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HomeMy WebLinkAboutFS 2014-07-08 COMPLETE AGENDA PACKETCity of Tukwila Finance and Safety Committee O Verna Seal, Chair O Joe Duffie O Kathy Hougardy AGENDA Distribution: V. Seal J. Duffie K. Hougardy D. Quinn D. Robertson Mayor Haggerton D. Cline P. McCarthy C. O'Flaherty S. Kerslake L. Humphrey B. Giberson V. Carlsen D. Speck TUESDAY, JULY 8, 2014 — 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. Authorize the purchase of a replacement Police a. Committee approval. Pg.1 Major Crimes vehicle. Bob Giberson, Public Works Director b. A resolution authorizing the issuance of claims prior to b. Forward to 7/14 C.O.W. Pg.9 Council approval. and 7/21 Regular Mtg. Vicky Carlsen, Deputy Finance Director c. Washington Place fee deferral. c. Forward to 7/14 C.O.W. Pg.31 Derek Speck, Economic Development Administrator for discussion. d. A resolution regarding the "Tukwila, City of Opportunity d. Forward to 7/14 C.O.W. Pg.41 Scholarship" program. and 7/21 Regular Mtg. David Cline, City Administrator e. Amendments to the Ethics Code. e. Forward to 7/14 C.O.W. Pg.51 David Cline, City Administrator and 7/21 Regular Mtg. 3. ANNOUNCEMENTS 4. MISCELLANEOUS Next Scheduled Meeting: Tuesday, July22, 2014 16. The City of Tukwila strives to accommodate individuals with disabilities. Please contact the City Clerk's Office at 206 - 433 -1800 ( TukwilaCitvClerk (aTukwilaWA.gov) for assistance. TO: City of Tukwila Jim Haggerton, Mayor INFORMATIONAL MEMORANDUM Mayor Haggerton Finance & Safety FROM: Bob Giberson, Public Works Director BY: Jeff Morton, Fleet Superintendent DATE: July 3, 2014 SUBJECT: Purchase Replacement Police Major Crimes Vehicle ISSUE Purchase of an additional replacement Ford Taurus for Police Major Crimes. BACKGROUND There are 6 Police Major Crime vehicles that will be approaching or surpassing their 100,000 mile replacement criteria within the 2015-2016 budget cycle. Due to a surplus in the current budget cycle, the Fleet division would like to purchase an additional replacement vehicle at a cost of $27,000 from the 2014 budget. BUDGET SUMMARY In 2014, The Jail Transport Van was budgeted for replacement with $160,000.00 (Line 8, page 331 2013-14 Biennial Budget). Due to a change in the vehicle platform for the prisoner transport van, the 2014 Police fleet replacement budget has a $79,696.58 surplus. Fleet is requesting to use $27,000 of this surplus to accelerate the replacement of one of Police's Major Crimes vehicles. RECOMMENDATION Tukwila Municipal Code 3.32.040 states "Any unbudgeted capital equipment or fixed asset item, including components or services of items, shall be approved by the Mayor and three affirmative votes of the respective Council committee assigned to the requesting department. 'Fixed asset' items are defined as costing at least $5,000 and having a useful life of at least two years," Staff recommends the Finance and Safety committee authorize the Mayor to approve the purchase of a Ford Taurus for Police Major Crimes in the amount of $26,497.82 out of the 2014 Budget line 501.02.594.480.64.00. Attachment: Page 331, 2013-2014 Biennial Budget Police 2014 Accounting Purchase Order WA2014 Info Memos-Council \ major crimes vehicle.doc 1 2 2013 -2014 Biennial Budget City of Tukwila, Washington Public Works — Equipment Rental NEW & REPLACEMENT PURCHASES IN 2013 -2014 CURRENT UNIT Scheduled Replacements UNIT No. PURCHASE YEAR 2013 2014 Estimated Replacement Year Replacement Unit POLICE: (A) 1) ;Patrol Car 1720 $ 63,000 2) MTPatrol Car 1723 1 63,000 3) ;Patrol Car, Crime Prev i 1127 1 63,000 4) Patrol Car 1 1724 's $ 63,000 1 2019 2018 2024 2018 :Patrol Car, Traffic '€ 1103 E 63,000: 2025 ._.,__._._ �,_.....,.�- _....n._.. -, �.. Motorcycle % 1072 1 35,000 j 2025 Detective Admin Sedan ; 1151 1 30,0001 2024 ail Transport Van 1 1221 1 160,000 1 2034 9) DARE Vehicle 1 1209 1 45,000 I 2024 FIRE: 10) Command Car, BC (B) —11T Pumper 12) 1 Pumper STREET: ._ 13) Sweeper 1464 i 220,000 1 1281 1 86,000 1352 j 700,000 ew i 700,000 s 14) Bucket Truck (B) 1 1278 ___ 3/4 Ton Pickup �� 1256 SEWER /SURFACE WATER: 6)ITV Van 1254 i 180,000 160,000 28,000_____ Patrol Car w __ Patrol Car Patrol Car, Crime Prev Patrol Car Patrol Car, Traffic Motorcycle'._ .ex Detective Admin Sedan Jail Transport Van DARE Vehicle 2023 Command Car, BC 2038 Pumper 2038 [Pumper 2023 2024 Sweeper Bucket Truck J3/4 -Ton Pickup WATER: 3/4 -Ton Pickup 1 1287 18) :Variable Message Board 1426 PARKS: 19) 1/4 -Ton Pickup 1 1255 GOLF: 20) : Utility Cart 1 1061 1 6,812 21) Utility Cart # 1067 6,812 22) ;Utility, Gator ! 1069 1 23) 1Mower, Greens E 1656 1 34,782 24) Mower, Greens Triplex 1-6604 � M,..M.�...mw 30,000 15,300 2033 ETV Van 2028 3/4 -Ton Pickup 2029 2031 25) E Mower, Trim 1 1633 26) !Core Harvester 6003 1 BUILDING MAINTENANCE: 27) Cargo Van .a,.,..�28)__ Cargo Van __...,......_......._., ___...,...... EQUIPMENT RENTAL: 29) Vehide Diagnostic System 1249 s 1248 9600 I _._ 22,000 2023 2023 5,000 1 2024 Variable Message Board 1/4 -Ton Pickup Utility Cart Utility Cart Utility, Gator 2035 Mower, Greens 34,081 1 2021 Mower Greens Triplex 27,000 2024 =Mower, Trim 7,000 ! 2021 `s Core Harvester 22,000) 2028 2029 Cargo Van ;Cargo Van �m..m�.�....,��.as.�._..n 5,300 2019 € Vehicle Diagnostic System Total by year! $ 2,194,906 I $ 699,681 Grand Total $ 2,894,587 (a) Positions were added to the Police Department later in the budget process for the Crime Prevention Reduction and Chronic Nuisance initiatives. Funding is available to purchase police vehicles for these positions, but they have not been reflected in the 501 Fund's New & Replacement Purchases. (b) Lines 10 and 14 were budgeted for replacement in 2012, but not purchased. Page 331 3 4 Vehicle PD Capital Expenditures Amount Budgeted Transport van 3/4 T 4x4 quad P/U Patrol K -9 Patrol Patrol Detective Motorcycle Fire Arms Trailer Total Budget Residual $60,677.58 $39,733.24 $73,033.12 $65,956.79 $65,956.79 $ 27,031.74 $45,314.16 $1,600.00 $379,303.42 $79,696.58 $160,000.00 $45,000.00 $63,000.00 $63,000.00 $63,000.00 $30,000.00 $35,000.00 $0.00 $459,000.00 Amended budget COPs grant 5 6 Unit (s): 2015 PD Detective Admin Sedan 1435 Budget Amendment Vehicle Part # Qty Description Total Item Cost 2015 Ford Taurus SE 1 Base vehicle $ 18,792.00 Sales Tax $ 1,559.74 State Contract Total $ 20,351.74 501.02.594.480.64.00 BASE VEHICLE SUB TOTAL $ 20,351.74 501.02.594.480.64.00 Licensing $ 47.75 BASE VEHICLE GRAND TOTAL $ 20,399.49 501.02.594.480.64.00 SFIONJ 2 SPITFIRE WINDSHIELD LED RED /BLUE $ 300.00 TAD6 1 WHELEN 6 LAMP DIRECTIONAL $ 345.00 SA315P 1 WHELEN SIREN W/ BRACKET $ 175.00 SS651 1 SLIMLINE U/C SIRE $ 160.00 ND0011W 2 HIDE -A -LED, LONG WHITE $ 224.00 VTX609B 2 WHELEN VERTEX LED BLUE $ 159.90 VTX609R 2 VERTEX HIDE -A -WAY LED RED $ 159.90 CCAS -SB -7 -800 1 STINGER PEEL N STICK ANTENNA $ 120.00 INTVERTER 800 1 INVERTER 800 WATT $ 131.67 289 1 HANDGUN LOCK BOX $ 212.50 FOAM -1 -12X13 1 1" SOLID BASE FOAM SHEET $ 10.00 SC- 934 -5 -A 1 CARBINE RACK IN TRUNK $ 255.00 SL75712 1 STINGER FLASHLIGHT $ 140.00 TINT360 1 FULL 360 DEGREE TINT 15% $ 250.00 RVS- 770613 1 REAR VIEW CAMERA SYSTEM $ 279.99 3105V 1 VIPER RESPONDER LE 1 -WAY SECURITY $ 131.25 PD2 1 FUSE BLOCK RELAY & CHARGE GUAR[ $ 189.00 75551 1 RELAY 4 TERMINAL DUAL FOR INVERTE $ 30.00 7700100 2 SWITCH ROCKER LIGHTED LED RED $ 7.90 SHOP SUPPLIES $ 19.95 Total items supplied by SPS: $ 3,301.06 Total installation: $ 2,200.00 Total Charges: $ 5,501.06 Sales Tax @ 9.5% $ 522.60 Grand Total SPS Charges with Tax: $ 6,023.66 APX 6500 w /05 faceplate 1 800 MHz Radio reband upgrade 1 First Aid Kit $ 24.13 1 Blood Borne Pathogen Kit $ 30.00 1 Fire Extinguisher $ 20.54 OUTFITTING TOTAL $ 6,098.33 In -house Outfitting Labor Cost Summary Base vehicle $ 20,399.49 Outfitting $ 6,098.33 Grand Total Capitalization PER UNIT $ 26,497.82 Budget (Over) / Under Budget Outfitting Labor Grand Total $ 26,497.82 Approvals NOTE: All items listed are based on proper outfitting of this particular make, model and year of vehicle. All prices are based on supplier's pricing at time of quote and is subject to change without notice. Department Director's Signature: Date: Public Works Director's Signature: (IN SIN ,_) \ / Date: Finance Director's Signature: w9 r T Date: C:\ Users \Tanya\AppData \Local \Microsoft \Windows \Temporary Internet Files \Content.Outlook \70YVXY53\2014 PD DETECTIVE CAR UNITPti$medds5 /17/2014 7 8 -s 4. 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 2, 2014 SUBJECT: Resolution authorizing issuance of checks before approval by Council ISSUE Approve Resolution authorizing the City to issue checks before Council has approved such claims through the Consent Agenda process. BACKGROUND The City currently pays claims twice a month, immediately after Regular Council meetings. Most contracts, professional services and utilities are paid via a regularly issued check. Many supplies are purchased via a City issued credit card (PCard program) through US Bank. Occasionally, invoices are paid late due to unforeseen circumstances with vendors, mail delivery issues, etc. DISCUSSION The City is seeking formal approval from Council to issue checks prior to Council approval to address urgent claims issues that sometimes arise. While this does not happen frequently, it does occasionally occur, and having authority to pay claims prior to Council approval gives the City the flexibility to pay the invoices immediately rather than waiting for the next Regular Council meeting. RCW 42.24.180 allows taxing districts, including Cities, to issue checks before approval by the legislative body. In order for the City to seek Council authority to implement this process, the City must meet 3 conditions. The conditions are outlined in the chart below and show the current practice and what changes could occur if Council allows the City to pay claims prior to Council approval. Requirement per RCW 42.24.180 Current Practice Revised Practice • The Auditing Officer and the The Finance Director and No change individuals designated to sign other City staff are currently checks shall have in place an bonded for $250,000 per official bond for the faithful loss discharge of his or her duties in an amount equal to or exceeding $50,000 9 INFORMATIONAL MEMO Page 2 The City Council shall adopt contracting, hiring, purchasing and disbursing policies that implement effective internal controls The City Council shall provide for its review of the documentation supporting claims paid and for City Council approval of all checks issued for payment of claims at a Council meeting within one month of issuance of the checks The City Council shall require that if, upon its review, it disapproves some claims, the Director of Finance and individuals designated to sign checks shall jointly establish the disapproved claims as receivables of the City and pursue collection diligently until the amounts disapproved are collected or until the City Council is satisfied and approves the claims Policies currently in place, policies reviewed and updated as necessary Council reviews all documentation prior to issuing checks Necessary process change upon implementation of proposed resolution No change Council would continue to review all documentation on a regular schedule. Most claims would be paid after Council review and approval, The City would have the authority to pay invoices immediately when necessary. Upon Council review, if a claim is disapproved, the claim will be recognized as a receivable to the City and the City will pursue collection until either the funds are recovered or the Council approves the claim for payment. While paying claims prior to Council approval gives the City flexibility to handle claims issues that can arise, the Council shall continue to retain full authority for review and approval. If the City needed to issue a check prior to Council approval, no more than 3 weeks would lapse before Council would have the opportunity to review and approve the check. It is not uncommon for government entities to seek this authority. Many cities and other government agencies have already implemented the provisions in RCW 42.24.180 including the Cities of Federal Way, Kent, SeaTac, and Newcastle. Having this ability will allow the Finance department to optimize efficiency and effectiveness and improve service quality and better ensure timely payment of invoices. RECOMMENDATION Council is being asked to approve the resolution and consider this item at the July 14, 2014 Committee of the Whole meeting and subsequent July 21, 2014 Regular Meeting. ATTACHMENTS Draft Resolution CrimeSHIELD Policy for Governmental Entities RCW 42.24.180 Taxing district — Issuance of warrants or checks before approval of legislative body - Conditions 10 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, AUTHORIZING ISSUANCE OF CHECKS IN PAYMENT OF CLAIMS BEFORE THE COUNCIL HAS ACTED TO APPROVE SUCH CLAIMS WHEREAS, RCW 42.24.180 authorizes the legislative body of local governments to authorize issuance of checks in payment of claims, after the designated officer has signed the checks; and WHEREAS, the City Council of the City of Tukwila has determined that it would be in the best interest of the City and its citizens, and would promote effectiveness and efficiency in the administration of the accounts payable of the City, to implement this enabling statute at the City of Tukwila effective August 1, 2014; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY RESOLVES AS FOLLOWS: Section 1. The Mayor and Auditing Officer of the City of Tukwila are authorized to sign or co-sign checks. The Mayor is the designated officer of the City, and the Finance Director shall serve as the Auditing Officer. Both the Mayor and the Auditing Officer shall be required to furnish an official bond for the faithful discharge of his or her duties in an amount not less than $50,000. Section 2. Any authorization provided by this resolution is subject to the adoption of policies and procedures for purchasing and disbursement of funds, which shall implement effective internal controls over funds and property of the City. Such policies and procedures shall be approved by resolution or other official City Council action. Section 3. Whenever checks are issued prior to City Council review and approval, as supported by this authorizing resolution, such review and approval of claims and supporting documentation shall occur at a regularly scheduled City Council meeting within one month from the date of issuance. W:\Word Processing\Resolutions\Authorize issuance of checks before Council approval 6-30-14 VC:bjs Page 1 of 2 11 Section 4. Upon the City Council's review of claims and supporting documentation, if the Council disapproves one or more claims, the Auditing Officer and Mayor shall jointly cause the disapproved claim or claims to be recognized (and shown on the City's financial books and records) as accounts receivable of the City. Collection of such accounts receivable shall be diligently pursued until the amounts are collected or until the City Council is satisfied and approves such claim or claims. Section 5. The City shall implement the policies and procedures authorized per RCW 4224.180 and this resolution effective August 1, 2014. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this day of , 2014. ATTEST/AUTHENTICATED: Christy O'Flaherty, MMC, City Clerk De'Sean Quinn, Council President APPROVED AS TO FORM BY: Filed with the City Clerk: Passed by the City Council: Resolution Number: Shelley M. Kerslake, City Attorney W:\Word Processing\Resolutions\Authorize issuance of checks before Council approval 6-30-14 VC:bjs Page 2 of 2 12 CrimeSHIELD Policy for Governmental Entities Co Code Hartford Fire Insurance Company Hartford, CT 06115 Hartford Casualty Insurance Company Hartford, CT 06115 1 3 The Company is shown above by Co. Code 1 Co Code Hartford Insurance Company of Illinois Naperville, IL 60566 Hartford Insurance Company of the Midwest Indianapolis, IN 46204 Hartford Insurance Company of the Southeast Maitland, FL 32751 G J POLICY NUMBER 52BPEAD8178 In return for the payment of the premium, and subject to all the terms of this Policy, we agree with you to provide the insurance stated in this Policy. DECLARATIONS ITEM 1. Named Insured: CITY OF TUKWILA 2. Mailing Address: 6200 SOUTHCENTER BLVD. TUKWILA, WA. 98188 from April 7, 1999 until cancelled 3. Policy Period: (12:01 A.M. Standard Time at Your Mailing Address) 4. Coverages, Limits of Insurance and Deductibles: Insuring Agreements, Limit of Insurance and Deductible Amounts shown below are subject to all of the terms of this policy that apply. Insuring Agreements Forming Part of This Policy 1.A. Employee Theft - Per Loss 1.B. Employee Theft - Per Employee 2. Depositors Forgery or Alteration 3. Theft, Disappearance and Destruction Money, Securiies and Other Property 4. Robbery and Safe Burglary - Money and Securities 5. Computer and Funds Transfer Fraud Limit of Insurance $250,000 $0 $0 Deductible Amount $1,000 $0 $0 $0 $0 $0 $0 5. Form Numbers of Endorsements Forming Part of This Policy When Issued: F- 4290 -0, F- 4298 -0 6. Cancellation of Prior Insurance: By acceptance of this Policy you give us notice cancelling prior policies or bonds numbered: the cancellations to be effective at the time this policy becomes effective. This Policy has been signed by the Company's President and Secretary, but it shall not be binding unless it is countersigned by its authorized representative. Michael S. Wilder, Secretary Ramani Ayer,President & COO Countersued by: , Authorized Representative Form F- 4202 -0 Page 1 of 12 © 1998, The Hartford 13 Throughout this Policy the words "you" and "your" refer to the named Insured in the Declarations. The words "we ", "us ", and "our" refer to the Company providing this insurance. Other words and phrases that appear in quotation marks have a special meaning. Refer to Section V., Exclusions; Section VI., General Conditions; and Section VII., Definitions, to determine where this Policy restricts coverage. I. CONSIDERATION CLAUSE In exchange for the payment of premium and subject to the Declarations, Insuring Agreements, Exclusions, Genera! Conditions, Definitions and terms of this Policy, we will pay for loss which you sustain resulting directly from acts committed or events occurring at any time and discovered by you during the Policy Period shown in the Declarations or during the period of time provided in General Condition L., EXTENDED PERIOD TO DISCOVER LOSS. II. INSURING AGREEMENTS Coverage is provided under the following Insuring Agreements if either an amount is stated in the Insuring Agreement or for which there is a Limit of Liability shown in the Declarations. A. INSURING AGREEMENT 1.A. - EMPLOYEE THEFT - PER LOSS We will pay for Toss of or damage to "money", "securities" and "other property" In any one "occurrence" which results directly from "theft" by an "employee", whether or not identifiable, while acting alone or in collusion with other persons. In this Insuring Agreement, "occurrence" means all loss caused by, or involving, one or more "employees" whether the result of a single act or a series of acts. B. INSURING AGREEMENT 1.B. - EMPLOYEE THEFT - PER EMPLOYEE We will pay for loss of or damage to "money", "securities" and "other property" In any one "occurrence" which results directly from "theft" by an "employee ", whether or not identifable, while acting alone or in collusion with other persons. In this Insuring Agreement, "occurrence" means all Toss up to the Limit of Liability caused by each "employee ", whether the result of a single act or a series of acts. C. INSURING AGREEMENT 2. - DEPOSITORS FORGERY OR ALTERATION 1. We will pay for Toss resulting directly from "forgery" or alteration of checks, drafts, promissory notes, or similar written promises, orders or directions to pay a sum certain in "money" that are a. made or drawn upon you; or b. made or drawn upon one acting as your agent and drawn on your account or that are purported to have been so made or drawn. 2. We will treat mechanically reproduced signatures the same as handwritten signatures. 3. If you are sued for refusing to pay any instrument in C.1. above, on the basis that it has been forged or altered and you have our written consent to defend against that suit, we will pay for any reasonable legal expenses that you incur and pay in such defense. The amount that we will pay is in addition to the Limit of Liability applicable to this Insuring Agreement. If a Deductible Amount applies to this Insuring Agreement, we will also apply it to the amount of legal expenses incurred in this Insuring Agreement. 4. You must include with your proof of loss any instrument involved in that loss, or, if that is not possible, an affidavit setting forth the amount and cause of loss and describing both sides of said instrument. 5. This Insuring Agreement covers loss you sustain anywhere in the world; the.Territory General Condition does not apply. Form F- 4202 -0 14 © 1998, The Hartford Page 2 of 12 D. INSURING AGREEMENT 3. - THEFT, DISAPPEARANCE AND DESTRUCTION - MONEY, SECURITIES AND OTHER PROPERTY 1. INSIDE THE PREMISES a. We will pay for loss of "money" and "securities" inside the "premises" or "banking premises" resulting directly from "theft", disappearance or destruction. b_ We will pay for loss of or damage to "other property" (1) inside the "premises" resulting directly from an actual or attempted "robbery" of a "custodian "; or (2) inside the "premises" in a safe or vault resulting directly from an actual or attempted "safe burglary". c. We will pay for loss from damage to the "premises" or its exterior resulting from an actual or attempted (1) "theft" of "money" or "securities "; or (2) "robbery" or "safe burglary" of "other property" if you are the owner of the "premises" or are liable for damage to it. d. We will pay for loss of or damage to a locked safe, vault, cash register, or cash box or cash drawer located inside the "premises" resulting directly from an actual or attempted "theft" or unlawful entry into those containers. 2. OUTSIDE THE PREMISES We will pay for a. loss of "money" and "securities" outside the "premises" in the care and custody of a "messenger" or an armored motor vehicle company resulting directly from "theft', disappearance or destruction; or b. Toss of or damage to "other property" outside the "premises" in the care and custody of a "messenger" or an armored motor vehicle company resulting directly from an actual or attempted "robbery". E. INSURING AGREEMENT 4. - ROBBERY AND SAFE BURGLARY - MONEY AND SECURITIES 1. INSIDE THE PREMIS ES We will pay for loss of or damage to "money" and "securities" a. resulting directly from an actual or attempted "robbery" of a "custodian" inside the "premises "; or b. resulting directly from an actual or an attempted "safe burglary" occurring inside the "premises" or inside a "banking premises ". 2. OUTSIDE THE PREMISES We will pay for Toss of or damage to 'money" and "securities" outside the "premises" in the care and custody of a "messenger" or an armored motor vehicle company resulting directly from an actual or attempted "robbery". F. INSURING AGREEMENT 5. - COMPUTER AND FUNDS TRANSFER FRAUD We will pay for Toss of and loss from damage to "money", "securities" and "other property" following and directly related to the use of any computer to fraudulently cause a transfer of that property from inside the "premises" or "banking premises" 1. to a person (other than a "messenger") outside those "premises "; or 2_ to a place outside those "premises ". And, we will pay for Toss of "money" or "securities" through "funds transfer fraud" resulting directly from "fraudulent transfer instructions" communicated to a "financial institution" and instructing such institution to pay, deliver, or transfer "money" or "securities" from your "transfer account". G. INSURING AGREEMENT 6. - MONEY ORDERS AND COUNTERFEIT CURRENCY Form F- 4202 -0 Page 3 of 12 © 1998, The Hartford 15 1. We will pay for loss resulting directly from your having in good faith, in exchange for merchandise, "money" or services accepted a. money orders issued by any post office, express company or bank in the United States of America or Canada that are not paid upon presentation; and b. "counterfeit' United States of America or Canadian Paper currency that is acquired during the regular course of business. The Limit of Insurance under this insuring agreement is $50,000. and there is no deductible applying to Toss covered under this agreement. 2. You must notify the police if you have reason to believe that you have accepted a "counterfeit" money order or "counterfeit" paper currency. III. LIMIT OF INSURANCE The most that we will pay for Toss in any one "occurrence" is the applicable Limit of Insurance shown in the Declarations. IV. DEDUCTIBLE We will not pay for loss in any one "occurrence" unless the amount of the loss exceeds the Deductible Amount shown in the Declarations. We . will then pay the amount of loss in excess of the Deductible Amount, up to the Limit of Insurance. In the event that more than one Deductible Amount could apply to the same loss, only the highest Deductible Amount will be applied. You must give us notice as soon as possible of any loss of the type insured under the Policy if, in your best estimation, such loss will, or will appear to exceed 25% of the current Deductible Amount for the Insuring Agreement under which the loss has occurred. V. EXCLUSIONS (Applying To All insuring Agreements Unless Otherwise Specified) This Policy Does Not Apply To And We Will Not Pay For: A. Accounting or Arithmetical Errors or Omissions Loss resulting from accounting or arithmetical errors. B. Acts of Employees, Managers, Directors, Trustees or Representatives Loss resulting from "theft" or any other dishonest or criminal act committed by any of your "employees ", managers, directors, trustees or representatives whether acting alone or in collusion with other persons or while performing services for you or otherwise except when covered under Insuring Agreement 1.A. or 1.B. C. Bonded Employee Loss caused by any "employee" required by law to be individually bonded. D. Damages Damages for which you are legally liable as a result of: t _ the deprivation of the civil rights of any person by an "employee"; or 2. the tortious conduct of an "employee" except conversion of property of other parties held by you in any capacity_ E. Employee Cancelled Under Prior Insurance Loss cause by any "employee" of yours or predecessor in interest of yours, for whom similar prior insurance has been cancelled and not reinstated since the last cancellation. F. Exchanges or Purchases Loss resulting from the giving or surrendering of property in any exchange or purchase. G. Fire Loss from damage to the premises resulting from fire, however caused, except for loss of or damage to "money" or "securities" and loss from damage to a safe or vault under Insuring Agreement 3. and 4. H. Governmental Action Loss resulting from seizure or destruction of property by order of governmental authority. Form F- 4202 -0 16 © 1998, The Hartford Page 4 of 12 I. Indirect Loss Loss that is an indirect result of any act or "occurrence" covered by this Policy including but not limited to loss resulting from 1. your inability to realize income that you would have realized had there been no loss of or damage to "money", "securities" or "other property ". 2. payment or damages of any type for which you are legally liable. But we will pay compensatory damages arising directly from a loss covered under this policy. 3. payment of costs, fees or other expenses you incur in establishing either the existence of or the amount of loss under this policy. J. Inventory Shortages Loss, or that part of any loss, the proof of which is as to its existence or amount is dependent upon 1. an inventory computation; or 2. a profit and loss computation. However, where you establish wholly apart from such inventory computations that you have sustained a loss covered under this Policy, then you may offer your inventory records and actual physical count of inventory in support of the amount of loss claimed. K. Legal Expenses Expenses related to any legal action except when covered under Insuring Agreement 2. L. Money Operated Devices Loss of property contained in any money operated device unless the amount of any "money" deposited in it is recorded by a continuous recording instrument in the device. M. Motor Vehicles or Equipment And Accessories Loss of or damage to motor vehicles, trailers, or semi - trailers or equipment or accessories attached to them. N. Nuclear Loss resulting from nuclear reaction, nuclear radiation, or radioactive contamination, or any related act or incident. O. Trading Losses Loss resulting directly or indirectly from trading, whether in your name or in a genuine or fictitious account. P. Transfer or Surrender of Property Loss of or damage to property of any kind after it has been transferred or surrendered to a person or place outside the "premises" or "banking premises" 1. on the basis of unauthorized instructions; or 2. as a result of a threat to do bodily harm to any person; or 3. as a result of a threat to do damage to any property. But this Exclusion does not apply under Insuring Agreement 3. or 4. to loss of "money', "securities" and `other property" while outside the "premises" or "banking premises" in the care and custody of a "messenger" if you: 1. had no knowledge of any threat at the time that the conveyance began; or 2. had knowledge of a threat at the time the conveyance began, but the loss was not related to the threat. Q. Treasurer or Tax Collector Loss caused by a treasurer or tax collector by whatever name known. R. Vandalism Loss from damages to the "premises" or to the exterior of any safe, vault, cash box, cash drawer or cash register by vandalism or mischief. S. Voluntary Parting of Title To or Possession of Property Loss resulting from your, or anyone acting on your express or implied authority, being induced by any dishonest act to voluntarily part with title to or possession of any property. T. War and Similar Actions Loss resulting from war, whether or not declared, warlike action, insurrection, rebellion, or revolution, or any related act or incident. Form F -4202 -0 Page 5 of 12 © 1998, The Hartford 17 VI. GENERAL CONDITIONS A. ARMORED MOTOR VEHICLE COMPANIES Under Insuring Agreements 3. and 4. we will pay only for the amount of loss you cannot recover 1. under your contract with the armored motor vehicle company; and 2. from any insurance or indemnity carried, by or for the benefit of customers of the armored motor vehicle company or from the armored motor vehicle company. B. CALCULATION OF PREMIUM The premium shown in the Declarations was computed based on rates in effect at the time the Policy was issued. On each renewal, continuation, or anniversary of the effecive date of this Policy, we will compute the premium in accordance with our rates and rules then in effect. C. CANCELLATION OR NONRENEWAL OF POLICY 1. CANCELLATION a. The first named Insured shown in the Declarations may cancel this Policy by mailing or delivering to us advance written notice of cancellation. b. We may cancel this policy by mailing or delivering to the first named Insured written notice of cancellation at least: (1) 10 days before the effective date of cancellation if we cancel for non - payment of premium; or (2) 90 days before the effective date of cancellation if we cancel for any other reason. c. We will mail or deliver our notice to the first named Insured's last mailing address known to us. d. Notice of cancellation will state the effective date of cancellation. The Policy Period will end on that date. e. If this policy is cancelled, we will send the first named Insured any premium refund due. If we cancel, the refund will be pro rata. If the first named Insured cancels, the refund may be less than pro rata. The cancellation will be effective even if we have not made or offered a refund. f. If notice is mailed, proof of mailing will be sufficient proof of notice. 2. NONRENEWAL a. We may elect not to renew this Policy at each annual anniversary date. b. If we decide not to renew this policy, we will mail or deliver written notice to the first named Insured shown in the Declarations, at the address shown in this Policy, at least 90 days before the annual anniversary date. c. If notice is mailed, proof of mailing will be sufficient proof of notice. D. CANCELLATION AS TO ANY EMPLOYEE Insuring Agreement 1.A. or 1.B. is cancelled as to any "employee" a. immediately upon discovery by you or any official or employee authorized to manage, govern, or control your "employees ", of "theft" or any other dishonest act committed by the "employee" whether before or after becoming employed by you. b. on the date specified in a notice mailed to you. The date will be at least 30 days after the date of the mailing. And, the mailing of notice to you at the last mailing address known to us will be sufficient proof of notice. Delivery of notice is the same as mailing. E. CHANGES This Policy contains all of the agreements between you and us concerning the insurance afforded. The first named Insured shown in the Declarations is authorized to make changes in the terms of this Policy with our consent. This Policy's terms can be amended or waived only by endorsement issued by us and made a part of this Policy. Form F- 4202 -0 Page 6 of 12 © 1998, The Hartford 18 F. CONCEALMENT, MISREPRESENTATION OR FRAUD This Policy is void in any case of fraud by you as it relates to this Policy at any time. It is also void if you or any other Insured, at any time, intentionally conceal or misrepresent a material fact concerning 1. this Policy; 2. the property covered under this Policy; 3. your interest in the property covered under this Policy; or 4. a claim under this Policy. G. CONSOLIDATION OR MERGER If through consolidation or merger with, or purchase or acquisition of assets or liabilities of, some other entity, any additional persons become "employees" or you acquire the use and control of any additional "premises" 1. you must give us written notice and obtain our written consent to extend this insurance to such additional "employees" or "premises ". We may condition our consent upon payment of an additional premium; but there shall only be a premium charge if such merger or acquisition results in a 15 %, or greater, increase in the number of "employees ", assets or revenues acquired through the merger or acquisition. 2. For the first 60 days after the effective date of such consolidation, merger, acquisition of assets or liabilities, any insurance afforded for "employees" or "premises" also applies to these additional "employees" or "premises" for acts committed within this 60 day period. H. DISCOVERY 1. We will pay for loss which you sustain through acts or events committed or occurring at any time and which are discovered by you during the Policy Period or during the period provided in General Condition L., EXTENDED PERIOD TO DISCOVER LOSS. 2. Discovery of loss occurs when you first become aware of facts which would cause a reasonable person to assume that a Toss covered by this Policy has been, or may be incurred even though the exact amount or the details of the loss may not then be known. 3. Discovery also occurs when you receive notice of an actual or potential claim against you alleging facts, which if true, would constitute a covered loss under this policy. I. DUTIES IN THE EVENT OF LOSS After you discover a loss or a situation which may result in a loss of or damage to "money", "securities" or "other property ", you must 1. notify us as soon as possible but no later than 60 days after discovery of loss. 2. submit to examination under oath at our request and give us a signed statement of your answers. 3. give us a detailed, sworn proof of Toss within 120 days. 4. cooperate with us in the investigation and settlement of any claim. 5. notify the police if you have reason to believe that your loss involves a violation of law. J. EMPLOYEE BENEFIT PLANS 1. If any one or more "employee benefit Plans" are insured jointly with any other entity under this Policy, you or the plan administrator must select a Limit of Insurance for Insuring Agreement 1. that is sufficient to provide a Limit of Insurance for each Plan which is at least equal to that required if each Plan were separately insured. 2. If the first named Insured is an entity other than a Plan, any payments we make to the Insured for loss sustained by any Plan will be held by that Insured for the use and benefit of the Plan(s) sustaining the loss. 3. If two or more Plans are insured under this Policy, any payment which we make for loss sustained by two or more Plans, or of commingled "funds" or "other property" of two or more Plans, which arises out of one "occurrence ", is to be shared by each Plan sustaining loss in the proportion that the Limit of Insurance required for each Plan bears to the total of those limits. 4. This Policy insures those Plans which are named as additional Insureds in the Declarations or on any attached Schedule for loss through fraud or dishonesty as defined in Section 2580.412 -9 of the Employee Retirement Income Security Act (ERISA) as amended. For any Plans not specifically named as Insureds, this Policy is deemed to be in compliance with, and satisfy the Form F -4202-0 © 1998, The Hartford Page 7 of 12 19 bonding requirements of Section 2580.412.11 of the act. This insurance provides a Limit of Insurance which is equal to 10% of the amount of the funds handled or $500,000., whichever is less, for each Plan bonded and the minimum Limit of Insurance for any Plan shall be $1,000. The Limit of Insurance available for any Plan loss will be determined by the amount of funds handled on the date when any covered loss occurs subject to the foregoing limitations. 5. The Deductible provision which applies to the Employee Theft Insuring Agreement shall not apply to Toss which is sustained by any Plan subject to ERISA and which Plan is covered under this insurance. K. EXAMINATION OF YOUR BOOKS AND RECORDS 1. We may examine and audit your books and records as they relate to this Policy at any time during the Policy Period and up to three years afterward. 2. We may also examine and audit the books and records of any organization which you newly acquire and that is deemed to be a named Insured under this Policy. L. EXTENDED PERIOD TO DISCOVER LOSS 1. We will pay for loss which you sustained prior to the effective date of termination or cancellation of this insurance, which is discovered by you a. no later than 60 days from the date of the termination, cancellation or non - renewal; and b. as respects any "employee benefit Plans )", no later than 1 year from the date of that termination, cancellation or non - renewal. 2. However, this extended period to discover loss terminates immediately upon the effective date of any other insurance obtained by you to replace, in whole or in part, the insurance afforded by this Policy, whether or not such other insurance provides coverage for loss sustained prior to its effective date. M. FACSIMILE SIGNATURES We will treat mechanically reproduced facsimile signatures the same as handwritten signatures. N. INDEMNIFICATION We will indemnify any of your officials who are required by law to give bonds for the faithful performance of their service against loss through "theft" by an "employee" who serves under them, subject to the Limit of insurance. O. INSPECTION AND SURVEYS 1. We have the right but are not obligated to a. make inspections and surveys at any time; b. give you reports on the conditions we find; and c. recommend changes. 2. Any inspections, surveys, reports or recommendations relate only to insurability and the premiums to be charged. We do not make safety inspections. We do not undertake to perform the duty of any person or organization to provide for the health or the safety of workers or the public. And, we do not warrant that conditions a. are safe or healthful; or b. comply with laws, regulations, codes or standards. 3. This condition applies not only to us, but also to any rating, advisory, rate service or similar organization which makes insurance inspections, surveys, reports or recommendations. P. JOINT INSURED 1. If more than one Insured is named in the Declarations, the first named Insured will act for itself and for every other Insured for all purposes of this Policy. If the first named Insured ceases to be covered, then the next named Insured will become the first named Insured. 2. if any Insured or officer of an Insured has knowledge of any information relevant to this Policy, that knowledge is considered to be knowledge of every Insured. 3. An "employee" of any Insured is considered to be an "employee" of every Insured. 4. If this Policy or any of its Insuring Agreements is cancelled, terminated or non - renewed as to any Insured, loss sustained by that Insured is covered only if discovered by you during the period of time provided in General Condition L., EXTENDED PERIOD TO DISCOVER LOSS. And, this extended period to discover loss also terminates in accordance with paragraph 2 of that condition. Form F -4202-0 Page 8 of 12 © 1998, The Hartford 20 5. We will not pay a greater amount for loss sustained by more than one Insured than we would pay if all of the loss had been sustained by one Insured. Q. LEGAL ACTION AGAINST US You may not bring any legal action against us involving loss 1. unless you have complied with all the terms of this Policy; and 2. until 90 days after you have filed proof of loss with us; and 3. unless such action is brought within 2 years from the date that you discover such loss. R. LIBERALIZATION If we adopt any revision that would broaden the coverage within the Policy without additional premium within 45 days prior to or during the Policy Period, the broadened coverage will immediately apply to this Policy. S. LOSS COVERED UNDER MORE THAN ONE INSURING AGREEMENT OF THIS POLICY If two or more Insuring Agreements of this Policy apply to the same loss, we will pay the lesser of 1. the actual amount of loss; or 2. the sum of the Limits of Insurance applicable to those Insuring Agreements. T. NON ACCUMULATION OF LIMIT OF INSURANCE Regardless of the number of years this Policy remains in force or the number of premiums paid, no Limit of Insurance cumulates from year to year or Policy Period to Policy Period. U. OTHER INSURANCE 1. This policy does not apply to loss recoverable or recovered under other insurance or indemnity. If the limit of the other insurance or indemnity is insufficient to cover the entire amount of the loss, this Policy will apply to that part of the loss, other than that failing within any Deductible Amount, not recoverable or recovered under the other insurance or indemnity. 2. However, this Policy will not apply to the amount of loss that is more than the applicable Limit of Insurance shown in the Declarations. V. OWNERSHIP OF PROPERTY; INTERESTS COVERED 1. The property covered under this Policy is limited to property a. that you own or lease; or b. for which you are legally liable. W. PREMIUMS The first named Insured is responsible for the payment of all premiums and will be the payee for all return °premiums we pay. X. RECORDS You must keep records of all property covered under this policy so we can verify the amount of any loss. Y. RECOVERIES 1. Any recoveries, less the cost of obtaining them, made after the settlement of loss covered by this Policy will be distributed a. to you, until you are reimbursed for any Toss that you sustain that exceeds the Limit of Insurance and the Deductible Amount, if any;' b. then to us, until we are reimbursed for the settlement made; and c. then to you, until you are reimbursed for that part of the loss equal to the Deductible Amount, if any. 2. Recoveries do not include any recovery a. from insurance, suretyship, reinsurance, security or indemnity taken for our benefit; or b. of original "securities" after duplicates of them have been issued. Z. SOLE BENEFIT This insurance is for your sole benefit. No legal proceeding of any kind to recover on account of loss under this policy may be brought by anyone but you. Form F -4202-0 Page 9 of 12 © 1998, The Hartford 21 AA. SPECIAL LIMIT OF INSURANCE FOR SPECIFIED PROPERTY (Insuring Agreement 3.) We will pay no more than $5,000. for any one "occurrence" of loss of or damage to 1. precious metals, precious or semi- precious stones, pearls, furs or completely or partially completed articles made of or containing such materials that constitute the principal value of such articles; or 2. manuscripts, drawings or records of any kind or the cost of reconstructing them or reproducing any information contained in them. BB. TERRITORY This Policy covers acts committed or events occurring within the United States of America, U.S. Virgin Islands, Puerto Rico or Canada. However, we will pay for loss under Insuring Agreement 1. which is caused by an "employee" while temporarily outside of the territories named in this General Condition for a period of not more than 90 consecutive days. CC. TRANSFER OF YOUR RIGHTS OF RECOVERY AGAINST OTHERS TO US You must transfer to us all your rights of recovery against any person or organization for any loss you sustained and for which we have paid or settled. You must also do everything necessary to secure those rights and do nothing after loss to impair them. DD. VALUATION 1. Subject to the applicable Limit of Insurance, we will pay for a. loss of "money" but only up to and including its face value. We may, at our option, pay for a loss of "money" issued by other than the United States of America in either the face value in the "money" issued in that country, or, in the United States of America dollar equivalent determined by the rate of exchange on the day that the loss occurred. b. loss of "securities' but only up to and including their value at the close of business on the day that the loss was discovered. But, we may, at our option, 1) pay the value of such "securities ", 2) replace them in kind in which event you must assign to us all your rights, title and interest in and to those "securities" or 3) pay the cost of any Lost Securities Bond required in connection with issuing duplicates of the "securities". However, we will be liable only for the payment of so much of the cost of the bond as would be charged for a bond having a penalty not exceeding (1) the value of the "securities" at the close of the business on the day the loss was discovered; or (2) the Limit of Insurance. c. loss of or damage to "other property" or loss from damage to the "premises" or its exterior for the replacement cost of the property without deduction for depreciation, subject to 2. below. However, we will not pay for more than the lesser of (1) the Limit of Insurance applicable to the lost or damaged property; or (2) the cost to replace the lost or damaged property with property of comparable material and quality and used for the same purpose; or (3) the amount that you actually spend that is necessary to repair or replace the lost or damaged property. 2. We will not pay on a replacement cost basis for any loss or damage a. until the lost or damaged property is actually repaired or replaced; and b. unless the repair or replacement is made as soon as reasonably possible after the loss or damage. If the lost or damaged property is not repaired or replaced, we will pay based on actual cash value. 3. We may, at our option, pay for loss of or damage to property other than "money" in the "money" of the country in which the loss occurred; or in the United States of America dollar equivalent of the "money" of the country where the loss occurred determined by the rate of exchange on the day the loss was discovered. Any property that we pay for or replace becomes our property. 4. Loss of or loss from damage to any books or records of account or other records, tapes, disks, or electronic media used by you in the business but only if a_ such books, records, tapes or disks are actually reproduced and then only for not more than the blank books, pages, tapes and disks or other materials plus the cost of labor for the actual transcription or copying of data which you shall furnish to reproduce such books, records, tapes or disks. VII DEFINITIONS Form F4202 -0 22 © 1998, The Hartford Page 10 of 12 A. "Banking premises" means the interior portion of that part of any building occupied by a banking institution or similar safe depository. B. "Counterfeit" means an imitation of an actual valid original which is intended to deceive and to be taken as the original C. "Custodian" means any "employee" while having the care and custody of property inside the "premises ", excluding any person while acting as a "watchperson" or janitor. D. "Employee" means 1. any natural person a. while in your service or for 60 days after termination of service; and b. who you compensate directly by salary, wages, commissions; and c. who you have the right to direct and control while performing services for you; including d. who is performing services for you as the chairman, or a member of any committee and whether compensated or not; or f. who is a non - compensated officer, or g. who is a volunteer who is not compensated, other than one who is a fund solicitor, while performing services for you that are usual to the duties of an "employee "; or h. who is a former employee, director or trustee retained as a consultant while performing services for you; or i. who is a student intem or guest student pursuing studies or duties in any of your offices or "premises ". 2. a natural person who is a trustee, officer, "employee", administrator or manager, except an administrator or a manager who is an independent contractor, of any "employee benefit Plan(s)" insured under this Policy; and your director or trustee while that person is handling "funds" or "other property" of "employee benefit Plan(s)" insured under this Policy. 3. a natural person who is furnished temporarily to you to substitute for a permanent "employee" to meet seasonal or short term work load conditions and while that temporary person is subject to your direction and control and performing services for you. However, such persons are excluded while having care and custody of property outside the "premises "; and a. "employee" does NOT mean (1) any agent, broker, person leased to you by a labor leasing firm, factor, commission merchant, consignee, independent contractor or representative of the same general character; or (2) any manager, director or trustee except while performing acts coming within the scope of the usual duties of an "employee". E. "Employee benefit Plan(s)" means any welfare or pension Plan listed in the Declarations, on an attached schedule or for which automatic coverage is afforded that is subject to the Employee Retirement Income Security Act (ERISA) of 1974, as amended. F. "Financial institution" means a bank, savings bank, savings and loan association or similar thrift institution, a stockbroker, mutual fund, liquid assets fund, or similar investment institution in which you maintain a "transfer account". G. "Forgery" means the signing of the name of another person or organization with intent to deceive; it does riot mean a signature which consists in whole or in part of one's own name signed with or without authority, in any capacity, for any reason. H. "Fraudulent transfer instructions" means 1. fraudulent electronic, telegraphic, facsimile, cable, teletype or telephone instructions to a "financial institution" to debit a "transfer account" and to pay, transfer or deliver "money" or "securities" from such account and which instructions purport to have been authorized by you but which have been fraudulently transmitted by another; or 2. fraudulent written instructions to a "financial institution" to debit a "transfer account" and to pay, transfer or deliver "money" or "securities" from such account through an electronic funds transfer system at specified times or under specified conditions and which instructions purport to have been duly authorized by you but which have been fraudulently issued, forged or altered by another. 1. "Funds transfer fraud" means "theft" of "money" or "securities" from any of your "transfer accounts" at a "financial institution" and occurring through "fraudulent transfer instructions" communicated to such "financial institution". J. "Messenger" means you or any "employee" while having care and custody of property outside the "premises ". one Form F- 4202 -0 Page 11 of 12 © 1998, The Hartford 23 K. "Money" means currency, coins and bank notes in current use and having a face value; and travelers checks, register checks and money orders held for sale to the general public. L. "Occurrence" means 1. as respects the Employee Theft Insuring Agreement, all loss caused by, or involving, one or more "employees ", whether the result of a single act or a series of acts. 2. as respects the Forgery or Alteration Insuring Agreement, all loss caused by any person or in which that person is involved, whether the loss involves one or more instruments. 3. as respects all other Insuring Agreements, an act or series of related acts involving one or more persons; or an act or event or a series of related acts or events not involving any person. M. "Other Property" means any tangible property other than "money" or "securities" that has intrinsic value but does not include any property excluded under this Policy. "Other property" does not include trade secrets, proprietary information, confidential information or any copyrights, patents, trademarks, proprietary manufacturing or processing procedures, or secret or confidential information, including but not limited to credit card numbers, bank account numbers or any similar information. N. "Premises" means the interior of that portion of any building which you occupy in conducting your business. O. "Robbery" means the unlawful taking of property from the care and custody of a person by one who has caused or threatened to cause that person bodily harm, or, committed an obviously unlawful act witnessed by that person. P. "Safe burglary" means the unlawful taking of property from within a locked safe or vault by a person unlawfully entering the safe or vault as evidenced by marks of forcible entry upon its exterior, or, the taking of a safe or vault from inside the "premises ". Q. "Securities" means negotiable or non - negotiable instruments or contracts representing either "money" or property and includes tokens, tickets, revenue and other stamps (whether represented by actual stamps or unused value in a meter) in current use; and, evidences of debt issued in connection with credit or charge cards, which cards are not issued by you; but does not include "money". R. "Theft" means the unlawful taking of "money", "securities" or "other property" to the deprivation of the Insured. S. "Transfer account" means an account maintained by you at a "financial institution" from which you or your authorized representative may cause the payment, transfer or delivery of "money" or "securities" by any means described in the "fraudulent transfer instructions" definition. T. "Watchperson" means any person who you retain specifically to have the care and custody of property inside the "premises" and who has no other duties. Form F -4202-0 24 © 1998, The Hartford Page 12 of 12 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. BRIDGE ENDORSEMENT The word "Policy" replaces the phrases "Crime General Provisions" and "Crime Coverage Forms" or "Coverage Part" wherever they appear in this Policy or in any endorsement made a part of the Policy. Form F- 4290 -0 Page 1 of 1 © 1998, The Hartford 25 26 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. WASHINGTON CHANGES A. The following General Conditions in the Policy are deleted in their entirely and replaced with the following: CANCELLATION a. The first named Insured shown in the Declarations may cancel this Policy by mailing or delivering to us advance written notice of cancellation. b. We may cancel this Policy by mailing or delivering to the first named Insured and the first named Insured's agent or broker written notice of cancellation, including the actual reason for the cancellation, to the last mailing address known to us, at least: (1) 10 days before the effective date of cancellation if we cancel for nonpayment of premium; or (2) 45 days before the effective date of cancellation if we cancel for any other reason. G. We will also mail or deliver to any mortgage holder, pledgee or other person shown in this Policy to have an interest in any loss which may occur under this Policy, at their last mailing address known to us, written notice of cancellation, prior to the effective date of cancellation. This notice will be the same as that mailed or delivered to the first named Insured. d. Notice of cancellation will state the effective date of cancellation. The Policy Period will end on that date. e. If this Policy is canceled, we will send the first named Insured any premium refund due. If we cancel, the refund will be pro rata. If the first named Insured cancels, the refund will be at least 90% of the pro rata refund. The cancellation will be effective even if we have not made or offered a refund. f. If notice is mailed, proof of mailing will be sufficient proof of notice. CHANGES This Policy contains all the agreements between you and us concerning the insurance afforded. The first named Insured shown in the Declarations is authorized on behalf of all insured to agree with us on changes in the terms of this Policy. If the terms are changes, the changes will be shown in an endorsement issued by us and made a part of this Policy. EXAMINATION OF YOUR BOOKS AND RECORDS 1. We may examine and audit your books and records as they relate to this Policy at any time during the Policy Period and up to three years afterward. 2. We may do the same as to the books and records of any organization you newly acqui re or form that is deemed to be named Insured under this Policy. INSPECTIONS AND SURVEYS We have the right but are not obligated to: 1. Make inspections and surveys at any time; 2. Give you reports on the conditions we find; and 3. Recommend changes. Any inspections, surveys, reports or recommendations relate only to insurability and the premiums to be charged. Such inspections are not safety inspections. We do not undertake any duty to provide for the health or safety of any person. And we do not represent or warrant that conditions: 1. Are safe or healthful; or Form F- 4298 -0 © 1998, The Hartford Includes copyrighted material of Insurance Services Office, Inc. with its permission ©copyright, Insurance Services Office, inc., 1988, 1997 Page 1 of 2 27 2. Comply with laws, regulations, codes or standards. This condition applies not only to us, but also to any rating, advisory, rate service or similar organization which makes insurance inspections, surveys, reports or recommendations on our behalf. NONRENEWAL We may elect not to renew this Policy by mailing or delivering written notice of non - renewal, stating the reasons for nonrenewal, to the first named Insured and the first named Insured's agent or broker at their last mailing addresses known to us. We will also mail to any mortgage holder, pledgee or other person shown in this Policy at their last mailing address known to us, written notice of nonrenewal. We will mail or deliver these notices at least 45 days before the: a. Expiration of the Policy; or b. Anniversary date of this Policy if this Policy has been written for a tern of more than one year. Otherwise, we will renew this Policy unless: a. The first named Insured fails to pay the renewal premium after we have expressed our willingness to renew, including a statement of the renewal premium, to the first named Insured and the first named Insured's agent or broker at least 20 days before the expiration date; or b. Other coverage acceptable to the insured has been procured prior to the expiration date of the Policy. PREMIUMS The first named Insured shown in the Declarations: 1. Is responsible for the payment of all premiums; and 2. Will be the payee for any return premiums we pay. RECOVERIES Any recovery or salvage on a loss will accrue entirely to our benefit until the sum paid by us has been made up. But, we will be entitled to any other recovery only after you have been fully compensated for the loss. B. The TRANSFER OF YOUR RIGHTS OF RECOVERY AGAINST OTHERS TO US General Condition is replaced by the following: If any person or organization to or for whom we make payment under this Policy has rights to recover damages from another, those rights are transferred to us to the extent of our payment. That person or organization must do everything necessary to secure our rights and must do nothing after loss to impair them. Form F- 4298 -0 Page 2 of 2 © 1998, The Hartford Includes copyrighted material of Insurance Services Office, Inc. with its permission ©copyright, Insurance Services Office, inc., 1988, 1997 28 RCW 42.24.180: *Taxing district — Issuance of warrants or checks before approval by legislative body ... Page 1 of 1 RCW 42.24.180 *Taxing district — Issuance of warrants or checks before approval by legislative body — Conditions. In order to expedite the payment of claims, the legislative body of any *taxing district, as defined in RCW 43.09.260, may authorize the issuance of warrants or checks in payment of claims after the provisions of this chapter have been met and after the officer designated by statute, or, in the absence of statute, an appropriate charter provision, ordinance, or resolution of the *taxing district, has signed the checks or warrants, but before the legislative body has acted to approve the claims. The legislative body may stipulate that certain kinds or amounts of claims shall not be paid before the board has reviewed the supporting documentation and approved the issue of checks or warrants in payment of those claims. However, all of the following conditions shall be met before the payment: (1) The auditing officer and the officer designated to sign the checks or warrants shall each be required to furnish an official bond for the faithful discharge of his or her duties in an amount determined by the legislative body but not Tess than fifty thousand dollars; (2) The legislative body shall adopt contracting, hiring, purchasing, and disbursing policies that implement effective internal control; (3) The legislative body shall provide for its review of the documentation supporting claims paid and for its approval of all checks or warrants issued in payment of claims at its next regularly scheduled public meeting or, for cities and towns, at a regularly scheduled public meeting within one month of issuance; and (4) The legislative body shall require that if, upon review, it disapproves some claims, the auditing officer and the officer designated to sign the checks or warrants shall jointly cause the disapproved claims to be recognized as receivables of the *taxing district and to pursue collection diligently until the amounts disapproved are collected or until the legislative body is satisfied and approves the claims. [1994 c 273 § 18; 1984 c 128 § 11.] Notes: *Reviser's note: "Taxing district" redesignated "local government" by 1995 c 301 § 15. http: // apps .leg.wa.gov /rcw /default.aspx ?cite= 42.24.180 6/30/20 30 � Jim Haggerton, Mayor INFORMATIONAL U��U�^�������K� nn�n ��n'�n�n��n n��n���u~ n�o�~x�u��n�x��n��*��n�n T[): Finance and Safety Committee FROM: Derek Speck, Economic Development Administrator DATE: July 2.2O14 SUBJECT: Washington Place Fee Deferral Options ISSUE The property owner of 223 Andover Park East would like to develop a mixed-use project called Washington Place and has requested the City reduce or defer fees and taxes, BACKGROUND Omar and Christine Lee, as owners of the former Circuit City site at 223 Andover Park East have been working for the past few years to demolish the Circuit City building and construct a mixed-use building that would comprise 370 multi-family residential units, 189 hotel rooms and a small cafe. The Lee's are still working on pr ject design and financing. Currently, the total project cost is over $100 million. The Lee's have explained that financing the p ject is very challenging and have requested the City for any possible reduction or deferral in taxes and fees in order to increase the probability that the p je[t can be funded. They plan to use the Federal foreign investor program (EB-5) to provide at Ieast $50 million of the project ject funding. Given the repayment arrangements they would have with those investors, the Lee's have indicated they would have greater ability to pay taxes and fees starting five years after receiving certificate of occupancy. Currently, the Lee's have requested: (1) the development permit fees to be limited to $000.000. (2) the development impact fees to be reduced to the extent possible and deferred for payment in years five through eight after receiving a certificate of occupancy, and (3) to receive approval for an eight year property tax exemption on the multi-family residential portion of the project. Following is our most current estimate of the permit and impact fees and when they would be required to be paid per current City policy. The fees are based on the City's adopted fee schedules and are intended to cover the City's costs of providing the related services. INFORMATIONAL MEMO Page 2 Current Estimate of Development Fees Due at Permit Application Due at Permit Issuance Total Building $208,000 $336,000 $544,000 Mechanical 13,000 54,000 67,000 Plumbing 2,000 7,000 9,000 Electrical 16,000 67,000 83,000 Traffic Concurrency 12,000 0 12,000 Traffic Impact 47,000 47,000 Fire Impact 484,000 484,000 Parks Impact 546,000 546,000 Total $251,000 $1,541,000 $1,792,000 Fees are estimates based on 189 hotel rooms and 370 apartments. Actual amounts will be calculated based on the application when submitted or when permits are issued. Additional permit fees may apply such as pavement mitigation, fire hydrants and sprinkers, special inspections, etc. Fees from non -City agencies such as water, sanitary sewer, and power are not reflected in this analysis. Developer may be required to install or contribute to infrastructure such as sanitary sewer. DISCUSSION The primary question is whether the City needs to make adjustments to the fees in order to ensure the development can move forward. We do not have a definitive answer to this question. On the one hand, the fees are less than 2% of the total project budget. Projects of this magnitude and risk do not typically move forward with higher projected returns that 2% would not make the go or no -go decision. On the other hand, this is not a typical project. Under conventional financing arrangements, this project would not be feasible since the estimated market rents for multi - family residential in Tukwila do not justify the investment. Because of the EB -5 funding method, the property owners and investors are willing to accept lower returns in early years in expectation of greater returns in later years. As such, smaller costs can add up to become significant enough to affect the go or no -go decision. The second question is whether the City would like to do what it can to adjust or defer fees to facilitate the project. Following are a number of reasons why the City may want to do so: • Vision - The project supports the City's vision for future development of the urban center and would start new multi - family residential development with higher amenities (e.g. view, rooftop clubhouse) than market demand would traditionally support. • Unique Opportunity- New development is often financed based on comparable rents at other properties. Since Tukwila has not had new apartment or condominium construction in decades, traditional financial markets are cautious about our market. 32 INFORMATIONAL MEMO Page 3 Given the property owner's knowledge and history in the region, alignment with the City's vision, and contacts with potential foreign iOV8GtorS, this is a unique opportunity. • Renovation - New, quality market rate multi-family residential would garner higher rents than other apartments in Tukwila. Those higher rents may help other multi-family properties in Tukwila justify redevelopment and renovation. • Image - This would be the tallest building between Seattle, Bellevue, and Tacoma. It will be very visible and can improve Tukwila's image and solidify Tukwila's Southcenter District as the premier location to live, work, and play between Seattle and Tacoma. • Public Safety - May increase public safety with more "eyes on the Street" fl the urban center. • Housing Options - Offers a type of housing that some Tukwila residents may desire. As units convert to ownership, it can encourage greater residential stability. • Tax Revenues — The proposed project has a significantly much higher property value than would be ikely under traditional market conditions. The property valuation for the proposed development is probably ten times greater than as a single story retail building. That additional valuation can result in higher construction sales tax and property taxes. Even if the City approves a multi-family property tax exemption, the one-time construction sales would be approximately $600,000 and annual property tax, sales tax, and real estate excise tax would range from $95,000 in year one to nearly $150,000 in year eight (See attached exhibit). It is important to remember that the City will incur costs to provide police, fire, parka, and public infrastructure services. We have not quantified those costs but believe they would be Iess than the revenueS. • Attracts Investment— Some of the EB-5 investors have significant wealth and may want to invest in future projects based on the success of this one. • Stimulates Development— If this project is aucoeaefu|, it provides an example that will facilitate other multi-family p jects to develop and may stimulate development of other types in the urban core. • Capacity to Defer— The City has some discretion as to when to incur the costs related to impact fees. For instance, if the fees are deferred, the City can choose to defer the related capital improvements to match with when the fees are received. Or, the City could borrow to complete the p jects and repay the debt as impact fees are collected. Even if the Council agrees with the above reasons to support the adjustments, there are a number of considerations why the City may not want to adjust or defer fees such as: • Precedence — The City cannot sustainab!y function if it reduces or defers fees on all projects. Approving adjustments for this project can encourage other property owners to make similar requests. INFORMATIONAL MEMO Page 4 • — As mentioned before, it is not completety certain that adjusting the City's fees would be the deciding factor in the success of the project. The third question is what method would be most acceptable. State law provides for cities to provide multi-family property tax exemptions and some fee adjustments or deferrals. Attached is some information from the Municipal Research and Services Center (MRSC) on those programs. If the Council is interested in considering adjustments or deferrals, staff would return with specific options. The attached spreadsheet shows the fee and revenue cash flows assuming the City makes no adjustments to the fees but defers the impact fees to be paid over years five through eight after the pr jectrRceiveaaondificateofoocupancyandaeaumingtheQtvapproveeono|ghtyear multi-family property tax exemption. The Administration is interested in seeing what the City can do to encourage this development while ensuring our costs related to the development are covered. Staff is still researching the fee deferral and multi-family property tax exemption program and will be prepared to make a recommendation in August. Staff would like to hear Council discussion of this item to help guide the research. FINANCIAL IMPACT An estimate of the city's tax and fee revenues for the project is attached. It is important to remember that the City will incur costs to provide pO|iCe, fire, parks, and public infrastructure services. We have not quantified those costs but believe they would be less than the revenues. Revenues and cost savings related to development stimulated by this project are difficult to quantify and are not included in the analysis. RECOMMENDATION The Committee is being asked to forward this item to the July 14th, 2014 Committee of the Whole meeting for discussion. Based on the discussion at COW, staff will return to a future council meeting with a recommendation. ATTACHMENTS MRSC Information on Multi-Family Property Tax Exemption MRSC Information on Fee Deferrals Projected Tax and Fee Revenues Spreadsheet 34 Municipal Research Service Center (MRSC) Multi-Family Tax Exemption Under RCW 84.14, Washington cities with a population of 15,000 or more may establish a tax exemption program to stimulate the construction of new, rehabilitated, or converted multi-family housing within designated areas of the cities, including affordable housing. (Cities in "Buildable Lands" counties under RCW 36.70A.215, and the largest city in a GMA county where no city has 15,000 or more population may also utilize the tax exemption program.) When a project is approved under this program, the value of eligible multifamily housing improvements is exempted from property taxes for 8 or 12 years. Land, existing improvements, and non- residential improvements are not exempt. Only multiple unit projects with 4 or more units are eligible for either the 8- or 12-year exemption, and only property owners who commit to renting or selling at least 20 percent of units as affordable housing units to low and moderate income households are eligible for a 12-year exemption. If the property use changes in a manner inconsistent with program requirements before the 8- or 12-year exemption ends, back taxes are recovered based on the difference between the taxes paid and the taxes that would have been paid without the tax exemption. • Bellingham Municipal Code Ch. 17.82.030 - Tax Exemptions for Multi-Family Housing in Targeted Residential Areas • Kirkland Municipal Code Ch. 5.88 - Multifamily Housing Property Tax Exemption • Moses Lake Municipal Code Ch. 18.23 -Multi-Family Housing Tax Exemption • Olympia Municipal Code Ch. 5.86 - Multi-Family Dwelling Tax Exemption • Spokane Municipal Code Ch. 8.15 - Multi-Family Housing Property Tax Exemption • Tacoma Municipal Code Title 6A, Ch. 6A.110 (2) - Tax Exemption for Multi-family Housing in Target Areas - Eight or Twelve-year property tax exemption • Vancouver Municipal Code Ch. 3.22- Multi-Family Housing Tax Exemption • Wenatchee Municipal Code Ch. 5.88 - Property Tax Exemptions for Eligible Improvements in Residentially Deficient Urban Centers • Yakima Municipal Code Ch. 11.63 - Downtown Redevelopment Tax Incentive Program 35 36 Municipal Research Service Center (MRSC) Impact Fee Payment Deferral Programs Introduction Local jurisdictions have taken different approaches regarding when to collect impact fees. Most jurisdictions in Washington do not issue building permits, or in other cases, subdivision or development permits, until impact fees have been paid. A developer then has a major incentive to pay up, since the developer may not proceed with the project until fees are paid. Once permits are issued, some fear that it may become more difficult to collect the fees. Also, collection at earlier stages provides more lead time for planning and construction of facilities before the new demand is realized. However, impact fees collected at these earlier stages represent a significant upfront expense which a developer must pay before the project is generating any revenues. As a result, developers have pushed for state legislation to require jurisdictions with impact fee programs to allow deferred payment. Initial attempts to pass such legislation failed. More recently, in large part to assist a building construction industry in recessionary times, a number of jurisdictions have adopted new ordinances allowing deferment of impact fee payment. Both Pierce County and Olympia have fashioned new deferred payment programs despite concerns with earlier programs. In April 2013, the legislature approved ESHB 1652, which would have required local jursidictions to adopt a fee collection deferral system. However, the legislation was vetoed by the Governor. For more information about impact fees in Washington, see our webpage: Impact Fees. Deferred Impact Fee Payment Code or Ordinance Examples • Kitsap County Code Ch. 4.110 - Impact Fees - See especially Sec. 4.110.020(E) and (F) - Impact fees must be paid before issuance of certificate of occupancy • Olympia Municipal Code Sec. 15.04.040(H) - To defer impact fee payment, a developer is required to execute an impact fee deferral agreement, which is recorded and creates a lien on the property. Note, however, that some lenders have required that the impact fee deferral agreement lien be subordinated to their financing before approving loans. Ordinance includes sunset clause. • Pierce County Code Sec. 4A.10.080(D - H) and Pierce County Ordinance No. 2010-65s - This ordinance allows owners of residential properties being constructed or improved for resale to request a voluntary lien to defer paying traffic and park impact fees until a property is sold, but no later 37 than 2 years from the date of building permit issuance, whichever comes first. Also, the webpage for the ordinance includes links to documents related to adoption process • Redmond Ordinance No. 2501, 11/2009, and Ordinance No. 2469, 06/2009 - Impact fees must be paid at time of drywall construction for individually permitted single family and detached residential construction. Ordinance includes sunset clause. • Renton Development Regulations §4-1-190(G)(6) - (12) - Fees for some types of development can be delayed until after sale of unit or 18 months from date of building permit issuance, subject to a lien • Woodland Municipal Code Ch. 3.41 - Development Impact Fees— Fire and Park, Recreation, Open Space or Trail Facilities - Woodland allows payment deferral for parks and fire facilities, but not for schools, or for its newly adopted transportation impact fees Impact Fee Deferral Programs and Documents • Sammamish Affidavit of Impact Fee Deferral • Kitsap County o Deferred Impact Fees (#5) - Handout explaining program in Q & A format o Deferred Impact Fee Acknowledgement form - Scroll down to form • Olympia Impact Fees, Community Planning and Development, 01/01/2013 - Brochure • Pierce County Impact Fee and Connection Charges Deferral Program - Includes link to brochure with questions and answers, and Request for Deferral Lien form 38 Projected City of Tukwila Tax and Fee Revenues Washington Place Paid at Time of Year After Certificate of Occupancy Application Issuance C of O 1 2 3 4 5 6 7 8 Ongoing Permit Fees Building $ 208,000 $ 336,000 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 544,000 $ Mechanical 13,000 54,000 - - - - - - - - - 67,000 Plumbing 2,000 7,000 - - - - - - - - - 9,000 Electrical 16,000 67,000 - - - - - - - - - 83,000 Traffic Concurrency 12,000 - - - - - 12,000 Traffic Impact - - - - - - 11,750 11,750 11,750 11,750 47,000 Fire Impact - - - - - - 121,000 121,000 121,000 121,000 484,000 Parks Impact - - - - - 136,500 136,500 136,500 136,500 546,000 Subtotal $ 251,000 $ 464,000 $ - $ - $ - $ - $ - $ 269,250 $ 269,250 $ 269,250 $ 269,250 $ 1,792,000 $ Construction Sales Tax - 600,000 - - - - 600,000 Property Tax - - 75,000 75,750 76,508 77,273 78,045 78,826 79,614 80,410 621,425 239,582 Real Estate Excise Tax - - - - - - 50,000 50,000 50,000 50,000 200,000 50,000 Sales Tax on Hotel 20,000 40,000 41,200 42,436 43,709 45,020 46,371 47,762 326,498 50,000 Total $ 251,000 $ 464,000 $ 600,000 $ 95,000 $ 115,750 $ 117,708 $ 119,709 $ 441,004 $ 443,096 $ 445,235 $ 447,422 $ 3,539,924 $ 339,582 Subtotal Notes: (a) This table estimates taxes and fees the City of Tukwila would receive if Washington Place is completed with 370 apartments and 189 hotel rooms as a total deveopment cost of $100 million including $75 million in "hard" costs. (b) Current City policy requires impact fees to be paid at time of permit issuance. This table reflects a deferral of impact fees until years 5 -8 after issuance of a CofO. (c) Permit fee assumptions listed on separate exhibit. (d) Construction sales tax estimated based on $70 million in taxable construction costs. (e) Property tax estimated at $0.00295 per dollar of valuation. Year 1 property tax based on $25 million of assessed valuation for hotel. Increased at 1% annually. (f) Property tax assumes City approves a multi - family property tax exemption for years 1 through 8 resulting in no additional property tax for the multi - family portion until after year 8. After that, the multi - family valuation is assumed to be $50 million escalated at 1% annually. (g) Real estate excise tax assumes property sales start in year 5 with 25 residential units per year at $400,000 per unit. (h) Sales tax assumes 189 hotel rooms rented at 70% occupancy at $100 /night with phasing during year 1. (i) This table includes revenues only and does not reflect the City's associated costs of providing services. (j) This table does not reflect taxes and fees paid to other government agencies, even if collected by the City. (k) This table does not reflect what the taxes and fees would be if the Washington Place development did not occur. (I) The City would receive loding tax but that is not included in this table due to its restricted use. Mayor's Office - Economic Development Updated: July 2, 2014 40 TO: City of Tukwila Jim Haggerton, Mayor INFORMATIONAL U��K�^�������U� xn�n�v��mnu�o�mu u��u�u~m�� n�u��u�uv��nn��o�����o�o Mayor Haggerton Finance & Safety Committee FROM: David Cline, City Administrator DATE: June 1B,2D14 SUBJECT: Tukwila City of Opportunity Scholarship ANNUAL REPORT The City received seven applications for the City of Opportunity Scholarship: one application from Aviation High School in the Highline School District and six applications from Foster High School in the Tukwila School District. All applications were forwarded to the selection committee members for review. There was 4.000 available for scholarship awards and two $2'000 scholarships were awarded. ISSUE After going through the scholarship process in 2014 Administration is recommending revisions to the program to include: ° Demonstration of Substantial Financial Need; • Make-up and Size of the Selection Committee; • Award Amounts; and • Eligibility of Immediate Family Members of City Employees and Elected Officials. DISCUSSION Demonstration of Substantial Financial Need: The resolution that adopted the City of Opportunity Scholarship indicated that financial need would be demonstrated by the information provided on the FAFSA Student Aid Report. Unfortunately, the Student Aid Report only provides the amount of Expected Family Contribution but does not provide annual family income or the financial information provided in completion of the FAFSA form used to determine need. Eligibility for the Washington State Need Grant is determined by the using the State Median Family Income chart and to be eligible a student's family income cannot exceed 70 percent of the State's median income. Administration recommended that the scholarship application be modified to include a financial section that provides requests the annual family income for the previous year and that eligibility is based on a family income that does not exceed 70 percent of the State's yls)-median iDCO08. After further discussion committee members would like financial Reed to continue to be based on the FAFSA Student Aid Report and would like the scholarship application to be arnended to request that the appiicani provide a written statement that describes his or her need for financial assistance. V state minimum of 15 �• '*m*pn .4 4 - * *4� e 42 INFORMATIONAL MEMO Page 2 Members of the Selection Committee: It is recommended that we modify the make -up of the selection committee to include the Mayor and /or his designee, the Council President and /or a City Council Representative, up to two appointed City employees and School District representative(s). The number of members on the selection committee will not exceed seven people in any given year. Award Amounts: It is recommended that the amount of the annual scholarship fund be increased from $4,000 to $10,000 with the minimum award amount being $1,000 and the maximum award amount being $5,000. This will allow the potential for additional recipients and more substantial scholarship awards. Eligibility of Immediate Family Members of City Employees and Elected Officials: It is a common practice for organizations that issue monetary awards to exclude employees and other individuals who are affiliated with the organization, as well as their family members, from eligibility to avoid a potential conflict of interest or the appearance of impropriety. After consulting with the City Attorney's office it is recommended that we adopt this exclusion. In the alternative, the Council can opt to allow immediate family members of City employees and elected officials, which meet all other eligibility requirements, to apply for the scholarship. After further discussion committee members have opted to allow immediate famiV members__ of Cit employees and elected officials, which meet all other eli ents to apply for the scholarsr i w, with the understanding that if a relative of a member of the Selection Committee submits an a rslication, the committee member will recuse themselves from the rating and evaluation of that a Gcation FINANCIAL IMPACT Increasing the amount of the scholarship fund from $4,000 to $10,000 will mean an additional $6,000 per year from the general fund. RECOMMENDATION The Council is being asked to approve a resolution amending the Tukwila City of Opportunity Scholarship requirements at the July 14, 2014 Committee of the Whole meeting and the subsequent July 21, 2014 Regular Meeting. ATTACHMENTS f ; . e Tab4e Draft Resolution Finance & Safety Committee Minutes from June 17, 2014 Finance & Safety Committee Minutes from June 3, 2014 RAFT A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, AMENDING THE "TUKWILA, CITY OF OPPORTUNITY SCHOLARSHIP" PROGRAM TO INCREASE THE FUNDING LEVEL AND REFINE PROCEDURES; AND REPEALING RESOLUTION NO. 1817. WHEREAS, the City of Tukwila has a scholarship program for high school students living in Tukwila; and WHEREAS, the purpose of establishing the scholarship program is to provide financial assistance and opportunity to deserving students to continue their education beyond high school; and WHEREAS, the scholarship grant shall be known and cited as the "Tukwila, City of Opportunity Scholarship;" and WHEREAS, following the initial implementation and awarding of scholarship funds, the City wishes to increase the funding level for the program and refine procedures; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY RESOLVES AS FOLLOWS: Section 1. Purpose. The purpose of establishing the scholarship program is to provide financial assistance and opportunity to deserving students to continue their education beyond high school. Section 2. Scholarship Eligibility Requirements. Recipients of the scholarship program shall meet the following qualifications: • Must be a resident of the City of Tukwila. Proof of residency is required at the time of application. • Must be equivalent to a senior in high school. • Must demonstrate a substantial financial need as indicated on the FAFSA Student Aid Report. Substantial financial need is defined as a household income of Tess than 70% of the State Median Income. W: \Word Processing \Resolutions \City scholarship program amended strike -thru 7 -1 -14 CT:bjs Page 1 of 3 43 • Must have applied to an undergraduate program at a community college, trade school or university. • Must demonstrate leadership qualities as evidenced by involvement in extra- curricular activities. • Must have a cumulative grade point average (GPA) of 2.75 or higher. • Must have completed a minimum of 15 hours of community service. official of the City of Tukwila. For purposes of the scholarship program, person or the person's spouse, e.g., within three degrees of relationship by blood marriage. Section 3. Funding. A sum of $4,00010,000 per calendar year shall be appropriated and reflected in the City of Tukwila budget. Scholarships will be awarded in increments of not less than $1,000 nor greater than $4005,000. Section 4. Scholarship Selection Committee. A Scholarship Selection Committee shall be created and shall include the Mayor and /or his or her designee, the City Council President and /or a City Council representative, and up to two City staff appointees and a-School District desi0neerepresentative(s) who can fairly evaluate the level of academic and extracurricular activities represented in the scholarship applications. Section 5. Roles and Authority for the Scholarship Fund. A. City staff shall administer the scholarship fund as directed by this resolution, and it shall be known and cited as the "Tukwila, City of Opportunity Scholarship." B. The Scholarship Selection Committee shall review the program annually and submit a report to Council that summarizes by school district: the applications, available funds, the scholarships awarded, the number of applications that did not result in scholarships, and any recommendations for revisions to the program. C. The Council shall receive the report and request revisions to the program as needed. Section 6. Application Review Process. The deadline for applications to be submitted is March 31 of each year. All applications will be reviewed by City staff to determine that the eligibility requirements have been met. All applications that meet the eligibility requirements will be reviewed by the Scholarship Selection Committee, which will present a recommendation to the City Council for approval of up to four scholarship awards. Scholarship recipients will be notified by April 30 each year. W: \Word Processing \Resolutions \City scholarship program amended strike -thru 7 -1 -14 CT:bjs 44 Page 2 of 3 Section 7. Repealer. Resolution No. 1817 is hereby repealed. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this day of , 2014. ATTEST /AUTHENTICATED: Christy O'Flaherty, MMC, City Clerk De'Sean Quinn, Council President APPROVED AS TO FORM BY: Filed with the City Clerk: Passed by the City Council: Resolution Number: Shelley M. Kerslake, City Attorney W: \Word Processing \Resolutions \City scholarship program amended strike -thru 7 -1 -14 CT:bjs Page 3 of 3 45 46 x-�^ ~�`_.I `7 x�//[l7 of 4 ��YC%��3/(� � � Finance and Safety Committee FINANCE AND SAFETY COMMITTEE Meeting Minutes June 17, 2014-5:3Op./D.; Hazelnut Conference Room PRESENT Councilmembers: Verna Seal, Chair; Joe Duffle, De'Sean Quinn (Absent: Kathy Hougardy) Staff: David C|ine, Vicky Carlsen, Eric Dreyer, Laurel Humphrey CALL TO ORDER: Committee Chair Seal called the meeting to order at 5:30 p.m. PRESENTATIONS No presentations. U. BUSINESS AGENDA A. Purchase of Firearms Training and Equipment Trailer Staff is seeking Committee approval to purchase a Police Department firearms equipment trailer not to exceed $0.800.00. The Firearms Unit conducts quarterly training sessions that involve the transport of bulky equipment. CurnenUy, this is handled by loading and unloading into multiple vehicles. Purchasing a trailer to transport and store the equipment instead would be a cost effective solution. The trailer will also be available for use by the SWAT and Civil Disturbance Units during their respective trainings. The estimated cost for the trailer is $9600.00, and funds are available from the Edward Byrne Memorial Justice Assistance Grant (JAG) Program and from Police Department Fleet Services. UNANIMOUS APPROVAL. B. Resolution: City of Opportunity Scholarship Staff is seeking Council approval of a resolution that would amend the "Tukwila, City of Opportunity Scholarship" program by increasing the funding level and refining procedures in response to lessons learned during the inaugural 2014 process. At the June 3, 2014 discussion on this item, the Committee agreed to raise the total fund to $10.000. and to modify the makeup of the selection committee. They requested more information on median income Ievels as well as further discussion of a community service component. * Financial Need: The Committee packet included a comparison table showing median income information for the county and state. Staff recommends that if the Committee decides to specify income criteria, that eligibility should be based on family income that does not exceed 70 percent of King County's median. The Committee decided to leave in the original language that states an applicant must "demonstrate a substantial financial need as indicated on the FAFSA Student Aid Report." To provide some additional flexibility to this requirement, they requested an item be added to the application that requests the student describe his or her need for financial assistance. • Community Service: The eligibility requirements currently state a minimum of 15 hours of community service. It is increasingly common for community service hours to be required for greduedon, as with Tukwila School District's requirement of 30 hours. The Committee decided to leave the original requirement of 15 hours in the eligibility criteria. Finance & Safety Committee Minutes June f7,2Ot4- Pape 2 • Eligibility of City Employee Relatives: The Committee decided to discuss this again and concluded that they would not like to exclude relatives of City employees or officials. They requested that staif add a procedure to the selection process that would prohibit an employee or official from scoring a candidate with whom they are related. Staff will develop a framework that addresses this request for further Committee consideration. RETURN TO FINANCE AND SAFETY COMMITTEE. C. 2014 l Quarter Cash and Investment Report Staff reviewed the 1* Quarter Cash and Investment Report for 2014, including information on the City's portfolio Comp0nents, performgnoe, policy compliance and liquidity gna|ysis, fund cash and investment balances, and investment environment. At March 31, 2014' the portfolio totaled $44.7 million comprised of $37.8 million in cash and cash equivalents and $6.9 in longer term investments. This represents a $1.8 million decrease from the December 31, 2013 balance, attributable to the collection of property taxes in the 2nd and 4mquorters. INFORMATION ONLY. D. 2014 1st Quarter Sales Tax Miscellaneous Revenue Report Staff presented the 2014 1st Quarter Miscellaneous Revenue Report. Information detailed in the staff report includes Sales tax revenues are down by $87,000 below the same period in 2013. and new construction sales tax was $92.000 lower. The City has collected $238,066 in sales tax mitigation as of March 31, 2014. This is 24% of the annual mitigation budget. INFORMATION ONLY. E. Ordinance: Creatinq Tukwila Municipal Code Chapter 2.97 - Code of Ethics Several iterations of a process to address allegations of ethics violations by elected officials have been discussed in Committee since 2013. At its June 3 meeting, the Committee decided to move forward with the creation of an Ethics Board made up of the Chairs or Chair's designee of the City's existing five C0mnnisSiVns, but they asked to have further review of the role of that board. They decided to retain the current Ethics Code (Chapter 2.95) to apply to City employees and appointed officia|o, and asked to create a new Chapter applicable tO elected officials. Staff returned with two options relating to the role of the Ethics Board. Option 1 (Board decides violation): The Board will make an initial determination of sufficiency, and if sufficient, an independent investigator will provide findings of hact, conc|usions, and a recommendation. Upon receipt of this report the Board will determine that a violation did or did not uocur, or that more information is needed. The Board will then draft a recommendation to the Council. Option 2(Counci| decides violation): The Board wiH make an initial determination of sufficiency, and if sufficieOt, an independent investigator will provide findings of fact only. Upon receipt of this report the Board will forward the findings to the Council who will then determine whether or not the violation has occurred and assign an appropriate penalty. Committee members discussed these options and unanimously agreed upon Option 1, in which the Ethics Board makes a determination of violation rather than the Council. The Committee asked questions relating to training and legal counsel for the Board during this process. City Administrator David Cline confirmed that the City Attorney will provide basic training, but if an allegation is nnode, independent counsel could be brought in to advise the Board during the process. The Committee agreed that there should be clearly atated, strong criteria for the selection of such counse|, but were not certain if this should be included within the ordinance or in a separate administrative procedure. Committee Chair Seal noted that Section 2.97.050(E) might be an appropriate location if the decision is made to include this Ianguage in the ordinance. 48 x~�~ '��_.l `7 ��2tl7 ��F � L�yZ%�)%/�J -, � Finance and Safety Couoitt ee FINANCE AND SAFETY COMMITTEE Meeting Minutes June 3, 2014 —517O/IDl.; Hazelnut Conference Room PRESENT Councilmembers: Verna Seal, Chair; Joe Duffie, Kathy Hougardy Staff: David Cline, Peggy McCarthy, Dori Tomaso, Laurel Humphrey CALL TO ORDER: Committee Chair Seal called the meeting to order at 5:30 p.m. PRESENTATIONS No presentations. U. BUSINESS AGENDA A. Fireworks Permit for July 4 Event at Starfire Sports Complex Staff is seeking Council approval of a Fireworks Permit Application submitted by Western Display Fireworks Ltd. for the fireworks display at the City's annual 4th of July Celebration at Starfire Sports Complex. The application has been approved by the Fire Marshal and found to be in compliance with standards and regulations, and this vendor and launch location have been working well. UNANIMOUS APPROVAL. FORWARD TO JUNE 16, 2014 REGULAR CONSENT AGENDA. B. Resolution and Annual Report: City of Opportunity Scholarship Staff is seeking Council approval of a resolution that would amend the requirements of the Tukwia City of Opportunity Scholarship as a result [f lessons learned from the inaugural 2014 process. Committee discussions on the four areas of modification recommended by staff are summarized as foliows: • Define "substantial financial need" as farnily income that does not exceed 70 percent of the state's median income. The Committee requested more information regarding median income levels for the city, county and state. While discussing a balance of need versus merit-based award criteria, Committee members expressed an interest in an expanded community service component to the application. • Modify the selection committee makeup to include the option of a representative from the City Council in addition to or instead of the Council President, and the option of additional City Staff and School District napreeentakivea, not to exceed seven total Committee members per year. The Committee agreed with this modification. • Increase the total amount of the annual scholarship fund to 810,000, allowing for the potential of additional recipients and/or more substantial awards. The Committee agreed with this modification. • Change eligibility standards to exclude City employees and elected officials in keeping with common practice and on the advice of the City Attorney. The Committee did not agree to this modification but would like to forward both options to the Committee of the Whole for discussion. Committee Chair Seal suggested that if employee relatives are included, their names be blacked out du the selection committee review process. RETURN TO COMMITTEE FOR FURTHER DISCUSSION. 50 City of Tukwila Jim Haggerton, Mayor INFORMATIONAL MEMORANDUM TO: Mayor Haggerton Finance & Safety Committee FROM: David Cline, City Administrator Shelley Kerslake, City Attorney DATE: June 18, 2014 SUBJECT: Creating Tukwila Municipal Code 2.97 — Code of Ethics for Elected Officials and Amending Tukwila Municipal Code 2.95 — Code of Ethics ISSUE Creating a Code of Ethics for Elected Officials that also creates a City Board of Ethics. DISCUSSION After further discussion on June 17, 2014, the Committee decided to move forward with Option 1 (detailed below) which creates Tukwila Municipal Code Chapter 2.97 — Code of Ethics for Elected Officials. Chapter 2.95 Code of Ethics will be amended to no longer apply to elected officials. Committee members asked about training for the Board of Ethics members and were informed that the City Attorney's office would provide training to the board members. There was also discussion about providing independent counsel to advise the Board during the process and a request to determine criteria for how independent counsel would be assigned. BACKGROUND At the Finance and Safety Committee meetings of October 8, October 22 and November 5, 2013, June 3, and June 17, 2014 the Committee discussed amending the City's Ethics Code. At the June 17, 2014 committee meeting three ordinances were reviewed and discussed. Option 1: Creates Chapter 2.97 Code of Ethics for Elected Officials and with the creation of an Ethics Board comprised of the chair or designee from each of the City's current commissions. Under this model, the Board would make an initial determination of complaint sufficiency. If the complaint is found to be initially sufficient, the Board will cause an investigation to be completed. The investigator will make findings of fact, conclusions and provide a recommendation. Upon receipt of the investigation report, the Board will determine one of the following: • That a violation of the ethics code did not occur; . • That additional information is needed to make a determination and hold a hearing which is limited in scope; or • That a violation of the ethics code did occur. The Board will draft a recommendation to the Council related to the recommended disposition. Option 2: Creates Chapter 2.97 Code of Ethics for Elected Officials and with the creation comprised of the chair or designee from each of the City's current commissions. Under this model, the Board would make an initial determination of complaint sufficiency. If the complaint is found to be initially sufficient, the Board will cause an investigation to be completed. The investigator will make findings of fact but will not draw any conclusions. Upon receipt of the investigation report, the Board will forward the findongs of fact to the Council. The Council will then determine whether an ethics violation has occurred and render the appropriate penalty, if necessary. Ordinance 3 amends Chapter 2.95 Code of Ethics to no longer apply to elected officials. INFORMATIONAL MEMO Page 2 At the June 3, 2014 meeting the Committee reviewed and discussed three separate ordinances for consideration: 1. Creation of an Ethics Board comprised of the chairs of the City's current commissions where the Board would make an initial determination of complaint sufficiency and if sufficient, the Board will cause an investigation to be completed. The investigator will make findings of fact but will not draw any conclusions. The Board will forward the findings of fact to the Council and the Council will then determine whether an ethics violation has occurred and render the appropriate penalty, if necessary; 2. Creation of an Ethics Board comprised of the chairs of the City's current commissions where the Board would make an initial determination of complaint sufficiency and if sufficient, the Board will cause an investigation to be completed. The investigator will make findings of fact, conclusions and provide a recommendation. Upon receipt of the investigation report, the Board wiU make a determination and draft a recommendation to the Council related to the recommended disposition; and 3. Creation of an Ethics Board appointed by the Mayor and Council. Over the course of the past few montha. Mayor's office staff members met with the Arts Commission, Civil Service Commission, Equity and Diversity Commission, Park Cornnniasion, and Planning Commission to share information regarding an ordinance amendment that would create an Ethics Board comprised of the Commission chairs. After detailed discussions, most commission members were supportive of the proposal to establish a Board of Ethics comprised of current Commission members. During the course of the discussion the foliowing questions were raised by several of the commissions: • How often has this Code of Ethics been used in the past • Why is the Council interested in changing the ethics code • Does it have to be the commission chair as the Ethics Board member? Can each commission choose any member, which may provide greater consistency • Who would provide ethics training to the Commission chairs and would training be offered on a regular basis, i.8. annually; • How would conflicts be handled in the case of an ethics issue involving a commissioner; • How would ethics issues regarding employees be handled; and • Is there a conflict of interest if the Ethics Board member is a City employee? After reviewing the three options Committee memhers rejected ureatinganewCkvBoand.The Committee members also indicated that they would like to further consider the role and duties of the Board of Ethics and asked that options 1 and 2 be revised to apply only 10 elected officials andadU|anguaggtha1thenlemUercanbeoConnrn|aeionChair^ordeaignee''andretu,nto Finance and Safety for further discussion. FINANCIAL IMPACT None. RECON8KNEN0ATION. The Council is being asked to forward these items, to a Committee of the Whole meeting for discussion and a subsequent Regular Meeting for adoption. ATTACHMENTS Informational Memorandum dated June 18, 2014 with track changes Minutes from the Finance and Safety Committee Meeting of 06/17/14 52 INFORMATIONAL MEMO Page 3 Minutes from the Finance and Safety Committee Meeting of 06/03/14 Minutes from the Finance and Safety Committee Meeting of 11/05/13 Minutes from the Finance and Safety Committee Meeting of 10/22/13 Minutes from the Finance and Safety Committee Meeting of 10/08/13 Ordinances 54 TO: City of Tukwila Jim Haggerton, Mayor INFORMATIONAL MEMORANDUM Mayor Haggerton Finance & Safety Committee FROM: David Cline, City Administrator Shelley Kerslake, City Attorney DATE: June 18, 2014 SUBJECT: Creating Tukwila Municipal Code 2.97 — Code of Ethics for Elected Officials and Amending Tukwila Municipal Code 2.95 — Code of Ethics ISSUE Creating a Code of Ethics for Elected Officials that also creates a City Board of Ethics. DISCUSSION After further discussion on June 17, 2014., the Committee decided to move forward with Option 1 Lgetailed below) which creates Tukwila Municipal Code Chaster 2,97 7. gpcip qfi_Ettlics for 1,:ilected_Officjals,clap,ter ,2„9,5,:_ Cade of Ethics yvill _be amended to no lonaer,amiy_to clected officials. Committee members asked about trainin for the Board of Ethics members and were informed that the City Attorney's office would provide trainin tothe board members. There was also discussion about providing independent counsel to advise the Board durin he process and a request to determine criteria for how independent counsel would be assigned. BACKGROUND At the Finance and Safety Committee meetings of October 8, October 22 and November 5, 2013 June 3 and June 17 2014 the Committee discussed amending the City's Ethics Code. At the June 17 2014 co tee meeting three ordinances were reviewed and discussed. Option 1: Creates Chapter 2.97 Code of Ethics for Elected Officials and with the creation of an Ethics Board comprised of the chair or designee from each of the City's current commissions. Under this model, the Board would make an initial determination of complaint sufficiency. If the complaint is found to be initially sufficient, the Board will cause an investigation to be completed. The investigator will make findings of fact, conclusions and provide a recommendation. Upon receipt of the investigation report, the Board will determine one of the following: • That a violation of the ethics code did not occur; • That additional information is needed to make a determination and hold a hearing which is limited in scope; or • That a violation of the ethics code did occur. The Board will draft a recommendation to the Council related to the recommended disposition. Option 2: Creates Chapter 2.97 Code of Ethics for Elected Officials and with the creation comprised of the chair or designee from each of the City's current commissions. Under this model, the Board would make an initial determination of complaint sufficiency. If the complaint is found to be initially sufficient, the Board will cause an investigation to be completed. The investigator will make findings of fact but will not draw any conclusions. Upon receipt of the investigation report, the Board will forward the findings of fact to the Council. The Council will then determine whether an ethics violation has occurred and render the appropriate penalty, if necessary. OrdinancChapLer 2.95 Code of Ethics to no longer apply to elected officials. 55 INFORMATIONAL MEMO Page 2 At the June 3, 2014 meeting the Committee reviewed and discussed three separate ordinances for consideration: 1. Creation of an Ethics Board comprised of the chairs of the City's current commissions where the Board would make an initial determination of complaint sufficiency and if sufficient, the Board will cause an investigation to be completed. The investigator will make findings of fact but will not draw any conclusions. The Board will forward the findings of fact to the Council and the Council will then determine whether an ethics violation has occurred and render the appropriate penalty, if necessary; 2. Creation of an Ethics Board comprised of the chairs of the City's current commissions where the Board would make an initial determination of complaint sufficiency and if sufficient, the Board will cause an investigation to be completed. The investigator will make findings of fact, conc!usions and provide a recommendation. Upon receipt of the investigation report, the Board wifl make a determination and draft a recommendation to the Council related to the recommended disposition; and 3. Creation of an Ethics Board appointed by the Mayor and Council. Over the course of the past few months, Mayor's office staff members met with the Arts Commission, Civil Service Commission, Equity and Diversity Commission, Park Commission, and Planning Commission to share information regarding an ordinance amendment that would create an Ethics Board comprised of the Commission chairs. After detailed discussions, most commission members were supportive of the proposal to establish a Board of Ethics comprised of current Commission members. During the course of the discussion the foliowing questions were raised by several of the commissions: • How often has this Code of Ethics been used in the past • Why is the Council interested in changing the ethics code • Does it have to be the commission chair as the Ethics Board member? Can each commission choose any member, which may provide greater consistency w Who would provide ethics training to the Commission chairs and would training be offered on a regular basis, i.e. annually; • How would conflicts be handled in the case of an ethics issue involving a commissioner; • How wou!d ethics issues regarding employees be handled; and • Is there a conflict of interest if the Ethics Board member is a City employee? After reviewing the three options Committee members rejected oreadngnnovvCitvBoard.Tho Committee members also indicated that they would like to further consider the role and duties of the Board of Ethics and asked that options 1 and 2 be revised to apply on!y to elected officials and add language that the member can be a Commission Chair "or designee" and return to Finance and Safety for further discussion. FINANCIAL IMPACT None. RECOMMENDATION The Council is being asked to forward these items, to a Committee of the Who!e meeting for discussion and a subsequent Regular Meeting for adoption. ATTACHMENTS Informational Memorandum dated June 18, 2014 with track changes Minutes from the Finance and Safety Committee Meeting of 06/17/14 56 INFORMATIONAL MEMO Page 3 Minutes from the Finance and Safety Committee Meeting of 06/03/14 Minutes from the Finance and Safety Committee Meeting of 11/05/13 Minutes from the Finance and Safety Committee Meeting of 10/22/13 Minutes from the Finance and Safety Committee Meeting of 10/08/13 Ordinances 58 Finance & Safety Committee Minutes June 17, 2014 — Page 2 • Eligibility of City Employee Relatives: The Committee decided to discuss this again and concluded that they would not like to exclude relatives of City employees or officials. They requested that staff add a procedure to the selection process that would prohibit an employee or official from scoring a candidate with whom they are related. Staff will develop a framework that addresses this request for further Committee consideration. RETURN TO FINANCE AND SAFETY COMMITTEE. C. 2014 1st Quarter Cash and Investment Report Staff reviewed the 1st Quarter Cash and Investment Report for 2014, including information on the City's portfolio components, performance, policy compliance and liquidity analysis, fund cash and investment balances, and investment environment. At March 31, 2014, the portfolio totaled $44.7 million comprised of $37.8 million in cash and cash equivalents and $6.9 in longer term investments. This represents a $1.8 million decrease from the December 31, 2013 balance, attributable to the collection of property taxes in the 2nd and 4th quarters. INFORMATION ONLY. D. 2014 1st Quarter Sales Tax Miscellaneous Revenue Report Staff presented the 2014 1st Quarter Miscellaneous Revenue Report. Information detailed in the staff report includes Sales tax revenues are down by $87,000 below the same period in 2013, and new construction sales tax was $92,000 lower. The City has collected $238,066 in sales tax mitigation as of March 31, 2014. This is 24% of the annual mitigation budget. INFORMATION ONLY. E. Ordinance: Creating Tukwila Municipal Code Chapter 2.97 — Code of Ethics Several iterations of a process to address allegations of ethics violations by elected officials have been discussed in Committee since 2013. At its June 3 meeting, the Committee decided to move forward with the creation of an Ethics Board made up of the Chairs or Chair's designee of the City's existing five Commissions, but they asked to have further review of the role of that board. They decided to retain the current Ethics Code (Chapter 2.95) to apply to City employees and appointed officials, and asked to create a new Chapter applicable to elected officials. Staff returned with two options relating to the role of the Ethics Board. Option 1 (Board decides violation): The Board will make an initial determination of sufficiency, and if sufficient, an independent investigator will provide findings of fact, conclusions, and a recommendation. Upon receipt of this report the Board will determine that a violation did or did not occur, or that more information is needed. The Board will then draft a recommendation to the Council. Option 2 (Council decides violation): The Board will make an initial determination of sufficiency, and if sufficient, an independent investigator will provide findings of fact only. Upon receipt of this report the Board will forward the findings to the Council who will then determine whether or not the violation has occurred and assign an appropriate penalty. Committee members discussed these options and unanimously agreed upon Option 1, in which the Ethics Board makes a determination of violation rather than the Council. The Committee asked questions relating to training and legal counsel for the Board during this process. City Administrator David Cline confirmed that the City Attorney will provide basic training, but if an allegation is made, independent counsel could be brought in to advise the Board during the process. The Committee agreed that there should be clearly stated, strong criteria for the selection of such counsel, but were not certain if this should be included within the ordinance or in a separate administrative procedure. Committee Chair Seal noted that Section 2.97.050(E) might be an appropriate location if the decision is made to include this language in the ordinance. 59 Finance & Safety Committee Minutes June 17, 2014 — Page 3 The Committee decided to discuss this again in Committee rather than forwarding the proposal to Committee of the Whole at this time. Staff will return with City Attorney feedback on the issue of selection criteria for outside counsel to the Ethics Board. The companion ordinance amending the current Chapter 2.95 to exclude elected officials will be considered at this time as well. RETURN TO FINANCE AND SAFETY COMMITTEE. III. MISCELLANEOUS Committee Chair Seal noted that the issue of noxious odors relating to illegal grow operations was referred to Finance and Safety by the Committee of the Whole on June 9. Committee members and staff briefly discussed how this will be addressed. One option is to add a component to the existing Nuisance Code to address this scenario, but there was agreement that this could be a substantial project. Mr. Cline agreed to seek City Attorney advice on the appropriate framework for this issue. The Committee will then review that information and will be better prepared to make a work plan request. Meeting adjourned at 6:37 p.m. Next meeting: Tuesday, July 8, 2014 — 5:30 p.m. — Hazelnut Conference Room ommittee Chair Approval Min tes by LH, Reviewed by VC 60 Finance & Safety Committee Minutes June 3, 2014 - Page 2 C. Ordinance: Amending Tukwila Municipal Code Chapter 2.95 - Code of Ethics In late 2013 the Finance and Safety Committee discussed several iterations of an ordinance to amend the City's Ethics Code. Most recently, on November 5, 2013, the Committee discussed three options for the creation of a new Ethics Board. The first option establishes a five member Ethics Board made up of the Chairs of the City's existing five Commissions, with adjudication of complaints by the City Council. The second option establishes a 5 member Ethics Board made up of existing Commission Chairs with adjudication of complaints by the Board itself. The third option establishes an Ethics Board made up of three new appointees by the Council and two by the Mayor with adjudication of complaints by the Board. Following the November 5, 2013 Committee discussion of those three options, the Committee asked staff to meet with each Commission to gather feedback on their potential involvement. In 2014 staff attended meetings of the Arts, Civil Service, Equity and Diversity, Park, and Planning Commissions to share the proposal and receive input. The majority of commission members were supportive but raised numerous questions about implementation. Committee members discussed the options and decided to reject option 3 that would create an Ethics Board composed of entirely new appointees. Ethics disputes have historically been rare in the City and creation of a new Board that would remain largely inactive was deemed impractical. The Committee would like to further discuss the adjudication process and asked that options 1 and 2 return to Finance and Safety at a future date with the following adjustments: • Revise the proposed ordinance(s) to be applicable only to elected officials. The current TMC Chapter 2.95 outlines a process that is still applicable to City employees and appointed volunteers. • Add language indicating the member can be a Commission Chair "or designee." • Retain highlighting of every appearance of the phrases "appearance of conflict of interest or impropriety" or "adverse to the interests of the City" as these will be discussed by the Committee of the Whole. RETURN TO COMMITTEE FOR FURTHER DISCUSSION. III. MISCELLANEOUS Finance Director Peggy McCarthy noted an area of recent confusion regarding reference to "retail sales tax," which can include tax generated from construction, and the existence of Retail as a type of sector. Although this terminology is correct, she will remind Council of the dual meanings in future discussions. Committee members and staff discussed the draft 2015 -2016 City Priorities that were presented at June 2 Regular Meeting. Some Councilmembers expressed an interest in reviewing those again prior to Budget review, and a follow -up meeting has been proposed. Meeting adjourned at 6:53 p.m. Next meeting: Tuesday, June 17, 2014 - 5:30 p.m. - Hazelnut Conference Room Committee Chair Approval Minutes by LH, Reviewed by PM 61 62 Finance & Safety Committee Minutes November 5, 2013 — Page 2 current system. While exempting properties with 1 -4 units from the RGRL fee will reduce annual revenue by approximately $11,495, the savings in staff time makes this a cost - effective proposal. Additionally, Code Enforcement staff will have more time to focus on health, safety and maintenance components of rental housing. MAJORITY APPROVAL. FORWARD TO NOVEMBER 18 REGULAR MEETING FOR DISCUSSION UNDER NEW BUSINESS. E. Ordinances: 2014 Property Tax Levy Staff is seeking Council approval of two ordinances: one that would increase the City's Regular Property Tax Levy from 2013, and one that would levy General Taxes. These ordinances are presented to the Council on an annual basis. According to the King County Assessor, the projected assessed value for Tukwila is $4,707,092,379. The allowable levy projected by King County is $14,043,979, representing the maximum 1% increase allowed by law. This is subject to change until the final rate is determined by the County. A levy amount of $14,100,000 is proposed in the draft ordinance and may be adjusted based on that determination. Because the County is now aware that the City has a firemen's pension fund, the City's maximum statutory levy rate is $3.325, pursuant to RCW 27.12.390. This is an increase that gives the City additional capacity for future growth or levy lid lifts. Staff distributed a table indicating actual property tax collection for 2011 -2013 and projections for 2014 -2017. Committee members asked that this table be attached to the information memo for Committee of the Whole discussion. A public hearing is scheduled for November 12, 2013. UNANIMOUS APPROVAL. FORWARD TO NOVEMBER 12 COMMITTEE OF THE WHOLE FOR PUBLIC HEARING AND DISCUSSION. F. Budget Legislation 1) Staff is seeking Council approval of a resolution to adopt the 2014 -2019 Financial Planning Model and Capital Improvement Program (CIP). Drafts of these documents were presented to the Council at a workshop on August 28, and the Utilities and Transportation Committees conducted further review in September. Staff reviewed an attachment to the informational memo that lists all of the changes made to the CIP since it was first proposed in August. Committee members asked clarifying questions of items they considered to be large policy questions, including: Fund 104: Bonding of total $5,965,000.00 for the Boeing Access Road over BNRR Bridge Rehabilitation and Interurban Avenue South projects. Committee members and staff agreed that further review of the City's debt policies in general would be valuable, using this as an example. Fund 301/412: Tukwila 205 Levee, Riverton Creek Flap, and Lower Gilliam projects moved from Parks to Surface Water Fund. This will be reviewed further in Committee of the Whole. Additionally, the Utilities Committee has just forwarded to the Committee of the Whole an ordinance amending the definition of Surface Water Management Conveyance Systems to include dikes, levees, and revetments. 2) Staff is seeking Council approval of an ordinance to amend the 2013 Budget. Staff provided an overview of the proposed changes, including new proposals, items over budget, previous Council approvals, revenue backed expenditures, accounting changes, and carryover. A public hearing is scheduled for November 12, 2013. UNANIMOUS APPROVAL. FORWARD TO NOVEMBER 12 COMMITTEE OF THE WHOLE FOR PUBLIC HEARING AND DISCUSSION. G. Ordinance: Ethics Code As follow up to the Committee's requests during the October 22 meeting, City Attorney Shelley Kerslake returned with three options for a proposed Ethics Code applicable to elected and appointed officials and City staff. The first option establishes a 5 member Ethics Board comprised of existing Commission Chairs with adjudication of complaints by the City Council. The second option establishes a 5 member Ethics Board comprised of existing Commission Chairs with adjudication of complaints by the Board itself. The third option establishes an Ethics Board comprised of three new appointees by the Council and two by the Mayor with adjudication of complaints by the Board. The Committee discussed the options, and highlights from that discussion are: 63 Finance & Safety Committee Minutes November 5, 2013 - Page 3 • The Committee asked the City Attorney to insert the phrase "board attorney" throughout but define that to mean City Attorney in the case of complaints against employees and Outside Counsel for complaints against officials. She was also requested to add to the informational memo a summary of fiscal impact which includes a range of costs associated with hiring outside counsel. • The City Attorney clarified that "recommended disposition" means the determination of a violation, not the penalty. • Committee members remain divided on the inclusion of the terms "appearance of impropriety" and "adverse to the interests of the City," and will debate that further in Committee of the Whole. • Training will be provided to members in either board makeup option. This training could occur annually, with a refresher offered when a complaint is made. The Committee agreed to recommend an Ethics Board comprised of existing Commission Chairs with adjudication by the Board as long as there is a strong training component. This recommendation will be dependent on majority approval by members of the five Commissions, and to that end the Committee asked the City Administrator or his designee to present the proposal at forthcoming meetings of those Commissions. If majority approval is not obtained, than the option to create a unique Ethics Board will again be reviewed by the Finance and Safety Committee. III. MISCELLANEOUS Meeting adjourned at 7:16 p.m. Next meeting: Tuesday, November 19, 2013 - 5:30 p.m. - Conference Room #3 Minutes by ..H 64 Committee Chair Approval Finance & Safety Committee Minutes October 22, 2013 — Page 2 D. Permit User Fee for Technology Investments Staff is seeking Council direction on the adoption of a new technology fee on building, public works and land use permits. Revenues from the fee would offset the total $356,460 cost of the new "Trakit" permit processing system as well as potentially fund the cost of preserving and providing electronic access to current and historical permit records. A combination of technology fee revenue and funds from the microfilming/digitizing budget would enable the Digital Records Coordinator position in the Office of the City Clerk (currently at 3/4 time) to become full time in 2014. Trakit integrates with the City's digital records repository through Laserfiche, providing web -based accessibility of finalized permit records to the public, and would result in less staff time spent on processing public records requests. A survey of other local jurisdictions indicates that many cities are applying a technology fee, and it is either a flat fee, fee per sheet, or percentage of the permit fee ranging from 1.3 to 5 %. Materials in the Committee packet provide estimated revenues from technology fees at varying percentage levels for the past several years as well as for an average permit revenue of 1.3 million dollars. For example, a technology fee set at 5% is estimated to bring in $65,000 annually. Staff recommends that Council consider imposing the technology fee at the 5% level. Provided for the Committee's review is a draft resolution that would impose a technology fee at the recommended 5% level, eliminate hourly fees imposed on complex permits, and finally, consolidate various but related fees into one schedule. There is a companion draft ordinance that would remove permit fees from Tukwila Municipal Code 16.04, Buildings and Construction, in accordance with this consolidation. The Community Affairs and Parks Committee also received a briefing on this proposal at its October 14 meeting, and in response to questions that arose then, the memo was updated to include information about the level of service provided by the comparison cities in Attachment A. None of the surveyed cities offer online accessibility to finalized permit records as Tukwila would under the 5% fee proposal. The revised Attachment A also includes a column indicating whether the comparison city imposes a B &O tax. A new table was added that shows a 10 year payback period for Trakit and the remaining available funds at different fee levels for digital records and technology replacement. After discussion and clarification of questions, Committee members were supportive of the fee at the 5% level. Decision - making regarding the level of funding for records management will be part of the 2014 budget review if the fee is approved by Council. FORWARD TO OCTOBER 28 COMMITTEE OF THE WHOLE. E. Ordinance — Interfering with Traffic Staff is seeking Council approval of an ordinance that would establish new regulations relating to interfering with traffic to be codified as Chapter 9.21 in the Tukwila Municipal Code. Conduct by pedestrians interfering with traffic in City rights -of -way not only causes congestion but is a public safety concern. This proposal would replace the current ordinance prohibiting certain types of solicitation, which does not address traffic interference by all types of pedestrians. The proposed ordinance would prohibit traffic interference in a public right -of -way and establish penalties for violation. In practice, officers who observed such activity would give the violator a written warning before issuing the infraction. UNANIMOUS APPROVAL. FORWARD TO OCTOBER 28 COMMITTEE OF THE WHOLE. F. Ordinance — Ethics Code As follow up to the Committee's requests from the October 8 meeting, City Attorney Shelley Kerslake returned with a proposed ordinance that establishes a single ethics code for elected officials, appointed officials, and City employees. The proposal establishes an appointed Ethics Board which would receive complaints of ethics violations and make an initial determination of sufficiency. Following an investigation by an independent investigator, Council would make the final determination based upon the facts. The revised proposal also includes a new section regarding penalty options for elected officials. 65 Finance & Safety Committee Minutes October 22, 2013 — Page 3 The City Attorney stated that the Administration's current recommendation is to establish an appointed Ethics Board that would make the initial determination of sufficiency and then continue its role as adjudicator for the entire complaint. If a violation is determined it would then go the Council for the penalty phase. The Board would also have a dual role of issuing advisory opinions which would be a benefit for City officials and employees. Committee Chair Robertson mentioned his ongoing concern about language relating to "appearance of impropriety" and "adverse to the interests of the City." He requested that every instance where that language appears be underlined for Committee of the Whole discussion. Councilmember Quinn added that he would like to see a stringent qualifications component relating to the appointment of board members. Committee Chair Robertson then brought forth a suggestion that, instead of establishing a new board, the standing chairs of existing boards and commissions (e.g. Planning Commission) receive appropriate training and form an ad hoc ethics committee when an incident arises. If an individual did not wish to participate the next senior member would be approached. By virtue of their existing appointment these individuals would already have experience in City operations as well as the ethics code. The Committee was not unanimous on this proposal but requested it be prepared for further discussion. After further discussion, the Committee requested the following be prepared and presented at another Finance and Safety meeting prior to advancing to the Committee of the Whole: • Option proposing an appointed Ethics Board with a makeup of five members, two to be appointed by the Mayor and three by the Council. The proposal will include rigorous standards of qualification. This option would have the investigator's findings of fact return to the Board for adjudication because of those rigorous standards. • Option proposing an Ethics Board comprised of current chairs of existing City boards /commissions, then adjudication by the Council after an investigator produces findings of fact. • Option proposing an Ethics Board comprised of current chairs of existing boards /commissions, then adjudication by the ad hoc Ethics Board after an investigator produces findings of fact. • Addition of definitions that may include examples of "appearance of impropriety" and "adverse to the interests of the City." • Cover memos explaining each option. • In Section 6, TMC 2.95.040 (D), change "the City Attorney's Office" to "outside counsel" in the last sentence. • In Section 7, TMC 2.95.045 (A), add the Mayor, Councilmember, and City Clerk to the list of those receiving a copy of a complaint. • In Section 7, TMC 2.95.045 (K), reinstate "elected official" in the last sentence. DISCUSSION ONLY. RETURN TO FINANCE AND SAFETY COMMITTEE. G. Police Department 2013 3`d Quarter Report Assistant Chief Linton shared a presentation that updated the Committee on items of significance that occurred in the Police Department during the third quarter. The information included highlights, crime statistics and crime reduction strategies. He also distributed a staffing updates chart, Seattle Times blog post relating to the guilty pleas by the owners of the Travelers Choice and Great Bear motels, and a map of residential burglary case reports. INFORMATION ONLY. III. MISCELLANEOUS Meeting adjourned at 7:15 p.m. Next meeting: Tuesday, November 5, 2013 — 5:30 p.m. — Conference Room #3 Committee Chair Approval Minutes b 1-1, Item F reviewed by SK 66 »,�`f Tukwila City of �������{% �' � Finance and Safety Committee FINANCE AND SAFETY COMMITTEE Meeting Minutes October /[20/3-5:30/zm.' Conference Room #y PRESENT Councilmembers: Dennis Robertson, Chair; De'Sean Quinn and Verna Seal Staff: Stephanie Brown, Kim Gilman, Peggy McCarthy, Vicky Carlsen, Jennifer Ferrer-Santa Ines, Shelly Kerslake, Kimberly Matej, Laurel Humphrey CALL TO ORDER: Committee Chair Robertson called the meeting to order at 5:30 p.m. I. PRESENTATIONS No presentations. 0[' BUSINESS AGENDA Consensus existed to take up items D and E as the first and second order of business, respectively. A. Resolution — Cancellation and Reportina of 2013 Unclaimed Property Staff io seeking Council approval of the annual resolution tha woud declare the cancellation ofabandoned or unclaimed property that is owed to individuals or business owners in time for reporting to the Washington State Department of Revenue Unclaimed Property Section by Noember 1, 2013. This year's report includes the cancellation of outstanding General Fund claims and payroll checks in the total amount of $1.933.16. The City has performed due diligence in notifying the property owners, and checks were issued to those who were successfully contacted through that effort. UNANIMOUS APPROVAL. FORWARD TO OCTOBER 21 REGULAR CONSENT AGENDA. B. Ordinance—Amending Ordinance No. 2408 relating to the Final Assessment Roll for LID No. 33 Staff is seeking Council approval of an ordinance that would amend Ordinance No. 2408 by replaci its Exhibit B, the final assessment roll for Klickitat Local Improvement District No. 33. After the passage of Ordinance No. 2408, it was discovered that eight parcels on the assessment roll contained outdated ownership do1a, and a corrected Final Assessment Roll must be adopted via a new ordinance. The corrected Final Assessment Roll also contains an annotation relating to an exemption for the King County Housing Authority on two parcels. The exemption was discovered after the assessment process had begun and it was determined that it would not be cost effective to start over. UNANIMOUS APPROVAL. FORWARD TO OCTOBER 21 REGULAR CONSENT AGENDA. K. Two Ordinances — Ethics Code for Elected Officials and for Employees and Appointed Officials Committee Chair Robertson provided an overview of a proposal to revise the Code of Ethics by adding a new chapter covering elected officials to include both the Council and the Mayor. A companion ordinance would amend the existing Code to remove the reference to elected ofDcioln, making it applicable only to City employees and appointed officials. This review and proposed revision to the Code was requested by �N������ the Council at its 2013 retreat, buscdupon urcvicn/ of ethics policies for officials in other local municipal, �� �- county and state governments. The proposal removes language prohibiting -appearance of impropriety" as well as activity that might be seen as adverse to the interests of the City," on the grounds that those are concepts difficult to define and enforce and are not widely used in the comparison jurisdictions. Another impetus for the proposal is that all of the jurisdictions reviewed have a process under which investigations and decisions of complaints against elected officials are either performed by an orobuderouo, appointed citizen board or the Coouuil, and none have a process under which the Mayor performs the review or makes the final determination. Ffnance & Safety Committee Minutes October 8,2O/3- Page 2 The investigation process outlined by the proposed ordinance begins with initial complaints first going to the Council President, who would review the validity of the complaint along with two other Councilmembers ofhis or her choosing. (Iflhe complaint is against the Council President. it would then go to the next most senior Councilmember.) If the initial review determines that the complaint is valid, it will next go to an investigator retained by the Council, who will investigate and provide results to the Council President for action. The Council President and two Councilmembers will prepare a written recommendation that is then discussed and decided by the entire Council with the exclusion of the complained about officiaL Committee members, staff, and the City Attorney discussed this prop aal at length. Committee Chair Robertson proposed a further suggestion 10 add the City Attorney to the group of Counc l President and two Councilmembers undertaking the preliminary review of the complaint validity. The City Attorney stated that the Mayor's Office recommends that the Mayor should remain in the existing Code Chapter 2.95 to have the same process as City employees and appointed officials in keeping with Tukwila's separation ofpowers structure. Councilmember Quinn proposed that the Committee consider an appointed Ethics Board model, citing the City of Federal Way's Code ofEthics as a favorable exarnple. Under this proposal, he would like to see the CooncU. Mayor and employees have the same review process, and the Council woud not be involved in the preliminary determination of complaint or in an investigatory role. Councilmembers and staff discussed the ethics board model as well as the language regarding "appearance of impropriety" and -interests appearing adverse to the City." The City Attorney provided several real-world examples when those principles were legally applicable. Ultimately, Councilmembers Quinn and Seal stated they would like to retain that language applying to elected officials, employees, and appointed officials. Councilmember Robertson remained opposed. Committee members agreed in concept on a process of a preliminary review of validity by an appointed ethics bourd, an investigation of facts by an independent atlorney, and a determination made by the Council. The Committee requested this issue return to the October 22 mcobog, and requested the City Attorney prepare a proposal for a code that would apply to the Council and employees and incorporate an ethics board component. In addition, they requested to see options regarding the position of Mayor in the process. DISCUSSION ONLY. RETURN TO COMMITTEE ON OCTOBER 22, 2013. D. Resolution-Council Benefits Staff is seeking Council approval of a resolution that would update health insurance benefits for Councilmembers. Since 2001, Councilmembers have received a benefit in which they can receive reimbursement for eligible medical expenses up to $3.4O0 per year. However, due to the Patient Protection and Affordable Care Act (PPACA) of 2007, this expense reimbursement option is considered a stand-alone health plan and therefore prohibited after January 1, 2014. The Council previously had the option to enroll in the City's Self-Insured Medical/Dental plan, but with the changes due to the PPACA, continuing this enrollment option is now the only medical benefit available to Councilmembers. Enrollment in the plan would be available this December for coverage beginning January 1. The City plan would bc secondary for Councilmembers receiving insurance through their workplace, and primary for those on a Medicare plan. The premium of 509.94 for an individual Councilmember per month would be paid by the City as it is for employees. In response to Committee member questions, the resolution will be presented at the October 22 Committee mee with information regarding a Group Health option aud clarification on the tier of coverage for those who already have primary and secondary insurance. In addition, staff is planning to add a recital to the resolution that explains the impetus for the change. Education ou the change 10 Council bcuofi1uwill he provided to Councilmembers on an individual or group basis as appropriate. DISCUSSION ONLY. RETURN TO COMMITTEE ON OCTOBER 22, 2013. 68 ELECTED OFFICIALS D AFT AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, ADOPTING A CODE OF ETHICS FOR ELECTED OFFICIALS, TO BE CODIFIED AT TUKWILA MUNICIPAL CODE CHAPTER 2.97; PROVIDING FOR SEVERABILITY; AND ESTABLISHING AN EFFECTIVE DATE. WHEREAS, the City of Tukwila wishes to provide uniform guidance to elected officials on ethical issues; and WHEREAS, State law prohibits certain conduct of City elected officials while serving the City; and WHEREAS, the City desires to provide for uniform investigation and adjudication of ethics complaints; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY ORDAINS AS FOLLOWS: Section 1. Code of Ethics Established. A Code of Ethics for Elected Officials, to be codified as Tukwila Municipal Code (TMC) Chapter 2.97, "Code of Ethics for Elected Officials," is hereby established to read as follows: CHAPTER 2.97 CODE OF ETHICS FOR ELECTED OFFICIALS Sections: 2.97.010 Purpose 2.97.020 Definitions 2.97.030 Prohibited Conduct 2.97.040 Board of Ethics 2.97.050 Complaint Process 2.97.060 Penalties for Noncompliance 2.97.070 Where to Seek Review W: Word Processing\Ordinances\Code of Ethics-Elected Officials strike-thru 7-1-14 CT:bjs Page 1 of 10 69 70 Section 2. TMC Section 2.97.010 is hereby established to read as follows: 2.97.010 Purpose A. It is the policy of the City of Tukwila to uphold, promote and demand the highest standard of ethics from all of its Elected Officials. Elected Officials shall maintain the utmost standards of personal integrity, truthfulness, honesty and fairness in carrying out their public duties; avoid any improprieties or material misrepresentations regarding their roles or authority as public servants, including the appearance of impropriety as defined herein; and never use their City positions or powers for improper personal gain. B. It is the intention of the City Council that TMC Chapter 2.97 be liberally interpreted to accomplish its purpose of protecting the public against decisions that are affected by undue influence, conflicts of interest, or any other violation of this Code of Ethics. In interpreting TMC Chapter 2.97, Elected Officials should be guided by common sense and practicality. This Code of Ethics is supplemental to Washington state law, RCW Chapter 42.23. Section 3. TMC Section 2.97.020 is hereby established to read as follows: 2.97.020 Definitions As used in TMC Chapter 2.97, these words shall have the following meanings, unless the context clearly indicates otherwise: 1. "Appearance of impropriety" refers to a situation which to a reasonable person without knowledge of the specific circumstances might seem to raise ethical issues. An example of such conduct could be when a person regularly and reliably collects money for his or her employer in his or her personal wallet and later gives it to his or her employer. By putting it in his or her personal wallet, it may look improper and give rise to suspicion. 2. "Adverse to the interests of the City" means taking action which could damage or prejudice the interests of the City or its citizens. 3. "Business" means any corporation, partnership, sole proprietorship, firm, , g niza ion, self-employed individual, consultant, holding company, joint stock company, receivership, trust, or any legal entity organized for profit. enterprise, franchise, association, or a 4. "Elected Official" means every individual elected to an office or position with the City. 5. "Compensation" means payment in any form for real or personal property or services of any kind. W: Word Processing\Ordinances\Code of Ethics-Elected Officials strike-thru 7-1-14 CT:bjs Page 2 of 10 6. "Gift" means a voluntary transfer of real or personal property of any kind or the voluntary rendition of services of any kind without consideration of equal or greater value, but not including any reasonable hosting expenses, including travel, entertainment, meal, and refreshment expenses incurred in connection with appearances, ceremonies, and occasions reasonably related to official City business, or where otherwise permitted by law. 7. "Hearing Examiner" shall mean the duly appointed and qualified Hearing Examiner for the City of Tukwila, or his/her designee. 8. "Immediate family" shall mean spouses, dependents, anyone residing in the person's household, and anyone within three generations by blood or marriage of the person or the person's spouse (e.g., within three degrees of relationship by blood or marriage). 9. "Person"means any individual, corporation, business or other entity, however constituted, organized or designated. Section 4. TMC Section 2.97.030 is hereby established to read as follows: 2.97.030 Prohibited Conduct The following shall constitute violations of this Code of Ethics: 1. General Prohibition Against Conflicts of Interest. In order to avoid becoming involved or implicated in a conflict of interest or impropriety, or an appearance of conflict of interest or impropriety, no current Elected Official should be involved in any activity that might be seen as conflicting with the conduct of official City business or as adverse to the interests of the City. Even the appearance of the conduct prohibited in TMC Section 2.97.030 alone may be sufficient to constitute a violation of this Code of Ethics. 2. Beneficial Interests in Contracts Prohibited. No Elected Official shall participate in his/her capacity as an Elected Official in the making of a contract in which she/he has a financial interest, direct or indirect. This shall include any contract for sale, lease or purchase, with or for the use of the City, or the acceptance directly or indirectly of any compensation, gratuity or reward from any other person beneficially interested therein. Provided, however, that this prohibition shall not apply where the Elected Official has only a remote interest in the contract, and where the fact and extent of such interest is disclosed and noted in the official minutes or similar records of the City prior to formation of the contract, and thereafter the governing body authorizes, approves or ratifies the contract in good faith, by a vote of its membership sufficient for the purpose without counting the vote(s) of the official(s) having the remote interest. For purposes of this TMC Chapter 2.97, a "remote interest" means: a. That of a non-salaried officer of a nonprofit corporation; b. That of an employee or agent of a contracting party where the compensation of such employee or agent consists entirely of fixed wages or salary; W: Word Processing \Ordinances \Code of Ethics-Elected Officials strike-thru 7-1-14 CT:bjs Page 3 of 10 71 c. That of a landlord or tenant of a contracting party; or d. That of a holder of less than one percent of the shares of a corporation, a limited liability company, or other entity, which is a contracting party. 3. Beneficial Influence in Contract Selection Prohibited. No Elected Official shall influence the City's selection of, or its conduct of business with, a corporation, person or firm having or proposing to do business with the City if the Elected Official has a financial interest in or with the corporation, person or firm, unless such interest is a remote interest and where the fact and extent of such interest is disclosed and noted in the official minutes or similar records of the City prior to formation of the contract. 4. Representation of Private Person at City Proceeding Prohibited. No Elected Official shall appear on behalf of a private person, other than him/herself or an immediate family member, or except as a witness under subpoena, before any regulatory governmental agency or court of law in an action or proceeding to which the City or an Elected Official in an official capacity is a party, or accept a retainer or compensation that is contingent upon a specific action by the City. 5. Certain Private Employment Prohibited. No Elected Official shall engage in or accept private employment from—or render services for—any private interest, when such employment or service is incompatible with the proper discharge of official duties or would tend to impair independence of judgment or action in the performance of official duties. 6. Beneficial Interest in Legislation Prohibited. No Elected Official, in appearing before the City Council or when giving an official opinion before the City Council, shall have a financial interest in any legislation coming before the City Council or participate in any discussion with or give an official opinion to the City Council, unless such interest is a remote interest and where the fact and extent of such interest is disclosed and noted on the record of the Council or similar records of the City, prior to consideration of the legislation by the City Council. 7. Disclosure of Confidential Information Prohibited. No Elected Official shall disclose or use any confidential, privileged or proprietary information, gained by reason of his/her official position, for a purpose which is other than a City purpose; provided, however, that nothing shall prohibit the disclosure or use of information which is a matter of public knowledge, or which is available to the public upon request. 8. Improper Use of Position Prohibited. No Elected Official shall knowingly use his/her office or position to secure personal benefit, gain or profit, or use his/her position to secure special privileges or exceptions for him/herself, or for the benefit, gain or profits of any other persons. 9. Improper Use of City Personnel Prohibited. No Elected Official shall employ or use any person under the Elected Official's official control or direction for the personal benefit, gain or profit of the Elected Official or another. This section does not apply to off-duty employment relationships, which are mutually negotiated. W: Word Processing\Ordinances\Code of Ethics-Elected Officials strike-thru 7-1-14 CT:bjs 72 Page 4 of 10 10. Improper Use of City Property Prohibited. No Elected Official shall use City owned vehicles, equipment, materials, money or property for personal or private convenience or profit. Such use is restricted to those services which are available to the public generally, for the authorized conduct of official City business, and for such purposes and under such conditions as are approved by administrative order of the Mayor or Council; provided, however, that the use of a City vehicle by an Elected Official participating in a carpooling program established by the City, and for a purpose authorized under such program, shall not be considered a violation of TMC Chapter 2.97 or any other provision of the Tukwila Municipal Code. 11. Acceptance of Compensation, Gifts, Favors, Rewards or Gratuity Prohibited. No Elected Official may, directly or indirectly, give or receive, or agree to give or receive, any compensation, gift, favor, reward or gratuity, for a matter connected with or related to the Elected Official's services with the City of Tukwila; provided, however, that this prohibition shall not apply to: a. Attendance by an Elected Official at a hosted meal when it is provided in conjunction with a meeting directly related to the conduct of City business, or where official attendance by the Elected Official as a City representative is appropriate; b. An award publicly presented in recognition of public service; or c. Any gift valued at $100.00 or less, which gift cannot reasonably be presumed to influence the vote, action or judgment of the Elected Official, or be considered as part of a reward for action or inaction. 12. Impermissible Conduct After Leaving City Service. a. Disclosure of Privileged, Confidential, or Proprietary Information Prohibited. No former Elected Official shall disclose or use any privileged, confidential or proprietary information gained because of his/her City position. b. Participation in City Matters Prohibited. No former Elected Official shall, during the period of one year after leaving City office: (1) Assist any person in matters involving the City if, while in the course of duty with the City, the former Elected Official was officially involved in the matter, or personally and substantially participated in the matter, or acted on the matter; or (2) Participate as or with a bidder, vendor or consultant in any competitive selection process for a City contract in which he/she assisted the City in determining the project or work to be done, or the process to be used. Section 5. TMC Section 2.97.040 is hereby established to read as follows: W: Word Processing \Ordinances \Code of Ethics-Elected Officials strike-thru 7-1-14 CT:bjs Page 5 of 10 73 2.97.040 Board of Ethics A. There is created a Board of Ethics for the City of Tukwila. The purpose of this Board of Ethics is to review ethics complaints for an initial determination of sufficiency before an investigation is initiated, adjudicate ethics complaints against elected officials and provide advisory opinions for Elected Officials, when requested. B. The Board of Ethics shall be composed of five members and shall be comprised of -sone member from each of the City's five standing Commissions: the Planning Commission, the Arts Commission, the Park Commission, the Equity and Diversity Commission and the Civil Service Commission. Should the chair of any Commission be unable or unwilling to serve on the Board of Ethics, the st—se-r4er- Commission shall select a member to serve on the Board. C. The Chair of the Board shall be elected by the Board members and shall serve as Chair for one year, at which time a new election shall occur. D. A majority of the Board of Ethics shall constitute a quorum. The Board shall meet as frequently as it deems necessary and in accordance with the provisions of the Tukwila Municipal Code. The Board shall adopt procedures consistent with the provisions of the Tukwila Municipal Code governing the conduct of its meetings. The Board shall be supported by the City Attorne or ass" ned inde endent legal outs counsel. E. The powers of the Ethics Board include rendering sufficiency determinations as described in TMC Section 2.97.050, adjudicating ethics complaints against Elected Officials and responding to requests from City-elected officials for advisory opinions regarding the application of the Code of Ethics to the prospective conduct of such person. 2.97.050 Complaint Process A. A complaint that this Code of Ethics has been violated may be filed with any one of the following officers, or his/her designee(s): 1. Mayor; or 2. City Attorney. B. No person shall knowingly file a false complaint or report of violation of this Code of Ethics. C. Any individual receiving a complaint that this Code of Ethics has been violated has an obligation to promptly forward the complaint, in writing, to the Board of Ethics for a sufficiency determination. After reviewing the complaint, the Board may take any of the following actions and inform the complainant, the respondent and the City Attorney or Mayor, as appropriate: 1. Determine that the facts stated in the complaint, even if true, would not constitute a violation of the Code of Ethics. W: Word Processing \Ordinances \Code of Ethics-Elected Officials strike-thru 7-1-14 CT:bjs 74 Page 6 of 10 2. Determine that the facts stated in the complaint, even if true, would not constitute a material violation of the Code of Ethics because any potential violation was inadvertent or minor or has been adequately cured, such that further proceedings on the complaint would not serve the purposes of the Code of Ethics. 3. Make a preliminary determination that the facts stated in the complaint, if true, could potentially constitute a violation of the Code of Ethics such that further proceedings are warranted. D. The Board shall submit a written report with its findings within 10 days of its receipt of the written complaint. The Board's determination of sufficiency is final and binding and no appeal is available. If the Board finds the complaint sufficient, then the complaint shall be investigated as set forth below. E. For all sufficient complaints, the City Attorney shall promptly designate an individual to conduct an investigation of the complaint and shall forward a confidential memorandum to all Councilmembers informing them that a complaint has been made. F. The individual designated to conduct the investigation shall notify the subject of the complaint that a complaint has been made. The designated investigator shall then complete the investigation and prepare written findings and conclusions within 60 days of the date the complaint is deemed sufficient, unless an extension is granted in writing by the City Attorney. A copy of the wriften investigation findings and conclusions shall be provided to the City Attorney. G. Within 5 business days of receipt of the investigator's written findings and conclusions, the City Attorney shall forward a copy of the investigation to the Chair of the Ethics Board. Copies of the recommended disposition and investigation findings and conclusions shall be forwarded by certified mail to the complaining party and the party complained against at their last known addresses. H. Within 10 business days of receipt of the investigator's report, the Board of Ethics shall convene and review the complaint, findings, conclusions and recommended disposition. As soon as practicable after giving due consideration to the complaint, the Board shall take any action or combination of actions that it deems appropriate and for which it is lawfully empowered to take including, but not limited to, the following: 1. Determine that no violation of the Code of Ethics has occurred. 2. Determine that a violation of the Code of Ethics has occurred. 3. If the Board determines that it needs more information to make a determination as to whether the Code of Ethics has been violated, it may convene a hearing to take such additional evidence as required by the Board. The scope of evidence requested by the Board should be strictly construed. At such hearing, the Board may call additional witnesses or consider additional documentary evidence. After final deliberations on the investigator's findings, as well as any additional testimony, statements, or documents presented at the hearing, the Board shall determine whether or not a violation of the Code of Ethics has occurred. Throughout the process, the Board may seek legal advice from the City Attorney or independent legal counsel as assigned by the City W: Word Processing\Ordinances\Code of Ethics-Elected Officials strike-thru 7-1-14 CT:bjs Page 7 of 10 75 Attorney. Ass ned inde.endent legal counsel shall have a minimum of five year municipal law experience. 4. After the Board has made its final determination under TMC Section 2.97.050, subsection H, (1), (2) or (3), the Board shall issue its written findings of fact and conclusions of law, along with its recommended disposition, if applicable. The Board's conclusions shall be based on the preponderance of evidence standard. The Board may recommend and the City Council may impose upon any Elected Official the penalties set forth in TMC Section 2.97.060. 5. Copies of the written findings of fact, conclusions and recommended disposition of the Board shall be forwarded by certified mail to the complaining party and the party complained against at their last known addresses. Additional copies shall be forwarded to the investigator, the City Attorney (or independent legal counsel), and the City Council. I. The written findings of fact, conclusions and recommended disposition shall be placed on the next regularly scheduled Council meeting agenda for discussion and disposition pursuant to TMC Section 2.97.060, by majority vote of the Council. J. Ex Parte Communications. After a complaint has been filed and during the pendency of a complaint before the Board, no member of the Board may communicate directly or indirectly with any party or other person about any issue or fact or law regarding the complaint, except that members of the Board may obtain legal advice with the City Attorney or assigned independent aute: legal counsel. K. The party complained against may, within 10 business days following the date of a recommended disposition that finds a violation of this Code of Ethics, request a formal hearing before the Hearing Examiner. A request for a formal hearing shall be in writing. Except for good cause shown, the hearing shall be scheduled to take place not sooner than 20 days nor later than 60 days from the date the appeal is filed. L. Within 30 days after the conclusion of a formal hearing, the Hearing Examiner shall, based upon a preponderance of the evidence, prepare findings of fact, conclusions of law, and his/her order. Copies of the Hearing Examiner's findings, conclusions and order shall be forwarded by certified mail to the complaining party and the party complained against at their last known addresses. A copy of the Hearing Examiner's findings, conclusions and order shall also be provided to the City Council and placed on the next regularly scheduled Council meeting agenda, for informational purposes only. Additional copies of the findings, conclusions and order shall be forwarded to the investigator, the City Attomey or the City Attorney's designee, and the person(s) responsible for acting on the Hearing Examiner's order. Section 6. TMC Section 2.97.060 is hereby established to read as follows: 2.97.060 Penalties for Noncompliance Any Elected Official found, by a preponderance of the evidence, to have violated any provision of this Code of Ethics may be subject to one or more of the following penalties by majority vote of the Council: W: Word Processing\Ordinances\Code of Ethics-Elected Officials strike-thru 7-1-14 CT:bjs 76 Page 8 of 10 1. A cease and desist order as to violations of this Code of Ethics. 2. An order to disclose any reports or other documents or information requested. 3. An order to pay to the City civil penalty of up to $1,000.00, where it is determined disciplinary measures are not appropriate under the circumstances. 4. Exclusion from bidding on City contracts for a period of up to 5 years. 5. Termination or invalidation of contract(s) entered into in violation of the Code of Ethics, but only if such contract(s) provide for termination in the event of a Code of Ethics violation. 6. Admonition. An admonition shall be a verbal statement approved by the City Council and made to the Elected Official by the Council President, or if the complaint is against the Council President, then by the next most senior Councilmember. An admonition under this section is not subject to further review or appeal except as may be otherwise provided by law. 7. Reprimand. A reprimand shall be administered to the Elected Official by a resolution of reprimand by the City Council. A reprimand under this section is not subject to further review or appeal, except as may be otherwise provided by law. 8. Censure. A censure shall be a written statement administered personally to the individual. The individual shall appear at a time and place directed by the Council to receive such censure. Notice shall be given at least 20 days before the scheduled appearance at which time a copy of the proposed censure shall be provided to the individual. Within 5 days of receipt of the notice, the individual may file a request for review of the content of the proposed censure with the City Council. Such a request will stay the administration of the censure. The City Council shall review the proposed censure in light of the investigator's findings of fact and the request for review, and may take whatever action appears appropriate under the circumstances. The action of the Council shall be final and not subject to further review. If no such request is received, the censure shall be administered at the time and place set. It shall be given publicly, and the individual shall not make any statement in support of or in opposition to or in mitigation thereof. A censure shall be deemed administered at the time it is scheduled whether or not the individual appears as required. Section 7. TMC Section 2.97.070 is hereby established to read as follows: 2.97.070 Where to Seek Review A. Cease and Desist Order. If ordered to cease and desist violating this chapter, the affected Elected Official may seek review by writ of review from the King County Superior Court pursuant to RCW 7.16, or other appropriate legal action. B. Public Disclosure. If ordered to disclose any documents or papers pursuant to this chapter, the affected Elected Official may seek review by writ of review from the King County Superior Court pursuant to RCW 7.16, or other appropriate legal action. W: Word Processing\Ordinances\Code of Ethics-Elected Officials strike-thru 7-1-14 CT:bjs Page 9 of 10 77 C. Civil Penalty. If ordered to pay a civil penalty, an appeal may be taken in the form of a trial de novo in the Tukwila Municipal Court, which shall hear the case according to the Civil Rules for Courts of Limited Jurisdiction and applicable local rules of the Tukwila Municipal Court. This appeal shall be taken by filing in the Tukwila Municipal Court a notice of appeal within 14 days of the date of the final written order. The person filing the appeal shall also, within the same 14 days, serve a copy of the notice of appeal on the person who issued the final written order and the City Attorney, or his/her designee, and file an acknowledgment or affidavit of service in the Tukwila Municipal Court. D. Exclusion from Public Bidding. If ordered to be excluded from bidding on public contracts and the exclusion actually occurs, the Elected Official excluded may seek whatever remedies exist at law or in equity. E. Termination of Contract(s). If termination of contract(s) is ordered, the person whose contract(s) was/were terminated may seek whatever remedies exist at law or in equity. Section 8. 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 9. 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 10. 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 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 , 2014. ATTEST/AUTHENTICATED: Christy O'Flaherty, MMC, City Clerk APPROVED AS TO FORM BY: Office of the City Attorney Jim Haggerton, Mayor Filed with the City Clerk: Passed by the City Council: Published: Effective Date: Ordinance Number: W: Word Processing\Ordinances\Code of Ethics-Elected Officials strike-thru 7-1-14 CT:bjs 78 Page 10 of 10 EMPLOYEES AND APPOINTED OFFICIALS R FT AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, AMENDING ORDINANCE NOS. 2127 AND 2068, AS CODIFIED AT TUKWILA MUNICIPAL CODE CHAPTER 2.95, "CODE OF ETHICS," TO CHANGE THE TITLE TO "CODE OF ETHICS FOR EMPLOYEES AND APPOINTED OFFICIALS" AND TO REMOVE ELECTED OFFICIALS FROM THE ETHICS PROCESS USED FOR EMPLOYEES AND APPOINTED OFFICIALS; PROVIDING FOR SEVERABILITY; AND ESTABLISHING AN EFFECTIVE DATE. WHEREAS, the City adopted a Code of Ethics by Ordinance No. 2068 on November 15, 2004 and amended the same by Ordinance No. 2127 on August 7, 2006; and WHEREAS, the City Council has established a separate chapter of the Tukwila Municipal Code relating to a Code of Ethics for Elected Officials, thereby requiring amendments to the current Code of Ethics codified in Tukwila Municipal Code Chapter 2.95; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY ORDAINS AS FOLLOWS: Section 1. Title of Tukwila Municipal Code (TMC) Chapter 2.95 Amended. Ordinance Nos. 2127 and 2068, as codified at TMC Chapter 2.95, "Code of Ethics," are hereby amended to change the title of TMC Chapter 2.95 to "Code of Ethics for Employees and Appointed Officials." Section 2. TMC Section 2.95.010 Amended. Ordinance Nos. 2127 §1 and 2068 §1 (part), as codified at TMC Section 2.95.010, "Purpose," are hereby amended to read as follows: 2.95.010 Purpose A. It is the policy of the City of Tukwila to uphold, promote and demand the highest standard of ethics from all of its employees and appointed officials, whethcr cicctcd, appeinted -or - hired. City officers and employees shall maintain the utmost standards of personal integrity, truthfulness, honesty and fairness in carrying out their public duties; they shall avoid any improprieties in their roles as public servants, including the appearance of W: Word Processing \Ordinances \Code of Ethics - Employees and Appointed strike -thru 7 -1 -14 CT:bjs Page 1 of 9 79 impropriety; and they shall never use their City positions or powers for improper personal gain. B. It is the intention of the City Council that TMC Chapter 2.95 be liberally interpreted to accomplish its purpose of protecting the public against decisions that are affected by undue influence, conflicts of interest, or any other violation of this Code of Ethics. In interpreting TMC Chapter 2.95, City officers and employees should be guided by common sense and practicality. This Code of Ethics is supplemental to Washington State law, RCW 42.23. Section 3. TMC Section 2.95.020 Amended. Ordinance No. 2068 §1 (part), as codified at TMC Section 2.95.020, "Definitions," is hereby amended to read as follows: 2.95.020 Definitions As used in TMC Chapter 2.95, these words shall have the following meanings, unless the context clearly indicates otherwise: 1. "Business" means any corporation, partnership, sole proprietorship, firm, enterprise, franchise, association, organization, self - employed individual, consultant, holding company, joint stock company, receivership, trust, or any legal entity organized for profit. 2. "City officer or employee" means every individual-elected, appointed, hired, or otherwise selected to an office or position with the City, or any subdivision thereof, whether such individual is paid or unpaid. 3. "Compensation" means payment in any form, for real or personal property or services of any kind. 4. "Gift" means a voluntary transfer of real or personal property of any kind, or the voluntary rendition of services of any kind, without consideration of equal or greater value, but not including any reasonable hosting, including travel-expenses, entertainment, meals, or refreshments expenses incurred furnished in connection with appearances, ceremonies, and occasions reasonably related to official City business, where otherwise permitted by law. 5. "Hearing Examiner" shall mean the duly appointed and qualified Hearing Examiner for the City of Tukwila, or his /her designee. 6. "Immediate family" shall mean spouses, dependents, anyone residing in the person's household, and anyone within three generations by blood or marriage of the person or the person's spouse, e.g., within three degrees of relationship by blood or marriagel. 7. "Person" means any individual, or corporation, business or other entity, however constituted, organized or designated. Section 4. TMC Section 2.95.030 Amended. Ordinance Nos. 2127 §2 and 2068 §1 (part), as codified at TMC Section 2.95.030, "Prohibited Conduct," are hereby amended to read as follows: W: Word Processing \Ordinances \Code of Ethics - Employees and Appointed strike -thru 7 -1 -14 CT:bjs 80 Page 2 of 9 2.95.030 Prohibited Conduct The following shall constitute violations of this Code of Ethics: 1. General Prohibition Against Conflicts of Interest. In order to avoid becoming involved or implicated in a conflict of interest or impropriety, or an appearance of conflict of interest or impropriety, no current City officer or employee should be involved in any activity that might be seen as conflicting with the conduct of official City business or as adverse to the interests of the City. Even the appearance of the conduct prohibited in TMC Section 2.95.030 alone may be sufficient to constitute a violation of this Code of Ethics. 2. Beneficial Interests in Contracts Prohibited. No City officer or employee shall participate in his /her capacity as a City officer or employee in the making of a contract in which she /he has a financial interest, direct or indirect. This shall include any contract for sale, lease or purchase, with or for the use of the City, or the acceptance directly or indirectly of any compensation, gratuity or reward from any other person beneficially interested therein. Except, that this prohibition shall not apply where the City officer or employee has only a remote interest in the contract, and where the fact and extent of such interest is disclosed and noted in the official minutes or similar records of the City prior to formation of the contract, and thereafter the governing body authorizes, approves or ratifies the contract in good faith, by a vote of its membership sufficient for the purpose without counting the vote(s) of the officer(s) having the remote interest. For purposes of TMC Chapter 2.95, a "remote interest" means: a. That of a non - salaried officer of a nonprofit corporation; b. That of an employee or agent of a contracting party where the compensation of such employee or agent consists entirely of fixed wages or salary; c. That of a landlord or tenant of a contracting party; or d. That of a holder of Tess than one percent of the shares of a corporation, a limited liability company, or other entity, which is a contracting party. 3. Beneficial Influence in Contract Selection Prohibited. No City officer or employee shall influence the City's selection of, or its conduct of business with, a corporation, person or firm having or proposing to do business with the City, if the City officer or employee has a financial interest in or with the corporation, person or firm, unless such interest is a remote interest and where the fact and extent of such interest is disclosed and noted in the official minutes or similar records of the City prior to formation of the contract, as defined in TMC 8.24.020. 4. Representation of Private Person at City Proceeding Prohibited. No City officer or employee shall appear on behalf of a private person, other than him /herself or an immediate family member, or except as a witness under subpoena, before any regulatory governmental agency or court of law in an action or proceeding to which the City or a City officer in an official capacity is a party, or accept a retainer or compensation that is contingent upon a specific action by the City. This provision shall not preclude an employee from exercising rights protected by the Public Employees Collective Bargaining W: Word Processing \Ordinances \Code of Ethics - Employees and Appointed strike -thru 7 -1 -14 CT:bjs Page 3 of 9 81 Act, including the right to appear and /or testify in a legal proceeding on behalf of a labor organization representing employees or seeking to represent employees of the City. 5. Certain Private Employment Prohibited. No City officer or employee shall engage in or accept private employment from —or render services for —any private interest, when such employment or service is incompatible with the proper discharge of official duties or would tend to impair independence of judgment or action in the performance of official duties. This provision shall not interfere with an employee's right to engage in off duty employment that is authorized pursuant to a collective bargaining agreement and /or Tukwila Police Department General Orders. 6. Beneficial Interest in Legislation Prohibited. No City officer or employee, in appearing before the City Council or when giving an official opinion before the City Council, shall have a financial interest in any legislation coming before the City Council or participate in discussion with or give an official opinion to the City Council, unless such interest is a remote interest and where the fact and extent of such interest is disclosed and noted on the record of the Council or similar records of the City, prior to consideration of the legislation by the City Council. 7. Disclosure of Confidential Information Prohibited. No City officer or employee shall disclose or use any confidential, privileged or proprietary information, gained by reason of his /her official position, for a purpose which is other than a City purpose; provided, that nothing shall prohibit the disclosure or use of information which is a matter of public knowledge, or which is available to the public upon request. This provision shall not preclude an employee from exercising rights protected by the Public Employees Collective Bargaining Act, including the right of a labor organization to utilize and disclose properly obtained information that the City deems confidential, privileged, or proprietary. 8. Improper Use of Position Prohibited. No City officer or employee shall knowingly use his /her office or position to secure personal benefit, gain or profit, or use his /her position to secure special privileges or exceptions for him /herself, or for the benefit, gain or profit of any other persons. This provision shall not preclude an employee from exercising rights protected by the Public Employees Collective Bargaining Act, including the right to negotiate agreements that address the wages, hours, and working conditions of employees of the City. 9. Improper Use of City Personnel Prohibited. No City officer or employee shall employ or use any person under the officer's or employee's official control or direction for the personal benefit, gain or profit of the officer or employee, or another. This section does not apply to off -duty employment relationships, which are mutually negotiated. 10. Improper Use of City Property Prohibited., No City officer or employee shall use City owned vehicles, equipment, materials, money or property for personal or private convenience or profit. Use is restricted to such services as are available to the public generally, for the authorized conduct of official City business, and for such purposes and under such conditions as are approved by administrative order of the Mayor; provided, the use of a City vehicle by a City officer or employee participating in a carpooling program W: Word Processing \Ordinances \Code of Ethics - Employees and Appointed strike -thru 7 -1 -14 CT:bjs 82 Page 4 of 9 established by the City, and for a purpose authorized under such program, shall not be considered a violation of TMC Chapter 2.95 or of any other provision of the TMC Tukwila Municipal Code. 11. Acceptance of Compensation, Gifts, Favors, Rewards or Gratuity Prohibited. No City officer or employee may, directly or indirectly, give or receive, or agree to give or receive, any compensation, gift, favor, reward or gratuity, for a matter connected with or related to the officer's or employee's services with the City of Tukwila; except this prohibition shall not apply to: a. Attendance of a City officer or employee at a hosted meal when it is provided in conjunction with a meeting directly related to the conduct of City business, or where official attendance by the officer or employee as a City representative is appropriate; b. An award publicly presented in recognition of public service; or c. Any gift valued at $100.00 or Tess, which cannot reasonably be presumed to influence the vote, action or judgment of the officer or employee, or be considered as part of a reward for action or inaction:; or d. An employee serving as a representative of a labor organization and /or an employee receiving compensation, gifts, or rewards from a labor organization of which he /she is a member. 12. Impermissible Conduct After Leaving City Service. a. Disclosure of Privileged, Confidential, or Proprietary Information Prohibited. No former officer or employee shall disclose or use any privileged, confidential or proprietary information gained because of his /her City employment. b. Participation in City Matters Prohibited. No former officer or employee shall, during the period of one year after leaving City office or employment: (1) Assist any person in matters involving the City if, while in the course of duty with the City, the former officer or employee was officially involved in the matter, or personally and substantially participated in the matter, or acted on the matter; (2) Represent any person as an advocate in any matter in which the former officer or employee was involved while a City officer or employee; or (3) Participate as or with a bidder, vendor or consultant in any competitive selection process for a City contract in which s /he assisted the City in determining the project or work to be done, or the process to be used. c. Duty to Inform. Whenever a City officer or employee wishes to contract with a former City officer or employee for expert or consultant services within one year of the latter's leaving City service, advance notice shall be given to the Mayor about the proposed agreement. W: Word Processing \Ordinances \Code of Ethics - Employees and Appointed strike -thru 7 -1 -14 CT:bjs Page 5 of 9 83 d. Exceptions. The prohibitions of TMC Section 2.95.030, paragraphs 12.b(1) and (2), shall not apply to a former officer or employee acting on behalf of a governmental agency, unless such assistance or representation is adverse to the interest of the City. Section 5. TMC Section 2.95.040 Amended. Ordinance Nos. 2127 §3 and 2068 §1 (part), as codified at TMC Section 2.95.040, "Complaint Process," are hereby amended to read as follows: 2.95.040 Complaint Process A. A complaint that this Code of Ethics has been violated may be filed with any one of the following officers, or his /her designee(s): 1. Mayor; or 2. City Attorney. B. No person shall knowingly file a false complaint or report of violation of this Code of Ethics. C. Any individual receiving a complaint that this Code of Ethics has been violated has an obligation to promptly forward the complaint, in writing, to the Mayor. The Mayor shall promptly designate an individual to conduct an investigation of the complaint. However, if the complaint alleges that the Mayor violated this Code of Ethics, then the individual receiving the complaint has an obligation to promptly forward the complaint, in writing, to the City Attorney, who shall designate an individual to conduct an investigation. D. Upon receipt of a complaint regarding an elected official or an appointed member, the City Attorney shall forward a confidential memorandum to all councilmembers informing them that a complaint has been made. ED. The individual designated to conduct the investigation shall notify the subject of the complaint that a complaint has been made. The designated investigator shall ; then complete the investigation and prepare written findings and conclusions within 60 days of the date the complaint is received by the Mayor or City Attorney, unless an extension is granted in writing by the Mayor. _ • - _' . - - . , _ - _ _ f.`.2 -. A copy of the written investigation findings and conclusions shall be provided to the Mayor _ , appropriate, FE. Within 5 business days of receipt of the investigator's written findings and conclusions, the Mayor or City Attorney, as appropriate, shall prepare a written recommended disposition of the complaint. Copies of the recommended disposition and the investigation findings and conclusions shall be forwarded by certified mail to the complaining party and the party complained against at their last known addresses. Additional copies of the recommended disposition shall be forwarded to the investigator, the City Attorney or the City Attorney's designee, and the person(s) responsible for acting on the recommended disposition. The recommended disposition shall not be implemented until the time for requesting a formal hearing, pursuant to TMC Section 2.95.040(I4G), has lapsed and no such hearing has been requested. W: Word Processing \Ordinances \Code of Ethics - Employees and Appointed strike -thru 7 -1 -14 CT:bjs 84 Page 6 of 9 GF. When the complaint is against an elected official or appointed board or commission member, the investigative findings and conclusions as discussed in TMC Section 2.95.040(i=E), as well as the recommended disposition, shall be placed on the next regularly scheduled Council meeting agenda, for informational purposes only. 14G. The party complained against may, within 10 business days following the date of athe recommended disposition, which that finds a violation of this Code of Ethics, request in writing a formal hearing before the Hearing Examiner. A request for a formal hearing shall be in writing. Except for good cause shown, the hearing shall be scheduled to take place not sooner than 20 days nor later than 60 days from the date the appeal is filed. H. Within 30 days after the conclusion of the-a formal hearing, the Hearing Examiner shall, based upon a preponderance of the evidence, prepare findings of fact, conclusions of law, and his /her order. Copies of the Hearing Examiner's findings, conclusions and order shall be forwarded by certified mail to the complaining party and the party complained against at their last known addresses. Additional copies of the findings, conclusions and order shall be forwarded to the investigator, the City Attorney or the City Attorney's designee, and the person(s) responsible for acting on the Hearing Examiner's order. In the case of a complaint against an elected official or appointed board or commission member, the Hearing Examiner's findings wilt -shall be forwarded to the City Council and placed on the next regularly scheduled Council meeting agenda, for informational purposes only. Section 6. TMC Section 2.95.050 Amended. Ordinance Nos. 2127 §4 and 2068 §1 (part), as codified at TMC Section 2.95.050, "Penalties for Noncompliance," are hereby amended to read as follows: 2.95.050 Penalties for Noncompliance A. Any person, other than an employee covered by a collective bargaining agreement found by a preponderance of the evidence to have violated any provision of this Code of Ethics; may be subject toany combination one or more of the following penalties: 1. A cease and desist order as to violations of this Code of Ethics; 2. An order to disclose any reports or other documents or information requested by the Mayor., or as requested by the City Attorney in the event the Mayor is found to have 3. An order to pay to the City a civil penalty of up to $1,000.00, where it is determined disciplinary measures are not appropriate under the circumstances; 4. Discipline, up to and including termination or removal from any position whether paid or unpaid, excluding elected positions, only after notice and hearing as provided by law. The pre - disciplinary procedures set forth in the provisions of the Tukwila Municipal Code and applicable personnel policies shall be followed for regular employees in the Classified City Service; 5. Exclusion from bidding on City contracts for a period of up to 5 years; and /or W: Word Processing \Ordinances \Code of Ethics - Employees and Appointed strike -thru 7 -1 -14 CT:bjs Page 7 of 9 85 6. Termination or invalidation of contract(s) entered into in violation of the Code of Ethics, only if such contract(s) provide for termination in the event of a Code of Ethics violation. B. Any allegation that an employee who is covered by a collective bargaining agreement has violated any provision of this Code of Ethics shall be investigated in accordance with the applicable collective bargaining agreement and Department Policies, Procedures, or General Orders. For any proven violation of this Code of Ethics, an employee may be disciplined up to and including termination in accordance with the applicable collective bargaining agreement. Any such discipline may be appealed in accordance with the applicable collective bargaining agreement or Civil Service Rules. Section 7. TMC Section 2.95.060 Amended. Ordinance No. 2068 §1 (part), as codified at TMC Section 2.95.060, 'Where to Seek Review," is hereby amended to read as follows: 2.95.060 Where to Seek Review A. Cease and Desist Order. If ordered to cease and desist violating this Code of Ethics, an affected party may seek review by writ of review from the King County Superior Court pursuant to RCW 7.16, or other appropriate legal action. B. Public Disclosure. If ordered to disclose any documents or papers pursuant to this Code of Ethics, an affected party may seek review by writ of review from the King County Superior Court pursuant to RCW 7.16, or other appropriate legal action. C. Civil Penalty. If ordered to pay a civil penalty, an appeal may be taken in the form of a trial de novo in the Tukwila Municipal Court, which shall hear the case according to the Civil Rules for Courts of Limited Jurisdiction and applicable local rules of the Tukwila Municipal Court. This appeal shall be taken by filing in the Tukwila Municipal Court a notice of appeal within 14 days of the date of the final written order. The person filing the appeal shall also, within the same 14 days, serve a copy of the notice of appeal on the person who issued the final written order and the City Attomey, or his /her designee, and file an acknowledgment or affidavit of service in the Tukwila Municipal Court. D. Discipline or Removal. If an employee or officer is disciplined or removed from office, then the person disciplined or removed from office may seek whatever remedies may be available at law or in equity. E. Exclusion from Public Bidding. If ordered to be excluded from bidding on public contracts and the exclusion actually occurs, the person excluded may seek whatever remedies exist at law or in equity. F. Termination of Contract(s). If termination of contract(s) is ordered, the person whose contract(s) was /were terminated may seek whatever remedies exist at law or in equity. W: Word Processing \Ordinances \Code of Ethics - Employees and Appointed strike -thru 7 -1 -14 CT:bjs 86 Page 8 of 9 Section 8. 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 9. 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 10. 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 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 , 2014. ATTEST /AUTHENTICATED: Christy O'Flaherty, MMC, City Clerk APPROVED AS TO FORM BY: Office of the City Attorney Jim Haggerton, Mayor Filed with the City Clerk: Passed by the City Council: Published: Effective Date: Ordinance Number: W: Word Processing \Ordinances \Code of Ethics - Employees and Appointed strike -thru 7 -1 -14 CT:bjs Page 9 of 9 87 88