ESCROW DEPOSIT EXHIBIT C NOTICE OF DEFEASANCE TO HOLDERS OF THE CITY OF SPOKANE VALLEY, WASHINGTON LIMITED TAX GENERAL OBLIGATION BONDS, 2003 ORIGINALLY DATED: NOVEMBER 18,2003 NOTICE IS HEREBY GIVEN to the owners of the City of Spokane Valley, Washington Limited Tax General Obligation Bonds, 2003 (the "2003 Bonds"), that pursuant to an Escrow Deposit Agreement dated , 2014, by and between the City of Spokane Valley, Washington (the "City") and U.S. Bank National Association, as escrow agent (the "Escrow Agent") and pursuant to Ordinance No. 03-084, enacted by the City Council of the City on October 28, 2003 (the "Ordinance"), the City has defeased all of the outstanding 2003 Bonds, as of , 2014, and intends to call such 2003 Bonds for redemption on , 2014 (the "Redemption Date"), at a redemption price equal to the principal amount thereof plus accrued interest. The 2003 Bonds called for redemption are defeased and deemed no longer outstanding and will be payable solely by application of money and/or government obligations deposited into an escrow fund held by the Escrow Agent. The 2003 Bonds will be paid by the City's Bond Registrar by application of the assets in such escrow fund on the Redemption Date. The 2003 Bonds to be defeased have the following maturity dates, principal amounts to be redeemed, interest rates, CUSIP numbers and redemption prices: Principal Amount Redemption Maturity Date to be Redeemed Interest Rate CUSIP No.* Price December 1, 2014 $ 270,000 4.00% 849063AL6 100% December 1, 2015 285,000 4.00 849063AM4 100 December 1, 2016 300,000 4.00 849063AN2 100 December 1, 2017 315,000 4.15 849063AP7 100 December 1,2018 360,000 4.25 849063AQ5 100 December 1, 2019 395,000 5.00 849063AR3 100 December 1,2020 440,000 5.00 849063AS1 100 December 1, 2021 485,000 5.00 849063AT9 100 December 1, 2022 525,000 5.00 849063AU6 100 December 1, 2023 580,000 5.00 849063AV4 100 December 1, 2025 940,000 5.00 849063AW2 100 December 1, 2033 2,540,000 5.00 849063AX0 100 CITY OF SPOKANE VALLEY, WASHINGTON Dated: , 2014. * This CUSIP number has been assigned by Standard & Poor's CUSIP Service Bureau and is included solely for the convenience of the holders. Neither the City nor the Escrow Agent shall be responsible for the selection or use of this CUS1P number, nor is any representation made to its correctness on the bond or as indicated in any redemption notice. EXHIBIT C—NOTICE OF DEFEASANCE O1-1SUSA:758213254.1 CONTINUING DISCLOSURE CERTIFICATE CITY OF SPOKANE VALLEY, WASHINGTON LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS,2014 This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered by the City of Spokane Valley, Washigton (the "City") in connection with the issuance of the above-named bonds (the "Bonds"). The Bonds are being issued pursuant to Ordinance No. 14- (the "Ordinance") enacted by the City Council of the City on , 2014. The City covenants and agrees as follows: SECTION 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the City for the benefit of the Holders and Beneficial Owners of the Bonds and in order to assist the Participating Underwriter in complying with Securities and Exchange Commission ("S.E.C.") Rule 15c2-12(b)(5). SECTION 2. Definitions. In addition to the definitions set forth in the Ordinance, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" shall mean any Annual Report provided by the City pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. "Beneficial Owner" shall mean any person that has or shares the power, directly or indirectly, to make investment decisions concerning ownership of any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries). "Dissemination Agent" shall mean the City, or any successor Dissemination Agent designated in writing by the City and which has filed with the City a written acceptance of such designation. "Holder" shall mean the person in whose name any Bond shall be registered. "Listed Events" shall mean any of the events listed in Section 5(a) or (b) of this Disclosure Certificate. "MSRB" shall mean the Municipal Securities Rulemaking Board or any other entity designated or authorized by the Securities and Exchange Commission to receive reports pursuant to the Rule. Until otherwise designated by the IVISRB or the Securities and Exchange Commission, filings with the MSRB are to be made through the Electronic Municipal Market Access (EMMA) website of the MSRB, currently located at http://emma.msrb.org. "Participating Underwriter" shall mean the original underwriter of the Bonds required to comply with the Rule in connection with offering of the Bonds. "Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. B-1 SECTION 3. Provision of Annual Reports. (a) The City shall, or shall cause the Dissemination Agent to, not later than nine (9) months after the end of the City's fiscal year (which shall be September 30 of each year, so long as the City's fiscal year ends on December 31), commencing with the report for the fiscal year ending December 31, 2014 (which is due not later than September 30, 2015), provide to the MSRB an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. The Annual Report may cross-reference other information as provided in Section 4 of this Disclosure Certificate; provided, that the audited financial statements of the City may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. If the City's fiscal year changes, it shall give notice of such change in a filing with the MSRB. The Annual Report shall be submitted on a standard form in use by industry participants or other appropriate form and shall identify the Bonds by name and CUSIP number. (b) Not later than 15 business days prior to said date, the City shall provide the Annual Report to the Dissemination Agent (if other than the City). If the City is unable to provide to the MSRB an Annual Report by the date required in subsection (a), the City shall, in a timely manner, send or cause to be sent to the MSRB a notice in substantially the form attached as Exhibit A. (c) The Dissemination Agent shall (if the Dissemination Agent is other than the City) file a report with the City certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, stating the date it was provided to the MSRB. SECTION 4. Content of Annual Reports. The City's Annual Report shall contain or include by reference the following: (a) Audited financial statements of the City for the preceding fiscal year, prepared in accordance with the Budgeting Accounting and Reporting System prescribed by the Washington State Auditor pursuant to RCW 43.09.200 (or any successor statute) and generally accepted accounting principles, and generally of the type included in the Official Statement for the Bonds under the heading ["DEBT AND FINANCIAL INFORMATION—Historical and Budgeted General Fund Operating Results" and APPENDIX D—"AUDITED FINANCIAL STATEMENTS – 2012."] If the City's audited financial statements are not available by the time the Annual Report is required to be provided to the MSRB pursuant to Section 3(a), the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement, and the audited financial statements shall be provided to the MSRB in the same manner as the Annual Report when they become available. (b) To the extent not included in the annual financial statements of the City, the Annual Report shall also include the following information generally of the type included in the Official Statement for the Bonds under the headings "DEBT AND FINANCIAL INFORMATION," including but not limited to the information in the following tables: (i) "Debt Summary;" B-2 (ii) "Assessed Valuation;" (iii) "Ad Valorem Tax Levies;" (iv) "Tax Collections;" and (v) "Consolidated Levy Rates." Any or all of the items listed above may be set forth in one or a set of documents or may be included by specific reference to other documents, including official statements of debt issues of the City or related public entities, which have been made available to the public on the MSRB's website. The City shall clearly identify each such other document so included by reference. SECTION 5. Reporting of Significant Events. (a) The City shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds in a timely manner not later than ten business days after the occurrence of the event: 1. Principal and interest payment delinquencies; 2. Unscheduled draws on debt service reserves reflecting financial difficulties; 3. Unscheduled draws on credit enhancements reflecting financial difficulties; 4. Substitution of credit or liquidity providers, or their failure to perform; 5. Adverse tax opinions or issuance by the Internal Revenue Service of proposed or final determination of taxability or of a Notice of Proposed Issue (IRS Form 5701 TEB); 6. Tender offers; 7. Defeasances; 8. Rating changes; or 9. Bankruptcy, insolvency, receivership or similar event of the obligated person. Note: for the purposes of the event identified in subparagraph (9), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a B-3 court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person. (b) The City shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material, in a timely manner not later than ten business days after the occurrence of the event: 1. Unless described in paragraph 5(a)(5), other material notices or determinations by the Internal Revenue Service with respect to the tax status of the Bonds or other material events affecting the tax status of the Bonds; 2. Modifications to rights of Bond holders; 3. Optional, unscheduled or contingent Bond calls; 4. Release, substitution, or sale of property securing repayment of the Bonds; 5. Non-payment related defaults; 6. The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms; or 7. Appointment of a successor or additional trustee or the change of name of a trustee. (c) Upon the occurrence of a Listed Event described in Section 5(a), or upon the occurrence of a Listed Event described in Section 5(b) which the City determines would be material under applicable federal securities laws, the City shall within ten business days of occurrence file a notice of such occurrence with the MSRB. Notwithstanding the foregoing, notice of the Listed Event described in subsections (b)(3) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to Holders of affected Bonds pursuant to the Ordinance. SECTION 6. Format for Filings with MSRB. Any report or filing with the MSRB pursuant to this Disclosure Certificate must be submitted in electronic format, accompanied by such identifying information as is prescribed by the MSRB. SECTION 7. Termination of Reporting Obligation. The City's obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the City shall give notice of such termination in a filing with the MSRB. B-4 SECTION 8. Dissemination Agent. The City may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the City pursuant to this Disclosure Certificate. The initial Dissemination Agent shall be the City. SECTION 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the City may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied: (a) If the amendment or waiver relates to the provisions of Sections 3(a), 4, or 5(a) or (b), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or the type of business conducted; (b) The undertaking, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) The amendment or waiver does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Holders or Beneficial Owners of the Bonds. In the event of any amendment or waiver of a provision of this Disclosure Certificate, the City shall describe such amendment in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the City. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in a filing with the MSRB, and (ii) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. SECTION 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice required to be filed pursuant to this Disclosure Certificate, in addition to that which is required by this Disclosure Certificate. If the City chooses to include any information in any Annual Report or notice in addition to that which is specifically required by this Disclosure Certificate, the City shall have no obligation under this Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event or any other event required to be reported. B-5 SECTION 11. Default. In the event of a failure of the City to comply with any provision of this Disclosure Certificate, any Holder or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Disclosure Certificate; provided, that any such action may be instituted only in Superior Court of the State of Washington in and for the County of Spokane or in U.S. District Court in or nearest to the County. The sole remedy under this Disclosure Certificate in the event of any failure of the City to comply with this Disclosure Certificate shall be an action to compel performance. SECTION 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the City, the Dissemination Agent, the Participating Underwriter and Holders and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. Date: CITY OF SPOKANE VALLEY, WASI-HINGTON By: Authorized City Representative B-6 CONTINUING DISCLOSURE EXHIBIT A FORM OF NOTICE TO THE MUNICIPAL SECURITIES RULEMAKING BOARD OF FAILURE TO FILE ANNUAL REPORT Name of City: CITY OF SPOKANE VALLEY, WASHINGTON Name of Bond Issue: CITY OF SPOKANE VALLEY, WASHINGTON LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS, 2014 Date of Issuance: ,2014 NOTICE IS HEREBY GIVEN that the City has not provided an Annual Report with respect to the above-named Bonds as required by Section 4 of the Continuing Disclosure Certificate of the City, dated the Date of Issuance. [The City anticipates that the Annual Report will be filed by .1 Dated: CITY OF SPOKANE VALLEY, WASHINGTON By: _ [to be signed only if filed] OHSUSA:758256771.3 B-7 PRELIMINARY OFFICIAL STATEMENT dated July , 2014 (Draft dated 07/01/14) '= NEW ISSUE BANK QUALIFIED BOOK-ENTRY MOODY'S RATING: "Applied For" (See"RATING"herein.) u In the opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel, based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other matters, the accuracy of certain representations and compliance with certain covenants, interest on the Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986. In the further a opinion of Bond Counsel, interest on the Bonds is not a specific preference item for purposes of the federal individual or corporate alternative -� LI minimum taxes, although Bond Counsel observes that such interest is included in adjusted current earnings when calculating corporate alternative eminimum taxable income. Bond Counsel expresses no opinion regarding any other tax consequences related to the ownership or disposition of or the amount,accrual or receipt of interest on,the Bonds. (See "TAX HATTERS"herein.) o $7,255,000" CITY OF SPOKANE VALLEY, WASHINGTON LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS,2014 DATED: Date of Delivery (expected to be August 12,2014) DUE: December 1,as shown on the inside cover • •` The City of Spokane Valley, Washington (the "City") provides this Official Statement in connection with the issuance of its Limited Tax General Obligation Refunding Bonds, 2014 (the "Bonds"). The a L '' Bonds mature on December 1 in each of the years and amounts set forth on the inside cover and will t, bear interest from their Date of Delivery to their respective maturities, or date of prior redemption, at the 4 rates per annum as shown on the inside cover. The Bonds will be issued as fully registered bonds under a book-entry system, initially registered to Cede & Co,, as nominee of The Depository Trust Company ("DTC"), which will act as securities depository for the Bonds. Individual purchases of Bonds will be made in the principal amount of $5,000, or integral multiples thereof The purchasers will not receive certificates representing their interest in the Bonds, as U long as the Bonds are in book-entry form. Interest will be payable semi-annually on June 1 and December 1, commencing December 1, 2014. The Washington State Fiscal Agent, currently The Bank of fi : New York Mellon, will serve as registrar, paying agent and transfer agent (the "Registrar") for the Bonds. For so long as the Bonds are held by DTC in book-entry form, principal and interest payments will be made as described herein. (See"THE BONDS - Book-Entry System" herein.) jThe City irrevocably covenants and agrees that for so long as any of the Bonds are outstanding, it will .% ^ include in its budget and levy taxes annually, in an amount permitted to cities without a vote of the electors of the Cit on all the taxable property in the Ci in amounts sufficient, together with all other money p p t}' h', g E legally available and to be used therefor, to pay the principal of and interest on the Bonds as the sante shall v a : become due. The full faith, credit and resources of the City are irrevocably pledged for the annual levy and collection of such taxes and the prompt payment of such principal and interest. The Bonds do not constitute a debt or indebtedness of the State of Washington or any political subdivision thereof other than the City. Proceeds of the Bonds are to be used to pay the costs of: (i)refunding on a current basis all or a portion of t. the City's outstanding Limited Tax General Obligation Bonds, 2003 (the "2003 LTGO Bonds) maturing in the years 2014 through 2023, 2025 and 2033 (the "Refunded Bonds"); and (ii) paying the costs related to •° the refunding of the Refunded Bonds and the issuance and sale of the Bonds. The Bonds are subject to 111 redemption prior to their stated maturities. (See "THE BONDS — Redemption and Purchase," "- • Authorization," "- Purpose and Use of Proceeds" and "SECURITY - PLEDGE OF FULL FAITH AND CREDIT"herein.) The City has designated the Bonds as "qualified tax-exempt obligations" for banks, thrift institutions and other financial institutions. (See "TAX MATTERS"herein for a discussion of this designation.) The Bonds are offered by the Underwriter when, as and if issued by the City, subject to the opinion as to tlegality of the Bonds by Orrick, Herrington & Sutcliffe LLP, Portland, Oregon, Bond Counsel. The Bonds, in book-entry form, are expected to be available through the facilities of DTC for delivery by cFast Automated Securities Transfer on or about August 12, 2014 (the "Date of Delivery"). This cover page contains certain information for quick reference only. It is not a summrny of this issue. Investors o: must read the entire official statement to obtain information essential to making an informed investment decision. �` ' r *Preliminary, subject to change. D.A. DAVIDSON & CO. S7,255,0001 CITY OF SPOKANE VALLEY, WASHINGTON LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS, 2014 MATURITY SCHEDULE' DATED: Date of Delivery (Estimated to be August 12,2014) DUE: December 1, as shown below Interest Price Year Amounts Rate Yield (%of Par) CUSIP No.2 2014 $355,000 2015 330,000 2016 345,000 2017 350,000 2018 390,000 2019 415,000 2020 450,000 2021 480,000 2022 510,000 2023 560,000 2024 435,000 2025 465,000 2026 505,000 2027 395,000 2028 300,000 2029 250,000 2030 230,000 2031 185,000 2032 135,000 2033 170,000 t Preliminary, subject to change. 2 CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by Standard & Poor's CUSIP Service Bureau, a division of The McGraw-Hill Companies, The CUSIP number is included above for convenience of the holders and potential holders of the Bonds. No assurance can be given that the CUSIP number for the Bonds will remain the same after the date of issuance and delivery of the Bonds. ii CITY OF SPOKANE VALLEY 11707 East Sprague Avenue, Suite 106 Spokane Valley, Washington 99206 (509) 921-1000 www.spokanevalley.org. Certain Elected City Officials: Mayor Dean Grafos Deputy Mayor Arne Woodard Council Members Lewis R. Higgins Ed Pace Chuck Hafner Ben Wick Bill Bates Certain Appointed City Officials: City Manager Mike Jackson Finance Director Mark Calhoun Public Works Director Eric Guth Parks & Recreation Director Mike Stone City Clerk Christine Bainbridge City Attorney Cary P. Driskell Deputy City Attorney Erik Lamb Underwriter D. A. DAVIDSON & CO. Columbia Center, 701 5' Avenue, Suite 4050 Seattle, Washington 98104 (206) 389-8000 Bond Counsel ORRICK, HERRINGTON & SUTCLIFFE LLP 1120 NW Couch Street, Suite 200 Portland, Oregon 97209 (503) 943-4800 Financial Advisor PIPER JAFFRAY & CO. 1420 Fifth Avenue, Suite 4300 Seattle, Washington 98101 (206) 628-2882 Neither the information on the City's website nor any links from that website is a part of this Official Statement and such information cannot be relied upon to be accurate as of the date of this Official Statement, nor should any such information be relied upon to make investment decisions regarding the Bonds, hIi No dealer, broker, sales representative or other person has been authorized by the City to give any information or to make any representations, other than those contained in this Official Statement, and if given or made, such other information or representations must not be relied upon as having been authorized by the City. The information in this Official Statement was obtained from sources believed to be reliable, but is not guaranteed as to accuracy or completeness. The Underwriter has reviewed the information in this Official Statement in accordance with, and as a pall of, its responsibilities under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of the information. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale hereunder shall create any implication that there has been no change in the financial condition or operations of the City described herein since the date of its distribution. This Official Statement contains, hi part, estimates and matters of opinion that are not intended as statements of fact, and no representation or warranty is made as to the correctness of such estimates and opinions or that they will be realized. The descriptions of the Bonds and the Bond Ordinance and all references to other documents or materials not claiming to be quoted in full are only brief outlines of some of the provisions and do not claim to summarize or describe all provisions. Copies of such documents may be obtained from the City or the Underwriter. THE BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED. IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. This Preliminary Official Statement will be"deemed final" by the City, pursuant to Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, except for information which is permitted to be excluded from this Preliminary Official Statement under said Rule 15c2-12. In connection with the offering and issuance of the Bonds, the Underwriter may over-allot or effect transactions that stabilize or maintain the market price of the Bonds at a level above that which might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time. Certain statements contained in this Official Statement reflect not historical facts but forecasts and "forward- looking statements." No assurance can be given that the future results discussed herein will be achieved, and actual results may differ materially from the forecasts described herein. In this respect, the words "estimate," "project," "anticipate," "expect,' "intend," "forecast," and "believe" and similar expressions are intended to identify forward-looking statements. All projections, forecasts, assumptions and other forward-looking statements are expressly qualified in their entirety by the cautionary statements set forth in this Official Statement. iv TABLE OF CONTENTS INTRODUCTION 1 THE BONDS 1 Description of Bonds 1 Payment of Bonds 1 Redemption and Purchase 1 Notice of Redemption 2 Failure to Redeem the Bonds 2 Defeasance of the Bonds 2 Debt Payment Record 3 Book-Entry System 3 Authorization 3 Purpose and Use of Proceeds 4 SECURITY - PLEDGE OF FULL FAITH AND CREDIT 6 PROPERTY TAX LIMITATIONS AND PROCEDURES 6 Limitations on Regular Property Tax Levies 6 Property Tax Levy Procedures 7 DEBT and FINANCIAL INFORMATION 9 Statutory Debt Limitations 9 Debt Summary 9 General Obligation Debt Ratios' 10 Future Financing 10 Direct and Estimated Overlapping General Obligation Debt 10 Debt Limitation Calculation I I Schedule of General Obligation Bond Debt Service 12 Assessed Valuation 13 Ad Valorem Tax Levies 13 Tax Collections 14 Interlocal Agreement with Spokane Public Facilities District 14 Consolidated Levy Rates 17 Major Taxpayers 18 Auditing of City Finances 18 Historical and Budgeted General Fund Operating Results 19 Budgetary Process 21 Description of Other Taxes 21 Authorized Investments 22 City Investments 23 THE CITY 23 Form of Local Government 24 City Administration 24 Summary of Accounting Policies 24 City Employment 25 Employee Relations 25 Pension Plans 26 Other Post-Employment Benefits 28 Risk Management 30 v INITIATIVE AND REFERENDUM 31 APPROVAL OF BOND COUNSEL 31 TAX MATTERS 31 NO LITIGATION CONCERNING THE BONDS 33 FINANCIAL ADVISOR 33 UNDERWRITING 34 RATING 34 CONFLICTS OF INTEREST 34 COMMITMENT TO PROVIDE CONTINUING DISCLOSURE 34 ADDITIONAL INFORMATION AND MISCELLANEOUS 35 PRELIMINARY OFFICIAL STATEMENT 35 DISCLOSURE STATEMENT 35 APPROVAL OF OFFICIAL STATEMENT 36 APPENDIX A-ECONOMIC AND DEMOGRAPHIC INFORMATION A-1 APPENDIX B- FORM OF CONTINUING DISCLOSURE CERTIFICATE B-1 APPENDIX C-FORM OF LEGAL OPINION C-1 APPENDIX D -AUDITED FINANCIAL STATEMENTS - 2012 D-1 APPENDIX E- BOOK-ENTRY SYSTEM E-1 vi S7,255,000' CITY OF SPOKANE VALLEY, WASHINGTON LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS, 2014 INTRODUCTION The City of Spokane Valley, Washington (the "City"), a municipal corporation duly organized and existing under and by virtue of the laws of the State of Washington (the "State"), furnishes this Official Statement, which includes the cover, inside cover, table of contents and appendices, in connection with the offering of$7,255,000'principal amount of Limited Tax General Obligation Refunding Bonds, 2014 (the "Bonds"). THE BONDS Description of Bonds The Bonds will be dated their Date of Delivery. The Bonds will mature on December 1 in each of the years and in the principal amounts set forth on the inside cover. The Washington State Fiscal Agent, currently The Bank of New York Mellon, will serve as registrar, paying agent and transfer agent (the "Registrar") for the Bonds. The Bonds will bear interest from the Date of Delivery, or the most recent interest payment date to which interest has been paid or duly provided for, whichever is later, at the rate per annum set forth on the inside cover. Interest will be calculated on the basis of a 360-day year consisting of twelve 30-day months, and will be payable semi-annually on June 1 and December 1, commencing December 1, 2014, until the stated date of maturity of the Bonds or date of prior redemption. For so long as the Bonds are held by DTC (as hereinafter defined) in book-entry form, principal and interest payments will be paid as described under the heading "THE BONDS - Book-Entry System." Payment of Bonds Both principal of and interest on the Bonds shall be payable in lawful money of the United States of America. Interest on the Bonds shall be paid by checks or drafts of the Registrar mailed on the interest payment date to the registered owners at the addresses appearing on the registration records of the City, maintained by the Registrar (the "Bond Register") on the 15th day of the month preceding the interest payment date (the "record date") or, if requested in writing by a registered owner of$1,000,000 or more in principal amount of Bonds prior to the applicable record date, by wire transfer on the interest payment date. Principal of the Bonds shall be payable upon presentation and surrender of the Bonds by the registered owners to the Registrar. Notwithstanding the foregoing, as long as the Bonds are registered in the name of DTC or its nominee, payment of principal of and interest on the Bonds shall be made in the manner set forth in the Blanket Issuer Letter of Representations between the City and DTC (the "Letter of Representations"). Redemption and Purchase* Optional Redemption. The City has reserved the right and option to redeem the Bonds maturing on or after December 1, 2024 prior to their stated maturity dates at any time on or after June 1, 2024*, as a +Preliminary, subject to change. 1 whole or in part (within the maturity in such manner as the Registrar shall determine), at 100% of the principal amount thereof to be redeemed plus accrued interest to the date fixed for redemption. Portions of the principal amount of any Bond, in installments of$5,000 or any integral multiple thereof, may be redeemed. If less than all of the principal amount of any Bond is redeemed, upon surrender of that Bond to the Registrar, there will be issued to the registered owner, without charge therefor, a new Bond or Bonds (at the option of the registered owner) in any of the denominations authorized by the Bond Ordinance (as hereinafter defined) in the aggregate principal amount remaining unredeemed. Purchase. The City has reserved the right and option to purchase any or all of the Bonds in the open market at any time at any price acceptable to the City. All Bonds purchased or redeemed under the optional redemption provisions, described above, will be cancelled. Notwithstanding the foregoing, for as long as the Bonds are registered in the name of DTC or its nominee, selection of Bonds for redemption shall be in accordance with the Letter of Representations. See "-- Book Entry System" below. Notice of Redemption While the Bonds are held by DTC in book-entry only form, any notice of redemption shall be given at the time, to the entity and in the manner required by DTC in accordance with the Letter of Representations, and the Registrar shall not be required to give any other notice of redemption. If the Bonds cease to be in book-entry only form, the City shall cause notice of any intended redemption of Bonds to be given by the Registrar not less than 20 nor more than 60 days prior to the date fixed for redemption by first-class mail, postage prepaid, to the registered owner of any Bond to be redeemed at the address appearing on the Bond Register at the time the Registrar prepares the notice, and the requirements of this sentence shall be deemed to have been fulfilled when notice has been mailed as so provided, whether or not it is actually received by the registered owner of any Bond to be redeemed. In the ease of an optional redemption, the notice may state that the City retains the right to rescind the redemption notice and the related optional redemption by giving a written notice of rescission to the affected registered owners no later than two (2) business days prior to the scheduled optional redemption date. Any notice of optional redemption that is so rescinded shall be of no effect, and the Bonds for which the notice of optional redemption has been rescinded shall remain outstanding. Failure to Redeem the Bonds If any Bond is not redeemed when properly presented at its maturity or date fixed for redemption, the City is obligated to pay interest on that Bond at the same rate provided in the Bond from and after its maturity or date fixed for redemption until that Bond, both principal and interest, is paid in full or until sufficient money for its payment in full is on deposit in the City's Bond Fund, hereafter defined, and the Bond has been called for redemption by giving notice of redemption to the registered owner of each of those unpaid Bonds. Defeasance of the Bonds In the event that money and/or Government Obligations (as such obligations are defined in chapter 39.53 RC W, as now or hereafter amended) maturing at such time or tunes and bearing interest to be earned thereon in amounts (together with such money, if necessary) sufficient to redeem and retire part or all of the Bonds in accordance with their terms, are set aside in a special account of the City to effect such redemption and retirement, and such money and the principal of and interest on such obligations 2 are irrevocably set aside and pledged for such purpose, then no further payments need be made into the Bond Fund of the City for the payment of the principal of and interest on the Bonds so provided for, and such Bonds shall cease to be entitled to any lien, benefit or security of the Bond Ordinance except the right to receive the money so set aside and pledged, and such Bonds shall be deemed not to be outstanding. The term "Government Obligations" has the meaning given in chapter 39.53 RCW, as amended, currently: (1) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by the United States of America and bank certificates of deposit secured by such obligations; (2) bonds, debentures, notes, participation certificates, or other obligations issued by the Banks for Cooperatives, the Federal Intermediate Credit Bank, the Federal Home Loan Bank system, the Export-Import Bank of the United States, Federal Land Banks, or the Federal National Mortgage Association; (3) public housing bonds and project notes fully secured by contracts with the United States; and (4) obligations of financial institutions insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation, to the extend insured or to the extent guaranteed as permitted under any other provision of State law. If the City defeases any of the Bonds, such Bonds may be deemed to be retired and "reissued" for federal income tax purposes as a result of the defeasance. Debt Payment Record The City has never defaulted on a payment of principal or interest on any of its Bonds or obligations. Book-Entry System The Bonds will be issued under a book-entry system, initially registered to Cede & Co., as nominee of The Depository Trust Company ("DTC"), New York, New York, which will act as securities depository for the Bonds. Individual purchases of the Bonds will be made in the principal amount of $5,000, or integral multiples thereof within a single maturity. When the Bonds are issued, ownership interest will be available to purchasers only through a book-entry system (the "Book-Entry System") maintained by DTC or such other depository institution designated by the City pursuant to the Bond Ordinance. See Appendix E to this Official Statement for further information about the Book-Entry System. The information presented in Appendix E was obtained from DTC, and the City makes no representation as to the accuracy or completeness thereof. If the Bonds are removed from the Book-Entry System and delivered to the person named as the registered owner of the Bonds on the registration records maintained by the Registrar in physical form, as described in Appendix E, the discussion therein of the Book-Entry System will not apply. The City will not be responsible or liable for maintaining, supervising or reviewing the records maintained by DTC, its participants or persons acting through such participants. Authorization The Bonds will be issued pursuant to the provisions of the Constitution and applicable laws of the State, particularly chapters 35A.40, 35.37, 39.36, 39.46 and 39.53 RCW and pursuant to Ordinance No. passed by the City Council on July 15, 2014, authorizing the issuance of the Bonds (the "Bond Ordinance"). 3 Purpose and Use of Proceeds Proceeds of the Bonds are to be used to pay the costs of: (i) refunding on a current basis all or a portion of the City's outstanding Limited. Tax General Obligation Bonds, 2003 (the "2003 LTGO Bonds") maturing in the years 2014 through 2023, 2025 and 2033 outstanding in the amount of$7,435,000 (the "Refunded Bonds"); and (ii) paying the costs related to the refunding of the Refunded Bonds and the issuance and sale of the Bonds. The Bonds are being issued so the City can obtain the benefit of savings in total debt service requirements. The proceeds of the Bonds, together with certain other available funds of the City, are to be used to provide funds to establish an irrevocable escrow to: (i) pay interest on the Refunded Bonds when due up to and including , 2014; (ii) and to call, pay and redeem on , 2014, all of the Refunded Bonds at the price of par; and (iii) pay the administrative costs of the refunding of the Refunded Bonds and the costs of the issuance and sale of the Bonds. From the proceeds of the Bonds and certain other available funds of the City, the City will deposit sufficient funds with U.S. Bank National Association (the "Escrow Agent"), to cause the refunding of the Refunded Bonds. The City's Finance Director, Manager, or any City employee either may appoint, are authorized to direct the Escrow Agent to purchase certain direct, noncallable obligations of the United States ("Acquired Obligations"), which will be deposited in the custody of the Escrow Agent. The funds deposited with the Escrow Agent or the maturing principal of the Acquired Obligations, interest earned thereon and cash will pay the principal of and interest on the Refunded Bonds up to and including , 2014. The funds deposited with the Escrow Agent, or the Acquired Obligations, along with interest earned thereon and cash will be pledged irrevocably to and held in trust for the benefit of the owners of the Refunded Bonds by the Escrow Agent, pursuant to a Refunding Trust Agreement to be executed by the City and the Escrow Agent on the Date of Delivery of the Bonds. Verification of Mathematical Calculations. , independent certified public accountants, verified the accuracy of the mathematical computations concerning the adequacy of the maturing principal amounts of and interest earned on the Acquired Obligations, to be placed together with other escrowed money in the escrow account to pay when due, pursuant to the call for redemption, the principal of and interest on the Refunded Bonds. The verification also confirms the mathematical computations supporting the conclusion of Bond Counsel that the Bonds are not "arbitrage bonds" as defined by Section 148 of the Code. (The remainder of this page intentionally left blank.) 4 Information on the Refunded Bonds (subject to change) is as follows: Amount Refunded Amount Redemption Issue Outstanding Maturities Refunded Date Premium 2003 Bonds $7,435,000 2014-2023, $7,435,000 , 2014 $0 2025' & 2033' Refunded Bonds Maturity Years Principal Interest (December 1) Amounts Rates CUSIP 2014 $ 270,000 4.00% 849063AL6 2015 285,000 4.00 849063AM4 2016 300,000 4.00 849063AN2 2017 315,000 4.15 849063AP7 2018 360,000 4.25 849063AQ5 2019 395,000 5.00 849063AR3 2020 440,000 5.00 849063AS1 2021 485,000 5.00 849063AT9 2022 525,000 5.00 849063AU6 2023 580,000 5.00 849063AV4 2025' 940,000 5.00 849063AW2 2033' 2,540,000 5.00 849063AX0 Total $7,435,000 Term Bonds. Sources and Uses. The estimated sources and application of Bond proceeds are shown in the table that follows. Sources of Funds:' Principal Amount of the Bonds $ City Contribution Net Original Issue Premium/(Discount) Total Sources of Funds $ Application of Funds:' Deposit to Escrow Account $ Deposit to Debt Service Account (Rounding) Costs of Issuance of the Bonds2 Total Application of Funds $ 'Amounts will be included in the final Official Statement. 2 Includes Bond Counsel fees, Underwriter's discount, Financial Advisor fee, rating agency fees, Escrow Agent fees, escrow verification fees, costs of printing and distributing the Preliminary and final Official Statements, and other related fees and expenses. 5 SECURITY -PLEDGE OF FULL FAITH AND CREDIT The Bonds are limited tax general obligations of the City. The full faith and credit of the City are irrevocably pledged for the payment of the Bonds, within the appropriate constitutional and statutory limitations for non-voted general obligations. The City has irrevocably covenanted and agreed that for so long as any of the Bonds are outstanding, it will levy taxes annually, in an amount permitted to cities without a vote of the electors of the City, on all the taxable property in the City, in amounts sufficient, together with all other money legally available and to be used therefor, to pay the principal of and interest on the Bonds as the same shall become due, keeping in mind constitutional and statutory tax limitations pertaining to non-voted general obligations.. The Spokane Public Facilities District (the "District") makes payments to the City related to the Mirabeau Point Project (defined herein). The City may, but is not required to, allocate such payments received by the District towards debt service payments on the 2003 LTGO Bonds (the Refunded Bonds) or the Bonds. The payments are scheduled payments on each June 1 and December 1, which commenced December 1, 2003 and will conclude on December 1, 2033 as further set forth in the Agreement and correspond to the debt service payments on the 2003 LTGO Bonds (the Refunded Bonds). (See "DEBT AND FINANCIAL INFORMATION - Interlocal Agreement with Spokane Public Facilities District" herein.) The Bonds are not obligations of the State, Spokane County, Washington (the "County"), the District, or any other municipal corporation other than the City„ For a description of the manner in which taxes are levied and collected, see "PROPERTY TAX LIMITATIONS AND PROCEDURES - Property Tax Levy Procedures." PROPERTY TAX LIMITATIONS AND PROCEDURES Limitations on Regular Property Tax Levies The authority of a city to levy taxes without a vote of the people for general city purposes, including the payment of debt service on limited tax general obligation debt, such as the Bonds, is subject to the limitations described below. Information relating to regular property tax limitations is based on existing statutes and constitutional provisions. Changes in such laws could alter the impact of these and other interrelated tax limitations on a city. Maximum Rale Limitation. RCW 84.52.043 allows a city to levy taxes of up to $3.375 per $1,000 of taxable property in the city and RCW 41.16.060 allows an additional $0.225 per $1,000 for any municipal purpose, if such additional levy is not required to fund pension programs. For cities annexed to a library district and/or a fire district, such as the City, the maximum levy rate is reduced by the amount of the library district and/or fire district levy. The Spokane County Library District's regular levy is $0.499734 per $1,000 and the Spokane Valley Fire District's regular levy is $1.500000 per $1,000, which reduces the City's current maximum regular levy rate to $1.600266. The City's regular levy for 2014 is $1.545147 per $1,000. These taxes may be levied without a vote of the people. This limitation is exclusive of a potential levy for the maintenance of a local improvement guaranty fund, which the City does not levy. One Percent Aggregate Regular Levy Limitation. Article VII, Section 2 of the Washington Constitution, as amended in 1973, limits aggregate regular property tax levies by the State and all taxing districts, except port districts and public utility districts, to $10 per $1,000 or 1.00% of the true and fair value of property. RCW 84.52.050 provides the same limitation by statute. 6 Aggregate Levy Rate Limitations. Within the 1.00% limitation described above, aggregate regular property taxes levied by entities other than the State may not exceed $590 per $1,000. If aggregate regular property tax levies exceed either limitation,junior taxing district levies within the arca affected are reduced or eliminated according to priority established in RCW 84.52.010. RCW 84.52.043 defines "junior taxing districts" as all taxing districts other that the State, counties, road districts, cities, towns, port districts and public utility districts. The City is not a junior taxing district. Constitutional Uniformity. Property taxes generally are subject to a "uniformity" requirement under the State Constitution, which specifies that similarly classified property throughout a taxing district must be taxed at a uniform rate. Aggregate property tax rates may vary within a taxing district because of the different overlapping districts. Under the uniformity requirement, if the available levy rate capacity varies within a district, then the rate for the entire district will be uniformly lowered to the lowest of the permissible rates under the aggregate rate limitations. Regular Levy Amount Increase Limitation Levy Amount Increase Limitation (101% Levy Lid). In addition to the rate limitations described above, state law (chapter 84.55 RCW) also restricts the increase in the total amount of an individual taxing district's regular levy from year to year. The law limits a taxing district's regular levy to an amount equal to 100% of the district's highest prior levy amount, multiplied by a "limit factor," plus a full value adjustment for new construction and certain other adjustments. The limit factor is defined as (i) the lesser of 101% or I00% plus inflation (measured by the implicit price deflator), or (ii) up to 101%, regardless of inflation, if approved by the legislative authority of the taxing district upon a finding of substantial need. RCW 84,55,050 allows a taxing district to levy a greater amount than would otherwise be allowed under the levy lid, either indefinitely or for a limited period or purpose if approved by a majority of the voters. This is known as a "levy lid lift." A levy lid lift does not permit the taxing district to exceed any applicable levy rate limitations. RCW 84.55.092 allows the property tax levy to be set at the amount that would be allowed if the tax levy for taxes due in each year since 1986 had been set at the frill amount allowed under chapter 84.55 RCW. This is sometimes referred to as "banked" levy capacity. "Banked" Levy Capacity. Currently, the City has $422,890 of"banked" levy capacity, which if levied in the full amount equals a levy of approximately $0.058989 per $1,000 at the 2014 Tax Year Assessed Valuation of$7,168,991,028. The City's current maximum regular levy rate is equal to $1.600266 per $1,000 and the City's regular levy for 2014 is $1.545147 per $1,000 and if the banked levy capacity is levied in the full amount, the City would exceed the maximum regular levy rate of $1.600266 by $0,00387 per $1,000 taking into consideration the information available for tax year 2014. Authorization of Excess Levies. RCW 84.52.052 authorizes the levying of taxes in excess of the $5.901$1,000 and 1.00% limit imposed by RCW 84,52.043 and 84.52,050, respectively, by taxing district except school districts, when a larger levy is necessary in order to prevent impairment of the obligation of the contracts. Any such taxing district may also levy taxes in excess of the rates specified by statute when authorized to do so by the voters of such taxing district. Excess levies require 60% voter approval and there must be at least 40% of the voters from the previous general election voting. Property Tax Levy Procedures Valuations and Assessments of Property for Taxation Purposes. The Spokane County Assessor (the "County Assessor") determines the value of all real and personal property throughout the County that is subject to ad valorem taxation. The County Assessor is an elected official whose duties and methods of determining value are prescribed and controlled by statute and by detailed regulations promulgated by the Department of Revenue of the State of Washington. For tax purposes, the assessed value of property 7 is set at 100% of its true and fair value as of January 1 of each year. All property is subject to revaluation at least once every four years and to an on-site appraisal at least once every six years. The property is listed by the County Assessor on a tax roll at its current assessed value and the tax roll is filed in the County Assessor's office. The County Assessor's determination is subject to revisions by the County Board of Equalization and, for certain property, subject to further revisions by the State Board of Equalization. After all administrative procedures are completed, the Board receives the County Assessor's final certificates of assessed value of property within the City. Property Tax Collection Procedures. Property taxes are levied in specific amounts, and the rate for all taxes levied for all taxing districts in each county is determined, calculated, and fixed by the County Assessor based upon the assessed valuation of the property within the various taxing districts. The County Assessor extends the taxes to be levied within each taxing district upon a property tax roll, which contains the total amount of taxes to be so levied and collected. The property tax roll is delivered to the County Treasurer by January 15, who bills and collects the taxes as certified. All such taxes are due and payable on the 30th of April of each year; but if the amount due from a taxpayer exceeds $50, one-half may be paid then and the balance no later than October 31 of that year. Delinquent taxes are subject to interest at the rate of 1.00% per month until paid. In addition, a penalty of 3.00% will be assessed on June 1st of the year in which the tax was due and 8.00% on December 1st of the year the tax was due. The method of giving notice of payment of taxes due, the County Treasurer's accounting for the money collected, the distribution of the taxes among the various taxing districts, notices of delinquency, and collection procedures are all covered by detailed statutes. Tax Liens and Foreclosure. Property taxes and all charges and expenses relating to the taxes constitute a statutory lien on the property taxed. The lien attaches to the property from and including January 1 in the year in which the tax is levied, and is discharged only when the taxes are paid. In other respects, and subject to the "Homestead Exemption," the lien for delinquent property taxes is prior to all other liens or encumbrances of any kind on real or personal property subject to taxation, except federal tax liens. The State's courts have not decided whether the Homestead Law (Chapter 6.13 RCW) may give the occupying homeowner a right to retain the first $125,000 of proceeds of the forced sale of the family residence or other "homestead" property for delinquent general property taxes. (See Algona vs. Sharp, 30 Wn. App. 837, 638 P.2d 627 (1982), holding the homestead right superior to the improvement district assessment), The United States Bankruptcy Court for the Western District of Washington has held that the Homestead Exemption applies to the lien for property taxes, while the State Attorney General has taken the position that it does not. By law, the County Treasurer must commence in superior court foreclosure of a tax lien on real property after three years have passed since the first delinquency. The County Treasurer must sell the property to the highest and best bidder for cash upon entry of the order of foreclosure. The minimum bid allowable is the total amount of the taxes, interest, penalty and costs due. If a property is foreclosed upon by the County Treasurer, it becomes stricken from the tax rolls and becomes Tax Title Property that is held in trust by the County for the benefit of the taxing districts within the levy code of that parcel. If and when the parcel is sold, proceeds of the sale are disbursed to the taxing districts within that levy code. A property owner may redeem the property at any time prior to the foreclosure sale by paying the County Treasurer the amount of the certificate of delinquency and all taxes, interest and costs accruing after the certificate of delinquency is issued, together with interest on such amount at the rate of 12.00% per annum. 8 DEBT AND FINANCIAL INFORMATION Statutory Debt Limitations The power of the City to contract debt of any kind is controlled and limited by State law. All debt must be set forth in accordance with detailed budget procedures and paid for out of identifiable receipts and revenues. The budget must be balanced for each fiscal year. It is unlawful for an officer or employee of the City to incur liabilities in excess of budgetary appropriations. The amount of indebtedness that a City may legally incur is limited by the Constitution and laws of the State. For State law purposes, "debt" generally includes any unconditional obligation that is generally payable from and secured by a pledge of tax revenues. Voter Approved Debt. As prescribed by State statutes, the unlimited tax general obligation indebtedness permitted for cities, subject to 60% majority vote of registered voters, at an election at which 40% of those who voted at the last general election cast a ballot, is limited to 2.50% of assessed valuation for general purposes, 2.50% for utilities and 2.50% for open space and park facilities and economic development purposes. The tax levy limitations described herein do not apply to excess tax levies approved by the voters for payment of voter-approved debt. The Bonds are not subject to voter- approval, No,,-Voted Debt. The City may, without a vote of the electors, incur general obligation indebtedness in an amount not to exceed L50% of assessed valuation. Additionally, the City may also, without a vote of the electors, enter into leases, if the total principal component of the lease payments together with the other non-voted general obligation indebtedness of the City, does not exceed 1.50% of assessed valuation. The combination of unlimited tax and limited tax general obligation debt for general purposes, including leases, cannot exceed 2.50% of assessed valuation and for all purposes cannot exceed 7.50% of assessed valuation. Debt Summary The following table presents a summary of certain City debt factors as of June 1, 2014, adjusted to exclude the Refunded Bonds and include the Bonds. (See "DEBT AND FINANCIAL INFORMATION — Debt Limitation Calculation and "— Direct and Estimated Overlapping General Obligation Debt" herein.) 2013 Population Estimate' 91,490 2014 Tax Year Assessed Valuation $7,168,991,028 Total Non-voted G.O. Debt Outstanding(including the Bonds and excluding the Refunded Bonds)2 $7,255,000 Total Voted G.O. Debt Outstanding $0 Total Direct G.O. Debt(voted&non-voted) Outstanding(including the Bonds and excluding the Refunded Bonds)2 $7,255,000 Estimated Overlapping Debt Outstanding $87,382,004 Total Direct and Overlapping Debt Outstanding' $94,637,004 Remaining Non-Voted General Obligation Debt Capacity' $100,341,966 Remaining Total General Obligation Debt Capacity (voted&110,1-voted) for General Purposes'. $172,031,877 'As estimated by the Washington State Office of Financial Management. 2 Preliminary, subject to change. (See "DEBT AND FINANCIAL INFORMATION - Schedule of General Obligation Bond Debt Service"and"-Direct and Estimated Overlapping General Obligation Debt"herein.) Source: Spokane County Assessor's and Treasurer's Offices. 9 General Obligation Debt Ratios' Assessed Valuation Per Capita $78,358 Direct Debt Per Capita $79 Direct and Overlapping Debt Per Capita $1,034 Direct Debt to Assessed Valuation 0.10% Direct and Overlapping Debt to Assessed Valuation 1.32% 'Preliminary;subject to change. Future Financing Other than the Bonds, the City has no plans to issue any other general obligation bonds within the next 12 months. Direct and Estimated Overlapping General Obligation Debt The following information sets forth the general obligation indebtedness of the City, including the Bonds and excluding the Refunded Bonds, which will be repaid with Bond proceeds, and of taxing entities with boundaries that overlap with the City as of June 1, 2014 (except as noted). Final Amount Direct General Obligation Debt: Maturity Outstanding_ Voted Debt None N/A $0 Total Voted Debt' $0 Non-Voted Debt Loans/Leases/Contracts N/A $0 The Bonds' 12/01/2033 7,255,000 Total Non-Voted Debt' $7,255,000 Total Voted and Non-Voted General Obligation Debt' $7,255,000 Estimated Overlapping Debt as of 06/01/2014: General Percent Amount Obligation Overlapping Overlapping Taxing Entity Debt Outstanding with City with City Spokane County $187,791,252 19.25% $36,151,288 Library District 2,905,000 34.61 1,005,370 Spokane School District No. 81 333,354,065 3.91 13,041,999 Central Valley School District No. 356 28,643,708 64.32 18,423,165 East Valley School District No. 361 6,623,397 60.31 3,994,248 West Valley School District No, 363 27,411,176 53.37 14,630,327 Spokane Valley Fire District No. 1 0 71.26 0 Moran Fire District No. 8 1,800,000 7.53 135,607 Total Overlapping Debt $87,382,004 Total Direct Debt of the City and Overlapping Debt' $94,637,004 'Preliminary; subject to change. Source:Spokane County Assessor's and Treasurer's Offices and certain taxing districts. 10 Debt Limitation Calculation In the State, there is a statutory limit on the amount of indebtedness a city may incur. (See "- Statutory Debt Limitations" above.) The following chart sets forth the remaining general obligation debt capacity of the City as of June 1, 2014, calculated to include the Bonds and exclude the Refunded Bonds. The 2014 tax year assessed valuation of the City for regular levies is $7,168,991,028. I. General Purposes: A. Non-Voted Debt Capacity (1.50% of Assessed Valuation) $107,534,865 Less: Non-Voted Debt (including the Bonds and excluding the Refunded Bonds)' (7,255,000) Plus: Cash and Investments in Debt Service Funds2 62,101 Remaining Capacity for Non-Voted General Purposes $100,341.966 Percent of Non-Voted Debt Capacity Remaining 93.3% B. Total General Debt Capacity (2.50% of Assessed Valuation) $179,224,776 Less: Voted Debt 0 Less: Non-Voted Debt (including the Bonds and excluding the Refunded Bonds)` (7,255,000) Plus: Cash and Investments in Debt Service Funds' 62,101 Remaining Capacity for Total General Debt Purposes $172,031,2 Percent of Total Debt Capacity Remaining 96.0% II. Utility Purposes: Voted Debt Capacity(2.50% of Assessed Valuation) $179,224,776 Less: Outstanding Debt 0 Remaining Capacity for Utility Purpose $179,224,776 Percent of Utility Debt Capacity Remaining 100.00% III. Parks and Open Space Purposes: Voted Debt Capacity(2.50% of Assessed Valuation) $179,224,776 Less: Outstanding Debt 0 Remaining Capacity for Parks and Open Space $179,224,776 Percent of Parks and Open Space Debt Capacity Remaining 100.00% 1 Preliminary, subject to change. (See "- Schedule of General Obligation Bond Debt Service" and "- Direct and Estimated Overlapping General Obligation Debt"herein.) 2 Balance as of April 30,2014, Source: Spokane County Assessor's Office and the City. 11 Schedule of General Obligation Bond Debt Service The following table presents a preliminary schedule of debt service requirements for the Bonds. Interest figures below may be rounded. Assuming the issuance of the Bonds and defeasance of the Refunded Bonds, the City will not have outstanding any additional non-voted debt other than the Bonds. The City does not have any outstanding unlimited tax (voter approved) general obligation debt. (See "- Direct and Estimated Overlapping General Obligation Debt" herein.) Limited Tax General Obligation Bond Debt Service Requirement. The Bonds' Total LTGO Year Principal' Interest' Debt Service' 2014 $355,000 $67,705 $422,705 2015 330,000 216,512 546,512 2016 345,000 209,913 554,913 2017 350,000 203,012 553,012 2018 390,000 196,013 586,013 2019 415,000 188,212 603,212 2020 450,000 179,913 629,913 2021 480,000 170,912 650,912 2022 510,000 156,513 666,513 2023 560,000 141,212 701,212 2024 435,000 124,413 559,413 2025 465,000 111,362 576,362 2026 505,000 92,763 597,763 2027 395,000 72,562 467,562 2028 300,000 55,775 355,775 2029 250,000 43,025 293,025 2030 230,000 32,400 262,400 2031 185,000 22,050 207,050 2032 135,000 13,725 148,725 2033 170,000 7,650 177,650 Total $7,255,000 $2,305,642 $9,560,642 'Preliminary,subject to change. Interest rates are estimated. 12 Assessed Valuation Set forth in the following table is the assessed valuation for regular levies of property located within the City for years 2010 through 2014. Tax % Change from Year Assessed Value Prior Year 2014 $7,168,991,028 3.6% 2013 6,921,825,295 (2,3) 2012 7,087,523,395 (0.7) 2011 7,140,947,644 (0.4) 2010 7,169,492,602 --- Source: Spokane County Assessor's Office. Ad Valorem Tax Levies The following presents the ad valorem tax levy rates and amounts for each fund of the City for tax years 2010 through 2014. The City does not have any voter-approved excess levies. Rates per$1,000 of Assessed Value Tax Year Regular 2014 $1.545147 2013 1.577609 2012 1.526445 2011 1.503003 2010 1.510108 Levy Amounts Tax Year Regular 2014 $11,077,144 2013 10,919,932 2012 10,818,717 2011 10,732,863 2010 10,826,709 Source: Spokane County Assessor's Office, 13 Tax Collections The following table presents the property taxes collected for the City in the tax years 2009 through 2014, and the percentage collected as of April 30, 2014. Tax Collected Percent of Tax Total Tax Percent of Tax Tax Regular Tax in Year of Collected in Collected as of Collected as of Year Levy' Levy Year of Levy 04/30/14 04/30/14 2014' $11,079,836 $5,162,925 46.6% $5,162,925 46.6% 2013 10,927,218 10,674,154 97.7 10,756,634 98.4 2012 10,823,726 10,606,030 98.0 10,682,547 98.7 2011 10,737,546 10,512,677 97.9 10,594,737 98.7 2010 10,835,349 10,594,917 97.8 10,693,496 98.7 2009 10,537,288 10,316,468 97.9 10,397,114 98.7 ' As adjusted by the Spokane County Treasurer's Office, 2 Through April 30,2014,as full year of tax collections is not available. Source: Spokane County Treasurer's Office. Interlocal Agreement with Spokane Public Facilities District [0i$eusslny Amendments?] The City, the District, and the County entered in to an Interlocal Agreement , dated as of August 19, 2003 ([as subsequently amended], the "Interlocal Agreement"), relating to the development and financing of three regional center projects, including the CenterPlace at Mirabeau Point (the "Mirabeau Point Project") located within the City. The Mirabeau Point Project is a 54,000 square-foot event facility that offers a variety of spaces including, banquet facilities, flexible meetinglconference rooms with media and technology options, an auditorium, classroom space utilized by the Community Colleges of Spokane and houses the Spokane Valley Senior Center. The City used a portion of the proceeds of the 2003 LTGO Bonds to finance costs of the Mirabeau Point Project, which was completed in 2005. The City has full and complete control over the development, operation and management of the Mirabeau Point Project that the City owns and operates on behalf of the City and the District. To help finance the costs of the Mirabeau Point Project, the District has agreed in the Interlocal Agreement to make regularly scheduled intergovernmental payments to the City (the "Mirabeau Point Payments") on each June 1 and December 1, commenting on December 1, 2003 and concluding on December 1, 2033, as set forth in the Interlocal Agreement. [All of the District's legal ownership interests, if any, in the Mirabeau Point Project shall terminate and revert to the City upon the termination of the District's obligation to make Miraheau Point Payments.] [Although the Mirabeau Point Payments correspond to the amounts of the debt service payments on the 2003 LTGO Bonds issued to finance the Mirabeau Point Project [or, as amended, on the Bonds issued to refinance such 2003 LTGO Bonds], the Mirabeau Point Payments are not pledged to the repayment of the 2003 LTGO Bonds (the Refunded Bonds) or the Bonds. The City may at its sole option, but is not required to, apply the Mirabeau Point Payments towards the payment of debt service on the portion of the 2003 LTGO Bonds (the Refunded Bonds) issued to finance costs of the Mirabeau Point Project[, as well as debt service on the portion of the Bonds issued to refund such 2003 LTGO Bonds]. Although the City is not required to apply the Mirabeau Point Payments to the payment of debt service on the 2003 LTGO Bonds (the Refunded Bonds) or the Bonds, the City assumes when preparing its annual budget that the Mirabeau Point Payments will be received. If there were to be a shortfall in the Mirabeau Point Payments received by the City, the City would be required to pay debt service on the 2003 LTGO Bonds (the Refunded Bonds) and the Bonds from the City's general fund. 14 The following table shows the amount of the Mirabeau Point Payments received and the amount budgeted to be received by the City since 2009 as well as the projected amount to be received by the City in 2014. Mirabeau Point Payments Amount Received by the City from Budgeted to be Received[Or Year the District debt service on Bonds?] Projected 2014 $441,520 $441,520 2013 437,120 437,120 2012 432,320 432,320 2011 427,120 427,120 2010 421,520 421,520 2009 419,670 419,670 Source: The City. Pursuant to the Interlocal Agreement, the District is required to make the Mirabeau Point Payments from the District's Regional Tax Revenues. The District's Regional Tax Revenues are applied in the amounts and in order set forth in the Interlocal Agreement. For purposes of the Mirabeau Point Payments Regional Tax Revenues consist of (i) all proceeds received on and after March 1, 2003 of a rebate from the State's portion of the sales and use tax collections in the County in the amount of a rebate from the State's portion of the sales and use tax collections in the County in the amount of 0.033% (the "District State Credit Sales and Use Tax"), imposed pursuant to RCW 82.14.390 and (ii) proceeds of a sales and uses tax of a rate not to exceed 0.10% of the selling price in the case of a sales tax or the value of the article used in the case of a use tax (the "District Sales and Use Tax"), imposed pursuant to RCW 82.14.390, received by or available to the District from and after the earlier of(a) January 1, 2018 and (b) the date on which all indebtedness incurred by the District in connection with the Spokane Veterans Memorial Arena is retired and/or legal defeased. The District's authority to collect the District State Credit Sales and Use Tax expires in 2027, which is prior to the final maturity of the 2003 LTGO Bonds [and the Bonds]. Because the final maturity of indebtedness of the District related to the Spokane Veteran Memorial Arena is currently December 1, 2017, the proceeds of the District Sales and Use Tax are not expected to be available for the Mirabeau Point Payments until January 1, 2018. The District's authority to collect the District Sales and Use Tax expires September 1, 2043. The Mirabeau Point Payments are not pledged to the repayment of the 2003 LTGO Bonds (the Refunded Bonds) and the City has no obligation to use the Mirabeau Point Payments to pay debt service on the 2003 LTGO Bonds (the Refunded Bonds) or the Bonds. The Mirabeau Point Payments are a special obligation of the District and the ability of the District to make such intergovernmental payment is dependent on the receipt of such certain tax revenues described above, which cannot be guaranteed. There can be no assurance that the City will receive any Mirabeau Point Payments and the City's obligation to pay debt service on the 2003 LTGO Bonds (the Refunded Bonds) and the Bonds is not contingent upon the receipt of such payments. The 2003 LTGO Bonds (the Refunded Bonds) and the Bonds are limited tax general obligations of the City for which the City has irrevocably covenanted and agreed that for so long as any of the 2003 LTGO Bonds (the Refunded Bonds) or the Bonds are outstanding, it will include in its budget and levy taxes annually, in an amount permitted to cities without a vote of the electors of the City, on all the taxable property in the City, in amounts sufficient, together with all other money legally available and to be used therefor, to pay the principal of and interest on the 2003 LTGO Bonds (the Refunded Bonds) and the Bonds as the same shall become due. 15 The 2003 LTGO Bonds are not obligations of the District, the 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 2003 LTGO Bonds shall be satisfied exclusively from the tax revenues; credit and other legally available sources of the City and no owner of the 2003 LTGO Bonds or other person shall have any right of action against or recourse to the District, the County, the City of Spokane, 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 2003 LTGO Bonds. Operating Reserve Account. The City established an Operating Reserve Account (the "Reserve Account"), which is available to pay operating expenses of the Mirabeau Point Project and to pay debt service payments. As of June 1, 2014, the Reserve Account had a current balance of $300,000. The Reserve Account was initially funded with non-bond proceeds in the amount of$100,000 in 2004, with the remaining $200,000 funded by General Fund operations in 2005. Although the Reserve Account is available to pay debt service on obligations relating to the Mirabeau Pont Project, the Reserve Account is not pledged to the repayment of the 2003 LTGO Bonds (the Refunded Bonds) or the Bonds and the City is not obligated to utilize such funds to pay debt service on the 2003 LTGO Bonds (the Refunded Bonds) or the Bonds. The City has never utilized the Operating Reserve Account. However, the City has established a plan to replenish any funds drawn from the Reserve Account. (The remainder of this page intentionally left blank.) 16 Consolidated Levy Rates The following table shows representative aggregate levy rates per $1,000 of assessed value of property located in the City (tax code area 144) for tax collection year 2014. The overlapping taxing districts within the City have the statutory power to levy regular property taxes at the rates, shown as maximum levy rates, subject to limitation, and to levy excess voter approved property taxes. These rates do not apply to all property within the City; therefore, additional taxing districts may levy taxes within the City, but are not shown below. Aggregate levy rates vary throughout the City due to different boundaries of overlapping taxing districts. Maximum Total Levy Regular Levy Taxing Entity Rates Rate State of Washington (statewide school levy)' $ 2.372966 $3.600 Spokane County' 1.302176 1.800 County Conservation Futures 0.047213 --- Library District' 0.499734 0.500 Spokane Valley Fire District No. 1 (regular)3 1.500000 1.500 Spokane Valley Fire District No. 1 (special) 1.691238 -Central Valley School District No. 356 (M&O)4 3.555682 --- Central Valley School District No. 356 (Bond)4 1.839854 --- The City' 1.545147 3.100 Total $14,354010 The levy by the State may not exceed S3.60 per$1,000 assessed value adjusted to the State equalized value in accordance with the indicated ratio fixed by the State Department of Revenue to be used exclusively for the support of the common schools to equalize the assessment base as between counties with different appraisal schedules. 2 A county may increase its levy from$1.80/$1,000 to a rate not to exceed 52,475151,000 for general county purposes if(a) the total levies for both the county and any road district within the county do not exceed 54.05/51,000 and (b) no other taxing district has its levy reduced as a result of the increased county levy. 3 RCW 84.52.043 allows a city to levy taxes of up to 53.375 per 51,000 of taxable property in the city and RCW 41,16.060 allows an additional $0.225 per 51,000 for any municipal purpose, if not required to fund pension programs. For cities annexed to a library district,such as the City,the maximum levy rate is reduced by the amount of the library district regular levy. For cities annexed to a fire district, such as the City, the maximum levy rate is reduced by the amount of the fire district regular levy. School districts are not authorized to impose regular levies. School district levies are voter-approved excess levies and, as such,are not subject to the rate and amount limitations applicable to regular Ievies. Source: Spokane County Assessor's Office. 17 Major Taxpayers The following table lists the ten largest taxpayers within the City for tax year 2014 listed in declining order of assessed value. %of City's 2014 Assessed 2014 Assessed Valuation Taxpayer Business Valuation ($7,168,991,028) 1. Kaiser Alum and Chem Corp Manufacturing $260,978,436 3.6% 2, Avista Corporation Utility 72,339,139 1.0 3. Spokane Valley Mall Mall 65,983,856 0.9 4, Park SPE, LLC Real Estate 66,198,520 0.9 5. Cellco Partnership/Verizon Wireless Telecommunications 48,852,700 0.7 6. Wal-Mart Stores Inc. Retail 35,375,029 0.5 7. Spokane Valley WA Hospital LLC Healthcare 39,724,538 0.6 8. Hanson Industries Alluvial Mining Equipment 26,132,170 0.4 9. Indian Pointe LLC Property Developer 24,640,990 0.3 10. BNSF Railway Company Railroad 22,453,990 0.3 Total $662,679,368 9.2% Source: Spokane County Treasurer's Office. Auditing of City Finances Accounting systems and budgetary controls are prescribed by the Office of the State Auditor in accordance with RCW 43.09.200 and RCW 43.09.230. State statutes require that audits for cities be conducted by the Office of the State Auditor. The City complies with the systems and controls prescribed by the Office of the State Auditor and establishes procedures and records which reasonably assure safeguarding of assets and the reliability of financial reporting. The State Auditor is required to examine the affairs of all local governments at least once every three years. The examination must include, among other things, the financial condition and resources of the City, whether the laws and constitution of the State are being complied with, and the methods and accuracy of the accounts and reports of the City. Reports of the auditor's examinations are required to be filed in the Office of the State Auditor and in the finance department of the City. The State Auditor last audited the City's financials for fiscal year 2012, which audit is included as Appendix D hereto. 18 Historical and Budgeted General Fund Operating Results The following General Fund financial information was extracted from the City's audited annual financial statements for the fiscal years ending December 31, 2008 through 2012 and unaudited financial statements for fiscal year ended December 31, 2013 and 2014 budgeted information. Additional information that may interpret, clarify or modify the data presented below may be contained in the complete financial audits, including the accompanying footnotes. Fiscal Year Ending December 31 Audited Audited Audited Audited Audited Unaudited 2008 2009 2010 2011 2012 2013 REVENUES: Taxes $29,423,180 $27,526,074 $27,443,362 $28,052,407 $28,867,500 $30,083,368 Licenses&Permits 2,508,810 2,121,233 2,099,977 1,938,683 2,099,092 2,427,635 Intergovernmental 1,251,415 1,785,273 2,114,048 2,143,518 2,233,750 1,951,671 Charges for Goods& Services 759,752 835,489 665,510 658,254 866,479 987,788 Fines and Forfeits 771,448 778,136 749,737 588,644 563,893 543,662 Investment Interest 361,845 137,934 148,036 91,879 97,111 68,177 Miscellaneous 1,542,299 1,495,673 1717,465 1,279,590 1,107,751 1,019,654 TOTAL REVENUES $36,618,748 $34,679,812 $34,938,135 $34,752,976 $35,835,576 $37,081,955 EXPENDITURES: General Government $3,467,064 $4,215,537 $4,046,806 $3,993,020 $4,203,373 $4,231,733 Public Safety 17,605,571 20,557,834 21,129,900 22,554,387 21,664,077 22,429,738 Utilities&Physical Environment 1,178,474 1,730,981 1,765,542 1,757,430 1,829,179 1,667,454 Transportation 49,458 34,300 34,300 0 0 0 Economic Environment 145,639 148,229 144,050 161,867 246,862 356,093 Community Development 2,971,123 2,044,939 1,878,758 1,771,845 1,894,058 2,030,754 Culture&Recreation 2,056,243 2,287,310 2,322,684 2,300,559 2,536,019 2,599,253 Debt Service 0 0 24 (952) 444 301 Capital Outlay 594,610 137,691 72,938 163,522 95,465 917,226 TOTAL EXPENDITURES $28,068,182 $31,156,821 $31,395,002 $32,701,678 $32,469,477 $34,232,552 Revs.Over/(Cinder)Exp. $8,550,566 $3,522,991 $3,543,133 $2,051,298 $3,366,099 $2,849,403 Net Total Other Sources(Uses) $(605,467) $(588,737) 5(690,139) 5(1,375,296) 5(2,847,603) $(8,112,107)2 NET CHANGE 1N FUND BALANCE $7,945,099 $2,934,254 $2,852,995 $676,001 $518,496 $(5,262,704) FUND BALANCE,JAN. 1 13,747,197 21,692,296 30,382,7361 33,235,731 33,911,732 34,593,550 Prior Period Adjustment 0 0 0 0 163,322 0 FUND BALANCE,DEC. 31 $21,692,296 $24,626,5501 $33,235,731 $33,911,732 $34,593,550 $29,330,846 Pursuant to GASB 54 implemented in 2010, the General Fund End Balance as of January 1 includes certain other non-major special revenue funds that were no longer allowed to be considered stand-alone special revenue funds under GASB 54 and consequently were consolidated with the General Fund. 2 This amount takes into consideration the decision of the City Council to transfer out of the General Fund the amount of$7,826,000 to a Capital Reserve Fund that was created to allow the City flexibility to address capital needs. Of the $7,826,000, approximately $2,690,000 has been committed by the City as follows: $2,320,000 as grant matching funds for a bridge replacement project with construction expected to occur 2014 through 2016;$268,000 for street landscaping to be completed in 2014; $60,000 for business route signage completed in 2013; and.$42,000 for a joint park/library site design completed in 2013. The City Council is in the process of prioritizing projects to commit the remaining$5,136,000 of funds. Source: The City's Audited Financial Statements for fiscal years 2008 through 2012 and unaudited financial statements far fiscal year 2013. 19 The following budgeted General Fund financial information was extracted from the City's 2013 and 2014 budgeted information, Additional information that may interpret, clarify or modify the data presented below may be contained in the complete budgets for each year. Budget Budget 2013 2014 REVENUES: Property Tax $10,943,700 511,049,400 Sales Tax/Criminal Justice/Public Safety/Gambling/Leasehold Excise 17,892,500 19,084,400 Franchise Fees/Business Registration 1,135,000 1,213,000 State Shared Revenues 1,684,600 1,886,500 Fines&Forfeitures/Public Safety 1,632,300 1,470,800 Community Development 1,174,000 1,255,400 Recreation Program 571,500 579,800 Miscellaneous and Investment Interest 165,000 122,900 Miscellaneous Department Revenue 0 85,500 Transfers-in 83,100 83,100 TOTAL REVENUES $35,281,700 $36,830,800 EXPENDITURES: City Council $390,111 $414,950 City Manager 637,984 660,843 Legal 474,161 448,922 Public Safety 22,139,200 23,384,643 Deputy City Manager 609,706 653,215 Finance/IT 1,089,633 1,180,659 Human Resources 232,469 237,883 Public Works 876,443 882,694 Community Development 3,223,345 3,294,559 Parks and Recreation 2,665,665 2,709,219 Pavement Preservation 855,857 888,823 General Government 1,799,100 1,741,600 Transfers-out 319,000 325,000 TOTAL RECURRING EXPENDITURES $35,312,674 $36,823,010 NET RECURRING REVENUES OVERI(UNDER)EXPENDITURES 5(30,974) $7,790 NON-RECURRING REVENUES: Transfers-in $50,787 $0 TOTAL NON-RECURRING REVENUES $50,787 $0 NON-RECURRING EXPENDITURES: Transfers-out $7,926,9942 $192,500 Law Enforcement Contingency 0 350,000 Department Equipment Needs 81,962 44,150 TOTAL NON-RECURRING EXPENDITURES $8,008,9562 $586,650 NET NON-RECURRING REVENUES OVERI(UNDER)EXPENDITURES $(7,958,169)2 $(586,650) NET CHANGE IN FUND BALANCE 5(7,989,143) $(578,860) FUND BALANCE,JAN. 1 534,593,549 29,330,846 FUND BALANCE,DEC. 31' $26,604,406 $28,751,986 Pursuant to GASB 54 implemented in 2010, the General Fund End Balance as of January 1 includes certain other non-major special revenue funds that were no longer allowed to be considered stand-alone special revenue funds under GASB 54 and consequently were consolidated with the General Fund. 2 This amount takes into consideration the decision of the City Council to transfer out of the General Fund the amount of$7,826,000 to a Capital Reserve Fund that was created to allow the City flexibility to address capital needs. Of the $7,826,000, approximately $2,690,000 has been committed by the City as follows: $2,320,000 as grant matching funds for a bridge replacement project with construction expected to occur 2014 through 2016;$268,000 for street landscaping to be completed in 2014;$60,000 for business route signage completed in 2013; and $42,000 for a joint park/library site design completed in 2013. The City Council is in the process of prioritizing projects to commit the remaining$5,136,000 of funds. Source: The City's budgeted information for fiscal years 2013 and 2014. 20 Budgetary Process The City adopts annual appropriated budgets for the general fund, capital funds, debt service fiends, street funds, equipment funds and utility funds. Annual appropriated budgets are adopted at the fund level and constitute the legal authority for expenditures at that level. The City's Finance Director is authorized to transfer budgeted amounts between any fund object classes within departments; however, any revisions that alter the total expenditures of a fund or that affect the number of authorized employee positions, salary ranges, hours or other conditions of employment must be approved by the City's legislative body. The City also has a policy stating that the General Fund Balance be maintained at an amount that is at least 50% of recurring expenditures. Description of Other Taxes In addition to its regular property tax levy, the City also collects various other taxes, including a retail sales tax (also known as a "local sales and use tax"), criminal justice tax, public safety sales tax and a gambling tax. The table below presents sources of tax revenue, other than property taxes, received in the General Fund for years 2009 through April 30, 2014. Sales & Criminal Public Gambling Year Use Tax Justice Tax Safety Tax Tax Total 20141 $4,050,519 $334,519 $188,706 $14,799 $4,588,543 2013 16,587,617 1,358,956 759,889 528,438 19,234,900 2012 15,427,377 1,286,302 724,052 618,394 18,056,125 2011 14,850,409 1,266,819 724,219 524,230 17,365,677 2010 14,097,299 1,241,917 711,068 646,143 16,696,427 2009 14,337,595 1,260,924 718,548 727,004 17,044,071 t Through April 30,2014. Local Sales and Use Tax, The City imposes a sales and use tax as a percent of the selling price on any retail sales or use of tangible personal property delivered or used within the City, upon which the State also imposes a sales and use tax. The total sales and use tax rate in the City is currently 8.70%, of which the City receives approximately 0.85%. Criminal Justice Tax. The Criminal Justice Tax is an additional local sales and use tax of 0.1% for funding criminal justice programs. The criminal justice sales tax distribution is based on population. This tax is levied only by the County and is imposed County-wide, but the receipts are shared with the cities. The adoption of this tax does not require a vote of the people. Of the revenue collected for criminal justice, 10% is distributed to the County and 90% to cities and the County on a per capita basis based on the estimated population as determined by the State office of Financial Management as of April 1 of each year. Revenues from the criminal justice tax are deposited into the City's General Fund, but may only be used for criminal justice purposes, including the construction, improvements and expansion of jails, court facilities, juvenile justice facilities and services with ancillary benefits to the civil justice system (such as domestic violence programs and services). The City's receipts from the County's criminal justice sales tax; therefore, are not available for debt service payments on the Bonds. 21 Public Safety Tax. The County voters approved an additional sales and use tax of 0.10% (the "Public Safety Tax"), that commenced in 2005 and was approved again by voters in August of 2009, with a termination date of March 31, 2020. State law requires that the proceeds of the Public Safety Tax must be shared with the County, such that 60% is distributed to the County and the remainder is allocated on a per capital basis to cities within the County. In addition, State law requires that at least one-third of all receipts of this tax must be dedicated to criminal justice purposes, fire protection purposes, or both. Criminal justice purposes are defined as activities that substantially assist the criminal justice system, which may include circumstances where ancillary benefit to the civil justice system occurs. This includes, but is not limited to, the construction, improvement, and expansion of jails, court facilities, juvenile justice facilities, and services with ancillary benefits to the civil justice system. Gambling Tax. A gambling tax of 5% is levied on the gross revenue received from bingo, raffles and punchboards and pull-tabs, less the amount paid as prizes, 10% on gross revenue received from social card games, less amounts paid as prizes, and 2% on the gross revenue from amusement games, less amounts paid as prizes. Authorized Investments Chapter 35.39 RCW limits the investment by cities and towns of its inactive funds or other funds in excess of current needs to the following authorized investments: United States bonds; United States certificates of indebtedness; bonds or warrants of the State and any local government in the State; its own bonds or warrants of a local improvement district which arc within the protection of the local improvement guaranty fund law; and any other investment authorized by law for any other taxing district or the State Treasurer. Under chapter 43.84 RCW, the State Treasurer may invest in non- negotiable certificates of deposit in designated qualified public depositories; in obligations of the U.S. government, its agencies and wholly owned corporations; in bankers' acceptances; in commercial paper, in the obligations of the federal home loan bank, federal national mortgage association and other government corporations subject to statutory provisions and may enter into repurchase agreements. Utility revenue bonds and warrants of any city and bonds or warrants of a local improvement district are also eligible investments (RCW 35.39.030). Moneys available for investment may be invested on an individual fund basis or may, unless otherwise restricted by law, be commingled within one common investment portfolio. All income derived from such investments is apportioned and used as prescribed by State law. Funds derived for the sale of bonds or other instruments of indebtedness will be invested or used in such manner as the authorizing ordinances, resolutions or bond covenants may lawfully prescribe. Local Government Investment Pool ("LGIP'). The Washington State Local Government Investment Pool (the "LGIP") was created by the Legislature in 1986 to provide a mechanism for political subdivisions to invest available funds and take advantage of the economies of scale and expertise of the LGIP to earn a competitive rate of return, security and liquidity of funds. The LGIP is a conservatively managed, highly liquid money market fund that is considered low-risk. The LGIP is restricted to investments with maturities of 397 days or less, and the average life typically is less than 60 days. Permissible investments include U.S. government and agency securities, bankers' acceptances, high quality commercial paper, repurchase and reverse repurchase agreements, and certificates of deposit issued by qualified Washington State depositories. The State Treasurer's Office administers the LGIP and reports that as of April 30, 2014, the LGIP had over 450 participants and a balance of approximately $11.8 billion. In its management of the LGIP, the State Treasurer is required to adhere, at all times, to the principles appropriate for the prudent investment 22 of public funds. These are, in priority order, (i) the safety of principal; (ii) the assurance of sufficient liquidity to meet cash flow demands; and (iii) to attain the highest possible yield within the constraints of the first two goals. Historically, the LGIP has had sufficient liquidity to meet all cash flow demands. Authorized Investments for Bond Proceeds. In addition to the eligible investments discussed above, bond proceeds may also be invested in mutual funds with portfolios consisting of U.S. government and guaranteed agency securities with average maturities of less than four years; municipal securities rated in one of the four highest categories; and money market funds consisting of the same, so long as municipal securities held in the fund(s) are in one of the two highest rating categories of a nationally recognized rating agency. Bond proceeds may also be invested in shares of money market funds with portfolios of securities otherwise authorized by law for investment by local governments (RCW 39.59.030). City Investments All investments of the City are made within the requirements of State law described above in the section "Authorized Investments." The City's deposits and certificates of deposit are primarily covered by federal depository insurance or by collateral held in a multiple financial institution collateral pool administered by the Washington Public Deposit Protection Commission. As of May 31, 2014, the City had the following investments. Investment Type Fair Value Certificates of Deposit $ 5,056,571 LGIP 44,699,931 Total $49,756,502 Source: The City. THE CITY The City was incorporated on March 31, 2003 as a non-charter code city. The City is located in the County in eastern Washington along Interstate 90, approximately 10 miles west of the Washington/Idaho border. The City is bordered by the City of Spokane to the west. The City encompasses an area of approximately 38.5 square miles, with an estimated 2012 population of 90,550 ranking the City as the 10'}' largest city in the State. The City is a general-purpose government and provides public safety, street construction, pavement preservation, parks and recreation, storm water and general administrative services. 23 Form of Local Government The City operates under a Council/Manager form of government. The City Council hires a City Manager to implement the City Council's policies. Biennially, at the first meeting of the calendar year, the City Council members choose a Mayor and a Deputy Mayor. Following is a list showing the Mayor and the seven City Council members and their current term expiration dates. Total Time Current Member Position Employer/Occupation Served Term Dean Grafos Mayor Business Owner 4.50 years 12/31/15 Arne Woodard Deputy Mayor Real Estate Broker 3.00 years 12/31/15 Bill Bates Council Member Retired 0.50 years 12/31/17 Charles E. Hafner Council Member Retired 3.00 years 12/31/17 Lewis R. Higgins Council Member Retired 1.25 years 12/31/17 Ed Pace Council Member Pastor 0.50 years 12/31/17 Ben Wick Council Member IT Administrator 3.50 years 12/31/15 City Administration The City Manager is hired by and is responsible to the City Council. The City Manager is responsible for overall administration of the City, such as carrying out City Council policy, administering the affairs of the City and directing, organizing, establishing, supervising and administering all departments, agencies, and offices of the City. Mr. Mike Jackson has been employed by the City since June 2003 and has served as City Manager since August 2010. Mr. Jackson has over 25 years of experience in the public sector. Mr. Jackson earned a Bachelor's degree in Recreation Resource Management and a Master's degree in Management from Regis University. Mr. Mark Calhoun serves as Finance Director for the City and is responsible for financial management, including general accounting, budget development, investment activities and information technology. Mr. Calhoun has been employed as the City's Finance Director since June 2011 and has a total of 19 years of experience in similar positions in the State of Washington. Mr. Calhoun earned a Bachelor's degree in Business Administration with an accounting emphasis from the University of Montana. Ms, Christine Bainbridge serves as the Clerk for the City. Ms. Bainbridge has been employed by the City since June 2003 as the City Clerk. Ms. Bainbridge earned a Bachelor's degree in Secondary Education from the University of Idaho. Summary of Accounting Policies The accounting and reporting policies of the City are prepared in conformity with generally accepted accounting principles ("GAAP") as applied to state and local governmental entities. GAAP for local governments include those principles prescribed by the Governmental Accounting Standards Board ("GASB"), which is the accepted standard-setting body for establishing governmental accounting and financial reporting principles, the Financial Accounting Standards Board, when applicable, and the American Institute of Certified Public Accountants pronouncements that have been made applicable by GASB Statements or Interpretations. 24 The City's government-wide financial statements are reported using the "economic resources measurement focus" and the "accrual basis of accounting," as are proprietary funds. Under this approach, revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. The City recognizes grant revenue and similar items in the year in which expenses were incurred and as soon as all the eligibility requirements imposed by the provider have been met. The City's governmental find financial statements, including the General Fund, are reported using the "current financial resources measurement focus" and the "modified accrual basis of accounting." Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 30 days of the end of the cun-ent fiscal period, Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences, claims, and judgments are recorded only when the payment is due. Property taxes, franchise fees, licenses, and interest associated with the current fiscal period are all considered to be susceptible to the accrual basis of accounting and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to the accrual basis as revenue is applicable for the current period. All other revenue items are considered to be measurable and available only when cash is received (modified basis of accounting). City Employment As of May 31, 2014, the City had 87.25 full-time equivalent ("FTE") employees and up to 39 seasonal employees. Employee Relations State law requires municipalities to bargain with formally recognized collective bargaining units, The City enters into written bargaining agreements with each of the bargaining organizations. Such agreements contain provisions on such matters as salaries, vacation, sick leave, medical and dental insurance, working conditions, and grievance procedures. The following table shows the bargaining organizations, number of employees participating and the expiration date of current contracts with the bargaining units representing City employees. Number of FTE Employees Expiration Bargaining Unit Participating Date of Contract Washington State Council of County and City Employees, Local 270-V, AFSCME 63.5 12/31/15 25 Pension Plans Substantially all of the City employees arc enrolled in the State Public Employees Retirement System ("PERS"). All systems are administered by the Washington State Department of Retirement Systems. Contributions by both employees and employers are based on gross wages. Contributions to PERS are based upon a percentage of gross salary. Retirement benefits for all plans are financed from employee and employer contributions, investments earnings. The information in the following sections have been obtained from the City's financial statements and information on the State Actuary's and State Department of Retirement System's websites. Public Employees' Retirement System. PERS is a cost-sharing multiple-employer retirement system comprised of three separate plans for membership purposes. Participants who joined the system by September 30, 1977, are PERS Plan 1 members. Those joining thereafter are enrolled in either PERS Plan 2 or a third plan, entitled PERS Plan 3, which provides members with a defined benefit plan similar to PERS Plan 2 and the opportunity to invest their retirement contributions in a defined contribution plan. PERS Plan 1 members are vested after the completion of five years of eligible service. PERS Plan 1 members are eligible for retirement after 30 years of service, or at the age of 60 with five years of service, or at the age of 55 with 25 years of service. The monthly benefit is 2 percent of the average final compensation ("AFC") per year of service (AFC is the monthly average of the 24 consecutive highest—paid service credit months). PERS Plan 2 members are vested after the completion of five years of eligible service. PERS Plan 2 members are eligible for normal retirement at the age of 65 with five years of service. The monthly benefit is 2 percent of the AFC per year of service (AFC is the monthly average of the 60 consecutive highest paid service months). PERS Plan 3 has a dual benefit structure. Employer contributions finance a defined benefit component, and member contributions finance a defined contribution component. The defined benefit portion provides a monthly benefit that is one percent of the AFC per year of service. Each biennium, the State Pension Funding Council adopts PERS Plan 1 employer contribution rates, PERS Plan 2 employer and employee contribution rates, and PERS Plan 3 employer contribution rates. Employee contribution rates for PERS Plan 1 are established by statute at six percent for state agencies and local government unit employees, and at 7.5 percent for state government elected officials. The employer and employee contribution rates for PERS Plan 2 and the employer contribution rate for PERS Plan 3 are developed by the Office of the State Actuary ("OSA") to fully fund PERS Plan 2 and the defined benefit portion of PERS Plan 3. All employers are required to contribute at the level established by the Legislature. Under PERS Plan 3, employer contributions finance the defined benefit portion of the plan, and member contributions finance the defined contribution portion. The Director of the Department of Retirement Systems sets PERS Plan 3 employee contribution rates. Six rate options are available ranging from 5 to 15 percent; two of the options are graduated rates dependent on the employee's age. As a result of the implementation of the Judicial Benefit Multiplier Program in January 2007, a second tier of employer and employee rates was developed to fund, along with investment earnings, the increased retirement benefits of those justices and judges that participate in the program. The methods used to determine the contribution requirements are established under state statute in accordance with chapters 41.40 and 41.45 RCW. 26 The required contribution rates expressed as a percentage of current-year covered payroll as of July 2013, are shown below: PERS Plan 1 PERS Plan 2 PERS Plan 3 Employer` 9.21% 9,21% 9.21%2 Employee 6.00% 4.92% Variable (5% to 15%) Includes a 0.18%administration fee. 'Plan 3 defined benefit portion only. Source: The Office of the State Actuary and DRS. While the City's contributions in 2013 of$456,163 represent the City's full current liability under the retirement systems, any unfunded pension benefit obligations could be reflected in future years as higher contribution rates. Contribution rates for employees and employers in the PERS Plans 2 and 3 may increase (or decrease) in the coming years. OSA's website (which is not incorporated into this Official Statement by reference) includes information regarding the values and funding Ievels of these retirement plans. For additional information, see the Audited Financial Statements for the Year Ended December 31, 2012, attached hereto as Appendix D. According to OSA, as of June 30, 2012, PERS Plans 2 and 3 had no unfunded actuarial accrued liability. However, during the years 2001 through 2010, the rates adopted by the Legislature were lower than those that would have been required to produce actuarially required contributions to PERS Plan 1, a closed plan with a large proportion of the retirees. OSA's actuarial valuation for PERS Plan 1 as of June 30, 2012 showed a 69% funded ratio (unfunded liability of$3.8 billion). PERS Plans 2 and 3 had a surplus of$2.3 billion as of June 30, 2012 (a 111% funded ratio). OSA uses the Projected Unit Credit ("PUC") cost method and the Actuarial Value of Assets ("AVA") to report a plan's funded status. PUC is one of several acceptable measures of a plan's funded status under current GASB rules. The PUC cost method projects future benefits under the plan, using salary growth and other assumptions and applies the service that has been earned as of the valuation date to determine accrued liabilities. AVA is calculated using a methodology which smoothes the effect of short-term volatility in the Market Value of Assets by deferring a portion of annual investment gains or losses over a period of up to eight years. Assets for one plan may not be used to fund benefits for another plan: however, all employers in PERS are required to make contributions at a rate (percentage of payroll) determined by OSA every two years for the sole purpose of amortizing the PERS Plan 1 unfunded actuarial accrued liability within a rolling 10-year period. The Legislature has established certain maximum contribution rates that began in 2009 and will continue until 2015 and certain minimum contribution rates that are to become effective in 2015 and remain in effect until the actuarial value of assets in PERS Plan 1 equals 100% of the actuarial accrued liability of PERS Plan 1. These rates are subject to change by future legislation enacted by the Legislature to address future changes in actuarial and economic assumptions and investment performance. In 2011, the Legislature ended the future automatic annual increase, which is a fixed dollar amount multiplied by the member's total years of service, for most retirees in the PERS Plan 1 plan, which is forecast to reduce the unfunded accrued actuarial liability in PERS Plan 1. A lawsuit has been filed challenging this legislation. Summary of the City Pension Plan Contributions. It is mandatory for all permanent City employees, including part-time employees who work 70 hours per month during five consecutive months, to participate in one of the following statewide local government retirement systems administered by the DRS, under cost-sharing multiple-employer public employee retirement systems. 27 The City made the following contributions as of the fiscal year ended December 31, 2013, on behalf of City employees who participated in the pension plans listed below. Number of City Contribution Retirement System Participants in 2013 Fiscal Year 2013 Public Employees Retirement System PERS Plan 1 (hired before 10/1/77) 0 $ 0 PERS Plan 2 60 296,314 PERS Plan 3 34 159,849 Total PERS 94 $456,163 Source: The City. Other Post-Employment Benefits GASB 45. The GASB standard concerning Accounting and Financial Reporting by Employers for Post- Employment Benefits Other than Pensions ("OPEB") is known as "GASB 45." OPEB includes post- employment healthcare, as well as other forms of post-employment benefits when provided separately from a pension plan. GASB 45 provides for the measurement, recognition and display of OPEB expenses/expenditures, related liabilities (assets), note disclosures, and if applicable, required supplementary information in the financial reports. The City — O.PEB, The City participates in the Association of Washington Cities Employee Benefit Trust ("AWCEBT"), a cost-sharing multiple employer welfare benefit plan administered by the Association of Washington Cities ("AWC"). AWCEBT provides medical benefits to certain eligible retired employees of the participating employers, such as the City, and their family members. The plan is administered by a trust of equivalent arrangement in which employer contributions to the trust are irrevocable. These plan assets are for the sole purpose of providing OPEB to retirees and their beneficiaries in accordance with the guidelines of the plan and plan assets are legally protected from creditors of the employers or plan administrator. In 2013, there were an estimated 240 employers enrolled in the AWCEBT. All the risks, rewards and costs, including benefit costs, are shared and are not individually attributed to the employers. A single actuarial valuation conducted biennially covers all plan participants. (The remainder of this page intentionally left blank.) 28 Retirees of the City receiving medical benefits from AWCEBT contribute the following monthly amounts. AWC HealthFirst 1000 Non-Medicare Non-Medicare enrolled retiree coverage enrolled retiree & spouse coverage $830.01 $837.26 Medicare Medicare enrolled retiree coverage enrolled retiree & spouse coverage $443.30 $456.13 AWC Selections 1000 Non-Medicare Non-Medicare enrolled retiree coverage enrolled retiree & spouse coverage $724.72 $729.99 Medicare Medicare enrolled retiree coverage enrolled retiree & spouse coverage $388.08 $398.04 Source: The City. Participating employers, such as the City, are contractually required to contribute at a rate assessed each year by the AWCEBT. The City's contributions for the year ended December 31, 2013 were $0, as the City did not have any retirees participating within the AWCEBT. The funded status of the AWCEBT as of January 1, 2013 is shown below. January 1, 2013 Actuarial Accrued Liability ("AAL") $132,860 Actuarial Value of Plan Assets 0 Unfunded AAL ("UAAL") $132,860 Source: The City. The projection of future benefit payments for an ongoing plan involves estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Such methods, assumptions and estimates are only that and are subject to change. The AWCEBT annual OPEB costs, percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for fiscal years 2013 and 2012 are shown below. AWCEBT Fiscal Annual OPEB % of OPEB Cost Net OPEB Year Cost Contributed Obligation 2013 $11,858 9.20% $141,241 2012 12,885 7.77% 130,474 Source: The City and the City's 2012 Audit. 29 Risk Management The City is exposed to financial loss resulting from City caused damage to property or persons, bodily injuries or illness of employees, and unemployment compensation. The City is insured and a member of the Washington Cities Insurance Authority ("WCIA") for general liability and property damage coverage. The City uses the Washington State Department of Labor and Industries Insurance Services for coverage to pay for medical care for job-related injuries and illnesses, and wage replacement when the injury or illness is serious enough to miss work. The City is self-insured for unemployment compensation benefits. The Risk Management Fund is used to account for, and finance the liability and unemployment insurance costs. Departments of the City make payments through intcrfund assessments to the fund on estimates of the amounts needed to pay prior and current year claims. Utilizing Chapter 48,62 RCW (self-insurance regulation) and Chapter 39.34 RCW (Interlocal Cooperation Act), nine cities originally formed WCIA on January 1, 1981. WCIA was created for the purpose of providing a pooling mechanism for jointly purchasing insurance,jointly self-insuring, and/or jointly contracting for risk management services. WCIA has a total of 145 members. New members initially contract for a three-year term, and thereafter automatically renew on an annual basis. A one- year withdrawal notice is required before membership can be terminated. Termination does not relieve a former member from its unresolved loss history incurred during membership. Liability coverage is written on an occurrence basis, without deductibles. Coverage includes general, automobile, police professional, public officials' errors and omissions, stopgap, and employee benefits liability. Limits are $4 million per occurrence self-insured layer, and $16 million per occurrence in the re-insured excess layer. The excess layer is insured by the purchase of reinsurance and insurance and is subject to aggregate limits. Total limits are $20 million per occurrence subject to aggregate sub-limits in the excess layers. The Board of Directors determines the limits and terms of coverage annually. Insurance coverage for property, automobile physical damage, fidelity, inland marine, and boiler and machinery are purchased on a group basis. Various deductibles apply by type of coverage. Property insurance and auto physical damage are self-funded from the members' deductible to $750,000, for all perils other than flood and earthquake and insured above that amount by the purchase of insurance. In- house services include risk management consultation, loss control field services, claims and litigation administration and loss analyses. WCIA contracts for the claims investigation consultants for personnel issues and land use problems, insurance brokerage and lobbyist services. WCIA is fully funded by its members, who make annual assessments on prospectively rated basis, as determined by an outside independent actuary. The assessments cover loss, loss adjustment, and administrative expenses. As outlined in the interlocal, WCIA retains the right to additionally assess the membership for any funding shortfall. An investment committee, using investment brokers produces additional revenue by investment of WCIA's assets in financial instruments which comply with State guidelines. These revenues directly offset portions of the membership's annual assessment. A Board of Directors governs WCIA which is comprised of one designated representative from each member. The Board elects an Executive Committee and appoints a Treasurer to provide general policy direction for the organization. The WCIA Executive Director reports to the Executive Committee and is responsible for conducting the day to day operations of the WCIA. 30 The City is self-insured on a reimbursement basis for unemployment compensation. The City incurred $14,126 in claims for unemployment compensation in 2013. INITIATIVE AND REFERENDUM Under the State Constitution, the voters of the State have the ability to initiate legislation and modify existing legislation through the powers of initiative and referendum, respectively. The initiative power in Washington may not be used to amend the State Constitution. Initiatives and referenda are submitted to the voters upon receipt of a petition signed by at least eight percent (initiative) and four percent (referenda) of the number of voters registered and voting for the office of Governor at the preceding regular gubernatorial election. Any law approved in this manner by a majority of the voters may not be amended or repealed by the Legislature within a period of two years following enactment, except by a vote of two-thirds of all members elected to each house of the Legislature. After two years, the law is subject to amendment or repeal by the Legislature in the same manner as other laws. In recent years, the State's voters have approved numerous initiatives and referenda that have limited the City's ability to impose taxes and collect fees. Some, but not all, of these initiatives and referenda have been determined to be unconstitutional. Initiative measures affecting local governments such as the City have been filed in the past and may be filed in the future. It cannot be predicted whether or when any such initiatives might gain sufficient signatures to qualify for submission to the Legislature and/or the voters or, if submitted, whether they ultimately would be approved. APPROVAL OF BOND COUNSEL The validity of the Bonds and certain other legal matters are subject to the approving legal opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel. A complete copy of the proposed form of opinion of Bond Counsel is attached hereto as Appendix C. The opinion of Bond Counsel is given based on factual representations made to Bond Counsel, and under existing law, as of the date of initial delivery of the Bonds, and Bond Counsel assumes no obligation to revise or supplement its opinion to reflect any facts or circumstances that may thereafter come to its attention, or any changes in law that may thereafter occur. The opinion of Bond Counsel is an expression of its professional judgment on the matters expressly addressed in its opinion and does not constitute a guarantee of result. Bond Counsel will be compensated only upon the issuance and sale of the Bonds. Bond Counsel undertakes no responsibility for the completeness or accuracy of this Official Statement. TAX MATTERS In the opinion of Orrick, Herrington & Sutcliffe LLP ("Bond Counsel"), based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other matters, the accuracy of certain representations and compliance with certain covenants, interest on the Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 (the "Code"). Bond Counsel is of the further opinion that interest on the Bonds is not a specific preference item for purposes of the federal individual or corporate alternative minimum taxes, although Bond Counsel observes that such interest is included in adjusted current earnings when calculating corporate alternative minimum taxable income. A complete copy of the proposed form of opinion of Bond Counsel is set forth in Appendix C hereto. To the extent the issue price of any maturity of the Bonds is less than the amount to be paid at maturity of such Bonds (excluding amounts stated to be interest and payable at least annually over the term of 31 such Bonds), the difference constitutes "original issue discount," the accrual of which, to the extent properly allocable to each Beneficial Owner thereof, is treated as interest on the Bonds which is excluded from gross income for federal income tax purposes. For this purpose, the issue price of a particular maturity of the Bonds is the first price at which a substantial amount of such maturity of the Bonds is sold to the public (excluding bond houses, brokers, or similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers). The original issue discount with respect to any maturity of the Bonds accrues daily over the term to maturity of such Bonds on the basis of a constant interest rate compounded semiannually (with straight-line interpolations between compounding dates). The accruing original issue discount is added to the adjusted basis of such Bonds to determine taxable gain or loss upon disposition (including sale, redemption, or payment on maturity) of such Bonds. Beneficial Owners of the Bonds should consult their own tax advisors with respect to the tax consequences of ownership of Bonds with original issue discount, including the treatment of Beneficial Owners who do not purchase such Bonds in the original offering to the public at the first price at which a substantial amount of such Bonds is sold to the public. Bonds purchased, whether at original issuance or otherwise, for an amount higher than their principal amount payable at maturity (or, in some cases, at their earlier call date) ("Premium Bonds") will be treated as having amortizable bond premium. No deduction is allowable for the amortizable bond premium in the case of bonds, like the Premium Bonds, the interest on which is excluded from gross income for federal income tax purposes. However, the amount of tax-exempt interest received, and a Beneficial Owner's basis in a Premium Bond, will be reduced by the amount of amortizable bond premium properly allocable to such Beneficial Owner. Beneficial Owners of Premium Bonds should consult their own tax advisors with respect to the proper treatment of amortizable bond premium in their particular circumstances. The Code imposes various restrictions, conditions and requirements relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the Bonds. The City has made certain representations and covenanted to comply with certain restrictions, conditions and requirements designed to ensure that interest on the Bonds will not be included in federal gross income. Inaccuracy of these representations or failure to comply with these covenants may result in interest on the Bonds being included in gross income for federal income tax purposes, possibly from the date of original issuance of the Bonds. The opinion of Bond Counsel assumes the accuracy of these representations and compliance with these covenants. Bond Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or not taken), or events occurring (or not occurring), or any other matters coming to Bond Counsel's attention after the date of issuance of the Bonds may adversely affect the value of, or the tax status of interest on, the Bonds. Accordingly, the opinion of Bond Counsel is not intended to, and may not, be relied upon in connection with any such actions, events or matters. Although Bond Counsel is of the opinion that interest on the Bonds is excluded from gross income for federal income tax purposes, the ownership or disposition of, or the accrual or receipt of amounts treated as interest on, the Bonds may otherwise affect a Beneficial Owner's federal, state or local tax liability. The nature and extent of these other tax consequences depends upon the particular tax status of the Beneficial Owner or the Beneficial Owner's other items of income or deduction. Bond Counsel expresses no opinion regarding any such other tax consequences. Current and future legislative proposals, if enacted into law, clarification of the Code or court decisions may cause interest on the Bonds to be subject, directly or indirectly, in whole or in part, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent Beneficial Owners from realizing the full current benefit of the tax status of such interest. For example, Representative Dave Camp, Chair of the House Ways and Means Committee released draft legislation 32 that would subject interest on the Bonds to a federal income tax at an effective rate of 10% or more for individuals, trusts, and estates in the highest tax bracket, and the Obarna Administration proposed legislation that would limit the exclusion from gross income of interest on the Bonds to some extent for high-income individuals. The introduction or enactment of any such legislative proposals or clarification of the Code or court decisions may also affect, perhaps significantly, the market price for, or marketability of, the Bonds. Prospective purchasers of the Bonds should consult their own tax advisors regarding the potential impact of any pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel is expected to express no opinion. The opinion of Bond Counsel is based on current legal authority, covers certain matters not directly addressed by such authorities, and represents Bond Counsel's judgment as to the proper treatment of the Bonds for federal income tax purposes. It is not binding on the Internal Revenue Service ("IRS") or the courts. Furthermore, Bond Counsel cannot give and has not given any opinion or assurance about the future activities of the City, or about the effect of future changes in the Code, the applicable regulations, the interpretation thereof or the enforcement thereof by the IRS. The City has covenanted, however, to comply with the requirements of the Code. Bond Counsel's engagement with respect to the Bonds ends with the issuance of the Bonds, and, unless separately engaged, Bond Counsel is not obligated to defend the City or the Beneficial Owners regarding the tax-exempt status of the Bonds in the event of an audit examination by the IRS. Under current procedures, parties other than the City and its appointed counsel, including the Beneficial Owners, would have little, if any, right to participate in the audit examination process. Moreover, because achieving judicial review in connection with an audit examination of tax-exempt bonds is difficult, obtaining an independent review of IRS positions with which the City legitimately disagrees may not be practicable. Any action of the IRS, including but not limited to selection of the Bonds for audit, or the course or result of such audit, or an audit of bonds presenting similar tax issues may affect the market price for, or the marketability of, the Bonds, and may cause the City or the Beneficial Owners to incur significant expense. The City has designated the Bonds as qualified tax-exempt obligations for banks, thrift institutions and other financial institutions so that such financial institutions will not be denied a deduction of 100 percent of their interest expenses allocable to the Bonds. However, corporate tax preference rules reduce by 20 percent the amount that may be deducted by such financial institutions for interest on funds allocable to tax-exempt obligations such as the Bonds. NO LITIGATION CONCERNING THE BONDS There is no controversy or litigation of any nature now pending or, to the knowledge of the City, threatened, restraining or enjoining the issuance, sale, execution or delivery of the Bonds, or in any way contesting or affecting the validity of the Bonds or any proceedings of the City taken with respect to the issuance or sale, or the validity of the levy of taxes for the payment. FINANCIAL ADVISOR The City has retained Piper Jaffray & Co. (the "Financial Advisor") to provide recommendations and other financial guidance to the City with respect the preparation of the Bonds for sale. The Financial Advisor has not audited, authenticated or otherwise verified the information set forth in this Official Statement with respect to appropriateness, accuracy or completeness of disclosure of such information and makes no guaranty, warranty or other representation is made by the Financial Advisor respecting accuracy and completeness of information or any other matters related to such information. 33 UNDERWRITING D.A. Davidson & Co. (the "Underwriter") has agreed, subject to the terms of a Bond Purchase Agreement, to purchase the Bonds from the City at a price of % of the par value of the Bonds. The Bond will be initially reoffered at an average price of % of the par value of the Bonds. The Bonds are being offered for sale to the public at the price shown on the inside cover of this Official Statement. Concessions from the initial offering price may be allowed to selected dealers and special purchasers. The initial offering prices are subject to change after the date hereof. RATING As noted on the cover page of this Official Statement, Moody's Investors Service ("Moody's") has assigned its municipal bond rating of" "to the Bonds (the "underlying rating"). No application was made to any other rating agency for the purpose of obtaining an additional rating on the Bonds. The rating reflects only the view of Moody's and an interpretation of such rating may be obtained only from the rating agency furnishing the same. There is no assurance that such rating will continue for any given period of time or that they will not be revised downward or withdrawn entirely by the rating agency, if, in the judgment of such agency, circumstances so warrant. Any such revision or withdrawal of such rating may have an adverse effect on the market price of the Bonds. Any further explanation of the underlying ratings may be obtained from Moody's. CONFLICTS OF INTEREST All or a portion of the fees of the Underwriter and Bond Counsel are contingent upon the issuance and sale of the Bonds. In addition, Bond Counsel from time to time serves as counsel to the Underwriter with respect to bonds issued by issuers other than the City. None of the members of the City Council or other officers of the City has any conflict of interest in the issuance of the Bonds that is prohibited by applicable law. COMMITMENT TO PROVIDE CONTINUING DISCLOSURE Pursuant to Rule 15c2-12 (the "Rule") of the Securities and Exchange Commission, the City, in connection with the issuance of the Bonds, has undertaken for the benefit of holders of the Bonds to provide certain financial information and operating data relating to the City by not later than nine months after the end of in each fiscal year, commencing with the fiscal year ending on December 3I, 2014 (the "Annual Financial Information"), and to provide notices of the occurrence of certain enumerated events (together with the Annual Financial Information, the "Disclosure Covenant"). The form of the City's Continuing Disclosure Certificate is attached as Appendix B hereto. Breach of the Disclosure Covenant will not constitute a default under the Bonds or the Ordinance. A broker or dealer is to consider a known breach of the Disclosure Covenant, however, before recommending the purchase or sale of the Bonds in the secondary market. Thus, a failure on the part of the City to observe the Disclosure Covenant may adversely affect the transferability and liquidity of the Bonds and their market price. Prior Compliance with Continuing Disclosure Undertakings The City has entered into a previous undertaking under Rule I5c2-12 with respect to the 2003 LTGO Bonds (the Refunded Bonds) (the "Undertaking"). During the preparation of this Official Statement, the City determined that it was not in compliance with its outstanding Undertaking. Specifically, the City determined that it did not submit certain annual operating data not otherwise included in its audited financial statements for fiscal years 2008 through 2012, did not file its audited financial statements fiscal 34 year 2008, did not timely file its audited financial statements for fiscal years 2009 through 2012, did not provide notices of late filings and did not file notices of rating changes of the municipal bond insurer of the 2003 LTGO Bonds (the Refunded Bonds) or of the most recent rating upgrade of the City that occurred in April 2014. On June 11, 2014, the City filed with the MSRB through its Electronic Municipal Market Access ("EMMA") system (i) its audited financial statements for fiscal year; (ii) the missing annual operating data for fiscal years 2008 through 2012; (iii) notice of bond insurer and City rating changes; (iv) a notice of the failure to provide annual information; and (v) notice of failure to provide event information in a timely manner. The City believes that it is currently in compliance with its outstanding Undertaking. The City's Finance Director (or such other officer of the City who may in the future perform the duties of that office) or his or her designee has been authorized and directed in his or her discretion to take such further action as may be necessary, appropriate or convenient to carry out the Undertaking in accordance with the Rule. ADDITIONAL INFORMATION AND MISCELLANEOUS The descriptions of the Bond Ordinance and other documents are brief summaries of certain provisions. Such summaries do not purport to be complete, and reference is made to such documents and contracts, copies of which are available, upon request and upon payment to the City of a charge for copying, mailing and handling, from the City Finance Director, 11707 East Sprague Avenue, Suite 106, Spokane Valley, Washington 99206. The summaries and descriptions contained in this Official Statement and the Appendices hereto of the provisions of the Bonds, the Bond Ordinance and all reference to other materials not purporting to be quoted in full are only brief outlines of some of the provisions and do not purport to summarize or describe all of the provisions. This Official Statement is not to be construed as a contract or agreement between the City and the Underwriter or holders of any of the Bonds. Any statements made in this Official Statement involving matters of opinion or estimates, whether or not so expressly stated, are set forth as such and not as representations of fact. No representation is made that any of such statements will be realized. PRELIMINARY OFFICIAL STATEMENT Pursuant to Rule 15c2-12(b)(1), the City, in the Bond Ordinance, will deem this Preliminary Official Statement "final," except for the omission of information dependent upon the pricing of the issue and the completion of the underwriting agreement, such as offering prices, interest rates, selling compensation, aggregate principal amount, and other terms dependent on the foregoing matters. DISCLOSURE STATEMENT As a condition to the issuance of the Bonds, the City is required to deliver to the Underwriter at the time of the delivery of the Bonds a certificate substantially to the effect that this Official Statement, including any appendices, and in any supplements or amendments hereto, delivered by the City (which shall be deemed an original part for the purposes of such statement) did not, at the time the Bonds are issued, contain any untrue statement of a material fact or omit to state a material fact where necessary to make a statement not misleading in light of the circumstances under which it was made. 35 APPROVAL OF OFFICIAL STATEMENT The execution and delivery of this Official Statement have been duly authorized by the City. CITY OF SPOKANE VALLEY, WASHINGTON By: Dean Grafos, Mayor 36 -*Nk APPENDIX A Economic and Demographic Information ECONOMIC AND DEMOGRAPHIC INFORMATION The following discussion includes descriptive information obtained from a variety of sources. The information is presented to provide the reader with an overview of the City and County's economy, but is not intended to be exhaustive or comprehensive. General Information The City is located in eastern Washington, in the central east area of Spokane County (the "County"), approximately 10 miles east of the City of Spokane ("Spokane"). Due to the City's proximity to Spokane, the economy of the City is directly tied to Spokane's economy. Spokane is the second largest city in the State with an estimated 2013 population of 211,300. The population of the County is estimated to be 480,000 in 2013. Both Spokane and the County have experienced steady annual growth in population. Historically, much of the County economy relied heavily on the natural resource-related sectors of forest products and agriculture. While these industries continue to be important elements of the area's economy, the County's economy has diversified significantly due to the influx and growth of high technology firms, airlines, and service industries attracted by the region's high quality work force. Spokane serves as the economic hub of the County and as the regional trade center for an area commonly known as the "Inland Northwest," consisting of portions of northeastern Washington, northern Idaho, western Montana and southern British Columbia in Canada. The total population of this region is approximately 1.7 million. Spokane and its metropolitan area provide higher education and research opportunities, high quality healthcare facilities, extensive support services for area residents and businesses and a large downtown retail and business core. Population Trends Historical population trends are presented below for the City, the County and the State. City of Spokane State of Year Spokane Valley County Washington 2013 91,490 480,000 6,882,400 2012 90,550 475,600 6,817,770 2011 90,110 472,650 6,767,900 2010 89,755 471,221 6,724,540 2009 88,969 466,426 6,672,159 2008 88,513 460,303 6,608,245 Source: Washington State Office of Financial Management for inter-census estimates as of each April and the 2010 U.S. Census. A-1 Taxable Retail Sales The following table lists the taxable retail sales for all industries within the City and the County since 2009. City of Spokane Year Spokane Valley County 2013 $1,884,116,497 $7,561,670,086 2012 1,745,839,808 7,122,104,855 2011 1,678,063,682 6,901,541,819 2010 1,5 85,010,451 6,75 5,693,930 2009 1,613,410,134 6,692,277,754 Source. Washington State Department of Revenue. Employment by Major Industry The table below sets forth the total number of full-time and part-time employees in the County for the years and industries as shown. Figures are shown in thousands. Employment Sector 2010 2011 2012 2013 2014' Total Non-Farm Employment 208.4 208.9 211.1 214.3 213.9 Mining, Logging, and Construction 9.8 9.4 9.6 10.0 9.2 Manufacturing 14.5 14.8 15.0 15.2 15.1 Trade, Transportation, and Utilities 40.4 40.4 41.1 42.0 41.8 Information 2.8 2.8 2.9 2.9 2.9 Financial Activities 12.1 12.3 12.6 12.9 13.0 Professional and Business Services 21.1 21.9 22.8 23.3 22.8 Education and Health Services 44.0 43.9 43.7 44.5 45.3 Leisure and Hospitality 18.7 18.9 19.0 19.2 18.2 Other Services 9.1 9.2 9.2 9.1 9.1 Government 35.9 35.4 35.1 35.3 36.5 Preliminary;as of March 2014. Source: Washington State Employment Security Department. A-2 Residential Building Permit Data The following table presents the number and value of residential building permits in the City and the County from 2008 through 2013. Building Permits and Valuation Year Residential Other Commercial Total Total Valuation 2013 1,415 682 571 2,668 $176,817,824 2012 1,301 607 579 2,487 109,154,277 2011 --- --- --- 2,816 65,369,891 2010 --- --- --- 2,650 86,403,059 2009 --- --- --- 2,918 105,111,785 * Includes mobile homes, duplexes, and multiple family dwellings. Source: The City. Spokane County Single Family Duplexes/Multi-Fancily Year Permits Value Permits Units Value 2013 1164 $352,223,939 43 271 31,347,286 2012 858 252,072,903 52 340 38,206,047 2011 734 158,039,604 64 1,045 98,817,872 2010 938 172,267,284 48 670 65,758,208 2009 809 135,777,790 54 977 69,763,188 Source: U.S. Census Bureau Major Employers The major employers in the County are as follows: Type of Business Number of Employer Activity Employees Fairchild Air Force Base Military 4,3631 State of Washington Government 4,202 Spokane Public Schools Education 3,025 Providence Sacred Heart Medical Center & Children's Hospital Health Care 3,010 Spokane County Government 1,908 City of Spokane Government 1,864 Wal-Mart Stores Retail 1,484 Northern Quest Resort & Casino Hotel/Casino 1,359 URM Stores Inc. Distribution 1,322 Central Valley School District Education 1,270 Rockwood Clinic PS Health Care 1,216 Community Colleges of Spokane Education 1,203 West Corp. Customer Service 1,169 Gonzaga University Education 1,168 Deaconess Medical Center Health Care 1,117 Source: Greater Spokane Incorporated, Journal of Business-2013 Market Fact Book A-3 Personal Income Trends The following table shows total and per capita personal income growth in the County from 2008 through 2012 (most recent data available from this source). Total Personal Per Capita Year Income (000s) Income 2012 $17,912,986 $37,653 2011 17,300,137 36,536 2010 16,628,671 35,220 2009 16,475,105 35,186 2008 16,673,524 36,069 Source: U.S. Department of Commerce, Bureau of Economic Analysis. Labor Force and Unemployment The following tables show labor force and employment data for the County since 2010 as well as unemployment rates for the State and the United States for the same period. --- - Unemployment Rates - -- - Spokane State of United Year Labor Force Employed County Washington States 2014' 224,121 206,315 7.9% 6.9% 6.8% 2013 225,185 207,454 7.9 7.0 7.4 2012 229,696 209,900 8.6 8.1 8.1 2011 229,380 207,950 9.3 9.2 8.9 2010 234,857 211,673 9.9 9.9 9.6 Preliminary; as of March 2014. Source: U.S. Department of Labor-Bureau of Labor Statistics. Median Household Income Trends The following table shows median household income growth in the County and the State for years 2009 through 2013. Year Spokane County State of Washington 2013' $49,373 $58,577 20122 48,265 56,444 2011 46,846 55,500 2010 46,320 54,888 2009 46,983 55,458 ' Projection,as of May 2014. 2 Preliminary estimate,as of May 2014. Source: Washington State Office of Financial Management 2011 Population Trends. Figures for 2012 are preliminary estimates, and those for 2013 are projected. A-4 APPENDIX B Form of Continuing Disclosure Certificate FORM OF CONTINUING DISCLOSURE CERTIFICATE • B-1 APPENDIX C Form of Legal Opinion APPENDIX D Audited Financial Statements —2012 APPENDIX E Book-Entry System THE DEPOSITORY TRUST COMPANY SAMPLE OFFERING DOCUMENT LANGUAGE DESCRIBING BOOK-ENTRY-ONLY ISSUANCE (Prepared by DTC--bracketed material may apply only to certain issues) 1. The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the securities (the "Securities"). The Securities will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Security certificate will be issued for [each issue of] the Securities, [each] in the aggregate principal amount of such issue, and will be deposited with DTC. [If, however, the aggregate principal amount of [any] issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue.] 2, DTC, the world's largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post- trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor's rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtec.com. 3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC's records. The ownership interest of each actual purchaser of each Security ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates rep resenting their ownership interests in E-1 Securities, except in the event that use of the book-entry system for the Securities is discontinued. 4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC's records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. 5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. [Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.] 6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. 7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). 8. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from Issuer or Agent, on payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, Agent, or Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of Issuer or Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. E-2 9. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to [Tender/Remarketing] Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant's interest in the Securities, on DTC's records, to [Tender/Remarketing] Agent. The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC's records and followed by a book-entry credit of tendered Securities to [Tender/Remarketing] Agent's DTC account. 10. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to Issuer or Agent, Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered. 11. Issuer may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC. 12. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that Issuer believes to be reliable, but Issuer takes no responsibility for the accuracy thereof. E-3 CITY OF SPOKANE VALLEY Request for Council Action Meeting Date: July 8, 2014 Department Director Approval: X Check all that apply: ❑ consent ❑ old business X new business ❑ public hearing ❑ information ❑ admin. report ❑ pending legislation ❑ executive session AGENDA ITEM TITLE: Proposed Resolution #14-007 Authorizing Investment of City of Spokane Valley Monies in the Office of the State Treasurer's Local Government Investment Pool (LGIP). GOVERNING LEGISLATION: RCW 43.250.010 and City of Spokane Valley Resolution #02-09 and Resolution #14-001. PREVIOUS COUNCIL ACTION TAKEN: The City's participation in the Washington State Treasurer's Local Government Investment Pool (LGIP) was initially approved by the City Council on December 10, 2002 via Resolution #02-09 and again on January 14, 2014 via the Council approval of Resolution #14-001. Most recently an Administrative Report was delivered to the Council on June 24 regarding the City's continued use of the LGIP. BACKGROUND: Since its inception the City has placed a portion of its investable money in the Local Government Investment Pool (LGIP) and the initial authorization to do so was granted via the adoption of Resolution #02-09 in December 2002 and again on January 14, 2014 through the adoption of Resolution #14-001. As a matter of routine, the Office of the State Treasurer is requesting that all municipalities across the State adopt an updated resolution with language crafted by them that authorizes continued participation in the LGIP. This updated resolution includes a Transaction Authorization Form that names the specific City personnel authorized to transact with the LGIP. Beyond being a place to invest money, the LGIP also serves as the only vehicle by which the Washington State Treasurer makes monthly deposits of proceeds from a number of sources including sales tax, motor vehicle fuel tax, liquor excise tax, liquor profits and construction grant reimbursements. The LGIP invests funds in priority order of 1) safety of principal, 2) maintaining liquidity to meet cash flow needs, and 3) providing competitive interest rate relative to other comparable investment alternatives, The LGIP offers 100% liquidity to its participants which means we can withdraw as much from our account as we need with just a one-day notice. In order to meet this objective, the LGIP: • Limits investments to securities with a maximum final maturity of 397 days • Maintains a weighted average maturity of 60 days or shorter • Maintains a weighted average life of 120 days • Limits the purchase of investments in securities other than those issued by the U.S. government or its agencies H:lCity Departments\Finance\St ate of WashingtonkLGlP12014 07 08 RCA12014 07 08 RCA re Resoluton 14-007 authorizing LGIP use.docx LGIP participants include: • All 39 counties in the State of Washington • All cities above a population of 10,000 • 160 special taxing districts • 30 community colleges and universities • 7 State agencies • 24 miscellaneous LGIP Participation by Entity Type Number By Account of Accounts Size Cities 36% 26% Counties 6% 47% Special Districts 24% 19% Colleges & UnKersities 4% 4% Bond Accounts 30% 4% 100% 100% Source is Washington State Treasruer's Office LGIP Investments March 2014 _ Calendar Year 2014 Investment Aerage Average Type Balance Percentage Balance Percentage Agency bullets 18,548,387 0.19% 25,555,552 0.27% Agency discount notes 3,836,748,663 40.26% 4,477,992,804 46.62% Agency floating rate notes 575,169,412 6.04% 572,945,899 5.97% Agency variable rate notes 806,991,065 8.47% 775,941,305 8.08% Certificates of deposit 62,450,000 0.66% 63,076,944 0.66% IB Bank deposits E 828,375,530 8.69% 1,022,226,202 10.64% Repurchase agreements 381,650,226 4.00% 247,652,644 2.58% Term repurchase agreements 1,627,419,355 17.08% 1,487,500,000 15.49% U.S. Treasury securities 1,293,205,794 13.57% 898,626,811 9.36% U.S. Treasury floating rate notes 99,960,185 1.05% 33,541,399 0.35% 9,530,518,617 100.00% 9,605,059,560 100.00% Average days to maturity 54 Source is Washington State Treasruer's Office OPTIONS: We are seeking Council approval of Resolution #14-007. RECOMMENDED ACTION OR MOTION: Move to approve Resolution #14-007 authorizing investment of City of Spokane Valley monies in the local government investment pool. BUDGETIFINANCIAL IMPACTS: The Local Government Investment Pool (LGIP) serves as the only vehicle by which the State of Washington disburses tax collections to cities including H.•LCity DepartmentstFinancelState of WashingtonkLGIP42014 07 08 RCA12014 07 08 RCA re Resoluton 14-007 authorizing LGIP use.docx sales tax, motor vehicle fuel tax, liquor excise tax, liquor profits and construction grant reimbursements. STAFF/COUNCIL CONTACT: Mark Calhoun ATTACHMENTS: • Resolution #14-007 • LGIP Prospectus dated January 2014 H:1City Departments1FinancelState of WashingtonlLG1P12014 07 08 RCA12014 07 08 RCA re Resoluton 14-007 authorizing LGIP use.docx RESOLUTION 14-007 AUTHORIZING INVESTMENT OF CITY OF SPOKANE VALLEY MONIES IN THE LOCAL GOVERNMENT INVESTMENT POOL WHEREAS, pursuant to Chapter 294,Laws of 1986,the Legislature created a trust fund to be known as the public funds investment account(commonly referred to as the Local Government Investment Pool (LGIP)) for the contribution and withdrawal of money by an authorized governmental entity for purposes of investment by the Office of the State Treasurer; and WHEREAS, from time to time it may be advantageous to the authorized governmental entity, City of Spokane Valley, the"governmental entity", to contribute funds available for investment in the LGIP; and WHEREAS,the investment strategy for the LGIP is set forth in its policies and procedures; and WHEREAS, any contributions or withdrawals to or from the LGIP made on behalf of the governmental entity shall be first duly authorized by the City Council of the City Spokane Valley, WA,the "governing body" or any designee of the governing body pursuant to this resolution or a subsequent resolution; and WHEREAS, the governmental entity will cause to be filed a certified copy of said resolution with the Office of the State Treasurer; and WHEREAS,the governing body and any designee appointed by the governing body with authority to contribute or withdraw funds of the governmental entity has received and read a copy of the prospectus and understands the risks and limitations of investing in the LGIP; and WHEREAS, the governing body attests by the signature of its members that it is duly authorized and empowered to direct the contribution or withdrawal of governmental entity monies, and to delegate certain authority to make adjustments to the incorporated transactional forms,to the individuals designated herein. NOW THEREFORE, BE IT RESOLVED that the governing body does hereby authorize the contribution and withdrawal of governmental entity monies in the LGIP in the maturer prescribed by law, rule, and prospectus. BE IT FURTHER RESOLVED that the governing body has approved the Local Government Investment Pool Transaction Authorization Form(Form)as substantially completed by the City Manager and incorporates said form into this resolution by reference and does hereby attest to its accuracy. The City Manager is further authorized to complete the Form with appropriate bank account numbers and submit it to the LGIP. BE IT FURTHER RESOLVED that the governmental entity designates Mike Jackson, City Manager as the"authorized individual"to authorize all amendments, changes, or alterations to the Form or any other documentation including the designation of other individuals to make contributions and withdrawals on behalf of the governmental entity. BE IT FURTHER RESOLVED that this delegation ends upon the written notice, by any method set forth in the prospectus, of the governing body that the authorized individual has been terminated or that his or her delegation has been revoked. The Office of the State Treasurer will rely solely on the governing body Resolution 14-007 Authorizing Investment in Washington Local Government Investment Pool Page 1 of 4 to provide notice of such revocation and is entitled to rely on the authorized individual's instructions until such time as said notice has been provided. BE IT FURTHER RESOLVED that the Form as incorporated into this resolution or hereafter amended by delegated authority, or any other documentation signed or otherwise approved by the authorized individual shall remain in effect after revocation of the authorized individual's delegated authority, except to the extent that the authorized individual whose delegation has been terminated shall not be permitted to make further withdrawals or contributions to the LGIP on behalf of the governmental entity. No amendments, changes,or alterations shall be made to the Form or any other documentation until the entity passes a new resolution naming a new authorized individual; and BE IT FURTHER RESOLVED that the governing body acknowledges that it has received the prospectus as provided by the Office of the State Treasurer. In addition, the governing body agrees that a copy of the prospectus will be provided to any person delegated or otherwise authorized to make contributions or withdrawals into or out of the LGIP and that said individuals will be required to read the prospectus prior to making any withdrawals or contributions or any further withdrawals or contributions if authorizations are already in place. Effective Date. This Resolution shall be effective upon adoption. Adopted this day of July, 2014. City of Spokane Valley Dean Grafos,Mayor ATTEST: City Clerk, Christine Bainbridge Approved as to Form: Office of the City Attorney • Resolution 14-007 Authorizing Investment in Washington Local Government Investment Pool Page 2 of 4 LOCAL GOVERNMENT INVESTMENT POOL TRANSACTION AUTHORIZATION FORM Please fill out this form completely, including any existing information,as this form will replace the previous form. Name of Entity: City of Spokane Valley, WA Mailing Address: Fax Number: 509-688-0236 11707 E. Sprague Ave., Suite 106 Spokane Valley, WA 99206 E-mail Contact: mcalfloun cj spokanevalley.org Do you wish to have your monthly LGIP statements faxed to the number listed above? Please note—if you choose to receive statements via fax, you will not receive another copy via U.S. mail. n YES, please fax statements 0 No, please send statements via U.S. mail Bank account where funds will be wired when a withdrawal is requested. (Note: Funds will not be transferred to any account other than that listed). Bank Name: Banner Bank Branch Location: 802 W. Riverside Avenue; Spokane, WA 99201 Bank Routing Number: Account Number: Account Name: Persons authorized to make deposits and withdrawals for the entity listed above. Name Title Signature Telephone Number Mark S. Calhoun Finance Director 509-720-5040 Dan Duffey Accounting Manager 509-720-5043 By signature below,I certify I am authorized to represent the institutionlageney for the purpose of this transaction, Finance Director Resolution 14-007 Authorizing Investment in Washington Local Government Investment Pool Page 3 of 4 Name Title Signature Telephone Number Mark S. Calhoun Finance Director 509-720-5040 Dan Duffey Accounting Manager 509-720-5043 By signature below,I certify I am authorized to represent the institution/agency for the purpose of this transaction. (Authorized Signature) (Title) (Date) - mcalhoun@spokanevalley.org 1509-720-5040 (Print Authorized Signature) (E-mail Address) (Telephone number) Any changes to these instructions must be submitted in writing to the Office of the State Treasurer. Please mail this form to the address listed below: OFFICE OF THE STATE TREASURER Date Received: LOCAL GOVERNMENT INVESTMENT POOL Fund Number: PO Box 40200 OLYMPIA,WA 98504-0200 Fax: (360)902-9044 State of Washington ) County of )ss. Signed or attested before me by Dated this_day of , 20 . Resolution 14-007 Authorizing Investment in Washington Local Government Investment Pool Page 4 of 4 LOCAL GOVERNMENT INVESTMENT POOL Prospectus January 2014 •S` ear I, i - `SSIINC* ;' James L. McIn tire Washington State Treasurer Contents I. The LGIP 3-4 II. Local Government Investment Pool—Money Market Fund 4-9 III. Management 9 IV. Miscellaneous 9-10 2 I. The LGIP The Local Government Investment Pool(the"LGIP")is an investment pool of public funds placed in the custody of the Office of the Washington State Treasurer(the"State Treasurer")for investment and reinvestment as defined by RCW 43,250.020. The purpose of the LGIP is to allow eligible governmental entities to participate with the state in the investment of surplus public funds,in a manner that optimizes liquidity and return on such funds. In establishing the LGIP,the legislature recognized that not all eligible governmental entities are able to maximize the return on their temporary surplus funds,and therefore it provided a mechanism whereby they may,at their option, utilize the resources of the State Treasurer to maximize the potential of their surplus funds while ensuring the liquidity of those funds. The State Treasurer has established a sub-pool within the LGIP whose shares are offered by means of this Prospectus:The LGIP-Money Market Fund (the"LGIP-MMF"or the"Fund"). The State Treasurer has the authority to establish additional sub-pools in the future. The Fund offered in this Prospectus seeks to provide current income by investing in high-quality,short term money market instruments. These standards are specific to the Fund,as illustrated in the following table. The LGIP-MMF offers daily contributions and withdrawals. FUND SNAPSHOT The table below provides a summary comparison of the Fund's investment types and sensitivity to interest rate risk. This current snapshot can be expected to vary over time. li{uls[�i lial+( :i�ll[.191i l�r�s(::„ Maximum Dollar-Weighted Average Maturity - _ for LGIP-MMF LGIP-Money Market Fund Cash 60 days Current Investments(as of November Bank Deposits 1,2013) US Treasury bills Repurchase agreements US Government agency obligations Fees and Expenses Administrative Fee. The State Treasurer charges pool participants a fee representing administration and recovery costs associated with the operation of the Fund. The administrative fee accrues daily from pool participants' earnings prior to the earnings being posted to their account. The administrative fee will be paid monthly. In the event that there are no earnings,the administrative fee will be deducted from principal. The chart below illustrates the operating expenses of the LGIP-MMF for past years,expressed in basis points as a percentage of fund assets. 3 Local Government Investment Pool-MMF Operating Expenses by Fiscal Year(in Basis Points) 2006 2007 2008 2009 2010 2011 2012 2013 Total Operating Expenses 1.12 0.96 0.84 0.88 0.64 0.81 0.68 0.87 (1 basis paint-0.01%) Because most of the expenses of the LGIP-MMF are fixed costs,the fee (expressed as a percentage of fund assets) will be affected by:(i)the amount of operating expenses;and(ii)the assets of the LGIP-MMF. The table below shows how the fee (expressed as a percentage of fund assets)would change as the fund assets change, assuming an annual fund operating expenses amount of$800,000. Fund Assets $6.0 bn $8.0 bn $10.0 bn Total Operating Expenses(in Basis Points) 1.33 1.0 .80 Portfolio Turnover:The Fund does not pay a commission or fee when it buys or sells securities(or"turns over"its portfolio). However,debt securities often trade with a bid/ask spread.Consequently,a higher portfolio turnover rate may generate higher transaction costs that could affect the Fund's performance. II. Local Government Investment Pool - Money Market Fund Investment Objective The LGIP-MMF will seek to effectively maximize the yield while maintaining liquidity and a stable share price of $1. Principal Investment Strategies The LGIP-MMF will seek to invest primarily in high-quality,short term money market instruments. Typically,at least 55%of the Fund's assets will be invested in US government securities and repurchase agreements collateralized by those securities. The LGIP-MMF means a sub-pool of the LGIP whose investments will primarily be money market instruments. The LGIP-MMF will only invest in eligible investments permitted by state law. The LGIP-MMF will not be an SEC-registered money market fund and will not be required to follow SEC Rule 2a-7. Investments of the LGIP-MMF will conform to the LGIP Investment Policy,the most recent version of which will be posted on the LGIP website and will be available upon request. Principal Risks of Investing in [lie LGIP-Money Market Fund Counterparty Credit Risk. A party to a transaction involving the Fund may fail to meet its obligations.This could cause the Fund to lose the benefit of the transaction or prevent the Fund from selling or buying other securities to implement its investment strategies. Interest Rate Risk. The LGIP-MMF's income may decline when interest rates fall. Because the Fund's income is based on short-term interest rates,which can fluctuate significantly over short periods,income risk is expected to be high. In addition,interest rate increases can cause the price of a debt security to decrease and even lead to a loss of principal. 4 Liquidity Risk. Liquidity risk is the risk that the Fund will experience significant net withdrawals of Fund shares at a time when it cannot find willing buyers for its portfolio securities or can only sell its portfolio securities at a material loss. Management Risk. Poor security selection or an ineffective investment strategy could cause the LGIP-MMF to underperform relevant benchmarks or other funds with a similar investment objective. Issuer Risk. The LGIP-MMF is subject to the risk that debt issuers and other counterparties may not honor their obligations. Changes in an issuer's credit rating(e.g.,a rating downgrade)or the market's perception of an issuer's creditworthiness could also affect the value of the Fund's investment in that issuer. The degree of credit risk depends on both the financial condition of the issuer and the terms of the obligation.Also,a decline in the credit quality of an issuer can cause the price of a money market security to decrease. Securities Lending Risk and Reverse Repurchase Agreement Risk. The LGIP-MMF may engage in securities lending or in reverse repurchase agreements. Securities lending and reverse repurchase agreements involve the risk that the Fund may lose money because the borrower of the Fund's securities fails to return the securities in a timely manner or at all or the Fund's lending agent defaults on its obligations to indemnify the Fund,or such obligations prove unenforceable. The Fund could also lose money in the event of a decline in the value of the collateral provided for loaned securities or a decline in the value of any investments made with cash collateral. Risks Associated with use of Amortized Cost. The use of amortized cost valuation means that the LGIP-MMF's share price may vary from its market value NAV per share. In the unlikely event that the State Treasurer were to determine that the extent of the deviation between the Fund's amortized cost per share and its market-based NAV per share may result in material dilution or other unfair results to shareholders,the State Treasurer may cause the Fund to take such action as it deems appropriate to eliminate or reduce to the extent practicable such dilution or unfair results. An investment in the LGIP-MMF is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of investments at$1 per share,pool participants could lose money by investing in the LGIP-MMF.There is no assurance that the LGIP-MMF will achieve its investment objective. Performance The following information is intended to address the risks of investing in the LGIP-MMF. The information illustrates changes in the performance of the LGIP-MMF's shares from year to year. Returns are based on past results and are not an indication of future performance. Updated performance information may be obtained on our website at www.tre.wa,gov or by calling the LGIP toll-free at 800-331-3284, 5 Fiscal Year-by-Year Returns: Net Yield Local Government Investment Pool 6.00% 5.21% 5.00% — - • 4.14% 4.04% 4.00% 3.00% - — 2.13% 2.00% -1746% - _L59% - 1.05% 0 1.00% — — 0.36% 0.22% 0.14% 0.17% 0.00% — [ i = -- -1.00% - - - -2.00% -3.00% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Local Government Investment Pool-Money Market Fund Average Accrued Net Yield 1 Year 3 years 5 years 10 years 0.17% 0.19% .52% 1.94% Transactions: LGIP-MMF General Information The minimum transaction size (contributions or withdrawals)for the LGIP-MMF will be five thousand dollars. The State Treasurer may, in its sole discretion,allow for transactions of less than five thousand dollars. Valuing Shares The LGIP-MMF will be operated using a net asset value(NAV)calculation based on the amortized cost of all securities held such that the securities will be valued at their acquisition cost,plus accrued income, amortized daily. The Fund's NAV will be the value of a single share. NAV will normally be calculated as of the close of business of the NYSE, usually 4:00 p.m. Eastern time. If the NYSE is closed on a particular day,the Fund will be priced on the next day the NYSE is open. 6 NAV will not be calculated and the Fund will not process contributions and withdrawals submitted on days when the Fund is not open for business. The time at which shares are priced and until which contributions and withdrawals are accepted is specified below and may be changed as permitted by the State Treasurer. To the extent that the LGIP-MMF's assets are traded in other markets on days when the Fund is not open for business,the value of the Fund's assets may be affected on those days. In addition,trading in some of the Fund's assets may not occur on days when the Fund is open for business. Transaction Limitation The State Treasurer reserves the right at its sole discretion to set a minimum and/or maximum transaction amount from the LGIP-MMF and to limit the number of transactions,whether contribution,withdrawal,or transfer permitted in a day or any other given period of time. The State Treasurer also reserves the right at its sole discretion to reject any proposed contribution,and in particular to reject any proposed contribution made by a pool participant engaged in behavior deemed by the State Treasurer to be abusive of the LGIP-MMF. A pool participant may transfer funds from one LGIP-MMF account to another subject to the same time and contribution limits as set forth in WAC 210.10.060. Contributions Pool participants may make contributions to the LGIP-MMF on any business day. All contributions will be effected by electronic funds transfer to the account of the LGIP-MMF designated by the State Treasurer. It is the responsibility of each pool participant to pay any bank charges associated with such electronic transfers to the State Treasurer. Failure to wire funds by a pool participant after notification to the State Treasurer of an intended transfer will result in penalties. Penalties for failure to timely wire will be assessed to the account of the pool participant responsible. Notice. To ensure same day credit,a pool participant must inform the State Treasurer of any contribution over one million dollars no later than 9 a.m.on the same day the contribution is made.Contributions for one million dollars or less can be requested at any time prior to 10 a.m.on the clay of contribution. For all other contributions over one million dollars that are requested prior to 10 a.m.,a pool participant may receive same day credit at the sole discretion of the State Treasurer. Contributions that receive same day credit will count,for earnings rate purposes,as of the day in which the contribution was made. Contributions for which no notice is received prior to 10:00 a.m.will be credited as of the following business day. Notice of contributions may be given by calling the Local Government Investment Pool (800-331-3284)OR by logging on to State Treasurer's Treasury Management System("TMS"). Please refer to the LGIP-MMF Operations Manual for specific instructions regarding contributions to the LGIP-MMF, Direct deposits from the State of Washington will be credited on the same business day. Pricing. Contribution requests received in good order will receive the NAV per unit of the LGIP-MMF next determined after the order is accepted by the State Treasurer on that contribution date. Withdrawals Pool participants may withdraw funds from the LGIP-MMF on any business day. Each pool participant shall file with the State Treasurer a letter designating the financial institution at which funds withdrawn from the LGIP-MMF shall be deposited(the"Letter").This Letter shall contain the name of the financial institution,the location of the financial institution,the account name,and the account number to which funds will be deposited.This Letter shall be signed by local officials authorized to receive and disburse funds,as described in WAC 210-10-020. 7 Disbursements from the LGIP-MMF will be effected by electronic funds transfer. Failure by the State Treasurer to wire funds to a pool participant after proper notification to the State Treasurer to disburse funds to a pool participant may result in a bank overdraft in the pool participant's bank account.The State Treasurer will reimburse a pool participant for such bank overdraft penalties charged to the pool participant's bank account. Notice. In order to withdraw funds from the LGIP-MMF,a pool participant must notify the State Treasurer of any withdrawal over one million dollars no later than 9 a.m,on the same day the withdrawal is made. Withdrawals for one million dollars or less can be requested at any time prior to 10 a.m.on the day of withdrawal. For all other withdrawals from the LGIP-MMF over one million dollars that are requested prior to 10 a.m.,a pool participant may receive such withdrawal on the same day it is requested at the sole discretion of the State Treasurer. No earnings will be credited on the date of withdrawal for the amounts withdrawn. Notice of withdrawals may be given by calling the Local Government Investment Pool (800-331-3284)OR by logging on to TMS. Please refer to the LGIP-MMF Operations Manual for specific instructions regarding withdrawals from the Fund. Pricing, Withdrawal requests with respect to the LGIP-MMF received in good order will receive the NAV per unit of the LGIP-MMF next determined after the order is accepted by the State Treasurer on that withdrawal date. Suspension of Withdrawals. If the State Treasurer has determined that the deviation between the Fund's amortized cost price per share and the current net asset value per share calculated using available market quotations(or an appropriate substitute that reflects current market conditions)may result in material dilution or other unfair results,the State Treasurer may, if it has determined irrevocably to liquidate the Fund,suspend withdrawals and payments of withdrawal proceeds in order to facilitate the permanent termination of the Fund in an orderly manner. The State Treasurer will distribute proceeds in liquidation as soon as practicable,subject to the possibility that certain assets may be illiquid,and subject to subsequent distribution,and the possibility that the State Treasurer may need to hold back a reserve to pay expenses. The State Treasurer also may suspend redemptions if the New York Stock Exchange suspends trading or closes, if US bond markets are closed,or if the Securities and Exchange Commission declares an emergency. If any of these events were to occur,it would likely result in a delay in the pool participants'redemption proceeds. The State Treasurer will notify pool participants within five business days of making a determination to suspend withdrawals and/or irrevocably liquidate the fund and the reason for such action. Earnings and Distribution LGIP-MMF Daily Factor The LGIP-MMF daily factor is a net earnings figure that is calculated daily using the investment income earned (excluding realized gains or losses)each day, assuming daily amortization and/or accretion of income of all fixed income securities held by the Fund,less the administrative fee. The daily Factor is reported on an annualized 7-day basis, using the daily factors from the previous 7 calendar days. The reporting of a 7-day annualized yield based solely on investment income which excludes realized gains or losses is an industry standard practice that allows for the fair comparison of funds that seek to maintain a constant NAV of$1.00. LGIP-MMF Actual Yield Factor The LGIP-MMF actual yield factor is a net daily earnings figure that is calculated using the total net earnings including realized gains and losses occurring each day, less the administrative fee. Dividends The LGIP-MMF's dividends include any net realized capital gains or losses,as well as any other capital changes other than investment income,and are declared daily and distributed monthly. Distribution The total net earnings of the LGIP-MMF will be declared daily and paid monthly to each pool participant's account in which the income was earned on a per-share basis.These funds will remain in the pool and earn additional interest unless withdrawn and sent to the pool participant's designated bank account as specified on the Authorization Form. Interest earned will be distributed monthly on the first business day of the following month. Monthly Statements and Reporting On the first business day of every calendar month,each pool participant will be sent a monthly statement which includes the pool participant's beginning balance,contributions,withdrawals,transfers,administrative charges, earnings rate,earnings,and ending balance for the preceding calendar month.Also included with the statement will be the monthly enclosure.This report will contain information regarding the maturity structure of the portfolio and balances broken down by security type. III. Management The State Treasurer is the manager of the LGIP-MMF and has overall responsibility for the general management and administration of the Fund, The State Treasurer has the authority to offer additional sub-pools within the LGIP at such times as the State Treasurer deems appropriate in its sole discretion. Administrator and Transfer Agent. The State Treasurer will serve as the administrator and transfer agent for the Fund. Custodian. A custodian for the Fund will be appointed in accordance with the terms of the LGIP Investment Policy. IV. Miscellaneous Limitation of Liability All persons extending credit to,contracting with or having any claim against the Fund offered in this Prospectus shall look only to the assets of the Fund that such person extended credit to,contracted with or has a claim against,and none of(i)the State Treasurer, (ii)any subsequent sub-pool,(iii)any pool participant, (iv)the LGIP, or (�the State Treasurer's officers,employees or agents(whether past,present or future),shall be liable therefor. The determination of the State Treasurer that assets,debts, liabilities,obligations,or expenses are allocable to the Fund shall be binding on all pool participants and on any person extending credit to or contracting with or having any claim against the LGIP or the Fund offered in this Prospectus. There is a remote risk that a court may not enforce these limitation of liability provisions, 9 Amendments This Prospectus and the attached Investment Policy may be amended from time to time. Pool participants shall receive notice of changes to the Prospectus and the Investment Policy. The amended and restated documents will be posted on the State Treasurer website: www.tre.wa.gov. Should the State Treasurer deem appropriate to offer additional sub-pools within the LGIP,said sub-pools will be offered by means of an amendment to this prospectus. LGIP-MMF Contact Information Internet:www.tre.wa.gov Treasury Management SystemJTMS Phone: 1-800-331-3284(within Washington State) Mail: Office of the State Treasurer Local Government Investment Pool PO Box 40200 Olympia,Washington 98504 FAX: 360-902-9044 10 CITY OF SPOKANE VALLEY Request for Council Action Meeting Date: July 8, 2014 Department Director Approval: Check all that apply: [' consent ❑ old business ® new business [' public hearing [' information ❑ admin. report [' pending legislation [' executive session AGENDA ITEM TITLE: Motion Consideration: Browns Park Conceptual Master Plan GOVERNING LEGISLATION: N/A PREVIOUS COUNCIL ACTION TAKEN: N/A BACKGROUND: Staff has been working with the Evergreen Region Volleyball Association (ERVA) to provide volleyball programming and events at Browns Park. Browns Park contains four sand volleyball courts that are becoming increasingly popular. ERVA is working with the City of Spokane Valley to expand the sand volleyball courts at Browns Park and create a premier outdoor volleyball venue in Spokane Valley. In order to pursue this concept, staff embarked upon a public master planning process for the park to determine the public's level of support and interest for potential changes to the park. The master planning process was led by the consultant, Michael Terrell - Landscape Architecture (MTLA). The Browns Park Conceptual Master Plan is in direct response to the outcomes from the stakeholders meetings and input from the neighborhood. Through the master planning process, two primary park user groups were identified. These groups are neighbors of all ages and the organized Volleyball Association. These two groups require distinctly different facilities and spaces. The conceptual master plan provides for both uses to function at the park harmoniously. It provides a vision for future development and acts as a guide for the revitalization of Browns Park. The City Council has discussed this conceptual master plan on three previous occasions including a public hearing. Staff will address the Council briefly and respond to questions. OPTIONS: 1) Suggest changes to the Master Plan, or 2) Provide additional direction RECOMMENDED ACTION OR MOTION: I move that we approve the Browns Park Conceptual Master Plan as presented. BUDGET/FINANCIAL IMPACTS: The financial impact would be if and when the City funds various improvements outlined in the master plan. STAFF CONTACT: Michael D. Stone, CPRP, Director of Parks and Recreation ATTACHMENTS: N/A ' r P i ..1" € :APL tlr:AIPSETT.Wo+,ri mac'' ,2 =F OVi iIP ,OLLEYE ik kik 11A1F1E�§ di'ElHICit'� ..,_ _ i c c ce-`t 3 I, E 3431114AVENUE f` 3-do€S�'s +d i 5 c+' s,41 f`ECR P `a 4 LXIS e'7 + "x*alb:IL-4.l C '3: i , LI ` -_ _ Fi:£ i?fAfs'v�:`e 6.Ri &5?? r �&l'it:' - COURT 5J7E(FOR FAMILY -- — - .erne r.C' :fi 'Set':�C e., .-..-.r ,. - --- _ Er,--1ALL FICA IC Sieft,Irtit III 2:1 • i. - ,. ,.mss- __ F _ F, r.. �x �" > A4 o .. 4y mss. ,fi g.+. . 9 ' ` ." '+ ,.. i ,_ sM> - jj- 3 L E?L'P• E C .;<tol '�i prfrH -vflk . n - __ r'ig ( *few TREE% IP e z _r, _-, _ E 32_140 AVENUE_ - ---------r- .1 ICY BROWNS PARK MASTERPLAN . �_� �.:a. CITY OF SPOKANE VALLEY Request for Council Action Meeting Date: July 8, 2014 Department Director Approval: Check all that apply: [' consent ❑ old business ® new business [' public hearing [' information ❑ admin. report [' pending legislation [' executive session AGENDA ITEM TITLE: Motion Consideration: 2014 City Safety Program Call for Projects GOVERNING LEGISLATION: N/A PREVIOUS COUNCIL ACTION TAKEN: Info memo on 2014 City Safety Program Call for Projects, June 10, 2014; Admin report, June 24, 2014. BACKGROUND: The Washington State Department of Transportation (WSDOT) issued a 2014 Call for Projects for allocation of Federal Highway Safety Improvement Program (HSIP) funds for safety projects. The federal funds may be used for preliminary engineering and design, purchasing of right-of-way, and construction of city safety improvement projects. Funds will be available in December of 2014. Projects require a local match of 10%. Projects advertised for construction by September 20, 2017 are eligible for 100% funding for construction (no local match required for eligible federal expenditures). Approximately $37 million in federal funds are available for the use of spot location and systematic improvements. Of these funds, $25 million will be allocated to spot location improvements, which include intersection, midblock, or corridor improvements. There is no maximum grant amount per agency for this category. The remaining $12 million will be allocated to systematic improvements, which include widespread, risk-based projects that cover wide areas (or citywide) throughout the city. The maximum grant amount per agency for this category has been established at $1 million. Agencies may apply for an unlimited number of projects, however a maximum of three from each agency will be funded. Staff has begun evaluating the proposed HSIP grant criteria and has identified a draft list of projects to review with Council. Information used to develop this draft list of projects includes: • The 2008-2012 crash data obtained from WSDOT • Federal Highway Administration (FHWA) criteria established within the Manual on Uniform Traffic Control Devices (MUTCD) • Visual observations and being proactive to enhance safety citywide Spot Location Projects: The proposed projects identified below are developed based on the review of the 2008 through 2012 crash data, coordination with WSDOT, and where safety improvements can result in a reduction of the severity of crashes. 1. McDonald Road — Mission Avenue to 16th Avenue (corridor improvements) 2. Sullivan Road Safety Study— Mission Avenue to Sprague Avenue (corridor study) Systematic Projects: The proposed project identified below was developed based on guidelines for improvements established by the FHWA as directed in the MUTCD and through coordination with WSDOT. 1. Reflective signal backplates — Citywide traffic signal enhancements at high volume intersections OPTIONS: 1) Approve the recommended projects for City Safety grant applications as presented, 2) Revise the list of projects for City Safety grant applications, or 3) provide additional direction for staff. RECOMMENDED ACTION OR MOTION: Move to authorize staff to proceed with applying for the three City Safety grants for the projects as listed above. BUDGET/FINANCIAL IMPACTS: Project costs are currently being developed in more detail for each project. The City's match on federally funded safety projects is 10% of the total project cost. Projects advertised for construction by September 20, 2017 are eligible for 100% funding for construction (no local match required for eligible federal expenditures). STAFF CONTACT: Sean Messner, PE — Senior Traffic Engineer Eric Guth, PE — Public Works Director ATTACHMENTS: WSDOT 2014 City Safety Program Grant Application, Citywide Safety Presentation 2014 City Safety Program ANIL Grant Application iMPZ Washington State Department of Transportation Local Programs Division Instructions: Please fill out this grant application completely.Applications that are not complete will not be considered.Applications can be filled out by hand and attachments can be hand drawn.Applications are due by 11:59 p.m. on Wednesday,July 16,2014 by email to H&LPGrants@wsdot.wa.gov. Please refer to City Safety Program in the subject line of your email. If you have questions about this program, please contact: • Region Local Programs Engineer: See http://www.wsdot.wa.gov/LocalPrograms/regional.htm for contact information. • Susan Bowe, P.E., Traffic Services Manager, susan.bowe@wsdot.wa.gov, 360-705-7380. Date: Type of project: ❑Spot location (projects at intersections, midblock locations, or on corridors)(Spot Location Subprogram) ❑Systematic(low cost,widespread, risk-based projects in the city or over wide areas of the city) (Systematic Subprogram) Project title: Does the project currently have federal funding? Federal aid project number(if assigned): Name of city: WSDOT Region assigned to the city: See http://www.wsdot.wa.gov/LocalPrograms/regional.htm for more information. ❑ Northwest ❑Olympic ❑Southwest ❑North Central ❑South Central ❑Eastern Name of contact person(s)for questions about this grant application: Title: Phone: Email: Mailing address: Legislative district(s): Congressional district: Brief project description: Provide a one to four sentence narrative that summarizes the project work. This is the type of description that could appear in the Statewide Transportation Improvement Program (STIP)entry for the project. Do not include quantities. Example: Improve traffic signal phasing and visibility of traffic signal heads. WSDOT concurrence if the project is on a state route. Projects on state routes must have been coordinated through the appropriate WSDOT regional office.Attach a letter or email that indicates concurrence with this application. Contact the Region Local Programs Engineer to request concurrence. Page 1 of 4 Project location and detailed description of work: Describe in detail the specific improvements to be made and the location(s)where the improvements will be made. Use the format below. See examples. Include specific street and intersection names, including all known versions of the name(example: Pear St./Main St. &4th Ave.). If a project is at a location that was recently annexed from a county, include the county road number(s)and milepost(s) (example: Road 70070 MP 7.07). For projects on state routes, include the state route number(s)and milepost(s) (example: SR 700 MP 70.70). To identify state route mileposts, see http://www.wsdot.wa.qov/mapsdata/roadway/pdf/HwvLog2013Statewide.pdf or http://www.wsdot.wa.qov/mapsdata/tools/srweb.htm.Attach additional sheets if necessary. Also attach a vicinity map(s)that identifies the location of all improvements. Example 1: This example is for a fictitious spot location project titled Peninsula Rd. and Ocean Beach Dr. Intersection Safety. Improvement/countermeasure#1 Install a left turn lane. 1. Peninsula Rd. &Ocean Beach Dr. (north and south legs) Example 2: This example is for a fictitious systematic project titled Orchard District Traffic Signal Improvements. Improvement/countermeasure#1 Install flashing yellow arrow signal operation. 1. Apple St. & 1st Ave. (northbound and southbound) 2. Pear St./Main St. &4th Ave. (northbound and southbound) 3. Quince St./SR 700 MP 70.24& 1st Ave. (northbound) 4. (list continues) Improvement/countermeasure#2 Install yellow retroreflective tape on traffic signal backplates. 1. Apple St. & 1st Ave. 2. (list continues for Apple St.) 3. Apple St. & 10th Ave. 4. Pear St./Main St. & 1st Ave. 5. (list continues for Pear St./Main St.) 6. Pear St./Main St. & 10th Ave. 7. (list continues) Improvement/countermeasure#1 Description: 1. Location 1 2. Location 2 3. etc. Improvement/countermeasure#2 Description: 1. Location 1 2. Location 2 3. etc. Improvement/countermeasure#3 Description: 1. Location 1 2. Location 2 3. etc. Page 2 of 4 Street and pedestrian and bicycle facility characteristics: Complete the following questions. Attach additional sheets if necessary. Describe the existing pedestrian and bicycle facilities at the project location. Identify the roadway width, sidewalk width, number and configuration of lanes and bicycle lanes,speed limit, and the estimated average daily traffic(ADT)volume. Do the existing pedestrian and bicycle facilities meet your city's current design standards and Americans with Disabilities Act standards? What pedestrian and bicycle facilities does this project address? For pedestrian and bicycle facilities not addressed by this project, what would it cost to bring those facilities up to current standards? Crashes (crash types) addressed: The project must address at least one fatal or serious injury crash or crash type from 2008-2012 (calendar years)found in WSDOT's collision database.A benefit/cost process will be used to score grant applications. Provide a description of the fatal and/or serious injury crashes or the fatal and/or serious injury crash types being addressed by the proposed improvements/countermeasures. Refer to the actual collision report numbers if you feel that this would be helpful. Attach additional sheets if necessary. To request collision data for your project, complete a 2014 City Safety Program Request for Collision Data form at http://www.wsdot.wa.gov/mapsdata/collision/pdf/2014_CitySafetyProgram_CollisionDataRequest.pdf. If a project is at a location that was recently annexed from a county, include the county road number(s)and milepost(s). The form can be returned by mail,fax, or email to: Collision Data &Analysis Branch, Washington State Department of Transportation, P.O. Box 47381, Olympia, WA 98504-47381,fax: 360-570-2449, email: collisionanalvsis@wsdot.wa.gov. For questions about ordering data, please contact 360-570-2454 or collisionanalvsis@wsdot.wa.gov. Once the data is received, please direct all questions to your agency's Region Local Program Engineer or Susan Bowe (Susan.Bowe@wsdot.wa.gov, 360-705-7380). Page 3 of 4 Project cost and Grant Request: Projects require a 10 percent local match. Projects that are advertised for construction by September 30, 2017 are eligible for 100%funding for construction (no local match required for eligible federal expenditures). Projects must be fully funded between this grant and other funding sources, if applicable. Include a detailed cost estimate with this application. The estimate must clearly show totals for all project phases (preliminary engineering, right-of-way, construction), as applicable. The cost estimate for construction must be determined assuming that the project will be built by contract and follow the Local Agency Guidelines (LAG) manual. Phase Total cost Amount funded from Match (Amount Amount requested previous Highway funded from from this grant(2014 Safety Improvement other sources) City Safety Program) Program (HSIP) funds Preliminary Engineering Right-of-Way Construction Total Identify the source of matching funds utilized for this project: Estimated milestones from the project schedule: Provide the estimated month and year for each milestone below. The milestones need to be determined assuming that the project will be built by contract, not by local agency or a partner agency's forces. Project selections will be made in December 2014. Project added to the local agency's Transportation Improvement Program (TIP): Project added to the regional TIP: Project inclusion in the Statewide Transportation Improvement Program (STIP): Project definition (Project Prospectus and Local Agency Agreement signed/Begin PE): National Environmental Policy Act (NEPA) kickoff: Environmental documents approved: Right of way start: Right of way certified: Geometric/30%design complete: General plan160%design complete: Advertisement date: Contract award date: Open to traffic (operationally complete)date: Page 4 of 4 City 2014 polik :: P .....- .._=. ...- - -e a; -go r+ rare 411111111 Ihk „ek Ai , , 4 I.I- 00 . . ill Roundabouts Corridor Access Bookplates 'yvl:h Longitudinal Rumble Enitariced Delineation Management Retforefie .tive Borders Strips and Stripes on and =fiction for Horizontal Tiro-Lace Roads Curves 4111'-' , k Ajk Or N 14 AD I I lig I I 1 I I I I 4 4 I 1: F Safety Edges.m Medians and Pedestrian Pedestrian Hybrid Road Diet Crossing Islands in Urban Beacon and Suburban Areas July 812014 Sean Messner, PE Funding • Highway Safety Improvement Program ( HSIP) •Federal Program •$37 Million available •$25 Million — Spot Location Subprogram •$12 Million — Systematic Improvements Subprogram •Local Match of 10% for study/design projects •No Match for construction if completed by 9/20/2017 • Funds available December 2014 Purpose • Reduce fatal and/or serious injury collisions by using engineering countermeasures •Spot Locations •Intersections •Midblock crossings •Corridors •Systematic •Low cost, widespread improvements Selection Process •Applications due to WSDOT on July 16t", 2014 •Maximum of 3 projects per agency •Spot Location subprogram projects •MUST address fatal and/or serious injuries (Per WSDOT) •Systematic subprogram projects •Meet FHWA criteria for crash reductions Pines • Pines / 16th Avenue iv" AoV •33 Crashes between 2008-2013 o vL \ •Candlestick channelization - - amellil installed April 25, 2012 �, * Reduced crashes by 50% .t -- li, (3 crashes in 2013) i 11.117111.111111111mIree P01-401- 6r4e4141 • 1 serious crash in 2012 4r •Skateboarder at Pines/16th intersection (not signal ) • No Further Safety Recommendations at this time Broadway Before/After Analysis •Broadway before/after analysis • Harold to University & Evergreen to Adams •Overall reduction in crashes by 20% (30 to 24) •Reduced evident injuries by 1% •Reduced left-turn and angle crashes by 26% •Reduced sideswipe crashes by 6% •Increased rear-end crashes by 27% •Increased possible injuries by 14% Broadway Before/After A •Crash Severity Number of Crashes Injury Type Pre - E/W Only Post - E/W Only Delta Fatality 0 0.0% 0 0.0% 0.0% Disabling 0 0.0% 0 0.0% 0.0% Serious 0 0.0% 0 0.0% 0.0% Evident Injury 4 13.3% 3 12.5% -0.8% Possible Injury 7 23.3% 9 37.5% 14.2% No Injury 19 63.3% 12 50.0% -13.3% TOTAL 30 1 24 1 Reduction in Crashes 20.00% Broadway B Analysis •Crash Types Number of Crashes Collision Type Pre - E/W Only Post - E/W Only Delta Opposite direction one left turn one straight 8 26.7% 2 8.3% -18.3% Entering at angle 6 20.0% 3 12.5% -7.5% Fixed Object 2 6.7% 4 16.7% 10.0% Same direction one stopped- rear end 8 26.7% 10 41.7% 15.0% Same direction sideswipe 2 6.7% 1 4.2% -2.5% Same Direction - all others 1 3.3% 0 0.0% -3.3% Same direction both moving - rear end 0 0.0% 3 12.5% 12.5% Bicycle/Pedestrian 1 3.3% 1 4.2% 0.8% Other 2 6.7% 0 0.0% -6.7% Total 30 1 24 1 IReduction in Crashes 20.00% Recommended Projects •Coordination with WSDOT led to refinement of projects • MUST address fatal and/or serious injury crashes • Mission/Pines and Sullivan/Sprague not eligible •Accessible Pedestrian Signals (APS) •Currently viewed as "access needs" and not "safety needs" SAPS not eligible Recommended Projects •Spot Locations that address fatal and/or serious crashes •McDonald Road — Mission to 16th •Sullivan Road — Mission to Sprague •Systematic Project that address safety •Reflective Backplates Spot Location Recommendations Mission � - - °SINALD ROAD • M D n ld Road — to 16th HIGHWAY SAFETY IMPRQYEMENT PROGRAM(HSIP) FxaECT t LOCAliR1 i lir —=: atf111Ol1,i : I T. ai' 1 1 iauriz.-2S.„rar—, Convert 4-lane to 3-lane to allow for � ' :i Fes l;:;EPA ;. i- . I . . � new bike lanes 4 , 1 i 1 SW RI IMF TIM 1 IANF Bl SW i 71 } + + ---1 0.11,^?0.11,^?0.11,^?SW LAME LO _ LAML LAML SW t I 1 I:•:Itiln::, • Modified traffic signals at r ,1 0 vas - Sw LP1 L4NL El SW new Sprague - 1 1ANE t`LANE Broadway & S ra ue F EASING A. • r 0 SECTION i Iiia a.1141 l hill • Potentially reduce crashes , •-rig -I 4014 iMP lAcDOINALO Figi4l7 by 29% (before/after = 20%) f . `. ' -f- L 'Id 1.119810)4 TO tem ME 4 II allll✓•.R 11.1H E.1'7/2 H 1 n I'{� NOT TO SCALE .lean ar. uuc: •Spot Location Recommendations / . / , ..,,y / , / / t _ __ Ator - 4, ,r_ w �' .,d ii,( sr / , / iiir ' clue/ - ,ry 1 Y A /J// � � p� /PI fJ 0__. 46 / i illi 4-Lane With center turn lane Spot Location Recommendations •Sullivan Road — Mission to Sprague .414 - I •Perform Roadway Safety Audit u �. Kr I * Identify safety deficiencies and 111 recommend improvements v I MI g � I . I Recommended Systematic Project •Yellow Reflective Backplates •Adds additional awareness to traffic signal indications * Recommended at signals per MUTCD Schedule •Obtain Council Approval • Refine Project Costs — July 11, 2014 • Finalize Applications — July 14, 2014 •Submit Applications to WSDOT — July 16, 2014 � CITY OF SPOKANE VALLEY Request for Council Action Meeting Date: July 8, 2014 Department Director Approval: Check all that apply: [' consent ❑ old business [' new business [' public hearing [' information ® admin. report [' pending legislation [' executive session AGENDA ITEM TITLE: North Spokane Corridor Project GOVERNING LEGISLATION: PREVIOUS COUNCIL ACTION TAKEN: BACKGROUND: Washington State Department of Transportation Regional Administrator Keith Metcalf will give an update on the North Spokane Corridor Project, including pavement preservation issues and revenue challenges. OPTIONS: RECOMMENDED ACTION OR MOTION: BUDGET/FINANCIAL IMPACTS: STAFF CONTACT: Eric Guth ATTACHMENTS: PowerPoint Presentation Eastern Region Update Keith A. Metcalf, P.E. Regional Administrator Eastern Region City of Spokane Valley July 8, 2014 Ask FrirWashington State Department of Transportation US 395 - North Spokane Corridor What's been accomplished? iir N y �S LEGEND w e • North half— 5.7 miles fully completed and open to t COMPLETE .. traffic in 2012 (on map in blue) i- FL CURRENT FOCUS • Opened the Children of the Sun pedestrian/bike trail • r' in 'ti --- _ ---1FRoicts - = ', ` ,r. Y' ...l, a - I ,weaE3LE11 ` a- _ ,;. rolve Fes' Sqm " *'r P r VOW .U. Eu[uu „. -! • - t 41? '; , ',..._ , 3 II _a . e - 1 US 2 & Farwell Road Interchanges -Y . =Y �- 1 . v. 3PRRG4f, •a I I 7 s. - v Adak 7 Washington State /, Department of Transportation 2 US 395 - North Spokane Corridor History of NSC funding to date Design $49 M Construction Right-of-Way $325 M $241 M • ederal Funding - $140 Million Stale Funding - $475 Million UNFUNDED AMOUNT - $1 .3 Billion i,901 Incl 'des $750 Million Interim Connection Estimated Total Cost: $1 ,930,000,000 $1 ,400,000,000 Total Allocated to Date: $615,000,000 Auk FroWashington State Department of Transportation US 395 - North Spokane Corridor-Unfunded Needs ,.. x _s Additional $750 million completes driveable freeway - # facility from Freya/Francis to 1-90 ^. . . a ,. }RAICIS Open useable segments as work progresses t. ' Use of the full 10.5 mile corridor $750M ..-. LN�}I[k.1 Ftii Realize benefits of prior investment -- °. Provides 1-90 connection ..M -- i 0 -_ ,, Right of Way purchases underway 4 "' • x EyClho Practical design strategies implemented to reduce 5 . ' cost. Working with City of Spokane and community p '"' members on design refinements ,� - a .. SpitgGllE' .'i- iL. $750 Million to connect to 1-90 1! Ask Washington State �, Department of Transportation 4 US 395 - North Spokane Corridor Under construction Francis Avenue Structure and Improvements F '�"''� . _ New bridge spans railway y plus new freeway & trail. #fit � _- Completed in June 2014. — --_sj c - ' — t.. BNSF Railway Relocation & - __ - - _ Children of the Sun Trail ExtensionLL s� F:Slfne _ �- .+ ` _ Bicycle ) • 7 miles of mainline and spur tracks �� = ' 2 freeway structures over railway "FranckAvenue - x , = 1 , . 1 mile of new trail ) ` rt_- " v, .-_: 2 trail structures over railway - 4 Under construction/Completion 2015 ilitii, joi-ar, II Ems — ,,- s 7 - — .!:;ibni Looking South .i Washington State WI Department of Transportation 5 4 a` I What's Coming Up 1 'FRANCIS - z;; " ' Summer/Fall 2016: • Grading, City Street Improvements, wImESL � � and Utility Relocation 41 Spokane River to Francis -� s 'M .. - Spring/Summer 2016: F,' Anticipated Wellesley/Freya ° 3 � Roundabout Construction 5. .,. SPOKANE RIVER 1.t � $ �- � . _ Ongoing: 1 - r �.r _ ; -= Right of Way Purchases throughout ._ ,,` -� corridor u. .. _ ;,:� . _ „ , ,4m .SIS WI . _ iir 90— 47 I ._ INTERSTATE 90 Aliik Washington State �, Department of Transportation Transportation Revenue Am Washington State Department of Transportation ' avement Eastern Region P-1 Program HMA/PCCP/BST Routes Eastern Region Pavement Preservation Team ,_. ........__ ©.._._.., o . . _ � -- • Extend the life of deteriorating "due" and "past ® a ,.., PEND due" pavements. OREILLE :REPUBLIC L._. lao - • - Maintenance forcesperform targeted pavement Programmed P1 =' . : ® g Projects through , repair on "due" pavements usingP1 funds. 2015— FERRY p HMA Conversion to �5 ' l • Provides interim cost savings bydelaying capital BST — — ' - STEVENS g y g p ; ' o expenditures while providing adequate roadway P1 Needs Ending z5 �' �- performance. Rn 2015 ® '° HMA Conversion to A ,fp. w -la BST . , 8 :_ 0 mi Kr HMA & PCCP = 410 OLINCOLN a *Y\ - - +.. , r Lane Miles g . ` ® - � �� �ysF � f BST = 280 Lane Miles •�� _ _, SPOKANE )))\\\\\ r -IF l 1® MEI ,' _ v $75 million r:, °'�" t r ADAMS a sse. .. li . ° } WHITMAN i� k --� 41 l� me" �x Adak Washington State �, Department of Transportation Washington State Highway Capital Construction Preservation Program - Current Biennium and 10 Year Outlook* $ Millions 700 600 500 400 300 200 100 0 13 - 15 15 - 17 17 - 19 19 - 21 21 - 23 23 - 25 Biennium * Based on 2014 Legislative Project List .i► Washington State yar Department of Transportation 11-9-11_3pm_CB Core assets at risk with declining revenues Total dollars of Pavement condition capital investment '03 and '05 (lane miles in ($ in millions) Current Revenue good/fair condition) $5,000 year package 100% capital investment Pavement a $4,000 Ii condition 901 $3,000 80% $2,000 70% $1 ,000 - 60% $0 ' T 50% 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 Year Ask Washingto Sof tateTra �, Depa tment nsportation ne.n52n sr 2013-15 Agency Highway Construction Program Program expenditures and workforce projection Includes the improvement and preservation programs with two exceptions: excludes expenditures for the Tacoma Narrows Bridge and expenditures in the improvement program reimbursed by Sound Transit. Total dollars Workforce (Millions) Current biennium $5,000 _ _ 3,500 $4,500 _ _ 3,300 $4,000 _ — -- 2,920 budgeted FTEs for 09-11 _ 3,100 ��'��� _ — 2,800 end-of-biennium _ 2,900 $3 0 _ Workforce FTEs 2,600 biennial average FTEs for 11-13 _ 2,700 2,400 end-of-biennium target _ _ 2,500 kiiit 2,200 proposed biennial average FTEs for 13-15 $2,000 _ \ 2,000 end-of-biennium target* " 2,300 $1 ,500 _ 2,285 `� . , _ 2,100 2011-13 ..0\,,,, j i $1 000 _ Biennium End it 2,029 _ 1 ,900 ? 2003 Nickel, 2005 TPA, Actual ."--000 _April 2014 ' $500 _ 2009 ARRA, and Pre-existing Actual _ 1 ,700 fund expenditures $01 ,500 . . I I I . . . i 1 1 I 99-01 01-03 03-05 05-07 07-09 09-11 11-13 13-15 15-17 17-19 19-21 21-23 23-25 Biennium 2015-2017 and beyond: Maximum workforce will be maintained at or below 2,000 FTE's(Engineering &Technical Core Competency Level), dependent on work load. Washington State v,740 , fiepartment of Transportation `�1 Source:WSDOT Capital Program Development and Management Transportation fuel tax is limited and committed 37140,2 per- gallon statefueltax ••••• ••••• ••••• •••• ••••" ••••• • 91/20 50 110 40 261 Transportation 160 Nickel cities and counties pay off bonds that Partnership projects* projects local roads funded past projects 421 projects CAvailable for use on state highways, bridges and ferries: • maintenance and operations • preservation • safety improvements ents • Of the 91 cent, z cents is used by tfe state for highway Fciects, 1 cent gm to cities and counties fix sleet and reed improvements. Washington State �, Department of Transportation Source:WSDOT 12 State fuel tax revenue buys less than it used to 2001 I . A 4 ' IT It Spa h LIV t�.;;"� , %�' ''ryry�� x`11,, �.uw.n � __ } �j G''' ^^4 /yJ ,14* ------"- i9i5LLWfAfwi��.Gu�•�- _ ''r7 IL 11180916 G I}1I, 80 fuel tax `; yam. `' LA ,'''''' �., l generated �i �,. 12 , ti w , .,� f , � � fV# iL 1118©5 Z 5 G + _:. at•: � $251 .8 million ,: ar i2 1 per year � , _� . n .. ,, � ___ .� 7� 411 i s:. � h t1'S. Inflation increases maintenance and 47 /o construction decline�� costs, causing a decline in fuel tax in 12 years* purchasing power 20127:7,17.47,71.7u. , ..,, ..•7'a lir:^4,—; in 2001 dollars, �. � a :w.ro. r Lost value 80 is worth ., '► 11 ' A due to ' ` 1 11180916 G $184.4 million ►z .... inflation ; q per year I - .tn..+ ��XPr , * As measured by the construction cost index. aillik Washington State �, Department of Transportation Source WSDOT 13 RESULTS0 0 wWSDOT c-,., MOVING WASHINGTON FORWARD r-f- Setting WSDOT's Direction E cp co cD Leaoeisno ,___ 3 * r : ova m Econon c Vrtairty Lynn Peterson - , Secretary of Transportation ; I ' . ' '11 1 a z a 0 c afe i tamability R1 g , Inteinty , ' eiiabi . < III 0 CD0 CD at CiD au) A CD CD cn Setting WSDOT's Direction WSDOT's Vision ei Goal 1 - STRATEGIC INVESTMENTS The Washington State Department of Transportation's =r4 vision is to be the best in -••• ` Goal 2 - MODAL INTEGRATION MENNE providing a sustainable and integrated multimodal * transportation system. 46 tr 4 Goal 3 - ENVIRONMENTAL STEWARDSHIP WSDOT's Mission tfilftiThe Washington State 11-11 - Goal 4 ORGANIZATIONAL STRENGTH Department of Transportation • provides and supports safe, .•.i. reliable and cost-effective trilti Goal 5 - COMMUNITY ENGAGEMENT transportation options to improve livable communities and economic vitality for Goal 6 - SMART TECHNOLOGY people and businesses. Adak Washington State �, Department of Transportation How is this plan different? • WSDOT's new strategic plan is Setting WSDOT's Direction for 2014-2017 • Results WSDOT represents a shift in the way we do business to get the most capacity of the entire multimodal transportation system, leverage our limited funding and engage with communities and partners • Results WSDOT implements our strategy for moving Washington forward • It emphasizes multimodal integration, strategic corridors and technology • It aligns with WSDOT's Reforms • Focuses on efficiencies- for example Practical Design, and Lean principles ,,,,,,,, , ,, ,)r,- , ,,,, - ,7' - - - . , -- - , , r ,,_ ____ „. .,.„,....r____ _ I. ' -1 ,'...„-: ..- - ,A,- *I Itl.., 04-1.. j --_ --- - —,C.11,— !4iolm--._,--:,;- -X-- -"" _Ilk . �z-.......... .. ...... . .. . ....... ... .. ...... .... . -: .y�iY '.n`. t- Yh Ask Washington State �, Department of Transportation '.P How does this plan align with Results Washington? WSDOT's strategic plan aligns with the Governor's strategic framework. Improving Washington's infrastructure and building a more sustainable transportation system are key components for building a prosperous economy (Goal 2). r-.! f World Class Education (Goal 1) 04. r ;.y ';1 Prosperous Economy (Goal 2) Sustainable Energy and a Clean Environment (Goal 3) Healthy and Safe Communities (Goal 4) aormardEfficient, Effective and Accountable Government (Goal 5) Washington State VAPPr Department of Transportation How does this plan align with WSDOT's Reforms? WSDOT's Reforms implement common-sense changes that transform our ability to foster an efficient, effective and accountable government for those we serve. These changes will align with Results WSDOT. • Reform I: Ensure efficiency and accuracy • Reform VII: Expand and strengthen through strong management direction construction contracting methods and protocols • Reform II: Reward innovation in cost- • Reform VIII: Implement vessel construction effective design and construction and maintenance improvements suggested management by State Auditor's Office (SAO) and develop cost-effective protocols to staff every • Reform III: Develop workforce scheduled ferry sailing • Reform IV: Increase opportunities for • Reform IX: Lean, more cost-effective disadvantaged business enterprise (DBE) operations • Reform V: Implement Practical Design • Reform X: Streamline tolling operations, costs and efficiencies • Reform VI: Strengthen quality assurance protocols for increased accountability Washington State Var Department of Transportation o � r u e sions• fig . . , � � . . . )1I. 1 I E 1. 1 A�Sy`. ', It-F x r 1 �� ! i 1 _ gam. 4 `' -+'. �, r For more information contact: _ � " � Keith MetcalfRegional ional Administrator ; � �2 '� ', �'� a } , , WSDOT Eastern Region . ' r 1 4 � 509-324-6010 metcalk@wsdot.wa.gov '-., `�• - NCe r r . -Z 1 v ���.-a ,,....<-�` - ter..'- w ; .r ' .4. I i . .-,-.�, W . 1 r P � i` 61 °Vipi 4a+ a+ ail � o I _ . WEE_LE7� - _ 4 w it EcIU [ , l w. r +t . r �d a { 1 F � A let s _ 4 .k. . , ,... , „ . _ , .. . A ' __• ...f-, F air• 1 90 .. * ^.SPRAGUE, -f`. - - `a�E � 1 > F I adilik Washington State /, Department of Transportation 19 CITY OF SPOKANE VALLEY Request for Council Action Meeting Date: July 8, 2014 Department Director Approval: Check all that apply: [' consent ❑ old business ❑ new business ❑ public hearing ❑ information ® admin. report ❑ pending legislation ❑ executive session AGENDA ITEM TITLE: Spokane Transit Authority Interlocal Agreement — Fiber Facilities GOVERNING LEGISLATION: N/A PREVIOUS COUNCIL ACTION TAKEN: N/A BACKGROUND: The purpose of this Interlocal Agreement is to provide the terms under which the City will permit the Spokane Transit Authority (STA) to utilize one pair (two strands) of dark fiber for the purpose of STA communicating between the Pence Cole Valley Transit Center at 4th Avenue and University Road, and STA's other facilities regarding STA business. The other STA facilities are already connected to the regional ITS infrastructure. This allows for better communication between STA facilities therefore providing benefit to transit riders. STA will construct the connection to the City's fiber facilities at the City's fiber vault located in the City right-of-way on the south side of the Appleway Boulevard corridor adjacent to the Valley Transit Center. STA will utilize the fiber connection to communicate about transit business with STA's other facilities, which are connected to the regional ITS infrastructure. All construction will be to the City's standards and STA and its contractor will obtain all necessary permits and inspections required by the City. STA will pay all costs related to the construction and will pay maintenance costs (if any) of their connection to our vault. STA will also pay a pro-rata share of all maintenance costs for any fiber used as part of this agreement. This agreement is a ten (10) year agreement with an option to renew for an additional 10 years. There is no impact to the City in terms of use of this fiber at this time as the fiber is available for use. OPTIONS: Discussion; Council consensus to bring this item back for a motion consideration at the July 15 Council meeting. RECOMMENDED ACTION OR MOTION: Discussion; Council consensus to bring this item back for a motion consideration at the July 15 Council meeting. BUDGET/FINANCIAL IMPACTS: No change to yearly budget and no additional City costs. STAFF CONTACT: Sean Messner, Senior Traffic Engineer Eric Guth, Public Works Director ATTACHMENTS: Interlocal agreement with STA INTERLOCAL AGREEMENT FOR SPOKANE TRANSIT AUTHORITY TO USE FIBER FACILITIES OWNED BY CITY OF SPOKANE VALLEY,AND OTHER MATTERS RELATING THERETO THIS INTERLOCAL AGREEMENT (hereinafter "Agreement") is between the CITY OF SPOKANE VALLEY, a Washington State municipal corporation, (hereinafter "City") and SPOKANE TRANSIT AUTHORITY, a Washington State political subdivision and special purpose district(hereinafter "STA"),and jointly referred to as the"Parties." RECITALS: WHEREAS Chapter 39.34 RCW, Interlocal Cooperation Act, permits governmental units to make the most efficient use of their powers by enabling them to cooperate with other localities on the basis of mutual advantage to perform functions,and provide services and facilities to each other and the public;and WHEREAS, the City owns fiber infrastructure that STA desires to use for telecommunication purposes (voice, data,video) at the Pence Cole Valley Transit Center located at the northwest corner of 4'h Avenue and University Road; and WHEREAS, it is in the operational and financial best interest of both Parties for the City to allow STA to utilize one pair (two strands) of dark fiber for the purpose of communicating about transit business with STA's other facilities. NOW,THEREFORE,the Parties agree as follows: 1. PARTIES A. City of Spokane Valley is a Washington State municipal corporation, referred to herein as "City", located at 11707 East Sprague,Suite 106, Spokane Valley,WA 99206. B. Spokane Transit Authority is a Washington State political subdivision and special purpose district known as STA, headquartered at Spokane Transit Administration Facility, 1230 West Boone Avenue, Spokane,Washington. 2. PURPOSE AND RESPONSIBILITIES The purpose of this Interlocal Agreement is to provide the terms under which the City will permit STA to utilize one pair (two strands) of dark fiber for the purpose of STA communicating between the Pence Cole Valley Transit Center (Valley Transit Center) at 4th Avenue and University Road, and STA's other facilities regarding STA business. STA, through its contractor, shall construct the connection to the City's fiber facilities at the City's fiber vault (the Vault), which is located in right-of-way in the south side of the Appleway Boulevard corridor adjacent to the Valley Transit Center, as shown in Attachment A, All construction shall be to the City's standards and STA and its contractor shall obtain all necessary permits and inspections required by City. 3. COSTS A. STA shall pay all costs related to constructing the connection to the City's fiber facilities from the Vault onto STA property. STA shall pay all costs of repair of said connection that may be required as a result of damage to the Vault not caused by City's negligence. If the Vault is moved due to a City road capital project, STA will pay the costs related to constructing STA's 1 new connection of one pair(two strands) of dark fiber to the City's relocated fiber facilities and fiber vault. B. STA shall pay its pro-rata share of all maintenance costs for any fiber actually used ,under this agreement. C. STA agrees to reimburse the City within 30 days of mailing of any invoice for such maintenance costs or installation costs incurred by the City. 4. TERM This Agreement shall begin upon signature by both jurisdictions and shall extend 10 years and may be renewed for additional 10 year terms upon written mutual agreement. Either Party may terminate this Agreement for cause or functionality any time upon 180 days prior written Notice. 5. OWNERSHIP OF FACILITIES The City shall continue to own all fiber strands, and STA shall have only a right to use the one pair of dark fiber strands under the terms set forth herein. STA shall own the connection from its facilities at the Valley Transit Center to the Vault. 6. LIABILITY A. The City shall defend, indemnify and hold harmless STA, its officers, employees and agents, from any claim, damage, loss, liability, injury, cost and expense arising out of the negligence or intentional acts of the City, its officers, employees and agents in connection with the Agreement,except to the extent of the negligence or intentional acts of STA, its officers,employees and agents. If an action,claim or proceeding instituted by a third party is directed at work or action taken by the City solely on behalf of STA, its officers, employees and agents, STA shall defend, indemnify and hold harmless the City from any expenses connected with the defense,settlement,or monetary judgment ensuing from such actions,claims,or proceedings. B. STA shall defend, indemnify and hold harmless the City, its officers, employees and agents, from any claim, damage, loss, liability, injury, cost and expense arising out of the negligence or intentional acts of STA, its officers, employees and agents in connection with the Agreement, except to the extent of the negligence or intentional acts of the City, its officers, employees and agents. If an action, claim or proceeding instituted by a third party is directed at work or action taken by STA solely on behalf of the City, its officers, employees and agents, the City shall defend, indemnify and hold harmless STA from any expenses connected with the defense, settlement, or monetary judgment ensuing from such actions,claims, or proceedings. C. Each Party specifically assumes potential liability for actions brought by its own employees against the other Party, and solely for the purposes of this indemnification, each Party specifically waives any immunity under Title 51 RCW. The parties have specifically negotiated this provision. D. In the event STA's fiber connection to the City's fiber network is compromised or service lost for whatever reason up to the connection in the Vault, the City is obligated to make reasonable efforts to restore connectivity. In such event, the City shall not be liable to STA for any consequential damages caused by a disruption in service. Any loss of service resulting from damage or other causes from the Vault into STA's property shall be the responsibility of STA. 2 7. NOTICES All Notices shall be in writing and served on any of the Parties either personally or by certified mail,return receipt requested, at their respective addresses. Notices sent by certified mail shall be deemed served when deposited in the United States mail,postage prepaid. CITY: City Manager City of Spokane Valley 11707 East Sprague, Suite 106 Spokane Valley,Washington 99206 STA: CEO or designee Spokane Transit Authority 1230 West Boone Avenue Spokane, Washington 99201 8. INSURANCE STA is a member of the Washington State Transit Insurance Pool (Pool) along with 24 other public transit agencies in Washington. STA obtains its insurance coverage from the Pool. The Pool is a public entity enabled by RCW 48.62. It is regulated and overseen by the state Office of Risk Management. The Pool is not a commercial insurer and is not rated. During the course of this contract, STA will maintain coverage from the Pool for auto, general, and public officials liability with limits no less than$10 million per occurrence. STA shall require any contractor or subcontractors working on the City's facilities or property to obtain and provide proof of insurance against claims for injuries to persons or damage to property which may arise from or in connection with the performance of the work hereunder by the contractor, its agents, representatives, employees or subcontractors in the following minimum forms and amounts: 1. Automobile liability insurance with a rninimum combined single limit for bodily injury and property damage of $1,000,000 per accident covering all owned, non-owned, hired and leased vehicles. Coverage shall be written on Insurance Services Office (ISO) farm CA 00 01 or a substitute form providing equivalent liability coverage. If necessary,the policy shall be endorsed to provide contractual liability coverage. 2. Commercial general liability insurance shall be written on ISO occurrence form CG 00 01, shall be written with limits no less than $1,000,000 each occurrence, $2,000,000 general aggregate, and shall cover liability arising from premises, operations, independent contractors and personal injury and advertising injury. City and STA shall be named as an additional insured under contractor's commercial general liability insurance policy with respect to the work performed for the STA. 3. Workers' compensation coverage as required by the industrial insurance laws of the State of Washington. 3 STA shall require that contractor's insurance is to be placed with insurers with a current A.M. Best rating of not less than A:VII. STA shall also require contractor to fax or send electronically in .pdf format a copy of insurer's cancellation notice within two business days of receipt to STA. As evidence of the insurance coverage required by this Agreement, STA shall furnish an insurance certificate from its risk pool to the City Clerk at the time STA returns the signed Agreement. The certificate shall specify the amount of coverage and the deduction or retention level. If requested, complete copies of insurance policies shall be provided to City, STA shall be financially responsible for all pertinent deductibles, self-insured retentions,and/or self-insurance under its policy. 9. MISCELLANEOUS A. Non-Waiver - No waiver by either Party of any of the terms of this Agreement shall be construed as a waiver of the same or other rights of that party in the future. B. Headings - Headings are inserted for convenience of reference only and are not to be deemed part of or to be used in construing this Agreement. C. Entire Agreement - This Agreement contains the entire understanding of the Parties. No representations, promises, or agreements not expressed herein have been made to induce either Party to sign this Agreement. D. Modification -No modification or amendment to this Agreement shall be valid until put in writing and signed with the same formalities as this Agreement. E. Assignment - Neither Party may assign its interest in this Agreement without the express written consent of the other Party. F. Severability - In the event any portion of this Agreement should become invalid or unenforceable,the rest of the Agreement shall remain in full force and effect. G. Compliance with Laws - The Parties shall observe all federal, state and local laws, ordinances and regulations,to the extent that they may be applicable to the terms of this Agreement. H. Non-Discrimination - The Parties shall not discriminate in violation of local, state, or federal law. I. Venue - This Agreement shall be construed under the laws of Washington State. Any action at Iaw, suit in equity or judicial proceeding regarding this Agreement or any provision hereto shall be instituted only in courts of competent jurisdiction within Spokane County,Washington. J. Counterparts - This Agreement may be executed in any number of counterparts, each of which, when so executed and delivered, shall be an original, but such counterparts shall together constitute but one and the same. K. Organization with Separate Entity and Powers - No new or separate legal or administrative entity is created to administer the provisions of this Agreement. Real or personal property acquired for purposes of this Agreement shall be held and disposed of as set forth herein. L. Agreement to be Filed- The City shall file this Agreement with its City Clerk. STA shall file this Agreement with the Spokane County Auditor. 4 M, Financing-Each Party shall be responsible for the financing of its contractual obligations under its normal budgetary process, N. Property Upon Termination -Title to all property acquired by any Party in the performance of this Agreement shall remain with the acquiring Party upon termination of the Agreement, Dated: CITY OF SPOKANE VALLEY 133. Mike Jackson/City Manager Attest: Approved as to form: Christine Bainbridge, City Clerk Office of the City Attorney Dated: ko SPOKANE TRANSIT AUTHORITY Byj y A- CEO S Attest: Approved as to form: Clerk of the Authority Legal C unsel 5 CITY OF SPOKANE VALLEY Request for Council Action Meeting Date: July 8, 2014 Department Director Approval: Check all that apply: [' consent ❑ old business [' new business [' public hearing [' information ® admin. report [' pending legislation [' executive session AGENDA ITEM TITLE: Opening McMillan Road GOVERNING LEGISLATION: RCW 35.22.280(7) PREVIOUS COUNCIL ACTION TAKEN: None BACKGROUND: On October 21, 1998, a neighboring citizen (parcel number 55082.0124) petitioned to have the McMillan Road right-of-way temporarily closed. At that time, the road consisted of merely a trail through a plowed field (parcel numbers 55082.0103 and 55082.0108). The petitioner believed that McMillan road should be closed to vehicular traffic because it was a constant source of dust and a convenient place to dump garbage. The petition also stated that dirt bikes race down the road, scaring local horses and causing a potentially dangerous situation. On February 16, 1999, the Board of County Commissioners of Spokane County approved Resolution No. 99-0124 and temporarily closed McMillan Road right-of-way between Buckeye Avenue on the south and Euclid Avenue on the north, to vehicular traffic. On November 8, 2007, preliminary plat application D4 (File number SUB-09-07) was submitted to the City of Spokane Valley to subdivide a 19.09 acre parcel into 88 single-family residential lots. The preliminary plat is located approximately 600 feet east of Barker Road and is bounded by Buckeye Avenue to the south and Euclid Avenue to the north. The preliminary plat map illustrated the extension of the closed portion of McMillan Road along the east boundary and indicated McMillan Road as the primary access to the proposed internal street system. On May 12, 2008, the City of Spokane Valley Hearing Examiner approved preliminary plat application D4 (SUB-09-07), although the opening of McMillan Road was not provided for as part of that process. Resolution No. 99-0124 provides that McMillan Road may be opened at such time as is necessary and then only by action from the Board of County Commissioners. Under state law, McMillan Road, like all other public roads in the City, transferred to the City upon incorporation. Accordingly, the action to open the road must now be taken by the City Council. Staff has provided a proposed resolution to open McMillan road for Council's consideration on July 15 to allow the developer to continue processing D4 (SUB-09-07) and to begin construction within the subdivision. OPTIONS: Consensus to proceed with a motion to consider approval of the proposed resolution opening the closed portion of McMillan Road from Buckeye Avenue north to Euclid Avenue at the next Council meeting on July 15; or take other action deemed appropriate RECOMMENDED ACTION OR MOTION. Consensus to proceed with a motion to consider approval of the proposed resolution opening the closed portion of McMillan Road from Buckeye Avenue north to Euclid Avenue, at the next Council meeting on July 15. BUDGET/FINANCIAL IMPACTS: N/A STAFF/COUNCIL CONTACT: Gabe Gallinger, D.E. Manager; Erik Lamb, Deputy City Attorney ATTACHMENTS: 1. McMillan Road Aerial Photo 2. D4 — Preliminary Plat Map 3. Proposed Resolution opening the portion of McMillan Road between Buckeye Avenue and Euclid Avenue to vehicular traffic. DRAFT CITY OF SPOKANE VALLEY SPOKANE COUNTY,WASHINGTON RESOLUTION NO. - A RESOLUTION OF THE CITY OF SPOKANE VALLEY, SPOKANE COUNTY, WASHINGTON, OPENING THE PORTION OF MCMILLAN ROAD RIGHT-OF-WAY BETWEEN BUCKEYE AVENUE AND EUCLID AVENUE TO VEHICULAR TRAFFIC,AND OTHER MATTERS RELATING THERETO. WHEREAS, McMillan Road is a public right-of-way that is located within the boundaries of the City of Spokane Valley; and WHEREAS, on February 16, 1999, the Board of County Commissioners of Spokane County approved Resolution No. 99-0124 and temporarily closed McMillan Road right-of-way between Buckeye Avenue on the south and Euclid Avenue on the north to vehicular traffic; and WHEREAS, preliminary plat application D4(File Number Sub-09-07) was submitted to the City of Spokane Valley that provides for the closed portion of McMillan Road as the primary access to the proposed internal street system; and WHEREAS,pursuant to RCW 35.22.280(7),the City has the authority to lay out,establish,open, alter,widen,extend,grade,pave,plan,establish grades,or otherwise improve streets within the City; and WHEREAS, the City Council finds that opening the closed portion of McMillan Road to vehicular traffic is in the best interest of the health, safety, and welfare of the citizens of the City. NOW THEREFORE, be it resolved by the City Council of the City of Spokane Valley, Spokane County,Washington, as follows: The City Council hereby opens McMillan Road right-of-way from the north right-of-way line of Buckeye Avenue to the south right-of way line of Euclid Avenue of Plat No. 2 of West Farms Irrigated Tracts, located in the Northwest Quarter (NW 1/4) of Section 8, Township 25 North, Range 45 E.W.M., to vehicular traffic. Adopted this day of July,2014. City of Spokane Valley Dean Grafos,Mayor ATTEST: Christine Bainbridge, City Clerk Approved as to Form: Office of the City Attorney Resolution No. - Aerial Map } l �1 I _�� -- -1--- �I 1 . �'°� Parcel 55082.0103 `r =` I '..a. g � ` Parcel 55082.0124 s tra T. ` ` /I ' CC) - if. iki il . ., . 11 i . 1 rte. lbw i 1 .off i 1I n', ". ,_i r� �I it " ry -L ' } . }.F�fir.., _• .. • A�. -- - A 1 -+�+' ,r r, '�' f I [Alt�� i y 4_. � .• p, w x. 1.,.,t, Parcel 55082.0 33 "..t.'-_.r a . p II It--. tir Parcel 55082.0108 II A, I5. { ,- %7" 3 ' � p. � - - i. . 1� � —f� .A ILc - y I x I ,.. -- mar l � y f r. . � � ! ° ' t %y + ' `— W,fat I - $ p . ' , it �w¢ "� 51 �.� - mo. !'�..SwI • orcxi�< • Ill — r-*r- ,1, -•'- f �^ 4. Ii:cr Via- I � B . _ City orSpokane Valley McMiI[an Road Right-of-Way community Development Department I PRELIMINARY PLAT OF LEGAL DESGRIP11011, BORDER EASEMENTS ARE PROPOSED AS NOTED BELOW, TRACTS 21 AND 41 OF PLAT NUMBER 2 OF WEST FARMS IRRIGATED TRACTS,AS FINAL WIDTHS TO BE DETERMINED. BEING A SUBDIVISION 1 OF TRACTS 21 84.41 PER PLAT THEREOF RECORDED IS BOOK"0"OF PLATS.PAGE 38: NOTE 1 13.0 BORDER EASEMENT PLAT NO.2, OF WEST FARMS IRRIGATED TRACTS IN THE NW 1/4 OF SECTION 8, TOWNSHIP 25 NORTH, EXCEPT THE SOUTH 15 FEET OF TRACT 41 FOR BUCKEYE AVENUE: NOTE 2 5.0'BORDER EASEMENT RANGE 45 EAST, WILLAMETTE MERIDIAN TOGETHER VRTH THAT PORTION OF VACATED MCMILLAN ROAD LYING EAST OF AND NOTE 3 12.0'BORDER EASEMENT CITY OF SPOKANE VALLEY ADJACENT TO TRACTS 21 AND 41 TSAR MOLE ATTACH BO OPERATOR OF LAW: NOTE 4 NO BORDER EASEMENT,BALK OF WALK IS R.O.W.LINE SPOKANE CO., WASHINGTON SITUATE IN THE COUNTY OF SPOKANE STATE OF WASHINGTON. LEGAL DESCRIPTION SOURCE PER STAR/TORY WARRANTY DEED,AM 5181308. NOTE 5 PROPOSED EASEMENT FOR LIFT STATION 21' TRACT 40 -1,1 2012° TRACT 22 SNORT PLAT NO.84-327 M / / BOK 3 OF SHORT PLATS PAGE 52 - - - R'- n" rrro _> ROPOSED VACATION .� Y- T / _ -- n 1 _µ-1 -'N R MCMILLAN ROAD 1 56.4 ,5_0__=2.1879.E.,,,__. �� - - - �.N - Szsai �� g Y' —� 16 15� t'.�.RO :7,----..±,_. S_ �_- -�w w AN I-~ >. -F. -+Fm --- k _ ' - 1,-- -,,:‘,646 -' --- - 4,SP-1 'we 3D LEGEND • m 0s_ - j "a �E yi--- i `ro� - �. 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I MUFF,KENNETH J,TU \ m ,} ; 1 1 11 m / I 1 o N.RAYMOND COURTG 111 \ / ,n w 1-- e N / I I I¢1 m -J L 1 -- --__i____ ::,,,3 J,.y .36 / 1 \l'I, I SPOKANE VALLEY, A 1211 WA 8206 I m I ` \o - 1 - - 014. es.a° I ` _. A4:..._ �o- - s'0t b T11 1 l � y 4 7 ,,___.'4: sos e° 6 zr -----��& $'b. _ - _ �: -_A -- -I,,____7_-_,_ .. _ W mO '4 1 .,,,,:o,,,,,,11,11 11 I HARMONY "' 1112 11 —' -,..,*4._i_-• "` 1 - - = l A t — ., ,� --.1I-11 I� smeEr �Tsl I�ea °sao SECTION INDEX 0° E r �= 1 1 - - 6 N0a - 4 _ 0OME ,, 00" I �-2 _ X s� 1 t _ �� I a.,b l� i20� �66° -.8 � 1 11 _ - --I / 1 I SII co o ,r _ In - C° ` �.. 5 l' 1s ffi',I, 01 of-I � ��e. M _ _ /v O = 'ro � '41 �` --1--e.- 1--)--- COACH-LITE ESTATES ° r-�:1 -o P T Prc NnIL C _- IN.ZL4 iP2.p JO2'98'41"W ' 30� NW 1/4 OF SECTION e I 1 I -7-^m� T °( BOOK 16 OF PLATS,PAGE 1 W RN T25 N R45 E W.M. 1/�" MEADOWLARK ADDIRON g .m BOOK zD.PLATS,Pc.48 - ��/�� 2'i 30' q I RACY 42 I USKH e TRACT 20 3,3°STREETArchUM itectural I -- / 1 -- -- JOEL ROAD ID 83501 p. I I W __ —„r1206 1 25 --- r --.--- --- - -- - --- ❑FoxPhone.(208) 6826 W- rvALLON F s�b ®621 W s°,TE,09 soone.e WA PG2°, P$.- _ -- - — - � iOW sosi 3za o4�3 �> GRAPHIC SCALE BASIS OF BEARING OWN BY: OWE DATE.1PrRdwg/12/ FoxLI . oIWs98248uae 14 A'oRlX pATE:12/12/05 �� 1u I AN ASSIGNED BEARING OF N89tl9'09"W ON THE EV: 2/24/06 Phone: hon Ferndale,380)312-1315 t. IMIIIMM C NTERLINE OF EUCLID AVE.AND THE WEST HALF (360)312-0124 THE NORTH BOUNDARY LINE OF SECTION 8 AS Pno (a FE5o)EL PER THE PLAT OF MEADOWLARK ADDITION SHEET 2 OF 2 USKH W.O. 909500 CITY OF SPOKANE VALLEY Request for Council Action Meeting Date: July 8, 2014 Department Director Approval: El Check all that apply: [' consent ❑ old business ❑ new business [' public hearing [' information ® admin. report ❑ pending legislation [' executive session AGENDA ITEM TITLE: Administrative Report: CTA-2014-0002 —A City-initiated text amendment to the Spokane Valley Municipal Code for recreational marijuana regulations. GOVERNING LEGISLATION: RCW 36.70A.106, SVMC 17.80.150 and 19.30.040; RCW 69.50 BACKGROUND: The proposal is to amend Spokane Valley Municipal Code ("SVMC") 19.120 and Appendix A to providing definitions for and zoning restrictions upon the production, processing, and retail sales of state-licensed recreational marijuana. Additionally,the proposal would adopt a new SVMC 19.85 to provide limitations on certain marijuana production and processing uses and to create 1,000 foot buffers between state-licensed production, processing, and retail sales of recreational marijuana and the Centennial Trail, Appleway Trail, undeveloped and vacant public school property and undeveloped and vacant public library property. The City Council previously adopted interim regulations for state-licensed recreational marijuana uses in addition to the state buffers described below to further protect and prevent distribution of marijuana to minors. The proposed amendments track the interim regulations as adopted by the City Council. Pursuant to state law, the interim regulations terminate on August 11, 2014 and final regulations must be adopted prior to such termination. Recreational Marijuana Background: Recreational marijuana was legalized within Washington State with the passage of Initiative 502 in November 2012. The state has worked over the last year and a half to develop extensive regulations for licensing and permitting of production (growing), processing, and retail sales of recreational marijuana. All recreational marijuana facilities must be licensed by the Washington State Liquor Control Board (the "LCB"). The LCB has been accepting and processing applications since November, 2013, and issued the first production and processing licenses within Spokane Valley in March 2014. Recently, the LCB conducted a lottery to select the three retail sales outlets that will be allowed within Spokane Valley. Under state law,there cannot be more than three retail sales outlets within Spokane Valley,but there is no restriction on the number of production and processing facilities allowed, although production facilities are limited to a maximum of 21,000 square feet of growing space. State law provides 1,000 foot buffers between recreational marijuana and several sensitive uses,including schools, libraries, and public parks, but excludes trails and undeveloped school or library property. The LCB enforces the state buffers through the state licensing process. On January 16, 2014, a Washington Attorney General Opinion was released that provided that local jurisdictions were not preempted by I- 502 from adopting local regulations and restrictions on state-licensed recreational marijuana uses. The City's buffers would be in addition to the state-mandated buffers and would be enforced by the City. All marijuana uses remain illegal under the federal Controlled Substances Act. However, the United State Department of Justice has released a policy memo to not prosecute licensed marijuana providers in states which have legalized marijuana and which have a strong enforcement and regulatory scheme. The Planning Commission conducted a study session on this item on June 12, 2014 and a public hearing on June 26, 2014. No public comment was received at the public hearing. After deliberations, the Planning Commission voted 4-0 to recommend approval of CTA 2014-0002 to City Council. OPTIONS: Consensus to proceed with a first ordinance reading at Council's July 15 meeting; take other action deemed appropriate. RECOMMENDED ACTION OR MOTION: Consensus to proceed with a first ordinance reading at Council's July 15 meeting. BUDGET/FINANCIAL IMPACTS: N/A STAFF CONTACT: Christina Janssen,Planner;Erik Lamb,Deputy City Attorney ATTACHMENTS: A. Proposed Text Amendments B. Staff Report to Planning Commission C. Planning Commission Findings of Fact D. Planning Commission Minutes from June 26 public hearing and deliberations E. Presentation Propose to adopt SVMC 19.85: 19.85.010 Marijuana production standards, A. Marijuana production shall be located or maintained at least 1,000 feet from the nearest property line of the uses listed in subsection(A)(1)and (2) of this section. Distance shall be measured from the nearest pro)ert ' line of the marruana roduction to the nearest property line of the following uses: 1. Vacant or undeveloped parcels owned by public school districts as established in RCW Title 28A;and 2. Vacant or undeveloped parcels owned by public library districts as established in Chapter 27.12 RCW. B. Marijuana production in the regional commercial and community commercial zones shall only be permitted indoors. 19.85,020 Marijuana processing standards. A._Marijuana processing shall be located or maintained at least 1,000 feet from the nearest property line of the uses listed in subsection (A)(1)and (2) of this section. Distance shall be measured from the nearest property line of the marijuana processing to the nearest property line of the following uses: 1. Vacant or undeveloped parcels owned by public school districts as established in RCW Title 28A; and 2. Vacant or undeveloped parcels owned by public library districts as established in Chapter 27.12 RCW. B. Marijuana processing in the regional commercial and community commercial zones shall be limited to packaging and labeling of useable marijuana. 19.85.030 Marijuana retail sales standards, Marijuana sales shall be located or maintained at least 1.000 feet from the nearest property line of the uses listed in subsection A through D of this section. Distance shall be measured from the nearest property line of the marijuana sales to the nearest property line of the following uses: A. Centennial Trail; B. Ali proposed, contemplated,and constructed multi-use trail and linear park uses on the Milwaukee right-of-way, as identified and contemplated in the interlocal agreement between Spokane County and the City of Spokane Valley, dated June 27, 2012; C. Vacant or undeveloped parcels owned by public school districts as established in RCW Title 28A; and D. Vacant or undeveloped parcels owned by public library districts as established in Chapter 27.12 RCW. APPENDIX A DEFINITIONS Marijuana processing: Processing marijuana into useable marijuana and marijuana-infused products, packaging and labeling useable marijuana and marijuana-infused products for sale in retail outlets, and sale of useable marijuana, and marijuana-infused products at wholesale by a maritrana processor licensed by the State Liquor Control Board and in accordance with the provisions of Chapter 69.50 RCW, as now adopted or hereafter amended. See"Industrial, light use category." Marijuana production: Production and sale of marijuana at wholesale by a marijuana producer licensed by the State Liquor Control Board and in accordance with the provisions of Chapter 69.50 RCW, as now adopted or hereafter amended. See'Agricultural and animals, use category,' Marijuana safes: Selling useable marijuana and marijuana-infused products in a retail outlet by a marijuana retailer licensed by the State Liquor Control Board and in accordance with the provisions of Chapter 69.50 RCW, as now adopted or hereafter amended. See "Retail sales, use category." 19.120.050 Permitted use matrix. SHARE Permitted Use Matrix Residential Zone Commercial and Industrial Zone Use Category/Type Supplemental Conditions Districts Districts R- R- R- R-MF-MF- MUCCMU GO 0 NC C RC P/051-1 1-2 1 2 3 4 1 2 Agriculture and Animal Animal processing/handling P SVMC 19.40.150. Keeping of swine is Animal raising and/or keeping SSSS S S S S prohibited Animal shelter S P P SVMC 19.60.080(B)(6) Beekeeping, commercial P Beekeeping, hobby S S S SVMC 19.40.150(C) Produce may be sold pursuant to RCW Community garden SSSS S S S S S 36/1.090 as adopted or amended Greenhouse/nursery, commercial P P P P Kennel S S S S S P P See zoning districts for conditions Marijuana production S S S S Chapter 19.85 SVMC Page 1 of 17 Permitted Use Matrix Residential Zone Commercial and Industrial Zone Use Category/Type Supplemental Conditions Districts Districts Industrial Light R- R- R- R-MF-MF- continued MUC CMU GO 0 NC C RC PICS I-1 1-2 1 2 3 4 1 2 Marijuana processing S S S S Chapter 19.85 SVMC Plastic injection molding, thermoplastic P P P P P P Processing,light P P Industrial Service Carpet/rug cleaning, dry cleaning, laundry, P P linen supply plant, commercial Contractor's yard P P Laboratories (bio safety level 2) P P P P Laboratories (bio safety level 3) P P P Laboratories(bio safety level 4) P P SVMC 19.60.050(B)(4), 19.60.060(B)(4), Recycling facility S S S P P 19.60.080(B)(5) Lodging Page 7 of 17 Permitted Use Matrix Residential Zone Commercial and Industrial Zone Use CategorylType Supplemental Conditions Districts Districts Retail Sales continued R- R- R-R-MF-MF- MUC CMU GO 0 NC C RC P/OSI-1 1-2 1 2 3 4 1 2 market/specialty foods General sales/service P P AAPPP P P Gift shop P P AAPPP A Grocery store P P S P P SVMC 19.60.040(B)(3) Office supply and computer sales P P APPP P P Landscape materials sales lot and P P P P P P greenhouse, nursery, garden center, retail Manufactured home sales P P P Marijuana sales S S S S Chapter 19.85 SVMC Market, outdoor P P PP PP Pawn shop P P P P Pharmacy P P APPPP P Secondhand store, consignment sales P P P P P S SVMC 19.70.010(6)(9) Page 12 of 17 ATTACHMENT A COMMUNITY DEVELOPMENT DEPARTMENT SiÔkane PLANNING DIVISION Valley STAFF REPORT AND RECOMMENDATION TO THE PLANNING COMMISSION CTA-2014-0002 STAFF REPORT DATE: June 3, 2014 HEARING DATE AND LOCATION: June 26, 2014, beginning at 6:00 p.m., Spokane Valley City Hall Council Chambers, Valley Redwood Plaza Building, 11707 East Sprague Avenue, Suite 101, Spokane Valley, Washington 99206. PROPOSAL DESCRIPTION: A city initiated text amendment to Spokane Valley Municipal Code (SVMC) to amend SVMC 19.120 and Appendix A and adopt SVMC 19.85 to provide definitions and regulations for the zoning and buffering of production, processing, and retail sales of state-licensed recreational marijuana. PROPONENT: City of Spokane Valley Community Development Department, 11707 E Sprague Ave, Suite 106, Spokane Valley, WA 99206 APPROVAL CRITERIA:: Spokane Valley Comprehensive Plan, Spokane Valley Municipal Code (SVMC) Title 17 General Provisions. SUMMARY OF RECOMMENDATION: The Planning Division recommends the Planning Commission approve the proposed amendment. STAFF PLANNER: Christina Janssen,Planner, Community Development Department ATTACHMENTS: Exhibit 1: Proposed text amendment to amend SVMC 19.120 and Appendix A, and adopt SVMC 19.85 A. BACKGROUND INFORMATION 1. APPLICATION PROCESSING: SVMC Chapter 17.80, Permit Processing Procedures. The following summarizes application procedures for the proposal. Process Date Ordinance 14-002 passed, adopting interim definitions 2/11/14 and regulations for state-licensed recreational marijuana Ordinance 14-004 passed, adopting amendments to the 4/22/14 interim regulations for state-licensed recreational marijuana SEPA Threshold Determination TBD Published Notice of Public Hearing: 6/6/14 & 6/13/14 Sent Notice of Public Hearing to staff/agencies: 6/6/14 PROPOSAL BACKGROUND: The proposal is to amend Spokane Valley Municipal Code (SVMC) 19.120 and Appendix A to providing definitions for and zoning restrictions upon the production,processing, and retail sales of state-licensed recreational marijuana. Additionally,the proposal would adopt a new SVMC 19.85 to provide limitations on certain marijuana production and processing uses and to create 1,000 foot buffers between state-licensed production,processing, and retail sales of recreational marijuana and the Centennial Trail,Appleway Trail, undeveloped and vacant public school property and undeveloped and vacant public library property. The City Council previously adopted interim regulations for state-licensed recreational marijuana uses in addition to the state buffers described below to further protect and prevent distribution of marijuana to minors. The proposal tracks the interim regulations as adopted by the City Council. Pursuant to state law, the interim regulations terminate in August, 2014 and final regulations must be adopted prior to such termination. Recreational Marijuana Background: Recreational marijuana was legalized within Washington State with the passage of Initiative 502 in November 2012. The state has worked over the last year to develop extensive regulations for licensing and permitting of production (growing), processing, and retail sales of recreational marijuana. All recreational marijuana facilities must be licensed by the Washington State Liquor Control Board (the "LCB"). The LCB has been accepting and processing applications since November, 2013, and issued the first production and processing licenses within Spokane Valley in March 2014. Recently,the LCB conducted a lottery to select the three retail sales outlets that will be allowed within Spokane Valley. Under state law,there cannot be more than three retail sales outlets within Spokane Valley, but there is no restriction on the number of production and processing facilities allowed. State law provides 1,000 buffers between recreational marijuana and several sensitive uses, including schools, libraries, and public parks, but excludes trails and undeveloped school or library property. The LCB enforces the state buffers through the state licensing process. On January 16, 2014, a Washington Attorney General Opinion was released that provided that the Attorney General's opinion was that local jurisdictions were not preempted by I-502 from adopting local regulations and restrictions on state- licensed recreational marijuana uses. The City's buffers would be in addition to the state-mandated buffers and would be enforced by the City. All marijuana uses remain illegal under the federal Controlled Substances Act. However, the United State Department of Justice has released a policy to not prosecute licensed marijuana providers in states which have legalized marijuana and which have a strong enforcement and regulatory scheme. B. FINDINGS AND CONCLUSIONS SPECIFIC TO THE MUNICIPAL CODE TEXT AMENDMENT 1. Compliance with Title 17 (General Provisions) of the Spokane Valley Municipal Code a. Findings: SVMC 17.80.150(F)Municipal Code Text Amendment Approval Criteria i. The City may approve Municipal Code Text amendment, if it finds that (1) The proposed text amendment is consistent with the applicable provisions of the Comprehensive Plan; Staff Analysis: The amendment is consistent with the Comprehensive plan goals by protecting residential areas, encouraging diversity among commercial uses, maintaining a flexible and consistent regulatory environment, and promoting compatibility between adjacent land uses. Page 2 of 4 Relevant Comprehensive Plan goals and policies are shown below: LUP-1.1 Maintain and protect the character of existing and future residential neighborhoods through the development and enforcement of the City's land use regulations and joint planning. LUP-1.2 Protect residential areas from impacts of adjacent non-residential uses and/or higher intensity uses through the development and enforcement of the City's land use regulations and joint planning. Land Use Goal LUP-10.2 Encourage a diverse array of industries to locate in Spokane Valley. Economic Goal EDG-7: Maintain a regulatory environment that offers flexibility, consistency, predictability and clear direction. Economic Policy EDP-7.1: Evaluate,monitor and improve development standards to promote compatibility between adjacent land uses; and update permitting processes to ensure that they are equitable, cost-effective, and expeditious. Economic Policy EDP-7.2: Review development regulations periodically to ensure clarity, consistency and predictability. Neighborhood Policy NP-2.1: Maintain and protect the character of existing and future residential neighborhoods through the development and enforcement of the City's land use regulations and joint planning. (2) The proposed amendment bears a substantial relation to public health, safety, welfare, and protection of the environment; Analysis: The proposed amendment will allow compliance with state law and allow state-licensed recreational marijuana businesses to locate within the Spokane Valley while separating such uses from identified sensitive uses and the City's existing and future residential uses. b. Conclusion(s): The proposed text amendment is consistent with the approval criteria contained in the SVMC. 2. Finding and Conclusions Specific to Public Comments a. Findings: No public comments have been received to date. b. Conclusion(s): Adequate public noticing was conducted for CTA-2014-0002 in accordance with adopted public noticing procedures 3. Finding and Conclusions Specific to Agency Comments a. Findings: No agency comments have been received to date. b. Conclusion(s): No concerns are noted. C. OVERALL CONCLUSION The proposed code text amendment is consistent with the Comprehensive Plans policies and goals. Page 3 of 4 D. STAFF RECOMMENDATION The Planning Division, after review and consideration of the submitted application and applicable approval criteria, recommends approval of the regulations for the production, processing, and retail sales of state-licensed recreational marijuana. Page 4 of 4 FINDINGS AND RECOMMENDATIONS OF THE SPOKANE VALLEY PLANNING COMMISSION FOR CTA-2014-0002 June 26,2014 The following findings are consistent with the Planning Commission's decision to recommend approval. Background: 1. Spokane Valley development regulations were adopted in September 2007 and became effective on October 28,2007. 2. CTA-2014-0002 is a City-initiated text amendment to Spokane Valley Municipal Code (SVMC) to amend SVMC 19.120 and Appendix A and adopt SVMC 19.85 to provide definitions and regulations for the zoning and buffering of production, processing, and retail sales of state-licensed recreational marijuana. 1 The Planning Commission held a public hearing and conducted deliberations on lune 26, 2014 and voted four to zero to recommend approval of the amendment to City Council. Planning Commission Findings: 1. Compliance with SVMC 17.80.150(F)Approval Criteria a. The proposed City-initiated code text amendment is consistent with the applicable provisions of the Comprehensive Plan; Finding(s): LUP-1.1; Maintain and protect the character of existing and future residential neighborhoods through the development and enforcement of the City's land use regulations and joint planning. LUP-1.2: Protect residential areas from impacts of adjacent non-residential uses and/or higher intensity uses through the development and enforcement of the City's land use regulations and joint planning. Land Use Goal LUP-10.2: Encourage a diverse array of industries to locate in Spokane Valley. Economic Goal EDG-7: Maintain a regulatory enviromnent that offers flexibility, consistency, predictability and clear direction. Economic Policy EDP-7.1: Evaluate,monitor and improve development standards to promote compatibility between adjacent land uses; and update permitting processes to ensure that they are equitable, cost-effective, and expeditious. Economic Policy EDP-7.2: Review development regulations periodically to ensure clarity, consistency and predictability. Neighborhood Policy NP-2.1: Maintain and protect the character of existing and future residential neighborhoods through the development and enforcement of the City's land use regulations and joint planning. b. The proposed amendment bears a substantial relation to public health, safety, welfare, and protection of the environment. • Findings and Recommendations of the Spokane Valley Planning Commission . Page 1 of 3 ATTACHMENT A Finding(s): i. Since 1970, federal law has prohibited the manufacture and possession of marijuana as a Schedule • I drug, based on the federal government's categorization of marijuana as having a"high potential for abuse, lack of any accepted medical use, and absence of any accepted safety for use in medically supervised treatment." Gonzales v. Raich, 545 U.S. 1, 14 (2005), Controlled Substance Act(CSA), 84 Stat, 1242,21 U.S.C. 801 et seq. ii. On November 6, 2012, voters of the State of Washington approved Initiative Measure No. 502(I- 502), now codified in chapters 69.50,46.04,46.20,46.21, and 46.61 Revised Code of Washington (RCW),which provisions, (A) decriminalized possession and use of certain amounts of marijuana and marijuana paraphernalia; (B)amended state laws pertaining to driving under the influence of intoxicants to include driving under the influence of marijuana; and(C)established a regulatory system licensing producers,processors, and retailers of recreational marijuana for adults 21 years of age and older,and required the Washington State Liquor Control Board(the LCB)to adopt procedures and criteria by December 1,2013 for issuing licenses to produce,process,and sell marijuana. iii. On August 29,2013, the United States Department of Justice issued a memo providing updated guidance on marijuana enforcement in response to the adoption of 1-502. Several ongoing federal enforcement priorities were outlined, including prevention of crime and preventing distribution of marijuana to minors. Further,the memo provided that the Department would not seek ongoing prosecution of marijuana providers, users, and local officials in states that authorized marijuana, provided that those state and local governments"implement strong and effective regulatory and enforcement systems that will address the threat those state laws could pose to public safety, public health, and other law enforcement interests. A system adequate to that task must not only contain robust controls and procedures on paper; it must also be effective in practice." iv. On October 16,2013,the LCB adopted rules pertaining to the licensing of marijuana producers, processors, and retailers, as set forth in chapter 314-55 Washington Administrative Code (WAC). v. Pursuant to the rules established in chapter 314-55 WAC,the LCB opened a 30-day application period and is currently processing and approving license applications received for marijuana producer,processor, and retailer licenses. vi. Pursuant to RCW 69.50.331(8)and WAC 314-55-050(10),the LCB is prohibited from licensing any marijuana producers,processors, and retailers within 1,000 feet of the perimeter of the grounds of any elementary or secondary school,playground,recreation center or facility,child care center, public park, excluding trails,public transit center, library, or any game arcade admission to which is not restricted to persons aged twenty-one years or older. vii. Pursuant to SVMC 19.20.050, City staff made an administrative interpretation and determination based on similar current permitted uses to permit licensed marijuana producers in light industrial and heavy industrial zones and for indoor-only production in regional commercial and community commercial zones. viii. Pursuant to SVMC 19.20.050, City staff made an administrative determination based on similar current permitted uses to permit licensed marijuana processors in light industrial and heavy industrial zones. ix. Pursuant to SVMC I9.20.050,City staff made an administrative determination based on similar current permitted uses to permit licensed marijuana retailers in mixed use center, corridor mixed use, community commercial, and regional commercial zones. x: The Planning Commission finds and determines that the Centennial Trail and proposed Appleway Trail are trails that are and will be regularly used by the citizens of the City, including minors,and Findings and Recommendations of the Spokane Valley Planning Commission Page 2 of 3 ATTACHMENT A adopting the regulations identified in CTA-2014-0002 will be consistent with the identified federal enforcement priorities and especially in preventing the distribution of marijuana to minors. xi. Pursuant to Article 11, Section 11 of the Washington Constitution, the City of Spokane Valley is authorized to"make and enforce within its limits all such local police, sanitary and other regulations as are not in conflict with general laws,"which includes the adoption of regulations governing Iand uses within the City. xii. On January 16, 2014, the Washington Attorney General issued Attorney General Opinion No.2, in which the stated that"[a]lthough Initiative 502(1-502)establishes a licensing and regulatory system for marijuana producers,processor, and retailers in Washington State, it includes no clear indication that it was intended to preempt local authority to regulate such businesses. We therefore conclude that I-502 left in place the normal powers of local governments to regulate within their jurisdictions." xiii: On February 11, 2014 the City Council adopted interim development regulations for the production, processing and retail sales of marijuana. On April 25, 2014 the City Council amended the interim regulations to include buffers for vacant or undeveloped parcels owned by public schools and library districts. The interim regulations expire on August 11,2014. xiv. The Planning Commission finds and determines that 1-502 does not preempt the City of Spokane Valley from exercising and administering its constitutional and statutory land use regulatory authority to allow and regulate land uses within the City limits. xv. Modifications to the recreational marijuana buffers and zoning established in SVMC 19.85 will continue to protect the City's citizens,including minors,and will be consistent with the identified federal enforcement priorities and especially in preventing the distribution of marijuana to minors. xvi. The proposed amendment will allow compliance with state law and allow state-licensed recreational marijuana businesses to locate within the Spokane Valley while separating such uses from identified sensitive uses and the City's existing and future residential uses. xvii. The Planning Commission finds that the land use limitations and buffering requirements established by CTA-2014-0002 are necessary for the preservation of the public health,public safety, public property and public peace. 2. Conclusion(s): a. The proposed text amendment is consistent with the approval criteria contained in the SVMVIC. b. The Growth Management Act stipulates that the comprehensive land use plan and development regulations shall be subject to continuing review and evaluation by the City. Recommendations: The Spokane Valley Planning Commission therefore recommends City Council adopt SVMC 19.85 and approve the proposed City-initiated code text amendments to SVMC Appendix A and SVMC 19.120. Approved .his 26`r'day of June,2014 '" . 1 Christina Canis- ,Vice Chairman ATTEST 1f .%tri f Deanna Horton,Administrative Assistant Findings and Recommendations of the Spokane Valley Planning Commission Page 3 of 3 DRAFT Minutes Spokane Valley Planning Commission Council Chambers—City Hall, June 26,2014 Vice Chair Carlsen called the meeting to order at 6:15 p.m. Commissioners, staff and audience stood for the pledge of allegiance. Ms. Horton took roll and the following members and staff were present: Kevin Anderson John Holtman, Community Development Director Christina Carlsen Cary Driskell, City Attorney Robert McCaslin,Absent Excused Lori Barlow,Senior Planner Mike Phillips Christina Janssen,Planner Steven Neill,Absent,Excused Tadas Kisielius, Special Council Joe Stoy,Absent-Excused Deanna Horton, Secretary Sam Wood Hearing no objections, Commissioners McCaslin, Neill and Stoy were excused from the meeting. Commissioner Anderson moved to approve the June 26, 2014 amended agenda. Motion passed four to zero. Commissioner Anderson moved to approve the June 12, 2014 minutes as presented. Motion passed,four to zero. COMMISSION REPORTS: Commissioners Phillips and Wood reported they attended the June 24, 2014 City Council meeting. ADMINISTRATIVE REPORT: Mr. Hohman welcomed new Commissioner Sam Wood, Mr. Hohman also discussed the Planning Commission advanced agenda. PUBLIC COMMENT; No public comment. COMMISSION BUSINESS: A. Public Hearing Spokane Valley Municipal Code (SVMC) Amendment CTA-2014-0002. Vice Chair Censer opened the public hearing at 6:27 p.m. City Attorney Cary Driskell gave an overview of Initiative 502, (I-502) regarding the regulations adopted by the state for the producing, processing and retail sales of recreational marijuana. He said the state law 1-502 decriminalized the use and possession for recreational use, established a regulatory system for licensing producers, processors and retailers and named the Washington State Liquor Control Board (WSLCB) as the governing authority for these regulations. The federal administration has determined it will not interfere with states who have voted to legalize recreational use of marijuana as long as those states can govern it appropriately. Mr. Driskell stated the Attorney General issued an opinion in January of 2014 that determined that I-502 contains no clear indication it was intended to preempt local authority to regulate recreational marijuana. On February 11, 2014 the City adopted interim regulations governing recreational marijuana. Interim regulations are only good for six months and then permanent regulations need to be adopted. The interim regulations follow the state regulations, however the City determined it would be appropriate to buffer the Centennial Trail and the proposed Appleway Trail along with any vacant and undeveloped public school land and library property. The interim regulations will expire in August 2014, so the final regulations need to be adopted prior to the interim regulations expiring. Staff identified some issues with the interim regulations. The buffer for the Centennial Trail extended to industrial properties on the north side of the river, which could be used for processing and growing. Also staff considered that processing included a variety of activities from just bagging the raw marijuana to complex chemical extractions. After reviewing the processing options, it may be appropriate to allow for the bagging only in zones other than industrial. On April 22, 2014 Council adopted amendments to the interim regulations. 06-12-14 Planning Commission Minutes Page 1 of 4 DRAFT The current interim regulations are: • Allow Recreational Marijuana Production in CC,RC, and both Industrial zones; but in CC and RC zones, only indoor grow operations are allowed. • Allow Recreational Marijuana Processing in CC, RC and both Industrial zones; but in CC and RC zones, only packaging and labeling of useable marijuana is allowed. • Allow Recreational Marijuana Retail Sales in MUC, CMU, CC, and RC zones; provide buffers from Centennial Trail and Appleway Trail. • Buffer all Recreational Marijuana from undeveloped public school and public library property. The proposed amendments would: • Mirror Existing Interim Regulations. • Amend Appendix A-Definitions: Add definitions for Marijuana processing,production, and sales. • Adopt SVMC 19.85: Development regulations for the processing, production and sales of Marijuana. • Amend SVMC 19.120.050-Permitted use matrix to include Marijuana uses. Ms. Christina Janssen then explained that the amendments to the Spokane Valley Municipal Code (SVMC)would be under Chapter 19.85. She explained the definitions would be in Appendix A, where all the definitions for the SVMC are located. In the Permitted Use matrix, marijuana production would be listed under Agriculture and.Animals, Processing would be listed under light industrial, and retail sales would be listed under the retail sales section. All of these listings have a reference to the code section for more information. Commissioner Anderson asked if the City would be issuing a license for the marijuana Mr. Hohman explained the City does not issue a business license, only an endorsement. The State would be handling all of the licensing requirements. Commissioner Carlsen asked if the City would be able to approve who would be receiving a license. Mr. Hohman said the City can register an objection with the state, and we believe they are taking those objections into account, however the City does not have any approving authority regarding who will receive a license. Commissioner Anderson asked if there was a list of who had received a license. Mr. Holtman explained it was a dynamic process with many people inquiring, two to three a day, about the different aspects of starting each type of license on a regular basis. Having no one who wished to test; Commissioner Carlsen closed the public hearing at 6,43 pan. Commissioner Carlsen moved to recommend approval of CTA-2014-0002 to the City Council. Commissioner Phillips stated he was opposed to any use of marijuana, and even opposed to voting in favor of these regulations. He said he would vote for it, however he would rather not have any marijuana in the City. Commissioner Wood said he understood Commissioner Phillips statement, but felt there were good buffers in place for the uses. Commissioner Carlsen said she feels the City has made a good attempt with the regulations laid out for the legalized uses, and the buffers will protect future uses. Commissioner Anderson voiced he felt the regulations were approving where legal operations would be allowed. He said he felt the legislature would be changing the rules because people did not vote on infused products. Motion passed four to zero. B. Deliberations Draft Shoreline Master Program (SMP),Draft Regulations. Senior Planner Lori Barlow stated that Mr. Kisielius was present to assist with guidance for a couple of items which staff needed direction before bringing back the Planning Commission draft of the regulations for review. Ms. Barlow handed out the comment matrix, which she offered had a response to each of the comments received at the public hearing along with a letter received 06-12-14 Planning Conunission Minutes Page 2 of 4 DRAFT from the Department of Ecology (DOE). Commissioner Anderson asked if the letter from DOE was appropriate after the close of the public hearing. Mr. Kisielius responded that DOE had a special role in the Shoreline Master Program. As the approving agency and a partner in the regulations, they have the authority and ability to provide more input than would normally be allowed in other circumstances. The Commissioners reviewed the comment matrix and changes were noted. Ms. Barlow said that at the last meeting, the question was asked how many privately owned parcels and structures would be impacted by the buffers. After an analysis, there were 92 privately owned parcels that would be impacted. Only 30 of those parcels would be impacted greater than one to two feet, 30 would be impacted by one to two feet and only two structures would be impacted. Those parcels impacted greater than one to two feet, the buffer might go up to the property line, but residential uses do not have a setback so it would have little effect on the property. The two structures which have been impacted are located on the north side of the river, on Kaiser property, which are pump houses. The buffers in the Orchard Avenue area have not changed, a straight 50 feet, which is the same as what it was before. The buffer in the Coyote Rock area is a straight 75 feet. Other areas will have a buffer which will follow the Shoreline Vegetation Report. 21.50.030(D) DOE is asking to have the language changed to state that the director will consult with DOE. "Shall" will be inserted for"will" and the change will be made. 21.50.110(F) DOE would like the whole definition from the WAC used.The definition will be updated. 21.50.110(G) Amending to update the new threshold for replacement docks, from $10,000 to $20,000. 21.50.260(B)(2)(c) DOE is asking for standards for paths and trails. Standards will be added to the regulations. 21.50.340(B)(2) will modify this section to remove the reference to permanent in-stream structures not impeding normal ground and surface water. Also, Table 21.50-2 will be changed to allow groins and weirs as a Conditional Use Permit (CUP) in the environments which allow in- stream structures. 21.50.430, where clocks will be allowed on the river. There has been considerable discussion by both user groups about where docks should be allowed on the river. Ms. Barlow pointed out the standards for allowing docks and said they are not allowed in free flowing portions of the river. DOE and Futurewise both commented that the regulations should state specifically where clocks will be allowed. Ms. Barlow reminded the Commissioners the City would not be the only reviewing agency in regard to docks on the river and that there are more stringent regulations from some of the other agencies. Mr. Hohman commented that he and Mr. Driskell had taken a tour of the river and the river at Coyote Rock is very shallow and the red band trout do indeed like to live in this area, as well as their predators. According to SVMC motorized boats are allowed to the Centennial Trail Bridge. Mr. Hohman said additional analysis should be required to have a dock at the location of the Coyote Rock area because previously two docks had been placed in this area and they had come loose and floated down the river. There are safety issues with a dock based on the structure of the river, such as the need to have a longer dock to get to a depth needed for a boat, and the problem of rafters running into the dock. The decision is to allow docks in the Orchard Avenue Area; and to allow docks in the Coyote Rock area provided the dock meets set criteria and shows that structural and habitat issues are addressed, and the dock must also meet the permitting regulations of all other required agencies. One of the options to address this issue will be some type of regulation regarding joint use/community docks. 21.50.480(C)(4)(a) request to modify language to say "legally constructed existing irrigation and drainage ditches..." This will be modified. 06-12-14 Planning Commission Minutes Page 3 of 4 DRAFT 21.50.510(B)will add"consistent with appropriate state and federal guidelines." 21.50.510(D)(f)(i) Commissioner Anderson said he had an issue with the language because it seemed there is a changing time line for monitoring the compensatory mitigation. Mr. Kisielius noted he would have the consultant biologist Noah Herlocker review the language. 21.50.520(C)(1) will modify to remove the exception for category III and IV wetlands. 21.50.520(E)(1)(c)(v)will remove the "or." 21.580.310 will wait to see how the language is drafted in regard to docks and then determine how to proceed. 21.50.420 modify to acknowledges the Department of Natural Resources has jurisdiction over projects on state owned land. 21.50.430 will be a place holder waiting on piers and dock language to be coming soon. Avista requested less stringent regulations from the City to perform maintenance duties around their power lines. City staff is not recommending any changes based on their request, but suggests a new foot note to the table 21.50-1 to clarify conditions when a Letter of Exemption would be required. Ms. Barlow said she felt the current allowances in the proposed regulations would take care of a majority of the maintenance work. Anything greater would require a permit and the City would like the ability to review any major work. 21.50.110(L)(4) Commissioner Anderson asked about this section and Avista having this section deleted. Staff stated after Avista explained the project, it could be determined it would not be necessary, however the language is from the WAC (Washington Administrativ Code) and it would be necessary depending on the project to require the Shoreline Development Permit or the surety bond. Commissioner Carlsen moved to extend the meeting to 9:15 p.m., motion passed four to zero. Staff is not recommending any changes based on Futurewise's comments except those which have already been addressed by DOE. Staff will be returning at the next meeting with a marked up version of the draft regulations for the Planning Commission's review. C. Findings of Fact for Spokane Valley Municipal Code(SVMC) Amendment CTA-2014-0002. The Commission reviewed the findings for CTA-2014-0002, Marijuana regulations. Commissioner Anderson moved to approve the Commission's Findings of Fact for CTA-2014- 0002. Vote on the motion was four in favor, zero against, motion passed. GOOD OF THE ORDER: The Commissioners welcomed Mr. Wood to their group. ADJOURNMENT: The meeting was adjourned at 9:06 p.m. Christina Carlsen, Chairperson Date signed Deanna Horton, Secretary 06.12-14 Planning Commission Minutes Page 4 of 4 Proposed Text Amendment: Recreational Marijuana Regulations Erik Lamb, Deputy City Attorney Christina Janssen, Planner Background • Recreational Marijuana is governed by numerous laws and codes Federal Law State Law • City Code 2 Federal Law: Controlled Substances Act • 21 U. S . C. 801 et seq • Marijuana is a Schedule I controlled substance "high potential for abuse, lack of accepted medical use, and absence of any accepted safety for use in medically supervised treatment." Gonzales v. Raich , 545 U. S . 1 (2005) • Production, processing, sale, distribution and use is illegal 3 State Law: Background Two Different Regulatory Schemes • Recreational Marijuana chapter 69 . 50 RCW (Initiative 502) • Medical Marijuana - chapter 69 . 51A RCW • Focused primarily on Recreational Marijuana Today 4 State Law: Initiative 502 ( RCW 69 .50) Legalizing Recreational Marijuana • I-502 passed in November of 2012 • Decriminalized possession and use of marijuana • Established a regulatory system licensing producers, processors, and retailers of recreational marijuana • Established the Washington State Liquor Control Board (the "LCB") as the regulatory agency in charge of administering and licensing recreational marijuana facilities 5 Federal Law: Department of Justice Response • August 29 , 2013 , United States Department of Justice issued its response to I-502 Issued memo providing guidance for ongoing prosecution of federal marijuana offenses Stated priorities for federal enforcement included prevention of crime and preventing distribution of marijuana to minors 6 Federal Law: Department of Justice Response - cont. • August DOJ memo further provided: Department would not seek ongoing prosecution of marijuana providers, users, and local officials in states that legalized marijuana, provided that those state and local governments "implement strong and effective regulatory and enforcement systems that will address the threat those state laws could pose to public safety, public health, and other law enforcement interests. A system adequate to that task must not only contain robust controls and procedures on paper, it must also be effective in practice." 7 Recreational Marijuana - RCW 69 .50 Generally • Possession and use of marijuana legal for people over 21 • Washington State Liquor Control Board (LCB) Rulemaking • Extensive rulemaking process throughout 2013 • LCB accepted applications during a 30 day period from November through December • LCB began issuing licenses for production and processing in Spring 2014 • LCB anticipates issuing retail licenses in July 8 Recreational Marijuana - LCB License Types • Producer (growing) • Processor (putting marijuana into useable form (e.g. , packaging or making marijuana extract and using it in baked goods)) • Retailer (selling) 9 Recreational Marijuana - LCB License Types • Producer (growing) • No limits on number of facilities statewide (total square feet of production space allowed statewide has been modified from original 2 million square feet and will be determined based upon total approved licenses) • May grow indoors, in greenhouses, and outdoors with 8-foot sight obscuring fence • May keep up to 125 percent of a year's harvest for outdoor growing; indoor growing may keep 6 months harvest onsite • Must keep product for 24 hour quarantine period prior to transporting to processor (to allow audit checks for traceability purposes) • Tiers of growing operations • Tier 1 — less than 1 ,400 square feet • Tier 2 — 1 ,400 to 7,000 square feet • Tier 3 — 7,000 to 21 ,000 square feet 10 Recreational Marijuana - LCB License Types Processor (putting marijuana into useable form (e.g. , packaging or making marijuana extract and using it in baked goods)) No limits on number of facilities statewide • Significant differences in types of processing Packaging dried marijuana vs. Solvent-based or other extraction processes and product production (e.g. , making marijuana- infused baked goods) Six months of average useable marijuana (plant material) and six months average of total production (finished product) may be stored onsite Must keep product for 24 hour quarantine period prior to transporting 11 to retail store (to allow audit checks for traceability purposes) Recreational Marijuana - LCB License Types • "Marijuana retailer" a person licensed by the LCB to sell useable marijuana and marijuana-infused products in a retail outlet � Marijuana products must be behind counters • LCB has set 334 total available retailer licenses Statewide • Formula distributes the number of locations proportionate to the most populous cities within each county. • 3 available retailer licenses in Spokane Valley; 18 total available in Spokane County (including Spokane Valley) 12 Recreational Marijuana - LCB License Types • Retail outlets may have up to four months of average inventory on site at any given time • No sales over the Internet • No delivery sales • Cannot share same space with medical marijuana outlet • Retail hours limited to 8 : OOAM to 12 : OOAM • Cannot sell alcohol at same location Limits on size and content of advertising 13 Recreational Marijuana - LCB Licensing Rules LCB adopted rules on October 16, 2013 pertaining to licensing of marijuana production, processing, and retail sales LCB rules prohibit any state licensed marijuana facility from being within 1 ,000 feet of the perimeter of any elementary or secondary school, playground, recreation center or facility, child care center, public park (excluding trails) , public transit center, library, or game arcade open to persons under the age of 21 . Administered solely by the State through the state licensing process. 14 Recreational Marijuana - LCB Licensing Rules Cont. LCB marijuana license does not constitute authorization for licensees to ignore local zoning, business licensing, and building and fire codes State will not review or disapprove applications based on local zoning or other regulatory issues — will encourage applicant to work with local jurisdiction No recreational licensed facilities in a personal residence. The city has the right to file written objections to the license within 20 days after it receives notice of an application from the LCB. This period 15 may be extended by the LCB upon request by the City. Recreational Marijuana - State Attorney General Opinion January 16 , 2014, the Washington Attorney General issued an opinion that determined that I-502 contains no clear indication it was intended to preempt local authority to regulate recreational marijuana Consistent with City's constitutional and statutory authority Subject to Legislative change in the future 16 Recreational Marijuana - City Response In 2013 , pursuant to SVMC 19 . 20.050, the City made an administrative determination based on the then-current City zoning code permitting licensed marijuana facilities in the following zones: Production — light and heavy industrial zones and, for indoor growing only, regional commercial and community commercial zones • Processing — light and heavy industrial zones Retail Sales — mixed use center, corridor mixed use, community commercial, and regional commercial zones 17 Recreational Marijuana - City Response cont. On February 11 , 2014, City Council adopted interim regulations governing recreational marijuana in the City Adopted findings regarding the history of marijuana and need for interim regulations. • Adopted definitions for marijuana production, marijuana processing, and marijuana sales that track state law definitions. Adopted amendments to the permitted use matrix to codify the administrative determination for permitted zones for marijuana 18 production, marijuana processing, and marijuana sales Recreational Marijuana - City Response cont. Interim regulations further: Adopted a 1 ,000 foot buffer between recreational marijuana property and the Centennial Trail and Old Milwaukee Right-of-Way (commonly known as Appleway Trail) . Adopted a 1 ,000 foot buffer between recreational marijuana property and vacant and undeveloped public school and public library property. 19 Recreational Marijuana - City Response cont. • Interim regulations further: • Set the date for this public hearing on the interim regulations pursuant to state law. • Established a six-month term for the interim regulations. Interim regulations terminate August 2014. Ratified all prior consistent acts. 20 Recreational Marijuana - City Response cont. • Identified issues with initial interim regulations: Buffer from Centennial Trail extends to industrial properties on north side of the Spokane River and therefore prohibits marijuana uses on those properties. Processing includes wide range of activities on one side processing includes simply bagging dried marijuana for resale on the other side processing includes complex chemical extraction 21 may be appropriate to allow bagging in zones other than industrial Recreational Marijuana - City Response cont. On April 22 , 2014, City Council adopted amendments to the interim regulations Also adopted findings required under state law • Interim Regulations are in: * SVMC 19. 120.050 (Permitted Use Matrix) SVMC 19.85 (Marijuana Uses) 22 City cont. Interim Regulations , as they now stand: Allow Recreational Marijuana Production in CC, RC, and both Industrial zones; but in CC and RC zones, only indoor grow operations are allowed Allow Recreational Marijuana Processing in CC, RC and both Industrial zones; but in CC and RC zones, only packaging and labeling of useable marijuana is allowed Allow Recreational Marijuana Retail Sales in MUC, CMU, CC, and RC zones; provide buffers from Centennial Trail and Appleway Trail Buffer all Recreational Marijuana from undeveloped public school and public library property 23 Proposed Amendments • Mirror Existing Interim Regulations • Appendix A-Definitions: Add definitions for Marijuana processing, production, and sales. • Adopt SVMC 19. 85 : Development regulations for the processing, production and sales of Marijuana. Amend SVMC 19 . 120.050-Permitted use matrix to include Marijuana uses. 24 Appendix • Marijuana processing: Processing marijuana into useable marijuana and marijuana-infused products, packaging and labeling useable marijuana and marijuana-infused products for sale in retail outlets, and sale of useable marijuana, and marijuana-infused products at wholesale by a marijuana processor licensed by the State Liquor Control Board and in accordance with the provisions of Chapter 69.50 RCW, as now adopted or hereafter amended. See "Industrial, light use category." • Marijuana production: Production and sale of marijuana at wholesale by a marijuana producer licensed by the State Liquor Control Board and in accordance with the provisions of Chapter 69.50_ RCW, as now adopted or hereafter amended. See "Agricultural and animals, use category." Marijuana sales: Selling useable marijuana and marijuana-infused products in a retail outlet by a marijuana retailer licensed by the State Liquor Control Board and in accordance with the provisions of Chapter RCW, as now adopted or hereafter amended. See "Retail sales, use category." 25 SV M C 19 85 ■ 19.85.010 Marijuana production standards. A. Marijuana production shall be located or maintained at least 1 ,000 feet from the nearest property line of the uses listed in subsection (A)(1) and (2) of this section. Distance shall be measured from the nearest property line of the marijuana production to the nearest property line of the following uses: 1 . Vacant or undeveloped parcels owned by public school districts as established in RCW Title 28A; and 2. Vacant or undeveloped parcels owned by public library districts as established in Chapter 27. 12 RCW. B. Marijuana production in the regional commercial and community commercial zones shall only be permitted indoors. 26 SV M C 19 85 ■ 19.85.020 Marijuana processing standards. A. Marijuana processing shall be located or maintained at least 1 ,000 feet from the nearest property line of the uses listed in subsection (A)(1) and (2) of this section. Distance shall be measured from the nearest property line of the marijuana processing to the nearest property line of the following uses: 1 . Vacant or undeveloped parcels owned by public school districts as established in RCW Title 28A; and 2. Vacant or undeveloped parcels owned by public library districts as established in Chapter 27. 12 RCW. B. Marijuana processing in the regional commercial and community commercial zones shall be limited to packaging and labeling of useable marijuana. 27 SV M C 19 85 ■ 19.85.030 Marijuana retail sales standards. Marijuana sales shall be located or maintained at least 1 ,000 feet from the nearest property line of the uses listed in subsection A through D of this section. Distance shall be measured from the nearest property line of the marijuana sales to the nearest property line of the following uses: A. Centennial Trail; B. All proposed, contemplated, and constructed multi-use trail and linear park uses on the Milwaukee right-of-way, as identified and contemplated in the interlocal agreement between Spokane County and the City of Spokane Valley, dated June 27, 2012; C. Vacant or undeveloped parcels owned by public school districts as established in RCW Title 28A; and D. Vacant or undeveloped parcels owned by public library districts as established in Chapter 27. 12 RCW. 28 19 . 120 . 050 Permitted Use Matrix Residential Zone Commercial and Industrial Zone Use Category.Type Supplemental Conditions Districts Districts R- R-R-R-M F-M F- MUCCMUGO10 NC C RCPDS 1-1 1-2 1 2 3 4 1 2 Agriculture and Animal Animal processing/handling FT SVMC 19.40.150. Keeping of swine is Animal raising andfor keeping SSSS S S S S prohibited Animal shelter S P P SVMC 19.60.060(B)(6) Beekeeping:commercial P Beekeeping,hobby S S S SVMC 19.40.150(C) Produce may be sold pursuant to RCW Community garden SSSS S S S S S 36.71.090 as adopted or amended Greenhousefnursery. commercial P P P P Kennel S S S S S P P See zoning districts for conditions Marijuana production S S S S Chapter 19.85 SVMC 29 19 . 120 . 050 Permitted Use Matrix Residential Zone Commercial and Industrial Zone Use CategoryfType Supplemental Conditions Districts Districts R- R-R-R-MF-MF- MUCCMU GC1 0 NC C RC PIOS 1-1 1-2 1 2 3 4 1 2 Industrial,Light Assembly,light P P P P P P P Carpenter shop P P P P Machine shop or metal fabrication P P P Manufacturing,light P P P Marijuana processing S S S S Chapter 19.85 SVMC Plastic injection molting,thermoplastic P P P P P P Processing,light P P Industrial Service Carpetfrug cleaning,dry cleaning,laundry, P P linen supply plant;commercial Contractor's yard P P Laboratories(bio safety level 2) P P P P 30 MP" 19 . 120 . 050 Permitted Use Matrix Residential Zane Commercial and Industrial Zane Use CategoryiType Supplemental Conditions Districts Districts R- R-R-R-MF-MF- Retail Sales MUCCMU GO O NC C RCP/0S I-1 1-2 1 2 3 4 1 2 market{specialty foods General salesfservice P P AAPPP P P Gift shop P P AAPPP A Grocery store P P S P P SVMC 19.60.040(6)(3) Office supply and computer sales P P APPP P P Landscape materials sales lot and P P P P P P greenhouse; nursery, garden center, retail Manufactured home sales P P P Marijuana sales S S S S Chapter 19.85 SVMC Market, outdoor P P PP P P Pawn shop P P P P Pharmacy P P APPPP P 31 Secondhand store,consignment sales P P P P P S SVMC 19.70.010(6)(9) Planning Commission Recommendation Planning Commission conducted a public hearing on the proposed amendments on June 26 , 2014. • No public comment was received. • Planning Commission voted 4-0 to recommend approval of CTA 2014-0002 to City Council . 32 Questions? 33 DRAFT ADVANCE AGENDA For Planning Discussion Purposes Only as of July 3,2014; 8:30 a.m. Please note this is a work in progress; items are tentative To: Council & Staff From: City Clerk, by direction of City Manager Re: Draft Schedule for Upcoming Council Meetings July 15,2014, Study Session Format,6:00 p.m. [due Mon,July 7] ACTION ITEMS: 1. Second Reading Proposed Ordinance 14-007,2003 Bond—Mark Calhoun,Erik Lamb (15 minutes) 2.First Reading Proposed Ordinance,Marijuana Regulations—Erik Lamb (15 minutes) 3. Proposed Resolution Opening McMillan Road—Gabe Gallinger,Erik Lamb (10 minutes) 4.Motion Consideration: Interlocal Agreement, STA Fiber—Eric Guth (10 minutes) NON-ACTION ITEMS 5. TIB Call for Projects— Steve Worley (20 minutes) 6. WSDOT Interlocal Agreement,Traffic Operations and Maintenance —Eric Guth (10 minutes) 7. Proposed, Code Text Amendment Setbacks—Micki Harnois (15 minutes) 8.Noel Proposed Telecommunication Franchise —Cary Driskell (10 minutes) 9. Public Facilities District Amended Interlocal Agreement—Erik Lamb (15 minutes) 10.Advance Agenda (5 minutes) [*estimated meeting: 125 minutes] July 22,2014,Formal Meeting Format,6:00 p.m. [due Mon,July 14] 1. Consent Agenda(claims,payroll,minutes) (5 minutes) 2. Second Reading Proposed Ordinance,Marijuana Regulations—Erik Lamb (15 minutes) 3.First Reading Proposed Ordinance,Noel Telecommunication Franchise —Cary Driskell (10 minutes) 4.Motion Consideration: Bid Award Appleway Trail,University to Pines—E. Guth (10 minutes) 5.Motion Consideration: Bid Award Mansfield Ave Connection—E. Guth (10 minutes) 6.Motion Consideration: TIB Call for Projects List— Steve Worley (10 minutes) 7.Motion Consideration: Interlocal Agreement,WSDOT Operation and Maintenance —Eric Guth(10 minutes) 8.Motion Consideration: Public Facilities District Amended Interlocal Agreement—Erik Lamb (10 minutes) 9.Admin Report: Advance Agenda (5 minutes) 10. Info Only: Department Monthly Reports [*estimated meeting: 85 minutes] July 29,2014 no meeting August 5,2014—No Meeting-National Night Out August 12,2014,Formal Meeting Format,6:00 p.m. [due Mon,Aug 4] 1. Consent Agenda(claims,payroll,minutes) (5 minutes) 2. Second Reading Proposed Ordinance,Noel Telecommunication Franchise —Cary Driskell (10 minutes) 3.First Reading Proposed Ordinance Amending Setbacks—Micki Harnois (15 minutes) 4.Motion Consideration: Bid Award,Argonne Corridor Upgrade —Eric Guth (10 minutes) 5.Admin Report: Estimated Revenues and Expenditures 2015 budget—Mark Calhoun (15 minutes) 6.Admin Report: Advance Agenda (5 minutes) [*estimated meeting: 60 minutes] August 19,2014, Study Session Format,6:00 p.m. [due Mon,Aug 11] 1.Advance Agenda (5 minutes) Draft Advance Agenda 7/3/2014 11:20:58 AM Page 1 of 3 August 26,2014,Formal Meeting Format,6:00 p.m. [due Mon,Aug 18] 1. PUBLIC HEARING: Proposed 2015 Budget—Mark Calhoun (15 minutes) 2. Consent Agenda(claims,payroll,minutes,motion to set 9/23 Budget hearing) (5 minutes) 3. Second Reading Proposed Ordinance Amending Setbacks—Micki Harnois (10 minutes) 4.Admin Report: Advance Agenda (5 minutes) 5. Info Only: Department Monthly Reports [*estimated meeting: 35 minutes] September 2,2014, Study Session Format, 6:00 p.m. [due Mon,Aug 25 1. Outside Agencies Presentations [5 min each]: (a)Economic Development, (b) Social Service) (—90 min) 2.Admin report on proposed ordinance adopting 2015 property taxes (20 minutes) 3.Advance Agenda (5 minutes) [*estimated meeting: 115 minutes] September 9,2014,Formal Meeting Format, 6:00 p.m. [due Tues,Sept 2] 1. Consent Agenda(claims,payroll,minutes) (5 minutes) 2. Community Development Block Grant Proposed Projects—Comm Dev (20 minutes) 3.Admin Report: City Manager presentation of 2015 Preliminary Budget (30 minutes) 4.Admin Report: Advance Agenda (5 minutes) [*estimated meeting: 60 minutes] September 16,2014, Study Session Format,6:00 p.m. [due Mon, Sept 8] 1.Admin Report: Code Text Batch Amendments—Marty Palaniuk (20 minutes) 2.Advance Agenda (5 minutes) September 23,2014,Formal Meeting Format,6:00 p.m. [due Mon, Sept 15] 1. PUBLIC HEARING: CDBG Proposed Projects—Comm Dev (15 minutes) 2. PUBLIC HEARING: Proposed 2015 Budget—Mark Calhoun (15 minutes) 3. Consent Agenda(claims,payroll,minutes) (5 minutes) 4.First Reading Proposed Property Tax Ordinance —Mark Calhoun (10 minutes) 5.Motion Consideration: CDBG Proposed Projects—Comm Dev. (10 minutes) 6.Motion Consideration: Outside Agency Allocations for 2015 —Mark Calhoun (15 minutes) 7.Admin Report: Proposed 2014 Budget Amendment—Mark Calhoun (20 minutes) 8.Admin Report: Advance Agenda (5 minutes) 9. Info Only: Department Monthly Reports [*estimated meeting: 95 minutes] September 30,2014,Study Session Format, 6:00 p.m. [due Mon, Sept 22] 1.Advance Agenda (5 minutes) October 7,2014,Study Session Format,6:00 p.m. [due Mon, Sept 29] 1.Advance Agenda (5 minutes) October 14,2014,Formal Meeting Format,6:00 p.m. [due Mon, Oct 6] 1. PUBLIC HEARING: Proposed 2014 Budget Amendment—Mark Calhoun (15 minutes) 2. Consent Agenda(claims,payroll,minutes) (5 minutes) 3. Second Reading Proposed Property Tax Ordinance—Mark Calhoun (10 minutes) 4.First Reading Proposed 2014 Budget Amendment—Mark Calhoun (10 minutes) 5.First Reading Proposed 2015 Budget Ordinance—Mark Calhoun (10 minutes) 6.Admin Report: Advance Agenda (5 minutes) [*estimated meeting: 55 minutes] October 21,2014, Study Session Format, 6:00 p.m. [due Mon, Oct 13] 1.Advance Agenda (5 minutes) Draft Advance Agenda 7/3/2014 11:20:58 AM Page 2 of 3 October 28,2014,Formal Meeting Format,6:00 p.m. [due Mon, Oct 20] 1. Consent Agenda(claims,payroll,minutes) (5 minutes) 2. Second Reading Proposed 2014 Budget Amendment—Mark Calhoun (10 minutes) 3. Second Reading Proposed 2015 Budget Ordinance—Mark Calhoun (10 minutes) 4.Admin Report: Lodging Tax Advisory Committee Recommendations—M.Calhoun (15 minutes) 5.Admin Report: Advance Agenda (5 minutes) 6. Info Only: Department Monthly Reports [*estimated meeting: 45 minutes] November 4,2014, Study Session Format,6:00 p.m. [due Mon, Oct 27] 1.Admin Report: 2015 Fee Resolution—Mark Calhoun (15 minutes) 2.Advance Agenda (5 minutes) November 11,2014—no meeting—Veteran's Day November 18,2014,Formal meeting 6:00 p.m. [due Mon,Nov 10] 1. Consent Agenda(claims,payroll,minutes) (5 minutes) 2. Proposed Resolution Amending Fee Resolution for 2015 —Mark Calhoun (15 minutes) 3.Advance Agenda (5 minutes) November 25,2014—no meeting— Thanksgiving week December 2,2014, Study Session Format, 6:00 p.m. [due Mon,Nov 24] 1.Advance Agenda (5 minutes) December 9,2014,Formal Meeting Format,6:00 p.m. [due Mon,Dec 1] 1. Consent Agenda(claims,payroll,minutes) (5 minutes) 2.Motion Consideration: Lodging Tax Allocations for 2015 (20 minutes) 3.Admin Report: Advance Agenda (5 minutes) December 16,2014, Study Session Format, 6:00 p.m. [due Mon,Dec 8] 1.Advance Agenda (5 minutes) December 23,2014 no meeting December 30,2014, Study Session Format,6:00 p.m. [due Mon,Dec 22] 1.Advance Agenda 2. Info Only: Department Monthly Reports *time for public or Council comments not included OTHER PENDING AND/OR UPCOMING ISSUES/MEETINGS: ADA Transition Plan Street Vacation/Connectivity Process Coal/Oil Train Environmental Impact Statement Tourism Promotion Agency(TPA) Economic Incentives Truck Parking in Residential Areas Fire and Life Safety Code Urban Agriculture (animals,bees,etc.) Historic Preservation SEPA/NEPA Process—Eric Guth Stormwater Swales,care of Draft Advance Agenda 7/3/2014 11:20:58 AM Page 3 of 3 CITY OF SPOKANE VALLEY Request for Council Action Meeting Date: July 8, 2014 Department Director Approval: Check all that apply: [' consent ❑ old business [' new business [' public hearing ® information [' admin. report [' pending legislation [' executive session AGENDA ITEM TITLE: 2014 TIB Call for Projects GOVERNING LEGISLATION: PREVIOUS COUNCIL ACTION TAKEN: June 24, 2014; Adoption of 2015-2020 Six Year TIP. BACKGROUND: The Washington State Transportation Improvement Board (TIB) issued a 2014 Call for Projects on May 30, 2014 for allocation of funding for the Urban Arterial Program (UAP) and Urban Sidewalk Program (SP). Approximately $75M is available statewide for funding the UAP, a decrease of about 11% from 2013 and $5M for the SP, for no change from 2013. The anticipated regional funding levels have decreased to $8.3M from $9.3M from last year for UAP for the Northeast Region; and remain the same as last year, $1.1M for the East Region SP program. Project applications are due Friday, August 22, 2014. At the March 2013 board meeting, the Transportation Improvement Board adopted new criteria to evaluate grant applications for urban agency construction projects. Criteria were redeveloped to make a stronger connection to statewide transportation priorities and with the intent of giving agencies clearer guidelines for competitive projects. The scoring is performed in bands that emphasize Safety, Growth and Development, Physical Condition, and Mobility. Previously, a project would need to score well across several categories in order to rank well. The effect of averaging scores sometimes meant that the top projects in a single category (like safety or growth & development) were not selected. Under the new criteria, a project that scores well in a particular category such as congestion relief or accident prevention/mitigation can now score well enough to be selected. Staff has evaluated the TIB grant criteria and worked to identify projects that will have the highest potential to receive funding. We have also reviewed the adopted 2015-2020 Six Year TIP, the Pavement Management Program, accident hot-spots, and other elements of the city's transportation network. Based on this evaluation, staff has come up with the following preliminary list of projects for submitting to TIB for the 2014 Call for Projects. UAP Projects: 1. University, 161 to Dishman Mica: This will be a pavement preservation project with an opportunity to restripe the existing roadway from a 4 to 3 lane street, providing one lane in each direction and a center-turn-lane from 16th Avenue south to Dishman Mica Road. Current traffic volumes of 5,300 vehicles per day in the new 3 lane section will be a LOS A. 2040 traffic models for the City show the future volume to be 5,900 vehicles per day and remain a LOS A. New bike lanes will be installed from 16th to 32nd Avenue along University Road to comply with the guidance shown in the City's "Recommended Bikeway Network" plan. University Road is an ideal location for bike lanes. University Road connects the southwest section of the City to the proposed Appleway Trail, the Spokane Valley Transit Center, and commercial and retail businesses along Sprague Avenue. On the south end, University Road connects to 32nd Avenue, allowing bikes good east-west access across the southern portion of the City. This project should score well because it offers enhancements in Safety & Mobility and the street is a prime candidate to meet the TIB Physical Conditions criteria. 2. Sullivan, Sprague to 81 Avenue: Sullivan Road south of Sprague has high traffic volumes and the asphalt surface has come to the end of its useful life. Any further deterioration will affect the structure of the road. This project will mill and inlay about 3" of asphalt. Also, between 4th and 8th Avenues on the west side of Sullivan Road, a new sidewalk will be installed. This new sidewalk completes a gap between the existing sidewalk at the signalized intersection at 8th Avenue across from the high school to sidewalks both east and north at 4th Avenue, meeting the City of Spokane Valley's Street Standards. This sidewalk will better serve pedestrians along this busy arterial that live, work, go to school, and shop in this mixed-use area. This area of the City serves high and low density residential, a high school, and commercial/retail businesses. 3. McDonald — 16th to Mission Avenues: Currently, McDonald is a 4 lane road from Sprague north to Mission Avenue. South of Sprague, McDonald is a two lane road to 16th Avenue. This project will restore the pavement using a mill and thin inlay. McDonald Road is designated as a road with bike lanes in the "Recommended Bikeway Network" plan. Once the road has been repaved, the section north of Sprague will be restriped from a 4 lane to a 3 lane section with bike lanes. Today, the daily traffic north of Sprague is 7,100 vehicles and with the 3 lane it will operate at a LOS B. In 2040, daily traffic volumes are predicted to be about 8,500 vehicles. The 2040 level of service will remain a LOS B. McDonald Road south of Sprague is a 2 lane roadway with adequate width already to stripe bicycle lanes. Other projects evaluated and considered for this funding program are shown on the attached supplemental project list. The TIB Board has made increases in sidewalk funding over the past three years in an effort to fund more complete streets and beneficial sidewalk projects. While the total funding available is still not significant, staff feels that the City has a good candidate in the 32nd Avenue, SR-27 to Evergreen project. SP Projects: 1. 32nd - SR-27 to Evergreen: This project will address pedestrian access across SR-27 and 32nd Avenue by providing sidewalks, barrier free accessibility across the highway, and sidewalks to three transit stops along 32nd Avenue. Currently, on the north side of the roadway pedestrians are forced to walk along the narrow shoulder between traffic and a guard rail. This project serves several residential and commercial developments and connects to recent improvements along Evergreen Rd. TIB has placed an emphasis this year on using recycled materials in projects they help fund. Staff is investigating recycled pavement techniques, warm mix applications, etc. that can be used in an urban environment that will provide a quality project and a long life. All proposed projects will be evaluated to see if these technologies can be used. OPTIONS: Info only RECOMMENDED ACTION OR MOTION: Info only BUDGET/FINANCIAL IMPACTS: The city's match on TIB funded projects is typically 20% of the total project cost. As the proposed TIB applications are developed, staff will coordinate with the Finance Department to ensure there are sufficient city funds to provide the needed match for the proposed TIB projects. Right-of-way is not an eligible cost for sidewalk projects. STAFF CONTACT: Steve M. Worley, PE — Senior Capital Projects Engineer Eric P. Guth, PE — Public Works Director ATTACHMENTS: Supplemental Project List TIB SUPPLEMENTAL PROJECT LIST (7-8-2014) SAFETY GROWTH & DEVELOPMENT Mission, Flora to Barker Mission, Flora to Barker Park, Broadway to Indiana Barker, Appleway to 1-90 Barker, Appleway to 9" Barker, Appleway to 9 " Barker, Spokane River to Trent (SR-291) Broadway, Flora to Barker Sprague/Barker, Intersection Improvement MOBILITY PHYSICAL CONDITION 32nd Dishman Mica to Evergreen 32nd Dishman Mica to Evergreen Park, Broadway to Indiana Argonne PCC, Indiana to Montgomery Broadway, Flora to Barker Sullivan & Euclid PCC Intersection Barker, Spokane River to Trent (SR-291 Broadway/Argonne/Mullan PCC SUSTAINABILITY CONSTRUCTABILITY (Looking for good pavement preservation Park, Broadway to Indiana methods using recycle/reuse, warm-mix Sullivan & Euclid PCC Intersection asphalt for mid volume roads (<10,000 ADT, not Broadway/Argonne/Mullan PCC a lot of trucks), innovative stormwater treatment, LED lighting and signing, etc.) CITY OF SPOKANE VALLEY Request for Council Action Meeting Date: July 8, 2014 Department Director Approval: Check all that apply: [' consent ❑ old business [' new business [' public hearing ® information ❑ admin. report [' pending legislation [' executive session AGENDA ITEM TITLE: Washington State Department Of Transportation (WSDOT) Interlocal Agreement —Traffic Operations and Maintenance GOVERNING LEGISLATION: N/A PREVIOUS COUNCIL ACTION TAKEN: WSDOT signal and illumination maintenance contract approval in 2003 and contract renewal in 2009; WSDOT intelligent transportation systems (ITS) contract maintenance contract in 2008. BACKGROUND: The City first signed a contract with the Washington State Department of Transportation (WSDOT) to maintain traffic signals and street lighting along Trent Avenue (SR 290) and along Pines Road (SR 27) in 2003. The contract did not include provisions for adding new traffic signals or for increasing the maintenance costs to adjust for inflation, nor did it include overhead charges. This contract was then renewed in 2009 (WSDOT contract number GM-01508) which accounted for inflation and overhead charges as well as minor revisions to the scope of work. The City then signed a contract with WSDOT for intelligent transportation systems (ITS) maintenance in 2008 (WSDOT contract number K237). The purpose of this new interlocal agreement is to combine the maintenance contracts for traffic signals, illumination, and ITS devices into one agreement. City traffic engineering staff maintains close communication and coordination with WSDOT maintenance staff for routine and emergency maintenance, as well as new installation and upgrades to traffic signal, street lighting, and ITS equipment. The services will remain the same. The new interlocal agreement will be a one (1) year contract automatically renewed on a calendar year basis expiring in 2024. OPTIONS: Information only. RECOMMENDED ACTION OR MOTION: Information only BUDGET/FINANCIAL IMPACTS: No change to yearly budget. STAFF CONTACT: Sean Messner, Senior Traffic Engineer Eric Guth, Public Works Director ATTACHMENTS: New interlocal agreement (WSDOT contract number GMB 1044) GMB 1044 STATE MAINTENANCE OF CITY OWNED TRAFFIC SIGNALS, ILLUMINATION, AND INTELLIGENT TRANSPORTATION SYSTEMS This Agreement is made and entered into between Washington State Department of Transportation, hereinafter the "STATE," and the City of Spokane Valley,hereinafter the "CITY," collectively referred to as "Parties," and individually, the "Party." WHEREAS, the CITY does not have sufficient staff and adequate equipment to perform the work described herein, and WHEREAS, on July 13, 2009, the CITY and STATE entered into Agreement GM-01508, which provided for STATE operation and maintenance of certain traffic signal systems (Signals) and illumination systems (Illumination) at city streets that intersect with State Route (SR) 290 and SR 27, and WHEREAS, on December 10, 2008, the CITY and STATE entered into Agreement K237, which provided for STATE operation and maintenance of certain city-owned Intelligent Transportation Systems (ITS) located on city streets, and WHEREAS, the CITY and STATE desire to combine the Agreements to meet current practices and update the estimated annual costs, and WHEREAS, the Parties have terminated K237 and will terminate Agreement GM-01508 upon execution of this Agreement which will provide for STATE operation and maintenance of the Signals, Illumination, and ITS now covered under Agreements GM-01508 and K237 and any future signal, illumination, and ITS additions or deletions, including repair or replacement of existing signal, illumination, ITS, as well as supplemental work, and WHEREAS, it would be to the mutual benefit of the STATE and the CITY for the STATE to perform the operation and maintenance of certain Signals, Illumination, and ITS to the extent set forth in this Agreement, and to establish, in writing, each Party's responsibility, NOW, THEREFORE, pursuant to RCW 47.28.140, the above recitals that are incorporated herein as if fully set forth below, and in consideration of the terms, conditions, covenants, and performances contained herein, and the attached Exhibits A, B and C which are incorporated and made a part hereof, IT IS MUTUALLY AGREED AS FOLLOWS: 1. GENERAL 1.1 The STATE agrees to perform, at CITY expense, certain maintenance and operation activities on identified city-owned Signals, Illumination, and ITS as listed in Exhibit A. GMB 1044 Page 1 of 8 1.2 The CITY and STATE will meet as necessary to coordinate system changes and address maintenance and operations issues for certain city-owned Signals, Illumination, and ITS. The CITY shall retain ownership of said Signals, Illumination, ITS. The STATE will coordinate review of proposed modifications of these systems with the CITY prior to implementation, unless extraordinary circumstances require the STATE to modify such systems without the CITY's concurrence. In the event a condition exists resulting from storm damage, third party damage, or other extraordinary reasons, the STATE may remove any obvious and immediate traffic hazards before notifying the CITY. The STATE is responsible for implementing and maintaining necessary traffic control from the point at which the condition is identified, at CITY expense, until the CITY has had time to respond with its own traffic control after notification. 2. STATE RESPONSIBILITIES Subject to the terms of this Agreement, the STATE, at CITY expense, agrees to operate and maintain the Signals, Illumination, and ITS by performing the tasks following: 2.1 Provide Routine Maintenance and Operation: a. Signal phasing and timing plans and adjustments. The CITY's Public Works Director or designee shall review any proposed revision before signal timing or phasing is implemented. b. Removal and replacement of failed components (i.e. load switches, loop amplifiers, conflict monitors, etc.). The components installed by the STATE shall be furnished by the CITY, or the STATE may elect to furnish the components and be reimbursed by the CITY. c. Routine preventative maintenance Signal systems, including controller equipment (inside the controller cabinet) and display and detection equipment (including, but not limited to, signal heads, lamps, etc.) and the illumination, and ITS systems consistent with the STATE's current preventative maintenance standards. d. Maintain all associated Signals interconnects. e. Perform locates for underground infrastructure including ITS fiber optic cable and associated infrastructure. f. Maintain accurate maintenance records, as to the time and materials used in completing the various tasks for Signals, Illumination, and ITS. g. Day to day observation of camera and VMS sign operations and performance. h. Maintenance of communications end equipment located at each device location cabinet, communications end equipment located in shared use hub located on I-90 at Sprague Ave. Interchange, and communications end equipment located at Spokane Regional Transportation Management Center (SRTMC) transmitting/receiving video/data from ITS systems identified in Exhibit A. GMB 1044 Page 2 of 8 2.2 Provide Emergency Maintenance. Perform emergency maintenance at CITY expense for damage caused by accidents, vandalism, adverse weather or unanticipated forces or actions on the Signals, Illumination, and ITS. Emergency maintenance includes repair or replacement of Signals, Illumination, and ITS, or components thereof, and the necessary traffic control for STATE workers to perform the work. The STATE shall notify the CITY within twenty-four (24) hours of the emergency work and include any information the STATE may possess if the damage was caused by a third party. 2.3 Standards. Work to be performed by the STATE will be consistent with current STATE practices for the operation and maintenance of Signals, Illumination, and ITS, as follows: a. Components employed in Signals, Illumination, and ITS or any other electrical installation will conform to requirements of WAC 296-46B-010 General, Traffic Management Systems (15)-(22). b. The STATE shall document Signals, Illumination, and ITS work performed in Signal Maintenance Management records. The STATE will maintain the records for a period of three (3) years from the date the work was completed. 3. CITY RESPONSIBILITIES 3.1 The CITY agrees to reimburse the STATE for the actual direct and related indirect costs of the work to be performed under this Agreement. 3.2 The CITY agrees to be responsible for the payment of operational power costs of all Signals, Illumination, and ITS covered by this Agreement. 3.3 The CITY shall provide maintenance, operation, repair and replacement work for the Signals, Illumination, and ITS that are not the responsibility of the STATE as defined under Section 2. 3.4 CITY shall be responsible for recovering the costs of damages caused by a third party pursuant to Section 2.2. 4. SUPPLEMENT: REPAIR OR REPLACEMENT OF TRAFFIC SIGNAL/ILLUMINATION/INTELLIGENT TRANSPORTATION SYSTEMS 4.1 Supplement: Should the CITY request the STATE to perform work not otherwise covered by this Agreement, the STATE may agree to perform the extra work at CITY expense. In this event, the Parties will supplement this Agreement by describing the work and executing the Supplement as provided by Exhibit C. The CITY agrees to fill out the Supplement in the form of Exhibit C, sign the Supplement and provide it to the STATE. The STATE will review the request, and if it agrees to perform the extra work, the STATE will sign and number the Supplement, returning a copy to the CITY. 4.2 The CITY agrees, upon satisfactory completion of the work performed pursuant to a properly executed Supplement under Section 4.1 and receipt of a STATE Notice of Physical Completion of the work, to deliver a letter of acceptance which shall include a waiver and release of the GMB 1044 Page 3 of 8 STATE from all future claims or demands of any nature resulting from the performance of the repair or replacement work under the applicable Supplement. 4.3 Prior to Supplement work acceptance, the STATE and CITY will perform a joint final inspection. 4.4 If a letter of acceptance is not received by the STATE within ninety (90) days following the Notice of Physical Completion of the repair or replacement work, the work shall be considered accepted by the CITY, and the STATE shall then automatically be released from all future claims and demands of any nature resulting from the performance of the repair or replacement work under the Supplement. 4.5 The CITY may withhold acceptance of work by submitting written notification to the STATE within ninety (90) calendar days following the Notice of Physical Completion of the repair or replacement work. This notification shall include the specific reason(s) for withholding the acceptance. 5. AMENDMENT: TRAFFIC SIGNAL/ILLUMINATION/INTELLIGENT TRANSPORTATION ADDITION OR DELETION 5.1 Amendment. Exhibit A of this Agreement may be amended to add or delete city-owned Signals, Illumination, and ITS by the CITY completing and providing the Amendment to the STATE, using the form as provided by Exhibit B. The Amendment shall include, at a minimum, a description and location of the Signals, Illumination, and/or ITS to be added or deleted. The effective date of coverage or deletion shall be agreed to by the Parties and stated in the Amendment. 5.2 The Signals/Illumination/ITS Addition or Deletion Amendment shall be approved by STATE by the signature of the Assistant Region Administrator for Maintenance and Operations or designee. A request for additional work shall be in the STATE's sole discretion to accept. The CITY shall review the Amendment, associated Exhibit B Worksheet Bl, including the estimated costs and indicate concurrence by authorized signature, returning one copy of the Amendment with original signatures to the STATE. The STATE will provide to the CITY a revised Exhibit A valuation cost for the Signal, Illumination, and ITS after the costs have risen over ten percent(10%) of the original estimated costs or upon mutual agreement of the Parties. 5.3 A Signals, Illumination or ITS may be deleted from this Agreement at the sole discretion of the STATE upon thirty (30) days written notice to the CITY. 6. MODIFICATION 6.1 This Agreement may be amended or modified only by the mutual agreement of the Parties. Such amendments or modifications shall not be binding unless they are in writing and signed by persons authorized to bind each of the Parties. GMB 1044 Page 4 of 8 7. PAYMENT and RECORDS 7.1 The current estimated actual direct and related indirect costs of routine maintenance and operation under this Agreement is shown in Exhibit A. It is anticipated that the identified costs will rise in subsequent years as materials, wages and other costs increase. 7.2 The CITY agrees to reimburse the STATE for the actual direct and related indirect costs of work covered by this Agreement, including additional work provided for under Sections 2.2, 4, and 5, and including all Supplements to and/or Amendments of this Agreement. The STATE shall provide the CITY with a detailed invoice, and the CITY agrees to make payment within thirty (30) calendar days after the date of each invoice. 7.3 The CITY agrees that if it does not make payment within ninety (90) calendar days after the date of a STATE invoice, the STATE may deduct and expend any monies to which the CITY is entitled to receive from the Motor Vehicle Fund as provided by RCW 47.24.050. 7.4 During the progress of any and all work performed by the STATE, and for a period of not less than three (3) years from the date of payment to the STATE for that work, the records and accounts pertaining to said work and accounting therefore are to be kept available for inspection and audit by the CITY. 7.5 Upon request by the CITY, at CITY cost, copies of all records, accounts, documents, or other data pertaining to the work will be furnished. 7.6 If any litigation, claim, or audit is commenced, the records and accounts along with supporting documentation shall be retained until all litigation, claim or audit finding has been resolved even though such litigation, claim or audit continues past the three (3) year retention period. 7.7 In the event that it is determined that an overpayment has been made to the STATE by the CITY, the CITY will invoice the STATE for the amount of overpayment, including the records that support the overpayment. The STATE shall pay the CITY for any overbilling amount within thirty (30) calendar days after the STATE receives such billing from the CITY. The STATE agrees that if payment for overbilling is not made within ninety (90) calendar days after the STATE has been billed for any overbilling amount, the CITY may deduct any overbilled amount from progress payments due to the STATE until such overbilled amount is satisfied. 8. RIGHT OF ENTRY 8.1 The CITY grants the STATE a right of entry upon all city-owned right of way and/or property for the purpose of performing all work authorized under this Agreement and any Supplements and/or Amendments thereto. GMB 1044 Page 5 of 8 9. TERM OF AGREEMENT 9.1 The term of this Agreement shall be for up to one (1) year, beginning on the executed date, and ending on December 31 of that year. This Agreement shall automatically be renewed on a calendar year basis unless written notice of termination is given by either Party by the preceding November 1 of any such year. Failure of either Party to notify the other of such termination on or before November 1 of any such year shall cause this Agreement to automatically be renewed for the next ensuing calendar year. This Agreement renewal process shall expire in 2024. 9.2 Either the STATE or the CITY may terminate this Agreement for any reason with written notice to the other Party at the end of sixty (60) calendar days following receipt of notice. Termination of this Agreement shall constitute termination of all associated Signals, Illumination or ITS Supplements and/or Amendments. Upon such notice and except as set forth in Section 11 herein, the STATE and/or CITY shall have no further responsibility of any kind or nature regarding the city-owned Signals, Illumination or ITS, including any systems that were added to this Agreement by Amendment. 10. DISPUTES 10.1 The Parties shall work collaboratively to resolve disputes and issues arising out of, or related to this Agreement. Disagreements shall be resolved promptly and at the lowest level of hierarchy. To this end, following the dispute resolution process in Sections 10.1a through 10.1d shall be a prerequisite to the filing of litigation concerning any dispute between the Parties: a. The Representatives designated in this Agreement shall use their best efforts to resolve disputes and issues arising out of, or related to this Agreement. The Representatives shall communicate regularly to discuss the status of the tasks to be performed hereunder and to resolve any disputes or issues related to the successful performance of this Agreement. The Representatives shall cooperate in providing staff support to facilitate the performance of this Agreement and the resolution of any disputes or issues arising during the term of this Agreement. b. A Party's Representative shall notify the other Party in writing of any dispute or issue that the Representative believes may require formal resolution according to Section 10.1d. The Representatives shall meet within five (5)working days of receiving the written notice and attempt to resolve the dispute. c. In the event the Representatives cannot resolve the dispute or issue, the CITY Public Works Director, and the STATE's Eastern Region Administrator, or their respective designees, shall meet and engage in good faith negotiations to resolve the dispute. d. In the event the Parties cannot resolve the dispute or issue, the CITY and the STATE shall each appoint a member to a disputes board. These two members shall then select a third member not affiliated with either Party. The three member board shall conduct a dispute GMB 1044 Page 6 of 8 resolution hearing that shall be informal and unrecorded. All expenses for the third member of the dispute board shall be shared equally by both Parties; however, each Party shall be responsible for its own costs and fees. 11. LEGAL RELATIONS 11.1 The Parties shall protect, defend, indemnify, and hold harmless each other and their employees and authorized agents,while acting within the scope of their employment as such, from any and all costs, claims, judgments, and /or awards of damages (both to persons and/or property), arising out of, or in any way resulting from, each Party's obligations to be performed pursuant to the provisions of this Agreement. The Parties shall not be required to indemnify, defend, or hold harmless the other Party if the claim, suit, or action for injuries, death, or damages (both to persons and/or property) is caused by the negligence of the other Party; provided that, if such claims, suits, or actions result from the concurrent negligence of(a) the STATE, its employees or authorized agents and (b) the CITY, its employees or authorized agents, or involves those actions covered by RCW 4.24.115, the indemnity provisions provided herein shall be valid and enforceable only to the extent of the negligence of each Party, its employees and/or authorized agents. 11.2 Section 11.1 shall survive the termination of this Agreement. 11.3 In the event that either Party deems it necessary to institute legal action or proceedings to enforce any right or obligation under this Agreement, the Parties agree that any such action or proceedings shall be brought in the superior court situated in Thurston County, Washington. 11.4 All claims brought which arise out of, in connection with, or incident to the work to be performed pursuant to the terms of this Agreement will be forwarded to the CITY for initial processing. Any such claims believed to be caused by the concurrent or sole negligence of the STATE will be formally tendered to the Office of Financial Management/of Risk Management Division for processing pursuant to RCW 4.92.100. 12. AGREEMENT REPRESENTATIVES 12.1 The Parties have designated the following Representatives for all communications under this Agreement. CITY STATE Public Works Director Eastern Region Traffic Engineer 11707 East Sprague Avenue 2714 N. Mayfair St. City of Spokane Valley, WA 99206 Spokane,WA 99207-2090 509-720-5000 509-324-6550 13. WORKING DAYS 13.1 Working days for this Agreement are defined as Monday through Friday, excluding Washington State holidays per RCW 1.16.050. GMB 1044 Page 7 of 8 IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the Party's date last signed below. WASHINGTON STATE CITY OF SPOKANE VALLEY DEPARTMENT OF TRANSPORTATION By: By: City Manager Larry Chatterton, Assistant Region Administrator for Maintenance and Operations Date: Date: APPROVED AS TO FORM APPROVED AS TO FORM By: By: City Attorney Ann E. Salay,Assistant Attorney General Date: Date: GMB 1044 Page 8 of 8 PARKS AND RE ATION .. FIRST QUARTER REPORTiko , ` , �tiie JANUARY—MARCH 2014F' • �< ' 1; . l; Y" ADMINISTRATION AND PARKS: �; - ' �-z. Cry - �+ ' r i p f:x' ` �'. i i , ir`_•--• '. 7, Staff i• -. 1:• e s ... ,� . .�i: iu ,. 4 , 4,,' `0"= , embarked upon a • T 4. „.i .,, ^�. , 1. ,._ 1 ,, public master •_ , . ''`' � . • k� �` , planning process ,•. r,� Y =f., _ -� for Browns Park - to determine the public's level of support and interest for potential changes to the park, as it was a priority in the 2013 Parks and Recreation Master Plan Update. An extensive process was held with the neighborhood, community, and stakeholders. Design consultants prepared conceptual site plans that were displayed at a March 27 Public Input Meeting. Based on input received from the public, a final conceptual Browns Park Master Plan was developed. We are seeking City Council approval. The Browns Park Master Plan provides a vision for future development and acts as a guide for revitalization of Browns Park. The future upgrades would include further expansion of the volleyball courts, construction of new picnic shelters and restrooms, new play equipment, a splash pad, lighting, and additional parking. o Contracts completed in the first quarter include; o Janitorial Services for the Police Precinct. o Marketing/advertising services for CenterPlace Regional Event Center. o Professional services for a Browns Park Master Plan, including site investigation, conceptual programming, and master plan development for improvements to the park and adding additional volleyball courts. o Professional services for the Discovery Playground renovation project. 0 Park Road Pool tank painting. 0 Quotes were solicited for the Precinct BAC Wall and Door Project. o Numerous repairs and painting projects at the Precinct were also completed. o Meetings with Washington State Parks, Spokane, and Spokane County continued regarding an Interlocal Agreement for jurisdiction and maintenance/repairs needs of the Centennial Trail. A final draft is now being circulated for review. i4 o Staff continues to participate with City staff on the design and - - , implementation of improvements to the Mission Trailhead project. fi: 1 • -\ ° Work began on the grant application for the Appleway Trail Phase 2B IIF project with the Recreation and Conservation Office. Applications are ,P % due May 1. ; ' A • Construction of the new picnic area and shelter at Sullivan Park was 0 • completed. ..-'.,:=4,,'..1.-;;•-•%. -.. • Staff worked with the Valley Macy's store on their"Heart Your Park" • � -` ,. campaign through the National Recreation and Park Association. - _- Donations were collected to support Mirabeau Point Park. N ).; 5 , , o Staff began working with Senske on a variety of vandalism issues that a „.,,..2..).-4- ,• ;,, ." a'� . it 4 it seem to be starting earlier this year, as well as preparing the parks for ;ti • i , - ,e4 .':,' opening in April. • & "•.► , ` "; CENTERPLACE: 'C-: I r- • CenterPlace staff took 261 reservations duringthe first11 t ,}' `" lip 1t''! quarter of 2014. A total of 580 events were booked in the - •� , F., first quarter, which is 95 events over the same time period f` " ' ' last year, which reflects an increase of 19.5%. The most �, eV,. ; T significant increases were in business meetings and °� '" .. `- banquets. ' ' ).711 I' 4 !. o We held an Open House for citizens to explore what CenterPlace l,T•j = . ,-1 r, i has to offer for weddings, conferences, business meetings, or '' other special event needs. It was an enjoyable evening with . , , , various vendors, including wedding-oriented vendors, and , '1 t -- delicious food menu samples presented by our in-house caterer, Red Rock Catering. ;' ' o In January, staff attended the largest Bridal Fair in the area at ,, 44 the Spokane Convention Center. The event was held for two SW days and over 3000 people walked through the doors, which included 1600 brides. This was one of the most successful bridal fairs we have attended, as we collected 307 leads from people that were interested in having their wedding or reception at CenterPlace. We also attended two smaller bridal fairs including the Coeur d'Alene Resort Bridal Fair in February and the INPRO Bridal Fair at the Red Lion in March. u CenterPlace was chosen as the site of the weeklong 2014 Spokane Tribe Youth Conference for the first time. We were appreciative and excited that the entire building was reserved (minus the Senior Center) for this event, as many youth from the region attended. • Carol Carter, our Customer Relations and Facility Coordinator, also assisted on the International Association of Venue Managers Conference Planning Board. The Association will be holding their annual conference in Spokane the first week of May. o Staff conducted interviews to hire additional part-time CenterPlace Hosts. u Staff held meetings with Red Rock Catering to refine the CenterPlace food and beverage policy. it i, A + t r 3 i G 2 RECREATION AND AQUATICS: 11 _-_,P-"'• 4, h 1 .• After receiving bids for designing and printing the , Nialley. Spring/Summer Recreation Brochure, a new vendor ,� Parks&AttrralianDrpasWhnr was chosen this time; Target Media. Classes were coordinated, and the brochure was assembled and i edited. It was distributed in March to all Spokane Valley _ _ •,1 �!li~,li�l=``, 4 ElementarySchools andtopast Parks and Recreation \ t t-• , , , , participants. Registration for classes began March 24. I. ' . ��� �l\ ' Li:. We hosted the first "Speed Networking" Event with the Greater ' , - , L�; r<;�. Spokane Valley Healthy Communities Network, which was very �, ��'\� +- „,,;�{ ��40, '' i,• . successful. This is a community organization whose vision is to ,. , , .. .., create awareness and provide access to health and wellness , ' f /644 t w resources for the Greater Spokane Valley. ,” Adult Dance Classes Summer Day Comps n Our Recreation Coordinator, Jennifer Papich, also attended the Youth Tennis Comps -` Special Olympics Project Unify Youth Summit at the HUB Sports Preschool Rt ardoosrMovies Preuhool Tumbling Classes Center. The Summit was a sports based strategy powered by an Outdoor Pool lnformaion ,, ,tiS dallf ' engaged youth community that increases athletic leadership S o yballno" opportunities for students with and without intellectual Kan MORE! ;'. disabilities, while creating communities of acceptance for all. isi o Staff continues outreach activities with the communityand looks for . . __ ,�:i.i � partnering opportunities; L- o Attended a Greater Spokane Valley Substance Abuse Council1. I ' meeting. Try.' - t ,41;k1, o Spoke at the February Children's Home Society Family Night regarding all the Parks and Recreation Department has to it \ • offer for families in the community. o Met with the YMCA and formed a partnership to work _ together to jointly offer programs and activities for the . ,'• upcoming Healthy Kids Day that will be occurring at both CenterPlace and YMCA campus locations, o Presented regarding Parks and Recreation to St. John -/ ---; Vianney's second grade class during their field trip to City Hall, / 1 e'----- Vi o Presented to Eastern Washington Recreation students on the field of recreation and summer job opportunities with the City of Spokane Valley. .• \ o Was a part of the public meeting regarding the Browns Park ` , ;' N► Master Plan to update the park and create a volleyball venue, _ -, •_W I and helped coordinate the Open House. ,- -" i o The Baby Bugs and Tumble Bugs Tumbling classes continued to be popular and the numbers did not come tumbling down. Swinging your partner round and round also proved to be a popular pastime ' in the colder months, as Beginning Partner Dance, Swing Dance, and Zumba were also well attended. 1 1 3 , SENIOR CENTER: \ I I t _ • The Senior Association hosted a Magic Show with Louie \ G Foxx in the Auditorium at CenterPlace and invited local , wet:1,. il. -,,,t ,.$ ,, retirement communities. Many people magically appeared , ,�; -- ' ;` for the audience and were dazzled. r :., • Wii Bowlers from the Senior Center won First Place again in the �_ ° ''. ~ tournament at Valley Nazarene Church. Needless to say, "Wii" - are so proud of our seniors team! ) I+ ci.rij-;---W-2E , , • We have many seniors participating in a variety of activities ,, IA throughout the month. Programs through the Community Colleges , :_ of Spokane Act 2 Seniors Program include senior fitness classes ‘ Aiv '5 '� and different art classes, which continue to grow in interest. participants January. Senior fitness had a total of 366 artici ants in Art � 1 classes show an increase as well, with 245 participants in January. -1 • A new quilting group has started meeting twice a month. Currently, '` ,�,_; • there are six to seven ladies meeting, finishing quilts they started � - 05 k. and helping each other, as well as enjoying a good social time. I ` '4 Everyone is invited to join. The ladies also make and donate quilts . i i ryk ' °� - for children in the hospital. ,im, }f . i • The AARP Driver Refresher course is typically full with 25 students ,. l , each month on the second Tuesday. After taking the class, most insurance companies offer a discount on premiums. It's safe to say the participants drive away happy at the end of day. • The Senior Center and the YMCA have partnered to offer discounted day passes to members of the Senior Center. The day pass is only $6. There have been many inquiries about the opportunity, and folks are happy to get the reduced rate. • Meals on Wheels brought attention to Numbers That Count... January February March their program by inviting elected officials Total Attendance 3,147- 2,739 3,171 to serve lunch on March 27. Present New Members 22 19 13 from the City of Spokane Valley were Billiards Room Participants _ 549 502 510 Mayor Dean Grafos and Council Member Pickleball Participants Ed Pace. (Jan. includes badminton amt.) 504 467 475 . s i 4 ir : .t-i ,, i , ; - 't , T isr i 4 CITY OF SPOKANE VALLEY Request for Council Action Meeting Date: July 8, 2014 Department Director Approval: Check all that apply: ❑ consent ❑ old business ❑ new business ❑ public hearing ® information ❑ admin. report ❑ pending legislation ❑ executive session AGENDA ITEM TITLE: Proposed Ordinance granting telecommunications franchise with Noel Communications, Inc. GOVERNING LEGISLATION: RCW 35A.47.040. PREVIOUS COUNCIL ACTION TAKEN: None. BACKGROUND: This proposed franchise agreement with Noel Communications, Inc. (Noel), would grant a non-exclusive franchise to construct, maintain, and operate telecommunication facilities within the public rights-of-way of the City. Noel does not currently have any fiber optic facilities in the rights-of-way. This agreement would grant a franchise for a period of 10 years, beginning on the effective date of this Ordinance, to install, construct, operate, maintain, replace and use all necessary equipment and facilities to place telecommunications facilities in, under, on, across, over, through, along or below the public rights-of-way and public places located in the City, as approved under City permits issued pursuant to this franchise. Similar to other franchises with private utility companies, the City would collect no fee from this agreement. The cost of any new construction or maintenance of Noel's facilities shall be solely Noel's expense. The City would require Noel to maintain insurance through the entire period of this agreement. The City will publish at Noel's cost a copy of a summary of the franchise in the newspaper following adoption prior to it becoming effective. Staff recommends approval of the proposed franchise. OPTIONS: NA RECOMMENDED ACTION OR MOTION: NA, information only. BUDGET/FINANCIAL IMPACTS: NA STAFF CONTACT: Cary Driskell, City Attorney ATTACHMENTS: Proposed Ordinance granting telecommunications franchise to Noel Communications, Inc. DRAFT CITY OF SPOKANE VALLEY SPOKANE COUNTY,WASHINGTON ORDINANCE NO. 14-00* AN ORDINANCE OF THE CITY OF SPOKANE VALLEY,SPOKANE COUNTY, WASHINGTON,GRANTING A NON-EXCLUSIVE FRANCHISE TO NOEL COMMUNICATIONS,INC.TO CONSTRUCT,MAINTAIN AND OPERATE TELECOMMUNICATIONS FACILITIES WITHIN THE PUBLIC RIGHTS-OF-WAY OF THE CITY OF SPOKANE VALLEY,AND OTHER MATTERS RELATING THERETO. WHEREAS, RCW 35A.47.040 authorizes the City to grant, permit, and regulate "nonexclusive franchises for the use of public streets, bridges or other public ways, structures or places above or below the surface of the ground for railroads and other routes and facilities for public conveyances, for poles, conduits, tunnels, towers and structures, pipes and wires and appurtenances thereof for transmission and distribution of electrical energy, signals and other methods of communication, for gas, steam and liquid fuels, for water, sewer and other private and publicly owned and operated facilities for public service"; and WHEREAS, RCW 35A.47.040 further requires that "no ordinance or resolution granting any franchise in a code city for any purpose shall be adopted or passed by the city's legislative body on the day of its introduction nor for five days thereafter, nor at any other than a regular meeting nor without first being submitted to the city attorney, nor without having been granted by the approving vote of at least a majority of the entire legislative body,nor without being published at least once in a newspaper of general circulation in the city before becoming effective"; and WHEREAS,this Ordinance has been submitted to the city attorney prior to its passage;and WHEREAS,the Council finds that the grant of the Franchise contained in this Ordinance, subject to its terms and conditions, is in the best interests of the public, and protects the health, safety, and welfare of the citizens of this City. NOW, THEREFORE, the City Council of the City of Spokane Valley, Spokane County, Washington,ordains as follows: Section 1. Definitions. For the purpose of this Ordinance, the following words and terms shall have the meaning set forth below: "City Manager"means the City Manager or designee. "construction" or "construct" shall mean constructing, digging, excavating, laying, testing, operating, extending, upgrading, renewing, removing, replacing, and repairing a facility. "day" shall mean a 24-hour period beginning at 12:01 AM. If a thing or act is to be done in less than seven days, intermediate Saturdays, Sundays and legal holidays shall be excluded in the computation of time. "franchise area" shall mean the entire geographic area within the City as it is now constituted or may in the future be constituted. Ordinance 14-00*Noel Communications,Inc.Telecommunications Franchise Page 1 of 14 DRAFT "hazardous substances" shall have the same meaning as RCW 70.105D.020(10). "maintenance,maintaining or maintain" shall mean the work involved in the replacement and/or repair of facilities, including constructing, relaying, repairing, replacing, examining, testing, inspecting, removing, digging and excavating, and restoring operations incidental thereto. "overbuilding" shall mean adding additional fiber capacity to an existing conduit housing fiber optic cable. "overlashing" shall mean the act of lashing new fiber optic cable to an existing aerial fiber optic cable. "permittee" shall mean a person or entity who has been granted a permit by the permitting authority. "permitting authority" shall mean the City Manager or designee authorized to process and grant permits required to perform work in the rights-of-way. "product" shall refer to the item,thing or use provided by the Grantee. "public property" shall mean any real estate or any facility owned by the City. "Public Works Director" shall mean the Spokane Valley Public Works Director or his/her designee. "relocation" shall mean any required move or relocation of an existing installation or equipment owned by Grantee whereby such move or relocation is necessitated by installation, improvement, renovation or repair of another entity's facilities in the rights- of-way,including Grantor's facilities. "right-of-way" shall refer to the surface of and the space along, above, and below any street, road, highway, freeway, lane, sidewalk, alley, court, boulevard, parkway, drive, Grantee easement, and/or public way now or hereafter held or administered by the City. "streets" or "highways" shall mean the surface of, and the space above and below, any public street, road, alley or highway, within the City used or intended to be used by the general public,to the extent the City has the right to allow the Grantee to use them. "telecommunications facilities" shall mean any of the plant, equipment, fixtures, appurtenances, antennas, and other facilities necessary to furnish and deliver telecommunications services, including but not limited to poles with crossarms, poles without crossarms, wires, lines, conduits, cables, communication and signal lines and equipment, braces, guys, anchors, vaults, and all attachments, appurtenances, and appliances necessary or incidental to the distribution and use of telecommunications services. The abandonment by Grantee of any telecommunications facilities as defined herein shall not act to remove the same from this definition. Section 2. Grant of Franchise. The City of Spokane Valley, a Washington municipal corporation(hereinafter the "City"),hereby grants unto Noel Communications, Inc. (hereinafter "Grantee"), a franchise for a period of 10 years, beginning on the effective date of this Ordinance, to Ordinance 14-00*Noel Communications,Inc.Telecommunications Franchise Page 2 of 14 DRAFT install, construct, operate, maintain, replace and use all necessary equipment and facilities to place telecommunications facilities in,under, on, across, over,through, along or below the public rights-of-way and public places located in the City of Spokane Valley, as approved under City permits issued pursuant to this franchise(hereinafter the"franchise"). This franchise does not permit Grantee to use such facilities to provide cable services as defined by 47 C.F.R. § 76.5(ff). Section 3. Fee. No right-of-way use fee is imposed for the term of this franchise. Any such right-of-way use or franchise fee that may be imposed by subsequent ordinance would apply to any subsequent franchise,if any,between the parties. Section 4. City Use. The following provisions shall apply regarding City use. 1. Grantee agrees to reserve to the City the right to access four dark fiber strands (two pair) along the route identified in Exhibit A as adopted or amended, within the boundaries of the City, for sole and exclusive municipal, non-commercial use or designation (the "City Reserved Fibers"). City agrees that it shall not use the City Reserved Fibers as a public utility provider of telecommunications business service to the public. 2. The City has the right to access by connection to the City Reserved Fibers at existing Grantee splice points or reasonably established access points within the City limits; provided that all splicing shall be sole responsibility of the Grantee. The City shall provide at least 30 days' written notice of intent to access the City Reserved Fibers. Upon any access or use of the City Reserved Fibers, City shall pay Grantee a recurring monthly charge of$20.00 per fiber pair per mile in use by the City (the "City Fiber Rate") unless otherwise specifically agreed by both the parties in writing and shall negotiate and enter into a "Fiber License Agreement" which shall govern the terms and conditions for use of the City Reserved Fibers, except cost, which is set forth herein. Said recurring monthly charge shall not be imposed until such time as the fiber is put into use by the City. 3. In the event the City Reserved Fibers are the last fibers remaining in Grantee's fiber bundle,then the following shall apply: A. If the City is using the fibers,then the rate the City shall pay Grantee will change from the City Fiber Rate to Grantee's standard commercial rate. B. If the City is not using the fibers,the City shall have the option of abandoning the City Reserved Fibers in lieu of paying Grantee's standard commercial rate. If Grantee installs additional fiber capacity, the City's right to use four dark fiber stands as set forth in subsections 1 and 2,immediately above, shall again be in effect. 4. All access, interconnection and maintenance to and on the City Reserved Fibers shall be performed by Grantee. The City shall pay all costs associated with such work to the City Reserved Fibers. The City Reserved Fibers shall have a term that matches the duration of this franchise Ordinance. 5. Consistent with and subject to RCW 35.99.070, at such time when Grantee is constructing, relocating, or placing ducts or conduits in public rights-of-way, the Public Works Director may require Grantee to provide the City with additional duct or conduit and related structures, at incremental cost,necessary to access the conduit at mutually convenient locations. Any ducts or conduits provided by Grantee under this section shall only be used for City municipal,non-commercial purposes. Ordinance 14-00*Noel Communications,Inc.Telecommunications Franchise Page 3 of 14 DRAFT A. The City shall not require that the additional duct or conduit space be connected to the access structures and vaults of the Grantee. B. This section shall not affect the provision of an institutional network by a cable television provider under federal law. C. Grantee shall notify the Public Works Director at least 14 days' prior to opening a trench at any location to allow the City to exercise its options as provided herein. Section 5. Recovery of Costs. Grantee shall reimburse the City for all costs of one publication of this franchise in a local newspaper, and required legal notices prior to any public hearing regarding this franchise, contemporaneous with its acceptance of this franchise. Grantee shall be subject to all permit and inspection fees associated with activities undertaken through the authority granted in this franchise or under City Code. Grantee shall be subject to all permit and inspection fees associated with activities undertaken through the authority granted in this franchise or under City Code. Section 6. Non-Exclusivity. This franchise is granted upon the express condition that it shall not in any manner prevent the City from granting other or further franchises or permits in any rights- of-way. This and other franchises shall, in no way, prevent or prohibit the City from using any of its rights-of-way or affect its jurisdiction over them or any part of them. Section 7. Non-Interference with Existing Facilities. The City shall have prior and superior right to the use of its rights-of-way and public properties for installation and maintenance of its facilities and other governmental purposes. The City hereby retains full power to make all changes, relocations, repairs, maintenance, establishments, improvements, dedications or vacation of same as the City may deem fit, including the dedication, establishment, maintenance, and improvement of all new rights-of- way, streets, avenues, thoroughfares and other public properties of every type and description. Any and all such removal or replacement shall be at the sole expense of the Grantee, unless RCW 35.99.060 provides otherwise. Should Grantee fail to remove, adjust or relocate its telecommunications facilities by the date established by the Public Works Director's written notice to Grantee and in accordance with RCW 35.99.060, the City may cause and/or effect such removal, adjustment or relocation, and the expense thereof shall be paid by Grantee. The owners of all utilities, public or private, installed in or on such public properties prior to the installation of the telecommunications facilities of the Grantee, shall have preference as to the positioning and location of such utilities so installed with respect to the Grantee. Such preference shall continue in the event of the necessity of relocating or changing the grade of any such public properties. Grantee's telecommunications facilities shall be constructed and maintained in such manner as not to interfere with any public use, or with any other pipes, wires, conduits or other facilities that may have been laid in the rights-of-way by or under the City's authority. If the work done under this franchise damages or interferes in any way with the public use or other facilities,the Grantee shall wholly and at its own expense make such provisions necessary to eliminate the interference or damage to the satisfaction of the Public Works Director. Section 8. Construction Standards. All work authorized and required hereunder shall comply with all generally applicable City Codes and regulations. Grantee shall also comply with all applicable federal and state regulations,laws and practices. Grantee is responsible for the supervision, condition, and quality of the work done,whether it is by itself or by contractors,assigns or agencies. Application of said federal, state, and City Codes and regulations shall be for the purposes of fulfilling the City's public trustee role in administering the primary use and purpose of public properties, and not for relieving the Ordinance 14-00*Noel Communications,Inc.Telecommunications Franchise Page 4 of 14 DRAFT Grantee of any duty, obligation, or responsibility for the competent design, construction, maintenance, and operation of its telecommunications facilities. Grantee is responsible for the supervision, condition, and quality of the work done,whether it is by itself or by contractors, assigns or agencies. If Grantee shall at any time be required, or plan,to excavate trenches in any area covered by this franchise,the Grantee shall afford the City an opportunity to permit other franchisees and utilities to share such excavated trenches, provided that: (1) such joint use shall not unreasonably delay the work of the Grantee; and(2) such joint use shall not adversely affect Grantee's telecommunications facilities or safety thereof. Joint users will be required to contribute to the costs of excavation and filling on a pro-rata basis. Section 9. Protection of Monuments. Grantee shall comply with applicable state laws relating to protection of monuments. Section 10. Tree Trimming. The Grantee shall have the authority to conduct pruning and trimming for access to Grantee's telecommunications facilities in the rights-of-way subject to compliance with the City Code. All such trimming shall be done at the Grantee's sole cost and expense. Section 11. Emergency Response. The Grantee shall, within 30 days of the execution of this franchise, designate one or more responsible people and an emergency 24-hour on-call personnel and the procedures to be followed when responding to an emergency. After being notified of an emergency, Grantee shall cooperate with the City to immediately respond with action to aid in the protection of the health and safety of the public. In the event the Grantee refuses to promptly take the directed action or fails to fully comply with such direction, or if emergency conditions exist which require immediate action to prevent imminent injury or damages to persons or property, the City may take such actions as it believes are necessary to protect persons or property and the Grantee shall be responsible to reimburse the City for its costs and any expenses. Section 12. One-Call System. Pursuant to RCW 19.122, Grantee is responsible for becoming familiar with, and understanding, the provisions of Washington's One-Call statutes. Grantee shall comply with the terms and conditions set forth in the One-Call statutes. Section 13. Safety. All of Grantee's telecommunications facilities in the rights-of-way shall be constructed and maintained in a safe and operational condition. Grantee shall follow all safety codes and other applicable regulations in the installation, operation, and maintenance of the telecommunications facilities. Section 14. Movement of Grantee's Telecommunications Facilities for Others. Whenever any third party shall have obtained permission from the City to use any right—of-way for the purpose of moving any building or other oversized structure, Grantee,upon at least 14 days' written notice from the City, shall move, at the expense of the third party desiring to move the building or structure, any of Grantee's telecommunications facilities that may obstruct the movement thereof; provided, that the path for moving such building or structure is the path of least interference to Grantee's telecommunications facilities, as determined by the City. Upon good cause shown by Grantee,the City may require more than 14 days' notice to Grantee to move its telecommunications facilities. Section 15. Acquiring New Telecommunications Facilities. Upon Grantee's acquisition of any new telecommunications facilities in the rights-of-way,or upon any addition or annexation to the City of any area in which Grantee retains any such telecommunications facilities in the rights-of-way, the Grantee shall submit to the City a written statement describing all telecommunications facilities involved, Ordinance 14-00*Noel Communications,Inc.Telecommunications Franchise Page 5 of 14 DRAFT whether authorized by franchise or any other form of prior right, and specifying the location of all such facilities. Such facilities shall immediately be subject to the terms of this franchise. Section 16. Dangerous Conditions - Authority of City to Abate. Whenever excavation, installation, construction, repair, maintenance, or relocation of telecommunications facilities authorized by this franchise has caused or contributed to a condition that substantially impairs the lateral support of the adjoining right-of-way, road, street or other public place, or endangers the public, adjoining public or private property or street utilities, the City may direct Grantee, at Grantee's sole expense, to take all necessary actions to protect the public and property. The City may require that such action be completed within a prescribed time. In the event that Grantee fails or refuses to promptly take the actions directed by the City, or fails to fully comply with such directions,or if emergency conditions exist which require immediate action,the City may enter upon the property and take such actions as are necessary to protect the public, adjacent public or private property,or street utilities,or to maintain the lateral support thereof, and all other actions deemed by the City to be necessary to preserve the public safety and welfare; and Grantee shall be liable to the City for all costs and expenses thereof to the extent caused by Grantee. Section 17. Hazardous Substances. Grantee shall comply with all applicable federal, state and local laws, statutes, regulations and orders concerning hazardous substances relating to Grantee's telecommunications facilities in the rights—of-way. Grantee agrees to indemnify the City against any claims, costs, and expenses, of any kind,whether direct or indirect, incurred by the City arising out of the release or threat of release of hazardous substances caused by Grantee's ownership or operation of its telecommunications facilities within the City's rights-of-way. Section 18. Environmental. Grantee shall comply with all environmental protection laws, rules, recommendations, and regulations of the United States and the State of Washington, and their various subdivisions and agencies as they presently exist or may hereafter be enacted, promulgated, or amended, and shall indemnify and hold the City harmless from any and all damages arising, or which may arise,or be caused by,or result from the failure of Grantee fully to comply with any such laws,rules, recommendations, or regulations, whether or not Grantee's acts or activities were intentional or unintentional. Grantee shall further indemnify the City against all losses, costs, and expenses (including legal expenses) which the City may incur as a result of the requirement of any government or governmental subdivision or agency to clean and/or remove any pollution caused or permitted by Grantee,whether said requirement is during the term of the franchise or subsequent to its termination. Section 19. Relocation of Telecommunications Facilities. Grantee agrees and covenants, at its sole cost and expense, to protect, support, temporarily disconnect, relocate or remove from any street any of its telecommunications facilities when so required by the City in accordance with the provisions of RCW 35.99.060,provided that Grantee shall in all such cases have the privilege to temporarily bypass, in the authorized portion of the same street upon approval by the City, any section of its telecommunications facilities required to be temporarily disconnected or removed. If the City determines that the project necessitates the relocation of Grantee's then- existing telecommunications facilities,the City shall: a) At least 60 days prior to the commencement of such improvement project, provide Grantee with written notice requiring such relocation; and b) Provide Grantee with copies of pertinent portions of the plans and specifications for such improvement project and a proposed location for Grantee's telecommunications Ordinance 14-00*Noel Communications,Inc.Telecommunications Franchise Page 6 of 14 DRAFT facilities so that Grantee may relocate its telecommunications facilities in other City rights-of-way in order to accommodate such improvement project. c) After receipt of such notice and such plans and specifications, Grantee shall complete relocation of its telecommunications facilities at no charge or expense to the City so as to accommodate the improvement project in accordance with RCW 35.99.060 (2). Grantee may, after receipt of written notice requesting a relocation of its telecommunications facilities, submit to the City written alternatives to such relocation. The City shall evaluate such alternatives and advise Grantee in writing if one or more of the alternatives are suitable to accommodate the work which would otherwise necessitate relocation of the telecommunications facilities. If so requested by the City, Grantee shall submit additional information to assist the City in making such evaluation. The City shall give each alternative proposed by Grantee full and fair consideration. In the event the City ultimately determines that there is no other reasonable alternative, Grantee shall relocate its telecommunications facilities as otherwise provided in this section. The provisions of this section shall in no manner preclude or restrict Grantee from making any arrangements it may deem appropriate when responding to a request for relocation of its telecommunications facilities by any person or entity other than the City, where the telecommunications facilities to be constructed by said person or entity are not or will not become City owned, operated or maintained facilities,provided that such arrangements do not unduly delay a City construction project. If the City or a contractor for the City is delayed at any time in the progress of the work by an act or neglect of the Grantee or those acting for or on behalf of Grantee,then Grantee shall indemnify, defend and hold the City, its officers, officials, employees and volunteers harmless from any and all claims, injuries, damages, losses or suits including attorney fees to the extent arising out of or in connection with such delays, except for delays and damages caused by the City. This provision may not be waived by the parties except in writing. Section 20. Abandonment of Grantee's Telecommunications Facilities. No facility constructed or owned by Grantee may be abandoned without the express written consent of the City, which consent shall not be unreasonably withheld. The City has discretion and authority to direct Grantee to remove a facility abandoned by Grantee (whether or not the entity had permission to abandon the facility) and restore the rights-of-way to their pre-removal condition when: (a) a City project involves digging that will encounter the abandoned facility; (b)the abandoned facility poses a hazard to the health, safety, or welfare of the public; (c) the abandoned facility is 24 inches or less below the surface of the rights-of-way and the City is reconstructing or resurfacing a street over the rights-of-way; or (d) the abandoned facility has collapsed,broke,or otherwise failed. Grantee may delay removal of the abandoned facility until such time as the City commences a construction project in the rights-of-way unless (b)or(d) above applies. When(b)or(d)applies, Grantee shall remove the abandoned facility from the rights-of-way as soon as weather conditions allow, unless the City expressly allows otherwise in writing. The expense of the removal, and restoration of improvements in the rights-of-way that were damaged by the facility or by the removal process, shall be the sole responsibility of the Grantee. If Grantee fails to remove the abandoned facilities in accordance with the above, then the City may incur costs to remove the abandoned facilities and restore the rights-of-way, and is entitled to reimbursement from Grantee for such costs,including reasonable attorney's fees and costs. Ordinance 14-00*Noel Communications,Inc.Telecommunications Franchise Page 7 of 14 DRAFT Section 21. Maps and Records Required. Grantee shall provide the City,at no cost to the City: 1. A route map that depicts the general location of the Grantee's telecommunications facilities placed in the rights-of-way. The route map shall identify telecommunications facilities as aerial or underground and is not required to depict cable types,number of fibers or cables, electronic equipment, and service lines to individual subscribers. The Grantee shall also provide an electronic map of the aerial/underground telecommunications facilities in relation to the right-of-way centerline reference to allow the City to add this information to the City's Geographic Information System ("GIS") program. The information in this subsection shall be delivered to the City by December 1,annually. 2. In connection with the construction of any City project,Grantee shall provide to the City,upon the City's reasonable request,copies of available drawings in use by Grantee showing the location of such telecommunications facilities. Grantee shall field locate its telecommunications facilities in order to facilitate design and planning of City improvement projects. 3. Upon written request of the City, Grantee shall provide the City with the most recent update available of any plan of potential improvements to its telecommunications facilities within the franchise area; provided, however, any such plan so submitted shall be deemed confidential and for informational purposes only, and shall not obligate Grantee to undertake any specific improvements within the franchise area.The information in this subsection shall be delivered to the City by December 1, annually. 4. In addition to the requirements of subsection 1 of this section,the parties agree to periodically share GIS files upon written request, provided Grantee's GIS files are to be used solely by the City for governmental purposes. Any files provided to Grantee shall be restricted to information required for Grantee's engineering needs for construction or maintenance of telecommunications facilities that are the subject of this franchise. Grantee is prohibited from selling any GIS information obtained from City to any third parties. 5. Public Disclosure Act. Grantee acknowledges that information submitted to the City may be subject to inspection and copying under the Washington Public Disclosure Act codified in RCW 42.56. Grantee shall mark as "PROPRIETARY/CONFIDENTIAL" each page or portion thereof of any documentation/information which it submits to the City and which it believes is exempt from public inspection or copying. The City agrees to timely provide the Grantee with a copy of any public disclosure request to inspect or copy documentation/information which the Grantee has provided to the City and marked as "PROPRIETARY/CONFIDENTIAL" prior to allowing any inspection and/or copying as well as provide the Grantee with a time frame, consistent with RCW 42.56.520, to provide the City with its written basis for non-disclosure of the requested documentation/information. In the event the City disagrees with the Grantee's basis for non-disclosure,the City agrees to withhold release of the requested documentation/information in dispute for a reasonable amount of time to allow Grantee an opportunity to file a legal action under RCW 42.56.540. Section 22. Limitation on Future Work. In the event that the City constructs a new street or reconstructs an existing street, the Grantee shall not be permitted to excavate such street except as set forth in the City's then-adopted regulations relating to street cuts and excavations. Section 23. Reservation of Rights by City. The City reserves the right to refuse any request for a permit to extend telecommunications facilities. Any such refusal shall be supported by a written statement from the Public Works Director that extending the telecommunications facilities, as proposed, would interfere with the public health, safety or welfare. Section 24. Remedies to Enforce Compliance. In addition to any other remedy provided Ordinance 14-00*Noel Communications,Inc.Telecommunications Franchise Page 8 of 14 DRAFT herein, the City reserves the right to pursue any remedy to compel or force Grantee and/or its successors and assigns to comply with the terms hereof, and the pursuit of any right or remedy by the City shall not prevent the City from thereafter declaring a forfeiture or revocation for breach of the conditions herein. Section 25. City Ordinances and Regulations. Nothing herein shall be deemed to direct or restrict the City's ability to adopt and enforce all necessary and appropriate ordinances regulating the performance of the conditions of this franchise, including any reasonable ordinances made in the exercise of its police powers in the interest of public safety and for the welfare of the public. The City shall have the authority at all times to control by appropriate regulations the location, elevation, and manner of construction and maintenance of any telecommunications facilities by Grantee, and Grantee shall promptly conform with all such regulations, unless compliance would cause Grantee to violate other requirements of law. In the event of a conflict between the Municipal Code and this franchise,City Code shall control. Section 26. Vacation. The City may vacate any City road, right-of-way or other City property which is subject to rights granted by this franchise in accordance with state and local law. Any relocation of telecommunications facilities resulting from a street vacation shall require a minimum of 180 days' notice as provided in section 37. Section 27. Indemnification. 1. Grantee hereby covenants not to bring suit and agrees to indemnify, defend and hold harmless the City, its officers, employees, agents and representatives from any and all claims, costs, judgments, awards or liability to any person arising from injury, sickness or death of any person or damage to property of any nature whatsoever relating to or arising out of this franchise agreement; except for injuries and damages caused solely by the negligence of the City. This includes but is not limited to injury: a) For which the negligent acts or omissions of Grantee, its agents, servants, officers or employees in performing the activities authorized by a franchise are a proximate cause; b) By virtue of Grantee's exercise of the rights granted herein; c) By virtue of the City permitting Grantee's use of the City's rights-of-ways or other public property; d) Based upon the City's inspection or lack of inspection of work performed by Grantee, its agents and servants, officers or employees in connection with work authorized on the facility or property over which the City has control, pursuant to a franchise or pursuant to any other permit or approval issued in connection with a franchise; e) Arising as a result of the negligent acts or omissions of Grantee, its agents, servants, officers or employees in barricading, instituting trench safety systems or providing other adequate warnings of any excavation, construction or work upon the facility, in any right-of-way, or other public place in performance of work or services permitted under a franchise; or Ordinance 14-00*Noel Communications,Inc.Telecommunications Franchise Page 9 of 14 DRAFT f) Based upon radio frequency emissions or radiation emitted from Grantee's equipment located upon the facility,regardless of whether Grantee's equipment complies with applicable federal statutes and/or FCC regulations related thereto. 2. Grantee's indemnification obligations pursuant to subsection 1 of this section shall include assuming liability for actions brought by Grantee's own employees and the employees of Grantee's agents, representatives, contractors and subcontractors even though Grantee might be immune under RCW Title 51 from direct suit brought by such an employee. It is expressly agreed and understood that this assumption of potential liability for actions brought by the aforementioned employees is limited solely to claims against the City arising by virtue of Grantee's exercise of the rights set forth in a franchise. The obligations of Grantee under this subsection have been mutually negotiated by the parties, and Grantee acknowledges that the City would not enter into a franchise without Grantee's waiver. To the extent required to provide this indemnification and this indemnification only, Grantee waives its immunity under RCW Title 51. 3. Inspection or acceptance by the City of any work performed by Grantee at the time of completion of construction shall not be grounds for avoidance of any of these covenants of indemnification. Provided, that Grantee has been given prompt written notice by the City of any such claim, said indemnification obligations shall extend to claims which are not reduced to a suit and any claims which may be compromised prior to the culmination of any litigation or the institution of any litigation. The City has the right to defend or participate in the defense of any such claim, and has the right to approve any settlement or other compromise of any such claim. 4. In the event that Grantee refuses the tender of defense in any suit or any claim, said tender having been made pursuant to this section, and said refusal is subsequently determined by a court having jurisdiction (or such other tribunal that the parties shall agree to decide the matter),to have been a wrongful refusal on the part of Grantee, then Grantee shall pay all of the City's costs for defense of the action, including all reasonable expert witness fees, reasonable attorney fees, the reasonable costs of the City of recovering under this subsection. 5. Grantee's duty to defend, indemnify and hold harmless City against liability for damages caused by the concurrent negligence of (a) City or City's agents, employees, or contractors, and (b) Grantee or Grantee's agents, employees, or contractors, shall apply only to the extent of the negligence of Grantee or Grantee's agents,employees,or contractors. In the event that a court of competent jurisdiction determines that a franchise is subject to the provisions of RCW 4.24.115, the parties agree that the indemnity provisions hereunder shall be deemed amended to conform to said statute and liability shall be allocated as provided herein. 6. Notwithstanding any other provisions of this section, Grantee assumes the risk of damage to its telecommunication facilities located in the rights-of-way and upon City-owned property from activities conducted by the City, its officers, agents, employees and contractors, except to the extent any such damage or destruction is caused by or arises from any willful or malicious action or gross negligence on the part of the City, its officers, agents, employees or contractors. Grantee releases and waives any and all such claims against the City, its officers, agents, employees or contractors. Grantee further agrees to indemnify, hold harmless and defend the City against any claims for damages, including, but not limited to,business interruption damages and lost profits,brought by or under users of Grantee's facilities as the result of any interruption of service due to damage or destruction of Grantee's facilities caused by or arising out of activities conducted by the City, its officers, agents, employees or contractors, except to the extent any such damage or destruction is caused by or arises from the sole negligence or any willful or malicious actions on the part of the City,its officers, agents,employees or contractors. Ordinance 14-00*Noel Communications,Inc.Telecommunications Franchise Page 10 of 14 DRAFT 7. The provisions of this section shall survive the expiration, revocation or termination of this franchise. Section 28. Insurance. Grantee shall procure and maintain for the duration of the franchise, insurance against claims for injuries to persons or damages to property which may arise from or in connection with the exercise of the rights, privileges and authority granted hereunder to Grantee, its agents,representatives or employees. Applicant's maintenance of insurance as required by this franchise shall not be construed to limit the liability of the Grantee to the coverage provided by such insurance, or otherwise limit the City's recourse to any remedy available at law or in equity. 1. Automobile Liability insurance with limits no less than $1,000,000 Combined Single Limit per accident for bodily injury and property damage. This insurance shall cover all owned, non-owned, hired or leased vehicles used in relation to this franchise. Coverage shall be written on Insurance Services Office (ISO) form CA 00 01 or a substitute form providing equivalent liability coverage. If necessary, the policy shall be endorsed to provide contractual liability coverage; and 2. Commercial General Liability insurance shall be written on Insurance Services Office (ISO) occurrence form CG 00 01, or a substitute form providing equivalent liability coverage acceptable to the City, and shall cover products liability. The City shall be named as an insured under the Applicant's Commercial General Liability insurance policy using ISO Additional Insured-State or Political Subdivisions-Permits CG 20 12 or a substitute endorsement acceptable to the City providing equivalent coverage. Coverage shall be written on an occurrence basis with limits no less than $1,000,000 Combined Single Limit per occurrence and $2,000,000 general aggregate for personal injury,bodily injury and property damage. Coverage shall include but not be limited to: blanket contractual; products/completed operations; broad form property; explosion, collapse and underground(XCU); and Employer's Liability. The insurance policies are to contain, or be endorsed to contain, the following provisions for Commercial General Liability insurance: 1. The Grantee's insurance coverage shall be primary insurance with respect to the City as outlined in the Indemnification section of this franchise. Any insurance, self-insurance, or insurance pool coverage maintained by the City shall be in excess of the Grantee's insurance and shall not contribute with it. 2. The Grantee's insurance shall be endorsed to state that coverage shall not be cancelled, except after 30 days' prior written notice has been given to the City. Insurance is to be placed with insurers with a current A.M.Best rating of not less than A:VII. Grantee shall furnish the City with original certificates and a copy of any amendatory endorsements,including the additional insured endorsement,evidencing the insurance requirements of the Grantee prior to the adoption of this Ordinance. Any failure to comply with the reporting provisions of the policies required herein shall not affect coverage provided to the City,its officers,officials,employees or volunteers. Ordinance 14-00*Noel Communications,Inc.Telecommunications Franchise Page 11 of 14 DRAFT Section 29. Performance Bond Relating to Construction Activity. Before undertaking any of the work, installation, improvements, construction, repair, relocation or maintenance authorized by this franchise, Grantee, or any parties Grantee contracts with to perform labor in the performance of this franchise, shall,upon the request of the City, furnish a bond executed by Grantee or Grantee's contractors and a corporate surety authorized to operate a surety business in the State of Washington, in such sum as may be set and approved by the City, not to exceed $25,000, as sufficient to ensure performance of Grantee's obligations under this franchise. The bond shall be conditioned so that Grantee shall observe all the covenants, terms and conditions and shall faithfully perform all of the obligations of this franchise, and to repair or replace any defective work or materials discovered in the City's road, streets,or property. Said bond shall remain in effect for the life of this franchise. In the event Grantee proposes to construct a project for which the above-mentioned bond would not ensure performance of Grantee's obligations under this franchise, the City is entitled to require such larger bond as may be appropriate under the circumstances. Section 30. Modification. The City and Grantee hereby reserve the right to alter, amend or modify the terms and conditions of this franchise upon written agreement of both parties to such alteration, amendment or modification. Section 31. Forfeiture and Revocation. If Grantee willfully violates or fails to comply with any of the provisions of this franchise, or through willful or unreasonable negligence fails to heed or comply with any notice given Grantee by the City under the provisions of this franchise, and an adequate opportunity to cure the violation or non-compliance has been given in writing to Grantee, then Grantee shall, at the election of the City, forfeit all rights conferred hereunder and this franchise may be revoked or annulled by the City after a hearing held upon reasonable notice to Grantee. The City may elect,in lieu of the above and without any prejudice to any of its other legal rights and remedies, to obtain an order from the Spokane County Superior Court compelling Grantee to comply with the provisions of this franchise and to recover damages and costs incurred by the City by reason of Grantee's failure to comply. Section 32. Assignment. This franchise may not be assigned or transferred without the written approval of the City, except that Grantee can assign this franchise without approval of, but upon notice to the City to, any parent, affiliate or subsidiary of Grantee or to any entity that acquires all or substantially all the assets or equity of Grantee,by merger, sale,consolidation or otherwise. Section 33. Acceptance. Not later than 60 days after passage of this Ordinance, the Grantee must accept the franchise herein by filing with the City Clerk an unconditional written acceptance thereof. Failure of Grantee to so accept this franchise within said period of time shall be deemed a rejection thereof by Grantee, and the rights and privileges herein granted shall, after the expiration of the 60-day period, absolutely cease,unless the time period is extended by ordinance duly passed for that purpose. Section 34. Survival. All of the provisions, conditions and requirements of sections: 5, 6, 7, 13, 16, 17, 18, 19, 20, 27, 28, 29, 37, 38 and 39 of this franchise shall be in addition to any and all other obligations and liabilities Grantee may have to the City at common law, by statute, by ordinance, or by contract, and shall survive termination of this franchise, and any renewals or extensions hereof. All of the provisions, conditions, regulations and requirements contained in this franchise shall further be binding upon the heirs, successors, executors, administrators, legal representatives and assigns of Grantee and City and all privileges, as well as all obligations and liabilities of Grantee shall inure to their respective heirs, successors and assigns equally as if they were specifically mentioned herein. Section 35. Severability. If any section, sentence, clause or phrase of this Ordinance should be held to be invalid or unconstitutional by a court of competent jurisdiction, such invalidity or unconstitutionality shall not affect the validity or constitutionality of any other section, sentence,clause or Ordinance 14-00*Noel Communications,Inc.Telecommunications Franchise Page 12 of 14 DRAFT phrase of this Ordinance. In the event that any of the provisions of the franchise are held to be invalid by a court of competent jurisdiction, the City reserves the right to reconsider the grant of the franchise and may amend, repeal, add, replace or modify any other provision of the franchise, or may terminate the franchise. Section 36. Renewal. Application for extension or renewal of the term of this franchise shall be made no later than 180 days of the expiration thereof. In the event the time period granted by this franchise expires without being renewed by the City, the terms and conditions hereof shall continue in effect until this franchise is either renewed or terminated by the City. Section 37. Notice. Any notice or information required or permitted to be given by or to the parties under this franchise may be sent to the following addresses unless otherwise specified,in writing: The City: City of Spokane Valley Attn: City Clerk 11707 East Sprague Avenue, Suite 106 Spokane Valley,WA 99206 Grantee: Noel Communications,Inc. Attn: Contracts Manager 901 E. Pitcher Street Yakima,WA 98901 Phone: (509) 575-4780 Facsimile: (509)457-5008 Section 38. Choice of Law. Any litigation between the City and Grantee arising under or regarding this franchise shall occur, if in the state courts, in the Spokane County Superior Court, and if in the federal courts,in the United States District Court for the Eastern District of Washington. Section 39. Non-Waiver. The City shall be vested with the power and authority to reasonably regulate the exercise of the privileges permitted by this franchise in the public interest. Grantee shall not be relieved of its obligations to comply with any of the provisions of this franchise by reason of any failure of the City to enforce prompt compliance,nor does the City waive or limit any of its rights under this franchise by reason of such failure or neglect. Section 40. Entire Agreement. This franchise constitutes the entire understanding and agreement between the parties as to the subject matter herein and no other agreements or understandings, written or otherwise, shall be binding upon the parties upon execution and acceptance hereof. This franchise shall also supersede and cancel any previous right or claim of Grantee to occupy the City roads as herein described. Section 41. Effective Date. This Ordinance shall be in full force and effect five days after publication of the Ordinance or a summary thereof occurs in the official newspaper of the City of Spokane Valley as provided by law. PASSED by the City Council this day of ,2014. Mayor, Dean Grafos Ordinance 14-00*Noel Communications,Inc.Telecommunications Franchise Page 13 of 14 DRAFT ATTEST: Christine Bainbridge,City Clerk Approved as to Form: Office of the City Attorney Date of Publication: Effective Date: Accepted by Noel Communications,Inc.: By: The Grantee, Noel Communications, Inc., for itself, and for its successors and assigns, does accept all of the terms and conditions of the foregoing franchise. IN WITNESS WHEREOF, has signed this day of_ 2014. Subscribed and sworn before me this day of ,2014. Notary Public in and for the State of residing in My commission expires Ordinance 14-00*Noel Communications,Inc.Telecommunications Franchise Page 14 of 14