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2014, 07-15 Study Session AGENDA CITY OF SPOKANE VALLEY CITY COUNCIL WORKSHEET STUDY SESSION Tuesday, July 15,2014 6:00 p.m. CITY HALL COUNCIL CHAMBERS 11707 East Sprague Avenue,First Floor (Please Silence Your Cell Phones During the Meeting) DISCUSSION LEADER SUBJECT/ACTIVITY GOAL ROLL CALL: ACTION ITEM: 1. Mark Calhoun,Erik Lamb Second Reading Proposed Ordinance Approve Ordinance #14-007,2003 Bond Refunding [public comment] 2. Erik Lamb First Reading Proposed Ordinance Advance Ordinance to #14-008,Marijuana Regulations Second Reading [public comment] 3. Erik Lamb, Gabe Gallinger Proposed Resolution#14-008 Opening Approve Resolution McMillan Road [public comment] 4. Eric Guth Motion Consideration: Interlocal Approve Interlocal Agreement with Spokane Transit Agreement Authority for Fiber Use [public comment] NON-ACTION ITEMS 5. Steve Worley Transportation Improvement Board Discussion/Information Call for Projects 6. Eric Guth Wa. State Dept. of Transportation Discussion/Information Traffic Operations&Maintenance Agreement 7.Micki Harnois Proposed Code Text Amendment, Setbacks Discussion/Information 8. Cary Driskell Proposed Noel Telecommunication Discussion/Information Franchise Agreement 9. Erik Lamb Public Facilities District Amended Interlocal Discussion/Information 10. Morgan Koudelka Traffic School Contract Discussion/Information 11. Eric Guth Appleway Trail Update Discussion/Information 12.Mayor Grafos Advance Agenda Discussion/Information 13. Information Only (will not be reported or discussed): (a)Draft Solid Waste Management Plan (b):Appleway Landscaping Project 14.Mayor Grafos Council Comments Discussion/Information 15.Mike Jackson City Manager Comments Discussion/Information ADJOURN Study Session Agenda,July 15,2014 CITY OF SPOKANE VALLEY Request for Council Action Meeting Date: July 15, 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: Second 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, and at the July 8, 2014 Council meeting, Council passed a motion to advance Ordinance #14-007 to a second reading. 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, 07-1511tem 1 RCA Ord 14-007 2003 LTGO 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, 07-1511tem 1 RCA Ord 14-007 2003 LTGO 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: I move to Approve Ordinance #14-007 as drafted 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, 07-1511tem 1 RCA Ord 14-007 2003 LTGO 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 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 July 15, 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 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 the Mayor or 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 so signed or attested shall have been authenticated or delivered by the Bond Registrar, or issued 7 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 or the Mayor and attested to by 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 15th 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 [ ], 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- , 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 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 1 1 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, enacted by the City Council of the City of Spokane Valley, Washington, on July , 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 I —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 are 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 2.01 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 lawfully 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 A2ent 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: mcalhoun@spokanevalley.org 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@orrick.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@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 CUS1P 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 849063AS1 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: $ EXHIIBIT 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 I, 2019 395,000 5.00 849063 AR3 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 CUSIP number, nor is any representation made to its correctness on the bond or as indicated in any redemption notice. EXHIBIT C—NOTICE OF DEFEASANCE OHSUSA7758213254,1 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. 14-007 (the "Ordinance") enacted by the City Council of the City on July _, 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 MSRB 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:I/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. (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. 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 historical financial information and operating data of the City: (i) Principal amount of general obligation bonds outstanding as of the end of the applicable fiscal year; (ii) Assessed valuation for the applicable fiscal year; B-2 (iii) Ad valorem tax levy amounts and rates for the applicable fiscal year; and (iv) Property tax collections for the applicable tax year. 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. Non-payment related defaults, if material; 3. Unscheduled draws on debt service reserves reflecting financial difficulties; 4. Unscheduled draws on credit enhancements reflecting financial difficulties; 5. Substitution of credit or liquidity providers, or their failure to perform; 6. 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) or 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; 7. Modifications to rights of Bond holders, if material; 8. Bond calls, if material, and tender offers; 9. Defeasances; 10. Release, substitution, or sale of property securing repayment of the Bonds; 11. Rating changes; 12. Bankruptcy, insolvency, receivership or similar event of the obligated person; 13. 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 B-3 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, if material; or 14. Appointment of a successor or additional trustee or the change of name of a trustee, if material. Note: for the purposes of the event identified in subparagraph (12), 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 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) Upon the occurrence of a Listed Event described in Section 5(a), the City shall within ten business days of occurrence file a notice of such occurrence with the MSRB. 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 Iegal 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. 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; 13-4 (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. 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. B-5 Date: CITY OF SPOKANE VALLEY, WASHINGTON 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 .] Dated: CITY OF SPOKANE VALLEY, WASHINGTON By: [to be signed only if filed] OHSUSA:758256771 4 B-7 PRELIMINARY OFFICIAL STATEMENT dated July , 2014 (Draft dated 07/09/14) 4 NEW ISSUE BANK QUALIFIED BOOK-ENTRY MOODY'S RATING: "Applied For" (See"RATING"herein.) • In the opinion of Orrick, Herrington et Sutclfe LLP, Bond Counsel, based upon an analysis of existing laws, regulations, rulings and court t, 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 c opinion of Bond Counsel, 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,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 MATTERS"herein.) 57,255,000' CITY OF SPOKANE VALLEY,WASHINGTON o 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 Cay Bonds mature on December 1 in each of the years and amounts set forth on the inside cover and will 6 bear interest from their Date of Delivery to their respective maturities, or date of prior redemption, at the g � • :. .L 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 e ` the Bonds, Individual purchases of Bonds will be made in the principal amount of$5,000, or integral a � . multiples thereof The purchasers will not receive certificates representing their interest in the Bonds, as It. 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 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.) The 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 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. The full faith, credit and resources of the City are irrevocably pledged for the annual levy and 24. 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 c the City's outstanding Limited Tax General Obligation Bonds, 2003 (the"2003 LTGO Bonds)maturing in theyears 2014 through2023, 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 redemption prior to their stated maturities. (See "THE BONDS — Redemption and Purchase," "- � Authorization," "- Purpose and Use of Proceeds" "SECURITY 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 legality of the Bonds by Orrick, Herrington & Sutcliffe LLP, Portland, Oregon, Bond Counsel. The C:"-;,, ° Bonds, in book-entryform, are expected to be available through the facilities of DTC for delivery ' p g by I Fast Automated Securities Transfer on or about August 12, 2014 (the "Date of Delivery"). C Cid C •G This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must read the entire official statement to obtain information essential to making an informed investment decision. Foy F` ti y *Preliminary, subject to change. D.A. DAVIDSON & CO. 57,255,000' 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 '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 5th 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 'k 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. iii 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 part 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, in 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 I5c2-12. 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- Iooking 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 8 DEBT and FINANCIAL INFORMATION 9 Statutory Debt Limitations 9 Debt Summary 10 General Obligation Debt Ratios' 10 Future Financing 10 Direct and Estimated Overlapping General Obligation Debt 11 Debt Limitation Calculation 12 Schedule of General Obligation Bond Debt Service 13 Assessed Valuation 14 Ad Valorem Tax Levies 14 Tax Collections 15 Interlocal Agreement with Spokane Public Facilities District 15 Consolidated Levy Rates 18 Major Taxpayers 19 Auditing of City Finances 19 Historical and Budgeted General Fund Operating Results 20 Budgetary Process 22 Description of Other Taxes 22 Authorized Investments 23 City Investments 24 THE CITY 24 Form of Local Government 25 City Administration 25 Summary of Accounting Policies 25 City Employment 26 Employee Relations 26 Pension Plans 27 Other Post-Employment Benefits 29 Risk Management 31 v INITIATIVE AND REFERENDUM 32 APPROVAL OF BOND COUNSEL 32 TAX MATTERS 32 NO LITIGATION CONCERNING THE BONDS 34 FINANCIAL ADVISOR 34 UNDERWRITING 35 RATING 35 CONFLICTS OF INTEREST 35 COMMITMENT TO PROVIDE CONTINUING DISCLOSURE 35 ADDITIONAL INFORMATION AND MISCELLANEOUS 36 PRELIMINARY OFFICIAL STATEMENT 36 DISCLOSURE STATEMENT 36 APPROVAL OF OFFICIAL STATEMENT 37 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 case 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 Bond Registrar no later than two (2) business days prior to the scheduled optional redemption date. The Bond Registrar shall give notice of such rescission as soon thereafter as practicable, and to the same affected registered owners, as notice of such optional redemption was given. 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 39.53.010 RCW, as now or hereafter amended) maturing at such time or times and bearing interest to be earned thereon in amounts (together with such money, if necessary) sufficient to redeem and retire part 2 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 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 39.53.010 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, :` ;`' 39.36, 39.46 and 39.53 RCW and pursuant to Ordinance No. 14- 007 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 Bonds' Total Application of Funds $ 'Amounts will be included in the final Official Statement. 2 Includes Band 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 Iimited tax general obligation debt, such as the Bonds, is subject to the limitations described below. Inforiiation 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 Rate 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 $5.90 per $1,000. If aggregate regular property tax levies exceed either limitation,junior taxing district levies within the area 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 100% 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 full 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. Excess property taxes are not subject to constitutional or statutory limitation as to rate or amount, but must be authorized by a 60% approving vote meeting minimum voter turnout requirements (expect for certain levies by school districts, which require only a simple majority approval). Excess property tax levies niay be made (1) by any taxing district for the repayment of voter- approved general obligation bonds issued for capital purposes, excluding replacement of equipment; (2) by any taxing district for one year for any governmental purpose; or (3) without a vote when necessary to prevent impairment of an obligation of contract, if ordered by a court of last resort. Excess levies for the repayment of voter-approved general obligation bonds must meet a minimum voter turnout of 40% of the number who voted at the last November general election. 7 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 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 I.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 lst 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. Shafp, 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 Hurst 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 8 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. 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 unlawfiil 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 b0% 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. Non-Voted Debt. The City may, without a vote of the electors, incur general obligation indebtedness in an amount not to exceed 1.50% 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. 9 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.) 2014 Population Estimate' 92,050 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 $7,25 5,000 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&non-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. General Obligation Debt Ratios' Assessed Valuation Per Capita $77,881 Direct Debt Per Capita $79 Direct and Overlapping Debt Per Capita $1,028 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. 10 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 Taxinntity 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. 11 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 Funds' 62,101 Remaining Capacity for Non-Voted General Purposes 5100,341.966 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 Funds2 62,101 Remaining Capacity for Total General Debt Purposes $172,031,877 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 $119,224,776 Percent of Utility Debt Capacity Remaining 100.00% IIL 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% ' 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. 12 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. 13 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. 14 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 $5,162,9252 46,6% $5,162,9252 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 The Cit , the District, and the County entered in to an interlocal Agreement , dated as of August 19, 2003 Os 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 meeting/conference 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 owner'sltil1��" nterests, if any, in the Mirabeau Point Project shall terminate and revert to the City upon the termination ,of the District's obligation to make Mirabeau 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. 15 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 Received Amount Year by the City from the District' Budgeted to be Received' 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 'The amount of the Mirabeau Point Payments are expected to decrease due to the refunding of the 2003 LTGO Bonds by the Bonds as a result of the benefit of savings in total debt service requirements. The Mirabeau Point Payments are to correspond to the amount of the debt service payments on the Bonds in the same manner the Mirabeau Pont Payments have historically corresponded to the debt service payments on the 2003 LTGO Bonds pursuant to the Interlocal Agreement. Source: The CO). 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 I, 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. 16 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 from funds available from future General Fund operations. (The remainder of this page intentionally left blank.) 17 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 County2 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$3.60 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. 2A county may increase its levy from 51.801$1,000 to a rate not to exceed S2.475/$1,000 for general county purposes if(a) the total levies for both the county and any road district within the county do not exceed $4.05/51,000 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 $3.375 per $1,000 of taxable property in the city and RCW 41.16.060 allows an additional 50.225 per $1,000 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. 4 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 levies. Source: Spokane County Assessor's Office. 18 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. 19 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 1,25IA15 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 S32,469,477 $34,232,552 Revs. Over/(Under)Exp. $8,550,566 $3,522,99I $3,543,133 $2,051,298 $3,366,099 $2,849,403 Net Total Other Sources(Uses) $(605,467) $(588,737) $(690,139) $(1,375,296) $(2,847,603) $(8,112,107)2 NET CHANGE IN FUND BALANCE $7,945,099 $2,934,254 $2,852,995 $676,001 $518,496 S(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 I 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 for fiscal year 2013. 20 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 $11,049,400 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 1,799,1.00 1,741,600 Transfers-out 319,000 325,000 TOTAL RECURRING EXPENDITURES $35,312,674 $36,823,010 NET RECURRING REVENUES OVER/(UNDER)EXPENDITURES $(30,974) $7,790 NON-RECURRING REVENUES: Transfers-in $50,787 SO 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 OVER/(UNDER)EXPENDITURES $(77958,169)2 $(586,650) NET CHANGE IN FUND BALANCE $(7,989,143) $(578,860) FUND BALANCE,JAN. 1' $34,593,549 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. 21 Budgetary Process The City adopts annual appropriated budgets for the general fund, capital funds, debt service funds, 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 1 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 the years 2009 through March 31, 2014. Sales & Criminal Public Gambling Year Use Tax Justice Tax Safety Tax Tax Total 2014' $4,050,519 $334,519 $188,706 $142,611 $4,716,355 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 1 Through March 31,2014. 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 niay 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. 22 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 atnounts 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 Iocal improvement district which are 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 23 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 finds 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 Iaw 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 2014 population of 92,050 ranking the City as the 10th 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. 24 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 12/31115 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. 25 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 fund 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 current 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 26 Pension Plans Substantially all of the City employees are 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 PIan 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. 27 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. 2 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 levels 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. GSA'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. 28 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 S 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 — OPEB. 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.) 29 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 enolIed 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. 30 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 interfund 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. 31 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 32 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 33 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 Obama 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. 34 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 31, 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 15c2-12 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 frnancial statements fiscal 35 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. 36 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: Mike Jackson, City Manager 37 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 2014 population of 212,300. The population of the County is estimated to be 484,500 in 2014. 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 2014 92,050 484,500 6,968,170 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 cis 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 1,585,010,451 6,755,693,930 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-Family 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 4,363 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 20I1 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 21I,673 9.9 9.9 9.6 • Preluninaly; 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.dtcc.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. S. 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 15,2014 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: First Reading Proposed Ordinance No. 14-008, adding defmitions for recreational marijuana uses, adopting zoning buffers for undeveloped school, library and certain-City property for recreational marijuana uses, and repealing interim marijuana regulations. GOVERNING LEGISLATION: RCW 36.70A.106, SVMC 17.80.150 and 19.30.040; RCW 69.50 PREVIOUS COUNCIL ACTION TAKEN: City Council heard an administrative report the proposed amendments on July 8,2014. Numerous other presentations regarding marijuana updates. BACKGROUND: The proposal is to amend Spokane Valley Municipal Code ("SVMC") 19.120 and Appendix A to provide 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 proposed amendments largely track the previously adopted interim regulations. However, based on comments received from Council during the administrative report, proposed SVMC 19.85 will now also create a 1,000 foot buffer between state-licensed production, processing, and retail sales of recreational marijuana and certain undeveloped City property, City Hall, and CenterPlace. The buffer to undeveloped City property will prevent nonconforming uses from establishing near undeveloped property owned or leased by the City for various municipal purposes, including a future City Hall or future park property,prior to development of such property. Additionally, undeveloped stormwater facilities and rights-of-way are not buffered as those types of uses do not create the same need for buffering. Finally, since Council has previously discussed and allowed indoor production and bagging and labeling of dried useable marijuana (no edible products or concentrates) within 1,000 feet of the Appleway Trail, those uses are continued to be allowed as part of the new additions to the amendments. Proposed Ordinance 14-008 also repeals the interim marijuana regulations previously adopted by City Council. 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. One issue discussed during the administrative report was the State's limitations on marijuana-infused products versus THC(the active hallucinogen)-infused products. After further review of applicable State law and discussions with the LCB, current laws and regulations do govern both marijuana-infused products and THC-infused products. In fact, the term "THC-infused" is somewhat of a misnomer because the oil,butter, or other compound that contains THC is in fact a marijuana extract that is derived as a result of the extraction process. Additionally,whether marijuana-infused or "THC-infused", the end product is an infused edible product containing THC. The extraction process and all infused products are governed by strict regulations under RCW 69.50 and WAC 314-55. For extraction, a processor must receive certification for the actual device and extraction process (such as pressurized butane or other processes) prior to receiving their license. Additionally, infused edible products (whether using marijuana leaves or THC extract) must receive prior approval by the LCB, must be prepared in an approved kitchen, must be scored to show individual servings, cannot require hot or cold storage, and cannot be appealing to children. Further, all edible infused products are limited to ten total servings of THC,with each serving limited to a maximum of ten milligrams active THC. Thus,whether infused with marijuana leaves or extract (such as oil or butter), the maximum THC is 100 milligrams per infused product. 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. As proposed,the amendments will supplement the buffers provided under State law to further limit access by minors and to prevent later nonconforming marijuana uses. 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. The staff report and Planning Commission recommendations were presented to the City Council in an Administrative Report on July 8,2014. OPTIONS: Move to advance to a second reading at Council's July 22 meeting; take other action deemed appropriate. RECOMMENDED ACTION OR MOTION: Move to advance Ordinance No. 14-008, adopting definitions for recreational marijuana uses, adopting zoning buffers for undeveloped school, library and certain-City property for recreational marijuana uses, and repealing interim marijuana regulations, to a second reading at Council's July 22 meeting. BUDGET/FINANCIAL IMPACTS: N/A STAFF CONTACT: Christina Janssen,Planner; Erik Lamb,Deputy City Attorney ATTACHMENTS: A. Proposed Ordinance No. 14-008 B. Staff Report to Planning Commission C. Planning Commission Findings of Fact D. Planning Commission Minutes from June 26 public hearing and deliberations DRAFT CITY OF SPOKANE VALLEY SPOKANE COUNTY,WASHINGTON ORDINANCE NO. 14-008 AN ORDINANCE OF THE CITY OF SPOKANE VALLEY, SPOKANE COUNTY, WASHINGTON, ADOPTING AMENDMENTS TO SPOKANE VALLEY MUNICIPAL CODE APPENDIX A, SPOKANE VALLEY MUNICIPAL CODE SECTION 19.120.010, AND ADOPTING CHAPTER 19.85 OF THE SPOKANE VALLEY MUNICIPAL CODE TO ESTABLISH ZONING FOR RECREATIONAL MARIJUANA USES, TO ESTABLISH BUFFER ZONES BETWEEN RECREATIONAL MARIJUANA PRODUCTION, PROCESSING, AND RETAIL USES AND UNDEVELOPED SCHOOL, LIBRARY AND CERTAIN CITY PROPERTIES, AS WELL AS TRAILS, REPEALING INTERIM DEVELOPMENT REGULATIONS ADOPTED PURSUANT TO ORDINANCES 14-002 AND 14-004,AND OTHER MATTERS RELATING THERETO. WHEREAS, 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; and WHEREAS,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; and WHEREAS, pursuant to the rules established in chapter 314-55 WAC, the LCB opened a 30-day application period and is currently processing license applications received for marijuana producer, processor, and retailer licenses; and WHEREAS, pursuant to RCW 36.70A.390, on February 11, 2014, City Council adopted Ordinance No. 14-002 adopting interim development regulations adopting fmdings, adopting definitions for recreational marijuana production, processing, and retail sales, adopting zoning for such marijuana uses, setting buffers between recreational marijuana uses and the Centennial Trail, Appleway Trail, and vacant school and library property, setting a public hearing, and setting a term for such interim regulations of six months; and WHEREAS, pursuant to RCW 36.70A.390, on March 25, 2014, City Council conducted a public hearing on the interim development regulations; and WHEREAS, pursuant to RCW 36.70A.390, on April 22, 2014, City Council adopted Ordinance No. 14-004 adopting findings for the interim development regulations and adopting amendments to the interim development regulations; and WHEREAS, on May 20, 2014, the Washington State Department of Commerce was notified pursuant to RCW 36.70A.106,providing a 60-day notice of intent to adopt amendments to Spokane Valley development regulations; and WHEREAS,on June 12,2014,the Planning Commission held a study session; and Ordinance 14-008 Page 1 of 9 DRAFT WHEREAS, on June 6, 2014, and June 13, 2014, notice of the Planning Commission public hearing was published in the Valley News Herald; and WHEREAS, on June 26, 2014, the Planning Commission held a public hearing, received evidence, information, public testimony, and a staff report with a recommendation followed by deliberations and provided a recommendation; and WHEREAS, on July 8,2014, City Council reviewed the proposed amendments; and WHEREAS, on July 15,2014, City Council considered a first ordinance reading to adopt the proposed amendments; and WHEREAS, on July 22, 2014, City Council considered a second ordinance reading to adopt the proposed amendments; and WHEREAS, the amendments set forth below are consistent with the goals and policies of the City's Comprehensive Plan; and WHEREAS,the amendments below bear a substantial relation to the public health, safety, and welfare and protection of the environment. NOW,THEREFORE,the City Council of the City of Spokane Valley ordains as follows: Section 1. Findings and Conclusions. The City Council acknowledges that the Planning Commission conducted appropriate investigation and study, held a public hearing on the proposed amendments and recommends approval of the amendments. The City Council has read and considered the Planning Commission's findings. The City Council hereby makes and adopts the following findings and conclusions: A. Growth Management Act Policies — The Washington State Growth Management Act (GMA) provides that each city shall adopt a comprehensive land use plan and development regulations that are consistent with and implement the comprehensive plan. B. Compliance with Spokane Valley Municipal Code (SVMC) 17.80.150(F): 1. The proposed amendments are consistent with the applicable provisions of the Comprehensive Plan: 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. Ordinance 14-008 Page 2 of 9 DRAFT 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 amendments bear a substantial relation to the public health, safety, welfare, and protection of the environment: a. 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. b. 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. c. 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 I- 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." d. 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). e. 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. f. 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. Ordinance 14-008 Page 3 of 9 DRAFT g. 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 adopting the proposed amendments will be consistent with the identified federal enforcement priorities and especially in preventing the distribution of marijuana to minors. h. Allowing marijuana uses near undeveloped school, library, and certain City- owned properties may create nonconforming uses when those properties are developed in the future that would be inconsistent with the identified federal enforcement priorities. i. 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 land uses within the City. j. On January 16, 2014,the Washington Attorney General issued Attorney General Opinion No. 2, in which he stated that "[a]lthough Initiative 502 (I-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." k. I-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. 1. 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. m. The proposed amendments 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. Section 2. Amendment. Appendix A of the SVMC is hereby amended with the following additions,to be added alphabetically: Manufacturing,petroleum and coal products: The manufacture of asphalt paving,roofing and coating and petroleum refining. Marijuana processing: Processing marijuana into useable marijuana,marijuana-infused products, and marijuana concentrates,packaging and labeling useable marijuana,marijuana-infused products, and marijuana concentrates for sale in retail outlets, and sale of useable marijuana,marijuana-infused products,and marijuana concentrates 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,marijuana-infused products,and marijuana concentrates 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." Ordinance 14-008 Page 4 of 9 DRAFT Market, outdoor: A temporary or seasonal location where produce and agricultural products including,but not limited to,pumpkins, Christmas trees and firewood, as well as crafts and other items are offered for sale to the public. Section 3. Amendment. SVMC 19.120.050 is hereby amended with the following additions: Permitted Use Matrix Residential Zone Commercial and Industrial Zone Use Category/Type Supplemental Conditions Districts Districts R- R-R-R-MF-MF- I- I- MUC CMU GO 0 NC C RCP/OS 1 2 3 4 1 2 1 2 Agriculture and Animal Animal processing/handling Animal raising and/or SSSS S S S S SVMC 19.40.150. Keeping of keeping swine is prohibited Animal shelter S P P SVMC 19.60.080(6)(6) Beekeeping, commercial Beekeeping, hobby S S S SVMC 19.40.150(C) Produce may be sold Community garden SSSS S S S S S pursuant to RCW 36.71.090 as adopted or amended Greenhouse/nursery, P P P P commercial Kennel S S S S S P P See zoning districts for conditions Marijuana production S S S S Chapter 19.85 SVMC Orchard, tree farming, P P commercial *** Industrial, Light Assembly, light P P P P P P P Carpenter shop P P P P Machine shop or metal P P fabrication Manufacturing, light P P P Marijuana processing S S S S Chapter 19.85 SVMC Plastic injection P P P P P P molding, thermoplastic Ordinance 14-008 Page 5 of 9 DRAFT Permitted Use Matrix Residential Zone Commercial and Industrial Zone Use Category/Type Supplemental Conditions Districts Districts R- R-R-R-MF-MF- I- I- MUC CMU GO 0 NC C RCP/OS 1 2 3 4 1 2 1 2 Processing, light P P Industrial Service Carpet/rug cleaning, dry cleaning, laundry, linen P P supply plant, commercial Contractor's yard P P Laboratories (bio safety P P P P level 2) *** Retail Sales Antique store P P P P P Retail sales may be accessory in industrial Appliance sales/service P P P P S S zones, only if manufactured/assembled on premises Floor area limited to 10% of Bakery, retail P P PPPPP S S gross leasable floor area (GLFA) not to exceed 1,000 sq. ft. Building supply and Floor area limited to 50,000 home improvement and P P S S P P P hardware store sq. ft. or less Candy and P P PPPPP P P confectionery Clothes retail sales P P P P P Convenience store P P SSPPP P P SVMC 19.60.020 Department/variety P P S P P Floor area limited to 50,000 store sq. ft. or less Educational and hobby P P PAPPP A A store Equipment sales, repair, P P P P and maintenance Florist shop P P AAPPP P Food sales, specialty/butcher P P S P P SVMC 19.60.040(6)(3) shop/meat market/specialty foods Ordinance 14-008 Page 6 of 9 DRAFT Permitted Use Matrix Residential Zone Commercial and Industrial Zone Use Category/Type Supplemental Conditions Districts Districts R- R-R-R-MF-MF- I- I- MUC CMU GO 0 NC C RCP/OS 1 2 3 4 1 2 1 2 General sales/service P P A APPP P P Gift shop P P AAPPP A Grocery store P P S P P SVMC 19.60.040(B)(3) Office supply and P P APPP P P computer sales Landscape materials sales lot and P P P P P P greenhouse, nursery, garden center, retail Manufactured home P P sales Marijuana sales S S S S Chapter 19.85 SVMC Market, outdoor P P PP P P Section 4. Adoption. That SVMC Title 19 be amended by adding a new chapter, to be designated"19.85" as follows: 19.85.010 Marijuana production standards. A. Marijuana production shall be located or maintained at least 1,000 feet from the nearest property line, measured from the nearest property line of the marijuana production facility to the nearest property line of any one or more of the following uses: 1. Vacant or undeveloped parcels owned by public school districts as established in RCW Title 28A; 2. Vacant or undeveloped parcels owned by public library districts as established in Chapter 27.12 RCW; 3. Vacant or undeveloped parcels leased or owned by the City; provided the following shall be excluded from consideration under this section: (a) any stormwater facility or right-of-way parcels owned or leased by the City and designated or identified as a stormwater facility or right-of-way in any document,plan or program adopted by the City Council, and(b)the Appleway Trail; or 4. (a) Any facility, building, campus, or collection of buildings designated or identified in any document, plan, or program adopted by the City Council as "Spokane Valley City Hall" or other similar term that identifies such facilities, buildings, campus, or collection of buildings as the City's primary administrative and legislative location, or(b)CenterPlace. Ordinance 14-008 Page 7 of 9 DRAFT 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, measured from the nearest property line of the marijuana processing facility to the nearest property line of any one or more of the following uses: 1. Vacant or undeveloped parcels owned by public school districts as established in RCW Title 28A; 2. Vacant or undeveloped parcels owned by public library districts as established in Chapter 27.12 RCW: 3. Vacant or undeveloped parcels leased or owned by the City; provided the following shall be excluded from consideration under this section: (a) any stormwater facility or right-of-way parcels owned or leased by the City and designated or identified as a stormwater facility or right-of-way in any document,plan or program adopted by the City Council, and(b)the Appleway Trail; or 4. (a) Any facility, building, campus, or collection of buildings designated or identified in any document, plan, or program adopted by the City Council as "Spokane Valley City Hall" or other similar term that identifies such facilities, buildings, campus, or collection of buildings as the City's primary administrative and legislative location, or(b)CenterPlace. 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,measured from the nearest property line of the marijuana sales facility to the nearest property line, of any one or more of the following uses: A. Centennial Trail; B. Appleway Trail; C. Vacant or undeveloped parcels owned by public school districts as established in RCW Title 28A; D. Vacant or undeveloped parcels owned by public library districts as established in Chapter 27.12 RCW; E. Vacant or undeveloped parcels leased or owned by the City; provided any stormwater facility or right-of- way parcels owned or leased by the City and designated or identified as a stormwater facility or right-of-way in any document,plan or program adopted by the City Council; or F. (1) Any facility, building, campus, or collection of buildings designated or identified in any document, plan, or program adopted by the City Council as "Spokane Valley City Hall" or other similar term that identifies such facilities,buildings, campus, or collection of buildings as the City's primary administrative and legislative location, or(2)CenterPlace. Section 5. Interim Development Regulations Repealed. The interim development regulations adopted pursuant to Ordinance Nos. 14-002 and 14-004 are hereby repealed and shall be without any force or effect as of the effective date of this Ordinance. Ordinance 14-008 Page 8 of 9 DRAFT Section 6. Other sections unchanged. All other provisions of Appendix A and Title 19 SVMC not specifically referenced hereto shall remain in full force and effect. Section 7. Severability. If any section, sentence, clause or phrase of this Ordinance shall 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 phrase of this Ordinance. Section 8. 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 of July,2014. ATTEST: Dean Grafos,Mayor City Clerk, Christine Bainbridge Approved as to Form: Office of the City Attorney Date of Publication: Effective Date: Ordinance 14-008 Page 9 of 9 ATTACHMENT A COMMUNITY DEVELOPMENT DEPARTMENT PLANNING DIVISION Spokane Valley i 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.I 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.I: 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. 3. The Planning Commission held a public hearing and conducted deliberations on June 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( ' 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 Iocate 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. 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, libraty, 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 19.20.050,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 land uses within the City. xii. On January 16, 2014,the Washington Attorney General issued Attorney General Opinion No.2, in which he stated that"[a]lthough Initiative 502(I-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 1-502 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 Iimitations 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. ConcIusion(s): a. The proposed text amendment is consistent with the approval criteria contained in the SVMC. 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 this 26th day of June,2014 I » ` - Christina Cads ,Vice Chairman ATTEST &/.0.--161U--WaYend 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 Holunan, 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 Carlsen 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 1-502 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. Hohman 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 testify, Commissioner Carlsen closed the public hearing at 6:43 p.m. 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 Commission 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 docks 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 docks 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 Ianguage 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 Ianguage because it seemed there is a changing time Iine 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.in., 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 CITY OF SPOKANE VALLEY Request for Council Action Meeting Date: July 15, 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: Resolution 14-008: Opening McMillan Road GOVERNING LEGISLATION: RCW 35.22.280(7) PREVIOUS COUNCIL ACTION TAKEN: Council heard an administrative report on the proposed resolution and opening of a portion of McMillan Road on July 8, 2014. 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: Move to approve Resolution No. 14-008 opening a portion of McMillan Road to vehicular traffic; or take other action deemed appropriate RECOMMENDED ACTION OR MOTION. Move to approve Resolution No. 14-008 opening McMillan Road to vehicular traffic between Buckeye Avenue and Euclid Avenue. 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 14-008 opening McMillan Road between Buckeye Avenue and Euclid Avenue to vehicular traffic. DRAFT CITY OF SPOKANE VALLEY SPOKANE COUNTY,WASHINGTON RESOLUTION NO. 14-008 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. 14-008 Aerial Map - �..J4_ _tea j 4 r _ I-Y �.x a "•to , :.' 1` y . #' w ' fi� Parcel 55082.0103I. .> ..x ice, — _ ��-- _-�_ r Parcel 55082.0124 t 10. 1 _ _ _,.......=,,._,-.:,� - _e �I / 1 _ ttt —2-_ - e 'a �'w„ ..A -�. _ ' ''... 17).C.' 147:tt;' ...7 ,.." i - \ A, .c .cc. =,71.— 47.i.r.irct... —,f , ikirADI c:, i: ir"" \ , .,- „,-...„-, 4' ,..,.. ! jq =_ "a -. Parcel 55082.0133 --- Win: -. - Parcel X5082+0108 `�; 1: .4410::„5.0.,.7...„-141,fr, r u j ii`..-,',,-1-,i, S 6 4. 1. < i III��� - - iia y�;yj \NI-1i , prom' nowt S 4 t �, l c ..,,r _,0-...P.. s R F — _ Mi • �q ; —� — ' k _, 'wk - 4 �x ltp r— � ` � , ti � � , ' _- r. _ , ' 3 , ." v ; -s - 1 , ` _ __, _ __- 1 1 Spo Cil%D vekkane tDep McMillan Road Right-of-Way Community Development Department I PRELIMINARR'PLAT OF LEGAL DESGRIPn01y 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 I OF TRACTS 21 e`.41 PER PLAT THEREOF RECORDED IN BOOK"O"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 N91H THAT PORTION OF VACATED MCMILLAN ROAD LYING EAST OF AND NOTE 3 12.0'BORDER EASEMENT CITY OF SPOKANE VALLEY ADJACENT TO MAC.21 AND 41 THAT WOULD ATTACH BY OPERATION 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 STATUTORY WARRANTY DEED,AM 5181308. 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Lit I�.. .smeEr .,---,TI- E, ; ---*,,,g,':/'\\-• �Tsl I�ea 6s 66 6� 6z:s SECTION INDEX 66 .,, -5 r � I� t -_BE" �� .'-a.,b I\ is�T 666 .81 It II - - -7 / I I I:g ,II ,_ m 5 , - Ln - LO - 15I:VI a olol'I � �� M _ /v O = 'ro zI �` 6E9• Tea ss .y O_/ N W Jam,/ \ Y I I I E3' _3P/3,13 3 FIs COACH-LITE ESTATES a ss.6a_— °S r �:I o P 3 Prc NnIL ,w W6 C i �,.ZL4 iP2.p NJO2'98'41 ' 30� NW 1/4 OF SECTION 8 "7- / T BOOK 16 OF PLATS,PAGE 1 W P1 T25 N R45 E WM. /k" e6,/ MEADOWLARK ADDIRON g ♦m 800K 20.PLATS,PG.48 x% ��/�� 2 i 30' q RACY 42 I USKH I a TRACT 20 9 9 4 3 e6 i � 313 6 R Architectural - I I -- /� 1 --_ - - JOEL ROAD I W 266 W- Fax (208)748-6825 - rvALL61, e ➢-b ------._-_ ------- ®s; w 6626611E 1W s 369 -- - _ a6a�e A o' - FPhone.(50g)33328-5139 4 �> ,[V GRAPHIC SCALE BASIS OF BEARING 9DWN 132 OWE 09500PreJwg Fox oIWs 982485uIte 14 /II NORTH DATE02/12/05 Fe �� 1u �� AN ASSIGNED BEARING OF AVE. ND THE ON THE EV: 2/24/06 Phone: hon H060)312-1815 X".• CENTERLINE OF EUCLID .AND THE WEST HALF (360)312-0124 OF THE NORTH BOUNDARY LINE OF SECTION 8 AS Pno (a F8RB)tt. 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 15, 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: STA Interlocal Agreement— Fiber Facilities GOVERNING LEGISLATION: N/A PREVIOUS COUNCIL ACTION TAKEN: Admin report, July 8, 2014. 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-year agreement with an option to renew for an additional ten 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 and this connection was accounted for in the original design through coordination with STA. OPTIONS: 1) Approve the interlocal agreement with STA, or 2) provide additional direction for staff. RECOMMENDED ACTION OR MOTION: Move to authorize the City Manager or designee to execute the STA interlocal agreement for fiber facilities. 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 minimum 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) form 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 contactors 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 B Mike Jackson/hty Manager Attest: Approved as to fonu: Christine Bainbridge, City Clerk Office of the City Attorney Dated: SPOKANE TRANSIT AUTHORITY Byj 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 15, 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: Transportation Improvement Board (TIB) 2014 Call for Projects GOVERNING LEGISLATION: PREVIOUS COUNCIL ACTION TAKEN: June 24, 2014; Adoption of 2015-2020 Six Year TIP and July 8, 2014; Info RCA. 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 TIB 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 and 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 recommends 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 (Level of Service) 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 and 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 three inches 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 who 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 four-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 four-lane to a three-lane section with bike lanes. Today, the daily traffic north of Sprague is 7,100 vehicles and with the three lanes 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 two 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 benefit 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. 321 - 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 Road. 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: Discussion only RECOMMENDED ACTION OR MOTION: Discussion 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, Project Maps 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 9th Barker, Appleway to 9th 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.) R'W 2 rr.. 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B \ UNIVERSITY DISHMAN MICA TO 16TH AVE v I TWLTL = TWO WAY LEFT TURN LANE TIB I SW = SIDEWALK DRAWN BY: DATE: I BBL = BUFFERED BIKE LANE I RW = RIGHT OF WAY MJH 7/15/2014 ammmwmj 35TH NTS CHECKED BY: DATE: RJW 7/15/2014 CITY OF SPOKANE VALLEY Request for Council Action Meeting Date: July 15, 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: 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, Info memo on WSDOT Interlocal Agreement, July 8, 2014. 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: Discussion RECOMMENDED ACTION OR MOTION: Council consensus to bring this item back for a motion consideration at the July 22nd Council meeting. 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 B1, 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. 9. TERM OF AGREEMENT GMB 1044 Page 5 of 8 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 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. GMB 1044 Page 6 of 8 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. IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the Party's date last signed below. GMB 1044 Page 7 of 8 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. 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Day to day observation of camera and VMS sign operations and performance. b. Removal and replacement of failed components. The failed components replaced by the STATE shall be replaced with CITY owned components or the CITY shall purchase the new components from STATE. c. Maintain accurate records, as to the time and materials used in completing the various tasks for each location. d. Routine preventative maintenance to the extent consistent with the STATE's current preventative maintenance standards. e. Maintenance of communications end equipment located at each device location cabinet, communications end equipment located in shared use hub located on 1-90 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 this Exhibit. f. Protect underground facilities by providing locating services for fiber optic cable and associated infrastructure. Maintain accurate records of locate requests in case of third party damage. ITS SYSTEM LOCATION CCTV System Appleway and Park Ave. SW Corner CCTV System Appleway and Dishman-Mica NE Corner CCTV System Appleway and University NW Corner CCTV System SR27 and Valleyway NW Corner -332 Cabinet with communication equipment - Modified B Service CCTV System SR27 and Mission SW Corner -332 Cabinet with communication equipment and SB count station CCTV System SR27 and SR290 SW Corner -332 Cabinet with communication equipment VMS and Controller Cabinet Sprague Ave. Between 1-90 and Thierman Road Communication Equipment CC 090 050/shared use cabinet at Sprague Ave. I/C(1- -Patch Panel w/72 fiber terminations 90) -EtherWAN switch for signal data transmission -Optelecom Transmitter and Receivers for video transmission Communication Equipment SRTMC -Optelecom Receiver for video transmission Communication Equipment CC 090 057/CCTV Cabinet at Pines Rd. I/C(1-90) -EtherWAN switch -Fiber patch panel Underground Fiber Optic Cable System SR27 at Sprague Ave.to SR27 at SR290(2.6 miles) -Fiber optic cable -Cable boxes -Pull boxes GMB 1044 Exhibit A Page 3 of 4 GMB 1044 Exhibit A CITY OF SPOKANE VALLEY ITS PM ESTIMATE Item Unit Quantity Cost Total CCTV:4 per year 3 TST's for 3 hours @ $56.99 per hour(includes traffic control) Hour 9 $ 56.99 $ 512.91 1 7G5 bucket truck for 3 hours @ $16.01 per hour Hour 3 $ 16.01 $ 48.03 1 TMA for 3 hours @ $5.57 Hour 3 $ 5.57 $ 16.71 Materials$20 LS 1 $ 20.00 $ 20.00 Total per PM per camera: $597.65 $ 597.65 CCTV:4 per year 4 $ 597.65 $2,390.60 VMS: 2 per year 3 TST's for 4 hours @ $56.99 per hour(includes traffic control) Hour 12 $ 56.99 $ 683.88 1 7G5 bucket truck for 4 hours @ $16.01 per hour Hour 4 $ 16.01 $ 64.04 1 TMA for 4 hours @ $5.57 Hour 4 $ 5.57 $ 22.28 Materials$10 LS 1 $ 10.00 $ 10.00 Total per PM per sign: $780.20 $ 780.20 VMS: 2 per year 2 $ 780.20 $1,560.40 CITY OF SPOKANE VALLEY EMERGENCY REPAIR ESTIMATES CCTV: VMS: $500 per camera per year.These are very expensive devices $500 per sign per year.These are very expensive devices so the actual cost to repair could be much higher. so the actual cost to repair could be much higher. COMMUNICATIONS SYSTEM: CITY OF SPOKANE VALLEY LOCATING ESTIMATES $500 for the system per year.These are very expensive devices FIBER UNDERGROUND: so the actual cost to repair could be much higher 2.6 miles at$1,000 per mile: Unit Quantity Cost Total Fiber locating Mile 2.6 $ 1,000.00 $ 2,600.00 Communication system Each 1 $ 500.00 $ 500.00 Cameras Each 6 $2,390.60 $ 14,343.60 VMS Each 1 $ 1,560.40 $ 1,560.40 CCTV Repair Each 1 $ 500.00 $ 500.00 GMB 01044 VMS Repair Each 1 $ 500.00 $ 500.00 Exhibit A Total Agreement Cost $20,004.00 Page 4 of 4 GMB 1044 EXHIBIT B AMENDMENT NO. TRAFFIC SIGNAL, ILLUMINATION, ITS ADDITION OR DELETION LOCATION/SR #OF ILLUMINATION SIGNAL IT SIGNAL /STREET/ #OF LUMINARES ILLUMINATION SIGNAL IT PM FLASHER EMERGENCY EMERGENCY EMERGNCY OPERATION ADDITION=A MILE POST SIGNALS (WATTAGE) IT SYSTEM PM COST PM COST COST PM COST MAINT COST MAINT COST MAINT COST COST LOCATE COST DELETION=D TOTALS ESTIMATED ANNUAL COST *Illumination PM cost was figured as follows:1 PM every 4 years.This PM includes clean fixture,replace bulb,service PM,clean around bases,and re-torque bolts.This is estimated to take 3 Transportation System Tech as 2 hours per each luminaire head.Tech C bill rate as of March 2008 is$47.86 per hour.This PM will also take one bucket truck 7G5 series which charges out at$14.39 per hour and a 2G2 series van which charges out at$2.54 per hour.A lamp is approximately$15.00.When you add labor of$287.16 plus$33.86 for vehicle plus $15.00 for parts you get a total of$336.02.Since this charge occurs every 4 years this total is divided by 4 for an average yearly cost approximately$84 per luminaire head. *Signal PM cost was figured as follows:5 PM's per year,1 overhead relamp PM and 4 quarterly cabinet PM's.The cabinet PM is one Transportation Systems Tech C for 3 hours.The TST C bills at$47.86 per hour.This PM will also take a 2G2 series van which charges out at$2.54 per hour.There will be approximately$10 for parts for each cabinet PM. For each cabinet PM the cost is$143.58 for labor and$7.62 for a vehicle.The total is$161.20 times 4,this is a total of$644.80. The overhead PM will take 3 TST C's 6 hours.This PM will also take a 7G6 series bucket truck which charges at$9.03 per hour.This PM will also take a 2G2 series van that charges at$2.54 per hour.This PM will also take approximately$175 in parts(depends on size of intersection).For each overhead PM the cost is$861.48 for labor plus vehicles at$69.42 plus parts at$175.00,this equals$1105.90.The total per signal per year is$1105.90 plus $644.80 this equals$1750.70. *Flasher PM cost was figured as follows: 1 PM per year which is an overhead relamp.The overhead PM will take 3 TST as 2 hours.The TST as charge out at$47.86 per hour.This PM will also take a 7G6 series bucket truck which charges at$9.03 per hour and a 2G2 van which charges at$2.54 per hour.This PM will also take approximately$15 in bulbs.The total PM cost is$287.16 for labor,$23.14 for vehicles,and$15 for parts,this totals$325.30. *Illumination, IT and signal emergency maintenance cost is an educated guess for an average per year.It could be substantially more than the estimate depending on circumstances. *The signal operation costs are figured as follows: Urban isolated low speed:This type of intersection will take a Transportation Engineer 2 which bills at$46.19 per hour,40 hours every 3 years.This is an average cost of $615.87 per year. Rural isolated high speed:This type of intersection will take a TE2 60 hours every 2 years.This is an average cost of$1385.70 per year. Urban isolated high speed:This type of intersection will take a TE2 60 hours every 2 years.This is an average cost of$1385.70 per year.Coordinated arterial:This type of intersection will take a TE2 80 hours every 2 years.This is an average cost of$1847.60 per year. *Locate costs are an average per year based on the last 2 years expenses. GMB 01044 EXHIBIT B WORKSHEET B 1 AMENDMENT NO. SIGNAL/ILLUMINATION/ITS ADDITION OR DELETION #OF ILLUMINATION SIGNAL ITS SIGNAL LOCATION/SR/STREET/ #OF LUMINARES ILLUMINATION SIGNAL ITS PM FLASHER EMERGENCY EMERGENCY EMERGENCY OPERATION ADDITION=A MILE POST SIGNALS (WATTAGE) ITS SYSTEM PM COST PM COST COST PM COST MAINT COST MAINT COST MAINT COST COST LOCATE COST DELETION=D TOTALS ESTIMATED ANNUAL COST (From Exhibit A) EXHIBIT C AGREEMENT GMB 1044 SIGNALS/ILLUMINATION/ITS REPAIR or REPLACEMENT SUPPLEMENT NO. S_ This Supplement to Agreement GMB 1044 is for the repair and/or replacement of Signals/Illumination/ITS as further provided herein and 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 Parties entered into Agreement GMB 1044 for the operation and maintenance of CITY owned Signaled, Illumination, and ITS systems, and WHEREAS, the CITY wishes to supplement this Agreement pursuant to Agreement Section 4 by including certain repair and/or replacement work (Work) that is not covered under Agreement Section 2.1, Provide Routine Maintenance and Operation or Agreement Section 2.2, Provide Emergency Maintenance, and WHEREAS, the STATE agrees to perform the Work at the CITY's expense, as provided in the Agreement, NOW, THEREFORE: Signals/Illumination/ITS Repair or Replacement 1. The Work proposed under this Supplement is described in the attached proposed work sheet. 2. The CITY agrees to reimburse the STATE for all costs and expenses associated with this Supplement pursuant to Section 7 Payment, of GMB 1044. Effective Date The effective date to start the Signals and/or Illumination and/or ITS Work identified in this Supplement is _ . Date: month/day/year CITY OF SPOKANE VALLEY WASHINGTON STATE DEPARTMENT OF TRANSPORTATION By: By: Title: Title: ER Asst. Region Administrator for Maintenance and Operations Date: Date: Agreement GMB 1044 Exhibit C, Supplement Worksheet Proposed Work System Type: Signals and/or Illumination and/or ITS Location: Work to be performed: Estimated Cost: Remarks: CITY OF SPOKANE VALLEY Request for Council Action Meeting Date: July 15, 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: Administrative report — Proposed Amendment to the Spokane Valley Municipal Code (SVMC) - CTA-2014-0001 GOVERNING LEGISLATION: RCW 36.70A.106, SVMC 17.80.150 and 19.30.040 PREVIOUS COUNCIL ACTION TAKEN: None BACKGROUND: CTA-2014-0001 is a citizen initiated code text amendment to modify the side and rear yard setback for the Light Industrial Zoning district from 35 feet to 20 feet when the site is adjacent to a residential zoning district or use. The Planning Commission conducted a study session on May 8, 2014, and a public hearing on May 22, 2014. During deliberations, the Commission discussed the setback as it affected proposed industrial uses when they were adjacent to residential uses within industrial zones, and industrial zones abutting residential zones. The Commission determined that the side and rear setbacks should support the uses intended within the zoning district and modified the request as follows: Require a 20 foot minimum side and rear yard setback in both the Light and Heavy Industrial Zones, if an industrial use is proposed adjacent to a residential use; and a 35 foot side or rear yard setback for uses if proposed on sites where the Heavy Industrial Zone abuts a Residential Zone. This supports industrial uses locating within the Industrial zones, consistent with the intent of the zoning district, and protects residential uses located in Residential Zones abutting Heavy Industrial Zones. Following the public hearing, the Planning Commission voted unanimously to recommend approval of the modified amendment (see Attachments). The Planning Commission approved their Findings of Fact on June 12, 2014. A comparison of the setback requirements of our neighboring jurisdictions will also be discussed. OPTIONS: Proceed to first ordinance reading; send back to Planning Commission for further review; or take other action deemed appropriate. RECOMMENDED ACTION OR MOTION: Consensus to proceed to first ordinance reading. BUDGET/FINANCIAL IMPACTS: N/A STAFF CONTACT: Micki Harnois, Planner ATTACHMENTS: A. Proposed Text Amendment B. Staff Report to Planning Commission C. Planning Commission Findings D. Planning Commission Minutes E. Presentation ATTACHMENT A Table 19.60-1 —Commercial Development Standards Office Commercial Mixed Use Industrial GO 0 NC** C RC CC" CMU* MUC* I-1 1-2 Minimum Front Yard Setback 20 20 20 20 20 20 20 20 20 20 Minimum Flanking Street Setback 20 20 20 20 20 20 20 20 20 20 Minimum Side and Rear Yard Adjacent to a 20 20 20 20 20 20 20 20 3520 3520 Residential Use or Zonc Minimum Side and Rear Yard Adjacent to a 20 20 20 20 20 20 20 20 20 35 Residential Zone Maximum Building Height(in feet) 45 100 35 35 100 Unlimited 50 60 40 65 *Except as otherwise required "Townhouse development in the NC zone shall comply with setback and building height standards in the R-4 zone found in Table 19.40-1 19.70.0101-1, Light Industrial district. SHARE A. The Light Industrial designation is a planned industrial area with special emphasis and attention given to aesthetics, landscaping and internal and community compatibility. Typical uses would include technology and other low-impact industries. Light Industrial areas may also include office and commercial uses as ancillary uses within an overall plan for industrial development. B. Supplemental Regulations. 1. The outdoor storage provisions contained in SVMC 19.60.060(B)shall apply to the 1-1 district. 2. Mobile food vendors shall be located on/within designated areas which do not interfere with parking or internal circulation with permission of the property owner, health certificate and permit. 3. Setbacks. a. Front and flanking street yard setbacks shall be 20 feet; and b. Side and rear yard setbacks of feet are required only adjacent to residential zoning districts. ATTACHMENT B COMMUNITY DEVELOPMENT DEPARTMENT PLANNING DIVISION Spokane Valley STAFF REPORT AND RECOMMENDATION TO THE PLANNING COMMISSION CTA-2014-0001 STAFF REPORT DATE: May 15,2014 HEARING DATE AND LOCATION: May 22, 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 citizen initiated text amendment proposing to amend Spokane Valley Municipal Code (SVMC) 19.70.010 (B-3-b), I-1, Light Industrial District to change the required side and rear yard setbacks adjacent to residential zoning districts from 35 feet to 20 feet. The proposal is to also change Table 19.60.1-Commercial Development Standards to specify that the minimum side and rear yard adjacent to a residential use or zone be 20 feet in the I-1 and I-2 zones. PROPONENT: John Renshaw, 1718 East Tilsley Place, Spokane,WA 99207 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 elimination of SVMC Chapter 19.70.010 (B-3-b), I-1 Light Industrial District and changing Table 19.60.1-Commercial Development Standards so the minimum side and rear yard setbacks in an Industrial zone adjacent to a residential use or zone will be 20 feet. STAFF PLANNER:Micki Harnois,Planner, Community Development Department ATTACHMENTS: Exhibit 1: Proposed text amendment to SVMC 19.70.010 (B-3-b),I-1,Light Industrial District and Table 19.60.1-Commercial Development Standards. A. BACKGROUND INFORMATION 1. APPLICATION PROCESSING: SVMC Chapter 17.80, Permit Processing Procedures. The following summarizes application procedures for the proposal. Process Date Pre-Application Meeting: April 23,2014 Application Submitted: April 23,2014 Determination of Completeness: April 23,2014 Published Notice of Public Hearing: May 2,2014 Sent Notice of Public Hearing to staff/agencies: May 7,2014 Staff Report and Recommendation CTA-2014-0001 2. PROPOSAL BACKGROUND: The proposal is to modify Spokane Valley Municipal Code (SVMC) Chapter 19.70.010(B-3-b),I-1,Light Industrial District(Section 3b) and Table 19.60.1- Commercial Development Standards. The intent is to create consistency in regard to minimum side and rear setbacks for commercial and industrial zones adjacent to residential zones or uses. The proposed amendment will change the minimum rear and side yard setbacks to 20 feet which will be the same as all office and commercial zones. Several older established industrial lots have a lot width of 50 feet and are adjacent to residential uses. With the current required side yard setbacks of 35 feet these lots would allow only very small industrial buildings. The following table shows the required setbacks in the City of Spokane and Spokane County: Light Industrial Heavy Industrial Spokane 5 ft 5 ft Valley Prior to 2007 Spokane 35 ft adjacent to a 35 ft adjacent to a Valley residential residential Nov use/zone use/zone 2007 City of 10 ft adjacent to R 10 ft adjacent to R Spokane zoned lots zoned lots City of 0 ft adjacent to 0 ft adjacent to Spokane residential use residential use Spokane 20 ft adjacent to a 100 ft adjacent to County residential zone a residential zone 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 proposed amendment is consistent with the applicable policies of the Comprehensive Plan. The amendment is consistent with the Comprehensive plan goals for providing adequate supply of usable land for industry and maintaining a flexible and consistent regulatory environment, and preserving and protecting neighborhoods. Relevant Comprehensive Plan goals and policies are shown below: Land Use Policy -13.1 Maximize efficiency of the development review process by continuously evaluating the permitting process and modifying as appropriate. Economic Goal EDG-7: Maintain a regulatory environment that offers flexibility, consistency,predictability and clear direction. Page 2 of 3 Staff Report and Recommendation CTA-2014-0001 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. (2) The proposed amendment bears a substantial relation to public health, safety, welfare,and protection of the environment; Staff Analysis: The amendment bears substantial relation to public health, safety, welfare and protection of the environment. The proposed amendment will make the development standards consistent for all commercial and industrial zones. 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): Public noticing was completed for CTA-2014-0001 on May 7,2014. 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. D. STAFF RECOMMENDATION The Planning Division, after review and consideration of the applicable approval criteria, staff recommends that the Planning Commission approve the reduction of the minimum side yard setback of 20 feet proposed by the applicant, John Renshaw. Staff also recommends that the statement in SVMC 19.70.010 (B-3-b),I-1 Light Industrial District be removed. Page 3 of 3 ATTACHMENT C FiNO!VI. -N.M.) RE.C.().M:vill—N1)ATRYNIS 101. 1. 11.1 „ANNI\c (:()N1MISSION VOR t'TA-lil-if imp,. IL'. 21/1.-1 Thc to recommend approval. RaccrwinI 0,1N 10;):.',2,-.1i. ii '! 11:2Ci! OJ LI 2S. .1..00 . . ! Li 1.7; • I;SVMC) I 10.010 • , Ii ri. ;ILLrotiw.....1 orRI l'..2..:11,1111.11 /..111.1IlII Iiti 5 ki I.:. 20 HI'L. 11J Li I C'1;i i 1,1L2l tIii1 the Vl!di 1111ji.,C,11 , IHLIIkiII !ft.,: or 1L,2i 111i. [ [ id 1-7 1.11c held a public hencing !CLIV1-1111001.H 1,1C!,11 ly:*2. C. lc U111./).:* I 1 .11)11C I ( !`-,1:..m.111-,9.-; 1.1 1.1 1. 1 lad I 111 2I) IL2. l, ...oid arnencliiT, I zi1)1,21 Conlinci-Li...,.1 tki.t the !Ili Hi )11.1:1 ;CM. yard !.:1C11.10Ci's '!11 [hi. I-I a‘ljacent ML it 012 arid ri.:Ar scibacks in the 1-2 folic Acliacciii IL IV:•;ILICIiIIH.1 /i112 L'i,1111111.,-;1..in voted 4_() 1(:1. 1111.1)1E.)Val 11)0d-died H Cli,y 4. Planning Cott Find hg 1. Compliance with SVMC 17.81).150F A ripiriavlii Ci-iteria i. riic propose.] ciriz.en initiated code text amendment is consistent with the applicable provisions or "lc (.:411preliensivc Plan; lAiLid 1 IA 1P-113.! Mir 'c efficiency of Ihc, develohnlont review process by ;.1,.; iIHriate. ;1 :vLI.,1:it,iry iliC It that offers flexibility, •,uul jj 1.cork!Lni,. c.1)1'• 1:.. 1111.:1k-. urk ululatel to elINL re that Ilc II,- LA*111111..2. LI)P-'i 2 regiP1H3:,11, IL.k11.11). 10 eii,one clar;r2, c pc:dic IIII LIII1.-loarsa ubstantial relation to public lieul(11, surety, welfare, arid Thr Fin! iL ito be Hyc,i ii4IiIII L'.; V..1111 [he iniQnt of die uses Findings and 11.tecnnrnendat ions of Ulu Val IDy i8.:011LIY111..111. raw 1 of 2 ATTACHMENT C 0 it ()Nile tllktl'llf- t'.Illlt: l'�I-.`�i�:�:i".:L� residential uses located in residential 'Ji l;IU' I�.a."�tLU F J(IIIIL'�Ill IC' II ICL,YS S! loll .{. Ill S_ , i i- I tic pub, L �';ti1,1, �;,i�, ;k,°I,F;r4, ,Intl protection °f flat environment are f'ur(Ytered by el ltiur;l:�� ti-,L; IdIC (.'it'. t.I.'UL Itai)I nL^;L1 r gt1 kii olas UV:4lklts i5ten( wti•illf struts und INA ides In the ;I I 1 LLch i 17.1�[I:eJILII.c;'l I'.iti1, 2, CauclusionN): a, The I1ropps.ed city inh i:ared code text amendment is eonsistent with the City's adopted L'_�ii:I1icI1 �L I . 4 flan :.id die crilci i:L contained in SVA'[( I7.80,150(F). 1. ' ,. { ;r, .11� i �I L.I__Ci L ,tt' ;1i,titl.ifwti that die comprehensive I:Ln(1 USC plan and development be subject 11,..1M;4. rcv iCww and ev.!du;atitrti by the City. Recommendations: The Spokane Valley J'lmttling Commission lllcreforc recommends City Council adopt the proposed citizen-initiated code text uril_•IltlriCru ii} 4'v'M Chapter 19.711.010 1.13-t-1t1 and I :tltile 11r,60.l as attached. A p ved.t '. 12" day ofJune,2014 dna Cttrlsen, V •e ATTEST Deanna Iloritan, Administrative Assistant I'itt1 LIgsand aeconiinendatioosot Llti SLrcik. he V.JI,y E'Ii.iniug Cuii;nitisioii Papp 2 ort Minutes Spokane Valley Planning Commission Council Chambers---City Hall, June 12,2014 Vice Chair Carlsen called the meeting to order at 6:00 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 Lori Barlow,Sr. Planner Christina Carlsen Erik Lamb, Deputy City Attorney Robert McCaslin Christina Janssen, Planner Mike Phillips Micki liarnois,Planner Steven Neill, Absent, Excused Deanna Morton, Secretary Jou Stay,Absent-Excused Heating no objections, Commissioners Weill and Stay were excused from the meeting. Corxrli.c.cioner AfcCeslin moved to approve the June 12, 2014 agenda. it was decided to switch Item B, Study Session for the marijuana regulations and hem C Shoreline Master Program. Motion passed four to zero. Corrmaissioner Carlsen moved to approve the May 22,2074 as presented Motion passed four to zero. COMMISSION REPORTS: Commissioners had no report. ADMINISTRATIVE REPORT; Sr.Planner Barlow offered an update on the Comprehensive Plan amendments. PUBLIC COMMENT: No public comment COMMISSION BUSINESS: A. Findings of Fact for Spokane Valley Municipal Code(SVMC)Amendment CTA-2014.0001. Planner Micki Harnois gave an overview of the proposed privately initiated amendment to the Spokane Valley Municipal Code(SVMC) 19.70.010(B)(3)(b)and Table 19.60-1 to change the required side and rear yard setbacks in the Industrial zones from the current 35 feet to 20 feet when the property is adjacent to a residential use or zone. Ms. Harnois explained the findings reflect the Planning Commission's request to have the setbacks changed in the Light and Heavy Industrial zone when adjacent to a residential use, to 20 feet, and for the side setbacks to 20 feet,and rear setback to 35 feet when adjacent to a::'esidential zone. Commissioner Anderson moved to approve the findings of fact and forward and tlrerri to the City Cowicil. \•lotion passed four to zero. B. Study Session — Proposed amendment to the Spokane Valley Municipal Code to adopt Marijuana regulations. Deputy City Attorney Erik iamb stated explaining how i-502. the state marijuana law is being regulated by the state. IIe 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(WS!.CB)as the governing authority for these regulations. Mr.Lamb explained a producer license is for the growing of marijuana. There are no limits on the number of producing facilities, but the state is limiting the amount of square footage statewide to between five and ten million square feet. Producers have a tiered system with the hugest allowable size facility being 21,000 square feet, A Processor license is for anyone panting marijuana into a useable form from packaging it to baggies, to putting it in baked goods. There are Qin limits on the number of processing facilities statewide. A retailer license is for anyone who wants to sell tl c usable marijuana. The WSLCB will be issuing 334 retailer licenses statewide, 3 for Spokane Valle^,, l8 total in Spokane County. He also noted that all uses are required to abide by local zoning codes and permitting require,uents. 06-12-14 Planning Commission Minutes Page 1 of 4 Mr. Lariib stated the Attorney General issued an opinion in Jan nary of 2014 that determined that 1-502 contains no clear indication it was intended to preempt local authority to regulate recreational marijuana. Sonic cities have chosen nEn 10 al IDec it. Commissioner Anderson asked if a city could allow growers and (processors but not the retail salee element. Mr. Lamb said he was aware that cities had banned it, for instance the City of Kent has banned medical marijuana, but he did not know what the basis was for the ban. The. City made an administrative determination based on the current City zoning code to pennit licensed marijuana facilities. Production licenses will be allowed in Light and Heavy Industrial (I- and I-2)zones and for indoor growing only they will be allowed in Regional. Commercial (RC) and Community Commercial (CC) zones. Proeessiug, will be allowed in I-I and 1=2 zones. Retail sales will be allowed in Mixed Use C eater (Mlle), Corridor Mixed llsc (CMU), Regional and Community Commercial zones. Commissioner Carlsen asked it'the only license needed for processing was (lie business License for the City. Mr. Lamb responded that if they are doing consumables it could require other permits, for instance from the Health Department. On February I 1, 2014 the City adopted interim regulations governing recreational marijuana. Interim regulations are only good for six months and then permanent regu"ations need to he adopted. The interim regulations follow the state regulations however the City determined it would 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. The current interim regulations are now;. • 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;hut in CC and RC zones,only packaging and labeling of useable marijuana is allowed • Allow Recreational Marijuana Retail Sales iii MtJC., C,MI..J,CC,and RC zones; provide buffers from Centennial Trail and Appleway '('rail • 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. a Adopt SVMC 19,85: Development regulations for the processing,production and sales of Marijuana. • Amend SVMC 14.120.050-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 tinder 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 i growing anti processing could be tillo\ved in the same place. Mr. Lamb stated it was possible and that applications for both in the swim place have been submitted to the City. Commissioner Carlsen inquired ii'it would make sense to have two definitions for processing based on the zone where the property was located. Staff explained the development standards would lay out where each type or processing would be allowed. Staff explained the public hearing is scheduled for June 2e, 06-12-14 Planning Commission Minutes Page 2 of 4 C. Deliberations Draft Shoreline Master Program(SMP),Draft Regulations. Senior Planner I.ori Barlow gave a presentation regarding some of the issues which were brought up it the public hearing which she felt needed the Cotmnission's direction. She stated she would be creating a matrix to address each of the comments which had been received and the City's response to them. Buffers came up often in the comments. Ms. Barlow said in most cities the huller is a standard width. The City had taken an approach to mirror the vegetation with buffers in most areas, She also reminded the Commissioners that a majority of the land along the river is owned by public entities. Very little is privately owned. Commissioner Phillips asked if the city is going to control the length of the buffers, how the property owner would know how far into their land the buffer would [al I. He stated he was concerned about not knowing: exactly where the property lines were in order to enforce the buffers without having each parcel surveyed. Ms, Barlow explained the city has a very good aerial pictures and the GIS system, while not perfect, would give a very good indication or where the property lines would be, but would only be used for planning purposes. Ms. Barlow explainetl that in tire area of the river which is considered Orchard Avenue, a standard buffer of 50 feet had been suggested since most of the private development in this area was already built out. In the Coyote Rocks area a sranla;'ci buffer is applied on the properties west of the bridge but the natural vegetation would serve as the buffer on the east side of the bridge. Commissioner Carlsen asked how people would know the huller if the buffers extended beyond the state land and affected their property, Ms. Barlow responded that in most cases they would not know until they came in to get a permit for a project on their property. However based on the Inventory Report, very few properties would be impacted, but Ms. Barlow stated she could bring back information as to how many private parcels would be impacted. Ms. Barlow then reviewed the proposed variance process and asked for direction from the Commissioners. She displayed to , options for the Commissioners: Option I would allow a reduction of the buffers by up to 25%on an administrative determination ifa specific criterion is met;Option 2 would remove up to 25%on an administrative determination and require applicants go through the formal variance process which would require DOE (Department nt. I.cobagy) to make the determination. it seemed the Commissioners present would rather have the 2. m 2:5'.t.r.r. to be dose administratively. Any retluest for tnore than 25("4i would still require the formal process and approval by 1)0l . Ms. Barlow moved err 10 a comment from DOE,that they feel standards are lacking in regard to trail/paths which will be allowed in the shoreline area. She displayed where the proposed requirements address trails and paths,but said there are no specific standards identified. She shared the trail/path standards which are contained in the Spokane County SMP,which DOE feels should be adopted. The next subject was where docks will be allowed on the river. There has been cons di rabie discussion about where docks should be allowed on the river, by both user groups, Ms. Barlow pointed out where the standards are for allowing docks and said they are not allowed in free flowing portions of the river. DOE and Fut u'ewise both commented that the regulations should state specifically where docks will be allowed. Ms. Barlow said staff felt the Shoreline Modification Activity table was specific enough stating in which environments they would be allowed. Commissioners discussed where on the river docks would be allowed, in the Orchard Avenue portion of the river, and Coyote Rocks development. Commissioner Anderson asked if a bond was required to install a dock in the case that the dock should come free of its moorings and float off and cause damage to soinconc else's property, No bond is required at this time to install in dock on the river. Commissioner Carlsen said it would be the homeowner's risk to install a dock in a more flowing section of the river. Ms. Barlow reminded the Commissioners the City would not be the only reviewing agency in regard to docks on the river and more stringent regulations from some of the other agencies. At this time,the Commissioners agreed to leave the dock regulations alone. The last subject discussed was Avista's request for less stringent regulations from the City to perform maintenance duties around their power lines. Ms. Barlow informed the Commissioners when she returns at the next meeting with the matrix, staff will not be proposing any changes to the language regarding these requests. 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. 06-12-14 Planning Commission Minutes Page 3 of4 GOOD OF THE ORDER: There were no comments concerning the Good of the Order. ADJOURNMENT: The meeting was adjourned at 8:25 p.m. 117 41 (2,04- Christi -CarlsenC irpeTr Date signed (94.144L) Deanna Horton,Secretary 06-12-14 Planning Commission Minutes Page 4 of 4 WRIFIFININI SOakane COMMUNITY DEVELOPMENT -PLANNING DiwsioN File # CTA-2014 - 0001 Text Amendment to the Spokane Valley Municipal Code Chapter 19.70.010 and Table 19.60.1 Administrative Report July 15, 2014 Municipal Code Text Amendment Ivor jCOMMUNITY DEVELOPMENT �P G �iwsioN v Background • Citizen initiated code text amendment • Request: Reduce the side and rear yard setbacks from 35' to 20' within the Industrial Zones when an industrial use is proposed next to residential use . Municipal Code Text Amendment 2 COMMUNITY DEVELOPMENT -PLANNING DIVCSIOIV .000 Valley Current Setback Requirements Table 19.60-1 Light Heavy Industrial Industrial Minimum Side and Rear Yard Adjacent to a Residential Use or 35' 35' Zone •Additional Code Reference: SVMC 19.70.010 (B-3-b) •Side and rear yard setbacks of 35' are required only adjacent to residential zoning district Municipal Code Text Amendment 3 COMMUNITY EVELOP E " -PLANNING DIVCSIOIV ' ' .000 Valley Planning Commission Discussion Issues • Intent of Industrial Zoning District • Existing narrow lots • Impacts to adjacent residential zones • Impacts to nonconforming residential uses • Comparison of Codes Municipal Code Text Amendment 4 COMMUNITY DEVELOPMENT -PLANNING DIVCSIOIV „is;Valley Industrial Zones Intent Light Industrial Zone Heavy Industrial Zone • Planned industrial area with • Characterized by intense industrial special emphasis and attention activities - may have significant given to aesthetics, landscaping and internal and community noise, odor or aesthetic impacts. compatibility • Typical Uses - manufacturing, • Typical Uses — technology, office, processing, fabrication, assembly, commercial uses, low impact freight handling industry • Residential uses not allowed, • Residential uses not allowed, however, non-conforming however, non-conforming properties still exist properties still exist Municipal Code Text Amendment 5 IMPIIIMM Spam— neCOMMUNITYUEVEL PME NT -P ANNING DIVISION- . SIOIV '�' _ Established Industrial Area — Typical Lot Sizes and Uses Vary , 4 C J,1411',11 1.ri. - r - y 95 411607 . __ I'4 _ -ill k6 �- - 1" ,' - _' - Residential . .g. - - %.1"-..:,4 35141.1612 _ . I� - µx , Uses adjacent a .. k - . 6... • to Industrial - - _ moi:- _ _, - _ , r - .. ._ �; uses r E'' n %.§.51,11.2018 t ,ri 35111. 0 .! 1` 19'I I'-Jl J,1,1-1 1 14^r. � �i ,6: `' •b � _ <F ,~ ri J f _ ,'� ". . rel „..., r 2 3 i. ■ -_ 1--_.--,� r, �- #n - -75141 2107 . - .GMEM} . i._ . 1911 LJU1 } •�i , 3 141 2. Oa ,A,. .,.... ] sr .. ._ �.. .a. a l ..I' 1 ■ Y4 ra t, .a — A r .2—FRp�L II MIr r ... W 1 1r Narrow Lots J y:., - E� - � _ 77141.2102 X351'11 s1s l _. - IIIIIIIIIIIIIM--. u COMMUNITY DEVELOPMENT -PLANNING _ ING DIVCSIOIV Industrial Zones with Existing Non-conforming Residential Uses ------>------- I i i 1 1 2 a a4 a 1 v 35132.0402 III I w ,4 6^ r . Exam 0 �L}] did"� 1 F moxao h—"7-1-1I Boo e•0._ i j. :11... %,_ F, � .., III C EL , DeSmet Av 1 1S. E §S L MUM a;, [at aldo no S E C lu•- alAo 0.v — – t i • }, C I r` ' to _ 6 9 .U I . ¢ I � —SP., A, VALLEYSB -' .. a - . i - azmas 1 , ...,1— v., \ _ 1 ,,,,i ..„.um. i1; As' e Brioadivay Av I _ � s, F I i. B }' .'� ( I 35144 9033 � R -, . q • 1 MEM DB 1 a: .8.a:1<, ID —... , , o,r A.J ' ,m ,�4 a44 r.' •••••'.'•'"s`I v�0—, — 1 Municipal Code Text Amendment IMINIMINEIM Iril Spokane COMMUNITY DEVELOPMENT -PLANNING - IV �' DIVCSIO Industrial Zones with Existing Non-conforming Residential Uses 4t r - -� t �L r `. '"om, - -- _ s Wool pp� s x SOokiineCOMMUNITY DEVELOPMENT -PLANNING DIVCSIOIV - _ Industrial Zones with Existing Non-conforming Residential Uses t 3514101 10 r_ �` �syc35141.0111-- ligliti J - _ i-u niir'''d • , .im �.•�� wil r ..47S-46'. _ �a- 'l �''. 3514 13 -- l 13412 ' �p8aQ W�sa�sb _� : �� w v .•.' _ 1.. 35141 0418 11 killilI I - IR j; I1. 4i. . Municipal Code Text Amendment 9 sookane COMMUNITYEVELOP E PAWNING DIVCSIOIV ' ' _ Industrial Zones Adjacent to Residential Zones - 11- - mci, (� .�.�..�.�� 1' 45.2-9.2,, . 182.900 45182.9183 14-ice �' NiIIi1: 1 9181a, -11''1, _ _ _ - ---- Rroadt aY Av -.. m - - •.d _ _ _ _-, _ - 9r d y AVJ icl k Y 11111 518290 e 41829 1 L C -_ n5183 alb - ' + � 1 4 c9'I�.9_ _ n5d3 Cz 1 wpm 111 - .. .45 35134 3233 la' ins l lar '� V 45183 90.59 - - '� _ f^45183 9859 S �.,'F y 4 a 1 .451839681 - -- - 4q ' y H 9o I. gar: ?■ 'ev . m -_ -- ---_AI - - I _ � r. 1 0.lkith -- k Av m o�ammom j L JC36�G5E -.7(.111-EIC� �' ,3POQ261 ,LL1i.AIL6V 4818 9143 f HY ammo rMUER � R P5183.0550 i OMR) IbPU35 k6�9dj 45183.0659 - II 1 ammio Ell la 451839158 45183 8653 anevwav_Ar ". Av V 1l 35134.9035 r 351349095 -1 BM t i _W aY _ y `E6 ] '?. 45183;9189 vf 4583 8- :`- - 5 451838]19 - MS MTh= I 451839190 ■r Marron g9on.A. 451839198 , ` �.M ®t.n A 'ry t jg 45183.9140 3 Municipal Code Text Amendment 10 Valley COMMUNITY DEVELOPMENT -PLANNING DIVCSIOIV Comparison of Side Yard Setback Requirements Light Industrial Heavy Industrial Spokane Valley 5 ' 5 Pre 2007 Spokane Valley 35 ` adjacent to residential 35' adjacent to residential Current use/zone use/zone City of 10' adjacent 0' adjacent to 10' adjacent to 0' adjacent to Spokane to R zoned residential use R zoned lots residential use lots Spokane 20' adjacent to residential 100' adjacent to residential zone County zone Liberty Lake 20' adjacent 0' adjacent to 20' adjacent to 0' adjacent to to residential residential use residential zone residential use zone Ivor _ingwipm sou- ne Valley COMMUNITY DEVELOPMENT --PLANNING DIVCSIOIV Planning Commission Recommendation : 1) Modify Table 19.60. 1 to allow a minimum side and rear yard setback of 20 feet in the I-1 and 1-2 Zones when the use is adjacent to a residential use (city-wide); and 2) Modify Table 19.60. 1 to allow a minimum side and rear yard setback adjacent to a residential zone be 20 feet in the I-1 Zone and 35 feet in the 1-2 Zones (city-wide) Conclusion : Amendment will allow established industrial zoned lots to be developed consistent with the existing industrial area. Municipal Code Text Amendment 12 COMMUNITY DEVELOPMENT -PLANNING DIVCSIOIV „is;Valley Planning Commission Recommendation — Table 19.60- 1 Office Commercial Mixed Use Industrial GO 0 NC C RC CC CMU MUC I-1 1-2 Minimum Front Yard Setback 20 20 20 20 20 20 20 20 20 20 Minimum Flanking Street 20 20 20 20 20 20 20 20 20 20 Setback Minimum Side and Rear Yard Adjacent to a Residential Use 20 20 20 20 20 20 20 20 3-520 3-520 Minimum Side and Rear Yard 20 20 20 20 20 20 20 20 20 35 Adjacent to a Residential Zone Municipal Code Text Amendment COMMUNITY DEVELOPMENT -PLANNING DIVCSIOIV '-' ,0,010 Valley 19.70.010 I-1 , Light Industrial district. B. Supplemental Regulations. 1 . The outdoor storage provisions contained in SVMC 19.60.060(B)1 shall apply to the I-1 district. 2. Mobile food vendors shall be located on/within designated areas which do not interfere with parking or internal circulation with permission of the property owner, health certificate and permit. 3. Setbacks. 111 /11 zoning districts. Purpose: Remove the reference in the Light Industrial Zone to be consistent with the table. Municipal Code Text Amendment 14 COMMUNITY DEVELOPMENT -PLANNING DIVCSIOIV Questions ? Municipal Code Text Amendment 15 CITY OF SPOKANE VALLEY Request for Council Action Meeting Date: July 15, 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: (1) place on future agenda for first reading; (2) other action as appropriate. RECOMMENDED ACTION OR MOTION: Consensus to place on future agenda for first ordinance reading. 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 CITY OF SPOKANE VALLEY Request for Council Action Meeting Date: July 15, 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 Amendment to Interlocal Agreement for Development of Regional Center Projects. GOVERNING LEGISLATION: RCW 39.34, RCW 36.100.030(2), RCW 35.59, RCW 67.28. PREVIOUS COUNCIL ACTION TAKEN: None. BACKGROUND: In 2003, the City of Spokane Valley entered into the Interlocal Agreement for Development of Regional Center Projects (the "Interlocal Agreement") with the Spokane Public Facilities District (the "District") and Spokane County in which, among other things, the District agreed to cooperatively make certain distributions to the City towards financing of CenterPlace. In conjunction with the execution of the Interlocal Agreement, the City issued $9,430,000 of Limited Tax General Obligation Bonds (the "2003 LTGO Bonds") for the purpose of constructing CenterPlace and making necessary road and street improvements surrounding the facility. 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 2003 LTGO Bond issue is currently $5,990,000. The City is currently in the process of refunding the 2003 LTGO Bonds, which will result in a savings to the City and reduction in the annual debt service payments. Accordingly, this will also result in a reduction in the amount of distributions required from the District. To allow for the reduction in payments, Bond counsel for the City has prepared a draft First Amendment to the Interlocal Agreement that reflects the reduction in distributions required as a result of the City's refunding. OPTIONS: Consensus to proceed with a motion consideration at the July 22, 2014 meeting; or take other action deemed appropriate. RECOMMENDED ACTION OR MOTION: Consensus to proceed with a motion consideration at the July 22, 2014 meeting. BUDGET/FINANCIAL IMPACTS: The First Amendment will result in a decrease in distributions from the PFD to the City. However, the decrease will correspond directly to the savings effected from the refunding of the 2003 LTGO Bonds, resulting in no net impact to the City's General Fund. STAFF CONTACT: Mark Calhoun and Erik Lamb ATTACHMENTS: Draft First Amendment to Interlocal Agreement for Development of Regional Center Projects OHS DRAFT DISTRIBUTED: 07/9/14 AFTER RECORDING, RETURN TO: Angela Trout Orrick, Herrington & Sutcliffe LLP 701 Fifth Avenue, Suite 5600 Seattle, Washington 98104 FIRST AMENDMENT TO INTERLOCAL AGREEMENT FOR DEVELOPMENT OF REGIONAL CENTER PROJECTS Grantor(s): Spokane Public Facilities District Spokane County,Washington City of Spokane Valley,Washington Grantee(s): Spokane Public Facilities District Spokane County,Washington City of Spokane Valley,Washington Reference No. of Related Document: Interlocal Agreement for Development of Regional Center Projects Recording No. 4962628, Spokane County,WA FIRST AMENDMENT TO INTERLOCAL AGREEMENT FOR DEVELOPMENT OF REGIONAL CENTER PROJECTS This First Amendment to Interlocal Agreement for Development of Regional Center Projects (the "First Amendment") is entered into this day of , 2014, by and among the SPOKANE PUBLIC FACILITIES DISTRICT (the "District"), a municipal corporation duly organized and existing under the laws of the State of Washington (the "State"); SPOKANE COUNTY, WASHINGTON (the "County"), a class A county duly organized and existing under the laws of the State; and the CITY OF SPOKANE VALLEY, WASHINGTON (the "Valley City"), a municipal corporation duly organized and existing under the laws of the State. The entities executing this First Amendment are each referred to below as a "Party," and are collectively referred to as the "Parties." Unless otherwise defined in this First Amendment, each capitalized term used in this First Amendment shall have the meaning given in the Agreement. RECITALS A. The District is authorized under RCW 36.100.030(1) to "acquire, construct, own, remodel, maintain, equip, reequip, repair and operate sports facilities, entertainment facilities, convention facilities or regional centers as defined in RCW 35.57.020, together with contiguous parking facilities." B. The Parties entered into an Interlocal Agreement for Development of Regional Center Projects, dated August 19, 2003 (as subsequently supplemented by the Approval and Acknowledgement of Exhibit C-2 Insertion to Interlocal Agreement for Development of Regional Center Project, dated November 25, 2003, the "Interlocal Agreement" and together with this First Amendment, the "Agreement"), by and among the District, the County and the Valley City, for the purpose of memorializing the agreements between each Party in connection with the development of three regional center projects within the boundaries of the District, consisting of the Convention Center Project, the Fair & Expo Center Project and the Mirabeau Point Project (collectively, the "Regional Center Projects"), and for the provision of financial assistance by the District in the form of intergovernmental payments to the Valley City (the "Mirabeau Point Payments"). C. Pursuant to Ordinance No. 03-084 adopted by the City Council of the Valley City on October 28, 2003, the Valley City issued its Limited Tax General Obligation Bonds, 2003 (the "2003 Bonds"), in an aggregate principal amount of$9,430,000 in part to provide financing for a portion of the costs of undertaking and accomplishing the Mirabeau Point Project. D. In order to achieve debt service savings on its outstanding limited tax general obligations bonds, the Valley City approved pursuant to Ordinance No. 14-007, adopted by the City Council of the Valley City on July 15, 2014, the issuance and sale of its Limited Tax General Obligation Refunding Bonds, 2014 (the "2014 Bonds"), in an aggregate principal amount not to exceed $7,900,000 for the purpose of redeeming and refunding all of the outstanding 2003 Bonds, including the portion of the 2003 Bonds issued to finance the Mirabeau Point Project. E. In connection with the issuance of the 2014 Bonds, the Parties wish to amend certain provisions of the Interlocal Agreement, including amending the Mirabeau Point Payment schedule to reflect lower Mirabeau Point Payments. F. Section 5.7 of the Interlocal Agreement provides that the Interlocal Agreement may be modified or amended only by a written instrument executed by all parties to the Intergovernmental Agreement. NOW, THEREFORE, in consideration of the mutual representations, covenants, promises and agreements hereinafter contained, the District, the County and the Valley City mutually represent, covenant, acknowledge and agree as follows: SECTION 1. AMENDMENTS TO INTERLOCAL AGREEMENT. 1.01. Amendment to Section 1 of Interlocal Agreement. The following definition in the Interlocal Agreement is hereby amended and restated in its entirety to read as follows (additions shown in bold underline format and deletions shown in strikethrough format for convenience): 1.38 Valley City Bonds means an issue of Valley City limited tax general obligation bonds authorized by the Valley City Bond Ordinance to be issued in an aggregate principal amount of not to exceed $7,000,000 to finance a portion of the cost of the Mirabeau Point Project and any issue of Valley City limited tax general obligation bonds issued to refund the initial issue of Valley City Bonds, provided that the aggregate principal amount of any such issue of refunding bonds allocable to refinancing the costs of the Mirabeau Point Project does not exceed $6,000,000 and that such refunding bonds mature no later than December 1, 2033. 1.02. Amendment to Section 4 of Interlocal Agreement. The following subsection of Section 4 of the Interlocal Agreement is hereby amended and restated in its entirety to read as follows (additions shown in bold underline format and deletions shown in strikethrough format for convenience): 4.04. Financing of Mirabeau Point Project. The Valley City shall issue the Valley City Bonds to finance a portion of the cost of the Mirabeau Point Project. The Valley City Bonds shall be payable from and secured by a pledge of the full faith and credit of the Valley City (within the constitutional and statutory tax limitations provided by law without a vote of the electors of the Valley City); shall be payable on June 1 (interest only) and December 1 (principal and interest) of each year; shall finally mature no later than Rine December 1, 2033; and shall have such other terms as provided in the Valley City Bond Ordinance. The District acknowledges and agrees that, although the Valley City Bonds will be limited tax general obligation bonds pledging the full faith and credit of the Valley City (within the constitutional and statutory tax limitations provided by law without a vote of the electors of the Valley City), the Valley City may at its sole option (but is not required to) apply the proceeds of the Mirabeau Point Payments to the payment of the Valley City Bonds. The Valley City Bonds and any disclosure documents related to the Valley City Bonds shall contain the following statement (or substantially similar language): "The [Valley City Bonds] are not obligations of the Spokane Public 3 Facilities District, Spokane County, the City of Spokane, the State of Washington or any other political subdivision of the State of Washington other than the City. All liabilities incurred by the City with respect to the [Valley City Bonds] shall be satisfied exclusively from the tax revenues, credit and other legally available sources of the City and no owner of the valley City Bonds] or other person shall have any right of action against or recourse to the Spokane Public Facilities District, Spokane County, the City of 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 [Valley City Bonds]." Furthermore, the District acknowledges that its obligation to make the Mirabeau Point Payments as required by Section 4.5 of this Agreement and described in the Intergovernmental Payment Schedule may be material to the offer and sale of the Valley City Bonds, and may be disclosed to potential purchasers and purchasers of those Valley City Bonds. At the City's request, the District will make an appropriate continuing disclosure undertaking in respect of the Valley City Bonds to the same extent as if the District were treated as an "obligated person" (within the meaning of SEC Rule 15c2-12) in respect of the Valley City Bonds. The Valley City shall covenant in the Valley City Bond Resolution Ordinance to maintain the tax exemption for the Valley City Bonds, and shall provide to the other Parties copies of annual financial information and operating data and any material event notices filed by the Valley City with NRMSIRs the Municipal Securities Rulemaking Board pursuant to its continuing disclosure undertaking under SEC Rule 15c2-12 in respect of the Valley City Bonds. 1.03. Amendment of Schedule C-2 of Interlocal Agreement. The Exhibit C-2 setting forth the scheduled Mirabeau Point Payments currently included in the Interlocal Agreement is hereby replaced with the amended Exhibit C-2 attached to this First Amendment. SECTION 2. MISCELLANEOUS. 2.01. Effectiveness of First Amendment. This First Amendment shall be effective with respect to each Party upon execution by that Party and filing of the executed First Amendment with the Spokane County Auditor as required by the provisions of RCW 39.34.040. 2.02. Ratification and Confirmation. Except as expressly amended by this First Amendment, the Agreement is in all respects ratified and confirmed and the terms, provisions and conditions thereof are and shall remain in full force and effect. From and after the date hereof all references to the Agreement shall mean such Agreement as amended by the terms of this First Amendment. 2.03. Captions. The article and section captions used in this First Amendment are for convenience only and shall not control and affect the meaning or construction of any of the provisions of this First Amendment or the Agreement. 2.04. Counterparts. This First Amendment may be executed in counterparts, and each such counterpart shall be deemed to be an original instrument. All such counterparts together will constitute one and the same First Amendment. 4 IN WITNESS WHEREOF, the Parties have executed this First Amendment by their duly authorized officers and representatives this day , 2014. COUNTY: SPOKANE COUNTY,WASHINGTON BY THE BOARD OF COMMISSIONERS SPOKANE COUNTY,WASHINGTON [Chair] [Vice-Chair] [Commissioner] ATTEST: [Deputy Clerk of the Board of County Commissioners] SIGNATURE PAGE - COUNTY DISTRICT: SPOKANE COUNTY PUBLIC FACILITIES DISTRICT [Chair/Chief Executive Officer] ATTEST: [Clerk of the Board] SIGNATURE PAGE - DISTRICT VALLEY CITY: CITY OF SPOKANE VALLEY, WASHINGTON City Manager ATTEST: City Clerk Approved as to form: Office of the City Attorney SIGNATURE PAGE—VALLEY CITY ATTACHMENT REPLACEMENT EXHIBIT C-2 TO INTERLOCAL AGREEMENT OHSUSA:758289770.2 EXHIBIT C-2-MIRABEAU POINT PAYMENTS CITY OF SPOKANE VALLEY Request for Council Action Meeting Date: July 15, 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: Traffic School Interlocal Agreement GOVERNING LEGISLATION: N/A PREVIOUS COUNCIL ACTION TAKEN: Council approved an Interlocal Agreement on January 10, 2012, and an Amendment on October 29, 2013. BACKGROUND: The Spokane County Sheriffs Office currently operates a traffic school for qualifying individuals who have received traffic infractions. The school allows officers to interact with the individuals in a positive environment, providing education regarding current traffic laws and safe driving techniques; in return the participants have their infractions dismissed upon satisfactory completion of the class. The City participates in the traffic school to create a positive impact upon drivers in our community while enhancing the relationship between the police and citizens. The original agreement was for one-year. Council approved an amendment extending the agreement one year and adding auto-renewal language. Prior to the County approving the amendment, the Sheriff disputed the application of indirect costs to the Traffic School and was successful in having legislation adopted at the state level prohibiting indirect costs. The County has subsequently revised the amendment language. Staff has reviewed the proposed revisions and finds them acceptable. OPTIONS: Approve the amendment, terminate participation in the traffic school, or request additional information. RECOMMENDED ACTION OR MOTION: Council consensus to place this matter on the July 22nd Council Consent Agenda BUDGET/FINANCIAL IMPACTS: The City is not charged for participation in the traffic school. All costs are paid by participants. The City does experience a net loss of traffic fine revenue of approximately $60,000. STAFF CONTACT: Morgan Koudelka, Senior Administrative Analyst ATTACHMENTS: Draft Interlocal Agreement DRAFT INTERLOCAL AGREEMENT AMONG THE CITY OF SPOKANE VALLEY, SPOKANE COUNTY,AND THE SPOKANE COUNTY SHERIFF FOR PARTICIPATION IN TRAFFIC SCHOOL THIS AGREEMENT entered into among SPOKANE COUNTY, a political subdivision of the State of Washington, having offices for the transaction of business at 1116 West Broadway Avenue, Spokane, Washington 99260, hereinafter referred to as "COUNTY," the SPOKANE COUNTY SHERIFF, having offices for the transaction of business at 1100 West Mallon, Spokane, Washington 99260, hereinafter referred to as "SHERIFF", and the CITY OF SPOKANE VALLEY, a municipal corporation of the State of Washington, having offices for the transaction of business at 11707 East Sprague, Suite 106, Spokane Valley, Washington 99206 Spokane Falls Boulevard, Spokane, Washington 99201, hereinafter referred to as "CITY", jointly hereinafter referred to as the "PARTIES." WITNESSETH: WHEREAS, pursuant to the provisions of RCW 36.32.120(6), the Spokane County Board of County Commissioners ("Board") has the care of County property and the management of County funds and business; and WHEREAS, chapter 39.34 RCW (Interlocal Cooperation Act), authorizes counties and cities to contract with each other to perform certain functions which each may legally perform; and WHEREAS, RCW 46.83.010 authorizes cities to establish a traffic school subject to agreement with their appropriate county. NOW, THEREFORE, for and in consideration of the mutual promises set forth hereinafter, and the above recitals which are incorporated herein by reference, the PARTIES do mutually agree as follows: SECTION NO. 1: PURPOSE The purpose of this Agreement is to set forth the PARTIES' understanding of the terms and conditions under which the CITY will participate in the traffic school currently being operated by the SHERIFF. SECTION NO. 2: DURATION/ TERMINATION This Agreement shall commence January 1, 2013, and run through December 31, 20132014. At the conclusion of the initial term, this Agreement shall automatically be renewed from year to year thereafter effective January 1st to December 31st Any party for any reason what so ever may terminate this Agreement upon 90 days written notice of termination to the other PARTIES. In the event of termination, the SHERIFF shall continue to provide traffic school services to those CITY participants participating in the traffic school prior to the effective date of termination. Page 1 of 7 DRAFT SECTION NO.3: TRAFFIC SCHOOL A. The SHERIFF currently operates a traffic school for the benefit of Spokane County residents who receive certain traffic infractions in unincorporated areas of the County. The CITY would like to participate in SHERIFF'S traffic school pursuant to chapters 39.34 and 46.83 RCW. B. The purpose of the traffic school is to instruct, educate, and inform all persons appearing for training in the proper, lawful, and safe operation of motor vehicles, including but not limited to rules of the road and the limitations of persons, vehicles, and bicycles and roads, streets, and highways under varying conditions and circumstances. C. The SHERIFF shall charge a fee as authorized by law to traffic school participants. The amount of the fee shall not exceed the base penalty for an unscheduled traffic infraction as established and periodically amended by the Washington State Supreme Court pursuant to RCW 46.63.110, plus any assessments and other costs that are required by statute or rule to be added to the base penalty. Fees collected in excess of the costs of the traffic school may be used as authorized by law-pursuant to RCW 46.83.070. The fee is intended to cover all direct and indirect costs of the traffic school. D. The traffic school shall be held at the Spokane County Sheriff's Office Training Center located at 10319 East Appleway Boulevard, Spokane Valley, WA, 99206 or at such other location as the SHERIFF may hereinafter determine. The training shall be entirely classroom (lecture, discussion and video presentation) and will be approximately six hours in length or as may be determined by the SHERIFF. E. It is anticipated that the Costs for operating the traffic school will be entirely funded by participant fees. For the purpose of this provision, the terminology Costs shall mean the annual expenditures plus indirect costs for the traffic school prepared by the SHERIFF and agreed to by the COUNTY. All PARTIES understand that if the total amount of participant fees exceeds the Cost for operating the traffic school in any calendar year that the surplus money in that calendar year can be used by the SHERIFF for any purpose authorized by law. No costs for the school shall be charged to the CITY. F. Eligible individuals (as determined by the SHERIFF) receiving traffic infraction citations within the city limits of the CITY, shall be given the option of participating in the Traffic School. Satisfactory completion of the class will result in the dismissal of the citation. Additionally, the Spokane County District Court handling a traffic infraction case within the limits of the CITY, shall have the legal ability as provided for in RCW 46.83.050, as part of any sentence imposed following a conviction for any traffic law violation, or as a condition on the suspension of sentence or deferral of any imposition of sentence, to order any person so convicted to attend the traffic school for a number of days to be determined by the court, but not to exceed the maximum number of days which the violator could be required to serve in the city or county jail as a result of his or her conviction. Page 2 of 7 DRAFT SECTION NO. 4: NOTICES All notices or other communications given hereunder shall be deemed given on: (i) the day such notices or other communications are received when sent by personal delivery; or (ii) the third day following the day on which the same have been mailed by certified mail delivery, receipt requested and postage prepaid addressed to PARTIES at the address set forth below, or at such other address as the PARTIES shall from time-to-time designate by notice in writing to the other PARTIES: CITY: City Clerk City of Spokane Valley 11707 East Sprague, Suite 106 Spokane Valley, Washington 99206 Copy: Chief of Police City of Spokane Valley 12710 East Sprague Spokane Valley, Washington 99216 COUNTY: Board of County Commissioners Spokane County Courthouse 1116 West Broadway Avenue Spokane, Washington 99260-0100 Copy: Sheriff Spokane County 1100 West Mallon Avenue Spokane, Washington 99260-0300 SECTION NO.5: ASSIGNMENT This Agreement shall be binding upon the PARTIES, their successors and assigns. No Party may assign, in whole or in part, its interest in this Agreement without the approval of the other Party. SECTION NO. 6: LIABILITY For purposes of this section, the term COUNTY shall include the Spokane County Sheriff. The COUNTY shall indemnify, defend and hold harmless the CITY, its officers and employees from all claims, demands, or suits in law or equity arising from the COUNTY's intentional or negligent acts or breach of its obligations under the Agreement. The COUNTY's duty to indemnify shall not apply to loss or liability caused by the intentional or negligent acts of the CITY, its officers and employees. The CITY shall indemnify, defend and hold harmless the COUNTY, its officers and employees from all claims, demands, or suits in law or equity arising from the CITY's intentional or negligent acts or breach of its obligations under the Agreement. The CITY's duty to indemnify Page 3 of 7 DRAFT shall not apply to loss or liability caused by the intentional or negligent acts of the COUNTY, its officers and employees. If the comparative negligence of the PARTIES and their officers and employees is a cause of such damage or injury, the liability, loss, cost, or expense shall be shared between the PARTIES in proportion to their relative degree of negligence and the right of indemnity shall apply to such proportion. Where an officer or employee of a Party is acting under the direction and control of the other Party, the Party directing and controlling the officer or employee in the activity and/or omission giving rise to liability shall accept all liability for the other Party's officer or employee's negligence. Each Party's duty to indemnify shall survive the termination or expiration of the Agreement. Each Party waives, with respect to the other Party only, its immunity under RCW Title 51, Industrial Insurance. The PARTIES have specifically negotiated this provision. SECTION NO. 7: INSURANCE During the term of the Agreement, the COUNTY shall maintain in force at its own expense, each insurance noted below: a. Worker's Compensation Insurance in compliance with RCW 51.12.020, which requires subject employers to provide workers' compensation coverage for all their subject workers and Employer's Liability or Stop Gap Insurance in the amount of not less than$1,000,000; b. General Liability Insurance on an occurrence basis, with a combined single limit of not less than $1,000,000 each occurrence for bodily injury and property damage. It shall include contractual liability coverage for the indemnity provided under this Agreement. It shall provide that the CITY, its officers and employees are additional insureds but only with respect to the COUNTY's services to be provided under this Agreement; and c. Automobile Liability Insurance with a combined single limit, or the equivalent of not less than $1,000,000 each accident for bodily injury and property damage, including coverage for owned,hired and non-owned vehicles. d. Professional Liability Insurance with a combined single limit of not less than $1,000,000 each claim, incident or occurrence. This is to cover damages caused by the error, omission, or negligent acts related to the professional services to be provided under this Agreement. The coverage must remain in effect for two years after the Agreement is completed. Page 4 of 7 DRAFT There shall be no cancellation, material change, reduction of limits or intent not to renew the insurance coverage(s) without at least 30 days written notice from the COUNTY or its insurer(s) to the CITY. SECTION NO. 8: ANTI-KICKBACK No officer or employee of the COUNTY, having the power or duty to perform an official act or action related to this Agreement shall have or acquire any interest in the Agreement, or have solicited, accepted or granted a present or future gift, favor, service or other thing of value from or to any person involved in the Agreement. SECTION NO. 9: VENUE STIPULATION This Agreement has been and shall be construed as having been made and delivered within the State of Washington and it is mutually understood and agreed by each party that this Agreement shall be governed by the laws of the State of Washington both as to interpretation and performance. Any action at law, suit in equity or judicial proceeding for the enforcement of this Agreement, or any provision hereto, shall be instituted only in courts of competent jurisdiction within Spokane County, Washington. SECTION NO. 10: 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. SECTION NO. 11: NON-DISCRIMINATION No individual shall be excluded from participation in, denied the benefit of, subjected to discrimination under, or denied employment in the administration of or in connection with this Agreement in violation of federal, state or local law. SECTION NO. 12: MISCELLANEOUS A. NON-WAIVER: No waiver by any 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. ENTIRE AGREEMENT: This Agreement contains terms and conditions agreed upon by the PARTIES. The PARTIES agree that there are no other understandings, oral or otherwise, regarding the subject matter of this Agreement. No changes or additions to this Agreement shall be valid or binding upon the PARTIES unless the change or addition is in writing, executed by the PARTIES. C. MODIFICATION: No modification or amendment to this Agreement shall be valid until put in writing and signed with the same formalities as this Agreement. Page 5of7 DRAFT D. HEADINGS: The section headings appearing in this Agreement have been inserted solely for the purpose of convenience and ready reference. In no way do they purport to, and shall not be deemed to define, limit or extend the scope or intent of the sections to which they pertain. E. 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. F. SEVERABILITY: If any parts, terms or provisions of this Agreement are held by the courts to be illegal, the validity of the remaining portions or provisions shall not be affected and the rights and obligations of the PARTIES shall not be affected in regard to the remainder of the Agreement. If it should appear that any part, term or provision of this Agreement is in conflict with any statutory provision of the State of Washington, then the part, term or provision thereof that may be in conflict shall be deemed inoperative and null and void insofar as it may be in conflict therewith and this Agreement shall be deemed to modify to conform to the statutory provision. G. RELATIONSHIP OF THE PARTIES: The PARTIES intend that an independent contractor relationship will be created by this Agreement. No agent, employee, servant or representative of the COUNTY shall be deemed to be an employee, agent, servant or representative of the CITY for any purpose. Likewise, no agent, employee, servant or representative of the CITY shall be deemed to be an employee, agent, servant or representative of the COUNTY for any purpose. For the purpose of this paragraph, the terminology"COUNTY" shall also include"SHERIFF". SECTION NO. 13: RCW 39.34 REQUIRED CLAUSES A. PURPOSE: See Section No. 1 above. B. DURATION: See Section No. 2 above. C. ORGANIZATION OF SEPARATE ENTITY AND ITS POWERS: No new or separate legal or administrative entity is created to administer the provisions of this Agreement. D. RESPONSIBILITIES OF THE PARTIES: See provisions above. E. AGREEMENT TO BE FILED: The CITY shall file this Agreement with its City Clerk and place it on its web site or other electronically retrievable public source. The COUNTY shall file this Agreement with its County Auditor or place it on its web site or other electronically retrievable public source. F. FINANCING: Each party shall be responsible for the financing of its contractual obligations under its normal budgetary process. G. TERMINATION: See Section No. 2 above. Page 6 of 7 DRAFT H. 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. Jointly acquired property shall be divided in proportion to the percentage share of each party contributing to its acquisition. IN WITNESS WHEREOF, the PARTIES have caused this Agreement to be executed on the date and year opposite their respective signature blocks. DATED: BOARD OF COUNTY COMMISSIONERS OF SPOKANE COUNTY,WASHINGTON Shelly O'QuinnAl French, Chair ATTEST: Al FrenchTodd Mielke, Vice-Chair Daniela Erickson Clerk of the Board Todd MiclkcShelly O'Quinn, Commissioner DATED: SPOKANE COUNTY SHERIFF Sheriff Ozzie Knezovich Approved as to form: Deputy Prosecuting Attorney DATED: CITY OF SPOKANE VALLEY City Manager ATTEST: Approved as to form: City Clerk Office of the City Attorney Page 7of7 CITY OF SPOKANE VALLEY Request for Council Action Meeting Date: July 15, 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: Appleway Trail Project #0176— University Plaza Design Concept GOVERNING LEGISLATION: PREVIOUS COUNCIL ACTION TAKEN: Adopted the 2013-2018 Six Year TIP on June 26, 2012; Info Memo in February 19th, 2013 Council Packet regarding SRTC Call for Projects for federal CMAQ and TA grant funds; Admin. Report on Preliminary CMAQ and TA project list at March 5th 2013 Council Meeting; Authorization to proceed with applying for CMAQ and TA grant funds for the Appleway Trail Project on March 12, 2013; Council approval to accept federal TA funds from SRTC on July 9, 2013. BACKGROUND: On July 11, 2013 the SRTC Board awarded $642,852 in federal Transportation Alternative Program (TAP) grant funds for the Appleway Trail Project — University to Evergreen. This amount only partially funded the proposed project. Earlier this year Council expressed their desire to move ahead with constructing that portion of the Appleway Trail between University Road and Pines Road. The federal TAP grant funds could then be used to construct the remaining portion of the trail between Pines Road and Evergreen Road. Staff has identified these two parts of the project as Phase 2A (University to Pines) and Phase 2B (Pines to Evergreen). Amenities to be included with the Phase 2A trail project are: • University Plaza • Trees • Irrigation lines (for trees and future use as the trail area develops) • Security lighting • Benches • Drinking fountain Several concepts for the University Plaza have been developed, reviewed by staff and revised. Staff would like to get Council's comments on what is currently being proposed as a design for the University Plaza. In order to keep the project moving forward staff will bring additional information on the status and design of the Appleway Trail project to the Council meeting Tuesday night. OPTIONS: Discussion RECOMMENDED ACTION OR MOTION: Council discussion. BUDGET/FINANCIAL IMPACTS: The current estimated cost for the Appleway Trail is approximately $1.4 million. The final estimate will likely change based on the final design of the project. STAFF CONTACT: Steve M. Worley— Senior Capital Projects Engineer Eric Guth — Public Works Director ATTACHMENTS: Appleway Trail — University Plaza Design Concepts BOSQUE I SITE PLAN < N m 0 5 10 20 Gabion Benches with Wood Seatingff V M Asphalt Trail .. ---..:R-7-..,,:---_-__ .-:Ado i '- i f ( -7\7 { - ._ '41 , — — Water Fountain(materials example) Rounded Boulder Mulch at Trees ---- .- r ` s� b. j � 4_--y R 'j a Cd •FSP'.. ! �.,� J -, • s +k - Y � Rw ' jg. . Movable Tables and Chairs + + i 4, ; Kiosk at f,. 410 J- mow _ Rail Paving ,`/ h J ! ! �' , Decomposed Granite Paving i _ ... . Concrete Sidewalk Ramp UNIVERSITY WAY Appleway Trail/Spokane Valley,WA June 30, 2014 BOSQUE I SIGN OPTION 1 City of Spokane Valley Standard Parks Sign v..._____... . ,,,_ Th\j-• - 1......_/ '---....4,-) r nPacc''n'1_ ioI ELEVATION A _ . .___-r, , ___ _t:-:,--',1,:io, _ ,:e,-,,,:::::,,,,,,i, , _ .__ 4- N 0 5 10 20 1 — i _ 4+ 0 Appleway Trail/Spokane Valley,WA June 30, 2014 DRAFT ADVANCE AGENDA For Planning Discussion Purposes Only as of July 10 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 22,2014,Formal Meeting Format,6:00 p.m. [due Mon,July 14] 1. Consent Agenda(claims,payroll,minutes,Traffic School Contract) (5 minutes) 2. Second Reading Proposed Ordinance 14-008 Marijuana Regulations—Erik Lamb (10 minutes) 3. First Reading Proposed Ordinance,Noel Telecommunication Franchise—Cary Driskell (5 minutes) 4. Motion Consideration: Bid Award Mansfield Ave Connection—E. Guth (5 minutes) 5.Motion Consideration: TIB Call for Projects List—Steve Worley (5 minutes) 6.Motion Consideration: Interlocal Agreement,WSDOT Operation and Maintenance —Eric Guth(5 minutes) 7.Motion Consideration: Public Facilities District Amended Interlocal Agreement—Erik Lamb (5 minutes) 8.Motion Consideration: Appleway Landscaping Project Bid Award—Eric Guth (10 minutes) 9. Admin Report: Bid Award Appleway Trail,University to Pines—Eric Guth (10 minutes) 10. Admin Report: Comprehensive Solid Waste Plan—Eric Guth (120 minutes) 11. Admin Report: Advance Agenda (5 minutes) 12. Info Only: (a)Dept Monthly Reports; (b)Beekeeping [*estimated meeting: 185 minutes] July 29,2014 no meeting July 31, 2014: Open House Event:Draft Solid Waste Comprehensive Plan; Council Chambers, 4 6 p.m. 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.Motion Consideration: Bid Award Appleway Trail,University to Pines—E. Guth (5 minutes) 6. Admin Report: Estimated Revenues and Expenditures 2015 budget—Mark Calhoun (15 minutes) 7. Tourism Promotion Agency(TPA)—Mark Calhoun,Erik Lamb (15 minutes) 8. Lodging Tax Advisory Committee—Mark Calhoun,Erik Lamb (15 minutes) 9. Admin Report: Advance Agenda (5 minutes) [*estimated meeting: 95 minutes] August 19,2014, Study Session Format, 6:00 p.m. [due Mon,Aug 11] 1. Historic Preservation—Mike Basinger (20 minutes) 2. Thierman Traffic Analysis—Sean Messner (20 minutes) 3. Shoreline Development Regulations—Lori Barlow (60 minutes) 4. Advance Agenda (5 minutes) [*estimated meeting: 105 minutes] 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] Draft Advance Agenda 7/10/2014 2:55:21 PM Page 1 of 3 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. Proposed 2015 Property Tax Ordinance—Mark Calhoun (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) [*estimated meeting: 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) 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—Mark Calhoun (15 minutes) 5. Admin Report: Advance Agenda (5 minutes) 6. Info Only: Department Monthly Reports [*estimated meeting: 45 minutes] Draft Advance Agenda 7/10/2014 2:55:21 PM Page 2 of 3 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 Coal/Oil Train Environmental Impact Statement Economic Incentives Fire and Life Safety Code SEPA/NEPA Process—Eric Guth Stormwater Swales,care of Street Vacation/Connectivity Process Truck Parking in Residential Areas Draft Advance Agenda 7/10/2014 2:55:21 PM Page 3 of 3 CITY OF SPOKANE VALLEY Request for Council Action Meeting Date: July 15, 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: Solid Waste Management Plan GOVERNING LEGISLATION: N/A PREVIOUS COUNCIL ACTION TAKEN: N/A BACKGROUND: With Council's decision to contract for solid waste management services, staff contracted with Green Solutions to assist in preparation of a Solid Waste Management Plan. This Plan is intended to provide guidance for the solid waste system within the City of Spokane Valley. The solid waste system includes garbage collection and disposal, and programs for waste reduction, recycling, organics, special wastes and the administration of these programs. This Plan is intended to provide guidance on program development and implementation for these activities for the next five to six years, while also attempting to anticipate the needs of the solid waste system 20 years from now. State law (Chapter 70.95 RCW) provides the authority for the City to adopt this Plan and also lists the requirements for the contents of the Plan. In preparing this Plan, the City is exercising its authority to "prepare and deliver to the county auditor of the county in which it is located its plan for its own solid waste management for integration into the comprehensive county plan" (RCW 70.95.080). The City will conduct a public input process for the review of this Plan from mid-July to August 31, 2014. When the draft plan is released in July, a digital copy of the draft plan will be placed on the City's website and a hard copy will be placed at the City Clerk's office and at the public library. Notices will be provided to City residents and businesses as to the availability of the draft plan and the process for providing comments. Opportunity for public comment will occur at a public open house scheduled for July 31, 2014, conducted for the specific purpose of receiving public input. After the deadline for public comments, City staff will prepare a response document to the State Department of Ecology (DOE) that lists every comment received and any revisions we are proposing to the Plan. The review process for the DOE consists of two parts: a 120-day draft plan review and a 45-day final review and approval. During DOE's final review process, staff will request Council's adoption of the Plan through a resolution. The draft plan is anticipated to be submitted to DOE on Wednesday, July 16, 2014. Staff anticipates bringing the final version of the plan before Council in November, 2014 for adoption. This item is scheduled as an Administrative Report for the July 22, 2014 Council meeting. OPTIONS: Information RECOMMENDED ACTION OR MOTION: Information BUDGET/FINANCIAL IMPACTS: N/A STAFF CONTACT: Eric Guth, Public Works Director ATTACHMENTS: Draft Solid Waste Management Plan �I'I'Y (lf' Spol, ane Valley SPOKANE VALLEY SOLID WASTE MANAGEMENT PLAN PRELIMINARY DRAFT PLAN JULY 2014 This page intentionally left blank to facilitate double-sided printing. t.. GREEN SOLUTIONS ENVIRONMENTAL CONSULTING SPOKANE VALLEY SOLID WASTE MANAGEMENT PLAN PRELIMINARY DRAFT PLAN JULY 2014 Prepared by: Green Solutions PO Box 680 South Prairie, WA 98385 rick@green-solutions.biz (360) 897-9533 This page intentionally left blank to facilitate double-sided printing. TABLE OF CONTENTS Executive Summary Introduction E-1 Overview of Recommendations E-1 Waste Reduction Recommendations E-2 Recycling and Organics Recommendations E-2 Solid Waste Collection Recommendations E-3 Transfer and Disposal Recommendations E-3 Special Waste Recommendations E-3 Administration Recommendations E-4 Implementation Details for the Recommendations E-4 1 Introduction 1.1 Purpose 1-1 1.2 Planning Area 1-1 1.3 Planning Authority 1-1 1.4 Required Plan Elements 1-1 1.5 Planning Goals 1-2 1.6 Solid Waste Planning History 1-3 1.7 Relationship to Other Plans 1-3 1.8 Public Participation in the Planning Process 1-4 2 Background of the Planning Area 2.1 Introduction 2-1 2.2 Demographics 2-1 2.3 Economy 2-2 2.4 Criteria for Siting Disposal Facilities in the Planning Area 2-4 2.5 Current Waste Generation 2-4 3 Waste Reduction 3.1 Existing Waste Reduction Activities 3-1 3.2 Waste Reduction Planning Issues 3-2 3.3 Alternative Waste Reduction Strategies 3-3 3.4 Evaluation of Waste Reduction Alternatives 3-7 3.5 Waste Reduction Recommendations 3-8 Spokane Valley Solid Waste Management Plan i Table of Contents by Green Solutions 4 Recycling and Organics Collection 4.1 Existing Recycling and Organics Programs 4-1 4.2 Designation of Recyclable Materials 4-6 4.3 Planning Issues for Recycling and Organics 4-8 4.4 Alternative Recycling and Organics Strategies 4-8 4.5 Evaluation of Recycling and Organics Alternatives 4-9 4.6 Recycling and Organics Recommendations 4-11 5 Solid Waste Collection 5.1 Existing Waste Collection Activities 5-1 5.2 Waste Collection Future Planning 5-3 5.3 Alternative Waste Collection Strategies 5-3 5.4 Evaluation of Waste Collection Alternatives 5-4 5.5 Waste Collection Recommendations 5-5 6 Transfer and Disposal 6.1 Existing Transfer and Disposal Activities 6-1 6.2 Transfer and Disposal Planning Issues 6-3 6.3 Alternative Transfer and Disposal Strategies 6-3 6.4 Evaluation of Transfer and Disposal Alternatives 6-5 6.5 Transfer and Disposal Recommendations 6-5 7 Special Wastes 7.1 Introduction 7-1 7.2 Biomedical Wastes 7-1 7.3 Construction and Demolition Wastes 7-3 7.4 Moderate-Risk Wastes 7-5 7.5 Street Sweepings and Vactor Wastes 7-9 7.6 Evaluation of Special Waste Alternatives 7-10 7.7 Special Waste Recommendations 7-11 8 Administration 8.1 Existing Administration Activities 8-1 8.2 Administration Planning Issues 8-3 8.3 Alternative Administration Strategies 8-4 8.4 Evaluation of Administration Alternatives 8-4 8.5 Administration Recommendations 8-5 Spokane Valley Solid Waste Management Plan ii Table of Contents by Green Solutions 9 Implementation Plan 9.1 Introduction 9-1 9.2 Waste Reduction Recommendations 9-1 9.3 Recycling and Organics Recommendations 9-2 9.4 Solid Waste Collection Recommendations 9-2 9.5 Transfer and Disposal Recommendations 9-2 9.6 Special Waste Recommendations 9-3 9.7 Administration Recommendations 9-3 9.8 Six-Year Implementation Schedule 9-3 9.9 Implementation Responsibilities 9-5 9.10 Funding Strategy 9-6 9.11 Twenty-Year Implementation Schedule 9-6 9.11 Procedures for Amending the Plan 9-7 Attachments Glossary A. Environmental Checklist B. Resolution of Adoption LIST OF TABLES Executive Summary E-1, Implementation Summary for Recommendations E-6 2 Background of the Planning Area 2-1, Population of Spokane Valley 2-1 2-2, Size of Businesses in Spokane Valley 2-3 2-3, Types of Businesses in Spokane Valley 2-3 2-4, Estimated Composition of Solid Waste Disposed in Spokane Valley 2-6 2-5, Recycled and Diverted Materials 2-7 2-6, Projected Solid Waste and Recycling Quantities for Spokane Valley 2-7 3 Waste Reduction 3-1, Rating of the Waste Reduction Alternatives 3-8 Spokane Valley Solid Waste Management Plan iii Table of Contents by Green Solutions List of Tables, continued 4 Recycling and Organics Collection 4-1, Materials Collected for Recycling by Waste Management 4-3 4-2, List of Designated Recyclable Materials 4-7 4-3, Rating of the Recycling and Organics Alternatives 4-10 5 Solid Waste Collection 5-1, Waste Collection Service Providers in Spokane Valley 5-1 5-2, Rating of the Waste Collection Alternatives 5-5 6 Transfer and Disposal 6-1, Preliminary Cost Analysis for Regional System 6-4 6-2, Rating of the Transfer and Disposal Alternatives 6-6 7 Special Wastes 7-1, Rating of the Special Waste Alternatives 7-11 8 Administration 8-1, Rating of the Administration Alternatives 8-5 9 Implementation Plan 9-1, Implementation Schedule for Recommendations 9-4 9-2, Implementation Responsibilities for Recommendations 9-5 9-3, Funding Strategies for Recommendations 9-6 LIST OF FIGURES 2 Background of the Planning Area 2-1, Population Distribution for Spokane Valley 2-2 4 Recycling and Organics Collection 4-1, Price Paid for Baled Aluminum Cans 4-5 4-2, Prices Paid for Select Recyclable Materials 4-5 6 Transfer and Disposal 6-1, Solid Waste Facilities in Spokane Valley 6-2 Spokane Valley Solid Waste Management Plan iv Table of Contents by Green Solutions EXECUTIVE SUMMARY for the SPOKANE VALLEY SOLID WASTE MANAGEMENT PLAN INTRODUCTION The Spokane Valley Solid Waste Management Plan (the "Plan") is intended to provide guidance for the solid waste system in the City of Spokane Valley. The solid waste system includes garbage collection and disposal, and programs for waste reduction, recycling, organics, special wastes and the administration of these programs. This Plan is intended to provide guidance on program development and implementation for these activities for the next five to six years,while also attempting to anticipate the needs of the solid waste system 20 years from now. State law (Chapter 70.95 RCW) provides the authority for the City to adopt this Plan and also lists the requirements for the contents of the Plan. In preparing this Plan, the City is exercising its authority to "prepare and deliver to the county auditor of the county in which it is located its plan for its own solid waste management for integration into the comprehensive county plan" (RCW 70.95.080). OVERVIEW OF RECOMMENDATIONS The most significant recommendations in this Plan deal with the new programs and activities that will be necessary for the City of Spokane Valley to create its solid waste system. The City recently contracted with Sunshine Recyclers, Inc. ("Sunshine"1) to provide solid waste transfer, transport, and disposal services for the City. This Plan designates the Sunshine Disposal & Recycling Transfer Station ("Sunshine Transfer Station") as the disposal facility for all solid waste from the City. An administrative fee paid by that facility will provide funding for the public education and other additional activities that the City will need to perform in support of the new system. This Plan also incorporates the changes resulting from the contracts with the waste haulers in the City (Waste Management and Sunshine Disposal). The process of contracting for waste collection services was already underway before the development of this Plan, and is a logical step for the City to take to ensure the appropriate services for their residents and businesses. 1 Sunshine Recyclers,Inc.operates a number of businesses providing transfer,disposal,and collection services. For the purposes of this Plan,"Sunshine"refers to that entity providing transfer,transport,and disposal services to the City pursuant to its recent contract,while"Sunshine Disposal"refers to the entity providing solid waste and recycling collection services. Spokane Valley Solid Waste Management Plan E-1 Executive Summary by Green Solutions All of the recommendations made in this Plan are listed below and are also summarized in Table E-1. Note that the recommendations are not listed in any particular order within each group (for instance, the three high-priority recommendations shown for waste reduction are not listed in any particular order, such as schedule or cost, within that group). WASTE REDUCTION RECOMMENDATIONS The following recommendations are being made for waste reduction programs (see Chapter 3 of the Plan for more details): High-Priority Recommendations WR1) The City of Spokane Valley will evaluate product stewardship programs as these are proposed on a statewide or national level, and support those if appropriate to the interests of their citizens and the business community. WR2) The business community in Spokane Valley may be encouraged to reduce waste through a recognition program that publicizes success stories. WR3) The City of Spokane Valley will adopt policies and practices to encourage City departments to reduce waste. Medium-Priority Recommendations WR4) Public education materials distributed by the City of Spokane Valley will include information on alternative handling methods for yard waste, the value of"smart shopping" methods, how to avoid wasting food, and the availability of volume-based garbage collection fees. Low-Priority Recommendations WR5) A ban on the disposal of yard waste within solid waste disposal containers may be considered in the future if public education and outreach efforts are not effective in diverting most of this material from the waste stream. RECYCLING AND ORGANICS RECOMMENDATIONS The following recommendations are being made for recycling and organics collection programs (see Chapter 4 for more details): Spokane Valley Solid Waste Management Plan E-2 Executive Summary by Green Solutions High-Priority Recommendations R1) Curbside recycling will continue to be included with garbage collection services for residential customers in Spokane Valley. R2) City residents and businesses will be encouraged to use the Sunshine Transfer Station for yard waste and organics ("Clean Green") drop-off services. Medium-Priority Recommendations R3) Weekly curbside recycling will be evaluated as part of the waste collection system changes expected to be implemented by Spokane Valley in 2018. SOLID WASTE COLLECTION RECOMMENDATIONS The following recommendations are being made for waste collection programs (see Chapter 5 for more details): High-Priority Recommendations C1) When the City fully assumes control of collection services, anticipated to be in 2018,various options will be considered for providers and service levels, including negotiating versus bidding for haulers and collection frequency for recycling. Medium-Priority Recommendations C2) Educate the public on the benefits of curbside collection services and the comprehensive costs related to self-haul to transfer station. TRANSFER AND DISPOSAL RECOMMENDATIONS The following recommendations are being made for transfer and disposal programs (see Chapter 6 for more details): High-Priority Recommendations D1) The Sunshine Transfer Station is designated as the disposal system for all solid waste from Spokane Valley, effective November 17, 2014. Spokane Valley Solid Waste Management Plan E-3 Executive Summary by Green Solutions SPECIAL WASTE RECOMMENDATIONS The following recommendations are being made for special waste programs (see Chapter 7 for more details): High-Priority Recommendations SW1) Proper disposal options for residential sharps (syringes) will be promoted through a cooperative effort between the City of Spokane Valley, the Spokane Regional Health District ("Health District"), and the waste collectors. SW2) Green building practices will be promoted by distributing brochures and publicizing other sources of information. SW3) City residents and businesses will be encouraged to use the Sunshine Transfer Station for MRW services. ADMINISTRATION RECOMMENDATIONS The following recommendations are being made for administration programs (see Chapter 8 for more details): High-Priority Recommendations Al) The additional services and programs needed by the City to support the City's solid waste system will be performed by contracted services to the extent feasible and appropriate. Existing City staff will be used to monitor the contracts and programs for solid waste in the City of Spokane Valley. Medium-Priority Recommendations A2) The additional funds needed to implement the City's solid waste system will be collected through surcharges on tipping fees collected at the Sunshine Transfer Station. IMPLEMENTATION DETAILS FOR THE RECOMMENDATIONS Table E-1 shows a summary of the recommendations, including the following information: • Lead agency (or company): each recommendation requires an agency or company to take charge of seeing that it is implemented in a timely fashion. The City of Spokane Valley Solid Waste Management Plan E-4 Executive Summary by Green Solutions Spokane Valley is the lead agency for most of the recommendations, but in some cases this responsibility is shared with other parties. • Priority: the level of priority is shown for each recommendation in case limited resources should prevent the implementation of all of the recommendations in the future. • Cost: cost information is shown where available, and the cost figures shown are only the costs to the City. In some cases, there may be additional costs to others in terms of user fees and other expenses. For many of the recommendations, the primary expense is staff time. • Funding sources: the proposed source(s) of the funds to pay for recommended activities is shown in the last column of Table E-1. The funding source for several of the recommendations is shown as "Fee/CPG," which is an abbreviated way of saying that the funds would come from the fees charged to Sunshine (the administrative fee and the right-of-way maintenance fee, collectively referred to as a "disposal surcharge" throughout this Plan) and/or Coordinated Prevention Grant ("CPG") funds when those become available to the City in mid-2015. Additional details for most of the recommendations can be found in the appropriate chapters of this Plan. The recommendations are numbered according to the chapter where they are discussed for easier cross-referencing to other parts of the Plan. Recommendation #WR1, for instance, is the first recommendation shown in the Waste Reduction chapter (Chapter 3). Note that the many of the recommendations are shown in an abbreviated form in Table E-1 due to space constraints. Spokane Valley Solid Waste Management Plan E-5 Executive Summary by Green Solutions Table E-1 Implementation Summary for Recommendations Recommended Activity Lead Agency Priority Annual Cost Funding Source Waste Reduction WR1) Support product stewardship programs as appropriate City High Staff time NA WR2) Business waste reduction recognition program City High $25K Fee/CPG WR3) Adopt city waste reduction policies City High Staff time NA WR4) Promote waste reduction City Medium $100K* Fee /CPG WR5) Consider yard waste disposal ban City Low Staff time NA Recycling and Organics R1) Continue to include curbside recycling with garbage City High Staff time NA service R2) Encourage use of Sunshine Transfer Station for clean City High Staff time** Fee /CPG green R3) Evaluate weekly curbside recycling City Medium Staff time NA Solid Waste Collection C1) Contract for collection service City High Staff time NA C2) Increase curbside collection subscriptions City Medium Staff time NA Transfer and Disposal D1) Designate Sunshine Transfer Station as the disposal site City High NA NA for all waste from Spokane Valley Special Wastes SW1) Promote proper disposal of residential sharps Health District High $25-$50K Fee /CPG SW2) Promote green building City High $5K Fee /CPG SW3) Encourage use of Sunshine Transfer Station for MRW City High Staff time** Fee /CPG Administration Al) Use existing staff City High Staff time NA A2) Disposal surcharge as funding source City Medium Staff time NA Notes: NA= Not Applicable. *The cost for Recommendation WR4 includes other public education. ** Includes expenses for public education, the cost of which are included in the cost shown to Recommendation WR4. Spokane Valley Solid Waste Management Plan E-6 Executive Summary by Green Solutions CHAPTER 1 INTRODUCTION 1 .1. PURPOSE This Plan is intended to guide the solid waste system in the City of Spokane Valley. The City's solid waste system (the "City's System") includes garbage collection and disposal, as well as programs for waste reduction, recycling, organics, special wastes, and for the administration of these programs. This Plan is intended to provide guidance for the implementation of the City's System for the next five to six years, while also attempting to anticipate the needs of the City's System for the next 20 years. 1 .2. PLANNING AREA This Plan primarily addresses programs and activities for the incorporated area of the City of Spokane Valley, although a few of the activities extend beyond City limits. There are no known Tribal properties in the City,but there are eighteen federally- owned properties that could potentially choose to manage their solid waste separately from the City's System. The federal properties range in size from 0.15 to 21.1 acres. Figure 6-1 shows a map of Spokane Valley and local solid waste facilities. 1 .3. PLANNING AUTHORITY State law (Chapter 70.95 RCW) provides the authority for the City to develop and implement this Plan. In preparing this Plan, the City is exercising its authority to "prepare and deliver to the county auditor of the county in which it is located its plan for its own solid waste management for integration into the comprehensive county plan" (RCW 70.95.080(3)(a)). 1 .4. REQUIRED PLAN ELEMENTS RCW 70.95.090 establishes requirements for solid waste management plans. These requirements include the following elements: • An inventory and description of existing solid waste handling facilities including any deficiencies in meeting current needs. • The projected 20-year needs for solid waste handling facilities. Spokane Valley Solid Waste Management Plan 1-1 Chapter 1: Introduction by Green Solutions • A program for the development of solid waste handling facilities that meets all laws and regulations, takes into account comprehensive land use plans, contains a six- year construction and capital acquisition program, and contains a plan for financing the capital costs and operational expenses of the proposed solid waste system. • A program for surveillance and control (to avoid or mitigate the negative impacts of improper waste handling). • An inventory and description of solid waste collection operations, including the identification of collection franchise holders, municipal operations, population densities by service area, and the projected waste collection needs for six years. • A comprehensive waste reduction and recycling element that provides programs to reduce the amount of wastes generated, provides mechanisms and incentives for source separation, and establishes recycling opportunities. • A review of potential areas that meet the criteria for land disposal facilities (RCW 70.95.165). 1 .5. PLANNING GOALS The goal of this Plan is to develop and maintain a solid waste management system that protects public health and the environment in a cost-effective manner. The specific goals of this Plan are to: • Ensure convenient and reliable services for managing solid waste. • Promote the use of innovative and economical waste handling methods. • Encourage public-private partnerships where possible. • Emphasize waste reduction as a fundamental management strategy. • Encourage the recovery of marketable resources from solid waste. • Assist the State in maintaining its goal of a 50 percent recycling rate. • Ensure compliance with state and local solid and moderate-risk waste regulations. • Assist those who sell and use products containing hazardous ingredients to minimize risks to public health and the environment. • Provide customers information and education to promote recommended waste management practices. • Support the State's Beyond Waste goals, especially for the five key initiatives: increased diversion of organic materials; increased use of green building methods; improved management of small-volume hazardous wastes; improved management of industrial wastes; and measuring progress. One of the six major goals of the Spokane Valley City Council for 2014 is to "implement solid waste alternatives for collection, transport and disposal in the best interest of the City of Spokane Valley." Spokane Valley Solid Waste Management Plan 1-2 Chapter 1: Introduction by Green Solutions 1 .6. SOLID WASTE PLANNING HISTORY The City of Spokane Valley was incorporated in 2003. Since that time, representatives of the City have participated in the Spokane County solid waste plan through an Interlocal Agreement effective July 15, 2003 through November 16, 2014. Since 2003, City representatives have participated in planning efforts through membership on the Spokane County Solid Waste Advisory Committee ("SWAC") and the Spokane Regional Solid Waste Liaison Board. Both of these groups were instrumental in the review and adoption of the Spokane County 2009 Comprehensive Solid Waste Management Plan. 1 .7. RELATIONSHIP TO OTHER PLANS This Plan is designed to be consistent with a number of other plans. The most significant of these plans are described below. Spokane County Solid Waste Management Plan To date, the City of Spokane Valley has participated in the development of the Spokane County 2009 Comprehensive Solid Waste Management Plan and has implemented programs consistent with that plan. Hence, the City is starting this planning process from a point that is consistent with the Spokane County plan. While future programs in the City may diverge from the County programs, the use of regional service-providers and facilities will help ensure consistency for most programs. Washington State Solid Waste Management Plan The Washington State Department of Ecology ("Ecology") prepared a statewide solid waste management plan, commonly referred to as the "Beyond Waste Plan," in 2004. The Beyond Waste Plan adopted a vision that states that society can transition to a point where waste is viewed as inefficient and most wastes have been eliminated. This transition is expected to take 20 to 30 years or more. In the short term, the Beyond Waste Plan recommends actions that can be undertaken to achieve specific goals in five areas: • Increased diversion of organic materials; • Increased use of green building methods; • Improved management of small-volume hazardous wastes; • Improved management of industrial wastes; and • Measuring progress. The Beyond Waste Plan was updated in 2009 to refine the goals and recommendations of the 2004 plan. The 2009 update also addressed additional solid and hazardous waste Spokane Valley Solid Waste Management Plan 1-3 Chapter 1: Introduction by Green Solutions issues. The Beyond Waste Plan is discussed in greater detail in several sections of this Plan as appropriate to the topics in each chapter. City Comprehensive Plan The Spokane Valley Comprehensive Plan ("SVCP") provides a 20-year vision for the future of Spokane Valley. The vision statement adopted by the SVCP is that Spokane Valley will be "a community of opportunity where individuals and families can grow and play and businesses can flourish and prosper." The SVCP was adopted on April 25, 2006, and revisions to this plan are considered annually. The SVCP provides a significant amount of detail for policies and programs for related topics (land use, transportation, utilities, etc.), and as such it should be considered to have precedence over this solid waste plan in those matters. Programs proposed in this plan, especially those that might impact capital facilities, land use and transportation, should be checked against the SVCP to ensure consistency. 1 .8. PUBLIC PARTICIPATION IN THE PLANNING PROCESS The City will use its standard adoption process for the final Plan. This process includes three steps; an informational memo to the City Council, an administrative report and work session, and a formal meeting where the Plan will be approved and adopted. Public comment will be accepted at the formal meeting of the City Council prior to adoption, which is anticipated to occur in November 2014,but the City will also provide additional opportunity for public comment prior to consideration of the Plan by City Council. The City will conduct a public input process for the review of this Plan from mid-July to August 31, 2014. When the draft plan is released in July, a digital copy of the draft plan will be placed on the City's website and a hard copy will be placed at the City Clerk's office and at the public library. Notices will be provided to City residents and businesses as to the availability of the draft plan and the process for providing comments on it. Opportunity for public comment will occur at an open house/public meeting conducted for the specific purpose of receiving public input and during the SEPA process. Comments can also be submitted through the City's website, www.spokanevalley.org. Spokane Valley Solid Waste Management Plan 1-4 Chapter 1: Introduction by Green Solutions CHAPTER 2 BACKGROUND OF THE PLANNING AREA 2 . 1 . INTRODUCTION This chapter of the Plan provides basic information that is used in later chapters, including information on demographics, economic factors, and the amount and composition of waste generated in the City. It also discusses the criteria for siting disposal facilities (landfill or incinerator) in the City. 2 .2. DEMOGRAPHICS Total Population The population of Spokane Valley has increased steadily since the City's incorporation in 2003 (see Table 2-1). Based on population, Spokane Valley is the tenth largest city in Washington State, and it is more populated than two-thirds (26 out of 39) of the counties in Washington State. Table 2-1 Population of Spokane Valley Year Total Population Annual Increase 2003 82,985 0.5% 2004 83,436 0.5% 2005 84,465 1.2% 2006 86,601 2.5% 2007 87,894 1.5% 2008 88,513 0.7% 2009 88,969 0.5% 2010 89,755 0.9% 2011 90,110 0.4% 2012 90,550 0.5% 2013 91,490 1.0% Projected Figures 2014 92,600 1.2% 2020 96,657 0.7% 2025 100,175 0.7% 2030 103,820 0.7% Source: Data for 2003-2013 is from the Washington Office of Financial Management (OFM). Data for 2014 through 2030 is from the Spokane Valley Planning Division. Spokane Valley Solid Waste Management Plan 2-1 Chapter 2: Background of the Planning Area by Green Solutions Housing Based on the most recent census, in 2010 there were 89,755 people occupying 36,558 households. There were another 2,293 households that were vacant at that time. Over half (62%) of the households were owner-occupied. Two-thirds (67.4%) of the housing in 2010 was single-family homes,with another 5.0% in duplexes through quadplexes, 21.4% in multi-family units (five or more units per building), and 6.2% in mobile homes. Age of Population The population distribution for Spokane Valley according to age is illustrated in Figure 2-1. Compared to the age distribution for Washington State, Spokane Valley's population contains a slightly higher percentage of young children (ages 0-4), slightly fewer middle-aged residents (ages 30-44), and a slightly higher percentage of senior citizens (ages 65 and up). Figure 2-1 Population Distribution for Spokane Valley 8.0% — — 7.0% 11...0.401.4016 7.0 6.0% 1- 5.0% 4.0% c 3.0% Washington 2.0% State 1.0% Spokane Valley 0.0% I I I I I I I I I I I I I I I I rn rnrn , rn rn rn + 7t (9.1 m rnuI uI �o �o r� r I 00 ,r, O u1 O u1 O u1 O u1 O u1 O u1 O u1 O 00 rI rI N N m m to N 00 Age Groups Sources: Data is from the Washington Office of Financial Management(OFM). 2.3. ECONOMY The City of Spokane Valley has a stable business environment and recognizes the importance of businesses in providing a strong local economy. The City provides relatively more assistance to businesses than other areas, especially in permitting new businesses and developing new sites. The City has a large industrial park (one the Spokane Valley Solid Waste Management Plan 2-2 Chapter 2: Background of the Planning Area by Green Solutions largest industrial parks in the country). Tables 2-2 and 2-3 show basic information about businesses in Spokane Valley. For Table 2-3, this information is organized according to Standard Industrial Classification ("SIC") codes, which is a federal system of organizing businesses by type of activity. Table 2-2 Size of Businesses in Spokane Valley (2013) Business Size Number of Percentage Businesses 1-4 Employees 2,754 58.3% 5-9 Employees 909 19.2% 10-19 Employees 496 10.5% 20-49 Employees 361 7.6% 50-99 Employees 121 2.6% 100-249 Employees 69 1.5% 250-499 Employees 10 0.2% 500-999 Employees 4 0.1% 1,000+ Employees 1 0.02% Total 4,725 Source: Data is from the Spokane Regional Site Selector and is for 2013. Table 2-3 Types of Businesses in Spokane Valley (2013) Business Type Number of Percentage Employees Agricultural, Forestry and Fishing (SIC 1-9) 640 1.2% Mining (SIC 10-14) 50 0.1% Construction (SIC 15-17) 2,647 5.1% Manufacturing (SIC 20-39) 5,825 11.1% Transportation and Communications (SIC 40-49) 3,187 6.1% Wholesale Trade (SIC 50-51) 4,045 7.7% Retail Trade (SIC 52-59) 12,820 24.5% Finance, Insurance, and Real Estate (SIC 60-69) 2,599 5.0% Services (SIC 70-89) 19,146 36.6% Public Administration (SIC 90-98) 1,189 2.3% Unclassified (SIC 99) 210 0.4% Total 52,359 Source: Data is from the Spokane Regional Site Selector and is for 2013. SIC = Standard Industrial Classification. Spokane Valley Solid Waste Management Plan 2-3 Chapter 2: Background of the Planning Area by Green Solutions 2.4. CRITERIA FOR SITING DISPOSAL FACILITIES IN THE PLANNING AREA The minimum required contents for a solid waste management plan include "a review of potential areas that meet the criteria for land disposal facilities" (RCW 70.95.090). These criteria are listed in a different section of State law, RCW 70.95.165, which refers to solid waste disposal facility siting, and include: (a) Geology (g) Cover material (b) Groundwater (h) Capacity (c) Soil (i) Climatic factors (d) Flooding (j) Land use (e) Surface water (k) Toxic air emissions (f) Slope (1) Other factors determined by Ecology Reviewing the siting factors in a solid waste management plan being prepared for a county,which would have a larger land area and potential landfill sites located away from urban areas, is more meaningful than addressing these criteria in this Plan. The area addressed by this Plan consists of only 38.2 square miles and has a population density of 2,394 people per square mile, making it highly unlikely that a solid waste disposal facility would be sited in the area. In addition, one of the standards adopted by Ecology prohibits the siting of MSW or limited purpose landfills over federally- designated sole source aquifers. The City of Spokane Valley is located over the Spokane Valley-Rathdrum Aquifer,which has been designated as a sole source aquifer. Hence, no new or expanded MSW or limited purpose landfills may be sited in Spokane Valley. Other types of land disposal facilities, such as land application sites, piles, and surface impoundments, might be possible in the planning area, but the specific factors that affect the siting of these types of facilities vary widely and will need to be reviewed at the time a specific proposal is being considered. 2.5. CURRENT WASTE GENERATION The current amount of waste generated in the City of Spokane Valley is estimated at 55,540 tons per year (see Table 2-5). This estimate includes residential and commercial waste quantities collected by the two waste collection companies currently active in the City, as well as the amounts "self-hauled"2 by residents and businesses to a transfer station. There is no data specific to Spokane Valley for the composition of this waste or 2 "Self-haul" is the term used for the practice of a waste generator(the person or company that created the waste)to haul their own waste to a transfer station or other disposal facility. This is a common practice for construction contractors, for instance, and in Spokane Valley there are also a significant number of residents that choose to use this method rather than subscribe to garbage collection services. Spokane Valley Solid Waste Management Plan 2-4 Chapter 2: Background of the Planning Area by Green Solutions for the amounts of recyclable and compostable materials that are collected from the City,but the following sections describe the best available information for these. Composition of Spokane Valley's Solid Waste Table 2-4 shows the estimated composition of the solid wastes disposed from Spokane Valley. These figures are provided for planning purposes and are based on data developed for a 12-county area in eastern Washington State. These figures can be used together with the waste disposal estimate of 55,540 tons per year to provide estimates for the amounts of specific materials disposed annually (as shown in the last column of Table 2-4). Amount of Recyclable Materials Collected from Spokane Valley Ecology conducts an annual survey of the amount of materials collected for recycling and composting in Washington State. This survey includes amounts collected through curbside recycling programs and also commercial and special collections for a wide variety of materials. Ecology can provide this data for each county, but the data is not available on a city-by-city basis. Prorating the data for Spokane County appears to be the best available source of data on how much recycling is currently conducted in Spokane Valley. Since 1999, Ecology has also collected data on the amount of"diverted" materials, which are materials that are diverted from disposal to beneficial uses that are not defined as recycling. Examples of diverted materials include asphalt and concrete that are recycled (these materials are not included in the definition of recycling) and wood waste burned for energy (incineration is also not defined as recycling). Table 2-5 shows the most recent recycling data for Spokane County (2012) and prorated figures for Spokane Valley based on the City's share of the County's population (19.0% in 2012). Table 2-5 uses a prorated share (55,540 tons) of the total solid waste amount for the County in order to provide a consistent analysis here. This figure is often called "MSW" (municipal solid waste),which does not include some types of industrial and other wastes. Construction and demolition ("C&D") wastes are also not generally included in MSW, although some amount of this is actually included in the MSW figures (to the extent that these materials are being handled as part of the regular waste stream and not being disposed at special facilities such as inert waste or limited purpose landfills). Industrial and C&D wastes are the primary sources of the amounts shown as "non-MSW disposed" in Table 2-5. As indicated in Table 2-5, the amount of waste "generated" includes both the waste disposed plus the amount recycled or diverted. Figures are provided in Table 2-5 for both MSW and also for the broader waste stream that includes non-MSW materials. The last two rows of Table 2-5 show per capita figures for recycling, disposal and waste generation. These figures are expressed in terms of pounds per person per day. Spokane Valley Solid Waste Management Plan 2-5 Chapter 2: Background of the Planning Area by Green Solutions Table 2-4 Estimated Composition of Solid Waste Disposed in Spokane Valley Materials Percent of Total Amount Disposed (by weight) (tons per year) Paper Newspaper 1.8 1,000 Cardboard 4.7 2,610 Other Recyclable Paper 9.5 5,280 Compostable Paper 4.4 2,440 Remainder/Composite 1.5 830 Total Paper 21.9 12,160 Plastics PET Bottles 0.8 440 HDPE Bottles 1.0 560 Other Plastic Pkg. 1.9 1,060 Film and Bags 4.2 2,330 Other Products 1.3 720 Remainder/Composite 1.4 780 Total Plastics 10.7 5,940 Glass Clear Glass Containers 0.8 440 Green Glass Containers 0.4 220 Brown Glass Containers 0.6 330 Stoneware, Ceramics 0.2 110 Remainder/Composite 0.3 170 Total Glass 2.3 1,280 Metals Aluminum Cans 0.4 220 Tin Cans 0.7 390 Other Non-Ferrous Metals 0.5 280 Other Ferrous Metals 2.6 1,440 Mixed Metal &Other 2.7 1,500 Total Ferrous Metals 6.9 3,830 Organics Food 10.8 6,000 Yard Wastes 9.8 5,540 Manures 2.8 1,560 Other Organics 2.4 1,330 Total Organics 25.8 14,330 Consumer Textiles 2.0 1,110 Products Furniture, Mattresses 2.7 1,500 All Other 2.1 1,170 Total Consumer Products 6.8 3,780 Other Wood 9.0 5,000 Construction 11.3 6,280 Hazardous/Special Wastes 3.7 2,050 Residues 1.5 830 Total Other 25.5 14,160 Totals 100.0% 55,540 Source: 2009 Washington Statewide Waste Characterization Study, Ecology 2010. Percentage figures are for the Eastern region (as defined by that study), which includes Spokane and 11 other counties. Figures may not add up exactly due to rounding. Spokane Valley Solid Waste Management Plan 2-6 Chapter 2: Background of the Planning Area by Green Solutions Table 2-5 Recycled and Diverted Materials (2012) Spokane County Spokane Valley Recycled Amount 352,913 67,053 MSW Disposed 292,337 55,544 Total MSW Generated 645,250 122,597 Recycling Rate 54.7% 54.7% Diverted Amount (Non-MSW) 231,863 44,054 Non-MSW Disposed 147,711 28,065 Total Non-MSW Generated 379,573 72,119 Recycling Rate, Non-MSW Only 61.1% 61.1% All Recycling and Diversion 584,776 111,107 All Wastes (MSW and Non-MSW) 440,048 83,609 Total Generation, All Wastes 1,024,823 194,716 Diversion Rate 57.1% 57.1% Pounds per Capita (MSW Only) Recycled 4.07 4.07 Disposed 3.37 3.37 Generated 7.43 7.43 Source: Data for Spokane County is from the Spokane Regional Solid Waste System webpage. Figures for the City of Spokane Valley are prorated from County data based on City's 19.0% of population in 2012. Municipal Solid Waste Planning Projections Table 2-6 shows figures for the amount of solid waste projected to be recycled, disposed and generated in Spokane Valley for the next 20 years. These figures do not include the diverted and disposed amounts of non-MSW wastes. These figures were derived using the per capita figures shown in Table 2-5 and the population projections shown in Table 2-1. In other words, these projections assume that the recycling rate and disposal rates will remain constant over the next 20 years (which is an unlikely scenario). It should also be noted that recycled and disposed quantities vary throughout the year. The lowest amounts of recycling and waste disposal generally occur in the winter months (but typically with a spike in waste quantities after Christmas), and the greatest amounts often occur in the spring and fall. Recent data for the Valley Transfer Station (2012) shows the greatest amounts of solid waste received in May and August, and the greatest amounts of Clean Green received in May and November. Better data on solid waste quantities for Spokane Valley will be available in the future as a result of the contract signed with Sunshine. That contract requires Sunshine to provide an annual report on the monthly amounts of waste disposed at their transfer station by type of waste (total solid waste, acceptable waste, recyclables, organics which are the same as Clean Green, C&D, MRW, special waste and unacceptable wastes). The Spokane Valley Solid Waste Management Plan 2-7 Chapter 2: Background of the Planning Area by Green Solutions report will also include the number of trips by haulers and self-haulers, and the number of customer service inquiries. A review of the current programs operating in Spokane Valley concluded that these are fully capable of handling current disposed and recycled quantities, and that these programs should be able to continue handling future quantities (for the next 20 years) as well. Table 2-6 Projected Solid Waste and Recycling Quantities for Spokane Valley 2012 2020 2030 Population 90,550 96,657 103,820 Recycled Amounts, tons/year 67,191 71,723 77,038 Disposed Amounts, tons/year 55.658 59.412 63.815 Total Waste Generated, tons/year 122,850 131,135 140,853 Source: Based on the per capita figures shown in Table 2-5 and population figures shown in Table 2-1. Spokane Valley Solid Waste Management Plan 2-8 Chapter 2: Background of the Planning Area by Green Solutions CHAPTER 3 WASTE REDUCTION 3.1. EXISTING WASTE REDUCTION ACTIVITIES Waste reduction refers to any action that avoids the generation of waste or reduces the toxicity of waste before it reaches the waste stream. Other terms used to describe waste reduction include source reduction, waste prevention,waste minimization and pollution prevention. Washington State law designates waste reduction as the highest priority waste management strategy. Examples of waste reduction methods include: • Reduce materials used in product manufacturing. • Increase the useful life of a product through durability and reparability. • Decrease the toxicity of products. • Reuse a product. • Reduce consumer use of materials and products. Existing waste reduction activities in Spokane Valley include public education, participation in regional programs,volume-based garbage fees, and backyard composting. These program elements are discussed below. Public Education To date, the City has distributed brochures developed by the Spokane Regional Solid Waste System (the "Regional System"). These brochures have addressed waste reduction, reuse, mulching, composting, and household hazardous waste. Other Regional Programs The City has participated in regional programs to encourage waste reduction. These programs have included school and youth education, public education, coalitions with other entities, business and institution education, and home composting. More information about these programs can be found in the Spokane County 2009 Comprehensive Solid Waste Management Plan. Volume-Based Garbage Collection Fees Volume-based collection fees provide important feedback to residents and businesses and help educate them to the idea that there is a cost associated with the amount of waste they produce. In Spokane Valley, garbage collection costs vary according to the size of the container and frequency of collection for both residential and commercial customers. For residential customers, current garbage collection charges range from $14.45 per month for a 35-gallon cart emptied weekly to $29.14 for a 96-gallon cart emptied weekly (for carts provided by the waste hauler, Waste Management). Waste Management's website points out the potential for cost savings and provides tips for Spokane Valley Solid Waste Management Plan 3-1 Chapter 3:Waste Reduction by Green Solutions reducing the amount of garbage. Private and Personal Reuse Efforts The reuse and other waste reduction efforts conducted by residents,businesses and non-profit groups in Spokane Valley should not be overlooked. Although many of these are individual efforts that only deal with a small amount of products, altogether these activities provide a huge benefit to the local economy and avoid additional waste generation. Examples of these activities include garage sales, donations to charitable and for-profit organizations, the use of Craigslist and eBay, collection and reuse of building materials by Habitat for Humanity, and many other related activities. Backyard Composting Backyard composting is addressed here (instead of in the next chapter) because it is considered a waste reduction method. The City has promoted backyard composting through local public education efforts and also through regional efforts. City Code Spokane Valley City Code does not specifically encourage or discourage waste reduction activities,but does provide a mechanism for controlling potential problems that could result from two waste reduction activities: garage sales and backyard composting. Garage sales lasting more than seven consecutive days or occurring on more than two consecutive weekends are not allowed by city code. Compost piles found to be attracting an infestation of insects or other vermin are also not allowed. 3.2. WASTE REDUCTION PLANNING ISSUES Waste reduction is the highest priority waste management strategy because it conserves resources, reduces waste management costs, and minimizes pollution. Waste reduction programs can be the most difficult to implement, however,because these programs may require changes in production methods and consumption patterns, and are influenced by national/global economies and other factors that are typically beyond the control of local government. Specific waste reduction issues are discussed below. Food Waste Food waste is one of the largest components of the waste stream (see Table 2-4) and as such deserves attention as to the waste reduction possibilities for it. At the same time, there is increasing national awareness as to the amount of edible food that is going to waste. According to a recent report by the Natural Resources Defense Council,3 40% of edible food is wasted as it travels from farms to kitchen tables. According to the USDA, 3 From "Wasted: How America is Losing up to 40 Percent of its Food from Farm to Fork to Landfill," by Dana Gunders, staff scientist with the Natural Resources Defense Council, August 2012. Spokane Valley Solid Waste Management Plan 3-2 Chapter 3:Waste Reduction by Green Solutions a family of four could save$2,275 per year by making simple changes in the way they handle food purchases and storage. Implementation Difficulty Despite its high priority, waste reduction is a difficult topic for municipalities to address because it often requires either additional public education efforts or mandatory requirements (which are generally unpopular). Some activities may even be interpreted as being anti-business (such as for programs targeting a reduction in the use of a specific product). Measuring and Evaluating Waste Reduction Activities Measuring waste reduction is also difficult because the amount of waste generated in a specific area fluctuates with many variables, including economic conditions, seasonal changes and local weather. Hence, it can be difficult to demonstrate the cost- effectiveness or productivity of specific waste reduction techniques. 3 .3. ALTERNATIVE WASTE REDUCTION STRATEGIES Many of the potential waste reduction methods, especially those regarding reductions in the degree of toxicity of specific products and waste reduction for manufacturing in general, are beyond the scope of what a single city can accomplish. Many of these are also beyond the scope of what a county or even a state can accomplish,but instead require action on a federal or international level. Perhaps the one exception to this principle is the idea of banning specific products,which can be done on a city or county level in order to force the use of a different product that has better waste reduction potential. The following alternatives were considered for new or expanded waste reduction activities. The listing of an alternative in this section does not mean that it is considered feasible or desirable, nor that is recommended (see Section 3.5 for waste reduction recommendations). Alternative A- Support New Product Stewardship Programs Product stewardship is a concept designed to alleviate the burden of end-of-life product management on local governments. Product stewardship programs typically address a specific type of product and provide an alternative collection or disposal system. One of the principles that this approach is based on is that the manufacturers of a product should bear the cost of collecting and recycling (or disposing of) that product, and that this will create an incentive for them to reduce the weight and/or toxicity of their products. Retailers, if they are involved in a program,would have an incentive to carry products that are easier (and so less expensive) to collect and recycle. Spokane Valley Solid Waste Management Plan 3-3 Chapter 3:Waste Reduction by Green Solutions Developing new product stewardship programs is beyond the scope of a city,but Spokane Valley could participate in such programs developed by others. Any new product stewardship proposals at the county, state or federal levels could be evaluated and supported as appropriate to the City's interests. The cost for implementing this alternative would primarily be a small amount of staff time. Alternative B - Ban Specific Products or Materials The City could consider banning specific products that are difficult to recycle and/or causing problems such as litter. Examples of such bans include single-use plastic bags and Styrofoam carry-out containers, both of which have been banned by other cities (such as Seattle, Portland, and Issaquah). Implementing this approach could potentially require a substantial amount of staff time to research and defend, plus additional staff time and outreach costs for informing the affected parties and possibly enforcing a ban. Alternative C- Ban Yard Waste from Garbage Disposal Of all of the materials in the waste stream,yard waste is probably the easiest material to handle through other means. Yard waste can be left on the lawn (mulching of grass clippings), applied as a top-mulch in landscaping and gardens, handled through backyard composting (for leaves, grass clippings and some types of food wastes), chipped on-site (for branches and other woody materials), or recycled through residential and commercial yard waste collection programs. If an outright ban on disposal of yard waste within solid waste disposal containers is not feasible or desirable at this time, additional public education could be conducted instead to promote mulching of grass clippings,backyard composting, and even vermicomposting (using worm bins to convert food wastes into a desirable soil amendment). Banning yard waste from being placed in solid waste disposal containers could then be reconsidered at a later date. Alternative D - Promote Smart Shopping The City could conduct more promotion on the subject of smart shopping, such as using durable grocery bags and buying in bulk. Businesses could be encouraged to promote the use of durable grocery bags and to offer durable bags for customer use (as many grocery stores are already doing). The City could conduct a campaign that encourages: • Buying in bulk. • Buying concentrates. • Purchasing reusable products. • Buying secondhand items. • Avoiding over-packaged items. • Avoiding products containing hazardous ingredients. • Borrowing or renting when possible. Spokane Valley Solid Waste Management Plan 3-4 Chapter 3:Waste Reduction by Green Solutions • Purchasing durable and repairable products. • Using reusable shopping bags. Another idea that is gaining in popularity is the use of fix-it workshops,where people can bring items in need of repairs and knowledgeable volunteers show them how to fix the item. Organizing this type of workshop is probably better accomplished by a non- profit group, but the City could help promote the workshops, provide space for the events, and possibly assist in other ways. Alternative E - Focus on Food Waste Food waste can be recycled through the yard waste collection program (see Chapter 4 for more details about that approach), but this does not address the fact that a substantial amount of edible food waste is unnecessarily discarded. A public education campaign could be used to inform residents of the meaning of expiration dates, opportunities to donate food, and other steps that could be taken to reduce food waste. Alternative F- Promote Volume-Based Collection Fees Waste Management already provides a system of volume-based fees for residential customers in Spokane Valley and surrounding areas, and rates charged by both haulers for commercial customers are also based on volumes. The availability of volume-based rates for residential customers could be publicized more to highlight the potential cost savings from waste reduction. The success of this approach could be monitored by the numbers of people who are signed up for the lower service levels. Furthermore, the City could require a rate system that provides greater incentive by reducing the cost for lower levels of service and increasing the cost of higher levels of service. For instance, the rate for a 64-gallon can emptied weekly could be set at an amount that is twice that of a 35-gallon can emptied weekly, and the rate for a 96-gallon can could be triple that of a 35-gallon can. This approach provides greater incentive for waste reduction and is used by many cities. Collection rates are discussed more thoroughly in Chapter 5. Alternative G - Business Waste Reduction Activities Business waste reduction programs are typically custom designed for each specific operation. Hence, this type of program is generally beyond the scope of a single city (to date, this approach has been conducted on a regional basis in the Spokane area). The City could, however, encourage businesses to examine their own wastes to look for ways to reduce the amounts of wastes, and to look for ways to recycle more (including the use of alternative products and materials that would be more recyclable). Business waste reduction programs typically include the following components: • Support and policy directives from upper management. • A waste reduction team or coordinator. • An accounting of materials purchased and waste produced. • A reduction plan targeting specific materials or practices. Spokane Valley Solid Waste Management Plan 3-5 Chapter 3:Waste Reduction by Green Solutions • Employee education. • Ongoing feedback (to employees and others as appropriate) and evaluation. The City could request that the Chamber of Commerce or another group help promote these ideas and to also institute a recognition program for businesses that successfully reduce the amount of their wastes. With the Chamber's assistance, the cost for this program would be minimal, limited perhaps to only $25,000 for outreach materials, awards or plaques, and related expenses. Alternative H- Government Sector Leading by Example The City could set an example for local businesses and organizations, and become an even greater force in the marketplace,by broadening and upgrading procurement policies. The City could target products that: • Allow for greater waste reduction, such as purchasing copy machines that make double-sided copies more easily and setting duplex copying as default. • Require replacement or repair less often, such as rechargeable batteries and durable furniture. • Are easily repaired, such as machinery with standardized, replaceable parts. • Can be reused, such as washable plates and glasses. • Have already been used. • Are nontoxic or less toxic, such as many cleaning agents and solvents now available. The City could also develop a more comprehensive in-house waste prevention program. By monitoring and reporting on effectiveness, costs, avoided costs, and program revenues for various waste reduction activities, the City could provide a model for local businesses and schools. In-house waste prevention programs could include: • Double- sided copying. • Routing slips instead of circulating multiple copies. • Electronic mail for intra-office messages. • Scrap pads from used paper. • Reusing large envelopes. • Use of very small cans for trash in individual offices,with larger containers provided for recycling. To ensure the program's continued success, employees need to receive regular updates about new waste reduction techniques. This information could be provided by informational notices or newsletters that are routed electronically on a regular basis. Spokane Valley Solid Waste Management Plan 3-6 Chapter 3:Waste Reduction by Green Solutions Alternative I - Monitoring Waste Prevention Results It would be useful to have a mechanism for monitoring the results of waste prevention programs in order to provide feedback to participants and to provide a basis for future adjustments in the approaches being used. For many communities, this is typically done by periodically calculating the waste generation rate on a per capita basis. Unfortunately, changes in the generation rate due to waste prevention programs are typically very small in a given time period and so are easily masked or overwhelmed by other factors, such as economic problems or natural disasters. In the latter case, floods and storms can create large amounts of waste and it can be difficult to fully identify and separately account for these amounts. Alternatives to per capita rates include periodically conducting surveys of the residents or businesses about their activities to reduce waste, or conducting waste stream surveys for specific materials, products or packaging. Both of these activities can be quite expensive and may still lead to ambiguous results. A more effective approach than quantifying the amount of waste reduction may be to gauge success using a "performance-based standard." This is where waste prevention activities are presumed to be successful based on achieving a specific level of effort or on another criteria. An example of this approach is to use the number of backyard composting bins that are distributed as a measure of the amount of yard debris that may be kept out of the waste stream. Other criteria can be used and these need to be tailored to each specific waste prevention activity. 3.4. EVALUATION OF WASTE REDUCTION ALTERNATIVES Review of Rating Criteria The above alternatives can be evaluated according to several key criteria, including consistency with solid waste planning goals, technical and political feasibility, and the relative cost-effectiveness of the alternative. Based on the ratings for these criteria, each alternative can be given an overall rating and a decision can then be made as to whether to pursue it or not. Consistency with Solid Waste Planning Goals: All of these alternatives support the goal of emphasizing waste reduction as a fundamental management strategy and the alternatives also support other planning goals. Feasibility: In judging the alternatives for technical and political feasibility, most of the alternatives can be adopted without controversy or legal issues. Two alternatives (B and C) have potential issues with public acceptability and impacts to business practices and so are rated low for this criteria as a result of those questions. Monitoring the results of waste reduction programs could be technically challenging, and so this alternative is also rated low for feasibility. Spokane Valley Solid Waste Management Plan 3-7 Chapter 3:Waste Reduction by Green Solutions Cost Effectiveness: Several of the waste reduction alternatives can be implemented without a significant investment in staff time or other resources, and so are rated high for cost-effectiveness. Alternative B would require significant amounts of staff time and other expenses such as outreach and enforcement,while possibly only affecting a small portion of the waste stream, and so this alternative is rated low for cost-effectiveness. A yard waste ban could require a significant amount of outreach to implement but also affects a significant portion of the waste stream, leading to a medium rating for this alternative. Monitoring the results of waste prevention programs has an uncertain return for the investment in staff time that could be necessary for this activity, so this alternative also has a low rating for cost-effectiveness. Rating of Alternatives The evaluation of the alternatives is summarized in the following table. Table 3-1 Rating of the Waste Reduction Alternatives Consistency with Planning Feasibility Cost- Overall Rating Alternative Goals Effectiveness A, Support product H H H H stewardship programs B, Ban specific products H L L L C, Ban yard waste H L M M D, Promote smart shopping H H H H E, Focus on food waste H H H H F, Promote volume-based H H H H fees G, Business waste reduction H H H H H, Government sector leading H H H H by example I, Monitoring waste H L L L prevention Rating Scores: H— High, M— Medium, L—Low 3.5 WASTE REDUCTION RECOMMENDATIONS The following recommendations are being made for waste reduction programs. The alternatives that were rated low in the above table are generally not being pursued as a recommendation in this Plan. Spokane Valley Solid Waste Management Plan 3-8 Chapter 3:Waste Reduction by Green Solutions High-Priority Recommendations WR1) The City of Spokane Valley will evaluate product stewardship programs as these are proposed on a statewide or national level, and support those if appropriate to the interests of their citizens and the business community. WR2) The business community in Spokane Valley may be encouraged to reduce waste through a recognition program that publicizes success stories. WR3) The City of Spokane Valley will adopt policies and practices to encourage city departments to reduce waste. Medium-Priority Recommendations WR4) Public education materials distributed by the City of Spokane Valley will include information on alternative handling methods for yard waste, the value of"smart shopping" methods, how to avoid wasting food, and the availability of volume-based garbage collection fees. Low-Priority Recommendations WR5) A ban on the disposal of yard waste within solid waste disposal containers may be considered in the future if public education and outreach efforts are not effective in diverting most of this material from the waste stream. The lead agency responsible for implementing and funding these recommendations will be the City. Funds are expected to come from a surcharge on tipping fees at the transfer station, other available City funds, and the CPG grant program administered by Ecology. The costs for three of these recommendations (WR1, WR3, and WR5) consist primarily of staff time (although if a yard waste ban were actually implemented, there would be additional expenses in the future for informing the public of this and possibly also costs for enforcement activities). Recommendation WR2 could cost about$25,000, depending on how it is actually implemented. The cost for Recommendation WR4 is not high if waste reduction tips and information is included in general public education efforts,but this is the only recommendation that addresses public education. Since the City is pursuing its own management of its System, it will need a broad public education effort to inform residents and businesses about waste collection services, self-haul options, and recycling and yard waste programs as well as waste reduction. Since this is the only recommendation that addresses public education, the full costs of those efforts is shown here and are estimated at$50,000 to $100,000 per year. The funding for Recommendations WR2 and WR4 would initially come from the disposal surcharge and other available City funds, and then be at least partially covered by CPG funds when the City becomes eligible for that grant in mid-2015. Spokane Valley Solid Waste Management Plan 3-9 Chapter 3:Waste Reduction by Green Solutions Recommendation WR1 should be implemented on an as-needed basis. The implementation of recommendations WR2, WR3 and WR4 should begin next year (2015), and WR5 should be evaluated in 2018. Spokane Valley Solid Waste Management Plan 3-10 Chapter 3:Waste Reduction by Green Solutions CHAPTER 4 RECYCLING AND ORGANICS COLLECTION 4.1. EXISTING RECYCLING AND ORGANICS PROGRAMS "Recycling" refers to the act of collecting and processing materials to return them to a similar use. Recycling does not include materials burned for energy recovery or destroyed through pyrolysis and other high-temperature processes. The State's definition of recycling is "recycling means transforming or remanufacturing waste materials into usable or marketable materials for use other than landfill disposal or incineration. Recycling does not include collection, compacting, repackaging, and sorting for the purpose of transport" (Chapter 173-350 WAC). As indicated in the definition, the common use of the term"recycling" to refer to the act of placing materials in a special cart or other container to be collected separately from garbage is a misnomer, and recycling does not actually occur until the materials are processed and then used to create new products. On the other hand, keeping recyclable materials separate from garbage at the point of generation is typically a critically-important first step in ensuring that the materials are actually recycled. Organics are also addressed in this chapter of the Plan. In the past, programs addressing organics have largely focused on yard debris (grass clippings, leaves and brush),but now these programs often include food waste and food-soiled paper. Previous processing methods for organics have consisted primarily of composting,but the addition of food waste is increasingly leading to the use of anaerobic digestion and other processing methods. The State's definition of composting is "composting means the biological degradation and transformation of organic solid waste under controlled conditions designed to promote aerobic decomposition. Natural decay of organic solid waste under uncontrolled conditions is not composting" (Chapter 173-350 WAC). Existing recycling and organics programs in Spokane Valley are primarily directed at the collection and transfer of these materials to facilities outside of the City. While the curbside and commercial collection programs operated by local haulers are the most visible examples of these programs, there is also a significant amount of other activities being conducted in the City. These activities are described in more detail below. Drop-Off and Buy-Back Programs The "typical" recyclables can be dropped off at several locations in and near the City for recycling, including the Sunshine Transfer Station and various other locations. Many of the other private companies and non-profit groups collect only a limited number of materials, but three such facilities in Spokane collect the full range of materials (Du-Mor Recycling, Earthworks Recycling, and Pacific Recycling). Spokane Valley Solid Waste Management Plan -4- 1 Chapter 5:Waste Collection by Green Solutions Examples of other drop-off activities include: • E-waste can be dropped off at a Salvation Army and several Goodwill locations in Spokane Valley. • Ink cartridges can be returned for recycling at several local stores, or sent back to manufacturers through the mail. • Rechargeable batteries can be dropped off at certain hardware stores and other locations (depending on the type of battery). • Clothing can be dropped off at collection kiosks. Options for dropping off yard debris and food scraps are less common and only two of these are known to exist currently in Spokane Valley (the Sunshine Transfer Station and the County-owned Valley Transfer Station). The Sunshine Transfer Station accepts Clean Green (including mixed yard debris, food scraps and food-soiled paper) for a fee ($50 per ton as of November 2014,with a minimum charge of$10). Curbside and Commercial Collection Programs Residents in Spokane Valley are provided with recycling collection services by Waste Management. The types of materials, collection frequency and other details for the curbside recycling program in Spokane Valley (and other urban areas) have been guided to date by a service level ordinance adopted by Spokane County. This ordinance has been codified as Chapter 8.58 of the Spokane County Code. The County Code requires that all subscribers to garbage collection services in Spokane Valley receive (and pay for) curbside recycling services. This Code also requires that certified haulers provide this service, and that the haulers must collect newspaper, cardboard, aluminum and steel cans, and plastic bottles (types 1 and 2) at a minimum. At the hauler's options, they may also collect a variety of other materials, including mixed paper, glass bottles, and other types of plastics and metals. The actual types of materials currently collected by Waste Management in Spokane Valley are listed in Table 4-1. The curbside recycling program is currently conducted on an every-other-week basis. For the mixed organics collection program (yard debris and food waste), the collection frequency is weekly from March through November and monthly from December through February. For the curbside recycling program, there is no extra charge for additional materials placed in paper bags or cardboard boxes next to the recycling cart. For the mixed organics collection program, there are extra charges levied for additional materials placed outside of the cart. Both the recycling and mixed organics carts are 96- gallon carts provided by Waste Management. Multi-family buildings (apartments) in Spokane Valley are also provided with recycling and mixed organics collection services by Waste Management. These services are provided on a subscription basis, meaning that the manager or owner of an apartment building may choose to subscribe to one or both of these services and thus make them Spokane Valley Solid Waste Management Plan 4-2 Chapter 5:Waste Collection by Green Solutions available to their tenants. Materials collected for multi-family buildings are the same as for the residential curbside program (see Table 4-1). The size and number of containers, collection frequency and other details depend on the subscription level for the multi- family building. Table 4-1 Materials Collected for Recycling by Waste Management Program Acceptable Materials Unacceptable Materials Residential Curbside, Clean paper and cardboard Laminated and food-soiled Multi-Family and (including office paper, papers Commercial Recycling magazines, paperback books, Light bulbs, window and mirror Programs mail and food boxes) glass, and ceramics Clean glass bottles and jars Sharp metals and batteries Aluminum and tin/steel cans, Electronics scrap metal, aluminum food containers, and empty/non- Styrofoam hazardous aerosol cans Plastic bags Plastic bottles, jars and tubs Garbage (including diapers, syringes and hazardous waste containers) Mixed Organics Yard debris (leaves, grass Diapers clippings and small branches) Pet waste and litter Food scraps (fruits, vegetables, Plastics bread, grains, meat, dairy, and coffee grounds) Foil Food-soiled paper (paper Liquids towels, food-soiled paper bags, Shredded paper and greasy pizza boxes) Other types of non- compostable materials Source: Waste Management website, 2/24/14. Note: See http://wmnorthwest.com/Spokane/index.html for complete list of acceptable and unacceptable materials, and other important details. Businesses in Spokane Valley are provided with recycling collection services by the two certificated haulers, Sunshine Disposal and Waste Management, and several other companies. Since recycling by and for commercial and industrial companies is defined as a "free market" system by law, a variety of additional private companies can provide collection services for these businesses. Companies such as Earthworks Recycling, Diversified Wood Recycling, American Recycling Corporation, Baker Commodities, Spokane Valley Solid Waste Management Plan 4-3 Chapter 5:Waste Collection by Green Solutions Dickson Iron and Metal, Pacific Steel Hide and Recycling, Action Recycling, Du-Mor Recycling, Clark's Recycling and others provide pickup and drop-off services for materials such as metals, paper, and grease in commercial quantities. It is difficult to adequately describe all of these activities here, and such a description would also quickly become outdated and hence would not be useful in a long-term document such as this Plan. Current information on these activities can be gotten from other sources, such as Ecology's 1-800-recycle website. Recycled Tonnages It is currently not feasible to precisely quantify the tonnages collected by the many companies involved in recycling and organics collection in the City. Although Ecology collects data on current recycling amounts on an annual basis, that data is only available on a county level. Pro-rating the amount of recycling occurring in Spokane County, however,provides an estimate of 67,053 tons recycled and composted in 2012 in Spokane Valley (see Table 2-5). This is equivalent to a recycling rate of 54.7%. If "diverted materials"4 are also included in this analysis, the amount of recycled and diverted materials increases to 111,107 tons per year (in 2012). Including diverted materials means that additional types of wastes must also be included, and so the diversion rate only increases slightly to 57.1%. Recycling Markets State regulations (RCW 70.95.090(7)(c)) require "a description of markets for recyclables," hence a description of the markets for recyclable materials collected in Spokane Valley is provided below. This is intended to be only a brief report of current conditions, and it should be noted that market conditions for recyclables can undergo substantial changes in a short amount of time. Market demand and prices for recyclables have fluctuated significantly over the past several years,just as prices for all commodities fluctuate with demand and other factors. Some recyclable materials have seasonal cycles in supply and demand, but all materials exhibit long-term trends with the possibility of sudden price spikes or dips. In some cases, long-term contracts with price floors can help moderate the swings in market revenues, but this isn't possible for all materials. Figures 4-1 and 4-2 show how the prices for aluminum cans and a few other materials collected from residential sources in the Pacific Northwest have fluctuated over the past 20 years. As can be seen in Figures 4-1 and 4-2, market prices dipped for most materials from 2008 to 2009 due to the slump in demand caused by the recession. 4 Diverted materials are materials that are handled separately from solid waste and instead directed to a beneficial use, but that do not meet the definition of recycling. Examples include construction wastes that are recycled and wood wastes that are burned for energy recovery. See Section 2.5 for more details. Spokane Valley Solid Waste Management Plan 4-4 Chapter 5: Waste Collection by Green Solutions Figure 4-1 Price Paid for Baled Aluminum Cans (Annual Averages) $2,000.00 $1,800.00 $1,600.00 $1,400.00 2 $1,200.00 a $1,000.00 $800.00 �L a $600.00 $400.00 $200.00 $0.00 . M L1 LD N co cn C .-I N Cr) Ln LD N co Q1 C .-I N M Q1 Q1 Q1 Q1 Q1 Q1 Q1 C C C C C C C C C C 01 01 01 01 01 01 01 C C C C C C C C C C C C C C N N N N N N N N N N N N N Source: Seattle Public Utilities website (original data source: American Metal Markets). Figure 4-2 Prices Paid for Select Recyclable Materials (Annual Averages) $600.00 $500.00 c $400.00 a $300.00 I Plastic U Mixed Paper a $200.00 Baled News $100.00 I $0.00 M i11 N O M i11 N O M cn cn cn o 0 0 0 0 0 cn cn cn o 0 0 0 0 0 0 0 rl I I I N N N N N N N Source: Seattle Public Utilities website (original data sources are Mill Trade Journal's Recycling Markets, Pulp and Paper Week, Recycling Times, and Waste News). Spokane Valley Solid Waste Management Plan 4-5 Chapter 5:Waste Collection by Green Solutions Another important factor for marketing of recyclable materials collected in Spokane Valley is the cost of transporting the materials to end-markets, many of which are outside of Washington State. Recyclers in eastern Washington are farther from most markets and so have less access to these markets because the transportation cost is a barrier. The low market value of many recyclable materials limits the number of materials that can be cost-effectively moved to markets. 4.2. DESIGNATION OF RECYCLABLE MATERIALS The designation of recyclable materials has taken on more importance with the adoption of Chapter 173-350 WAC,which defines recyclable materials as being those materials "that are identified as recyclable materials pursuant to a local comprehensive solid waste plan." Since market conditions for recyclables can change drastically in a short amount of time, the list of designated materials is also accompanied by a description of the process for revising that list. Table 4-2 shows the list of designated recyclable materials. This list is not intended to create a requirement that every recycling program in the City collect every designated material. Instead, the intent is that through a combination of programs, residents and businesses should have an opportunity to recycle all of the designated materials through at least one program. In other words, if plastics are on the designated materials list, then at least one program in the city must collect plastics. The list has been prioritized to indicate the degree of access that residents and businesses should have for these materials (in other words, greater access should be available for the higher-priority materials). The list of"designated recyclable materials" shown in Table 4-2 should be used for guidance as to the materials to be recycled in the future. This list is based on existing conditions (collection programs and markets), and future markets and technologies may warrant changes in this list. The following conditions are grounds for additions or deletions to the list of designated materials: • The market price for an existing material becomes so low that it is no longer feasible to collect, process and/or ship it to markets. • Local markets and/or brokers expand their list of acceptable items based on new uses for materials or technologies that increase demand. • New local or regional processing or demand for a particular material develops. • No market can be found for an existing recyclable material, causing the material to be stockpiled with no apparent solution in the near future. • The potential for increased or decreased amounts of diversion. • Legislative mandate. • Other conditions not anticipated at this time. Spokane Valley Solid Waste Management Plan 4-5 Chapter 5:Waste Collection by Green Solutions Table 4-2 List of Designated Recyclable Materials Priority Level Material High Priority Recyclables Materials: Clean paper and cardboard Materials that should Clean glass bottles and jars be collected by the Aluminum and tin cans, scrap metal, curbside, multi-family aluminum food containers, and empty/non- and commercial hazardous aerosol cans recycling programs, or Plastic bottles, jars and tubs by the mixed organics collection programs, in Mixed Organics the city. Yard debris Food scraps Food-soiled paper Medium Priority Edible food (donated) Materials: Cell phones Materials that should Electronics (e-waste) be collected at drop-off Clothing, textiles and buy-back locations Oil and oil filters (in the city or nearby), Antifreeze or through other collection services. Asphalt and concrete Batteries (all types) All metals, inc. appliances Plastic bags Reusable building materials Low Priority Wood Materials: Carpet Hard to recycle Drywall materials that should Roofing materials be recycled if markets Mixed construction and demolition are available. Shrink wrap, building wrap, and other film plastics Tires Any proposed changes in the list of designated materials should be reviewed and approved by the Public Works Director, and minor changes in this list may be adopted without formally amending this Plan. Spokane Valley Solid Waste Management Plan 4-6 Chapter 5:Waste Collection by Green Solutions 4.3. PLANNING ISSUES FOR RECYCLING AND ORGANICS The City of Spokane Valley is currently well-served by a variety of recycling and composting programs, but several improvements and issues could be addressed by this Plan. The most significant of these are noted below. The collection frequency for the residential curbside recycling program is currently every-other-week. Other studies have repeatedly shown that more frequent collections will lead to more diversion. Some communities have gone so far as to make garbage collection every-other-week and recycling weekly to encourage more recycling. Glass is currently included in the curbside recycling program and is mixed with other materials. When mixed with other materials, glass both contaminates the other materials and the glass itself is difficult to recycle. Recycling services in the City of Spokane Valley have been guided to date by a service level ordinance adopted by Spokane County. Since the City has assumed management of its System (see Chapter 6), it may be necessary or desirable for the City to adopt its own service level ordinance or otherwise ensure that garbage customers must also be provided with curbside recycling services. 4.4. ALTERNATIVE RECYCLING AND ORGANICS STRATEGIES The following alternatives were considered for new or expanded recycling and organics activities. The listing of an alternative in this section does not mean that it is considered feasible or desirable, nor that is recommended (see Section 4.6 for recycling and organics recommendations). Alternative A- Increase Curbside Recycling to Weekly Collection Studies have repeatedly shown that more frequent collection of recyclables leads to increased tonnages collected. Several cities have recently gone so far as to make recycling collections weekly and changed garbage collection to every-other-week (although a recent proposal by Seattle to do this failed due to questions about costs versus service levels). In general, weekly recycling collections are not double the cost of every-other-week collections, but the additional cost is in the range of 30 to 50% more than every-other-week collections. Weekly collection programs can be expected to collect about 30 to 40% additional tonnages over every-other-week collections. It should be noted that the additional tonnages more than make up for the greenhouse gas emissions related to the additional fuel consumed to run the route twice as much, since every additional ton of recyclables carries with it a huge benefit in greenhouse gas reductions. Spokane Valley Solid Waste Management Plan 4-7 Chapter 5:Waste Collection by Green Solutions Alternative B - Switch to Dual Stream Collection to Collect Glass Separately Glass is a serious problem when mixed with other materials for recycling. Broken glass contaminates the other materials, especially paper and plastic, and makes it more difficult to recycle those materials. The glass that is carried along with the other materials causes problems with the processing equipment for paper and plastic and does not get recycled but ends up in landfills near the processing plants for the other materials. The glass that is recovered from a curbside mixture is also difficult to recycle because it consists of mixed colors and is also highly contaminated by other materials. Even if collected separately, however, markets for glass in Eastern Washington are nearly non-existent (although conversion to fiberglass and other alternative uses may be options), and the value of glass does not pay for the costs of shipping it to markets in Seattle and Portland. Alternative C-Minimum Service Level to Include Curbside Recycling When Spokane Valley creates its System, the City could continue to require curbside recycling services for residential garbage customers through a variety of means, such as by contract with the garbage haulers or through a service level ordinance. Alternative D - Drop-Off Site for Mixed Organics When the City of Spokane Valley leaves the Regional System, there is a question about the level of access that residents and local businesses will continue to have to the services provided by that system, including the Clean Green drop-off program at the Valley Transfer Station. This service will instead be provided by a drop-off site at the Sunshine Transfer Station. The contract signed with Sunshine in June 2014 provides for this and other services. Spokane Valley residents and businesses should be encouraged to use the Clean Green drop-off site at the Sunshine Transfer Station. 4.5. EVALUATION OF RECYCLING AND ORGANICS ALTERNATIVES Review of Rating Criteria The above alternatives can be evaluated according to several key criteria, including consistency with solid waste planning goals, technical and political feasibility, and the relative cost-effectiveness of the alternative. Based on the ratings for these criteria, each alternative can be given an overall rating and a decision can then be made as to whether to pursue it or not. Consistency with Solid Waste Planning Goals: All of these alternatives support the goal of increasing the recovery of marketable materials and providing convenient services for solid waste management. Spokane Valley Solid Waste Management Plan 4-8 Chapter 5:Waste Collection by Green Solutions Feasibility: Alternatives C and D appear relatively easy for the City to implement, while Alternative A could be difficult due to the increased costs. Alternative B would also be difficult to implement, since it too would be more expensive but more importantly it would be very difficult for residents and businesses to switch to a dual- stream system after they have enjoyed the convenience of a single-stream system. Cost Effectiveness: Alternative A would cost more but would also lead to more tons collected for recycling, resulting in a cost per ton for recycling similar to the current system. Alternative B would be relatively expensive to implement, since additional bins or carts would be needed for curbside recycling program participants, although it could potentially result in more tons of material being actually recycled in the end. Alternative C would not cost much to implement but could provide significant advantages. Alternative D will require significant capital investment but will be self- funding (from tipping fees) and is very cost-effective compared to the alternative (disposal of yard and food waste as garbage). Rating of Alternatives The evaluation of the alternatives is summarized in the following table. Table 4-3 Rating of the Recycling and Organics Alternatives II prConsistency with Planning Feasibility Cost- Overall Rating Alternative is Goals Effectiveness A, Weekly curbside recycling H L M M B, Dual-stream approach H L L L C, Continue to include curbside recycling with H H H H garbage service D, Encourage City residents and businesses to use H H H H Sunshine Transfer Station clean green site Rating Scores: H — High, M— Medium, L—Low Spokane Valley Solid Waste Management Plan 4-9 Chapter 5:Waste Collection by Green Solutions 4.6 RECYCLING AND ORGANICS RECOMMENDATIONS The following recommendations are being made for recycling and organics programs: High-Priority Recommendations R1) Curbside recycling will continue to be included with garbage collection services for residential customers in Spokane Valley. R2) City residents and businesses will be encouraged to use the Sunshine Transfer Station for Clean Green drop-off services. Medium-Priority Recommendations R3) Weekly curbside recycling will be evaluated as part of the waste collection system changes expected to be implemented by Spokane Valley in 2018. The City has determined that it will implement its own System and so will implement R1 and has entered into a contract with Sunshine to implement R2. The City will be responsible for implementing Recommendation R3 as part of the changes anticipated in the future for the waste collection system (see next chapter). None of these recommendations will result in direct costs to the City, although two of the recommendations (R2 and R3) will result in additional costs to others, and those costs will be funded by user fees. Spokane Valley Solid Waste Management Plan 4-10 Chapter 5:Waste Collection by Green Solutions CHAPTER 5 SOLID WASTE COLLECTION 5.1. EXISTING WASTE COLLECTION ACTIVITIES Existing Waste Haulers There are two solid waste collection service providers in Spokane Valley. As further described below, the City currently has franchises with both haulers, Sunshine Disposal and Waste Management. Under the current franchises, Sunshine Disposal collects waste from large containers (i.e., roll-offs and stationary compactors) for non- subscription customers, and Waste Management collects waste from containers (i.e.. compactors, rolloff containers smaller dumpsters, and residential garbage carts) from residential and commercial customers. Sunshine Disposal provides recycling services to commercial customers, and Waste Management provides collection and recycling services for both residential and commercial customers, and Clean Green for residential customers. The City is in the process of negotiating contracts with both haulers. While negotiations are still ongoing, the City anticipates that the contracts will be for a term ending in 2018 and that both haulers will continue to provide the same services as they are currently providing. The mailing addresses and current population density for the service areas of the two collection service providers are shown in Table 5-1. Table 5-1 Waste Collection Service Providers in Spokane Valley Density Address Population Land Area, (people per Service Provide Served square miles square mile) Sunshine Disposal 11320 W. McFarland Road, NA 38.22 NA Airway Heights, WA 99001 Waste Management 11321 E. Indiana Avenue, 91,490 38.22 2,394.0 Spokane Valley, WA 99206 Totals 91,490 38.22 2,394.0 Source: Population and land area figures are from the Washington Office of Financial Management (OFM) for 2013. There are also other collection services active in the City for special types of waste. Two companies have been issued statewide authority by the UTC to collect biomedical waste, for instance. These companies are Stericycle of Washington and Waste Management Healthcare Solutions of Washington. Other companies collect hazardous wastes. "Self-haul" by the waste generator (transportation of a person's or company's Spokane Valley Solid Waste Management Plan 5- 1 Chapter 5:Waste Collection by Green Solutions own waste) is also allowed, as long as the waste is brought to a properly-permitted facility. Regulations Concerning Waste Collection The Washington State authorities that govern collection activities are Ecology and the Washington Utilities and Transportation Commission("UTC"). RCW 70.95.020 also assigns responsibilities to local government for the management of solid waste handling while encouraging the use of private industry. The various laws that may apply to solid waste collection companies include: • Chapter 81.77 RCW, Solid Waste Collection Companies: This law establishes the state regulatory authority for solid waste collection companies and the procedures and standards with which they must comply. • Chapter 35.21 RCW, Cities and Towns: This law establishes authority of towns and cities in regards to solid waste and the procedures and standards with which they must comply. • Chapter 480-70 WAC, Rules for Solid Waste and/or Refuse Collection Companies: This chapter establishes standards for public safety, fair practices, reasonable charges, nondiscriminatory application of rates, adequate and dependable service, consumer protection, and compliance for solid waste collection companies. • Chapter 480-07 WAC, UTC Procedural Rules: This chapter addresses how to conduct business with the UTC. Four forms of collection services are allowed by State law in the City: • Certificated: With this collection method, cities are not actively involved in the management of garbage collection. Instead, it allows the UTC-certificated hauler to provide service under UTC regulation. • Municipal: Municipal collection utilizes municipal employees to collect waste (such as is done in the City of Spokane). • Licensed collection: This method applies to municipalities that require private collectors to have both a city-issued license as well as a UTC certificate. This approach gives the municipality limited control over collection services. Pursuant to state law, the City has assumed control and management of solid waste collection within its boundaries by entering into 7-year franchises with Waste Management and Sunshine Disposal for solid waste, recycling, and organic collection in 2008. Pursuant to state law, the City is currently negotiating contracts for the extinguishment of the haulers' statutory rights for measurable damages. Under such contracts, the City anticipates the haulers will continue to provide the same services as they have provided under the existing franchises. The City anticipates that it will enter into the contracts with Waste Management and Sunshine Disposal in 2014 to provide Spokane Valley Solid Waste Management Plan 5-2 Chapter 5:Waste Collection by Green Solutions for full extinguishment of haulers' statutory rights by March, 2018. After completion of the contracts with Waste Management and Sunshine, the City anticipates submitting a request for proposals for a long-term contract for solid waste, recycling, and organic collection in 2018. 5.2. WASTE COLLECTION FUTURE PLANNING When the City seeks a new contract for waste collection in 2018, the City will have the opportunity to develop a collection system from the ground up. The City could maintain the existing system or make changes to improve recycling and waste reduction options. The following are possible changes the City may consider: • Encourage more favorable recycling rates as a waste reduction initiative. • Encourage homeowners to participate in subscription waste collection and recycling services. • Explore innovative ways to increase recycling activities. • Explore citywide cleanup events and seasonal moderate risk waste roundups. The City anticipates conducting a public participation program prior to going out for a new contract in 2018 to determine desired services and the acceptability of some of these options. 5.3. ALTERNATIVE WASTE COLLECTION STRATEGIES The following alternatives were considered for new or expanded waste collection activities. The listing of an alternative in this section does not mean that it is considered feasible or desirable, nor that is recommended (see Section 5.5 for waste collection recommendations). Alternative A- Contracted Collection Services The City is currently negotiating contracts with existing waste collection companies (Waste Management and Sunshine Disposal) that are anticipated to be executed in 2014 with terms lasting until 2018. As the expiration date draws near with Waste Management and Sunshine Disposal, the City will utilize a process to receive public input on various options for service levels. Such options will include:, collection frequencies, recycling options, citywide cleanup programs,moderate risk waste roundup , and other aspects of solid waste collection. Alternative B - Increase Curbside Collection Subscriptions The City would encourage increasing subscriptions for curbside collection through educating customers of the benefits of collection services. This approach reduces the Spokane Valley Solid Waste Management Plan 5-3 Chapter 5:Waste Collection by Green Solutions amount of illegal dumping and "junk" properties, and leads to lower per-unit collection fees. Collection fees are lower on the average because collection services can operate more efficiently when more households and businesses participate. This approach is also more efficient because it reduces individual trips that people make to a transfer station to drop off their garbage,with the resulting congestion there and the increased impact to the environment due to fuel consumption. Finally, there is anecdotal evidence to suggest that people who self-haul their garbage do not recycle as much as those who subscribe to garbage collection and curbside recycling services. 5.4. EVALUATION OF WASTE COLLECTION ALTERNATIVES Review of Rating Criteria The above alternatives can be evaluated according to several key criteria, including consistency with solid waste planning goals, technical and political feasibility, and the relative cost-effectiveness of the alternative. Based on the ratings for these criteria, each alternative can be given an overall rating and a decision can then be made as to whether to pursue it or not. Consistency with Solid Waste Planning Goals: Both of these alternatives support the goal of providing convenient and reliable services, although some people may take issue with the idea that curbside garbage collection is better than self-haul to the transfer station. Feasibility: In judging the alternatives for technical and political feasibility, Alternative A can actually be considered more feasible than maintaining the status quo,whereas Alternative B is rated medium for this criteria due to the presumed somewhat unpopular question if customers want to subscribe to curbside collection. Cost Effectiveness: Both Alternatives A and B should be cost-effective. Rating of Alternatives The evaluation of the alternatives is summarized in the following table. Table 5-2 Rating of the Waste Collection Alternatives Consistency with Planning Goals Feasibility Cost- Effectiveness Overall Rating odk Alternative A, Contracted collection H H H H service B, Increase curbside M M M M subscri•tions Spokane Valley Solid Waste Management Plan 5-4 Chapter 5:Waste Collection by Green Solutions Rating Scores: H— High, M— Medium, L—Low 5.5 WASTE COLLECTION RECOMMENDATIONS The following recommendations are being made for waste collection programs: High-Priority Recommendations C1) When the City fully assumes control of collection services, anticipated to be in 2018,various options will be considered for providers and service levels, including negotiating versus bidding for haulers and collection frequency for recycling. Medium-Priority Recommendations C2) Educate the public on the benefits of curbside collection services and the comprehensive costs related to self-haul to transfer station. The City is the lead agency for both of these recommendations. Recommendation Cl should be implemented by 2018 through a competitive or negotiated process. Recommendation C2 could be evaluated at the time that the collection contract changes. Spokane Valley Solid Waste Management Plan 5-5 Chapter 5:Waste Collection by Green Solutions CHAPTER 6 TRANSFER AND DISPOSAL 6.1 . EXISTING TRANSFER AND DISPOSAL ACTIVITIES Overview There are currently two transfer stations operating in Spokane Valley: a private station owned and operated by Sunshine and a public facility, the Valley Transfer Station (see Figure 6-1). There are three additional transfer stations operating in Spokane County (but outside of the City limits for Spokane Valley): the North County Transfer Station (also known as Colbert Transfer Station), the City of Spokane Waste-to-Energy (WTE) Facility (which also acts a transfer station), and a transfer facility operated by Stericycle (for biomedical wastes). There are no disposal facilities in Spokane Valley. In other areas of Spokane County, there is the City of Spokane W 11, Facility, one active municipal solid waste ("MSW") landfill (Northside Landfill), one limited purpose landfill (Graham Road Recycling and Disposal), and six permitted inert waste landfills. The Northside Landfill is not open to the public,but is used by the City of Spokane for emergency disposal purposes (in case the WTE Facility is temporarily shut down) and for disposal of materials that cannot be processed at the W 11, Facility. The Graham Road Landfill is open to the public and handles primarily construction and demolition waste, petroleum-contaminated soils, inert wastes, asbestos and other wastes. All of the six inert waste landfills are privately owned and operated. Three of these are not open to the public, and one of the inert landfills is permitted but not currently operating. The two inert waste landfills that are open to the public (Busy Bee Landfill and Spokane Rock Products) handle primarily concrete and asphalt. There are also a number of closed landfills in Spokane County (most notably Colbert Landfill, Greenacres Landfill and Mica Landfill), some of which are still undergoing monitoring and remedial actions. Sunshine Disposal &Recycling Transfer Station The Sunshine Transfer Station is a privately owned and operated transfer station located at 2405 University Road in Spokane Valley. This transfer station has been in operation at that location since 1983. The transfer station is currently open to contractors and commercial haulers for waste disposal. Residential and commercial waste collected by Sunshine Disposal is delivered here. Depending on the type of waste, these wastes are consolidated into transfer trailers or intermodal containers, which are used to transport waste to its final disposal site. Waste from contractors is generally transferred to the Graham Road limited purpose landfill. Cardboard and other recyclables collected from local businesses are delivered to the station and prepared for transport to markets by sorting and baling. Workers also separate some recyclables (primarily metals and wood) from mixed loads on the station's tipping floor. Spokane Valley Solid Waste Management Plan 6-1 Chapter 6:Transfer and Disposal by Green Solutions Figure 6-1 Solid Waste Facilities in Spokane Valley ,___ 1. Aiii WASHINGTON 6.2 SPOKANE COUNTY 1 L. 1 ■ Valley Transfer Station ■ Sunshine Disposal Transfer Station City of Spokane Valley L rf w44 s Note: Although the Valley Transfer Station is located in Spokane Valley, it is part of the Spokane County system and is not part of the City's System. Spokane Valley Solid Waste Management Plan 6-2 Chapter 6:Transfer and Disposal by Green Solutions The permit for the Sunshine Transfer Station was recently modified to include an MRW drop-off site, the capability to serve residential self-haul customers, a drop-off area for Clean Green, recycling drop-off containers, and other changes. Valley Transfer Station The Valley Transfer Station has been in operation since 1991. Previously, this station was owned and operated by the Regional System, but a recent agreement between the City of Spokane and Spokane County has transferred the ownership of this and the North Side Transfer Station to Spokane County.. This transfer of ownership will become effective in November 2014. This agreement also includes provisions for the County to direct waste from the transfer stations to the City's WTE Facility. At the time that this Plan was being developed, the County was going through the process of hiring a private company to operate the transfer stations. The Valley Transfer Station is open to residential and commercial customers, and accepts solid waste for disposal at the WTE Facility. The Valley Transfer Station also accepts recyclable materials, Clean Green and moderate-risk waste ("MRW"), and has a separate area for collecting white goods (large appliances such as refrigerators and washing machines). 6.2. TRANSFER AND DISPOSAL PLANNING ISSUES The interlocal agreement for the Regional System expires on November 16, 2014. The City of Spokane Valley has entered into a contract with Sunshine to provide transfer, transport, and disposal services through its transfer station. The contract has a term of 10 years,with the option for two three-year extensions. Certain disposal options, including but not limited to incineration facilities and landfills located within the City of Spokane Valley, are not considered feasible options and so are not discussed in this Plan. 6.3. ALTERNATIVE TRANSFER AND DISPOSAL STRATEGIES The City recently went through an evaluation process to evaluate using the new County system and Valley Transfer Station versus use of the Sunshine Transfer Station. The City Council selected Sunshine and recently entered into a new contract with Sunshine to provide transfer and disposal services, so no additional options for these services need to be evaluated at this time. This contract is anticipated to save a substantial amount of money for City residents and businesses. Spokane Valley Solid Waste Management Plan 6-3 Chapter 6:Transfer and Disposal by Green Solutions The contract that the City of Spokane Valley has signed with Sunshine provides for a tipping fee (disposal charge) of$98.15 per ton for solid waste, with a minimum fee of $15.20 per load. Clean Green will be accepted at the Sunshine Transfer Station for $50.00 per ton with a minimum fee of$10.00 per load. Separated recyclables and MRW will be received at the Sunshine Transfer Station at no charge. All rates will be paid by customers directly to Sunshine. The City will receive an administrative fee of$125,000 per year from Sunshine, a portion of which will be used to pay for staff administration of the City's contract with Sunshine. 6.4 TRANSFER AND DISPOSAL RECOMMENDATIONS The following recommendation is being made for transfer and disposal programs: High-Priority Recommendations D1) The Sunshine Transfer Station is designated as the disposal system for all solid waste from Spokane Valley, effective November 17, 2014. The City is the lead agency for this and related activities. Funding for transfer and disposal costs will be derived from surcharges on tipping fees. Spokane Valley Solid Waste Management Plan 6-4 Chapter 6:Transfer and Disposal by Green Solutions CHAPTER 7 SPECIAL WASTES 7.1 . INTRODUCTION The purpose of this chapter is to review the generation, handling and disposal methods for special wastes in Spokane Valley. These wastes generally require special handling and disposal due to regulatory requirements or for one or more other reasons. Hence, these wastes are currently managed and disposed of separately from the solid waste disposal system, and may not actually be defined as solid waste. The following special wastes are discussed in this chapter: 7.2 Biomedical Wastes 7.3 Construction and Demolition ("C&D") Wastes 7.4 Moderate-Risk Waste 7.5 Street Sweepings and Vactor Waste The source(s) and current handling practices for each special waste are described in this chapter. All of the wastes are also examined for needs and issues,but only those that pose disposal problems were further examined for alternatives and recommendations. 7.2. BIOMEDICAL WASTES Existing Management Practices for Biomedical Wastes State law (Chapter 70.95K RCW) defines biomedical wastes to include: Animal waste: animal carcasses,body parts and bedding of animals that are known to be infected with, or have been inoculated with, pathogenic microorganisms infectious to humans. Biosafety level 4 disease waste: biosafety level 4 disease waste is waste contaminated with blood, excretions, exudates, or secretions from humans or animals who are isolated to protect others from highly communicable infectious diseases that are identified as pathogenic organisms assigned to biosafety level 4 by the centers for disease control, national institute of health, biosafety in microbiological and biomedical laboratories, current edition. Cultures and stocks: wastes infectious to humans and includes specimen cultures, cultures and stocks of etiologic agents, wastes from production of biologicals and Spokane Valley Solid Waste Management Plan 7-1 Chapter 7: Special wastes by Green Solutions serums, discarded live and attenuated vaccines, and laboratory waste that has come into contact with cultures and stocks of etiologic agents or blood specimens. Such waste includes but is not limited to culture dishes,blood specimen tubes, and devices used to transfer, inoculate, and mix cultures. Human blood and blood products: discarded waste human blood and blood components, and materials containing free flowing blood and blood products. Pathological waste: human source biopsy materials, tissues, and anatomical parts that emanate from surgery, obstetrical procedures and autopsy. Does not include teeth, human corpses, remains and anatomical parts that are intended for internment or cremation. Sharps: all hypodermic needles, syringes and IV tubing with needles attached, scalpel blades, and lancets that have been removed from the original sterile package. Clinics and agencies that generate biomedical waste are required to prepare and maintain a biomedical waste management plan. The plan must identify the types and quantities of biomedical waste and handling procedures for segregation, containment, transport, treatment, monitoring and disposal. The management plan must also include staff training procedures and contingency planning and identify specific individuals responsible for biomedical waste handling. The plan must be approved by the chief executive of the facility and must be available for inspection at the request of the local health officer. Biomedical waste must be segregated from other waste materials. Biomedical waste, other than sharps, must be enclosed in a red plastic bag and placed in a labeled, biomedical waste storage container. Sharps must be placed in a leak-proof, puncture- resistant, labeled container secured with a lid. Biomedical waste must be treated by an approved method prior to disposal. Approved treatment methods include steam sterilization, incineration and others as approved by the local health officer. The UTC regulates transporters of biomedical wastes. The UTC has issued statewide franchises to Waste Management and Stericycle to transport biomedical wastes. Their regulations also allow regular solid waste haulers to refuse to haul wastes that they observe to contain infectious wastes as defined by the UTC. Individual residents who generate hypodermic needles are not regulated as are clinics and agencies. Residents may collect used hypodermic needles in either a labeled sharps containers made for that purpose or in empty plastic bottles such as detergent or bleach bottles (preferably labeled). Full containers can be dropped off at MRW collection sites. Spokane Valley Solid Waste Management Plan 7-2 Chapter 7: Special wastes by Green Solutions Planning Issues for Biomedical Wastes Most biomedical wastes generated in Washington State are currently being handled properly. There are occasionally problems with small amounts of biomedical wastes being improperly disposed from small generators such as veterinarians and dental offices, but in general these can be addressed on an as-needed basis. Residential "sharps" (syringes), however, can be a problem. Sharps and other biomedical wastes are generated at residential locations from home health care, especially for diabetes and other health problems, and from illegal drug use. Residential sources often lack access to proper disposal methods, and residential sharps thrown in the garbage can pose a hazard to waste collectors and others. Alternative Strategies for Biomedical Wastes The following alternative was considered for biomedical wastes. Special Waste Alternative A- Publicize Proper Disposal Options for Residential Sharps: An ongoing campaign could be conducted to publicize and promote the proper disposal options for residential sharps. This could be accomplished through a multi-prong effort involving the City, the Health District and local pharmacies that sell syringes. The Health District and local pharmacies could take the lead on establishing programs to handle the syringes and publicizing the availability of these programs. For the City, a brief explanation of the problems and proper disposal opportunities could be included on general information that is distributed about the waste collection system. This alternative is evaluated further at the end of this chapter (see Section 7.6). 7.3. CONSTRUCTION AND DEMOLITION WASTES Existing Management Practices for C&D Wastes This section of the Plan also addresses "green building," which is a topic closely related to construction and demolition wastes. C&D wastes are defined simply as the wastes that are generated from construction and demolition activities. These wastes consist primarily of new and used building materials (wood, sheetrock, pipe and other metals, shingles, etc.), concrete and asphalt. Land clearing wastes, including soil, stumps and brush, are also sometimes included in this category,but these materials are rarely treated as a waste. To the extent these materials are taken off-site, the materials can be handled as a valuable product, clean fill or inert wastes (in the case of clean soils), or as a wood waste. A category related to C&D wastes is "inert wastes." State rules adopted in February 2003, Chapter 173-350 WAC, created this category of waste. Inert wastes are defined to include some types of construction wastes, such as concrete, asphalt,brick, tile,wood, and roofing,but specifically excludes sheetrock. Inert wastes also include glass, Spokane Valley Solid Waste Management Plan 7-3 Chapter 7: Special wastes by Green Solutions stainless steel, aluminum, and other wastes that can meet the criteria for inert wastes (will not burn, creates no harmful leachate or gases, etc.). The regulatory status of inert wastes differs from mixed C&D wastes, with disposal requirements that are less strict. The total amount of C&D wastes generated in Spokane Valley is unknown,but for most communities C&D wastes are generated in quantities equal to half or more of the regular solid waste stream. C&D wastes are generated at a rate that is proportional to construction activity, and so annual amounts will vary depending on population growth, the economic climate and other factors. Large commercial developments and other one-time projects can have a significant impact on annual amounts, as can natural disasters. C&D wastes can be handled in a variety of ways. Some of this waste can be reused or recycled at facilities in the area (such as Habitat for Humanity, Brown Building Materials and Greenacres Gypsum), and much of it is brought to one of the landfills in the area (Graham Road Recycling and Disposal or one of the inert waste landfills). A significant amount of C&D wastes are disposed with solid wastes. According to the estimated waste composition figures (see Table 2-4), there are 5,000 tons of wood and 6,280 tons of construction waste in the solid waste stream from Spokane Valley. Beyond Waste Plan: Increasing the amount of green building practices is one of the five key initiatives identified in the State's Beyond Waste Plan. Green building is defined by the Beyond Waste Plan as "design and construction practices that significantly reduce or eliminate the negative impact of buildings on the environment and occupants in five broad areas: sustainable site planning; conservation of materials and resources; energy efficiency and renewable energy; safeguarding water and water efficiency; and indoor air quality." The Beyond Waste Plan adopted a short-term goal of"dramatically increasing adoption of environmentally preferable building construction, operation and deconstruction practices throughout the state and the region." A separate long-term goal was also adopted, which is for "green building to be a mainstream and usual practice throughout the state." Planning Issues for C&D Wastes There appears to be no significant problems currently with the management of C&D wastes in Spokane Valley, although reuse and recycling opportunities for these materials could likely be used more. Alternative Strategies for C&D Wastes Possible alternatives for C&D wastes are described below. Special Waste Alternative B - Install Collection Areas at the Transfer Stations: An area at the two local transfer stations could be set up as a collection and temporary storage point for reusable building materials. Materials could be placed in this area by either the customers or by transfer station staff (time permitting). The area should be Spokane Valley Solid Waste Management Plan 7-4 Chapter 7: Special wastes by Green Solutions close to the tipping floor but also distinctly separated from it, to avoid confusion about what materials are permissible to take (scavenging directly from the tipping floor should not be allowed due to safety and regulatory concerns). Rules would need to be established as to whom may take materials from this area, and in any case solid waste customers should be required to weigh out and complete their garbage transaction before taking materials from this area. Special Waste Alternative C - Promote Green Building: As mentioned earlier in this section, Ecology has adopted green building as one of the five primary initiatives in the Beyond Waste Plan. The scope of green building is very broad, however, and there are only a few of these topics that fit within the context of this Plan. For instance, issues dealing with energy efficiency,water conservation and indoor air quality have little to do with topics such as C&D recycling or even the use of recycled products. The green building activities that are relevant to this Plan are limited to: • Promoting de-construction activities that allow reuse and recycling. • Encouraging builders and others to recycle C&D materials. These activities could be promoted using a variety of tactics, ranging from providing links to other sources of information to recycling requirements attached to new building permits. For the City of Spokane Valley, an appropriate level of involvement might be to provide brochures and other information developed by others, as these are available. Alternatives B and C are evaluated further at the end of this chapter (see Section 7.6). 7.4. MODERATE-RISK WASTES Introduction Residents and businesses in Spokane Valley produce small amounts of hazardous wastes, such as used solvents or other chemicals and leftover amounts of products such as garden chemicals and paints. For most businesses and virtually all residents, the amount of hazardous waste produced falls below the amount that is regulated and so is classified by Washington State law as a "moderate-risk waste". Businesses that create larger amounts of these wastes are regulated as hazardous waste generators and are subject to stricter requirements. Hazardous wastes as defined by State law (RCW 70.105.010) are excluded from the definition of solid waste, and so are not required to be addressed in a Plan such as this. Since MRW generators are not required to retain the services of a hazardous waste disposal company (as larger generators must do), however, MRW will be disposed with solid waste if a convenient alternative is not provided. In other words, solid waste systems must provide an alternative disposal method for MRW or by default these materials will end up in the wastes that are sent to landfills or incinerators. In Spokane Valley Solid Waste Management Plan 7-5 Chapter 7: Special wastes by Green Solutions recognition of this need, a State law (RCW 70.105.220) required local governments to produce a "local hazardous waste plan" that was to be implemented by December 31, 1991. This section of the Plan addresses MRW in recognition of the need for a solid waste system to provide a viable alternative for the proper disposal of these wastes. This section is not intended to satisfy the requirements for a local hazardous waste plan, which would require much more extensive analysis and program development. The City of Spokane Valley is considered to have satisfied the 1991 requirement for such a plan based on the fact that prior to its incorporation in 2003 the City was part of Spokane County, and the County has already complied with that requirement. Furthermore, it should be noted that another provision of State law (RCW 70.95.080(6)) clearly states "local governments shall not be required to include a hazardous waste element in their solid waste management plans." Regulations for Moderate-Risk Wastes MRW includes waste materials that have the characteristics of and pose the same risks as hazardous wastes, but are generated in relatively small quantities by individual households and in small quantities by businesses. In other words, these wastes are flammable, corrosive, toxic, and/or reactive. Federal law does not currently regulate these wastes as hazardous, but each state can adopt stricter regulations for hazardous waste from households and small quantity generators. Washington State has chosen to regulate these materials. Ecology has created a waste classification called MRW that includes household hazardous waste (which is generated by residential sources) and small quantity generator waste (which is generated by businesses,but in quantities below the current threshold for hazardous waste regulations). A State law adopted in 1991 also added used oil to the list of materials to be addressed by MRW programs. Conditionally Exempt Small Quantity Generator Waste: Many businesses and institutions produce small quantities of hazardous wastes. Conditionally exempt small quantity generators ("CESQGs") may produce hazardous waste at rates less than 220 pounds per month or per batch (or 2.2 pounds per month or per batch of extremely hazardous waste) and accumulate less than 2,200 pounds of hazardous waste on-site (or 22 pounds of extremely hazardous waste). Extremely hazardous wastes include specific pesticides and other poisons that are more toxic than other hazardous wastes. At amounts above these limits, the businesses become medium or large-quantity generators and must comply with the reporting and other requirements for hazardous waste management and disposal. CESQGs are conditionally exempt from State and Federal regulation, meaning that they are exempt only as long as they generate less waste than the threshold amounts and properly manage and dispose of their wastes. Used Oil: Washington State law (Chapter 70.95I RCW) requires that local governments manage used oil in conjunction with their MRW programs and submit annual reports to Ecology. Spokane Valley Solid Waste Management Plan 7-6 Chapter 7: Special wastes by Green Solutions The Beyond Waste Plan Ecology is required by law (Chapters 70.105 and 70.95 RCW) to develop and update the statewide hazardous waste and solid waste plans. In 2004, Ecology simultaneously updated the 1991 State Solid Waste Management Plan and the 1994 State Hazardous Waste Management Plan. In 2004, the updated plans were published together as the Beyond Waste Plan. An updated version of the Beyond Waste Plan became available at the end of 2009. The Beyond Waste Plan's 30-year vision states: "We can transition to a society where waste is viewed as inefficient, and where most wastes and toxic substances have been eliminated. This will contribute to economic, social and environmental vitality." The Beyond Waste Plan recognizes that "waste generation in Washington continues to increase, and that toxic substances are more prevalent in our everyday lives now than they were just few years ago." It explains why it is important to move beyond waste and concludes "to lower the risks to people and the environment, Washington needs to shift to an approach that will significantly reduce wastes and toxic substances over time." The Beyond Waste Plan adopted five initiatives as starting points for reducing solid and toxic wastes in Washington. One of these initiatives is "reducing small-volume hazardous materials and wastes." This initiative addresses products and substances commonly used in households and in relatively small quantities by businesses. Ecology included this initiative in the Beyond Waste Plan for three reasons: 1. The Beyond Waste Plan assumes that MRW affects everyone. A major premise of the Beyond Waste Plan is that small-volume hazardous materials and wastes are everywhere and that people come into contact with them daily. As a result, chronic and acute exposure to hazardous chemicals in homes and businesses can be a significant health risk,which can be very costly to businesses and society due to health care costs, environmental degradation, insurance and liability. 2. The Beyond Waste Plan also assumes that the current management system is not sustainable over the long term. Government funds pay for special collections, fixed facilities, and treatment and disposal programs to keep MRW out of municipal solid waste landfills and away from illegal disposal, but currently only a portion of all MRW is actually captured. Achieving future goals will require a better approach, including safer alternatives, product stewardship,waste reduction, recycling and convenient collection opportunities that do not rely primarily on public systems and finances. 3. Finally, the Beyond Waste Plan assumes that great strides are possible, and that many opportunities exist to reduce and eliminate risks associated with MRW. This is based in part on the idea that consumer demand is building for less harmful products, as well as for more reuse and recycling. Several regional and national Spokane Valley Solid Waste Management Plan 7-7 Chapter 7: Special wastes by Green Solutions initiatives are already underway, such as E-Cycle, the Take-it-Back Network and fluorescent lamp recycling,which lend credence to these ideas. The Beyond Waste Plan identifies the following recommendations for the small-volume hazardous materials initiative to succeed: 1. Eliminate or minimize groups of the most toxic chemicals as part of the Ecology's Reducing Toxic Threats work. 2. Reduce threats from mercury. 3. Reduce threats from Persistent Bioaccumulative Toxins. 4. Develop a more comprehensive list of covered electronics through a product stewardship infrastructure. 5. Reduce the use of high-risk pesticides, emphasize proper use, and encourage effective alternatives. 6. Reduce and manage all architectural paint wastes. 7. Implement and promote Environmentally Preferable Purchasing at state and local governments and in institutional settings,with Ecology leading by example. Support the Climate Action Team proposals and other initiatives. 8. Ensure MRW and hazardous substances are regulated and managed according to hazards, toxicity and risk. 9. Support full implementation of local hazardous waste plans. 10. Ensure businesses and facilities handling MRW comply with environmental laws and regulations. Encourage as much reuse and recycling of MRW as possible. 11. Educate the public and businesses on prevention, proper use, storage, and disposal of hazardous products and wastes. Encourage safer alternatives to minimize toxic threats, especially to vulnerable populations. 12. Develop and implement a strategy for a more regionally focused MRW program by evaluating the most significant threats and effective approaches, including safer alternatives, to reducing those threats. The Beyond Waste Plan adopted"five-year milestones" for these recommendations. Existing Management Practices for Moderate-Risk Wastes To date, moderate-risk wastes generated in Spokane Valley have been handled through drop-off collection sites at the Valley Transfer Station and two other locations operated by the Regional System. The drop-off site at the Valley Transfer Station is open from 7:30 a.m. to 5:00 p.m. seven days per week (except major holidays). Spokane Valley Solid Waste Management Plan 7-8 Chapter 7: Special wastes by Green Solutions Only household hazardous wastes are accepted for free at this site. CESQG's are referred to a private contractor for disposal of their wastes, and the private contractor periodically conducts collection events for CESQGs at the transfer station. Ongoing funding for the MRW program is provided through a portion of the tipping fee and Ecology's CPG grant program. Public education and information about the MRW program, including technical assistance to commercial generators, has been provided to date by Regional System staff. Others in the area, including garbage haulers and recycling companies, also provide information on proper handling and disposal of MRW. Planning Issues for MRW Wastes Because the City of Spokane Valley has chosen to leave the Regional System, an alternative program will be needed for MRW. Access to the MRW services at the Valley Transfer Station and other County-owned facilities may not be available. Sunshine has agreed to provide this service at its transfer station, and it is anticipated that they will collect a similar range of materials. Alternative Strategies for MRW Wastes Special Waste Alternative D - Encourage City Residents and Businesses to Use New Program for MRW: When the City leaves the Regional System in November 2014, local residents and businesses could be encouraged to use the MRW collection site at the Sunshine Transfer Station because access to existing County-owned sites may no longer be available. This alternative is evaluated further at the end of this chapter (see Section 7.6). 7.5. STREET SWEEPINGS AND VACTOR WASTES Existing Management Practices for Street Sweepings and Vactor Wastes Street sweepings and vactor wastes are two different wastes that are often managed together and are sometimes collectively called "street wastes." Street sweepings are the result of sweeping streets and parking lots to remove litter, sand and other materials. Vactor waste,which gets its name from the brand name of a vacuum truck that is often used to collect this material, is the result of pumping out stormwater catch basins, ditches, detention and retention ponds and similar structures. Both of these materials are potentially contaminated with heavy metals, petroleum products, and other chemicals, as well as being contaminated with litter (paper, plastic and metals). Only in extreme cases would the street sweepings or vactor waste be so contaminated that it would be necessary to handle these wastes as a dangerous waste, but the physical and chemical contaminants do limit the options for using these materials as clean fill or in other reuse applications. Spokane Valley Solid Waste Management Plan 7-9 Chapter 7: Special wastes by Green Solutions In Spokane Valley, street sweeping and the collection of vactor wastes are done by private companies under contract with the City. In the past, the City has provided a temporary storage site where wood pellets were added to the wastes to soak up excess water, and then the mixture was hauled to a landfill for disposal. At the time this Plan was being developed, however, the City was constructing a "decant facility," which will allow excess liquids to drain out of these wastes. This approach will avoid the need for adding wood pellets and also reduce the number of trips needed to the landfill. Planning Issues for Street Sweepings and Vactor Wastes With the construction of the decant facility, there are no additional known issues for street sweepings and vactor wastes, and so no need to examine additional alternatives for these materials. 7.6. EVALUATION OF SPECIAL WASTE ALTERNATIVES Review of Rating Criteria The special waste alternatives can be evaluated according to several key criteria, including consistency with solid waste planning goals, technical and political feasibility, and the relative cost-effectiveness of the alternative. Based on the ratings for these criteria, each alternative can be given an overall rating and a decision can then be made as to whether to pursue it or not. Consistency with Solid Waste Planning Goals: All of the special waste alternatives support the goals of providing reliable solid waste services and encouraging recycling and/or proper disposal as appropriate to the type of waste. Feasibility: Alternatives A (publicizing proper disposal methods for residential sharps) and C (promoting green building) are feasible although may lead to a minor amount of additional expenses not currently being incurred by the City. Alternative B (installing set-aside areas at the two transfer stations in the City) is not likely to be technically or politically feasible (due to cost and space constraints). Alternative D (using the Sunshine Transfer Station for MRW) is feasible and has been contractually arranged. Cost Effectiveness: Alternative A (publicizing proper disposal methods for residential sharps) is cost-effective in the sense that this may avoid a significant personal injury (should a waste collector or other person be stuck by an improperly-disposed syringe). Alternative B (installing set-aside areas at the two transfer stations in the City) may not be cost-effective in the sense that it would be hard to recover the capital costs of constructing the area for this activity. Alternative C (promoting green building) could be considered cost-effective in the sense that an investment in education and outreach would lead to future cost savings (from energy and water savings) in the ownership of homes and commercial buildings. Alternative D (using the Sunshine Transfer Station Spokane Valley Solid Waste Management Plan 7-10 Chapter 7: Special wastes by Green Solutions for MRW) should be cost-effective in the sense that a proper disposal system for MRW could avoid injuries or environmental damages. Rating of Alternatives The evaluation of the alternatives is summarized in the following table. Table 7-1 Rating of the Special Waste Alternatives Consistency with Planning Feasibility Cost- Overall Rating Alternative Goals Effectiveness Biomedical Wastes A, Publicize proper disposal options for residential H M H H sharps C&D Wastes B, Collection areas at transfer H L L L stations C, Promote green building H M H H Moderate-Risk Wastes D, Use Sunshine Transfer H H H H Station for MRW Rating Scores: H - High, M- Medium, L—Low 7.7 SPECIAL WASTE RECOMMENDATIONS The following recommendations are being made for special waste programs: High-Priority Recommendations SW1) Proper disposal options for residential sharps (syringes) will be promoted through a cooperative effort between the City of Spokane Valley, the Health District, and the waste collectors. SW2) Green building practices will be promoted by distributing brochures and publicizing other sources of information. SW3) City residents and businesses will be encouraged to use the Sunshine Transfer Station for MRW services. Spokane Valley Solid Waste Management Plan 7-11 Chapter 7: Special wastes by Green Solutions For Recommendation SW1, implementation responsibility should be shared by the City and the Health District,with assistance and cooperation from the two waste collection companies. The City will be the lead agency for Recommendations SW2 and SW3. The cost for Recommendation SW1 could be in the range of$25,000 to $50,000, depending on the extent of the public information and outreach campaign, and the potential to "piggy-back" on related public information efforts. The cost for Recommendation SW2 would be minimal, assuming the City would at most need to pay for minor modifications to the City's website and for printing of brochures developed by others. The cost for Recommendation SW3 will be significant, but this cost will be embedded in the disposal costs at the Sunshine Transfer Station and will be funded by Sunshine through tipping fees. Recommendation SW3 will be implemented after November 2014, although publicity activities may begin before that date. Spokane Valley Solid Waste Management Plan 7-12 Chapter 7: Special wastes by Green Solutions CHAPTER 8 ADMINISTRATION 8.1 . EXISTING ADMINISTRATION ACTIVITIES City of Spokane Valley The City of Spokane Valley, which was incorporated March 31, 2003, is a non-charter code city that operates under a Council-City Manager system of government. This form of government provides a separation of politics from day-to-day administration of the City's activities, and also allows for professional management of the City's activities. The Council consists of seven elected officials serving staggered four-year terms. All of the seven positions are "at large." Every two years, the City Council members choose one member to serve as the Mayor of the City Council, and a second person to serve as Deputy Mayor. The City Council is generally responsible for adopting legislation and policies, adopting the City's budget, approving contracts, and hiring the City Manager. The City Manager is responsible for implementing City ordinances, preparing the City budget, negotiating and overseeing contracts, managing City operations and staff, and managing other aspects of the City's operations. Prior to this Plan, the City of Spokane Valley participated in local solid waste programs largely though the Regional System,which included the City of Spokane, Spokane County, and other regional cities. This involvement guided policies and programs in the City and throughout the region. Solid waste services are performed by private companies, although the City and others have been involved in public education and other support activities. The City is also involved in solid waste though the City Code, which has provisions that address problems with properties that accumulate junk, such as inoperable cars and badly-managed piles of organic materials that are attracting pests. The City of Spokane Valley recently entered into a contract with Sunshine that stipulates that Sunshine will provide solid waste transfer, transport and disposal services for City residents and businesses. A clause of that contract provides that an administrative fee be paid to the City. This fee is to be paid in quarterly installments for a total annual amount of$125,000. There is also a provision of that contract that provides for a "Right-of-Way Maintenance Fee" to be paid by Sunshine, in the amount of$1.00 per ton for each ton of solid waste over 45,500 tons per year. Together, these funds are referred to as a "disposal surcharge" in other parts of this Plan, and these funds are expected to cover the City's expenses for operating the City's System. Spokane County and the Spokane Regional Solid Waste System Until recently, solid waste programs in Spokane County were largely managed through the Regional System. Spokane Valley and the other cities in Spokane County have Spokane Valley Solid Waste Management Plan 8-1 Chapter 8:Administration by Green Solutions participated in this Regional System while maintaining some autonomy in solid waste collections and other programs (the City of Spokane, for instance, operates its own collection system for recycling and solid waste). The Regional System will cease to exist in November 2014, however, and Spokane County will become the lead agency for many of the programs that had been handled by the Regional System. Spokane Regional Health District The Health District is responsible for health programs throughout Spokane County, including Spokane Valley. In addition to programs addressing personal health problems and food safety, the Health District has an Environmental Public Health Division that conducts inspections of solid waste facilities and handles complaints related to solid waste. Washington State Agencies and Regulations The two State agencies that are primarily involved in solid waste management are Ecology and the UTC. Washington Department of Ecology: The Solid Waste Handling Standards (Chapter 173-350 WAC) were promulgated by Ecology under the authority granted by Chapter 70.95 RCW. In addition, Chapter 173-351 WAC, Criteria for Municipal Solid Waste Landfills, contains the current standards for municipal solid waste landfills. The Model Litter Control and Recycling Act (RCW 70.93.060) prohibits depositing garbage on any property not properly designated as a disposal site. There is also a "litter fund" that has been created through a tax levied on wholesale and retail businesses, and the monies from this fund have been used for education, increased litter clean-up efforts, and contracts to eligible county entities for illegal dump clean-up activities. Under the Model Toxics Control Act (Chapter 70.105D RCW), grants are available to local governments for solid waste management plans and programs, hazardous waste management plans and programs, and remedial actions to clean up existing hazardous waste sites. Solid and hazardous waste planning and programs are funded through the CPG program administered by Ecology's Solid Waste and Financial Assurance Program. Ecology also responds to complaints regarding hazardous material spills or releases. Washington Utilities and Transportation Commission: The UTC regulates privately- owned utilities and companies that provide public services such as electric power, telephone, natural gas, private water systems, transportation, and waste collection. The UTC's authority over solid waste collection is established in Chapter 81.77 RCW and Chapter 480-70 WAC. The UTC regulates residential and non-residential garbage collection services, primarily in unincorporated areas and also for incorporated areas that have not taken control of Spokane Valley Solid Waste Management Plan 8-2 Chapter 8:Administration by Green Solutions the collection system. Cities are permitted by State law to choose their form of waste collection regulation. Many cities in Washington contract with a private hauler for garbage collection services (or collect it with city crews as in the case of Spokane), and only a few rely on the UTC to regulate a private garbage hauler as if they were an unincorporated area. UTC authority does not extend to companies operating under contract with any city or town, or to any city or town that undertakes solid waste collection. This regulatory system was set up by the State Legislature in the 1960's to ensure that every citizen and business, no matter how remotely located, can get garbage collection service. The UTC regulates solid waste collection companies by granting "certificates of convenience and necessity" that allow companies to operate in specified service areas. It also regulates solid waste collection, under authority of RCW 81.77.030, by: • Fixing collection rates, charges, classifications, rules, and regulations. • Regulating accounts, service, and safety of operations. • Requiring annual reports and other reports and data. • Supervising collection companies in all matters affecting their relationship to their customers. • Requiring collection companies to use rate structures consistent with state waste management priorities. The UTC requires certificate holders to provide the minimum levels of solid waste collection and recycling services established by a local solid waste management plan and enacted through a service level ordinance. Federal Agencies and Regulations At the federal level, the Resource Conservation and Recovery Act of 1976 (RCRA), as amended by the Solid Waste Disposal Act Amendments of 1980 (42 U.S.C. 6901-6987), is the primary body of legislation dealing with solid waste. Subtitle D of RCRA deals with non-hazardous solid waste disposal and requires the development of a state comprehensive solid waste management program that outlines the authorities of local, state and regional agencies. Subtitle D requires that the state program must prohibit "open dumps" and must provide that all solid waste is disposed in an environmentally- sound manner. 8.2. ADMINISTRATION PLANNING ISSUES No City personnel are currently assigned responsibility for solid waste management and recycling issues. When the City leaves the Regional System, the City will begin to incur costs for activities that are currently handled by the Regional System. These costs are not well- Spokane Valley Solid Waste Management Plan 8-3 Chapter 8:Administration by Green Solutions defined at this time, but are anticipated to be in the neighborhood of$50,000 to $100,000, primarily for various education and outreach activities. The City will also become eligible for CPG funds from Ecology beginning July 1, 2015, and these funds could be used to cover these costs and/or help defray the expense of the MRW program or other programs. As of July 1, 2015, Spokane Valley will be eligible for approximately $250,000 in CPG funds (for a two-year period), although the City will need to provide a 25% match ($83,300, or$41,650 annually) for those funds. 8.3. ALTERNATIVE ADMINISTRATION STRATEGIES The following alternatives were considered for new or expanded administration programs. The listing of an alternative in this section does not mean that it is considered feasible or desirable, nor that is recommended (see Section 8.5 for administration recommendations). Alternative A- Hire Staff to Manage the Solid Waste System None of the existing City employees are specifically assigned to solid waste activities, and so these duties currently fall on the Public Works Director and others. With its new System, additional work will be required for managing contracts, conducting public education activities, and also possibly grant management and reporting. One full-time employee may be needed to manage the System. If the collection system is changed to one where the City handles the billing, then additional personnel would be needed for that as well. Alternative B - Use Private Contractors and Existing Staff to Manage the Solid Waste System It should be noted that the idea of hiring additional staff is contrary to the typical approach for Spokane Valley, and it is more likely that the City will wish to contract out for as many of the activities as possible and then have existing contracts management staff monitor the progress of those activities. 8.4. EVALUATION OF ADMINISTRATION ALTERNATIVES Review of Rating Criteria The above alternatives can be evaluated according to several key criteria, including consistency with solid waste planning goals, technical and political feasibility, and the relative cost-effectiveness of the alternative. Based on the ratings for these criteria, each alternative can be given an overall rating and a decision can then be made as to whether to pursue it or not. Consistency with Solid Waste Planning Goals: Both of these alternatives support the goals for this Plan. Spokane Valley Solid Waste Management Plan 8-4 Chapter 8:Administration by Green Solutions Feasibility: Between Alternatives A (hiring new staff) and B (the use of existing staff), Alternative B is more technically and politically feasible. Cost Effectiveness: Alternative B (using existing staff) is more cost-effective than Alternative A (hiring new staff). Rating of Alternatives The evaluation of the alternatives is summarized in the following table. Table 8-1 Rating of the Administration Alternatives 11116,_ meIII III Consistency Cost- with Planning Feasibility Cost- Overall Rating Alternative Goals Effectiveness A, Hire new staff H L L L B, Use existing staff H H H H Rating Scores: H - High, M- Medium, L—Low 8.5 ADMINISTRATION RECOMMENDATIONS The following recommendations are being made for administration programs: High-Priority Recommendations Al) The additional services and programs needed by the City to support the City's solid waste system will be performed by contracted services to the extent feasible and appropriate. Existing City staff will be used to monitor the contracts and programs for solid waste in the City of Spokane Valley. Medium-Priority Recommendations A2) The additional funds needed to implement the City's solid waste system will be collected through surcharges on tipping fees collected at the Sunshine Transfer Station. The City of Spokane Valley is the lead agency for both of these recommendations, which will be implemented in November 2014. The funding source is defined above, plus CPG funds can be used when the City becomes eligible for those. Spokane Valley Solid Waste Management Plan 8-5 Chapter 8:Administration by Green Solutions CHAPTER 9 IMPLEMENTATION PLAN 9.1 . INTRODUCTION This chapter lists all of the recommendations from previous chapters and presents a plan to implement the recommendations. These recommendations are intended to guide decision-making activities for Spokane Valley for the next six years,while also providing direction for the next 20 years. Implementation of individual program elements will be accomplished through annual budgets and contracts. 9.2. WASTE REDUCTION RECOMMENDATIONS The following recommendations are being made for waste reduction programs (see Chapter 3 for more details): High-Priority Recommendations WR1) The City of Spokane Valley will evaluate product stewardship programs as these are proposed on a statewide or national level, and support those if appropriate to the interests of their citizens and the business community. WR2) The business community in Spokane Valley may be encouraged to reduce waste through a recognition program that publicizes success stories. WR3) The City of Spokane Valley will adopt policies and practices to encourage City departments to reduce waste. Medium-Priority Recommendations WR4) Public education materials distributed by the City of Spokane Valley will include information on alternative handling methods for yard waste, the value of"smart shopping" methods, how to avoid wasting food, and the availability of volume-based garbage collection fees. Low-Priority Recommendations WR5) A ban on the disposal of yard waste within solid waste disposal containers may be considered in the future if public education and outreach efforts are not effective in diverting most of this material from the waste stream. Spokane Valley Solid Waste Management Plan 9-1 Chapter 9: Implementation Plan by Green Solutions 9.3. RECYCLING AND ORGANICS RECOMMENDATIONS The following recommendations are being made for recycling and organics collection programs (see Chapter 4 for more details): High-Priority Recommendations R1) Curbside recycling will continue to be included with garbage collection services for residential customers in Spokane Valley. R2) City residents and businesses will be encouraged to use Sunshine Transfer Station for Clean Green drop-off services. Medium-Priority Recommendations R3) Weekly curbside recycling will be evaluated as part of the waste collection system changes expected to be implemented by Spokane Valley in 2018. 9.4. SOLID WASTE COLLECTION RECOMMENDATIONS The following recommendations are being made for waste collection programs (see Chapter 5 for more details): High-Priority Recommendations C1) When the City fully assumes control of collection services, anticipated to be in 2018,various options will be considered for providers and service levels, including negotiating versus bidding for haulers and collection frequency for recycling.. Medium-Priority Recommendations C2) Educate the public on the benefits of curbside collection services and the comprehensive costs related to self-haul to transfer station. 9.5. TRANSFER AND DISPOSAL RECOMMENDATIONS The following recommendations are being made for transfer and disposal programs (see Chapter 6 for more details): High-Priority Recommendations Spokane Valley Solid Waste Management Plan 9-2 Chapter 9: Implementation Plan by Green Solutions D1) The Sunshine Transfer Station is designated as the disposal system for all solid waste from Spokane Valley, effective November 17, 2014. 9.6. SPECIAL WASTE RECOMMENDATIONS The following recommendations are being made for special waste programs (see Chapter 7 for more details): High-Priority Recommendations SW1) Proper disposal options for residential sharps (syringes) will be promoted through a cooperative effort between the City of Spokane Valley, the Health District, and the waste collectors. SW2) Green building practices will be promoted by distributing brochures and publicizing other sources of information. SW3) City residents and businesses will be encouraged to use the Sunshine Transfer Station for MRW services. 9.7. ADMINISTRATION RECOMMENDATIONS The following recommendations are being made for administration programs (see Chapter 8 for more details): High-Priority Recommendations Al) The additional services and programs needed by the City to support the City's solid waste system will be performed by contracted services to the extent feasible and appropriate. Existing City staff will be used to monitor the contracts and programs for solid waste in the City of Spokane Valley. Medium-Priority Recommendations A2) The additional funds needed to implement the City's solid waste system will be collected through surcharges on tipping fees collected at the Sunshine Transfer Station. 9.8. SIX-YEAR IMPLEMENTATION SCHEDULE Except for the recommendations that depend on whether the City chooses to leave the Regional System or not, all of the recommended strategies are scheduled for Spokane Valley Solid Waste Management Plan 9-3 Chapter 9: Implementation Plan by Green Solutions implementation within the six-year planning period. The proposed implementation schedule is shown in Table 9-1. Table 9-1 Implementation Schedule for Recommendations ecommendation 11P11.2015 12016 •011117 2018 2019 2020 Waste Reduction WR1) Support product stewardship programs as appropriate WR2) Business waste reduction recognition program WR3) Adopt city waste reduction policies X WR4) Promote waste reduction ��� WR5) Consider yard waste disposal ban X X Recycling and Organics R1) Continue to include curbside recycling with garbage services R2) Encourage use of Sunshine Transfer Station for clean green R3) Evaluate weekly curbside recycling X Solid Waste Collection C1) Contract for collection service X C2) Increase curbside subscriptions X Transfer and Disposal D1) Designate Sunshine Transfer Station as X disposal site (2014) Special Wastes SW1) Promote proper disposal of residential sharps > I> 00. SW2) Promote green building SW3) Encourage use of Sunshine Transfer Station for MRW Administration Al) Use existing staff A2) Disposal surcharge as funding source X— indicates a singular or short-term event. Shading indicates ongoing activities. Spokane Valley Solid Waste Management Plan 9-4 Chapter 9: Implementation Plan by Green Solutions 9.9. IMPLEMENTATION RESPONSIBILITIES The City of Spokane Valley is primarily responsible for most of the recommendations made in this Plan, but that responsibility is shared with others as appropriate to the nature of the recommended activity. Implementation responsibilities for the recommended activities are summarized in Table 9-2. Table 9-2 Implementation Responsibilities for Recommendations Recommendation CityCountyHealth Waste Others District Haulers Waste Reduction WR1) Support product stewardship programs X as appropriate WR2) Business waste reduction recognition X O program WR3) Adopt city waste reduction policies X WR4) Promote waste reduction X WR5) Consider yard waste disposal ban X Recycling and Organics R1) Continue to include curbside recycling X O with garbage services R2) Encourage use of Sunshine Transfer Station for clean green X O R3) Evaluate weekly curbside recycling X 0 Solid Waste Collection C1) Contract for collection service X 0 C2) Increase curbside subscriptions X Transfer and Disposal D1) Designate Sunshine Transfer Station as X disposal site Special Wastes SW1) Promote proper disposal of residential O O X O sharps SW2) Promote green building X SW3) Encourage use of Sunshine Transfer X X O Station for MRW Administration Al) Use existing staff X A2) Disposal surcharge as funding source X X—indicates primary responsibility. 0— indicates secondary responsibility. Spokane Valley Solid Waste Management Plan 9-5 Chapter 9: Implementation Plan by Green Solutions 9.10. FUNDING STRATEGY The recommended programs will be funded through garbage rates, tipping fees, a disposal surcharge, other user fees, and State grants (CPG funds). It should be noted here that none of the recommendations in this Plan require additional construction or other capital acquisition activities (beyond the recent modifications that Sunshine has opted to make at the Sunshine Transfer Station), and so the costs addressed in this Plan are solely for operating expenses for a variety of programs. A summary of the funding sources for the recommended programs is shown in Table 9-3. Garbage rates will be used to fund waste collection, curbside recycling and commercial recycling programs. Tipping fees will be used for the recommended waste reduction, transfer, transport and disposal, household hazardous waste, and administration. Special user fees will fund small quantity generator and other special waste programs. Table 9-3 Funding Strategies for Recommendations LjjjorActjtY _a 0 � a L Waste Reduction X X X Recycling and Organics X X X Solid Waste Collection X Transfer and Disposal X Special Wastes X X X Administration X X 9.11 . TWENTY-YEAR IMPLEMENTATION SCHEDULE It is anticipated that programs and facilities in Spokane Valley will generally be able to stay on the course established by this Plan for the next twenty years. The waste stream for the City is not expected to increase so much (see Table 2-6) as to create capacity issues for the collection and disposal system that the City is proposing to use. The recently-executed contract with Sunshine will provide disposal services for at least the next ten years (with two three-year extensions possible). The contracts for waste collection services will provide for those services through 2018, at which time the City anticipates it will enter into a long term contract for solid waste collection services(as Spokane Valley Solid Waste Management Plan 9-6 Chapter 9: Implementation Plan by Green Solutions described in Chapter 5). Recycling and organics collection services will continue to be provided through the collection and disposal contracts. Hence, the twenty-year implementation strategy is much the same as the implementation details shown in the previous tables in this chapter. Changes will likely continue to occur, however, in the local, statewide and national solid waste arena, and should any of these changes require an amendment or revision to this Plan then the steps described in the next section can be taken to address those. 9.12. PROCEDURES FOR AMENDING THE PLAN The Solid Waste Management-Reduction and Recycling Act (Chapter 70.95 RCW) requires local governments to maintain their solid waste plans in current condition. Plans must be reviewed and revised, if necessary, every five years. Assuming a timely adoption process for this Plan,with the process completed in late 2014, this plan should be reviewed and, if necessary, revised or amended in 2019 or 2020. According to Ecology's guidelines5, "amendments" are more minor changes that generally occur within the five-year time period after a solid waste plan is approved,whereas "revisions" are more significant changes that could require more opportunities for public review and comment. Individuals or organizations wishing to propose Plan amendments before the scheduled review process must petition the City of Spokane Valley in writing. The petition should describe the proposed amendment, its specific objectives and explain why immediate action is needed prior to the next scheduled review. The Public Works Director will investigate the basis for the petition and prepare a recommendation for the City Manager. If the City Manager decides that the petition warrants further consideration, the Public Works Director will draft a proposed amendment. This process will also be used if City staff initiate amendments to the Plan. The proposed amendment must be submitted to the City Council and undergo the normal review and approval process for this type of Plan amendment. As an amendment, a SEPA Checklist will likely not be necessary,but the proposed amendment should be reviewed by Ecology (the extent and timing for their review should be determined at a later date on a case-by-case basis). Once adopted, the amendment should be submitted to Ecology for review and approval. The Public Works Director may develop reasonable rules for submitting and processing proposed Plan amendments, and may establish reasonable fees to investigate and process petitions. All administrative rulings of the Public Works Director and City Manager may be appealed to the City Council. Guidelines for Development of Local Comprehensive Solid Waste Management Plans and Plan Revisions,by the Washington Department of Ecology,February 2010,Publication#10-07-005. Spokane Valley Solid Waste Management Plan 9-7 Chapter 9: Implementation Plan by Green Solutions Minor changes that may occur in the System,whether due to internal decisions or external factors, can be adopted without the need to go through a formal amendment process. Implicit in the development and adoption of this Plan is the understanding that emergency actions may need to be taken by the City in the future for various reasons, and that these actions can be undertaken without needing to amend this plan beforehand. In this case, City staff will endeavor to inform Ecology and other key stakeholders as soon as feasibly possible, but not necessarily before new actions are implemented. If the emergency results in permanent and significant changes to the System, an amendment to this Plan will be prepared. If, however, the emergency actions are only undertaken on a temporary or short-term basis, an amendment will not be considered necessary. Spokane Valley Solid Waste Management Plan 9-8 Chapter 9: Implementation Plan by Green Solutions GLOSSARY The following definitions are provided for various terms used in the Spokane Valley Solid Waste Management Plan: Biomedical waste: infectious and injurious waste originating from a medical, veterinary, or intermediate care facility, or from home use. Buy-back recycling center: a facility that pays people for recyclable materials. Commercial solid waste: solid waste generated by non-industrial businesses. This includes waste from business activities such as construction; transportation, communications and utilities; wholesale trades; retail trades; finance, insurance and real estate; other services; and government. This term is also used to refer to all waste except residential, or is used by waste collectors to refer to all waste that is collected using dumpsters. Commingled: recyclable materials that have been collected separately from garbage by the generator, but the recyclable materials have been mixed together in the same container (see also single stream). Composting: the controlled biological decomposition of organic wastes to produce a humus-like final product that can be used as a soil amendment. In this plan, backyard composting means a small-scale activity performed by homeowners on their own property, using yard debris that they generate. CPG: Coordinated Prevention Grants, a grant program administered by the Washington State Department of Ecology. Curbside recycling: the act of collecting recyclable materials directly from residential generators, usually after the recyclable materials have been placed at the curb (or at the side of the street if no curb exists in the area) by the residents. EPA: the United States Environmental Protection Agency; the federal agency responsible for promulgation and enforcement of federal environmental regulations. Ferrous metals: materials that are predominantly (over 75% by weight) made of iron. Includes cans and various iron and steel alloys that contain enough iron such that magnets adhere to them, but for recycling this generally does not include paint cans or other containers that may contain hazardous residues. Groundwater: water present in subsurface geological deposits (aquifers). Spokane Valley Solid Waste Management Plan G-1 Glossary by Green Solutions HDPE: high-density polyethylene, a type of plastic commonly used in milk, detergent, and bleach bottles and other containers. Also used for products that line and cap landfills. Household hazardous waste: wastes that would be classified as hazardous due to their nature or characteristics, except that the amount is too small to be regulated and the wastes are generated by households (which are exempt). Includes aerosol cans, solvents, some paints, cleaners, pesticides, herbicides, compressed gases, oil, other petroleum products, car batteries and other materials. Industrial waste: solid waste generated by various manufacturing companies. Includes waste generated by businesses that manufacture the following products; food, textile mill products, apparel, lumber, paper, printing, chemicals, stone, clay, glass, fabricated metals, equipment, and miscellaneous other products. Does not include hazardous wastes generated by these industries. Inert wastes: includes wastes that are inert in nature, such as glass, concrete, rocks, gravel, and bricks. Mixed paper: all other types of recyclable paper not included in newspaper, cardboard or high-grade papers. Includes materials such as "junk mail," magazines,books, and white and colored printing and writing papers. Moderate-risk wastes (MRW): includes household hazardous waste (see definition above) and wastes produced by businesses that potentially meet the definition of a hazardous wastes except the amount of waste produced falls below regulatory limits. MSW: municipal solid waste (see also "solid waste"). Mulching: includes 1) leaving grass clippings on the lawn when mowing; 2) placing yard debris,compost, wood chips or other materials on the ground in gardens or around trees and shrubs to discourage weeds and retain moisture. Non-ferrous metals: materials predominantly made of copper, lead, brass, tin, aluminum, and other metals except iron. PET: polyethylene terephthalate, a type of plastic. Commonly used to refer to 2-liter beverage bottles, although other containers are also increasingly being made from this material, including containers for liquid and solid materials such as cooking oil, liquor, peanut butter, and many other food and household products. Public education: a broad effort to present and distribute informational materials. Spokane Valley Solid Waste Management Plan G-2 Glossary by Green Solutions Public information: the development of educational materials for the public, including brochures,videos, and public service announcements. RCW: Revised Code of Washington. Recycling: the act of collecting and/or processing source-separated materials in order to return them to a usage similar in nature to their previous use. Reusable items: items that may be reused (or easily repaired), including things such as small electronics, household items such as dishes, and furniture. Roll-off: large open-topped container, generally 8 to 40 cubic yards in volume, used for collecting and transporting wastes. Self-haul waste: waste that is brought to a landfill or transfer station by the person or company that created the waste. The former is called residential self-haul and the latter is called either non-residential or commercial self-haul. SEPA: State Environmental Policy Act. Single stream: refers to the practice of placing all recyclable materials together in one container for curbside collection. This is similar to "commingled" except that glass bottles may or may not be included in a commingled mixture whereas glass bottles are mixed with the other materials in single stream collection programs. Solid waste: solid and semisolid wastes, including but not limited to garbage, rubbish, ashes, industrial wastes, swill, demolition and construction wastes, discarded commodities,wood waste, and various special wastes. Special wastes: wastes that have particular characteristics such that they present special handling and/or disposal problems. Spokane Regional Solid Waste System: The name of the system that operated the public transfer stations and other aspects of the solid waste system through November 2014. This system was created by Interlocal agreements between Spokane County and the cities in the county, and was administered by the City of Spokane. Stationary compactor: A compaction unit installed at an apartment building or medium to large-sized business, used for compacting and transporting wastes. Tipping fee: The rate charge by transfer and disposal facilities, generally on a per-ton basis. Spokane Valley Solid Waste Management Plan G-3 Glossary by Green Solutions Transfer station: an intermediate solid waste disposal facility at which solid waste is temporarily deposited to await transportation to a final disposal site. UGA: Urban Growth Area, see Spokane Valley Comprehensive Plan for more details. UTC: Washington Utilities and Transportation Commission. WAC: Washington Administrative Code. Waste reduction or waste prevention: reducing the amount or type of solid waste that is generated. Also defined by state rules to include reducing the toxicity of wastes. White goods: large appliances such as refrigerators. Yard debris: includes leaves, grass clippings,brush and branches. Spokane Valley Solid Waste Management Plan G-4 Glossary by Green Solutions ATTACHMENT A ENVIRONMENTAL CHECKLIST APPENDIX A ENVIRONMENTAL CHECKLIST INTRODUCTION Ecology guidelines for solid waste plans require that the potential impacts of this Spokane Valley Solid Waste Management Plan must be evaluated according to the State Environmental Policy Act (SEPA) process. This checklist has been prepared to fulfill that requirement. SUMMARY The SEPA checklist prepared for this Plan is intended only to address those programs specifically recommended by the Plan. Any new facilities or other activities proposed subsequent to this Plan will need to undergo their own SEPA review process. No negative environmental impacts are anticipated to result from the programs recommended in this Plan. Spokane Valley Solid Waste Management Plan A-1 Attachment A: Environmental Checklist by Green Solutions SEPA CHECKLIST p (lane v.. SVMC 21 .20 Valley Community Development— Planning Division 11703 E Sprague Ave Suite B-3 • Spokane Valley WA 99206 509.720.5310 • Fax: 509.688.0037 •planning®spokanevalley.org STAFF USE ONLY Date Submitted: Received by: Fee: PLUS #: File #: A. BACKGROUND 1. Name of proposed project, if applicable: Spokane Valley Solid Waste Management Plan 2. Name of applicant: Spokane Valley Public Works Department 3. Address and phone number of applicant and contact person: Eric Guth, 509-720-5000, 11707 East Sprague Ave., Suite 106, Spokane Valley, WA 99206 4. Date checklist prepared: June 12, 2014 5. Agency requesting checklist: Washington Department of Ecology 6. Proposed timing or schedule (including phasing, if applicable): The recommendations contained in the Solid Waste Management Plan will be implemented primarily over the next five years. 7. Do you have any plans for future additions, expansion, or further activity related to or connected with this proposal? If yes, explain. No 8. List any environmental information you know about that has been prepared, or will be prepared, directly related to this proposal. The permit for one of the facilities mentioned in this Plan, the Sunshine Disposal & Recycling Transfer Station, was recently modified to allow some of the proposed activities to proceed. The permit is issued by the Spokane Regional Health District and the Spokane Valley Solid Waste Management Plan A-2 Attachment A: Environmental Checklist by Green Solutions modifications were reviewed by the Spokane Regional Health District and the Washington Department of Ecology. 9. Do you know whether applications are pending for governmental approvals of other proposals directly affecting the property covered by your proposal? If yes, explain. NA 10. List any government approvals or permits that will be needed for your proposal, if known. This Plan must be adopted by the Spokane Valley City Council and then the Washington Department of Ecology must approve the plan. 11. Give brief, complete description of your proposal, including the proposed uses and the size of the project and site. Recommendations are made in this Plan for solid waste, moderate-risk waste and other aspects of the solid waste management system. Recommended actions include education and promotion, assignment of implementation responsibilities, and a funding strategy. 12. Location of the proposal. The activities described in the plan will take place primarily in the City of Spokane Valley. 13. Does the proposed action lie within the Aquifer Sensitive Area (ASA)? The general Sewer Service Area? Priority Sewer Service Area? Yes, the activities described in this Plan will take place in the City of Spokane Valley. 14. The following questions supplement Part A. a. Critical Aquifer Recharge Area (CARA) / Aquifer Sensitive Area (ASA). 1. Describe any systems, other than those designed for the disposal of sanitary waste, installed for the purpose of discharging fluids below the ground surface (includes systems such as those for the disposal of Stormwater or drainage from floor drains). Describe the type of system, the amount of material to be disposed of through the system and the types of material likely to be disposed of (including materials which may enter the system inadvertently through spills or as a result of firefighting activities). NA 2. Will any chemicals (especially organic solvents or petroleum fuels) be stored in aboveground or underground storage tanks? If so, what types and quantities of material will be stored? NA 3. What protective measures will be taken to insure that leaks or spills of any chemicals stored or used on site will not be allowed to percolate to groundwater? This includes measures to keep chemicals out of disposal systems. NA Spokane Valley Solid Waste Management Plan A-3 Attachment A: Environmental Checklist by Green Solutions 4. Will any chemicals be stored, handled or used on the site in a location where a spill or leak will drain to surface or groundwater or to a stormwater disposal system discharging to surface or groundwater? NA b. Stormwater 1. What are the depths on the site to groundwater and to bedrock (if known)? NA 2. Will stormwater be discharged into the ground? If so, describe any potential impacts. NA B. ENVIRONMENTAL ELEMENTS EVALUATION FOR AGENCY USE ONLY 1) Earth a. General description of the site (check one): ❑ flat, ❑ rolling, ❑ hilly, ❑ steep slopes, ❑ mountainous, other Does not apply b. What is the steepest slope on the site (approximate percent slope)? Does not apply c. What general types of soils are found on the site (for example, clay, sand, gravel, peat, muck)? If you know the classification of agricultural soils, specify them and note any prime farmland. Does not apply d. Are there surface indications or history of unstable soils in the immediate vicinity? If so, describe. Does not apply e. Describe the purpose, type, and approximate quantities of any filling or grading proposed. Also indicate source of fill. Does not apply f. Could erosion occur as a result of clearing, construction, or use? If so, generally describe. Does not apply g. About what percent of the site will be covered with impervious surfaces after project construction? Spokane Valley Solid Waste Management Plan A-4 Attachment A: Environmental Checklist by Green Solutions Does not apply EVALUATION FOR h. Proposed measures to reduce or control erosion, or other impacts to the earth, if any: AGENCY USE ONLY Does not apply 2) Air a. What types of emissions to the air would result from the proposal (i.e., dust, automobile, odors, industrial wood smoke) during construction and when the project is completed? If any, generally describe and give approximate quantities if known. Does not apply b. Are there any off-site sources of emissions or odor that may affect your proposal? If so, generally describe. Does not apply c. Proposed measures to reduce or control emissions or other impacts to air, if any: Does not apply 3) Water a. Surface: 1) Is there any surface water body on or in the immediate vicinity of the site (including year-round and seasonal streams, saltwater, lakes, ponds, wetlands)? If yes, describe type and provide names. If appropriate, state what stream or river it flows into. Does not apply 2) Will the project require any work over, in, or adjacent to (within 200 feet) the described waters? If yes, please describe and attach available plans. Does not apply 3) Estimate the amount of fill and dredge material that would be placed in or removed from surface water or wetlands and indicate the area of the site that would be affected. Indicate the source of fill material. Does not apply 4) Will the proposal require surface water withdrawals or diversions? Give general description, purpose, and approximate quantities if known. Spokane Valley Solid Waste Management Plan A-5 Attachment A: Environmental Checklist by Green Solutions Does not apply EVALUATION FOR 5) Does the proposal lie within a 100-year floodplain? If so, note AGENCY USE ONLY location on the site plan. Does not apply 6) Does the proposal involve any discharges of waste materials to surface waters? If so, describe the type of waste and anticipated volume of discharge. Does not apply b. Ground: 1) Will ground water be withdrawn, or will water be discharged to ground water? Give general description, purpose, and approximate quantities if known. Does not apply 2) Describe waste material that will be discharged into the ground from septic tanks or other sources, if any (for example: Domestic sewage; industrial, containing the following chemicals; agricultural; etc.). Does not apply c. Water runoff(including stormwater): 1) Describe the source of runoff (including storm water) and method of collection and disposal, if any (include quantities, if known). Where will this water flow? Will this water flow into other waters? If so, describe. Does not apply 2) Could waste materials enter ground or surface waters? If so, generally describe. Does not apply d. Proposed measures to reduce or control surface, ground, and runoff water impacts, if any: Does not apply 4) Plants a. Check or circle types of vegetation found on the site: ❑ deciduous tree: alder, maple, aspen, other ❑ evergreen tree: fir, cedar, pine, other ❑ shrubs Spokane Valley Solid Waste Management Plan A-6 Attachment A: Environmental Checklist by Green Solutions ❑ grass ❑ pasture EVALUATION FOR ❑ crop or grain AGENCY USE ONLY ❑ wet soil plants: cattail, buttercup, bullrush, skunk cabbage, other ❑ water plants: water lily, eelgrass, milfoil, other ❑ other types of vegetation Does not apply b. What kind and amount of vegetation will be removed or altered? Does not apply c. List threatened or endangered species known to be on or near the site. Does not apply d. Proposed landscaping, use of native plants, or other measures to preserve or enhance vegetation on the site, if any: Does not apply 5) Animals a. Circle any birds and animals which have been observed on or near the site or are known to be on or near the site: ❑ birds: hawk, heron, eagle, songbirds, other: ❑ mammals: deer, bear, elk, beaver, other: ❑ fish: bass, salmon, trout, herring, shellfish, other: Does not apply b. List any threatened or endangered species known to be on or near the site. Does not apply c. Is the site part of a migration route? If so, explain. Does not apply d. Proposed measures to preserve or enhance wildlife, if any: Does not apply 6) Energy and natural resources a. What kinds of energy (electric, natural gas, oil, wood stove, solar) will be used to meet the completed project's energy needs? Describe Spokane Valley Solid Waste Management Plan A-7 Attachment A: Environmental Checklist by Green Solutions whether it will be used for heating, manufacturing, etc. Does not apply EVALUATION FOR b. Would your project affect the potential use of solar energy by adjacent AGENCY USE ONLY properties? If so, generally describe. Does not apply c. What kinds of energy conservation features are included in the plans of this proposal? List other proposed measures to reduce or control energy impacts, if any: Does not apply 7) Environmental health a. Are there any environmental health hazards, including exposure to toxic chemicals, risk of fire and explosion, spill, or hazardous waste, that could occur as a result of this proposal? If so, describe Does not apply 1) Describe special emergency services that might be required. Does not apply 2) Proposed measures to reduce or control environmental health hazards, if any: Does not apply b. Noise 1) What types of noise exist in the area which may affect your project (for example: traffic, equipment, operation, other)? Does not apply 2) What types and levels of noise would be created by or associated with the project on a short-term or a long-term basis? Indicate what hours noise would come from the site. Does not apply 3) Proposed measures to reduce or control noise impacts, if any: Does not apply 8) Land and shoreline use a. What is the current use of the site and adjacent properties? Does not apply b. Has the site been used for agriculture? If so, describe. Spokane Valley Solid Waste Management Plan A-8 Attachment A: Environmental Checklist by Green Solutions Does not apply EVALUATION FOR c. Describe any structures on the site. AGENCY USE ONLY Does not apply d. Will any structures be demolished? If so, what? Does not apply e. What is the current zoning classification of the site? Does not apply f. What is the current comprehensive plan designation of the site? Does not apply g. If applicable, what is the current shoreline master program designation of the site? Does not apply h. Has any part of the site been classified as an "environmentally sensitive" area? If so, specify. Does not apply i. Approximately how many people would reside or work in the completed project? Does not apply j. Approximately how many people would the completed project displace? Does not apply k. Proposed measures to avoid or reduce displacement impacts, if any: Does not apply I. Proposed measures to ensure the proposal is compatible with existing and projected land uses and plans, if any: Does not apply 9) Housing a. Approximately how many units would be provided, if any? Does not apply b. Approximately how many units, if any, would be eliminated? Does not apply Spokane Valley Solid Waste Management Plan A-9 Attachment A: Environmental Checklist by Green Solutions c. Proposed measures to reduce or control housing impacts, if any: Does not apply EVALUATION FOR 10) Aesthetics AGENCY USE ONLY a. What is the tallest height of any proposed structure(s), not including antennas; what is the principal exterior building material(s) proposed? Does not apply b. What views in the immediate vicinity would be altered or obstructed? Does not apply c. Proposed measures to reduce or control aesthetic impacts, if any: Does not apply 11) Light and glare a. What type of light or glare will the proposal produce? What time of day would it mainly occur? Does not apply b. Could light or glare from the finished project be a safety hazard or interfere with views? Does not apply c. What existing off-site sources of light or glare may affect your proposal? Does not apply d. Proposed measures to reduce or control light and glare impacts, if any: Does not apply 12) Recreation a. What designated and informal recreational opportunities are in the immediate vicinity? Does not apply b. Would the proposed project displace any existing recreational uses? If so, describe. Does not apply c. Proposed measures to reduce or control impacts on recreation, including recreation opportunities to be provided by the project or applicant, if any: Spokane Valley Solid Waste Management Plan A-10 Attachment A: Environmental Checklist by Green Solutions Does not apply EVALUATION FOR 13) Historic and cultural preservation AGENCY USE ONLY a. Are there any places or objects listed on, or proposed for, national, state, or local preservation registers known to be on or next to the site? If so, generally describe. Does not apply b. Generally describe any landmarks or evidence of historic, archaeological, scientific, or cultural importance known to be on or next to the site. Does not apply c. Proposed measures to reduce or control impacts, if any: Does not apply 14) Transportation a. Identify public streets and highways serving the site, and describe proposed access to the existing street system. Show on site plans, if any. Does not apply b. Is site currently served by public transit? If not, what is the approximate distance to the nearest transit stop? Does not apply c. How many parking spaces would the completed project have? How many would the project eliminate? Does not apply d. Will the proposal require any new roads or streets, or improvements to existing roads or streets, not including driveways? If so, generally describe (indicate whether public or private). Does not apply e. Will the project use (or occur in the immediate vicinity of) water, rail, or air transportation? If so, generally describe. Does not apply f. How many vehicular trips per day would be generated by the completed project? If known, indicate when peak volumes would occur. Does not apply Spokane Valley Solid Waste Management Plan A-11 Attachment A: Environmental Checklist by Green Solutions g. Proposed measures to reduce or control transportation impacts if any: EVALUATION FOR Does not apply AGENCY USE ONLY 15) Public services a. Would the project result in an increased need for public services (for example: fire protection, police protection, health care, schools, other)? If so, generally describe. Does not apply b. Proposed measures to reduce or control direct impacts on public services, if any. Does not apply 16) Utilities a. Check utilities currently available at the site: ❑ electricity, ❑ natural gas, ❑water, ❑ refuse service, ❑ telephone, ❑ sanitary sewer, ❑ septic system, ❑ other—describe Does not apply b. Describe the utilities that are proposed for the project, the utility providing the service, and the general construction activities on the site or in the immediate vicinity which might be needed. Does not apply C. SIGNATURE The above answers are true and complete to the best of my knowledge. I understand that the lead agency is relying on them to make its decision. Signature: Date Submitted: Spokane Valley Solid Waste Management Plan A-12 Attachment A: Environmental Checklist by Green Solutions D. SUPPLEMENTAL SHEET FOR NON-PROJECT ACTIONS 1. How would the proposal be likely to increase discharge to water; emissions to air; production, storage, or release of toxic or hazardous substances; or production of noise? Implementation of the proposed recommendations should help reduce the amount of water and air discharges, while increasing the proper handling of any solid or toxic wastes that are generated in the City. There should not be an increase or reduction in noise. a. Proposed measures to avoid or reduce such increases are: Not Applicable. 2. How would the proposal be likely to affect plants, animals, fish, or marine life? No impacts to plants, animals, fish and marine life are anticipated. a. Proposed measures to protect or conserve plants, animals, fish, or marine life are: Not Applicable. 3. How would the proposal be likely to deplete energy or natural resources? The proposed recommendations should help reduce energy demands and help to conserve natural resources, by increasing waste reduction and other activities. Increased recycling leads to conservation of natural resources and also reduces energy demands. In general, using recycled materials in place of virgin materials requires significantly less energy in the manufacturing process. a. Proposed measures to protect or conserve energy and natural resources are: Not Applicable. 4. How would the proposal be likely to use or affect environmentally sensitive areas or areas designated (or eligible or under study) for governmental protection; such as parks, wilderness, wild and scenic rivers, threatened or endangered species habitat, historic or cultural sites, wetlands, floodplains, or prime farmlands? None of these areas will be negatively impacted by the recommendations in this Plan. a. Proposed measures to protect such resources or to avoid or reduce impacts are: Not Applicable. 5. How would the proposal be likely to affect land and shoreline use, including whether it would allow or encourage land or shoreline uses incompatible with existing plans? No direct impacts to land or shoreline use are anticipated to result from the proposed recommendations. a. Proposed measures to avoid or reduce shoreline and land use impacts are Not Applicable. Spokane Valley Solid Waste Management Plan A-13 Attachment A: Environmental Checklist by Green Solutions 6. How would the proposal be likely to increase demands on transportation or public services and utilities? The proposed recommendations should lead to minor reductions in transportation requirements and public services, although if curbside recycling is increased to weekly then there would be additional traffic in the City. Transportation of solid waste out of the city should be lessened by increased waste reduction and recycling. a. Proposed measures to reduce or respond to such demand(s) are: Not Applicable. 7. Identify, if possible, whether the proposal may conflict with local, state, or federal laws or requirements for the protection of the environment. No such conflicts are likely. The intent of creating this Plan is to comply with various laws and requirements (especially on the state level) regarding environmental protection and other factors. E. SIGNATURE I, the undersigned, swear under penalty of perjury that the above responses are made truthfully and to the best of my knowledge. I also understand that, should there be any willful misrepresentation or willful lack of full disclosure on my part, the agency may withdraw any Determination of Nonsignificance that it might issue in reliance upon this check list. Date: Signature: Please print or type: Proponent: Eric Guth Address: 11707 East Sprague, Suite 106, Spokane Valley, WA 99206 Phone: 509-720-5000 Person completing form (if different from proponent): Name: Rick Hlavka, Green Solutions Address: PO Box 680, South Prairie, WA 98385 Phone: 360-897-9533 Spokane Valley Solid Waste Management Plan A-14 Attachment A: Environmental Checklist by Green Solutions ATTACHMENT B RESOLUTION OF ADOPTION Pending (this section will contain the city's resolution adopting this Plan, which will be nearly the final step of the process). Spokane Valley Solid Waste Management Plan B-1 Attachment B: Resolution of Adoption by Green Solutions CITY OF SPOKANE VALLEY Request for Council Action Meeting Date: July 15, 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: Appleway Landscaping — Phase 1 GOVERNING LEGISLATION: PREVIOUS COUNCIL ACTION TAKEN: 21 May 2013 Council consensus to start design work for Phase 1, Dora to Park Road; Ordinance 13-016, Adoption of 2014 Budget on 22 Oct 2013; 20 May 2014 Council consensus to separate sidewalks and pay for extra work from 402 Stormwater Budget. BACKGROUND: The Appleway Landscaping Phase 1 project improves landscaping along Appleway from Dora to Park Road, where feasible. The work includes retrofit of existing driveway approaches to keep stormwater flows from crossing them at the intersections with the sidewalk, modifications to existing sections of sidewalk, modifications to existing swales, and the installation of low pressure underground irrigation, sod and trees. The project design was completed the last full week of June and the advertisement for public bidding to construct the project was in local publications on June 27th and July 4th, 2014. A bid opening for this project is scheduled for July 15th at 10:00 am. Staff will be tabulating the bid results after the bid opening for all responsive and responsible bidders and determining a low bidder. An agenda item will be placed on the 22 July 2014 City Council meeting to authorize the City Manager to enter into a contract with the apparent lowest responsive and responsible bidder for the project. The current schedule for this project is to follow the Appleway Blvd. Street Preservation Project that is scheduled for construction during August, and we plan to begin construction just after Labor Day continuing until the end of October. OPTIONS: Information RECOMMENDED ACTION OR MOTION: Information BUDGET/FINANCIAL IMPACTS: $268,000 from account 312 and additional funding for stormwater improvements of$180,000 to $200,000 from account 402. STAFF CONTACT: Eric Guth — Public Works Director Art Jenkins — Stormwater Engineer ATTACHMENTS: none