HomeMy WebLinkAboutFIN 2025-03-24 COMPLETE AGENDA PACKETCity of Tukwila
Finance and Governance
Committee
O Armen Papyan, Chair
O Dennis Martinez
O Verna Seal
AGENDA
MONDAY, MARCH 24, 2025 — 5:30 PM
Distribution:
A. Papyan
D. Martinez
V. Seal
T. Sharp
J. McConnell
Mayor McLeod
M. Wine
A. Youn
L. Humphrey
ON -SITE PRESENCE:
TUKWILA CITY HALL
HAZELNUT CONFERENCE ROOM
6200 SOUTHCENTER BOULEVARD
REMOTE PARTICIPATION FOR THE PUBLIC:
1-253-292-9750, ACCESS CODE: 441656166#
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Item
Recommended Action
Page
1.
BUSINESS AGENDA
a. Puget Sound Regional Fire Authority (PSRFA): Lease
a.
Forward to 4/14 C.O.W.
Pg.1
Agreements and Deeds
Meeting Agenda & 4/21
Kari Sand, City Attorney
Regular Meeting
b. Dell Lease Agreement — Police Department Rugged
b.
Forward to 4/7 Regular
Pg. 41
Tablets
Meeting Consent Agenda
Mike Marcum, Technical Operations Supervisor
Pg. 43
c. Introduction to Minimum Wage Program
c.
Discussion Only
Julie Hatley, Senior Fiscal Coordinator
Pg. 47
d. 2024 Year -End Financial Report
d.
Discussion Only
Tony Cullerton, Deputy Finance Director
e. City Investment & Debt Policies
e.
Discussion Only
Pg. 71
Tony Cullerton, Deputy Finance Director
2.
MISCELLANEOUS
• Status update on Business and Occupation Tax review
Aaron BeMiller, Finance Director
Next Scheduled Meeting: April28, 2025
SThe City of Tukwila strives to accommodate individuals with disabilities.
Please contact the City Clerk's Office at 206-433-1800 (TukwilaCityClerk@TukwilaWA.gov) for assistance.
City of Tukwila
Thomas McLeod, Mayor
INFORMATIONAL MEMORANDUM
TO: Finance and Governance Committee
FROM: Kari L. Sand, Tukwila City Attorney
CC: Thomas McLeod
DATE: March 24, 2025
SUBJECT: Transfer of City Fire Stations 52 and 53, and leases of Fire Stations 51 and
54, to the Puget Sound Regional Fire Authority and City leaseback of
various rooms at Fire Station 52
ISSUE
Whether City Council should approve: (1) proposed leases with the Puget Sound Regional Fire
Authority ("RFA") for Fire Stations 51 and 54; (2) proposed deed transfers of Fire Stations 52
and 53 to the RFA; and (3) proposed City leaseback of various rooms at Fire Station 52
pursuant to the voter -approved 2023 RFA Annexation Plan.
BACKGROUND
In August 2023, Tukwila voters approved annexing into the RFA. Pursuant to the voter -approved
2023 RFA Plan, the City is now required to lease Fire Stations 51 and 54 to the RFA, to sell Fire
Stations 52 and 53 to the RFA, and leaseback to the City various rooms at Fire Station 52, subject
to certain terms and conditions.
DISCUSSION
City Administration and the City Attorney's Office has drafted the proposed leases and deeds
consistent with the voter -approved 2023 RFA Plan. On March 19, 2025, the RFA Governing
Board approved the proposed leases and deeds. The key terms to the leases and deeds are as
follows:
• Fire Station 51 and Fire Station 54 Leases
o 50-year lease term for Fire Station 51; 15-year lease term for Fire Station 54
o RFA will pay the City $1.00 per year in rent for each property
o RFA will pay for all utilities, maintenance, repairs, improvements, and landscaping
o RFA will indemnify, defend, and hold the City harmless for all damages/injuries
occurring on properties unless they were caused by the City
o RFA will pay for, and maintain, insurance on the properties
• Fire Station 52 and 53 Deeds
o Both Fire Stations will be sold to RFA for $1.00 each
o If the RFA stops using the properties to deploy RFA response units, the properties
automatically revert back to the City
• Fire Station 52 Leaseback to the City
o City will lease three (3) rooms at Fire Station 52 for purposes of Emergency
Operations Center ("EOC") storage closet (Rm. 212), for training (Rm. 210), and
for HAM radio storage (Rm. 213). Room 210 will be the City's back-up EOC and
shall be permitted for use as a public meeting space for up to 20 hours per week.
FINANCIAL IMPACT
• Fire Station 51 will be leased to the RFA for a 50-year term at a rate of $1.00 per year.
The RFA will pay all maintenance and utilities serving the Fire Station.
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INFORMATIONAL MEMO
Page 2
• Fire Station 52 will be sold to the RFA for $1.00.
• Fire Station 53 will be sold to the RFA for $1.00.
• Fire Station 54 will be leased to the RFA for a 15-year term at a rate of $1.00 per year.
The RFA will pay all maintenance and utilities serving the Fire Station.
• The City's leaseback of various rooms at Fire Station 52 for 50-year terms at a rate of
$1.00 per year that will renew automatically unless sooner terminated.
RECOMMENDATION
The Committee is being asked to forward this matter to the April 14, 2025 Committee of the Whole
Meeting.
ATTACHMENTS
A. Proposed Lease for Fire Station 51
B. Proposed Bargain and Sale Deed for Fire Station 52
C. Proposed City Leaseback of various rooms at Fire Station 52
D. Proposed Bargain and Sale Deed for Fire Station 53
E. Proposed Lease for Fire Station 54
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Attachment A
LEASE AGREEMENT
BETWEEN THE CITY TUKWILA AND
PUGET SOUND REGIONAL FIRE AUTHORITY
FIRE STATION 51
THIS LEASE AGREEMENT (hereinafter "Lease") is between the CITY OF TUKWILA,
a municipal corporation of the State of Washington ("City"), and PUGET SOUND REGIONAL
FIRE AUTHORITY, a Washington municipal corporation ("RFA") (collectively referred to as "the
Parties").
RECITALS
1. The City owns real property legally described in Exhibit A attached and incorporated herein
and located at 17951 Southcenter Parkway, Tukwila, Washington 98188 (the "Property")
(Parcel #s 3523049008 & 3523049040 (shown as vacant)).
2. The City currently leases a portion of the Property to RFA for use as a fire station, which will
expire on December 31, 2024, in accordance with the Parties' amended Interlocal Agreement
for Consolidation for Fire Services.
3. According to Section 7.c.1.a.i of the 2023 Puget Sound Regional Fire Authority Plan, the City
is required to "retain ownership of the real property on which [Fire] Station 51 is located and
shall lease [Fire] Station 51 to the RFA for 50-year terms at the rate of $1 per year. As
conditions of the lease, the RFA shall assume 100% of the maintenance costs and shall use
[Fire] Station 51 to deploy response units, subject to any other interests in the property."
AGREEMENT
NOW, THEREFORE, the City and RFA agree as follows:
1. PREMISES.
1.1. Lease of Premises. The City leases to the RFA, and the RFA leases from the City, the
Premises upon the terms specified in this Lease.
1.2. As -Is. The above -described Property and all improvements thereto, except for the
vacant portion of the Property depicted and described in Exhibit B, comprise the
"Premises" that are subject to this Lease Agreement. The City is providing the Premises
in "as -is" condition for the RFA's use. The City makes no representation regarding the
condition of the Premises or improvements located on the same.
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2. USE.
2.1. Permitted Use. The RFA shall use the Premises for the deployment of RFA response
units (the "Permitted Use") and for no other purpose unrelated to the delivery of fire
protection and emergency medical services.
2.2. Liens and Encumbrances. The RFA shall keep the Premises free and clear of any liens
and encumbrances arising out of or relating to its use or occupancy of the Premises.
3. TERM.
3.1. Term Defined. The term of this Lease shall be for fifty (50) years ("Initial Term"),
which shall commence retroactively to January 1, 2025 ("Commencement Date"). This
Agreement will continue for the Initial Term and will automatically renew for
additional fifty-year terms, subject to the right of either party to terminate this
Agreement.
3.2. End of Term. Upon the expiration or termination of the Term, as applicable, the RFA
shall surrender the Premises to the City in the same or better condition as on the
Commencement Date, reasonable wear and tear excepted.
3.3. Hold Over. If the RFA remains in possession of the Premises after termination of this
Lease, the occupancy shall not be an extension or renewal of the Term. The occupancy
shall be a month -to -month tenancy, on terms identical to the terms of this Lease, which
may be terminated by either party on thirty (30) days written notice.
4. LEASE PAYMENT.
4.1. Rent. The RFA shall pay to the City the annual rent of One Dollar and No/100 Cents
($1.00) ("Rent"). The first installment shall be due and payable on or before
Commencement Date, and subsequent installments shall be due and payable on or
before the 1st day of each year thereafter.
5. UTILITIES AND OTHER EXPENSES.
5.1. Utilities. The RFA will be responsible for all utilities serving the Premises. This
includes payment of all fees that may be charged to the RFA or City, related to the
Premises or use thereof, such as stormwater fees and property fees charged by the King
County Assessor.
6. MAINTENANCE AND LANDSCAPING.
6.1. Maintenance. The RFA shall at its sole cost and expense, keep and maintain in good
order and in clean, attractive, and safe condition the Premises. The RFA shall also pay
100% of the repair and replacement costs of the Premises. If any additions, repairs,
alterations, maintenance, replacement, or changes to the Premises are required by any
public authority, the RFA shall, at its sole cost and expense, make the same. All
additions, repairs, alterations, replacements, or changes to the Premises shall be made
in accordance with Section 7. Any damage or repairs that are the result of the City's
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negligent or intentional acts shall be the sole responsibility of the City. Upon
termination of this Lease, the RFA shall return to the Property to the City in the same
condition as it was received with reasonable wear and tear excepted.
6.2. Landscaping. The RFA shall regularly maintain all landscaped areas on the Premises
so that they present a neat and attractive appearance to the reasonable satisfaction of the
City. This includes, but is not limited to, regular watering, pruning, weeding and repair
of the landscaped areas. The RFA shall replace all plant materials which are damaged
or killed during the term of this Lease of the same type, unless a suitable alternative is
approved by the City.
7. TENANT IMPROVEMENTS.
7.1. Construction. The RFA shall not construct, alter, replace, remove or make major
repairs of any improvements on the Premises without the prior written consent of the
City. Prior to any construction, alteration, replacement, removal, or major repair of any
improvements on the Premises, the RFA shall submit to the City plans and
specifications that describe the proposed activity. Construction shall not commence
until the City has approved the plans and specifications in writing. The City shall have
thirty (30) days in which to review the proposed plans and specifications. The plans and
specifications shall be deemed approved and the requirement for the City's written
consent shall be treated as waived, unless the City notifies the RFA otherwise within
the thirty (30) days. Upon completion of construction, the RFA shall promptly provide
the City with as -built plans and specifications. The City's consent and approval shall
not be required for any routine maintenance or repair of improvements made by the
RFA pursuant to its obligation to maintain the Premises in good order and repair that
does not result in the construction, alteration, replacement, removal, or major repair of
any improvements on the Premises. The provisions of this section do not obviate any
permit requirements that may apply to the proposed activity.
7.2. Ownership of Improvements. On the termination of the Lease, all RFA-initiated
improvements shall become the property of the City without payment by the City.
7.3. Unauthorized Improvements. Improvements made on the Premises without the City's
prior consent pursuant to subsection 7.1 or which are not in conformance with the plans
submitted to and approved by the City ("Unauthorized Improvements") shall
immediately become property of the City, unless the City elects otherwise. Regardless
of ownership of Unauthorized Improvements, the City may, at its option, require the
RFA to sever, remove, and dispose of them. If the RFA fails to remove an Unauthorized
Improvement upon request, the City may remove it and charge the RFA for the cost of
removal and disposal.
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8. INDEMNIFICATION.
8.1. The RFA agrees that it will protect, save, defend, hold harmless and indemnify the City,
its officials, employees, volunteers and agents from any and all demands, claims, suits,
actions, judgments, or liabilities for injury or death of any person, or for loss or damage
to property, arising as a result of accidents, injuries, or other occurrences on the
Premises or on City's Property, occasioned by either the negligent or willful conduct of
the RFA, its agents or any person or entity holding under the RFA or any person or
entity on the Premises or on the City's property as a result of RFA's activity, regardless
of who the injured party may be. Notwithstanding the foregoing, the City shall, to the
extent permitted by law, indemnify and hold the RFA harmless for any and all demands,
claims, judgments, or liability for loss or damage arising from the City's negligent,
reckless and/or willful acts (including those of the City's employees, officials, or
agents).
It is further specifically and expressly understood that the indemnification provided
herein constitutes the RFA's waiver of immunity under Industrial Insurance, Title 51
RCW, solely for the purposes of this indemnification. This waiver has been mutually
negotiated and agreed to by the RFA and City. The provisions of this section shall
survive the expiration or termination of this Lease.
9. ENVIRONMENTAL LIABILITY/RISK ALLOCATION.
9.1. Definition. "Hazardous Substance" means any substance which now or in the future
becomes regulated or defined as Hazardous Substance or Hazardous Waste under any
federal, state, or local statute, ordinance, rule, regulation, or other law relating to human
health, environmental protection, contamination or cleanup, including, but not limited
to, the Comprehensive Environmental Response, Compensation and Liability Act of
1980 ("CERCLA"), 42 U.S.C. 9601 et seq., and Washington's Model Toxics Control
Act ("MTCA"), RCW 70.10SD.010 et seq.
9.2. Use of Hazardous Substances. The RFA covenants and agrees that Hazardous
Substances will not be used, stored, generated, processed, transported, handled,
released, or disposed of in, on, under, or above the Premises, except in accordance with
all applicable laws.
9.3. Current Conditions, Duty of Utmost Care, and Duty to Investigate
9.3.1. The City makes no representations about the condition of the Premises. With
regard to any Hazardous Substances that may exist in, on, under, or above the
Premises, the City disclaims any and all responsibility to conduct
investigations, to review any State records, documents or files, or to obtain or
supply any information to the RFA.
9.3.2. The RFA shall exercise the utmost care with respect to both Hazardous
Substances in, on, under, or above the Premises as of the Commencement
Date, and any Hazardous Substances that come to be located in, on, under, or
above the Premises during the Term of this Lease, along with the foreseeable
acts or omissions of third parties affecting those Hazardous Substances, and
the foreseeable consequences of those acts or omissions occurring as a result
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of the RFA's use or occupancy of the Premises. The obligation to exercise
utmost care under this subsection 9.3 includes, but is not limited to, the
following requirements:
9.4. Notification and Reporting.
9.4.1. The RFA shall immediately notify the City if the RFA becomes aware of any
of the following:
a) A release or threatened release of Hazardous Substances in, on, under,
or above the Premises, any adjoining Premises, or any other Premises
subject to use by the RFA occurring as a result of the RFA's use or
occupancy of the leased Premises in violation of federal and state laws;
b) Any problem or liability related to, or derived from, the presence of any
Hazardous Substances in, on, under, or above the Premises, any adjoining
property, or any other property occurring as a result of the RFA's use or
occupancy of the Premises;
c) Any actual or alleged violation of any federal, state, or local statute,
ordinance, rule, regulation, or other law pertaining to Hazardous
Substances with respect to the Premises, any adjoining property, or any
other property subject to use by the RFA in conjunction with its use or
occupancy of the Premises;
d) Any lien or action with respect to any of the foregoing; or,
e) Any notification from the Environmental Protection Agency, Department
of Ecology, or King County that remediation or removal of Hazardous
Substances is or may be required at the Premises.
9.4.2. Upon request, the RFA shall provide the City with copies of any and all
reports, studies, or audits which pertain to environmental issues or concerns
associated with the Premises, and which were prepared for the RFA and
submitted to any federal, state, or local authorities pursuant to any federal,
state, or local permit, license, or law. These permits include, but are not limited
to, any National Pollution Discharge and Elimination System Permit, any
Army Corps of Engineers permit, any State hydraulics permit, any State Water
Quality certification, or any Substantial Development Permit.
9.5. Indemnification.
9.5.1. The RFA shall fully indemnify, defend, and hold the City harmless from and
against any and all claims, demands, damages, natural resource damages,
response costs, remedial costs, cleanup costs, losses, liens, liabilities, penalties,
fines, lawsuits, other proceedings, costs, and expenses (including attorneys' fees
and disbursements), that arise out of, or are in any way related to:
a) The use, storage, generation, processing, transportation, handling, or
disposal of any Hazardous Substance or Hazardous Waste by the RFA,
its contractors, agents, employees, guests, invitees, or affiliates in, on,
4905-8458-5503, v. 1
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under, or above the Premises, any adjoining property, or any other
property occurring as a result of the RFAs use or occupancy of the
Premises, during the Term of this Lease;
b) The release or threatened release of any Hazardous Substance or
Hazardous Waste, or the exacerbation of any Hazardous Substance or
Hazardous Waste contamination, in, on, under, or above the Premises,
any adjoining property, or any other property subject to use by the RFA
in conjunction with its use of the Premises, which release, threatened
release, or exacerbation occurs or occurred during the term of this Lease
and as a result of:
i. Any act or omission of the RFA, its contractors, agents, employees,
guests, invitees, or affiliates; or,
ii. Any foreseeable act or omission of a third party unless the RFA
exercised the utmost care with respect to the foreseeable acts or
omissions of the third party and the foreseeable consequences of
those acts or omissions.
9.5.2. In addition to the indemnifications provided in subsection 9.5.1, the RFA shall
fully indemnify the City for any and all damages, liabilities, costs, or expenses
(including attorneys' fees and disbursements) that arise out of or are in any
way related to the RFA's breach of the obligations of subsection 9.3.2. This
obligation is not intended to duplicate the indemnity provided in subsection
9.5.1 and applies only to damages, liabilities, costs, or expenses that are
associated with a breach of subsection 9.3.2 and which are not characterized
as a release, threatened release, or exacerbation of Hazardous Substances or
Hazardous Wastes.
9.5.3. The City shall notify the RFA in writing of any third -party claim with
reasonable promptness, and the RFA shall have the right to compromise or
defend any such claim, provided that such compromise or defense of such
claim does not negate the RFA's obligation to indemnify and hold the City
harmless.
9.5.4. The City shall release, indemnify, and hold the RFA harmless from any and
all liabilities, obligations, judgments, demands, damages, causes of action,
claims, costs, and expenses, including but not limited to all reasonable
attorney's fees and costs of suit, arising out of or in connection with any
contamination from hazardous waste or an environmental condition on the
Premises caused solely by the City, its agents and representatives.
9.6. Cleanup. If a release of Hazardous Substances or Hazardous Wastes occurs in, on,
under, or above the Premises, arising out of any action, inaction, or event described or
referred to in subsection 9.5, above, the RFA shall, at its sole expense, promptly take
all actions necessary or advisable to clean up the Hazardous Substances or Hazardous
Wastes. Cleanup actions shall include, without limitation, removal, containment and
remedial actions and shall be performed in accordance with all applicable laws, rules,
ordinances, and permits. RFA's obligation to undertake a cleanup under this subsection
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9.6 shall be limited to those instances where the Hazardous Substances or Hazardous
Wastes exist in amounts that exceed the threshold limits of any applicable regulatory
cleanup standards. The RFA shall also be solely responsible for all cleanup,
administrative, and enforcement costs of governmental agencies, including natural
resource damage claims, arising out of any action, inaction, or event described or
referred to in subsection 9.5, above.
9.7. Sampling by the City, Reimbursement, and Split Samples.
9.7.1 The City may conduct sampling, tests, audits, surveys, or investigations
("Tests") of the Premises at any time to determine the existence, scope, or
effects of Hazardous Substances or Hazardous Wastes on the Premises, any
adjoining property, any other property subject to use by the RFA in
conjunction with its use of the Premises, or any natural resources. If such
Tests, along with any other information, demonstrates the existence, release,
or threatened release of Hazardous Substances arising out of any action,
inaction, or event described or referred to in subsection 9.5, above in
violation of federal or state law, the RFA shall promptly reimburse the City
for all costs associated with such Tests.
9.7.2 The City's ability to seek reimbursement for any Tests under this subsection
shall be conditioned upon the City providing the RFA written notice of its
intent to conduct any Tests at least fifteen (15) calendar days prior to
undertaking such Tests, unless such Tests are performed in response to an
emergency situation in which case the City shall only be required to give such
notice as is reasonably practical.
10. ASSIGNMENT AND SUBLETTING.
10.1. The RFA shall not sell, convey, mortgage, assign, pledge, sublet, or otherwise transfer
or encumber all or any part of the RFA's interest in this Lease or the Premises without
the City's prior written consent which may not be unreasonably withheld by the City.
In the event of such consent, each permitted transferee shall assume all obligations
under this Lease. No assignment, sublet, or transfer shall release, discharge, or
otherwise affect the liability of RFA. The consolidation of the RFA with another entity
or the formation of a regional fire authority in which the RFA is a participating
jurisdiction shall not constitute an assignment under this Lease. The City's consent shall
not be required for a sublease of the premises to another governmental entity providing
services that directly support and benefit the operation of the regional RFA.
11. INSURANCE. For the term of this Lease and any extension thereof:
11.1. The RFA shall procure and maintain, for the benefit of the RFA and the City, an
insurance policy on the Premises in the amount of the replacement cost, for damage
from fire; earthquake; and other perils. The proceeds payable on a claim against said
insurance policy for damage shall be used to repair damage to the building so insured.
However, if both the RFA and the City agree not to repair or replace said building, or
if the RFA elects to terminate this Lease as provided in subsection 12.1, all such
available insurance proceeds shall be retained by the City and all salvage resulting from
any risk covered by the RFA's insurance shall also belong to the City.
4905-8458-5503, v. 1
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11.2. The RFA shall be responsible for maintaining its own fire and hazard insurance on RFA-
owned personal property and leasehold improvements placed within and on the
Premises by the RFA.
11.3. The RFA shall procure and maintain, insurance against claims for injuries to persons or
damage to property which may arise from or in connection with this Lease by the RFA,
its agents, representatives, employees, or subcontractors.
12. DAMAGE OR DESTRUCTION DUE TO CASUALTY. The Parties recognize that some or
all use of the Property or Premises may be interfered with or prevented because of fire,
earthquake, flood, storm, landslide, act of war, vandalism, theft or other extraordinary casualty
("Casualty").
12.1. Material Damage. If the Premises are damaged or destroyed by fire or any Casualty
the parties shall meet and determine how long the repair and restoration will take within
thirty (30) days after the date of such damage. After that determination has been made,
RFA shall have a period of thirty (30) days to terminate the Lease by giving written
notice to the City.
12.2. Repair after Damage. If the RFA does not give notice of the RFA's election to
terminate as provided in subsection 12.1, then the RFA shall, subject to the provisions
of this Section, and provided sufficient insurance proceeds are available, repair such
damage so that the Premises are restored to a condition of similar quality, character, and
utility for the RFA's purposes. To assist with said repair work, the City shall provide
the RFA with any and all insurance proceeds it has received, or is entitled to receive,
from the insurance policy referenced in subsection 11.1. However, in no event shall the
City be obligated to provide the RFA with more money for repair work than is provided
by insurance proceeds in subsection 11.1.
13. DEFAULT AND REMEDIES.
13.1. Acts Constituting Default. The RFA shall be in default of this Lease on the occurrence
of any of the following:
13.1.1 Failure to pay expenses when due;
13.1.2 Failure to comply with any law, regulation, policy, or order of any lawful
governmental authority;
13.1.3 Failure to comply with any other provision of this Lease;
13.1.4 Failure to cure a default pursuant to Section 13.2 below;
13.1.5 Proceedings are commenced by or against the RFA under any bankruptcy act
or for the appointment of a trustee or receiver of RFAs' Premises; or
13.1.6 The RFA vacates or abandons the Premises.
13.2. Failure to Cure. A default shall become an event of default ("Event of Default") if the
RFA fails to cure, or take positive steps to cure, the default within 30 days after the City
provides the RFA with written notice of default, which specifies the nature of the
default.
13.3. City's Remedies Upon Default. Upon an Event of Default, the City may terminate this
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Lease and remove the RFA by summary proceedings or otherwise. The City's reentry
or repossession of the Property under this subsection shall not be construed as an
election to terminate this Lease or cause a forfeiture of rents or other charges to be paid
during the balance of the Term, unless the City gives a written notice of termination to
the RFA or termination is decreed by legal proceedings.
14.ENTRY BY THE CITY. The City shall have the right to enter the Premises at any reasonable
hour to inspect for compliance with the terms of this Lease upon twenty-four (24) hours' written
notice. The City and/or its agents shall comply with all of the RFA's work safety rules and
restrictions.
15.NOTICE. Any notices required or permitted under this Lease may be personally delivered,
delivered by certified mail, return receipt requested, to the addresses listed on the signature
page or to such other places as the parties may direct in writing from time to time. A notice
shall be deemed given and delivered upon personal delivery or three (3) days after being mailed
as set forth above, whichever is applicable.
16. MISCELLANEOUS.
16.1. Authority. The City and the RFA represent that each person signing on this Lease
on its behalf is authorized to do so.
16.2. Successors and Assigns. This Lease shall be binding upon and inure to the benefit
of the parties, their successors and assigns.
16.3. Headings. The headings used in this Lease are for convenience only and in no way
define, limit, or extend the scope of this Lease or the intent of any provision.
16.4. Waiver. The waiver by the City of any breach or default of any term, covenant, or
condition of this Lease shall not be deemed to be a waiver of such term, covenant,
or condition; of any subsequent breach or default of the same; or of any other term,
covenant, or condition of this Lease. The City's acceptance of a rental payment
shall not be construed to be a waiver of any preceding or existing breach other than
the failure to pay the particular rental payment that was accepted.
16.5. Cumulative Remedies. The rights and remedies of the City under this Lease are
cumulative and in addition to all other rights and remedies afforded to the City by
law or equity or otherwise.
16.6. Time is of the Essence. TIME IS OF THE ESSENCE as to each and every
provision of this Lease.
16.7. Invalidity. If any provision of this Lease shall prove to be invalid, void, or illegal,
it shall in no way affect, impair, or invalidate any other provision of this Lease.
16.8. Applicable Law and Venue. This Lease shall be interpreted and construed in
accordance with the laws of the State of Washington. Any reference to a statute
shall mean that statute as presently enacted or hereafter amended or superseded.
Venue for any action arising out of or in connection with this Lease shall be in the
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Superior Court for King County, Washington.
16.9. Modification. Any modification of this Lease must be in writing and signed by the
parties. The City shall not be bound by any oral representations or statements.
16.10. Quiet Enjoyment. The City covenants and agrees that the RFA, upon performing
the terms and conditions of the Lease, may peacefully hold and enjoy the Premises
during said term without any interruption by the City, its successors or assigns, or
any person or company lawfully claiming by or through it.
16.11. Recording of Short Form Lease. Neither the City nor the RFA may record this
Lease without the other's prior approval, but the Parties will at any time at the
request of either party promptly execute duplicate originals of an instrument, in
recordable form, which will constitute a short form of this Lease, setting forth a
description of the Premises, the terms of this lease and other provisions hereof,
except the rental and other provisions as either party may request, which may be
recorded.
16.12. Duplicate Originals. This Lease Agreement may be executed in duplicate
originals.
THIS AGREEMENT requires the signature of all parties and is executed as of the date of
the last signature below and is effective as of January 1, 2025.
PUGET SOUND REGIONAL CITY OF TUKWILA
FIRE AUTHORITY
By: By:
Chief Mayor
DATE: DATE:
APPROVED AS TO FORM: ATTEST:
RFA Attorney
NOTICES TO BE SENT TO:
[Addresses listed on next page]
City Clerk
APPROVED AS TO FORM:
City Attorney
12
Puget Sound Fire Administration
20811 84th Ave S
Kent, WA 98032
City of Tukwila Mayor's Office
6200 Southcenter Blvd
Tukwila, WA 98188
4905-8458-5503, v. 1
13
EXHIBIT A
TUKWILA STATION 51 LEASE
ABBREVIATED LEGAL DESCRIPTION
NEW PARCEL "C" DESCRIBED AND DELINEATED IN CITY OF TUKWILA BOUNDARY
LINE ADJUSTMENT NO. L 13-005 RECORDING NO. 20130227900005 (BEING A PORTION
OF NE QTR NW QTR STR 35-23-04); TGW ADJOINING PORTION OF N HALF OF S 178TH
ST VACATED BY CITY OF TUKWILA ORDINANCE NO. 2400 RECORDING NO.
20160120000736; TGW ADJOINING PORTION OF SOUTHCENTER PARKWAY VACATED
BY CITY OF TUKWILA ORDINANCE NO. 2240; and
NEW PARCEL "B" DESCRIBED AND DELINEATED IN CITY OF TUKWILA BOUNDARY
LINE ADJUSTMENT NO L 13-005 RECORDING NO 20130227900005 (BEING A PORTION
OF NE QTR NW QTR AND SE QTR NW QTR STR 35-23-04); TGW ADJOINING PORTION
OF S HALF OF S 178TH ST VACATED BY CITY OF TUKWILA ORDINANCE NO 2400
RECORDING NO 20160120000736
Also known as King County Parcel Nos. 352304-9008 and 352304-9040 (shown as vacant),
located at 17951 Southcenter Pkwy.
4905-8458-5503, v. 1
14
EXHIBIT B
TUKWILA STATION 51 LEASE
UNDEVELOPED PORTION OF PROPERTY
Undeveloped portion of King County Tax Parcel #3523049008, highlighted in yellow above,
running approximately 190 feet along the border with King County Tax Parcel #3523049107,
then running approximately125 feet in a southeasterly direction along Southcenter Parkway, then
running westerly approximately 240 feet from Southcenter Parkway, and then running
northeasterly approximately 125 feet to the border with King County Tax Parcel #3523049107.
4905-8458-5503, v. 1
15
Attachment B
After Recording Mail To:
Kari L. Sand
Ogden Murphy Wallace, P.L.L.C.
701 5th Avenue, Suite 5600
Seattle, Washington 98104
BARGAIN & SALE DEED
DATE: [DATE]
GRANTOR: City of Tukwila
GRANTEE: Puget Sound Regional Fire Authority
ABBREVIATED
LEGAL:
ASSESSOR'S 359700-0320
TAX PARCEL NO:
ADDRESS: 15447 65TH AVE S
THE GRANTOR CITY OF TUKWILA, a Washington municipal corporation for and in
consideration of One Dollar ($1.00), and other good and valuable consideration, in hand paid,
bargains, sells, and conveys to the GRANTEE, Puget Sound Regional Fire Authority, a
Washington municipal corporation, the following real estate, situated in the County of King,
state of Washington, legally described as follows:
INTERURBAN ADD TO SEATTLE LOT 17 LESS PORTION LY NLY OF
FOLLOWING DESCRIBED LINE - BEGIN SW CORNER OF LOT 17 TH NORTH
210 FEET TH N 89-47-00 E TO WLY MARGIN OF 65 TH AVE S LESS POR DAF
- POR OF LOT 17 DAF - BAAP OF C/L OF RENTON-THREE TREE PT NO 2649
& W LN OF SEC 23- 23- 04 SD PT BEING ENG STA 135+29.92 FR WCH SW
COR OF SD SEC 23 BEARS S 0-11-42 E 2044.06 FT TH S 84-51-48 E 1647.24
FT TH ON A CRV TO RGT HAVING A RAD OF 955. 37 FT 360 FT TH S 63-15-
48 E 359.18 FT TH ON A CRV TO LFT RAD OF 5729.65 FT 370 FT TH S 66-57-
48 E 1162. 53 FT TH ON A CRV TO LFT HAVING A RAD OF 716.34 FT 442.40
FT TH N 77-38-42 E 201. 68 FT TH LEAVING SD C/L OF SD RD & RUNNING N
00-14-00 E 272.03 FT TH S 00-14-00 W 87.94 FT M/L TO NWLY MGN OF VAC
MACADAM RD TH S 49-00-00 W ALG SD NWLY MGN 106.38 FT TH N 00-14-
16
00 E 312.55 FT M/L TO S LN OF LOT 17 IN SD PLAT & TPOB TH CONT N 00-
14-00 E 150 FT TH S 88-24-47 E PLW NLY LN OF SD LOT 17 170 FT M/L TO
SWLY MGN OF 65TH AVE S TH SELY ALG SD MGN TO SE COR OF SD LOT
17 TH N 89-09-00 W ALG S LN OF LOT 17 TO TPOB LESS POR LYING WITHIN
M. W. ADD LESS RD
In the event the Grantee ceases to use the above -described real estate to deploy Puget Sound
Regional Fire Authority response units, the same shall revert to the Grantor.
This conveyance is subject to covenants, conditions, restrictions, and easements, if any,
affecting title, which may appear in the public record, including those shown on any recorded
plat or survey.
DATED this day of , 2025.
STATE OF WASHINGTON )
County of
ss.
GRANTOR:
CITY OF TUKWILA
a Washington municipal corporation
By:
Name: Thomas McLeod
Title: Mayor
I certify that I know or have satisfactory evidence Thomas McLeod is the person who appeared
before me, and said person acknowledged that he signed this instrument, on oath stated that he
was authorized to execute the instrument and acknowledged it as the Mayor of the City of Tukwila,
a Washington municipal corporation, to be the free and voluntary act of such party for the uses
and purposes mentioned in the instrument.
Dated:
Type/Print Name of Notary.
Notary Public in and for the State of Washington, residing
at
My appointment expires:
17
Attachment C
LEASE AGREEMENT
BETWEEN THE CITY TUKWILA AND
PUGET SOUND REGIONAL FIRE AUTHORITY
FIRE STATION 52
ROOMS 210, 212, AND 213
THIS LEASE AGREEMENT (hereinafter "Lease") is between the CITY OF TUKWILA,
a municipal corporation of the State of Washington ("City"), and PUGET SOUND REGIONAL
FIRE AUTHORITY, a Washington municipal corporation ("RFA") (collectively referred to as "the
Parties").
RECITALS
1. On January 1, 2025, the City transferred the real property legally described in Exhibit A
attached and incorporated herein and located at 15447 65th Avenue South Tukwila, Washington
98188 (the "Property") (Parcel #3597000320) to the RFA.
2. Pursuant to Section 7.c.l.a.ii of the 2023 Puget Sound Regional Fire Authority Plan, the City
retains the right to access and use certain areas of the Property.
AGREEMENT
NOW, THEREFORE, the City and RFA agree as follows:
1. PREMISES.
Description of Premises. The following areas of the above -described Property and all
improvements thereto collectively comprise the "Premises" that are the subject to this
Lease Agreement:
1.1.1. The 212 EOC Storage closet ("212 EOC Storage Closet");
1.1.2. The 210 Training Room ("210 Training Room"); and
1.1.3. The 213 HAM closet ("213 HAM Closet").
1.2. Lease of Premises. The City leases to the RFA, and the RFA leases from the City, the
Premises upon the terms specified in this Lease.
1.3. As -Is. The RFA is providing the Premises in "as -is" condition for the City's use. The
RFA makes no representation regarding the condition of the Premises or improvements
located on the same.
18
2. USE.
2.1. Permitted Use.
2.1.1. 212 EOC Storage Closet. The City shall be permitted reasonable access and
use of the 212 EOC Storage for any lawful purpose.
2.1.2. 210 Training Room. The City shall be permitted access and use of the 210
Training Room as the City's backup Emergency Operations Center on all days
and at all hours without notice to the RFA in the event of an emergency and
until termination of the emergency event. The City shall also be permitted
reasonable access and use of the 210 Training Room as a public meeting space
up to twenty (20) hours per calendar week, provided RFA staff is on -site to
facilitate such use.
2.1.3. 213 HAM Closet. The City shall be permitted reasonable access and use of
the 213 HAM Closet for storage of ham radios and related equipment.
2.2. Liens and Encumbrances. The City shall keep the Premises free and clear of any liens
and encumbrances arising out of or relating to its use or occupancy of the Premises.
3. TERM.
3.1. Term Defined. The term of this Lease shall be for 50 years ("Initial Term"), which shall
commence retroactively to January 1, 2025 ("Commencement Date"). This Agreement
will continue for the Initial Term and will automatically renew for additional 50-year
terms, subject to the City's right to terminate this Agreement in Section 3.4.
3.2. End of Term. Upon the termination of the Lease, as applicable, the City shall surrender
the Premises to the RFA in the same or better condition as on the Commencement Date,
reasonable wear and tear excepted.
3.3. Hold Over. If the City remains in possession of the Premises after termination of this
Lease, the occupancy shall not be an extension or renewal of the Term. The occupancy
shall be a month -to -month tenancy, on terms identical to the terms of this Lease, which
may be terminated by either party on thirty (30) days written notice.
3.4. Termination by City. The City may terminate this Agreement, for any reason, by
providing ninety (90) days' written notice to the RFA.
4. LEASE PAYMENT.
4.1. Rent. The City shall pay to the RFA the annual rent of One Dollar and No/100 Cents
($1.00) ("Rent"). The first installment shall be due and payable on or before
Commencement Date, and subsequent installments shall be due and payable on or
before the 1st day of each year thereafter.
4911-0762-8575, v. 1
19
5. UTILITIES AND OTHER EXPENSES.
5.1. Utilities. The RFA shall be solely responsible for all utilities serving the Premises. This
includes payment of all fees that may be charged to the RFA or City, related to the
Premises or use thereof, such as stormwater fees and property fees charged by the King
County Assessor.
6. MAINTENANCE.
6.1. Maintenance. The City shall at its sole cost and expense, keep and maintain in good
order and in clean, attractive, and safe condition the Premises. The RFA shall also pay
100% of the repair and replacement costs of the Premises. If any additions, repairs,
alterations, maintenance, replacement, or changes to the Premises are required by any
public authority, the RFA shall, at its sole cost and expense, make the same. All
additions, repairs, alterations, replacements, or changes to the Premises shall be made
in accordance with Section 7. Any damage or repairs that are the result of the City's
negligent or intentional acts shall be the sole responsibility of the City. Upon
termination of this Lease, the City shall return the Premises to the RFA in the same
condition as it was received with reasonable wear and tear excepted.
7. TENANT IMPROVEMENTS.
7.1. Construction. The City shall not construct, alter, replace, remove or make major repairs
of any improvements on the Premises without the prior written consent of the RFA.
Prior to any construction, alteration, replacement, removal, or major repair of any
improvements on the Premises, the City shall submit to the RFA plans and
specifications that describe the proposed activity. Construction shall not commence
until the City has approved the plans and specifications in writing. The RFA shall have
thirty (30) days in which to review the proposed plans and specifications. The plans and
specifications shall be deemed approved and the requirement for the RFA's written
consent shall be treated as waived, unless the RFA notifies the City otherwise within
the thirty (30) days. Upon completion of construction, the City shall promptly provide
the RFA with as -built plans and specifications. The RFA's consent and approval shall
not be required for any routine maintenance or repair of improvements made by the
City pursuant to its obligation to maintain the Premises in good order and repair that
does not result in the construction, alteration, replacement, removal, or major repair of
any improvements on the Premises. The provisions of this section do not obviate any
permit requirements that may apply to the proposed activity.
7.2. Ownership of Improvements. On the termination of the Lease, all City -initiated
improvements shall become the property of the RFA without payment by the RFA.
7.3. Unauthorized Improvements. Improvements made on the Premises without the
RFA's prior consent pursuant to subsection 7.1 or which are not in conformance with
the plans submitted to and approved by the RFA ("Unauthorized Improvements") shall
immediately become property of the RFA, unless the RFA elects otherwise. Regardless
of ownership of Unauthorized Improvements, the RFA may, at its option, require the
City to sever, remove, and dispose of them. If the City fails to remove an Unauthorized
20
Improvement upon request, the RFA may remove it and charge the City for the cost of
removal and disposal.
8. INDEMNIFICATION.
8.1. The City agrees that it will protect, save, defend, hold harmless and indemnify the RFA,
its officials, employees, volunteers and agents from any and all demands, claims, suits,
actions, judgments, or liabilities for injury or death of any person, or for loss or damage
to property, arising as a result of accidents, injuries, or other occurrences on the
Premises or on RFA's Property, occasioned by either the negligent or willful conduct
of the City, its agents or any person or entity holding under the City or any person or
entity on the Premises or on the RFA's property as a result of City's activity, regardless
of who the injured party may be. Notwithstanding the foregoing, the RFA shall, to the
extent permitted by law, indemnify and hold the City harmless for any and all demands,
claims, judgments, or liability for loss or damage arising from the RFA's negligent,
reckless and/or willful acts (including those of the RFA's employees, officials, or
agents).
It is further specifically and expressly understood that the indemnification provided
herein constitutes the City's waiver of immunity under Industrial Insurance, Title 51
RCW, solely for the purposes of this indemnification. This waiver has been mutually
negotiated and agreed to by the RFA and City. The provisions of this section shall
survive the expiration or termination of this Lease.
9. ASSIGNMENT AND SUBLETTING.
9.1. The City shall not sell, convey, mortgage, assign, pledge, sublet, or otherwise transfer
or encumber all or any part of the City's interest in this Lease or the Premises without
the RFA's prior written consent which may not be unreasonably withheld by the RFA.
In the event of such consent, each permitted transferee shall assume all obligations
under this Lease. No assignment, sublet, or transfer shall release, discharge, or
otherwise affect the liability of City. The RFA's consent shall not be required for a
sublease of the premises to another governmental entity providing services that directly
support and benefit the operation of the City.
10. INSURANCE.
10.1. During the term of this Lease and any extension thereof, the RFA shall maintain an
insurance policy on the Premises in the amount of the replacement cost, for damage
from fire; earthquake; and other perils. The proceeds on a claim against said insurance
policy for damage shall be used to repair damage to the Premises so insured. However,
if the RFA is not required or elects not to repair said Premises, all such insurance
proceeds shall be retained by the RFA. All salvage resulting from any risk covered by
the RFA's insurance shall also belong to the RFA.
10.2. The City shall be responsible for maintaining its own fire and hazard insurance on City -
owned personal property and leasehold improvements placed within and on the
4911-0762-8575, v. 1
21
Premises by the City.
10.3. The City shall procure and maintain for the duration of the Lease, insurance against
claims for injuries to persons or damage to property which may arise from or in
connection with this Lease by the City, its agents, representatives, employees, or
subcontractors.
11. DAMAGE OR DESTRUCTION DUE TO CASAULTY. The Parties recognize that some or
all use of the Property or Premises may be interfered with or prevented because of fire,
earthquake, flood, storm, landslide, act of war, vandalism, theft or other extraordinary casualty
("Casualty").
11.1. Material Damage. If the Premises are damaged or destroyed by fire or any Casualty
the parties shall meet and determine how long the repair and restoration will take within
thirty (30) days after date of such damage. After that determination has been made, the
City shall have a period of thirty (30) days to terminate the Lease by giving written
notice to the RFA.
11.2. Repair after Damage. If the City does not give notice of the City's election to terminate
as provided in subsection 11.1, then the RFA shall, subject to the provisions of this
Section, immediately commence and diligently pursue the completion of the repair of
such damage so that the Premises are restored to a condition of similar quality,
character, and utility for the City's purposes. Notwithstanding anything contained
herein to the contrary, if the Premises are not repaired and restored within one hundred
twenty (120) days from the date of the damage, the City may cancel the Lease at any
time before the RFA completes the repairs and delivers the restored Premises to the
City. If the City does not so terminate, the RFA shall continue to restore the Premises.
The City shall have no claim against the RFA for any direct, incidental, or consequential
damages arising from the RFA's failure to commence or complete any repairs to the
Premises. In no event shall the RFA be obligated to spend more money on the repair
than is provided by insurance proceeds in subsection 10.1.
11.3. Uninsured Damage. If damage or destruction is caused by a peril not required to be
insured against hereunder and for which insurance proceeds are not available, either the
City or RFA may terminate this Lease by thirty (30) days written notice to the other of
its election to do so, and the Lease shall be deemed to have terminated as of such date
unless the other party agrees in writing to pay for such repairs or restoration.
12. DEFAULT AND REMEDIES.
12.1. Acts Constituting Default. The City shall be in default of this Lease on the occurrence
of any of the following:
12.1.1. Failure to pay expenses when due;
12.1.2. Failure to comply with any law, regulation, policy, or order of any lawful
governmental authority;
12.1.3. Failure to comply with any other provision of this Lease;
12.1.4. Failure to cure a default pursuant to Section 12.2 below;
12.1.5. Proceedings are commenced by or against the City under any bankruptcy act
22
or for the appointment of a trustee or receiver of City's Premises; or
12.1.6. The City vacates or abandons the Premises.
12.2. Failure to Cure. A default shall become an event of default ("Event of Default") if the
City fails to cure, or take positive steps to cure, the default within 30 days after the RFA
provides the City with written notice of default, which specifies the nature of the default.
12.3. RFA's Remedies Upon Default. Upon an Event of Default, the RFA may terminate
this Lease and remove the City by summary proceedings or otherwise. The RFA's
reentry or repossession of the Premises under this subsection shall not be construed as
an election to terminate this Lease or cause a forfeiture of rents or other charges to be
paid during the balance of the Term, unless the RFA gives a written notice of
termination to the City or termination is decreed by legal proceedings.
13.ENTRY BY THE RFA. The RFA shall have the right to enter the Premises at any reasonable
hour to inspect for compliance with the terms of this Lease upon twenty-four (24) hours' notice.
The City and/or its agents shall comply with all of the RFA's work safety rules and restrictions.
14.NOTICE. Any notices required or permitted under this Lease may be personally delivered,
delivered by certified mail, return receipt requested, to the addresses listed on the signature
page or to such other places as the parties may direct in writing from time to time. A notice
shall be deemed given and delivered upon personal delivery or three (3) days after being mailed
as set forth above, whichever is applicable.
15. MISCELLANEOUS.
15.1. Authority. The City and the RFA represent that each person signing on this Lease
on its behalf is authorized to do so.
15.2. Successors and Assigns. This Lease shall be binding upon and inure to the benefit
of the parties, their successors and assigns.
15.3. Headings. The headings used in this Lease are for convenience only and in no way
define, limit, or extend the scope of this Lease or the intent of any provision.
15.4. Waiver. The waiver by the RFA of any breach or default of any term, covenant, or
condition of this Lease shall not be deemed to be a waiver of such term, covenant,
or condition; of any subsequent breach or default of the same; or of any other term,
covenant, or condition of this Lease. The RFA's acceptance of a rental payment
shall not be construed to be a waiver of any preceding or existing breach other than
the failure to pay the particular rental payment that was accepted.
15.5. Cumulative Remedies. The rights and remedies of the City under this Lease are
cumulative and in addition to all other rights and remedies afforded to the City by
law or equity or otherwise.
15.6. Time is of the Essence. TIME IS OF THE ESSENCE as to each and every
provision of this Lease.
4911-0762-8575, v. 1
23
15.7. Invalidity. If any provision of this Lease shall prove to be invalid, void, or illegal,
it shall in no way affect, impair, or invalidate any other provision of this Lease.
15.8. Applicable Law and Venue. This Lease shall be interpreted and construed in
accordance with the laws of the State of Washington. Any reference to a statute
shall mean that statute as presently enacted or hereafter amended or superseded.
Venue for any action arising out of or in connection with this Lease shall be in the
Superior Court for King County, Washington.
15.9. Modification. Any modification of this Lease must be in writing and signed by the
parties. The City shall not be bound by any oral representations or statements.
15.10. Quiet Enjoyment. The RFA covenants and agrees that the City, upon performing
the terms and conditions of the Lease, may peacefully hold and enjoy the Premises
during said term without any interruption by the RFA, its successors or assigns, or
any person or company lawfully claiming by or through it.
15.11. Recording of Short Form Lease. Neither the City nor the RFA may record this
Lease without the other's prior approval, but the Parties will at any time at the
request of either party promptly execute duplicate originals of an instrument, in
recordable form, which will constitute a short form of this Lease, setting forth a
description of the Premises, the terms of this lease and other provisions hereof,
except the rental and other provisions as either party may request, which may be
recorded.
15.12. Duplicate Originals. This Lease Agreement may be executed in duplicate
originals.
THIS AGREEMENT requires the signature of all parties and is executed as of the date of the
last signature below and is effective as of January 1, 2025.
[SIGNATURE BLOCKS FOLLOW ON NEXT PAGE]
24
PUGET SOUND REGIONAL CITY OF TUKWILA
FIRE AUTHORITY
By: By:
Chief Mayor
DATE: DATE:
APPROVED AS TO FORM: ATTEST:
RFA Attorney
City Clerk
APPROVED AS TO FORM:
City Attorney
NOTICES TO BE SENT TO: NOTICES TO BE SENT TO:
Puget Sound Fire Administration
20811 84th Ave S
Kent, WA 98032
City of Tukwila Mayor's Office
6200 Southcenter Blvd
Tukwila, WA 98188
4911-0762-8575, v. 1
25
EXHIBIT A
TUKWILA STATION 52
ABBREVIATED LEGAL DESCRIPTION
INTERURBAN ADD TO SEATTLE LOT 17 LESS PORTION LY NLY OF FOLLOWING
DESCRIBED LINE - BEGIN SW CORNER OF LOT 17 TH NORTH 210 FEET TH N 89-47-00
E TO WLY MARGIN OF 65 TH AVE S LESS POR DAF - POR OF LOT 17 DAF - BAAP OF
C/L OF RENTON-THREE TREE PT NO 2649 & W LN OF SEC 23- 23- 04 SD PT BEING
ENG STA 135+29.92 FR WCH SW COR OF SD SEC 23 BEARS S 0-11-42 E 2044.06 FT TH S
84-51-48 E 1647.24 FT TH ON A CRV TO RGT HAVING A RAD OF 955. 37 FT 360 FT TH S
63-15-48 E 359.18 FT TH ON A CRV TO LFT RAD OF 5729.65 FT 370 FT TH S 66-57-48 E
1162. 53 FT TH ON A CRV TO LFT HAVING A RAD OF 716.34 FT 442.40 FT TH N 77-38-
42 E 201. 68 FT TH LEAVING SD C/L OF SD RD & RUNNING N 00-14-00 E 272.03 FT TH
S 00-14-00 W 87.94 FT M/L TO NWLY MGN OF VAC MACADAM RD TH S 49-00-00 W
ALG SD NWLY MGN 106.38 FT TH N 00-14-00 E 312.55 FT M/L TO S LN OF LOT 17 IN
SD PLAT & TPOB TH CONT N 00-14-00 E 150 FT TH S 88-24-47 E PLW NLY LN OF SD
LOT 17 170 FT M/L TO SWLY MGN OF 65TH AVE S TH SELY ALG SD MGN TO SE COR
OF SD LOT 17 TH N 89-09-00 W ALG S LN OF LOT 17 TO TPOB LESS POR LYING
WITHIN M. W. ADD LESS RD
Also known as King County Parcel No. 359700-0320, located at 15447 651h Avenue South
Tukwila, Washington 98188.
26
Attachment D
After Recording Mail To:
Kari L. Sand
Ogden Murphy Wallace, P.L.L.C.
701 5th Avenue, Suite 5600
Seattle, Washington 98104
BARGAIN & SALE DEED
DATE: [DATE]
GRANTOR: City of Tukwila, a Washington municipal
corporation
GRANTEE: Puget Sound Regional Fire Authority, a
Washington municipal corporation
ABBREVIATED
LEGAL:
ASSESSOR'S 335140-0825
TAX PARCEL NO:
THE GRANTOR, CITY OF TUKWILA, a Washington municipal corporation, for and in
consideration of One Dollar ($1.00), and other good and valuable consideration, in hand paid,
bargains, sells, and conveys to the GRANTEE, Puget Sound Regional Fire Authority, a
Washington municipal corporation, the following real estate, situated in the County of King, state
of Washington, legally described as follows:
HILLMANS CD MEADOW GARDENS #3 LOTS 1 THRU 15 BLOCK 26 TGW
LOTS 1 THRU 12 BLOCK 27 TGW LOTS 1 THRU 15 BLOCK 28 TGW
UNIMPROVED AND VACATED SOUTH 114TH STREET AND SOUTH 115TH
STREET — TUKWILA ORDINANCE NO. 1751 EFFECTIVE DATE AUGUST 20,
1995
In the event the Grantee ceases to use the above -described real estate to deploy Puget Sound
Regional Fire Authority response units, the same shall revert to the Grantor.
This conveyance is subject to covenants, conditions, restrictions and easements, if any, affecting
title, which may appear in the public record, including those shown on any recorded plat or survey.
27
DATED this day of , 2025.
STATE OF WASHINGTON )
County of King )
ss.
GRANTOR:
CITY OF TUKWILA
a Washington corporation
By:
Name: Thomas McLeod
Title: Mayor
I certify that I know or have satisfactory evidence Thomas McLeod is the person who
appeared before me, and said person acknowledged that he signed this instrument, on oath
stated that he was authorized to execute the instrument and acknowledged it as the Mayor of the
City of Tukwila, a Washington municipal corporation, to be the free and voluntary act of such party
for the uses and purposes mentioned in the instrument.
Dated:
Type/Print Name of Notary.
Notary Public in and for the State of Washington, residing
at
My appointment expires:
28
Attachment E
LEASE AGREEMENT
BETWEEN THE CITY TUKWILA AND
PUGET SOUND REGIONAL FIRE AUTHORITY
FIRE STATION 54
THIS LEASE AGREEMENT (hereinafter "Lease") is between the CITY OF TUKWILA,
a municipal corporation of the State of Washington ("City"), and PUGET SOUND REGIONAL
FIRE AUTHORITY, a Washington municipal corporation ("RFA") (collectively referred to as "the
Parties").
RECITALS
1. The City owns real property legally described in Exhibit A attached and incorporated herein
and located at 4237 S. 144th Street, Tukwila, Washington 98168 (the "Property") (Parcel
#0040000365).
2. The City currently leases a portion of the Property to RFA for use as a fire station, which will
expire on December 31, 2024, in accordance with the Parties' amended Interlocal Agreement
for Consolidation for Fire Services.
3. According to Section 7.c.1.a.iv of the 2023 Puget Sound Regional Fire Authority Plan, the City
is required to "retain ownership of the real property on which [Fire] Station 54 is located and
shall lease [Fire] Station 54 to the RFA for a 15-year term at the rate of $1 per year. As
conditions of the lease, the RFA shall assume 100% of the maintenance costs and shall use
[Fire] Station 54 to deploy response units, subject to any other interests in the property."
AGREEMENT
NOW, THEREFORE, the City and RFA agree as follows:
1. PREMISES.
1.1. Lease of Premises. The City leases to the RFA, and the RFA leases from the City, the
Premises upon the terms specified in this Lease.
1.2. As -Is. The above -described Property and all improvements thereto comprise the
"Premises" that are subject to this Lease Agreement. The City is providing the Premises
in "as -is" condition for the RFA's use. The City makes no representation regarding the
condition of the Premises or improvements located on the same.
2. USE.
2.1. Permitted Use. The RFA shall use the Premises for the deployment of RFA response
units (the "Permitted Use") and for no other purpose unrelated to the delivery of fire
protection and emergency medical services.
2.2. Liens and Encumbrances. The RFA shall keep the Premises free and clear of any liens
and encumbrances arising out of or relating to its use or occupancy of the Premises.
4931-7633-7695, v. 1
29
3. TERM.
3.1. Term Defined. The term of this Lease shall be for fifteen (15) years ("Initial Term"),
which shall commence retroactively to January 1, 2025 ("Commencement Date");
however, in accordance with Section 7.c.1.a.iv of the 2023 Puget Sound Regional Fire
Authority Plan, before December 31, 2034, either Tukwila or RFA shall provide notice
to the other party, indicating whether this lease will terminate upon expiration of this
lease or be renewed for an additional term subject to conditions to be mutually
negotiated by the parties.
3.2. End of Term. Upon the expiration or termination of the Term, as applicable, the RFA
shall surrender the Premises to the City in the same or better condition as on the
Commencement Date, reasonable wear and tear excepted.
3.3. Hold Over. If the RFA remains in possession of the Premises after termination of this
Lease, the occupancy shall not be an extension or renewal of the Term. The occupancy
shall be a month -to -month tenancy, on terms identical to the terms of this Lease, which
may be terminated by either party on thirty (30) days written notice.
4. LEASE PAYMENT.
4.1. Rent. The RFA shall pay to the City the annual rent of One Dollar and No/100 Cents
($1.00) ("Rent"). The first installment shall be due and payable on or before
Commencement Date, and subsequent installments shall be due and payable on or
before the 1st day of each year thereafter.
5. UTILITIES AND OTHER EXPENSES.
5.1. Utilities. The RFA will be responsible for all utilities serving the Premises. This
includes payment of all fees that may be charged to the RFA or City, related to the
Premises or use thereof, such as stormwater fees and property fees charged by the King
County Assessor.
6. MAINTENANCE AND LANDSCAPING.
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6.1. Maintenance. The RFA shall at its sole cost and expense, keep and maintain in good
order and in clean, attractive, and safe condition the Premises. The RFA shall also pay
100% of the repair and replacement costs of the Premises. If any additions, repairs,
alterations, maintenance, replacement, or changes to the Premises are required by any
public authority, the RFA shall, at its sole cost and expense, make the same. All
additions, repairs, alterations, replacements, or changes to the Premises shall be made
in accordance with Section 7. Any damage or repairs that are the result of the City's
negligent or intentional acts shall be the sole responsibility of the City. Upon
termination of this Lease, the RFA shall return to the Property to the City in the same
condition as it was received with reasonable wear and tear excepted.
6.2. Landscaping. The RFA shall regularly maintain all landscaped areas on the Premises
so that they present a neat and attractive appearance to the reasonable satisfaction of the
City. This includes, but is not limited to, regular watering, pruning, weeding and repair
of the landscaped areas. The RFA shall replace all plant materials which are damaged
or killed during the term of this Lease of the same type, unless a suitable alternative is
approved by the City.
7. TENANT IMPROVEMENTS.
7.1. Construction. The RFA shall not construct, alter, replace, remove or make major
repairs of any improvements on the Premises without the prior written consent of the
City. Prior to any construction, alteration, replacement, removal, or major repair of any
improvements on the Premises, the RFA shall submit to the City plans and
specifications that describe the proposed activity. Construction shall not commence
until the City has approved the plans and specifications in writing. The City shall have
thirty (30) days in which to review the proposed plans and specifications. The plans and
specifications shall be deemed approved and the requirement for the City's written
consent shall be treated as waived, unless the City notifies the RFA otherwise within
the thirty (30) days. Upon completion of construction, the RFA shall promptly provide
the City with as -built plans and specifications. The City's consent and approval shall
not be required for any routine maintenance or repair of improvements made by the
RFA pursuant to its obligation to maintain the Premises in good order and repair that
does not result in the construction, alteration, replacement, removal, or major repair of
any improvements on the Premises. The provisions of this section do not obviate any
permit requirements that may apply to the proposed activity.
7.2. Ownership of Improvements. On the termination of the Lease, all RFA-initiated
improvements shall become the property of the City without payment by the City.
7.3. Unauthorized Improvements. Improvements made on the Premises without the City's
prior consent pursuant to subsection 7.1 or which are not in conformance with the plans
submitted to and approved by the City ("Unauthorized Improvements") shall
immediately become property of the City, unless the City elects otherwise. Regardless
of ownership of Unauthorized Improvements, the City may, at its option, require the
RFA to sever, remove, and dispose of them. If the RFA fails to remove an Unauthorized
Improvement upon request, the City may remove it and charge the RFA for the cost of
removal and disposal.
8. INDEMNIFICATION.
8.1. The RFA agrees that it will protect, save, defend, hold harmless and indemnify the City,
its officials, employees, volunteers and agents from any and all demands, claims, suits,
actions, judgments, or liabilities for injury or death of any person, or for loss or damage
to property, arising as a result of accidents, injuries, or other occurrences on the
Premises or on City's Property, occasioned by either the negligent or willful conduct of
the RFA, its agents or any person or entity holding under the RFA or any person or
entity on the Premises or on the City's property as a result of RFA's activity, regardless
of who the injured party may be. Notwithstanding the foregoing, the City shall, to the
extent permitted by law, indemnify and hold the RFA harmless for any and all demands,
claims, judgments, or liability for loss or damage arising from the City's negligent,
reckless and/or willful acts (including those of the City's employees, officials, or
agents).
4931-7633-7695, v. 1
31
It is further specifically and expressly understood that the indemnification provided
herein constitutes the RFA's waiver of immunity under Industrial Insurance, Title 51
RCW, solely for the purposes of this indemnification. This waiver has been mutually
negotiated and agreed to by the RFA and City. The provisions of this section shall
survive the expiration or termination of this Lease.
9. ENVIRONMENTAL LIABILITY/RISK ALLOCATION.
9.1. Definition. "Hazardous Substance" means any substance which now or in the future
becomes regulated or defined as Hazardous Substance or Hazardous Waste under any
federal, state, or local statute, ordinance, rule, regulation, or other law relating to human
health, environmental protection, contamination or cleanup, including, but not limited
to, the Comprehensive Environmental Response, Compensation and Liability Act of
1980 ("CERCLA"), 42 U.S.C. 9601 et seq., and Washington's Model Toxics Control
Act ("MTCA"), RCW 70.10SD.010 et seq.
9.2. Use of Hazardous Substances. The RFA covenants and agrees that Hazardous
Substances will not be used, stored, generated, processed, transported, handled,
released, or disposed of in, on, under, or above the Premises, except in accordance with
all applicable laws.
9.3. Current Conditions, Duty of Utmost Care, and Duty to Investigate
9.3.1. The City makes no representations about the condition of the Premises. With
regard to any Hazardous Substances that may exist in, on, under, or above the
Premises, the City disclaims any and all responsibility to conduct
investigations, to review any State records, documents or files, or to obtain or
supply any information to the RFA.
9.3.2. The RFA shall exercise the utmost care with respect to both Hazardous
Substances in, on, under, or above the Premises as of the Commencement
Date, and any Hazardous Substances that come to be located in, on, under, or
above the Premises during the Term of this Lease, along with the foreseeable
acts or omissions of third parties affecting those Hazardous Substances, and
the foreseeable consequences of those acts or omissions occurring as a result
of the RFA's use or occupancy of the Premises. The obligation to exercise
utmost care under this subsection 9.3 includes, but is not limited to, the
following requirements:
32
9.4. Notification and Reporting.
9.4.1. The RFA shall immediately notify the City if the RFA becomes aware of any
of the following:
a) A release or threatened release of Hazardous Substances in, on, under,
or above the Premises, any adjoining Premises, or any other Premises
subject to use by the RFA occurring as a result of the RFA's use or
occupancy of the leased Premises in violation of federal and state laws;
b) Any problem or liability related to, or derived from, the presence of any
Hazardous Substances in, on, under, or above the Premises, any
adjoining property, or any other property occurring as a result of the
RFA's use or occupancy of the Premises;
c) Any actual or alleged violation of any federal, state, or local statute,
ordinance, rule, regulation, or other law pertaining to Hazardous
Substances with respect to the Premises, any adjoining property, or any
other property subject to use by the RFA in conjunction with its use or
occupancy of the Premises;
d) Any lien or action with respect to any of the foregoing; or,
e) Any notification from the Environmental Protection Agency,
Department of Ecology, or King County that remediation or removal of
Hazardous Substances is or may be required at the Premises.
9.4.2. Upon request, the RFA shall provide the City with copies of any and all
reports, studies, or audits which pertain to environmental issues or concerns
associated with the Premises, and which were prepared for the RFA and
submitted to any federal, state, or local authorities pursuant to any federal,
state, or local permit, license, or law. These permits include, but are not limited
to, any National Pollution Discharge and Elimination System Permit, any
Army Corps of Engineers permit, any State hydraulics permit, any State Water
Quality certification, or any Substantial Development Permit.
9.5. Indemnification.
9.5.1. The RFA shall fully indemnify, defend, and hold the City harmless from and
against any and all claims, demands, damages, natural resource damages,
response costs, remedial costs, cleanup costs, losses, liens, liabilities,
penalties, fines, lawsuits, other proceedings, costs, and expenses (including
attorneys' fees and disbursements), that arise out of, or are in any way related
to:
a) The use, storage, generation, processing, transportation, handling, or
disposal of any Hazardous Substance or Hazardous Waste by the RFA,
its contractors, agents, employees, guests, invitees, or affiliates in, on,
under, or above the Premises, any adjoining property, or any other
property occurring as a result of the RFAs use or occupancy of the
Premises, during the Term of this Lease;
33
4931-7633-7695, v. 1
34
b) The release or threatened release of any Hazardous Substance or
Hazardous Waste, or the exacerbation of any Hazardous Substance or
Hazardous Waste contamination, in, on, under, or above the Premises,
any adjoining property, or any other property subject to use by the RFA
in conjunction with its use of the Premises, which release, threatened
release, or exacerbation occurs or occurred during the term of this Lease
and as a result of:
i. Any act or omission of the RFA, its contractors, agents, employees,
guests, invitees, or affiliates; or,
ii. Any foreseeable act or omission of a third party unless the RFA
exercised the utmost care with respect to the foreseeable acts or
omissions of the third party and the foreseeable consequences of
those acts or omissions.
9.5.2. In addition to the indemnifications provided in subsection 9.5.1, the RFA shall
fully indemnify the City for any and all damages, liabilities, costs, or expenses
(including attorneys' fees and disbursements) that arise out of or are in any
way related to the RFA's breach of the obligations of subsection 9.3.2. This
obligation is not intended to duplicate the indemnity provided in subsection
9.5.1 and applies only to damages, liabilities, costs, or expenses that are
associated with a breach of subsection 9.3.2 and which are not characterized
as a release, threatened release, or exacerbation of Hazardous Substances or
Hazardous Wastes.
9.5.3. The City shall notify the RFA in writing of any third -party claim with
reasonable promptness, and the RFA shall have the right to compromise or
defend any such claim, provided that such compromise or defense of such
claim does not negate the RFA's obligation to indemnify and hold the City
harmless.
9.5.4. The City shall release, indemnify, and hold the RFA harmless from any and
all liabilities, obligations, judgments, demands, damages, causes of action,
claims, costs, and expenses, including but not limited to all reasonable
attorney's fees and costs of suit, arising out of or in connection with any
contamination from hazardous waste or an environmental condition on the
Premises caused solely by the City, its agents and representatives.
9.6. Cleanup. If a release of Hazardous Substances or Hazardous Wastes occurs in, on,
under, or above the Premises, arising out of any action, inaction, or event described or
referred to in subsection 9.5, above, the RFA shall, at its sole expense, promptly take
all actions necessary or advisable to clean up the Hazardous Substances or Hazardous
Wastes. Cleanup actions shall include, without limitation, removal, containment and
remedial actions and shall be performed in accordance with all applicable laws, rules,
ordinances, and permits. RFA's obligation to undertake a cleanup under this subsection
9.6 shall be limited to those instances where the Hazardous Substances or Hazardous
Wastes exist in amounts that exceed the threshold limits of any applicable regulatory
cleanup standards. The RFA shall also be solely responsible for all cleanup,
administrative, and enforcement costs of governmental agencies, including natural
resource damage claims, arising out of any action, inaction, or event described or
referred to in subsection 9.5, above.
9.7. Sampling by the City, Reimbursement, and Split Samples.
9.7.1 The City may conduct sampling, tests, audits, surveys, or investigations
("Tests") of the Premises at any time to determine the existence, scope, or
effects of Hazardous Substances or Hazardous Wastes on the Premises, any
adjoining property, any other property subject to use by the RFA in
conjunction with its use of the Premises, or any natural resources. If such Tests,
along with any other information, demonstrates the existence, release, or
threatened release of Hazardous Substances arising out of any action, inaction,
or event described or referred to in subsection 9.5, above in violation of federal
or state law, the RFA shall promptly reimburse the City for all costs associated
with such Tests.
9.7.2 The City's ability to seek reimbursement for any Tests under this subsection
shall be conditioned upon the City providing the RFA written notice of its
intent to conduct any Tests at least fifteen (15) calendar days prior to
undertaking such Tests, unless such Tests are performed in response to an
emergency situation in which case the City shall only be required to give such
notice as is reasonably practical.
10. ASSIGNMENT AND SUBLETTING.
10.1. The RFA shall not sell, convey, mortgage, assign, pledge, sublet, or otherwise transfer
or encumber all or any part of the RFA's interest in this Lease or the Premises without
the City's prior written consent which may not be unreasonably withheld by the City.
In the event of such consent, each permitted transferee shall assume all obligations
under this Lease. No assignment, sublet, or transfer shall release, discharge, or
otherwise affect the liability of RFA. The consolidation of the RFA with another entity
or the formation of a regional fire authority in which the RFA is a participating
jurisdiction shall not constitute an assignment under this Lease. The City's consent shall
not be required for a sublease of the premises to another governmental entity providing
services that directly support and benefit the operation of the regional RFA.
11. INSURANCE. For the term of this Lease and any extension thereof:
11.1. The RFA shall procure and maintain, for the benefit of the RFA and the City, an
insurance policy on the Premises in the amount of the replacement cost, for damage
from fire; earthquake; and other perils. The proceeds payable on a claim against said
insurance policy for damage shall be used to repair damage to the building so insured.
However, if both the RFA and the City agree not to repair or replace said building, or
if the RFA elects to terminate this Lease as provided in subsection 12.1, all such
available insurance proceeds shall be retained by the City and all salvage resulting from
any risk covered by the RFA's insurance shall also belong to the City.
11.2. The RFA shall be responsible for maintaining its own fire and hazard insurance on RFA-
owned personal property and leasehold improvements placed within and on the
Premises by the RFA.
4931-7633-7695, v. 1
35
11.3. The RFA shall procure and maintain, insurance against claims for injuries to persons or
damage to property which may arise from or in connection with this Lease by the RFA,
its agents, representatives, employees, or subcontractors.
12. DAMAGE OR DESTRUCTION DUE TO CASUALTY. The Parties recognize that some or
all use of the Property or Premises may be interfered with or prevented because of fire,
earthquake, flood, storm, landslide, act of war, vandalism, theft, or other extraordinary casualty
("Casualty").
12.1. Material Damage. If the Premises are damaged or destroyed by fire or any Casualty
the parties shall meet and determine how long the repair and restoration will take within
thirty (30) days after date of such damage. After that determination has been made, RFA
shall have a period of thirty (30) days to terminate the Lease by giving written notice to
the City.
12.2. Repair after Damage. If the RFA does not give notice of the RFA's election to
terminate as provided in subsection 12.1, then the RFA shall, subject to the provisions
of this Section, and provided sufficient insurance proceeds are available, repair such
damage so that the Premises are restored to a condition of similar quality, character and
utility for the RFA's purposes. To assist with said repair work, the City shall provide
the RFA with any and all insurance proceeds it has received, or is entitled to receive,
from the insurance policy referenced in subsection 11.1. However, in no event shall the
City be obligated to provide the RFA with more money for repair work than is provided
by insurance proceeds in subsection 11.1.
13. DEFAULT AND REMEDIES.
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13.1. Acts Constituting Default. The RFA shall be in default of this Lease on the occurrence
of any of the following:
13.1.1. Failure to pay expenses when due;
13.1.2. Failure to comply with any law, regulation, policy, or order of any lawful
governmental authority;
13.1.3. Failure to comply with any other provision of this Lease;
13.1.4. Failure to cure a default pursuant to Section 13.2 below;
13.1.5. Proceedings are commenced by or against the RFA under any bankruptcy act
or for the appointment of a trustee or receiver of RFAs' Premises; or
13.1.6. The RFA vacates or abandons the Premises.
13.2. Failure to Cure. A default shall become an event of default ("Event of Default") if the
RFA fails to cure, or take positive steps to cure, the default within 30 days after the City
provides the RFA with written notice of default, which specifies the nature of the
default.
13.3. City's Remedies Upon Default. Upon an Event of Default, the City may terminate this
Lease and remove the RFA by summary proceedings or otherwise. The City's reentry
or repossession of the Property under this subsection shall not be construed as an
election to terminate this Lease or cause a forfeiture of rents or other charges to be paid
during the balance of the Term, unless the City gives a written notice of termination to
the RFA or termination is decreed by legal proceedings.
14. ENTRY BY THE CITY. The City shall have the right to enter the Premises at any reasonable
hour to inspect for compliance with the terms of this Lease upon twenty-four (24) hours' written
notice. The City and/or its agents shall comply with all of the RFA's work safety rules and
restrictions.
15.NOTICE. Any notices required or permitted under this Lease may be personally delivered,
delivered by certified mail, return receipt requested, to the addresses listed on the signature
page or to such other places as the parties may direct in writing from time to time. A notice
shall be deemed given and delivered upon personal delivery or three (3) days after being mailed
as set forth above, whichever is applicable.
16. MISCELLANEOUS.
16.1. Authority. The City and the RFA represent that each person signing on this Lease
on its behalf is authorized to do so.
16.2. Successors and Assigns. This Lease shall be binding upon and inure to the benefit
of the parties, their successors and assigns.
16.3. Headings. The headings used in this Lease are for convenience only and in no way
define, limit, or extend the scope of this Lease or the intent of any provision.
16.4. Waiver. The waiver by the City of any breach or default of any term, covenant, or
condition of this Lease shall not be deemed to be a waiver of such term, covenant,
or condition; of any subsequent breach or default of the same; or of any other term,
covenant, or condition of this Lease. The City's acceptance of a rental payment
shall not be construed to be a waiver of any preceding or existing breach other than
the failure to pay the particular rental payment that was accepted.
16.5. Cumulative Remedies. The rights and remedies of the City under this Lease are
cumulative and in addition to all other rights and remedies afforded to the City by
law or equity or otherwise.
16.6. Time is of the Essence. TIME IS OF THE ESSENCE as to each and every
provision of this Lease.
16.7. Invalidity. If any provision of this Lease shall prove to be invalid, void, or illegal,
it shall in no way affect, impair, or invalidate any other provision of this Lease.
16.8. Applicable Law and Venue. This Lease shall be interpreted and construed in
accordance with the laws of the State of Washington. Any reference to a statute
shall mean that statute as presently enacted or hereafter amended or superseded.
Venue for any action arising out of or in connection with this Lease shall be in the
Superior Court for King County, Washington.
16.9. Modification. Any modification of this Lease must be in writing and signed by the
parties. The City shall not be bound by any oral representations or statements.
4931-7633-7695, v. 1
16.10. Quiet Enjoyment. The City covenants and agrees that the RFA, upon performing
37
the terms and conditions of the Lease, may peacefully hold and enjoy the Premises
during said term without any interruption by the City, its successors or assigns, or
any person or company lawfully claiming by or through it.
16.11. Recording of Short Form Lease. Neither the City nor the RFA may record this
Lease without the other's prior approval, but the Parties will at any time at the
request of either party promptly execute duplicate originals of an instrument, in
recordable form, which will constitute a short form of this Lease, setting forth a
description of the Premises, the terms of this lease and other provisions hereof,
except the rental and other provisions as either party may request, which may be
recorded.
16.12. Duplicate Originals. This Lease Agreement may be executed in duplicate
originals.
THIS AGREEMENT requires the signature of all parties and is executed as of the date of
the last signature below and is effective as of January 1, 2025.
PUGET SOUND REGIONAL CITY OF TUKWILA
FIRE AUTHORITY
By: By:
Chief Mayor
DATE: DATE:
APPROVED AS TO FORM: ATTEST:
RFA Attorney City Clerk
APPROVED AS TO FORM:
City Attorney
NOTICES TO BE SENT TO: NOTICES TO BE SENT TO:
Puget Sound Fire Administration
20811 84th Ave S
Kent, WA 98032
City of Tukwila Mayor's Office
6200 Southcenter Blvd
Tukwila, WA 98188
38
EXHIBIT A
TUKWILA STATION 54 LEASE
ABBREVIATED LEGAL DESCRIPTION
ADAMS HOME TRS LESS CO RD
Also known as King County Parcel No. 004000-0365, located at 4237 S. 144th Street, Tukwila,
Washington 98168
4931-7633-7695, v. 1
39
40
City of Tukwila
Thomas McLeod, Mayor
INFORMATIONAL MEMORANDUM
TO: Finance Committee
FROM: Joel Bush, Chief Technical Officer
BY: Mike Marcum, Technical Operations Supervisor
CC: Mayor McLeod
DATE: 3/17/25
SUBJECT: Dell Lease Agreement- PD Rugged Tablets
ISSUE
TIS is seeking Council authorization to enter into a four-year lease agreement with Dell
Financial Services.
BACKGROUND
The device lease will refresh the PD's fleet of rugged tablets, which are currently over 5 years
old.
DISCUSSION
Attached is the Dell Financial Services proposal for review by the Finance Committee and
Council.
FINANCIAL IMPACT
The annual cost will not exceed $57,289.61, or $212,026.38 over four years. This is a routine,
budgeted expense.
RECOMMENDATION
The Finance Committee is being asked to review the rugged tablet refresh on 3/24 and forward
it to the Regular Meeting consent agenda on 4/7/25 for approval, authorizing the mayor to sign
the lease agreement.
ATTACHMENTS
Dell Proposal No. 0000129796.1
41
Dell
Financial
Services
Technology Payment Solutions
03/18/25
Prepared for: TUKWILA, WASHINGTON
Proposal No. 0000129796.1
Expiration Date: 04/17/2025
Quote
Description Product Subtotal
3000186832117.1 Dell Latitude 7230 Rugged $192,427.38
Extreme Tablet
Dell Latitude 7230 Rugged $159,301.89
Extreme Tablet
Dell Dock Fischer UD22 $4,168.80
Dell Keyboard for Latitude $28,956.69
7230 Rugged Extreme Tab
Subtotal:
$192,427.38
Taxes, Shipping & Fees:
'Personal Property Management Fee may apply
Rate Factor & Payment
Financed Amount
Total Amount: Rate Factor & Payment
Financed Amount
Structure Notes
Madison Cupples
DFS Account Manager
(512) 639-8143
l MadisonCupples@Dell.com
48 Month
TELP
Payments Annual
Due Advance
Interim Rent None
Rate Factor Payment
0.27020 $51,993.95
0.27020 $43,043.43
0.27020 $1,126.41
0.27020 $7,824.11
0.27020 $51,993.95
0.27020 $5,295.66
$19,599.00
Proposal Notes
Please note, this includes estimated taxes.
End of Term Option(s):
Tax Exempt Lease Purchase (TELP) options:
1. Exercise the option to purchase the products for one dollar; or,
2. For an agreed upon fee, return all products to DFS at lessee's expense.
Payment solutions provided and serviced by Dell Financial Services L.L.C. or its affiliate or designee ("DFS") to qualified customers. Offers may not be available or may vary in certain countries. Where available, offers may be changed without notice and are
subject to product availability, credit approval, execution of documentation provided by and acceptable to DFS, and may be subject to minimum transaction size. Offers not available for personal, family or household use. Restrictions and additional requirements
may apply to transactions with governmental or public entities. Proposal is property of DFS, contains confidential information and shall not be duplicated or disclosed in whole or part. Proposal is not a firm offer of a payment solution. Pricing and rates based
upon the final amount, configuration and specification of the supplied equipment, software, services or fees. Prorata payment may be due in the first payment cycle. Proposal excludes additional costs to customer such as shipping, maintenance, fling fees,
applicable taxes, insurance and similar items. Proposal valid through the expiration date shown above, or if none is specified, for 30 calendar days from date of presentation. Upon expiration, lease rates may be changed in the event that market rates change.
Additional Information:
LEASE QUOTE: The Lease Quote is exclusive of shipping costs, maintenance fees, fling fees, licensing fees, property or use taxes, insurance premiums and similar items which shall be for Lessee's account. Lessee will pay payments and all other amounts
without set-off, abatement or reduction for any reason whatsoever. Additionally, Lessee shall declare and pay all sales, use and personal property taxes to the appropriate taxing authorities. If you are sales tax exempt, please provide a copy of your Exemption
Certificate with the Lease Contract. If Lessee provides the appropriate tax exemption certificates to DFS, sales and use taxes will not be collected by DFS. However, if your taxing authority assesses a personal property tax on leased equipment, and if DFS pays
that tax under your lease structure, Lessee must reimburse DFS for that tax expense in connection with the Lessee's lease.
PURCHASE ORDER: The Purchase Order must be made out to Dell Financial Services L.L.C., One Dell Way, RR8-23, Round Rock, TX 78682. The Purchase Order will need to include the quote number, quantity and description of the equipment. Please indicate
that the PO is for a lease order and shows the type of lease, the term length, and payment frequency. The date of the lease quote referenced should be included. Please be sure to include any applicable shipping costs as a line item and include your address as the
SHIP TO destination.
DOCUMENTATION: The Agreement executed between DFS and Lessee shall include all required leasing terms and conditions, including, but not limited to, payment terms, non -appropriation, essential use, authority, taxes, and insurance. In addition to a duly
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City of Tukwila
Thomas McLeod, Mayor
INFORMATIONAL MEMORANDUM
TO: Finance & Governance Committee
FROM: Aaron BeMiller, Finance Director
BY: Julie Hatley, Senior Fiscal Coordinator — Minimum Wage Ordinance
CC: Thomas McLeod, Mayor
DATE: 3/24/2025
SUBJECT: 2024 Tukwila Labor Standards Year -End Review
ISSUE
Staff is reporting Tukwila Labor Standards 2024 year-end review.
BACKGROUND
On November 8, 2022, City of Tukwila voters overwhelmingly approved, at 82% to 18%,
Initiative Measure No. 1 concerning labor standards for certain employees.
The measure added Tukwila Municipal Code (TMC) Chapter 5.63 and TMC 5.04.113.
TMC 5.63 states the intent of the voter approved legislation is to establish fair labor
standards and protect worker rights by:
1) Ensuring the vast majority of employees in Tukwila receive a minimum wage
comparable to employers in SeaTac and Seattle;
2) Requiring covered employers to offer additional hours of work to qualified part-
time employees before hiring new employees to fill those hours;
3) Adopting enforcement requirements.
The main effect of TMC 5.63 is to ensure that, to the extent reasonably practicable, people
employed in Tukwila have good wages and access to sufficient hours of work.
In addition, Initiative Measure No. 1 assigned the City's Finance Department as the entity
responsible for ensuring compliance with the intent and requirements of TMC 5.63.
TMC 5.63 — also known as the Minimum Wage and Fair Access to Additional Hours of
Work Ordinance — went into effect July 1, 2023. Council subsequently approved hiring an
FTE Senior Fiscal Coordinator to develop and manage the program starting January 2024.
DISCUSSION
In 2024, staff was directed to identify and track annual compliance certifications, required
from employers covered by TMC 5.63, to build an accurate database for actionable insights
and inform decision -making for resource allocation and capacity planning.
43
INFORMATIONAL MEMO
Page 2
To achieve this goal, staff continues to strategically research City businesses to identify
each covered employer and their payroll or human resources contact information to
establish contact, provide education, and request certification form.
In 2024, 5% of the 2,400 estimated employers in Tukwila certified their compliance. As a
result of database building efforts in 2024 and Q1 2025, 9% of possible annual compliance
certifications have been received in 2025. This is an increase of 4% compared to 2024 in
Q1 2025 alone.
On July 1, 2025, the Ordinance will have been in effect for two years. As the database of
employers covered by the Ordinance grows, a pattern of non -compliant employers will be
assessed. Staff will work with City Leadership and City Attorney for interpretation of TMC
5.63 enforcement requirements for repeated, intentional non -compliant employers.
The attached chart provides a comparison of Tukwila's, Renton's, and SeaTac's minimum
wage programs.
RECOMMENDATION
Information Only.
https://tukwilawa.sharepoint.com/sites/mayorsoffice/cc/Council Agenda Items/Finance/FINAL DRAFT_3-24-2025_Minimum Wage Ordinance_F&G
Presentation.docx
44
Attachment to Labor Standards 3/24/2025 Finance & Governance Informational Memorandum
Comparison Chart of Tukwila, Renton, and SeaTac Minimum Wage Programs
Comparisons
City of Renton
City of SeaTac
City of Tukwila
Labor Standards Name
Labor Standards for Certain Employees
Employment Standards Ordinance
Labor Standards for Certain Employees
(aka Minimum Wage & Fair Access to
Additional Hours of Work Ordinance)
Became Law By
Voter Initiative - Measure No. 23-02
City Council - Proposition 1
Voter Initiative - Measure No. 1
Year Effective
2024
2014
2023
Focus
All Large Employers, Mid -Size Employers,
and certain Franchises.
Includes FTE, part-time, and temporary.
Certain Hospitality Employers
& Transportation Employers
(larger employers meeting
requirements)
All Large Employers, Mid Size Employers,
and certain Franchises.
Includes FTE, part-time, and temporary.
2025 Minimum Wage
$20.90 Large Employers
$18.90. Mid -Size Employers
(increases to $19.90 July 1, 2025)
$20.17
$21.10 Large Employers
$20.10 Mid -Size Employers
(until phase -in period ends July 1, 2025)
Estimated Employers
Covered by Ordinance
2,469
72
2,400
Land Area in Square Miles
23.5
10
9.6
Estimated Resident Total
108,800
31,799
21,780
Requires Annual
Compliance Certifications
Yes. At in-house City license renewal.
No
Yes. January 31stdeadline.
Complaint Investigations
Performed In -House
No (L&I)
No (L&I)
Yes
Full Customer Service
Offered
No
City Hall phone number and
staff email on website.
Employers:
Refer employers to
consult an attorney.
Employees:
Ordinance same as Tukwila, but
refer complainants to L&I.
Lack adequate staff to do more.
No
Feedback button on web page.
Employers:
Refer employers to
consult an attorney.
Employees:
Asks for Claim Form, but refer
complainants to L&I.
Lack adequate staff to do more.
Yes
Staff direct phone number and email on
website for daily support.
Building employer database.
Comprehensive Administrative Rule
w/FAQs & Examples.
Employers:
Relationship building with businesses
& associations (host Q&As).
(Rotary, Washington Retail Association)
Education & Communication.
Web portalfor compliance forms.
Employees:
Community Outreach.
City Complaint Form w/possible
CityAttorney Investigation.
Source Citations:
City of Renton website and their Tax & Licensing Manager
City of SeaTac website and their Finance Director
City of Tukwila website and their Senior Fiscal Coordinator
United States Census
45
46
City of Tukwila
Tom McLeod, Mayor
Finance Department —Aaron BeMiller, Director
INFORMATIONAL MEMORANDUM
TO: Finance & Governance Committee
CC: Mayor McLeod
FROM: Aaron Be Miller, Finance Director
By: Tony Cullerton, Deputy Finance Director
DATE: March 24, 2025
SUBJECT: 2024 Year -End Financial Report
SUMMARY
The City of Tukwila's 2024 Year -End Financial Report provides a comprehensive overview of the
city's fiscal performance, detailing key revenue drivers, expenditure patterns, and budget
variances. This report highlights the factors influencing financial outcomes, such as rising sales tax
revenue and shifts in departmental spending, while offering insights into strategic adjustments
made to balance growth and sustainability. By examining these financial dynamics, the report aims
to inform stakeholders about the city's financial health and guide future budgeting decisions.
Discussion
The 2024 Annual Year -End Report provides an overview of the city's financial performance,
highlighting key figures, significant trends, and notable items. While the financial data presented is
largely complete, final year-end accruals and adjustments are still in progress to prepare the 2024
Annual Comprehensive Financial Report (ACFR).
In 2024, revenues exceeded the budget by 2.6%, reflecting an increase of $2.1 million, primarily
driven by higher -than -expected sales tax collections. Expenditures remained 0.3% below budget,
resulting in savings of $241,884. The City successfully met the requirements of both the General
Fund Balance Policy and the Contingency Fund Balance Policy.
Attachments
• Year -End 2024 Financial Report
47
City of Tukwila
Year End Financial Report
January — December
2024
General Fund Overview
For 2024, the General Fund met both the General Fund Balance Policy and the Contingency Fund
Balance Policy.
General Fund
Revenues
Expenditures
Net
2024 Beginning Fund Balance
2024 Ending Fund Balance
2024 Budget
78,683,209
81,863,699
(3,180,490)
2024 Actual $Diff % Diff
80,751,914 2,068,705 2.6%
81,621,815 (241,884) -0.3%
(869,902)
24,991,228
24,121,326
General Fund - Required Ending Fund Balance Calculation
2023 Ongoing Revenues
18% of Ongoing Revenues
2024 GF Unassigned FB
Amount Over/(Under)
70,536,362
12,696,545
17,836,267
$5,139,722
Contingency Fund - Required Ending Fund Balance Calculation
10% of 2022 Ongonig Revenues
Contingency Fund
Amount Over/(Under)
7,053,636
7,154,961
$101,325
49
83,000
82,000
81,000
80,000
79,000
78,000
General Fund
2024 Revenues & Expenditures
Budget vs Actual
78,683
80,752
81,864
81,622
Revenues Expenditures
■ 2024 Budget ■ 2024 Actual
Revenues came in 2.6% over budget. This represents an increase of $2.1 million. The key driver that led
to the increase in revenues over budget was Sales Tax.
General Fund expenditures finished the year 0.3% under budget. The top expenditure categories include
Salaries, at 51 % of the total General Fund budget and Professional Services, at 40% of the total budget.
50
General Fund Overview - Revenues by Category
Below are General Fund revenues by category. Variances from the prior year that are greater than 10%
AND $250k are listed below and further explained in the report.
Year -to -Date as of December 31, 2024
SUMMARY BY REVENUE TYPE
BUDGET
ACTUAL
COMPARISON OF RESULTS
2024
Budget
2022
2023
2024
Allocated Budget
vsActuals
OVER/(UNDER)
%
Change
Received
$
2023/2024
%
2023/2024
Property Tax
18,124,000
17,233,512
17,536,670
17,510,903
(613,097)
97%
(25,767)
-0.1%
Sales Taxes -Retail
21,725,000
21,023,287
21,881,507
23,905,762
2,180,762
110%
2,024,255
9.3%
Use Taxes
930,000
953,890
970,202
940,689
10,689
101%
(29,514)
-3.0%
Admission Taxes
875,000
819,932
842,387
904,888
29,888
103%
62,500
7.4%
Utility Taxes
4,300,000
3,949,799
4,125,408
4,412,082
112,082
103%
286,674
6.9%
Business & Occupation Tax
3,000,000
0
0
2,100,831
(899,169)
70%
2,100,831
0.0%
Interfund Utility Taxes
2,784,300
2,404,685
2,567,243
2,684,965
(99,335)
96%
117,722
4.6%
Gambling & Excise Taxes
4,665,700
4,964,964
4,464,521
4,294,934
(370,766)
92%
(169,587)
-3.8%
Total Tax Revenue
56,404,000
51,350,070
52,387,938
56,755,053
351,053
101%
$4,367,114
8.3%
Business Licenses
3,230,000
2,939,066
3,243,556
2,691,302
(538,698)
83%
(552,254)
-17.0%
Rental Housing permits
45,000
64,605
57,751
43,233
(1,767)
96%
(14,518)
-25.1%
Building Permits
1,813,743
1,799,493
2,430,331
2,279,459
465,716
126%
(150,872)
-6.2%
Franchise Fees
508,000
573,391
589,509
802,094
294,094
158%
212,584
36.1%
Total Licenses and Permits
5,596,743
5,376,555
6,321,147
5,816,088
219 345
104%
($505,059)
-8.0%
Sales Tax Mitigation Pyments
508,376
794,337
635,470
508,376
(0)
100%
(127,094)
-20.0%
SCLAgreement
2,300,000
2,416,079
2,651,351
3,033,985
733,985
132%
382,634
14.4%
Grant Revenues
2,951,608
2,882,099
3,668,912
2,904,336
(47,272)
98%
(764,576)
-20.8%
State Entitlements
510,500
503,242
661,534
664,806
154,306
130%
3,272
0.5%
Intergovernmental Revenue
654,000
566,979
704,493
764,287
110,287
117%
59,794
8.5%
Total Intergovernmental Revenue
6,924,484
7,162,736
8,321,760
7,875,790
951,306
114%
($445,971)
-5.4%
General Government Revenue
16,620
26,040
22,703
16,594
(26)
100%
(6,110)
-26.9%
Security revenue
1,739,150
978,782
1,179,543
1,408,513
(330,637)
81%
228,971
19.4%
Transportation Revenue
20,000
1,961
288
450
(19,550)
2%
162
56.3%
Plan Check and Review Fees
832,481
834,728
1,258,163
795,012
(37,469)
95%
(463,151)
-36.8%
Culture and Recreation Fees
232,870
143,197
166,621
298,439
65,569
128%
131,817
79.1%
Fines and Penalties
754,275
480,632
311,630
426,805
(327,470)
57%
115,176
37.0%
OTHER INCOME
125,650
450,568
566,570
674,485
548,835
537%
107,915
19.0%
Total Charges for Services
3,721,046
2,915,909
3,505,517
3,620,298
(322,113)
97%
$114,781
3.3%
TOTAL OPERATING REVENUE
72,646,273
66,805,270
70,536,362
74,067,228
1,420,955
102%
$3,530,866
5.0%
Indirect Cost Allocation
2,963,517
2,687,997
2,822,397
2,963,517
0
100%
141,120
5.0%
Investment Earnings
250,000
(494,257)
770,383
953,322
703,322
381%
182,939
23.7%
Rent & Concessions
1,035,570
192,355
466,505
1,224,107
188,537
118%
757,602
162.4%
Transfers In
1,787,849
2,553,951
1,323,249
1,543,740
(244,109)
86%
220,491
16.7%
Bond Proceeds
0
98,699
2,561,209
0
0
#DIV/0!
(2,561,209)
-100.0%
Sale of Capital Assets
0
0
0
0
0
#DIV/0!
0%
0.0%
Total Non Operating Revenue
6,036,936
5,038,744 I
7,943,744
,84,686
647,750
111%
($1,259,058)
-15.8%
TOTAL REVENUE 78,683,209
71,844,015
78,480,106
80,751,914
5,502,407
103%
$2,271,808
2.9%
%of Year
100%
51
Revenue Category Table and Chart
Revenue Category
Tax
Licenses and Permits
Intergovernmental
Charges for Services
Non -Operating Income
Total
Amount %
56,755,053 70.3%
5,816,088 7.2%
7,875,790 9.8%
3,620,298 4.5%
6,684,686 8.3%
80,751,914 100.0%
2024 Revenues
8.3%
4.5%
9.8%
7.2% 0111.11In'-
70.3%
■ Tax ■ Licenses and Permits ■ Intergovernmental ■ Charges for Services ■ Non Operating Income
52
Business Licenses - Business licensing revenue decreased 17% in 2024 compared to 2023. The
decrease in revenue is because of a lower employee count in 2024 as well as, there was a timing issue
where one large business renewed their business license one week after the 2024 cutoff, resulting in
those revenues being reported in 2025.
Franchise Fees Franchise Fees are up 36% over the prior year.
Sales Tax Mitigation Payments are on a declining schedule. Sales Tax Mitigation will end on June 30,
2026.
SCL Agreement — Received large back pay of $192k.
Grant Revenues finished the year $746,576 less than the prior year.
Plan Check and Review Fees are a function of charges for services pertaining to the work of permitting
in DCD. This is a volatile revenue that is difficult to tie to market conditions.
Culture and Recreation Fees are up significantly as a result of an increase in participation in Recreation
programing.
Rent & Concessions — Short -Term facility rentals in TCC and TFORCE Freight Long -Term Lease.
Business & Occupation Tax — We budgeted $3 million, prior to understanding the timing of the
revenues. Quarter 4 revenues are received in the first quarter of the following year.
53
General Fund Revenue Charts
Property Tax
2024 Budget
2022 Actual
2023 Actual
2024 Actual
Actual less
Budget
2024 vs 2023 $
Diff
% Diff
18,124,000
17,233,512
17,536,670
17,510,903
(613,097)
(25,767)
-0.1 %
Property tax is the most stable and predictable revenues. 2024 had a 0.1 % decrease from the prior year.
The decrease represents $25,767.
17,600
7 17,550
17,500
0 17,450
~ 17,400
17,350
17,300
17,250
17,200
17,150
17,100
17,050
17,234
2022 Actual
Property Tax
Jan -Dec
2022 - 2024
17,537
17,511
2023 Actual 2024 Actual
54
Sales Tax
2024 Budget
2022 Actual
2023 Actual
2024 Actual
Actual Tess
Budget
2024 vs 2023 $
Diff
% Diff
22,655,000
21,977,177
22,851,709
24,846,451
2,191,451
1,994,742
8.7%
Sales Tax increased 8.7% over the prior year. Inflation played a significant role. Increases in prices,
resulting in increased sales tax.
Thousands
25,500
25,000
24,500
24,000
23,500
23,000
22,500
22,000
21,500
21,000
20,500
21,977
2022 Actual
Sales Tax
Jan - Dec
2022 - 2024
22,852
24,846
2023 Actual 2024 Actual
55
Utility Tax
2024
Budget
2022
Actual
2023
Actual
2024
Actual
Actual less
Budget
2024 vs 2023 $
Diff
% Diff
4,300,000
3,949,799
4,125,408
4,412,082
112,082
286,674
6.9%
Utility Tax increases 6.9%, representing $286,674 over the previous year. The largest increases
were in Gas and Electricity. Decreases were in Cable and Telecom.
Utility 2022 2023 2024 $ Change % Change
Cable 241,837 221,303 189,404 (31,899) -14.4%
Electric 1,684,968 1,744,101 1,903,993 159,892 9.2%
Gas 641,496 659,959 758,798 98,839 15.0%
Telecommunications 669,210 715,237 666,377 (48,860) -6.8%
Solid Waste General 712,704 785,009 893,509 108,500 13.8%
Total 3,950,216 4,125,610 4,412,082 286,472 6.94%
Thousands
4,500
4,400
4,300
4,200
4,100
4,000
3,900
3,800
3,700
3,950
2022 Actual
Utility Tax
Jan - Dec
2022 - 2024
4,125
4,412
2023 Actual 2024 Actual
56
Interfund Utility Tax
2024 Budget
2022
Actual
2023
Actual
2024
Actual
Actual
Tess
Budget
2024 vs 2023
$ Diff
%
Diff
2,784,300
2,404,685
2,567,243
2,684,965
(99,335)
117,722
4.6%
Interfund Utility Tax is a tax imposed upon the City for our use of utilities. This has increased 4.6% over
the prior year, coming in approximately $99,000 under budget and an increase over the prior year of
approximately $117,772.
Thousands
2,800
2,700
2,600
2,500
2,400
2,300
2,200
Interfund Utility Tax
Jan - Dec
2022 - 2024
2,405
2022 Actual
2,685
2,567
2023 Actual 2024 Actual
57
Gambling Tax
2024
Budget
2022
Actual
2023
Actual
2024
Actual
Actual less
Budget
2024 vs 2023
$ Diff
% Diff
4,665,700
4,964,964
4,464,521 4,294,934 (370,766)
(169,587)
-3.8%
The City of Tukwila has five casinos/card rooms within the city limits. One card room has been closed for
renovations, resulting in a slight decline in revenues when compared to the prior year.
Thousands
5,200
5,000
4,800
4,600
4,400
4,200
4,000
3,800
4,965
2022 Actual
Gambling Tax
Jan - Dec
2022 - 2024
4,465
4,295
2023 Actual 2024 Actual
11
58
Admission Tax
2024
Budget
2022
Actual
2023
Actual
2024
Actual
Actual
Tess
Budget
2024 vs 2023
$ Diff
% Diff
875,000
819,932
842,387
904,888
29,888
62,500
7.4%
Admission Tax revenue finished the year slightly above budget and 7.4% over the same period last
year.
920,000
900,000
880,000
860,000
840,000
820,000
800,000
780,000
760,000
819,932
2022 Actual
Admission Tax
Jan - Dec
2022 - 2024
842,387
904,888
2023 Actual 2024 Actual
59
Business Licenses
Actual
2024
2022
2023
2024
Tess
2024 vs 2023
Budget
Actual
Actual
Actual
Budget
$ Diff
% Diff
3,230,000
2,939,066
3,243,556
2,691,302
(538,698)
(552,254)
-17.0%
The reduction in Business License is a result of reduced employee count reported by businesses
and a timing issue where one large business renewed their business license after the 2024 cutoff.
N 3,500
g 3,000
vi
t • 2,500
i-
2,000
1,500
1,000
500
0
2,939
2022 Actual
Business Licenses
Jan - Dec
2022 - 2024
3,244
2,691
2023 Actual 2024 Actual
60
Building Permits
2024
Budget
2022
Actual
2023
Actual
2024
Actual
Actual less
Budget
2024 vs 2023 $
Diff
% Diff
1,813,743
1,799,493
2,430,331
2,279,459
465,716
(150,872)
-6.2%
Building Permits is volatile and difficult to forecast due to numerous external factors that affect
the economy and the region. Building Permits ended the year, 6.2% lower than last year. This
percentage represents a decline of $150,872 from the previous year.
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
1,799,493
2022 Actual
Building Permits
Jan - Dec
2022 - 2024
2,430,331
2,279,459
1
2023 Actual 2024 Actual
61
General Fund Overview — Expenditures by Department
General Fund expenditures ended the year 0.3% under budget. The majority of departments ended the
year with their expected department budget. A few departments came in slightly higher than anticipated.
Those increases have been identified and further explained below.
DEPARTMENT
BUDGET
ACTUAL
2024
Budget
2022 2023 2024
Budget
vs Actual
OVER/(UNDER)
%
Expended
$ Change % Change
2023/2024
City Council
393,067
356,579
366,378
379,671
(13,396)
_
96.6%
13,293 3.6%
Mayor's Office
2,405,513
2,176,819
2,308,617
2,691,788
286,275
111.9%
383,171 16.6%
Administrative Services
5,621,624
4,873,710
6,491,702
5,715,582
93,958
101.7%
(776,120) -12.0%
Finance Department
4,625,307
3,065,214
3,177,417
3,899,112
(726,195)
84.3%
721,695 22.7%
Rec Dept/ Parks Maint
5,808,439
4,846,653
5,110,670
5,357,225
(451,214)
92.2%
246,555 4.8%
Community Dev
5,063,237
4,273,322
4,582,457
5,066,216
2,979
100.1%
483,760 10.6%
Municipal Court
1,859,399
1,565,412
1,623,823
2,109,368
249,968
113.4%
485,544 29.9%
Police Department
24,212,875
18,868,518
21,267,400
24,054,433
(158,442)
99.3%
2,787,033 13.1%
Fire Department
16,605,441
15,158,419
15,087,708
16,661,942
56,501
100.3%
1,574,234 10.4%
PW Dept / Street Maint
8,002,142
7,000,206
7,171,066
7,338,932
(663,210)
91.7%
167,866 2.3%
Subtotal
74,597,044
62,184,851
67,187,238
73,274,269
(1,322,775)
98.2%
6,087,031 9.1%
Non Departmental
7,266,656
10,176,398
8,846,463
8,347,547
1,080,891
114.9%
(498,916) N/A
Total Expenditures
81,863,699
72,361,249
76,033,701
81,621,815
(241,884)
99.7%
5,588,115 7.3%
% of Year 100.04
Mayor's Office
• Employee separation package
• Increase in Professional Development
Administrative Services
• 2024 Budget miscalculation with Online Services — NeoGov.
Municipal Court
• Revenue backed expense (Blake Court decision)
• Court received approval for a 1.25 FTE increase.
Fire
• Contracted services
Non Departmental
• Asylees expenditures prior to July 2024, related to Riverton Park United Methodist Church.
15
62
General Fund Overview - Expenditures by Category
Year -to -Date as of December 31, 2024
BUDGET
ACTUAL
COMPARISON OF RESULTS
Budget
%
$ Change
%Change
2024
2022
2023
2024
vs Allocated Expended
Annual
OVER/(UNDER)
2023/2024
2023/2024
Salaries
28,083,897
30,114,781
23,711,940
27,990,130
(93,767)
99.7%
4,278,190
18.0%
Extra Labor
794,977
404,565
636,214
778,690
(16,287)
98.0%
142,476
22.4%
Overtime
797,180
2,603,186
1,538,172
1,534,204
737,024
192.5%
(3,969)
(0.3%)
Holiday Pay
250,000
490,172
248,642
282,335
32,335
112.9%
33,694
13.6%
FICA
2,299,308
1,917,780
1,897,933
2,225,890
(73,418)
96.8%
327,957
17.3%
Pension-LEOFF
690,494
1,022,802
627,753
606,665
(83,829)
87.9%
(21,088)
(3.4%)
Pension-PERS/PSERS
1,877,476
1,469,268
1,502,228
1,664,610
(212,866)
88.7%
162,382
10.8%
Industrial Insurance
616,066
689,029
417,744
458,121
(157,945)
74.4%
40,377
9.7%
Medical & Dental
5,818,916
7,312,010
5,407,414
5,833,058
14,142
100.2%
425,644
7.9%
Unemployment
0
37,205
34,230
39,741
39,741
#DIV/0!
5,510
16.1%
Uniform/Clothing
33,504
9,085
4,926
8,158
(25,346)
24.3%
3,232
65.6%
Total Salaries & Benefits
41,261,818
46,069,8841
36,027,1951
41,421,601
159,783
100.4%
5,394,406
15.0%
Supplies
640,401
612,325
547,604
505,130
(135,270)
78.9%
(42,474)
(7.8%)
Repairs & Maint Supplies
420,705
383,135
461,096
547,865
127,160
130.2%
86,769
18.8%
Resale Supplies
2,580
859
0
2,247
(333)
87.1%
2,247
#DIV/0!
Small Tools
228,078
179,442
270,919
263,224
35,145
115.4%
(7,695)
(2.8%)
Technology Supplies
112,364
96,274
323,566
86,430
(25,934)
76.9%
(237,137)
(73.3%)
Fleet Supplies
7,260
6,687
7,738
6,596
(664)
90.8%
(1,142)
(14.8%)
Total Supplies
1,411,387
1,278,7211
1,610,9231
1,411,491
104
100.0%
(199,432)
(12.4%)
Professional Services
25,694,051
6,904,463
22,255,045
25,327,858
(366,193)
98.6%
3,072,813
13.8%
Communications
468,177
515,789
473,134
519,202
51,024
110.9%
46,068
9.7%
Professional Development
532,851
395,311
452,144
501,534
(31,317)
94.1%
49,389
10.9%
Advertising
66,716
44,856
46,861
35,744
(30,972)
53.6%
(11,117)
(23.7%)
Rentals
319,003
188,473
1,003,426
215,714
(103,289)
67.6%
(787,712)
(78.5%)
Technology Services
1,081,907
786,143
610,245
1,426,529
344,622
131.9%
816,285
133.8%
Utilities
2,387,484
2,366,955
2,345,382
2,266,029
(121,455)
94.9%
(79,353)
(3.4%)
Repairs & Maint Services
1,483,739
2,567,904
1,535,753
1,801,703
317,964
121.4%
265,950
17.3%
Miscellaneous
701,220
626,722
472,941
508,647
(192,574)
72.5%
35,706
7.5%
Total Services
32,735,150
14,396,616
29,194,9301
32,602,959
(132,191)
99.6%
3,408,028
11.7%
Capital Outlay -Land
0
98,699
2,561,209
0
0
- (2,561,209)
(100.0%)
Other Improvements
0
0
0
0
0
-
0
#DIV/0!
Machinery & Equipment
590,000
289,145
1,093,290
334,066
(255,934)
56.6%
(759,224)
(69.4%)
Construction Projects
0
0
0
0
0
0
#DIV/0!
Total Capital Outlay
590,000
387,843
3,654,4991
334,066
(255,934)
56.6%
(3,320,433)
(90.9%)
Transfers Out
5,865,345
10,228,184
5,546,153
5,851,699
(13,646)
99.8%
305,546
5.5%
Total Non Operating Expens
5,865,345
10,228,184
5,546,153
5,851,699
(13,646)
99.8%
305,546
5.5%
Total Expenditures
81,863,700
72,361,249
76,033,701
81,621,815
(241,884)
99.7%
5,588,115
7.3%
% of Year
100.0%
63
General Fund Category Table and Chart
Salaries & Benefits 41,421,601 50.7%
Supplies 1,411,491 1.7%
Services 32, 602, 959 39.9%
Capital Outlay 334,066 0.4%
Transfers Out 5,851,699 7.2%
Total Expenses 81,621,815 100.0%
2024 Expenditures
0.4%
39.9%10
1.7%
50.7%
■ Salaries & Benefits ■ Supplies ■ Services ■ Capital Outlay
64
Thousands
50,000
45,000
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
46,070
General Fund Expenditure Categories
Salaries & Benefits
Jan - Dec
2022 - 2024
36,027
41,422
2022 2023 2024
Increase of 15%
• Salary adjustments
• Separation package
• Retro Pay
• Increase benefit rates (medical/dental)
• FICA increases as Salaries increase
65
1,800,000
1,600,000
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
1,278,721
Supplies
Jan - Dec
2022 - 2024
1,610,923
1,411,491
2022 2023 2024
Reduction of 12% over the prior year.
• Conversation about saving money towards end of biennium
66
35,000
co
• 30,000
0
t
H
25,000
20,000
15,000
10,000
5,000
0
14,397
Professional Services
Jan - Dec
2022 - 2024
29,195
32,603
2022 2023 2024
Increase of 11.7%
• Regional Fire Authority Contract
• Repairs & Maintenance Services
o RPUMC Parking Lot Clean up
o Valley Com Dispatch Svs. Radios/Telemetry
o TCC HVAC Replacement
67
Thousands
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
388
Capital Outlay
Jan - Dec
2022 - 2024
3,654
334
2022 2023 2024
Down 91 % from prior year
• TIS Network infrastructure purchases in 2023.
68
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
0
10, 228,184
Transfers Out
Jan - Dec
2022 - 2024
5,546,153
5,851,699
2022 2023 2024
• 2024 is consistent with the prior year.
• Debt Service paid in 2022 (LTGO)
• Capital Transfers in 2022 (Fund 104 — Bridges & Arterial Street)
Conclusion
The City of Tukwila's 2024 Year -End Financial Report highlights a significant sales tax revenue increase
of $2,024,255 (9.3%) above budget projections, contributing to overall revenue growth. Salaries and
services accounted for the largest expenditure categories, comprising 51 % and 40% of the General Fund
budget, respectively. Notable financial changes include revenue fluctuations across various categories,
such as a 17% decline in certain fees and a 7.4% rise in rental and concession income. Expenditures
rose in areas like the Regional Fire Authority contract and technology services, while some departments
achieved cost reductions toward the biennium's end. The City navigated evolving costs with adjustments
for market rate studies, retroactive pay, and increased benefit rates, reflecting a dynamic fiscal
landscape.
69
70
City of Tukwila
Tom McLeod, Mayor
Finance Department — Aaron BeMiller, Director
INFORMATIONAL MEMORANDUM
TO: Finance & Governance Committee
CC: Mayor McLeod
FROM: Aaron Be Miller, Finance Director
By: Tony Cullerton, Deputy Finance Director
DATE: March 24, 2025
SUBJECT: Investment and Debt Policies
SUMMARY
The Finance Department remains dedicated to identifying opportunities to enhance the quality of
service it provides. A key priority is the evaluation and optimization of both new and existing revenue
streams. Historically, the Treasury program has been underutilized due to previous leadership
priorities. To address this, the Finance Department is taking proactive steps by developing
comprehensive investment and debt policies. These policies will serve as strategic frameworks to guide
the City in strengthening its investment portfolio and financial management practices.
Discussion
Effective treasury investing is a key part of sound financial management for local governments. By
wisely investing surplus funds, the City of Tukwila can create additional revenue, improve cash flow,
and secure better returns while managing risks. These careful investments help ensure long-term
financial stability, allowing the City to navigate economic challenges and invest in important public
services and infrastructure. A strong treasury investment strategy not only meets the City's immediate
fiscal needs but also builds a foundation for sustainable economic growth and community resilience.
This strategy begins with clear investment and debt policies. The City recently received a Certificate of
Excellence for its Investment Policy from the Washington Public Treasurers Association (WPTA), an
honor that will be recognized at this year's WPTA conference. Additionally, the City's Debt Policy has
been submitted for consideration for this same prestigious award.
Summary
This is currently for discussion only. Our primary objective is to secure certification of the Debt Policy
before proceeding with a formal review of both the Investment and Debt Policies. At a later date, we
intend to move both policies through the official process by resolution to repeal and replace the existing
Investment Policy (Resolution 2034) and Debt Policy (Resolution 1840), ensuring they are updated and
aligned with current standards.
Attachments
• Attachment A - City Investment Policy
• Attachment B - City Debt Policy
• Attachment C - Press Release
71
Attachment A
City of4wila
Invemit Nolicy
2025
72
Table of Contents
1. Introduction 3
2. Governing Authority 3
3. Policy Statement 3
4. Scope 3
5. Objectives 3
A. Safety 4
B. Liquidity 4
C. Return on Investment 5
6. Standards of Care 5
A. Delegation of Authority and Responsibilities .. 5
B. Prudence 6
C. Ethics and Conflicts of Interest 6
7. Safekeeping, Custody and Controls 6
A. Delivery vs. Payment 6
B. Third -Party Safekeeping 7
8. Authorized Financial Dealers 8
A. Broker/Dealers 8
B. Investment Advisors 8
C. Depositories 9
D. Competitive Trans ns .. 9
9. Authorized and Su' e m 9
A. Authorized I tments .... 9
B. Suitable Invest is 10
C. Bank Collateraliza 11
D. Prohibited Investment 11
10. Investment Parameters 11
A. Diversification 11
B. Investment Maturity 12
C. Strategic Philosophy 13
11. Reporting Requirements 14
12. Policy Adoption 15
Glossary of Terms 16
2
73
1. Introduction
This Investment Policy defines the parameters within which funds are to be invested by the City
of Tukwila ("City"). This policy also formalizes the framework, of the City's Policy and Procedures
to provide the authority and constraints for the City to maintain an effective and judicious
management of funds within the scope of this policy.
These policies are intended to be broad enough to allow the Finance Director or authorized
designee to function properly within the parameters of responsibility and authority, yet specific
enough to adequately safeguard the investment assets.
2. Governing Authority
The City of Tukwila's investment authority is derived fro W Chapters 35A.40.050 and
35.39.032. The investment program shall be operated in c. ce with Washington Revised
Statutes and applicable Federal Law. All funds within i- scopthis policy are subject to
regulations established by the State of Washington.
3. Policy Statement
This policy establishes standards and guideli
all of the City of Tukwila's investable cash and
preservation of principal, provide liqu
market rate of return. All invest conf
the investment of public funds.
4. Scope
ire lion, management and oversight for
must be invested prudently to assure
for daily cash requirements, and provide a
to federal, state, and local statutes governing
This policy applies to a es of - City of Tukwila with regard to investing the financial assets
of the City. The City co - its funds to maximize investment earnings and to increase
efficiencies with regard to i stment pricing, safekeeping, and administration. Investment
income will be allocated to the various funds based on their respective participation and in
accordance with generally accepted accounting principles (GAAP). Principal and interest is
apportioned for the benefit of the various participating funds or for the benefit of the general fund.
(RCW 35.39.034) The city maintains the right to separate certain funds and exclude them from
the scope of this policy. Should bond covenants be more restrictive than this policy, funds shall
be invested in full compliance with those restrictions.
5. Objectives
All funds will be invested in a manner that is in conformance with federal, state and other legal
requirements. In addition, the objectives, in order of priority, of the investment activities will be as
follows:
3
74
A. Safety
Safety of principal is the primary objective of the City. To mitigate credit and interest rate
risk, investment decisions shall be undertaken in a manner that seeks to ensure
preservation of capital in the overall portfolio. To obtain this objective, the following steps
will be taken:
i. Credit risk. This is the risk of loss due to the financial failure of the security
backer. The city will minimize credit risk by:
1. Limiting exposure to poor credits and concentrating the
safest types of securities.
2. Diversifying the investment portfolio so that
securities will be minimized; and
3. Actively monitoring the investment portfoj
changing economic market conditions, et
4. Credit rating downgrade. If the credit
downgraded below the minimum r
security, the Finance Director shal
basis in order to determine if t
analysis of the credit rating on
apply the general objective of safet
level
luate the do
hould be
potential
issuer or
investments in the
losses
on
individual
oldings for rating changes,
a security is subsequently
new investment of that
rade on a case -by -case
eld or sold after further
ing basis. The Finance Director will
uidity, and return to make the decision.
ii. Interest rate risk. This is the risk t lue of securities in the portfolio will
fall due to increases in gen- al inte es. e city will mitigate the interest rate risk
by:
1.
Structuring
requirement
to sell securitie
2. I nves
m
3. In
esta
weight
B. Liquidity
olio so that securities mature to meet cash
ngoing operations, thereby avoiding the need
e open arket prior to maturity;
ds primarily in short-term instruments (i.e., investments
e year); and
liquidity funds in a manner that is consistent with the
turn objectives of this policy within the stated maximum
e maturity constraint.
The investment portfolio will be structured to meet all expected obligations in a timely
manner, to avoid premature sale of an investment at a loss of principal. The investment
portfolio will provide liquidity sufficient to enable the City to meet all cash requirements
that might reasonably be anticipated. This will be accomplished by either maintaining a
portion of the portfolio in investment vehicles offering daily liquidity at face value, such as
the Washington State Local Government Investment Pool (LGIP) or structuring the
portfolio so that securities mature concurrently with cash needs to meet anticipated
demands. Because all possible cash demands cannot be anticipated, the portfolio should
consist largely of securities with active secondary or resale markets.
4
75
C. Return on Investment
The investment portfolio will be structured with the objective of attaining a market rate of
return throughout economic cycles, commensurate with the investment risk parameters
and the cash flow characteristics of the portfolio.
D. Legality
The investment portfolio will be invested in a manner that meets RCW statutes and all
legal requirements of the City.
6. Standards of Care
A. Delegation of Authority and Responsibilities
i. Governing Body
The City Council, as the governing bo
responsibility for the portfolio. The C
manage the investment program in ac
35.39.032, 36.29.020 and City pand
investment policy.
ii. Delegation of Authority
The City Council d
Investment Officer
behalf of the In
Officer. Bot
granted c
City, wi etain ultimate fiduciary
esignate an investment officer to
ce with RCW sections 35A.40.050,
view and adopt any changes to the
Finance Director, or their designee, as the
rson may initiate investment transactions on
icer without the express written consent of the Investment
investment advisor shall maintain record of individuals
actions by the Investment Officer.
iii. Training: S •roc res shall include explicit delegation of authority to persons
responsible for - - ent transactions to provide adequate redundancy by properly
trained and infor . staff. All staff engaging in investment transactions shall attend
public investment training. Staff shall not engage in any allowable investment
transaction for which they cannot articulate a rationale for having done so.
iv. Finance Committee:
The Finance & Governance Committee shall meet at least annually to receive a report
on investment performance and investment compliance.
v. Registered Investment Advisor
The City may engage the services of an external registered investment adviser to
assist with the management of the City's investment portfolio in a manner that is
consistent with the City's objectives and this policy. Such advisers shall provide
recommendation and advice regarding the City investment program including but not
5
76
limited to advice related to the purchase and sale of investments in accordance with
this Investment Policy. Such advisers must be registered under the Investment
Advisers Act of 1940.
B. Prudence
The standard of prudence to be used by the Finance Director or any designees in the
context of managing the overall portfolio is the prudent person rule enacted by State
Statute (RCW 11.100.020) which states:
Investments will be made with judgment and care, under circumstances then
prevailing, which persons of prudence, discretion a intelligence exercise in the
management of their own affairs not in regard to culation but in regard to the
permanent disposition of the funds considering robable income as well as the
probable safety of the capital.
The Finance Director and authorized inves
accordance with the Finance Director's
Policy, and who exercise due diligence, shal
credit risk or market price change of a investm
are reported in a timely fashion
developments.
C. Ethics and Conflicts of I
Officers and designate
personal business activit
program, or wh'
Employees a
material fina
jurisdiction, an
positions that cou
officers shall subord
nt officers aemployees who act in
p -dures and the City's Investment
ved of personal responsibility for the
rovided deviations from expectations
is .ction is taken to control adverse
d in the investment process shall refrain from
ould co flict with the proper execution of the investment
'r their ability to make impartial investment decisions.
Is shall disclose to the City Manager in writing any
in financial institutions that conduct business within this
further disclose any large personal financial/investment
ed to the performance of the City's portfolio. Employees and
their personal investment transactions to those of the City of
Tukwila, particularly with regard to the time of purchases and sales.
Persons authorized to invest shall not accept gifts form the institutions with which the City
places investments. Occasional business meals are acceptable and must be reported to
the Finance Director and Finance Committee.
7. Safekeeping, Custody and Controls
A. Delivery vs. Payment
All trades of marketable securities will be executed (cleared and settled) on a delivery vs.
payment (DVP) basis to ensure that securities are deposited in the City's safekeeping
institution prior to the release of funds.
6
77
B. Third -Party Safekeeping
Prudent treasury management requires that all purchased securities be bought on a
delivery versus payment (DVP) basis and be held in safekeeping by the City, an
independent third -party financial institution, or the City's designated depository.
The City's Finance Director shall designate all safekeeping arrangements and an
agreement of the terms executed in writing. All securities will be receipted and recorded
based on the terms in the custodial contract. The third -party custodian shall be required
to provide a monthly statement to the City listing at a minimum each specific security, book
yield, description, maturity date, market value, par value, purchase date, and CUSIP
number. The City will have online access through the safekeeping bank for verification of
the account holdings and transactions.
All collateral securities pledged to the City for certificat
held in a segregated account at the issuing financi
State's Public Deposit Protection Commission (PD
C. Performance Standards / Benchmark
The investment portfolio is expected to pro
interest rate cycles but may underperfrm or ou
management portfolio shall be man. _ •ng
a specific benchmark, i.e. 3-Year Con
Index, etc.].
D. Downgraded Securiti
The City may, from time
the event a ratin
will review an
Committee.
the Finance Dir
continue to hold
eventual realization
E. Internal Controls
f deposit or demand shall be
titution that is reporting to the
ilar returns to the benchmark over
orm in certain periods. The City's cash
parison for market yield of [Name
Treasury Index, 0-3 year Treasury
be inv 'ted in a security whose rating is downgraded. In
e minimum allowed by this policy, the Finance Director
ropriate plan of action to the Council via the Finance
an Investment Advisor, that Investment Advisor shall notify
ommend a plan of action within one month. The City may
aded investment to maturity if a probable outcome is the
value, rather than a realized loss if divested prior to maturity.
The Finance Director is responsible for establishing and maintaining an internal control
structure designed to ensure that the assets of the City are protected from loss, theft or
misuse. Specifics for the internal controls shall be documented in an investment
procedures manual.
The internal control structure shall be designed to provide reasonable assurance that
these objectives are met. The concept of reasonable assurance recognizes that the cost
of a control should not exceed the benefits likely to be derived and the valuation of costs
and benefits requires estimates and judgments by management. The internal controls
shall address the following points at a minimum:
7
78
i. Control of collusion
ii. Separation of transaction authority from accounting and recordkeeping
iii. Custodial safekeeping
iv. Avoidance of physical delivery securities of marketable securities
v. Clear delegation of authority to subordinate staff members
vi. Written confirmation of transactions for investments and wire transfers
vii. Dual authorizations of wire transfers
viii. Staff training and
ix. Review, maintenance and monitoring of security procedures both manual and
automated.
F. External Controls
The Office of the State Auditor requires that in accordance with Revised Code of
Washington 43.09.260, the City must undergo annual fin cial examinations performed
by State Examiners. Investment management is to b cluded as part of the annual
independent audit to assure compliance with this inv nt policy.
8. Authorized Financial Dealers
A. Broker/Dealers
The Finance Director or designee sh
financial institutions and broker/deal
investment purposes. Any fir.- eligi
and deletions to the list • - ade
financial institutions w
Director with the follow'
i. Annual
ii. Proof
iii. Proof
iv. A comp)
City Invest
B. Investment Advisors
tatements.
dustry Regulatory Authority) certification.
ith the State of Washington.
ealer questionnaire and a certification of having read the
icy.
view annually a list of all authorized
proved to transact with the City for
make an application to the City. Additions
the City's discretion. All broker/dealers and
ess with the City must supply the Finance
The City may contract with an external investment advisor to assist with the management
of the City's investment portfolio in a manner that is consistent with the City's objectives
and this policy. Advisors must be registered under the Investment Advisers Act of 1940
and must act in a non -discretionary capacity, requiring approval from the City prior to all
transactions.
The Finance Director or designee may utilize the investment advisor's approved
broker/dealer list in lieu of the City's own approved list. The advisor must submit the
approved list to the City annually and provide updates throughout the year as they occur.
The advisor must maintain documentation of appropriate license and professional
credentials of broker/dealers on the list. The annual investment advisor broker/dealer
review procedures include:
8
79
FINRA Certification check
- Firm Profile
- Firm History
- Firm Operations
- Disclosures of Arbitration Awards, Disciplinary and Regulatory Events
- State Registration Verification
ii. Financial review of acceptable FINRA capital requirements or letter of credit for
clearing settlements.
The advisor may be authorized through the contracted agreement to open accounts on
behalf of the City with the broker/dealers on the approved broker/dealer list. The City will
receive documentation directly from the brokers for account verification and regulatory
requirements.
C. Depositories
The City will only place funds exceeding t
who are currently participating in t
Compliance/listing with the PDPC will be ver
annually.
D. Competitive Transactions
Transactions must be
securities and interfun
provided from at least th
electronic tradin
other securitie
Advisor han
as requested.
DIC insurance limits with banks
hington State PDPC program.
by the Finance Director or designee
mpetitive basis and documented, excluding
City of Tukwila. Competitive prices should be
ara e • .kers, financial institutions or through a national
purchased security is only offered by one broker, then
ure may be used for documentation purposes. If an
ions, then they must provide the competitive documentation
9. Authorized and • ble Investments
A. Authorized Investments
All investments of the City are limited by RCW, principally RCW 35A.40.050 and
39.59.020.
Additional Specifications:
• This policy recognizes S&P, Moody's and Fitch as the major Nationally Recognized
Statistical Ratings Organizations (NRSRO).
• Minimum credit ratings and percentage limitations apply to the time of purchase.
• All securities must be purchased on the secondary market and may not be purchased
directly from the issuer.
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• Securities rated in the broad single -A category with a negative outlook may not be
purchased. Portfolio holdings of corporate notes downgraded to below single A and
portfolio holdings of securities rated single A with their outlooks changed to negative
may continue to be held. No additional purchases are permitted.
B. Suitable Investments
U. S Treasury Obligations: Direct obligations of the United States Treasury.
US Agency Obligations: US Government Agency Obligations and US Government
Sponsored Enterprises (GSEs) which may include, but are not limited to the following:
Federal Farm Credit Banks Funding Corporation (FFCB), Federal Home Loan Bank
(FHLB), Federal National Mortgage Association (FNMA), Federal Home Loan Mortgage
Corporation (FHLMC), and Tennessee Valley Authority (TVA).
Supranational Bonds: United States dollar deno
obligations that are issued or guaranteed by supran
the time of investment, the institution has the Uni
These include: International Bank for Reconstr on
Bank); the International Finance Corporatio C); th
and the Inter -American Development Bank
Municipal Debt Obligations: Bonds
the State of Washington, General
the time of investment the bonds mu
nationally recognized rating a
Corporate Notes: Un
investment policies an
notes must be rated at le
that rate the not
maturity mus
portfolio can
purchased from
the note is 3% of
may be purchased fr
ted bonds, notes or other
institutions, provided, that at
as its largest shareholder.
elopment (IBRD or World
velopment Bank (ADB)
Washington, any local government in
utside the State of Washington; at
e three highest credit ratings of a
of Tukwila is not required to be rated.
ations purchased in accordance with the
d by the State Investment Board. Corporate
ak sing e A (A-) or better by all the major rating agencies
urchase for inclusion in the corporate note portfolio. The
rs and the maximum duration of the corporate note
years. The percentage of corporate notes that may be
uer rated AA- or better by all major rating agencies that rate
of the total portfolio. The percentage of corporate notes that
any single issuer rated in the broad single A (A-) category from
all the major rating agencies that rate the security is 2% of the total portfolio. The individual
country limit of non-U.S. and non -Canadian exposure is 2% of the total portfolio. The
exposure is determined by the country of domicile of the issuers of portfolio securities.
Commercial Paper: Commercial paper must be rated with the highest short-term credit
rating category of any two major Nationally Recognized Statistical Rating Organizations
(NRSROs) at the time of purchase. If the commercial paper is rated by more than two
major NRSROs, it must have the highest rating from all of them. Commercial paper
holdings may not have maturities exceeding 270 days. Any commercial paper purchased
with a maturity longer than 100 days must also have an underlying long-term credit rating
at the time of purchase in one of the three highest rating categories of an NRSRO. The
percentage of commercial paper that may be purchased from any one issuer is 3% of the
market value of the total portfolio. Issuer constraints will apply to the combined holdings
of corporate notes and commercial paper holdings.
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Certificates of Deposit: Non-negotiable Certificates of Deposit of financial institutions
which are qualified public depositories as defined by RCW 39.58.010(2) and in
accordance with the restrictions therein.
Bank Time Deposits and Savings Accounts: Deposits in PDPC approved banks.
Local Government Investment Pool: Investment Pool managed by the Washington
State Treasury Office.
C. Bank Collateralization
The PDPC makes and enforces regulations and administers a program to ensure public
funds deposited in banks and thrifts are protected if a financial institution becomes
insolvent. The PDPC approves which banks and thrifts can hold state and local
government deposits and monitors collateral pledged to s- ' re uninsured public deposits.
Under the act, all public treasurers and other custodian public funds are relieved of the
responsibility of executing tri-party agreements, ing pledged securities, and
authorizing additions, withdrawals, and exchange col - al.
D. Prohibited Investments
i. The City shall not lend securities nor
reverse repurchase program
ii. The City shall not invest in m
iii. The City shall not invest in Eq
iv. The City shall not inv Cryp ' . rrency
10. Investment Param
A. Diversificatio
"y participate in a securities lending or
curities.
The City will di 'fy the ' estment of all funds by adhering to the constraints listed in
the following table. e- ents in securities shall not exceed the following percentages
of the total portfolio a - time of purchase.
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Total Portfolio Diversification Constraints
tings, S&P,
Issue Type Maximum % Maximum ° oody's, or Maximum
Holdings per Iss uivalent Maturity
RO
USTreasuryObligations 100% ne 10years
USAgencyObligations 100% 35% N/A 10years
SupranationalAgencyNotes 10% AA /Az3 10years
Municipal Bonds (GO Outside WA 30° 5% A-/A3 10 years
City of Tukwila Debt Obligations 15% N/A N/A
3%for AA-
2% for A-,
Corporate Notes AA+ A-/A3 Short Term 5.5year
A1{1 Long Term A -
Commercial Paper 25% 3% /A3 270 days
Deposits in
PDPC a pproved
Bank Time Deposits/S20% 10% banks N/A
Deposits in
PDPC a pproved
Certificates of Deposit 25% 10% banks 5years
State LGIP 100% None N/A N/a
Issuer constraints apply to the combined issues in corporate and commercial paper holdings.
Sort Term Ratings: Moody's - P1MIG1/VMIG1, S&P - A-1/SP-1, Fitch - F1
Note: Individual country limit of non-US/non-Canadian exposure is 2%oftotal portfolio
B. Investment Maturity
i. Liquidity Funds — Tier 1
Liquidity funds will be defined as those funds that are in the State LGIP City, bank
deposits, bank certificates of deposits or money market instruments and will be
available for immediate use.
ii. Investment Core Funds — Tier 2
Investment funds will be defined as the funds in excess of liquidity requirements and
invested in authorized investments and maturity structure listed below.
iii. Total Portfolio Maturity Constraints:
Maturity Constraints
m % of
otal folio
Under 30 days
10°°
Under 1 year
25%
<(
Under 5 years
90%
Under 10 years
100%
Maturity Constr.' •
Total Portfolio
Maximum
Weighted A ge M. rity
2.0 years
Duration of ,. - 1. - tfolio 3.0 years
S i y to onstraint
Maximum % of
Total Portfolio
ble Agen Securities
25%
C. Strategic Philosoph
The primary investment philosophy of the City is to match investment maturities with
expected cash outflows. Securities shall generally be held until maturity, with the following
exceptions:
i. A security with a declining credit may be sold early to protect the principal value
of the portfolio.
ii. The portfolio duration or maturity buckets should be adjusted to better reflect
the structure of the underlying benchmark portfolio.
iii. A security exchange that would improve the quality, yield and target maturity
of the portfolio based on market conditions.
iv. A sell of a security to provide for unforeseen liquidity needs.
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11. Reporting Requirements
A. Reporting
The Finance Director or designee shall be responsible for investment reporting. At a
minimum, monthly reporting (RCW 35.39.032) shall be made available providing detailed
information on the investment portfolio.
Specific Requirements:
• Book Yield
• Holdings Report including mark to market and security description
• Transactions Report
• Weighted Average Maturity or Duration
B. Performance Standards/Evaluation
i. The portfolio shall be managed to obtain a fair - return and earnings rate that
incorporates the primary objectives of prot c g thity's capital and assuring
adequate liquidity to meet cash flow needs
ii. The investment portfolio will be invest
measured against a selected benchmark
chosen minimum and maximum
to achieve market rates of retur
benchmark is to appropriately m
cycles. The investmen
benchmark over inter
periods. The portf
market rates of retur
US treasury 0
quarterly.
iii. The liquid
C. Compliance Repo
redetermined structure that will be
o. The structure will be based upon a
maturity) and will have the objective
tment horizons. The purpose of a
in the portfolio through interest rate
xpected to provide similar returns to the
may underperform or outperform in certain
to first protect principal and then achieve
used will be the US treasury 0-3-year index or
and comparisons will be calculated monthly and reported
ield will be compared quarterly to the LGIP average yield.
A quarterly compliance report will be generated comparing the portfolio positions to this
investment policy.
The Investment Policy sets forth concentration constraints and minimum credit ratings for
each type of security. These limits apply to the initial purchase of a security and do not
automatically trigger the sale of a security as the portfolio value fluctuates or in the event
of credit rating downgrade. Due to fluctuations in the aggregate surplus funds balance,
maximum percentages for a particular issuer or investment type may be exceeded at a
point in time. Securities need not be liquidated to realign the portfolio; however,
consideration should be given to this matter when future purchases are made to ensure
that appropriate diversification is maintained.
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D. Accounting Method
The City shall comply with all required legal provisions and Generally Accepted
Accounting Principles (GAAP). The accounting principles are those contained in the
pronouncements of authoritative bodies including, but not necessarily limited to, the
Governmental Accounting Standards Board (GASB).
Pooling of Funds: Except for cash in certain restricted and special funds, the City will
consolidate balances from all funds to maximize investment earnings. Investment income
will be allocated to the various funds based on their respective participation in the
investment program and in accordance with generally accepted accounting principles.
12. Policy Adoption
The City's Investment Policy shall be adopted by the City
Finance Committed as needed but not less than every tw,
by the City Council on , 2025.
and reviewed by the Council
is Policy has been adopted
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Glossary of Terms
Agency Securities: Government sponsored enterprises of the US Government.
Bankers Acceptances: A time draft accepted (endorsed) by a bank or trust company. The
accepting institution guarantees payment of the bill, as well as the issuer. BAs are short-term
non -interest -bearing notes sold at a discount and redeemed by the accepting bank at maturity for
full face value.
Bond: An interest -bearing security issued by a corporation, government, governmental agency,
or other body. It is a form of debt with an interest rate, maturity, and face value, and specific
assets sometimes secure it. Most bonds have a maturity of greater than one year and generally
pay interest semiannually. See Debenture.
Broker: An intermediary who brings buyers and sellers together and handles their orders,
generally charging a commission for this service. In contrast to a principal or a dealer, the broker
does not own or take a position in securities.
Collateral: Securities or other property that a borrower pled• - .s security for the repayment of
a loan. Also refers to securities pledged by a bank to secu its of public monies.
Commercial Paper: Short-term, unsecured, neg• i..le . issory notes issued by
corporations.
Current Maturity: The amount of time left until an
bill issued nine months ago has a current maturity
CUSIP: A CUSIP number identifies securities. CUSI
Identification Procedures, which was esta. ' -. unde
Association to develop a uniform method of
securities.
Dealer: An individual or firm that
dealers buy for their own accoun
is determined by the differenc
Debenture: Unsecured debt ba
documented by an agree
Delivery: Either of tw
receipt (also called
money for the securiti
Duration: A measure
changes in interest rates.
atures. or example, a one-year
onths.
ds for Committee on Uniform Security
auspices of the American Bankers
I, U.S. government, and corporate
or act " • a principal in security transactions. Typically,
tomer from their inventory. The dealer's profit
aid and the price received.
integrity of the borrower, not by collateral, and
n indenture.
ering securities: delivery vs. payment and delivery vs.
vs. payment is delivery of securities with an exchange of
ulate the price sensitivity of a bond or portfolio of bonds to
uals the sum of the present value of future cash flows.
Full Faith and Credit: Indicato that the unconditional guarantee of the United States government
backs the repayment of a debt.
General Obligation Bonds (GOs): Bonds secured by the pledge of the municipal issuer's full
faith and credit, which usually includes unlimited taxing power.
Government Bonds: Securities issued by the federal government; they are obligations of the
U.S. Treasury; also known as "governments."
Interest: Compensation paid or to be paid for the use of money. The rate of interest is generally
expressed as an annual percentage.
Investment Funds: Core funds are defined as operating fund balance, which exceeds the City's
daily liquidity needs. Core funds are invested out the yield curve to diversify maturity structure in
the overall portfolio. Having longer term investments in a portfolio will stabilize the overall portfolio
interest earnings over interest rate cycles.
Investment Securities: Securities purchased for an investment portfolio, as opposed to those
purchased for resale to customers.
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Liquidity: The ease at which a security can be bought or sold (converted to cash) in the market.
A large number of buyers and sellers and a high volume of trading activity are important
components of liquidity.
Liquidity Component: A percentage of the total portfolio that is dedicated to providing liquidity
needs for the City.
LGIP: Local Government Investment Pool run by the State of Washington Treasurer's office
established to help cities with short term investments.
Mark to Market: Adjustment of an account or portfolio to reflect actual market price rather than
book price, purchase price or some other valuation.
Municipals: Securities, usually bonds, issued by a state, its agencies, by cities or other municipal
entities. The interest on "munis" is usually exempt from federal income taxes and state and local
income taxes in the state of issuance. Municipal securities may or may not be backed by the
issuing agency's taxation powers.
Par Value: The value of a security expressed as a specific dollar amount marked on the face of
the security or the amount of money due at maturity. Par valuesshould not be confused with
market value.
Portfolio: A collection of securities held by an individual or ' tion.
Prudent Person Rule: A long-standing common-law rule r es a trustee who is investing
for another to behave in the same way as a pruden • ividual easonable discretion and
intelligence who is seeking a reasonable income an. -servation of tal.
Quotation or Quote: A bid to buy or the lowest off- . sell curity in any market at a particular
time.
Repurchase Agreement: Range in maturi from ov_ . ht to fixed time to open end. Repos
involve a simultaneous sale of securities by . .r gov: ent securities dealer to an investor
with an agreement for the bank or governme;, •e- er to repurchase the securities at a
fixed date at a specified rate of intere
Treasury Bill (T-Bill): An obligati ► . - U. ` :overnment with a maturity of one year or less.
T-bills bear no interest but are s
Treasury Bonds and Notes: • at' - .S. government that bear interest. Notes have
maturities of one to ten years; bo -ve long maturities.
Yield: The annual rate • - _ .n - vestment, expressed as a percentage of the investment.
Income yield is obtai •y divi• the rrent dollar income by the current market price for the
security. Net yield, . -Id to mats ty, is the current income yield minus any premium above par
or plus any discount fr• •ar in t purchase price, with the adjustment spread over the period
from the date of purchase h_ . to of maturity of the bond.
Yield to Maturity: The averannual yield on a security, assuming it is held to maturity; equals
to the rate at which all principal and interest payments would be discounted to produce a present
value equal to the purchase price of the bond.
Ratings Table — Long -Term
Three Highest
Rating
Categories
S&P
Moody's
Fitch
Definition
AAA
Aaa
AAA
Highest credit quality
AA+, AA, AA-
Aa1, Aa2, Aa3
AA+, AA, AA-
Very high credit quality
A+, A, A-
A1, A2, A3
A+, A, A-
High credit quality
BBB+, BBB, BBB-
Baal, Baa2, Baa3
BBB+, BBB, BBB-
Good credit quality
BB+, BB, BB-
Ba1, Ba2, Ba3
BB+, BB, BB-
Non -investment grade
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Ratings Table — Short -Term
Highest Rating
Category
S&P
Moody's
Fitch
Definition
Al+, Al
P1+, P1
F1+, F1
Highest credit quality
Municipal Commercial Paper
A-1, A-1+, SP-1+, SP-1
P1, MIG1, VMIG1
F1+, F1
Highest credit quality
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Attachment B
CITY OF TUKWILA
4c)
ADOPTED [DATE]
1
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TABLE OF CONTENTS
SECTION I. INTRODUCTION
SECTION II. GOVERNING PRINCIPLES
SECTION III. ROLES AND RESPONSIBILITIES
SECTION IV. PROFESSIONAL SERVICES
SECTION V. TRANSACTION -SPECIFIC POLICIES
SECTION VI. COMPLIANCE POLICIES
SECTION VII. OTHER POLICIES
3
3
4
5
6
9
10
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Section I. Introduction
Purpose and Overview
The objective of this policy is to provide general guidance for the issuance and management of all City of
Tukwila (the City) debt. Further, this policy establishes criteria to protect the City's financial integrity while
providing a mechanism to fund the City's capital needs prudently and cost effectively. Adherence to this
policy is essential to ensure that the City Council (Council) maintains a debt position which allows the
Council to protect the City, its functionality, and the credit quality of its obligations.
The City's Finance Department is charged with ensuring compliance with all debt policy requirements.
Capital Planning
The City shall integrate its debt issuance with its Capital Improvement Program (referred to herein as CIP
or Capital Facilities Plan) spending to ensure that planned financing c• . rms to policy targets regarding
the level and composition of outstanding debt. This planning coers the long-term horizon, paying
particular attention to financing priorities, capital outlays and c' •e' •rojects.
Long-term borrowing shall be confined to the acquisitio
and shall not be used to fund operating or maintena
deficits is not permitted except in emergencies as adop
capital projects under consideration, the Cit hall bud
operations to fund ongoing maintenance nee
renewal. The source of funds for the project sho
In the issuance and mana
constitution and with
regulations, as applica
Governing Law
or constru of capital improvements
e issuance of debt to fund operating
ormal action by the City Council. For all
and set aside sufficient revenue from
serves for periodic replacement and
tended use of bond financing.
ng Principles
the City shall comply with the State of Washington (State)
ements imposed by federal, State, and local rules and
section highlights the legal framework for debt issuance.
State Statutes. The City issues ebt in accordance with the Revised Code of Washington (RCW), in
particular chapters 39.36, 39.46, and 39.53, the State constitution along with all other City, State, and
federal laws, rules, and regulations.
Federal Rules and Regulations. The City shall issue and manage debt in accordance with the limitations
and constraints imposed by federal rules and regulations, including but not limited to, Internal Revenue
Code of 1986, as amended, and Treasury Department Regulations thereunder (Tax Law), and the
Securities Acts of 1933 and 1934 (Securities Law).
Local Rules and Regulations. The City shall issue and sell debt in accordance with the limitations and
constraints imposed by the Tukwila Municipal Code (TMC), including but not limited to Title 3 (Revenue
and Finance) and City ordinances, resolutions, policies, procedures, and bond covenants.
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Legal Debt Limits for GO Debt
State law (RCW 39.36.020) allows for the issuance of general obligation (GO) debt, through a public vote,
of up to 7.5% of the City's assessed property valuation. The limit of 7.5% of assessed valuation for GO
debt is divided between three different use types: 1) 2.5% for municipally owned water, sewer, or electric
facilities; 2) 2.5% for open space and parks; and 3) 2.5% for general government purposes. Within the
2.5% limit for general government purposes, State law allows the Council to issue debt without a vote of
the people. This non -voted debt (also called councilmanic debt) cannot be greater than 1.5% of the
assessed property valuation of the City.
Section III. Roles and Responsibilities
Responsibilities of City Council
• Approve this policy and any updates/changes to this poi'
applicable rules and regulations for debt issuance.
• Approve projects to be financed as part of the City
• Adopt an ordinance authorizing the issuance an
delegation requirements provided for in R
representative, the City Finance Director or their d
• Approve budgets sufficient to provide f
Responsibilities of the Finance Director
• Apply and promote prudent
• Oversee any debt issua
documents.
• Approve the issu
authorized by
• Provide for the
agent receives fun
• Ensure compliance wi
help ensure compliance with all
tal Faciliti an.
e of d-bt, and, a plicable, setting forth the
39 .040 when appointing a designated
ee, to approve the final terms of the debt.
nt of principal and interest on all debt.
bonds and review and approval of disclosure
the lowest acceptable cost and risk within the parameters
ordinance.
of principal and interest payment on all debt and ensure the fiscal
nt of debt service on or prior to the payment date.
ax Laws, Securities Laws, contractual requirements, and other rules
and regulations governing the issuance of debt.
• Ensure compliance with all terms, conditions, post -issuance requirements, and Tax Law
requirements imposed by law and/or the legal documents governing the debt issued.
• Ensure any annual disclosure reports and notices regarding the occurrence of certain events are
timely posted to the EMMA (Electronic Municipal Market Access) system in accordance with
continuing disclosure undertakings of the City pursuant to Securities Law.
• Maintain records for all outstanding debt.
• Oversee all aspects of debt management.
• Solicit and select professional services providers as necessary, to administer debt financing.
• Consult with the City's contracted municipal advisor to determine the method of sale best suited
for each issue of debt (competitive sale, negotiated sale, or bank/direct placement).
• Select the manner of sale of debt.
• Monitor opportunities to refund debt and recommend such refunding as appropriate.
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• Provide pertinent information to credit rating agencies when issuing debt and as routine credit
reviews occur.
IV. Professional Services
The City's Finance Director will be responsible for the solicitation and selection of professional services as
necessary to administer the City's debt program. Professional service providers necessary to issue debt
may include, but are not limited to bond counsel, disclosure counsel (which may be bond counsel),
municipal advisor, underwriters, banks, rating agencies, and fiscal agent. Selection of the service providers
will consider availability, professional knowledge, accountability, cost, as well as successful partnerships
in previous debt issuances. The City will issue debt considering cost and associated risk.
Professional Service Providers
Bond Counsel — Debt issued by the City will generally include a writ opinion by bond counsel affirming
that the City is legally authorized to issue the proposed debt. Th shall provide that the obligation
is legal, valid and binding, and enforceable against the City. e case x exempt financing, the legal
opinion will address the treatment of interest for purpose ax Law.
Municipal Advisor — A Municipal Advisor may be used in the issuance of the City's debt. The
Municipal Advisor will provide the City with obje ve advice analysis on debt issuance. This includes,
but is not limited to, coordinating of finance te, •" orin arket opportunities, structuring and
pricing of debt, competitive sale execution, and r• 'ewi - - e iminary and final official statements.
Disclosure Counsel - The Disclosure ' nse hick 'y be bond counsel) plays a critical role in ensuring
that the City's preliminary and .I offi• - e is comply with Securities Laws and disclosure
requirements. Disclosure Counse - :es guidance on the accuracy, completeness, and
transparency of the info - •r- •ted to investors, helping to mitigate the risk of material
misstatements or omis . Wore clo with the City's finance team, bond counsel, and municipal
advisor, Disclosure C. el reviews ancial and operational disclosures, drafts legal sections of the
official statements, and ides le: advice in connection with the City's obligations under SEC Rule
15c2-12 and other applicab . ons. Their expertise helps protect the City from potential legal and
regulatory risks while maintain nvestor confidence in the bond issuance process.
Underwriters — An Underwriter will be selected in advance for all debt issued in a negotiated sale method.
The Underwriter is responsible for purchasing debt and reselling the debt to investors.
Arbitrage Rebate Consultant — As necessary, the City may engage with an arbitrage rebate consultant to
ensure the City is compliant with Tax Law on tax-exempt bonds by calculating potential arbitrage rebate
liabilities. The consultant will analyze investment earnings, determine rebate amounts owed under IRS
Code 148(f), and assist with documentation, deadlines, and best practices to minimize exposure and avoid
penalties.
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Fiscal Agent —A fiscal agent may be used to provide accurate and timely securities processing and payment
to bondholders. As provided under RCW 43.80, the City will work with the Fiscal Agent that is determined
by the State.
Section V. Transaction -Specific Policies
For any City project planned to be funded through debt, an analysis will be done to consider: (a) other
potential ways to finance the project; (b) future operating and maintenance costs, including debt
repayment; (c) expected cash inflows that could help offset the amount borrowed; and (d) anticipated
cash outflows for construction or equipment to ensure compliance with arbitrage rules.
Method of Sale
The Finance Director, in consultation with the City's municipal advisor, ill determine the method of sale
best suited for each issue of debt (competitive sale, negotiated sale, . ank/direct placement). The type
of debt to be issued and manners of the sale will be submitted to Council for approval in the bond
ordinance. The bond ordinance will authorize the issuance a . .le o .t, and, as applicable, set forth
the delegation requirements provided for in RCW 6.040 wh: appointing a designated
representative, the City Finance Director or their desig - o ap..ve the finterms of the debt.
Bond Insurance
For each issue, the City, in conjunction with its advi will evaluate the costs and benefits of
bond insurance or other credit enhancements. cement purchases by the City must be
competitively procured in a manner de reaso - by the City Finance Director.
Bond Ballot Measures
Prior to any unlimited tax general o
voters, the capital projec
the best interest of th
for the project should r
Investor and Rating Agency Relations
escribed below) proposition being placed before the
ion must, unless otherwise justified and have found to be in
ed in the City's Capital Facilities Plan. The source of funds
ed use of bond financing.
The City will maintain good communications with bond rating agencies and investors about its fiscal
condition. The City will provide full, accurate and complete disclosure on financial reports and in disclosure
documents to comply with the anti -fraud requirements of Securities Laws.
Short-term debt
The City may use short-term debt, defined as a period not to exceed three years, to fund cash flow needs,
which may be caused by a delay in receipting tax revenues or issuing long-term debt. The City will not
issue short-term debt for current operations, except in the event of an emergency.
The City may issue interfund loans rather than issuing outside debt to meet short-term cash flow needs.
The issuance of an interfund loan will be permissible only after an analysis of the loaning fund(s) indicate(s)
that excess funds are available, and the use of these funds will not impact the loaning fund(s) current
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95
operations or constitute a permanent diversion of funds. All interfund borrowing will bear interest based
upon at least the prevailing LGIP (Local Government Investment Pool) rate.
Council authorizes the City's Finance Director to approve short-term interfund loans for a period not to
exceed three calendar months and the City Administrator to approve short-term interfund loans for a
period not to exceed 12 calendar months. See long-term debt section below for policy on loans exceeding
12 calendar months. The Finance Director shall notify the Finance & Governance Committee and/or City
Council of any use of directorial or administrator approved interfund loans at the first reasonable
opportunity.
Interfund loans are not considered "debt" for purposes of State law, Securities Law, or Tax Law.
Long-term debt
The City will issue long-term debt, defined as a period greater than thre- years, for capital projects which
cannot reasonably be financed on a pay-as-you-go funding str. :y from anticipated cash flows.
Acceptable uses of bond proceeds are one-time capital projects -n be capitalized and depreciated
in accordance with the City's accounting principles. (Refudeb also an acceptable use. See
refunding debt section below.)
The City Council may issue long-term interfund loans
means of financing capital improvements. The issuance o
an analysis of the loaning fund(s) indicate that - funds a
not impact the loaning fund(s) current operat
interfund borrowing will bear interest .ased u rj7 lea
Investment Pool) rate.
issuing outside debt instruments as a
erfund loan will be permissible only after
yailable, and the use of these funds will
a permanent diversion of funds. All
the prevailing LGIP (Local Government
The decision to use an interfund - de debt to fund capital projects will be based on
which is deemed to be the most co' -ctive approach to meet City capital needs. The City's Finance
Department is responsibl: s► . n assessment. Interfund loans are not considered "debt" for
purposes of State law, ' urities La • r T. aw.
The City will not issue Ion: m deb r current operational needs, except in the event of an emergency.
Types of long-term debt the G .y issue:
Limited Tax General Obligation (LTGO) Bonds: LTGO debt is secured by a pledge of the full faith and credit
of the City and is payable from regular property taxes and other legally available funds. These bonds can
be issued without a vote of registered voters but are limited in that debt service payments must be paid
from legally available City revenue sources. The amount of LTGO outstanding debt cannot exceed the
threshold stated above.
Unlimited Tax General Obligation (UTGO) Bonds: UTGO debt is secured by a pledge of the full faith and
credit of the City and is payable from excess property taxes and other legally available funds. These bonds
can only be issued when authorized by a 60% majority vote of registered voters (meeting the minimum
voter turnout requirement). As part of the ballot proposition, voters will approve the issuance of the UTGO
debt and an excess property tax levy, as a completely new and dedicated source of revenue, to pay the
debt service. The amount of UTGO debt cannot exceed the thresholds stated above. Proceeds of UTGO
debt are limited to capital purposes only and not the replacement of equipment.
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Revenue Bonds: Revenue bonds are used to finance construction of and/or improvements to facilities of
enterprise systems operated by the City in accordance with the Capital Facilities Plan and are payable
from and secured by a pledge of revenue of the enterprise. No taxing power or general fund pledge is
provided as security, with the exception of double -barrel bonds. Double -barrel bonds are a type of
municipal bond that are backed by enterprise funds and the full faith and credit of the City. Unlike general
obligation bonds, revenue bonds are not subject to the City's statutory debt limitation nor is voter
approval required. Revenue bonds may contain certain covenants and obligations of the City, including
but not limited to, future parity bond tests, annual debt service coverage requirements, restrictions on
disposal of the enterprise facility/utility, and other terms to protect the stream of revenue pledged to the
repayment of the revenue bonds.
Reserve accounts may be created on a transaction -by -transaction basis. Any reserve account created shall
be maintained and funded as required by bond ordinances and as deemed advisable by the City Council
or the designated representative on behalf of the City. The City shall cture any debt service reserve
fund to not violate the Tax Code.
The City will strive for annual revenue bond debt coverage of . east times the annual debt service
paid in such year. Additional bonds issued may be subject dditional b. tests as described in bond
ordinances.
Special Assessment Bonds: Also referred to as Local Impro t District (LID) bonds, this type of debt is
used to finance capital improvements that ben- .•erty o s within the LID. LID debt is repaid from
annual assessments paid to the City by propert in LID. LIDs are formed by City Council
following the process outlined in State statutes a te .04 TMC. The cost is borne only by those
who receive a special benefit from th- ' -men , ID debt is not part of the debt capacity calculation.
Other Debt Instruments: Instrum. • ' .rks Trust Fund loans or other financing contracts
issued through the State of Was , fe.er. grant loans, bond anticipation notes (BAN), tax
anticipation notes (TAN), a • r other legal debt issues may be incurred as allowed by law.
Refunding Debt
Refunding debt may be issuedthe City in accordance with chapter 39.53 RCW. Refunding debt is
typically issued to take advantage of lower interest rates for overall cost savings, restructure debt, or
modify bond covenants. Refunding bonds are an acceptable use of bond proceeds provided that, and
unless otherwise justified and found to be in the best interest of the City, a) the net present value (NPV)
of the overall savings (not by maturity) is at least 3% and b) the final maturity date of the obligation is not
extended.
Other Considerations
The following terms shall be applied to the City's debt transactions, as appropriate. Individual terms may
change as dictated by the marketplace or the unique qualities of the transaction.
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• Maturity —The City shall issue debt with an average life less than or equal to the average life of
the assets being financed. Unless otherwise stated in law, the final maturity of the debt shall be
no longer than 40 years (RCW 39.46.110).
• Debt Service Structure — Unless otherwise justified, debt service should be structured on a level
basis (i.e., level annual payments). Refunding bonds should be structured to produce equal
savings by fiscal year. Unless otherwise justified, debt shall not have capitalized interest. If
appropriate, debt service reserve funds may be used for revenue bonds.
• Price Structure — The City's long-term debt may include par, discount, and premium bonds. Call
Provisions — For each transaction, the City shall evaluate the costs and benefits of call provisions.
In general, the City shall opt for a call date no later than 10 %2 years from the date of the bonds.
• Tax -exemption — Unless otherwise justified and deemed necessary, the City shall issue its debt on
a tax-exempt basis.
• Reimbursement declaration — Must be made prior to bond issuance if the City intends to be
reimbursed out of tax exempt bond proceeds for capital costs • ' .d prior to the closing date.
• The City will not use derivatives in connection with any new . ncings.
• The City will not become obligated for any new City de• herwise be involved in any new
financing that would include a variable rate of intere varia. •ebt service (excluding of any
additional rent payable under a financing lease or . -r obligatio ongoing transaction fees).
Section VI. Comp
The City will comply with all federal, State,
investment of bond proceeds and associated fun
requirements may include restrictions • - type
the length of time that such procee. . nd f . s ma
For refunding escrows, the City m
issued by the U.S. Treasury
consultation with the Ci
under State law and r
The City will maintain a sy
they are spent, and for what
separately from other City funds and on an issue by issue basis.
icies
I res ions and City policies regarding the
bt-related investment limitations. Such
curities allowed the yield on such securities, and
e invested.
ate and Local Government Series (SLGS) securities
ing requirements of Tax Law and if determined advisable after
and bond counsel, in open -market securities as permitted
nan s.
cking bond proceeds, including how proceeds are invested, when
ose. Bond proceeds shall, unless otherwise permitted, be tracked
The City shall maintain records related to the bonds for the life of the bonds (plus any refunding bonds)
plus three years.
The City will, unless otherwise permitted, spend at least 85% of tax-exempt bond proceeds within three
years from the date of issuance pursuant to Tax Law, and take such steps as necessary to avoid or manage
arbitrage. The City will maintain a system of recordkeeping and reporting to meet the arbitrage rebate
compliance requirement of the IRS (Internal Revenue Service, IRC 148) regulation. For each bond issue,
the recordkeeping will include tracking the yield and investment earnings on bond proceeds, calculating
rebate payments, and remitting any rebate earnings to the federal government in a timely manner to
preserve the tax-exempt status of the outstanding debt obligation. Any bond proceeds invested will
comply with the City's investment policy and strategies, unless further restricted by bond covenant. The
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City may, when determined to be in the best interest of the City or required, contract with an arbitrage
rebate consultant to assist with the arbitrage rebate calculation.
The City will repay principal plus interest in accordance with the payment terms of the bond or contract.
Furthermore, the City will comply with all bond or contract covenants. This includes, but is not limited to,
any undertakings to provide ongoing disclosure and notice of certain listed events under Securities Laws.
Annual disclosure will take the form of the City's audited annual financial statements as well as other
information required by the bond or contract that is not reasonably contained in the annual report. The
City Finance Director will develop and comply with all post -issuance compliance policies and procedures
related to Tax Law and policies and procedures relating to initial and ongoing disclosure under Securities
Laws.
The Finance Director and bond counsel will coordinate their activities and review all debt issuance to
ensure that all securities are issued in compliance with State a . federal legal and regulatory
requirements by the State law, Tax Law, Securities Law, rules and re ions.
The Finance Director may institute procedures to implement t
provisions related to State law, Tax Law, Securities Law, rules,
No derivative products shall be used in connection wit
Periodic Review
o and other bond covenants and
regulateapplicable to the City's debt.
This debt policy must be adopted • ounce he p. will be reviewed at least every four years by the
Finance Department and modific. s m - ted to and approved by the Council.
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Attachment C
• WPTA
•
Washington Public
Treasurers Association
www.WPTA.us
1712 6th Avenue
Suite 100, PMB 1334
Tacoma WA 98405
FOR IMMEDIATE RELEASE
March 5, 2025
NEWS RELEASE
For more information contact:
WPTA Investment Policy Certification Chair:
City of Federal Way Finance Director Steve Groom
Phone: (253) 835-2520
Email: Steve.Groom@FederalWayWA.gov
(Tukwila, WA) — Washington Public Treasurers Association has awarded a Certificate of
Excellence to City of Tukwila for its Investment Policy, judged by an impartial statewide
panel as meeting the high standards of the Investment Policy Certification Program.
The Washington Public Treasurers Association (WPTA) has assisted local governments with
investment policies since 1988. Effective investment policies can help protect taxpayer funds
entrusted to investment officers, assist governing bodies desiring to approve worthy policies,
articulate investment priorities clearly, and guide staff in good stewardship best practices.
Founded in 1983, WPTA has provided the local governments of Washington with opportunities
for education, networking, and working to improve and promote the public treasury management
profession. WPTA's policy review committee evaluates vital elements covering 23 criteria
categories that should be addressed in a thorough and effective policy.
Tukwila's Deputy Finance Director Tony Cullerton will be recognized formally at the up -coming
WPTA Annual Conference in Chelan, Washington, for putting in the hard work to elevate the
agency's policy to best -practice level, and for making its policy an example that others might
emulate. Excellence in public treasury is furthered when we all help each other, elevating our
profession and better serving our citizens and taxpayers.
Washington Public Treasurers Association (WPTA) seeks to advance the profession of public
treasurers in the state of Washington through education, mutual support, professional recognition,
and legislative advocacy, serving its membership who in turn serve cities, counties, special
districts and state agencies in the State of Washington.
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