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HomeMy WebLinkAboutFS 2015-07-21 COMPLETE AGENDA PACKET.11101VJ di 0'0 1.00hip, 1141 , City of Tukwila Finance and Safety Committee O Kathy Hougardy, Chair O Joe Duffie O De'Sean Quinn AGENDA Distribution: K. Hougardy J. Duffle D. Quinn K. Kruller D. Robertson Mayor Haggerton D. Cline P. McCarthy C. O'Flaherty R. Turpin L. Humphrey D. Speck B. Giberson M. Villa TUESDAY, JULY 21, 2015 — 5:30 PM HAZELNUT CONFERENCE ROOM (formerly known as CR #3) at east entrance of City Hall Item Recommended Action Page 1. PRESENTATION(S) 2. BUSINESS AGENDA a. Contracts regarding the arena project. a. Forward to 7/27 C.O.W. Pg.1 Derek Speck, Economic Development Administrator and 8/3 Regular Mtg. b. An ordinance amending the 2015 -2016 biennial budget. b. Forward to 7/27 C.O.W. Pg.59 Peggy McCarthy, Finance Director for public hearing and 8/3 Regular Mtg. c. A resolution adopting a financial reserve policy. c. Forward to 7/27 C.O.W. Pg.71 Peggy McCarthy, Finance Director and 8/3 Regular Mtg. d. General revenue sources: Levy lid lift, voted debt, d. Information only. Pg.81 B &O tax, Transportation Benefit District, etc. Peggy McCarthy, Finance Director e. A lease agreement for Police evidence storage. e. Forward to 8/3 Consent Pg.91 Bob Giberson, Public Works Director, and Agenda. Mike Villa, Police Chief f. 2015 2nd Quarter Police Department Report. f. Information only. Pg.151 Mike Villa, Police Chief 3. ANNOUNCEMENTS 4. MISCELLANEOUS Next Scheduled Meeting: Tuesday, Auoust 18, 2015 �. The City of Tukwila strives to accommodate individuals with disabilities. Please contact the City Clerk's Office at 206 - 433 -1800 (TukwilaCityClerk ©TukwilaWA.gov) for assistance. TO: City of Tukwila Jim Haggerton, Mayor INFORMATIONAL MEMORANDUM Mayor Haggerton Finance and Safety Committee FROM: Derek Speck, Economic Development Administrator DATE: July 15, 2015 SUBJECT: Consulting Contracts for Proposed Arena ISSUE Staff requests Council approval for consulting contracts related to the proposed arena. BACKGROUND In May 2015 RLB Holdings Sports and Entertainment, LLC submitted an application for State Environmental Policy Act (SEPA) review for permits and approvals necessary to construct a multi- purpose sports and entertainment arena in Tukwila. The City of Tukwila has determined that an Environmental Impact Statement (EIS) will be prepared. As is typical for environmental reviews and projects of this nature, staff contracted with consultants to assist with technical analyses and project management. Similar to what occurs in other large projects, these costs will be paid by the developer. Staff would like to amend some of those contracts to expand their scope to carry the project work through the EIS period and the end of this year. Staff requests Council approval for those contract amendments that exceed the Administration's approval authority. As information, the table below also includes two contracts that are still within the Administration's approval authority but are shown here in order to give Council context for all the contracts related to the arena at this time. Contract Maximum Amount Firm Purpose Current Proposed 15 -059 Daley Morrow Poblete, Inc. Water, sewer, stormwater analysis $20,000 $50,000 15 -078 Skinner Planning and Environmental Solutions EIS review $35,000 $75,000 15 -084 Fehr & Peers Traffic analysis $20,000 $40,000 15 -107 Shiels Obletz Johnsen Project management $35,000 $100,000 15 -127 Fehr & Peers Parking analysis $12,500 $25,000 15 -080 Walker Macy Architectural design review $10,000 $10,000 To be determined Transit analysis $0 $20,000 Total $132,500 $320,000 There are a few items that are important to note: (1) These contracts are revenue neutral to the City because the arena developer and City will enter into an agreement in which the developer will reimburse the City for these 1 2 INFORMATIONAL MEMO Page 2 costs. Since the reimbursement agreement relates to the City receiving revenue and does not authorize expenditures, it does not require Council approval. The arena developer has reviewed the draft reimbursement agreement and indicated their concurrence. (2) The contract amounts shown are maximum "not to exceed" limits. Most of the contracts are based on actual time and materials and the full amount may not be spent. (3) As the arena project progresses, it's possible that other contracts will be necessary. DISCUSSION The Daley Morrow Poblete contract provides technical analysis of the arena's effects on the city's water, sanitary sewer, and stormwater capacity and infrastructure. The Skinner Planning and Environmental Review contract will provide for the assistance of Lloyd Skinner who is reviewing the EIS and performing other planning work related to the arena. The two Fehr & Peers contracts are for different scopes of work that fall within Administration's approval authority, however, staff seeks Council approval since, when combined, they exceed Administration's approval limits and we would like to avoid any misperceptions. One of the contracts is to analyze the proposed parking for the arena and the other contract is to analyze the traffic impacts. The Shiels Obletz Johnsen contract provides for Ken Johnsen to serve as the City's project manager for the arena. The five contracts are currently in effect. Staff is requesting Council approval of amendments to increase the maximum compensation in the agreements. The contracts with proposed amendments are attached. FINANCIAL IMPACT There is no financial impact to the City because the cost of the contracts will be reimbursed by the arena developer. Although the contracts are revenue neutral, budget amendments may be necessary later this year to show increases in revenues and expenditures. RECOMMENDATION The Council is being asked to approve five proposed contract amendments and consider this item at the July 27, 2015 Committee of the Whole meeting and subsequent August 3, 2015 Regular Meeting. ATTACHMENTS (1) Contract 15 -059 Daley Morrow Poblete, Inc. with amendment #1 (2) Contract 15 -078 Skinner Planning and Environmental Review with amendment #2 (3) Contract 15 -084 Fehr & Peers (for traffic analysis) with amendment #1 (4) Contract 15 -107 Shiels Obletz Johnsen with amendment #1 (5) Contract 15 -127 Fehr & Peers (for parking analysis) with amendment #1 C: \Users \derek- s \Desktop\Arena Contracts Memo.doc Attachment #1 Contract 15 -059 Daley Morrow Poblete, Inc. with amendment #1 3 CONTRACT FOR SERVICES Amendment #1 Between the City of Tukwila and Daley- Morrow - Poblete, Inc. That portion of Contract No. 15 -059 between the City of Tukwila and Daley - Morrow - Poblete, Inc. is amended as follows: Section 3: Duration of Agreement; Time for Performance. This Agreement shall be in full force and effect for a period commencing upon execution and ending December 31, 2015, unless sooner terminated under the provisions hereinafter specified. Work under this Agreement shall commence upon written notice by the City to the Consultant to proceed. The Consultant shall perform all services and provide all work product required pursuant to this Agreement no later than December 31, 2015 unless an extension of such time is granted in writing by the City as authorized by the Mayor. Section 4: The Consultant shall be paid by the City for completed work and for services rendered under this Agreement as follows: A. Payment for the work provided by the Consultant shall be made as provided on Exhibit "B -1" attached hereto, provided that the total amount of payment to the Consultant shall not exceed 50,000 without express written modification of the Agreement signed by the City. Exhibits A and B are hereby amended and restated as attached hereto as Exhibit A -1 and Exhibit B- 1. All references to Exhibit A and Exhibit B in contract 15 -059 shall be read as referring to Exhibit A -1 and Exhibit B -1, respectively. All other provisions of the contract shall remain in full force and effect. Dated this day of August, 2015. CITY OF TUKWILA CONSULTANT Jim Haggerton, Mayor Alex Poblete, P.E., Vice - President Daley- Morrow - Poblete, Inc. Amendment #1 Page 1 of 3 4 Contract 15 -059 Exhibit A -1 Scope of Work On call civil engineering consulting services, as requested by the City of Tukwila, will include but not be limited to: • Development plan review for compliance with City code and development standards • Construction support • Attending meetings as requested • Other planning and engineering services as agreed to by the parties Any request for services not listed above shall be agreed upon by the City and the Consultant prior to performance of said services. Daley- Morrow - Poblete, Inc. Amendment #1 Page 2 of 3 5 Contract 15 -059 Exhibit B -1 Payment Payment for pre- approved on -call work will not exceed the budget list in Section 4.A without an approved amendment to the agreement. Payment will be based on invoices supporting hours worked based on the following fee schedule: STANDARD FEE SCHEDULE 2015 PROFESSIONAL ENGINEER PROFESSIONAL LAND SURVEYOR EXPERT WITNESS PROJECT MANAGER DESIGN ENGINEER PLANNER ENGINEERING TECHNICIAN CADD TECHNICIAN CADD DRAFTER SURVEY TECHNICIAN OFFICE SURVEY COMPUTATIONS SECRETARIAL STAFF 2 -MAN SURVEY CREW 3 -MAN SURVEY CREW $120.00 PER HOUR $110.00 PER HOUR $200.00 PER HOUR $100.00 PER HOUR $ 95.00 PER HOUR $100.00 PER HOUR $ 90.00 PER HOUR $ 85.00 PER HOUR $ 80.00 PER HOUR $ 90.00 PER HOUR $ 90.00 PER HOUR $ 50.00 PER HOUR $130.00 PER HOUR $160.00 PER HOUR DIRECT EXPENSE CHARGES INVOICED COSTS TO DMP, INC. — PLUS 15% (Long Distance Calls, Reproductions, miscellaneous materials, sub - consultants, etc.) OVER TIME — Charges at 1.5 times the hourly rate charge listed above. REPRODUCTIONS - CADD Plats $7.50 per L.F. (Mylar), plus hourly rate $6.00 per L.F. (Vellum), plus hourly rate Xerox Plans $3.00 per sheet (Paper), plus hourly rate $15.00 per sheet (Mylar), plus hourly rate COPIES - 24X36 $3.00 per page, plus hourly rate 18X24 $2.00 per page, plus hourly rate Color 8.5x11 $1.25 per page, plus hourly rate B/W 8.5x11 $ .10 per page, plus hourly rate CD's $75.00 each, plus hourly rate TRANSPORTATION EXPENSES - $0.65 Per Mile. Daley- Morrow - Poblete, Inc. Amendment #1 Page 3 of 3 6 City of Tukwila 6200 Southcenter Boulevard, Tukwila WA 98188 15 -059 Contract Number: Council Approval N/A CONSULTANT AGREEMENT FOR ON -CALL ENGINEERING SUPPORT SERVICES THIS AGREEMENT is entered into between the City of Tukwila, Washington, hereinafter referred to as "the City ", and Daley - Morrow - Poblete, Inc., a Washington corporation, hereinafter referred to as "the Consultant ", in consideration of the mutual benefits, terms, and conditions hereinafter specified. 1 Project Designation. The Consultant is retained by the City to perform on -call engineering support services in connection with the project titled nN - NGiVSE,eriv& Svpr'oR -T svtZ.vics. 2. Scope of Services. The Consultant agrees to perform the services, identified on Exhibit "A" attached hereto, including the provision of all labor, materials, equipment and supplies. 3. Duration of Agreement; Time for Performance. This Agreement shall be in full force and effect for a period commencing upon execution and ending 1 z.13 V/6"-- , unless sooner terminated under the provisions hereinafter specified. Work under this Agreement shall commence upon written notice by the City to the Consultant to proceed. The Consultant shall perform all services and provide all work product required pursuant to this Agreement no later than t z /31 /15 unless an extension of such time is granted in writing by the City. 4. Payment. The Consultant shall be paid by the City for completed work and for services rendered under this Agreement as follows: A. Payment for the work provided by the Consultant shall be made as provided on Exhibit "B" attached hereto, provided that the total amount of payment to the Consultant shall not exceed ©, o o e9 without express written modification of the Agreement signed by the City. B. The Consultant may submit vouchers to the City once per month during the progress of the work for partial payment for that portion of the project completed to date. Such vouchers will be checked by the City and, upon approval thereof, payment shall be made to the Consultant in the amount approved. C. Final payment of any balance due the Consultant of the total contract price earned will be made promptly upon its ascertainment and verification by the City after the completion of the work under this Agreement and its acceptance by the City. D. Payment as provided in this section shall be full compensation for work performed, services rendered, and for all materials, supplies, equipment and incidentals necessary to complete the work. E. The Consultant's records and accounts pertaining to this Agreement are to be kept available for inspection by representatives of the City and the state of Washington for a period of three (3) years after final payments. Copies shall be made available upon request. / <$ L c/ o? (/rC /6 //(,//516S 7 5. Ownership and Use of Documents. All documents, drawings, specifications and other materials produced by the Consultant in connection with the services rendered under this Agreement shall be the property of the City whether the project for which they are made is executed or not. The Consultant shall be permitted to retain copies, including reproducible copies, of drawings and specifications for information, reference and use in connection with the Consultant's endeavors. The Consultant shall not be responsible for any use of the said documents, drawings, specifications or other materials by the City on any project other than the project specified in this Agreement. 6. Compliance with Laws. The Consultant shall, in performing the services contemplated by this Agreement, faithfully observe and comply with all federal, state, and local laws, ordinances and regulations, applicable to the services rendered under this Agreement. 7. Indemnification. The Consultant shall defend, indemnify and hold the City, its officers, officials, employees and volunteers harmless from any and all claims, injuries, damages, losses or suits including attorney fees, arising out of or resulting from the acts, errors or omissions of the Consultant in performance of this Agreement, except for injuries and damages caused by the sole negligence of the City. Should a court of competent jurisdiction determine that this Agreement is subject to RCW 4.24.115, then, in the event of liability for damages arising out of bodily injury to persons or damages to property caused by or resulting from the concurrent negligence of the Consultant and the City, its officers, officials, employees, and volunteers, the Consultant's liability hereunder shall be only to the extent of the Consultant's negligence. It is further specifically and expressly understood that the indemnification provided herein constitutes the Consultant's waiver of immunity under Industrial Insurance, Title 51 RCW, solely for the purposes of this indemnification. This waiver has been mutually negotiated by the parties. The provisions of this section shall survive the expiration or termination of this Agreement. 8. Insurance. The Consultant shall procure and maintain for the duration of the Agreement, 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 Consultant, its agents, representatives, or employees. Consultant's maintenance of insurance as required by the agreement shall not be construed to limit the liability of the Consultant to the coverage provided by such insurance, or otherwise limit the City's recourse to any remedy available at law or in equity. A. Minimum Amounts and Scope of Insurance. Consultant shall obtain insurance of the types and with the limits described below: 1. Automobile Liability insurance with a minimum combined single limit for bodily injury and property damage of $1,000,000 per accident. Automobile Liability insurance shall cover 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. CA revised :1-2013 8 Page 2 2. Commercial General Liability insurance with limits no less than $1,000,000 each occurrence, $2,000,000 general aggregate. Commercial General Liability insurance shall be written on ISO occurrence form CG 00 01, and shall cover liability arising from premises, operations, independent contractors and personal injury and advertising injury. The City shall be named as an insured under the Consultant's Commercial General Liability insurance policy with respect to the work performed for the City. 3. Workers' Compensation coverage as required by the Industrial Insurance laws of the State of Washington. 4. Professional Liability with limits no less than $1,000,000 per claim and $1,000,000 policy aggregate limit. Professional Liability insurance shall be appropriate to the Consultant's profession. B. Other Insurance Provision. The Consultant's Automobile Liability and Commercial General Liability insurance policies are to contain, or be endorsed to contain that they shall be primary insurance with respect to the City. Any Insurance, self - insurance, or insurance pool coverage maintained by the City shall be excess of the Consultant's insurance and shall not be contributed or combined with it. C. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best rating of not less than A:VII. D. Verification of Coverage. Consultant shall furnish the City with original certificates and a copy of the amendatory endorsements, including but not necessarily limited to the additional insured endorsement, evidencing the insurance requirements of the Consultant before commencement of the work. Certificates of coverage and endorsements as required by this section shall be delivered to the City within fifteen (15) days of execution of this Agreement. E. Notice of Cancellation. The Consultant shall provide the City with written notice of any policy cancellation, within two business days of their receipt of such notice. F. Failure to Maintain Insurance. Failure on the part of the Consultant to maintain the insurance as required shall constitute a material breach of contract, upon which the City may, after giving five business days notice to the Consultant to correct the breach, immediately terminate the contract or, at its discretion, procure or renew such insurance and pay any and all premiums in connection therewith, with any sums so expended to be repaid to the City on demand, or at the sole discretion of the City, offset against funds due the Consultant from the City. 9. Independent Contractor. The Consultant and the City agree that the Consultant is an independent contractor with respect to the services provided pursuant to this Agreement. Nothing in this Agreement shall be considered to create the relationship of employer and employee between the parties hereto. Neither the Consultant nor any employee of the Consultant shall be entitled to any benefits accorded City employees by virtue of the services provided under this Agreement. The City shall not be responsible for withholding or otherwise deducting federal income tax or social security or for contributing to the state industrial insurance program, otherwise assuming the duties of an employer with respect to the Consultant, or any employee of the Consultant. CA revised : 1 -2013 Page 3 9 10. Covenant Against Contingent Fees. The Consultant warrants that he has not employed or retained any company or person, other than a bonafide employee working solely for the Consultant, to solicit or secure this contract, and that he has not paid or agreed to pay any company or person, other than a bonafide employee working solely for the Consultant, any fee, commission, percentage, brokerage fee, gifts, or any other consideration contingent upon or resulting from the award or making of this contract. For breach or violation of this warrant, the City shall have the right to annul this contract without liability, or in its discretion to deduct from the contract price or consideration, or otherwise recover, the full amount of such fee, commission, percentage, brokerage fee, gift, or contingent fee. 11. Discrimination Prohibited. The Consultant, with regard to the work performed by it under this Agreement, will not discriminate on the grounds of race, religion, creed, color, national origin, age, veteran status, sex, sexual orientation, gender identity, marital status, political affiliation or the presence of any disability in the selection and retention of employees or procurement of materials or supplies. 12. Assignment. The Consultant shall not sublet or assign any of the services covered by this Agreement without the express written consent of the City. 13. Non - Waiver. Waiver by the City of any provision of this Agreement or any time limitation provided for in this Agreement shall not constitute a waiver of any other provision. 14. Termination. A. The City reserves the right to terminate this Agreement at any time by giving ten (10) days written notice to the Consultant. B. In the event of the death of a member, partner or officer of the Consultant, or any of its supervisory personnel assigned to the project, the surviving members of the Consultant hereby agree to complete the work under the terms of this Agreement, if requested to do so by the City. This section shall not be a bar to renegotiations of this Agreement between surviving members of the Consultant and the City, if the City so chooses. 15. Applicable Law; Venue; Attorney's Fees. This Agreement shall be subject to, and the Consultant shall at all times comply with, all applicable federal, state and local laws, regulations, and rules, including the provisions of the City of Tukwila Municipal Code and ordinances of the City of Tukwila. In the event any suit, arbitration, or other proceeding is instituted to enforce any term of this Agreement, the parties specifically understand and agree that venue shall be properly laid in King County, Washington. The prevailing party in any such action shall be entitled to its attorney's fees and costs of suit. Venue for any action arising from or related to this Agreement shall be exclusively in King County Superior Court. 16. Severability and Survival. If any term, condition or provision of this Agreement is declared void or unenforceable or limited in its application or effect, such event shall not affect any other provisions hereof and all other provisions shall remain fully enforceable. The provisions of this Agreement, which by their sense and context are reasonably intended to survive the completion, expiration or cancellation of this Agreement, shall survive termination of this Agreement. CA revised : 1 -2013 10 Page 4 17. Notices. Notices to the City of Tukwila shall be sent to the following address: Public Works Department City of Tukwila 6300 Southcenter Boulevard, Suite 100 Tukwila, WA 98188 Notices to Consultant shall be sent to the following address: Daley- Morrow - Poblete, Inc. 726 Auburn Way N Auburn, WA 98002 18. Entire Agreement; Modification. This Agreement, together with attachments or addenda, represents the entire and integrated Agreement between the City and the Consultant and supersedes all prior negotiations, representations, or agreements written or oral. No amendment or modification of this Agreement shall be of any force or effect unless it is in writing and signed by the parties. DATED this -Dr-(A day of Gt-- , 20 . CITY OF TUKWILA $08 Gtf3F...rr, so A1, PV[gt./c wGtkJ' P [ 1CC• G--oR CA revised : 1 -2013 CONSULTANT By: Printed Name: Alex Poblete, P.E. Title: Vice - Presiden Page 5 11 ON -CALL ENGINEERING SUPPORT SERVICES EXHIBIT A & B SCOPE OF WORK On -call civil engineering consulting services, as requested by the City of Tukwila, will include, but not be limited to: • Development plan review for compliance with City code and development standards • Construction support • Attending meetings as requested • Other planning and engineering services as agreed to by the parties Any request for services not listed above shall be agreed upon by the City and the Consultant prior to performance of said services. PAYMENT Payment for pre- approved on -call work will not exceed the budget listed in Section 4.A. without an approved amendment to the agreement. Payment will be based on invoices supporting hours worked based on the following fee schedule: STANDARD FEE SCHEDULE 2015 PROFESSIONAL ENGINEER PROFESSIONAL LAND SURVEYOR EXPERT WITNESS PROJECT MANAGER 12 $120.00 PER HOUR $110.00 PER HOUR $200.00 PER HOUR $100.00 PER HOUR DESIGN ENGINEER $95.00 PER HOUR PLANNER $100.00 PER HOUR ENGINEERING TECHNICIAN $90.00 PER HOUR CADD TECHNICIAN $85.00 PER HOUR CADD DRAFTER $80.00 PER HOUR SURVEY TECHNICIAN $90.00 PER HOUR OFFICE SURVEY COMPUTATIONS $90.00 PER HOUR SECRETARIAL STAFF $50.00 PER HOUR 2 -MAN SURVEY CREW $130.00 PER HOUR 3 -MAN SURVEY CREW $160.00 PER HOUR DIRECT EXPENSE CHARGES: INVOICED COSTS TO DMP, INC. — PLUS 15% (Long Distance Calls, Reproductions, miscellaneous materials, sub - consultants, etc.) OVERTIME — Charges at 1.5 times the hourly charge rate. REPRODUCTIONS - CADD Plats - $7.50 per L.F. (Mylar), plus hourly rate $6.00 per L.F. (Vellum), plus hourly rate Xerox Plans - $3.00 per Sheet (Paper), plus hourly rate $15.00 per Sheet (Mylar), plus hourly rate COPIES: 24 X 36 $3.00 per page, plus hourly rate 18 X 24 $2.00 per page, plus hourly rate color 8 1/2 X 11 $1.25 per page, plus hourly rate b/w 8''/ X 11 $ .10 per page, plus hourly rate CD'S $75.00 each, plus hourly rate TRANSPORTATION EXPENSES - $0.65 Per Mile. 13 14 Attachment #2 Contract 15 -078 Skinner Planning and Environmental Review with amendment #2 15 CONTRACT FOR SERVICES Amendment #2 Between the City of Tukwila and Skinner Planning and Environmental Solutions That portion of Contract No. 15 -078 between the City of Tukwila and Skinner Planning and Environmental Solutions is amended as follows: Section 3: Duration of Agreement; Time for Performance. This Agreement shall be in full force and effect for a period commencing upon execution and ending December 31, 2015, unless sooner terminated under the provisions hereinafter specified. Work under this Agreement shall commence upon written notice by the City to the Consultant to proceed. The Consultant shall perform all services and provide all work product required pursuant to this Agreement no later than December 31, 2015 unless an extension of such time is granted in writing by the City as authorized by the Mayor. Section 4: The Consultant shall be paid by the City for completed work and for services rendered under this Agreement as follows: A. Payment for the work provided by the Consultant shall be made as provided on Exhibit "B -2" attached hereto, provided that the total amount of payment to the Consultant shall not exceed $75,000 without express written modification of the Agreement signed by the City. Exhibits A and B are hereby amended and restated as attached hereto as Exhibit A -2 and Exhibit B- 2. All references to Exhibit A and Exhibit B in contract 15 -078 shall be read as referring to Exhibit A -2 and Exhibit B -2, respectively. All other provisions of the contract shall remain in full force and effect. Dated this day of August, 2015. CITY OF TUKWILA CONTRACTOR Jim Haggerton, Mayor Lloyd Skinner, Principal Skinner SEPA Contract Amendment #2 Page 1 of 3 16 Contract 15 -078 Exhibit A -2 Scope of Work On -call consultant services as requested by the City of Tukwila including but not limited to: • Regulatory review, • Project level SEPA environmental analysis, and • EIS document preparation and review. Payment for pre- approved on -call work will not exceed the budget listed in section 4.A without an approved amendment to this agreement. Skinner SEPA Contract Amendment #2 Page 2 of 3 17 Contract 15 -078 Exhibit B -2 Payment Payment will be based on invoices reflecting hours worked at a fully burdened rate of $175/hour. Contractor will provide an estimate of the hours required for individual tasks prior to beginning work. Skinner SEPA Contract Amendment #2 Page 3 of 3 18 City of Tukwila 6200 Southcenter Boulevard, Tukwila WA 98188 Contract Number:15 -078 Council Approval N/A CONSULTANT AGREEMENT FOR ON -CALL SEPA SERVICES THIS AGREEMENT is entered into between the City of Tukwila, Washington, hereinafter referred to as "the City ", and Skinner Planning and Environmental Solutions, hereinafter referred to as "the Consultant ", in consideration of the mutual benefits, terms, and conditions hereinafter specified. 1. Project Designation. The Consultant is retained by the City to perform on -call SEPA support services on an as- needed basis. 2. Scope of Services. The Consultant agrees to perform the services, identified on Exhibit "A" attached hereto, including the provision of all labor, materials, equipment and supplies. 3. Duration of Agreement; Time for Performance. This Agreement shall be in full force and effect for a period commencing upon execution and ending December 31, 2015, unless sooner terminated under the provisions hereinafter specified. Work under this Agreement shall commence upon written notice by the City to the Consultant to proceed. The Consultant shall perform all services and provide all work product required pursuant to this Agreement no later than December 31, 2015 unless an extension of such time is granted in writing by the City. 4. Payment. The Consultant shall be paid by the City for completed work and for services rendered under this Agreement as follows: A. Payment for the work provided by the Consultant shall be made as provided on Exhibit "B" attached hereto, provided that the total amount of payment to the Consultant shall not exceed $10,000 without express written modification of the Agreement signed by the City. B. The Consultant may submit vouchers to the City once per month during the progress of the work for partial payment for that portion of the project completed to date. Such vouchers will be checked by the City and, upon approval thereof, payment shall be made to the Consultant in the amount approved. C. Final payment of any balance due the Consultant of the total contract price earned will be made promptly upon its ascertainment and verification by the City after the completion of the work under this Agreement and its acceptance by the City. D. Payment as provided in this section shall be full compensation for work performed, services rendered, and for all materials, supplies, equipment and incidentals necessary to complete the work. E. The Consultant's records and accounts pertaining to this Agreement are to be kept available for inspection by representatives of the City and the state of Washington for a period of three (3) years after final payments. Copies shall be made available upon request. 05 a alfis&-ek-u1--) 19 5. Ownership and Use of Documents. All documents, drawings, specifications and other materials produced by the Consultant in connection with the services rendered under this Agreement shall be the property of the City whether the project for which they are made is executed or not. The Consultant shall be permitted to retain copies, including reproducible copies, of drawings and specifications for information, reference and use in connection with the Consultant's endeavors. The Consultant shall not be responsible for any use of the said documents, drawings, specifications or other materials by the City on any project other than the project specified in this Agreement. 6. Compliance with Laws. The Consultant shall, in performing the services contemplated by this Agreement, faithfully observe and comply with all federal, state, and local laws, ordinances and regulations, applicable to the services rendered under this Agreement. 7. Indemnification. The Consultant shall defend, indemnify and hold the City, its officers, officials, employees and volunteers harmless from any and all claims, injuries, damages, losses or suits including attorney fees, arising out of or resulting from the acts, errors or omissions of the Consultant in performance of this Agreement, except for injuries and damages caused by the sole negligence of the City. Should a court of competent jurisdiction determine that this Agreement is subject to RCW 4.24.115, then, in the event of liability for damages arising out of bodily injury to persons or damages to property caused by or resulting from the concurrent negligence of the Consultant and the City, its officers, officials, employees, and volunteers, the Consultant's liability hereunder shall be only to the extent of the Consultant's negligence. It is further specifically and expressly understood that the indemnification provided herein constitutes the Consultant's waiver of immunity under Industrial Insurance, Title 51 RCW, solely for the purposes of this indemnification. This waiver has been mutually negotiated by the parties. The provisions of this section shall survive the expiration or termination of this Agreement. 8. Insurance. The Consultant shall procure and maintain for the duration of the Agreement, 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 Consultant, its agents, representatives, or employees. Consultant's maintenance of insurance as required by the agreement shall not be construed to limit the liability of the Consultant to the coverage provided by such insurance, or otherwise limit the City's recourse to any remedy available at law or in equity. A. Minimum Amounts and Scope of Insurance. Consultant shall obtain insurance of the types and with the limits described below: 1. Automobile Liability insurance with a minimum combined single limit for bodily injury and property damage of $1,000,000 per accident. Automobile Liability insurance shall cover 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. CA revised : 1 -2013 20 Page 2 2. Commercial General Liability insurance with limits no less than $1,000,000 each occurrence, $2,000,000 general aggregate. Commercial General Liability insurance shall be written on ISO occurrence form CG 00 01 and shall cover liability arising from premises, operations, independent contractors and personal injury and advertising injury. The City shall be named as an insured under the Consultant's Commercial General Liability insurance policy with respect to the work performed for the City. 3. Workers' Compensation coverage as required by the Industrial Insurance laws of the State of Washington. 4. Professional Liability with limits no less than $1,000,000 per claim and $1,000,000 policy aggregate limit. Professional Liability insurance shall be appropriate to the Consultant's profession. B. Other Insurance Provision. The Consultant's Automobile Liability and Commercial General Liability insurance policies are to contain, or be endorsed to contain that they shall be primary insurance with respect to the City. Any Insurance, self - insurance, or insurance pool coverage maintained by the City shall be excess of the Consultant's insurance and shall not be contributed or combined with it. C. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best rating of not less than A:VII. D. Verification of Coverage. Consultant shall furnish the City with original certificates and a copy of the amendatory endorsements, including but not necessarily limited to the additional insured endorsement, evidencing the insurance requirements of the Consultant before commencement of the work. Certificates of coverage and endorsements as required by this section shall be delivered to the City within fifteen (15) days of execution of this Agreement. E. Notice of Cancellation. The Consultant shall provide the City with written notice of any policy cancellation, within two business days of their receipt of such notice. F. Failure to Maintain Insurance. Failure on the part of the Consultant to maintain the insurance as required shall constitute a material breach of contract, upon which the City may, after giving five business days notice to the Consultant to correct the breach, immediately terminate the contract or, at its discretion, procure or renew such insurance and pay any and all premiums in connection therewith, with any sums so expended to be repaid to the City on demand, or at the sole discretion of the City, offset against funds due the Consultant from the City. 9. Independent Contractor. The Consultant and the City agree that the Consultant is an independent contractor with respect to the services provided pursuant to this Agreement. Nothing in this Agreement shall be considered to create the relationship of employer and employee between the parties hereto. Neither the Consultant nor any employee of the Consultant shall be entitled to any benefits accorded City employees by virtue of the services provided under this Agreement. The City shall not be responsible for withholding or otherwise deducting federal income tax or social security or for contributing to the state industrial insurance program, otherwise assuming the duties of an employer with respect to the Consultant, or any employee of the Consultant. CA revised : 1 -2013 Page 3 21 10. Covenant Against Contingent Fees. The Consultant warrants that he has not employed or retained any company or person, other than a bonafide employee working solely for the Consultant, to solicit or secure this contract, and that he has not paid or agreed to pay any company or person, other than a bonafide employee working solely for the Consultant, any fee, commission, percentage, brokerage fee, gifts, or any other consideration contingent upon or resulting from the award or making of this contract. For breach or violation of this warrant, the City shall have the right to annul this contract without liability, or in its discretion to deduct from the contract price or consideration, or otherwise recover, the full amount of such fee, commission, percentage, brokerage fee, gift, or contingent fee. 11. Discrimination Prohibited. The Consultant, with regard to the work performed by it under this Agreement, will not discriminate on the grounds of race, religion, creed, color, national origin, age, veteran status, sex, sexual orientation, gender identity, marital status, political affiliation or the presence of any disability in the selection and retention of employees or procurement of materials or supplies. 12. Assignment. The Consultant shall not sublet or assign any of the services covered by this Agreement without the express written consent of the City. 13. Non - Waiver. Waiver by the City of any provision of this Agreement or any time limitation provided for in this Agreement shall not constitute a waiver of any other provision. 14. Termination. A. The City reserves the right to terminate this Agreement at any time by giving ten (10) days written notice to the Consultant. B. In the event of the death of a member, partner or officer of the Consultant, or any of its supervisory personnel assigned to the project, the surviving members of the Consultant hereby agree to complete the work under the terms of this Agreement, if requested to do so by the City. This section shall not be a bar to renegotiations of this Agreement between surviving members of the Consultant and the City, if the City so chooses. 15. Applicable Law; Venue; Attorney's Fees. This Agreement shall be subject to, and the Consultant shall at all times comply with, all applicable federal, state and local laws, regulations, and rules, including the provisions of the City of Tukwila Municipal Code and ordinances of the City of Tukwila. In the event any suit, arbitration, or other proceeding is instituted to enforce any term of this Agreement, the parties specifically understand and agree that venue shall be properly laid in King County, Washington. The prevailing party in any such action shall be entitled to its attorney's fees and costs of suit. Venue for any action arising from or related to this Agreement shall be exclusively in King County Superior Court. 16. Severability and Survival. If any term, condition or provision of this Agreement is declared void or unenforceable or limited in its application or effect, such event shall not affect any other provisions hereof and all other provisions shall remain fully enforceable. The provisions of this Agreement, which by their sense and context are reasonably intended to survive the completion, expiration or cancellation of this Agreement, shall survive termination of this Agreement. CA revised : 1 -2013 22 Page 4 17. Notices. Notices to the City of Tukwila shall be sent to the following address: City Clerk City of Tukwila 6200 Southcenter Boulevard Tukwila, WA 98188 Notices to Consultant shall be sent to the following address: Lloyd Skinner Skinner Planning and Environmental Solutions 3S-6/ , - 1Co!2 S7 d(e FoYes Povat WA- 9 18. Entire Agreement; Modification. This Agreement, together with attachments or addenda, represents the entire and integrated Agreement between the City and the Consultant and supersedes all prior negotiations, representations, or agreements written or oral. No amendment or modification of this Agreement shall be of any force or effect unless it is in writing and signed by the parties. DATED this 7 day of April, 2015. CITY OF TUKWILA Jack P City o ukwila DCD Director CA revised : 1 -2013 CONSULTANT B Printed Name: Lloyd Skinner Title: Page 5 23 Exhibit A Scope of Work On -call consultant services as requested by the City of Tukwila including but not limited to: • Regulatory review, • Project level SEPA environmental analysis, and • EIS document preparation and review. Payment for pre - approved on -call work will not exceed the budget listed in section 4. A without an approved amendment to this agreement. Exhibit B Payment Payment will be based on invoices reflecting hours worked at a fully burdened rate of $175/hour. Contractor will provide an estimate of the hours required for individual tasks prior to beginning work. CA revised :1 -2013 24 Page 6 City of Tukwila 6200 Southcenter Boulevard, Tukwila WA 98188 Agreement Number: 15- 078(a) Council Approval N/A CONTRACT FOR SERVICES Amendment #1 Between the City of Tukwila and Skinner Planning and Environmental Solutions That portion of Contract No. 15 -078 between the City of Tukwila and Skinner Planning and Environmental Solutions is amended as follows: Section 4: A. Payment for the work provided by the Consultant shall be made as provided on Exhibit "B" attached hereto, provided that the total amount of payment to the Consultant shall not exceed $35,000 without express written modification of the Agreement signed by the City. All other provisions of the contract shall remain in full force and effect. Dated this a ! sy day of May, 2015. CITY OF TUKWILA i CONTRACTOR Ji aggerto /for CA: 2012 Lloyd ` inner, Principal Page 1 of 1 25 Exhibit B Payment Payment will be based on invoices reflecting hours worked at a fully burdened rate of $175/hour. Contractor will provide an estimate of the hours required for individual tasks prior to beginning work. 26 Attachment #3 Contract 15 -084 Fehr & Peers (for traffic analysis) with amendment #1 27 CONTRACT FOR SERVICES Amendment #1 Between the City of Tukwila and Fehr and Peers That portion of Contract No. 15 -084 between the City of Tukwila and Fehr & Peers is amended as follows: Section 3: Duration of Agreement; Time for Performance. This Agreement shall be in full force and effect for a period commencing upon execution and ending December 31, 2015, unless sooner terminated under the provisions hereinafter specified. Work under this Agreement shall commence upon written notice by the City to the Consultant to proceed. The Consultant shall perform all services and provide all work product required pursuant to this Agreement no later than December 31, 2015 unless an extension of such time is granted in writing by the City as authorized by the Mayor. Section 4: The Consultant shall be paid by the City for completed work and for services rendered under this Agreement as follows: A. Payment for the work provided by the Consultant shall be made as provided on Exhibit "B -1" attached hereto, provided that the total amount of payment to the Consultant shall not exceed $40,000 without express written modification of the Agreement signed by the City. Exhibits A and B are hereby amended and restated as attached hereto as Exhibit A -1 and Exhibit B- 1. All references to Exhibit A and Exhibit B in contract 15 -084 shall be read as referring to Exhibit A -1 and Exhibit B -1, respectively. All other provisions of the contract shall remain in full force and effect. Dated this day of August, 2015. CITY OF TUKWILA CONSULTANT Jim Haggerton, Mayor Chris Breiland, Principal Fehr & Peers Traffic Study Amendment #1 Page 1 of 3 28 Contract 15 -084 Exhibit A -1 Scope of Work Fehr & Peers will complete the following Scope of Work to peer review for the traffic study assumptions /results, model data, mitigation strategies, comment letters and related documents being prepared by the Northwest Arena applicants • Task 1 — Review studies, model results, mitigation strategies, etc. prepared by the applicant's consultants • Task 2 — Summaries our review and potential implications to the City of Tukwila transportation facilities • Task 3 — Provide recommended changes or submit comments directly to applicant's consultants All work performed under this agreement will be executed swiftly as we understand that time is of the essence. Fehr & Peers Traffic Study Amendment #1 Page 2 of 3 29 Contract 15 -084 Exhibit B -1 Payment Based on the scope of work in Exhibit A -1 invoices will be billed on a time and materials basis based on the following hourly rates: Principal: $240 Project Engineer/Planner: $105 -$135 Administrative: $95 Fehr & Peers Traffic Study Amendment #1 Page 3 of 3 30 City of Tukwila 6200 Southcenter Boulevard, Tukwila WA 98188 Contract Number: 15 -084 Council Approval N/A CONSULTANT AGREEMENT FOR ON -CALL TRAFFIC ENGINEERING SUPPORT SERVICES THIS AGREEMENT is entered into between the City of Tukwila, Washington, hereinafter referred to as "the City ", and Fehr & Peers , hereinafter referred to as "the Consultant ", in consideration of the mutual benefits, terms, and conditions hereinafter specified. 1. Project Designation. The Consultant is retained by the City to perform On -Call Traffic Engineering Support Services. 2. Scope of Services. The Consultant agrees to perform the services, identified on Exhibit "A" attached hereto, including the provision of all labor, materials, equipment and supplies. 3. Duration of Agreement; Time for Performance. This Agreement shall be in full force and effect for a period commencing upon execution and ending December 31, 2016, unless sooner terminated under the provisions hereinafter specified. Work under this Agreement shall commence upon written notice by the City to the Consultant to proceed. The Consultant shall perform all services and provide all work product required pursuant to this Agreement no later than December 31, 2016 unless an extension of such time is granted in writing by the City. 4. Payment. The Consultant shall be paid by the City for completed work and for services rendered under this Agreement as follows: A. Payment for the work provided by the Consultant shall be made as provided on Exhibit "B" attached hereto, provided that the total amount of payment to the Consultant shall not exceed $20,000 without express written modification of the Agreement signed by the City. B. The Consultant may submit vouchers to the City once per month during the progress of the work for partial payment for that portion of the project completed to date. Such vouchers will be checked by the City and, upon approval thereof, payment shall be made to the Consultant in the amount approved. C. Final payment of any balance due the Consultant of the total contract price earned will be made promptly upon its ascertainment and verification by the City after the completion of the work under this Agreement and its acceptance by the City. D. Payment as provided in this section shall be full compensation for work performed, services rendered, and for all materials, supplies, equipment and incidentals necessary to complete the work. E. The Consultant's records and accounts pertaining to this Agreement are to be kept available for inspection by representatives of the City and the state of Washington for a period of three (3) years after final payments. Copies shall be made available upon request. .5'4d a Cam/ 6,/U,4 -S 31 5. Ownership and Use of Documents. All documents, drawings, specifications and other materials produced by the Consultant in connection with the services rendered under this Agreement shall be the property of the City whether the project for which they are made is executed or not. The Consultant shall be permitted to retain copies, including reproducible copies, of drawings and specifications for information, reference and use in connection with the Consultant's endeavors. The Consultant shall not be responsible for any use of the said documents, drawings, specifications or other materials by the City on any project other than the project specified in this Agreement. 6. Compliance with Laws. The Consultant shall, in performing the services contemplated by this Agreement, faithfully observe and comply with all federal, state, and local laws, ordinances and regulations, applicable to the services rendered under this Agreement. 7. Indemnification. The Consultant shall defend, indemnify and hold the City, its officers, officials, employees and volunteers harmless from any and all claims, injuries, damages, losses or suits including attorney fees, arising out of or resulting from the acts, errors or omissions of the Consultant in performance of this Agreement, except for injuries and damages caused by the sole negligence of the City. Should a court of competent jurisdiction determine that this Agreement is subject to RCW 4.24.115, then, in the event of liability for damages arising out of bodily injury to persons or damages to property caused by or resulting from the concurrent negligence of the Consultant and the City, its officers, officials, employees, and volunteers, the Consultant's liability hereunder shall be only to the extent of the Consultant's negligence. It is further specifically and expressly understood that the indemnification provided herein constitutes the Consultant's waiver of immunity under Industrial Insurance, Title 51 RCW, solely for the purposes of this indemnification. This waiver has been mutually negotiated by the parties. The provisions of this section shall survive the expiration or termination of this Agreement. 8. Insurance. The Consultant shall procure and maintain for the duration of the Agreement, 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 Consultant, its agents, representatives, or employees. Consultant's maintenance of insurance as required by the agreement shall not be construed to limit the liability of the Consultant to the coverage provided by such insurance, or otherwise limit the City's recourse to any remedy available at law or in equity. A. Minimum Amounts and Scope of Insurance. Consultant shall obtain insurance of the types and with the limits described below: 1. Automobile Liability insurance with a minimum combined single limit for bodily injury and property damage of $1,000,000 per accident. Automobile Liability insurance shall cover 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. CA revised : 1 -2013 32 Page 2 2. Commercial General Liability insurance with limits no less than $1,000,000 each occurrence, $2,000,000 general aggregate. Commercial General Liability insurance shall be written on ISO occurrence form CG 00 01 and shall cover liability arising from premises, operations, independent contractors and personal injury and advertising injury. The City shall be named as an insured under the Consultant's Commercial General Liability insurance policy with respect to the work performed for the City. 3. Workers' Compensation coverage as required by the Industrial Insurance laws of the State of Washington. 4. Professional Liability with limits no less than $1,000,000 per claim and $1,000,000 policy aggregate limit. Professional Liability insurance shall be appropriate to the Consultant's profession. B. Other Insurance Provision. The Consultant's Automobile Liability and Commercial General Liability insurance policies are to contain, or be endorsed to contain that they shall be primary insurance with respect to the City. Any Insurance, self - insurance, or insurance pool coverage maintained by the City shall be excess of the Consultant's insurance and shall not be contributed or combined with it. C. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best rating of not less than A:VII. D. Verification of Coverage. Consultant shall furnish the City with original certificates and a copy of the amendatory endorsements, including but not necessarily limited to the additional insured endorsement, evidencing the insurance requirements of the Consultant before commencement of the work. Certificates of coverage and endorsements as required by this section shall be delivered to the City within fifteen (15) days of execution of this Agreement. E. Notice of Cancellation. The Consultant shall provide the City with written notice of any policy cancellation, within two business days of their receipt of such notice. F. Failure to Maintain Insurance. Failure on the part of the Consultant to maintain the insurance as required shall constitute a material breach of contract, upon which the City may, after giving five business days notice to the Consultant to correct the breach, immediately terminate the contract or, at its discretion, procure or renew such insurance and pay any and all premiums in connection therewith, with any sums so expended to be repaid to the City on demand, or at the sole discretion of the City, offset against funds due the Consultant from the City. 9. Independent Contractor. The Consultant and the City agree that the Consultant is an independent contractor with respect to the services provided pursuant to this Agreement. Nothing in this Agreement shall be considered to create the relationship of employer and employee between the parties hereto. Neither the Consultant nor any employee of the Consultant shall be entitled to any benefits accorded City employees by virtue of the services provided under this Agreement. The City shall not be responsible for withholding or otherwise deducting federal income tax or social security or for contributing to the state industrial insurance program, otherwise assuming the duties of an employer with respect to the Consultant, or any employee of the Consultant. CA revised : 1 -2013 Page 3 33 10. Covenant Against Contingent Fees. The Consultant warrants that he has not employed or retained any company or person, other than a bonafide employee working solely for the Consultant, to solicit or secure this contract, and that he has not paid or agreed to pay any company or person, other than a bonafide employee working solely for the Consultant, any fee, commission, percentage, brokerage fee, gifts, or any other consideration contingent upon or resulting from the award or making of this contract. For breach or violation of this warrant, the City shall have the right to annul this contract without liability, or in its discretion to deduct from the contract price or consideration, or otherwise recover, the full amount of such fee, commission, percentage, brokerage fee, gift, or contingent fee. 11. Discrimination Prohibited. The Consultant, with regard to the work performed by it under this Agreement, will not discriminate on the grounds of race, religion, creed, color, national origin, age, veteran status, sex, sexual orientation, gender identity, marital status, political affiliation or the presence of any disability in the selection and retention of employees or procurement of materials or supplies. 12. Assignment. The Consultant shall not sublet or assign any of the services covered by this Agreement without the express written consent of the City. 13. Non - Waiver. Waiver by the City of any provision of this Agreement or any time limitation provided for in this Agreement shall not constitute a waiver of any other provision. 14. Termination. A. The City reserves the right to terminate this Agreement at any time by giving ten (10) days written notice to the Consultant. B. In the event of the death of a member, partner or officer of the Consultant, or any of its supervisory personnel assigned to the project, the surviving members of the Consultant hereby agree to complete the work under the terms of this Agreement, if requested to do so by the City. This section shall not be a bar to renegotiations of this Agreement between surviving members of the Consultant and the City, if the City so chooses. 15. Applicable Law; Venue; Attorney's Fees. This Agreement shall be subject to, and the Consultant shall at all times comply with, all applicable federal, state and local laws, regulations, and rules, including the provisions of the City of Tukwila Municipal Code and ordinances of the City of Tukwila. In the event any suit, arbitration, or other proceeding is instituted to enforce any term of this Agreement, the parties specifically understand and agree that venue shall be properly laid in King County, Washington. The prevailing party in any such action shall be entitled to its attorney's fees and costs of suit. Venue for any action arising from or related to this Agreement shall be exclusively in King County Superior Court 16. Severability and Survival. If any term, condition or provision of this Agreement is declared void or unenforceable or limited in its application or effect, such event shall not affect any other provisions hereof and all other provisions shall remain fully enforceable. The provisions of this Agreement, which by their sense and context are reasonably intended to survive the completion, expiration or cancellation of this Agreement, shall survive termination of this Agreement. CA revised : 1 -2013 34 Page 4 17. Notices. Notices to the City of Tukwila shall be sent to the following address: City Clerk City of Tukwila 6200 Southcenter Boulevard Tukwila, WA 98188 Notices to Consultant shall be sent to the following address: Ov:s Are (cp Fekr 4 P _5 at toot (eh l , s4 (tzo 52c% file Icf LS' 18. Entire Agreement; Modification. This Agreement, together with attachments or addenda, represents the entire and integrated Agreement between the City and the Consultant and supersedes all prior negotiations, representations, or agreements written or oral. No amendment or modification of this Agreement shall be of any force or effect unless it is in writing and signed by the parties. DATED this IV SI day of Apiu.k , 20 15 . CITY OF TUKWILA CONSULTANT 1Se( iklgithrl By: Z-A.C3 Bob Giberson, Public Works Director Printed Name: Chr1' Are I (G. ta. Title: Ricit:Fc‘( CA revised : 1 -2013 Page 5 35 FEHRtREERS April 2, 2015 Bob Giberson, PE Public Works Director City of Tukwila 6300 Southcenter Blvd, Suite 100 Tukwila, WA 98188 614,14J-3 Re: Review of Large Development Traffic Studies and Related Documents Dear Mr. Giberson: Fehr & Peers understands that Tukwila would like to have us review traffic study assumptions /results, model data, mitigation strategies, comment letters, and related documents for a proposed large development that is undergoing environmental review. Our work will be performed on a time and materials basis and our initial budget will be set at $20,000. Given the on -call nature of this work, it is difficult to define a precise scope of work, but a general outline is provided below. • Task 1 — Review studies, model results, mitigation strategies, etc. prepared by the applicant's consultants • Task 2 — Summarize our review and potential implications to City of Tukwila transportation facilities • Task 3 — Provide recommended changes or submit comments directly to applicant's consultants All work performed under this agreement will be executed swiftly, as we understand that time is of the essence. This letter serves at Exhibit A and B, as referenced in the City's Consultant Agreement. Sincerely, FEHR & PEERS 426-67 Chris Breiland, PE Principal Attachments: Scope of Work, Budget 1001 4th Avenue, Suite 4120, Seattle WA 98154 (206) 576-4220 Fax (206) 576 -4225 www.fehrandpeers.com 36 Attachment #4 Contract 15 -107 Shiels Obletz Johnsen with amendment #1 37 CONTRACT FOR SERVICES Amendment #1 Between the City of Tukwila and Shiels Obletz Johnsen, Inc. That portion of Contract No. 15 -107 between the City of Tukwila and Shiels Obletz Johnsen, Inc. is amended as follows: 1. Scope and Schedule of Services to be Performed by Contractor. The Contractor shall perform those services described on Exhibit A attached hereto and incorporated herein by this reference as if fully set forth. In performing such services, the Contractor shall at all times comply with all Federal, State, and local statutes, rules and ordinances applicable to the performance of such services and the handling of any funds used in connection therewith. The Contractor shall request and obtain prior written approval from the City if the scope or schedule is to be modified in any way. 2. Compensation and Method of Payment. The City shall pay the Contractor for services rendered at a rate of $270.00 per hour. The total amount to be paid shall not exceed $100,000. 4. Duration of Agreement. This Agreement shall be in full force and effect for a period commencing May 15, 2015, and ending December 31, 2015, unless sooner terminated under the provisions hereinafter specified unless an extension of such time is granted in writing by the City as authorized by the Mayor. Exhibit A is hereby amended and restated as attached hereto as Exhibit A -1. All references to Exhibit A in contract 15 -107 shall be read as referring to Exhibit A -1. All other provisions of the contract shall remain in full force and effect. Dated this day of August, 2015. CITY OF TUKWILA CONTRACTOR Jim Haggerton, Mayor Ken Johnsen, Executive Vice President Shiels Obletz Johnsen, Inc. Amendment #1 Page 1 of 2 38 Contract 15 -107 Exhibit A -1 Scope of Services Shiels Obletz Johnsen, Inc. (SOJ) NW Arena Project Under the direction of the City Administrator, SOJ will provide project management services for the City's involvement on the NW Arena Project. These services will include: A. Ongoing advice to the City Administrator on how to organize City staff and consultant services. B. Manage the City's team working on the project, including: — Leading regular City team meetings — Maintaining a project schedule for City tasks — Coordinating City's outreach/communications regarding the project — Advising the City Administrator regarding the need for City team resources C. Manage communications with RLB Holdings, including regular meetings with RLB. D. Work with the City team to carry out the City's project review including: — Environmental review — Street vacation — Development agreement with RLB — Building permits E. Identify areas where work with other entities, such as King County Metro, Sound Transit, Puget Sound Energy is necessary. Develop a strategy and a work plan for carrying out that work. F. Prepare a work program outline for on -going City work on NW Arena Project. SOJ will carry out this work on a time and materials basis. SOJ employees will bill for work based on established hourly rates. Any direct costs, such as travel, will be billed at cost. Shiels Obletz Johnsen, Inc. Amendment #1 Page 2 of 2 39 40 City of Tukwila 6200 Southcenter Boulevard, Tukwila WA 98188 Contract Number: 15 -107 Council Approval N/A CONTRACT FOR SERVICES This Agreement is entered into by and between the City of Tukwila, Washington, a non - charter optional municipal code city hereinafter referred to as "the City," and Shiels Obletz Johnsen, Inc. hereinafter referred to as "the Contractor," whose principal office is located at 800 Fifth Avenue, Suite 4130, Seattle WA 98104. WHEREAS, the City has determined the need to have certain services performed for its citizens but does not have the manpower or expertise to perform such services; and WHEREAS, the City desires to have the Contractor perform such services pursuant to certain terms and conditions; now, therefore, IN CONSIDERATION OF the mutual benefits and conditions hereinafter contained, the parties hereto agree as follows: 1. Scope and Schedule of Services to be Performed by Contractor. The Contractor shall perform those services described on Exhibit A attached hereto and incorporated herein by this reference as if fully set forth. In performing such services, the Contractor shall at all times comply with all Federal, State, and local statutes, rules and ordinances applicable to the performance of such services and the handling of any funds used in connection therewith. The Contractor shall request and obtain prior written approval from the City if the scope or schedule is to be modified in any way. 2. Compensation and Method of Payment. The City shall pay the Contractor for services rendered according to the rate and method set forth on Exhibit B attached hereto and incorporated herein by this reference. The total amount to be paid shall not exceed $35,000 at a rate of $270/hr. 3. Contractor Budget. The Contractor shall apply the funds received under this Agreement within the maximum limits set forth in this Agreement. The Contractor shall request prior approval from the City whenever the Contractor desires to amend its budget in any way. 4. Duration of Agreement. This Agreement shall be in full force and effect for a period commencing May 15, 2015, and ending December 31, 2015, unless sooner terminated under the provisions hereinafter specified. 5. Independent Contractor. Contractor and City agree that Contractor is an independent contractor with respect to the services provided pursuant to this Agreement. Nothing in this Agreement shall be considered to create the relationship of employer and employee between the parties hereto. Neither Contractor nor any employee of Contractor shall be entitled to any benefits accorded City employees by virtue of the services provided under this Agreement. The City shall not be responsible for withholding or otherwise deducting federal income tax or social security or contributing to the State Industrial Insurance Program, or otherwise assuming the duties of an employer with respect to the Contractor, or any employee of the Contractor. Shiels Obletz Johnsen, Inc. 15± of Z p ri Y n a- 4--.s Page 1 of 5 41 6. Indemnification. The Contractor shall defend, indemnify and hold the City, its officers, agents, officials, employees and volunteers harmless from any and all claims, injuries, damages, losses or suits including attorney fees, arising out of or in connection with the performance of this Agreement, except for injuries and damages caused by the sole negligence of the City. Should a court of competent jurisdiction determine that this Agreement is subject to RCW 4.24.115, then, in the event of liability for damages arising out of bodily injury to persons or damages to property caused by or resulting from the concurrent negligence of the Contractor and the City, its officers, officials, employees, and volunteers, the Contractor's liability hereunder shall be only to the extent of the Contractor's negligence. It is further specifically and expressly understood that the indemnification provided herein constitutes the Contractor's waiver of immunity under Industrial Insurance, Title 51 RCW, solely for the purposes of this indemnification. This waiver has been mutually negotiated by the parties. The provisions of this section shall survive the expiration or termination of this Agreement. 7. Insurance. The Consultant shall procure and maintain for the duration of the Agreement, 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 Consultant, its agents, representatives, or employees. Consultant's maintenance of insurance as required by the agreement shall not be construed to limit the liability of the Consultant to the coverage provided by such insurance, or otherwise limit the City's recourse to any remedy available at law or in equity. A. Minimum Amounts and Scope of Insurance. Consultant shall obtain insurance of the types and with the limits described below: 1. Automobile Liability insurance with a minimum combined single limit for bodily injury and property damage of $1,000,000 per accident. Automobile Liability insurance shall cover 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 with limits no less than $1,000,000 each occurrence, $2,000,000 general aggregate. Commercial General Liability insurance shall be written on ISO occurrence form CG 00 01 and shall cover liability arising from premises, operations, independent contractors and personal injury and advertising injury. The City shall be named as an insured under the Consultant's Commercial General Liability insurance policy with respect to the work performed for the City. 3. Workers' Compensation coverage as required by the Industrial Insurance laws of the State of Washington. 4. Professional Liability with limits no less than $1,000,000 per claim and $1,000,000 policy aggregate limit Professional Liability insurance shall be appropriate to the Consultant's profession. B. Other Insurance Provision. The Consultant's Automobile Liability and Commercial General Liability insurance policies are to contain, or be endorsed to contain that they shall be primary insurance with respect to the City. Any Insurance, self- insurance, or insurance pool coverage maintained by the City shall be excess of the Consultant's insurance and shall not be contributed or combined with it. C. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best rating of not less than A:VII. D. Verification of Coverage. Consultant shall furnish the City with original certificates and a copy of the amendatory endorsements, including but not necessarily limited to the additional insured endorsement, evidencing the insurance requirements of the Consultant before commencement of the work. Certificates of coverage and endorsements as required by this section shall be delivered to the City within fifteen (15) days of execution of this Agreement. E. Notice of Cancellation. The Consultant shall provide the City with written notice of any policy cancellation, within two business days of their receipt of such notice. F. Failure to Maintain Insurance. Failure on the part of the Consultant to maintain the insurance as required shall constitute a material breach of contract, upon which the City may, after giving five business days notice to the Consultant to correct the breach, immediately terminate the contract or, at its discretion, procure or renew such insurance and pay any and all premiums in connection Shiels Obletz Johnsen, Inc. Page 2 of 5 42 therewith, with any sums so expended to be repaid to the City on demand, or at the sole discretion of the City, offset against funds due the Consultant from the City. 8. Record Keeping and Reporting. A. The Contractor shall maintain accounts and records, including personnel, property, financial and programmatic records which sufficiently and properly reflect all direct and indirect costs of any nature expended and services performed in the performance of this Agreement and other such records as may be deemed necessary by the City to ensure the performance of this Agreement. B. These records shall be maintained for a period of seven (7) years after termination hereof unless permission to destroy them is granted by the office of the archivist in accordance with RCW Chapter 40.14 and by the City. 9. Audits and Inspections. The records and documents with respect to all matters covered by this Agreement shall be subject at all times to inspection, review or audit by law during the performance of this Agreement. 10. Termination. This Agreement may at any time be terminated by the City giving to the Contractor thirty (30) days written notice of the City's intention to terminate the same. Failure to provide products on schedule may result in contract termination. If the Contractor's insurance coverage is canceled for any reason, the City shall have the right to terminate this Agreement immediately. 11. Discrimination Prohibited. The Consultant, with regard to the work performed by it under this Agreement, will not discriminate on the grounds of race, religion, creed, color, national origin, age, veteran status, sex, sexual orientation, gender identity, marital status, political affiliation or the presence of any disability in the selection and retention of employees or procurement of materials or supplies. 12. Assignment and Subcontract. The Contractor shall not assign or subcontract any portion of the services contemplated by this Agreement without the written consent of the City. 13. Entire Agreement; Modification. This Agreement, together with attachments or addenda, represents the entire and integrated Agreement between the City and the Contractor and supersedes all prior negotiations, representations, or agreements written or oral. No amendment or modification of this Agreement shall be of any force or effect unless it is in writing and signed by the parties. 14. Severability and Survival. If any term, condition or provision of this Agreement is declared void or unenforceable or limited in its application or effect, such event shall not affect any other provisions hereof and all other provisions shall remain fully enforceable. The provisions of this Agreement, which by their sense and context are reasonably intended to survive the completion, expiration or cancellation of this Agreement, shall survive termination of this Agreement. 15. Notices. Notices to the City of Tukwila shall be sent to the following address: City Clerk, City of Tukwila 6200 Southcenter Blvd. Tukwila, Washington 98188 Notices to the Contractor shall be sent to the address provided by the Contractor upon the signature line below. 16. Applicable Law; Venue; Attorney's Fees. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington. In the event any suit, arbitration, or other Shiels Obletz Johnsen, Inc. Page 3 of 5 43 proceeding is instituted to enforce any term of this Agreement, the parties specifically understand and agree that venue shall be properly laid in King County, Washington. The prevailing party in any such action shall be entitled to its attorney's fees and costs of suit. DATED this Tday of 3 `A4A, 2015. CITY OF TUKWILA oc- Ma im Hagge A EST /AUTHENTICATED: Ad Air # City Clerk, Christy O'Flaherty APPROVED AS TO FORM: q_cuyLizzu Office of the City Attorney Shiels Obletz Johnsen, Inc. 44 CONTRACTOR en . nsen xet Address: 800 Fifth Avenue, Suite 4130 Seattle WA 98104 Page 4 of 5 Exhibit A Scope of Services Shiels Obletz Johnsen, Inc. (SOJ) NW Arena Project Under the direction of the City Administrator, SOJ will provide project management services for the City's involvement on the NW Arena Project. These services will include: A. Ongoing advice to the City Administrator on how to organize City staff and consultant services. B. Manage the City's team working on the project, including: — Leading regular City team meetings — Maintaining a project schedule for City tasks - Coordinating City's outreach/communications regarding the project — Advising the City Administrator regarding the need for City team resources C. Manage communications with RLB Holdings, including regular meetings with RLB. D. Work with the City team to early out the City's project review including: — Environmental review — Street vacation — Development agreement with RLB — Building permits E. Identify areas where work with other entities, such as King County Metro, Sound Transit, Puget Sound Energy is necessary. Develop a strategy and a work plan for carrying out that work. F. Prepare a work program outline for on -going City work on NW Arena Project. SOJ will carry out this work on a time and materials basis. SOJ employees will bill for work based on established hourly rates. Any direct costs, such as travel, will be billed at cost. Shiels Obletz Johnsen, Inc. Page 5 of 5 45 46 Attachment #5 Contract 15 -127 Fehr & Peers (for parking analysis) with amendment #1 47 CONTRACT FOR SERVICES Amendment #1 Between the City of Tukwila and Fehr and Peers That portion of Contract No. 15 -127 between the City of Tukwila and Fehr & Peers is amended as follows: Section 3: Duration of Agreement; Time for Performance. This Agreement shall be in full force and effect for a period commencing upon execution and ending December 31, 2015, unless sooner terminated under the provisions hereinafter specified. Work under this Agreement shall commence upon written notice by the City to the Consultant to proceed. The Consultant shall perform all services and provide all work product required pursuant to this Agreement no later than December 31, 2015 unless an extension of such time is granted in writing by the City as authorized by the Mayor. Section 4: The Consultant shall be paid by the City for completed work and for services rendered under this Agreement as follows: A. Payment for the work provided by the Consultant shall be made as provided on Exhibit "B -1" attached hereto, provided that the total amount of payment to the Consultant shall not exceed $25,000 without express written modification of the Agreement signed by the City. Exhibits A and B are hereby amended and restated as attached hereto as Exhibit A -1 and Exhibit B- 1. All references to Exhibit A and Exhibit B in contract 15 -127 shall be read as referring to Exhibit A -1 and Exhibit B -1, respectively. All other provisions of the contract shall remain in full force and effect. Dated this day of August, 2015. CITY OF TUKWILA CONSULTANT Jim Haggerton, Mayor Chris Breiland, Principal Fehr & Peers Parking Study Amendment #1 Page 1 of 3 48 Contract 15 -127 Exhibit A -1 Scope of Work Fehr & Peers will complete the following Scope of Work to peer review for the parking study results being prepared by the Northwest Arena applicants: • Kick -off meeting /call with City staff • Review of parking study prepared for arena — it is assumed that the applicant will analyze parking demand and develop a plan for up to three events. As part of the review we will focus on the following key assumptions: o Arrival mode split assumptions (we will consider the practical capacity of the transit network in the study area as part of this review) o Average vehicle occupancy o Parking supply locations and amount of proposed parking o Willingness to walk assumptions (how far people will walk from parking to the arena) o Potential parking shuttle arrangements (practicality of shuttles between parking supplies and the arena) o Parking impacts to neighboring businesses; mitigation strategies • Memorandum summarizing our review of the parking studies including: o Major issues that may have been missed /understated in the studies and how we recommend to address these issues o Weaknesses with any assumptions o Recommendations of how to strengthen the study o Results and findings of other relevant parking studies for similar facilities /events and localized travel data to document any difference in assumptions /methodology • Meeting or call with City to discuss our review • Response to one round of comments on our peer review from the Project Applicants (assumed as 16 hours of staff time) • As an optional task we can also attend one meeting with the Project Applicants to discuss our findings Fehr & Peers Parking Study Amendment #1 Page 2 of 3 49 Contract 15 -127 Exhibit B -1 Payment Based on the scope of work in Exhibit A -1 invoices will be billed on a time and materials basis based on the following hourly rates: Principal: $240 Project Engineer/Planner: $105 -$135 Administrative: $95 Fehr & Peers Parking Study Amendment #1 Page 3 of 3 50 City of Tukwila 6200 Southcenter Boulevard, Tukwila WA 98188 Contract Number: 15 -127 Council Approval N/A CONSULTANT AGREEMENT FOR PARKING ANALYSIS SERVICES THIS AGREEMENT is entered into between the City of Tukwila, Washington, hereinafter referred to as "the City ", and Fehr & Peers, hereinafter referred to as "the Consultant ", in consideration of the mutual benefits, terms, and conditions hereinafter specified. 1. Project Designation. The Consultant is retained by the City to perform parking analysis services in connection with the project titled NW Arena Parking Study Peer Review. 2. Scope of Services. The Consultant agrees to perform the services, identified on Exhibit "A" attached hereto, including the provision of all labor, materials, equipment and supplies. 3. Duration of Agreement; Time for Performance. This Agreement shall be in full force and effect for a period commencing upon execution and ending 12/31/15, unless sooner terminated under the provisions hereinafter specified. Work under this Agreement shall commence upon written notice by the City to the Consultant to proceed. The Consultant shall perform all services and provide all work product required pursuant to this Agreement no later than 12/31/15 unless an extension of such time is granted in writing by the City. 4. Payment. The Consultant shall be paid by the City for completed work and for services rendered under this Agreement as follows: A. Payment for the work provided by the Consultant shall be made as provided on Exhibit "B" attached hereto, provided that the total amount of payment to the Consultant shall not exceed $12,500.00 without express written modification of the Agreement signed by the City. B. The Consultant may submit vouchers to the City once per month during the progress of the work for partial payment for that portion of the project completed to date. Such vouchers will be checked by the City and, upon approval thereof, payment shall be made to the Consultant in the amount approved. C. Final payment of any balance due the Consultant of the total contract price earned will be made promptly upon its ascertainment and verification by the City after the completion of the work under this Agreement and its acceptance by the City. D. Payment as provided in this section shall be full compensation for work performed, services rendered, and for all materials, supplies, equipment and incidentals necessary to complete the work. E. The Consultant's records and accounts pertaining to this Agreement are to be kept available for inspection by representatives of the City and the state of Washington for a period of three (3) years after final payments. Copies shall be made available upon request. I J 51 5. Ownership and Use of Documents. All documents, drawings, specifications and other materials produced by the Consultant in connection with the services rendered under this Agreement shall be the property of the City whether the project for which they are made is executed or not. The Consultant shall be permitted to retain copies, including reproducible copies, of drawings and specifications for information, reference and use in connection with the Consultant's endeavors. The Consultant shall not be responsible for any use of the said documents, drawings, specifications or other materials by the City on any project other than the project specified in this Agreement. 6. Compliance with Laws. The Consultant shall, in performing the services contemplated by this Agreement, faithfully observe and comply with all federal, state, and local laws, ordinances and regulations, applicable to the services rendered under this Agreement. 7. Indemnification. The Consultant shall defend, indemnify and hold the City, its officers, officials, employees and volunteers harmless from any and all claims, injuries, damages, losses or suits including attorney fees, arising out of or resulting from the acts, errors or omissions of the Consultant in performance of this Agreement, except for injuries and damages caused by the sole negligence of the City. Should a court of competent jurisdiction determine that this Agreement is subject to RCW 4.24.115, then, in the event of liability for damages arising out of bodily injury to persons or damages to property caused by or resulting from the concurrent negligence of the Consultant and the City, its officers, officials, employees, and volunteers, the Consultant's liability hereunder shall be only to the extent of the Consultant's negligence. It is further specifically and expressly understood that the indemnification provided herein constitutes the Consultant's waiver of immunity under Industrial Insurance, Title 51 RCW, solely for the purposes of this indemnification. This waiver has been mutually negotiated by the parties. The provisions of this section shall survive the expiration or termination of this Agreement. 8. Insurance. The Consultant shall procure and maintain for the duration of the Agreement, 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 Consultant, its agents, representatives, or employees. Consultant's maintenance of insurance as required by the agreement shall not be construed to limit the liability of the Consultant to the coverage provided by such insurance, or otherwise limit the City's recourse to any remedy available at law or in equity. A. Minimum Amounts and Scope of Insurance. Consultant shall obtain insurance of the types and with the limits described below: 1. Automobile Liability insurance with a minimum combined single limit for bodily injury and property damage of $1,000,000 per accident. Automobile Liability insurance shall cover 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. CA revised : 1 -2013 52 Page 2 2. Commercial General Liability insurance with limits no less than $1,000,000 each occurrence, $2,000,000 general aggregate. Commercial General Liability insurance shall be written on ISO occurrence form CG 00 01 and shall cover liability arising from premises, operations, independent contractors and personal injury and advertising injury. The City shall be named as an insured under the Consultant's Commercial General Liability insurance policy with respect to the work performed for the City. 3. Workers' Compensation coverage as required by the Industrial Insurance laws of the State of Washington. 4. Professional Liability with limits no less than $1,000,000 per claim and $1,000,000 policy aggregate limit. Professional Liability insurance shall be appropriate to the Consultant's profession. B. Other Insurance Provision. The Consultant's Automobile Liability and Commercial General Liability insurance policies are to contain, or be endorsed to contain that they shall be primary insurance with respect to the City. Any Insurance, self - insurance, or insurance pool coverage maintained by the City shall be excess of the Consultant's insurance and shall not be contributed or combined with it. C. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best rating of not less than A:VlI. D. Verification of Coverage. Consultant shall furnish the City with original certificates and a copy of the amendatory endorsements, including but not necessarily limited to the additional insured endorsement, evidencing the insurance requirements of the Consultant before commencement of the work. Certificates of coverage and endorsements as required by this section shall be delivered to the City within fifteen (15) days of execution of this Agreement. E. Notice of Cancellation. The Consultant shall provide the City with written notice of any policy cancellation, within two business days of their receipt of such notice. F. Failure to Maintain Insurance. Failure on the part of the Consultant to maintain the insurance as required shall constitute a material breach of contract, upon which the City may, after giving five business days notice to the Consultant to correct the breach, immediately terminate the contract or, at its discretion, procure or renew such insurance and pay any and all premiums in connection therewith, with any sums so expended to be repaid to the City on demand, or at the sole discretion of the City, offset against funds due the Consultant from the City. 9. Independent Contractor. The Consultant and the City agree that the Consultant is an independent contractor with respect to the services provided pursuant to this Agreement. Nothing in this Agreement shall be considered to create the relationship of employer and employee between the parties hereto. Neither the Consultant nor any employee of the Consultant shall be entitled to any benefits accorded City employees by virtue of the services provided under this Agreement. The City shall not be responsible for withholding or otherwise deducting federal income tax or social security or for contributing to the state industrial insurance program, otherwise assuming the duties of an employer with respect to the Consultant, or any employee of the Consultant. CA revised : 1 -2013 Page 3 53 10. Covenant Against Contingent Fees. The Consultant warrants that he has not employed or retained any company or person, other than a bonafide employee working solely for the Consultant, to solicit or secure this contract, and that he has not paid or agreed to pay any company or person, other than a bonafide employee working solely for the Consultant, any fee, commission, percentage, brokerage fee, gifts, or any other consideration contingent upon or resulting from the award or making of this contract. For breach or violation of this warrant, the City shall have the right to annul this contract without liability, or in its discretion to deduct from the contract price or consideration, or otherwise recover, the full amount of such fee, commission, percentage, brokerage fee, gift, or contingent fee. 11. Discrimination Prohibited. The Consultant, with regard to the work performed by it under this Agreement, will not discriminate on the grounds of race, religion, creed, color, national origin, age, veteran status, sex, sexual orientation, gender identity, marital status, political affiliation or the presence of any disability in the selection and retention of employees or procurement of materials or supplies. 12. Assignment. The Consultant shall not sublet or assign any of the services covered by this Agreement without the express written consent of the City. 13. Non - Waiver. Waiver by the City of any provision of this Agreement or any time limitation provided for in this Agreement shall not constitute a waiver of any other provision. 14. Termination. A. The City reserves the right to terminate this Agreement at any time by giving ten (10) days written notice to the Consultant. B. In the event of the death of a member, partner or officer of the Consultant, or any of its supervisory personnel assigned to the project, the surviving members of the Consultant hereby agree to complete the work under the terms of this Agreement, if requested to do so by the City. This section shall not be a bar to renegotiations of this Agreement between surviving members of the Consultant and the City, if the City so chooses. 15. Applicable Law; Venue; Attorney's Fees. This Agreement shall be subject to, and the Consultant shall at all times comply with, all applicable federal, state and local laws, regulations, and rules, including the provisions of the City of Tukwila Municipal Code and ordinances of the City of Tukwila. In the event any suit, arbitration, or other proceeding is instituted to enforce any term of this Agreement, the parties specifically understand and agree that venue shall be properly laid in King County, Washington. The prevailing party in any such action shall be entitled to its attorney's fees and costs of suit. Venue for any action arising from or related to this Agreement shall be exclusively in King County Superior Court. 16. Severability and Survival. If any term, condition or provision of this Agreement is declared void or unenforceable or limited in its application or effect, such event shall not affect any other provisions hereof and all other provisions shall remain fully enforceable. The provisions of this Agreement, which by their sense and context are reasonably intended to survive the completion, expiration or cancellation of this Agreement, shall survive termination of this Agreement. CA revised : 1 -2013 54 Page 4 17. Notices. Notices to the City of Tukwila shall be sent to the following address: City Clerk City of Tukwila 6200 Southcenter Boulevard Tukwila, WA 98188 Notices to Consultant shall bff sent to the following address: C 1„i-,-s &e: (cgd r -eikr (Per2<5 tool L,4t Sfe /62 5e W �5r5� 18. Entire Agreement;Mddification. This Agreement, together with attachments or addenda, represents the entire and integrated Agreement between the City and the Consultant and supersedes all prior negotiations, representations, or agreements written or oral. No amendment or modification of this Agreement shall be of any force or effect unless it is in writing and signed by the parties. DATED this 0 day of Jii-. CITY OF TUKWILA CONSULTANT I" .'/ Jack Pac , Comm! ity Development Director CA revised : 1 -2013 By: ,20). Printed Name: &2vd, Title: 10r;/t: eft( Page 5 55 FEHRtPEERS June 8, 2015 Jack Pace Director Department of Community Development City of Tukwila 6300 Southcenter Blvd, Suite 100 Tukwila, WA 98188 Re: Peer Review of Northwest Arena Parking Study Dear Mr. Pace: Exhibit A P15- 521 -SE Fehr & Peers is pleased to submit this scope of work and budget estimate to peer review the parking study results being prepared by the Northwest Arena applicants. This scope of work would include the following: • Kick -off meeting /call with City staff • Review of parking study prepared for arena — it is assumed that the applicant will analyze parking demand and develop a plan for up to three events. As part of the review, we will focus on the following key assumptions: o Arrival mode split assumptions (we will consider the practical capacity of the transit network in the study area as part of this review) o Average vehicle occupancy o Parking supply locations and amount of proposed parking o Willingness to walk assumptions (how far people will walk from parking to the arena) o Potential parking shuttle arrangements (practicality of shuttles between parking supplies and the arena o Parking impacts to neighboring businesses; mitigation strategies • Memorandum summarizing our review of the parking studies including: o Major issues that may have been missed /understated in the studies and how we recommend to address these issues o Weaknesses with any assumptions o Recommendations of how to strengthen the study 1001 4th Avenue, Suite 4120, Seattle WA 98154 (206) 576 -4220 Fax (206) 576 -4225 www.fehrandpeers.com 56 June 6, 2014 Page 2 of 2 FEHR'PEERS Exhibit B o Results and findings of other relevant parking studies for similar facilities /events and localized travel data to document any differences in assumptions /methodology • Meeting or call with City to discuss our review • Response to one round of comments on our peer review from the Project Applicants (assumed as 16 hours of staff time) As an optional task, we can also attend one meeting with the Project Applicants to discuss our findings. Based on the scope of work outlined above, we recommend a budget of $12,500 to be billed on a time -and- materials basis. This budget assumption does not include the optional meeting with the project applicants. This fee is based on the following hourly billing rates: Principal: $240 Project Engineer /Planner. $105435 Administrative: $95 We look forward to working with you on this project. Please let me know if you have any questions. Sincerely, FEHR & PEERS Ce--67 Chris Breiland, PE Principal 57 58 TO: City of Tukwila Jim Haggerton, Mayor INFORMATIONAL MEMORANDUM Mayor Haggerton Finance and Safety Committee FROM: Peggy McCarthy, Finance Director DATE: July 1, 2015 SUBJECT: 2015 Budget Amendments adjusting the 2015 -16 Biennial Budget ISSUE Approve the 2015 budget amendments adjusting the 2015 -2016 Biennial Budget. BACKGROUND In the past, budget amendments have been presented for approval once, in the fall of the year. For 2015, an additional budget amendment process has been scheduled to: a. Incorporate budget items that were known but not included in the 2015 -16 budget due to time constraints, and b. Adjust the budgeted beginning fund balances to the actual 2014 ending fund balances for any large variances. In addition to these amendment types, certain other amendments have been proposed for initiatives supported by the Administration or Council. The amendments have been grouped into three categories, (1) From 2015 -16 Budget Process, (2) Carryovers from 2014, and (3) Other. These categories are explained in more detail below. From 2015 -16 Budget Process — These items were known at the time the budget was published but adjustments were not made due to time constraints. This category also includes a true up of the budgeted beginning fund balances based on the actual 2014 ending fund balances. Carryovers from 2014 — Certain budget that was not used in 2014 is being carried over to 2015. The capital project budget carryovers will occur with the second budget amendment process in the fall. Other — Most amendments in this category support initiatives advocated by the Administration or the City Council or are revenue backed with no effect on fund balance. DISCUSSION General Fund. In the category, From 2015 -16 Budget Process, an additional $109,772 of grant expenditure budget is included for the Community Development Commute Trip Reduction (CTR) and Recycling grants; Recreation has included $50,000 in additional revenue and expenditure for the REACH after school program offered in conjunction with the YMCA. Additional expenditure budget of $46,600 is added for a variety items and additional $159,400 in grant revenue — including $136,000 for the Auto Theft Task Force Grant — has also been included. The beginning fund balance budget is increased by $681,000 to reflect 2014 actual ending fund balance. In the category, Carryovers from 2014, $100,000 of budget is added for the $50,000 purchase of Municipal Court software, Code Smart, approved but not expended in 2014 and for $50,000 of Fire Department equipment purchases planned for 2014 but made in 2015. 59 60 INFORMATIONAL MEMO Page 2 In the category, Other, many of the items are revenue backed. For those expenditures that are not revenue backed, additional budget has been added to sales tax revenue as an offset. (The positive sales tax budget variance for the first quarter in 2015 was $336,000). The category also contains an amendment moving $60,000 budget for Fire department radios to the Emergency Management division from the Administration division — all within the Fire Department budget. Other Category Sponsor Amendment Amount Funded by 2015 Sales Tax Collected in Excess of Budget 53rd Ave S. Transfer to Residential Street fund to fund design work. Residential Street $174,000 RFA project management and backfill DCD /Mayor $100,000 Technology strategic plan Technology $ 20,000 Fire Marshall vehicle Fire $ 18,474 Preschool expansion — City portion (discussed at Community Affairs and Parks Committee on April 13, 2015). Recreation $ 13,250 Total $ 325,724 Revenue Backed — Grants, Fees or Reimbursement Arrangements Additional FTE for Auto Theft Task Force detective; cost is reimbursed by Task Force. Police $ 64,100 Additional FTE for officer to serve as trainer at the Washington State Criminal Justice Training Center for the Basic Law Enforcement Academy; cost is reimbursed by Academy Police $ 72,100 Building inspections and plan review consultants; cost passed through to customer. DCD $150,000 Expand the Preschool program; portion of expansion paid for by user fees (discussed at Community Affairs and Parks Committee on April 13, 2015). Recreation $ 21,750 Additional sales tax of $422,696 is budgeted to cover the $325,724 in expenditures for the items included in the Other category listed in the chart above and the $100,000 in expenditures in the Carryovers from 2014 category, reduced by the $3,028 net additional revenue budgeted in the From 2015 -16 Budget Process category. Residential Street Fund 103. In the category, From 2015 -16 Budget Process, the beginning fund balance is reduced by $235,000 to reflect the 2014 actual ending fund balance. In the category, Other, 53rd Ave S design work is funded through $174,000 of revenue transferred in from the General Fund replacing the $174,000 of grant funding that was not awarded. Arterial Street Fund 104. In the category, From 2015 -16 Budget Process, the beginning fund balance is increased by $775,000 to reflect the 2014 actual ending fund balance. In the category, Other, budget for $866,000 of major maintenance on three bridges and the corresponding $780,000 BRAC grant funding is added and the $86,000 City portion is budgeted as a use of ending fund balance. W:12015 Info Memos\Biennial Budget Amendmentl .docx INFORMATIONAL MEMO Page 3 Local Improvement District (LID) Fund 233. In the category, From 2015 -16 Budget Process, the beginning fund balance is increased by $237,000 to reflect the 2014 actual ending fund balance. Facilities Fund 302. In the category, From 2015 -16 Budget Process, the beginning fund balance is reduced by $863,000 to reflect the 2014 actual ending fund balance. Facilities Fund 401. In the category, From 2015 -16 Budget Process, the beginning fund balance is reduced by $723,000 to reflect the 2014 actual ending fund balance. Facilities Fund 402. In the category, From 2015 -16 Budget Process, the beginning fund balance is increased by $1,885,000 to reflect the 2014 actual ending fund balance. Facilities Fund 412. In the category, From 2015 -16 Budget Process, the beginning fund balance is reduced by $136,000 to reflect the 2014 actual ending fund balance. In the category, Other, 53rd Ave S design work is funded through the use of $120,000 of ending fund balance replacing the $120,000 of grant funding that was not awarded. Equipment Rental & Replacement Fund 501. In the category, From 2015 -16 Budget Process, budget for the $23,000 purchase of an Emergency Management SUV is added; corresponding grant revenue was recorded in the 2015 budget. In the category Carryovers from 2014, budget of $306,500 for purchases planned and budgeted in 2014 but not made is added; funding is from the use of ending fund balance. In the category, Other, budget is added for the $50,000 purchase of a Fire Prevention pickup truck moved up to 2015 from 2018. Enhanced platform cost of $18,474 will be paid for by the Fire Department through an internal replacement fee charge. Ending fund balance of $338,026 is used to pay for the additional budgeted net expenditures. Employee Healthcare Fund 502. In the category, From 2015 -16 Budget Process, the beginning fund balance is reduced by $1,006,000 to reflect the 2014 actual ending fund balance. Employee Healthcare Fund 503. In the category, From 2015 -16 Budget Process, the beginning fund balance is reduced by $262,000 to reflect the 2014 actual ending fund balance RECOMMENDATION The Finance and Safety Committee is being asked to approve the 2015 budget amendments adjusting the 2015 -2016 biennial budget. This item is scheduled for a public hearing and discussion at the July 27, 2015 Committee of the Whole and the subsequent August 3, 2015 Regular Council Meeting. ATTACHMENTS Draft Ordinance and 2015 -2016 Biennial Budget Amendment Detail (spreadsheet) W:12015 Info Memos\Biennial Budget Amendmentl.docx 61 62 DRAFT AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, AMENDING ORDINANCE NO. 2458, WHICH ADOPTED THE CITY OF TUKWILA'S BIENNIAL BUDGET FOR THE 2015 -2016 BIENNIUM, TO ADOPT AN AMENDED BIENNIAL BUDGET; PROVIDING FOR SEVERABILITY; AND ESTABLISHING AN EFFECTIVE DATE. WHEREAS, Ordinance No. 2458 adopted the 2015 -2016 biennial budget of the City of Tukwila on November 17, 2014; and WHEREAS, on July 27, 2015, following required public notification, the City Council conducted a public hearing on the proposed budget amendments; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY ORDAINS AS FOLLOWS: Section 1. Ordinance Amended. Ordinance No. 2458 is hereby amended with the City Council's adoption of the document entitled "City of Tukwila 2015 -2016 Biennial Budget Amendment," attached hereto and incorporated by this reference as if fully set forth herein, in accordance with RCW 35A.33.075. Section 2. Estimated Revenues and Appropriations. The totals of the estimated revenues and appropriations for each separate fund and the aggregate totals are as follows: FUND EXPENDITURES REVENUES 000 General $122,930,819 $122,930,819 $127,438,824 $127,438,824 103 Residential Street $2,600,000 $2,-60-070-0-0 $10,846,721 $10,846,721 104 Arterial Street $41,577,820 $41,577,820 $36,686,080 $36,686,080 206 LID Gurantee Fund $680,000 $680,000 233 $2,637,813 $2,637,813 • i • 304 $5- 607 -,000 - - - - - - ,080 302 Facility Replacement $9,719,204 $9,719,204 W: Word Processing \Ordinances \Budget amendment 2015 -2016 biennium 7 -15 -15 PM:bjs (continued...) Page 1 of 2 63 FUND EXPENDITURES REVENUES 401 Water $18,814,000 $17,699,000 $18,814,000 $17,699,000 402 Sewer $15,401000 $21,871,000 $15,401,000 $21,871,000 412 Surface Water '. 20 173 000 '. 20 173 000 501 Equipment Rental $11,608,610 $11,608,610 502 Employee Health Insurance $13,274,958 $13,274,958 Fund 503 Retiree Health Insurance Fund $1,510,191 $1,510,191 Section 3. Copies on File. A complete copy of the final budget for 2015 -2016, as adopted, together with a copy of this amending ordinance, shall be kept on file in the City Clerk's Office, and a copy shall be transmitted by the City Clerk to the Division of Municipal Corporations of the Office of the State Auditor and to the Association of Washington Cities. Section 4. Corrections by City Clerk or Code Reviser. Upon approval of the City Attorney, the City Clerk and the code reviser are authorized to make necessary corrections to this ordinance, including the correction of clerical errors; references to other local, state or federal laws, codes, rules, or regulations; or ordinance numbering and section /subsection numbering. Section 5. Severability. If any section, subsection, paragraph, sentence, clause or phrase of this ordinance or its application to any person or situation should be held to be invalid or unconstitutional for any reason by a court of competent jurisdiction, such invalidity or unconstitutionality shall not affect the validity or constitutionality of the remaining portions of this ordinance or its application to any other person or situation. Section 6. Effective Date. This ordinance or a summary thereof shall be published in the official newspaper of the City, and shall take effect and be in full force and effect five days after passage and publication as provided by law. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this day of , 2015. ATTEST /AUTHENTICATED: Christy O'Flaherty, MMC, City Clerk APPROVED AS TO FORM BY: Rachel B. Turpin, City Attorney Jim Haggerton, Mayor Filed with the City Clerk: Passed by the City Council: Published: Effective Date: Ordinance Number: Attachment: City of Tukwila 2015 -2016 Biennial Budget Amendment W: Word Processing \Ordinances \Budget amendment 2015 -2016 biennium 7 -15 -15 PM:bjs 64 Page 2 of 2 City of Tukwila 2015 -2016 Biennial Budget Amendment Adopted August 3, 2015 Reconciliation of 2015 -2016 Budget Summary to Ordinance ORIGINAL BUDGET AMENDED BUDGET EXPENDITURES 2015 Expenditures 2016 Expenditures 2016 Ending Fund Balance Total Expenditures 2015 Amendment Total Expenditures 000 General $ 56,528,833 $ 59,762,899 $ 9,526,047 $ 125,817,778 1,621,046 - (235,000) 780,000 237,000 (863,000) (723,000) 1,885,000 (256,000) 41,474 (1,006,000) (262,000) $ 127,438,824 2,597,316 10,846,721 36,686,080 5,703,632 180,000 1,415,333 1,623,400 866,315 1,172,100 229,800 1,095,500 226,260 669,000 2,637,813 3,902,000 9,719,204 901,000 550,200 17,699,000 21,871,000 4,181,494 20,173,000 11,608,610 13,274,958 1,510,191 1,617,300 101 Hotel /Motel 1,577,642 427,500 592,174 2,597,316 103 City Street 1,868,000 8,823,000 390,721 11,081,721 104 Arterial Street 21,557,511 14,200,217 148,353 35,906,080 105 Contingency - - 5,703,632 5,703,632 109 Drug Seizure Fund 55,000 45,000 80,000 180,000 200 LTGO Bonds 537,000 878,333 - 1,415,333 211 Limited Tax G.O. Refunding Bonds, 2008 811,300 811,100 1,000 1,623,400 212 Limited Tax G.O. Bonds, 2009A 437,355 427,960 1,000 866,315 214 Limited Tax G.O. Bonds, 2010A 585,649 585,451 1,000 1,172,100 216 Limited Tax G.O. Refunding Bonds, ValleyComm 228,800 - 1,000 229,800 217 2011 Refunding Bonds 545,825 548,675 1,000 1,095,500 218 2014 Facility 113,130 113,130 - 226,260 206 LID Guaranty - - 669,000 669,000 233 2013 LID 794,284 736,005 870,524 2,400,813 301 Land Acquisition, Recreation & Park Devl. 3,273,000 1 292,000 337,000 3,902,000 302 Facility Replacement 4,380,000 4,415,000 1,787,204 10,582,204 303 General Government Improvements 320,550 330,641 249,809 901,000 304 Fire Improvements - - 550,200 550,200 401 Water 7,448,185 8,298,949 2,674,866 18,422,000 402 Sewer 8,636,400 9,796,006 1,553,594 19,986,000 411 Foster Golf Course 1,768,017 1,812,394 601,083 4,181,494 412 Surface Water 11,070,311 6,591,228 2,767,461 20,429,000 501 Equipment Rental 3,555,343 2,409,952 5,601,841 11,567,136 502 Insurance Fund 6,342,002 6,344,241 1,594,715 14,280,958 503 Insurance - LEOFF 1 Fund 948,819 617,391 205,981 1,772,191 611 Firemen's Pension 132,727 132,727 1,351,846 1,617,300 Total $ 133,515,682 $ 128,399,799 $ 37,261,050 $ 299,176,531 $ 1,219,520 $ 300,396,051 REVENUES 2015 Beginning Fund Balance 2015 Revenues 2016 . Revenues Total Revenues 2015 Amendment Total Revenues 000 General $ 9,500,000 $ 56,731,999 $ 59,585,779 $ 125,817,778 1,621,046 (235,000) 780,000 237,000 (863,000) (723,000) 1,885,000 (256,000) 41,474 (1,006,000) (262,000) 127,438,824 2,597,316 10,846,721 36,686,080 5,703,632 180,000 1,415,333 1,623,400 866,315 1,172,100 229,800 1,095,500 226,260 669,000 2,637,813 3,902,000 9,719,204 901,000 550,200 17,699,000 21,871,000 4,181,494 20,173,000 11,608,610 13,274,958 1,510,191 1,617,300 101 Hotel /Motel 500,000 1,467,316 630,000 2,597,316 103 City Street 1,400,000 524,842 9,156,878 11,081,721 104 Arterial Street 600,000 21,302,000 14,004,080 35,906,080 105 Contingency 5,700,000 1,816 1,816 5,703,632 109 Drug Seizure Fund 60,000 60,000 60,000 180,000 200 LTGO Bonds - 537,000 878,333 1,415,333 211 Limited Tax G.O. Refunding Bonds, 2008 1,000 811,300 811,100 1,623,400 212 Limited Tax G.O. Bonds, 2009A 1,000 437,355 427,960 866,315 214 Limited Tax G.O. Bonds, 2010A 1,000 585,649 585,451 1,172,100 216 Limited Tax G.O. Refunding Bonds, ValleyComm 1,000 228,800 229,800 217 2011 Refunding Bonds 1,000 545,825 548,675 1,095,500 218 2014 Facility 113,130 113,130 226,260 206 LID Guaranty 668,000 500 500 669,000 233 2013 LID 805,000 810,140 785,673 2,400,813 301 Land Acquisition, Recreation & Park Devl. 1,100,000 2,491,000 311,000 3,902,000 302 Facility Replacement 1,800,000 4,453,602 4,328,602 10,582,204 303 General Government Improvements 500,000 200,500 200,500 901,000 304 Fire Improvements 450,000 50,100 50,100 550,200 401 Water 6,500,000 5,829,000 6,093,000 18,422,000 402 Sewer 3,400,000 8,262,000 8,324,000 19,986,000 411 Foster Golf Course 600,000 1,769,747 1,811,747 4,181,494 412 Surface Water 2,200,000 11,261,000 6,968,000 20,429,000 501 Equipment Rental 4,500,000 3,613,043 3,454,093 11,567,136 502 Insurance Fund 3,500,000 5,186,929 5,594,029 14,280,958 503 Insurance - LEOFF 1 Fund 500,000 703,851 568,340 1,772,191 611 Firemen's Pension 1,500,000 58,650 58,650 1,617,300 Total $ 45,788,000 $ 128,037,095 $ 125,351,436 $ 299,176,531 $ 1,219,520 $ 300,396,051 65 Ref Dept I GENERAL FUND 2015 -2016 Biennial Budget Amendment Detail Explanation { Acct Desc Expense Revenue t Net From 2015 -16 Budget Process 1 DCD Business Recycling 1 . DCD 2% Cost of living raise for Maggie Lubov for 2015 - grant funded 3 DCD Increased for additional work /staff - grant funded 4 I DCD Increased for additional expenses such as - new consultant services -!Prof Services grant funded 'Prof Services Extra Labor - CTR 'Coordinator Supplies - Operating 5 DCD Increased for additional expenses For new employees - grant tunded s 1 ravel - rarKing, meals, ( )mileage 6 DCD Misc. expenses - grant funded 1 DCD Metro CTR Program and additional Metro expenses 1 000.08.558.601.41.02 000.08.558.602.12.00 1 ' 000.08.558.602.31.00 1000.08.558.602.41.07 X000.08.558.602743.07 1 wise. — — —_— 000.08.558.602.49.07 I i Intergovernmental — — ;000.08.558.602.51.00 1 9 1 Rec Expenditures related to recreation and enrichment services for the 'Extra Labor 1 REACH After School Program (contract with Tukwila School District) 10 ;Rec Expenditures related to recreation and enrichment services for the Supplies — — 1 REACH After School Program (contract with Tukwila School District) 1 1000.07.574.200.12.00 1 000.07.5747200731.05 { 11 ' Rec REACH Revenue (Reimbursement from TSD) Revenue 1 '000.347.600.02 12 I Fire An error occurred in the final budget process. Line item was IEM Office & Operating 1000.11.525.600.31.00 idecreased from $16.8 K to $8K. 'Supplies 13 rMayor Postage Meter Lease - Budget was decreased and it needs to be -; 1Ceases � reinstated to cover the lease agreement 1 14 ; Fire Emergency Management vehicle paid for by the EMPG14 grant. 'Fleet Capital Grant revenue was recorded in the 2015 -16 budget but expenditure !Fire Dept was not. 1 1000.03.514.200.45.00 000.11.522.300.45.94 15 I Street IPublic Works Street Traffic Control Supplies - Repair & Maintenance Streets - Street 1000.16.542.640.31.01 was reduced by $20,000 during the budget process. For 2015 & 2016 Maintenance /Traffic Control I 16 r Pol Auto Theft Task Force Grant revenue omitted from budget ,,WA Assoc of Sheriffs and 000.334.069.00.01 I !Police Chiefs 17 Mayor Grant Funds not budgeted 1 'Public Defense 1 000.334.010.22.00 18 I Fin Adjust beginning fund balance based on 2014 actual ending fund !Estimated Beginning Fund 1000.291.740.00.00 Balance Estimated Ending Fund V __ {Balance balance 19 r_ Fin Adjust ending fund balance based on beginning fund balance - __ adjustment 20 Total from 2015 -16 Budget Process Carryovers from 2014 10,000 I 4,272 500 1 36,500 500 43,000 15,000 (109,772) 5,000 23,000 10,000 i (5,000) (23,000) (10,000) 136,000 , 136,000 23,400 { 23,400 681,000 681,000 = 887,372 890,400 1 20 1 CRT Code Smart software - insufficient time in 2014 to fully implement !Software I 1 21 ' Fire 2014 purchases of Personal Protective Equipment were deferred Suppression Operating with the instruction to make purchase in 2015, and to amend the !Supplies 1 associated Acct# in June of 2015 1 Total Carryovers from 2014 1000.09.594.120.64.00 000.11.522.200.31.01 50,000 50,000 100,000 3,028 (50,000) (50,000) (100,0001` 1 of 5 66 2015 Increase (Decrease) Ref !Dept Explanation Acct Desc i Acct # Expense 1 Revenue Net Other 22' PWE 53rd Ave S (S 137th St - S 144th St) - City to fully fund design as 'Transfer -out to Residential 000.597.103.00.00 unsucessful for grant funds. Once designed, the residential street ,Streets { should be "shovel ready" for future construction grant. Discussed at { the 2/17/15 Transportation Committee. 23 DCD Contract labor to backfill RFA Project Manager's position as part- Extra Labor time planner 24 I Mayor Increase RFA Project Manager from .5 FTE to 1 FTE (000.08.558.600.12.00 { (Salaries and benefits 1000.08.5587600. * *. ** I I 5 r IT IT Strategic Planning Consultant - John Luthy, The Futures Corp. Technical Support X000.12.518.880.42.00 I I I 26 Fire Originally scheduled Fire Prevention's 1/2 -ton Pickup Unit #1226 to Fleet Capital 000.11.522.300.45.94 I be replaced in 2018. Now purchase in 2015 with Fire making up the !Fire Dept C I $18,474 price difference. I 1 27 5Police Reimbursement from the Washington Auto Theft Prevention TWA Assoc of Sheriffs and 7000.334.069.00.00 v I Authority (WATPA) grant for salary for an detective assigned as a (Police Chiefs (WATPA grant) 1 I Auto Theft Task Force (ATTF) Detective. Begins July 1 28 ' Police Reimbursement of benefits for the detective assigned as a ATTF 'WA Assoc of Sheriffs and 000.334.069.00.01 detective. .Police Chiefs (WATPA grant) ( ( ( 29 , Police Salaries to backfill the assigned detective Police Detective 000.10.5 * *. ** *.11.00 I I I 30' Police Benefits to backfill the assigned detective {Police Detective 000.10.5 * *. * * *.2 *.00 16,800' 174,000 , (174,000) 50,000 50,000 '(I j (100,000) 20,000 (20,000) 8,474 47,300 47,300 I ( I 31 I Police Reimbursement of Salary for an Officer assigned as a trainer at the 1WSCJTC BLEA 1000.334.* IWashington State Criminal Justice Training Center (WSCJTC) for the 'reimbursement Basic Law Enforcement Academy (BLEA), begins June 1. Three year I agreement. I I 32 ,, Police Reimbursement of Benefits for the Officer assigned as a TAC Officer ¶W-SCJTC BLEA ;000.334.* I at WSCJTC (reimbursement I 33 ' Police Salaries to backfill the officer assigned to BLEA 34 Police Benefits to backfill the officer assigned to BLEA - 'Police Officer 000.10.5 Police Officer _ 1000.10.5 ( * * *.2 *.00 35 19,500 -'1--D-CD Consultant services for plan review and building inspections due to 1Professional Services '4000.08.559.600.41.00 150,000 ( vacancies in Building Division. 36 r DCD Consultant services for plan review and building inspections due to Permit fees X000.322.100.00.00 vacancies in Building Division. 37 ' Rec Expenditures related to expanded preschool; discussed at 'Salaries .5 FTE to .7-5-ft-E-. 75 FTE 000.07.574.200.11.00 13,485 Community Affairs & Parks Committee on April 13, 2015 38 I Rec Expenditures related to expanded preschool 39 "Rec Expenditures related to expanded preschool 40 Rec Expenditures related to expanded preschool 41 ( Rec Expenditures related to expanded preschool j i I 42 I Rec Revenue related to expanded preschool 'Revenue- !Professional Revenue _ ( ( (Extra Labor 1000.07.574.200.12.00 8,813 { I Benefits000.07.574.200.2x.xx 11,102 I ( 'Supplies '000.07.574.200.31.07 i I (Professional Services 1000.07.574.200.41.07 I I I 1,100 500 150,000 (18,474) (13,250) 2of5 67 2015 Increase (Decrease) Ref !Dept Explanation I Acct Desc 46 Fire Movement of the "ongoing replacement of 800 MHz radio's" funds ,Small Tools and Minor ;000.11.525.600.35.00 from Fire Administration to Fire Emergency Management !Equipment, Emergency I !Management I unds 1RadiosAdmin 7000. 11.522.100.48.01 I i 1 I 60 , Fin Use sales tax collected in excess of budget to fund additional !Sales tax revenue 7000.313.100.00.00 — I General Fund costs ($336K positive budget variance for 1st quarter I I I 2015) I Acct # Expense i Revenue , Net 47 I Fire Movement of the ongoing replacement of 800 MHz radio's from Fire Administration to Fire Emergency Management Total Other 60,000 (60,000) 422,696 i 422,696 633,674 730,646 96,972 Total General Fund 000 RESIDENTIAL STREET FUND 103 1,621,046 , 1,621,046 From 2015 -16 Budget Process 61 ! Fin 62 I Fin Adjust beginning fund balance based on 2014 actual ending fund balance !Estimated Beginning Fund 103.291.740.00.00 Balance Adjust ending fund balance based on beginning fund balance (Estimated Ending Fund adjustment !Balance 103.01.291.840.00.001 (235,000)1 ( (235,000) Other 63 ! PWE 53rd Ave S (S 137th St - S 144th St) - City to fully fund design as 1 unsucessful for grant funds. Once designed, the residential street should be "shovel ready" for future construction grant.— — — 64 PWE 53rd Ave S (S 137th St - S 144th St) - Use City funds in place of grant funds not received. !Decrease in grant funding t (2/17/14 Transp Committee Transfer in from General !Fund I I o 1103.334.030.63.00 ' 103.397.000.00.00 Total Residential Street (235,000)! (174,000), 174,000 I (235,000)1 ARTERIAL STREET FUND 104 From 2015 -16 Budget Process 65 I Fin Adjust beginning fund balance based on 2014 actual ending fund balance 66 Fin Adjust ending fund balance based on beginning fund balance adjustment !Estimated Beginning Fund 1104.291,740.00.00 !Balance JEstimated Ending Fund (Balance 7 104.01.291.840.00.00 775,000 775,000 , Other 67 ; PWE Major Maintenance on 3 Bridges 2015. With success of BRAC grant ,CIP ;104.98.595.800.41.00:', I funding, increase budget for design and use Annual Bridge with Grant Revenue I IInspections for 10% design grant match. No match for construction. 1 68 r Fin Fund projectthrough endingfund balance. 1:Endingfund balance — 1104.01.291.840700.00 ■ 1 1 Total Arterial Street LID FUND 233 From 2015 -16 Budget Process 866,000 7 780,000 ! (86,000)1 (86,000) 86,000 780,000 i 780,000 69 , Fin Adjust beginning fund balance based on 2014 actual ending fund Estimated Beginning Fund ■233.291.740.00.00 I balance !Balance I 70 ! Fin Adjust ending fund balance based on beginning fund balance — !Estimated Ending Fund — !233.00.291.840.00.00 adjustment Balance 237,000 237,000 ! (Total LID Fund 233 68 237,000 237,000 3 of 5 2015 Increase (Decrease) Ref !Dept j Explanation Acct Desc Acct FACILITIES FUND 302 Expense ! Revenue Net From 2015-16 Budget Process 71 Fin Adjust beginning fund balance based on 2014 actual ending fund Estimated Beginning Fund i302.291.740.00.00 balance !Balance I I 72 Fin Adjust ending fund balance based on beginning fund balance !Estimated Ending Fund 1302.00.291.840.00.00 adjustment 'Balance (863,000)! (863,000)i Total Facilities Fund 233 WATER FUND 401 (863,000)! (863,000)! From 2015-16 Budget Process 73 1 Fin Adjust beginning fund balance based on 2014 actual ending fund Estimated Beginning Fund ;401.293.700.00.00 I balance !Balance I _ L J. I "Estimated Ending Fund '401.02.293.800.00.00 I 1 74 1 Fin Adjust ending fund balance based on beginning fund balance adjustment Balance 1 1 1 (723,000)1 (723,000); Total Water Fund 401 SEWER FUND 402 (723,000)! (723,000)! From 2015-16 Budget Process 75 1 Fin Adjust beginning fund balance based on 2014 actual ending fund !Estimated Beginning Fund ;402.293300.00.00 I balance 1Balance I L... .4 _ ...1 76 ' Fin Adjust ending fund balance based on beginning fund balance 'Estimated Ending Fund '402.02.293.800.00.00 I i I adjustment !Balance I 1 1 1,885,000 ! 1 1 1,885,000 Total Sewer Fund 402 SURFACE WATER 412 1,885,000 1,885,000 From 2015-16 Budget Process 77 1 Fin Adjust beginning fund balance based on 2014 actual ending fund !Estimated Beginning Fund 1412.293.700.00.00 balance Balance 78 E'Fin Adjust ending fundCaTance based on beginning fund balance listimated Ending Fund 7412.02.293.800.00.00 adjustment !Balance 1 Other (136,000): 1 (136,000)! 79 1 PWE 53rd Ave S Surface Water - Fund Design with all City funds as ;Decrease grant funding, ;412.333.970.36.00 I unsucessful for grant funds. Once designed, the residential street 1presented to 2/17/14 Transp I should be "shovel ready". !Committee 1 80 I Fin 53rd Ave S Surface Water - use ending fund balance to replace grant !Ending fund balance 1412.02.293.800.00.00 funds not awarded. I I 1 , , ■ (120,000): (120,000)! Total Surface Water Fund 412 (256,000)l (256,000)! FLEET FUND 501 From 2015-16 Budget Process 81 ! Fire Ford Escape SUV from FEMA grant; grant revenue recorded in 2015 !Fire ;501.02.594.480.64.00 i , budget but expenditure was not 1 1 82 ' Fin Equipment Replacement revenue frortlFireOepartment Fleet Capital 1501.348.301.00.00 I 1 1 ,Fire Dept 23,000 23,000 Carryovers from 2014 83 I PWE 2014 Fleet Purchases; Ordered in 2014, yet delivery & payment in !Fleet Capital 1501.02.594.480.64.00 I 2015, 2014 Line 6 for $45,500 and Line 14 for $147,000. I I 84 ■ PWE 2014 Fleet Purchases; Not purchased in 2013 or 2014. Carryover to ,Fleet Capital ,501.02.594.480.64.00 I 2015. 2014 Line 10 for $86,000 and Line 15 for $28,000. 1 1 192,500 114,000 (306,500) 4 of 5 69 2015 Increase (Decrease) Ref [Dept Other Explanation Acct Desc Acct # Expense ! Revenue Net 85 ; PWE Originally scheduled Fire Prevention's 1/2-ton Pickup Unit #1226 to !Fleet Capital ;501.02.594.480.64.00 I be replaced in 2018. Now purchase in 2015 with Fire making up the [Fire Dept I I--- $18,474 price difference. 86 ' PWE Equipment Replacement revenue from Fire Department Fleet Capital 501.348.301.00.00 I 1 I Fire Dept I I I - ,--- 87 ' PWE Use ending fund balance to pay for the expenditure carryovers and Ending fund balance 1501.02.298.800.00.00 rescheduled purchases. 1 I I 50,000 1 (50,000) 1 18,474 18,474 (338,026) 338,026 Total Fleet Fund 501 EMPLOYEE HEALTHCARE FUND 502 41,474 i 41,474 From 2015-16 Budget Process 88 ; Fin Adjust beginning fund balance based on 2014 actual ending fund lEstimated Beginning Fund 1502.293.700.00.00 balance 'Balance 89 t Fin Adjust ending fund balance based on beginning fund balance Estimated Ending Fund 1502.00.293.800.00.00 adjustment Balance (1,006,000) (1,006,000) Total Employee Healthcare Fund 402 (1,006,000)! (1,006,000)1 From 2015-16 Budget Process 90 Fin Adjust beginning fund balance based on 2014 actual ending fund Estimated Beginning Fund ;503.293.700.00.00 balance !Balance 91 Fin Adjust ending fund balance based on beginning fund balance 7Estimated Ending Fund 7503.00.293.800.00.00 ; adjustment Balance (262,000)1 (262,000)i 'Total Retiree Healthcare Fund 503 (262,000)i (262,000)i TOTAL AMENDMENT TO 2015-2016 BIENNIAL BUDGET $ 1,219,520 $ 1,219,520 5 of 5 70 TO: City of Tukwila Jim Haggerton, Mayor INFORMATIONAL MEMORANDUM Mayor Haggerton City Council FROM: Peggy McCarthy, Finance Director DATE: July 15, 2015 SUBJECT: Revision to Financial Reserve Policy ISSUE Consider for approval the proposed revisions to the Financial Reserve Policy, as currently set forth in Resolution 1774. BACKGROUND A Reserve policy was established in 2009 as a safeguard to protect the community, its residents, and businesses from unforeseen or emergent situations that could negatively impact the City's finances including revenue shortfalls and unanticipated expenditures. The policy was revised in October 2012 to augment, simplify and clarify the policy criteria and guidance. The revision now proposed would increase the General Fund reserve level, add a One -time Revenue Reserve and conform the healthcare fund reserve policy to current practices. DISCUSSION Revisions to the current policy is now being considered for the following reasons: 1. To ensure sufficient General Fund balance is maintained. The current policy requires a 10% General Fund minimum fund balance. The Government Finance Officer Association (GFOA) Best Practices recommends a 16.67% minimum balance. The proposed policy revision increases the minimum balance to 18 %. Together, the proposed revised 18% General Fund reserve requirement and the existing 10% Contingency Fund reserve requirement would commit 28 %, or approximately $15.4 million, to reserves. This level is realistic and attainable since the 2014 unassigned General Fund balance was $10 million and the 2014 Contingency Fund balance totaled $5.7 million. This represents a combined total of $15.7 million exceeding the estimated $15.4 million required should the policy revision be adopted. The increased level of reserves is considered prudent based on the City's experience with previous revenue shortfalls. When the City experienced a revenue shortfall as a result of the combined effect of the Great Recession and the adoption of destination based sales tax, sales tax revenue declined by more than $4 million from a high of $20 million in 2007 to a low of less than $16 million in each of the years 2009, 2010 and 2012. Additionally, the governmental fund balances, as presented in Attachment A of the Financial Planning Model, have declined by over $8 million from a high in 2007 of $29 million to the current $21 million level. 2. To establish a One -time Revenue Reserve. A One -time Revenue Reserve is proposed to ensure that a portion of revenue windfalls from one -time or periodic events — such as construction sales tax and real property sales -- is set aside and saved. The reserve would reside in the Contingency fund and be in addition to the Contingency fund minimum balance requirement. 71 72 INFORMATIONAL MEMO Page 2 The One -Time Revenue Reserve would be credited annually with 10% of the prior year one -time revenues. This would occur only if the General Fund surplus for the year is sufficient to cover the reserve funding. Use of the reserves would be based on the recommendation by City Administration and approval by City Council through a resolution. Should the Reserve be established, the funding goal for 2015 (based on 2014 actual one -time revenues) would be $81,900. The estimated funding goal for 2016 (based on 2015 estimated one -time revenues) could approximate $170,000, for an estimated biennial total of $251,900. The funding goal for the 2017 -2018 biennium could exceed $1,000,000 depending on the timing of one -time revenue events. These events include real property sales of the Tukwila Village land, TIB Redevelopment properties, Longacres property, and the former Fire Station 53. Planned construction activities generating construction sales tax include Tukwila Village, Washington Place and other development projects. 3. To conform the self - insured healthcare reserve minimums to those used by the actuary in the annual IBNR (incurred but not reported) liability and IBNR reserve calculations. The Policy now states that the IBNR reserve should equal 2.5 times the IBNR. In practice, and as conservatively recommended by the actuary and healthcare broker, the IBNR reserve should equal 1.5% of the IBNR. This reserve is in addition to the IBNR liability. RECOMMENDATION The Council is being asked to approve the resolution revising the Financial Reserve Policy at the July 27, 2015 Committee of the Whole meeting and the subsequent August 3, 2015 Regular Meeting. ATTACHMENTS - Resolution Revising the Financial Reserve Policy - Committee Minutes from the July 7 Finance and Safety (FS) Committee Meeting, requesting changes - Informational Memorandum from July 7 FS meeting W:12015 Info Memos\Reserve Policy 7 -21 -15 Revised.doc D• AFT NOTE: (1) Strike - through /underline text that is not shaded denotes changes from existing policy (as per Resolution No. 1774), and reflects the draft ordinance as it went to the Finance and Safety Committee meeting on 7 -7 -15. (2) Strike - through /underline text that is shaded denotes changes from existing policy (as per Resolution No. 1774), PLUS additional changes (additions /deletions) made after the Finance and Safety Committee meeting on 7 -7 -15. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, REVISING THE PREVIOUSLY ADOPTED FINANCIAL RESERVE POLICY TO INCREASE THE GENERAL FUND RESERVE LEVEL, ADD A ONE -TIME REVENUE SPECIAL PROTECT RESERVE, AND CONFORM THE HEALTH CARE FUND RESERVE POLICY TO CURRENT PRACTICES; AND REPEALING RESOLUTION NO. 1774. WHEREAS, for the well -being and sustainability of the community, its residents, and businesses, it is important that the City of Tukwila be prepared to respond to any and all situations that could result in a risk and /or crisis to the City's finances including, but not limited to, revenue shortfalls and unanticipated expenditures; and WHEREAS, it is the responsibility of the City Council of the City of Tukwila to provide policy direction for the City's biennial budget through the passage of motions and ordinances, adoption of resolutions, and final approval of said budget; and WHEREAS, a financial reserve policy establishes, attains, and restores minimum fund balances, including self- insured health care reserve funds, and specifies review and reporting of such; and WHEREAS, the Best Practices promulgated by the Government Finance Officers Association recommends that the unrestricted fund balance in the General Fund equal no less than two months of regular General Fund operating revenues, or 16.67 %; and WHEREAS, credit rating agencies consider combined General Fund and Contingency Reserve Fund balances of at least 30% of operating revenues to be a good indication of credit worthiness; and and 2012 in prior years the financial health of the City was negatively impacted by recession and changes in state law; and W: \Word Processing \Reserve Policy revised -2nd version 7 -15 -15 PM:bjs Page 1 of 3 73 Model Attachment A declined from a high of over $29 million in 2007 to a current level of $21 million; WHEREAS, it is financially prudent to save a portion of revenue windfalls derived from one -time or periodic events, such as the sale of real property or sales tax collected on ''construction activity, as a means of offsetting the effects of recessions or other events that could force the City to reduce service levels; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY RESOLVES AS FOLLOWS: Section 1. Minimum Fund Balances. A. At the close of each fiscal year, the General Fund unassigned balance shall equal or exceed 18 %, and the ReseRie-Contingency Fund reserve balance shall each equal or exceed 10 %1 of the previous year General Fund revenue, exclusive of significant non - operating, non - recurring revenues such as real estate sales or transfers in from other funds. B. In regard to the Enterprise Funds, aAt the close of each fiscal year,. the unrestricted fund balances of the Enterprise Funds shall equal or exceed 20% of the previous year revenue, exclusive of significant non - operating, non - recurring revenues such as real estate sales, transfers in from other funds or debt proceeds. C. Use or draw down of minimum balances shall occur only upon recommendation of City Administration and approval by City Council through a resolution. Should use or draw down occur, the City Administration shall establish a plan, no later than the end of the fiscal year following the year of decline, to restore the fund balance to the prescribed minimum level. The plan shall be presented to and approved by the City Council. Section 2. Special Projec }One -time Revenue Reserve. All expenditures from • - - - - -. - - e - - - - - - - - - _ _ - - A Special- P- reiectOne time Revenue Reserve shall be established and maintained in the GeneralContingency Fund. The Special ProjectOne time Revenue Reserve shall be credited annually with 10% of the prior years one -time revenues to the extent General Fund surplus for the year is sufficient to cover the reserve funding. , e e - sales and sales tax received on construction activity. Use of the reserve shall occur only upon recommendation by City Administration and approval by City Council through a resolution. 3. USO and Restoration. The prescribed minimum fund balances Use of reserves or draw down of minimum balances shall occur only W: \Word Processing \Reserve Policy revised -2nd version 7 -15 -15 PM:bjs 74 upon Page 2 of 3 prescribed minimum balance after 2014City Administration shall establish a plan, no later than the end of the fiscal year following the year of decline, to restore the fund balance to the prescribed minimum level. The plan shall be presented to and approved by the City Council. Section 43. Self- insured Health Care Funds. In regard to the self insured health care funds, tThe City shall maintain a reserve balance in each of its self- insured health care funds in an amount equal to 21.5 times, or 250150 %, of the actuarially determined IBNR (incurred but not reported) rebalance. Use of the reserve wi-ilshall occur only upon recommendation by City Administration and approval by City Council through a resolution. health care plan funds. Section 5. A report showing compliance with the Financial Reserve Policy shall be provided to the City Council on an annual basis, no later than July 1 of each year. Section 6. Repealer. Resolution No. 1774 is hereby repealed. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this day of , 2015. ATTEST /AUTHENTICATED: Christy O'Flaherty, MMC, City Clerk Kate Kruller, Council President APPROVED AS TO FORM BY: Rachel B. Turpin, City Attorney W: \Word Processing \Reserve Policy revised -2nd version 7 -15 -15 PM:bjs Filed with the City Clerk: Passed by the City Council: Resolution Number: Page 3 of 3 75 76 Finance & Safety Committee Minutes July 7, 2015 - Pape 2 D. Resolution: Financial Reserve Policy Staff is seeking Council approval of a resolution that would revise the City's Financial Reserve Policy in three specific areas. Those revisions and the Committee's discussion is summarized below. A clean copy of the proposed resolution was distributed to the Committee. 1. Change the General Fund minimum balance from 10% to 18%. Staff considers this increased level of reserves to be prudent based on the City's experience with previous revenue shortfalls, such as those experienced in the Great Recession and the state's adoption of the destination based sales tax. The proposed 18% reserve requirement and the existing 10% contingency fund requirement would commit 28 %, or approximately $15.4 million to reserves. Draw down of the minimum balance could occur only by Council resolution. The Committee agreed with this proposal. 2. Establish a Special Project Reserve based on 10% of one -time revenues. This proposal is to ensure a portion of one -time revenue windfalls is saved for special one -time expenditures, and the reserve would be funded by allocating 10% of one -time revenues to the reserve each year. Use of this reserve could occur only by Council resolution. The Committee spoke in favor of a work session in which Council would establish the criteria for special projects in this scenario. As written, it is undefined and they felt it would be important to clarify this as soon as possible. The Committee asked that staff return with examples from the Mayor of applicable special projects as well as from other jurisdictions with a similar policy. They also requested an analysis of impacts to the 2015 -2016 budget, considering one -time revenues have already been appropriated. The Committee made no recommendation pending the additional information requested. 3. Change the self - insured healthcare reserve minimums from 2.5 times the IBNR (incurred but not reported) to 1.5 %. This is a housekeeping revision that will conform the City's policy to actual practice and recommendation from the actuary and healthcare broker. The Committee agreed with this proposal. Staff requested clarification on when to schedule further discussion on this item. The Committee requested that staff make a determination on when the additional information can reasonably be gathered and this will inform whether the item will move on to the Committee of the Whole or return to Finance and Safety. The potential for a work session as noted above will also be discussed at that time. NO RECOMMENDATION PENDING ADDITIONAL INFORMATION DESCRIBED IN ITEM 2 ABOVE. E. 2015 1st Quarter Sales Tax and Miscellaneous Revenue Report Staff presented the 2015 1st Quarter Sales Tax and Miscellaneous Revenue Report. Information detailed in the staff report includes retail sales tax, gambling tax, and admissions tax revenues, with sales tax broken out by industry classifications. Total sales tax collections for the 1st quarter were $546,000, or 16 %, above those for the same period last year. There was an increase in construction sales tax of $123,000 over the same quarter last year, or up by 84 %, and an increase in sales tax from other industries of $423,000, or 13 %. The City collected $284,506 in sales tax mitigation as of March 31. Councilmember Quinn noted that a future presentation from Economic Development staff on industry trends would be useful for the Council. INFORMATION ONLY. 77 78 TO: City of Tukwila Jim Haggerton, Mayor INFORMATIONAL MEMORANDUM Mayor Haggerton City Council FROM: Peggy McCarthy, Finance Director DATE: July 1, 2015 SUBJECT: Revision to Financial Reserve Policy ISSUE Consider for approval the proposed revisions to the Financial Reserve Policy, as currently set forth in Resolution 1774. BACKGROUND A Reserve policy was established in 2009 as a safeguard to protect the community, its residents, and businesses from unforeseen or emergent situations that could negatively impact the City's finances including revenue shortfalls and unanticipated expenditures. The policy was revised in October 2012 to augment, simplify and clarify the policy criteria and guidance. The revision now proposed would increase the General Fund reserve level, add a Special Project Reserve and conform the healthcare fund reserve policy to current practices. DISCUSSION Revisions to the current policy is now being considered for the following reasons: 1. To ensure sufficient General Fund balance is maintained. The current policy requires a 10% General Fund minimum fund balance, the Government Finance Officer Association (GFOA) Best Practices recommends a 16.67% minimum balance and the proposed policy revision increases the minimum balance to 18 %. Together, the proposed revised 18% General Fund reserve requirement and the existing 10% Contingency Fund reserve requirement would commit 28 %, or approximately $15.4 million, to reserves. This level is realistic and attainable since the 2014 unassigned General Fund balance was $10 million and the 2014 Contingency Fund balance totaled $5.7 million -- for a combined total of $15.7 million exceeding the estimated $15.4 million required should the policy revision be adopted. The increased level of reserves is considered prudent based on the City's experience with previous revenue shortfalls. When the City experienced a revenue shortfall as a result of the combined effect of the Great Recession and the adoption by the state of Washington of the destination based sales tax, sales tax revenue declined by more than $4 million from a high of $20 million in 2007 to a low of less than $16 million in 2009, 2010 and 2012. Additionally, the governmental fund balances, as presented in Attachment A of the Financial Planning Model, have declined by over $8 million from a high in 2007 of $29 million to the current $21 million level. 2. To establish a Special Project Reserve based on 10% of one -time revenues. To ensure a portion of one -time revenue windfalls is saved for special one -time expenditures, a Special Project reserve is proposed. The reserve would be funded by allocating 10% of one -time revenues to the reserve each year. Through the first quarter of 2015, 10% of one -time revenues 79 INFORMATIONAL MEMO Page 2 approximate $62 thousand comprised of $12 thousand from construction sales tax and $50 thousand from the Tukwila Village land sale. 3. To conform the self - insured healthcare reserve minimums to those used by the actuary in the annual IBNR (incurred but not reported) liability and IBNR reserve calculations. The Policy now states that the IBNR reserve should equal 2.5 times the IBNR. In practice, and as conservatively recommended by the actuary and healthcare broker, the IBNR reserve should equal 1.5% of the IBNR. This reserve is in addition to the IBNR liability. RECOMMENDATION The Council is being asked to approve the resolution revising the Financial Reserve Policy at the July 13, 2015 Committee of the Whole meeting and the subsequent July 20, 2015 Regular Meeting. ATTACHMENTS Revised Financial Reserve Policy — clean copy Revised Financial Reserve Policy — red lined Resolution 1774 Financial Reserve Policy GFOA Best Practice W: \FIN Projects \Council Agenda Items \2015 \Reserve Policy \InfoMemo Reserve Policy 6- 30- 15.doc 80 TO: City of Tukwila Jim Haggerton, Mayor INFORMATIONAL MEMORANDUM Mayor Haggerton Finance & Safety Committee FROM: Peggy McCarthy, Finance Director BY: Vicky Carlsen, Deputy Finance Director DATE: July 15, 2015 SUBJECT: Option to Enhance Revenues ISSUE Review various options available to the City to increase revenues. BACKGROUND At the May 19, 2015, Finance and Safety Committee meeting, a request was made to bring additional revenue options to Committee. The request was to review levy lid lifts, voted debt, and business and occupation (B &O) taxes. This has been expanded to include other potential revenue sources as well. DISCUSSION Levy Lid Lifts A levy lid lift allows the City to levy up to our maximum levy rate, which is $3.32 (depending on what the King County Library levies). For 2015, the City's levy rate is $2.84. For 2015, a levy lid lift could have increased property tax revenue by $2.4 million. Levy lid lifts require a simple majority to pass. There are 2 options for lid lifts; single -year or multi -year: • Single -year (or basic lift) can be for any amount of time and can be for any purpose. The purpose can be stated in the ballot title but it's not required. Additionally, proceeds can be used for debt service. For debt service, the maximum time period is nine years. To make the lift permanent requires language in the ballot title expressly stating that it is permanent. If it is not permanent, at the end of the time period, the base for future levies will revert to what the dollar amount of the levy would have been if no lift had ever been done. • Multi -year lifts can be done for any purpose but the purpose must be stated in the title of the ballot measure. New funds raised may not supplant existing funds used for the purpose of the lid lift. Existing funds mean actual operating expenditures for the year in which the ballot measure is approved by voters. The lid may be bumped up each year for up to 6 years. At the end of the specified period, the levy in the final period may be designated as the base amount for the calculation for all future levy increases. Voted Debt The City can issue general obligation (voted) debt for capital purposes. Voters must approve the bonds with a super majority (60 %) and the total number of voters must be no less than 40% of the voters who voted in the last preceding general state election. 81 INFORMATIONAL MEMO Page 2 If approved, the property tax levy would be in excess of the City's regular levy and would be outside the 101% limit and can exceed the City's regular levy cap of $3.32. The levy would be used to repay principal and interest of bonds and are levied for the duration of the bond. The City's voted debt capacity is 2.5% of total assessed valuation less outstanding debt. For 2015, the City's voted debt limit is just over $103 million. Business and Occupation (B &O) Tax B &O taxes are levied at a percentage rate on the gross receipts of a business, less some deductions. It is measured on the value of products, gross proceeds of sale, or gross income of the business. Businesses are put in classes such as manufacturing, retail, services, and wholesale. Within each class, the rate must be the same. However, it can differ among classes. The maximum rate that can be imposed by a city without voter approval is 0.2% (0.002), however a city may levy a rate higher than 0.2% if approved by a majority of voters. All ordinances that impose this tax for the first time, or raise rates, must also provide for a referendum procedure. A model ordinance, drafted by Association of Washington Cities, must be adopted by all cities imposing a B &O tax. If the ordinance deviates from the non - mandatory provisions of the model ordinance, a description of the differences must be available to the public in written and electronic form. A uniform, minimum small business tax threshold of at least $20,000 in gross income annually must be established. However, a city may establish a higher threshold before the tax is owed. It is estimated that the City could bring in approximately $4 million annually. Transportation Benefit District (TBD) TBDs are quasi - municipal corporations with independent taxing authority, including the authority to impose property taxes and impact fees for transportation purposes. The purpose of a TBD is to finance construction of, and operate, improvements to roadways, high capacity transportation systems, public transit systems, and other transportation management programs. Creation of a TBD requires a public hearing and a finding of public interest for formation. The ordinance establishing the TBD must specify the functions and transportation improvements to be exercised or funded and establish the boundaries of the district. The most viable funding options include a $20 car tab, which would generate approximately $500 thousand or a sales tax increase of 0.2 %, which would generate roughly $3.6 million annually. Special Purpose Districts Forming a new or annexing to an existing special purpose district allows the City to eliminate that service from its budget. Two relevant examples include the creation of the Metropolitan Park District, which removed the cost of the pool from the budget, and the annexation of fire service into the Kent Regional Fire Authority, which would remove approximately $11 - $13 million in operating and capital expenses annually. Additionally, a portion of property tax revenue currently received by the City would transfer to the RFA. If the City annexes to the Kent Regional Fire Authority, the reduction in expenditures would be greater than the loss of property tax revenue. This would increase the City's revenue capacity between $3 and $6 million. City Council will need to make a policy decision regarding the use of the additional capacity. 82 INFORMATIONAL MEMO Page 3 To annex to the Kent Regional Fire Authority, voters would need to approve the measure with a simple majority. Admission Tax Admission tax is limited to not more than 5% paid by the person who pays an admission charge. The only exemptions stated in ROW 35.21.280 are admissions for activities of elementary or secondary schools or any public facility of a public facility district. The Tukwila Municipal Code levies the maximum 5 %, however, the City currently exempts non- profit endeavors. The City has identified one business that has non - profit status. If the City no longer exempts this business, the City could receive an additional $300 thousand in admission tax revenue. The estimate provided is based on annual attendance posted on its website and taking into account that memberships account for a certain percentage of the attendance reported. Further analysis would be required to calculate a better estimate. Parking Tax The parking tax is a local option transportation tax and as such, the taxes collected must be used for transportation purposes. The Tukwila Municipal Code states that the taxes must be used for transportation purposes within the Tukwila Comprehensive Transportation Plan. The City currently levies a 5% fee on gross revenues, generating approximately $150 thousand a year on five businesses that charge for parking. The parking tax was imposed in 1998 and has never been adjusted. There is no limit on the tax rate and many ways of assessing the tax are allowed. If the City increased the tax to 10 %, revenues could be doubled to $300 thousand. If the tax were changed to a flat fee rather than a percent, revenue collection could be even higher. Revenue Generating Regulatory License (RGRL) There is flexibility in how the RGRL fee is designed. The fee can be applied based on FTE, as the City currently does, or it can be based on number of employees or the square footage of the business. The fee can also vary based on the type of business. The City currently charges a business license fee of $12 and an RGRL fee of $55 for a combined fee of $67 per FTE, which generates over $2 million a year. The RGRL fee was first implemented in 2011 and last time the fee itself was amended was in 2011. Every $1 increase in fee would generate an additional $30 thousand in new revenue. Impact Fees Cities that plan under the Growth Management Act can assess impact fees for fire, parks, open spaces, recreation facilities, and transportation needs. The fees are to be used to pay for system improvements that are reasonably related to the new development and that will reasonably benefit the new development. Current park and fire impact fee schedule is as follows: (GFA = Gross Floor Area) 83 Park Impact Fee Fire Impact Fee Land Use Per Residential Unit Per 1,000 Sq. Ft GFA Per Residential Unit Per 1,000 Sq. Ft GFA Single Family $922 $1,426 Multi - Family $1,200 $1,398 Office $1,624 $837 Retail $580 $419 Industrial $127 $262 (GFA = Gross Floor Area) 83 INFORMATIONAL MEMO Page 4 Traffic impact fees are calculated based on a number or variable including zone, type of structure, and land use. A chart showing all traffic impact fees has been included as an attachment. Any increase in rates would increase revenue. However, the increase in revenue is dependent on development. Local Improvement District (LID) LIDs are financing tools that are a means of assisting benefiting properties in financing capital improvements through the formation of a special assessment district. They allow improvements to be financed and paid for over a period of time through assessments against the benefiting properties. LIDs could be used to finance roadway improvements, adding sidewalks, or other infrastructure capital needs. Costs can be shared by both the property owner and the City or borne entirely by the property owner. The revenue that could be generated from an LID would depend on the project. There are two types of LIDs; Councilmanic and petition. Councilmanic is self- imposed by the City while the petition method is when property owners request the improvement. Utility Tax A 6% utility tax, which is the maximum allowed by law without a vote, is currently imposed on businesses within the City selling electric energy, gas, telephone, cable television, and solid waste. There are two ways that the City could increase utility tax revenue. The City could ask voters to approve a utility tax that exceeds 6 %. Every 1 % of utility tax could generate approximately $600 thousand in additional utility tax revenue. The second option would be to extend the tax to water and sewer districts serving Tukwila property owners. Currently, these customers do not pay any utility tax, though utility customers served by the City's utilities do pay this tax. Extending the tax to these entities could generate over $250 thousand annually in additional utility tax revenue. Alternatively, the City could negotiate a franchise fee with the water and sewer districts serving Tukwila property owners. A franchise fee provides flexibility in how the fee is calculated, whereas, a utility tax is calculated on usage. Reduce Operational Costs Another option to change the financial picture of the City would be to reduce operational costs by enacting a 10% reduction in costs in all departments. A 10% cut in expenditures across the board would result in approximately $4.9 million savings. However, a 10% reduction in costs would decrease services, programs, and staff in all departments. Administration and City Council would need to determine what programs, services, and staff would be reduced and /or eliminated. Future Anticipated Expenditures The City has identified $98 — 139 million in facility needs. Annual debt service per year is estimated to be $2 million for a criminal justice facility, $1 million for a public works campus (general fund share), and $2 million for City Hall. If the City does not annex to the Kent RFA, there would be additional facility needs for the fire stations. Estimated annual debt service is estimated to be between $800 thousand and $1.3 million. Additionally, a list of unfunded CIP projects is also included in the attached Revenue matrix. 84 INFORMATIONAL MEMO Page 5 RECOMMENDATION For Information only. ATTACHMENTS Revenue Matrix Traffic Impact Fee Schedule 2007 85 86 Finance & Safety July 21, 2015 Attachment Tukwila's current rate is $2.84 per 1,000; the cap is $3.32. Bonds largely used for capital projects. O O co U CO C ms CU E L CL in Q C O a) v) a x v -0 -C .- O 4. > 73 +N+ • _N 'O. i a) m N u > C CO O co U CIO v co L L +, O v) -a O C) O a) m >. C O o 'u a 0_ i� 0_ L C O +-, co i O N -0 .2% available to cities. CU 0 CD N N N oL.o -0 C CO a) . — v) +,, a) O a1 x ID -0 a) .2% sales tax available to cities. N >L - O L -. v a) MO •14 I C I C L> a 3( 3 U `—° C +.+ O 4., O VI I ? +, > >.. > 4., OD N CO C Q a) +-+ v- Q O. 0. O. O C v N 0 v O O O o m u' m 0. 0_ a 0. H L -0 V) 0 v a) -p O O to C. Q N CO CO L L SOL a.1 CU +� O 4.' 0 O 0 0 0 $4,000,000 annually Councilmanic $3,600,000 annually co a) O 0. 0. (0 0 O v} 0 Q U C co E U C O U a) o c O co u1 to o _0 a) ro +' o L > 0 -0 N O wiz Car tab — car owners Councilmanic oA L L ++ C F O ,C C p N 4= oa N -C I- >. 3 U O a) U a) L a) oA ., 0 cm.) C p 0 O. -6 �O O O a) N Na-' •X 6-) O > m C Q- E +., O 4; U L f6 -O 5... Q co cu LO H co :F, O +, O CO 1.. O N a) }, C El_) u N • a. -O U _ `a) .0 >. � 4-, uta .4." O zm n C N > _ C p a) N L C U +., U CO v ~ s Y 2 O y LI- N +., -.Y L m X v v - .CCD CO a) i o l0 O o � ac '', a) a) a) _C +m CD > C m Y L L +-' N X U CO >- C O CU R a) N 4 L O � H .c 4-, N C O co O a) Lb �N O ++ oA O O 0 __I -0 ? o N 4, C C c co `C v v) 0- u O -a co C = o N •• a CC ii v Q L o v m Q v x o > • • • • ° U C ai ^ U C �4--, +� a) u O a) O a) a U u U UC I— 2 cC suppression needs a CD Councilmanic 0 0 O O 3 O 0 0 0 Y ,-.6- L0". C v} v* v). O C -0 U C N -1 c+4 ..' + L C C_ X tp �p U. 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O a) O Councilmanic and Depends on project C 0 +-' a) Q Voter Approved OA C co N a) N a) C U' N a) O -c, CD 0 a) N O N co C 0 U a, L 0 0 Reduction in Councilmanic C co N fo OA O O. 00 -C a) C E O) a .0 0 U C 0 U C CO C 0 0 L C 73 N a) U i a) N C ca a) _ E o L El CU X a 0. m 0 E u a, U N "r5 4 O U U' -C N D m CeC U services would be cut. 87 Finance & Safety July 21, 2015 Attachment 88 C a� U, a L C O C :+_ O v E E a, C � h C co L i., O i a 0 } E t = f0 vi U tF Y 0 CI) L m U 0 t.D N f0 f0 f0 C d a u C C C O O a 0 a) a) E a, U U E U .� U L a N aJ aJ a) O aJ -O 0 4-, '6 L L N L (a f0 0 f6 a) a v >- a a±- a f6 0 0 0 0 0 0 0 00 0 C oo O O > 0 N a-t 0 N tn- N f0 a1 3 U, m CU U C 0 U (11 U, E U, a) 47I 0 f0 4— E3 4- N C LL a) O C X a1 C C CO 0 C N CD O U aJ -C 4— renovation of one station. 0 :'-• 0 4- o 4 O a, LA v C in v; a) 0 v *-, v CU CU C L .f. 0. 7 0.0 O 4. 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O 0 O 0 i 0 0 O 0 0 0 0 0 0 0 c6 0 0 0 0 0 0 0 O 0 0 C O 0 0 O 0 O 0 C O O O O - 3 O O O O 0 O Q. 3 O O O O O 0 0 O O 0 0 0 C Y O - 4^-1 fV a) C - O N O O 4-1 fN O m C CU v— _ • C f6 f0 C a) C +r C f0 f0 N I 0 60 000 C 0 0 C 00 13 tn- tn- 0 Oi 00 m $5,000,000 annually Fire Department Vf U a 0 L v »- - X aJ L d N a+ ,� L fn i (5 i --o '° 3 w C a O. U a) C a) a ' D 0 W v> Q C H +� u 3 'p to C C MO . S LL L f0 cu .a) N = C aJ C y., 'C lC 0 0 Z O 00 0 O m oc ec (n Q m .l (n m m U- to O. O. il , I Figure 9 -1 Traffic Impact Fee Schedule 2007 Land Uses Unit of Measure Zone 1 Zone 2 Zone 3 Zone 4 Cost per Trip All Other Uses $1,736.80 $1,357.77 $1,061.201 $819.38 Residential Single Family dwelling $1,659.35 $1,297.22 $1,013.88 $782.84 Multi Family dwelling $712.09 $556.69 $435.09 $335.95 Retirement Community dwelling $722.89 $565.13 $441.69 $341.04 Nursing Home /Convalescent Center bed $289.15 $226.05 $176.68 $136.42 Assisted Living dwelling $289.15 $226.05 $176.68 $136.42 Commercial - Services Drive -in Bank sq ft/GFA $23.14 $18.09 $14.14 $10.92 Walk -in Bank sq ft/GFA $18.67 $14.60 $11.41 $8.81 Day Care Center sq ft/GFA $9.28 $7.25 $5.67 $4.38 Library sq ft/GFA $4.24 $3.32 $2.59 $2.00 Post Office sq ft/GFA $6.46 $5.05 $3.95 $3.05 Hotel /Motel room $1,107.80 $866.04 $676.87 $522.63 Service Station VFP $3,203.13 $2,504.10 $1,957.14 $1,511.17 Service Station /Minimart VFP $3,203.13 $2,504.10 $1,957.14 $1,511.17 Service Station /Minimart/Car Wash VFP $3,203.13 $2,504.10 $1,957.14 $1,511.17 Carwash (Self - Serve) stall $2,826.58 $2,209.72 $1,727.06 $1,333.51 Movie Theater screen $64.24 $50.22 $39.25 $30.31 Health Club sq ft/GFA $4.42 $3.46 $2.70 $2.09 Racquet Club sq ft/GFA $1.99 $1.56 $1.22 $0.94 Marina berth $247.38 $193.39 $151.15 $116.71 Commercial - Institutional Elementary School /Jr. High School student $195.27 $152.66 $119.31 $92.13 High School student $131.43 $102.75 $80.31 $62.01 University /College student $267.56 $209.17 $163.48 $126.23 Church sq ft/GFA $1.15 $0.90 $0.70 $0.54 Hospital sq ft/GFA $2.22 $1.73 $1.35 $1.05 Commercial - Restaurant Restaurant sq ft/GFA $9.56 $7.48 $5.84 $4.51 Fast Food Restaurant w/o drive - through sq ft/GFA $12.27 $9.60 $7.50 $5.79 Fast Food Restaurant w /drive - through sq ft/GFA $16.26 $12.71 $9.94 $7.67 Industrial Light Industry/High Technology sq ft/GFA $2.06 $1.61 $1.26 $0.97 Industrial Park sq ft/GFA $2.06 $1.61 $1.26 $0.97 Warehousing /Storage sq ft/GFA $1.15 $0.90 $0.70 $0.54 Mini Warehouse sq ft/GFA $0.50 $0.39 $0.31 $0.24 GLA= Gross Leasable Area GFA= Gross Floor Area VFP= Vehicle Fueling Positions (Maximum number of vehicles that can be fueled simultaneously) Page 1 of 2 89 Figure 9 -1 Traffic Impact Fee Schedule 2007 Land Uses Unit of Measure Zone 1 Zone 2 Zone 3 Zone 4 Cost per Trip All Other Uses $1,736.80 $1,357.77 $1,061.201 $819.38 Commercial - Retail Shopping Center: up to 9,999 sq ft sq ft/GLA $4.18 $3.27 $2.55 $1.97 10,000 sq ft- 49,999 sq ft sq ft/GLA $3.51 $2.75 $2.15 $1.66 50,000 sq ft- 99,999 sq ft sq ft/GLA $3.03 $2.37 $1.85 $1.43 100,000 sq ft- 199,999 sq ft sq ft/GLA $2.61 $2.04 $1.59 $1.23 200,000 sq ft- 299,999 sq ft sq ft/GLA $2.38 $1.86 $1.45 $1.12 300,000 sq ft- 399,999 sq ft sq ft/GLA $2.82 $2.21 $1.72 $1.33 over 400,000 sq ft sq ft/GLA $3.17 $2.48 $1.94 $1.49 Miscellaneous Retail Sales sq ft/GFA $3.17 $2.48 $1.94 $1.49 Supermarket sq ft/GFA $7.73 $6.04 $4.72 $3.64 Convenience Market sq ft/GFA $14.39 $11.25 $8.79 $6.79 Nursery/Garden Center sq ft/GFA $2.62 $2.05 $1.60 $1.24 Furniture Store sq ft/GFA $0.22 $0.17 $0.13 $0.10 Car Sales - New /Used sq ft/GFA $4.56 $3.57 $2.79 $2.15 Auto Care Center sq ft/GLA $2.62 $2.05 $1.60 $1.24 Quick Lubrication Vehicle Shop Service Bay $2,899.10 $2,266.42 $1,771.37 $1,367.73 Auto Parts Sales sq ft/GFA $3.34 $2.61 $2.04 $1.58 Pharmacy (with drive - through) sq ft/GFA $3.44 $2.69 $2.10 $1.62 Pharmacy (without drive - through) sq ft/GFA $3.36 $2.63 $2.05 $1.58 Free - Standing Discount Store sq ft/GFA $3.13 $2.44 $1.91 $1.47 Hardware /Paint Store sq ft/GFA $2.66 $2.08 $1.62 $1.25 Discount Club sq ft/GFA $3.13 $2.44 $1.91 $1.47 Video Rental sq ft/GFA $4.88 $3.82 $2.98 $2.30 Home Improvement Superstore sq ft/GFA $1.33 $1.04 $0.81 $0.63 Tire Store Service Bay $1,938.32 $1,515.31 $1,184.33 $914.45 Electronics Superstore sq ft/GFA $3.11 $2.43 $1.90 $1.46 Commercial - Office Administrative Office: up to 9,999 sq ft sq ft/GFA $8.10 $6.33 $4.95 $3.82 10,000 sq ft- 49,999 sq ft sq ft/GFA $8.10 $6.33 $4.95 $3.82 50,000 sq ft- 99,999 sq ft sq ft/GFA $4.70 $3.67 $2.87 $2.22 100,000 sq ft- 199,999 sq ft sq ft/GFA $3.56 $2.78 $2.17 $1.68 200,000 sq ft- 299,999 sq ft sq ft/GFA $3.10 $2.43 $1.90 $1.46 over 300,000 sq ft sq ft/GFA $2.91 $2.27 $1.78 $1.37 Medical Office /Clinic sq ft/GFA $6.29 $4.91 $3.84 $2.97 GLA= Gross Leasable Area GFA= Gross Floor Area VFP= Vehicle Fueling Positions (Maximum number of vehicles that can be fueled simultaneously) Page 2 of 2 90 City of Tukwila Jim Haggerton, Mayor INFORMATIONAL MEMORANDUM TO: Jim Haggerton, Mayor Finance and Safety Committee From: Mike Villa, Police Chief Bob Giberson, Public Works Director Date: July 17, 2015 Subject: Police Department Evidence Storage ISSUE Approve a lease for Police Department Evidence Storage at 571 Strander Boulevard. BACKGROUND Current Police evidence storage facilities do not meet state standards, are a health and safety risk to staff, and are severely insufficient in capacity to meet storage needs. Several sites throughout the City are being used for Police evidence storage, including: the rear garage at Old Fire Station 53, the outdoor fenced yard west of the George Long Shop, and a gated bay at the Minkler Shop. In summary the primary issues with these existing storage areas are: lack of security and separation; lack of environmental protection; and no facility exists to store biohazard or chemicals. To provide suitable storage space in a secure location, the City needs at least 8,000 square feet of warehouse space. A number of spaces are available, but include a large proportion of office space which almost doubles the lease rate. Recently a 10,000 square foot space opened up on Strander Boulevard in the Andover Distribution Center (see attached brochure). The negotiated lease rate for 2015 is $4,700.00 with the first 3 months at no charge. The lease rate does not include the "triple net" share of the buildings power, security, water and sewer. The triple net charge is expected to run about $0.164 per month or approximately $1,640. For 2017 -18, the budget will need to increase to $80,000 plus annual rent increases. DISCUSSION This proposed warehouse space has a drive -in accessible ramp to the concrete warehouse floor, which is ideal for tow truck or flatbed delivery of evidence vehicles. The 200 foot by 50 foot space is adequate for all vehicle storage needs. Minor improvements need to be accomplished in order to secure impounded vehicles, including chain link fence /gates, alarm system, additional lighting and related work. This lease will allow the orderly vacation of the above mentioned storage areas and allow for the surplussing of Old Fire Station 53 after other storage uses are accommodated throughout the City. FISCAL IMPACT Police has budgeted $50,000 for a leased storage facility. At the negotiated lease rate, the budget will have to be increased 3% per year for the duration of the 5 -year lease. RECOMMENDATION The Council is being asked to approve the lease agreement with IIT Andover DC, LLC, for the 571 Strander Boulevard, Suite H2 warehouse space and authorize the Mayor to sign the lease and consider this item on the Consent Agenda at the August 3, 2015 Council Meeting. Attachment: Proposed 571 Strander Blvd, Suite 1-12 Lease Agreement 91 92 IN DUST .CA INCOME TRUST' LEASE AGREEMENT (MULTI - TENANT) by and between IIT Andover DC, LLC, a Delaware limited liability company "Landlord" and The City of Tukwila "Tenant" Premises: 571 Strander Blvd, Tukwila, WA 98188 Project: Andover Distribution Center Dated: July , 2015 93 TABLE OF CONTENTS Page ARTICLE I BASIC PROVISIONS AND CERTAIN DEFINITIONS 1 ARTICLE II GRANTING CLAUSE 3 ARTICLE III DELIVERY OF PREMISES; RELOCATION OF PREMISES 3 ARTICLE IV BASE RENT 4 ARTICLE V PERMITTED USE; TENANT'S FINANCIAL STATEMENTS 4 ARTICLE VI TENANT'S RESPONSIBILITY FOR TAXES, OTHER REAL ESTATE CHARGES AND INSURANCE EXPENSES 5 ARTICLE VII COMMON AREA 6 ARTICLE VIII RULES AND REGULATIONS 8 ARTICLE IX PROVISIONS APPLICABLE TO ALL RENTS 9 ARTICLE X USE AND CARE OF PREMISES 10 ARTICLE XI MAINTENANCE AND REPAIR OF PREMISES 11 ARTICLE XII ALTERATIONS 13 ARTICLE XIII LANDLORD'S RIGHT OF ACCESS 14 ARTICLE XIV SIGNS; EXTERIOR OF PREMISES 14 ARTICLE XV UTILITIES 15 ARTICLE XVI INSURANCE COVERAGES 15 ARTICLE XVII WAIVER OF LIABILITY; MUTUAL WAIVER OF SUBROGATION 16 ARTICLE XVIII DAMAGES BY CASUALTY 17 ARTICLE XIX EMINENT DOMAIN 18 ARTICLE XX ASSIGNMENT AND SUBLETTING 18 ARTICLE XXI SUBORDINATION; ATTORNMENT; ESTOPPELS 19 ARTICLE XXII ENVIRONMENTAL MATTERS/HAZARDOUS MATERIALS 20 ARTICLE XXIII DEFAULT BY TENANT AND REMEDIES 23 ARTICLE XXIV LANDLORD'S CONTRACTUAL SECURITY INTEREST 27 ARTICLE XXV HOLDING OVER 27 ARTICLE XXVI NOTICES 27 ARTICLE XXVII SECURITY DEPOSIT 28 ARTICLE XXVIII COMMISSIONS 28 ARTICLE XXIX LAWS AND REGULATIONS 29 ARTICLE XXX MISCELLANEOUS 29 List of Exhibits Exhibit A (The Premises); Exhibit B (The Project); Exhibit C (Move -Out Standards); Exhibit D (Rules and Regulations); Exhibit E (Form of Hazardous Materials Disclosure Certificate); Exhibit F (Commencement Date Certificate); Exhibit G(Option to Extend Addendum); Exhibit H (Improvement Addendum) DCAPDX_1789765_v1 94 LEASE AGREEMENT (Multi- Tenant) ARTICLE I BASIC PROVISIONS AND CERTAIN DEFINITIONS 1.1 Definitions. The following list sets out certain deemed terms and certain fmancial and other information pertaining to this Lease Agreement (this "Lease "): (a) "Landlord ": IIT Andover DC, LLC, a Delaware limited liability company (b) Landlord's notice address: c/o Industrial Income Trust Inc. Attn: Scott Recknor, SVP — Asset Management 518 17th Street, Suite 1700 Denver, Colorado 80202 With a copy to: do Industrial Income Trust Inc. Attn: Jonathan Linker, Senior Real Estate Counsel 518 17th Street, Suite 1700 Denver, Colorado 80202 (c) "Tenant ": The City of Tukwila (d) Tenant's notice address: Attn: (e) "Premises ": that portion of the Building containing approximately 10,000 leasable square feet in area, as described or shown on Exhibit A attached to this Lease and commonly known as 571 Strander Blvd., Building A, Tukwila, WA 98188. Any statement of square footage set forth in this Lease or that may have been used in calculating Base Rent, Tenant's Proportionate Share and/or Operating Costs is an approximation which Landlord and Tenant agree is reasonable, and the Base Rent and Tenant's Proportionate Share based thereon are not subject to revision whether or not the actual square footage is more or less. (f) "Building ": 571 Strander Blvd., Building A, Tukwila, WA 98188 consisting of approximately 81,225 square feet. (g) "Project ": Landlord's property located in the City of Tukwila, State of Washington, consisting of approximately 162,885 square feet of rentable area, which property is described or shown on Exhibit B attached to this Lease. With regard to Exhibit B, the parties agree that Exhibit B is attached solely for the purpose of locating the Building and the Premises within the Project and that no representation, warranty, or covenant is to be implied by any other information shown on Exhibit B (i.e., any indication as to existing or future buildings, access, tenants or prospective tenants, etc., is subject to change at any time). (h) "Tenant's Proportionate Share ": Tenant's Proportionate Share of the Project shall be a fraction, the numerator of which is the total floor area (all of which is deemed "leasable ") in the Premises and the denominator of which is the total leasable floor area of all buildings in the Project at the time when the respective charge was incurred. Tenant's Proportionate Share of the Building shall be a fraction with the same said numerator, but the denominator of which shall be the total leasable floor area of the Building at the time when the respective charge was incurred. As of the date of this Lease: (a) the total floor area of the Premises shall be as provided for in Section 1.1(e); (b) the total leasable floor area of all buildings in the Project shall be as provided for in 1 DCAPDX1 789765_v1 95 Section 1.1(f); (c) the Tenant's Proportionate Share of the Project shall be 6.14% subject to adjustment as provided below, and (d) the Tenant's Proportionate Share of the Building shall be 12.31% subject to adjustment as provided below. At such time, if ever, any space is added to or subtracted from the Premises and/or the Building or any of the buildings in the Project, or if buildings are added to or removed from the Project, the Tenant's Proportionate Share shall be adjusted accordingly. Landlord's system for measurement of total leasable floor area shall be as determined by Landlord. (i) "Permitted Use ": as defined in Section 5.1 of this Lease. (j) "Lease Term ": Commencing on September 1, 2015 (the "Commencement Date ") and continuing until 5:00 p.m. on December 31, 2020 (the "Expiration Date "). At the request of Landlord, Tenant shall execute and deliver to Landlord on or after the Commencement Date a completed certificate in substantially the form attached hereto as Exhibit F (the "Commencement Date Certificate "), provided the Premises are in the condition required under the Lease. If the Commencement Date does not occur on the first day of a calendar month, then for purposes of Rent payments, "month 1" shall commence on the Commencement Date and shall end at the conclusion of the last calendar day of the following calendar month (for example, if the Commencement Date is February 10th, then "month 1" in the Rent chart would begin on February 10th and would end upon the conclusion of business on March 31st). And in such event the Rent for "month 1" shall be pro -rated based on the actual number of days in such "month 1"; and the balance of any Base Rent abatement (or free rent) for "month 1", if any, shall be credited to the first calendar month in which Tenant is actually required to pay Base Rent (for example, if Tenant is entitled to five (5) months of Base Rent abatement and the Commencement Date occurs on February 10th, then a Base Rent abatement equal to nine (9) days shall be credited for the month of July). (k) "Option Period ": Landlord hereby grants to Tenant one (1) option to extend the term of this Lease for sixty (60) months, commencing when the prior term expires, as more particularly set forth in Exhibit G attached hereto. (1) "Base Rent ": Base Rent shall be the sum of the amounts set forth below and shall be paid as follows during the respective months of the Lease Term: Period Base Rent/Year Base Rent/Month 1 through 3 $0.00 $0.00 4 through 12 $55,200.00 $4,600.00 13 through 24 $56,856.00 $4,738.00 25 through 36 $58,560.00 $4,880.00 37 through 48 $60,312.00 $5,026.00 49 through 60 $62,124.00 $5,177.00 61 through 63 $63,984.00 $5,332.00 (m) Estimated Monthly Payment. The following table is provided as an estimate of Tenant's initial monthly payment broken down into its components and this table does not reflect any taxes, if applicable, that apply to such payments. Tenant acknowledges that the estimates contained in this table do not supersede the specific provisions contained elsewhere in this Lease and may be adjusted annually or more often by Landlord as provided for in Article IX below. Base Rent $4,600.00 Estimate for Initial Operating Costs (Section 7.4) Estimate for Initial Real Estate Charges (Article VI) Estimate for Initial Insurance Expenses (Article VI) ESTIMATED TOTAL INITIAL MONTHLY PAYMENT DCAPDX _1 789765_v1 96 2 $700.00 $900.00 $40.00 $6,240.00 (n) "Prepaid Rent ": $6,240.00 being an estimate of the Base Rent plus Tenant's obligations for Operating Costs, Real Estate Charges and Insurance Expenses for the first full month of the Lease Term plus a prorated amount for any partial month between the Commencement Date and the first day of such first full month, if the Commencement Date is not the first day of a calendar month, such Prepaid Rent being due and payable upon execution of this Lease. (o) "Security Deposit ": $6,972.00 such Security Deposit being due and payable upon execution of this Lease and being subject to the applicable provisions of Section 23.8 and Article XXVII of this Lease. (P) "Rent ": as defined in Section 9.1 of this Lease. 1.2 Address for Rent Payments: All amounts payable by Tenant to Landlord shall, until further notice from Landlord, be paid to IIOP dba IIT Andover DC LLC pursuant to the following instructions: If by Wire Transfer: Account Name: IIOP dba IIT Andover DC LLC Financial Institution: Wells Fargo, N.A.; Denver, CO ABA Number: 121000248 Account Number: 4125776146 Reference: Property Number - 509201 — IIT Andover DC LLC If by check: Account Name: IIOP dba IIT Andover DC LLC Address: IIOP dba IIT Andover DC LLC ATTN: Katie Pierson 518 17th St., Suite 1700 Denver, CO 80202 Reference: Property Number - 509201 — IIT Andover DC LLC ARTICLE II GRANTING CLAUSE 2.1 Grant and Acceptance. Landlord leases the Premises to Tenant and Tenant accepts the Premises from Landlord for the Lease Term, upon and subject to the terms and conditions set forth in this Lease. ARTICLE IlI DELIVERY OF PREMISES; RELOCATION OF PREMISES 3.1 Acceptance of Premises. Except to the extent modified by Landlord's express assumption of construction obligations, if any, in an exhibit attached to this Lease, the Premises are leased "AS IS," with Tenant accepting all defects, if any; and Landlord makes no warranty of any kind, express or implied, with respect to the Premises (without limitation, Landlord makes no warranty as to the habitability, fitness or suitability of the Premises for a particular purpose, nor as to compliance with any laws, rules or regulations, nor as to the absence of any toxic or otherwise hazardous substances). This Section 3.1 is subject to any contrary requirements under applicable law; however, in this regard, Tenant acknowledges that it has been given the opportunity to inspect the Premises and to have qualified experts inspect the Premises prior to the execution of this Lease. 3.2 Delay in Delivery. If this Lease is executed before the Premises become vacant, or if any present tenant or occupant of the Premises holds over, and Landlord cannot acquire possession of the Premises prior to the Commencement Date of this Lease, as above defined, Landlord shall not be deemed to be in default under this Lease; and in such event, Tenant agrees to accept possession of the Premises at such time as Landlord is able to turn over possession of the same to Tenant. If Landlord utilizes the provisions of this Section 3.2, the Commencement 3 DCAPDX_1789765_v1 97 Date (and Lease Term) shall be extended day- for -day for each day during which Landlord is unable to turn over possession of the Premises to Tenant. 3.3 Relocation. In the event Landlord determines it necessary to utilize the Premises for other purposes during the Lease Term, Tenant agrees to relocate to other space located within the Project, provided such other space is of equal or larger size than the Premises or, at Tenant's option, to other space which is not less than 90% of the square footage of the Premises. Landlord shall give Tenant at least thirty (30) days' written notice of any such relocation. Landlord shall pay all reasonable documented out -of- pocket expenses of any such relocation, including the expenses of moving and reconstruction of all Tenant - furnished and Landlord - furnished improvements, but not including any component for revenues which may be lost during the relocation. In the event of such relocation, neither Tenant's Base Rent nor Proportionate Share shall be increased, and this Lease shall continue in full force and effect without any change in the terms or other conditions, but with the new location substituted for the old location set forth in Section 1.1(e) of this Lease. ARTICLE N BASE RENT 4.1 Base Rent. Tenant shall pay to Landlord Base Rent in monthly installments in the amount(s) specified in Section 1.1(k) of this Lease. The first such monthly installment shall be due and payable on or before the date of execution of this Lease (as stated in Section 1.1(n) of this Lease), and subsequent installments shall be due and payable on or before the first day of each calendar month during the Lease Term. ARTICLE V PERMITTED USE; TENANT'S FINANCIAL STATEMENTS 5.1 Permitted Use of Premises. The Premises shall be used as a police department evidence storage facility. Tenant's use of the Premises is further subject to Article X of this Lease and to all other provisions hereof. Tenant acknowledges that the specification of a "permitted use" means only that Landlord has no objection to the specified use and does not include any representation or warranty by Landlord as to whether or not such specified use complies with applicable laws and/or requires special governmental permits. In this regard, Tenant acknowledges that Section 1.1(i) of this Lease is subject to Sections 3.1 and 10.5 of this Lease. 5.2 Tenant Financial Statements. Tenant shall, within ten (10) days after a request from Landlord, deliver to Landlord such financial statements as are reasonably required by Landlord to verify the net worth of Tenant, or an affiliate or parent company of Tenant as Landlord may request. Tenant represents and warrants to Landlord that all such fmancial statements provided in connection with this Lease including, without limitation, any that have been provided prior to the date of this Lease, are true, complete and correct as of the date thereof. Tenant further agrees to cooperate with any request by Landlord for Tenant's written permission or other cooperation in connection with Landlord's obtaining a credit report or similar information regarding Tenant and/or Tenant's principals, if any, from third -party sources; and in this regard, Tenant, to the maximum extent permitted by applicable law, hereby waives any obligations to Tenant which Landlord may otherwise have with regard to Landlord's seeking and/or obtaining any such third -party reports or information. Landlord anticipates that its request for the additional information prescribed in this Section 5.2 will be limited either to a potential sale or financing of the Building or of all or a portion of the Project or to Landlord's concern as to the continuing financial ability of Tenant to perform its obligations under this Lease. Tenant acknowledges and agrees that any financial statements submitted by Tenant to Landlord at any time in connection with this Lease are being relied upon by Landlord in entering into this Lease and extending any credit to Tenant and, to the extent that such financial statements, or any financial statements provided by Tenant to landlord subsequent to the execution of this Lease, are materially false or incorrect, it shall be deemed a Tenant default, and Landlord, upon or after discovery of such, may terminate this Lease or pursue any other applicable default remedies set forth in this Lease. Further, Landlord specifically reserves all rights it may have to object to a discharge or reorganization by Tenant in any bankruptcy proceeding filed by or against Tenant based upon such materially false or incorrect financial statements. DCAPDX_1789765_v1 98 4 5.3 Confidentiality; Marketing Materials. Landlord shall use good faith efforts to keep confidential all non - public financial statements supplied by Tenant; provided, however, that Landlord has the right to reveal such information to mortgagees, prospective purchasers and prospective mortgagees (and their respective agents) and to Landlord's managers, officers, personnel, affiliates, partners, directors, advisors, accountants, attorneys, members, and consultants, and as may be required by law, including, without limitation, securities regulations, or by legal process; and, provided further, that Landlord and Landlord's affiliates have the right to include, disclose, or otherwise publicize Tenant's name as one of Landlord's or Landlord's affiliates' tenants in any of Landlord's marketing materials, press releases, presentations, or other disclosures. The following materials and information are not considered "non- public financial statements" for purposes of this Lease and will not be subject to the restrictions set for in the preceding sentence: (i) information which is or becomes generally available to the public other than as a result of a wrongful disclosure by Landlord; (ii) information which reasonably can be demonstrated to be known to Landlord prior to its disclosure by Tenant hereunder; (iii) information which becomes available to Landlord on a non - confidential basis from sources other than Tenant; and (iv) information which Landlord may be compelled to disclose by court order or applicable law. ARTICLE VI TENANT'S RESPONSIBILITY FOR TAXES, OTHER REAL ESTATE CHARGES AND INSURANCE EXPENSES 6.1 Personal Property. Tenant shall be liable for all taxes levied against personal property and trade fixtures placed by Tenant in the Premises. If any such taxes are levied against Landlord or Landlord's property and if Landlord elects to pay the same or if the assessed value of Landlord's property is increased by inclusion of personal property and trade fixtures placed by Tenant in the Premises and Landlord elects to pay the taxes based on such increase, Tenant shall pay to Landlord upon demand that part of such taxes for which Tenant is liable under this Section 6.1. 6.2 Real Estate Charges and Insurance Expenses. Tenant shall also be liable for Tenant's Proportionate Share of all Real Estate Charges (as defined below) and Insurance Expenses (as defined below) related to the Project or Landlord's ownership of the Project. All payments for which Tenant is liable pursuant to this Article VI shall be considered for all purposes to be Additional Rent (as defined in Section 9.1 below) under this Lease and shall be payable as provided for under Article IX. "Real Estate Charges" shall include ad valorem taxes, general and special assessments, improvement bond or bonds, levy or tax, parking surcharges, any tax or excise on rents, any franchise or gross margins or receipt tax, any tax or charge for governmental services (such as street maintenance or fire protection), any tax, exaction or other charge imposed in connection with the ownership, operation, leasing or use of the Project, any tax or charge which replaces or is in addition to any of such above - described Real Estate Charges, any tax or charge which is implemented after the date of this Lease and is reasonably determined by Landlord to have been assessed in lieu of the whole or part of any of such above - described Real Estate Charges; provided, however, that Real Estate Charges shall not be deemed to include any capital stock, estate, inheritance or general income tax. "Insurance Expenses" shall include all premiums and other expenses incurred by Landlord for liability (including umbrella) insurance, property insurance and business interruption insurance (including, without limitation and to the extent deemed appropriate by Landlord, environmental coverage, pollution coverage, mold coverage, terrorism coverage and whatever other special coverages and/or endorsements that Landlord, in Landlord's reasonable discretion, may from time to time consider appropriate in connection with Landlord's ownership, management or operation of the Project). Landlord shall have the right to reduce or terminate any such insurance or coverage at any time. 6.3 Separate Assessments. Landlord may, if Landlord deems it appropriate to do so, attempt to obtain separate assessments for Tenant's obligations pursuant to Section 6.1 and, with respect to Section 6.2, for such of the Real Estate Charges as are readily susceptible of separate assessment; and if Landlord does attempt to so obtain separate assessments, Tenant shall cooperate with Landlord's efforts. To the extent of a separate assessment, Tenant agrees to pay such assessment before it becomes delinquent and to keep the Premises free and clear from any liens or attachments; moreover, as to all periods of time during the Lease Term, this covenant of Tenant shall survive the termination of this Lease. 5 DCAPDX_1789765_vl 99 6.4 Right to Contest. Tenant agrees that, as between Tenant and Landlord, Landlord has the sole and absolute right to contest taxes levied against the Premises and the Project (other than taxes levied directly against Tenant's personal property within the Premises). Accordingly, Tenant, to the maximum extent permitted by law, irrevocably waives any and all rights that Tenant may have to receive from Landlord a copy of notices received by Landlord regarding the appraisal or reappraisal, for tax purposes, of all or any portion of the Premises or the Project. Additionally, Tenant, to the maximum extent permitted by law, hereby assigns to Landlord any and all rights of Tenant to protest or appeal any governmental appraisal or reappraisal of the value of all or any portion of the Premises or the Project. To the maximum extent permitted by law, Tenant agrees that it will not protest or appeal any such appraisal or reappraisal before a governmental taxing authority without the express written authorization of Landlord. 6.5 Adjustment of Prorated Amounts. At such time as Landlord has reason to believe that at some time within the immediately succeeding twelve (12) month period Tenant will owe Landlord any amounts pursuant to one or more of the preceding sections of this Article VI, Landlord may, upon providing documentation of such amounts, direct that Tenant prepay monthly a pro rata portion of the prospective future payment as provided for in Article IX which amount may be adjusted by Landlord from time to time. In the event Landlord determines that the total of the monthly payments pursuant to this Section 6.5 for any appropriate period is not equal to the total of payments required from Tenant for either Real Estate Charges or Insurance Expenses, or both, pursuant to previous sections in this Article VI, then Tenant shall pay to Landlord any deficiency or Landlord shall refund, credit to Tenant or offset against future payments from Tenant any overpayment, as the case may be, as provided for in Article IX. Real Estate Charges for tax years commencing prior to or extending beyond the Lease Term shall be prorated to coincide with the corresponding Commencement Date or expiration date of this Lease. If the Building is not separately assessed, Real Estate Charges allocated to the Building shall be an equitable proportion of the Real Estate Charges for all of the land and improvements included within the tax parcel assessed. ARTICLE VII COMMON AREA 7.1 Definition. The term "Common Area" is defined for all purposes of this Lease as that part of the Project intended for the common use of all tenants and their employees and other invitees, including among other facilities (as such may be applicable to the Project), parking areas, private streets and alleys, landscaping, curbs, sidewalks, lighting facilities and the like, as they may exist from time to time, but excluding (i) space in buildings (now or hereafter existing) designated for rental for commercial purposes, as the same may exist from time to time, (ii) streets and alleys maintained by a public authority, (iii) areas within the Project which may from time to time not be owned by Landlord (unless subject to a cross - access agreement benefiting the area which includes the Premises), and (iv) areas leased to any other tenant or otherwise restricted by Landlord. In addition, although the roof(s) of the building(s) in the Project are not literally part of the Common Area, they will be deemed to be so included solely for purposes of (A) Landlord's ability to prescribe rules and regulations regarding same, and (B) Tenant's obligations to pay Operating Costs with respect thereto. Landlord reserves the right to change from time to time the dimensions, size and location of the Common Area, as well as the dimensions, identities, locations, number, size and types of any buildings, signs or other improvements in the Project, including, without limitation, driveways, entrances, parking spaces, parking areas, loading areas, ingress, egress, direction of traffic, walkways and landscape areas; provided, however, that no such changes will materially and adversely impair the access to the Premises. For example, and without limiting the generality of the immediately preceding sentence, Landlord may from time to time substitute for any parking area other areas reasonably accessible to the tenants of the Project. Landlord retains the right to construct additional buildings and other improvements within the Common Area. 7.2 Use of Common Area. Tenant and its employees and invitees, and when duly authorized pursuant to the provisions of this Lease, its subtenants and licensees, shall have the nonexclusive right to use the Common Area (expressly excluding roofs of buildings in the Project) as constituted from time to time, such use to be in common with Landlord, other tenants in the Project and other persons permitted by Landlord to use the same, and subject to such reasonable rules and regulations governing use as Landlord may from time to time prescribe. For example, and without limiting the generality of Landlord's ability to establish rules and regulations governing all aspects of the Common Area, Tenant agrees as follows: DCAPDX_1789765_v1 100 6 (a) If Landlord designates specific parking areas for Tenant and Tenant's employees, then Tenant shall comply with Landlord's designation and shall institute procedures to ensure that its employees also comply. In the event Tenant or its employees fail to park their cars in designated parking areas as aforesaid, then Landlord at its option may charge Tenant Fifty Dollars ($50.00) per day per car parked in any area other than those designated, as and for liquidated damages, and Tenant shall pay such charges upon demand. Tenant also authorizes Landlord to cause any car which is not parked in the designated parking areas to be towed from the Project; moreover, Tenant shall on demand from Landlord reimburse Landlord for the cost thereof, and Tenant shall in all respects indemnify and hold Landlord harmless with respect to such towing by Landlord. (b) Tenant shall not take any action which would interfere with the rights of other persons to use the Common Area. (c) Landlord may temporarily close any part of the Common Area for such periods of time as may be necessary to make repairs or alterations or during construction or to prevent the public from obtaining prescriptive rights. (d) With regard to the roof(s) of the building(s) in the Project, including without limitation, the roof(s) above the Premises, any use of the roof(s) whatsoever is hereby exclusively reserved to Landlord for any and all purposes and in all respects in its sole and absolute discretion. Landlord shall have the exclusive rights to use, possess, lease, alter, construct on, or otherwise manage the roof in its sole and absolute discretion. In no event shall Tenant or any of its employees, affiliates agents, subtenants, concessionaires, contractors, consultants, visitors or invitees of any kind, access or go upon the roof of the Building or cause or permit any penetration of such roof without the express prior written consent of Landlord and subject to a license agreement in form satisfactory to Landlord, each in Landlord's sole and absolute discretion. If Tenant demonstrates to Landlord's satisfaction (in Landlord's sole and absolute discretion) both an actual need to use the roof and adequate procedures and safeguards to assure that no damage is done to the roof(s) (such as proper reattachment and sealing in connection with HVAC repair or replacement), all roof warranties are preserved in full, and also agrees to execute a license agreement in form satisfactory to Landlord (in Landlord's sole and absolute discretion), then Landlord may grant Tenant access to the roof(s) solely for such purpose, all in Landlord's sole and absolute discretion. 7.3 Maintenance of Common Area. Landlord shall be responsible for the operation, management and maintenance of the Common Area, the manner of maintenance and the expenditures therefore (which shall be included in Operating Costs) to be in the sole and absolute discretion of Landlord, but to be generally in keeping with similar warehouse properties within the same geographical area as the Project. Without limiting the generality of the immediately preceding sentence, Tenant acknowledges that LANDLORD MAKES NO REPRESENTATION, COVENANT OR WARRANTY REGARDING WHETHER OR NOT LANDLORD WILL PROVIDE SECURITY SERVICES, OR IF SO, WHAT FORM OF SECURITY SERVICES WILL BE PROVIDED. 7.4 Operating Costs; Tenant's Payment of Operating Costs. (a) In addition to the Rent and other charges prescribed in this Lease, Tenant shall pay to Landlord, as Additional Rent required pursuant to this Lease, Tenant's Proportionate Share of the actual cost of Landlord's management, operation and maintenance of the Common Area, as well as other shared costs of any kind which may be incurred by Landlord in its discretion in connection with the operation, cleaning, security, maintenance, ownership, and management (collectively, the "Operating Costs "), including, without limitation, all costs of the following: lighting, painting, cleaning, policing, inspecting, repairing, replacing Common Area elements; trash removal (except as paid directly by Tenant or otherwise administered pursuant to Section 10.4 of this Lease); insect and pest treatments and eradication (whether in the Common Area or for the Building or the Project); security (if and to the extent Landlord elects to provide security); roof repairs and maintenance; environmental protection improvements or devices and health and safety improvements and devices which may be required by applicable laws (including the maintenance, repair and replacement of same); environmental monitoring programs and devices; wages and salaries of all employees, agents, consultants and others engaged in operation, cleaning maintenance, repair, replacement and security of the Project; charges and assessments paid by Landlord pursuant to any owner's association, reciprocal easement, covenants or comparable document affecting the Building or the Project; any fees which Landlord pays for the management or asset management of the Project; an allowance for 7 DCAPDX_1789765_v1 101 Landlord's administrative or overhead costs, in the amount of fifteen percent (15 %) of the total of all other Operating Costs; utilities; snow and ice removal; the cost of resurfacing and restriping parking areas and roadways; reasonable reserves for any of the foregoing or any other Operating Costs; any other item stated in this Lease to be an Operating Cost, and the cost of any insurance for which Landlord is not reimbursed pursuant to Section 6.2. In addition, although the roof(s), canopies, sewer and water lines servicing the Project, fire- protection systems and devices, if any (such as sprinkler systems, if any), foundations and exterior surfaces of the building(s) in the Project are not literally part of the Common Area, Landlord and Tenant agree that all costs incurred by Landlord with respect to all sewer (including septic systems, if applicable) and water lines and other equipment (including maintenance, repair and replacement of same), fire- protection equipment and devices (including maintenance, repair and replacement of same), exterior painting and for roof and canopy maintenance, repair and replacement shall be included as Operating Costs pursuant to this Section 7.4, to the extent not specifically allocated to Tenant under this Lease nor to another tenant pursuant to its lease. The charges contemplated in this Section 7.4, however, shall not include any expenses paid or reimbursed by Tenant pursuant to Article VI of this Lease. Operating Costs shall expressly exclude: (i) costs of alterations of tenant spaces (including all tenant improvements to such spaces); (ii) costs of capital improvements; (iii) depreciation, interest and principal payments on mortgages, and other debt costs, if any; (iv) real estate brokers' leasing commissions or compensation and advertising and other broker marketing expenses; (v) costs of other services or work performed for the singular benefit of another tenant or occupant (other than for Common Area); (vi) legal, space planning, construction, and other expenses incurred in procuring tenants for the Building or renewing or amending leases with existing tenants or occupants of the Building (other than Tenant); (vii) costs of advertising and public relations and promotional costs and attorneys' fees associated with the leasing of the Building; (viii) any expense for which Landlord actually receives reimbursement from insurance, condemnation awards, other tenants, (other than through the payment of additional rent under such tenants' leases) or any other source; (ix) costs incurred in connection with the sale, financing, refinancing, mortgaging, or other change of ownership of the Building; (x) Real Estate Charges or Insurance Expenses, which are passed through to Tenant separately; (xi) costs, fines, interest, penalties, legal fees or costs of litigation incurred due to the late payments of utility bills and other costs incurred by Landlord's failure to make such payments when due unless caused by Tenant's failure to pay on time; (xii) any attorneys' fees incurred by Landlord in connection with any lease or proposed lease at the Project; and (xiii) costs arising from Landlord's charitable or political contributions. (b) Tenant shall make payment to Landlord for Tenant's Proportionate Share of Operating Costs based upon the estimated annual cost of Operating Costs, payable in advance at the same time each month as Base Rent is payable, but subject to adjustment after the end of the year on the basis of the actual costs for such year as provided for under Article IX. Alternatively, Tenant shall, at Landlord's option, make payments to Landlord for Operating Costs on demand at intervals not more frequently than monthly. In addition, if either before or during the Lease Term Landlord in its discretion elects to amortize a non - capital expense instead of charging it in full during the year in which it is incurred by Landlord, then such expense shall be amortized (with interest accruals commensurate with Landlord's interest costs) beginning with the date on which payment for the expense was made and continuing through the amortization period. With regard to the charges contemplated in this Section 7.4, Tenant further agrees that unless within thirty (30) days after Landlord's delivery to Tenant of an assessment and/or statement related to any such charges, Tenant delivers to Landlord a written assertion of one or more specific errors or a written request for further detail regarding a specific charge, then the assessment and/or statement shall be deemed correct in all respects. In addition, Tenant further agrees that if it so asserts error or requests further information within such thirty (30) day period, Tenant will nevertheless pay all amounts charged by Landlord pending a resolution thereof. ARTICLE VIII RULES AND REGULATIONS 8.1 Rules and Regulations. During the Lease Term and subject to the rules and regulations for the Project attached hereto as Exhibit D, as modified by Landlord from time to time (the "Rules "), Tenant shall be entitled to use the Common Area parking lot of the Project. Tenant's parking rights are in common with the parking rights of any other tenants of the Project, and Tenant is not entitled to any reserved parking spaces. Landlord reserves the right at any time to designate areas in the Common Area where Tenant may or may not park. Tenant's parking rights are the personal rights of Tenant, and Tenant shall not transfer, assign or otherwise convey its parking DCAPDX_1789765_v1 102 8 rights separate and apart from this Lease. Landlord shall not be responsible for enforcing Tenant's parking rights against any third parties. ARTICLE IX PROVISIONS APPLICABLE TO ALL RENTS 9.1 Rent. For purposes of this Lease, the term "Rent," "Rents," "Rental" or "Rentals" shall be deemed to include Base Rent (Sections 1.1(k)) and 4.1 of this Lease), Tenant's required payments for Real Estate Charges and Insurance Expenses (Article VI of this Lease), Operating Costs (Section 7.4 of this Lease) and Additional Rent. Landlord and Tenant agree that each provision of this Lease for determining Rent adequately and sufficiently describes to Tenant the method by which such Rent is to be computed. Any and all other sums of money or charges to be paid by Tenant pursuant to the provisions of this Lease other than Base Rent are hereby designated as and included in the term "Additional Rent." A failure to pay Additional Rent shall be treated in all events as the failure to pay Rent. 9.2 Payment of Rent. Rent shall accrue from the Commencement Date, and shall be payable to Landlord at Landlord's address specified in Section 1.2 of this Lease, or at any other address which Landlord may subsequently designate in a written notice to Tenant. 9.3 Tenant's Proportionate Share. Tenant shall pay to Landlord Tenant's Proportionate Share of the Operating Costs, Real Estate Charges and Insurance Expenses (collectively, the "Shared Expenses ") as set forth above. Further, Tenant shall during each calendar year pay to Landlord an estimate of Tenant's Proportionate Share of the Shared Expenses as hereinafter set forth. Beginning on the Commencement Date, Tenant shall pay to Landlord each month on the first day of the month an amount equal to one - twelfth (1/12) of Tenant's Proportionate Share of the Shared Expenses for the calendar year in question as reasonably estimated by Landlord, with an adjustment to be made between the parties at a later date as hereinafter provided. If the Commencement Date is not the first day of a calendar month, Tenant shall pay a prorated portion of Tenant's Proportionate Share of the Shared Expenses for such partial month on the Commencement Date. Furthermore, Landlord may from time to time furnish Tenant with notice of a re- estimation of the amount of Tenant's Proportionate Share and Tenant shall commence paying its re- estimated Tenant's Proportionate Share on the first day of the month following receipt of said notice. As soon as practicable following the end of any calendar year, Landlord shall submit to Tenant a statement setting forth the exact amount of Tenant's Proportionate Share of the Shared Expenses for the calendar year just completed and the difference, if any, between Tenant's Proportionate Share of the actual Shared Expenses for the calendar year just completed and the estimated amount of Tenant's Proportionate Share of the Shared Expenses which were paid for such year. Such statement shall also set forth the amount of the estimated Shared Expenses reimbursement for the new calendar year computed in accordance with the foregoing provisions. To the extent that Tenant's Proportionate Share of the actual Shared Expenses for the period covered by such statement is higher than the estimated payments which Tenant previously paid during the calendar year just completed, Tenant shall pay to Landlord the difference within thirty (30) days following receipt of said statement from Landlord. To the extent that Tenant's Proportionate Share of the actual Shared Expenses for the period covered by the applicable statement is less than the estimated payments which Tenant previously paid during the calendar year just completed, Landlord shall at its option either refund said amount to Tenant within thirty (30) days or credit the difference against Tenant's estimated reimbursement for such Shared Expenses for the current year. In addition, with respect to the monthly reimbursement, until Tenant receives such statement, Tenant's monthly reimbursement for the new calendar year shall continue to be paid at the then current rate, but Tenant shall commence payment to Landlord of the monthly installments of reimbursement on the basis of the statement beginning on the first day of the month following the month in which Tenant receives such statement. Landlord shall provide documentation of Shared Expenses upon Tenant's request. 9.4 Survival of Proportionate Share. Tenant's obligation with respect to Tenant's Proportionate Share of the Shared Expenses shall survive the expiration or early termination of this Lease and Landlord shall have the right to retain the Security Deposit (if any), or so much thereof as it deems necessary, to secure payment of Tenant's Proportionate Share of the actual Shared Expenses for the portion of the final calendar year of the Lease during which Tenant was obligated to pay such expenses; provided, Tenant shall only be responsible for the Proportionate Share of Shared Expenses incurred during Tenant's tenancy. If Tenant occupies the Premises for less 9 DCAPDX_1789765_v1 103 than a full calendar year during the first or last calendar years of the Lease Term, Tenant's Proportionate Share for such partial year shall be calculated by proportionately reducing the Shared Expenses to reflect the number of months in such year during which Tenant occupied the Premises. Tenant shall pay Tenant's Proportionate Share within fifteen (15) days following receipt of notice thereof. 9.5 Due Dates for Rent; Late Charge. The parties agree that each monthly installment of Base Rent and, unless otherwise elected by Landlord, Tenant's monthly payments for the Shared Expenses are payable on or before the first day of each calendar month. Any such payment of Rent which is not received on or before the first day of a particular calendar month shall be deemed past -due. The parties further agree that each annual adjustment payment from Tenant (such as the payments prescribed in Sections 6.5, 7.4 and 9_3) is payable within thirty (30) days after receipt of Landlord's written statement requesting such payment from Tenant; and any such prescribed payment which is not so received shall be deemed past -due. All Rent shall be due and payable in advance, without demand, offset or deduction of any nature. In the event any Rent which is payable pursuant to this Lease is not actually received by Landlord within five (5) days after its due date for any reason whatsoever (including, but not limited to, a failure in the United States mails), or if any Rent payment is by check which is returned for insufficient funds, then in addition to the past due amount, Tenant shall pay to Landlord a late charge in an amount equal to fifteen percent (15 %) of the Rent then due, in order to compensate Landlord for its administrative and other overhead expenses. Any such late charge shall be payable as Additional Rent under this Lease and shall be payable immediately on demand. If any Rent is paid by check which is returned for insufficient funds, Tenant shall immediately make the required payment to Landlord in the form of a cashier's check or money order; moreover, Tenant shall also pay Landlord the amounts specified above in this Section 9.5, plus an additional fee of $100.00 to compensate Landlord for its expense and effort in connection with the dishonored check. 9.6 Advance Rent Payment. If Tenant fails twice in any 12 -month period to make any required payment of Rent(s) within five (5) days after such payment is due,. then Landlord, in order to reduce its administrative costs may require, by giving written notice to Tenant (and in addition to any late charge accruing pursuant to Section 9.5 above, as well as any other rights and remedies accruing pursuant to Article XXIII or Article XXIV below, or any other provision of this Lease or at law), that Rent is to be paid quarterly in advance instead of monthly and that all future Rent payments are to be made on or before the due date by cashier's check or money order, and that the delivery of Tenant's personal or corporate check will no longer constitute a payment of Rent as provided in this Lease. Any acceptance of a monthly Rent payment or of a personal or corporate check thereafter by Landlord shall not be construed as a subsequent waiver of said rights. ARTICLE X USE AND CARE OF PREMISES 10.1 Term of Use. Tenant may commence use of the Premises on or immediately after the Commencement Date and may operate continuously at the Premises throughout the Lease Term. 10.2 Permitted Use. The Premises may be used only for the purpose or purposes specified in Section 5.1 above, and for no other purpose. 10.3 Certain Prohibited Uses. Tenant shall not conduct or give notice of any fire, auction (public or private), "going- out -of- business," "lost -our- lease," "moving," bankruptcy or similar sale at or on the Premises. Tenant shall not permit any objectionable noises, odors, vibrations, dust, gas, exhaust or smoke to emanate from the Premises (or from any facility or equipment servicing the Premises); nor place or permit any radio or television antenna, satellite dish, loudspeaker or amplifier on the roof or exterior walls or outside the Premises or where the same can be seen or heard from outside the Premises; nor place any antenna, equipment, awning or other projection on the exterior of the Premises or Building; nor take any other action which would constitute a nuisance or would unreasonably interfere with, disturb or endanger Landlord or other tenants of the Project or occupants or owners of adjacent or nearby properties, or unreasonably interfere with their use of their respective premises; nor permit any unlawful or immoral practice to be carried on or committed on the Premises; nor do or permit anything which would void Tenant's or Landlord's insurance, increase the cost of insurance or cause the disallowance of sprinkler credits. If Tenant causes any increase in the cost of insurance on the Premises or the Project, then Tenant shall pay to Landlord the amount of such increase as Additional Rent. DCAPDX_I789765_vl 104 10 10.4 Care of Premises by Tenant. Tenant shall take good care of the Premises and shall operate in the Premises in a safe, careful and proper manner; shall not commit or suffer waste in or about the Premises, nor to any facility or equipment for which Tenant is responsible pursuant to Section 11.2 of this Lease; shall not cause damage or permit any trucks or vehicles visiting the Premises to cause any damage to the Premises or any other portion of the Building (and, if any such damage should occur, shall immediately repair same or, if Landlord so elects, reimburse Landlord for Landlords cost in repairing same); and shall keep the Premises free of insects, rodents, vermin and other pests. Tenant shall keep the Premises secure, Tenant hereby acknowledging that security is Tenant's responsibility and that Tenant is not relying on any representation or warranty by Landlord in this regard. Tenant shall not overload the floors in the Premises, nor deface or injure the Premises. Tenant shall keep the Premises and all parking areas, driveways, sidewalks, landscape areas, service -ways and loading areas adjacent to the Premises neat, clean and free from dirt, rubbish, ice or snow at all times. Tenant shall store all trash and garbage within the Premises, or in a trash dumpster or similar container approved by Landlord in Landlord's sole and absolute discretion; and if Landlord is not arranging for trash pick -up as part of the services for which Tenant pays pursuant to Section 7.4 above, then Tenant shall arrange for the regular pick -up of such trash and garbage at Tenant's expense. Receiving and delivery of goods and merchandise and removal of garbage and trash shall be made only in the manner and areas prescribed by Landlord. Outside storage, including, without limitation, storage of containers, trailers, trucks and other vehicles, is prohibited without Landlord's prior written consent which may be withheld in Landlord's sole and absolute discretion. 10.5 Tenant's Compliance with Law. Tenant shall procure at its sole expense any permits and licenses required for the transaction of business in the Premises and shall otherwise comply with all applicable laws, ordinances and governmental regulations. In addition, if the nature of Tenant's business makes it advisable for Tenant to take any extra precautions (for example, in the case of equipment requiring special safety training for employees, Tenant's compliance with all required educational programs and procedures), Tenant shall take all such extra precautions. Without limiting the generality of the foregoing Tenant further agrees as follows: (a) Tenant shall not commence business operations in the Premises without having first obtained any and all permits or approvals necessary for the lawful operation of Tenant's business in the Premises from the appropriate governmental authority; (b) Tenant shall be responsible, at its sole expense, for compliance with the federal Americans with Disabilities Act of 1990 ( "ADA "), as the same may have been or may be amended from time to time, and all federal, state, county and municipal laws, ordinances, codes and regulations which relate in any way to the matters regulated by the ADA (collectively, the "ADA -based Laws "); the Premises shall not be used as a place of public accommodation under the ADA or ADA -based Laws; moreover, if and to the extent that because of Tenant's construction and/or activities within or upon the Premises, one or more of the ADA -based Laws require Landlord to alter and/or improve the Common Area or any portion of the Building or the Project, then Tenant shall reimburse Landlord upon demand for the cost of such alterations and improvements; (c) Tenant shall be responsible for compliance with all federal, state, county and municipal laws and regulations relating to health and safety, including without limitation the federal. Occupational Safety and Health Act of 1970 ( "OSHA "), as the same may have been or may be amended from time to time, and any and all other federal, state, county and municipal laws, ordinances, codes and regulations which relate in any way to the matters regulated by OSHA; and (d) At Landlord's request, Tenant shall deliver to Landlord copies of all necessary permits and licenses and proof of Tenant's compliance with all such laws, ordinances, governmental regulations and extra precautions. Any use or occupancy of the Premises by or on behalf of Tenant prior to the Commencement Date shall be subject to each and every obligation of Tenant under this Lease. ARTICLE XI MAINTENANCE AND REPAIR OF PREMISES 11.1 Maintenance by Landlord. Landlord shall at Landlord's expense (subject to Section 7.4 above) keep the foundation, the structural elements of all exterior walls and the structural elements of the roof of the 11 DCAPDX_1789765_vl 105 Premises in good repair, reasonable wear and tear and uninsured losses and damage caused by Tenant, its employees, agents or contractors excepted. As used in this Lease, the term "exterior walls" shall specifically exclude: plate glass; windows, doors and other exterior openings; dock bumpers, dock plates or levelers; office entries or store fronts; window and door frames, closure devices, locks and hardware; lighting, heating, air - conditioning, plumbing and other electrical, mechanical and electromotive installation equipment and fixtures; signs, placards, or other advertising media of any type; and interior painting or other treatment of interior walls, all of which are to be maintained, repaired and replaced by Tenant or at Tenant's sole cost provided, however, that Landlord will be responsible for performing adequate preventative maintenance on the HVAC (as defined below) for the Premises. Landlord, however, shall not be required to make any repairs occasioned by the act or negligence of Tenant, its agents, employees, subtenants, licensees and concessionaires (including, but not limited to, roof leaks resulting from Tenant's installation, replacement or maintenance of air - conditioning equipment or any other roof penetration or placement); and the provisions of the previous sentence are expressly recognized to be subject to the provisions of Article XVIII, Article XIX, and Article XXIII of this Lease. In the event that the Premises should become in need of repairs required to be made by Landlord hereunder, Tenant shall give immediate written notice thereof to Landlord, and Landlord shall have a reasonable time after receipt by Landlord of such written notice in which to make such repairs. Tenant waives the right to make repairs at Landlord's expense under any applicable Laws. 11.2 Maintenance by Tenant. Tenant shall keep the Premises in good, clean and habitable condition and shall at its sole cost and expense make all needed repairs and replacements, including replacement of cracked or broken glass, except for repairs and replacements required to be made by Landlord under the provisions of Section 11.1, Article XVIII and Article XIX. Without limiting the coverage of the previous sentence, it is understood that Tenant's responsibilities therein include all items which are expressly excluded from Landlord's responsibility in Section 11.1 above, as well as the maintenance, repair and replacement of all of the following facilities and equipment, to the extent located within the Premises or outside of the Premises and servicing the Premises: lighting, heating, air - conditioning, fire- protection sprinkler systems, plumbing, exhaust systems, and other electrical, mechanical and electromotive installation, equipment and fixtures. In addition, Tenant's responsibilities shall also include all repairs in ducts, conduits, pipes and wiring, and any sewer stoppage located in, under and above the Premises, regardless of when or how the defect or other cause for repair or replacement occurred or became apparent. Tenant shall give Landlord prompt written notice of any leaks or water damage and any need for repair or replacement as contemplated in this Section 11.2, especially if such repair or replacement is necessary for maintaining health and safety (such as the fire- protection sprinkler system). If any repairs required to be made by Tenant hereunder are not made within ten days after written notice delivered to Tenant by Landlord (or less than ten days, in the case of a situation which by its nature requires an immediate response or a response within less than ten days), Landlord may at its option make such repairs without liability to Tenant for any loss or damage which may result to its stock or business by reason of such repairs; and Tenant shall pay to Landlord upon demand, as Additional Rent hereunder, the cost of such repairs plus a one -time charge in an amount equal to fifteen percent (15 %) of the cost of repairs, in order to compensate Landlord for its administrative and other overhead expenses. At the expiration or earlier termination of this Lease, Tenant shall surrender the Premises broom -clean and in good condition, free of debris and of Tenant's personal property and equipment excepting reasonable wear and tear and losses required to be restored by Landlord in Section 11.1, Article XVIII and Article XIX of this Lease, and in accordance with the Move -Out Standards set forth in Exhibit C to this Lease; and without limiting the generality of the foregoing, Tenant agrees that it shall repair all damage which may be caused to the Premises by the removal of Tenant's property; moreover, Tenant shall remove all of Tenant's signage and repair all damage caused by the installation, operation or removal of same. Any of Tenant's property not removed by Tenant from the Premises on or before the expiration of this Lease shall be deemed abandoned and Landlord may dispose of or remove such property, at its sole election, without any liability whatsoever to Tenant for damages therefor. 11.3 HVAC Maintenance. Landlord shall, at Tenant's expense, perform adequate preventive maintenance on the hot water, heating, ventilation and air - conditioning equipment ( "HVAC ") for the Premises pursuant to maintenance service contracts entered into by Landlord with a licensed or qualified HVAC contractor (the "HVAC Contractor "). Without limiting the generality of the immediately preceding sentence, the following maintenance shall be performed by Landlord or the HVAC Contractor at Tenant's expense: (a) the replacement of all filters in the HVAC system at least quarterly; (b) inspection of the entire heating, ventilation and air - conditioning equipment by the HVAC Contractor at least quarterly; and (c) cleaning and inspection of valves, belts, and safety DCAPDX_1789765_v1 106 12 controls by the HVAC Contractor at least quarterly. Landlord shall bill Tenant for the cost of each of the foregoing, which shall be paid within ten (10) days of receipt of Landlord's invoice as Additional Rent. ARTICLE XII ALTERATIONS 12.1 Tenant's Construction. Tenant shall not make any alterations, additions or improvements to the Premises ( "Alterations ") in excess of $5,000 at any one time without the prior written consent of Landlord, which shall not be unreasonably withheld, conditioned or delayed, except for the installation of unattached, movable trade fixtures which may be installed without drilling, cutting, or otherwise defacing the Premises. Whenever Tenant proposes to do any construction work within the Premises, Tenant shall first furnish to Landlord plans and specifications in such detail as Landlord may request covering all such work, together with an identification of the contractor(s) whom Tenant plans to employ for the work. In no event shall Tenant make any Alterations that affect the structure of the Building, the roof or the foundations, the HVAC, electrical, plumbing, life safety or other Building systems, the Common Areas or any other tenant. In no event shall any construction work be commenced within the Premises without Landlord's written confirmation that it has no objection to Tenant's plans and specifications and contractor(s). All such work shall be completed promptly, in a good and workmanlike manner and using only good grades of materials. Landlord may, at its election, monitor or engage a third party to monitor such work. Tenant shall reimburse Landlord for all reasonable third -party out -of- pocket expenses incurred by Landlord (including, without limitation, any construction management or similar fees and related costs payable by Landlord to a third party engaged by Landlord to monitor such work) in connection with Landlord's review of Tenant's plans and other submissions as requested by Landlord and for monitoring such construction in connection with Alterations. Notwithstanding the rights accorded to Landlord pursuant to the immediately preceding sentences, Tenant acknowledges and agrees that Landlord's permission for Tenant to commence construction or monitoring of such work shall in no way constitute any representation or warranty by Landlord as to the adequacy or sufficiency of such plans and specifications, the improvements to which they relate, the capabilities of such contractors or the compliance of any such work with any applicable laws, codes or other requirements; instead, any such permission or monitoring shall merely be the consent of Landlord as required hereunder, which consent may be withheld in Landlord's sole and absolute discretion. Without limiting the generality of the preceding sentences in this Section 12.1, Tenant acknowledges and agrees that any installation or replacement of Tenant's heating or air- conditioning equipment must be subject to such preceding sentences and must be effected strictly in accordance with Landlord's instructions regarding same. 12.2 Quality of Construction Work by Tenant. All construction work done by Tenant within the Premises shall be performed in a good and workmanlike manner, lien -free and in compliance with all governmental, legal, and insurance requirements, and in such manner as to minimize interference with other construction in progress and with the transaction of business in the Project. Without limiting the generality of the foregoing, Landlord shall have the right to require that such work be performed in accordance with rules and regulations which Landlord may from time to time prescribe. Tenant agrees to indemnify Landlord and hold Landlord harmless against any loss, liability or damage resulting from such work. 12.3 Lien Waivers; Insurance; Plans. In the event Tenant uses a general contractor or other third party to perform construction work within the Premises, Tenant shall, prior to the commencement of such work, require said general contractor or other third party to execute and deliver to Landlord a waiver and release of any and all claims against Landlord. The delivery of the applicable release shall be a condition precedent to Tenant's ability to enter on and begin its construction work at the Premises and if applicable, to any reimbursement from Landlord for its construction work. Landlord may post at the Premises such notices of non - responsibility as may be provided for under applicable law. Tenant shall provide Landlord with as -built plans and specifications for all Alterations done by Tenant. 12.4 Ownership of Alterations. All Alterations and fixtures (including, without limitation, all floor coverings and all heating and air - conditioning equipment but excluding Tenant's unattached, readily movable furniture and office equipment) which may be made or installed by either party upon the Premises shall remain upon and be surrendered with the Premises and become the property of Landlord at the termination of this Lease, unless 13 DCAPDX_1789765_vl 107 Landlord requests their removal, in which event Tenant shall remove the same and restore the Premises to its original condition at Tenant's expense. 12.5 Renovation by Landlord. In the event that Landlord elects to renovate all or any portion of the Project, Tenant will cooperate with such renovation, including Tenant's tolerating temporary inconveniences (including, without limitation, the temporary removal of Tenant's signs) in order to facilitate such renovation, as it may relate to the exterior of the Premises. 12.6 Trade Fixtures. Tenant may, without Landlord's consent, at Tenant's sole cost, and in compliance with all applicable laws and codes and with Landlord's requirements set forth in this Article XII, install shelves, racking and other trade fixtures in the ordinary course of its business, so long as such trade fixtures do not alter, overload or damage the Premises and may be removed without causing any damage to the Premises. At the end of the Lease Term all such trade fixtures shall be removed at Tenant's cost and the Premises restored to its original condition at Tenant's expense. ARTICLE XIII LANDLORD'S RIGHT OF ACCESS 13.1 Right of Entry. Landlord shall have the right to enter upon the Premises upon at least 48 hours' notice (unless in the event of an emergency, in which case prior notice is not required) for the purpose of inspecting the same, or of making repairs to the Premises, or of making repairs, alterations or additions to adjacent premises, or of showing the Premises to prospective purchasers, tenants or lenders, all without being deemed guilty of or liable for any breach of any covenant of quiet enjoyment or eviction of Tenant and without abatement of Rent. Tenant shall be provided the opportunity to be present. This Section 13.1, however, shall not be deemed to impose any obligation upon Landlord to enter the Premises, except if and to the extent that any such obligation may be specifically required pursuant to another express provision of this Lease. For each of the foregoing purposes, Landlord may at all times have and retain a key with which to unlock all of the doors in, upon and about the Premises, excluding Tenant's vaults and safes, and Landlord shall have the means which Landlord may deem proper to open said doors in an emergency in order to obtain entry to the Premises. Tenant shall cooperate with Landlord in connection with any and all showings of the Premises to prospective tenants. Provided such actions are consistent with applicable law, any entry to the Premises obtained by Landlord by any of said means or otherwise shall not under any circumstances be construed or deemed to be a forcible or unlawful entry into, or a detainer of, the Premises, or an eviction of Tenant from the Premises or any portion thereof, or grounds for any abatement or reduction of Rent and Landlord shall not have any liability to Tenant for any damages or losses on account of any such entry by Landlord. 13.2 "For Rent" Signs. Tenant will permit Landlord to place and maintain "For Rent" or "For Lease" signs on the Premises during the last one hundred eighty (180) days of the Lease Term, it being understood that such signs shall in no way affect Tenant's obligations pursuant to Section 10.3, Section 14.1 or any other provision of this Lease. ARTICLE XIV SIGNS; EXTERIOR OF PREMISES 14.1 Signs; Exterior. Tenant shall not, without Landlord's prior written consent, which consent may be withheld in Landlord's sole and absolute discretion, (a) make any changes to the exterior of the Premises, (b) install any exterior lighting, decorations, banners, placards, balloons, flags, awnings, canopies or the like, (c) erect or install any signs, lettering, decorations or advertising media of any type which can be viewed from the exterior of the Premises, or (d) install any window or door covering or treatment. All signs, lettering, placards, decorations and advertising media shall conform in all respects to any rules and regulations established by Landlord for the Building or Project from time to time in the exercise of its sole and absolute discretion as well as all applicable laws, codes and regulations and any covenants affecting the Project or the Building, and shall be subject to Landlord's requirements as to construction, method of attachment, size, shape, height, lighting, color and general appearance. Any signs, window treatment, bars or other installations visible from outside the Premises shall be DCAPDX_1789765_v1 108 14 removed by Tenant at the end of the Lease Term, at Tenant's sole cost, and Tenant shall restore the Premises to its original condition. ARTICLE XV UTILITIES 15.1 Service to Premises. Tenant shall contract with all utility providers to arrange service to the Premises and shall provide to Landlord and to such utility providers access to the electric lines, feeders, risers, wiring and any other facilities within or servicing the Premises. Tenant shall promptly pay all charges and maintenance costs for electricity, water, gas (but only if provided by Landlord), telephone service, sewerage service, sprinkler service and other utilities or services furnished to the Premises plus all applicable deposits, surcharges, taxes, penalties or other costs related to such services. Landlord may, if it so elects, furnish one or more such utility services to Tenant, and in such event Tenant shall purchase the use of such services as are tendered by Landlord, and shall pay on demand as Additional Rent under this Lease the rates established therefor by Landlord which shall not exceed the rates which would be charged for the same services furnished directly by the local public utility companies. Landlord may at any time discontinue furnishing any such service without obligation to Tenant other than to connect the Premises to the public utility, if any, furnishing such service. In addition, if certain utilities are furnished to the Premises in common with other premises, then Landlord shall make a good faith estimate as to the amount used by each tenant (including Tenant) and bill each tenant accordingly; however, at any time, Landlord may elect to install one or more sub - meters for one or more premises (which, if installed at the Premises, shall be at Tenant's expense), in which event Landlord will bill each tenant whose premises is sub - metered for the amount used according to that tenant's sub - meter. Any amounts which Landlord bills to Tenant under the terms of this Section 15.1 will be considered Additional Rent and will be due within ten (10) days after the date upon which Landlord delivers such bill to Tenant. Tenant agrees to limit water and sewer usage to ordinary restroom use. 15.2 Interruption of Service. Landlord shall not be liable for any interruption whatsoever in utility services not furnished by Landlord, nor for interruptions in utility services furnished by Landlord which are due to fire, accident, strike, acts of God or other causes beyond the control of Landlord or which are necessary or useful in connection with making any alterations, repairs or improvements. Without limiting the generality of the foregoing, Landlord shall in no way be liable or responsible for any loss, damage, or expense that Tenant may sustain or incur by reason of any failure, interference, disruption, or defect in the supply or character of the electric energy furnished to the Premises, or if the quantity or character of the electric energy supplied by any utility or service provider is no longer available or suitable for Tenant's requirement, and no such failure, defect, unavailability or unsuitability shall constitute an actual or constructive eviction, in whole or in part, or entitle Tenant to any abatement or diminution of Rent. ARTICLE XVI INSURANCE COVERAGES 16.1 Insurance by Landlord. Landlord shall procure and maintain throughout the Lease Term a policy or policies of insurance, at its sole cost and expense (but subject to Article VI above), causing the Project to be insured under special form of property coverage (sometimes referred to as "all- risk" coverage) and commercial general liability insurance (plus, as to either coverage, whatever endorsements or special coverages Landlord, in its sole and absolute discretion, may from time to time consider appropriate), to the extent necessary to comply with Landlord's obligations pursuant to other provisions of this Lease, and such other insurance (if any) that Landlord reasonably deems appropriate for the Project. 16.2 Insurance by Tenant. Tenant, at its sole cost and expense, shall procure and maintain throughout the Lease Term the following policies of insurance: (a) property insurance causing Tenant's leasehold improvements and business personal property (sometimes also referred to as "fixtures and contents "); and 15 DCAPDX1 789765_v1 109 (b) commercial general liability insurance coverage insuring against all claims, demands or actions for bodily injury, property damage, personal and advertising injury, and medical payments arising out of or in connection with Tenant's use or occupancy of the Premises, or by the condition of the Premises, with a limit of not less than $2,000,000.00 per occurrence and aggregate (and no offset for occurrences on property other than the Premises), and with coverage for contractual liability; and (c) worker's compensation insurance insuring against and satisfying Tenant's obligations and liabilities under the worker's compensation laws of the state where the Premises is located, together with employer's liability insurance in an amount not less than $1,000,000.00 each accident, $1,000,000.00 disease policy limit, and $1,000,000.00 disease each employee; the full limits of insurance are to apply per location; and (d) automobile liability insurance covering all owned, nonowned, and hired vehicles with a $1,000,000.00 per accident limit for bodily injury and property damage; and (e) during any period when construction work is being done in or on the Premises, such additional insurance as Landlord may reasonably require pursuant to Article XII of this Lease. If the operations of Tenant should change in a material manner from those conducted on the Commencement Date and in the opinion of Landlord or Landlord's insurance advisor, the amount or scope of such coverage is reasonably deemed inadequate at any time during the Lease Term, Tenant shall increase such coverage to such reasonable amounts or scope as Landlord or Landlord's advisor deems adequate. Tenant shall notify Landlord at least thirty (30) days prior to cancellation of such insurance. Tenant shall provide Landlord with evidence of insurance demonstrating that the insurance required by this Lease is in effect. If Tenant should fail to comply with the foregoing requirements relating to insurance, Landlord may obtain such insurance and Tenant shall pay to Landlord on demand as Additional Rent hereunder the premium cost thereof plus interest as provided in Section 23.2(a). Tenant hereby acknowledges and agrees that any such payment and interest shall be payable immediately on demand as Additional Rent and that the same are cumulative with, and do not supersede or reduce in any way, Landlord's rights as specified in Article XXIII of this Lease. ARTICLE XVII WAIVER OF LIABILITY; MUTUAL WAIVER OF SUBROGATION 17.1 Non - Liability of Landlord. Landlord and Landlord's agents and employees shall not be liable to Tenant or to Tenant's employees, subtenants, concessionaires, agents, invitees, or visitors, or to any other person whomsoever, for any injury to person or damage to property caused by the Premises or other portions of the Project becoming out of repair, or by defect or failure of any structural element of the Premises or of any equipment, pipes or wiring, or broken glass, or by the backing up of drains, or by gas, water, steam, electricity or oil leaking, escaping or flowing into the Premises, nor shall Landlord be liable to Tenant, or to Tenant's employees, subtenants, concessionaires, agents, invitees, or visitors, or to any other person whomsoever, for any loss or damage that may be occasioned by or through the acts or omissions of other tenants of the Project or of any other persons whomsoever unless same were caused by Landlord's negligence or intentional misconduct. Landlord shall not be held responsible in any way on account of any construction, repair or reconstruction (including widening) of any private or public roadways, walkways or utility lines. This Section 17.1 shall survive the expiration or earlier termination of this Lease. 17.2 Indemnity by Tenant. Landlord shall not be liable to Tenant or to Tenant's employees, agents, or visitors, or to any other person whomsoever, for any injury to person or damage to property on or about the Premises or the Project caused by the negligence or misconduct of Tenant, its employees, subtenants, licensees or concessionaires, or of any other person entering the Project under express or implied invitation of Tenant, or arising out of the use of the Premises by Tenant and the conduct of its business therein, or arising out of any breach or default by Tenant in the performance of its obligations under this Lease; and Tenant hereby agrees to indemnify Landlord and its partners, members, affiliates and subsidiaries, and all of their respective officers, trustees, directors, employees, stockholders, partners, representatives, servants, insurers, and agents and Landlord's designated property management company (collectively, the "Landlord Indemnitees ") and hold each of the Landlord Indemnitees harmless from any loss, cost, expense, damage, or claim arising out of such damage or injury, except for those DCAPDX1789765_vl 110 16 caused by Landlord's negligence or intentional misconduct. Except for the negligence or intentional misconduct of Landlord, its agents, employees or contractors, and to the extent permitted by law, Tenant agrees to indemnify, defend, and hold harmless the Landlord Indemnitees from and against any and all losses, liabilities, damages, costs and expenses (including reasonable attorneys' fees and costs) resulting from claims by third parties for injuries to any person and damage to or theft or misappropriation or loss of property occurring in or about the Project and arising from the use and occupancy of the Premises or from any activity, work, or thing done, permitted or suffered by Tenant in or about the Premises or due to any other act or omission of Tenant, its subtenants, assignees, invitees, employees, contractors or agents. Notwithstanding anything to the contrary contained in this Section 17.2, all property of Tenant and its contractors, employees, customers and invitees, kept or stored on the Premises, whether leased or owned by any such parties, shall be so kept or stored at the sole risk of Tenant and Tenant shall hold Landlord harmless from any claims arising out of damage to the same, except for such claims arising from Landlord's negligence or intentional misconduct, including subrogation claims by Tenant's insurance carriers. Landlord or its agents shall not be liable for interference with light or other intangible rights. The furnishing by Tenant of the insurance required under this Lease shall not be deemed to limit Tenant's obligations under this Section 17.2. This Section 17.2 shall survive the expiration or earlier termination of this Lease. 17.3 Waiver of Claims/Waiver of Subrogation. Landlord and Tenant each hereby waive and release one another from any and all liability or responsibility to the other, or to any other party claiming through or under them by way of subrogation or otherwise, for any loss or damage to property caused by a casualty which is insurable under the special form of property coverage (sometimes referred to as "all- risk" coverage); provided, however, that this mutual waiver and release shall be applicable only with respect to a loss or damage occurring during the time when property insurance policies, which are readily available in the marketplace, contain a clause or permit an endorsement to the effect that any such release and waiver shall not adversely affect or impair the policy or the right of the insured party to receive proceeds under the policy; provided, further, that this release and waiver shall not be applicable to the portion of any damage which is not reimbursed by the damaged party's insurer because of the "deductible" in the damaged party's insurance coverage. THE RELEASE AND WAIVER CONTAINED IN THIS SECTION 17.3 APPLIES EVEN TO A LOSS WHICH IS ATTRIBUTABLE TO THE NEGLIGENCE OF THE PARTY HEREBY RELEASED (AND ANYONE ELSE FOR WHOM LANDLORD OR TENANT MAY BE RESPONSIBLE); HOWEVER, THIS RELEASE AND WAIVER SHALL NOT APPLY TO A PARTY'S WILLFUL WRONGDOING OR GROSS NEGLIGENCE. The release and waiver specified in this Section 17.3 is cumulative with any releases or exculpations which may be contained in other provisions of this Lease. ARTICLE XVIII DAMAGES BY CASUALTY 18.1 Notice by Tenant. Tenant shall give immediate written notice to Landlord of any damage caused to the Premises by fire or other casualty. 18.2 Election by Landlord. In the event that the Premises shall be damaged or destroyed by fire or any other casualty insurable under special form (sometimes referred to as "all- risk ") property insurance and neither Party elect to terminate this Lease as hereinafter provided, Landlord shall proceed with reasonable diligence to rebuild and repair the Premises. In the event (a) the Building is destroyed or substantially damaged by a casualty not covered by Landlord's insurance, (b) such building is destroyed or rendered untenantable to an extent in excess of fifty percent (50 %) of the first floor area by a casualty covered by Landlord's insurance, (c) the holder of a mortgage, deed of trust or other lien on such building at the time of the casualty elects, pursuant to such mortgage, deed of trust or other lien, to require the use of all or part of Landlord's insurance proceeds in satisfaction of all or part of the indebtedness secured by the mortgage, deed of trust or other lien, or (d) the damage will require more than ninety (90) days to restore, then either Party may elect, within sixty days after the occurrence of such casualty, to terminate this Lease. 18.3 Restoration. Landlord's obligation to rebuild and repair under this Article XVIII shall in any event be limited to restoring one of the following (as may be applicable): (a) if this Lease does not include an attached exhibit describing Landlord's initial construction responsibility ( "Landlord's Work "), restoring the Premises to substantially the condition in which the same existed prior to such casualty, exclusive of any alterations, 17 DCAPDX_1789765_v1 111 additions, improvements, fixtures and equipment installed by Tenant; or (b) restoring Landlord's Work, as described in the applicable exhibit attached to this Lease (if such an exhibit is attached), to substantially the same condition in which the same existed prior to the casualty. 18.4 Rent Abatement during Reconstruction. Tenant agrees that during any period of reconstruction or repair of the Premises, it will continue the operation of its business within the Premises to the extent practicable. During the period from the occurrence of the casualty until Landlord's repairs are completed, the Base Rent shall be reduced to such extent as may be fair and reasonable under the circumstances, as agreed by the Parties; however, there shall be no abatement of Additional Rent or other charges provided for herein. ARTICLE XIX EMINENT DOMAIN 19.1 Termination for Taking of Premises. If more than thirty percent (30 %) of the floor area of the Premises should be taken for any public or quasi - public use under any governmental law, ordinance or regulation or by right of eminent domain or by private purchase in lieu thereof, this Lease shall terminate and the rent shall be abated during the unexpired portion of this Lease, effective on the date physical possession is taken by the condemning authority. 19.2 Adjustment for Partial Taking. If less than thirty percent (30 %) of the floor area of the Premises should be taken as aforesaid, this Lease shall not terminate; however, the Base Rent payable hereunder during the unexpired portion of this Lease shall be reduced in proportion to the area of the Premises taken, effective on the date physical possession is taken by the condemning authority, and Tenant's Proportionate Share shall be recalculated. Following such partial taking, Landlord shall, in each instance, to the extent of net proceeds received by Landlord from the condemnation award, make all necessary repairs or alterations to the remaining Premises or, if an exhibit describing Landlord's Work is attached to this Lease, all necessary repairs within the scope of Landlord's Work as described in such exhibit, as the case may be, to cause the remaining portions of the Premises to be an architectural whole. 19.3 Taking Outside Premises If any part of the Project outside the Premises should be taken as aforesaid, this Lease shall not terminate, nor shall the rent payable hereunder be reduced. 19.4 Condemnation Awards. All compensation awarded for any taking (or the proceeds of private sale in lieu thereof) of the Premises or any part of the Project outside the Premises shall be the sole property of Landlord, and Tenant hereby assigns its interest in any such award to Landlord; provided, however, Landlord shall have no interest in any award made to Tenant for Tenant's moving and relocation expenses or for the loss of Tenant's fixtures and other tangible personal property if a separate award for such items is made to Tenant, as long as such separate award does not reduce the amount of the award that would otherwise be awarded to Landlord. ARTICLE XX ASSIGNMENT AND SUBLETTING 20.1 Prohibition. Tenant shall not assign or in any manner transfer this Lease or any estate or interest therein, or sublet the Premises or any part thereof or grant any license, concession or other right of occupancy of any portion of the Premises without the prior written consent of Landlord, which may be withheld by Landlord in its sole and absolute discretion, in each instance. In this regard, Tenant further acknowledges and agrees that Landlord's acceptance of Rent from an assignee or subtenant shall not be deemed to constitute Landlord's consent to such assignment or sublease (in fact, Tenant acknowledges that the Rent payment process is such that Landlord will not likely even be aware of the party from whom Rent are received). In addition, Landlord shall also be entitled to charge Tenant a $1,500.00 fee for processing Tenant's request, plus any attorneys' fees and costs incurred by Landlord, regardless of whether or not Landlord grants its consent. Consent by Landlord to one or more assignments or sublettings shall not operate as a waiver of Landlord's rights as to any subsequent assignments and sublettings. DCAPDX1789765_v1 112 18 20.2 Assumption by Assignee. Any assignee or sublessee of an interest in and to this Lease shall be deemed, by acceptance of such assignment or sublease or by taking actual or constructive possession of all or any portion of the Premises, to have assumed all of the obligations set forth in or arising under this Lease. Such assumption shall be effective as of the earlier of the date of such assignment or sublease or the date on which the assignee or sublessee obtains possession of all or any portion of the Premises; however, with specific regard to any assignment, the assignee shall be responsible for all unsatisfied obligations of Tenant under this Lease, regardless of when such obligations arose and when such assumption became effective. 20.3 Tenant Remains Liable; Excess Rent. Notwithstanding any assignment or subletting, Tenant shall at all times remain fully responsible and liable for the payment of the Rent herein specified and for compliance with all of Tenant's other obligations under this Lease (even if future assignments and sublettings occur subsequent to the assignment or subletting by Tenant, and regardless of whether or not Landlord's approval has been obtained for such future assignments and sublettings). Moreover, in the event that the rental due and payable by a sublessee (or a combination of the rental payable under such sublease plus any bonus or other consideration therefor or incident thereto) exceeds the Rent payable under this Lease, or if with respect to a permitted assignment or sublease, permitted license or other transfer by Tenant permitted by Landlord, the consideration payable to Tenant by the assignee, sublessee, licensee or other transferee exceeds the rental payable under this Lease, then Tenant shall be bound and obligated to pay Landlord all such excess rental and other excess consideration within ten (10) days following receipt thereof by Tenant from such sublessee, assignee, licensee or other transferee, as the case may be. Finally, in the event of an assignment or subletting, it is understood and agreed that all rentals paid to Tenant by an assignee or sublessee shall be received by Tenant in trust for Landlord, to be forwarded immediately to Landlord without offset or reduction of any kind; and upon election by Landlord such rentals shall be paid directly to Landlord as specified in Article IV of this Lease (to be applied as a credit and offset to Tenant's rental obligation). 20.4 No Encumbrances. Tenant shall not mortgage, pledge or otherwise encumber its interest in this Lease or in the Premises. 20.5 Transfer by Landlord. In the event of the transfer and assignment by Landlord of its interest in this Lease and in the Building to a person expressly assuming Landlord's obligations under this Lease, Landlord shall thereby be released from any further obligations hereunder, and Tenant agrees to look solely to such successor - in- interest of the Landlord for performance of such obligations. In addition, as described more fully in Section 27.3 of this Lease, any Security Deposit given by Tenant to secure performance of Tenant's obligations hereunder may be assigned and transferred by Landlord to such successor -in- interest, and Landlord shall thereby be discharged of any further obligation relating thereto. ARTICLE XXI SUBORDINATION; ATTORNMENT; ESTOPPELS 21.1 Subordination. Tenant accepts this Lease subject and subordinate to any mortgage, deed of trust, ground lease or other lien presently existing or hereafter placed upon the Building or any portion of the Premises, and to any renewals and extensions thereof. Tenant agrees that any mortgagee or ground lessor shall have no duty, liability or obligation to perform any of the obligations of Landlord under this Lease and shall have the right at any time to subordinate its mortgage, deed of trust, ground lease or other lien to this Lease; provided, however, notwithstanding that this Lease may be (or may become) superior to a mortgage, deed of trust, ground lease or other lien, the mortgagee shall not be liable for prepaid rentals, security deposits and claims accruing during Landlord's ownership; and further provided that the provisions of a mortgage, deed of trust, ground lease or other lien relative . to the rights of the mortgagee with respect to proceeds arising from an eminent domain taking (including a voluntary conveyance by Landlord) and provisions relative to proceeds arising from insurance payable by reason of damage to or destruction of the Premises shall be prior and superior to any contrary provisions contained in this Lease with respect to the payment or usage thereof. Landlord is hereby irrevocably vested with full power and authority to subordinate this Lease to any mortgage, deed of trust, ground lease or other lien hereafter placed upon the Premises. The foregoing agreements shall be effective without the execution of any further documents, provided, however, that Tenant hereby agrees that it will, within ten (10) business days following any request, execute such further instruments subordinating this Lease as Landlord or a mortgagee may request, including, without limitation, such mortgagee's standard form of subordination, non - disturbance and attornment agreement. Tenant shall recognize as 19 DCAPDX_1789765_vl 113 its landlord and attorn to any person succeeding to Landlord under this Lease upon any foreclosure or deed in lieu of foreclosure by Landlord's mortgagee at the election of such mortgagee or successor -in- interest. Upon request of such mortgagee or successor -in- interest, Tenant shall execute and deliver an instrument or instruments confirming its attornment; provided, however, that any successor -in- interest will not be (i) bound by payment of rent for more than one month in advance (except as otherwise required under this Lease), (ii) bound by any amendment or modification to this Lease which was subject to approval by such mortgagee or successor -in- interest pursuant to such mortgagee's agreements with Landlord, if such amendment or modification to this Lease was in fact made without the consent of the mortgagee, (iii) liable for any security deposit not actually received by such mortgagee or successor -in- interest, or (iv) liable for or subject to claims or offsets accruing during Landlord's ownership or previous acts or omissions of Landlord. 21.2 Notice to Holder. At any time when the holder of an outstanding mortgage, deed of trust, ground lease or other lien covering Landlord's interest in the Premises has given Tenant written notice of its interest in this Lease, Tenant may not exercise any remedies for default by Landlord hereunder unless and until the holder of the indebtedness secured by such mortgage, deed of trust, ground lease or other lien shall have received written notice of such default and a reasonable time (not less than 30 days) shall thereafter have elapsed without the default having been cured. 21.3 Estoppel Certificate. Tenant agrees that it will within ten (10) business days following request by Landlord execute and deliver to Landlord a written statement (an "Estoppel Certificate ") addressed to Landlord, (and/or parties designated by Landlord), which statement shall identify Tenant and this Lease, shall certify that this Lease is unmodified and in full force and effect (or if there have been modifications, that the same is in full force and effect as so modified), shall confirm that Landlord is not in default as to any obligations of Landlord under this Lease (or if Landlord is in default, specifying any default), shall state the dates to which the rent and other changes have been paid in advance, if any, shall confirm Tenant's agreements contained above in this Article XXI, and shall contain such other information or confirmations as Landlord may reasonably require. If Tenant fails to do so within ten (10) business days after the delivery of a written request from Landlord to Tenant, then this shall be a default under the Lease and Landlord would have all rights and remedies accorded to Landlord pursuant to Article XXIII of this Lease. Landlord is also hereby irrevocably appointed and authorized as the agent and attorney -in -fact of Tenant to execute and deliver any such written statement on Tenant's behalf. 21.4 Financial Information. If Landlord desires to finance, refmance, or sell the Building, the Project, or any part thereof, Tenant shall deliver to any potential lender or purchaser designated by Landlord such fmancial statements of Tenant as may be reasonably required by such lender or purchaser, including but not limited to Tenant's financial statements for the past three years. ARTICLE XXII ENVIRONMENTAL MATTERS/HAZARDOUS MATERIALS 22.1 Compliance with Environmental Laws. Tenant's operations in the Premises —as well as all property, substances and other materials kept, stored, allowed to be brought within, or disposed of from the Premises —shall comply in all respects with all federal, state, and municipal laws, ordinances, codes and regulations relating to the protection of the environment and natural resources, now existing or hereafter enacted (collectively, the "Environmental Laws "), including without limitation the following: (i) the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 (often referred to as "CERCLA "), as amended by the Superfund Amendments and Reauthorization Act of 1986, as same may have been further amended or may be further amended from time to time, (ii) the federal Resource Conservation and Recovery Act of 1976, as amended by the Used Oil Recycling Act of 1980, the Solid Waste Disposal Act Amendments of 1980, and the Hazardous and Solid Waste Amendments of 1984, as same may have been further amended or may be further amended from time to time, (iii) the federal Water Pollution Control Act of 1972 (often referred to as the "Clean Water Act "), as same may have been amended or may be amended from time to time, (iv) the federal Spill Compensation and Control Act of 1976, as same may have been amended or may be amended from time to time, and (v) any and all other federal, state, county, and municipal laws, ordinances, codes and regulations which relate in any way to the matters regulated by CERCLA and/or any other above - mentioned federal legislation. All property kept, stored or allowed to be brought within the Premises shall be at Tenant's sole risk. Tenant shall immediately notify Landlord in the event DCAPDX_1789765■1 114 20 Tenant becomes aware of any actual or potential environmental hazard or any actual or alleged violation of one or more Environmental Laws. 22.2 Definition of Hazardous Materials. As used in this Lease, the term "Hazardous Materials" shall mean and include (a) any hazardous or toxic wastes, materials or substances, and other pollutants or contaminants, which are or become regulated by any Environmental Laws; (b) petroleum, petroleum by- products, gasoline, diesel fuel, crude oil or any fraction thereof; (c) asbestos and asbestos - containing material, in any form, whether friable or non - friable; (d) polychlorinated biphenyls; (e) radioactive materials; (f) lead and lead - containing materials; (g) any other material, waste or substance displaying toxic, reactive, ignitable or corrosive characteristics, as all such terms are used in their broadest sense, and are defined or become defined by any Environmental Law; or (h) any materials which cause or threaten to cause a nuisance upon or waste to any portion of the Project or any surrounding property; or pose or threaten to pose a hazard to the health and safety of persons or of natural resources. For purposes of this Lease, the term "Hazardous Materials" shall not include nominal amounts of ordinary household cleaners, office supplies and janitorial supplies which are not actionable under any Environmental Laws and do not constitute a Reportable Use (as defined in Section 22.3 below). 22.3 Tenant's Representations and Covenants. Tenant hereby represents, warrants, and covenants to Landlord, its successors and assigns, the holder of any mortgage lien on the Building and the lessor under any ground lease affecting the Premises that Tenant has not and will not bring or permit to be brought upon the Premises or the Project any Hazardous Materials, except as specified below in this Section 22.3. Tenant shall not engage in any activity in or about the Premises which constitutes a Reportable Use (as hereinafter defined) of Hazardous Materials without the express prior written consent of Landlord, which consent may be withheld in Landlord's sole and absolute discretion, and compliance in a timely manner (at Tenant's sole cost and expense) with all Regulations (as defined in Section 29.2) or any Environmental Law. "Reportable Use" shall mean (i) the installation or use of any above or below ground storage tank, (ii) the generation, possession, storage, use, transportation, or disposal of a Hazardous Material that requires a permit from, or with respect to which a report, notice, registration, or business plan is required to be filed with any governmental authority, and (iii) the presence in, on, or about the Premises of a Hazardous Material with respect to which any Regulation or any Environmental Law requires that a notice be given to persons entering or occupying the Premises or neighboring properties. Tenant shall not be entitled to use or store any Hazardous Materials on, in, or about any portion of the Premises or the Project without, in each instance, obtaining Landlord's prior written consent thereto, which consent may be withheld in Landlord's sole and absolute discretion. If Landlord, in its sole and absolute discretion, consents to any such usage or storage, then Tenant shall be permitted to use and/or store only those Hazardous Materials that are necessary for Tenant's business and to the extent disclosed in a Hazardous Materials disclosure certificate (the "HazMat Certificate ") substantially in the form attached hereto as Exhibit E and as expressly approved by Landlord in writing, which approval may be withheld in Landlord's sole and absolute discretion. Tenant covenants, represents and warrants to Landlord that the information in the HazMat Certificate, if any, is true and correct and accurately describes the nature and use(s) of Hazardous Materials which will be made and/or used on the Premises by Tenant. Tenant shall, commencing with the date which is one year from the Commencement Date and continuing every year thereafter, and at such other times as Landlord may request, deliver to Landlord an updated executed HazMat Certificate describing Tenant's then - present use of Hazardous Materials on the Premises, and any other reasonably necessary documents and information as requested by Landlord. Any usage and storage of Hazardous Materials by Tenant may only be to the extent of the quantities of Hazardous Materials as specified in the then - applicable HazMat Certificate as expressly approved by Landlord, which approval may be withheld in Landlord's reasonable discretion. In all events such usage and storage must at all times be in full compliance with any and all Environmental Laws (as interpreted by judicial and administrative decisions), decrees, directives, guidelines, permits or permit conditions, currently existing and as amended, enacted, issued or adopted in the future which are or become applicable to Tenant or all or any portion of the Premises and in compliance with the recommendations of Landlord's consultants. Tenant agrees that any changes to the type and/or quantities of Hazardous Materials specified in the most recent HazMat Certificate be implemented only with the prior written consent of Landlord, which consent may be given or withheld in Landlord's sole and absolute discretion. Tenant shall not be entitled or permitted to install any tanks under, on or about the Premises for storage of Hazardous Materials without the express written consent of Landlord, which may be given or withheld in Landlord's sole and absolute discretion. Subject to the limitations on Landlord's access rights as set forth in Section 13.1 above, Landlord shall have the right, in Landlord's reasonable discretion, at all times during the Lease Term when Landlord reasonably believes Tenant is in violation of this Lease to (i) inspect the Premises, (ii) conduct tests and investigations to determine whether Tenant is in compliance with the provisions of this 21 DCAPDX_1789765_vI 115 Article XXII or to determine if Hazardous Materials are present in, on or about the Project, (iii) request lists of all Hazardous Materials used, stored or otherwise located on, under or about any portion of the Premises and/or the Common Areas, and (iv) require Tenant to complete a survey of its use, storage and handling of Hazardous Materials in the Premises, using a form and following procedures designated by Landlord, in Landlord's reasonable discretion (the "Survey "). Tenant shall reimburse Landlord for the cost of all such inspections, tests and investigations, and all costs associated with any Survey. Tenant shall cooperate in any tests, inspections or investigations conducted by or on behalf of Landlord. If as a result of an inspection, test or Survey Landlord determines, in Landlord's sole and absolute discretion, that Tenant should implement or perform safety, security or compliance measures, Tenant shall within thirty (30) days after written request by Landlord perform such measures, at Tenant's sole cost and expense. The aforementioned rights granted herein to Landlord and its representatives shall not create (a) a duty on Landlord's part to inspect, test, investigate, monitor or otherwise observe the Premises or the activities of Tenant with respect to Hazardous Materials, including, without limitation, Tenant's operation, use and any remediation relating thereto, or (b) liability on the part of Landlord and its representatives for Tenant's use, storage, disposal or remediation of Hazardous Materials, it being understood that Tenant shall be solely responsible for all liability in connection therewith. 22.4 Reporting and Cleanup. Tenant shall give to Landlord immediate verbal and follow -up written notice of any spills, releases, discharges, disposals, emissions, migrations, removals or transportation of Hazardous Materials on, under or about any portion of the Premises or Project or in any Common Areas provided that Tenant has actual, implied or constructive knowledge of such event(s). Tenant, at its sole cost and expense, covenants and warrants to promptly investigate, clean up, remove, restore and otherwise remediate (including, without limitation, preparation of any feasibility studies or reports and the performance of any and all closures) any spill, release, discharge, disposal, emission, migration or transportation of Hazardous Materials arising from or related to the acts or omissions of Tenant or its employees, invitees, agents or contractors or its assignees or sub - lessees (collectively, the "Tenant Parties ") such that the affected portions of the Project and any adjacent property are returned to the condition existing prior to the appearance of such Hazardous Materials. Any such investigation, clean up, removal, restoration and other remediation shall only be performed after Tenant has obtained Landlord's prior written consent, which consent shall not be unreasonably withheld so long as such actions would not potentially have a material adverse long -term or short-term effect on any portion of the Project. Notwithstanding the foregoing, Tenant shall be entitled to respond immediately to an emergency without first obtaining Landlord's prior written consent. Tenant, at its sole cost and expense, shall conduct and perform, or cause to be conducted and performed, all closures as required by any Environmental Laws or any agencies or other governmental authorities having jurisdiction thereof. If Tenant fails so to promptly investigate, clean up, remove, restore, provide closure or otherwise so remediate, Landlord may, but without obligation to do so, take any and all steps necessary to rectify the same, and Tenant shall promptly reimburse Landlord, upon demand, for all actual costs and expenses to Landlord of performing investigation, cleanup, removal, restoration, closure and remediation work, together with interest thereon as provided in Section 23.2(a). All such work undertaken by Tenant, as required herein, shall be performed in such a manner as to enable Landlord to make full economic use of the Premises and other portions of the Project after the satisfactory completion of such work. 22.5 Environmental Indemnity. In addition to Tenant's other indemnity obligations under this Lease, Tenant agrees to, and shall, protect, indemnify, defend (with counsel acceptable to Landlord) and hold Landlord and the other Indemnitees harmless from and against any and all loss, cost, damage, liability or expense (including, without limitation, diminution in value of any portion of the Premises, damages for the loss of or restriction on the use of rentable or usable space, and from any adverse impact of Landlord's marketing of any space within the Premises) arising at any time during or after the Lease Term in connection with or related to, directly or indirectly, the use, presence, transportation, storage, disposal, migration, removal, spill, release or discharge of Hazardous Materials on, in or about any portion of the Premises as a result (directly or indirectly) of the intentional or negligent acts or omissions of Tenant or Tenant Parties. Tenant shall indemnify Landlord and hold Landlord harmless from and against any and all liability, liens, claims, demands, damages, expenses, fees, costs, fines, penalties, suits, proceedings, actions and causes of action (including without limitation all attorneys' fees and expenses) arising out of or relating to, directly or indirectly, any violation or alleged violation by Tenant or any party accessing the Premises by or through Tenant of any one or more of the Environmental Laws, except for any violations of Environmental Laws which may be caused by Landlord. This indemnification shall survive the expiration or termination of this Lease. Neither the written consent of Landlord to the presence, use or storage of Hazardous Materials in, on, under or about any portion of the Premises nor the strict compliance by Tenant with all DCAPDX_1789765■1 116 22 Environmental Laws shall excuse Tenant from its obligations of indemnification pursuant hereto. Tenant shall not be relieved of its indemnification obligations under the provisions of this Section 22.5 due to Landlord's status as either an "owner" or "operator" under any Environmental Laws. 22.6 Cleanup at End of Term. Tenant's obligations and liabilities pursuant to the provisions of this Article XXII shall survive the expiration or earlier termination of this Lease. If it is determined by Landlord that the condition of all or any portion of the Premises is not in compliance with the provisions of this Lease with respect to Hazardous Materials, including without limitation, all Environmental Laws, at the expiration or earlier termination of this Lease, then Landlord may require Tenant to hold over possession of the Premises until Tenant can surrender the Premises to Landlord in the condition in which the Premises existed as of the Commencement Date and prior to the appearance of such Hazardous Materials except for reasonable wear and tear, including without limitation, the conduct or performance of any closures as required by any Environmental Laws. For purposes hereof, the term "reasonable wear and tear" shall not include any deterioration in the condition or diminution of the value of any portion of the Premises in any manner whatsoever related to, directly or indirectly, Hazardous Materials. Any such holdover by Tenant will be with Landlord's consent, which may be withheld in Landlord's sole and absolute discretion will not be terminable by Tenant in any event or circumstance and will otherwise be subject to all the provisions of this Lease. ARTICLE XXIII DEFAULT BY TENANT AND REMEDIES 23.1 Events of Default. The following events shall be deemed to be events of default (each, a "default ") by Tenant under this Lease: (a) Tenant shall fail to pay any installment of Rent or any other obligation under this Lease involving the payment of money and such failure shall continue for a period of three (3) days after written notice thereof to Tenant; provided, however, that if during the immediately preceding twelve (12) month period Landlord has already given Tenant a written notice of Tenant's failure to pay an installment of Rent, no notice shall be required for a Rent delinquency to become an event of default (i.e., the event of default will automatically occur on the fourth (4th) day after the date upon which the Rent becomes due). In addition, if Tenant fails to pay any Rent when due more than two times during any twelve -month period or more than three times during the entirety of the Lease Term or any extension thereof, Landlord may, in its sole and absolute discretion, demand in writing that Tenant pay, and Tenant shall thereafter pay, all future Rent quarterly in advance and by cashier's check or certified funds. (b) Tenant shall fail to comply with any provision, term, condition or covenant of this Lease, other than as described in subsection (a) above, and either (i) shall not cure such failure within ten (10) days after written notice thereof to Tenant, or if such default cannot reasonably be cured within ten (10) days then Tenant shall not be in default so long as it has commenced to cure within ten (10) days and is diligently prosecuting same and completes such cure within thirty (30) days after written notice thereof to Tenant, or (ii) shall cure that particular failure but shall again fail to comply with the same provision of the Lease within one (1) year after Landlord's written notice. (c) Tenant shall become insolvent, or shall make a transfer in fraud of creditors, or shall make an assignment for the benefit of creditors. (d) Tenant shall file a petition under any section or chapter of the federal Bankruptcy Code, as amended, or under any similar law or statute of the United States or any state thereof; or Tenant shall be adjudged bankrupt or insolvent in proceedings filed against Tenant. (e) A receiver or trustee shall be appointed for the Premises or for all or substantially all of the assets of Tenant or an attachment or other judicial seizure shall have occurred for the Premises or all or substantially all of Tenant's assets on the Premises. 23 DCAPDX1789765_v1 117 (f) Tenant shall desert, abandon or vacate or shall commence to desert or vacate the Premises or any substantial portion of the Premises at any time prior to the last month of the Lease Term, subject to the provisions of Section 24.1 of this Lease. (g) Tenant shall do or permit to be done anything which creates a lien upon the Premises or upon all or any part of the Project. (h) Tenant shall fail to maintain insurance as required under Section 16.2 hereof or Tenant shall breach any of the representations, warranties or covenants set forth in Article XXII. 23.2 Landlord's Remedies. Upon the occurrence of any such events of default, then in addition to the remedies available to Landlord under the other provisions of this Lease and all applicable laws, Landlord shall also have the option to pursue any one or more of the following remedies without any notice or demand whatsoever. Landlord's election of any one remedy under this Section 23.2 shall in no way prejudice Landlord's right at any time thereafter to exercise any other remedy. (a) Rent and Penalties. Tenant shall be obligated pay to Landlord all unpaid Rent and to reimburse Landlord for the damages suffered by Landlord as a result of the event of default, plus interest on such amounts at the maximum contractual rate which could legally be charged in the event of a loan of such amounts to Tenant (but in no event to exceed 18% per annum), such interest to accrue continuously on any unpaid balance due to Landlord by Tenant during the period commencing with the Rent due date and terminating with the date on which Tenant makes full payment of all amounts owing to Landlord at the time of said payment; and Landlord may pursue a monetary recovery from Tenant. (b) Tenant Liens. Landlord may take any one or more of the actions permissible at law to insure performance by Tenant of Tenant's covenants and obligations under this Lease. It is agreed that in the event of any default described in subsection (g) of Section 23.1 of this Lease, Landlord may pay or bond around such lien, whether or not contested by Tenant; and in such event Tenant agrees to reimburse Landlord on demand for all costs and expenses incurred in connection with any such action, with Tenant further agreeing that Landlord shall in no event be liable for any damages or claims resulting from such action. (c) Landlord's Right to Terminate. Upon Tenant's breach, Landlord may terminate this Lease by written notice to Tenant: (i) Until Landlord is able, through commercially reasonable efforts (i.e., subject to Section 23.4 of this Lease), to relet the Premises under terms satisfactory to Landlord, Tenant shall pay to Landlord on or before the first (1st) day of each calendar month, the monthly Rent and other charges provided in this Lease. If and after the Premises has been relet by Landlord, Tenant shall pay to Landlord on the twentieth (20th) day of each calendar month the difference between the monthly Rent and other charges provided in this Lease for such calendar month and that are actually collected by Landlord for such month. If it is necessary for Landlord to bring suit in order to collect any deficiency, Landlord shall have a right to allow such deficiencies to accumulate and to bring an action on several or all of the accrued deficiencies at one time. Any such suit shall not prejudice in any way the right of Landlord to bring a similar action for any subsequent deficiency or deficiencies. Any amount collected by Landlord from subsequent tenants for any calendar month in excess of the monthly Rent and other charges provided in this Lease, shall be credited to Tenant in reduction of Tenant's liability for any calendar month for which the amount collected by Landlord will be less than the monthly Rent and other charges provided in this Lease; but Tenant shall have no right to such excess other than the above - described credit. (d) Landlord's Right to Perform. Except as specifically provided otherwise in this Lease, all covenants and agreements by Tenant under this Lease shall be performed by Tenant at Tenant's sole cost and expense and without any abatement or offset of Rent. In the event of any default by Tenant, Landlord may, without waiving or releasing Tenant from any of Tenant's obligations, make such payment or perform such other act as required to cure such default on behalf of Tenant. All sums so paid by Landlord and all necessary incidental costs incurred by Landlord in performing such other acts shall be payable by Tenant to Landlord within five (5) days after demand therefor as Additional Rent. DCAPDX_1789765_vI 118 24 (e) Security Deposit. Landlord may apply Tenant's Security Deposit to the extent necessary to make good any rent arrearage, to pay the cost of remedying Tenant's default or to reimburse Landlord for expenditures made or damages suffered as a consequence of Tenant's default, without prejudice to any other remedies Landlord may have under this Lease. Following any such application of the Security Deposit, Tenant shall pay to Landlord on demand the amount so applied in order to restore the Security Deposit to its original amount. (t) Rights and Remedies Cumulative. All rights, options and remedies of Landlord contained in this Section 23.2 and elsewhere in this Lease shall be construed and held to be cumulative, and no one of them shall be exclusive of the other, and Landlord shall have the right to pursue any one or all of such remedies or any other remedy or relief which may be provided by law or in equity, whether or not stated in this Lease. Nothing in this Section 23.2 shall be deemed to limit or otherwise affect Tenant's indemnification of Landlord pursuant to any provision of this Lease. 23.3 Monthly Rent. It is expressly agreed that in determining "the monthly Rent and other charges provided in this Lease," as that term is used throughout Section 23.2 above, the term "Rent" includes, without limitation, all payments prescribed in Section 9.1 of this Lease. 23.4 Mitigation of Damages. (a) In the event of a default under this Lease, Landlord and Tenant shall each use commercially reasonable efforts to mitigate any damages resulting from a default of the other party under this Lease. (b) Landlord's obligation to mitigate damages after a default by Tenant shall be satisfied in full if Landlord undertakes to lease the Premises to another tenant (a "Substitute Tenant ") in accordance with the following criteria: (i) Landlord shall have no obligation to solicit or entertain negotiations with any other prospective tenant for the Premises until Landlord obtains full and complete possession of the Premises including, without limitation, the final and unappealable legal right to relet the Premises free of any claim of Tenant. (ii) Landlord shall not be obligated to offer the Premises to a Substitute Tenant when other premises in the Project suitable for that prospective tenant's use are available. (iii) Landlord shall not be obligated to lease the Premises to a Substitute Tenant for a rental less than the current fair market rental then prevailing for similar space, nor shall Landlord be obligated to enter into a new lease under other terms and conditions that are unacceptable to Landlord under Landlord's then current leasing policies for comparable space. whose use would: (iv) Landlord shall not be obligated to enter into a lease with any proposed tenant a. Disrupt the tenant mix or balance of the Project;, b. Violate any restriction, covenant, or requirement contained in the lease of another tenant of the Project; c. Adversely affect the reputation of the Project; or d. Be incompatible with the operation of the Project. (v) Landlord shall not be obligated to enter into a lease with any proposed Substitute Tenant (a "Substitute Lease ") which does not have, in Landlord's reasonable opinion, sufficient financial resources or operating experience to operate the Premises. 25 DCAPDX_1789765_v1 119 (vi) Landlord shall not be required to expend any amount of money to alter, remodel, or otherwise make the Premises suitable for use by a proposed Substitute Tenant unless: a. Tenant pays any such sum to Landlord in advance of Landlord's execution of a Substitute Lease with such Substitute Tenant (which payment shall not be in lieu of any damages or other sums to which Landlord may be entitled as a result of Tenant's default under this Lease); or b. Landlord, in Landlord's sole and absolute discretion, determines that any such expenditure is financially justified in connection with entering into any such Substitute Lease. (c) Upon compliance with the above criteria regarding the releasing of the Premises after a default by Tenant, Landlord shall be deemed to have fully satisfied Landlord's obligation to mitigate damages under this Lease and under any law or judicial ruling in effect on the date of this Lease or at the time of Tenant's default, and Tenant waives and releases, to the fullest extent legally permissible, any right to assert in any action by Landlord to enforce the terms of this Lease, any defense, counterclaim, or rights of setoff or recoupment respecting the mitigation of damages by Landlord, unless and to the extent Landlord maliciously or in bad faith fails to act in accordance with the requirements of this Section 23.4. 23.5 Landlord Expenses. It is further agreed that, in addition to all payments required pursuant to Section 23.2 above, Tenant shall compensate Landlord for all expenses incurred by Landlord in repossession (including, among other expenses, any increase in insurance premiums caused by the vacancy of the Premises), all expenses incurred by Landlord in reletting (including, among other expenses, repairs, remodeling, replacements, advertisements and brokerage fees), all concessions granted to a new tenant upon reletting (including, among other concessions, renewal options), all actual losses incurred by Landlord as a direct or indirect result of Tenant's default (including, among other losses, any claims asserted by Landlord's mortgagee or by other tenants or potential tenants of the Project which result in any loss, cost or expense to Landlord) and a reasonable allowance for Landlord's administrative efforts, salaries and overhead attributable directly or indirectly to Tenant's default and Landlord's pursuing the rights and remedies provided herein and under applicable law. 23.6 Injunctive Remedies. Either Party may restrain or enjoin any breach or threatened breach of any covenant, duty or obligation herein contained without the necessity of proving the inadequacy of any legal remedy or irreparable harm. The remedies hereunder shall be deemed cumulative and not exclusive of each other. 23.7 Attorney Fees and Costs. If on account of any breach or default by Tenant in its obligations hereunder, Landlord shall employ an attorney to represent, enforce or defend any of Landlord's rights or remedies hereunder, Tenant agrees to pay any reasonable attorneys' fees and costs incurred by Landlord in connection therewith. 23.8 Use of Security Deposit. Tenant acknowledges its obligation to deposit with Landlord the sum stated in Section 1.1(o) above, to be held by Landlord for the performance by Tenant of Tenant's covenants and obligations under this Lease. Upon the occurrence of any event of default by Tenant, Landlord may, from time to time, without prejudice to any other remedy provided herein or provided by law, use such funds to the extent necessary to make good any arrears of Rent and any other damage, injury, expense or liability caused to Landlord by such event of default; and in such event, Tenant shall pay to Landlord on demand the amount so applied in order to restore the Security Deposit to its original amount. 23.9 Remedies Not Exclusive. No agreement to accept a surrender of the Premises and no act or omission by Landlord or Landlord's agent during the Lease Term shall constitute an acceptance or surrender of the Premises unless made in writing and signed by Landlord. No reentry or taking possession of the Premises by Landlord shall constitute an election by Landlord to terminate this Lease unless a written notice of such intention is given to Tenant. Pursuit of any of the above remedies shall not preclude pursuit of any other remedies prescribed in other sections of this Lease and any other remedies provided by law. Forbearance by either Party to enforce one or DCAPDX_1789765_vl 120 26 more of the remedies herein provided upon an event of default shall not be deemed or construed to constitute a waiver of such default or any remedy therefor. ARTICLE XXIV LANDLORD'S CONTRACTUAL SECURITY INTEREST 24.1 Grant of Security Interest. Tenant does hereby grant to Landlord, and Landlord shall have at all times, a security interest in and a valid first lien upon all of the personal property and trade fixtures belonging to Tenant situated in and upon the Premises to secure the obligations of Tenant for all Base Rent, Additional Rent and other sums to become due hereunder and the performance by Tenant of each and all of Tenant's other covenants and obligations hereunder. The security interest and lien granted herein may be foreclosed in the manner and form provided by law for the foreclosure of chattel mortgages or in any other manner provided or permitted by law. Tenant hereby acknowledges and agrees that the applicable provisions of the Uniform Commercial Code, as adopted in the state where the Premises is located, permit Landlord to file a financing statement without Tenant's signature; and Tenant hereby consents to such a filing by Landlord. ARTICLE XXV HOLDING OVER 25.1 Holdover. Tenant is not permitted to hold over possession of the Premises after the expiration or earlier termination of the Lease Term without the express prior written consent of Landlord, which consent Landlord may withhold in its sole and absolute discretion. If Tenant holds over after the expiration or earlier termination of the Lease Term with or without the express written consent of Landlord, then, in addition to all other remedies available to Landlord at law or at equity or under this Lease, Tenant shall become a tenant at sufferance only, upon the terms and conditions set forth in this Lease so far as applicable (including Tenant's obligation to pay all. Additional Rent under this Lease), but at a Base Rent equal to two hundred percent (200 %) of the Base Rent applicable to the Premises immediately prior to the date of such expiration or earlier termination. Any such holdover Rent shall be paid on a per month basis without reduction for partial months during the holdover. Acceptance by Landlord of Rent after such expiration or earlier termination shall not constitute consent to a hold over hereunder or result in an extension of this Lease. This Section 25.1 shall not be construed to create any express or implied right to holdover beyond the expiration of the Lease Term or any extension thereof. Tenant shall be liable, and shall pay to Landlord within ten (10) days after demand, for all losses incurred by Landlord as a result of such holdover, and shall indemnify, defend and hold Landlord and the Landlord Indemnitees harmless from and against all liabilities, damages, losses, claims, suits, costs and expenses (including reasonable attorneys' fees and costs) arising from or relating to any such holdover tenancy, including without limitation, any claim for damages made by a proposed succeeding tenant. Tenant's indemnification obligation hereunder shall survive the expiration or earlier termination of this Lease. The foregoing provisions of this Article XXV are in addition to, and do not affect, Landlord's right of re -entry or any other rights of Landlord hereunder or otherwise at law or in equity. ARTICLE XXVI NOTICES 26.1 Method and Addresses. Wherever any notice is required or permitted under this Lease, such notice shall be in writing. Any notice or document required or permitted to be delivered under this Lease shall be deemed to be delivered when it is actually received by the designated addressee or, if earlier and regardless of whether actually received or not, when it is either (i) deposited in the United States mail, postage prepaid, certified mail, return receipt requested, or (ii) delivered to the custody of a reputable messenger service or overnight courier service, addressed to the applicable party to whom it is being delivered at the respective address for such party as is set out in Section 1.1 above (or for deliveries to Tenant, and at Landlord's option, to Tenant at the Premises), or at such other address as such applicable party may have theretofore specified to the delivering party by written notice. 26.2 Multiple Parties. If and when included within the term "Landlord" as used in this Lease there be more than one person, firm or corporation, all shall jointly arrange among themselves for their joint execution of 27 DCAPDX_1789765_v1 121 such notice specifying some individual at some specific address for the receipt of notices and payments to the Landlord; if and when included within the term "Tenant" as used in this Lease there be more than one person, firm or corporation, all shall jointly arrange among themselves for their joint execution of such a notice specifying some individual at some specific address for the receipt of notices and payments to Tenant. All parties included within the terms "Landlord" and "Tenant," respectively, shall be bound by notices and payments given in accordance with the provisions of this Article to the same effect as if each had received such notice or payment. In addition, Tenant agrees that notices to Tenant may be given by Landlord's attorney, property manager or other agent. ARTICLE XXVII SECURITY DEPOSIT 27.1 Comingling; Restoration. The Security Deposit prescribed in Section 1.1(o) of this Lease shall be held by Landlord without liability for interest and as security for the performance by Tenant of Tenant's covenants and obligations under this Lease, it being expressly understood that the Security Deposit shall not be considered an advance payment of Rent or a measure of Landlord's damages in case of default by Tenant. Landlord may commingle the Security Deposit with Landlord's other funds. As prescribed in Section 23.8 of this Lease, Landlord may, without prejudice to any other remedy, use the Security Deposit to the extent necessary to make good any Rent delinquencies or to satisfy any other covenant or obligation of Tenant hereunder; and following any such application of the Security Deposit, Tenant shall pay to Landlord on demand the amount so applied in order to restore the Security Deposit to its original amount. No part of the Security Deposit shall be considered to be held in trust, to bear interest, or to be prepayment for any monies to be paid by Tenant under this Lease. 27.2 Return of Deposit. Subject to Section 9.4 above, within thirty (30) days after Tenant (i) has surrendered the Premises to Landlord (which, Landlord and Tenant agree, includes turning over to Landlord's representative all keys to the Premises), and (ii) has provided Landlord with a forwarding address, Landlord shall return to Tenant the portion of the Security Deposit remaining after deducting all damages, charges and other amounts permitted by the terms of this Lease and applicable law. Tenant acknowledges and agrees that if Tenant has breached this Lease before or during Tenant's surrendering the Premises to Landlord, then Landlord shall be entitled to deduct from the Security Deposit being returned to Tenant (if any) all damages and losses that Landlord has suffered or that Landlord reasonably estimates that it will suffer as a result of such breach of this Lease by Tenant. 27.3 Assignment of Deposit. If Landlord transfers its interest in the Premises during the term of this Lease, Landlord may assign the Security Deposit to the transferee; and upon such transfer and the transferee's acknowledgement of responsibility to Tenant for the Security Deposit (which acknowledgement will be deemed to have been effected if the transferee assumes the obligations of the Landlord under this Lease, i.e., even without a specific mention of the Security Deposit), Landlord shall thereafter have no further liability for the return of the Security Deposit. ARTICLE XXVIII COMMISSIONS 28.1 Brokers. Landlord shall pay to Agent a commission for negotiating this Lease, in accordance with a separate agreement between Landlord and Agent. Tenant hereby represents and warrants to Landlord that Tenant has not dealt with any broker or finder or real estate licensee in connection with this Lease other than Agent defined below. Tenant shall protect, indemnify, defend and hold harmless Landlord from any and all damages, liabilities, losses, costs, or expenses (including, without limitation, reasonable attorneys' fees and costs) which Landlord may incur or sustain from a claim for a commission, broker's fee, finder's fee, or other similar compensation by any party other than Agent claiming by, through or under Tenant with respect to this Lease. As used herein, "Agent" means Thad Mallory of Kidder Mathews LLC, a Washington limited liability company, whose principal office is located at 12886 Interurban Avenue South, Tukwila, Washington 98168 -3318, and whose applicable broker license number is 86084. DCAPDX1789765_v1 122 28 that: ARTICLE XXIX LAWS AND REGULATIONS 29.1 OFAC. (a) Certification. Each of Landlord and Tenant certifies, represents, warrants and covenants (i) It is not acting and will not act, directly or indirectly, for or on behalf of any person, group, entity, or nation named by any Executive Order or the United States Treasury Department as a terrorist, "Specially Designated National and Blocked Person ", or other banned or blocked person, entity, nation or transaction pursuant to any law, order, rule, or regulation that is enforced or administered by the Office of Foreign Assets Control; and (ii) It is not engaged in this transaction, directly or indirectly on behalf of, or instigating or facilitating this transaction, directly or indirectly on behalf of, any such person, group, entity or nation. (b) Indemnity. Landlord and Tenant each hereby agrees to defend (with counsel reasonably acceptable to the other party), indemnify and hold harmless the other party and the respective Landlord Indemnitees and Tenant Indemnitees, as applicable, from and against any and all claims arising from or related to any such breach of the foregoing certifications, representations, warranties and covenants. 29.2 Tenant's Compliance with Regulations. Landlord and Tenant acknowledge that there are in effect federal, state, county and municipal laws, orders, rules, directives and regulations (collectively referred to hereinafter as the "Regulations "), and that additional Regulations may hereafter be enacted or go into effect, relating to or affecting the Premises or the Project. Regulations shall include all Environmental Laws. Tenant agrees that it will not cause or permit to be caused any act or practice, by negligence, omission or otherwise, that would violate any of said Regulations. In addition, and notwithstanding any other provisions of this Lease, Tenant shall have no claim against Landlord by reason of any changes Landlord may make to the Project or the Premises pursuant to said Regulations or any charges imposed upon Tenant, Tenant's customers or other invitees pursuant to same. Tenant shall, within five days after receipt of Landlord's written request, provide Landlord with copies of all documents and information evidencing Tenant's compliance with any Regulations and shall immediately notify Landlord in writing (with copies of any documents involved) upon receipt of any threatened or actual claim, notice, citation, warning, complaint or report pertaining to or involving failure by Tenant or the Premises to comply with any Regulations. ARTICLE XXX MISCELLANEOUS 30.1 Relationship of Parties. Nothing in this Lease shall be deemed or construed by the parties hereto, nor by any third party, as creating the relationship of principal and agent or of partnership or of joint venture between the parties hereto, it being understood and agreed that neither the method of computation of rent, nor any other provision contained herein, nor any acts of the parties hereto, shall be deemed to create any relationship between the parties hereto other than the relationship of landlord and tenant. 30.2 No Offset; Independent Covenants. Tenant shall not for any reason withhold or reduce Tenant's required payments of Rent and other charges provided in this Lease, it being agreed (i) that the obligations of Landlord under this Lease are independent of Tenant's obligations except as may be otherwise expressly provided in this Lease and (ii) that to the maximum extent permitted under applicable law, Tenant hereby waives all rights which it might otherwise have to withhold Rent. The immediately preceding sentence shall not be deemed to deny Tenant the ability of pursuing all rights granted it under this Lease or at law (with the exception of any right of Tenant to offset or withhold the payment of Rent, which right is hereby waived to the maximum extent permitted by applicable law); however, at the direction of Landlord, Tenant's claims in this regard shall be litigated in 29 DCAPDX_1789765_v1 123 proceedings different from any litigation involving Rent claims or other claims by Landlord against Tenant (i.e., each party may proceed to a separate judgment without consolidation, counterclaim or offset as to the claims asserted by the other party). 30.3 No Continuing Waiver. One or more waivers of any covenant, term or condition of this Lease by either party shall not be construed as a waiver of a subsequent breach of the same covenant, term or condition. The consent or approval by either party to or of any act by the other party requiring such consent or approval shall not be deemed to waive or render unnecessary consent to or approval of any subsequent similar act. 30.4 Force Majeure. Whenever a period of time is herein prescribed for action to be taken by either party hereto, neither party shall not be liable or responsible for, and there shall be excluded from the computation of any such period of time, any delays due to strikes, riots, acts of God, shortages of labor or materials, war, governmental laws, regulations or restrictions or any other causes of any kind whatsoever which are beyond its reasonable control. 30.5 Landlord's Manager. Tenant is hereby notified that Landlord may, from time to time, appoint a manager for the Project (each a "Landlord's Manager ") to whom Landlord may delegate some or all of Landlord's obligations under this Lease. Upon appointment of a Landlord's Manager and notice to Tenant of the same; (a) Tenant shall be required and authorized to take direction from Landlord's Manager with respect to Tenant's obligations under this Lease and (b) any release or indemnification of Landlord under this Lease shall also apply to Landlord's Manager. 30.6 Severability. In the event that any provision or part of this Lease should be held to be invalid or unenforceable by a court of competent jurisdiction, such provision shall be reformed and enforced to the maximum extent permitted by law. If such provision cannot be reformed, then it shall be severed from this Lease and the validity and enforceability of the remaining provisions of this Lease shall not be affected thereby. 30.7 Underlying Lease. If this Lease is in fact a sublease, Tenant accepts this Lease subject to all of the terms and conditions of the underlying lease under which Landlord holds the Project or the Building as lessee. Tenant covenants that it will do no act or thing which would constitute a violation by Landlord of its obligation under such underlying lease; provided, however, that Tenant's agreement in this regard is premised on Landlord's assurances to the effect that the terms of this Lease do not violate such underlying lease. 30.8 Governing Law. The laws of the state where the Premises is located shall govern the interpretation, validity, performance and enforcement of this Lease. Except to the extent required otherwise by applicable law, the venue for any action under this Lease shall be the county in which the Premises are located. 30.9 Headings. The captions and headings used herein are for convenience only and do not limit or amplify the provisions hereof. 30.10 Number; Gender. Whenever herein the singular number is used, the same shall include the plural, and words of any gender shall include each other gender. 30.11 Inurement. The terms, provisions and covenants contained in this Lease shall apply to, inure to the benefit of and be binding upon the parties hereto and their respective heirs, successors -in- interest and legal representatives except as otherwise herein expressly provided. 30.12 Entire Agreement; Amendments. This Lease contains the entire agreement between the parties, and no rights are created in favor of either party on account of any condition or event other than as specified or expressly contemplated in this Lease. No brochure, rendering, information or correspondence shall be deemed to be a part of this agreement unless specifically incorporated herein by reference. In addition, no agreement shall be effective to change, modify or terminate this Lease in whole or in part unless such is in writing and duly signed by the party against whom enforcement of such change, modification or termination is sought. DCAPDX_1789765_v1 124 30 30.13 No Reliance. LANDLORD AND TENANT HEREBY ACKNOWLEDGE THAT THEY ARE NOT RELYING UPON ANY BROCHURE, RENDERING, OFFERING MATERIALS, INFORMATION, REPRESENTATION OR PROMISE OF THE OTHER, OR OF THE AGENT OR COOPERATING AGENT, EXCEPT AS MAY BE EXPRESSLY SET FORTH IN THIS LEASE. 30.14 No Recording. Neither this Lease nor any memorandum thereof shall be recorded by or on behalf of Tenant in any real property records or other public records without the prior written consent of Landlord, which may be withheld in Landlord's sole and absolute discretion. 30.15 Inducement Recapture in Event of Breach. Any agreement by Landlord for possession of the Premises by Tenant without the payment or with reduced payment of Rent or other charges or any agreement for the giving or paying by Landlord to or for Tenant of any cash or other bonus, inducement, incentive or consideration for Tenant's entering into this Lease including, but not limited to tenant improvement allowances and abated Rent, all of which concessions are hereinafter collectively referred to as "Inducement Provisions," are conditioned upon Tenant's full, timely and faithful performance of all of the terms, covenants, and conditions of this Lease to be performed or observed by Tenant. Upon the occurrence of an event of default by Tenant, any Rent, other charge, bonus, inducement or consideration abated, given or paid by Landlord under such an Inducement Provision shall be immediately due and payable by Tenant to Landlord and recoverable by Landlord as Additional Rent due under this Lease, notwithstanding any subsequent cure by Tenant of such event of default. 30.16 Quiet Enjoyment. Upon payment by Tenant of the Rents herein provided, and upon the observance and performance of all terms, provisions, covenants and conditions on Tenant's part to be observed and performed, Tenant shall, subject to all of the terms, provisions, covenants and conditions of this Lease, peaceably and quietly hold and enjoy the Premises for the entire term of this Lease without hindrance or molestation from all persons claiming by, through or under Landlord. 30.17 Landlord's Costs. Tenant shall reimburse Landlord on demand for all reasonable legal, engineering, and other professional or consulting services and expenses incurred by Landlord in connection with any requests by Tenant or any lender of Tenant for consent, waiver or approval of any kind. 30.18 Exhibits Control. This Lease consists of thirty articles and Exhibits A through Exhibit H. With the exception of Article VII, in the event any provision of an exhibit or other attached page shall be inconsistent with a provision in the body of this Lease, the provision as set forth in the exhibit or other attached page shall be deemed to control 30.19 No Offer. The submission by Landlord of this instrument to Tenant for examination, negotiation or signature does not constitute an offer of, an option for, or a representation by Landlord regarding, a prospective lease. This Lease shall be effective if and when (and only if and when) it has been executed and delivered by both Landlord and Tenant. 30.20 Mortgagee Consent. The terms and conditions of this Lease are subject to written approval by Landlord's mortgagee(s), including any lender(s) who, at the time of the execution of this Lease, has committed or are considering committing to Landlord to make a loan secured by all or any portion of the Premises, and such written approval is a condition precedent to Landlord's obligations hereunder. [Landlord and Tenant signatures follow] 31 DCAPDX1789765_v1 125 EXECUTED to be effective as of the later of the dates accompanying a signature by Landlord or Tenant below; provided, however, that if the later of the dates accompanying a signature by Landlord or Tenant below is different from the date specified as the "Date of This Lease" on the cover page of this Lease, then the date so specified on the cover page of this Lease shall be deemed to be the "Date of This Lease" for all purposes. LANDLORD: IIT ANDOVER DC LLC, a Delaware limited liability company By: IIT AZ -CO -WA Holdco LLC, a Delaware limited liability company, its sole member By: IIT Real Estate Holdco LLC, a Delaware limited liability company, its sole member By: Industrial Income Operating Partnership LP, a Delaware limited partnership, its sole member By: Industrial Income Trust Inc., a Maryland corporation, its general partner By: Name printed: Title: Date of Signature: , 2015 State of Washington County of I certify that I know or have satisfactory evidence that is the person who appeared before me, and said person acknowledged that (he /she) signed this instrument, on oath stated that (he /she) was authorized to execute the instrument and acknowledged it as the of to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. Dated: , 2015 DCAPDX_1789765_v1 126 (Signature) (Title) My appointment expires: [Tenant signatures, next page.] 32 TENANT: THE CITY OF TUKWILA By: Name printed: Title: Date of Signature: , 2015 State of Washington County of I certify that I know or have satisfactory evidence that is the person who appeared before me, and said person acknowledged that (he /she) signed this instrument, on oath stated that (he /she) was authorized to execute the instrument and acknowledged it as the of to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. Dated: , 2015 DCAPDX_1789765_v1 (Signature) (Title) My appointment expires: 33 127 128 EXHIBIT A The Site Plan of the Premises to 0 DCAPDX_1789765_yl A - 1 129 130 EXHIBIT B Legal Description of The Project TRACT 1, ANDOVER INDUSTRIAL PARK NO. 4, ACCORDING TO THE PLAT THEROF, RECORDED IN VOLUME 79 OF PLATS, PAGES(S) 39 AND 40, IN KING COUNTY WASHINGTON. B -1 DCAPDX_1789765_v1 131 132 EXHIBIT C Move -Out Standards At the expiration or earlier termination of the Lease and in addition to any other provisions of the Lease regarding surrender of the Premises, Tenant shall surrender the Premises in the same condition as they were upon delivery of possession thereto under the Lease, reasonable wear and tear excepted, and shall deliver all keys to Landlord. Before surrendering the Premises, Tenant shall remove all of its personal property and trade fixtures and such alterations or additions to the Premises made by Tenant as may be specified by Landlord for removal. If Tenant fails to remove its personal property, fixtures or alterations or additions upon the expiration or earlier termination of the Lease, the same shall be deemed abandoned and shall become the property of Landlord. Notwithstanding the foregoing, Tenant shall be liable to Landlord for all costs and damages incurred by Landlord in removing, storing or selling such property, fixtures, alterations or additions and in restoring the Premises to the condition required pursuant to the Lease. Notwithstanding anything to the contrary in the Lease, Tenant shall surrender the Premises, at the time of the expiration or earlier termination of the Lease, in a condition that shall include, but is not limited to, the following: 1. Lights: 2. Roll -Up Doors & Pedestrian Doors: 3. Loading Docks: 4. Warehouse Floor: 5. Tenant- Installed Equipment & Wiring: 6. Walls: DCAPDX_1789765_v1 Office, exterior, emergency exit and warehouse lights will be fully operational with all bulbs functioning. Replacement lamps should be consistent in color, type and style. Roll -up doors must receive fmal maintenance by a licensed contractor to include: lube, adjustments, alignment and replacement of seals and panels (if required). Pedestrian doors must have all hardware in working condition (including crash hardware, thresholds, closers and weather - stripping). Replacement of doors and/or hardware shall be of similar type as existing. Tenant shall provide written evidence of such maintenance /repairs to Landlord. Includes dock levelers, dock bumpers, dock door seals, pit levelers and sump pumps. Tenant to provide evidence of fmal maintenance on all items from a licensed contractor. Tenant shall remove all paint and stickers and leave floors free of stains and swept, with no racking bolts or other protrusions left in floor. Cracks should be repaired with an epoxy or polymer. Tenant shall remove all air lines, junction boxes, distribution boxes, conduit, etc. All wiring shall be terminated back to point of connection. Telecom and associated data wiring shall be removed and terminated at the original phone board. Warehouse Walls - Sheetrock (drywall) damage should be patched and fire -taped so that there are no holes remaining. Office walls shall be patched and returned to a paint -ready condition. C -1 133 7. Roof: Any tenant - installed equipment must be removed and roof penetrations properly repaired by Landlord's roofing contractor. 8. Signs: 9. Heating & Air Conditioning System: 10. Plumbing: 11. Overall Cleanliness: DCAPDX_1789765_v1 134 All Tenant - installed signage shall be removed, including interior and exterior window signage. Exterior building surface shall be restored to original condition, including patching of all holes and painting to match exterior color. HVAC equipment must receive final maintenance by a licensed HVAC contractor, including filter changes and repairs /replacements if required. Tenant shall provide written evidence of maintenance /repairs to Landlord. Restroom/Kitchen fixtures and accessories (i.e. "insta- hot" water heaters, vanity heaters, handrails, soap dispensers, paper towel holders, etc.) shall be returned in good working condition, free of leaks and stains. Tenant shall provide written evidence of final service to water heater. Clean windows, sanitize bathroom(s), vacuum carpet, and remove any and all debris from office and warehouse. Remove all pallets and debris from exterior of premises and dock areas. In addition, Tenant shall properly dispose of all hazardous materials, including paint, at Tenant's expense. C -2 EXHIBIT D Rules and Regulations General Rules Tenant shall faithfully observe and comply with the following Rules and Regulations: 1. Tenant shall not alter any locks or install any new or additional locks or bolts on any doors or windows of the Premises without obtaining Landlord's prior written consent, which consent shall not be unreasonably withheld. Tenant shall bear the cost of any lock changes or repairs required by Tenant. 2. Access to the Project may be refused unless the person seeking access has proper identification or has a previously received authorization for access to the Project. Landlord and its agents shall in no case be liable for damages for any error with regarding to the admission to or exclusion from the Project of any person. In case of invasion, mob, riot, public excitement or other commotion, Landlord reserves the right to prevent access to the Project during the continuance thereof by any means it deems appropriate for the safety and protection of life and property. 3. No cooking shall be done or permitted on the Premises, nor shall the Premises be used for any improper or objectionable purposes. Notwithstanding the foregoing, Underwriters' Laboratory- approved equipment and microwave ovens may be used in the Premises for heating food and brewing coffee, tea, hot chocolate and similar beverages for employees and visitors of Tenant, provided that such use is in accordance with all applicable federal, state and city laws, codes, ordinances, rules and regulations; and provided further that such cooking does not result in odors escaping from the Premises. 4. No boring or cutting for wires shall be allowed without the consent of Landlord, which consent may be withheld in Landlord's sole and absolute discretion. Tenant shall not interfere with broadcasting or reception from or in the Project or elsewhere. No gaming devices shall be operated in the Premises. 5. Landlord reserves the right to exclude or expel from the Project any person who, in the judgment of Landlord, is intoxicated or under the influence of liquor or drugs, or who shall in any manner do any act in violation of any of these Rules and Regulations. 6. Tenant shall store all its trash and garbage within the interior of the Premises or in other locations approved by Landlord, in Landlord's sole and absolute discretion. All moveable trash receptacles provided by the trash disposal firm for the Premises must be kept in the trash enclosure areas, if any, provided for that purpose. No material shall be placed in the trash boxes or receptacles if such material is of such nature that it may not be disposed of in the ordinary and customary manner of removing and disposing of trash in the vicinity of the Project without violation of any law or ordinance goveming such disposal. 7. Tenant shall comply with all safety, fire protection and evacuation procedures and regulations established by Landlord or any governmental agency. 8. The sidewalks, entries, and driveways of the Project shall not be obstructed by Tenant or any Tenant Parties, or used by them for any purpose other than ingress to and egress from the Premises. 9. Except for qualified service dogs, no animals shall be allowed in or about the Premises or in the Common Areas. 10. Tenant shall not install or operate any steam or gas engine, boiler, or other mechanical apparatus in the Premises, except as specifically approved in the Lease. The use of oil, gas or inflammable liquids for heating, lighting or any other purpose is expressly prohibited. Explosives or other articles deemed extra hazardous shall not be brought into the Project. D -1 DCAPDX_1789765_v1 135 11. Tenant shall not permit dumping of waste or refuse or permit any harmful materials to be placed in any drainage system or sanitary system in or about the Premises or the Project. 12. Tenant shall ascertain from Landlord the maximum amount of electrical current which can safely be used in the Premises, taking into account the capacity of the electrical wiring in the Project and the Premises and the needs of other tenants, and shall not use more than such safe capacity. Landlord's consent to the installation of electric equipment shall not relieve Tenant from the obligation not to use more electricity than such safe capacity. PARKING RULES 1. Tenant shall not permit or allow any vehicles that belong to or are controlled by Tenant or Tenant's employees, suppliers, shippers, customers or invitees to be loaded, unloaded or parked in areas other than those designated by Landlord for such activities and at times approved by Landlord in Landlord's sole and absolute discretion. Tenant shall ensure that users of the parking area obey all posted signs and park only in the areas designated for vehicle parking. Tenant and its customers, employees, suppliers, shippers and invitees shall comply with all rules and regulations adopted by Landlord from time to time relating to truck parking and/or truck loading and unloading. 2. Landlord reserves the right to relocate all or a part of parking spaces within the parking area. If access to the parking areas is not now controlled with gates or similar devices, Landlord shall have the right, but not the obligation, to install gates or other devices to control access to the parking areas, and Tenant shall comply with all of Landlord's rules and regulations relating to access to the parking areas. Landlord shall use commercially reasonable efforts to minimize inconvenience to Tenant caused by the relocation of parking spaces or the installation of parking controls. 3. Landlord will not be responsible for any damage to vehicles, injury to persons or loss of property, all of which risks are assumed by the party using the parking area. 4. The maintenance, washing, waxing or cleaning of vehicles in the parking area or Common Areas is prohibited. 5. Tenant shall be responsible for seeing that all of its employees, agents, contractors, suppliers, shippers, and invitees comply with the applicable parking rules, regulations, laws and agreements. 6. At Landlord's request, Tenant shall provide Landlord with a list which includes the name of each person using the parking facilities based on Tenant's parking rights under this Lease and the license plate number of the vehicle being used by that person. Tenant shall provide Landlord with an updated list within five (5) days after any part of the list becomes inaccurate. 7. All parking spaces may only be used for parking vehicles no larger than full -size passenger automobiles or pick -up trucks. Parking any type of recreational vehicles is specifically prohibited on or about the Project. No vehicle of any type shall be stored in the parking areas at any time. No overnight truck parking shall be allowed except to the extent that the Premises include truck loading doors in which event one truck may be parked overnight in front of each loading door. In the event that a vehicle is disabled, it shall be removed within 48 hours. There shall be no "For Sale" or other advertising signs on or about any parked vehicle. All vehicles shall be parked in the designated parking areas in conformity with all signs and other markings. All parking will be open parking, and no reserved parking, numbering or lettering of individual spaces will be permitted except as specified by Landlord. 8. If Tenant commits or allows in the parking lot any of the activities prohibited by this Lease or the Rules, then Landlord shall have the right, without notice, in addition to such other rights and remedies that it may have, to remove or tow away the vehicle involved and charge the cost to Tenant, which cost shall be immediately payable by Tenant upon demand by Landlord. DCAPDX 1789765 v1 136 D -2 Landlord reserves the right at any time to change or rescind any one or more of these Rules and Regulations, or to make such other and further reasonable Rules and Regulations as in Landlord's judgment may from time to time be necessary for the management, safety, care and cleanliness of the Project, and for the preservation of good order therein, as well as for the convenience of other tenants therein. Landlord may waive any one or more of these Rules and Regulations for the benefit of any particular tenant, but no such waiver by Landlord shall be construed as a waiver of such Rules and Regulations in favor of any other tenant, nor prevent Landlord from thereafter enforcing any such Rules or Regulations against any or all tenants of the Project. Tenant shall be deemed to have read these Rules and Regulations and to have agreed to abide by them as a condition of its occupancy of the Premises. D -3 DCAPDX_1789765_v1 137 138 EXHIBIT E Form of Hazardous Materials Disclosure Certificate General Information Name of Responding Company: Mailing Address: Signature: Title: Phone: Date: Age of Facility: Length of Occupancy: Major products manufactured and/or activities conducted on the property: Types of Business Activities (check all that apply) ❑❑❑❑ ❑❑❑❑❑❑ Machine Shop Light assembly Research and development Product service or repair Photo processing Automotive service and repair Manufacturing Warehouse Integrated/printed circuit Chemical /pharmaceutical product Hazardous Materials Activities (check all that apply) ❑❑❑❑❑❑❑❑❑❑❑❑❑❑❑❑ Degreasing Chemical/etching/milling Wastewater treatment Painting Striping Cleaning Printing Analytical lab Plating Chemical/missing /synthesis Silkscreen Lathe /mill machining Deionizer water product Photo masking Wave solder Metal finishing HAZARDOUS MATERIALS/WASTE HANDLING AND STORAGE A. Are hazardous materials handled on any of your shipping and receiving docks in container quantities greater than one gallon? ❑ Yes ❑ No B. If hazardous materials or waste are stored on the premises, please check off the nature of the storage and type(s) of materials below. Types of Storage Container (list above - ground storage only) El 1 gallon or 3 liter bottles /cans 5 to 30 gallon carboys 55 gallon drums Tanks E -1 DCAPDX_1789765_v1 Type of Hazardous Materials and/or Waste Stored CI Acid Phenol Caustic /alkaline cleaner Cyanide Photo resist stripper 139 ❑ Paint ❑ Flammable solvent ❑ Gasoline /diesel Fuel ❑ Nonflammable /chlorinated solvent ❑ Oil/cutting fluid C. Do you accumulate hazardous waste onsite? ❑ Yes ❑ No If yes, how is it being handled? ❑ On -site treatment or recovery ❑ Discharged to sewer ❑ Hauled offsite If hauled offsite, by whom: ❑ Incineration D. Indicate your hazardous waste storage status with Department of Health Services: ❑ Generator ❑ Interim status facility ❑ Permitted TSDF ❑ None of the above WASTEWATER TREATMENT/DISCHARGE A. Do you discharge industrial wastewater to: ❑ Sewer ❑ Storm drain ❑ Surface water ❑ No industrial discharge B. Is your industrial wastewater treated before discharge? ❑ Yes ❑ No If yes, what type of treatment is being conducted: ❑ Neutralization ❑ Metal hydroxide formation ❑ Closed -loop treatment ❑ Cyanide destruct ❑ HT treatment ❑ Other SUBSURFACE CONTAINMENT OF HAZARDOUS MATERIALS /WASTES A. Are buried tanks /sumps being used for any of the following: ❑❑❑❑❑❑❑ Hazardous waste storage Chemical storage Gasoline /diesel fuel storage Waste treatment Wastewater neutralization Industrial wastewater treatment None of the above B. If buried tanks are located onsite, indicate their construction: DCAPDX_1789765_v1 140 E -2 ❑ Steel ❑ Fiberglass ❑ Concrete ❑ Inside open vault ❑ Double walled C. Are hazardous materials or untreated industrial wastewater transported via buried piping to tanks, process areas or treatment areas: ❑ Yes ❑ No D. Do you have wet floors in your process areas? ❑ Yes ❑ No If yes, name processes: E. Are abandoned underground tanks or sumps located on the property? ❑ Yes ❑ No HAZARDOUS MATERIALS SPILLS A. Have hazardous materials ever spilled to: ❑ The sewer ❑ The storm drain ❑ Onto the property ❑ No spills have occurred B. Have you experienced any leaking underground tanks or sumps? ❑ Yes ❑ No C. If spills have occurred, were they reported? ❑ Yes ❑ No Check which government agencies that you contacted regarding the spill(s): ❑ Department of Health Services. ❑ Department of Fish and Game ❑ Environmental Protection Agency ❑ Regional Water Quality Control Board ❑ Fire Department D. Have you been contacted by a government agency regarding soil or groundwater contamination on your site? ❑ Yes ❑ No Do you have exploratory wells onsite? ❑ Yes ❑ No If yes, indicate the following: Number of wells: Approximate depth of wells: Well diameters: PLEASE ATTACH ENVIRONMENTAL REGULATORY PERMITS, AGENCY REPORTS THAT APPLY TO YOUR OPERATION. AND HAZARDOUS WASTE MANIFESTS. Check off those enclosed: ❑ Hazardous Materials Inventory Statement, HMIS ❑ Hazardous Materials Management Plan, HMMP ❑ Department of Health Services, Generatory Inspection Report ❑ Underground Tank Registrations ❑ Industrial Wastewater Discharge Permit ❑ Hazardous Waste Manifest E -3 DCAPDX_1789765_v1 141 142 EXHIBIT F Commencement Date Certificate [SAMPLE ONLY — FORM TO BE COMPLETED BY LANDLORD AND EXECUTED BY TENANT ON OR AFTER COMMENCEMENT DATE] LANDLORD: TENANT: LEASE DATE: PREMISES: Tenant hereby accepts the Premises as being in the condition required under the Lease. The Commencement Date of the Lease is The Expiration Date of the Lease is Landlord: Tenant: [DO NOT SIGN] [DO NOT SIGN] By: a By: By:. Its: Its: - - Telephone: ( ) Telephone: ( ) Facsimile: ( ) Facsimile: ( ) Executed at: Executed at: on: on: F -1 DCAPDX_I789765_v1 143 144 EXHIBIT G Option to Extend Addendum 1. Option to Extend. Landlord hereby grants to Tenant the option to extend the term of this Lease for sixty (60) months ( "Option Period ") commencing when the prior term expires. 2. Exercise Dates. For purposes of Paragraph 5 of this Addendum, a. the Earliest Exercise Date is twelve (12) months prior to the date that the Option Period would commence, and b. the Last Exercise Date is nine . (9) months prior to the date that the Option Period would commence. 3. Monthly Base Rent. The monthly Base Rent for each month of an Option Period shall be the amount calculated in accordance with the Market Rent Adjustment provision below, but in no event shall the monthly Base Rent for an Option Period be less than the highest monthly Base Rent payable during the term immediately preceding the Option Period. 4. Market Rent Adjustment. Four (4) months prior to the commencement of the Option Period, the Parties shall negotiate in good faith to determine the Base Rent for the Option Period. If written agreement cannot be reached by the Parties by the date which is three months prior to the commencement of that Option Period, then the option for that Option Period will automatically terminate. For purposes hereof, the "Market Rent Adjustment" rate shall mean the then prevailing market rate for comparable space in the Project and comparable buildings in the vicinity of the Project, taking into account the size of the Lease, the length of the renewal term, market escalations and the credit of Tenant. The Base Rent shall not be reduced by reason of any costs or expenses saved by Landlord by reason of Landlord's not having to find a new tenant for such premises (including, without limitation, brokerage commissions, costs of improvements, rent concessions or lost rental income during any vacancy period). 5. Conditions to Exercise of Option. Tenant's right to extend is conditioned upon and subject to each of the following: a. In order to exercise an option to extend, Tenant must give written notice of such election to Landlord and Landlord must receive the same by the Last Exercise Date but not prior to the Earliest Exercise Date. If proper notification of the exercise of an option is not given and/or received, such option shall automatically expire. Tenant acknowledges that because of the importance to Landlord of knowing no later than the Last Exercise Date whether or not Tenant will exercise the option, the failure of Tenant to notify Landlord by the Last Exercise Date will conclusively be presumed an election by Tenant not to exercise the option. b. Tenant shall have no right to exercise an option (i) if Tenant is in default or (ii) in the event that Landlord has given to Tenant three or more notices of separate defaults during the 12 -month period immediately preceding the exercise of the option, whether or not the defaults are cured. The period of time within which an option may be exercised shall not be extended or enlarged by reason of Tenant's inability to exercise an option because of the provisions of this paragraph. c. All of the terms and conditions of this Lease, except where specifically modified by this Addendum, shall apply during Option Periods. d. The options are personal to Tenant, cannot be assigned or exercised by anyone other than Tenant, and only while Tenant is in possession of the entire Premises and without the intention of thereafter assigning or subletting. 6. Notice. Notice of Rent Adjustments shall be made as specified in Article XXVI of the Lease. G -1 DCAPDX1789765_v1 145 146 EXHIBIT H IMPROVEMENT ADDENDUM 1. Landlord's Work; Construction Allowance. This Improvement Addendum sets forth the obligations of Landlord and Tenant with respect to the preparation of the Premises for Tenant's occupancy. Subject to the terms and conditions of this Improvement Addendum, Landlord shall perform improvements to the Premises in accordance with the worklist attached hereto as Schedule 1 (the "Worklist "). The improvements to be performed by Landlord in accordance with the Worklist are hereinafter referred to as "Landlord's Work ". Landlord shall, as necessary, enter into one or more direct contracts for Landlord's Work with a general contractor or other contractors selected by Landlord. In addition, Landlord shall have the right to select and approve of any subcontractors used in connection with Landlord's Work. Tenant acknowledges and agrees that, except as expressly set forth on the Worklist, Landlord's Work shall be constructed using Building- standard materials designated by Landlord for the Building. In no event shall Landlord's Work include (i) any costs of procuring or installing in the Premises any trade fixtures, equipment, furniture, furnishings, telephone equipment, cabling for any of the foregoing or other personal property ( "Personal Property") to be used in the Premises by Tenant, and the cost of such Personal Property shall be paid by Tenant, or (ii) any costs or expenses of any consultants retained by Tenant with respect to design, procurement, installation or construction of improvements or installations, whether real or personal property, for the Premises. 2. Tenant Delay; Commencement Date. If Landlord shall be delayed in substantially completing Landlord's Work as a result of the occurrence of any of the following (a "Tenant Delay "): (a) Tenant's failure to furnish information in accordance with this Improvement Addendum or to respond to any request by Landlord for any approval or information within any time period prescribed, or if no time period is prescribed, then within two (2) business days of such request; or (b) Tenant's request for materials, finishes or installations that have long lead times after having first been informed by Landlord that such materials, finishes or installations will cause a Tenant Delay; or (c) Changes in any plans and specifications requested by Tenant, including any Change Orders; or (d) The performance or nonperformance by a person or entity employed by on or behalf of Tenant in the completion of any work in the Premises (all such work and such persons or entities being subject to prior approval of Landlord); or (e) Any request by Tenant that Landlord delay the completion of any component of Landlord's Work; or Any breach or default by Tenant in the performance of Tenant's obligations under the Lease; or Tenant's failure to pay any amounts as and when due under this Improvement Addendum; or (f) (g) (h) Any delay resulting from Tenant's having taken possession of the Premises for any reason prior to substantial completion of Landlord's Work; or (i) Any other delay chargeable to Tenant, its agents, employees or independent contractors; then, for purposes of determining the date of substantial completion shall be deemed to be the day that Landlord's Work would have been substantially completed absent any such Tenant Delay. Landlord's Work shall be deemed to be substantially completed on the date that Landlord's Work has been performed H -1 147 (or would have been performed absent any Tenant Delay), other than any details of construction, mechanical adjustment or any other matter, the noncompletion of which does not materially interfere with Tenant's use of the Premises for the Permitted Use. If the Premises are delayed from being substantially completed due to Tenant Delay, then Tenant shall be responsible for all costs and any expenses occasioned by such delay, including any costs and expenses attributable to increases in labor or materials. 3. Interpretation; Incorporation Into Lease. This Improvement Addendum shall not be deemed applicable to any additional space added to the original Premises at any time or from time to time, whether by any options under the Lease or otherwise, or to any portion of the original Premises or any additions to the Premises in the event of a renewal or extension of the original Lease Term or Term, whether by any options under the Lease or otherwise, unless expressly so provided in the Lease or any amendment or supplement to the Lease. Landlord shall not be required to perform under this Improvement Addendum during the existence of any default under the Lease. All capitalized terms used in this Improvement Addendum but not defined herein shall have the same meanings ascribed to such terms in the Lease. H -2 148 SCHEDULE 1 WORKLIST 1) All plumbing, HVAC, mechanical systems and dock doors shall be in good working order and condition. 2) Remove and repair the damaged railings on the grade level ramp. [END OF EXHIBIT] SCHEDULE 1 149 150 ukw la FolicF Finance and Safety Committee Quarterly Information 2ne Quarter, 2015 Ell MYWIVA: =MAW Finance & Safety Quarterly Information brief Agenda Staffing Update 2nd Quarter Highlights Crime Statistics Finance & safety Quarterly Information brief 2"d Quarter Highlights Staffing One new lateral officer Two lateral officers passed FTO One officer appointed to BLEA as a Training Officer Recognition Life Saving Medals Joseph Zaehler /Matthew Valdez David Pollett/Jake Berry Certificate of Commendation Sanjay Prasad A world -class police department delivering professional law enforcement service 3 Finance & safety Quarterly Information brief 2"d Quarter Highlights Significant Operations & Events TBOB presentation to Sound Cities Association DARE graduation Citizen's Academy Graduation Foster HS Career Day Foster HS Civics Engagement Physical Fitness Program LEAN for evidence processing Community Building /Public Trust Committee Meeting A world -class police department delivering professional law enforcement service 4 Finance & safety Quarterly Information brief 2"d Quarter Highlights Significant Operations & Events Paper Airplane Contest Teen Summer Kick -Off Tukwila Girl Scout Troop Donation To Canines Courtroom Mock Trial With Second Graders Somali Community Basketball Tournament A world -class police department delivering professional law enforcement service 5 Finance & safety Quarterly Information brief 2nd Highlights Significant Operations & Events Park Safety CPT Increased Patrols Neighborhood Emphasis Patrols New Email For Traffic Issues Click- It -Or- Ticket Emphasis Transit Center Bicycle Emphasis Drug Investigation — Foster High School A world -class police department delivering professional law enforcement service 6 Finance & Safety Quarterly Information brief 2 "d Quarter Crime Statistics Case Reports 2000 1 `o a w 1500 a L.) 20052006200720082009201020112012201320142015 Second Quarter 2005- 2015 — Second Quarter Average A world -class police department delivering professional law enforcement service 7 Finance & Safety Quarterly Information brief 2 "d Quarter Crime Statistics Calls for Service 10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 Calls for Service 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Second Quarter 2005 -2015 — Second Quarter Average A world -class police department delivering professional law enforcement service 8 Finance & Safety Quarterly Information brief 2 "d Quarter Crime Statistics 30 25 20 a, c, 15 0 10 5 0 Robbery 20052006200720082009201020112012201320142015 Second Quarter 2005 -2015 — Second Quarter Average A world -class police department delivering professional law enforcement service 9 Finance & Safety Quarterly Information brief 16 14 12 10 8 6 4 2 0 2015 Crime Statistics Robbery Offenses 2015 Compared to Previous Years oy0 �e� 4\,§ 4\,§ PQc � 4\aJ >o� O`er �o 05" moth >a� Few Sa� �� 40J Range Since 2005 2015 A world -class police department delivering professional law enforcement service 10 Finance & Safety Quarterly Information brief 2 "d Quarter Crime Statistics Aggravated Assault 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Second Quarter 2005- 2015 — Second Quarter Average A world -class police department delivering professional law enforcement service 11 Finance & Safety Quarterly Information brief 2015 Crime Statistics Aggravated Assault Offenses 2015 Compared to Previous Years ti` V ac t J c` � Q vs. �O�la P O >a��O�h ��� �a` P�� �a� >� Range Since 2005 2015 A world -class police department delivering professional law enforcement service 12 Finance & Safety Quarterly Information brief 2 "d Quarter Crime Statistics Burglary 1st and 2nd Degree 90 80 70 60 y 50 40 O 30 20 10 0 Second Quarter 2005- 2015 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 — Second Quarter Average A world -class police department delivering professional law enforcement service 13 Finance & Safety Quarterly Information brief 25 20 15 10 2015 Crime Statistics Burglary 1 -2 Offenses 2015 Compared to Previous Years e k�� �a� lac Pic >�� >�\ te$ 49 o`er o, 0 >a�10 �h << lac Range Since 2005 2015 A world -class police department delivering professional law enforcement service 14 Finance & Safety Quarterly Information brief 2 "d Quarter Crime Statistics Residential Burglary 2005 2006 2007 2008 2009 2010 2011 2012 201 3 2014 201 5 Second Quarter 2005- 2015 — Second Quarter Average A world -class police department delivering professional law enforcement service 15 Finance & Safety Quarterly Information brief 35 30 25 20 15 10 2015 Crime Statistics Residential Burglary Offenses 2015 Compared to Previous Years �Oy0 � 4a. 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