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HomeMy WebLinkAbout2001-028 Public Facilities District (PFD) D rr 9 i r -1 recrI - e4 q/r/cD ORDINANCE NO. 2001 28 [NANCE of the City of Yakima, Washington, approving an interlocal agreement with the Cities of Selah and Union Gap to form the Yakima Public Facilities District pursuant to RCW 35.57.020. WHEREAS, the City of Yakima ( "Yakima ") currently owns and operates the Yakima Convention Center (the "Convention Center "), providing first -class meeting, ballroom and other event facilities; WHEREAS, the City of Yakima, together with the Cities of Selah and Union Gap, desire to expand the Convention Center to stimulate economic development by creating jobs; realize additional sales tax and lodging tax revenues; attract commercial business and tourism; and provide facilities for convention, special events and community events including public meetings and performing arts events for, among others in the region, the residents of Yakima, at an estimated cost of over $10,000,000 (the "Project "); WHEREAS, Chap. 35.57 RCW (the "Act ") authorizes one or more cities located in a county with a population of less than one million to create a public facilities district (a "PFD ") to acquire, remodel, finance and operate one or more `.`regional centers "; WHEREAS, "regional centers" are defined to include, among other things, existing convention centers to be improved at a cost of at least S10,000,000 including debt service; WHEREAS, PFDs have access to several new revenue sources, including a state sales and use tax credit (the "Sales Tax "), which operates to shift 0.033% of the retail sales and use taxes generated within the PFD boundaries to the PFD; WHEREAS, in order to complete the Project and access the Sales Tax, the City wishes to join with the Cities of Selah and Union Gap to create a PFD solely for the purpose of acquiring (by purchase, lease or otherwise), financing, improving and operating regional centers, as defined in the Act (the "District "); WHEREAS, the Act requires a Local match in order for the District to impose the Sales Tax and, accordingly, Yakima will transfer a leasehold interest in the Convention Center to the District in satisfaction of this match requirement (the value of the Convention Center and the underlying site is approximately $11,800,000); WHEREAS, the value of the leasehold interest is estimated to be significantly more than 33% of the net present value projected Sales Taxes of the District (approximately $2.4 million), thereby satisfying the match requirement; WHEREAS, Yakima intends to issue bonds and apply net bond proceeds to finance the Project, in consideration for the District's pledge of all Sales Tax receipts to Yakima to pay debt service on the bonds and other regional center costs; WHEREAS, Yakima also intends to contribute lodging taxes to the District, in an amount, if any, determined annually by the Yakima City Council, to the operation of the Convention Center, and will contribute revenues to the District in the event of a Sales Tax shortfall; WHEREAS, the City is authorized and empowered to enter into the Interlocal Agreement pursuant to Chap. 39.34 RCW and to form the District pursuant to Chap. 35.57 RCW; NOW, THEREFORE, BE IT ORDAINED BY the City of Yakima, Washington, as follows: Section 1. Approval of Interlocal Agreement: Formation of the District. Pursuant to RCW 35.57.010(1), the City hereby approves the interlocal agreement at?ached as Appendix A hereto (the "Interlocal Agreement "), creating a public facilities district in cooperation with the Cities of Selah and Union Gap. As set forth in the Interlocal Agreement, the name of the District shall be the Yakima Regional Public Facilities District. The District shall be a municipal corporation, an independent taxing authority and a taxing district. The District shall be coextensive with the boundaries of Yakima, and the Cities of Selah and Union Gap, as the same may be amended from time to time. The District shall acquire (by purchase, lease or otherwise), construct, own, remodel, maintain, equip, reequip, repair, finance, and/or operate one or more regional centers, as defined in RCW 35.57.020, including the Convention Center, the Project and related parking facilities. Except as limited by State law and the Interlocal Agreement, the District shall have the powers, purposes and form set forth in its charter (the "Charter "). As set forth in the Interlocal and the Charter, in consideration for the mutual promises set forth therein, the District's power to impose sales and use taxes authorized under RCW 82.14.048 is subject to the City's, the City of Selah's and the City of Union Gap's approval of any such levy prior to placement on the ballot. In addition, also in consideration for the mutual promises set forth in Appendix A, the District's annual budget, its power to impose admission charges, parking charges, admissions taxes and -2- P: \SC \SC09L 01106114 parking taxes, and any gambling activity or public display of artwork under authority of the District is subject to the approval of the Yakima City Council. Section 2. Charter. The Charter is hereby approved in the form attached as Exhibit A to the Interlocal Agreement. The Charter shall be amended only with the approval of Yakima, and the Cities of Selah and Union Gap. The District shall commence its existence effective upon execution of the Interlocal Agreement by Yakima, and the Cities of Selah and Union Gap. Section 3. Board of Directors. A board consisting of seven directors (the "Board "), as initially identified in the Charter, is hereby approved to govern the affairs of the District. The directors shall be appointed and serve their terms as provided in the Charter. All corporate powers of the District shall be exercised by or under the authority of the Board; and the business, property and affairs of the District shall be managed under the direction of the Board, except as may be otherwise provided for by law or in the Interlocal Agreement or in the Charter. Section 4. Authorization of Documents. The City Manager is hereby authorized to execute the Interlocal Agreement. The City Manager and his designee, and each of the other appropriate officers, agents and representatives of Yakima are each hereby authorized and directed to take such steps, to do such other acts and things, and to execute such letters, certificates, agreements, papers, financing statements, assignments or instruments as in their judgment may be necessary, appropriate or desirable in order to carry out the terms and provisions of, and complete the transactions contemplated by this ordinance. Section 5. Prior Acts. All acts taken pursuant to the authority of this ordinance but • • prior to its effective date are hereby ratified and confirmed. -3- P:1SC \SCO9L 01/06/14 Section 6. Effective Date. This ordinance shall be effective 30 days after its passage, approval and publication as provided by law. PASSED by the Council of the City of Yakima at a regular meeting thereof, held this 19th day of June, 2001. CITY OF YAKIMA, WASHINGTON ' P f Mary Place Mayor ATTEST City Clerk APPROVED AS TO FORM: City Attorney First Reading: Publication Date: 6 - 2 3 - 200/ Effective Date: 7- 2. - 200 I -4- P:\SC\SCO9L 01/06/14 APPENDIX A INTERLOCAL AGREEMENT A -1 P \SC \SC09L 01/06/14 , INTERLOCAL COOPERATION AGREEMENT TO FORM A PUBLIC FACILITIES DISTRICT By and Among THE CITY OF YAKIMA THE CITY OF SELAH and THE CITY OF UNION GAP ,1&-c- 14.4+1 p 72333-23 `o /3 /ve + This INTERLOCAL COOPERATION AGREEMENT TO FORM A PUBLIC FACILITIES DISTRICT (the "Agreement ") is executed by and among the CITY OF YAKIMA, WASHINGTON ("Yakima "), the CITY OF SELAH, WASHINGTON ( "Selah ") and the CITY OF UNION GAP, WASHINGTON ( "Union Gap ") (Yakima, Selah and Union Gap are collectively referred to herein as "the Parties ") for the purposes of establishing a multi -city public facilities district to assist in the financing, development and operation of, regional convention center facilities; stimulating economic development by creating jobs, realizing additional sales tax and lodging tax revenues and attracting commercial business and tourism; and providing facilities for community events including public meetings and performing arts events. The Parties enter into this Agreement effective as of the date of execution by all three Parties, for the purposes and under the terms contained herein. WHEREAS, Yakima currently owns and operates the Yakima Convention Center (the "Convention Center "), providing first -class meeting, ballroom and other event facilities; WHEREAS, the Parties desire to expand the Convention Center, at an estimated cost of over $10,000,000 (the "Project "); WHEREAS, Chap. 35.57 RCW (the "Act ") authorizes one or more contiguous cities located in a county with a population of less than one million to create a public facilities district (a "PFD ") to acquire, remodel, finance, and operate one or more "regional centers "; WHEREAS, "regional centers" are defined to include, among other things, existing convention centers to be improved at a cost of at least ten million dollars including debt service; WHEREAS, PFDs have access to several new revenue sources, including a state sales and use tax credit (the "Sales Tax"), which operates to shift 0.033% of the retail sales and use taxes generated within the PFD boundaries to the PFD; WHEREAS, in order to complete the Project and access the Sales Tax, the Parties wish to create a PFD solely for the purpose of acquiring, constructing, owning, remodeling, maintaining equipping, re- equipping, repairing, financing and operating regional centers, as defined in the Act (the "District "); WHEREAS, the Act requires a 33% local match of the net present value of the Sales Tax to be collected by the District in order for the District to impose the Sales Tax and, accordingly, Yakima will transfer a leasehold interest in the Convention Center and the underlying site to the District in satisfaction of this match requirement (the value of the Convention Center and the underlying site is approximately $11,800,000); WHEREAS, the value of leasehold interest is estimated to significantly exceed the net present value of 33% of the projected Sales Taxes of the District (approximately $2.4 million); WHEREAS, pursuant to the Design, Development, Construction, Financing and Operating Agreement between Yakima and the District, the District will sublease the Convention Center and the underlying site to Yakima. and Yakima will design, develop, construct, operate and maintain the property in return for certain rights, including the right to retain all revenues of the Convention Center; WHEREAS, subject to certain limitations set forth herein, Yakima intends to issue bonds and apply bond proceeds to finance the Project, in consideration for the District's pledge of Sales Tax receipts to Yakima to pay debt service on the bonds and other Regional Center costs; WHEREAS, the Parties are authorized and empowered to enter into this Agreement pursuant to Chap. 39.34 RCW; NOW THEREFORE, in consideration of mutual promises and covenants herein, the Parties agree: Section 1. Definitions. Except for the terms defined in this section, and unless the context indicates otherwise, for the purposes of this Agreement and the Related Documents, the Parties shall use the definitions found in Chap. 35.57 RCW as they may be amended. Additional Bonds means Completion Bonds or Refunding Bonds issued by Yakima. Additional Revenue means all revenue received by the District (or by Yakima on behalf of the District), including gifts, grants, donations, Admission Charges, Admission Taxes, Parking Charges, Parking Taxes, Voted Sales Taxes and any other revenue received by the District and derived from the District's operation of the facilities, including investment income; but excluding Sales Tax Revenue and amounts received from Yakima pursuant to Section III(C) of the Development Agreement (including investment earning thereon). Administrative Costs means the costs of the District incurred in administering the District and the Development Agreement. Administrative Costs shall be specified in the District's annual budget submitted to Yakima for approval and to Selah and Union Gap for review and comment. Admissions Charge means any charge imposed by the District (or by Yakima on behalf of the District) for admission to its facilities, including charges for season tickets or subscriptions; cover charges, or charges for use of seats and tables, and other similar accommodations; charges for food and refreshment if free entertainment, recreation, or amusement is provided; charges for rental or use of equipment or facilities for purposes of recreation or amusement; and automobile parking charges if the amount of the charge is determined according to the number of passengers in the automobile. Admission Tax means any tax imposed by the District pursuant to RCW 35.57.100 to be paid by any person who pays an Admissions Charge. Agreement means this interlocal agreement. Bond Counsel means a firm of lawyers nationally recognized and accepted as bond counsel and so employed by Yakima. ? P' \SC \SC091 01/06/18 Bond Ordinance means the ordinance of the Yakima Council authorizing the issuance of the Bonds and any amendments and supplements. Bonds means the bonds, notes or other evidences of indebtedness issued pursuant to and under authority of the Bond Ordinance to provide for the financing or refinancing of the' Project. Yakima reserves the right not to issue the Bonds if, at the time the Bonds are to be sold, the total interest cost on the Bonds exceeds 5.55 %. Board means the governing body vested with the management of the affairs of the District. Bylaws means the rules adopted for the regulation or management of the affairs of the District approved by this Agreement and all subsequent amendments. Charter means the articles of organization of the District approved by this Agreement and all subsequent amendments. Code means the Internal Revenue Code of 1986, as amended, and all applicable regulations and rulings thereunder. Completion Bonds means additional bonds of Yakima issued to pay Costs of the Project. Costs of the Project means all capital costs that are paid or incurred by Yakima in connection with the design, development and construction of the Project, including, but not limited to all or a portion of the interest on Bonds during the period of construction of such improvements, and for a period of time thereafter; amounts required to meet any reserve requirement for the Bonds; the cost of paying or reimbursing Yakima or any fund thereof for expenses, including planning, permitting and design expenses, incident and properly allocable to the Project; and all other items of expense incident and properly allocable to designing, developing and constructing the Project, financing the Project and placing the Project in operation. Debt Service means the amount to be paid on the next succeeding Payment Date to pay the principal of, premium, if any, and interest on Bonds and any Additional Bonds coming due on such Payment Date. Debt Service Fund means the special fund(s) or account(s) established by Yakima pursuant to the Bond Ordinance or a Supplemental Bond Ordinance for the purpose of paying the principal of, premium, if any, and interest on Bonds and /or any Additional Bonds. Debt Service Reserve Fund means the Debt Service Reserve Fund (or Account), if any, established by Yakima under the Bond Ordinance or Supplemental Bond Ordinance. which secures the Bonds and /or any Additional Bonds. -3- P 1SC\SC091 01/06/18 Development Agreement means the Design, Development, Construction, Financing and Operating Agreement by and between Yakima and the District. District means the public facilities district created pursuant to Section 1. Favorable Opinion of Bond Counsel means, with respect to any action, a written legal opinion of Bond Counsel addressed to Yakima, to the effect that such action is permitted under the laws of the State and under applicable ordinances of the Yakima Council, including the Bond Ordinance and any Supplemental Bond Ordinance, and will not impair the exclusion of interest on a Bond or any other bonds of Yakima from gross income for federal income tax purposes under the Code (subject to the inclusion of any exceptions contained in the opinion delivered upon original issuance of such bond). Lease Agreement means the Lease Agreement by and between Yakima and the District providing for the transfer of a leasehold interest in the Convention Center and the underlying site to the District in satisfaction of the match required under RCW 82.14.390. Lodging Taxes means lodging taxes received by Yakima pursuant to Chap. 67 RCW. Net Proceeds, when used with reference to the Bonds, means the principal amount of such Bonds, plus original issue premium, if any, and less original issue discount, if any, and less the proceeds of the Bonds used to pay costs of issuance or deposited in the Debt Service Reserve Fund. Operating Manual means the Operating Standards Manual for the expanded Convention Center. Outstanding, when used as of any particular time with reference to Bonds or Additional Bonds, means all Bonds or Additional Bonds authenticated and delivered by Yakima under the Bond Ordinance or any Supplemental Bond Ordinance except (1) Bonds or Additional Bonds theretofore cancelled by Yakima or surrendered to Yakima for cancellation; (2) Bonds or Additional Bonds with respect to which all liability of Yakima shall have been discharged in accordance with the Bond Ordinance or Supplemental Bond Ordinance, as applicable, and (3) Bonds or Additional Bonds for the transfer or exchange of, or in lieu of, or in substitution for which other Bonds or Additional Bonds shall have been authenticated and delivered by Yakima pursuant to the Bond Ordinance or Supplemental Bond Ordinance, as applicable. Parking Charge means "vehicle parking charges" as defined in RCW 35.57.110. Parking Tax means a tax on any vehicle parking charge imposed at any parking facility that is owned or leased by the District pursuant to RCW 35.57.110. Payment Date means the dates specified in the Bond Ordinance, or any Supplemental Bond Ordinance, as dates for the payment of interest on, principal of or premium, if any, with respect to the Bonds or any Additional Bonds. -4- P \SC \SC091 01/06/18 PFD Revenue Reserve Fund means the PFD Revenue Reserve Fund (or Account), if any, established by Yakima under the Bond Ordinance or Supplemental Bond Ordinance. The amount of revenue consisting of the District's Sales Tax Revenue received by Yakima that shall be maintained in the PFD Revenue Reserve Fund shall be determined at the time that the Bonds are issued. Predevelopment Costs means the cost of all planning, legal, architectural, engineering and other services incurred by Yakima in connection with the Project until the date of issuance of the Bonds. Project means the design, construction, and operation of the additions to the Convention Center, as described in the Project Documents. Project Documents means all design documents (including drawings describing the structural, mechanical, acoustical, lighting, and electrical systems of the Project, detailed site plans, preliminary specifications, and schematic design documents), construction documents (including all drawings and specifications necessary to completely describe the Project in detail to a contractor for the purposes of bidding and construction, schedules, plans and specifications, and the construction contract) and Project budgets (setting forth the construction contract cost, taxes, all contingencies, fees and allowances). Related Documents mean the Charter, the Lease Agreement, the Bylaws and the Development Agreement. Refunding Bonds means bonds, notes or other evidence of indebtedness of Yakima the proceeds of which will be used to refund Bonds. Sales Tax means the nonvoted sales and use tax to be imposed by the District in accordance with RCW 82.14.390 at a rate not to exceed 0.033% of the selling price in the case of a sales tax or value of the article used in the case of a use tax, which tax shall be deducted from the amount of tax otherwise required to be collected or paid over to the State's Department of Revenue and shall expire when the Bonds and any Additional Bonds are retired, or, in any event, not more than 25 years after the Sales Tax is first collected. Sales Tax Revenue means all Sales Taxes received by the District. Selah means the City of Selah, Washington, a municipal corporation of the State, as now or hereafter constituted. State means the State of Washington. Supplemental Bond Ordinance means any ordinance adopted by the Yakima Council amending. or supplementing the Bond Ordinance, including any ordinance adopted by the Yakima Council in connection with the issuance of Additional Bonds. -5- P \SC \SC091 01/06/18 Union Gap means the City of Union Gap, Washington a municipal corporation of the State, as now or hereafter constituted. Voted Sales Tax means any sales and use tax imposed by the District pursuant to RCW 82.14.048 and approved by the voters. Yakima means the City of Yakima, a municipal corporation of the State, as now or hereafter constituted. Yakima City Manager means the City Manager of Yakima, or any successor to the office. Yakima Council means the City Council of Yakima, or any successor thereto as provided by law. Section 2. Formation of the District. Pursuant to RCW 35.57.010(1), the Parties hereby create a public facilities district. The District shall be a municipal corporation, an independent taxing authority and a taxing district, with the powers and limitations as set forth in its Charter and this Agreement. The District shall be coextensive with the boundaries of the Parties, as the same may be amended from time to time. Section 3. Name. The name of the District shall be the Yakima Regional Public Facilities District. Section 4. Purpose. The District shall acquire (by purchase, lease or otherwise), construct, own, remodel, maintain, equip, reequip, repair, finance, and /or operate (either directly or by contract) one or more Regional Centers, as defined in RCW 35.57.020. Specifically, the District shall acquire a leasehold interest in the Convention Center, and finance the Project and related parking facilities in accordance with the Development Agreement. Section 5. General Powers. Except as limited by State law, this Agreement and the Charter, the District shall have and may exercise all lawful powers necessary or convenient to affect the purposes for which the District is organized and to perform authorized corporate functions. Section 6. Specific Powers. Without limitation, the District shall have the following specific powers: (a) to acquire (by purchase, lease or otherwise), construct, own. remodel, maintain, equip. reequip, repair, finance, and operate (either directly or by contract) the Convention Center, the. Project. related parking facilities and any other Regional Center, subject to the limitations set forth in Section 7; (b) to accept and expend gifts, grants, and donations; (c) to impose the following charges, fees. and taxes authorized in RCW 35.57.040: -6- P \SC'SC091 01!06/18 (i) Admission Charges, Parking Charges and any other fees or charges for the use of any of its facilities, subject to the limitations set forth in Section 7; (ii) Admission Taxes, subject to the limitations set forth in Section 7; (iii) Parking Taxes, subject to the limitations set forth in Section 7; (iv) Voted Sales Taxes, subject to the limitations set forth in Section 7; (v) Sales Taxes at a rate not to exceed the limit set forth in RCW 82.14.390 to be collected from those persons . who are taxable by the State under Chaps. 82.08 and 82.12 RCW upon the occurrence of any taxable event within the District; (d) to use Sales Tax Revenue, Additional Revenue and other receipts for its purposes; (e) to contract with a public or private entity (including but not limited to Yakima) for the construction, financing, operation and /or management of the Project, related parking or for any other Regional Center owned or operated by the District, subject to Section 18; (f) to use the supplemental alternative public works contracting procedures set forth in Chap. 39.10 RCW: (g) to acquire and transfer real and personal property by lease, sublease, purchase, or sale, subject to the limitations set forth in Section 7; and (h) to issue general obligation bonds (subject to statutory debt limits) or revenue bonds. Section 7. Limitations on Powers. (a) No Power of Eminent Domain. The District shall not have the power of eminent domain. (b) Additional Regional Centers — Yakima Approval. The District's power to acquire, construct, own, remodel, maintain, equip, reequip, repair, finance, and operate (either directly or by contract) any Regional Center other than the Convention Center, the Project and related parking facilities is subject to the approval of Yakima; -7- P. \SC \SC091 01/06/18 (c) Convention Center Expansion Project — Yakima Approval. (i) Yakima Approval of Parking Taxes and Admission Taxes. In consideration for Yakima's agreement to issue the Bonds and apply Net Proceeds to pay Predevelopment Costs (to the extent that such costs are not to be paid from Sales Tax Revenue) and Costs of the Project under the terms of the Development Agreement, the District's power to impose Admission Taxes and Parking Taxes shall be subject to the approval of the Yakima Council. (ii) Yakima Approval of Admission Charges and Parking Charges. In consideration for Yakima's agreement to apply Lodging Taxes to pay a portion of the costs of operating and maintaining the Convention Center and the Project under the terms of the Development Agreement, the District's power to impose charges and fees, including all Admission Charges and Parking Charges, shall be subject to the approval of the Yakima Council. (iii) Yakima Approval of Gambling Activity and Public Display of Artwork. In consideration of Yakima's agreement to issue the Bonds and apply Net Proceeds to pay Predevelopment Costs (to the extent that such costs are not to be paid from Sales Tax Revenue) and Costs of the Project under the terms of the Development Agreement, and in consideration for Yakima's agreement to apply Lodging Taxes to pay a portion of the costs of operating and maintaining the Convention Center and the Project under the terms of the Development Agreement, the following activities shall be subject to the approval of the Yakima Council: a. any gambling activity under the authority of the District at the Convention Center; and b. any public display of artwork under the authority of the District at the Convention Center. (iv) Annual Budget Approval and Approval of Property Transfers. In consideration for Yakima's agreement to issue the Bonds and apply Net Proceeds to pay Predevelopment Costs (to the extent that such costs are not to be paid from Sales Tax Revenue) and Costs of the Project under the terms of the Development Agreement and in consideration of Yakima's agreement to apply Lodging Taxes to pay a portion of the costs of operating and maintaining the Convention Center under the terms of the Development Agreement, the District's annual budget, including Administrative Costs, shall be subject to the approval of the Yakima Council. The District shall forward its proposed annual budget to the Parties (for review and comment by Selah and Union Gap and for approval by the Yakima Council) no later than September 1 of the year -8- P.ISC\SC091 01/06/18 prior to the budget year. The District shall also forward any amendment to its approved annual budget to Yakima for approval and to Selah and Union Gap for review and comment. In addition, any acquisition or transfer of real and personal property with a value over $100,000 by lease, sublease, purchase, or sale by the District shall be subject to approval by the Yakima Council. (d) Party Approval of Voted Sales Tax. Prior to placing on the ballot any Voted Sales Tax, the District shall forward the draft proposed ballot language to each of the Parties. The District's power to impose the Voted Sales Tax is subject to the approval of each of the Parties. (e) No Political Activity. No funds, assets or property of the District shall be used for any political activity, except as set forth in the Charter. (f) No Private Inurement. The District shall not operate in a manner that creates any private inurement, except that the District may compensate employees; reimburse employees, Board members, volunteers and agents for reasonable expenses; defend and indemnify Board members or employees acting in good faith on behalf of the District and within the scope of their duties; hold harmless Board members or employees acting in good faith on behalf of the District and within the scope of their duties and provide liability insurance for employees, Board members, volunteers or other agents. Section 8. Charter. The Charter is hereby approved in the form set forth as Exhibit A. The Charter shall be deemed issued upon execution of this Agreement by all of the Parties. The Charter shall be issued in duplicate originals, each bearing the Yakima seal attested by the City Clerk of Yakima. One original shall be filed with Yakima; duplicate originals shall be provided to the District and to the City Clerks of Selah and Union Gap. The Charter shall be amended only with the approval of each of the Parties. Section 9. Effect of Issuance of Charter. The District shall commence its existence effective upon issuance of the Charter by Yakima pursuant to Section 8 (that is, upon execution of this Agreement by all of the Parties). Except as against the State or the Parties in a proceeding to cancel or revoke the Charter, delivery of a duplicate original Charter shall conclusively establish that the District has been established in compliance with the procedures of this Agreement. Section 10. Board of Directors. A board consisting of seven directors (the "Board "). as described in the Charter, is hereby established to govern the affairs of the District. The directors shall be appointed and serve their terms as provided in the Charter. All corporate powers of the District shall be exercised by or under the authority of the Board; and the business, property and affairs of the District shall be managed under the direction of the Board. except as may be otherwise provided for by law, this Agreement, or in the Charter. Section 11. Board Removal. As set forth in the Charter, if it is determined for any reason that any or all of the Board members should be removed from office, the City Council for -9- P 1SC\SC091 O1/O6/78 the City that originally appointed the Board member to be removed may by ordinance remove that Board member from office. The term of any Board member removed pursuant to this section shall expire when the removal ordinance takes effect. Vacancies created under this section shall be filled in the manner provided in the Charter. Section 12. Organizational Meeting. Upon issuance of the Charter, the Yakima City Manager or his designee shall call an organizational meeting of the initial Board within 30 days, giving at least three days' advance written notice to each Board Member, unless waived in writing. At such meeting, the Board shall organize itself, may appoint officers, and shall select the District's place of business. Section 13. Bylaws. (a) The initial Bylaws of the District are hereby approved in the form set forth at Exhibit B. The power to alter, amend, or repeal the Bylaws or adopt new ones shall be vested in the Board, except as otherwise provided in this Agreement or in the Charter. The Bylaws shall be consistent with the Charter. (b) As necessary and appropriate in the discretion of the Yakima Council, the Yakima Council may amend the Bylaws by ordinance adopted at or after a public meeting held with notice to the District, Selah and Union Gap. Amendments to the Bylaws adopted by the Yakima Council may not be further amended by the District for one year except with Yakima Council approval. Section 14. Dissolution. So long as the Bonds are Outstanding, if the Yakima Council makes an affirmative finding that dissolution is warranted for any reason, the existence of the District may be terminated by ordinance of the Yakima Council adopted at or after a public meeting. held with notice to the City of Selah, the City of Union Gap, the District and the Board and affording a reasonable opportunity to be heard and present testimony. At such time as the Bonds are no longer Outstanding, if all three of the Parties make an affirmative finding that dissolution is warranted for any reason, the existence of the District may be terminated by ordinance of the City Council of all three Parties adopted at or after a public meeting, held with notice to the other Parties, the District and the Board and affording a reasonable opportunity to be heard and present testimony. In either event, dissolution shall be accomplished as provided in the Charter, and shall not take effect until proper provision has been made for disposition of all District assets. At such time as the Bonds are no longer Outstanding, one or two of the Parties may withdraw from this Agreement, by ordinance of the City Council of such Party or Parties, adopted at or after a public meeting. held with notice to the other Parties, the District and the Board and affording a reasonable opportunity to be heard and present testimony. In such event, the District shall not be dissolved but shall continue its existence in all respects, except that the boundaries of the District shall be deemed revised to exclude the territory of the withdrawing Party(ies). -10- P \SC \SC091 01/06/18 Upon satisfactory completion of dissolution proceedings, the City Clerk of Yakima shall indicate such dissolution by inscription of "Charter cancelled" on the Charter of the District on file with the City and, when available. on the duplicate originals of the District, Selah and Union Gap, and the existence of the District shall cease. The City Clerk of Yakima shall give notice thereof pursuant to State law and to other persons requested by the District in its dissolution statement. The Parties hereby acknowledge that the District's assets and property will largely be derived from Yakima. Specifically, Yakima will transfer a leasehold interest in the Convention Center and the underlying site to the District, will issue bonds to pay Predevelopment Costs (to the extent that such costs are not to be paid from Sales Tax Revenue) and Costs of the Project, will construct the Project, and will apply Lodging Taxes to pay a portion of the cost of operating and maintaining the Convention Center and the Project. Accordingly, upon dissolution of the District and the winding up of its affairs, all of the District interest in the Convention Center, the site, the Project, and all assets or property of the District that are proceeds of the foregoing shall vest in Yakima unless the Yakima Council or a trustee or court has provided for the transfer of the District's interest in the Convention Center, the site, the Project, and proceeds of the District to a qualified entity or entities that will fulfill the purposes for which the District was chartered. At such time as the District acquires any other Regional Center, the Parties shall enter into a plan providing for the disposition of such Regional Center and related assets upon dissolution of the District. If Selah or Union Gap fail to enter into such a plan, then upon dissolution of the District and the winding up of its affairs, title to such Regional Center and all assets or property of the District that are proceeds of the foregoing shall vest in Yakima unless the Yakima Council or a trustee or court has provided for the transfer of the such Regional Center and proceeds of the District to a qualified entity or entities that will fulfill the purposes for which the District was chartered. Section 15. Indemnification. The City of Yakima shall indemnify and hold harmless the Cities of Union Gap and Selah from any liability arising from a challenge to the formation of the Yakima Regional Public Facilities District under RCW 35.57.010. Section 16. Ancillary Authority. The Yakima City Manager is granted all such power and authority as reasonably necessary or convenient to enable him or her to administer this Agreement efficiently and to perform the duties imposed in this Agreement and the Related Documents. Section 17. Term of Agreement. This Agreement shall automatically terminate on the date on which District is dissolved pursuant to Section 14. Termination shall not relieve any Party of responsibility_ for meeting financial and other obligations outstanding at the time of termination. -11- P \SC \SCO9I 01/06/18 Section 18. Transfer of the Convention Center to the District. Yakima hereby agrees to enter into. the Lease Agreement. The Parties agree that the transfer of a leasehold interest in the Convention Center and the underlying site to the District pursuant to the Lease Agreement shall constitute a donation from the City to the District to be used . for the construction, improvement or rehabilitation of a Regional Center as defined in RCW 82.14.390. The value of the Convention Center and the underlying site is approximately $11,800,000. The Parties agree that the value of the leasehold interest in the Convention Center and the underlying site to be transferred pursuant to the Lease Agreement is substantially more than the net present value of 33% of total Sales Taxes to be received by the District (approximately $2.4 million). Section 19. Management Agreements. Any management contract entered into by the District or Yakima for the operation or management of the Convention Center and the Project shall be consistent with the Development Agreement. Prior to executing any management contract (with the exception of the Development Agreement), the District or Yakima, as applicable, shall have received a Favorable Opinion of Bond Counsel regarding the terms of the management contract. Section 20. Limitation of Liability. The District is a separate legal entity. All liabilities incurred by the District shall be satisfied exclusively from the assets, credit, and properties of the District, and no creditor or other person shall have any right of action against or recourse to the Parties, their assets, credit, or services, on account of any debts, obligations, liabilities or acts or omissions of the .District. Section 21. Non - Waiver. No waiver by any Party of any term or condition of this Agreement shall be deemed or construed to constitute a waiver of any other term or condition or of any subsequent breach whether of the same or of a different provision of this Agreement. Section 22. No Third -Party Beneficiary. This Agreement is entered into for the benefit of the residents of the Parties to facilitate the completion of the Project, stimulate economic development by creating jobs, realize additional sales and lodging tax revenues, attract commercial business and tourism, and provide facilities for convention, special events, community events including public meetings and performing arts events. This Agreement is not entered into with the intent that it shall benefit any party not signing this Agreement, and no other person or entity shall be entitled to be treated as a third -party beneficiary of this Agreement; provided that any owner of the Bonds or Additional Bonds shall be a third -party beneficiary for the purposes of enforcing payments to be made by the District to Yakima in amounts sufficient for Yakima to pay Debt Service. Section 23. The City of Yakima intends to contribute lodging taxes to pay a portion of the cost of operating and maintaining the Convention Center, in an amount, if any, determined annually by the Yakima City Council. As between the Cities, as set forth in the Development Agreement, the City of Yakima will also be solely responsible to contribute revenues in the case of a Sales Tax shortfall. The Cities of Union Gap and Selah shall have no financial responsibility to the District in the event of a Sales Tax shortfall. • -12- P:\ SC \SC091 01/06/19 PAa Section 21. Counterparts. This Agreement may be executed in two or more counterparts, and each such counterpart shall be deemed to be an original instrument. All such counterparts together will constitute one and the same Agreement. IN WITNESS HEREOF, this Agreement is executed by the City of Yakima, the City of Selah and the City of Union Gap. THE CITY OF YAKIMA, WASHINGTON Contract No. 2001 -70 Ordinance No. 2001 -28 Richard A. Zais, Jr. City Manager THE CITY OF SELAH,.:WASHItGTON By Robert Jones Mayor THE CITY OF UNION GAP, WASHINGTON By: -" c_ d 'Q�� , C. Reeves, . Mayor -13- P 1SC \SC091 01/06/18 EXHIBIT A CHARTER A-1 P \SC \SC091 01/06/18 APPENDIX A TO INTERLOCAL AGREEMENT A -1 Table Of Contents Page ARTICLE I Name and Seal: Definitions 1 Section 1.1. Name 1 Section 1.2. Seal 1 Section 1.3. Definitions 1 ARTICLE II Authority and Limit on Liability 1 Section 2.1. Authority 1 Section 2.2. Limit on Liability 2 Section 2.3. Mandatory Disclaimer 2 ARTICLE III Duration 2 ARTICLE IV Purpose 3 ARTICLE V Powers 4 Section 5.1. Powers 4 ( Section 5.2. Limitation of Powers 6 ARTICLE VI Board of Directors And Corporate Officers 10 Section 6.1. Powers 10 Section 6.2. Board Composition 10 Section 6.3. Terms of Office 11 Section 6.4. Quorum and Manner of Action 12 Section 6.5. Officers and Division of Duties 13 Section 6.6. Bonding, of Corporate Officers 13 Section 6.7. Executive Committee 13 Section 6.8. Removal of Board Members 13 ARTICLE VII Meetings 15 Section 7.1. Board Meetings 15 Section 7.2. Parliamentary Authority 15 Section 7.3. Minutes 16 ARTICLE VIII Procedural Requirements 16 Section 8.1. Board Review and Concurrence 16 Section 8.2. Establishment and Maintenance of Office and Records 17 Section 8.3. Access to Records 17 Section 8.4. Deposit of Public Funds 17 Section 8.5. Reports and Information 18 Section 8.6. Audits and Inspections 18 Section 8.7. Insurance 19 P• \SC \SCO9Q 01/07/03 Section 8.8. Bylaws 19 Section 8.9. Conflict of Interest 19 Section 8.10. Discrimination 21 ARTICLE IX Amendments to Charter and Bylaws 22 Section 9.1. Proposals to Amend Charter 22 Section 9.2. Charter Amendments 22 Section 9.3. Amendments to Bylaws 23 ARTICLE X Commencement 23 ARTICLE XI Dissolution 24 Section 11.1. Dissolution Process 24 Section 11.2. Trusteeship 24 ARTICLE XII Approval of Charter 25 P \SC \SCO9Q P \SC \SCO9Q 01/07/03 CHARTER OF THE YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT ARTICLE I Name and Seal; Definitions Section 1.1. Name. The name of this public facilities district shall be the YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT (hereinafter referred to as the "District "). Section 1.2. Seal. The District's seal shall be a circle with the name " YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT" inscribed therein. The Board shall approve the seal by resolution. Section 1.3. Definitions. All capitalized terms used but not defined herein shall have the meanings set forth in the Interlocal Cooperation Agreement To Form a Public Facilities District by and among the City of Yakima, Washington ( "Yakima "), the City of Selah, Washington ( "Selah ") and the City of Union Gap, Washington ( "Union Gap" and collectively with Yakima and Selah, the "Cities "), dated June 25, 2001 (the "Interlocal Agreement "). ARTICLE II Authority and Limit on Liability Section 2.1. Authority. The District is a public facilities district organized pursuant to RCW 35.57.010, the Interlocal Agreement, Ordinance No. 2001 -28 of Yakima, Ordinance Nos. 2298 and 2300 of Union Gap, and motion of the Selah City Council approved on June 12, 2001. Section 2.2. Limit on Liability. All liabilities incurred by the District shall be satisfied exclusively from the assets, credit, and properties of the District, and no creditor or other person shall have any right of action against or recourse to the Cities, their assets, credit, or services, on account of any debts, obligations, liabilities or acts or omissions of the District. Section 2.3. Mandatory Disclaimer. The following disclaimer shall be posted in a prominent place where the public may readily see it in the District's principal and other offices. It shall also be printed or stamped on all contracts, notes, bonds, and other documents that may entail any debt or liability by the District. The YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT is organized pursuant to RCW 35.57.010, the Interlocal Financing Agreement by and among the City of Yakima, Washington, the City of Selah, Washington and the City of Union Gap, Washington, dated June 25, 2001 (the " Interlocal Agreement "), Ordinance No. 2001 -28 of the City of Yakima, Ordinance Nos. 2298 and 2300 of the City of Union Gap, and motion of the City of Selah City Council approved on June 12, 2001. The Interlocal Agreement provides as follows: "All liabilities incurred by the District shall be satisfied exclusively from the assets, credit, and properties of the District, and no creditor or other person shall have any right of action against or recourse to the Cities of Yakima, Selah or Union Gap, their assets, credit, or services, on account of any debts, obligations, liabilities or acts or omissions of the District." ARTICLE III Duration The duration of the District shall be perpetual except as provided in the Interlocal Agreement. ARTICLE IV Purpose The purpose of the District is to provide a legal entity under RCW 35.57.010 and the Interlocal Agreement to acquire (by purchase, lease or otherwise), construct, own, remodel, maintain, equip, reequip, repair, finance, and operate (either directly or by contract) one or more -2- P. \SC \SC09Q 01/07/03 Regional Centers, as defined in RCW 35.57.020, including, but are not limited to, the Convention Center consisting of the following components: a) Operation of Convention Center facilities, including meeting space, ballroom and other event facilities, with related activities; b) Operation of Convention Center programs and exhibits; c) Acquisition, display and maintenance of Convention Center exhibits; d) Restaurant or other food, beverage and banquet service facilities to enhance the attractiveness of the Convention Center to visitors; f) Any other uses reasonably or necessarily related to the operation of Convention Center facilities; and g) Related parking. To the extent appropriate and consistent with the needs and objectives of the Cities and the District's purpose, the District may acquire, lease and/or operate and manage real property, including but not limited to the Convention Center; secure financing; undertake or otherwise provide for the construction and development of the Project; and otherwise undertake and accomplish all activities and projects necessary for the Project and the operation of the Convention Center. The District shall have no purpose other than acquisition, construction, ownership, remodeling, maintenance, equipping, reequipping, repair, financing, and/or operation (either directly or by contract) of the Convention Center and any other Regional Center approved under the terms of the Interlocal Agreement. For the purpose only of securing the exemption from federal income taxation for interest on obligations of the District, the District constitutes an authority and instrumentality of Yakima (within the meaning of those terms in federal regulations and rulings pursuant to Section 103 of the Code). -3- P. \SC \SC09Q 01/07/03 ARTICLE V Powers Section 5.1. Powers. The District shall have and may exercise all lawful powers conferred by State law, the Interlocal Agreement, ordinance, this Charter and its Bylaws, including the usual powers of a corporation for public purposes and, without limitation, the power to: A. Hire employees, staff, and services; prescribe their duties, qualifications, and compensation; and secure the services of consultants for professional services, technical assistance, or advice; B . Contract for any corporate purpose with the United States, a state, and any political subdivision or agency of either, and with individuals, associations and corporations and other entities (including public or private entities) including the financing, construction, equipping, operation or management of the Convention Center and expansion Project, related parking or for any other Regional Center owned or operated by the District; C. Sue and be sued in its name; D . Purchase, lease, exchange, mortgage, encumber, improve, use, or otherwise transfer or grant security interests in real or personal property or any interests therein; grant or acquire options on real and personal property; and contract regarding the income or receipts from real and personal property; E. Accept and expend gifts, grants, and donations, including funds or property from the United States, a state, and any municipality or political subdivision or agency of either, property acquired by any such governmental unit through the exercise of its power of eminent domain, and funds or property from corporations, associations, individuals or any other source, and comply with the terms and conditions therefor; -4- P \SC \SCO9Q 01/07/03 F. Impose the following charges, fees, and taxes authorized in RCW 35.57.040: Admission Charges, Parking Charges and any other fees or charges for services, goods or use of any of its facilities; Admission Taxes; Parking Taxes; Voted Sales Taxes; and Sales Taxes at a rate not to exceed the limit set forth in RCW 82.14.390; G. Use Sales Tax Revenue, Additional Revenue and other receipts for its corporate purposes; H. Use the supplemental alternative public works contracting procedures set forth in Chap. 39.10 RCW; Borrow or lend its funds, property, credit or services for corporate purposes, or act as a surety or guarantor for corporate purposes; issue revenue bonds or general obligation bonds in conformity with the debt limitations set forth in RCW 35.57.030 and other applicable provisions of State law in such principal amounts as in the discretion of the District shall be necessary or appropriate to provide sufficient funds for achieving any corporate purposes; provided, however, that all bonds and notes or liabilities occurring thereunder shall be satisfied exclusively from the assets, properties or credit of such District, and no creditor or other person shall have any recourse to the assets, credit or services of the Cities thereby, unless any or all of the Cities shall by ordinance expressly guarantee such bonds or notes; J. Manage, on behalf of the United States, a state, and any municipality or political subdivision or agency of either, any property acquired by such entity through gift, purchase, construction, lease, assignment, default, or exercise of the power of eminent domain; K. Recommend to the United States, a state, and any municipality or political subdivision or agency of either, consistent with all applicable laws, such tax, -5- P \SC \SCO9Q 01/07/03 financing, and security measures as the District may deem appropriate to maximize the public interest in activities in which the District by this Charter has a particular responsibility; L. Control the use and disposition of corporate property, assets, and credit; M. Invest and reinvest its funds; N. Establish the consideration (if any) for property transferred, all in pursuit of corporate purposes; 0. Maintain books and records as appropriate for the conduct of its affairs; P. Conduct corporate affairs, carry on its operations, and use its property as allowed by law and consistent with this Charter, and its Bylaws; name corporate officials; Q. Identify and recommend to the United States, a state, and any municipality or political subdivision or agency of either, the acquisition by the appropriate governmental entity for transfer to or use by the District of property and property rights, which, if so acquired, whether through purchase or the exercise of eminent domain, and so transferred or used, would materially advance the purpose for which the District is chartered; and R. Exercise and enjoy such other powers as may be authorized by law. Section 5.2. Limitation of Powers. The District organized under this Charter in all activities and transactions shall be limited in the following respects: A. The District shall have no power of eminent domain; B. The District may not incur or create any liability that permits recourse by any party or member of the public to any assets, services, resources, or credit of the Cities. All liabilities incurred by the District shall be satisfied exclusively from the assets and credit of the District; no creditor or other person shall have any -6- P 1SC1SCO9Q 01/07/03 recourse to the assets, credit, or services of the Cities on account of any debts, obligations, liabilities, acts, or omissions of the District; C. No funds, assets, or property of the District shall be used for any partisan political activity or to further the election or defeat of any candidate for public office or ballot proposition; nor shall any funds or a substantial part of the activities of the District be used for publicity or educational purposes designed to support or defeat legislation pending before the Congress of the United States, or the legislature of the State or the Cities; provided, however, that funds may be used for representatives of the District to communicate with members of Congress, State legislators or City council members concerning funding and other matters directly affecting the District, so long as such activities do not constitute a substantial part of the District's activities and so long as such activities are not specifically limited elsewhere in this Charter or the Interlocal Agreement; D. All Sales Tax Revenue, Additional Revenue, receipts, assets, or credit of the District shall be applied toward or expended upon services, projects, and activities authorized by this Charter. No part of the net earnings of the District shall inure to the benefit of, or be distributable as such to, the Board members, officers of the District or other private persons, except that the District is authorized and empowered to: i. Compensate those persons or entities performing services for the District, including District employees and legal counsel, a reasonable amount for services rendered, and reimburse Board members and others for reasonable expenses actually incurred in performing their duties; ii. Assist District officials as members of a general class of persons to be assisted by a District - approved project or activity to the same extent as other -7- P.1SC \SCO9Q 01/07/03 members of the class so long as no special privileges or treatment accrues to such corporate official by reason of his or her status or position in the District; iii. Defend and indemnify any current or former Board member or employee and their successors, spouses and marital communities against all costs, expenses, judgments, and liabilities, including attorneys' fees, reasonably incurred by or imposed upon him or her in connection with or resulting from any civil claim, action, or proceeding in which he or she is or may be made a party by reason of being or having been a corporate official, or by reason of any action alleged to have been taken or omitted by him or her as such official, provided that he or she was acting in good faith on behalf of the District and within the scope of duties imposed or authorized by law. This power of indemnification shall not be exclusive of other rights to which corporate officials may be entitled as a matter of law; iv. Purchase insurance to protect and hold personally harmless any of its officials, its employees, and its agents from any civil action, claim, or proceeding instituted against the foregoing individuals arising out of the performance, in good faith, of duties for, or employment with, the District and to hold these individuals harmless from any expenses connected with the defense, settlement, or monetary judgments from such actions, claims, or proceedings. The purchase of such insurance and its policy limits shall be discretionary with the Board, and such insurance shall not be considered to be compensation to the insured individuals. The powers conferred by this subsection shall not be exclusive of any other powers conferred by law to purchase liability insurance; and v. Sell assets for a consideration greater than their reasonable market value or acquisition costs, charge more for services than the expense of providing -8- P \SC \SCO9Q 01/07/03 them, or otherwise secure an increment in a transaction, or carry out any other transaction or activity, so long as such gain is not the principal object or purpose of the District's transactions or activities and is applied to or expended upon services, projects, and activities otherwise authorized as corporate purposes; E. The District organized under this chapter shall not issue shares of stock, pay dividends, make private distribution of assets, make loans to its board members or employees or otherwise engage in business for private gain; F. The District's power to acquire (by purchase, lease or otherwise), construct, own, remodel, maintain, equip, reequip, repair, finance, and operate (either directly or by contract) any Regional Center other than the Convention Center, the Project and related parking facilities is subject to the approval of Yakima; (. G. In consideration for Yakima's agreement to issue the Bonds and apply Net Proceeds to pay Predevelopment Costs and Costs of the Project under the terms of the Development Agreement and Yakima's agreement to apply Lodging Taxes to pay a portion of Operation and Maintenance Costs under the terms of the Development Agreement, the following District powers shall be subject to the approval of the Yakima City Council: i. The District shall not impose Admission Charges or Parking Charges without the prior approval of the Yakima City Council; ii. The District shall not impose Admission Taxes or Parking Taxes without the prior approval of the Yakima City Council; iii. The District's annual budget, including Administrative Costs, shall be subject to annual approval by the Yakima City Council; -9- P' \SC1SC09Q 01/07/03 iv. Any acquisition or transfer of real and personal property with a value over $100,000 by lease, sublease, purchase, or sale by the District shall be subject to approval by the Yakima City Council; v. Any gambling activity under the authority of the District at the Convention Center shall be subject to approval by the Yakima City Council; and vi. Any public display of artwork under the authority of the District at the Convention Center shall be subject to approval by the Yakima City Council. H . The District's power to impose Voted Sales Taxes authorized under RCW 82.14.048 is subject to the approval by each of the Parties prior to placement on the ballot. ARTICLE VI Board of Directors And Corporate Officers Section 6.1. Powers. The Board shall govern the affairs of the District. All corporate powers of the District shall be exercised by or under the authority of, and the business, property and affairs of the District shall be managed under the direction of, the Board except as may be otherwise provided in this Charter, the Interlocal Agreement or State law. Section 6.2. Board Composition. Pursuant to RCW 35.57.010, the Board shall be composed of seven members. The initial members of the Board shall be appointed as follows. One Boardmember shall be appointed by the Yakima City Council, one Boardmember by the Selah City Council and one Boardmember by the Union Gap City Council. Four Boardmembers shall be appointed by the Yakima City Council based on recommendations from local organizations such as the local chamber of commerce, local economic development council, and local labor council. The Boardmembers shall not be council members of the Cities either at the - -- time of their appointment or at any time thereafter. -10- P. \SC \SCO9Q 01/07/03 Section 6.3. Terms of Office. A. The terms of office of the initially appointed members of the Board shall commence on the effective date of this Charter and shall be staggered as follows: 1. Group I. One member for a one -year term; 2. Group II. One member for a two -year term; 3. Group III. One member for a three -year term; and 4. Group IV. The remainder for four -year terms. B. With respect to the appointments of the initial Board members, the following members are assigned to the four groups identified in subsection 6.3.A above for purposes of determining the length of terms of such initial Board members: the Group I member shall be appointed by the Yakima City Council, based on recommendations from local organizations; the Group II member shall be appointed by the Yakima City Council; the Group III member shall be appointed by the Yakima City Council, based on recommendations from local organizations; the remainder of the appointments shall be Group IV members. C. The expired term of the Group I member shall be filled by the Yakima City Council, based on recommendations from local organizations. D. The expired term of the Group II member shall be filled by appointment of the Yakima City Council. E. The expired term of the Group III member shall be filled by appointment of the Yakima City Council, based on recommendations from local organizations. F. The expired term of one of the Group IV members shall be filled by the Selah City Council, the expired term of one of the Group IV members shall be filled by the Union Gap City Council and the expired term of the remainder of the Group IV members shall be filled by the Yakima City Council, based on \ recommendations from local organizations. -1 1- P \SC \SC09Q 01/07/03 G. Except for the initial members of the board, each member shall be appointed to serve for a four -year term. Each member shall continue to serve until his or her successor has been appointed and qualified as provided in the bylaws. Members may be reappointed to serve not more than four consecutive full terms. H. Terms shall expire on June 30of the year in which the respective group is scheduled to terminate. Nominations for new appointees or for reappointment of existing members shall be processed in the manner provided in the Bylaws. I. Vacancies occurring during the course of a term shall be filled by appointment by the City Manager of the City that made the original appointment to the vacant position, subject to confirmation by the City Council of the City that made the original appointment to the vacant position, in the manner and to the effect provided in the Bylaws to complete the unexpired term to which appointed. Section 6.4. Quorum and Manner of Action. At all meetings of the Board a majority of directors then in office shall constitute a quorum. The Board may adopt resolutions of the Board only by an affirmative vote of a majority of the Boardmembers then in office. Section 6.5. Officers and Division of Duties. A. The initial officers of the District shall be the President, Vice President, Secretary and Treasurer of the Board. In no event shall there be less than two officers designated, nor shall the same person occupy the office of president and that of treasurer, or any office responsible for custody of funds and maintenance of accounts and finances. Additional officers may be provided for in the Bylaws. B. The President shall be the agent of the District for service of process; the Bylaws may designate additional corporate officials as agents to receive or initiate process. The corporate officers, who shall be selected from among the membership of the Board as provided in the Bylaws, shall manage the daily affairs and operations of the District. -12- P \SC1SC09Q 01/07/03 C. The Board shall oversee the activities of the corporate officers, establish and /or implement policy, participate in corporate activity in matters prescribed by the Interlocal Agreement, and shall have stewardship for management and determination of all corporate affairs. Section 6.6. Bonding of Corporate Officers. Each corporate official responsible for handling accounts and finances shall file as soon as practicable with the District a fidelity bond in an amount determined by the District to be adequate and appropriate, and may hold the corporate office only as long as such a bond continues in effect. Section 6.7. Executive Committee. The Bylaws may provide for an Executive Committee, which shall be appointed and /or removed by the Board, and shall have and exercise such authority of the Board in the management between meetings of the Board, as may be specified in the Bylaws. Section 6.8. Removal of Board Members. The City Council of each City may by ordinance remove from the Board with or without cause any member of the Board appointed by that City at or after a public meeting, with prior notice to the District and the other Cities. In the event of removal, members shall be replaced in the same manner as provided for in filling vacancies on the Board. -13- P.1SC\SCO9Q 01/07/03 ARTICLE VII Meetings Section 7.1. Board Meetings. A. The Board shall meet at least quarterly each year; special meetings of the Board may be called as provided by the Charter, the Bylaws or RCW 42.30.010 et seq. B. The Board shall be the governing body of a public agency as defined in RCW 42.30.020, and all meetings of the board shall be held and conducted in accordance with RCW 42.30.010 et seq. ( "The Open Public Meetings Act "). Notice of meetings shall be given in a manner consistent with RCW 42.30.010 et seq. In addition, the District shall routinely provide reasonable notice of meetings to any individual specifically requesting it in writing. C. All Board meetings, including executive and all other permanent and ad hoc committee meetings, shall be open to the public to the extent required by RCW 42.30.010 et seq. G, The Board and committees may hold executive sessions to consider matters enumerated in RCW 42.30.010 et seq., or privileged matters recognized by law, and shall enter the cause therefor upon its official journal. At all public meetings, any citizen shall have a reasonable opportunity to address the Board either orally or by written petition. Voting by telephone or by proxy is not permitted. Section 7.2. Parliamentary Authority. The rules in Robert's Rules of Order (revised) shall govern the District in all cases to which they are applicable, where they are not inconsistent with the Charter or with the special rules of order of the District set forth in the Bylaws. -14- P. \SC\SC09Q 01/07/03 Section 7.3. Minutes. Copies of the minutes of all regular or special meetings of the Board shall be available to any person or organization that requests them. The minutes of all Board meetings shall include a record of individual votes on all matters requiring Board concurrence or approval. ARTICLE VIII Procedural Requirements Section 8.1. Board Review and Concurrence. A. At least quarterly, the Board shall review monthly statements of income and expenses, which compare budgeted expenditures to actual expenditures. The Board shall review all such information at regular meetings, the minutes of which shall specifically note such reviews and include such information. B. General or particular authorization or review and concurrence of the Board by resolution shall be necessary for any of the following transactions: 1. Transfer or conveyance of an interest in real estate other than release of a lien or satisfaction of a mortgage after payment has been received and the execution of a lease for a current term less than one year; 2. The contracting of debts, issuances of notes, debentures, or bonds, and the mortgaging or pledging of authority assets or credit to secure the same; 3. The donation of money, property or other assets belonging to the District; 4. An action by the District as a surety or guarantor; 5. All capital expenditures in excess of twenty -five thousand dollars ($25,000), and all other transactions in which: (i) the consideration exchanged or received by the District exceeds the greater of one percent of the previous year's operating budget or twenty -five thousand dollars ($25,000) or (ii) the performance by the District shall extend over a period exceeding one year from the date of execution of an agreement therefor; -1 5- P 1SC \SCO9Q 01/07/03 6. Adoption of an annual budget approved by the Yakima City Council. The District shall forward its proposed annual budget to the Cities (for review and comment by Selah and Union Gap and for approval by the Yakima City Council) no later than September 1 of the year prior to the budget year. The annual budget shall include a projected operating and capital budget for the next fiscal year as well as a summary of projects and activities to be undertaken during the next fiscal year; 7. Certification of annual reports and statements to be filed with the Cities as true and correct in the opinion of the Board and of its members; 8. Proposed amendments to the Charter and Bylaws; and 9. Such other transactions, duties, and responsibilities as the Charter shall repose in the Board or the Board may reserve. Section 8.2. Establishment and Maintenance of Office and Records. The District shall: r' A. Maintain a principal office at a location within the boundaries of the Cities; B. File and maintain with each City a current listing of all Board officials, their positions and their home addresses, their business and home phone numbers, the address of the District's principal office and of all other offices used by it, and a current set of its Bylaws; and C. Maintain all of its records in a manner consistent with the Preservation and Destruction of Public Records Act, RCW Chapter 40.14. Section 8.3. Access to Records. A. The District shall keep an official journal containing the minutes of proceedings at all meetings of the Board and the resolutions of the Board. B. Any person shall have access to records and information of the District to the extent required by State law. Section 8.4. Deposit of Public Funds. All money belonging to or collected for the use of the District, coming into the hands of any corporate official or officer thereof, shall be deposited in a qualified public depositary as determined by the Washington Public Deposit Protection -16- P\SCISC09Q 01/07/03 Commission. Such monies may be invested at the direction of the Board, by resolution, in investments that would be lawful for the investments of Yakima funds. Section 8.5. Reports and Information. The District shall, within five months after the end of its fiscal year, file an annual report with each City containing financial statements of assets and liabilities, revenue and expenditures and changes in its financial position during the previous year; a summary of significant accomplishments; a list of depositories used; a list of authority officials and a list of officials bonded pursuant to Section 6.6 of this Charter. Section 8.6. Audits and Inspections. The District is subject to review and audit by the State Auditor, as provided by law. The District shall send a copy of its audited financial statements to each City no later than 30 days after such audited financial statements are available. In addition, the District shall, at any time during normal business hours and as often as the Yakima City Council, the Yakima City Manager or his designee, or the State Auditor deem necessary, make available to the Yakima City Council, the Yakima City Manager or his designee, the State Auditor and, at the request of the City, an independent auditor for examination all of its financial records, and shall permit the Yakima City Council, the Yakima City Manager or his designee, State Auditor and, at the request of the City, an independent auditor to audit, examine and make excerpts or transcripts from such records, and to make audits of all contracts, invoices, materials, payrolls, records of personnel, conditions of employment and other data relating to all the aforesaid matters. The District shall review with the Yakima City Manager or his or her designee within 45 days of receipt and take immediate corrective action to address any audit findings or qualifications in its audit reports. Section 8.7. Insurance. The District shall maintain in full force and effect public liability insurance in an amount sufficient to cover potential claims for bodily injury, death or disability and for property damage, which may arise from or be related to projects and activities of the District, naming Yakima as an additional insured, if such insurance shall be available at a -17- P\SC \SCO9Q 01/07/03 reasonable price as determined by the Board. If insurance is not maintained the District shall maintain adequate reserves to cover potential claims and losses. Section 8.8. Bylaws. A. The properly adopted Bylaws of the District shall be the official rules for the governing of meetings and the affairs of the District. B. The Bylaws may be amended as provided in Article IX of this Charter in order to provide additional or different rules for governing the District and its activities as are not inconsistent with this Charter. C. Amendments to the Bylaws shall be effective 10 days after filing of same with the City Clerks of Yakima, Selah and Union Gap, unless such amendment(s) shall have been passed by unanimous vote of the Board and an earlier effective date shall have been set. Section 8.9. Conflict of Interest. A. Except as provided in this section, a Board member or employee of the District may not participate in Board decisions if that person or a member of that person's immediate family has a financial interest in the issue being decided unless the financial interest is a remote financial interest and participation is approved under subsection B of this section. B. A Board member or employee may participate in a decision if that person or a member of that person's immediate family has only a remote financial interest, the fact and extent of the interest is disclosed to the Board in a public meeting and is noted in the minutes of the Board before any participation by the member in the decision, and thereafter in a public meeting the Board by vote authorizes or approves the participation. If the person whose participation is under consideration is a Board member, that person may not vote under this subsection. For purposes of this subsection, "remote financial interest" means: (i) that of a nonsalaried officer or director of a nonprofit corporation; - 1 8- P1SCVSCO9Q 01/07/03 (ii) that of an employee or agent of a contracting party where the compensation of the employee or agent consists entirely of fixed wages or salary and the contract is awarded by bid or by other competitive process; (iii) that of a landlord or tenant of a contracting party, except in cases where the property subject to the lease or sublease is owned or managed by the public corporation; (iv) that of a holder of less than one percent of the shares of the corporation or cooperative that is the contracting party; or (v) that of an owner of a savings and loan or bank savings or share account or credit union deposit account if the interest represented by the account is less than two percent of the total deposits held by the institution. C. A Board member or employee is not considered to be financially interested in a decision when the decision could not affect that person in a manner different from its effect on the public. D. No Board member or employee of the District shall accept, directly or indirectly, any gift, favor, loan, retainer, entertainment or other thing of monetary value from any person, firm or corporation having dealings with the District when such acceptance would conflict with the performance of a Board member or employee's official duties. A conflict, or possibility of conflict, shall be deemed to exist where a reasonable and prudent person would believe that it was given for the purpose of obtaining special considerations or influence; provided that application of this provision shall take into consideration the established customs and practices of the District. E. The Board may adopt additional conflict of interest and ethical rules it considers appropriate. F. For purposes of this section, "participate in a decision" includes all discussions, deliberations, preliminary negotiations, and votes. G. For purposes of this section, "immediate family" means: 1. A spouse; 2. Any parent, parent -in -law, child, son -in -law, or daughter -in -law; and -19- P \SCISCO9Q 01/07/03 3. Any sibling, uncle, aunt, cousin, niece or nephew residing in the household of the corporate official or employee. Section 8.10. Discrimination. A. Board membership may not directly or indirectly be based upon or limited by creed, age, race, color, religion, sex, national origin, marital status or the presence of any sensory, mental or physical disability, unless such limitations are necessary for the performance of the role and no less discriminatory alternatives are available. - 20 - P \SC\SCO9Q 01/07/03 B. To ensure equality of employment opportunity, the District shall not discriminate in any matter related to employment because of creed, age, race, color, religion, sex, national origin, marital status or the presence of any sensory, mental or physical disability, unless such limitations are necessary for the performance of the role and no less discriminatory alternatives are available. The District shall, in all solicitations or advertisements for employees placed by or on behalf of the District, state that all qualified applicants will receive consideration for employment without regard to creed, age, race, color, religion, sex, national origin, marital status or the presence of any sensory, mental or physical disability, unless such limitations are necessary for the performance of the role and no less discriminatory alternatives are available. ARTICLE IX Amendments to Charter and Bylaws Section 9.1. Proposals to Amend Charter. A. Subject to Section 8 of the Interlocal Agreement, the District may propose to the Yakima City Council that its Charter be amended by resolution passed by a procedure outlined in its Bylaws at a regular or special meeting of the Board for which 30 days' advance written notice was given. B. When required by law, the District shall propose to the Yakima City Council an amendment to this Charter that will conform to and be consistent with said law. C. As necessary and appropriate in the discretion of the Yakima City Council, the Yakima City Council may propose to amend this Charter on its own initiative. Section 9.2. Charter Amendments. Pursuant to Section 8 of the Interlocal Agreement, the Charter may be amended only with the approval of all of the Parties to the Interlocal Agreement, whether in response to a resolution passed by the District's Board of Directors, or on the initiative of Yakima. After approval of a Charter amendment by all of the Parties, the revised Charter shall be deemed issued and shall be filed in the same manner as the original Charter. -21- P.1SC1SCO9Q 01/07/03 Section 9.3. Amendments to Bylaws. The Bylaws of the District may be amended by a resolution passed by a majority of the Board members in office at the time. Bylaws shall be reviewed annually after the election of officers with recommendations, if any, for amending the bylaws proposed by the Executive Committee, if such committee is established, otherwise by an ad hoc Bylaws Committee appointed by the Board President. At any other time, any Board member may introduce necessary amendments to the Bylaws to the Board for consideration. As provided in the Interlocal Agreement, as necessary and appropriate in the discretion of the Yakima City Council, the Yakima City Council may amend the Bylaws by ordinance adopted at or after a public meeting held with notice to the District, Selah and Union Gap. Amendments to the Bylaws adopted by the Yakima City Council may not be further amended by the District for one year except with Yakima City Council approval. ARTICLE X Commencement The District shall commence its existence effective upon the issuance of its Charter. -22- P 1SC \SCO9Q 01/07/03 ARTICLE XI Dissolution Section 11.1. Dissolution Process. A. Subject to the dissolution procedures set forth in Section 14 of the Interlocal Agreement, if the Board makes an affirmative finding that dissolution is necessary or appropriate because the purposes of District may not be fulfilled for any reason, the Board may adopt a resolution requesting Yakima to dissolve the District. B. Upon adoption of a motion by the Yakima City Council requesting the following information, or upon adoption by the District board of a resolution requesting its own dissolution, the District shall file a dissolution statement with the City Clerk of Yakima setting forth: 1. The name and principal office of the District; 2. The debts, obligations and liabilities of the District, including conditions of grants and donations, and the property and assets available to satisfy the same; the provisions to be made for satisfaction of outstanding liabilities and performance of executory contracts; and the estimated time for completion of its dissolution; 3. Any pending litigation or contingent liabilities; 4. The Board resolution requesting such dissolution and the date(s) and proceedings leading toward its adoption, whenever the dissolution be voluntary; and 5. A list of persons to be notified upon completion of dissolution. Section 11.2. Trusteeship A. Jurisdiction over dissolution arises in the event the dissolution ordinance enacted by the Yakima City Council (or by all of the Cities, as set forth in Section 14 of the Interlocal Agreement) requests Superior Court trusteeship. In the event that the dissolution ordinance(s) so provide(s), the Superior Court of Yakima County shall have jurisdiction and authority to appoint -23- P. \SC \SCO9Q 01/07/03 trustees or receivers of corporate property and assets and supervise such trusteeship or receivership. B. The trustees appointed by the Superior Court shall take such actions as necessary during the trusteeship to achieve the object thereof as reasonable. The trustees shall have the power and authority to reorganize the District and recommend amendment of its Charter and/or its Bylaws; suspend and/or remove District officials, and manage the assets and affairs of the District; and exercise any and all District powers as necessary or appropriate to fulfill outstanding agreements, to restore the capability of the District, to perform the functions and activities for which it is chartered, to reinstate its credit or credibility with its creditors or obligees, and, if so authorized by the Superior Court, to oversee its dissolution and appropriate subsequent transactions. ARTICLE XII Approval of Charter APPROVED by Interlocal Agreement by and among the City of Yakima, Washington, the City of Selah, Washington and the City of Union Gap, Washington, dated June 25, 2001, and by Ordinance No. 2001 -28 of the City of Yakima adopted on June 19, 2001, motion of the City of Selah City Council approved on June 12, 2001, and Ordinance Nos. 2298 and 2300 of the City of Union Gap adopted on June 11, 2001 and June 25, 2001, respectively. ATTEST l<1.444 l ( SEAL1 Is! f aJu2 .,- ' , City Clerk 6 City of Yakima, Washington -24- P \SC \SC09Q 01/07/03 EXHIBIT B BYLAWS B-1 P: \SC \SC091 01106/18 BYLAWS OF THE YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT ARTICLE I Board Section 1.1. Nominations - Expired Terms. Nominations for appointment or reappointment to fill expired terms on the Board shall be submitted along with resumes on the fauns provided, to the City Manager of the City responsible for appointing the Boardmember not later than two months prior to the date the term is due to expire. The bodies so designated in the Charter shall make nominations. Nominations from local organizations or any other interested group or agency may be submitted to the Yakima City Manager for consideration as set forth in the Charter. Section 1.2. Vacancies. Subject to Section 3 hereof, vacancies on the Board shall be filled by appointment of the City Manager of the City that made the original appointment to the vacant position, subject to confirmation by the City Council of the City that made the original nomination to the vacant position. A vacancy or vacancies on the Board shall be deemed to exist in the case of the death, disability, resignation or removal from office of any Board member as provided herein. Upon such an occurrence, the Board shall notify the body that has the power to nominate a replacement for such a member and said body shall have the opportunity to nominate another person as Board member to fill the vacant term, subject to confirmation as prescribed in the Charter. If the appointing body has not appointed another person as Board member to fill the vacant term described herein within two calendar months from that body's receipt of notice of said vacancy, the vacancy shall be filled by the Yakima City Manager. Such person shall serve pending, and be subject to confirmation as prescribed in the Charter. Section 1,3. Status of Appointed Members. Members appointed by the applicable City Manager, under Article VI of the Charter shall serve in an acting capacity unless confirmed by the applicable City Council. Acting members may attend meetings and participate in the discussions of the Board's business, but shall not have a vote on matters before the Board nor shall they be considered "in office" for purposes of determining a quorum. Once confirmed, appointees shall have the full power and responsibility of a Board member provided by the Charter and these Bylaws. ARTICLE II Officers and Committees Section 2.1. Officers Designated. The officers of the District shall be a President, Vice President, Secretary, and Treasurer, each of who shall be elected by the Board. Such other officers and assistant officers as may be deemed necessary may be elected or appointed by the Board. No person may simultaneously occupy the office of President and that of Treasurer, or any office responsible for custody of funds and maintenance of accounts and finances. In addition to the powers and duties specified below, the officers shall have such powers and perform such duties as the Board may prescribe. Section 2.2. Election. Qualifications and Term of Office. The Board shall elect each of the officers from among its members. The officers shall be elected by the Board at the first regular meeting after the term of new or reappointed Board members commences each year, for a one -year term, and each officer shall hold office during said one -year term and until his or her successor is elected. The Board at its organizational meeting shall elect the first officers of the Board. Section 2.3. Powers and Duties. a) President. The President shall be the chief executive officer of the District and shall have general supervision over the business of the District, subject, however, to the control of the Board of Directors, The President shall preside at all meetings of the Board. The President may sign and execute, in the name of the District deeds, mortga- ges, leases, bonds, contracts and other instruments duly authorized by the Board, and -2- P:1SC \SC09R 01/08/31 generally shall perform all duties incident to the office of President and such other duties as may from time to time be assigned to such office by the Board. b) Vice - President. At the request of the President or in case of his or her absence or disability, the Vice- President shall perform all duties of the President and, when so acting, shall have all the powers of and be subject to all restrictions upon, the President. In addition, the Vice- President shall perfouii such other duties as may from time to time be assigned to that office by the Board or the President. c) Secretary. The Secretary shall: 1. Certify and keep at the office of the District, or at such other place as the Board may order, the original or a copy of the Bylaws, as they may have been amended; 2. Keep at the office of the District, or at such other place as the Board may order, a book of minutes of all meetings of the Board, recording therein the time and place of holding, whether regular or special, and, if special, how authorized, the notice thereof given, and the proceedings thereat; 3. See that all notices are duly given in accordance with the provisions of these Bylaws or as required by law; 4. Be custodian of the records and seal of the District; 5. Exhibit at all reasonable times to any director, upon request, the Bylaws and minutes of the proceedings of the directors of the District; and 6. In general, perform all duties of the office of Secretary and such other duties as may from time to time be assigned to such office by the Board of Directors or the President. d) Treasurer. The Treasurer shall receive and have charge of all funds of the District and shall disburse such funds only as directed by the Board. The Treasurer shall, in general, perform all duties incident to the office of chief financial officer and such -3- P :1SC \SC09R 01/08/31 other duties as may from time to time be assigned to such office by the Board or the President. Section 2.4. Removal. Upon reasonable prior notice to all Board members of the alleged reasons for dismissal, the Board by an affirmative vote of the majority of all the Board members may remove any officer from his or her office (but not from his or her membership on the Board) whenever in its judgment the best interests of the District will be served thereby. Section 2.5. Vacancies. The Board shall fill any office that becomes vacant with a successor who shall hold office for the unexpired term and until his or her successor shall have been duly elected. Section 2.6. Establishment of Committees. The Board, by resolution, may designate from among its members one or more committees, each consisting of at least three members, to represent the Board and, except as prohibited by the Charter, act for and on behalf of the Board. The designation of any such committee and the delegation thereto of authority shall not operate to relieve any member of the Board of any responsibility imposed by law. Section 2.7. Executive Committee. The Executive Committee of the District shall consist of the President, Vice President, the Secretary and the Treasurer of the Board and one member -at -large elected by the Board. The provisions for election, quali- fications, term of office and removal of the member -at -large of the Executive Committee shall be identical to those of officers of the Board as provided herein in Sections 2.2, 2.4, and 2.5 of this Article. Except as provided in the Charter, the Executive Committee shall have and exercise such powers of the Board as the Board may from time to time provide by resolution. -4- P \SC \SCO9R 01/08/31 ARTICLE III Meetings Section 3.1. Regular Board Meetings. Regular meetings of the Board shall be held at least once every quarter at a location within the District. The Board shall establish such regular meeting time and place by resolution. Section 3.2. Special Board Meetings. Subject to Article VII of the Charter, special meetings of the Board may be held at any place at any time whenever called by the President or a majority of the members of the Board. Section 3.3. Notice of Regular Board Meetings. No notice of the regular meeting shall be required, except of the first regular meeting and after any change in the time or place of such meeting adopted by resolution of the Board as above provided. Notice of such changed regular meeting shall be given by the Secretary or by the person or persons calling the meeting by personal communication over the telephone to each Board member at least 24 hours prior to the time of the meeting or by at least three days' notice by mail, telegram or written communication. If mailed, notice shall be mailed by U.S. mail, postage prepaid, to the last known address of each Board member. In addition, the District shall routinely provide reasonable notice of meetings to any individual specifically requesting it in writing. At any regular meeting of the Board, any business may be transacted and the Board may exercise all of its powers. Section 3.4. Notice of Special Board Meetings. Notice of all special meetings of the Board shall be given by the Secretary or by the person or persons calling the special meeting by delivering personally or by mail written notice at least 24 hours prior to the time of the meeting to each Board member and to each local newspaper of general circulation and to each radio or television station that has requested notice as provided in RCW 42.30.080. In addition, the District shall provide notice of special meetings to any individual specifically requesting it in writing. -5- P \SC \SCO9R 01/08/31 The time and place of the special meeting and the business to be transacted must be specified in the notice. Final disposition shall not be taken on any other matter at such meetings. Section 3.5. Waiver of Notice. Notice as provided in Sections 3.3 and 3.4 hereof may be dispensed with as to any member of the Board who at or prior to the time the meeting convenes files with the Board a written waiver of notice or who is actually present at the meeting at the time it convenes. Such notice may also be dispensed with as to special meetings called to deal with an emergency involving injury or damage to persons or property or the likelihood of such injury or damage, where time requirements of such notice would make notice impractical and increase the likelihood of such injury or damage. Notice, as provided in Article IX of the Charter concerning proposed amendments to the Charter or Bylaws and votes on such amendments, may not be waived. Section 3.6. Notice to the Cities. Notice of all meetings and minutes of all meetings of the Board shall be given to the City Clerks of Yakima, Selah and Union Gap. ARTICLE IV Amendments to Charter and Bylaws Section 4.1. Proposals to Amend Charter and Bylaws. 1. Proposals to amend the Charter or Bylaws shall be presented in a format that strikes over material to be deleted and underlines new material. 2. Any Board member may introduce a proposed amendment to the Charter or to the Bylaws (which may consist of new Bylaws) at any regular meeting or at any special meeting of which 30 days' advance notice has been given. Section 4.2. Board Consideration of Proposed Amendments. If notice of a proposed amendment to the Charter or to the Bylaws, and information including the text of the proposed amendment and a statement of its purpose and effect, is provided to -6- P. \SC \SCO9R 01/08/31 members of the Board 15 days prior to any regular Board meeting or any special meeting of which 30 days' advance notice has been given, then the Board may vote on the proposed amendment at the same meeting as the one at which the amendment is introduced. If such notice and information is not so provided, the Board may not vote on the proposed amendment until the next regular Board meeting or special meeting of which 30 days' advance notice has been given and at least 15 days prior to which meeting such notice and information is provided to Board members. Germane amendments to the proposed amendment within the scope of the original amendment will be permitted at the meeting at which the vote is taken. Section 4.3. Vote Required for Amendments to Charter or Bylaws. Resolutions of the Board approving proposed amendments to the Charter or approving amendments to the Bylaws require an affirmative vote of a majority of the Board members then in office as provided in the Charter. As provided in the Interlocal Agreement, as necessary and e appropriate in the discretion of the Yakima City Council, the Yakima City Council may amend the Bylaws by ordinance adopted at or after a public meeting held with notice to the District, the City of Selah and the City of Union Gap. Amendments to the Bylaws adopted by the Yakima City Council may not be further amended by the District for one year except with Yakima City Council approval. Section 4.4. Cities' Approval of Proposed Charter Amendments. Proposed Charter amendments adopted by the Board shall be submitted to each of the Parties to the Interlocal Agreement. The District's Charter may be amended only as provided in Article IX of the Charter. � -7- - P \SC \SCO9R 01/08/31 ARTICLE V Administrative Provisions Section 5.1. Books and Records. The District shall keep current and complete books and records of account and shall keep minutes of the proceedings of its Board and its committees having any of the authority of the Board. The District shall provide no less than 90 days' written notice to the City of Yakima, the City of Selah, and the City of Union Gap prior to the destruction of any permanent books and records. Section 5.2. Indemnification of Board Members. The District elects to defend and indemnify its present and former Board members and officers and their successors, spouses and marital communities to the full extent authorized by law and the Charter. In addition, the right of indemnification shall inure to each Board member or officer and his or her spouses and marital communities upon his or her appointment to the Board and in the event of his or her death shall extend to his or her heirs, legal representatives and estate. Each person who shall act as Board member or officer of the District shall be deemed to do so in reliance upon such indemnification and such rights shall not be exclusive of any other right that he or she may have. Section 5.3. Principal Office. The principal office of the District shall be located within the District. The Board shall establish the principal office by resolution. Section 5.4. Fiscal Year. The Fiscal Year of the District shall begin January 1 and end December 31 of each year, except the first fiscal year, which shall run from the date the Charter was issued to December 31, 2001. ARTICLE VI Approval of Bylaws APPROVED by Interlocal Agreement by and among the City of Yakima, Washington, the City of Selah, Washington and the City of Union Gap, Washington, dated June 25, 2001, and by Ordinance No 2001 -28 of the City of Yakima adopted on -8- P \SC \SC09R 01/08/31 June 19, 2001, motion of the City of Selah City Council approved on June 12, 2001, and Ordinance Nos. 2298 and 2300 of the City of Union Gap adopted on June 11, 2001 and June 25, 2001, respectively. -9- P:\SC\SC09R 01/08/31 BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. For Meeting Of: June 19, 2001 ITEM TITLE: Public Facilities District (PFD): an ordinance to form a Public Facilities District and a Resolution to adopt Development and Lease Agreements SUBMITTED BY: Dick Zais, City Manager Rita Anson, Finance Director CONTACT PERSON/TELEPHONE: Rita Anson #575 - 6050 Tim Jes ccountant, #575 -6050 SUMMARY EXPLANATION: In 1999, the Washington State Legislature passed legislation that allowed Cities to establish a Public Facilities District (PFD) for the purpose of owning and operating a Regional Center. Under this legislation, a Public Facility District is allowed to receive revenue from the state in the form of a sales tax credit, if certain criteria are met. This revenue comes from sales taxes already paid by the buyer of goods within the City; this is not a new nor an increased tax. By establishing a PFD, a portion of the sales taxes currently being collected and going to the state can be directed back to our local area (to the PFD). For the past several months, the Cities of Yakima, Union Gap and Selah have researched the possibility of forming a three city PFD for the purpose of re- directing these sales tax revenues to the local area and using the funds to finance an expansion to the Yakima Convention The formation of a PFD requires the parties to pass an ordinance for that purpose; the Interlocal Agreement between the cities is an Attachment to the ordinance and the PFD Charter and Bylaws are included as exhibits to the Interlocal Agreement. These are the documents needed to establish the PFD. With the understanding that the Yakima City Council would consider the formation of a three city PFD at its June 19, 2001 meeting, Union Gap and Selah approved the formation of a joint PFD at their June 11th and 12 Council meetings, respectively. (Note: the, Charter, Bylaws and Interlocal Agreement documents passed by the three cities must be substantially identical. The ordinance needed by Yakima will be somewhat different from that passed by Union Gap and Selah as Yakima has more involvement in the PFD and therefore the Yakima ordinance will cover more elements; however, the ordinances may not be inconsistent.) Continued on next page ... Resolution X Ordinance X Other (Specify) Contract Mail to (name and address): see special instructions in document Phone: Funding Source PFD (sales tax cr it) City APPROVED FOR SUBMITTAL: -� > s C v M anager STAFF RECOMMENDATION: Pass Ordinance and Adopt Resolution BOARD /COMMISSION RECOMMENDATION: COUNCIL ACTION: Page 2/5 In addition to the ordinance and related documents (noted above) that must be passed by all three cities in order to form the PFD; Yakima and the Public Facilities District must also enter into two additional agreements to effect the balance of the agreement under which the PFD and the City would function; (1) Lease Agreement; Yakima provides a 25 year lease of the Convention Center to PFD, (2) Design, Development, Construction, Financing and Operating Agreement (aka: Development Agreement): performs multiple functions: (a) Assigns responsibility for the Design, Development and Construction of the expansion of the Convention Center to Yakima and establishes the terms thereof; (b) Establishes a sublease of the Convention Center from the PFD to Yakima; and (c) Assigns responsibility for the operation and maintenance of the convention center to Yakima and establishes the terms thereof Due to the multiple purposes of the Development Agreement, it is a relatively long and complex document. When reading the Development Agreement, it is helpful to keep in mind that the Agreement specifies the authority, responsibilities and restrictions of the PFD and Yakima based on the agreements that Yakima has leased the Convention Center to the PFD and that the PFD has sub - leased the facility back to Yakima. (ie: Yakima and the PFD are each a lessor and a lessee) A Complete Set of the PFD Legal Documents Include: • Yakima Ordinance establishing the PFD; enclosed • Interlocal Agreement (as an Attachment to the Ordinance); distributed next week • Charter (as an Exhibit to the Interlocal Agreement); distributed last week • Bylaws (as an Exhibit to the Interlocal Agreement); distributed last week • Resolution to Adopt the following Contracts:; enclosed • Design, Development, Construction, Financing and Operating Agreement; enclosed • Lease Agreement; enclosed • Updated copy of the Ordinance as approved by the cities of Union Gap and Selah, will be distributed to you, for your records, when received Please Note: • For your convenience, you may wish to insert the above documents into the three -ring binder provided to you last week. • • The Yakima Ordinance is enclosed • The Interlocal Agreement had one slight change in wording due to a request by the Selah City Council — it did not change the agreement in any way; however, for consistency with Selah and Union Gap, Council will need to vote on the new version. Union Gap is updating the document and Yakima had not received it prior to going to print; therefore, it is not enclosed. It will be distributed at the Council meeting. Again, the change made by Selah only changed the location of some wording within the document, thus, the copy you received last week is still accurate as to all aspects of the agreement. • The Charter and Bylaws you received in last week's Council package have not changed, therefore, copies of these documents are not enclosed. • The Resolution to approve the Development and Lease Agreements and the Agreements themselves are enclosed Page 3/5 OVERVIEW OF FINAL PFD PROPOSAL : GENERAL: • A three City Public Facility District; Selah, Union Gap and Yakima • *Yakima will indemnify Union Gap & Selah from legal challenges to the formation of PFD • A seven member PFD Board will be appointed as follows: 1 Member - Union Gap City Council Discretion 1 Member - Selah City Council Discretion 1 Member - Yakima City Council Discretion 4 Members - Yakima City Council based on input from community groups Note: The City that appoints the board member may also remove the member • Once PFD Board is appointed, the existing Yakima Valley Visitors & Convention Bureau Advisory Committee previously established by Yakima City Council, will be dissolved • District's powers to impose the Voted Sales Tax is subject to the approval of all three Cities prior to placement on the ballot • Yakima will have approval authority for PFD's annual budget and must approve any admission and parking fees/ taxes, any gambling activities any public display of artwork and the acquisition or transfer of real and personal property valued over $100,000 • Yakima is responsible for design and construction of Convention Center expansion FINANCIAL: • Yakima will issue 25 yr. bonds and use net proceeds to fund Convention Center expansion • Yakima will provide a 25 year lease of the Convention Center (Building and Land) to the PFD in satisfaction of the 33% match requirement • PFD to sub -lease the Convention Center to Yakima to Operate and Maintain • The Convention Center expansion will cost approx. $10 million, including debt service • So long as the bonds are outstanding, only Yakima has the ability to dissolve the PFD • PFD will impose a .033% sales tax (credit) which will re- direct to the PFD revenues that are currently going to the state (sales tax revenues from sales within the three cities) • PFD will transfer to Yakima all revenues received; such revenues will be used to pay debt service on bonds, to pay operating and maintenance expenses of the Convention Center and /or other Regional Center purposes • In the event that the District's sales tax revenues are insufficient to cover the debt service on the bonds, Yakima will have sole responsibility for making up any deficiency; Union Gap and Selah will not be required to contribute. Note: we believe the probability of this occurring to be very low and in the unlikely event of such an occurrence, the amount of any funding requirement from Yakima to be minimal. (For more information, refer to Attachment B - impact of a 5% and a 10% loss in sales tax revenues from all three Cities and Attachment C - five year sales tax revenue history for each of the three cities.) • Yakima will contribute lodging taxes, in an amount, if any, determined annually by the Yakima City Council, to support debt service payments, operation and maintenance of the Convention Center and / or other Regional Center purposes * This is a new agreement with the Cities of Union Gap and Selah since the last update to Council. They requested this during the final negotiations prior to their approval of the formation of the PFD Page 4/5 OTHER CONSIDERATIONS: The enclosed plan for the formation of the Public Facilities District, the financing of the expansion of the Convention Center and the on -going operation and maintenance of the Center is based on weeks of analysis and research including numerous discussions with legal counsel, bond counsel, bond underwriters, the department of Revenue, the State Auditors Office, members of the Yakima Visitors and Convention Bureau its Board and Advisory Committee, staff and Council Members from the Cities of Selah, Union Gap and Yakima, owners and employees of local motels /hotels, consultants and appraisers. Many documents and studies have been prepared as part of this research, including Market /Financial Analysis Study of the Convention Center Expansion, Preliminary Architect Evaluation and an Appraisal of the existing Convention Center. This proposal is based on the combined results of all of the above research keeping in mind the City's three primary financing objectives; (1) to minimize the impact on the City's general obligation debt capacity, (2) to maximize the funds available for the expansion of the Convention Center and (3) to provide a marketable bond offering to the public. Yakima is establishing a PFD that is different in some significant respects from other PFDs that have been formed to date and our financing proposal is creative and sensitive to market changes. Therefore, please keep in mind: • No guarantees that the bonds will be marketable • Changes in the Bond Market may require changes to our financing plan, which could have an impact on the expansion plans • No guarantees that the Department of Revenue will approve the use of the lease agreement to satisfy the match requirement (which triggers our ability to attain the sales tax credit) • To make the financing plan work, the Convention Center may have to temporarily reduce operating expenditures and /or non - operating expenditures such as promotional expenses Discussions with rating agencies and investment bankers indicate that the financing plan is both reasonable and achievable; however, nothing is certain until we actually go to market with the bond issue. In spite of the risks noted above, City staff, legal counsel and bond counsel believe this proposal to be a conservative, legal and, in the case of the bonds, a marketable plan. Page 5/5 NEXT STEPS: If the Yakima City Council approves the formation of a Public Facilities District (PFD) the next steps include: • Appointment of Board Members (staff is preparing an outline of a nomination and appointment process for Council's review; this will be distributed in the near future) • Board to Hold Organizational Meeting Within 30 days of Effective Date of PFD Formation. At this meeting the following needs to occur: Approve the Lease Agreement Approve Development Agreement Impose the State Sales Tax (Credit) Other Organizational Activities • Submit Request to Department of Revenue to Commence Transfer of Sales Tax Revenue to the Public Facilities District • Commence Pre - construction Activities for the Convention Center Expansion • Amend existing management agreement for the operation and maintenance of the. Convention Center to be consistent with PFD Development and Lease Agreements Note: the construction bonds will not be issued before mid year 2002. This is to allow the sales tax revenues to build up and be sufficient to cover the first debt service payment on the bonds (which will occur approximately six months after the issuance of the bonds) and to provide some reserves for future payments. • Attachments: : A: Questions from one Council Member and related Answers B: Worksheet identifying impact of a 5% and a 10% reduction in sales tax revenues of the Cities of Selah, Union Gap and Yakima C Worksheet reflecting the sales tax revenues for each of the three cities for the past five years ATTACHMENT A AGENDA STATEMENT PUBLIC FACILITIES DISTRICT QUESTIONS AND ANSWERS: Following are questions received from a Council Member and the related answers: 1. Under the heading of "Questions and Answers" at the April 18, 2000 Council Study Session, staff indicated that, "if the City no longer owns the Convention Center, it is unclear whether or not the City may receive any amount (hotel /motel tax revenues) over the amount needed to service the existing Convention Center bonds, due to the fact that the City would no longer own a facility, (underscore added for emphasis) which qualifies it to receive the hotel /motel tax revenues. Bond Counsel is reviewing this issue." What was the response of Bond Counsel? (See also Question No. 3 below.) Since the current proposal calls for the City to Lease the Convention Center to the PFD (rather than transferring title), this is no longer applicable; however, bond counsel has indicated transferring the title of the Convention Center to the PFD would not have prevented the City from collecting the hotel /motel taxes 2. "In the event the District's sales tax revenues are insufficient to cover the debt service on the bonds, Yakima will have sole responsibility for making up any deficiency." What would be the City of Yakima's source of funds should there be a deficiency? This is a risk that Yakima is taking; any needed revenues would come from operating revenues of the Convention Center, if available; hotel /motel tax revenue, if available; or the General Fund as a last resort. However, we believe the chances of this occurring are minimal; a 5% reduction in the sales tax revenues of all three cities would not be enough to cause these revenues to be insufficient to cover the debt service. (Refer to the attached worksheet which identifies the impact of a 5% and a 10% reduction in the sales tax revenues of all three cities.) 3. Yakima will transfer a leasehold interest in the Convention Center and the underlying site to the district in satisfaction of the local match. Does this include both the Convention Center building and land? (See also Question No. 1 above.) Yes, the City will lease the Convention Center building and land to the PFD DirectoriF &B PFD Questions and Answers.doc Page 2 4. Has Bond Counsel reviewed a proposed management contract, or will this be accomplished at a later date? No, the management contract has not yet been drafted; this will need to be done in the near future. (The financing proposal, however, has been reviewed by Bond Counsel and by the Bond Underwriters and, although there are never any guarantees as to the marketability of the bonds until they actually hit the market, they are comfortable that this is a solid proposal and gave their recommendation to its structure and marketability. 5. The Charter at Article IV (page 3) reads in part: "For the purpose only of securing the exemption from federal income taxation for interest on obligations of the District, the District constitutes an authority and instrumentality of Yakima... ". What authorizes this without naming Union Gap and Selah? This simply has Yakima "extending" its authority to issue tax exempt bonds to the PFD; authorization from more than one City is not necessary. This is simply an added option and is not likely necessary as the PFD has its own authority to issue tax exempt bonds and due to the fact that Yakima will be issuing the bonds. 6. Article V Powers in the Charter authorizes the District to impose specified charges and taxes (admission, parking) without limitation (underscore added for emphasis). How can these Charter powers of the District "be subject to the approval of the Yakima Council" in an Interlocal Cooperation Agreement? Why wouldn't the Council approval be stated in the Charter of the District? The Charter identifies the powers of the PFD, as authorized by the legislature (which is "without limitation "). However, the PFD may contract with a 3rd party (Yakima, in this case) to give up some of its legal authority for some consideration. The Charter must first provide this authority to the PFD and then the PFD may agree to limit its own authority in "trade" for some other consideration; which it is doing via the Interlocal Agreement. Director /F &B PFD Questions and Answers.doc ATTACHMENT B THREE CITY PUBLIC FACILITY DISTIRCT SAMPLE DEBT SERVICE PAYMENTS WITH REDUCED SALES TAX REVENUES: A. Estimated Annual Debt Service Payment (three cities): $480,000 Based on $3.7 million par value Revenue Bond and a $2.6 million par value LTGO Bond B. Sales Tax Credit (based on year 2000): $21,872 4.32% Selah $84,358 16.65% Union Gap $400,576 79.04% Yakima $506,806 100.00% C. Example - 5% Reduction in Sales Tax Revenue of All Three Cities: $506,806 X .95 $481,466 Tax Revenue Received $480,000 Less Annual Debt Service Payment Required $1,466 Excess Revenue (No Contribution Required) D. Example - 10% Reduction in Sales Tax Revenue of All Three Cities: $506,806 $0.90 $456,125 $480,000 Less Annual Debt Service Payment Required ($23,875) Additional Revenues Required (1st from reserves; then Yakima must contribute to cover balance of any deficiency) 06/14/2001 PFD - Info - Examples City Contributions - Rev Short fall 05 -01 -01 ATTACHMENT C City of Yakima Public Facilities District Project State Sales Tax Credit Available Based on Sales Tax Collected As Reported by Washington Dept of Revenue 2000 Credit by Multi -City Tax Credit Calculation 1996 1997 1998 1999 2000 Selah Sales Tax $ 448,440 $ 546,159 $ 539,351 $ 599,638 $ 563,359 $ 21,872 _ Union Gap Sales Tax 1,683,302 1,962,292 1,993,338 1,976,213 2,172,860 84,358 Yakima Sales Tax 9,920,745 10,373,742 10,464,547 10,274,839 10,317,870 400,576 Total Sales Tax Collected $ 12,052,487 $ 12,882,193 $ 12,997,236 $ 12,850,690 $ 13,054,089 Total Sales (Divide by .0085) $ 1,417,939,647 $ 1,515,552,118 $ 1,529,086,588 $ 1,511,845,882 $ 1,535,775,176 State Credit (Times .00033) $ 467,920 $ 500,132 $ 504,599 $ 498,909 $ 506,806 $ 506,806 Annual Percentage Change 6.9% 0.9% -1.1% 1.6% Average Annual Percentage Change 2.1% Note: According to the Department of Revenue Local Tax Distribution Report, Local Sales and Use Taxes are distributed as follows: "15% is given to the county for transactions occurring within cities. The remaining 85 % is distributed to the cities as their share of the basic or optional tax. Counties receive the full amount attributable to sales in the unincorporated areas, plus the 15 % share for sales in cities." Summary: Total sales tax for all three cities combined has hovered around $12.9 million for the past 4 years. However, when comparing 2000 to 1996, sales tax has demonstrated an average annual percentage increase of 2.1% for that period. A growth assumption of 1% was used to calculate match requirements, which should be attainable over the extended period of 25 years. The debt issue is planned to maximize project funds, but keep the annual debt service under $480,000. cje 06/14/2001 public facilities district ESTABLISHMENT OF THE YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT PRESTON GATES & ELLIS LLP ESTABLISHMENT OF THE YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT TRANSCRIPT INDEX 1. Yakima City Council Agenda Statement. 2. City of Yakima Ordinance No. 2001 -28 approving an interlocal agreement with the Y pp g �' Cities of Selah and Union Gap to form the Yakima Regional Public Facilities District ( "PFD "), passed on June 19, 2001. 3. City of Union Gap Ordinance Nos. 2298 and 2300 approving an interlocal agreement to form the PFD, and copy of minutes of the City of Selah Council Meeting held on June 12, 2001 showing the motion approving an interlocal agreement. 4. Interlocal Cooperation Agreement to Form a Public Facilities District by and among the City of Yakima, the City of Selah and the City of Union Gap, executed on June 25, 2001. 5. PFD Charter. 6. PFD Bylaws. 7. City of Yakima Resolution No. R- 2001 -102 approving the Lease Agreement and the Development Agreement. 8. PFD Resolution No. 2001 -01 establishing the PFD corporate office, PFD Resolution No. 2001 -02 establishing regular meetings of the Board, PFD Resolution No. 2001 -03 approving the Lease Agreement and the Development Agreement, and PFD Resolution No. 2001 -04 imposing a retail sales and use tax. 9. Lease Agreement, dated as of July 27, 2001, by and between the City of Yakima and the PFD. 10. Design, Development, Construction, Financing and Operating Agreement by and Between the City of Yakima and the PFD, dated as of July 27, 2001. 11. Yakima City Council Agenda Statement regarding the resolution to appoint board members of the PFD. 12. Chap. 35.57 RCW Public Facilities Districts. K:\25739 \00049 \SC \SC 02110 BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON • AGENDA STATEMENT Item No. I O For Meeting Of: June 19, 2001 ITEM TITLE: Public Facilities District (PFD): an ordinance to form a Public Facilities District and a Resolution to adopt Development and Lease Agreements SUBMITTED BY: Dick Zais, City Manager Anson, Finance Director CONTACT PERSON/TELEPHONE: Rita Anson #575 - 6050 Tim Jeer ccountant, #575 -6050 SUMMARY EXPLANATION: In 1999, the Washington State Legislature passed legislation that allowed Cities to establish a Public Facilities District (PFD) for the purpose of owning and operating a Regional Center. Under this legislation, a Public Facility District is allowed to receive revenue from the state in the form of a sales tax credit, if certain criteria are met. This revenue comes from sales taxes already paid by the buyer of goods within the City; this is not a new nor an increased tax. By establishing a PFD, a portion of the sales taxes currently being collected and going to the state can be directed back to our local area (to the PFD). •For the past several months, the Cities of Yakima, Union Gap and Selah have researched the possibility of forming a three city PFD for the purpose of re- directing these sales tax revenues to the local area and using the funds to finance an expansion to the Yakima Convention Center. The formation of a PFD requires the parties to pass an ordinance for that purpose; the Interlocal Agreement between the cities is an Attachment to the ordinance and the PFD Charter and Bylaws are included as exhibits to the Interlocal Agreement. These are the documents needed to establish the PFD. With the understanding that the Yakima City Council would consider the formation of a three city PFD at its June 19, 2001 meeting, Union Gap and Selah approved the formation of a joint PFD at their June 11th and 12 Council meetings, respectively. (Note: the, Charter, Bylaws and Interlocal Agreement documents passed by the three cities must be substantially identical. The ordinance needed by Yakima will be somewhat different from that passed by Union Gap and Selah as Yakima has more involvement in the PFD and therefore the Yakima ordinance will cover more elements; however, the ordinances may not be inconsistent.) Continued on next • a • e .. . Resolution X Ordinance X Other (Specify) Contract Mail to (name and address): see special instructions in document • Phone: Funding Source PFD (sales tax cr it O APPROVED FOR SUBMITTAL: — > I City Manager STAFF RECOMMENDATION: Pass Ordinance and Adopt Resolution BOARD /COMMISSION RECOMMENDATION: COUNCIL ACTION: is iftl Page 2/5 • In addition to the ordinance and related documents (noted above) that must be passed by all three cities in order to form the PFD; Yakima and the Public Facilities District must also enter into two additional agreements to effect the balance of the agreement under which the PFD and the City would function; (1) Lease Agreement; Yakima provides a 25 year lease of the Convention Center to PFD, (2) Design, Development, Construction, Financing and Operating Agreement (aka: Development Agreement): performs multiple functions: (a) Assigns responsibility for the Design, Development and Construction of the expansion of the Convention Center to Yakima and establishes the terms thereof; (b) Establishes a sublease of the Convention Center from the PFD to Yakima; and (c) Assigns responsibility for the operation and maintenance of the convention center to Yakima and establishes the terms thereof Due to the multiple purposes of the Development Agreement, it is a relatively long and complex P P P P 8�' Y g P document. When reading the Development Agreement, it is helpful to keep in mind that the Agreement specifies the authority, responsibilities and restrictions of the PFD and Yakima based on the agreements that Yakima has leased the Convention Center to the PFD and that the PFD has sub - leased the facility back to Yakima. (ie: Yakima and the PFD are each a lessor and a lessee) A Complete Set of the PFD Legal Documents Include: 0 _ • Yakima Ordinance establishing the PFD; enclosed • Interlocal Agreement (as an Attachment to the Ordinance); distributed next week • Charter (as an Exhibit to the Interlocal Agreement); distributed last week • Bylaws (as an Exhibit to the Interlocal Agreement); distributed last week • Resolution to Adopt the following Contracts:; enclosed • Design, Development, Construction, Financing and Operating Agreement; enclosed • Lease Agreement; enclosed • Updated copy of the Ordinance as approved by the cities of Union Gap and Selah, will be distributed to you, for your records, when received Please Note: • For your convenience, you may wish to insert the above documents into the three -ring binder provided to you last week. • The Yakima Ordinance is enclosed • The Interlocal Agreement had one slight change in wording due to a request by the Selah City Council — it did not change the agreement in any way; however, for consistency with Selah and Union Gap, Council will need to vote on the new version. Union Gap is updating the document and Yakima had not received it prior to going to print; therefore, it is not enclosed. It will be distributed at the Council meeting. Again, the change made by Selah only changed the location of some wording within the document, thus, the copy you received last week is still accurate as to all aspects of the agreement. . • The Charter and Bylaws you received in last week's Council package have not 1 changed, therefore, copies of these documents are not enclosed. • The Resolution to approve the Development and Lease Agreements and the Agreements themselves are enclosed Page 3/5 OVERVIEW OF FINAL PFD PROPOSAL : GENERAL: • A three City Public Facility District; Selah, Union Gap and Yakima • *Yakima will indemnify Union Gap & Selah from legal challenges to the formation of PFD • A seven member PFD Board will be appointed as follows: 1 Member - Union Gap City Council Discretion 1 Member - Selah City Council Discretion 1 Member - Yakima City Council Discretion 4 Members - Yakima City Council based on input from community groups Note: The City that appoints the board member may also remove the member • Once PFD Board is appointed, the existing Yakima Valley Visitors & Convention Bureau Advisory Committee previously established by Yakima City Council, will be dissolved • District's powers to impose the Voted Sales Tax is subject to the approval of all three Cities prior to placement on the ballot • Yakima will have approval authority for PFD's annual budget and must approve any admission and parking fees/ taxes, any gambling activities any public display of artwork and the acquisition or transfer of real and personal property valued over $100,000 • Yakima is responsible for design and construction of Convention Center expansion FINANCIAL: 1 • Yakima will issue 25 yr. bonds and use net proceeds to fund Convention Center expansion • Yakima will provide a 25 year lease of the Convention Center (Building and Land) to the PFD in satisfaction of the 33% match requirement • PFD to sub -lease the Convention Center to Yakima to Operate and Maintain • The Convention Center expansion will cost approx. $10 million, including debt service • So long as the bonds are outstanding, only Yakima has the ability to dissolve the PFD • PFD will impose a .033% sales tax (credit) which will re- direct to the PFD revenues that are currently going to the state (sales tax revenues from sales within the three cities) • PFD will transfer to Yakima all revenues received; such revenues will be used to pay debt service on bonds, to pay operating and maintenance expenses of the Convention Center and /or other Regional Center purposes • In the event that the District's sales tax revenues are insufficient to cover the debt service on the bonds, Yakima will have sole responsibility for making up any deficiency; Union Gap and Selah will not be required to contribute. Note: we believe the probability of this occurring to be very low and in the unlikely event of such an occurrence, the amount of any funding requirement from Yakima to be minimal. (For more information, refer to Attachment B - impact of a 5% and a 10% loss in sales tax revenues from all three Cities and Attachment C - five year sales tax revenue history for each of the three cities.) • Yakima will contribute lodging taxes, in an amount, if any, determined annually by the Yakima City Council, to support debt service payments, operation and maintenance of the Convention Center and /or other Regional Center purposes * This is a new agreement with the Cities of Union Gap and Selah since the last update to Council. They requested this during the final negotiations prior to their approval of the formation of the PFD 1 • Page 4/5 OTHER CONSIDERATIONS: The enclosed plan for the formation of the Public Facilities District, the financing of the expansion of the Convention Center and the on -going operation and maintenance of the Center is based on weeks of analysis and research including numerous discussions with legal counsel, bond counsel, bond underwriters, the department of Revenue, the State Auditors Office, members of the Yakima Visitors and Convention Bureau its Board and Advisory Committee, staff and Council Members from the Cities of Selah, Union Gap and Yakima, owners and employees of local motels/hotels, consultants and appraisers. Many documents and studies have been prepared as part of this research, including Market/Financial Analysis Study of the Convention Center Expansion, Preliminary Architect Evaluation and an Appraisal of the existing Convention Center. This proposal is based on the combined results of all of the above research keeping in mind the City's three primary financing objectives; (1) to minimize the impact on the 111 City's general obligation debt capacity, (2) to maximize the funds available for the expansion of the Convention Center and (3) to provide a marketable bond offering to the public. Yakima is establishing a PFD that is different in some significant respects from other PFDs that have been formed to date and our financing proposal is creative and sensitive to market changes. Therefore, please keep in mind: • No guarantees that the bonds will be marketable • Changes in the Bond Market may require changes to our financing plan, which could have an impact on the expansion plans • No guarantees that the Department of Revenue will approve the use of the lease agreement to satisfy the match requirement (which triggers our ability to attain the sales tax credit) • To make the financing plan work, the Convention Center may have to temporarily reduce operating expenditures and /or non - operating expenditures such as promotional expenses Discussions with rating agencies and investment bankers indicate that the financing plan is both reasonable and achievable; however, nothing is certain until we actually go to market with the bond issue. In spite of the risks noted above, City staff, legal counsel and bond counsel believe this proposal to be a conservative, legal and, in the case of the bonds, a marketable plan. 1- Page 5/5 • NEXT STEPS: If the Yakima City Council approves the formation of a Public Facilities District (PFD) the next steps include: • Appointment of Board Members (staff is preparing an outline of a nomination and appointment process for Council's review; this will be distributed in the near future) • Board to Hold Organizational Meeting Within 30 days of Effective Date of PFD Formation. At this meeting the following needs to occur: Approve the Lease Agreement Approve Development Agreement Impose the State Sales Tax (Credit) Other Organizational Activities • Submit Request to Department of Revenue to Commence Transfer of Sales Tax • Revenue to the Public Facilities District • Commence Pre - construction Activities for the Convention Center Expansion • Amend existing management agreement for the operation and maintenance of the Convention Center to be consistent with PFD Development and Lease Agreements Note: the construction bonds will not be issued before mid year 2002. This is to allow the sales tax revenues to build up and be sufficient to cover the first debt service payment on the bonds (which will occur approximately six months after the issuance of the bonds) and to provide some reserves for future payments. Attachments: : A: Questions from one Council Member and related Answers B: Worksheet identifying impact of a 5% and a 10% reduction in sales tax revenues of the Cities of Selah, Union Gap and Yakima III Worksheet reflecting the sales tax revenues for each of the three cities for the past five years ATTACHMENT A AGENDA STATEMENT PUBLIC FACILITIES DISTRICT QUESTIONS AND ANSWERS: Following are questions received from a Council Member and the related answers: 1. Under the heading of "Questions and Answers" at the April 18, 2000 Council Study Session, staff indicated that, "if the City no longer owns the Convention Center, it is unclear whether or not the City may receive any amount ( hotel/motel tax revenues) over the amount needed to service the existing Convention Center bonds, due to the fact that the City would no longer own a facility, (underscore added for emphasis) which qualifies it to receive the hotel/motel tax revenues. Bond Counsel is reviewing this issue." What • was the response of Bond Counsel? (See also Question No. 3 below.) Since the current proposal calls for the City to Lease the Convention Center to the PFD (rather than transferring title), this is no longer applicable; however, bond counsel has indicated transferring the title of the Convention Center to the PFD would not have prevented the City from collecting the hotel/motel taxes 2. "In the event the District's sales tax revenues are insufficient to cover the debt service on the bonds, Yakima will have sole responsibility for making up any deficiency." What would be the City of Yakima's source of funds should there be a deficiency? This is a risk that Yakima is taking; any needed revenues would come from operating revenues of the Convention Center, if available; hotel /motel tax revenue, if available; or the General Fund as a last resort. However, we believe the chances of this occurring are minimal; a 5% reduction in the sales tax revenues of all three cities would not be enough to cause these revenues to be insufficient to cover the debt service. (Refer to the attached worksheet which identifies the impact of a 5% and a 10% reduction in the sales tax revenues of all three cities.) 3. Yakima will transfer a leasehold interest in the Convention Center and the • underlying site to the district in satisfaction of the local match. Does this include both the Convention Center building and land? (See also Question No. 1 above.) Yes, the City will lease the Convention Center building and land to the PFD Director/F &B PFD Questions and Answers.doc Page 2 4. Has Bond Counsel reviewed a proposed management contract, or will this be accomplished at a later date? No, the management contract has not yet been drafted; this will need to be done in the near future. (The financing proposal, however, has been reviewed by Bond Counsel and by the Bond Underwriters and, although there are never any guarantees as to the marketability of the bonds until they actually hit the market, they are comfortable that this is a solid proposal and gave their recommendation to its structure and marketability. 5. The Charter at Article IV (page 3) reads in part: "For the purpose only of securing the exemption from federal income taxation for interest on obligations of the District, the District constitutes an authority and instrumentality of Yakima... ". What authorizes this without naming Union Gap and Selah? This simply has Yakima "extending" its authority to issue tax exempt bonds to the PFD; authorization from more than one City is not necessary. This is simply an added option and is not likely necessary as the PFD has its own authority to issue tax exempt bonds and due to the fact that Yakima will be issuing the bonds. 6. Article V Powers in the Charter authorizes the District to impose specified charges and taxes (admission, parking) without limitation (underscore added for emphasis). How can these Charter powers of the District "be subject to the approval of the Yakima Council" in an Interlocal Cooperation Agreement? Why wouldn't the Council approval be stated in the Charter of the District? The Charter identifies the powers of the PFD, as authorized by the legislature (which is "without limitation "). However, the PFD may contract with a 3rd party (Yakima, in this case) to give up some of its legal authority for some consideration. The Charter must first provide this authority to the PFD and then the PFD may agree to limit its own authority in "trade" for some other consideration; which it is doing via the Interlocal Agreement. 4110 Di rector/F &B PFD Questions and Answers.doc ATTACHMENT B THREE CITY PUBLIC FACILITY DISTIRCT SAMPLE DEBT SERVICE PAYMENTS WITH REDUCED SALES TAX REVENUES: A. Estimated Annual Debt Service Payment (three cities): $480,000 Based on $3.7 million par value Revenue Bond and a $2.6 million par value LTGO Bond B. Sales Tax Credit (based on year 2000): $21,872 4.32% Selah $84,358 16.65% Union Gap $400,576 79.04% Yakima $506,806 100.00% C. Example - 5% Reduction in Sales Tax Revenue of All Three Cities: $506,806 X .95 $481,466 Tax Revenue Received $480,000 Less Annual Debt Service Payment Required $1,466 Excess Revenue (No Contribution Required) D. Example - 10% Reduction in Sales Tax Revenue of All Three Cities: $506,806 $0.90 $456,125 $480,000 Less Annual Debt Service Payment Required ($23,875) Additional Revenues Required (1st from reserves; then Yakima must contribute to cover balance of any deficiency) 06/14/2001 PFD - Info - Examples City Contributions - Rev Short fall 05 -01 -01 • • ATTACHM : 410 City of Yakima Public Facilities District Project State Sales Tax Credit Available Based on Sales Tax Collected As Reported by Washington Dept of Revenue 2000 Credit by Multi -City Tax Credit Calculation 1996 1997 1998 1999 2000 City SelahSalesTax $ 448,440 $ 546,159 $ 539,351 $ 599,638 $ 563,359 $ 21,872 Union Gap Sales Tax 1,683,302 1,962,292 1,993,338 1,976,213 2,172,860 84,358 Yakima Sales Tax 9,920,745 10,373,742 10,464,547 10,274,839 10,317,870 400,576 Total Sales Tax Collected $ 12,052,487 $ 12,882,193 $ 12,997,236 $ 12,850,690 $ 13,054,089 Total Sales (Divide by .0085) $ 1,417,939,647 $ 1,515,552,118 $ 1,529,086,588 $ 1,511,845,882 $ 1,535,775,176 State Credit (Times .00033) $ 467,920 $ 500,132 $ 504,599 $ 498,909 $ 506,806 $ 506,806 Annual Percentage Change 6.9% 0.9% -1.1% 1.6% Average Annual Percentage Change 2.1% Note: According to the Department of Revenue Local Tax Distribution Report, Local Sales and Use Taxes are distributed as follows: "15% is given to the county for transactions occurring within cities. The remaining 85 % is distributed to the cities as their share of the basic or optional tax. Counties receive the full amount attributable to sales in the unincorporated areas, plus the 15 % share for sales in cities." Summary: Total sales tax for all three cities combined has hovered around $12.9 million for the past 4 years. However, when comparing 2000 to 1996, sales tax has demonstrated an average annual percentage increase of 2.1% for that period. A growth assumption of 1% was used to calculate match requirements, which should be attainable over the extended period of 25 years. The debt issue is planned to maximize project funds, but keep the annual debt service under $480,000. cje 06/14/2001 public facilities district • CITY OF YAKIMA, WASHINGTON AN ORDINANCE of the City of Yakima, Washington, approving an interlocal agreement with the Cities of Selah and Union Gap to form the Yakima Regional Public Facilities District pursuant to RCW 35.57.020. • PASSED ON JUNE 19 , 2001 Prepared by: PRESTON GATES & ELLIS LLP 5000 Columbia Center 701 Fifth Avenue Seattle, Washington 98104 -7078 • TABLE OF CONTENTS • Page Section 1. Formation of the District 2 Section 2. Charter 3 Section 3. Board of Directors 3 Section 4 General Authorization 3 Section 5. Prior Acts 4 Section 6. Effective Date 4 Appendix A Interlocal Agreement II Ili _i_ P: \SC \SC09L 01106114 • ORDINANCE NO. 2001 28 AN ORDINANCE of the City of Yakima, Washington, approving an interlocal agreement with the Cities of Selah and Union Gap to form the Yakima Public Facilities District pursuant to RCW 35.57.020. WHEREAS, the City of Yakima ( "Yakima ") currently owns and operates the Yakima Convention Center (the "Convention Center "), providing first -class meeting, ballroom and other event facilities; WHEREAS, the City of Yakima, together with the Cities of Selah and Union Gap, desire to expand the Convention Center to stimulate economic development by creating jobs; realize additional sales tax and lodging tax revenues; attract commercial business and tourism; and provide facilities for convention, special events and community events including public meetings and performing arts events for, among others in the region, the residents of Yakima, at an estimated cost of over $10,000,000 (the "Project "); WHEREAS, Chap. 35.57 RCW (the "Act ") authorizes one or more cities located in a county with a population of less than one million to create a public facilities district (a "PFD ") to acquire, remodel, finance and operate one or more "regional centers "; • WHEREAS, "regional centers" are defined to include, among other things, existing convention centers to be improved at a cost of at least $10,000,000 including debt service; WHEREAS, PFDs have access to several new revenue sources, including a state sales and use tax credit (the "Sales Tax "), which operates to shift 0.033% of the retail sales and use taxes generated within the PFD boundaries to the PFD; WHEREAS, in order to complete the Project and access the Sales Tax, the City wishes to join with the Cities of Selah and Union Gap to create a PFD solely for the purpose of acquiring (by purchase, lease or otherwise), financing, improving and operating regional centers, as defined in the Act (the "District "); WHEREAS, the Act requires a local match in order for the District to impose the Sales Tax and, accordingly, Yakima will transfer a leasehold interest in the Convention Center to the District in satisfaction of this match requirement (the value of the Convention Center and the underlying site is approximately $11,800,000); WHEREAS, the value of the leasehold interest is estimated to be significantly more than 33% of the net present value projected Sales Taxes of the District (approximately $2.4 million), thereby satisfying the match requirement; WHEREAS, Yakima intends to issue bonds and apply net bond proceeds to finance the Project, in consideration for the District's pledge of all Sales Tax receipts to Yakima to pay debt • service on the bonds and other regional center costs; WHEREAS, Yakima also intends to contribute lodging taxes to the District, in an • amount, if any, determined annually by the Yakima City Council, to the operation of the Convention Center, and will contribute revenues to the District in the event of a Sales Tax shortfall; WHEREAS, the City is authorized and empowered to enter into the Interlocal Agreement pursuant to Chap. 39.34 RCW and to form the District pursuant to Chap. 35.57 RCW; NOW, THEREFORE, BE IT ORDAINED BY the City of Yakima, Washington, as follows: Section 1. Approval of Interlocal Agreement: Formation of the District. Pursuant to RCW 35.57.010(1), the City hereby approves the interlocal agreement attached as Appendix A hereto (the "Interlocal Agreement "), creating a public facilities district in cooperation with the Cities of Selah and Union Gap. As set forth in the Interlocal Agreement, the name of the District shall be the Yakima Regional Public Facilities District. The District shall be a municipal corporation, an independent • taxing authority and a taxing district. The District shall be coextensive with the boundaries of Yakima, and the Cities of Selah and Union Gap, as the same may be amended from time to time. The District shall acquire (by purchase, lease or otherwise), construct, own, remodel, maintain, equip, reequip, repair, finance, and/or operate one or more regional centers, as defined in RCW 35.57.020, including the Convention Center, the Project and related parking facilities. Except as limited by State law and the Interlocal Agreement, the District shall have the powers, purposes and form set forth in its charter (the "Charter "). As set forth .; the Interlocal and the Charter, in consideration for the mutual promises set forth therein, the District's power to impose sales and use taxes authorized under RCW 82.14.048 is subject to the City's, the City of Selah's and the City of Union Gap's approval of any such levy prior to placement on the ballot. In addition, also in consideration for the mutual promises set forth in Appendix A, the District's i • annual budget, its power to impose admission charges, parking charges, admissions taxes and -2- P:1SC \SC09L 01/06/14 • parking taxes, and any gambling activity or public display of artwork under authority of the District is subject to the approval of the Yakima City Council. Section 2. Charter. The Charter is hereby approved in the form attached as Exhibit A to the Interlocal Agreement. The Charter shall be amended only with the approval of Yakima, and the Cities of Selah and Union Gap. The District shall commence its existence effective upon execution of the Interlocal Agreement by Yakima, and the Cities of Selah and Union Gap. Section 3. Board of Directors. A board consisting of seven directors (the "Board "), as initially identified in the Charter, is hereby approved to govern the affairs of the District. The directors shall be appointed and serve their terms as provided in the Charter. All corporate powers of the District shall be exercised by or under the authority of the Board; and the business, property and affairs of the District shall be managed under the direction of the Board, except as • may be otherwise provided for by law or in the Interlocal Agreement or in the Charter. Y P Y �' Section 4. Authorization of Documents. The City Manager is hereby authorized to execute the Interlocal Agreement. The City Manager and his designee, and each of the other appropriate officers, agents and representatives of Yakima are each hereby authorized and directed to take such steps, to do such other acts and things, and to execute such letters, certificates, agreements, papers, financing statements, assignments or instruments as in their judgment may be necessary, appropriate or desirable in order to carry out the terms and provisions of, and complete the transactions contemplated by this ordinance. Section 5. Prior Acts. All acts taken pursuant to the authority of this ordinance but prior to its effective date are hereby ratified and confirmed. • -3- P: \SC\SCO9L 01/06/14 0 Section 6. Effective Date. This ordinance shall be effective 30 days after its passage, approval and publication as provided by law. PASSED by the Council of the City of Yakima at a regular meeting thereof, held this 19th day of June, 2001. CITY OF YAKIMA, WASHINGTON IS/ MARY PLACE Mary Place Mayor ATTEST IS/ KAREN S. ROBERTS, CMC City Clerk 0 APPROVED AS TO FORM: /S/ RAYMOND L. PAOLELLA City Attorney First Reading: Publication Date: 6 -2 2 -20 0 1 Effective Date: 7-22-2001 tc, be a true and correct copy of the :3 filed in my office. i /' C .' ' CLERK I A / B ' . , - 3 Y : ' ,- - ..._ ..:,. _ . ..' .a.yeput- I I \ ;,,q -4- P:\SC\SCO9L 01/06/14 APPENDIX A INTERLOCAL AGREEMENT • A-I P:\SC\SCO9L 01106114 INTERLOCAL COOPERATION AGREEMENT TO FORM A PUBLIC FACILITIES DISTRICT By and Among THE CITY OF YAKIMA THE CITY OF SELAH and THE CITY OF UNION GAP [DRAFTER'S NOTE: The date on which this agreement was executed by all three parties was June 25, 20011 . This INTERLOCAL COOPERATION AGREEMENT TO FORM A PUBLIC FACILITIES DISTRICT (the "Agreement ") is executed by and among the CITY OF YAKIMA, WASHINGTON ( "Yakima "), the CITY OF SELAH, WASHINGTON ( "Selah ") and the CITY OF UNION GAP, WASHINGTON ( "Union Gap ") (Yakima, Selah and Union Gap are collectively referred to herein as "the Parties ") for the purposes of establishing a multi -city public facilities district to assist in the financing, development and operation of, regional convention center facilities; stimulating economic development by creating jobs, realizing additional sales tax and lodging tax revenues and attracting commercial business and tourism; and providing facilities for community events including public meetings and performing arts events. The Parties enter into this Agreement effective as of the date of execution by all three Parties, for the purposes and under the terms contained herein. WHEREAS, Yakima currently owns and operates the Yakima Convention Center (the "Convention Center "), providing first -class meeting, ballroom and other event facilities; WHEREAS, the Parties desire to expand the Convention Center, at an estimated cost of over $10,000,000 (the "Project "); WHEREAS, Chap. 35.57 RCW (the "Act ") authorizes one or more contiguous cities located in a county with a population of less than one million to create a public facilities district (a "PFD ") to acquire, remodel, finance, and operate one or more "regional centers "; WHEREAS, "regional centers" are defined to include, among other things, existing convention centers to be improved at a cost of at least ten million dollars including debt service; WHEREAS, PFDs have access to several new revenue sources, including a state sales and use tax credit (the "Sales Tax "), which operates to shift 0.033% of the retail sales and use taxes generated within the PFD boundaries to the PFD; WHEREAS, in order to complete the Project and access the Sales Tax, the Parties wish to create a PFD solely for the purpose of acquiring, constructing, owning, remodeling, maintaining, equipping, re- equipping, repairing, financing and operating regional centers, as defined in the Act (the "District "); WHEREAS, the Act requires a 33% local match of the net present value of the Sales Tax to be collected by the District in order for the District to impose the Sales Tax and, accordingly, Yakima will transfer a leasehold interest in the Convention Center and the underlying site to the District in satisfaction of this match requirement (the value of the Convention Center and the underlying site is approximately $11,800,000); WHEREAS, the value of leasehold interest is estimated to significantly exceed the net present value of 33% of the projected Sales Taxes of the District (approximately $2.4 million); WHEREAS, pursuant to the Design, Development, Construction, Financing and Operating Agreement between Yakima and the District, the District will sublease the Convention Center and the underlying site to Yakima, and Yakima will design, develop, construct, operate and maintain the property in return for certain rights, including the right to retain all revenues of the Convention Center; WHEREAS, subject to certain limitations set forth herein, Yakima intends to issue bonds and apply bond proceeds to finance the Project, in consideration for the District's pledge of Sales Tax receipts to Yakima to pay debt service on the bonds and other Regional Center costs; WHEREAS, the Parties are authorized and empowered to enter into this Agreement pursuant to Chap. 39.34 RCW; NOW THEREFORE, in consideration of mutual promises and covenants herein, the Parties agree: Section 1. Definitions. Except for the terms defined in this section, and unless the context indicates otherwise, for the purposes of this Agreement and the Related Documents, the Parties shall use the definitions found in Chap. 35.57 RCW as they may be amended. Additional Bonds means Completion Bonds or Refunding Bonds issued by Yakima. Additional Revenue means all revenue received by the District (or by Yakima on behalf of the District), including gifts, grants, donations, Admission Charges, Admission Taxes, Parking Charges, Parking Taxes, Voted Sales Taxes and any other revenue received by the District and derived from the District's operation of the facilities, including investment income; but excluding Sales Tax Revenue and amounts received from Yakima pursuant to Section III(C) of the Development Agreement (including investment earning thereon). Administrative Costs means the costs of the District incurred in administering the District and the Development Agreement. Administrative Costs shall be specified in the District's annual budget submitted to Yakima for approval and to Selah and Union Gap for review and comment. Admissions Charge means any charge imposed by the District (or by Yakima on behalf of the District) for admission to its facilities, including charges for season tickets or subscriptions; cover charges, or charges for use of seats and tables, and other similar accommodations; charges for food and refreshment if free entertainment, recreation, or amusement is provided; charges for rental or use of- equipment or facilities for purposes of recreation or amusement; and automobile parking charges if the amount of the charge is determined according to the number of passengers in the automobile. Admission Tax means any tax imposed by the District pursuant to RCW 35.57.100 to be paid by any person who pays an Admissions Charge. Agreement means this interlocal agreement. Bond Counsel means a firm of lawyers nationally recognized and accepted as bond counsel and so employed by Yakima. -2- P: \ SC \SC091 01/06/18 Bond Ordinance means the ordinance of the Yakima Council authorizing the issuance of the Bonds and any amendments and supplements. Bonds means the bonds, notes or other evidences of indebtedness issued pursuant to and under authority of the Bond Ordinance to provide for the financing or refinancing of the Project. Yakima reserves the right not to issue the Bonds if, at the time the Bonds are to be sold, the total interest cost on the Bonds exceeds 5.55 %. Board means the governing body vested with the management of the affairs of the District. Bylaws means the rules adopted for the regulation or management of the affairs of the p g g District approved by this Agreement and all subsequent amendments. Charter means the articles of organization of the District approved by this Agreement and all subsequent amendments. Code means the Internal Revenue Code of 1986, as amended, and all applicable regulations and rulings thereunder. Completion Bonds means additional bonds of Yakima issued to pay Costs of the Project. Costs of the Project means all capital costs that are paid or incurred by Yakima in connection with the design, development and construction of the Project, including, but not limited to all or a portion of the interest on Bonds during the period of construction of such improvements, and for a period of time thereafter; amounts required to meet any reserve requirement for the Bonds; the cost of paying or reimbursing Yakima or any fund thereof for expenses, including planning, permitting and design expenses, incident and properly allocable to the Project; and all other items of expense incident and properly allocable to designing, developing and constructing the Project, financing the Project and placing the Project in operation. Debt Service means the amount to be paid on the next succeeding Payment Date to pay the principal of, premium, if any, and interest on Bonds and any Additional Bonds coming due on such Payment Date. Debt Service Fund means the special fund(s) or account(s) established by Yakima pursuant to the Bond Ordinance or a Supplemental Bond Ordinance for the purpose of paying the principal of, premium, if any, and interest on Bonds and /or any Additional Bonds. Debt Service Reserve Fund means the Debt Service Reserve Fund (or Account), if any, established by Yakima under the Bond Ordinance or Supplemental Bond Ordinance, which secures the Bonds and /or any Additional Bonds. -3- P:\sc \SCO9I 01/06/18 Development Agreement means the Design, Development, Construction, Financing and Operating Agreement by and between Yakima and the District. District means the public facilities district created pursuant to Section 1. Favorable Opinion of Bond Counsel means, with respect to any action, a written legal opinion of Bond Counsel addressed to Yakima, to the effect that such action is permitted under the laws of the State and under applicable ordinances of the Yakima Council, including the Bond Ordinance and any Supplemental Bond Ordinance, and will not impair the exclusion of interest on a Bond or any other bonds of Yakima from gross income for federal income tax purposes under the Code (subject to the inclusion of any exceptions contained in the opinion delivered upon original issuance of such bond). Lease Agreement means the Lease Agreement by and between Yakima and the District providing for the transfer of a leasehold interest in the Convention Center and the underlying site to the District in satisfaction of the match required under RCW 82.14.390. Lodging Taxes means lodging taxes received by Yakima pursuant to Chap. 67 RCW. Net Proceeds, when used with reference to the Bonds, means the principal amount of such Bonds, plus original issue premium, if any, and less original issue discount, if any, and less the proceeds of the Bonds used to pay costs of issuance or deposited in the Debt Service Reserve Fund. Operating Manual means the Operating Standards Manual for the expanded Convention Center. • Outstanding, when used as of any particular time with reference to Bonds or Additional Bonds, means all Bonds or Additional Bonds authenticated and delivered by Yakima under the Bond Ordinance or any Supplemental Bond Ordinance except (1) Bonds or Additional Bonds theretofore cancelled by Yakima or surrendered to Yakima for cancellation; (2) Bonds or Additional Bonds with respect to which all liability of Yakima shall have been discharged in accordance with the Bond Ordinance or Supplemental Bond Ordinance, as applicable, and Bonds or Additional Bonds for the transfer or exchange of or in lieu of (3 ) of, or in substitution for which other Bonds or Additional Bonds shall have been authenticated and delivered by Yakima pursuant to the Bond Ordinance or Supplemental Bond Ordinance, as applicable. Parking Charge means "vehicle parking charges" as defined in RCW 35.57.110. Parking Tax means a tax on any vehicle parking charge imposed at any parking facility that is owned or leased by the District pursuant to RCW 35.57.110. Payment Date means the dates specified in the Bond Ordinance, or any Supplemental Bond Ordinance, as dates for the payment of interest on, principal of or premium, if any, with respect to the Bonds or any Additional Bonds. -4- P: 1SC\SC09I 01/06/18 PFD Revenue Reserve Fund means the PFD Revenue Reserve Fund (or Account), if any, established by Yakima under the Bond Ordinance or Supplemental Bond Ordinance. The amount of revenue consisting of the District's Sales Tax Revenue received by Yakima that shall be maintained in the PFD Revenue Reserve Fund shall be determined at the time that the Bonds are issued. Predevelopment Costs means the cost of all planning, legal, architectural, engineering and other services incurred by Yakima in connection with the Project until the date of issuance of the Bonds. Project means the design, construction, and operation of the additions to the Convention Center, as described in the Project Documents. Project Documents means all design documents (including drawings describing the structural, mechanical, acoustical, lighting, and electrical systems of the Project, detailed site plans, preliminary specifications, and schematic design documents), construction documents (including all drawings and specifications necessary to completely describe the Project in detail to a contractor for the purposes of bidding and construction, schedules, plans and specifications, and the construction contract) and Project budgets (setting forth the construction contract cost, taxes, all contingencies, fees and allowances). Related Documents mean the Charter, the Lease Agreement, the Bylaws and the Development Agreement. Refunding Bonds means bonds, notes or other evidence of indebtedness of Yakima the proceeds of which will be used to refund Bonds. Sales Tax means the nonvoted sales and use tax to be imposed by the District in accordance with RCW 82.14.390 at a rate not to exceed 0.033% of the selling price in the case of a sales tax or value of the article used in the case of a use tax, which tax shall be deducted from the amount of tax otherwise required to be collected or paid over to the State's Department of Revenue and shall expire when the Bonds and any Additional Bonds are retired, or, in any event, not more than 25 years after the Sales Tax is first collected. Sales Tax Revenue means all Sales Taxes received by the District. Selah means the City of Selah, Washington, a municipal corporation of the State, as now or hereafter constituted. State means the State of Washington. Supplemental Bond Ordinance means any ordinance adopted by the Yakima Council amending or supplementing the Bond Ordinance, including any ordinance adopted by the Yakima Council in connection with the issuance of Additional Bonds. -5- P: \SC \SC091 01/06/18 • Union Gap means the City of Union Gap, Washington, a municipal corporation of the State, as now or hereafter constituted. Voted Sales Tax means any sales and use tax imposed by the District pursuant to RCW 82.14.048 and approved by the voters. Yakima means the City of Yakima, a municipal corporation of the State, as now or hereafter constituted. Yakima City Manager means the City Manager of Yakima, or any successor to the office. Yakima Council means the City Council of Yakima, or any successor thereto as provided by law. Section 2. Formation of the District. Pursuant to RCW 35.57.010(1), the Parties hereby create a public facilities district. The District shall be a municipal corporation, an independent taxing authority and a taxing district, with the powers and limitations as set forth in its Charter and this Agreement. The District shall be coextensive with the boundaries of the Parties, as the same may be amended from time to time. Section 3. Name. The name of the District shall be the Yakima Regional Public Facilities District. Section 4. Purpose. The District shall acquire (by purchase, lease or otherwise), construct, own, remodel, maintain, equip, reequip, repair, fmance, and/or operate (either directly or by contract) one or more Regional Centers, as defined in RCW 35.57.020. Specifically, the District shall acquire a leasehold interest in the Convention Center, and finance the Project and related parking facilities in accordance with the Development Agreement. Section 5. General Powers. Except as limited by State law, this Agreement and the Charter, the District shall have and may exercise all lawful powers necessary or convenient to affect the purposes for which the District is organized and to perform authorized corporate functions. Section 6. Specific Powers. Without limitation, the District shall have the following specific powers: (a) to acquire (by purchase, lease or otherwise), construct, own, remodel, maintain, equip, reequip, repair, finance, and operate (either directly or by contract) the Convention Center, the Project, related parking facilities and any other Regional Center, subject to the limitations set forth in Section 7; (b) to accept and expend gifts, grants, and donations; (c) to impose the following charges, fees, and taxes authorized in RCW 35.57.040: - 6 - P:IS C \SC091 01/06/18 (i) Admission Charges, Parking Charges and any other fees or charges for the use of any of its facilities, subject to the limitations set forth in Section 7; (ii) Admission Taxes, subject to the limitations set forth in Section 7; (iii) Parking Taxes, subject to the limitations set forth in Section 7; (iv) Voted Sales Taxes, subject to the limitations set forth in Section 7; (v) Sales Taxes at a rate not to exceed the limit set forth in RCW 82.14.390 to be collected from those persons who are taxable by the State under Chaps. 82.08 and 82.12 RCW upon the occurrence of any taxable event within the District; (d) to use Sales Tax Revenue, Additional Revenue and other receipts for its purposes; (e) to contract with a public or private entity (including but not limited to Yakima) for the construction, financing, operation and/or management of the Project, related parking or for any other Regional Center owned or operated by the District, subject to Section 18; (f) to use the supplemental alternative public works contracting procedures set forth in Chap. 39.10 RCW: (g) to acquire and transfer real and personal property by lease, sublease, purchase, or sale, subject to the limitations set forth in Section 7; and (h) to issue general obligation bonds (subject to statutory debt limits) or revenue bonds. Section 7. Limitations on Powers. (a) No Power of Eminent Domain. The District shall not have the power of eminent domain. (b) Additional Regional Centers — Yakima Approval. The District's power to acquire, construct, own, remodel, maintain, equip, reequip, repair, finance, and operate (either directly or by contract) any Regional Center other than the Convention Center, the Project and related parking facilities is subject to the approval of Yakima; -7- P: \SC \SC091 01/06/18 (c) Convention Center Expansion Project — Yakima Approval. (i) Yakima Approval of Parking Taxes and Admission Taxes. In consideration for Yakima's agreement to issue the Bonds and apply Net Proceeds to pay Predevelopment Costs (to the extent that such costs are not to be paid from Sales Tax Revenue) and Costs of the Project under the terms of the Development Agreement, the District's power to impose Admission Taxes and Parking Taxes shall be subject to the approval of the Yakima Council. (ii) Yakima Approval of Admission Charges and Parking Charges. In consideration for Yakima's agreement to apply Lodging Taxes to pay a portion of the costs of operating and maintaining the Convention Center and the Project under the terms of the Development Agreement, the District's power to impose charges and fees, including all Admission Charges and Parking Charges, shall be subject to the approval of the Yakima Council. (iii) Yakima Approval of Gambling Activity and Public Display of Artwork. In consideration of Yakima's agreement to issue the Bonds and apply Net Proceeds to pay Predevelopment Costs (to the extent that such costs are not to be paid from Sales Tax Revenue) and Costs of the Project under the terms of the Development Agreement, and in consideration for Yakima's agreement to apply Lodging Taxes to pay a portion of the costs of operating and maintaining the Convention Center and the Project under the terms of the Development Agreement, the following activities shall be subject to the approval of the Yakima Council: a. any gambling activity under the authority of the District at the Convention Center; and b. any public display of artwork under the authority of the District at the Convention Center. (iv) Annual Budget Approval and Approval of Property Transfers. In consideration for Yakima's agreement to issue the Bonds and apply Net Proceeds to pay Predevelopment Costs (to the extent that such costs are not to be paid from Sales Tax Revenue) and Costs of the Project under the terms of the Development Agreement and in consideration of Yakima's agreement to apply Lodging Taxes to pay a portion of the costs of operating and maintaining the Convention Center under the terms of the Development Agreement, the District's annual budget, including Administrative Costs, shall be subject to the approval of the Yakima Council. The District shall forward its proposed annual budget to the Parties (for review and comment by Selah and Union Gap and for approval by the Yakima Council) no later than September 1 of the year -8- P: \SC \SC091 01/06/18 prior to the budget year. The District shall also forward any amendment to its approved annual budget to Yakima for approval and to Selah and Union Gap for review and comment. In addition, any acquisition or transfer of real and personal property with a value over $100,000 by lease, sublease, purchase, or sale by the District shall be subject to approval by the Yakima Council. (d) Party Approval of Voted Sales Tax. Prior to placing on the ballot any Voted Sales Tax, the District shall forward the draft proposed ballot language to each of the Parties. The District's power to impose the Voted Sales Tax is subject to the approval of each of the Parties. (e) No Political Activity. No funds, assets or property of the District shall be used for any political activity, except as set forth in the Charter. (f) No Private Inurement. The District shall not operate in a manner that creates any private inurement, except that the District may compensate employees; reimburse employees, Board members, volunteers and agents for reasonable expenses; defend and indemnify Board members or employees acting in good faith on behalf of the District and within the scope of their duties; hold harmless Board members or employees acting in good faith on behalf of the District and within the scope of their duties and provide liability insurance for employees, Board members, volunteers or other agents. Section 8. Charter. The Charter is hereby approved in the form set forth as Exhibit A. The Charter shall be deemed issued upon execution of this Agreement by all of the Parties. The Charter shall be issued in duplicate originals, each bearing the Yakima seal attested by the City Clerk of Yakima. One original shall be filed with Yakima; duplicate originals shall be provided to the District and to the City Clerks of Selah and Union Gap. The Charter shall be amended only with the approval of each of the Parties. Section 9. Effect of Issuance of Charter. The District shall commence its existence effective upon issuance of the Charter by Yakima pursuant to Section 8 (that is, upon execution of this Agreement by all of the Parties). Except as against the State or the Parties in a proceeding to cancel or revoke the Charter, delivery of a duplicate original Charter shall conclusively establish that the District has been established in compliance with the procedures of this Agreement. Section 10. Board of Directors. A board consisting of seven directors (the "Board "), as described in the Charter, is hereby established to govern the affairs of the District. The directors shall be appointed and serve their terms as provided in the Charter. All corporate powers of the District shall be exercised by or under the authority of the Board; and the business, property and affairs of the District shall be managed under the direction of the Board, except as may be otherwise provided for by law, this Agreement, or in the Charter. Section 11. Board Removal. As set forth in the Charter, if it is determined for any reason that any or all of the Board members should be removed from office, the City Council for -9- P: \SC \SC091 01/06/18 the City that originally appointed the Board member to be removed may by ordinance remove that Board member from office. The term of any Board member removed pursuant to this section shall expire when the removal ordinance takes effect. Vacancies created under this section shall be filled in the manner provided in the Charter. Section 12. Organizational Meeting. Upon issuance of the Charter, the Yakima City Manager or his designee shall call an organizational meeting of the initial Board within 30 days, giving at least three days' advance written notice to each Board Member, unless waived in writing. At such meeting, the Board shall organize itself, may appoint officers, and shall select the District's place of business. Section 13. Bylaws. (a) The initial Bylaws of the District are hereby approved in the form set forth at Exhibit B. The power to alter, amend, or repeal the Bylaws or adopt new ones shall be vested in the Board, except as otherwise provided in this Agreement or in the Charter. The Bylaws shall be consistent with the Charter. (b) As necessary and appropriate in the discretion of the Yakima Council, the Yakima Council may amend the Bylaws by ordinance adopted at or after a public meeting held with notice to the District, Selah and Union Gap. Amendments to the Bylaws adopted by the Yakima Council may not be further amended by the District for one year except with Yakima Council approval. Section 14. Dissolution. So long as the Bonds are Outstanding, if the Yakima Council makes an affirmative finding that dissolution is warranted for any reason, the existence of the District may be terminated by ordinance of the Yakima Council adopted at or after a public meeting, held with notice to the City of Selah, the City of Union Gap, the District and the Board and affording a reasonable opportunity to be heard and present testimony. At such time as the Bonds are no longer Outstanding, if all three of the Parties.make an affirmative finding that dissolution is warranted for any reason, the existence of the District may be terminated by ordinance of the City Council of all three Parties adopted at or after a public meeting, held with notice to the other Parties, the District and the Board and affording a reasonable opportunity_ to be heard and present testimony. In either event, dissolution shall be accomplished as provided in the Charter, and shall not take effect until proper provision has been made for disposition of all District assets. At such time as the Bonds are no longer Outstanding, one or two of the Parties may withdraw from this Agreement, by ordinance of the City Council of such Party or Parties, adopted at or after a public meeting, held with notice to the other Parties, the District and the Board and affording a reasonable opportunity to be heard and present testimony. In such event, the District shall not be dissolved but shall continue its existence in all respects, except that the boundaries of the District shall be deemed revised to exclude the territory of the withdrawing Party(ies). -10- P: \SC\SC091 01 /06 /18 Upon satisfactory completion of dissolution proceedings, the City Clerk of Yakima shall indicate such dissolution by inscription of "Charter cancelled" on the Charter of the District on file with the City and, when available, on the duplicate originals of the District, Selah and Union Gap, and the existence of the District shall cease. The City Clerk of Yakima shall give notice thereof pursuant to State law and to other persons requested by the District in its dissolution statement. The Parties hereby acknowledge that the District's assets and property will largely be derived from Yakima. Specifically, Yakima will transfer a leasehold interest in the Convention Center and the underlying site to the District, will issue bonds to pay Predevelopment Costs (to the extent that such costs are not to be paid from Sales Tax Revenue) and Costs of the Project, will construct the Project, and will apply Lodging Taxes to pay a portion of the cost of operating and maintaining the Convention Center and the Project. Accordingly, upon dissolution of the District and the winding up of its affairs, all of the District interest in the Convention Center, the site, the Project, and all assets or property of the District that are roceeds of the foregoing shall vest in Yakima P g g unless the Yakima Council or a trustee or court has provided for the transfer of the District's interest in the Convention Center, the site, the Project, and proceeds of the District to a qualified entity or entities that will fulfill the purposes for which the District was chartered. At such time as the District acquires any other Regional Center, the Parties shall enter into a plan providing for the disposition of such Regional Center and related assets upon dissolution of the District. If Selah or Union Gap fail to enter into such a plan, then upon dissolution of the District and the winding up of its affairs, title to such Regional Center and all assets or property of the District that are proceeds of the foregoing shall vest in Yakima unless the Yakima Council or a trustee or court has provided for the transfer of the such Regional Center and proceeds of the District to a qualified entity or entities that will fulfill the purposes for which the District was chartered. Section 15. Indemnification. The City of Yakima shall indemnify and hold harmless the Cities of Union Gap and Selah from any liability arising from a challenge to the formation of the Yakima Regional Public Facilities District under RCW 35.57.010. Section 16. Ancillary Authority. The Yakima City Manager is granted all such power and authority as reasonably necessary or convenient to enable him or her to administer this Agreement efficiently and to perform the duties imposed in this Agreement and the Related Documents. Section 17. Term of Agreement. This Agreement shall automatically terminate on the date on which District is dissolved pursuant to Section 14. Termination shall not relieve any Party of responsibility for meeting financial and other obligations outstanding at the time of termination. -11- P:\SC\SCO9I 01/06/18 Section 18. Transfer of the Convention Center to the District. Yakima hereby agrees to enter into the Lease Agreement. The Parties agree that the transfer of a leasehold interest in the Convention Center and the underlying site to the District pursuant to the Lease Agreement shall constitute a donation from the City to the District to be used for the construction, improvement or rehabilitation of a Regional Center as defined in RCW 82.14.390. The value of the Convention Center and the underlying site is approximately $11,800,000. The Parties agree that the value of the leasehold interest in the Convention Center and the underlying site to be transferred pursuant to the Lease Agreement is substantially more than the net present value of 33% of total Sales Taxes to be received by the District (approximately $2.4 million). Section 19. Management Agreements. Any management contract entered into by the District or Yakima for the operation or management of the Convention Center and the Project shall be consistent with the Development Agreement. Prior to executing any management contract (with the exception of the Development Agreement), the District or Yakima, as applicable, shall have received a Favorable Opinion of Bond Counsel regarding the terms of the management contract. Section 20. Limitation of Liability. The District is a separate legal entity. All liabilities incurred by the District shall be satisfied exclusively from the assets, credit, and properties of the District, and no creditor or other person shall have any right of action against or recourse to the Parties, their assets, credit, or services, on account of any debts, obligations, liabilities or acts or omissions of the District. Section 21. Non - Waiver. No waiver by any Party of any term or condition of this Agreement shall be deemed or construed to constitute a waiver of any other term or condition or of any subsequent breach whether of the same or of a different provision of this Agreement. Section 22. No Third -Party Beneficiary. This Agreement is entered into for the benefit of the residents of the Parties to facilitate the completion of the Project, stimulate economic development by creating jobs, realize additional sales and lodging tax revenues, attract commercial business and tourism, and provide facilities for convention, special events, community events including public meetings and performing arts events. This Agreement is not entered into with the intent that it shall benefit any party not signing this Agreement, and no other person or entity shall be entitled to be treated as a third -party beneficiary of this Agreement; provided that any owner of the Bonds or Additional Bonds shall be a third -party beneficiary for the purposes of enforcing payments to be made by the District to Yakima in amounts sufficient for Yakima to pay Debt Service. Section 23. The City of Yakima intends to contribute lodging taxes to pay a portion of the cost of operating and maintaining the Convention Center, in an amount, if any, determined annually by the Yakima City Council. As between the Cities, as set forth in the Development Agreement, the City of Yakima will also be solely responsible to contribute revenues in the case of a Sales Tax shortfall. The Cities of Union Gap and Selah shall have no financial responsibility to the District in the event of a Sales Tax shortfall. -12- P: \SC\SC091 01/06/19 6 C' P6 140 Section 21. Counterparts. This Agreement may be executed in two or more counterparts, and each such counterpart shall be deemed to be an original instrument. All such counterparts together will constitute one and the same Agreement. IN WITNESS HEREOF, this Agreement is executed by the City of Yakima, the City of Selah and the City of Union Gap. THE CITY OF YAKIMA, WASHINGTON Contract No. 2001 -70 Ordinance No. 2001 -28 Richard A. Zais, Jr. City Manager THE CITY OF SELAH . AS G7TON By Robert Jones Mayor ,. • THE CITY OF UNION GAP, WASHINGTON • By: c. 1 :fey C. Reeves, KT Mayor Certified to be a true and correct copy of the ari iur.J filed in my office. 7_ - 7 —)/ \ A ' CITY CLERK . . J By 2 4 L , : Deputy Y A K / \� 3 SRAL . • 3 - PASC1SC091 01/06/18 • IT CITY OF UNION GAP, WASHINGTON ORDINANCE NO. 2298 AN ORDINANCE of the City of Union Gap, Washington, approving an interlocal agreement with the Cities of Yakima and Selah to form the Yakima Public Facilities District pursuant to RCW 35.57.020. WHEREAS, Chap. 35.57 RCW (the "Act ") authorizes one or more cities located in a county with a population of less than one million to create a public facilities district (a "PFD ") to acquire, remodel, finance and operate one or more "regional centers "; WHEREAS, the City wishes to join with the Cities of Yakima and Selah to create a PFD solely for the purpose of acquiring (by purchase, lease or otherwise), financing, improving and operating regional centers, as defined in the Act (the "District "); NOW, THEREFORE, BE IT ORDAINED BY the City of Union Gap, Washington, as follows: • Section 1. Approval of Interlocal Agreement; Formation of the District. Pursuant to RCW 35.57.010(1), the City hereby approves the interlocal agreement attached as Appendix A hereto (the "Interlocal Agreement "), creating a public facilities district in cooperation with Yakima and the City of Selah. Section 2. Charter. The Charter is hereby approved in the form attached as Exhibit A to the Interlocal Agreement. The Charter shall be amended only with the approval of the City, Yakima and the City of Selah. The District shall commence its existence effective upon execution of the Interlocal Agreement by the City, Yakima and the City of Selah. Section 3. Board of Directors. A board consisting of seven directors (the `Board "), as initially identified in the Charter, is hereby approved to govern the affairs of the District. The directors shall be appointed and serve their terms as provided in the Charter. Section 4. Authorization of Documents. The Mayor is hereby authorized to execute • the Interlocal Agreement. The e Mayor and his designee, and each of the other appropriate City of Union Gap, Washington Ordinance No. 2298 Page 1 of 2 • officers, agents and representatives of the City p ty are each hereby authorized and directed to take such steps, as in their judgment may be necessary, appropriate or desirable in order to carry out the terms and provisions of, and complete the transactions contemplated by this ordinance. Section 5. Prior Acts. All acts taken pursuant to the authority of this ordinance but prior to its effective date are hereby ratified and confirmed. Section 6. Effective Date. This ordinance shall be effective 5 days after its passage, approval and publication as provided by law. PASSED by the Council of the City of Union Gap this 11 day of June, 2001. Aubr *% Reeves, Jr. ." • Mayor ATTEST I. Uzi Ka.- een M. Holscher City Clerk APPROVED AS TO FORM: � .- City Atto ley • City of Union Gap, Washington Ordinance No. 2298 Page 2 of 2 APPENDIX A INTERLOCAL AGREEMENT ■ • A-1 PASMSCO9L 01/06/14 INTERLOCAL COOPERATION AGREEMENT TO FORM A PUBLIC FACILITIES DISTRICT By and Among THE CITY OF YAKIMA THE CITY OF SELAH and THE CITY OF UNION GAP [DRAFTER'S NOTE: The date on which this agreement was executed by all three parties was June 25, 2001.] This INTERLOCAL COOPERATION AGREEMENT TO FORM A PUBLIC FACILITIES DISTRICT (the "Agreement ") is executed by and among the CITY OF YAKIMA, WASHINGTON ( "Yakima "), the CITY OF SELAH, WASHINGTON ( "Selah ") and the CITY OF UNION GAP, WASHINGTON ( "Union Gap ") (Yakima, Selah and Union Gap are collectively referred to herein as "the Parties ") for the purposes of establishing a multi -city public facilities district to assist in the financing, development and operation of, regional convention center facilities; stimulating economic development by creating jobs, realizing additional sales tax and lodging tax revenues and attracting commercial business and tourism; and providing facilities for community events including public meetings and performing arts events. The Parties enter into this Agreement effective as of the date of execution by all three g Y Parties, for the purposes and under the terms contained herein. WHEREAS, Yakima currently owns and operates the Yakima Convention Center (the "Convention Center "), providing first -class meeting, ballroom and other event facilities; WHEREAS, the Parties desire to expand the Convention Center, at an estimated cost of over $10,000,000 (the "Project "); WHEREAS, Chap. 35.57 RCW (the "Act ") authorizes one or more contiguous cities located in a county with a population of less than one million to create a public facilities district (a "PFD ") to acquire, remodel, finance, and operate one or more "regional centers "; WHEREAS, "regional centers" are defined to include, among other things, existing convention centers to be improved at a cost of at least ten million dollars including debt service; WHEREAS, PFDs have access to several new revenue sources, including a state sales and use tax credit (the "Sales Tax "), which operates to shift 0.033% of the retail sales and use taxes generated within the PFD boundaries to the PFD; WHEREAS, in order to complete the Project and access the Sales Tax, the Parties wish to create a PFD solely for the purpose of acquiring, constructing, owning, remodeling, maintaining, equipping, re- equipping, repairing, financing and operating regional centers, as defined in the Act (the "District "); WHEREAS, the Act requires a 33% local match of the net present value of the Sales Tax to be collected by the District in order for the District to impose the Sales Tax and, accordingly, Yakima will transfer a leasehold interest in the Convention Center and the underlying site to the District in satisfaction of this match requirement (the value of the Convention Center and the underlying site is approximately $11,800,000); WHEREAS, the value of leasehold interest is estimated to significantly exceed the net present value of 33% of the projected Sales Taxes of the District (approximately $2.4 million); WHEREAS, pursuant to the Design, Development, Construction, Financing and Operating Agreement between Yakima and the District, the District will sublease the Convention Center and the underlying site to Yakima, and Yakima will design, develop, construct, operate and maintain the property in return for certain rights, including the right to retain all revenues of the Convention Center; WHEREAS, subject to certain limitations set forth herein, Yakima intends to issue bonds and apply bond proceeds to finance the Project, in consideration for the District's pledge of Sales Tax receipts to Yakima to pay debt service on the bonds and other Regional Center costs; WHEREAS, the Parties are authorized and empowered to enter into this Agreement pursuant to Chap. 39.34 RCW; NOW THEREFORE, in consideration of mutual promises and covenants herein, the Parties agree: Section 1. Definitions. Except for the terms defined in this section, and unless the context indicates otherwise, for the purposes of this Agreement and the Related Documents, the Parties shall use the definitions found in Chap. 35.57 RCW as they may be amended. Additional Bonds means Completion Bonds or Refunding Bonds issued by Yakima. Additional Revenue means all revenue received by the District (or by Yakima on behalf of the District), including gifts, grants, donations, Admission Charges, Admission Taxes, Parking Charges, Parking Taxes, Voted Sales Taxes and any other revenue received by the District and derived from the District's operation of the facilities, including investment income; but excluding Sales Tax Revenue and amounts received from Yakima pursuant to Section III(C) of the Development Agreement (including investment earning thereon). Administrative Costs means the costs of the District incurred in administering the District and the Development Agreement. Administrative Costs shall be specified in the District's annual budget submitted to Yakima for approval and to Selah and Union Gap for review and comment. Admissions Charge means any charge imposed by the District (or by Yakima on behalf of the District) for admission to its facilities, including charges for season tickets or subscriptions; cover charges, or charges for use of seats and tables, and other similar accommodations; charges for food and refreshment if free entertainment, recreation, or amusement is provided; charges for rental or use of equipment or facilities for purposes of recreation or amusement; and automobile parking charges if the amount of the charge is determined according to the number of passengers in the automobile. Admission Tax means any tax imposed by the District pursuant to RCW 35.57.100 to be paid by any person who pays an Admissions Charge. Agreement means this interlocal agreement. Bond Counsel means a firm of lawyers nationally recognized and accepted as bond counsel and so employed by Yakima. -2- P: \SC \SC091 01/06/18 Bond Ordinance means the ordinance of the Yakima Council authorizing the issuance of the Bonds and any amendments and supplements. Bonds means the bonds, notes or other evidences of indebtedness issued pursuant to and under authority of the Bond Ordinance to provide for the financing or refinancing of the Project. Yakima reserves the right not to issue the Bonds if, at the time the Bonds are to be sold, the total interest cost on the Bonds exceeds 5.55 %. Board means the governing body vested with the management of the affairs of the District. Bylaws means the rules adopted for the regulation or management of the affairs of the District approved by this Agreement and all subsequent amendments. Charter means the articles of organization of the District approved by this Agreement and all subsequent amendments. Code means the Internal Revenue Code of 1986, as amended, and all applicable regulations and rulings thereunder. Completion Bonds means additional bonds of Yakima issued to pay Costs of the Project. Costs of the Project means all capital costs that are paid or incurred by Yakima in connection with the design, development and construction of the Project, including, but not limited to all or a portion of the interest on Bonds during the period of construction of such improvements, and for a period of time thereafter; amounts required to meet any reserve requirement for the Bonds; the cost of paying or reimbursing Yakima or any fund thereof for expenses, including planning, permitting and design expenses, incident and properly allocable to the Project; and all other items of expense incident and properly allocable to designing, developing and constructing the Project, financing the Project and placing the Project in operation. Debt Service means the amount to be paid on the next succeeding Payment Date to pay the principal of, premium, if any, and interest on Bonds and any Additional Bonds coming due on such Payment Date. Debt Service Fund means the special fund(s) or account(s) established by Yakima pursuant to the Bond Ordinance or a Supplemental Bond Ordinance for the purpose of paying the principal of, premium, if any, and interest on Bonds and /or any Additional Bonds. Debt Service Reserve Fund means the Debt Service Reserve Fund (or Account), if any, established by Yakima under the fond Ordinance or Supplemental Bond Ordinance, which secures the Bonds and/or any Additional Bonds.. -3- P:\SC \SC091 01/06/18 Development Agreement means the Design, Development, Construction, Financing and Operating Agreement by and between Yakima and the District. District means the public facilities district created pursuant to Section 1. Favorable Opinion of Bond Counsel means, with respect to any action, a written legal opinion of Bond Counsel addressed to Yakima, to the effect that such action is permitted under the laws of the State and under applicable ordinances of the Yakima Council, including the Bond Ordinance and any Supplemental Bond Ordinance, and will not impair the exclusion of interest on a Bond or any other bonds of Yakima from gross income for federal income tax purposes under the Code (subject to the inclusion of any exceptions contained in the opinion delivered upon original issuance of such bond). Lease Agreement means the Lease Agreement by and between Yakima and the District providing for the transfer of a leasehold interest in the Convention Center and the underlying site to the District in satisfaction of the match required under RCW 82.14.390. Lodging Taxes means lodging taxes received by Yakima pursuant to Chap. 67 RCW. Net Proceeds, when used with reference to the Bonds, means the principal amount of such Bonds, plus original issue premium, if any, and less original issue discount, if any, and less the proceeds of the Bonds used to pay costs of issuance or deposited in the Debt Service Reserve Fund. Operating Manual means the Operating Standards Manual for the expanded Convention Center. Outstanding, when used as of any particular time with reference to Bonds or Additional Bonds, means all Bonds or Additional Bonds authenticated and delivered by Yakima under the Bond Ordinance or any Supplemental Bond Ordinance except (1) Bonds or Additional Bonds theretofore cancelled by Yakima or surrendered to Yakima for cancellation; (2) Bonds or Additional Bonds with respect to which all liability of Yakima shall have been discharged in accordance with the Bond Ordinance or Supplemental Bond Ordinance, as applicable, and (3) Bonds or Additional Bonds for the transfer or exchange of, or in lieu of, or in substitution for which other Bonds or Additional Bonds shall have been authenticated and delivered by Yakima pursuant to the Bond Ordinance or Supplemental Bond Ordinance, as applicable. Parking Charge means "vehicle parking charges" as defined in RCW 35.57.110. Parking Tax means a tax on any vehicle parking charge imposed at any parking facility that is owned or leased by the District pursuant to RCW 35.57.110. Payment Date means the dates specified in the Bond Ordinance, or any Supplemental Bond Ordinance, as dates for the payment of interest on, principal of or premium, if any, with respect to the Bonds or any Additional Bonds. -4- P:\SC\SC091 01/06/18 PFD Revenue Reserve Fund means the PFD Revenue Reserve Fund (or Account), if any, established by Yakima under the Bond Ordinance or Supplemental Bond Ordinance. The amount of revenue consisting of the District's Sales Tax Revenue received by Yakima that shall be maintained in the PFD Revenue Reserve Fund shall be determined at the time that the Bonds are issued. Predevelopment Costs means the cost of all planning, legal, architectural, engineering and other services incurred by Yakima in connection with the Project until the date of issuance of the Bonds. Project means the design, construction, and operation of the additions to the Convention Center, as described in the Project Documents. Project Documents means all design documents (including drawings describing the structural, mechanical, acoustical, lighting, and electrical systems of the Project, detailed site plans, preliminary specifications, and schematic design documents), construction documents (including all drawings and specifications necessary to completely describe the Project in detail to a contractor for the purposes of bidding and construction, schedules, plans and specifications, and the construction contract) and Project budgets (setting forth the construction contract cost, taxes, all contingencies, fees and allowances). Related Documents mean the Charter, the Lease Agreement, the Bylaws and the Development Agreement. Refunding Bonds means bonds, notes or other evidence of indebtedness of Yakima the proceeds of which will be used to refund Bonds. Sales Tax means the nonvoted sales and use tax to be imposed by the District in accordance with RCW 82.14.390 at a rate not to exceed 0.033% of the selling price in the case of a sales tax or value of the article used in the case of a use tax, which tax shall be deducted from the amount of tax otherwise required to be collected or paid over to the State's Department of Revenue and shall expire when the Bonds and any Additional Bonds are retired, or, in any event, not more than 25 years after the Sales Tax is first collected. Sales Tax Revenue means all Sales Taxes received by the District. Selah means the City of Selah, Washington, a municipal corporation of the State, as now or hereafter constituted. • State means the State of Washington. Supplemental Bond Ordinance means any ordinance adopted by the Yakima Council amending or supplementing the Bond Ordinance, including any ordinance adopted by the Yakima Council in connection with the issuance of Additional Bonds. -5- P: \SC \SC091 01/06/18 • Union Gap means the City of Union Gap, Washington, a municipal corporation of the State, as now or hereafter constituted. Voted Sales Tax means any sales and use tax imposed by the District pursuant to RCW 82.14.048 and approved by the voters. Yakima means the City of Yakima, a municipal corporation of the State, as now or hereafter constituted. Yakima City Manager means the City Manager of Yakima, or any successor to the office. Yakima Council means the City Council of Yakima, or any successor thereto as provided by law. Section 2. Formation of the District. Pursuant to RCW 35.57.010(1), the Parties hereby create a public facilities district. The District shall be a municipal corporation, an independent taxing authority and a taxing district, with the powers and limitations as set forth in its Charter and this Agreement. The District shall be coextensive with the boundaries of the Parties, as the same may be amended from time to time. Section 3. Name. The name of the District shall be the Yakima Regional Public Facilities District. Section 4. Purpose. The District shall acquire (by purchase, lease or otherwise), construct, own, remodel, maintain, equip, reequip, repair, finance, and/or operate (either directly or by contract) one or more Regional Centers, as defined in RCW 35.57.020. Specifically, the District shall acquire a leasehold interest in the Convention Center, and finance the Project and related parking facilities in accordance with the Development Agreement. Section 5. General Powers. Except as limited by State law, this Agreement and the Charter, the District shall have and may exercise all lawful powers necessary or convenient to affect the purposes for which the District is organized and to perform authorized corporate functions. Section 6. Specific Powers. Without limitation, the District shall have the following specific powers: (a) to acquire (by purchase, lease or otherwise), construct, own, remodel, maintain, equip, reequip, repair, finance, and operate (either directly or by contract) the Convention Center, the Project, related parking facilities and any other Regional Center, subject to the limitations set forth in Section 7; (b) to accept and expend gifts, grants, and donations; (c) to impose the following charges, fees, and taxes authorized in RCW 35.57.040: -6- P: \SC \SC091 01/06/18 (i) Admission Charges, Parking Charges and any other fees or charges for the use of any of its facilities, subject to the limitations set forth in Section 7; (ii) Admission Taxes, subject to the limitations set forth in Section 7; (iii) Parking Taxes, subject to the limitations set forth in Section 7; (iv) Voted Sales Taxes, subject to the limitations set forth in Section 7; (v) Sales Taxes at a rate not to exceed the limit set forth in RCW 82.14.390 to be collected from those persons who are taxable by the State under Chaps. 82.08 and 82.12 RCW upon the occurrence of any taxable event within the District; (d) to use Sales Tax Revenue, Additional Revenue and other receipts for its purposes; (e) to contract with a public or private entity (including but not limited to Yakima) for the construction, financing, operation and/or management of the Project, related parking or for any other Regional Center owned or operated by the District, subject to Section 18; (f) to use the supplemental alternative public works contracting procedures set forth in Chap. 39.10 RCW: (g) to acquire and transfer real and personal property by lease, sublease, purchase, or sale, subject to the limitations set forth in Section 7; and (h) to issue general obligation bonds (subject to statutory debt limits) or revenue bonds. Section 7. Limitations on Powers. (a) No Power of Eminent Domain. The District shall not have the power of eminent domain. (b) Additional Regional Centers — Yakima Approval. The District's power to acquire, construct, own, remodel, maintain, equip, reequip, repair, finance, and operate (either directly or by contract) any Regional Center other than the Convention Center, the Project and related parking facilities is subject to the approval of Yakima; Project p g subject pP -7- P:\SC\SC091 01 /06/18 (c) Convention Center Expansion Project — Yakima Approval. (i) Yakima Approval of Parking Taxes and Admission Taxes. In consideration for Yakima's agreement to issue the Bonds and apply Net Proceeds to pay Predevelopment Costs (to the extent that such costs are not to be paid from Sales Tax Revenue) and Costs of the Project under the terms of the Development Agreement, the District's power to impose Admission Taxes and Parking Taxes shall be subject to the approval of the g subject P Yakima Council. (ii) Yakima Approval of Admission Charges and Parking Charges. In consideration for Yakima's agreement to apply Lodging Taxes to pay a portion of the costs of operating and maintaining the Convention Center and the Project under the terms of the Development Agreement, the District's power to impose charges and fees, including all Admission Charges and Parking Charges, shall be subject to the approval of the Yakima Council. (iii) Yakima Approval of Gambling Activity and Public Display of Artwork In consideration of Yakima's agreement to issue the Bonds and apply Net Proceeds to pay Predevelopment Costs (to the extent that such costs are not to be paid from Sales Tax Revenue) and Costs of the Project under the terms of the Development Agreement, and in consideration for Yakima's agreement to apply Lodging Taxes to pay a portion of the costs of operating and maintaining the Convention Center and the Project under the terms of the Development Agreement, the following activities shall be subject to the approval of the Yakima Council: a. any gambling activity under the authority of the District at the Convention Center; and b. any public display of artwork under the authority of the District at the Convention Center. (iv) Annual Budget Approval and Approval of Property Transfers. In consideration for Yakima's agreement to issue the Bonds and apply Net Proceeds to pay Predevelopment Costs (to the extent that such costs are not to be paid from Sales Tax Revenue) and Costs of the Project under the terms of the Development Agreement and in consideration of Yakima's agreement to apply Lodging Taxes to pay a portion of the costs of operating and maintaining the Convention Center under the terms of the Development Agreement, the District's annual budget, including Administrative Costs, shall be subject to the approval of the Yakima Council. The District shall forward its proposed annual budget to the Parties (for review and comment by Selah and Union Gap and for approval by the Yakima Council) no later than September 1 of the year -8- P:1SC\SC091 01/06/18 prior to the budget year. The District shall also forward any amendment to its approved annual budget to Yakima for approval and to Selah and Union Gap for review and comment. In addition, any acquisition or transfer of real and personal property with a value over $100,000 by lease, sublease, purchase, or sale by the District shall be subject to approval by the Yakima Council. (d) Party Approval of Voted Sales Tax. Prior to placing on the ballot any Voted Sales Tax, the District shall forward the draft proposed ballot language to each of the Parties. The District's power to impose the Voted Sales Tax is subject to the approval of each of the Parties. (e) No Political Activity. No funds, assets or property of the District shall be used for any political activity, except as set forth in the Charter. (f) No Private Inurement. The District shall not operate in a manner that creates any private inurement, except that the District may compensate employees; reimburse employees, Board members, volunteers and agents for reasonable expenses; defend and indemnify Board members or employees acting in good faith on behalf of the District and within the scope of their duties; hold harmless Board members or employees acting in good faith on behalf of the District and within the scope of their duties and provide liability insurance for employees, Board members, volunteers or other agents. Section 8. Charter. The Charter is hereby approved in the form set forth as Exhibit A. The Charter shall be deemed issued upon execution of this Agreement by all of the Parties. The Charter shall be issued in duplicate originals, each bearing the Yakima seal attested by the City Clerk of Yakima. One original shall be filed with Yakima; duplicate originals shall be provided to the District and to the City Clerks of Selah and Union Gap. The Charter shall be amended only with the approval of each of the Parties. Section 9. Effect of Issuance of Charter. The District shall commence its existence effective upon issuance of the Charter by Yakima pursuant to Section 8 (that is, upon execution of this Agreement by all of the Parties). Except as against the State or the Parties in a proceeding to cancel or revoke the Charter, delivery of a duplicate original Charter shall conclusively establish that the District has been established in compliance with the procedures of this Agreement. - Section 10. Board of Directors. A board consisting of seven directors (the "Board "), as described in the Charter, is hereby established to govern the affairs of the District. The directors shall be appointed and serve their terms as provided in the Charter. All corporate powers of the District shall be exercised by or under the authority of the Board; and the business, property and affairs of the District shall be managed under the direction of the Board, except as may be otherwise provided for by law, this Agreement, or in the Charter. Section 11. Board Removal. As set forth in the Charter, if it is determined for any reason that any or all of the Board members should be removed from office, the City Council for -9- P:1SC1SC091 01/06/18 the City that originally appointed the Board member to be removed may by ordinance remove that Board member from office. The term of any Board member removed pursuant to this section shall expire when the removal ordinance takes effect. Vacancies created under this section shall be filled in the manner provided in the Charter. Section 12. Organizational Meeting. Upon issuance of the Charter, the Yakima City Manager or his designee shall call an organizational meeting of the initial Board within 30 days, giving at least three days' advance written notice to each Board Member, unless waived in writing. At such meeting, the Board shall organize itself, may appoint officers, and shall select the District's place of business. Section 13. Bylaws. (a) The initial Bylaws of the District are hereby approved in the form set forth at Exhibit B. The power to alter, amend, or repeal the Bylaws or adopt new ones shall be vested in the Board, except as otherwise provided in this Agreement or in the Charter. The Bylaws shall be consistent with the Charter. (b) As necessary and appropriate in the discretion of the Yakima Council, the Yakima Council may amend the Bylaws by ordinance adopted at or after a public meeting held with notice to the District, Selah and Union Gap. Amendments to the Bylaws adopted by the Yakima Council may not be further amended by the District for one year except with Yakima Council approval. Section 14. Dissolution. So long as the Bonds are Outstanding, if the Yakima Council makes an affirmative fording that dissolution is warranted for any reason, the existence of the District may be terminated by ordinance of the Yakima Council adopted at or after a public meeting, held with notice to the City of Selah, the City of Union Gap, the District and the Board and affording a reasonable opportunity to be heard and present testimony. At such time as the Bonds are no longer Outstanding, if all three of the Parties make an affirmative finding that dissolution is warranted for any reason, the existence of the District may be terminated by ordinance of the City Council of all three Parties adopted at or after a public meeting, held with notice to the other Parties, the District and the Board and affording a reasonable opportunity. to be heard and present testimony. In either event, dissolution shall be accomplished as provided in the Charter, and shall not take effect until proper provision has been made for disposition of all District assets. At such time as the Bonds are no longer Outstanding, one or two of the Parties may withdraw from this Agreement, by ordinance of the City Council of such Party or Parties, adopted at or after a public meeting, held with notice to the other Parties, the District and the Board and affording a reasonable opportunity to be heard and present testimony. In such event, the District shall not be dissolved but shall continue its existence in all respects, except that the boundaries of the District shall be deemed revised to exclude the territory of the withdrawing Party(ies). -10- P:1SC \SC091 01/06/18 Upon satisfactory completion of dissolution proceedings, the City Clerk of Yakima shall indicate such dissolution by inscription of "Charter cancelled" on the Charter of the District on file with the City and, when available, on the duplicate originals of the District, Selah and Union Gap, and the existence of the District shall cease. The City Clerk of Yakima shall give notice thereof pursuant to State law and to other persons requested by the District in its dissolution statement. The Parties hereby acknowledge that the District's assets and property will largely be derived from Yakima. Specifically, Yakima will transfer a leasehold interest in the Convention Center and the underlying site to the District, will issue bonds to pay Predevelopment Costs (to the extent that such costs are not to be paid from Sales Tax Revenue) and Costs of the Project, will construct the Project, and will apply Lodging Taxes to pay a portion of the cost of operating and maintaining the Convention Center and the Project. Accordingly, upon dissolution of the District and the winding up of its affairs, all of the District interest in the Convention Center, the site, the Project, and all assets or property of the District that are proceeds of the foregoing shall vest in Yakima unless the Yakima Council or a trustee or court has provided for the transfer of the District's interest in the Convention Center, the site, the Project, and proceeds of the District to a qualified entity or entities that will fulfill the purposes for which the District was chartered. At such time as the District acquires any other Regional Center, the Parties shall enter into a plan providing for the disposition of such Regional Center and related assets upon dissolution of the District. If Selah or Union Gap fail to enter into such a plan, then upon dissolution of the District and the winding up of its affairs, title to such Regional Center and all assets or property of the District that are proceeds of the foregoing shall vest in Yakima unless the Yakima Council or a trustee or court has provided for the transfer of the such Regional Center and proceeds of the District to a qualified entity or entities that will fulfill the purposes for which the District was chartered. Section 15. Indemnification. The City of Yakima shall indemnify and hold harmless the Cities of Union Gap and Selah from any liability arising from a challenge to the formation of the Yakima Regional Public Facilities District under RCW 35.57.010. Section 16. Ancillary Authority. The Yakima City Manager is granted all such power and authority as reasonably necessary or convenient to enable him or her to administer this Agreement efficiently and to perform the duties imposed in this Agreement and the Related Documents. Section 17. Term of Agreement. This Agreement shall automatically terminate on the date on which District is dissolved pursuant to Section 14. Termination shall not relieve any Party of responsibility for meeting financial and other obligations outstanding at the time of termination. -11- P:\SC \SC091 01/06/18 Section 18. Transfer of the Convention Center to the District. Yakima hereby agrees to enter into the Lease Agreement. The Parties agree that the transfer of a leasehold interest in the Convention Center and the underlying site to the District pursuant to the Lease Agreement shall constitute a donation from the City to the District to be used for the construction, improvement or rehabilitation of a Regional Center as defined in RCW 82.14.390. The value of the Convention Center and the underlying site is approximately $11,800,000. The Parties agree that the value of the leasehold interest in the Convention Center and the underlying site to be transferred pursuant to the Lease Agreement is substantially more than the net present value of 33% of total Sales Taxes to be received by the District (approximately $2.4 million). Section 19. Management Agreements. Any management contract entered into by the District or Yakima for the operation or management of the Convention Center and the Project shall be consistent with the Development Agreement. Prior to executing any management contract (with the exception of the Development Agreement), the District or Yakima, as applicable, shall have received a Favorable Opinion of Bond Counsel regarding the terms of the management contract. Section 20. Limitation of Liability. The District is a separate legal entity. All liabilities incurred by the District shall be satisfied exclusively from the assets, credit, and properties of the District, and no creditor or other person shall have any right of action against or recourse to the Parties, their assets, credit, or services, on account of any debts, obligations, liabilities or acts or omissions of the District. • Section 21. Non - Waiver. No waiver by any Party of any term or condition of this Agreement shall be deemed or construed to constitute a waiver of any other term or condition or of any subsequent breach whether of the same or of a different provision of this Agreement. Section 22. No Third -Party Beneficiary. This Agreement is entered into for the benefit of the residents of the Parties to facilitate the completion of the Project, stimulate economic development by creating jobs, realize additional sales and lodging tax revenues, attract commercial business and tourism, and provide facilities for convention, special events, community events including public meetings and performing arts events. This Agreement is not entered into with the intent that it shall benefit any party not signing this Agreement, and no other person or entity shall be entitled to be treated as a third -party beneficiary of this Agreement; provided that any owner of the Bonds or Additional Bonds shall be a third -party beneficiary for the purposes of enforcing payments to be made by the District to Yakima in amounts sufficient for Yakima to pay Debt Service. Section 23. The City of Yakima intends to contribute lodging taxes to pay a portion of the cost of operating and maintaining the Convention Center, in an amount, if any, determined annually by the Yakima City Council. As between the Cities, as set forth in the Development Agreement, the City of Yakima will also be solely responsible to contribute revenues in the case of a Sales Tax shortfall. The Cities of Union Gap and Selah shall have no financial responsibility to the District in the event of a Sales Tax shortfall. -12- P: \SC\SC091 01/06/19 , p6a Section 2l. Counterparts. This Agreement may be executed in two or more counterparts, and each such counterpart shall be deemed to be an original instrument. All such counterparts together will constitute one and the same Agreement. IN WITNESS HEREOF, this Agreement is executed by the City of Yakima, the City of Selah and the City of Union Gap. THE CITY OF YAKIMA, WASHINGTON Contract No. 2001 -70 Ordinance No. 2001 -28 By L Richard A. Zais, Jr. • City Manager THE CITY. OF SELAK4WAS 1 GTON By Robert Jones Mayor THE CITY OF UNION GAP, WASHINGTON • rey C. Reeves, . Mayor Certified tified to be a true and correct copy of the original filed in my office. 7-- 7— d ( CITY CLERK 01 Deputy vier YA /,y�9 1 ; 3 SEAL -13- P:1SC1SC091 01/06/18 CITY OF UNION GAP, WASHINGTON III ORDINANCE NO. 2300 AN ORDINANCE of the City of Union Gap, Washington, approving an interlocal agreement with the Cities of Yakima and Selah to form the Yakima Public Facilities District pursuant to RCW 35.57.020. WHEREAS, the City previously adopted Ordinance No. 2298 approving an Interlocal Agreement to form the Yakima Public Facilities District; and WHEREAS, the City of Selah made changes to the Interlocal Agreement; NOW, THEREFORE, BE IT ORDAINED BY the City of Union Gap, Washington, as follows: Section 1. Approval of Interlocal Agreement; Formation of the District, Pursuant to RCW 35.57.010(1), the City hereby approves the Interlocal Agreement attached as Appendix A hereto (the "Interlocal Agreement "), creating a public facilities district in cooperation with Yakima and the City of Selah. • Section 2. Authorization of Documents. The Mayor is hereby authorized to execute the Interlocal Agreement. The Mayor and his designee, and each of the other appropriate officers, agents and representatives of the City are each hereby authorized and directed to take such steps, as in their judgment may be necessary, appropriate or desirable in order to carry out the terms and provisions of, and complete the transactions contemplated by this ordinance. Section 3. Prior Acts. All acts taken pursuant to the authority of this ordinance but prior to its effective date are hereby ratified and confirmed. Section 4. Effective Date. This ordinance shall be effective 5 days after its passage, approval and publication as provided by law. PASSED by the Council of the City of Union Gap this 25 day of June 2001. a / • _� i , 1.L.--...r Au D I - . C. Reeves, Jr.,' ayor ATTEST: /' L ) ) 2 - AT _/�� Kathleen M. Holscher, City Clerk • APPROVED AS TO FORM: /�� ��I _ . - . -- - _ A %�11,.._ ity At ney regory . Ligh I City of Selah • Council Minutes of June 12, 2001 C Regular Meeting Selah Council Chambers 115 West Naches Avenue Selah, WA 98942 A. Call to Order — Mayor Bob Jones called the meeting to order at 4:00pm. B. Roll Call Members Present: Doug Howie, Jerry Kobes, Keith Larson, Allen Schmid, Herb Schmidt, Scott Smeback Members Excused: Ron Deatherage Staff Present: Frank Sweet, City Supervisor; Kevin Roy, City Attorney; Jerry Davis, Fire Chief; Dennis Davison, Community Planner; Joe Henne, Public Works Director; Jeff Hagler, Parks & Recreation Director C. Pledge of Allegiance D. Agenda Changes City Supervisor Sweet called Council Members' attention to the packet from the City of Union Gap containing the ordinance passed by the Union Gap City Council on Monday, June 11, 2001 regarding participation in the Public Facilities District proposed by the City of Yakima. He noted the packet will be part of the discussion on Item L — 1. E. Public Appearances F. Getting To Know Our Businesses G. Communications 1. Oral -none 2. Written a. Profile of General Demographic Characteristics: Census 2000 • b. Superior Refuse Invoice for Community Days Council Members expressed their appreciation for Superior Refuse's contributions to the Selah community. Selah City Council Minutes 6/12/01 Council Members expressed their appreciation for Superior Refuse's contributions to the Selah • community. Council Member Schmidt presented the City of Selah with a Certificate of Appreciation from the Farmers Market. This certificate was presented to recognize the outstanding commitment the City of Selah has given the Farmers Market for the past five years. H. Proclamations /Announcements 1. Hire a Veteran Month - June 2001 Mayor Jones read and signed the Proclamation promoting June 2001 as Hire a Veteran Month. He noted the importance of the contribution veterans have made to our nation. I. Consent Agenda All items listed with an asterisk ( *) were considered as part of the Consent Agenda. * 1. Approval of Minutes: May 22, 2001 Council Member Schmid noted his name was spelled incorrectly on page three. • * 2. Approval of Claims & Payroll-Claim checks nos. 36327 — 36422 for a total of PP yr $94,641.88 and Payroll checks nos. 46642 — 46734 for a total of $113,339.91. Council Member Kobes moved and Council Member Schmidt seconded to approve the Consent Agenda with the correction to the May 22, 2001 minutes. With voice vote, the motion carried unanimously. J. Public Hearings K. New Business L. Old Business 1. Public Facilities District Mayor Jones noted that last week, the City of Selah received the updated copy of the information regarding the Public Facilities District. He explained that the Public Facilities District is a proposed collaboration between Selah, Union Gap and Yakima so that 033% sales tax sent to the state will be returned and used for Yakima Convention Center upgrades. He reported that the ordinance has been approved by the City of Union Gap with some changes. • Rita Anson, City of Yakima Finance Director, was present to answer questions. Councilman Howie asked about potential liability for the City. Ms. Anson stated that the City of Yakima assumes full responsibility if sales tax revenue is not sufficient to cover upgrade costs, noting that Selah and Union Gap will not be held responsible if a deficit occurs (See Section 15). Selah City Council Minutes 6/12/01 2 • City Attorney Roy also questioned the content of the Interlocal Agreement regarding a potential shortfall, stating responsibility should be spelled out in the body of the agreement. Kathleen Holscher, Union Gap City Clerk, explained that the RCW is over - riding authority. According to the RCW, Yakima is the responsible party as they are selling the bonds. City Attorney Roy also questioned the wording of Section 7d regarding a sales tax increase being placed on the ballot. He asked for a clarification regarding its "approval." Ms. Anson stated that any sales tax increase must be agreed upon prior to placement on the ballot. Council Member Larson asked about the need for an increased sales tax. Ms. Anson stated that a PFD does not necessarily mean increase in the sales tax rate; however, it does have the power to bring an increased sales tax proposal to voters should there be a need. She noted the revenue projections in the Agreement are shown at the existing 2001 tax rate. Council Member Schmid asked about the appointment of board members as described on Page 1 of the Bylaws. Ms. Anson responded that three of the seven members will be appointed at the discretion of the Yakima, Union Gap and Selah City Councils accordingly. The Yakima City Council will appoint the four remaining members, based on nominations from local organizations. Councilman Schmid expressed concern over the power of Yakima to appoint board members, the potential of Yakima filling vacancies created by the cities of Selah or Union Gap. • City Attorney Roy asked for clarification of the dissolution policy. If bonds are outstanding, only Yakima can dissolve the PDF. If there are no outstanding bonds, all three must agree. According to Rita, this is to protect the City of Yakima as they are on the hook for bond repayment. City Attorney Roy also questioned the discrepancy in effective dates. The City of Union Gap has an effective date of five days from passage, whereas Selah has thirty days from passage. This difference is due variances in community codes. Council Member Schmid moved to approve the Interlocal Agreement with the City of Yakima and the City of Union Gap to form a Public Facilities District pursuant to RCW 35.57.020. He further moved the Mayor be authorized to sign the agreement as adopted by the City of Union Gap with the correction of the title of Section 24. Council Member Howie seconded. It was further clarified that the intention of the motion is to include the Bylaws and Charter provided by the City of Yakima. Roll was taken. Councilman Smeback - yes; Councilman Schmid - yes; Councilman Schmidt - yes; Councilman Larson - yes; Councilman Kobes - yes; Councilman Howie - yes. Motion carried unanimously. M. Resolutions 1. Resolution Authorizing the Mayor to Sign the Professional Services Contract for Selah Hearing Examiner with Philip A. Lamb City Supervisor Frank Sweet reminded Council Members that an ordinance moving to a hearing • examiner was adopted last fall, prior to adopting the Moratorium on the Acceptance and/or Approval of Subdivisions, Rezones, and Outside Utility Agreements. He noted that the moratorium has now been lifted, so the Hearing Examiner can be put into action. City Attorney Roy stated that he Selah City Council Minutes 6/12/01 3 anticipates ordinances regarding specific items will be brought for council's approval and /or III amendment in the near future. Council Member Schmid asked for a clarification regarding billing practices as outlined in items 7 and 8 on page 3 of the agreement. Phil Lamb stated that he would submit an itemized statement by the 10 of the month for work completed as of the end of the prior month. Council Member Kobes questioned the reimbursement of training costs incurred by Mr. Lamb. Currently such costs are split 50 -50 between the County and the City of Yakima. Mr. Lamb stated that he anticipates he will pro rate a portion of his costs to the City of Selah at the time costs are incurred. Council Member Kobes asked for a clarification of the role Mr. Lamb will have. City Supervisor Sweet stated the Planning Commission will no longer be doing subdivisions, plats, and public hearings, etc. These will be done by and with Mr. Lamb. The Planning Commission will be involved in long range planning and other issues. The City Council still has the option of holding public hearings if it so chooses and will have access to minutes and materials of Hearing Examiner public hearings just as it did with the Planning Commission. Council Member Schmid commented that, as a previous member of the Planning Commission, he believes this decision will be an excellent move, particularly considering the future of growth management, etc. Mayor Jones agreed, commenting that the professional /legal expertise of Mr. Lamb is needed to remove the emotional responses sometimes made with the Planning Commission. • Mr. Lamb clarified that the Planning Commission will continue to serve the City, working on comprehensive plans, ordinances, long -range planning, etc. Council Member Schmidt moved and Council Member Smeback seconded to approve the Resolution authorizing the Mayor To Sign the Professional Services Contract for Selah Hearing Examiner with Mr. Philip A. Lamb. Roll was taken. Councilman Smeback — yes; Councilman Schmid — yes; Councilman Schmidt — yes; Councilman Larson — yes; Councilman Kobes — yes; Councilman Howie — yes. Motion carried unanimously. N. Ordinances O. Communications 1. Oral Laura Duncan of 113 East Fremont addressed the City Council concerning the safety on East Fremont. Ms. Duncan stated there is not striping on the street nor are there any sidewalks. Fire trucks and construction trucks use that street frequently throughout the day, causing a safety hazard for pedestrians and other drivers. Public Works Director Joe Henne stated that East Fremont was part of the six -year street plan, but nothing has been done. Mayor Jones told Ms. Duncan that the City tries to rate projects according to need, and the Council will do the best that it can. • Further discussion on this issue involved the speed limit and possibly encouraging off street parking. City Supervisor Sweet reminded the Council that with property tax cuts the City has had reduced revenue. Selah City Council Minutes 6/12/01 4 • Council Member Schmid asked that Public Works look at the intersection on 1St and Fremont. He has noted some serious crumbling on the side of the road. P. Reports /Announcements 1. Mayor 2. Building Code Inspector introduced by City Supervisor Sweet 3. Council Members 4. Boards 5. Departmental a. Selah Library Board Minutes May 15, 2001 - Unapproved b. Selah Police Department Monthly Report-April 2001 Mayor Jones stated that tomorrow City crews will be putting up the flags for Flag Day to remain flying through the 4 of July. He informed the Council that the cleanup in downtown Selah was being done by community service workers. Mayor Jones also announced the resignation of Jim Thomas from the Planning Commission and that he is looking for a replacement. He asked that Council Members who know of any qualified people, to please let him know. • Frank Sweet, City Supervisor, introduced John Gawlik, the new Building Inspector /Code Enforcement Officer, who came on board as of June 1, 2001. He will be in Union Gap this week learning how they operate. City Attorney Kevin Roy noted that John Gawlik also serves as security officer for Selah Municipal Court and has done a fine job in that capacity. Fire Chief Jerry Davis reported New EMS Director will be starting on July 1. Public Works Director Joe Henne reported that spring cleanup was done by a group from the Department of Corrections. He stated the Goodlander LID project has started, but is moving somewhat slowly because some of the residents who were not in favor of the project have caused a few delays. Councilman Schmid asked about the chip seal on Fremont, suggesting the City repair it before any more oil is picked up. Mr. Henne said be believes it has cured now. Community Planner Dennis Davison reported that since the moratorium has been lifted, Chuck Johnson will be bringing his proposed plat before the City Council again, most likely at the next meeting. He further reported there will be a study session regarding the sign ordinance. He is encouraging Mr. Lamb and members of the City Council to read the Planning Commission Sign Code Amendment. Council Member Kobes asked what the schedule will be regarding this amendment. The Community Planner stated that there would be a study session prior to the Council meeting. Council Member Kobes expressed concern that there had not been adequate opportunity for public input. Dennis stated that a public hearing was held and only two people attended. Copies of the proposed amendment have • been distributed to various sign companies and Chamber of Commerce members. He stated he is not aware of any opposition to the amendment. Selah City Council Minutes 6/12/01 5 Jeff Hagler, Parks Director, reported that summer programs have begun at the pool which is now open • for special end -of -the -year functions for the city schools. He further reported there are some problems with the main boiler, but they are being handled, and it should be up and running shortly. A new pool manager was hired, and she appears to be very good. Council Member Howie praised the Maintenance Department for their generous donation of logs to the WIN Program. Council Member Larson complimented Julie and the new library board, noting it appears that they are doing a really good job. Council Member Kobes stated the Council should thank Keith and Superior Refuse for their generous support of Community Days. Q. Executive Session (No Executive Session scheduled) R. Adjournment Council Member Schmidt moved and Council Member Kobes seconded that the meeting be adjourned. With voice vote, the motion passed unanimously. The meeting adjourned at 5:15pm. z . • a Robert L. Jones, Ma 7 (Excused) Ad ir Ronald Deatherage, Council Member K it arso , r sir Member e7„. Gerald Kobes, Council Member Doug Howie, dune Me • , er ____, A $40) ‘ c! ' Sco back ncil Member Allen Schm2, Council Member Herb Schmidt, ouncil Member • ATTEST' Dale E. ovobielski; Cl Treasurer Selah City Council Minutes 6/12/01 6 • INTERLOCAL COOPERATION AGREEMENT TO FORM A PUBLIC FACILITIES DISTRICT By and Among THE CITY OF YAKIMA THE CITY OF SELAH • and THE CITY OF UNION GAP [DRAFTER'S NOTE: The date on which this agreement was executed by all three parties was June 25, 2001.] • • Table Of Contents Page ARTICLE I Name and Seal: Definitions 1 Section L1. Name 1 Section 1.2. Seal 1 Section 1.3. Definitions 1 ARTICLE II Authority and Limit on Liability 1 Section 2.1. Authority 1 Section 2.2. Limit on Liability 2 Section 2.3. Mandatory Disclaimer 2 ARTICLE III Duration 2 ARTICLE IV Purpose 3 ARTICLE V Powers 4 • Section 5.1. Powers 4 Section 5.2. Limitation of Powers 6 ARTICLE VI Board of Directors And Corporate Officers 10 Section 6.1. Powers 10 Section 6.2. Board Composition 10 Section 6.3. Terms of Office 11 Section 6.4. Quorum and Mariner of Action 12 Section 6.5. Officers and Division of Duties 13 Section 6.6. Bonding of Corporate Officers 13 Section 6.7. Executive Committee 13 Section 6.8. Removal of Board Members 13 ARTICLE VII Meetings 15 Section 7.1. Board Meetings 15 Section 7.2. Parliamentary Authority 15 Section 7.3. Minutes 16 ARTICLE VIII Procedural Requirements 16 Section 8.1. Board Review and Concurrence 16 Section 8.2. Establishment and Maintenance of Office and Records 17 Section 8.3. Access to Records 17 Section 8.4. Deposit of Public Funds 17 • Section 8.5. Reports and Information 18 Section 8.6. Audits and Inspections 18 Section 8.7. Insurance 19 P. \SC\SC09Q 01/07/03 • Section 8.8. Bylaws 19 Section 8.9. Conflict of Interest 19 Section 8.10. Discrimination 21 ARTICLE IX Amendments to Charter and Bylaws 22 Section 9.1. Proposals to Amend Charter 22 Section 9.2. Charter Amendments 22 Section 9.3. Amendments to Bylaws 23 ARTICLE X Commencement 23 ARTICLE XI Dissolution 24 Section 11.1. Dissolution Process 24 Section 11.2. Trusteeship 24 ARTICLE XII Approval of Charter 25 P: \SC \SCO9Q • • P: \SC \SCO9Q 01/07/03 110 This INTERLOCAL COOPERATION AGREEMENT TO FORM A PUBLIC FACILITIES DISTRICT (the "Agreement ") is executed by and among the CITY OF YAKIMA, WASHINGTON ( "Yakima "), the CITY OF SELAH, WASHINGTON ( "Selah ") and the CITY OF UNION GAP, WASHINGTON ( "Union Gap ") (Yakima, Selah and Union Gap are collectively referred to herein as "the Parties ") for the purposes of establishing a multi -city public facilities district to assist in the financing, development and operation of, regional convention center facilities; stimulating economic development by creating jobs, realizing additional sales tax and lodging tax revenues and attracting commercial business and tourism; and providing facilities for community events including public meetings and performing arts events. The Parties enter into this Agreement effective as of the date of execution by all three Parties, for the purposes and under the terms contained herein. WHEREAS, Yakima currently owns and operates the Yakima Convention Center (the "Convention Center "), providing first -class meeting, ballroom and other event facilities; WHEREAS, the Parties desire to expand the Convention Center, at an estimated cost of over $10,000,000 (the "Project "); WHEREAS, Chap. 35.57 RCW (the "Act ") authorizes one or more contiguous cities located in a county with a population of less than one million to create a public facilities district (a "PFD ") to acquire, remodel, finance, and operate one or more "regional centers "; III WHEREAS, "regional centers" are defined to include, among other things, existing convention centers to be improved at a cost of at least ten million dollars including debt service; WHEREAS, PFDs have access to several new revenue sources, including a state sales and use tax credit (the "Sales Tax "), which operates to shift 0.033% of the retail sales and use taxes generated within the PFD boundaries to the PFD; WHEREAS, in order to complete the Project and access the Sales Tax, the Parties wish to create a PFD solely for the purpose of acquiring, constructing, owning, remodeling, maintaining, equipping, re- equipping, repairing, financing and operating regional centers, as defined in the Act (the "District "); WHEREAS, the Act requires a 33% local match of the net present value of the Sales Tax to be collected by the District in order for the District to impose the Sales Tax and, accordingly, Yakima will transfer a leasehold interest in the Convention Center and the underlying site to the District in satisfaction of this match requirement (the value of the Convention Center and the underlying site is approximately $11,800,000); WHEREAS, the value of leasehold interest is estimated to significantly exceed the net present value of 33% of the projected Sales Taxes of the District (approximately $2.4 million); WHEREAS, pursuant to the Design, Development, Construction, Financing and • Operating Agreement between Yakima and the District, the District will sublease the Convention Center and the underlying site to Yakima, and Yakima will design, develop, construct, operate 110 and maintain the property in return for certain rights, including the right to retain all revenues of the Convention Center; WHEREAS, subject to certain limitations set forth herein, Yakima intends to issue bonds and apply bond proceeds to finance the Project, in consideration for the District's pledge of Sales Tax receipts to Yakima to pay debt service on the bonds and other Regional Center costs; WHEREAS, the Parties are authorized and empowered to enter into this Agreement pursuant to Chap. 39.34 RCW; NOW THEREFORE, in consideration of mutual promises and covenants herein, the Parties agree: Section 1. Definitions. Except for the terms defined in this section, and unless the context indicates otherwise, for the purposes of this Agreement and the Related Documents, the Parties shall use the definitions found in Chap. 35.57 RCW as they may be amended. Additional Bonds means Completion Bonds or Refunding Bonds issued by Yakima. Additional Revenue means all revenue received by the District (or by Yakima on behalf of the District), including gifts, grants, donations, Admission Charges, Admission Taxes, Parking • Charges, Parking Taxes, Voted Sales Taxes and any other revenue received by the District and derived from the District's operation of the facilities, including investment income; but excluding Sales Tax Revenue and amounts received from Yakima pursuant to Section III(C) of the Development Agreement (including investment earning thereon). Administrative Costs means the costs of the District incurred in administering the District and the Development Agreement. Administrative Costs shall be specified in the District's annual budget submitted to Yakima for approval and to Selah and Union Gap for review and comment. Admissions Charge means any charge imposed by the District (or by Yakima on behalf of the District) for admission to its facilities, includin g charges es for season tickets or subscriptions; cover charges, or charges for use of seats and tables, and other similar accommodations; charges for food and refreshment if free entertainment, recreation, or amusement is provided; charges for rental or use of equipment or facilities for purposes of recreation or amusement; and automobile parking charges if the amount of the charge is determined according to the number of passengers in the automobile. Admission Tax means any tax imposed by the District pursuant to RCW 35.57.100 to be paid by any person who pays an Admissions Charge. Agreement means this interlocal agreement. • Bond Counsel means a firm of lawyers nationally recognized and accepted as bond counsel and so employed by Yakima. -2- P: \S C \S C091 01/06/18 • Bond Ordinance means the ordinance of the Yakima Council authorizing the issuance of the Bonds and any amendments and supplements. Bonds means the bonds, notes or other evidences of indebtedness issued pursuant to and under authority of the Bond Ordinance to provide for the financing or refinancing of the Project. Yakima reserves the right not to issue the Bonds if, at the time the Bonds are to be sold, the total interest cost on the Bonds exceeds 5.55 %. Board means the governing body vested with the management of the affairs of the District. Bylaws means the rules adopted for the regulation or management of the affairs of the District approved by this Agreement and all subsequent amendments. Charter means the articles of organization of the District approved by this Agreement and all subsequent amendments. Code means the Internal Revenue Code of 1986, as amended, and all applicable regulations and rulings thereunder. • Completion Bonds means additional bonds of Yakima issued to pay Costs of the Project. Costs of the Project means all capital costs that are paid or incurred by Yakima in connection with the design, development and construction of the Project, including, but not limited to all or a portion of the interest on Bonds during the period of construction of such improvements, and for a period of time thereafter; amounts required to meet any reserve requirement for the Bonds; the cost of paying or reimbursing Yakima or any fund thereof for expenses, including planning, permitting and design expenses, incident and properly allocable to the Project; and all other items of expense incident and properly allocable to designing, developing and constructing the Project, financing the Project and placing the Project in operation. Debt Service means the amount to be paid on the next succeeding Payment Date to pay the principal of, premium, if any, and interest on Bonds and any Additional Bonds coming due on such Payment Date. Debt Service Fund means the special fund(s) or account(s) established by Yakima pursuant to the Bond Ordinance or a Supplemental Bond Ordinance for the purpose of paying the principal of, premium, if any, and interest on Bonds and /or any Additional Bonds. Debt Service Reserve Fund means the Debt Service Reserve Fund (or Account), if any, established by Yakima under the Bond Ordinance or Supplemental Bond Ordinance, which secures the Bonds and /or any Additional Bonds.. • -3- P:\sc \sco91 01/06/18 • Development Agreement means the Design, Development, Construction, Financing and Operating Agreement by and between Yakima and the District. District means the public facilities district created pursuant to Section 1. Favorable Opinion of Bond Counsel means, with respect to any action, a written legal opinion of Bond Counsel addressed to Yakima, to the effect that such action is permitted under the laws of the State and under applicable ordinances of the Yakima Council, including the Bond Ordinance and any Supplemental Bond Ordinance, and will not impair the exclusion of interest on a Bond or any other bonds of Yakima from gross income for federal income tax purposes under the Code (subject to the inclusion of any exceptions contained in the opinion delivered upon original issuance of such bond). Lease Agreement means the Lease Agreement by and between Yakima and the District providing for the transfer of a leasehold interest in the Convention Center and the underlying site to the District in satisfaction of the match required under RCW 82.14.390. Lodging Taxes means lodging taxes received by Yakima pursuant to Chap. 67 RCW. Net Proceeds, when used with reference to the Bonds, means the principal amount of such Bonds, plus original issue premium, if any, and less original issue discount, if any, and less • the proceeds of the Bonds used to pay costs of issuance or deposited in the Debt Service Reserve Fund. Operating Manual means the Operating Standards Manual for the expanded Convention Center. Outstanding, when used as of any particular time with reference to Bonds or Additional Bonds, means all Bonds or Additional Bonds authenticated and delivered by Yakima under the Bond Ordinance or any Supplemental Bond Ordinance except (1) Bonds or Additional Bonds theretofore cancelled by Yakirna or surrendered to Yakima for cancellation; (2) Bonds or Additional Bonds with respect to which all liability of Yakima shall have been discharged in accordance with the Bond Ordinance or Supplemental Bond Ordinance, as applicable, and (3) Bonds or Additional Bonds for the transfer or exchange of, or in lieu of, or in substitution for which other Bonds or Additional Bonds shall have been authenticated and delivered by Yakima pursuant to the Bond Ordinance or Supplemental Bond Ordinance, as applicable. Parking Charge means "vehicle parking charges" as defined in RCW 35.57.110. Parking Tax means a tax on any vehicle parking charge imposed at any parking facility that is owned or leased by the District pursuant to RCW 35.57.110. Payment Date means the dates specified in the Bond Ordinance, or any Supplemental Bond Ordinance, as dates for the payment of interest on, principal of or premium, if any, with 411 respect to the Bonds or any Additional Bonds. -4- P: \SC \SC091 01/06/18 • PFD Revenue Reserve Fund means the PFD Revenue Reserve Fund (or Account), if any, established by Yakima under the Bond Ordinance or Supplemental Bond Ordinance. The amount of revenue consisting of the District's Sales Tax Revenue received by Yakima that shall be maintained in the PFD Revenue Reserve Fund shall be determined at the time that the Bonds are issued. Predevelopment Costs means the cost of all planning, legal, architectural, engineering and other services incurred by Yakima in connection with the Project until the date of issuance of the Bonds. Project means the design, construction, and operation of the additions to the Convention Center, as described in the Project Documents. Project Documents means all design documents (including drawings describing the structural, mechanical, acoustical, lighting, and electrical systems of the Project, detailed site plans, preliminary specifications, and schematic design documents), construction documents (including all drawings and specifications necessary to completely describe the Project in detail to a contractor for the purposes of bidding and construction, schedules, plans and specifications, and the construction contract) and Project budgets (setting forth the construction contract cost, taxes, all contingencies, fees and allowances). • Related Documents mean the Charter, the Lease Agreement, the Bylaws and the Development Agreement. Refunding Bonds means bonds, notes or other evidence of indebtedness of Yakima the proceeds of which will be used to refund Bonds. Sales Tax means the nonvoted sales and use tax to be imposed by the District in accordance with RCW 82.14.390 at a rate not to exceed 0.033% of the selling price in the case of a sales tax or value of the article used in the case of a use tax, which tax shall be deducted from the amount of tax otherwise required to be collected or paid over to the State's Department of Revenue and shall expire when the Bonds and any Additional Bonds are retired, or, in any event, not more than 25 years after the Sales Tax is first collected. Sales Tax Revenue means all Sales Taxes received by the District. Selah means the City of Selah, Washington, a municipal corporation of the State, as now or hereafter constituted. State means the State of Washington. Supplemental Bond Ordinance means any ordinance adopted by the Yakima Council amending or supplementing the Bond Ordinance, including any ordinance adopted by the Yakima Council in connection with the issuance of Additional Bonds. • -5- P: \S C \SC091 01/06/18 • • Union Gap means the City of Union Gap, Washington, a municipal corporation of the State, as now or hereafter constituted. Voted Sales Tax means any sales and use tax imposed by the District pursuant to RCW 82.14.048 and approved by the voters. Yakima means the City of Yakima, a municipal corporation of the State, as now or hereafter constituted. Yakima City Manager means the City Manager of Yakima, or any successor to the office. Yakima Council means the City Council of Yakima, or any successor thereto as provided by law. Section 2. Formation of the District. Pursuant to RCW 35.57.010(1), the Parties hereby create a public facilities district. The District shall be a municipal corporation, an independent taxing authority and a taxing district, with the powers and limitations as set forth in its Charter and this Agreement. The District shall be coextensive with the boundaries of the Parties, as the same may be amended from time to time. S Section 3. Name. The name of the District shall be the Yakima Regional Public Facilities District. Section 4. Purpose. The District shall acquire (by purchase, lease or otherwise), construct, own, remodel, maintain, equip, reequip, repair, finance, and/or operate (either directly or by contract) one or more Regional Centers, as defined in RCW 35.57.020. Specifically, the District shall acquire a leasehold interest in the Convention Center, and finance the Project and related parking facilities in accordance with the Development Agreement. Section 5. General Powers. Except as limited by State law, this Agreement and the Charter, the District shall have and may exercise all lawful powers necessary or convenient to affect the purposes for which the District is organized and to perform authorized corporate functions. Section 6. Specific Powers. Without limitation, the District shall have the following specific powers: (a) to acquire (by purchase, lease or otherwise), construct, own, remodel, maintain, equip, reequip, repair, finance, and operate (either directly or by contract) the Convention Center, the Project, related parking facilities and any other Regional Center, subject to the limitations set forth in Section 7; (b) to accept and expend gifts, grants, and donations; • (c) to impose the following charges, fees, and taxes authorized in RCW 35.57.040: -6- P: \SC \SC091 01/06/18 ix , • (i) Admission Charges, Parking Charges and any other fees or charges for the use of any of its facilities, subject to the limitations set forth in Section 7; (ii) Admission Taxes, subject to the limitations set forth in Section 7; (iii) Parking Taxes, subject to the limitations set forth in Section 7; (iv) Voted Sales Taxes, subject to the limitations set forth in Section 7; (v) Sales Taxes at a rate not to exceed the limit set forth in RCW 82.14.390 to be collected from those persons who are taxable by the State under Chaps. 82.08 and 82.12 RCW upon the occurrence of any taxable event within the District; (d) to use Sales Tax Revenue, Additional Revenue and other receipts for its purposes; (e) to contract with a public or private entity (including but not limited to Yakima) for the construction, financing, operation and/or management of the Project, related parking or for any other Regional Center owned or operated by the District, subject to Section 18; • to use the supplemental alternative public works contracting procedures set pp p g p s s t forth in Chap. 39.10 RCW: (g) to acquire and transfer real and personal property by lease, sublease, purchase, or sale, subject to the limitations set forth in Section 7; and (h) to issue general obligation bonds (subject to statutory debt limits) or revenue bonds. Section 7. Limitations on Powers. (a) No Power of Eminent Domain. The District shall not have the power of eminent domain. (b) Additional Regional Centers — Yakima Approval. The District's power to acquire, construct, own, remodel, maintain, equip, reequip, repair, finance, and operate (either directly or by contract) any Regional Center other than the Convention Center, the Project and related parking facilities is subject to the approval of Yakima; • -7- P: \SC \SC091 01/06/18 • (c) Convention Center Expansion Project — Yakima Approval. (i) Yakima Approval of Parking Taxes and Admission Taxes. In consideration for Yakima's agreement to issue the Bonds and apply Net Proceeds to pay Predevelopment Costs (to the extent that such costs are not to be paid from Sales Tax Revenue) and Costs of the Project under the terms of the Development Agreement, the District's power to impose Admission Taxes and Parking Taxes shall be subject to the approval of the Yakima Council. (ii) Yakima Approval of Admission Charges and Parking Charges. In consideration for Yakima's agreement to apply Lodging Taxes to pay a portion of the costs of operating and maintaining the Convention Center and the Project under the terms of the Development Agreement, the District's power to impose charges and fees, including all Admission Charges and Parking Charges, shall be subject to the approval of the Yakima Council. (iii) Yakima Approval of Gambling Activity and Public Display of Artwork In consideration of Yakima's agreement to issue the Bonds and apply Net Proceeds to pay Predevelopment Costs (to the extent that such costs are • not to be paid from Sales Tax Revenue) and Costs of the Project under the terms of the Development Agreement, and in consideration for Yakima's agreement to apply Lodging Taxes to pay a portion of the costs of operating and maintaining the Convention Center and the Project under the terms of the Development Agreement, the following activities shall be subject to the approval of the Yakima Council: a. any gambling activity under the authority of the District at the Convention Center; and b. any public display of artwork under the authority of the District at the Convention Center. (iv) Annual Budget Approval and Approval of Property Transfers. In consideration for Yakima's agreement to issue the Bonds and apply Net Proceeds to pay Predevelopment Costs (to the extent that such costs are not to be paid from Sales Tax Revenue) and Costs of the Project under the terms of the Development Agreement and in consideration of Yakima's agreement to apply Lodging Taxes to pay a portion of the costs of operating and maintaining the Convention Center under the terms of the Development Agreement, the District's annual budget, including Administrative Costs, shall be subject to the approval of the Yakima Council. The District shall forward its proposed annual budget to the • Parties (for review and comment by Selah and Union Gap and for approval by the Yakima Council) no later than September 1 of the year -8- P: \SC1SC091 01/06/18 • prior to the budget year. The District shall also forward any amendment to its approved annual budget to Yakima for approval and to Selah and Union Gap for review and comment. In addition, any acquisition or transfer of real and personal property with a value over $100,000 by lease, sublease, purchase, or sale by the District shall be subject to approval by the Yakima Council. (d) Party Approval of Voted Sales Tax. Prior to placing on the ballot any Voted Sales Tax, the District shall forward the draft proposed ballot language to each of the Parties. The District's power to impose the Voted Sales Tax is subject to the approval of each of the Parties. (e) No Political Activity. No funds, assets or property of the District shall be used for any political activity, except as set forth in the Charter. (f) No Private Inurement. The District shall not operate in a manner that creates any private inurement, except that the District may compensate employees; reimburse employees, Board members, volunteers and agents for reasonable expenses; defend and indemnify Board members or employees acting in good faith on behalf of the District and within the scope of their duties; hold harmless Board members or employees acting in good faith on behalf of the District and within the scope of their duties and provide liability insurance for employees, Board members, volunteers or other agents. Section 8. Charter. The Charter is hereby approved in the form set forth as Exhibit A. The Charter shall be deemed issued upon execution of this Agreement by all of the Parties. The Charter shall be issued in duplicate originals, each bearing the Yakima seal attested by the City Clerk of Yakima. One original shall be filed with Yakima; duplicate originals shall be provided to the District and to the City Clerks of Selah and Union Gap. The Charter shall be amended only with the approval of each of the Parties. Section 9. Effect of Issuance of Charter. The District shall commence its existence effective upon issuance of the Charter by Yakima pursuant to Section 8 (that is, upon execution of this Agreement by all of the Parties). Except as against the State or the Parties in a proceeding to cancel or revoke the Charter, delivery of a duplicate original Charter shall conclusively establish that the District has been established in compliance with the procedures of this Agreement. Section 10. Board of Directors. A board consisting of seven directors (the "Board "), as described in the Charter, is hereby established to govern the affairs of the District. The directors shall be appointed and serve their terms as provided in the Charter. All corporate powers of the District shall be exercised by or under the authority of the Board; and the business, property and affairs of the District shall be managed under the direction of the Board, except as may be otherwise provided for by law, this Agreement, or in the Charter. 111 Section 11. Board Removal. As set forth in the Charter, if it is determined for any reason that any or all of the Board members should be removed from office, the City Council for -9- P: \SC \SC091 01/06/18 • the City that originally appointed the Board member to be removed may by ordinance remove that Board member from office. The term of any Board member removed pursuant to this section shall expire when the removal ordinance takes effect. Vacancies created under this section shall be filled in the manner provided in the Charter. Section 12. Organizational Meeting. Upon issuance of the Charter, the Yakima City Manager or his designee shall call an organizational meeting of the initial Board within 30 days, giving at least three days' advance written notice to each Board Member, unless waived in writing. At such meeting, the Board shall organize itself, may appoint officers, and shall select the District's place of business. Section 13. Bylaws. (a) The initial Bylaws of the District are hereby approved in the form set forth at Exhibit B. The power to alter, amend, or repeal the Bylaws or adopt new ones shall be vested in the Board, except as otherwise provided in this Agreement or in the Charter. The Bylaws shall be consistent with the Charter. (b) As necessary and appropriate in the discretion of the Yakima Council, the Yakima Council may amend the Bylaws by ordinance adopted at or after a public meeting held with notice to the District, Selah and Union Gap. Amendments to the Bylaws adopted by • the Yakima Council may not be further amended by the District for one year except with Yakima Council approval. Section 14. Dissolution. So long as the Bonds are Outstanding, if the Yakima Council makes an affirmative finding that dissolution is warranted for any reason, the existence of the District may be terminated by ordinance of the Yakima Council adopted at or after a public meeting, held with notice to the City of Selah, the City of Union Gap, the District and the Board and affording a reasonable opportunity to be heard and present testimony. At such time as the Bonds are no longer Outstanding, if all three of the Parties make an affirmative finding that dissolution is warranted for any reason, the existence of the District may be terminated by ordinance of the City Council of all three Parties adopted at or after a public meeting, held with notice to the other Parties, the District and the Board and affording a reasonable opportunity to be heard and present testimony. In either event, dissolution shall be accomplished as provided in the Charter, and shall not take effect until proper provision has been made for disposition of all District assets. At such time as the Bonds are no longer Outstanding, one or two of the Parties may withdraw from this Agreement, by ordinance of the City Council of such Party or Parties, adopted at or after a public meeting, held with notice to the other Parties, the District and the Board and affording a reasonable opportunity to be heard and present • testimony. In such event, the District shall not be dissolved but shall continue its existence in all respects, except that the boundaries of the District shall be deemed revised to exclude the territory of the withdrawing Party(ies). -10- P: \SC \SC091 01/06/18 • Upon satisfactory completion of dissolution proceedings, the City Clerk of Yakima shall indicate such dissolution by inscription of "Charter cancelled" on the Charter of the District on file with the City and, when available, on the duplicate originals of the District, Selah and Union Gap, and the existence of the District shall cease. The City Clerk of Yakima shall give notice thereof pursuant to State law and to other persons requested by the District in its dissolution statement. The Parties hereby acknowledge that the District's assets and property will largely be derived from Yakima. Specifically, Yakima will transfer a leasehold interest in the Convention Center and the underlying site to the District, will issue bonds to pay Predevelopment Costs (to the extent that such costs are not to be paid from Sales Tax Revenue) and Costs of the Project, will construct the Project, and will apply Lodging Taxes to pay a portion of the cost of operating and maintaining the Convention Center and the Project. Accordingly, upon dissolution of the District and the winding up of its affairs, all of the District interest in the Convention Center, the site, the Project, and all assets or property of the District that are proceeds of the foregoing shall vest in Yakima unless the Yakima Council or a trustee or court has provided for the transfer of the District's interest in the Convention Center, the site, the Project, and proceeds of the District to a qualified entity or entities that will fulfill the purposes for which the District was chartered. • At such time as the District any acquires other Regional Center, the Parties shall Y g enter into a plan providing for the disposition of such Regional Center and related assets upon dissolution of the District. If Selah or Union Gap fail to enter into such a plan, then upon dissolution of the District and the winding up of its affairs, title to such Regional Center and all assets or property of the District that are proceeds of the foregoing shall vest in Yakima unless the Yakima Council or a trustee or court has provided for the transfer of the such Regional Center and proceeds of the District to a qualified entity or entities that will fulfill the purposes for which the District was chartered. Section 15. Indemnification. The City of Yakima shall indemnify and hold harmless the Cities of Union Gap and Selah from any liability arising from a challenge to the formation of the Yakima Regional Public Facilities District under RCW 35.57.010. Section 16. Ancillary Authority. The Yakima City Manager is granted all such power and authority as reasonably necessary or convenient to enable him or her to administer this Agreement efficiently and to perform the duties imposed in this Agreement and the Related Documents. Section 17. Term of Agreement. This Agreement shall automatically terminate on the date on which District is dissolved pursuant to Section 14. Termination shall not relieve any Party of responsibility for meeting financial and other obligations outstanding at the time of • termination. -11- P:\SC \SC091 01/06/18 • Section 18. Transfer of the Convention Center to the District. Yakima hereby agrees to enter into the Lease Agreement. The Parties agree that the transfer of a leasehold interest in the Convention Center and the underlying site to the District pursuant to the Lease Agreement shall constitute a donation from the City to the District to be used for the construction, improvement or rehabilitation of a Regional Center as defined in RCW 82.14.390. The value of the Convention Center and the underlying site is approximately $11,800,000. The Parties agree that the value of the leasehold interest in the Convention Center and the underlying site to be transferred pursuant to the Lease Agreement is substantially more than the net present value of 33% of total Sales Taxes to be received by the District (approximately $2.4 million). Section 19. Management Agreements. Any management contract entered into by the District or Yakima for the operation or management of the Convention Center and the Project shall be consistent with the Development Agreement. Prior to executing any management contract (with the exception of the Development Agreement), the District or Yakima, as applicable, shall have received a Favorable Opinion of Bond Counsel regarding the terms of the management contract. Section 20. Limitation of Liability. The District is a separate legal entity. All liabilities incurred by the District shall be satisfied exclusively from the assets, credit, and properties of the District, and no creditor or other person shall have any right of action against or recourse to the Parties, their assets, credit, or services, on account of any debts, obligations, • liabilities or acts or omissions of the District. Section 21. Non- Waiver. No waiver by any Party of any term or condition of this Agreement shall be deemed or construed to constitute a waiver of any other term or condition or of any subsequent breach whether of the same or of a different provision of this Agreement. Section 22. No Third -Party Beneficiary. This Agreement is entered into for the benefit of the residents of the Parties to facilitate the completion of the Project, stimulate economic development by creating jobs, realize additional sales and lodging tax revenues, attract commercial business and tourism, and provide facilities for convention, special events, community events including public meetings and performing arts events. This Agreement is not entered into with the intent that it shall benefit any party not signing this Agreement, and no other person or entity shall be entitled to be treated as a third -party beneficiary of this Agreement; provided that any owner of the Bonds or Additional Bonds shall be a third -party beneficiary for the purposes of enforcing payments to be made by the District to Yakima in amounts sufficient for Yakima to pay Debt Service. Section 23. The City of Yakima intends to contribute lodging taxes to pay a portion of the cost of operating and maintaining the Convention Center, in an amount, if any, determined annually by the Yakima City Council. As between the Cities, as set forth in the Development Agreement, the City of Yakima will also be solely responsible to contribute revenues in the case of a Sales Tax shortfall. The Cities of Union Gap and Selah shall have no financial responsibility to the District in the event of a Sales Tax shortfall. • -12- P: \SC \SC091 01/06/19 • • • • • • „A, 03/ Section 2. Counterparts. This Agreement may be executed in two or more counterparts, and each such counterpart shall be deemed to be an original instrument. All such counterparts together will constitute one and the same Agreement. • IN WITNESS HEREOF, this Agreement is executed by the City of Yakima, the City of Selah and the City of Union Gap. THE CITY OF YAKIMA, WASHINGTON Contract No. 2001 -70 Ordinance No. 2001 -28 Richard A. Zais, Jr. • .City Manager • THE CITY- OF SELAHgWASH } ogoN • • By: f . 4110 Robert Jones s7' Mayor • 1 Z THE CITY OF UNION GAP, WASHINGTON By: c.1 - .:ey C. Reeves, i Mayor Certified to be a true and correct copy of the original filed in my office. 7 -2-7:( 1 ,40 CITY CLERK • NIA Ki; SEA / • . • ch. i yjNG �p� -13- P: \SC \SC091 01/06/18 EXHIBIT A CHARTER A -1 Pasc\scosi CHARTER OF THE YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT ARTICLE I Name and Seal; Definitions Section 1.1. Name. The name of this public facilities district shall be the YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT (hereinafter referred to as the "District "). Section 1.2. Seal. The District's seal shall be a circle with the name "YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT" inscribed therein. The Board shall approve the seal by resolution. Section 1.3. Definitions. All capitalized terms used but not defined herein shall have the meanings set forth in the Interlocal Cooperation Agreement To Form a Public Facilities District by and among the City of Yakima, Washington ( "Yakima "), the City of Selah, Washington ( "Selah ") and the City of Union Gap, Washington ( "Union Gap" and collectively with Yakima and Selah, the "Cities "), dated June 25, 2001 (the "Interlocal Agreement "). ARTICLE II Authority and Limit on Liability Section 2.1. Authority. The District is a public facilities district organized pursuant to RCW 35.57.010, the Interlocal Agreement, Ordinance No. 2001 -28 of Yakima, Ordinance Nos. 2298 and 2300 of Union Gap, and motion of the Selah City Council approved on June 12, 2001. Section 2.2. Limit on Liability. All liabilities incurred by the District shall be satisfied exclusively from the assets, credit, and properties of the District, and no creditor or other person shall have any right of action against or recourse to the Cities, their assets, credit, or services, on . account of any debts, obligations, liabilities or acts or omissions of the District. Section 2.3. Mandatory Disclaimer. The following disclaimer shall be posted in a prominent place where the public may readily see it in the District's principal and other offices. It shall also be printed or stamped on all contracts, notes, bonds, and other documents that may entail any debt or liability by the District. The YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT is organized pursuant to RCW 35.57.010, the Interlocal Financing Agreement by and among the City of Yakima, Washington, the City of Selah, Washington and the City of Union Gap, Washington, dated June 25, 2001 (the "Interlocal Agreement "), Ordinance No. 2001 -28 of the City of Yakima, Ordinance Nos. 2298 and 2300 of the City of Union Gap, and motion of the City of Selah City Council approved on June 12, 2001. The Interlocal Agreement provides as follows: "All liabilities incurred by the District shall be satisfied exclusively from the assets, credit, and properties of the District, and no creditor or other person shall have any right of action against or recourse to the Cities of Yakima, Selah or Union Gap, their assets, credit, or services, on account of any debts, obligations, liabilities or acts or omissions of the District." ARTICLE III Duration The duration of the District shall be perpetual except as provided in the Interlocal Agreement. ARTICLE IV Purpose The purpose of the District is to provide a legal entity under RCW 35.57.010 and the Interlocal Agreement to acquire (by purchase, lease or otherwise), construct, own, remodel, maintain, equip, reequip, repair, finance, and operate (either directly or by contract) one or more -2- P: \SC \SCO9Q 01/07/03 Regional Centers, as defined in RCW 35.57.020, including, but are not limited to, the Convention Center consisting of the following components: a) Operation of Convention Center facilities, including meeting space, ballroom and other event facilities, with related activities; b) Operation of Convention Center programs and exhibits; c) Acquisition, display and maintenance of Convention Center exhibits; d) Restaurant or other food, beverage and banquet service facilities to enhance the attractiveness of the Convention Center to visitors; f) Any other uses reasonably or necessarily related to the operation of Convention Center facilities; and g) Related parking. To the extent appropriate and consistent with the needs and objectives of the Cities and the District's purpose, the District may acquire, lease and/or operate and manage real property, including but not limited to the Convention Center; secure financing; undertake or otherwise provide for the construction and development of the Project; and otherwise undertake and accomplish all activities and projects necessary for the Project and the operation of the Convention Center. The District shall have no purpose other than acquisition, construction, ownership, remodeling, maintenance, equipping, reequipping, repair, financing, and/or operation (either directly or by contract) of the Convention Center and any other Regional Center approved under the terms of the Interlocal Agreement. For the purpose only of securing the exemption from federal income taxation for interest on obligations of the District, the District constitutes an authority and instrumentality of Yakima (within the meaning of those terms in federal regulations and rulings pursuant to Section 103 of the Code). -3- P: \SC \SC09Q 01/07/03 ARTICLE V Powers Section 5.1. Powers. The District shall have and may exercise all lawful powers conferred by State law, the Interlocal Agreement, ordinance, this Charter and its Bylaws, including the usual powers of a corporation for public purposes and, without limitation, the power to: A. Hire employees, staff, and services; prescribe their duties, qualifications, and compensation; and secure the services of consultants for professional services, technical assistance, or advice; B . Contract for any corporate purpose with the United States, a state, and any political subdivision or agency of either, and with individuals, associations and corporations and other entities (including public or private entities) including the financing, construction, equipping, operation or management of the Convention Center and expansion Project, related parking or for any other Regional Center owned or operated by the District; C. Sue and be sued in its name; D . Purchase, lease, exchange, mortgage, encumber, improve, use, or otherwise transfer or grant security interests in real or personal property or any interests therein; grant or acquire options on real and personal property; and contract regarding the income or receipts from real and personal property; P P P P rh'; E. Accept and expend gifts, grants, and donations, including funds or property from the United States, a state, and any municipality or political subdivision or agency of either, property acquired by any such governmental unit through the exercise of its power of eminent domain, and funds or property from corporations, associations, individuals or any other source, and comply with the terms and conditions therefor; -4- P:1SC \SCO9Q 01/07/03 • F. Impose the following charges, fees, and taxes authorized in RCW 35.57.040: Admission Charges, Parking Charges and any other fees or charges for services, goods or use of any of its facilities; Admission Taxes; Parking Taxes; Voted Sales Taxes; and Sales Taxes at a rate not to exceed the limit set forth in RCW 82.14.390; G. Use Sales Tax Revenue, Additional Revenue and other receipts for its corporate purposes; H. Use the supplemental alternative public works contracting procedures set forth in Chap. 39.10 RCW; Borrow or lend its funds, property, credit or services for corporate purposes, or act as a surety or guarantor for corporate purposes; issue revenue bonds or general obligation bonds in conformity with the debt limitations set forth in RCW 35.57.030 and other applicable provisions of State law in such principal amounts as in the discretion of the District shall be necessary or appropriate to provide sufficient funds for achieving any corporate purposes; provided, however, that all bonds and notes or liabilities occurring thereunder shall be satisfied exclusively from the assets, properties or credit of such District, and no creditor or other person shall have any recourse to the assets, credit or services of the Cities thereby, unless any or all of the Cities shall by ordinance expressly guarantee such bonds or notes; - J. Manage, on behalf of the United States, a state, and any municipality or political subdivision or agency of either, any property acquired by such entity through gift, purchase, construction, lease, assignment, default, or exercise of the power of eminent domain; K. Recommend to the United States, a state, and any municipality or political subdivision or agency of either, consistent with all applicable laws, such tax, -5- P:\SC \SC090 01/07/03 financing, and security measures as the District may deem appropriate to maximize the public interest in activities in which the District by this Charter has a particular responsibility; L. Control the use and disposition of corporate property, assets, and credit; M. Invest and reinvest its funds; N. Establish the consideration (if any) for property transferred, all in pursuit of corporate purposes; 0. Maintain books and records as appropriate for the conduct of its affairs; P. Conduct corporate affairs, carry on its operations, and use its property as allowed by law and consistent with this Charter, and its Bylaws; name corporate officials; Q. Identify and recommend to the United States, a state, and any municipality or political subdivision or agency of either, the acquisition by the appropriate governmental entity for transfer to or use by the District of property and property rights, which, if so acquired, whether through purchase or the exercise of eminent domain, and so transferred or used, would materially advance the purpose for which the District is chartered; and R. Exercise and enjoy such other powers as may be authorized by law. Section 5.2. Limitation of Powers. The District organized under this Charter in all activities and transactions shall be limited in the following respects: A. The District shall have no power of eminent domain; B. The District may not incur or create any liability that permits recourse by any party or member of the public to any assets, services, resources, or credit of the Cities. All liabilities incurred by the District shall be satisfied exclusively from the assets and credit of the District; no creditor or other person shall have any -6- P: \SC \SCO9Q 01/07/03 recourse to the assets, credit, or services of the Cities on account of any debts, obligations, liabilities, acts, or omissions of the District; C. No funds, assets, or property of the District shall be used for any partisan political activity or to further the election or defeat of any candidate for public office or ballot proposition; nor shall any funds or a substantial part of the activities of the District be used for publicity or educational purposes designed to support or defeat legislation pending before the Congress of the United States, or the legislature of the State or the Cities; provided, however, that funds may be used for representatives of the District to communicate with members of Congress, State legislators or City council members concerning funding and other matters directly affecting the District, so long as such activities do not constitute a substantial part of the District's activities and so long as such activities are not specifically limited elsewhere in this Charter or the Interlocal Agreement; D. All Sales Tax Revenue, Additional Revenue, receipts, assets, or credit of the District shall be applied toward or expended upon services, projects, and activities authorized by this Charter. No part of the net earnings of the District shall inure to the benefit of, or be distributable as such to, the Board members, officers of the District or other private persons, except that the District is authorized and empowered to: i. Compensate those persons or entities performing services for the District, including District employees and legal counsel, a reasonable amount for services rendered, and reimburse Board members and others for reasonable expenses actually incurred in performing their duties; ii. Assist District officials as members of a general class of persons to be assisted by a District - approved project or activity to the same extent as other -7- P: \SC \SC090 01/07/03 members of the class so long as no special privileges or treatment accrues to such corporate official by reason of his or her status or position in the District; iii. Defend and indemnify any current or former Board member or employee and their successors, spouses and marital communities against all costs, expenses, judgments, and liabilities, including attorneys' fees, reasonably incurred by or imposed upon him or her in connection with or resulting from any civil claim, action, or proceeding in which he or she is or may be made a party by reason of being or having been a corporate official, . or by reason of any action alleged to have been taken or omitted by him or her as such official, provided that he or she was acting in good faith on behalf of the District and within the scope of duties imposed or authorized by law. This power of indemnification shall not be exclusive of other rights to which corporate officials may be entitled as a matter of law; iv. Purchase insurance to protect and hold personally harmless any of its officials, its employees, and its agents from any civil action, claim, or proceeding instituted against the foregoing individuals arising out of the performance, in good faith, of duties for, or employment with, the District and to hold these individuals harmless from any expenses connected with the defense, settlement, or monetary judgments from such actions, claims, or proceedings. The purchase of such insurance and its policy limits shall be discretionary with the Board, and such insurance shall not be considered to be compensation to the insured individuals. The powers conferred by this subsection shall not be exclusive of any other powers conferred by law to purchase liability insurance; and v. Sell assets for a consideration greater than their reasonable market value or acquisition costs, charge more for services than the expense of providing -8- P: \SC \SC09Q 01/07/03 them, or otherwise secure an increment in a transaction, or carry out any other transaction or activity, so long as such gain is not the principal object or purpose of the District's transactions or activities and is applied to or expended upon services, projects, and activities otherwise authorized as corporate purposes; E. The District organized under this chapter shall not issue shares of stock, pay dividends, make private distribution of assets, make loans to its board members or employees or otherwise engage in business for private gain; F. The District's power to acquire (by purchase, lease or otherwise), construct, own, remodel, maintain, equip, reequip, repair, finance, and operate (either directly or by contract) any Regional Center other than the Convention Center, the Project and related parking facilities is subject to the approval of Yakima; G. In consideration for, Yakima's agreement to issue the Bonds and apply Net Proceeds to pay Predevelopment Costs and Costs of the Project under the terms of the Development Agreement and Yakima's agreement to apply Lodging Taxes to pay a portion of Operation and Maintenance Costs under the terms of the Development Agreement, the following District powers shall be subject to the approval of the Yakima City Council: i. The District shall not impose Admission Charges or Parking Charges without the prior approval of the Yakima City Council; ii. The District shall not impose Admission Taxes or Parking Taxes without the prior approval of the Yakima City Council; iii. The District's annual budget, including Administrative Costs, shall be subject to annual approval by the Yakima City Council; - P: \SC\SC09Q 01/07/03 iv. Any acquisition or transfer of real and personal property with a value over $100,000 by lease, sublease, purchase, or sale by the District shall be subject to approval by the Yakima City Council; v. Any gambling activity under the authority of the District at the Convention Center shall be subject to approval by the Yakima City Council; and vi. Any public display of artwork under the authority of the District at the Convention Center shall be subject to approval by the Yakima City Council. H . The District's power to impose Voted Sales Taxes authorized under RCW 82.14.048 is subject to the approval by each of the Parties prior to placement on the ballot. ARTICLE VI Board of Directors And Corporate Officers Section 6.1. Powers. The Board shall govern the affairs of the District. All corporate powers of the District shall be exercised by or under the authority of, and the business, property and affairs of the District shall be managed under the direction of, the Board except as may be otherwise provided in this Charter, the Interlocal Agreement or State law. Section 6.2. Board Composition. Pursuant to RCW 35.57.010, the Board shall be composed of seven members. The initial members of the Board shall be appointed as follows. One Boardmember shall be appointed by the Yakima City Council, one Boardmember by the Selah City Council and one Boardmember by the Union Gap City Council. Four Boardmembers shall be appointed by the Yakima City Council based on recommendations from local organizations such as the local chamber of commerce, local economic development council, and local labor council. The Boardmembers shall not be council members of the Cities either at the time of their appointment or at any time thereafter. -10- P:1SC1SC09Q 01/07/03 Section 6.3. Terms of Office. A . The terms of office of the initially appointed members of the Board shall commence on the effective date of this Charter and shall be staggered as follows: 1. Group I. One member for a one -year term; 2. Group II. One member for a two -year term; 3. Group III. One member for a three -year term; and 4. Group IV. The remainder for four -year terms. B. With respect to the appointments of the initial Board members, the following members are assigned to the four groups identified in subsection 6.3.A above for purposes of determining the length of terms of such initial Board members: the Group I member shall be appointed by the Yakima City Council, based on recommendations from local organizations; the Group II member shall be appointed by the Yakima City Council; the Group III member shall be appointed by the Yakima City Council, based on recommendations from local organizations; the remainder of the appointments shall be Group IV members. C. The expired term of the Group I member shall be filled by the Yakima City Council, based on recommendations from local organizations. D. The expired term of the Group II member shall be filled by appointment of the Yakima City Council. E. The expired term of the Group III member shall be filled by appointment of the Yakima City Council, based on recommendations from local organizations. F. The expired term of one of the Group IV members shall be filled by the Selah City Council, the expired term of one of the Group IV members shall be filled by the Union Gap City Council and the expired term of the remainder of the Group IV members shall be filled by the Yakima City Council, based on recommendations from local organizations. -1 1 - PaSC \SC090 01/07/03 G. Except for the initial members of the board, each member shall be appointed to serve for a four -year term. Each member shall continue to serve until his or her successor has been appointed and qualified as provided in the bylaws. Members may be reappointed to serve not more than four consecutive full terms. H. Terms shall expire on June 30of the year in which the respective group is scheduled to terminate. Nominations for new appointees or for reappointment of existing members shall be processed in the manner provided in the Bylaws. I. Vacancies occurring during the course of a term shall be filled by appointment by the City Manager of the City that made the original appointment to the vacant position, subject to confirmation by the City Council of the City that made the original appointment to the vacant position, in the manner and to the effect provided in the Bylaws to complete the unexpired term to which appointed. Section 6.4. Quorum and Manner of Action. At all meetings of the Board a majority of directors then in office shall constitute a quorum. The Board may adopt resolutions of the Board only by an affirmative vote of a majority of the Boardmembers then in office. Section 6.5. Officers and Division of Duties. A. The initial officers of the District shall be the President, Vice President, Secretary and Treasurer of the Board. In no event shall there be less than two officers designated, nor shall the same person occupy the office of president and that of treasurer, or any office responsible for custody of funds and maintenance of accounts and finances. Additional officers may be provided for in the Bylaws. B. The President shall be the agent of the District for service of process; the Bylaws may designate additional corporate officials as agents to receive or initiate process. The corporate officers, who shall be selected from among the membership of the Board as provided in the Bylaws, shall manage the daily affairs and operations of the District. -12- P:\SC\SCO9Q 01/07/03 C. The Board shall oversee the activities of the corporate officers, establish and /or implement policy, participate in corporate activity in matters prescribed by the Interlocal Agreement, and shall have stewardship for management and determination of all corporate affairs. Section 6.6. Bonding of Corporate Officers. Each corporate official responsible for handling accounts and finances shall file as soon as practicable with the District a fidelity bond in an amount determined by the District to be adequate and appropriate, and may hold the corporate office only as long as such a bond continues in effect. Section 6.7. Executive Committee. The Bylaws may provide for an Executive Committee, which shall be appointed and /or removed by the Board, and shall have and exercise such authority of the Board in the management between meetings of the Board, as may be specified in the Bylaws. Section 6.8. Removal of Board Members. The City Council of each City may by ordinance remove from the Board with or without cause any member of the Board appointed by that City at or after a public meeting, with prior notice to the District and the other Cities. In the event of removal, members shall be replaced in the same manner as provided for in filling vacancies on the Board. • -13- P:1SC1SC090 01/07/03 ARTICLE VII Meetings Section 7.1. Board Meetings. A. The Board shall meet at least quarterly each year; special meetings of the Board may be called as provided by the Charter, the Bylaws or RCW 42.30.010 et B. The Board shall be the governing body of a public agency as defined in RCW 42.30.020, and all meetings of the board shall be held and conducted in accordance with RCW 42.30.010 et seq. ( "The Open Public Meetings Act "). Notice of meetings shall be given in a manner consistent with RCW 42.30.010 et se . In addition, the District shall routinely provide reasonable notice of meetings to any individual specifically requesting it in writing. C. All Board meetings, including executive and all other permanent and ad hoc committee meetings, shall be open to the public to the extent required by RCW 42.30.010 et seq. The Board and committees may hold executive sessions to consider matters enumerated in RCW 42.30.010 et seq., or privileged matters recognized by law, and shall enter the cause therefor upon its official journal. At all public meetings, any citizen shall have a reasonable opportunity to address the Board either orally or by written petition. Voting by telephone or by proxy is not permitted. Section 7.2. Parliamentary Authority. The rules in Robert's Rules of Order (revised) shall govern the District in all cases to which they are applicable, where they are not inconsistent with the Charter or with the special rules of order of the District set forth in the Bylaws. -14- P:\SC\SCO9Q 01/07/03 Section 7.3. Minutes. Copies of the minutes of all regular or special meetings of the Board shall be available to any person or organization that requests them. The minutes of all Board meetings shall include a record of individual votes on all matters requiring Board concurrence or approval. ARTICLE VIII Procedural Requirements Section 8.1. Board Review and Concurrence. A. At least quarterly, the Board shall review monthly statements of income and expenses, which compare budgeted expenditures to actual expenditures. The Board shall review all such information at regular meetings, the minutes of which shall specifically note such reviews and include such information. B. General or particular authorization or review and concurrence of the Board by resolution shall be necessary for any of the following transactions: 1. Transfer or conveyance of an interest in real estate other than release of a lien or satisfaction of a mortgage after payment has been received and the execution of a lease for a current term less than one year; 2. The contracting of debts, issuances of notes, debentures, or bonds, and the mortgaging or pledging of authority assets or credit to secure the same; 3. The donation of money, property or other assets belonging to the District; 4. An action by the District as a surety or guarantor; 5. All capital expenditures in excess of twenty -five thousand dollars ($25,000), and all other transactions in which: (i) the consideration exchanged or received by the District exceeds the greater of one percent of the previous year's operating budget or twenty -five thousand dollars ($25,000) or (ii) the performance by the District shall extend over a period exceeding one year from the date of execution of an agreement therefor; -15- P:1SC\SC09Q 01/07/03 6. Adoption of an annual budget approved by the Yakima City Council. The District shall forward its proposed annual budget to the Cities (for review and comment by Selah and Union Gap and for approval by the Yakima City Council) no later than September 1 of the year prior to the budget year. The annual budget shall include a projected operating and capital budget for the next fiscal year as well as a summary of projects and activities to be undertaken . during the next fiscal year; 7. Certification of annual reports and statements to be filed with the Cities as true and correct in the opinion of the Board and of its members; 8. Proposed amendments to the Charter and Bylaws; and 9. Such other transactions, duties, and responsibilities as the Charter shall repose in the Board or the Board may reserve. Section 8.2. Establishment and Maintenance of Office and Records. The District shall: A. Maintain a principal office at a location within the boundaries of the Cities; B. File and maintain with each City a current listing of all Board officials, their positions and their home addresses, their business and home phone numbers, the address of the District's principal office and of all other offices used by it, and a current set of its Bylaws; and C. Maintain all of its records in a manner consistent with the Preservation and Destruction of Public Records Act, RCW Chapter 40.14. Section 8.3. Access to Records. A. The District shall keep an official journal containing the minutes of proceedings at all meetings of the Board and the resolutions of the Board. B. Any person shall have access to records and information of the District to the extent required by State law. Section 8.4. Deposit of Public Funds. All money belonging to or collected for the use of the District, coming into the hands of any corporate official or officer thereof, shall be deposited in a qualified public depositary as determined by the Washington Public Deposit Protection -16- P: \SC \SC09Q 01/07/03 Commission. Such monies may be invested at the direction of the Board, by resolution, in investments that would be lawful for the investments of Yakima funds. Section 8.5. Reports and Information. The District shall, within five months after the end of its fiscal year, file an annual report with each City containing financial statements of assets and liabilities, revenue and expenditures and changes in its financial position during the previous year; a summary of significant accomplishments; a list of depositories used; a list of authority officials and a list of officials bonded pursuant to Section 6.6 of this Charter. Section 8.6. Audits and Inspections. The District is subject to review and audit by the State Auditor, as provided by law. The District shall send a copy of its audited financial statements to each City no later than 30 days after such audited financial statements are available. In addition, the District shall, at any time during normal business hours and as often as • the Yakima City Council, the Yakirna City Manager or his designee, or the State Auditor deem necessary, make available to the Yakima City Council, the Yakima City Manager or his designee, the State Auditor and, at the request of the City, an independent auditor for examination all of its financial records, and shall permit the Yakima City Council, the Yakima City Manager or his designee, State Auditor and, at the request of the City, an independent auditor to audit, examine and make excerpts or transcripts from such records, and to make audits of all contracts, invoices, materials, payrolls, records of personnel, conditions of employment and other data relating to all the aforesaid matters. The District shall review with the Yakima City Manager or his or her designee within 45 days of receipt and take immediate corrective action to address any audit findings or qualifications in its audit reports. Section 8.7. Insurance. The District shall maintain in full force and effect public liability insurance in an amount sufficient to cover potential claims for bodily injury, death or disability and for property damage, which may arise from or be related to projects and activities of the District, naming Yakima as an additional insured, if such insurance shall be available at a • -17- P.1SC \SCO9Q 01/07/03 reasonable price as determined by the Board. If insurance is not maintained the District shall maintain adequate reserves to cover potential claims and losses. Section 8.8. Bylaws. A. The properly adopted Bylaws of the District shall be the official rules for the governing of meetings and the affairs of the District. B. The Bylaws may be amended as provided in Article IX of this Charter in order to provide additional or different rules for governing the District and its activities as are not inconsistent with this Charter. C. Amendments to the Bylaws shall be effective 10 days after filing of same with the City Clerks of Yakima, Selah and Union Gap, unless such amendment(s) shall have been passed by unanimous vote of the Board and an earlier effective date shall have been set. Section 8.9. Conflict of Interest. A. Except as provided in this section, a Board member or employee of the District may not participate in Board decisions if that person or a member of that person's immediate family has a financial interest in the issue being decided unless the financial interest is a remote financial interest and participation is approved under subsection B of this section. B. A Board member or employee may participate in a decision if that person or a member of that person's immediate family has only a remote financial interest, the fact and extent of the interest is disclosed to the Board in a public meeting and is noted in the minutes of the Board before any participation by the member in the decision, and thereafter in a public meeting the Board by vote authorizes or approves the participation. If the person whose participation is under consideration is a Board member, that person may not vote under this subsection. For purposes of this subsection, "remote financial interest" means: (i) that of a nonsalaried officer or director of a nonprofit corporation; -18- P:1SC \SCO9Q 01/07/03 (ii) that of an employee or agent of a contracting party where the compensation of the employee or agent consists entirely of fixed wages or salary and the contract is awarded by bid or by other competitive process; (iii) that of a landlord or tenant of a contracting party, except in cases where the property subject to the lease or sublease is owned or managed by the public corporation; (iv) that of a holder of less than one percent of the shares of the corporation or cooperative that is the contracting party; or (v) that of an owner of a savings and loan or bank savings or share account or credit union deposit account if the interest represented by the account is less than two percent of the total deposits held by the institution. C. A Board member or employee is not considered to be financially interested in a decision when the decision could not affect that person in a manner different from its effect on the public. D. No Board member or employee of the District shall accept, directly or indirectly, any gift, favor, loan, retainer, entertainment or other thing of monetary value from any person, firm or corporation having dealings with the District when such acceptance would conflict with the performance of a Board member or employee's official duties. A conflict, or possibility of conflict, shall be deemed to exist where a reasonable and prudent person would believe that it was given for the purpose of obtaining special considerations or influence; provided that application of this provision shall take into consideration the established customs and practices of the District. E. The Board may adopt additional conflict of interest and ethical rules it considers appropriate. F. For purposes of this section, "participate in a decision" includes all discussions, deliberations, preliminary negotiations, and votes. G. For purposes of this section, "immediate family" means: 1. A spouse; 2. Any parent, parent -in -law, child, son -in -law, or daughter -in -law; and -19- P: \SC \SC090 01/07/03 3. Any sibling, uncle, aunt, cousin, niece or nephew residing in the household of the corporate official or employee. Section 8.10. Discrimination. A. Board membership may not directly or indirectly be based upon or limited by creed, age, race, color, religion, sex, national origin, marital status or the presence of any sensory, mental or physical disability, unless such limitations are necessary for the performance of the role and no less discriminatory alternatives are available. -20- P:1SC \SC090 01/07/03 B. To ensure equality of employment opportunity, the District shall not discriminate in any matter related to employment because of creed, age, race, color, religion, sex, national origin, marital status or the presence of any sensory, mental or physical disability, unless such limitations are necessary for the performance of the role and no less discriminatory alternatives are available. The District shall, in all solicitations or advertisements for employees placed by or on behalf of the District, state that all qualified applicants will receive consideration for employment without regard to creed, age, race, color, religion, sex, national origin, marital status or the presence of any sensory, mental or physical disability, unless such limitations are necessary for the performance of the role and no less discriminatory alternatives are available. ARTICLE IX Amendments to Charter and Bylaws Section 9.1. Proposals to Amend Charter. A. Subject to Section 8 of the Interlocal Agreement, the District may propose to the Yakima City Council that its Charter be amended by resolution passed by a procedure outlined in its Bylaws at a regular or special meeting of the Board for which 30 days' advance written notice was given. B. When required by law, the District shall propose to the Yakima City Council an amendment to this Charter that will conform to and be consistent with said law. C. As necessary and appropriate in the discretion of the Yakima City Council, the Yakima City Council may propose to amend this Charter on its own initiative. Section 9.2. Charter Amendments. Pursuant to Section 8 of the Interlocal Agreement, the Charter may be amended only with the approval of all of the Parties to the Interlocal Agreement, whether in response to a resolution passed by the District's Board of Directors, or on the initiative of Yakima. After approval of a Charter amendment by all of the Parties, the revised Charter shall be deemed issued and shall be filed in the same manner as the original Charter. -21- P:\SC1SCO9Q 01/07/03 Section 9.3. Amendments to Bylaws. The Bylaws of the District may be amended by a resolution passed by a majority of the Board members in office at the time. Bylaws shall be reviewed annually after the election of officers with recommendations, if any, for amending the bylaws proposed by the Executive Committee, if such committee is established, otherwise by an ad hoc Bylaws Committee appointed by the Board President. At any other time, any Board member may introduce necessary amendments to the Bylaws to the Board for consideration. As provided in the Interlocal Agreement, as necessary and appropriate in the discretion of the Yakima City Council, the Yakima City Council may amend the Bylaws by ordinance adopted at or after a public meeting held with notice to the District, Selah and Union Gap. Amendments to the Bylaws adopted by the Yakima City Council may not be further amended by the District for one year except with Yakima City Council approval. ARTICLE X Commencement The District shall commence its existence effective upon the issuance of its Charter. -22- P:1SC1SC09Q 01/07/03 ARTICLE XI Dissolution Section 11.1. Dissolution Process. A. Subject to the dissolution procedures set forth in Section 14 of the Interlocal Agreement, if the Board makes an affirmative finding that dissolution is necessary or appropriate because the purposes of District may not be fulfilled for any reason, the Board may adopt a resolution requesting Yakima to dissolve the District. B. Upon adoption of a motion by the Yakima City Council requesting the following information, or upon adoption by the District board of a resolution requesting its own dissolution, the District shall file a dissolution statement with the City Clerk of Yakima setting forth: 1. The name and principal office of the District; 2. The debts, obligations and liabilities of the District, including conditions of grants and donations, and the property and assets available to satisfy the same; the provisions to be made for satisfaction of outstanding liabilities and performance of executory contracts; and the estimated time for completion of its dissolution; 3. Any pending litigation or contingent liabilities; 4. The Board resolution requesting such dissolution and the date(s) and proceedings leading toward its adoption, whenever the dissolution be voluntary; and 5. A list of persons to be notified upon completion of dissolution. Section 11.2. Trusteeship A. Jurisdiction over dissolution arises in the event the dissolution ordinance enacted by the Yakima City Council (or by all of the Cities, as set forth in Section 14 of the Interlocal Agreement) requests Superior Court trusteeship. In the event that the dissolution ordinance(s) so provide(s), the Superior Court of Yakima County shall have jurisdiction and authority to appoint -23- P:1SC \SC090 01/07/03 trustees or receivers of corporate property and assets and supervise such trusteeship or receivership. B. The trustees appointed by the Superior Court shall take such actions as necessary during the trusteeship to achieve the object thereof as reasonable. The trustees shall have the power and authority to reorganize the District and recommend amendment of its Charter and/or its Bylaws; suspend and /or remove District officials, and manage the assets and affairs of the District; and exercise any and all District powers as necessary or appropriate to fulfill outstanding agreements, to restore the capability of the District, to perform the functions and activities for which it is chartered, to reinstate its credit or credibility with its creditors or obligees, and, if so authorized by the Superior Court, to oversee its dissolution and appropriate subsequent transactions. ARTICLE XII Approval of Charter APPROVED by Interlocal Agreement by and among the City of Yakima, Washington, the City of Selah, Washington and. the City of Union Gap, Washington, dated June 25, 2001, and by Ordinance No. 2001 -28 of the City of Yakima adopted on June 19, 2.001, motion of the City of Selah City Council approved on June 12, 2001, and Ordinance Nos. 2298 and 2300 of the City of Union Gap adopted on June 11, 2001 and June 25, 2001, respectively. ATTEST /s/ City Clerk City of Yakima, Washington • -24- - P: \SC \SC090 01/07/03 EXHIBIT B BYLAWS B -1 P:\sc\scosi BYLAWS OF THE YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT ARTICLE I Board Section 1.1. Nominations - Expired Terms. Nominations for appointment or reappointment to fill expired terms on the Board shall be submitted along with resumes on the forms provided, to the City Manager of the City responsible for appointing the Boardmember not later than two months prior to the date the term is due to expire. The bodies so designated in the Charter shall make nominations. Nominations from local • organizations or any other interested group or agency may be submitted to the Yakima City Manager for consideration as set forth in the Charter. Section 1.2. Vacancies. Subject to Section 3 hereof, vacancies on the Board shall be filled by appointment of the City Manager of the City that made the original appointment to the vacant position, subject to confirmation by the City Council of the City that made the original nomination to the vacant position. A vacancy or vacancies on the Board shall be deemed to exist in the case of the death, disability, resignation or removal from office of any Board member as provided herein. Upon such an occurrence, the Board shall notify the body that has the power to nominate a replacement for such a member and said body shall have the opportunity to nominate another person as Board member to fill the vacant term, subject to confirmation as prescribed in the Charter. If the appointing body has not appointed another person as Board member to fill the vacant term described herein within two calendar months from that body's receipt of notice of said vacancy, the vacancy shall be filled by the Yakima City Manager. Such person shall serve pending, and be subject to confirmation as prescribed in the Charter. Section 1.3. Status of Appointed Members. Members appointed by the applicable City Manager, under Article VI of the Charter shall serve in an acting capacity unless confirmed by the applicable City Council. Acting members may attend meetings and participate in the discussions of the Board's business, but shall not have a vote on matters before the Board nor shall they be considered "in office" for purposes of determining a quorum. Once confirmed, appointees shall have the full power and responsibility of a Board member provided by the Charter and these Bylaws. ARTICLE II Officers and Committees Section 2.1. Officers Designated. The officers of the District shall be a President, Vice President, Secretary, and Treasurer, each of who shall be elected by the Board. Such other officers and assistant officers as may be deemed necessary may be elected or appointed by the Board. No person may simultaneously occupy the office of President and that of Treasurer, or any office responsible for custody of funds and maintenance of accounts and finances. In addition to the powers and duties specified below, the officers shall have such powers and perform such duties as the Board may prescribe. Section 2.2. Election, Qualifications and Term of Office. The Board shall elect each of the officers from among its members. The officers shall be elected by the Board at the first regular meeting after the term of new or reappointed Board members commences each year, for a one -year term, and each officer shall hold office during said one -year term and until his or her successor is elected. The Board at its organizational meeting shall elect the first officers of the Board. _ Section 2.3. Powers and Duties. a) President. The President shall be the chief executive officer of the District and shall have general supervision over the business of the District, subject, however, to the control of the Board of Directors. The President shall preside at all meetings of the Board. The President may sign and execute, in the name of the District deeds, mortga- ges, leases, bonds, contracts and other instruments duly authorized by the Board, and -2- P: \SC \SC09R 02/03/14 generally shall perform all duties incident to the office of President and such other duties as may from time to time be assigned to such office by the Board. b) Vice - President. At the request of the President or in case of his or her absence or disability, the Vice - President shall perform all duties of the President and, when so acting, shall have all the powers of, and be subject to all restrictions upon, the President. In addition, the Vice- President shall perform such other duties as may from time to time be assigned to that office by the Board or the President. c) Secretary. The Secretary shall: 1. Certify keep at the office of the District, or at such other place as the Board may order, the original or a copy of the Bylaws, as they may have been amended; 2. Keep at the office of the District, or at such other place as the Board may order, a book of minutes of all meetings of the Board, recording therein the time and place of holding, whether regular or special, and, if special, how authorized, the notice thereof given, and the proceedings thereat; 3. See that all notices are duly given in accordance with the provisions of these Bylaws or as required by law; 4. Be custodian of the records and seal of the District; 5. Exhibit at all reasonable times to any director, upon request, the Bylaws and minutes of the proceedings of the directors of the District; and 6. In general, perform all duties .of the office of Secretary and such other duties as may from time to time be assigned to such office by the Board of Directors or the President. d) Treasurer. The Treasurer shall receive and have charge of all funds of the District and shall disburse such funds only as directed by the Board. The Treasurer shall, in general, perform all duties incident to the office of chief financial officer and such -3- P: \SC \SCO9R 02/03/14 other duties as may from time to time be assigned to such office by the Board or the President. Section 2.4. Removal. Upon reasonable prior notice to all Board members of the alleged reasons for dismissal, the Board by an affirmative vote of the majority of all the Board members may remove any officer from . his or her office (but not from his or her membership on the Board) whenever in its judgment the best interests of the District will be served thereby. Section 2.5. Vacancies. The Board shall fill any office that becomes vacant with a successor who shall hold office for the unexpired term and until his or her successor shall have been duly elected. Section 2.6. Establishment of Committees. The Board, by resolution, may designate from among its members one or more committees, each consisting of at least three members, to represent the Board and, except as prohibited by the Charter, act for and on behalf of the Board. The designation of any such committee and the delegation thereto of authority shall not operate to relieve any member of . the Board of any responsibility imposed by law. Section 2.7. Executive Committee. The Executive Committee of the District shall consist of the President, Vice President, the Secretary and the Treasurer of the Board and one member -at -large elected by the Board. The provisions for election, quali- fications, term of office and removal of the member -at -large of the Executive Committee shall be identical to those of officers of the Board as_provided herein in Sections 2.2, 2.4, and 2.5 of this Article. Except as provided in the Charter, the Executive Committee shall have and exercise such powers of the Board as the Board may from time to time provide by resolution. -4- P: \SC \SCO9R 02/03/14 ARTICLE III Meetings Section 3.1. Regular Board Meetings. Regular meetings of the Board shall be held at least once every quarter at a location within the District. The Board shall establish such regular meeting time and place by resolution. Section 3.2. Special Board Meetings. Subject to Article VII of the Charter, special meetings of the Board may be held at any place at any time whenever called by • the President or a majority of the members of the Board. Section 3.3. Notice of Regular Board Meetings. No notice of the regular meeting shall be required, except of the first regular meeting and after any change in the time or place of such meeting adopted by resolution of the Board as above provided. Notice of such changed regular meeting shall be given by the Secretary or by the person or persons calling the meeting by personal communication over the telephone to each Board member at least 24 hours prior to the time of the meeting or by at least three days' notice by mail, telegram or written communication. If mailed, notice shall be mailed by U.S. mail, postage prepaid, to the last known address of each Board member. In addition, the District shall routinely provide reasonable notice of meetings to any individual specifically requesting it in writing. At any regular meeting of the Board, any business may be transacted and the Board may exercise all of its powers. Section 3.4. Notice of Special Board Meetings. Notice of all special meetings of the Board shall be given by the Secretary or by the person or persons calling the special meeting by delivering personally or by mail written notice at least 24 hours prior to the time of the meeting to each Board member and to each local newspaper of general circulation and to each radio or television station that has requested notice as provided in RCW 42.30.080. In addition, the District shall provide notice of special meetings to any individual specifically requesting it in writing. -5- P: \SC \SCO9R 02/03/14 The time and place of the special meeting and the business to be transacted must be specified in the notice. Final disposition shall not be taken on any other matter at such meetings. Section 3.5. Waiver of Notice. Notice as provided in Sections 3.3 and 3.4 hereof may be dispensed with as to any member of the Board who at or prior to the time the meeting convenes files with the Board a written waiver of notice or who is actually present at the meeting at the time it convenes. Such notice may also be dispensed with as to special meetings called to deal with an emergency involving injury or damage to persons or property or the likelihood of such injury or damage, where time requirements of such notice would make notice impractical and increase the likelihood of such injury or damage. Notice, as provided in Article IX of the Charter concerning proposed amendments to the Charter or Bylaws and votes on such amendments, may not be waived. Section 3.6. Notice to the Cities. Notice of all meetings and minutes of all meetings of the Board shall be given to the City Clerks of Yakima, Selah and Union Gap. ARTICLE IV Amendments to Charter and Bylaws Section 4.1. Proposals to Amend Charter and Bylaws. 1. Proposals to amend the Charter or Bylaws shall be presented in a format that strikes over material to be deleted and underlines new material. 2. Any Board member may introduce a proposed amendment to the Charter or to the Bylaws (which may consist of new Bylaws) at any regular meeting or at any special meeting of which 30 days' advance notice has been given. Section 4.2. Board Consideration of Proposed Amendments. If notice of a proposed amendment to the Charter or to the Bylaws, and information including the text of the proposed amendment and a statement of its purpose and effect, is provided to -6- P: \SC \SCO9R 02/03/14 members of the Board 15 days prior to any regular Board meeting or any special meeting of which 30 days' advance notice has been given, then the Board may vote on the proposed amendment at the same meeting as the one at which the amendment is introduced. If such notice and information is not so provided, the Board may not vote on the proposed amendment until the next regular Board meeting or special meeting of which 30 days' advance notice has been given and at least 15 days prior to which meeting such notice and information is provided to Board members. Germane amendments to the proposed amendment within the scope of the original amendment will be permitted at the meeting at which the vote is taken. Section 4.3. Vote Required for Amendments to Charter or Bylaws. Resolutions of the Board approving proposed amendments to the Charter or approving amendments to the Bylaws require an affirmative vote of a majority of the Board members then in office as provided in the Charter. As provided in the Interlocal Agreement, as necessary and appropriate in the discretion of the Yakima City Council, the Yakima City Council may amend the Bylaws by ordinance adopted at or after a public meeting held with notice to the District, the City of Selah and the City of Union Gap. Amendments to the Bylaws adopted by the Yakima City Council may not be further amended by the District for one year except with Yakima City Council approval. Section 4.4. Cities' Approval of Proposed Charter Amendments. Proposed Charter amendments adopted by the Board shall be submitted to each of the Parties to the Interlocal Agreement. The District's Charter may be amended only as provided in Article IX of the Charter. -7- P: 1SC \SC09R 02/03/14 ARTICLE V Administrative Provisions Section 5.1. Books and Records. The District shall keep current and complete books and records of account and shall keep minutes of the proceedings of its Board and its committees having any of the authority of the Board. The District shall provide no less than 90 days' written notice to the City of Yakima, the City of Selah, and the City of Union Gap prior to the destruction of any permanent books and records. Section 5.2. Indemnification of Board Members. The District elects to defend and indemnify its present and former Board members and officers and their successors, spouses and marital communities to the full extent authorized by law and the Charter. In addition, the right of indemnification shall inure to each Board member or officer and his or her spouses and marital communities upon his or her appointment to the Board and in the event of his or her death shall extend to his or her heirs, legal representatives and estate. Each person who shall act as Board member or officer of the District shall be deemed to do so in reliance upon such indemnification and such rights shall not be exclusive of any other right that he or she may have. Section 5.3. Principal Office. The principal office of the District shall be located within the District. The Board shall establish the principal office by resolution. Section 5.4. Fiscal Year. The Fiscal Year of the District shall begin January 1 and end December 31 of each year, except the first fiscal year, which shall run from the date the Charter was issued to December 31, 2001. ARTICLE VI Approval of Bylaws APPROVED by Interlocal Agreement by and among the City of Yakima, Washington, the City of Selah, Washington and the City of Union Gap, Washington, dated June 25, 2001, and by Ordinance No. 2001 -28 of the City of Yakima adopted on -8- P: \SC \SC09R 02/03/14 June 19, 2001, motion of the City of Selah City Council approved on June 12, 2001, and Ordinance Nos. 2298 and 2300 of the City of Union Gap adopted on June 11, 2001 and June 25, 2001, respectively. -9- P: \SC \SC09R 02/03/14 • CHARTER OF THE YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT ARTICLE I Name and Seal; Definitions Section 1.1. Name. The name of this public facilities district shall be the YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT (hereinafter referred to as the "District "). Section 1.2. Seal. The District's seal shall be a circle with the name "YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT" inscribed therein. The Board shall approve the seal by resolution. • Section 1.3. Definitions. All capitalized terms used but not defined herein shall have the meanings set forth in the Interlocal Cooperation Agreement To Form a Public Facilities District by and among the City of Yakima, Washington ( "Yakima "), the City of Selah, Washington ( "Selah ") and the City of Union Gap, Washington ( "Union Gap" and collectively with Yakima and Selah, the "Cities "), dated June 25, 2001 (the "Interlocal Agreement "). ARTICLE II Authority and Limit on Liability Section 2.1. Authority. The District is a public facilities district organized pursuant to RCW 35.57.010, the Interlocal Agreement, Ordinance No. 2001 -28 of Yakima, Ordinance Nos. 2298 and 2300 of Union Gap, and motion of the Selah City Council approved on June 12, 2001. Section 2.2. Limit on Liability. All liabilities incurred by the District shall be satisfied exclusively from the assets, credit, and properties of the District, and no creditor or other person • • shall have any right of action against or recourse to the Cities, their assets, credit, or services, on account of any debts, obligations, liabilities or acts or omissions of the District. Section 2.3. Mandatory Disclaimer. The following disclaimer shall be posted in a prominent place where the public may readily see it in the District's principal and other offices. It shall also be printed or stamped on all contracts, notes, bonds, and other documents that may entail any debt or liability by the District. The YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT is organized pursuant to RCW 35.57.010, the Interlocal Financing Agreement by and among the City of Yakima, Washington, the City of Selah, Washington and the City of Union Gap, Washington, dated June 25, 2001 (the "Interlocal Agreement "), Ordinance No. 2001 -28 of the City of Yakima, Ordinance Nos. 2298 and 2300 of the City of Union Gap, and motion of the City of Selah City Council approved on June 12, 2001. The Interlocal Agreement provides as follows: "All liabilities incurred by the District shall be satisfied exclusively from the assets, credit, and properties of the District, and no creditor or other person shall have • any right of action against or recourse to the Cities of Yakima, Selah or Union Gap, their assets, credit, or services, on account of any debts, obligations, liabilities or acts or omissions of the District." ARTICLE III Duration The duration of the District shall be perpetual except as provided in the Interlocal Agreement. ARTICLE IV Purpose The purpose of the District is to provide a legal entity under RCW 35.57.010 and the Interlocal Agreement to acquire (by purchase, lease or otherwise), construct, own, remodel, maintain, equip, reequip, repair, finance, and operate (either directly or by contract) one or more • -2- P: \SC \SC09Q 01/07/03 • Regional Centers, as defined in RCW 35.57.020, including, but are not limited to, the Convention Center consisting of the following components: a) Operation of Convention Center facilities, including meeting space, ballroom and other event facilities, with related activities; b) Operation of Convention Center programs and exhibits; c) Acquisition, display and maintenance of Convention Center exhibits; d) Restaurant or other food, beverage and banquet service facilities to enhance the attractiveness of the Convention Center to visitors; f) Any other uses reasonably or necessarily related to the operation of Convention Center facilities; and g) Related parking. To the extent appropriate and consistent with the needs and objectives of the Cities and • the District's purpose, the District may acquire, lease and/or operate and manage real property, including but not limited to the Convention Center; secure financing; undertake or otherwise provide for the construction and development of the Project; and otherwise undertake and accomplish all activities and projects necessary for the Project and the operation of the Convention Center. The District shall have no purpose other than acquisition, construction, ownership, remodeling, maintenance, equipping, reequipping, repair, financing, and/or operation (either directly or by contract) of the Convention Center and any other Regional Center approved under the terms of the Interlocal Agreement. For the purpose only of securing the exemption from federal income taxation for interest on obligations of the District, the District constitutes an authority and instrumentality of Yakima (within the meaning of those terms in federal regulations and rulings pursuant to Section 103 of the Code). • -3- P:\SC\SCO9Q 01/07/03 • ARTICLE V Powers Section 5.1. Powers. The District shall have and may exercise all lawful powers conferred by State law, the Interlocal Agreement, ordinance, this Charter and its Bylaws, including the usual powers of a corporation for public purposes and, without limitation, the power to: A. Hire employees, staff, and services; prescribe their duties, qualifications, and compensation; and secure the services of consultants for professional services, technical assistance, or advice; B . Contract for any corporate purpose with the United States, a state, and any political subdivision or agency of either, and with individuals, associations and • corporations and other entities (including public or private entities) including the financing, construction, equipping, operation or management of the Convention Center and expansion Project, related parking or for any other Regional Center owned or operated by the District; C. Sue and be sued in its name; D . Purchase, lease, exchange, mortgage, encumber, improve, use, or otherwise transfer or grant security interests in real or personal property or any interests therein; grant or acquire options on real and personal property; and contract regarding the income or receipts from real and personal property; E. Accept and expend gifts, grants, and donations, including funds or property from the United States, a state, and any municipality or political subdivision or agency of either, property acquired by any such governmental unit through the exercise of its power of eminent domain, and funds or property from corporations, • associations, individuals or any other source, and comply with the terms and • conditions therefor; -4- P:1SC \SCO9Q 01/07/03 • F. Impose the following charges, fees, and taxes authorized in RCW 35.57.040: Admission Charges, Parking Charges and any other fees or charges for services, goods or use of any of its facilities; Admission Taxes; Parking Taxes; Voted Sales Taxes; and Sales Taxes at a rate not to exceed the limit set forth in RCW 82.14.390; G. Use Sales Tax Revenue, Additional Revenue and other receipts for its corporate purposes; H. Use the supplemental alternative public works contracting procedures set forth in Chap. 39.10 RCW; Borrow or lend its funds, property, credit or services for corporate purposes, or act as a surety or guarantor for corporate purposes; issue revenue bonds or general • obligation bonds in conformity with the debt limitations set forth in RCW 35.57.030 and other applicable provisions of State law in such principal amounts as in the discretion of the District shall be necessary or appropriate to provide sufficient funds for achieving any corporate purposes; provided, however, that all bonds and notes or liabilities occurring thereunder shall be satisfied exclusively from the assets, properties or credit of such District, and no creditor or other person shall have any recourse to the assets, credit or services of the Cities thereby, unless any or all of the Cities shall by ordinance expressly guarantee such bonds or notes; J. Manage, on behalf of the United States, a state, and any municipality or political subdivision or agency of either, any property acquired by such entity through gift, purchase, construction, lease, assignment, default, or exercise of the power of eminent domain; K. Recommend to the United States, a state, and any municipality or political subdivision or agency of either, consistent with all applicable laws, such tax, -5- P: \SC \SCO9Q 01/07/03 • financing, and security measures as the District may deem appropriate to maximize the public interest in activities in which the District by this Charter has a particular responsibility; L. Control the use and disposition of corporate property, assets, and credit; M. Invest and reinvest its funds; N. Establish the consideration (if any) for property transferred, all in pursuit of corporate purposes; 0. Maintain books and records as appropriate for the conduct of its affairs; P. Conduct corporate affairs, carry on its operations, and use its property as allowed by law and consistent with this Charter, and its Bylaws; name corporate officials; Q. Identify and recommend to the United States, a state, and any municipality or • political subdivision or agency of either, the acquisition by the appropriate governmental entity for transfer to or use by the District of property and property rights, which, if so acquired, whether through purchase or the exercise of eminent domain, and so transferred or used, would materially advance the purpose for which the District is chartered; and R. Exercise and enjoy such other powers as may be authorized by law. Section 5.2. Limitation of Powers. The District organized under this Charter in all activities and transactions shall be limited in the following respects: A. The District shall have no power of eminent domain; B. The District may not incur or create any liability that permits recourse by any party or member of the public to any assets, services, resources, or credit of the Cities. All liabilities incurred by the District shall be satisfied exclusively from • the assets and credit of the District; no creditor or other person shall have any -6- P: 1SC\SC09Q 01/07/03 • recourse to the assets, credit, or services of the Cities on account of any debts, obligations, liabilities, acts, or omissions of the District; C. No funds, assets, or property of the District shall be used for any partisan political activity or to further the election or defeat of any candidate for public office or ballot proposition; nor shall any funds or a substantial part of the activities of the District be used for publicity or educational purposes designed to support or defeat legislation pending before the Congress of the United States, or the legislature of the State or the Cities; provided, however, that funds may be used for representatives of the District to communicate with members of Congress, State legislators or City council members concerning funding and other matters directly affecting the District, so long as such activities do not constitute a • substantial part of the District's activities and so long as such activities are not specifically limited elsewhere in this Charter or the Interlocal Agreement; D. All Sales Tax Revenue, Additional Revenue, receipts, assets, or credit of the District shall be applied toward or expended upon services, projects, and activities authorized by this Charter. No part of the net earnings of the District shall inure to the benefit of, or be distributable as such to, the Board members, officers of the District or other private persons, except that the District is authorized and empowered to: i. Compensate those persons or entities performing services for the District, including District employees and legal counsel, a reasonable amount for services rendered, and reimburse Board members and others for reasonable expenses actually incurred in performing their duties; ii. Assist District officials as members of a general class of persons to be • assisted by a District - approved project or activity to the same extent as other -7- P: \SC \SCO9Q 01/07/03 • members of the class so long as no special privileges or treatment accrues to such corporate official by reason of his or her status or position in the District; iii. Defend and indemnify any current or former Board member or employee and their successors, spouses and marital communities against all costs, expenses, judgments, and liabilities, including attorneys' fees, reasonably incurred by or imposed upon him or her in connection with or resulting from any civil claim, action, or proceeding in which he or she is or may be made a party by reason of being or having been a corporate official, or by reason of any action alleged to have been taken or omitted by him or her as such official, provided that he or she was acting in good faith on behalf of the District and within the scope of duties imposed or authorized by law. This • power of indemnification shall not be exclusive of other rights to which corporate officials may be entitled as a matter of law; iv. Purchase insurance to protect and hold personally harmless any of its officials, its employees, and its agents from any civil action, claim, or proceeding instituted against the foregoing individuals arising out of the performance, in good faith, of duties for, or employment with, the District and to hold these individuals harmless from any expenses connected with the defense, settlement, or monetary judgments from such actions, claims, or proceedings. The purchase of such insurance and its policy limits shall be discretionary with the Board, and such insurance shall not be considered to be compensation to the insured individuals. The powers conferred by this subsection shall not be exclusive of any other powers conferred by law to purchase liability insurance; and • v. Sell assets for a consideration greater than their reasonable market value or acquisition costs, charge more for services than the expense of providing -8- P: \SC \SCO9Q 01/07/03 • them, or otherwise secure an increment in a transaction, or carry out any other transaction or activity, so long as such gain is not the principal object or purpose of the District's transactions or activities and is applied to or expended upon services, projects, and activities otherwise authorized as corporate purposes; E. The District organized under this chapter shall not issue shares of stock, pay dividends, make private distribution of assets, make loans to its board members or employees or otherwise engage in business for private gain; F. The District's power to acquire (by purchase, lease or otherwise), construct, own, remodel, maintain, equip, reequip, repair, finance, and operate (either directly or by contract) any Regional Center other than the Convention Center, the Project • and related parking facilities is subject to the approval of Yakima; G. In consideration for Yakima's agreement to issue the Bonds and apply Net Proceeds to pay Predevelopment Costs and Costs of the Project under the terms of the Development Agreement and Yakima's agreement to apply Lodging Taxes to pay a portion of Operation and Maintenance Costs under the terms of the Development Agreement, the following District powers shall be subject to the approval of the Yakima City Council: i. The District shall not impose Admission Charges or Parking Charges without the prior approval of the Yakima City Council; ii. The District shall not impose Admission Taxes or Parking Taxes without the prior approval of the Yakima City Council; iii. The District's annual budget, including Administrative Costs, shall be subject to annual approval by the Yakima City Council; • -9- P: \SC \SC09Q 01/07/03 III iv. Any acquisition or transfer of real and personal property with a value over $100,000 by lease, sublease, purchase, or sale by the District shall be subject to approval by the Yakima City Council; v. Any gambling activity under the authority of the District at the Convention Center shall be subject to approval by the Yakima City Council; and vi. Any public display of artwork under the authority of the District at the Convention Center shall be subject to approval by the Yakima City Council. H . The District's power to impose Voted Sales Taxes authorized under I RCW 82.14.048 is subject to the approval by each of the Parties prior to placement on the ballot. III ARTICLE VI Board of Directors And Corporate Officers Section 6.1. Powers. The Board shall govern the affairs of the District. All corporate powers of the District shall be exercised by or under the authority of, and the business, property and affairs of the District shall be managed under the direction of, the Board except as may be otherwise provided in this Charter, the Interlocal Agreement or State law. Section 6.2. Board Composition. Pursuant to RCW 35.57.010, the Board shall be composed of seven members. The initial members of the Board shall be appointed as follows. One Boardmember shall be appointed by the Yakima City Council, one Boardmember by the Selah City Council and one Boardmember by the Union Gap City Council. Four Boardmembers shall be appointed by the Yakima City Council based on recommendations from local organizations such as the local chamber of commerce, local economic development council, and • local labor council. The Boardmembers shall not be council members of the Cities either at the time of their appointment or at any time thereafter. -10- P:1SC \SC09Q 01/07 /03 • Section 6.3. Terms of Office. A . The terms of office of the initially appointed members of the Board shall commence on the effective date of this Charter and shall be staggered as follows: 1. Group I. One member for a one -year term; 2. Group II. One member for a two -year term; 3. Group III. One member for a three -year term; and 4. Group IV. The remainder for four -year terms. B. With respect to the appointments of the initial Board members, the following members are assigned to the four groups identified in subsection 6.3.A above for purposes of determining the length of terms of such initial Board members: the Group I member shall be appointed by the Yakima City Council, based on • recommendations from local organizations; the Group II member shall be appointed by the Yakima City Council; the Group III member shall be appointed by the Yakima City Council, based on recommendations from local organizations; the remainder of the appointments shall be Group IV members. C . The expired term of the Group I member shall be filled by the Yakima City Council, based on recommendations from local organizations. D. The expired term of the Group II member shall be filled by appointment of the Yakima City Council. E. The expired term of the Group III member shall be filled by appointment of the Yakima City Council, based on recommendations from local organizations. F. The expired term of one of the Group IV members shall be filled by the Selah City Council, the expired term of one of the Group IV members shall be filled by the Union Gap City Council and the expired term of the remainder of the Group IV members shall be filled by the Yakima City Council, based on recommendations from local organizations. -1 1- P: \SC \SC09Q 01/07/03 • G. Except for the initial members of the board, each member shall be appointed to serve for a four -year term. Each member shall continue to serve until his or her successor has been appointed and qualified as provided in the bylaws. Members may be reappointed to serve not more than four consecutive full terms. H. Terms shall expire on June 30of the year in which the respective group is scheduled to terminate. Nominations for new appointees or for reappointment of existing members shall be processed in the manner provided in the Bylaws. I. Vacancies occurring during the course of a term shall be filled by appointment by the City Manager of the City that made the original appointment to the vacant position, subject to confirmation by the City Council of the City that made the original appointment to the vacant position, in the manner and to the effect 0 provided in the Bylaws to complete the unexpired term to which appointed. Section 6.4. Ouorum and Manner of Action. At all meetings of the Board a majority of directors then in office shall constitute a quorum. The Board may adopt resolutions of the Board only by an affirmative vote of a majority of the Boardmembers then in office. Section 6.5. Officers and Division of Duties. A. The initial officers of the District shall be the President, Vice President, Secretary and Treasurer of the Board. In no event shall there be less than two officers designated, nor shall the same person occupy the office of president and that of treasurer, or any office responsible for custody of funds and maintenance of accounts and finances. Additional officers may be provided for in the Bylaws. B. The President shall be the agent of the District for service of process; the Bylaws may designate additional corporate officials as agents to receive or initiate process. The corporate officers, who shall be selected from among the membership of the Board as provided • in the Bylaws, shall manage the daily affairs and operations of the District. -1 2- P: \SC \SC09Q 01/07/03 • C. The Board shall oversee the activities of the corporate officers, establish and /or implement policy, participate in corporate activity in matters prescribed by the Interlocal Agreement, and shall have stewardship for management and determination of all corporate affairs. Section 6.6. Bonding of Corporate Officers. Each corporate official responsible for handling accounts and finances shall file as soon as practicable with the District a fidelity bond in an amount determined by the District to be adequate and appropriate, and may hold the I corporate office only as long as such a bond continues in effect. Section 6.7. Executive Committee. The Bylaws may provide for an Executive Committee, which shall be appointed and /or removed by the Board, and shall have and exercise such authority of the Board in the management between meetings of the Board, as may be • specified in the Bylaws. Section 6.8. Removal of Board Members. The City Council of each City may by ordinance remove from the Board with or without cause any member of the Board appointed by that City at or after a public meeting, with prior notice to the District and the other Cities. In the event of removal, members shall be replaced in the same manner as provided for in filling vacancies on the Board. • 1 - 1 3 - P: \SC\SC09Q 01/07/03 • ARTICLE VII Meetings Section 7.1. Board Meetings. A. The Board shall meet at least quarterly each year; special meetings of the Board may be called as provided by the Charter, the Bylaws or RCW 42.30.010 et seq. B. The Board shall be the governing body of a public agency as defined in RCW 42.30.020, and all meetings of the board shall be held and conducted in accordance with RCW 42.30.010 et seq. ( "The Open Public Meetings Act "). Notice of meetings shall be given in a manner consistent with RCW 42.30.010 et seq. In addition, the District shall routinely provide reasonable notice of meetings to any individual specifically requesting it in writing. C. All Board meetings, including executive and all other permanent and ad hoc • committee meetings, shall be open to the public to the extent required by RCW 42.30.010 et seq. The Board and committees may hold executive sessions to consider matters enumerated in RCW 42.30.010 et seq., or privileged matters recognized by law, and shall enter the cause therefor upon its official journal. At all public meetings, any citizen shall have a reasonable opportunity to address the Board either orally or by written petition. Voting by telephone or by proxy is not permitted. Section 7.2. Parliamentary Authority. The rules in Robert's Rules of Order (revised) shall govern the District in all cases to which they are applicable, where they are not inconsistent with the Charter or with the special rules of order of the District set forth in the Bylaws. III -14- P:\SC \SC09Q 01/07/03 • Section 7.3. Minutes. Copies of the minutes of all regular or special meetings of the Board shall be available to any person or organization that requests them. The minutes of all Board meetings shall include a record of individual votes on all matters requiring Board concurrence or approval. ARTICLE VIII Procedural Requirements Section 8.1. Board Review and Concurrence. A. At least quarterly, the Board shall review monthly statements of income and expenses, which compare budgeted expenditures to actual expenditures. The Board shall review all such information at regular meetings, the minutes of which shall specifically note such reviews and include such information. III B. General or particular authorization or review and concurrence of the Board by resolution shall be necessary for any of the following transactions: 1. Transfer or conveyance of an interest in real estate other than release of a lien or satisfaction of a mortgage after payment has been received and the execution of a lease for a current term less than one year; 2. The contracting of debts, issuances of notes, debentures, or bonds, and the mortgaging or pledging of authority assets or credit to secure the same; 3. The donation of money, property or other assets belonging to the District; 4. An action by the District as a surety or guarantor; 5. All capital expenditures in excess of twenty -five thousand dollars ($25,000), and all other transactions in which: (i) the consideration exchanged or received by the District exceeds the greater of one percent of the previous year's operating budget or twenty -five thousand dollars ($25,000) or (ii) the performance by the District shall extend over a period exceeding one year from the date of execution of an agreement therefor; • -1 5- P: \SC \SC09Q 01/07/03 • 6. Adoption of an annual budget approved by the Yakima City Council. The District shall forward its proposed annual budget to the Cities (for review and comment by Selah and Union Gap and for approval by the Yakima City Council) no later than September 1 of the year prior to the budget year. The annual budget shall include a projected operating and capital budget for the next fiscal year as well as a summary of projects and activities to be undertaken during the next fiscal year; 7. Certification of annual reports and statements to be filed with the Cities as true and correct in the opinion of the Board and of its members; 8. Proposed amendments to the Charter and Bylaws; and 9. Such other transactions, duties, and responsibilities as the Charter shall repose in the Board or the Board may reserve. • Section 8.2. Establishment and Maintenance of Office and Records. The District shall: A. Maintain a principal office at a location within the boundaries of the Cities; B. File and maintain with each City a current listing of all Board officials, their positions and their home addresses, their business and home phone numbers, the address of the District's principal office and of all other offices used by it, and a current set of its Bylaws; and C. Maintain all of its records in a manner consistent with the Preservation and Destruction of Public Records Act, RCW Chapter 40.14. Section 8.3. Access to Records. A. The District shall keep an official journal containing the minutes of proceedings at all meetings of the Board and the resolutions of the Board. B. Any person shall have access to records and information of the District to the extent required by State law. Section 8.4. Deposit of Public Funds. All money belonging to or collected for the use of • the District, coming into the hands of any corporate official or officer thereof, shall be deposited in a qualified public depositary as determined by the Washington Public Deposit Protection -16- P: \SC \SC09Q 01/07/03 • Commission. Such monies may be invested at the direction of the Board, by resolution, in investments that would be lawful for the investments of Yakima funds. Section 8.5. Reports and Information. The District shall, within five months after the end of its fiscal year, file an annual report with each City containing financial statements of assets and liabilities, revenue and expenditures and changes in its financial position during the previous year; a summary of significant accomplishments; a list of depositories used; a list of authority officials and a list of officials bonded pursuant to Section 6.6 of this Charter. Section 8.6. Audits and Inspections. The District is subject to review and audit by the State Auditor, as provided by law. The District shall send a copy of its audited financial statements to each City no later than 30 days after such audited financial statements are available. In addition, the District shall, at any time during normal business hours and as often as • the Yakima City Council, the Yakima City Manager or his designee, or the State Auditor deem necessary, make available to the Yakima City Council, the Yakima City Manager or his designee, the State Auditor and, at the request of the City, an independent auditor for examination all of its financial records, and shall permit the Yakima City Council, the Yakima City Manager or his designee, State Auditor and, at the request of the City, an independent auditor to audit, examine and make excerpts or transcripts from such records, and to make audits of all contracts, invoices, materials, payrolls, records of personnel, conditions of employment and other data relating to all the aforesaid matters. The District shall review with the Yakima City Manager or his or her designee within 45 days of receipt and take immediate corrective action to address any audit findings or qualifications in its audit reports. Section 8.7. Insurance. The District shall maintain in full force and effect public liability insurance in an amount sufficient to cover potential claims for bodily injury, death or disability and for property damage, which may arise from or be related to projects and activities of the • District, naming Yakima as an additional insured, if such insurance shall be available at a -17- P.1SC \SCO9Q 01/07/03 1 • reasonable price as determined by the Board. If insurance is not maintained the District shall maintain adequate reserves to cover potential claims and losses. Section 8.8. Bylaws. A. The properly adopted Bylaws of the District shall be the official rules for the governing of meetings and the affairs of the District. B. The Bylaws may be amended as provided in Article IX of this Charter in order to provide additional or different rules for governing the District and its activities as are not inconsistent with this Charter. C. Amendments to the Bylaws shall be effective 10 days after filing of same with the City Clerks of Yakima, Selah and Union Gap, unless such amendment(s) shall have been passed by unanimous vote of the Board and an earlier effective date shall have been set. • Section 8.9. Conflict of Interest. A. Except as provided in this section, a Board member or employee of the District may not participate in Board decisions if that person or a member of that person's immediate family has a financial interest in the issue being decided unless the financial interest is a remote financial interest and participation is approved under subsection B of this section. B. A Board member or employee may participate in a decision if that person or a member of that person's immediate family has only a remote financial interest, the fact and extent of the interest is disclosed to the Board in a public meeting and is noted in the minutes of the Board before any participation by the member in the decision, and thereafter in a public meeting the Board by vote authorizes or approves the participation. If the person whose participation is under consideration is a Board member, that person may not vote under this subsection. For purposes of this subsection, "remote financial interest" means: (i) that of a nonsalaried officer or director of a nonprofit corporation; • - 1 8- P: \SC1SCO9Q 01/07/03 • (ii) that of an employee or agent of a contracting party where the compensation of the employee or agent consists entirely of fixed wages or salary and the contract is awarded by bid or by other competitive process; (iii) that of a landlord or tenant of a contracting party, except in cases where the property subject to the lease or sublease is owned or managed by the public corporation; (iv) that of a holder of less than one percent of the shares of the corporation or cooperative that is the contracting party; or (v) that of an owner of a savings and loan or bank savings or share account or credit union deposit account if the interest represented by the account is less than two percent of the total deposits held by the institution. C. A Board member or employee is not considered to be financially interested in a decision when the decision could not affect that person in a manner different from its effect on the public. • D. No Board member or employee of the District shall accept, directly or indirectly, any gift, favor, loan, retainer, entertainment or other thing of monetary value from any person, firm or corporation having dealings with the District when such acceptance would conflict with the performance of a Board member or employee's official duties. A conflict, or possibility of conflict, shall be deemed to exist where a reasonable and prudent person would believe that it was given for the purpose of obtaining special considerations or influence; provided that application of this provision shall take into consideration the established customs and practices of the District. E. The Board may adopt additional conflict of interest and ethical rules it considers appropriate. F. For purposes of this section, "participate in a decision" includes all discussions, deliberations, preliminary negotiations, and votes. G. For purposes of this section, "immediate family" means: • 1. A spouse; 2. Any parent, parent -in -law, child, son -in -law, or daughter -in -law; and -19- P: \SC \SCO9Q 01/07/03 • 3. Any sibling, uncle, aunt, cousin, niece or nephew residing in the household of the corporate official or employee. Section 8.10. Discrimination. A. Board membership may not directly or indirectly be based upon or limited by creed, age, race, color, religion, sex, national origin, marital status or the presence of any sensory, mental or physical disability, unless such limitations are necessary for the performance of the role and no less discriminatory alternatives are available. • • -20- P: \SC \SCO9Q 01/07/03 • B. To ensure equality of employment opportunity, the District shall not discriminate in any matter related to employment because of creed, age, race, color, religion, sex, national origin, marital status or the presence of any sensory, mental or physical disability, unless such limitations are necessary for the performance of the role and no less discriminatory alternatives are available. The District shall, in all solicitations or advertisements for employees placed by or on behalf of the District, state that all qualified applicants will receive consideration for employment without regard to creed, age, race, color, religion, sex, national origin, marital status or the presence of any sensory, mental or physical disability, unless such limitations are necessary for the performance of the role and no less discriminatory alternatives are available. ARTICLE IX Amendments to Charter and Bylaws 1111 Section 9.1. Proposals to Amend Charter. A. Subject to Section 8 of the Interlocal Agreement, the District may propose to the Yakima City Council that its Charter be amended by resolution passed by a procedure outlined in its Bylaws at a regular or special meeting of the Board for which 30 days' advance written notice was given. B. When required by law, the District shall propose to the Yakima City Council an amendment to this Charter that will conform to and be consistent with said law. C. As necessary and appropriate in the discretion of the Yakima City Council, the Yakima City Council may propose to amend this Charter on its own initiative. Section 9.2. Charter Amendments. Pursuant to Section 8 of the Interlocal Agreement, the Charter may be amended only with the approval of all of the Parties to the Interlocal Agreement, whether in response to a resolution passed by the District's Board of Directors, or on the initiative of Yakima. After approval of a Charter amendment by all of the Parties, the revised Charter shall be deemed issued and shall be filed in the same manner as the original Charter. • -21- P: \SC \SCO9Q 01/07/03 ■ • Section 9.3. Amendments to Bylaws. The Bylaws of the District may be amended by a resolution passed by a majority of the Board members in office at the time. Bylaws shall be reviewed annually after the election of officers with recommendations, if any, for amending the bylaws proposed by the Executive Committee, if such committee is established, otherwise by an ad hoc Bylaws Committee appointed by the Board President. At any other time, any Board member may introduce necessary amendments to the Bylaws to the Board for consideration. As provided in the Interlocal Agreement, as necessary and appropriate in the discretion of the Yakima City Council, the Yakima City Council may amend the Bylaws by ordinance adopted at or after a public meeting held with notice to the District, Selah and Union Gap. Amendments to the Bylaws adopted by the Yakima City Council may not be further amended by the District for one year except with Yakima City Council approval. • ARTICLE X Commencement The District shall commence its existence effective upon the issuance of its Charter. • - 22 - P:1SC \SCO9Q 01/07/03 • ARTICLE XI Dissolution Section 11.1. Dissolution Process. A. Subject to the dissolution procedures set forth in Section 14 of the Interlocal Agreement, if the Board makes an affirmative finding that dissolution is necessary or appropriate because the purposes of District may not be fulfilled for any reason, the Board may adopt a resolution requesting Yakima to dissolve the District. B. Upon adoption of a motion by the Yakima City Council requesting the following information, or upon adoption by the District board of a resolution requesting its own dissolution, the District shall file a dissolution statement with the City Clerk of Yakima setting forth: • 1. The name and principal office of the District; 2. The debts, obligations and liabilities of the District, including conditions of grants and donations, and the property and assets available to satisfy the same; the provisions to be made for satisfaction of outstanding liabilities and performance of executory contracts; and the estimated time for completion of its dissolution; 3. Any pending litigation or contingent liabilities; 4. The Board resolution requesting such dissolution and the date(s) and proceedings leading toward its adoption, whenever the dissolution be voluntary; and 5. A list of persons to be notified upon completion of dissolution. Section 11.2. Trusteeship A. Jurisdiction over dissolution arises in the event the dissolution ordinance enacted by the Yakima City Council (or by all of the Cities, as set forth in Section 14 of the Interlocal Agreement) requests Superior Court trusteeship. In the event that the dissolution ordinance(s) so provide(s), the Superior Court of Yakima County shall have jurisdiction and authority to appoint -23- P: \SC \SC09Q 01/07/03 • trustees or receivers of corporate property and assets and supervise such trusteeship or receivership. B. The trustees appointed by the Superior Court shall take such actions as necessary during the trusteeship to achieve the object thereof as reasonable. The trustees shall have the power and authority to reorganize the District and recommend amendment of its Charter and/or its Bylaws; suspend and /or remove District officials, and manage the assets and affairs of the District; and exercise any and all District powers as necessary or appropriate to fulfill outstanding agreements, to restore the capability of the District, to perform the functions and activities for which it is chartered, to reinstate its credit or credibility with its creditors or obligees, and, if so authorized by the Superior Court, to oversee its dissolution and appropriate subsequent transactions. ARTICLE XII • Approval of Charter APPROVED by Interlocal Agreement by and among the City of Yakima, Washington, the City of Selah, Washington and the City of Union Gap, Washington, dated June 25, 2001, and by Ordinance No. 2001 -28 of the City of Yakima adopted on June 19, 2001, motion of the City of Selah City Council approved on June 12, 2001, and Ordinance Nos. 2298 and 2300 of the City of Union Gap adopted on June 11, 2001 and June 25, 2001, respectively. ATTEST /s/ City Clerk City of Yakima, Washington • -24- P: \SC \SC09Q 01/07/03 BYLAWS OF THE • YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT ARTICLE I Board Section 1.1. Nominations - Expired Terms. Nominations for appointment or reappointment to fill expired terms on the Board shall be submitted along with resumes on the forms provided, to the City Manager of the City responsible for appointing the Boardmember not later than two months prior to the date the term is due to expire. The bodies so designated in the Charter shall make nominations. Nominations from local organizations or any other interested group or agency may be submitted to the Yakima City Manager for consideration as set forth in the Charter. Section 1.2. Vacancies. Subject to Section 3 hereof, vacancies on the Board shall • be filled by appointment of the City Manager of the City that made the original appointment to the vacant position, subject to confirmation by the City Council of the City that made the original nomination to the vacant position. A vacancy or vacancies on the Board shall be deemed to exist in the case of the death, disability, resignation or removal from office of any Board member as provided herein. Upon such an occurrence, the Board shall notify the body that has the power to nominate a replacement for such a member and said body shall have the opportunity to nominate another person as Board member to fill the vacant term, subject to confirmation as prescribed in the Charter. If the appointing body has not appointed another person as Board member to fill the vacant term described herein within two calendar months from that body's receipt of notice of said vacancy, the vacancy shall be filled by the Yakima City Manager. Such person shall serve pending, and be subject to confirmation as prescribed in the Charter. Section 1.3. Status of Appointed Members. Members appointed by the • applicable City Manager, under Article VI of the Charter shall serve in an acting capacity • unless confirmed by the applicable City Council. Acting members may attend meetings and participate in the discussions of the Board's business, but shall not have a vote on matters before the Board nor shall they be considered "in office" for purposes of determining a quorum. Once confirmed, appointees shall have the full power and g q � Pp p responsibility of a Board member provided by the Charter and these Bylaws. ARTICLE II Officers and Committees Section 2.1. Officers Designated. The officers of the District shall be a President, Vice President, Secretary, and Treasurer, each of who shall be elected by the Board. Such other officers and assistant officers as may be deemed necessary may be elected or appointed by the Board. No person may simultaneously occupy the office of President and that of Treasurer, or any office responsible for custody of funds and maintenance of 1111 accounts and finances. In addition to the powers and duties specified below, the officers shall have such powers and perform such duties as the Board may prescribe. Section 2.2. Election, Qualifications and Term of Office. The Board shall elect each of the officers from among its members. The officers shall be elected by the Board at the first regular meeting after the term of new or reappointed Board members commences each year, for a one -year term, and each officer shall hold office during said one -year term and until his or her successor is elected. The Board at its organizational meeting shall elect the first officers of the Board. Section 2.3. Powers and Duties. a) President. The President shall be the chief executive officer of the District and shall have general supervision over the business of the District, subject, however, to the control of the Board of Directors. The President shall preside at all meetings of the • Board. The President may sign and execute, in the name of the District deeds, mortga- ges, leases, bonds, contracts and other instruments duly authorized by the Board, and - 2- P: \SC \SC09R 02/03/14 • generally shall perform all duties incident to the office of President and such other duties as may from time to time be assigned to such office by the Board. b) Vice - President. At the request of the President or in case of his or her absence or disability, the Vice - President shall perform all duties of the President and, when so acting, shall have all the powers of, and be subject to all restrictions upon, the President. In addition, the Vice - President shall perform such other duties as may from time to time be assigned to that office by the Board or the President. c) Secretary. The Secretary shall: 1. Certify and keep at the office of the District, or at such other place as the Board may order, the original or a copy of the Bylaws, as they may have been amended; 2. Keep at the office of the District, or at such other place as the Board may order, a book of minutes of all meetings of the Board, recording therein the • time and place of holding, whether regular or special, and, if special, how authorized, the notice thereof given, and the proceedings thereat; 3. See that all notices are duly given in accordance with the provisions of these Bylaws or as required by law; 4. Be custodian of the records and seal of the District; 5. Exhibit at all reasonable times to any director, upon request, the Bylaws and minutes of the proceedings of the directors of the District; and 6. In general, perform all duties of the office of Secretary and such other duties as may from time to time be assigned to such office by the Board of Directors or the President. d) Treasurer. The Treasurer shall receive and have charge of all funds of the District and shall disburse such funds only as directed by the Board. The Treasurer shall, • in general, perform all duties incident to the office of chief financial officer and such -3- P: \SC \SCO9R 02/03/14 • other duties as may from time to time be assigned to such office by the Board or the President. Section 2.4. Removal. Upon reasonable prior notice to all Board members of the alleged reasons for dismissal, the Board by an affirmative vote of the majority of all the Board members may remove any officer from his or her office (but not from his or her membership on the Board) whenever in its judgment the best interests of the District will be served thereby. Section 2.5. Vacancies. The Board shall fill any office that becomes vacant with a successor who shall hold office for the unexpired term and until his or her successor shall have been duly elected. Section 2.6. Establishment of Committees. The Board, by resolution, may designate from among its members one or more committees, each consisting of at least three members, to represent the Board and, except as prohibited by the Charter, act for • and on behalf of the Board. The designation of any such committee and the delegation thereto of authority shall not operate to relieve any member of the Board of any responsibility imposed by law. Section 2.7. Executive Committee. The Executive Committee of the District shall consist of the President, Vice President, the Secretary and the Treasurer of the Board and one member -at -large elected by the Board. The provisions for election, quali- fications, term of office and removal of the member -at -large of the Executive Committee shall be identical to those of officers of the Board as provided herein in Sections 2.2, 2.4, and 2.5 of this Article. Except as provided in the Charter, the Executive Committee shall have and exercise such powers of the Board as the Board may from time to time provide by resolution. • -4- P: \ SC \SCO9R 02/03/14 • ARTICLE III Meetings Section 3.1. Regular Board Meetings. Regular meetings of the Board shall be held at least once every quarter at a location within the District. The Board shall establish such regular meeting time and place by resolution. Section 3.2. Special Board Meetings. Subject to Article VII of the Charter, special meetings of the Board may be held at any place at any time whenever called by the President or a majority of the members of the Board. Section 3.3. Notice of Regular Board Meetings. No notice of the regular meeting shall be required, except of the first regular meeting and after any change in the time or place of such meeting adopted by resolution of the Board as above provided. Notice of such changed regular meeting shall be given by the Secretary or by the person or persons calling the meeting by personal communication over the telephone to each Board member • at least 24 hours prior to the time of the meeting or by at least three days' notice by mail, telegram or written communication. If mailed, notice shall be mailed by U.S. mail, postage prepaid, to the last known address of each Board member. In addition, the District shall routinely provide reasonable notice of meetings to any individual specifically requesting it in writing. At any regular meeting of the Board, any business may be transacted and the Board may exercise all of its powers. Section 3.4. Notice of Special Board Meetings. Notice of all special meetings of the Board shall be given by the Secretary or by the person or persons calling the special meeting by delivering personally or by mail written notice at least 24 hours prior to the time of the meeting to each Board member and to each local newspaper of general circulation and to each radio or television station that has requested notice as provided in RCW 42.30.080. In addition, the District shall provide notice of special meetings to any • individual specifically requesting it in writing. -5- P: \SC \SCO9R 02/03/14 • The time and place of the special meeting and the business to be transacted must be specified in the notice. Final disposition shall not be taken on any other matter at such meetings. Section 3.5. Waiver of Notice. Notice as provided in Sections 3.3 and 3.4 hereof may be dispensed with as to any member of the Board who at or prior to the time the meeting convenes files with the Board a written waiver of notice or who is actually present at the meeting at the time it convenes. Such notice may also be dispensed with as to special meetings called to deal with an emergency involving injury or damage to persons or property or the likelihood of such injury or damage, where time requirements of such notice would make notice impractical and increase the likelihood of such injury or damage. Notice, as provided in Article IX of the Charter concerning proposed amendments to the Charter or Bylaws and votes on such amendments, may not be waived. • Section 3.6. Notice to the Cities. Notice of all meetings and minutes of all meetings of the Board shall be given to the City Clerks of Yakima, Selah and Union Gap. ARTICLE IV Amendments to Charter and Bylaws Section 4.1. Proposals to Amend Charter and Bylaws. 1. Proposals to amend the Charter or Bylaws shall be presented in a format that strikes over material to be deleted and underlines new material. 2. Any Board member may introduce a proposed amendment to the Charter or to the Bylaws (which may consist of new Bylaws) at any regular meeting or at any special meeting of which 30 days' advance notice has been given. Section 4.2. Board Consideration of Proposed Amendments. If notice of a proposed amendment to the Charter or to the Bylaws, and information including the text • of the proposed amendment and a statement of its purpose and effect, is provided to -6- P: \SC \SCO9R 02/03/14 • members of the Board 15 days prior to any regular Board meeting or any special meeting of which 30 days' advance notice has been given, then the Board may vote on the proposed amendment at the same meeting as the one at which the amendment is introduced. If such notice and information is not so provided, the Board may not vote on the proposed amendment until the next regular Board meeting or special meeting of which 30 days' advance notice has been given and at least 15 days prior to which meeting such notice and information is p rovided to Board members. Germane amendments to the proposed amendment within the scope of the original amendment will be permitted at the meeting at which the vote is taken. Section 4.3. Vote Required for Amendments to Charter or Bylaws. Resolutions of the Board approving proposed amendments to the Charter or approving amendments to the Bylaws require an affirmative vote of a majority of the Board members then in office as provided in the Charter. As provided in the Interlocal Agreement, as necessary and • appropriate in the discretion of the Yakima City Council, the Yakima City Council may amend the Bylaws by ordinance adopted at or after a public meeting held with notice to the District, the City of Selah and the City of Union Gap. Amendments to the Bylaws adopted by the Yakima City Council may not be further amended by the District for one year except with Yakima City Council approval. Section 4.4. Cities' Approval of Proposed Charter Amendments. Proposed Charter amendments adopted by the Board shall be submitted to each of the Parties to the Interlocal Agreement. The District's Charter may be amended only as provided in Article IX of the Charter. • -7- - P. \SC \SCO9R 02/03/14 • ARTICLE V Administrative Provisions Section 5.1. Books and Records. The District shall keep current and complete books and records of account and shall keep minutes of the proceedings of its Board and its committees having any of the authority of the Board. The District shall provide no less than 90 days' written notice to the City of Yakima, the City of Selah, and the City of Union Gap prior to the destruction of any permanent books and records. Section 5.2. Indemnification of Board Members. The District elects to defend and indemnify its present and former Board members and officers and their successors, spouses and marital communities to the full extent authorized by law and the Charter. In addition, the right of indemnification shall inure to each Board member or officer and his or her spouses and marital communities upon his or her appointment to the Board and in the event of his or her death shall extend to his or her heirs, legal representatives and estate. Each person who shall act as Board member or officer of the District shall be deemed to do so in reliance upon such indemnification and such rights shall not be exclusive of any other right that he or she may have. Section 5.3. Principal Office. The principal office of the District shall be located within the District. The Board shall establish the principal office by resolution. Section 5.4. Fiscal Year. The Fiscal Year of the District shall begin January 1 and end December 31 of each year, except the first fiscal year, which shall run from the date the Charter was issued to December 31, 2001. ARTICLE VI Approval of Bylaws APPROVED by Interlocal Agreement by and among the City of Yakima, Washington, the City of Selah, Washington and the City of Union Gap, Washington, • dated June 25, 2001, and by Ordinance No. 2001 -28 of the City of Yakima adopted on -8- P: \SC \SC09R 02/03/14 • June 19, 2001, motion of the City of Selah City Council approved on June 12, 2001, and Ordinance Nos. 2298 and 2300 of the City of Union Gap adopted on June 11, 2001 and June 25, 2001, respectively. • • -9- P: \SC\SC09R 07/03/14 411, RESOLUTION NO. R - 2001 - f) 2 A RESOLUTION of the City of Yakima, Washington, approving the lease of the Yakima Convention Center to the Yakima Regional Public Facilities District; and approving an agreement between the City and the Yakima Regional Public Facilities District for the purpose of financing, expanding, operating and maintaining the Yakima Convention Center. WHEREAS, the City of Yakima ( "Yakima ") currently owns and operates the Yakima Convention Center (the "Convention Center "), providing first -class meeting, ballroom and other event facilities; WHEREAS, the City of Yakima, together with the Cities of Selah and Union Gap, desire to expand the Convention Center to stimulate economic development by creating jobs; realize additional sales tax and lodging tax revenues; attract commercial business and tourism; and provide facilities for convention, special events and community events including public meetings and performing arts events for, among others in the region, the residents of Yakima (the "Project "); WHEREAS, pursuant to Chap. 35.57 RCW (the "Act ") the Cities of Yakima, Selah and • Union Gap have approved the creation of the Yakima Regional Public Facilities District (the "District ") to assist in completing the Project; WHEREAS, the District has access to several new revenue sources to complete the Project, including a state sales and use tax credit (the "Sales Tax "), which operates to shift 0.033% of the retail sales and use taxes generated within the District boundaries to the District; WHEREAS, the Act requires a 33% local match in order for the District to impose the Sales Tax and, accordingly, Yakima desires to transfer a leasehold interest in the Convention Center to the District in satisfaction of this match requirement (the value of the Convention Center and the underlying site is approximately $11,800,000); WHEREAS, the value of the leasehold interest is estimated to be significantly more than 33% of the net present value of projected Sales Taxes of the District (approximately $2.4 million), thereby satisfying the match requirement; WHEREAS, Yakima intends to issue bonds and apply the net proceeds to finance the Project, in consideration for the District's pledge of all Sales Tax receipts to Yakima to pay debt service on the bonds and other Project costs; WHEREAS, Yakima also intends to contribute lodging taxes to the District, in an amount, if any, determined annually by the Yakima City Council, to the operation of the • Convention Center, and will contribute revenues to the District in the event of a Sales Tax shortfall; 1 WHEREAS, Yakima will design and construct the Project, and will operate and maintain • the Convention Center, as expanded by the Project; WHEREAS, Yakima desires to enter into an agreement with the District providing for such financing, design, construction, operation and maintenance of the Convention Center, as expanded by the Project; NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Yakima, Washington: - Section 1. Approval of Lease Agreement. The City hereby approves the Lease Agreement with the District in substantially the form attached as Appendix A hereto (the "Lease Agreement "), with such changes consistent with the intent of the attached form as the City Manager shall approve. Section 2. Approval of Development Agreement. The City hereby approves the • Design, Development, Construction, Financing and Operating Agreement with the District, in substantially the form attached as Appendix B hereto (the "Development Agreement"), with such changes consistent with the intent of the attached form as the City Manager shall approve. The Development Agreement also constitutes a sublease of the Convention Center property back to the City. Section 3. Authorization of Documents. The City Manager is hereby authorized to execute the Lease Agreement and the Development Agreement. The City Manager and his designee, and each of the other appropriate officers, agents and representatives of Yakima are each hereby authorized and directed to take such steps, to do such other acts and things, and to execute such instruments as in their judgment may be necessary, appropriate or desirable in order to carry out the terms and provisions of, and complete the transactions contemplated by this resolution. Section 4. Effective Date. This Resolution shall be in effect from and after its adoption. • 2 • ADOPTED at a regular meeting of the Council of the City of Yakima, Washington this 19th day of June, 2001. ATTEST: CITY OF YAKIMA, WASHINGTON psi KAREN S. ROBERTS, CMC S/ MARY PLACE By City Clerk Mayor • 110 3 • APPENDIX A LEASE AGREEMENT LEASE AGREEMENT This LEASE AGREEMENT (the "Lease ") is made as of July 27, 2001, by and between the CITY OF YAKIMA, WASHINGTON (the "City "), a municipal corporation and first class city of the State of Washington, and the YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT (the "District ", and together with the City, the "Parties "), a public facilities district created by the City and the Cities of Selah and Union Gap, to lease certain real property of the City to the District to assist in the design, development, construction, financing and operation of the Yakima Convention Center, as expanded. Reference is made to that certain Design, Development, Construction and Financing Agreement dated July 27, 2001, between the undersigned (the "Development Agreement "). 1. Effective Date. This Lease and all of the terms and conditions hereof shall become effective as of the date set forth above; provided that all of the rights, duties and obligations of the City and the District, as lessor and lessee, respectively, under this Lease are not and shall not be effective unless and until the Development Agreement becomes effective. 2. Leased Premises. From and after commencement of the Lease Term (as defined herein), the City hereby leases to the District and the District hereby hires from the City certain improved real property located in the City of Yakima, Washington, legally described in Exhibit A attached hereto and by this reference incorporated (the "Premises ") and certain improvements thereon consisting of a convention center, and further improvements to be built on said Premises (the "Improvements "). Such Premises are subject to all easements, reservations, encumbrances and restrictions of record. 3. Term. The Lease Term of this Lease, and all obligation of the parties hereto as lessor and lessee, shall commence on the effective date of the Development Agreement and shall automatically terminate upon expiration or termination of the Development Agreement, unless otherwise terminated or amended as set forth herein. The District shall be entitled to possession of the Premises upon commencement of the Lease Term hereunder. 4. Prepaid Rent. Within 60 days after the commencement of the Lease Term, the District shall pay $50 to the City, which amount represents prepaid rent for the entire Lease Term. The Parties acknowledge that the value of the Premises and Improvements existing as of the date of this Lease is appraised at $11,800,000. The value of the leasehold interest in the Premises hereby transferred is significantly in excess of 33% of the net present value of sales taxes the District projects that it will collect under RCW 82.14.390 (approximately $2.4 million). It is the parties' intent that the City lease the Premises to the District in satisfaction of the local match requirement under RCW 82.14.390. 5. Use of the Premises. The Premises shall be used by the District solely for the operation and maintenance of the Premises and the lease back of the same to the City and for other District purposes consistent with the Development Agreement. At no time during the Lease Term shall the District use the Premises in whole or in part for any unlawful purpose, nor shall the District permit or commit any nuisance or illegal activity on the Premises. 6. Compliance with Laws. The District shall comply with all municipal, county, state and federal laws, rules, regulations or ordinances applicable to the Premises and the Improvements, and the ownership, use and occupancy thereof. 7. Liens and Encumbrances. _Except as expressly provided in this Lease, the District shall keep the Premises and the Improvements thereon free of mechanics' and materialmen's liens and other liens of like nature including tax liens, and will defend and hold the City harmless against such liens or claims and against all attorney's fees and other costs and expenses growing out of or incurred as a result of such liens or claims so long as such liens or claims arise from the actions of the District and not the actions of the City. The City shall defend and hold harmless the District against such liens or claims, fees, costs or expenses growing out of or incurred as a result of the actions of the City and not the actions of the District. Provided, however that the District may in good faith and at the District's own expense contest the validity of any such lien or claim, through litigation if necessary. In the event that the District contests any lien or claim, the District shall prosecute the contest with reasonable diligence, and the District shall at all times effectually stay or prevent any official or judicial sale of the Premises and/or Improvements and the District shall pay or otherwise satisfy any final judgment (unless the District shall appeal same, in which event the judgment from the last appeal shall be the applicable judgment), which may be entered against it and thereafter promptly procure record satisfaction of release of the lien or claim. In the event that the District fails to fully discharge or in good faith contest any such lien or claim that has been perfected, the City may pay the same, or any part thereof, and the City shall be the sole judge of the validity of said lien or claim. All amount so paid by the City shall be recoverable against the District. 8. Maintenance and Repair of Premises and Improvements. The District shall maintain the Premises and Improvements in good repair and working order, and shall make such repairs necessary to so maintain the Premises and Improvements. 9. Taxes and Assessments. The District covenants and agrees to pay all real estate taxes and assessments, if any, levied upon the Premises and Improvements that become due and payable during the Lease Term prior to delinquency, together with any leasehold excise tax that may be assessed against the District's leasehold interest hereunder; provided, that if any such taxes or assessments may be paid in installments without penalty, the District shall have the right to pay any such taxes or assessments in installments. The District may contest the legal validity or amount of any tax, assessment or other charge for which the District may be responsible under this Lease and may institute such proceedings as the District considers necessary. If the District contests any such tax, assessment or other charge, the District may withdraw or defer payment or pay under protest, provided the District shall protect the City and the Premises and Improvements from any lien by adequate surety bond or other appropriate security. The City appoints the District as the City's attorney -in -fact for the purpose of making all payments to any taxing authorities and for the purpose of contesting any taxes, assessments or other charges, conditioned on the District's preventing any lien from being levied on the Premises or Improvements or upon the City. However, if the District chooses not to contest any tax, assessment or charge, the District shall give the City timely notice thereof so that the City may contest any taxes, assessments or charges levied against the Premises or Improvements if the District fails to do so. 10. Utility Charges. The District shall be solely responsible for and shall promptly pay all charges for heat, water, light, gas, electricity, sewer and garbage or any other utility now or hereafter used or consumed on the Premises. In no event shall the City be liable for an interruption or failure in the supply of such utilities to the Premises. 11. Alterations. Except as permitted by the Development Agreement, the District shall not alter the Premises or the Improvements without the prior written consent of the City. 12. Insurance. The District shall, at its sole cost and expense, procure and maintain in force during the Lease Term all liability and other insurance required to be procured and maintained by the City under the Development Agreement. 13. Assignment. Except as otherwise provided in Section 22, the District shall not assign or transfer this Lease or any interest therein, nor shall this Lease or any interest therein be assignable or transferable by operation of law or by any process or proceeding of a court, or otherwise, without the prior written consent of the City, which consent shall not be unreasonably withheld. 14. Eminent Domain. A. The following definitions apply in construing provisions of this Lease relating to a taking of or damages to all or a part of the Premises or Improvements or interest therein by eminent domain or inverse condemnation. i. "Taking" means the taking or damaging, including severance damage, by eminent domain or inverse condemnation for any public or quasi - public use under any statute or any purchase or other acquisition under threat of condemnation. The taking shall be considered to take place as of the later of the date actual physical possession is taken by the condemnor; and the date on which the right to compensation and damages accrues under the law applicable to the Premises. ii. "Total taking" means the taking of the fee title to all of the Premises. iii. "Substantial taking" means the taking of so much of the Premises or Improvements or both that one or more of the following conditions result: (i) the conduct of the District's use(s) of the Premises would be substantially prevented or impaired, (ii) the remaining Premises could not be economically and feasibly be made to be so usable by the District, or (iii) the Improvements would be other than reasonably efficient or economic or could not economically and feasibly be made reasonably efficient or economic for the District's use. iv. "Partial taking" means any taking of the fee title that is not either a total taking or a substantial taking. v. "Award" means compensation paid for the taking, whether pursuant to judgment, by agreement or otherwise. B. The party receiving any notice of an intended taking or a willingness to make a negotiated private purchase in lieu of condemnation shall promptly give the other party written notice of the receipt and contents thereof. C. The City and the District shall each have the right to represent separately their respective interest in each proceeding or negotiation with respect to the taking or intended taking and to make full proof of their claim. No agreement, settlement, sale or other transfer to or with the condemning authority shall be made without the consent of the City, the District and all leasehold mortgagees. D. Upon a total taking, the City and the District shall be relieved of all obligations hereunder and this Lease shall terminate. Such termination of obligations shall not prejudice the District's right to recover compensation calculated in accordance with the terms hereof for the taking of the District's interest in the Premises and Improvements. The amount of damages resulting to the City and the District and to the respective interests of the City and the District in the Premises by reason of such taking shall be separately determined and computed by the court having jurisdiction over such eminent domain proceedings. Separate awards and judgment shall be made with respect to the damage to the City and the District and such awards shall be paid separately to the City and the District. If the City's and the District's damages (and awards therefore) cannot or will not be separately determined and computed by such court, then the award granted shall be divided between the City and the District in a fair and equitable manner, it being understood that the District's portion is to compensate the District for the loss of its leasehold interest hereunder, and the City's portion is to compensate the City for the loss of the right of reversion hereunder and its leasehold interest under the Development Agreement. E. Within 45 days after the District receives notice of an intended substantial taking, the District shall provide written notice of the same to the Yakima City Manager. Upon receipt of such notice the City Manager and the District shall confer as to the level of taking. The City shall have the final determination as to whether the taking should be treated as a total taking or partial taking. • F. Upon a partial taking, the Lease shall remain in full force and effect, covering the remaining Premises. The amount of damages resulting to the City and the District and their respective interests in the Premises and the Improvements shall be separately determined and computed by the court having jurisdiction over such eminent domain proceedings. Separate awards and judgments shall be made with respect to the damage to the • City and the District, and such awards shall be paid separately to the City and the District, respectively. G. If the City's and the District's damages (and the awards therefor) cannot or will not be determined or computed by the court, then all sums, including damages and interest, awarded for the fee title or leasehold, or both, shall be deposited promptly with a mutually agreed upon escrow agent and shall be equitably distributed and disbursed for the following purposes: i. To the District for the purpose of compensating the District for the value of its leasehold interest taken and for restoring any taken Improvements, plus any amount awarded to remove or relocate subtenants, plus any amount specifically awarded to or for the District for detriment to business and severance damages. ii. To the City, a sum equal to the value of the Premises taken. iii. To the City, for the purpose of compensating it for the value of the lost leasehold interest in the Development Agreement. iv. The remainder to the City, to be applied by the City to the repayment of Bonds or Additional Bonds (as defined in the Development Agreement) or to any other lawful use. H. Upon the taking for the temporary use of all or any part of the Premises or Improvements for a period of less than 12 months, the rent under this Lease shall not be affected in any way, and the District shall be entitled to any award for the use or estate taken. I. Nothing in this Lease shall be deemed to limit the City's right of eminent domain. 15. Indemnification. To the extent permitted by law, the District shall defend, indemnify, and hold the City and the Premises harmless from any and all damages or liabilities at any time occasioned by or arising out of (i) any act, activity or omission of the District, or anyone holding themselves out under the District (except the City), or (ii) the occupancy or use of the Premises or any part thereof, by or under the District, excluding the occupancy and use by the City, or (iii) the state or condition of the Premises and the Improvements or any part thereof, except to the extent the City shall itself be grossly negligent in the circumstances. Without limiting in any way the foregoing indemnification, the District agrees that during its use and occupancy of the Premises it shall comply with all laws, regulations, rules and ordinances of the City, the State and the federal government with regard to the use, storage, and disposal of hazardous and toxic substances on the Premises and the Improvements, and the District shall to the fullest extent permitted by law defend, indemnify and hold harmless the City for any and all damages or liabilities with regard to hazardous and toxic substances occasioned by and arising from the District's activities on the Premises and Improvements. 16. Default. Time is of the essence in this Lease, and in the event that (i) the District shall default in the payment of taxes, assessments, utility charges or any other amounts due hereunder, and such default is not caused by the City's failure to meet its obligations under the Development Agreement, and if such default shall continue for 10 days following written notice and demand; (ii) the District shall default in the performance or observation of any other terms, covenants, conditions or agreements of this Lease for 15 days after written notice and demand, or in the case of such default that cannot with due diligence and in good faith be cured within 15 days, the District fails to proceed promptly after such notice and with due diligence and in good faith, to begin to cure said default, (iii) there shall be filed against the District in any court or other tribunal pursuant to any statute or other rule of law, either of the United States or of any State or of any other authority now or hereafter exercising jurisdiction, a petition in bankruptcy or insolvency proceedings or for reorganization or for the appointment of a receiver or trustee of all or substantially all of the District's property, or for any other form of debtor relief, unless, such petition be filed against the District and if in good faith the District promptly thereafter commences and diligently prosecutes any and all proceedings appropriate to secure the dismissal of such petition and shall secure such dismissal within 60 days after the date of filing or the commencement of such proceedings, (iv) if the District vacates or abandons the Premises or Improvements, or (v) the District defaults under the Development Agreement and such default is not cured within the cure periods set forth in the Development Agreement, then and in any such case, at the City's option and in addition to all other rights and remedies, the City may, following the expiration of the cure period, if any, provided herein for such default, immediately declare the District's rights under this Lease terminated and enter the Premises and the Improvements using such force as may be necessary and repossess itself thereof, as of its former estate, and remove all persons and property from the Premises and the Improvements. Such reentry shall not constitute a termination of this Lease and, notwithstanding any such reentry, the liability of the District to pay amounts hereunder (including taxes, assessments and utilities) shall not be extinguished for the balance of the term of this Lease and the District shall make good to the City any deficiency arising from receipt by the City of any lesser amount than that hereinbefore agreed upon. 17. Waiver. Neither the acceptance of rental nor any other actions or omissions by the City at any time after the happening of any event authorizing the cancellation or forfeiture of this Lease shall operate as a waiver of any past or future violation, breach or failure to keep or perform any covenant hereof, to deprive the City of its right to cancel or forfeit this Lease, upon written notice provided for herein, at any time that cause for cancellation or forfeiture may exist, or be construed so as to at any future time estop the City from promptly exercising any other option, right, or remedy, including the right to declare an event of default hereunder that it may have under any term or provision of this Lease. 18. Force Majeure. Any prevention, delay, nonperformance or stoppage due to a "Force Majeure" shall excuse nonperformance for the period of such prevention, delay, nonperformance or stoppage, except for obligations imposed by this Lease for the payment of taxes or insurance. "Force Majeure" means any causes or conditions beyond a party's reasonable control (including, but not limited to fire, explosion, presence of a hazardous substance, earthquake, storm, flood, wind, drought or act of God or one or more of the elements; court order, legislation, delay or failure to act by civil, military or other governmental authority other than a party; strike, lockout, or other labor dispute; riot, insurrection, sabotage or war; breakdown or destruction of, or damage or casualty to, any equipment, facility or other property; any delay or failure by any third party to provide a necessary service, supply, part, equipment, personnel or other item; or interruption, suspension, curtailment or other disruption of a utility). 19. Access by the City. At any time during the Lease Term, the City and the City's agents shall have the right to enter the Premises and the Improvements on reasonable notice to examine the same. Nothing contained herein shall be construed to impose upon the City a duty to repair the Premises or Improvements. 20. Surrender of Premises. At the expiration or sooner termination of this Lease, the District shall immediately return to the City the Premises and Improvement in its condition following completion of the Project defined in the Development Agreement, except reasonable wear and tear and damage by fire or other casualty. Upon termination of the Lease for any reason the District shall be liable for all costs and expense of restoring the Premises and Improvements to the condition at the time of completion of the Project, but only if such removal and restoration is requested by the City. The District's obligation to perform the covenants of this Section shall survive the expiration or termination of this Lease. 21. Quiet Enjoyment. The District, upon fully complying with and promptly performing all of the terms, conditions, and covenants of this Lease on its part to be performed, shall have and quietly enjoy the Premises for the Lease Term. 22. Leasehold Mortgages. During the term of this Lease, the District shall not encumber its leasehold interest in the Premises or Improvements without the prior written consent of the City. Notwithstanding the foregoing, the District is authorized to assign its rights and interests in this Lease to any financial institution, municipal bond trustee, municipal bond insurer or other entity as may be necessary to accomplish the financing or refinancing of the Project, provided that the District must obtain the prior written consent of the Yakima City Manager. 23. Consent to Lease Back. The parties hereby acknowledge and agree that they would not execute this Lease but for the agreement by the City to operate and maintain the Improvements, finance, construct and operate the Project and lease back the Premises to the City pursuant to the Development Agreement. The obligations of the District under this Section 23 are integral to this Lease and may not be severed herefrom without invalidating the entire Lease. 24. Termination. This Lease may be terminated after notice and opportunity to cure of any event of default in accordance with Section 16. This Lease shall also automatically terminate upon termination of the Development Agreement. • 25. Amendment. This Lease may not be amended except by written instrument approved by resolution duly adopted by the District and approved by City ordinance or resolution. No course of dealing between the parties or delay in exercising any rights hereunder shall operate as a waiver of any rights of any party. 26. Entire Agreement. This Lease and any collateral instruments referenced herein contain the entire agreement between the parties hereto and shall not be modified or amended in any manner except by an instrument in writing executed by the parties hereto. Previous drafts of this Lease or any portions thereof shall not be utilized in any manner by either party should any dispute arise as to the intent of this Lease. 27. Notices. All notices which may be or are requested to be given pursuant to this Lease shall be deemed given when hand delivered, or when deposited in the U.S. Mail, postage prepaid, and marked registered or certified mail, return receipt requested, and addressed to the parties at the following addresses unless otherwise provided for herein: To the City: Richard A. Zais, Jr. City Manager City of Yakima 129 N. 2nd Street Yakima, WA 98901 With a copy to: Raymond L. Paolella, Esq. City Attorney City of Yakima 200 South Third Street Yakima, WA 98901 To the District: Richard E. Ostrander Chair Yakima Regional Public Facilities District 10 N. 8 Street Yakima, WA 98901 28. Severability. If any term or provision of this Lease or the application thereof to any person or circumstances shall, to any extent, be invalid or unenforceable (with the exception of Section 23), the remainder of this Lease or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby and shall continue in full force and effect. 29. No Merger. In no event shall (a) the leasehold interest, estate or rights of the District hereunder, (b) the rights of any leasehold mortgagee upon the District's leasehold interest, estate or rights hereunder, or (c) the leasehold interest, estate or rights of the District as sublessor under the Development Agreement, merge with any interest, estate or rights of the City as fee owner of the Premises and Improvements and lessor under this Lease or as sublessee under the Development Agreement, it being understood that such leasehold interest, estate and rights of the District hereunder and such rights of any leasehold mortgagee shall be deemed to be separate and distinct from the City's interest, estate or rights as fee owner of the Premises and Improvements, and as sublessee under the Development Agreement notwithstanding that any such interests, estate or rights shall at any time be held or vested in the same, person, corporation or other entity. 30. Limited Obligation of the District. The District is organized pursuant to Chapter 35.57 RCW. as a municipal corporation, separate and distinct from the City. All liabilities incurred by the District shall be satisfied exclusively from the assets, credit, and properties of the District, and no creditor or other person shall have any right of action against or recourse to the City or the Cities of Selah or Union Gap, their assets, credit, or services, on account of any debts, obligations, liabilities or acts or omissions of the District. 31. Attorneys' Fees. In the event of litigation between the City and the District or their successors or assigns to enforce a right or rights provided by or arising under this Lease, the non - prevailing party shall pay to the prevailing party reasonable attorneys' fees and other costs and expenses of litigation, including appeals. The amount of costs and attorneys' fees shall be included in any judgment or award for the prevailing party and the court or arbitrator in any such litigation shall determine which is the prevailing party. 32. Recording. The District shall not record this Lease without the written consent of the City; however, upon the request of either party hereto the other party shall join in the execution of a memorandum of this Lease for recording purposes. The memorandum of Lease shall describe the parties, the Premises and Improvements, and the Lease and shall incorporate this Lease and the Development Agreement by reference. • 33. Governing Law Tirne. This Lease and the rights of the parties hereto shall }�, be g ovemed and construed in accordance with the laws of the State of Washington. Time is of I the essence in this Lease. IN WITNESS WHEREOF, the parties hereto have executed this document as of the day and year first above written. DATED this of..\ , 2001. • CITY OF YAKIMVIA YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT i r- K , T Ifi I a a: + - v C r" -.\\- " B Chair Richard A. Zais, Jr. Board of Directors s. City Manager Boar • Attest: , YA,,/ . s e lr1. j ■ \j ia1� City ° Clerk , ' r i liGTO N Approved as to form: �-.d- :_k;=74& ,14--0117-& City Attorney • Certified to be a true and correct copy of the cumnaaact aet 0.70k2)/ -93 . ' original filed in my office. 2/2/62- • r cxvrms a= R -.?40 / — /ate , CITY CLERK B y / . . . _ f , 11.', Deputy 4 f V AKi — *.. , i S EAL ; . . y • I STATE OF WASHINGTON) • ) ss. COUNTY OF YAKIMA ) I certify that I know or have satisfactory - evidence that `' - . • ? :; ; is the person who appeared before me, and said person acknowledged that he /she signed this instrument, on oath stated that he /she was authorized to execute the instrument and acknowledged it as the O,(\ -t\ (nil, °,il,iit �, -0 of 0, zi, (';(rni:, to be the free and voluntary act of such party 'for the uses and purposes ni'ntioned in the instrument. Dated: - 1 ,;),'7 , 2001. , LL B n R• B Nota Public ,j �Q' �oN EXp 1 ry C l I V .._ 4 . , �a �R Print/Type Name ,__W n Y a ,- 0 G V C , y c� ,� M y commission exp �� MO a S). JUNE 9I �'�' (Use thi ' o OF , `ti'Ar'' I) STATE OF WASHINGTON ) ) ss. COUNTY OF YAKIMA ) I certify that I know of have satisfactory evidence that /6 , ,,, the person who appeared before me, and said person acknowledged that he /she signed this instrument, on oath stated that he /she was a thorize,�,d to execute _the instrument and acknowledged it as the CA'z/ ., of ie- 72 '(?" c go be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. .200.Z- Dated: , ,G( z,,/ 7 7- '/ ,-2e TI. - , oPss0NE p� Notary Pu _ ° °, 2 �� R FC Print/Type Name i� `y PK! KIM '' p� My commission expires - = : " - PUB , o SEAL i 9,. 'ARCH fi g` ",,.SHING- Use this spa � ( te ` >• fi !seal) Certified to be a true and correc copy of ( ie original filed in my office. V2., 0'7— CITY CLERK By _ / _.. %: 6 .1 Deputy I0 EXHIBIT A LEGAL DESCRIPTION OF PROPERTY Real property located at 10 No. 8th Street, Yakima, Washington, including accompanying parking lots: Lot 1 and the E 60 feet of Lots 15 & 16, Block 149, together with vacated alley; and Lots 1 -8 & the E 60 feet of Lots 9 -16, Block 150; together with vacated alley, and the E 220 feet of vacated "A" Street; and Lots 1 -4, 6 -8 and 9 -14, Block 170, together with vacated alley; and Lots 1 -3 and 14 -16, Block 169; All in Husons Addition to North Yakima as recorded in Vol. "A" of Plats, pg. 11, records of Yakima County, Washington. A -1 . • APPENDIX B DEVELOPMENT AGREEMENT K:\25739 \00049 \SC \SC N20UC A DESIGN, DEVELOPMENT, CONSTRUCTION, FINANCING AND OPERATING AGREEMENT BY AND BETWEEN CITY OF YAKIMA, WASHINGTON and YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT • July 27, 2001 • Public Facilities District Design, Development, Construction, Financing and Operating Agreement TABLE OF CONTENTS Page DEFINITIONS _ 2 II. INTENT AND RELATIONS 7 A. Intent 7 B. Description 8 C. Yakima's Regulatory Role Reserved 8 D. Governing Law and Venue 8 III. SCOPE OF COMMITMENTS 8 A. Commitments by the District 8 1. Repayment Obligation 8 2. District Funds 9 B. Commitments by Yakima 11 5. 1. Site Availability 11 2. Issuance of the Bonds 11 3. Application of Net Proceeds 11 4. Design, Development and Construction Responsibility 11 5. Operation and Maintenance Responsibility 11 6. Operation and Maintenance Costs 13 C. Commitment by Yakima to Replenish Sales Tax Shortfall 14 1. Funding Commitment 14 IV. .PROJECT COMPONENTS AND OPERATION CRITERIA 14 A. Project Components 14 B. Project Purpose 14 1. Public Access 15 2. Yakima Approval 15 C. Project Contracting and Management _ 15 V. DEVELOPMENT CRITERIA AND OVERSIGHT - 16 A. Generally 16 B. Standards of Performance 16 C. Development Schedule and Substantial Completion Date 16 VI. PROJECT COSTS 17 ' P :lSC1SC09H 01/06/14 - VII. INSURANCE 17 } A. Insurance Requirements 17 B. Insurance Policies 17 C. Adjustments 18 VIII. AS IS 18 A. Due Diligence 18 B. Acceptance 18 IX. LIABILITY _ 19 A. Indemnification of Yakima 19 X. DESTRUCTION OR CONDEMNATION 20 A. Total or Partial Destruction 20 B. Condemnation 20 XI. RIGHT TO ASSIGN OR OTHERWISE TRANSFER 21 A. Right to Transfer Agreement 21 XII. DEFAULT 21 A. Event of Default of the District 21 - 1 B. Force Majeure 22 XIII. REMEDIES 22 A. Remedies Upon Default 22 B. No Waiver by Yakima 23 C. Termination 23 D. Reversion of the Property to Yakima 23 E. Certain Provisions Survive Termination 24 XIV. REPRESENTATIONS AND WARRANTIES 24 A. Yakima's Representations 24 B. The District's Representations and Warranties 24 C. Tax Covenant 24 XV. LEASE BACK 25 A. Sublease 25 B. Rent 25 C. Lease Obligations Assumed 25 XVI. MISCELLANEOUS 25 ( A. Captions 25 B. Construction 25 -11- P:\SC4SC09H 01/06/14 C. Entire Agreement 25 D. Successors and Assigns 25 r E. Notices 26 F. Incorporation by Reference 26 G. Execution in Counterparts 26 H. Waiver 26 L Exculpation 27 J. Severability 27 K. Term 27 L. Amendments 27 EXHIBIT A — LEGAL DESCRIPTION OF THE PROPERTY EXHIBIT B — DEBT SERVICE SCHEDULE - APPENDIX 1 — PROJECT DOCUMENTS • i�. -111' P:1SC\SC09H 01/06/14 DESIGN, DEVELOPMENT, CONSTRUCTION, FINANCING AND OPERATING AGREEMENT This DESIGN, DEVELOPMENT, CONSTRUCTION, FINANCING AND OPERATING AGREEMENT (the "Agreement ") is made as of July 27, 2001, by and between the CITY OF YAKIMA, WASHINGTON ( "Yakima "), a municipal corporation and first class city of the State of Washington, and the YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT (the "District ", and together with Yakima, the "Parties "), a public facilities district created by Yakima and the Cities of Selah and Union Gap, to provide for the design, development, construction, financing and operation of the Yakima Convention Center, as expanded. WHEREAS, Yakima currently owns and operates the Yakima Convention Center (the "Convention Center "), providing first -class meeting, ballroom and other event facilities; WHEREAS, Yakima desires to expand the Convention Center (the "Project "); WHEREAS, the Convention Center, as expanded by the Project, will serve as a Regional Center under RCW 35.57.030, benefiting the region including residents of Yakima, the City of Selah and the City of Union Gap (the "Cities ") by stimulating economic development, creating jobs, realizing additional sales and lodging tax revenues, attracting commercial business and tourism, and providing facilities for convention, special events and community events including public meetings and performing arts event; WHEREAS, pursuant to Chap. 35.57 RCW (the "Act "), the Cities have entered into an Interlocal Agreement to form the District for the purpose of acquiring (by purchase, lease or otherwise), and assisting with the financing, development and operation of, the Convention Center as expanded by the Project; WHEREAS, under the Act, the District has access to several new revenue sources, including a state sales and use tax credit (the "Sales Tax "), which operates to shift 0.033% of the retail sales and use taxes generated within the District boundaries to the District; WHEREAS, the Act requires a local match of 33% of the net present value of the Sales Tax in order for the District to impose the Sales Tax; WHEREAS, Yakima has entered into a Lease Agreement transferring a leasehold interest in the Convention Center property described in Exhibit A hereto (the "Property ") (the value of the Convention Center property is approximately $11,800,000) to the. District in satisfaction of this match requirement (approximately $2.4 million); WHEREAS, the District will lease back the Property to Yakima pursuant to this Agreement; WHEREAS, subject to certain limitations set forth herein, Yakima will issue bonds to finance the Project, in consideration for the District's pledge of Sales Tax receipts to pay debt service on the bonds and other Regional Center costs; WHEREAS, Yakima will apply the net proceeds of the bonds to design, develop and construct the Project, under the terms set forth herein; WHEREAS, to provide for stable financing and operation of the Project in light of the cyclical nature of Sales Taxes, Yakima wishes to provide additional funding in the event of a Sales Tax shortfall; and WHEREAS, Yakima will operate the Convention Center, as expanded by the Project, and will apply certain City lodging taxes (in an amount, if any, determined annually by the City Council) to pay a portion of the costs of operation and maintenance; WHEREAS, the Parties desire that Yakima finance, design, develop and operate the Convention Center as expanded by the Project on the terms set forth herein, and the District and Yakima assist in financing the Project, also on the terms set forth herein; NOW, THEREFORE, in consideration of the mutual undertaking and promises contained herein, and the benefits to be realized by each Party including the benefits to the general public in the region by the completion and operation of the Project, the Parties agree as follows: I. DEFINITIONS For purposes of this Agreement, and any agreements supplemental hereto, the terms defined in this Article shall have the following meanings, except as herein otherwise expressly provided: Additional Bonds means Completion Bonds or Refunding Bonds issued by Yakima. Additional Revenue means all revenue received by the District (or by Yakima on behalf of the District), including gifts, grants, donations, Admission Charges, Admission Taxes, Parking Charges, Parking Taxes, Voted Sales Tax, and any other revenue derived from the ownership or operation of the facilities of the District, including investment income; but excluding Sales Tax Revenue and amounts received from Yakima pursuant to Section III(C) (including investment earnings thereon). Administrative Costs means the costs of the District incurred in administering the District and this Agreement. Administrative Costs shall be specified in the District's annual budget submitted to Yakima for approval and to the Cities of Selah and Union Gap for review and comment. Admission Charge means any charge imposed by the District (or by Yakima on behalf of the District) for admission to its facilities, including charges for season tickets or subscriptions; cover charges, or charges for use of seats and tables, and other similar accommodations; charges • ', -2- P:1SC\SCO9H 01 /08 /14 I • for food and refreshment if free entertainment, recreation, or amusement is provided; charges for ■ rental or use of equipment or facilities for purposes of recreation or amusement; and automobile parking charges if the amount of the charge is determined according to the number of passengers in the automobile. Admission Tax means any tax imposed by the District pursuant to RCW 35.57.100 to be paid by any person who pays an Admission Charge. Agreement means this Design, Development, Construction, Financing and Operating Agreement. Beneficial Occupancy shall mean when the Project is granted a temporary or permanent Certificate of Occupancy for the Convention Center as expanded by the Project from Yakima's building official. Bond Counsel means a firm of lawyers nationally recognized and accepted as bond counsel and so employed by Yakima. Bond Ordinance means the ordinance(s) of the Yakima Council authorizing the issuance of the Bonds and any amendments. Bonds means the bonds, notes or other evidence's of indebtedness issued by Yakima ) pursuant to and under authority of the Bond Ordinance to finance or refinance the Project. Yakima reserves the right not to issue the Bonds if, at the time the Bonds are to be sold, the total interest cost on the Bonds exceeds 5.55 %, or if the financing is determined to no longer be economical. Board means the governing body vested with the management of the affairs of the District. Charter means the Charter of the District, issued pursuant to the Interlocal Agreement, as amended from time to time. Code means the Internal Revenue Code of 1986, as amended, and all applicable regulations and rulings thereunder. Completion Bonds means additional bonds of Yakima issued to pay Costs of the Project. Costs of the Project means all capital costs that are paid or incurred by Yakima in connection with the design, development and construction of the Project, including, but not limited to all or a portion of the interest on Bonds during the period of construction of such improvements, and for a period of time thereafter; amounts required to meet any reserve requirement for the Bonds; the cost of paying or reimbursing Yakima or any fund thereof for expenses, including planning, permitting and design expenses, incident and properly allocable to the Project; and all other items of expense incident and properly allocable to designing, -3- P:■SClSC09H 01/06/14 developing and constructing the Project, financing the Project and placing the Project in I operation. Debt Service means the amount to be paid on the next succeeding Payment Date to pay the principal of, premium, if any, and interest on Bonds and any Additional Bonds coming due on such Payment Date. A schedule setting forth Debt Service to be paid on the Bonds and any Additional Bonds shall be attached as Exhibit B at such time as the Bonds or any Additional Bonds are issued. Debt Service Fund means the special fund(s) or account(s) established by Yakima under the Bond Ordinance or a Supplemental Bond Ordinance for the purpose of paying the principal of, interest on and redemption price, if any, of Bonds and/or any Additional Bonds. Debt Service Reserve Fund means the Debt Service Reserve Fund (or Account), if any, established by Yakima under the Bond Ordinance or Supplemental Bond Ordinance, which secures the Bonds and/or any Additional Bonds. Debt Service Reserve Fund Requirement means the amount required to be deposited to the Debt Service Reserve Fund, as established in the Bond Ordinance. District means the public facilities district created pursuant to the Interlocal Agreement. Event(s) of Default shall be as defined in Article IV herein. • Favorable Opinion of Bond Counsel means a written legal opinion of Bond Counsel addressed to Yakima, to the effect that such action is permitted under the laws of the State and under applicable ordinances of the Yakima Council, including the Bond Ordinance and any Supplemental Bond Ordinance, and will not impair the exclusion of interest on a Bond or any other bonds of Yakima from gross income for federal income tax purposes under the Code (subject to the inclusion of any exceptions contained in the opinion delivered upon original issuance of such bond). Force Majeure means any causes or conditions beyond a Party's reasonable control (including, but not limited to fire, explosion, presence of a hazardous substance, earthquake, storm, flood, wind, drought or act of God or one or more of the elements; court order, legislation, delay or failure to act by civil, military or other governmental authority other than a party; strike, lockout, or other labor dispute; riot, insurrection, sabotage or war; breakdown or destruction of, or damage or casualty to, any equipment, facility or other property; any delay or failure by any third party to provide a necessary service, supply, part, equipment, personnel or other item; or interruption, suspension, curtailment or other disruption of a utility). Governmental Authority shall mean any board, bureau, commission, department, or body . of any municipal, county, state, or federal governmental or quasi - governmental unit, or any subdivision thereof, having, asserting, or acquiring jurisdiction over the Property or the management, operation, use, or improvement thereof. -.4- P:lsC1sC09H 01/06/14 • Improvements shall mean all buildings, structures, fixtures, improvements and equipment constructed or located on the Property, including, but not limited to, the structure of the Convention Center and the parking facilities, elevator(s), lighting, seating, carpeting, HVAC, plumbing, electrical and mechanical systems. Insurance Proceeds mean the greater of (i) the proceeds from the insurance policies actually maintained by Yakima with respect to the Convention Center or Project; or (ii) the proceeds that would have been available had Yakima maintained the insurance policies required to be maintained by Yakima under this Agreement. Interlocal Agreement means the Interlocal Financing Agreement between the Cities creating the District. Law(s) and Ordinance(s) shall mean all present and future applicable laws, ordinances, rules, regulations, resolutions, permits, authorizations, orders and requirements of all federal, state, county and municipal governments, the departments, bureaus or commissions thereof, authorities, boards or officers, any national or local board of fire underwriters, or any other body or bodies exercising similar functions having or acquiring jurisdiction over all or any part of the Property, including Yakima acting in its governmental capacity. Lodging Taxes means lodging taxes received by Yakima pursuant to Chap. 67 RCW. Net Proceeds, when used with reference to the Bonds, means the principal amount of -_.. such Bonds, plus original issue premium, if any, and less original issue discount, if any, and less the proceeds of the Bonds used to pay costs of issuance or deposited in the Debt Service Reserve Fund and/or the PFD Revenue Reserve Fund. Operating Manual means the Operating Standards Manual for the expanded Convention Center. 4 Operation and Maintenance Costs means all necessary costs to Yakima of operating and maintaining the Convention Center as expanded by the Project, including but not limited to administrative and general expenses, costs of insurance (including reasonable contributions for self - insurance reserves, if any), consulting technical services and repairs and replacements (to the extent not properly classifiable as capital costs), real estate taxes, if any, but excluding depreciation (or reserves therefor), amortization of intangibles or other bookkeeping entries of a similar nature and debt service on the Bonds and any Additional Bonds. Outstanding, when used as of any particular time with reference to Bonds or Additional Bonds, means all Bonds or Additional Bonds authenticated and delivered by Yakima under the Bond Ordinance or any Supplemental Bond Ordinance except (1) Bonds or Additional Bonds theretofore cancelled by Yakima or surrendered to Yakima for cancellation; (2) Bonds or Additional Bonds with respect to which all liability of Yakima shall have been discharged in accordance with the Bond Ordinance or Supplemental Bond Ordinance, as applicable, and (3) Bonds or Additional Bonds for the transfer or exchange of or in lieu of or in substitution for which other Bonds or Additional Bonds shall have been authenticated and delivered by Yakima pursuant to the Bond Ordinance or Supplemental Bond Ordinance, as applicable. -5- P:\SC1SCO9H 01/06/14 Parking Charge means "vehicle parking charges" as defined in RCW 35.57.110._:- Parking Tax means a tax on any Parking Charge imposed at any parking facility that is owned or leased by the District pursuant to RCW 35.57.110. Payment Date means the dates specified in the Bond Ordinance, or any Supplemental Bond Ordinance, as dates for the payment of interest on, principal of or premium, if any, with respect to the Bonds or any Additional Bonds. Permitted Investments means investments permitted by State law for investment of Yakima and District funds, consistent with the terms of the Bonds and any Additional Bonds. PFD Revenue Reserve Fund means the PFD Revenue Reserve Fund (or Account), if any, established by Yakima under the Bond Ordinance or Supplemental Bond Ordinance. The amount of revenue consisting of the District's Sales Tax Revenue received by Yakima that shall be maintained in the PFD Revenue Reserve Fund shall be established in the Bond Ordinance. Predevelopment Costs means the cost of all planning, legal, architectural, engineering and other services incurred by Yakima in connection with the Project until the date of issuance of the Bonds. Project means the design, construction, and operation of the additions to the Convention Center, as described in the Project Documents. Project Documents means all design documents (including drawings describing the structural, mechanical, acoustical, lighting, and electrical systems of the Project, detailed site plans, preliminary specifications, and schematic design documents), construction documents (including all drawings and specifications necessary to completely describe the Project in detail to a contractor for the purposes of bidding and construction, schedules, plans and specifications, and the construction contract) and Project budgets (setting forth the construction contract cost, taxes, all contingencies, fees and allowances). Property shall mean the real property described in Exhibit A attached hereto or as hereafter amended. Refunding Bonds means bonds, notes or other evidence of indebtedness the proceeds of which will be used to refund Bonds. Sales Tax means the nonvoted sales and use tax to be imposed by the District in accordance with RCW 82.14.390 at a rate not to exceed 0.033% of the selling price in the case of a sales tax or value of the article used in the case of a use tax, which tax shall be deducted from the amount of tax otherwise required to be collected or paid over to the State's Department of Revenue and shall expire when the Bonds and any Additional Bonds are retired, or, in any event, not more than 25 years after the Sales Tax is first collected. • -6- PASC\SC09I$ 01/06/14 Sales Tax Revenue means all Sales Taxes received by the District. State means the State of Washington. Substantial Completion shall mean when the Beneficial Occupancy of the Convention Center as expanded by the Project is achieved. Supplemental Bond Ordinance means any ordinance adopted by the Yakima Council amending or supplementing the Bond Ordinance, including any ordinance adopted by the Yakima Council in connection with the issuance of Additional Bonds. Voted Sales Tax means any sales and use tax imposed by the District pursuant to RCW 82.14.048 and approved by the voters. Yakima means the City of Yakima, Washington, a municipal corporation of the State, as now or hereafter constituted. Yakima Council means the City Council of Yakima, or any successor thereto as provided by law. f II. INTENT AND RELATIONS [ ` A. Intent. 1. Financing. It is the intent of this Agreement that the District lease the Property to Yakima and that Yakima finance the Project. In consideration for Yakima's agreement to finance the Project, it is the intent of the Parties that the District transfer all Sales Tax Revenue to Yakima to pay Predevelopment Costs (to the extent not paid from Net Proceeds), Debt Service and other Regional Center costs including but not limited to funding and/or replenishing the Debt Service Reserve Fund and PFD Revenue Reserve Fund and reimbursing Yakima for deposits made to the Debt Service Fund pursuant to Section III(C). It is the intent of the Parties that, in the event that Yakima provides notice that amounts on deposit in the Debt Service Fund and the PFD Revenue Reserve Fund are projected to be insufficient (not taking into account amounts in the Debt Service Reserve Fund) for Yakima to pay Debt Service when due, Yakima will deposit sufficient funds to the Debt Service Fund to remedy such deficiency as set forth in Section III(C). 2. Development. It is the intent of this Agreement that Yakima design, develop and construct the Project in accordance with the Project Documents and the standards of performance set forth in Article V. This Agreement is intended by the Parties to establish the design, development and construction standards and other performance criteria for the Project. 3. Operation. It is the intent of the Parties that Yakima operate and maintain the Convention Center and the Project, and that Yakima retain all rents, receipts, profits and other revenues of the Convention Center as expanded by the Project. In consideration for Yakima's agreement to operate and maintain the Convention Center and the Project, it is the intent of the Parties that the District pay Additional Revenue, if any, to Yakima, and that Yakima -7- - P:LSC \SC09H 01/06/14 pay the District's Administrative Costs. In addition, the Parties intend that Yakima apply certain i. Lodging Taxes to pay a portion of Operation and Maintenance Costs, in an amount, if any, r'` determined on an annual basis by Yakima. B. Description. The Property is located at 10 North Eighth Street , Yakima, Washington 98901 -2515, as legally described on the attached Exhibit A. The Convention Center, as improved by the Project, will occupy approximately 47,000 square feet. C. Yakima's Regulatory Role Reserved. Any Yakima design review and approvals provided for herein are independent of, in addition to and do not in any way obligate Yakima with respect to usual and customary Yakima permitting, code compliance and other regulatory reviews. The outcome of any such regulatory review is independent of and is in no way biased, prejudiced or predetermined in any way by this Agreement. Nothing in this Agreement is intended or shall be construed to require that Yakima exercise its discretionary authority under its regulatory ordinances to further the Project nor bind Yakima to do so. Yakima will process applications for permits and approvals associated therewith as if such applications were made without any Yakima participation in such projects. D. Governing Law and Venue. This Agreement and the rights and obligations of the Parties shall be governed by, and construed and interpreted in accordance with, the laws of the State. Any suit filed between the Parties concerning this Agreement shall be commenced in the Superior Court in Yakima County. III. SCOPE OF COMMITMENTS A. Commitments by the District 1. Payment Obligation. (a) Payment of Debt Service and Predevelopment Costs. In consideration for Yakima's agreement to issue the Bonds and design, develop and construct the Project, the District shall pay all Sales Tax Revenue to Yakima to pay Yakima's Debt Service and Predevelopment Costs (to the extent not paid from Net Proceeds), and other Regional Center costs including but not limited to funding and/or replenishing the Debt Service Reserve Fund and PFD Revenue Reserve Fund and reimbursing Yakima for deposits made to the Debt Service Fund pursuant to Section III(C). (b) Pledge of Sales Tax Revenue, Additional Revenue and other Receipts of the District. The District hereby pledges Sales Tax Revenue and other amounts to be paid by the District to Yakima for payment of Debt Service, Predevelopment Costs (to the extent not paid from Net Proceeds), and other Regional Center costs including but not limited to funding and/or replenishing the Debt Service Reserve Fund and PFD Revenue Reserve Fund and reimbursing Yakima for deposits made to the Debt Service Fund pursuant to Section III(C). The obligation of the District to pay Sales Tax Revenue and other amounts due under the Agreement and to perform and observe the other obligations on its part contained herein shall be absolute and unconditional, and shall not be subject to diminution by setoff, counterclaim, abatement or -8- P:ISC\SCO9H 01/06/14 otherwise. The District's obligations under this Agreement shall continue in effect and shall survive the satisfaction of Yakima's obligations under the Bonds, the Bond Ordinance, any Additional Bonds, and any Supplemental Bond Ordinance until such time as all Predevelopment Costs and Debt Service have been 'paid, together with any other amounts owed to Yakima hereunder. The Parties acknowledge and agree that Yakima will pledge this Agreement, as well as the District's Sales Tax Revenue and other amounts to be paid by the District to Yakima, to the payment of the Bonds and any Additional Bonds. Such pledge will be material to the offer and sale of the Bonds, and will be disclosed to potential purchasers and purchasers of the Bonds. Bondholders will rely on this pledge in purchasing the Bonds. So long as the Bonds or any Additional Bonds are Outstanding, the District shall not issue bonds, or incur any other obligation, secured by Sales Tax Revenue or by Additional Revenue. (c) Revenue and Payment Reports. The District shall file annual financial statements and annual reports with the Cities, as required under Sections 8.5 and 8.6 of the Charter. Each such report shall bear a current date, be signed by an appropriate and duly authorized District officer and be supported by reasonable documentation sufficient to sustain the accuracy of the report. (d) Termination for Failure To Timely Pay. This Agreement is specifically conditioned upon the District's timely payment of amounts due hereunder. In the event that the District fails to transfer amounts as and when required to Yakima, Yakima may .terminate this Agreement pursuant to the provisions contained in Article XIII. 2. District Funds. The District shall establish the following Funds and accounts: Sales Tax Revenue Fund (or Account), Additional Revenue Fund (or Account), and the Administrative Fund (or Account). The District may, in its discretion, establish such additional accounts and subaccounts as the District deems necessary or useful, but the establishment of any such account or subaccount shall not alter or modify any of the requirements of this Agreement with respect to a deposit or use of money in the funds. (a) Sales Tax Revenue Fund. The District shall establish a Sales Tax Revenue Fund and shall deposit in the Sales Tax Revenue Fund all Sales Tax Revenue and all net earnings on investments of money in the Sales Tax Revenue Fund. Amounts in the Sales Tax Revenue Fund may be invested in Permitted Investments. The District shall maintain records sufficient to permit calculation of the income on investments and interest earned on deposit of amounts held in the Sales Tax Revenue Fund, and such income and interest shall become part of the Sales Tax Revenue Fund unless otherwise applied in accordance with this Section. The money and investments in the Sales Tax Revenue Fund are irrevocably pledged and shall be used and transferred by the District as follows: Within three working days after receipt, all amounts on deposit in the Sales Tax Revenue Fund to Yakima to pay Debt Service, Predevelopment Costs and other Regional Center costs, including but not limited to funding and/or replenishing the Debt Service Reserve Fund and PFD Revenue Reserve Fund and reimbursing Yakima for deposits made to the Debt Service Fund pursuant to Section III(C). - 9' P:1SC\SC09H 01/06/14 (b) Additional Revenue Fund. The District shall deposit in the Additional Revenue Fund all Additional Revenue received by the District and all net earnings on investments of money in the Additional Revenue Fund. Amounts received from Yakima to pay . Administrative Costs shall be deposited to the Additional Revenue Fund. Amounts in the Additional Revenue Fund may be invested in Permitted Investments. The District shall maintain records sufficient to permit calculation of the income on investments and interest earned on deposit of amounts held in the Additional Revenue Fund, and such income and interest shall become part of the Additional Revenue Fund unless otherwise applied in accordance with this Section. The money and investments in the Additional Revenue Fund are irrevocably pledged and shall be used and transferred by the District at least monthly as follows and in the following order of priority: _ (i) To the Administrative Fund to pay Administrative Costs; and (ii) The remainder, to Yakima to pay Operation and Maintenance Costs. To the extent that Additional Revenues are received by Yakima on behalf of the District, Yakima shall apply such Additional Revenues to pay (i) Administrative Costs and/or (ii) Operation and Maintenance Costs. (c) Administrative Fund. The District shall establish an Administrative Fund. Amounts transferred from the Additional Revenue Fund to pay Administrative Costs pursuant to subsection (b) shall be deposited to the Administrative Fund. - shall be used to pay Administrative Costs. Amounts in the Administrative Fund may be invested in Permitted Investments. The District shall maintain records sufficient to permit calculation of the income on investments and interest earned on deposit of amounts held in the Administrative Fund, and such income and interest shall become part of the Administrative Fund unless otherwise applied in accordance with this Section. (d) Liens. Except as permitted under this Agreement, the District shall not create any lien upon funds created hereunder other than the lien hereby created. -10- P:1SC1SC09H 01/06/14 B. Commitments by Yakima 1. Site Availability. Pursuant to the terms of the Lease Agreement between Yakima and District, dated July 27, 2001, Yakima will lease to the District the Property described in Exhibit A. The Parties agree that the leasehold interest in the Property is donated (for nominal consideration in the form of $50 in rent) by Yakima to the District to be used for the construction of a Regional Center, as defined in RCW 35.57.030. Moreover, the Parties agree that the value of the Property is $11,800,000. The value of the leasehold interest in this Property transferred by the Lease Agreement significantly exceeds 33% of the net present value of the total Sales Taxes projected to be received by the District (approximately $2.4 million). 2. Issuance of the Bonds. Yakima agrees to issue the Bonds and Completion Bonds, if necessary. Yakima reserves the right not to issue the Bonds if, at the time the Bonds are to be sold, the total interest cost on the Bonds exceeds 5.55 %, or if the financing is determined to no longer be economical. The Bonds shall be in an aggregate principal amount to be determined. by Yakima, at least equal to the projected Costs of the Project, Predevelopment Costs, amounts to pay costs of issuance and amounts to be deposited to the Debt Service Reserve Fund, if any. 3. Application of Net Proceeds. Yakima agrees to apply Net Proceeds to pay Predevelopment Costs and Costs of the Project as follows. (a) Predevelopment Costs. Yakima has incurred and will continue to incur Predevelopment Costs for the benefit of the District. Yakima will pay these Predevelopment Costs from the District's Sales Tax Revenue received by Yakima to the extent that Predevelopment Costs are not paid from Net Proceeds (at Yakima's election). (b) Costs of the Project. In addition, Yakima will apply Net Proceeds to pay Costs of the Project. 4. Design, Development and Construction Responsibility. Yakima shall design or contract for the design of the Project and construct or contract for the construction of the Project, in accordance with the Project Documents and with the standards of performance set forth in Article V and elsewhere in this Agreement. 5. Operation and Maintenance Responsibility. (a) Operations and Maintenance — Generally. Yakima agrees to operate and maintain the Improvements including the Convention Center, related parking and, upon Substantial Completion, the Project, on the terms and in accordance with the standards set forth herein. Yakima shall operate and maintain the Improvements including the Convention Center, related parking and the Project as a first class convention center facility, to be kept at all times in a safe and clean condition. Yakima shall provide (directly or by contract) all management, supervision, personnel, materials, equipment, services and supplies necessary to operate, maintain and repair of the -11- P: \ SC1SC09H 01/06/14 • Improvements and shall take all reasonable precautions to prevent damage, injury or loss by i reason of or related to the operations and maintenance of the Improvements to any person or property. Yakima shall hire an appropriate number of qualified employees to operate and maintain the Improvements consistent with the best management practices. Yakima shall properly supervise and direct its employees and other parties implementing the performance of its duties, obligations and functions under this Agreement. Yakima shall be fully responsible for the performance of such employees and other parties. Yakima shall comply with all applicable Laws and Ordinances relating to the safety of persons or property or their protection from damage, injury or loss. Yakima shall obtain all statements, certificates, permits, licenses, rights, and approvals, whether public, private, local, state or federal, that are necessary or appropriate to the continued operation of the Improvements as a first class convention center. Yakima shall undertake all modifications to the Improvements required to comply with state, federal and local laws, rules, regulations, judgments, orders and decrees. Prior to Substantial Completion of the Project, Yakima shall- provide pre- opening services, including start-up of the Project, mobilization of staff and services, and performance of marketing and booking plans. (b) Compliance with the Operating Manual. Yakima shall maintain the Improvements in substantial compliance with the terms of the Operating Manual during the term of this Agreement. The Operating Manual shall not be amended except with the written approval of the Yakima City Manager or his or her designee. The Operating Manual shall not be revised in a manner that will impair the security of the owners of the Bonds or any Additional Bonds. (c) Insurance. Yakima shall maintain insurance as set forth in Article VII. • -12- P:GSC\SC09H 01/06/14 • 6. Operation and Maintenance Costs. (a) Obligation To Pay Operation and Maintenance Costs and Administrative Costs; Right to Receive all Rents and Operating Revenues. Yakima shall pay Operation and Maintenance Costs from revenues derived from operation of the Convention Center and the Project, Additional Revenues received from the District, from Lodging Taxes, or other Yakima funds, as set forth below. Within a reasonable period after receipt of an invoice therefor, Yakima shall pay to the District its Administrative Costs as set forth in the District's budget approved by Yakima. All rents, receipts, profits and other revenue derived from the operation of the Convention Center and the Project shall be retained by, and shall be the property of, Yakima, and shall be applied to pay Operation and Maintenance Costs or any other lawful purposes of Yakima. (b) Lodging Taxes. To the extent not paid from revenues derived from operation of the Convention Center and the Project, Additional Revenues received from the District, or other Yakima funds, Yakima will apply Lodging Taxes to pay Operation and Maintenance Costs. The amount of Lodging Taxes to be applied to this purpose in any year shall be determined by the Yakima Council in its sole discretion as part of its annual budget process. The amount of Lodging Taxes to be applied to pay Operation and Maintenance Costs may vary ) from year to year and may equal zero in some years. In any event, the amount of Lodging Taxes to be applied shall not exceed the amount available after payment of debt service on Yakima's 'outstanding bonds (including all or a portion of the Bonds) to which these taxes are pledged. Yakima's obligation hereunder is limited only to the amounts designated for this purpose by the Yakima Council. Yakima does not hereby guarantee any obligations or liability of the District. It is expressly understood and agreed that any obligation or liability arising out of and/or incurred by the District by reason of this Agreement, or the carrying out of any activity in connection therewith, shall be satisfied exclusively from the assets and credit of the District, and no creditor or any other person or entity shall have any recourse to any of the assets, credit, or services of Yakima on account of any debts, obligations, or liabilities of the District (c) Amounts Remitted to Yakima. Amounts remitted to Yakima pursuant to Section III(A)(2)(a) and (2)(b)(ii) shall be used by Yakima for the following purposes. Receipts that are Sales Tax Revenue shall be used to pay Predevelopment Costs (to the extent not paid from Net Proceeds), Debt Service, and for the purposes set forth in RCW 35.57.020, as the same may be amended (acquiring, constructing, owning, remodeling, maintaining, equipping, reequipping, repairing, financing, and operating one or more Regional Centers). Receipts that are Additional Revenues shall be applied to pay Operation and Maintenance Costs. Yakima's obligation hereunder is limited only to the amounts received from the District. • (: Yakima does not hereby guaranty any debt obligations or liability of the District. -13- P:lSC1sco9H 01/06114 All amounts remitted to Yakima pursuant to Section III(A)(2)(a) and 2(b)(ii), together ! with all rents, receipts, profits and other revenues derived by Yakima from its operation of the (:_ Convention Center, shall be retained by and be the property of Yakima to be applied to pay Operation and Maintenance Costs (directly or by contract) or for other lawful purposes of Yakima . It is the Parties intent that all such amounts shall be Yakima funds, accounted for in Yakima's books and accounts. (d) Additional Support. To the extent, as from time to time authorized by the Yakima City Manager, Yakima will utilize its employees to provide oversight and administrative assistance in working with District to achieve the mutual goals and objectives of the Cities and District under this Agreement. Unless otherwise specified in this Agreement or applicable law, actions to be taken or decisions to be made by Yakima will be the responsibility of the Yakima City Manager or his or her designee. Yakima hereby grants to the extent permitted by law such person or persons the power, authority, and right to carry out all such responsibilities. C. Commitment by Yakima to Replenish Sales Tax Shortfall - 1. Funding Commitment. Yakima shall provide notice to the District in the event that amounts in the Debt Service Fund and the PFD Revenue Reserve Fund (not taking into account amounts in the Debt Service Reserve Fund) are projected to be insufficient to pay Debt Service on any Payment Date. In such event, Yakima will deposit sufficient funds to the Debt Service Fund to remedy such deficiency. Yakima's obligation hereunder is limited only to the amount to be paid to replenish any projected deficiency in the Debt Service Fund. Yakima does not hereby guarantee any debt obligations or liability of the District. It is expressly understood and agreed that any obligation or liability arising out of and/or incurred by the District by reason of this Agreement, or the carrying out of any activity in connection therewith, shall be satisfied exclusively from the assets 0 and credit of the District, and no creditor or any other person or entity shall have any recourse to any of the assets, credit, or services of Yakima on account of any debts, obligations, or liabilities of District. IV. PROJECT COMPONENTS AND OPERATION CRITERIA A. Project Components. Yakima shall finance, design and construct the Project in accordance with the Project Documents, and in accordance with the performance specifications set forth herein. B. Project Purpose. The Project is being constructed to serve the needs of the region, including the residents of Yakima, the City of Selah and the City of Union Gap. Following Project completion, Yakima shall be solely responsible for management, operation and maintenance of the Convention Center, as expanded by the Project, consistent with the terms of this Agreement and the Operating Manual. -14- P:\SC13C091-1 01/06/14 1. Public Access. Yakima shall provide regular hours during which the Convention Center will be open to the public (subject to reasonable Admission Charges); provide public programs; and make available for reasonable public use any ballroom, auditorium, meeting rooms or other public spaces in the Convention Center (subject to reasonable security measures). 2. Yakima Approval. In consideration of Yakima's obligations hereunder, the District agrees that the following shall be subject to the approval of the Yakima Council: (a) Approval of the Yakima Council: (i) The District shall not impose Admission Charges or Parking Charges without the prior approval of the Yakima Council, as set forth in the Interlocal Agreement and the Charter. (ii) The District shall not impose Admission Taxes or Parking Taxes without the prior approval of the Yakima Council. (iii) The District's annual budget, including Administrative Costs, shall be subject to the approval of the Yakima Council and to review and comment by the Cities of Selah and Union Gap. (iv) The District shall not authorize or engage in gambling activities or • authorize or publicly display any artwork without the prior approval of the Yakima Council. (v) Any acquisition or transfer of real and personal property with a value over $100,000 by lease, sublease, purchase, or sale by the District shall be subject to approval by the Yakima Council. C. Project Contracting and Management 1. Yakima shall construct the Project according to the Project Documents. 2. Yakima will select the contractor(s) for the Project through a competitive bidding process under the Laws of the State, pursuant to procedures designed to provide maximum practical competition by and from qualified contractors. 3. Yakima shall take reasonable precautions to prevent unnecessary damage, injury or loss to property, structures, and vegetation in the Project area and shall at its own expense repair any damage thereto caused by its, or its contractors', actions. Yakima shall require its contractors to take any and all precautions that may be necessary to render all portions of the Project and any adjacent areas affected by the Project secure in every respect, and to decrease the likelihood of accidents from any cause, and to avoid contingencies that are liable to delay the Project. Yakima shall require its contractors to exercise utmost care when using explosives or other hazardous materials or equipment, and when utilizing unusual methods. -15- P:ISC\SC09-f 01/06/14 These requirements shall in no way relieve Yakima of its responsibility for safety on the Project. ( The District shall not be responsible for any unsafe conditions. : —) V. DEVELOPMENT CRITERIA AND OVERSIGHT : y A. Generally. Except as otherwise provided in this Section, the Parties hereby agree that Yakima shall have sole responsibility for construction of the Project and shall be responsible for obtaining all necessary land use, building and mechanical permits, and all other required permits or approvals for construction of the Project. Yakima shall promptly comply with all applicable Laws and Ordinances as they relate to the Property and Improvements. Yakima's responsibility to finance such construction is limited to the extent of Net Proceeds. B. Standards of Performance. Yakima shall perform the terms of this Agreement according to the following standards: 1. Performance in a good and workmanlike manner and in compliance with all applicable laws and ordinances, rules, and regulations. 2. Use of materials that are of first class quality and workmanship. 3. Maintenance and warranty of all portions of the Project consistent with the . Project Documents. C. Development Schedule and Substantial Completion Date. • 1. RCW 82.14.390 currently requires that construction of the Project commence before January 1, 2003. Accordingly, Yakima shall commence construction of the Project before January 1, 2003, or such later start date set forth in any amendment to RCW 82.14.390 (the "Date of Commencement "). 2. Yakima shall pursue the design and construction of the Project to achieve Substantial Completion within 24 months after the Date of " Commencement, excluding time periods when the design, construction or development of the Project is unavoidably delayed by reasons of Force Majeure; provided, however, that said date may be extended by the Yakima City Manager. VL PROJECT COSTS. Yakima shall finance, design, construct, and assume the risk of loss of the Project from Net Proceeds and from other amounts paid by the District to Yakima pursuant to the Agreement. -16- PAsc\sco9H 01/06/14 VII. INSURANCE A. Insurance Requirements. Yakima shall maintain and keep in force insurance covering all aspects of the construction activity on the Property, including but not limited to the following requirements: 1. Builder's All Risk Comprehensive Coverage. Yakima shall keep, or shall require the construction contractor to keep, all Project components, including but not limited to the Convention Center and parking facilities, insured for Builders All Risk Comprehensive Coverage including earthquake and flood in any event in an amount not less than one hundred percent (100 %) of the then_ full "Replacement Cost," being the cost of replacing the Project components, and all fixtures, equipment, improvements and betterments thereto. 2. Commercial General Liability. Yakima shall carry, and shall require its construction contractor to carry, Commercial General Liability insurance providing coverage against claims for bodily injury, death or property damage on the Property with broad form liability and property damage endorsement, such insurance to afford minimum protection, during the term of the construction phase, and written for combined single limits of liability of no less than Ten Million Dollars ($10,000,000), per occurrence, said amount to be adjusted from time to time with coverage deemed customary under like conditions. 3. Property Damage Insurance. Yakima shall carry property insurance ) covering the Property including all Improvements, including earthquake, flood, boiler and machinery insurance, in an amount equal to at least one hundred percent (100 %) of the replacement cost of all Improvements. Such insurance shall contain coverage against loss or damage by perils no less broad than the current edition of the ISO Special Form, 1985 Edition. Yakima shall be responsible for payment of any deductibles under said insurance policies and any costs of restoration resulting from any uninsured or underinsured losses. B. Insurance Policies. Insurance a e policies required herein: 1. Shall be issued by companies authorized to do business in the State with the following qualifications: a. The companies must be rated no less than "A," as to general policy holders rating and no less than "X" as to financial category in accordance with the latest edition of Best's Key Rating Guide, published by A.M. Best Company, Incorporated. b. The policies shall be issued as primary policies. 2. Each such policy or certificate of insurance mentioned and required in this Section VII shall have attached thereto (1) an endorsement that such policy shall not be canceled or materially changed without at least 30 days' prior written notice to the District and Yakima; (2) an endorsement to the effect that the insurance as to any one insured shall not be invalidated by any act or neglect of any other insured; (3) an endorsement pursuant to which the insurance -17- - P:1SC4SC09H 01/06/14 carrier waives all rights of subrogation against the Parties hereto; and (4) an endorsement pursuant to which this insurance is primary and noncontributory. 3. The certificates of insurance and insurance policies shall be furnished to the District and Yakima prior to commencing any construction under this Agreement. The certificate(s) shall clearly indicate the insurance and the type, amount and classification, as required for strict compliance with this Section VII. 4. Cancellation of any insurance or non - payment by Yakima of any premium for any insurance policies required by this Agreement shall constitute an Event of Default under Section XII of this Agreement. C. Adjustments. The types of policies, risks insured, coverage amounts, deductibles and endorsements may be adjusted from time to time as the District and Yakima may mutually determine. VIII. AS IS A. Due Diligence. The District acknowledges that it has diligently investigated to its full satisfaction the physical condition of the Property and all other matters that in the District's judgment affect the District's use of the Property and the District's willingness to enter into this Agreement. The District acknowledges that except as expressly provided for in this Agreement, neither Yakima nor any employee, officer, agent or representative of Yakima has made any representations or warranties whatsoever regarding the Property or this transaction or any facts 4:, relating thereto, including, without limitation, any representations or warranties concerning the physical condition of the Property, access, zoning laws, environmental matters, suitability, feasibility, utilities, or any other matter affecting the Property or the use thereof. B. Acceptance. Except as expressly provided for in this Agreement, Yakima shall accept the Property "as is" and "where is" with all faults, of any nature or kind, without any representations or warranties, express or implied or statutory of any kind whatsoever by the District or any employee, officer, agent or representative of the District. Upon acceptance by Yakima of the Property under this Agreement, then Yakima shall be deemed to have accepted the Property and to have waived and released its right to recover from the District any and all damages, losses liabilities, costs, or expenses whatsoever (including attorneys' fees and costs) . and claims therefor, whether direct or indirect, known or unknown, foreseen or unforeseen, which may arise on account of or in any way arising out of or connected with the physical condition of the Property or any Law or Ordinance. C. Environmental Contamination. Yakima agrees to indemnify and hold harmless the District for any environmental contamination existing as of the date of this Agreement. Yakima agrees to design and develop the Project in such a manner as to minimize, to the extent financially practicable, the excavation of native soils. In the event Yakima encounters contaminated soils, Yakima shall be responsible for all costs of remediating the contaminated soil, and for seeking recovery from responsible parties. -18- P:SSC1SC09H 01/06/14 II The Parties agree that in the event contaminated soils are encountered and any Party incurs remediation costs, the Parties shall fully cooperate in pursuing claims against those entities that may be liable. IX LIABILITY A. Indemnification of Yakima. During the term of this Agreement, to the maximum extent not prohibited by law, the District agrees to and shall indemnify and hold Yakima harmless from and against all liability, loss, damage, cost, or expenses (including reasonable attorneys' fees and court costs, amounts paid in settlements and judgment) arising from or as a result of the death of any person or of any accident, injury, loss or damage whatsoever to any person or to the property of any person that occurs on or adjacent to the Property and that is directly or indirectly caused by the acts, errors, or omissions of the District or its officers, agents, servants, employees, officers, contractors or subcontractors. The District shall not be responsible for (and such indemnity shall not apply to) the gross negligence or willful misconduct of Yakima, or their respective officials, servants, employees or officers. X DESTRUCTION OR CONDEMNATION f f ,� A. Total or Partial Destruction. • 1. If the Convention Center or Project is totally or partially destroyed at any time after execution of this Agreement, and the Insurance Proceeds are or would have been sufficient to pay the cost of reconstruction or restoration, or if the uninsured cost of . reconstruction or restoration is less than Two Hundred Fifty Thousand Dollars ($250,000), and the damage or destruction is such that as a result thereof Yakima cannot meet its obligations under this Agreement, Yakima shall reconstruct or restore the damage consistent with terms of this Agreement within two years of the destruction; provided that, if the damage or destruction is such that Yakima may notwithstanding such damage or destruction continue to fulfill its obligations under this Agreement, Yakima shall have the discretion to use the Insurance Proceeds to restore and repair the Property to the extent necessary and appropriate for its purposes. If the Insurance Proceeds are insufficient and the uninsured cost is more than Two Hundred Fifty Thousand Dollars ($250,000), Yakima may elect to reconstruct or restore the damage or to terminate this Agreement by delivery of _written notice to the District within 30 days after the destruction. 2. If Yakima elects not to reconstruct or restore the damage, this Agreement shall terminate and the Property shall revert to Yakima pursuant to Section XIII. The District shall transfer the Property in its then condition to Yakima, along with any Insurance Proceeds attributable to the damage or destruction of the Project. B. Condemnation. If the whole or any substantial part of the Property is taken or condemned in the exercise of eminent domain powers (or by conveyance in lieu thereof), such -19- P:GSC\SC09H 01/06/14 that Yakima can no longer meet its obligations under this Agreement, this Agreement shall !' terminate upon the date when possession of the Property so taken shall be acquired by the condemning authority. As used herein, "substantial" shall be defined as reasonably preventing the conduct of Yakima's activities. Yakima shall have the right to claim and recover from the condemning authority such compensation as may be separately awarded or recoverable by Yakima in Yakima's own right on account of any and all damage to Yakima's activities by reason of the condemnation and on account of any cost or loss Yakima might sustain; provided that, ' p at the District shall pay to Yakima that portion of its condemnation proceeds equal to the amount of Debt Service on the Outstanding Bonds and Additional Bonds, if any. XL RIGHT TO ASSIGN OR OTHERWISE TRANSFER A. Right to Transfer Agreement. 1. During the term of this Agreement and at such time as the Bonds or Additional Bonds are no longer Outstanding, the District shall have the right to assign or otherwise transfer the Agreement, to such other persons, firms, corporations, partnerships, joint ventures, and federal, state or municipal government or agency thereof, as the District shall select (the "Transferee "), provided, however, that: a. The District must obtain the prior written consent of Yakima; f .. b. Such assignment or transfer shall be made expressly subject to the f ., terms, covenants and conditions of this Agreement; c. The District shall deliver to Yakima a duly executed and recorded copy of the document evidencing such transfer, including a suitable estoppel agreement(s); and d. Such transfer shall not be effective to bind Yakima until the Transferee has assumed all obligations of the District under this Agreement and notice thereof is given to Yakima, and such notice shall designate the name and address of the Transferee. 2. Said Transferee (and all succeeding and . successor Transferees) shall succeed to all rights and obligations of the District under this Agreement, subject, however, to all duties and obligations of the District in and pertaining to the then unperformed provisions of this Agreement. Upon such transfer by the District, or by a successor in accordance with the requirements of this Section, the District (and/or its successor(s)) as Transferor in such a transfer shall not be released and discharged from all of its duties and obligations hereunder which pertain to the then unperformed provisions of this Agreement without the written consent and release of Yakima. XIL DEFAULT A. Event of Default of the District. This section shall apply if the District fails to keep, observe, or perform any of its duties or obligations under this Agreement (an "Event of -20- P:1SMC09H 01/06/14 f . Default "). Notwithstanding the generality of this paragraph, an "Event of Default" shall be deemed to occur for any of the following specific events: 1. The failure of the District to pay amounts due to Yakima hereunder when due. 2. Conversion by the District of any portion of the Property to any use other than the uses permitted under the Charter and this Agreement. 3. The making by the District of an assignment for the benefit of creditors contrary to the terms of this Agreement, or filing a petition in bankruptcy or of reorganization under any bankruptcy or insolvency law or filing a petition to effect a composition or extension of time to pay its debts. 4. The appointment of a receiver or trustee of the property of the District, which appointment is not vacated or stayed within ninety days. 5. The filing of a petition in bankruptcy against the District or for its reorganization under any bankruptcy or insolvency law that shall not be dismissed or stayed by the court within ninety days after such filing. ( B. Force Majeure. The District shall not be considered to be in breach of or default • under this Agreement on account of any delay or failure to perform as required by this Agreement as a result of a Force Majeure event. XIII. REMEDIES A. Remedies Upon Default. If an Event of Default on the part of the District shall occur, then Yakima at any time after periods set forth for the exercise of rights herein shall have the following cumulative rights and remedies: 1. Provide Notice and Time to Cure. If Yakima desires to take action for an Event of Default, Yakima shall provide written notice to the District specifying such Event of Default or Events of Default and stating that Yakima at its option may terminate this Agreement on the date specified in such notice, which shall be at least 30 days, but no more than 90 days, after the giving of such notice, unless the District cures such Event of Default. 2. Injunction. Yakima shall be entitled to restrain, by injunction, the commission of or attempt or threatened commission of an Event of Default and to obtain a judgment or order specifically prohibiting a violation or breach of any such term or provision of this Agreement without, in either case, being required to prove or establish that Yakima does not have an adequate remedy at law. The District hereby waives the requirement of any such proof and acknowledges that Yakima would not have an adequate remedy at law for the District's commission of an Event of Default hereunder. _21- P:USC\SC09H - 01/06/14 3. Terminate for Default. E a. Yakima shall be entitled to immediately terminate this Agreement . - if any Event of Default continues for a period of 30 days after written notice thereof from Yakima to the District, or in the case of such Event of Default which cannot with due diligence and in good faith be cured within 30 days, the District fails to proceed promptly after such notice and with due diligence and in good faith, to begin to cure said Event of Default; provided that, in such event proper time to cure may be extended only by written permission of Yakima. b. In the event that this Agreement terminates for reasons of an Event of Default, Yakima, in its sole discretion, shall have the option of exercising one or both of the following choices: (i) Receive payment from the District in an amount required to pay Predevelopment Costs (to the extent not paid from Net Proceeds), Debt Service on the Outstanding Bonds and any Additional Bonds when due, and the amount necessary to reimburse Yakima for any amounts paid pursuant to Section III(C). • (ii) Inunediately terminate the Lease Agreement. 4. Recover Damages, Costs and Expenses. Yakima shall be entitled to proceed against the District for all direct damages, costs and expenses arising from the District's committing an Event of Default hereunder and to recover all such direct damages, costs and >` expenses, including reasonable attorneys' fees. B. No Waiver by Yakima. No failure by Yakima to insist upon the performance of any of the terms of this Agreement or to exercise any right or remedy consequent upon a breach thereof, shall constitute a waiver of any such breach or of any of the terms of this Agreement. None of the terms of this Agreement to be kept, observed or performed by the District, and no breach thereof, shall be waived, altered or modified except by a written instrument executed by Yakima. No waiver of any breach shall affect or alter this Agreement, but each of the terms of this Agreement shall continue in full force and effect with respect to any other then existing or subsequent breach thereof. No waiver of any default of the District hereunder shall be implied from any omission by Yakima to take any action on account of such default if such default persists or is repeated, and no express waiver shall affect any default other than the default specified in the express waiver and then only for the time and to the extent therein stated. One or more waivers by Yakima shall not be construed as a waiver of a subsequent breach of the same covenant, term or conditions. -22- P:1SC1SC09H 01/06/14 / ,: C. Termination Notwithstanding anything to the contrary contained in this Agreement: 1. Termination by Mutual Agreement Prior to Beneficial Occupancy. This Agreement shall terminate under circumstances where all Parties mutually agree in writing that it is impossible or impractical to design, develop or construct the Project. In the event that one Party determines that it is impossible or impractical to design, develop or construct the Project, the Parties agree to meet and enter into good faith negotiations regarding whether the Project has become impossible or impractical. D. Reversion of the Leasehold Interest to Yakima. In the event that this Agreement terminates prior to Beneficial Occupancy, Yakima may immediately terminate the Lease Agreement and reenter and retake the Property, and the District shall promptly: 1. Remove all of its personal property from the Property; 2. Remove all rubble, debris and unusable improvements from the Property as required by Yakima in its sole discretion; 3. Remove all waste materials and rubbish from and about the Property and adjacent property; and 4. Satisfy or bond all liens upon the Project (or claims which with notice or passage of time or both would mature into a lien). Yakima shall be entitled to retain title to the Property and all Improvements, including the Convention Center and Project, free and clear of any leasehold interest or other claim of the District and anyone claiming by, through or under the District. E. Certain Provisions Survive Termination. The following provisions of this Agreement shall survive notwithstanding any termination of this Agreement and reversion of the leasehold interest in the Property and Improvements to Yakima: 1. As Is (Section VIII); 2. Liability (Section IX); and - 3. Destruction or Condemnation (Section X). -23- P: ISC\SC09H 01/06/14 XIV. REPRESENTATIONS AND WARRANTIES A. Yakima's Representations. Yakima hereby represents and warrants to the District that it has full statutory right, power and authority to enter into this Agreement and perform in accordance with its terms and provisions; that the person signing this Agreement on behalf of Yakima has the authority to bind Yakima and to enter into this transaction; and that Yakima has taken all requisite action and steps to legally authorize the execution, delivery, and performance of this Agreement. B. The District's Representations and Warranties. The District hereby represents and warrants to Yakima that it has full power and authority to enter into this Agreement and perform in accordance with its terms and provisions; that the parties signing this Agreement on behalf of the District have the authority to bind the District and to enter into this transaction; and that the District has taken all requisite action and steps to legally authorize the execution, delivery, and performance of this Agreement. C. Tax Covenant. The District acknowledges that the Bonds are to be issued as tax - exempt obligations. The District covenants that it will not take any action to cause interest on the Bonds or any Additional Bonds to be taxable. XV. LEASE BACK A. Sublease. The District hereby leases to the City and the City hereby hires from the District certain improved real property located in the City of Yakima, Washington, legally described in Exhibit A attached hereto and by this reference incorporated (the "Premises ") and certain improvements thereon consisting of a convention center, and the Project to be built on the Premises (the "Improvements "). Such Premises are subject to all easements, reservations, encumbrances and restrictions of record, including in particular that certain Lease Agreement between the City, as lessor, and the District, as lessee, dated July 27, 2001. B. Rent. Within 60 days of the date of this Agreement, the City shall pay to the District $50, which represents prepaid rent for the entire term of this Agreement. C. Lease Obligations Assumed._Except as other wise provided herein, the District hereby assigns and the City agrees to assume all duties and obligations of the District under the Lease Agreement. XVL MISCELLANEOUS A. Captions. The headings and captions of this Agreement and the Table of Contents preceding the body of this Agreement are for convenience and reference only and in no way define, limit or describe the scope or intent of this Agreement nor in any way affect this Agreement. -24- P: \SC \SCO9H 01/06/14 B. Construction. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the Party or Parties may require. The Parties hereby acknowledge and agree that each was properly represented by counsel and this Agreement was negotiated and drafted at arms' length so that the judicial rule of construction to the effect that a legal document shall be construed against the draftsman shall be inapplicable to this Agreement. C. Entire Agreement. This Agreement and any collateral instruments referenced herein contain the entire agreement between the Parties hereto and shall not be modified or amended in any manner except by an instrument in writing executed by the Parties hereto. Previous drafts of this Agreement or any portions thereof shall not be utilized in any manner by either Party should any dispute arise as to the intent of this Agreement. D. Successors and Assigns. The terms herein contained shall bind and inure to the benefit of Yakima, its successors and assigns, and the District, its successors and assigns, except as may be otherwise provided herein. E. Notices. All notices which may be or are requested to be given pursuant to this Agreement shall be deemed given when hand delivered, or when deposited in the United States Mail, postage prepaid, and marked registered or certified mail, return receipt requested, and addressed to the Parties at the following addresses unless otherwise provided for herein: To Yakima: Richard A. Zais, Jr. City Manager City of Yakima 129 N. 2nd Street Yakima, WA 98901 With a copy to: Raymond L. Paolella, Esq. City Attorney City of Yakima 200 South Third Street Yakima, WA 98901 To the District: Richard E. Ostrander Chair Yakima Regional Public Facilities District 10 N. 8 Street Yakima, WA 98901 F. Incorporation by Reference. All exhibits and appendices annexed hereto are hereby incorporated by reference herein. • -25- P: \SC \SC09H 01/06/14 G. Execution in Counterparts. 1. This Agreement may be executed in any number of counterparts and by different Parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same Agreement. 2. This Agreement becomes effective when the representatives of the Parties have executed it. H. Waiver. The_waiver by either the District or Yakima of the performance of any covenant, condition, or promise shall not invalidate this Agreement nor shall it be considered a waiver by such Party of any other covenant, condition, or promise hereunder. The waiver by either the District or Yakima of the time for performing any act shall not constitute a waiver of the time for performing any other act or an identical act required to be performed at a later time. The exercise of any remedy provided by law or the provisions of this Agreement shall not exclude other consistent remedies unless they are expressly excluded. _ I. Exculpation. Notwithstanding anything contained to the contrary in any provision of this Agreement, it is specifically agreed and understood that there shall be absolutely no personal liability on the part of any individual officers or directors of Yakima or the District with respect to any of the obligations, terms, covenants, and conditions of this ,_ Agreement. �- O J. Severability. If any term or provision of this Agreement or the application thereof to any person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Agreement or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby and shall continue in full force and effect. K. Term. This Agreement shall terminate on the later of the date that the Bonds and any Additional Bonds are no longer Outstanding and the date on which the Sales Tax expires. L. Amendments. This Agreement may be amended, only with the written consent of the Parties. • • -26- P:1SC\SC09H 01/06/14 • IN WITNESS WHEREOF, the Parties hereto have executed this document as of the day and year first above written. DATED this day of , 2001. CITY OF YAKIMA • B Richard A. Zais, Jr. • City Manager • Attest: • , • City Clerk `� ��' A. d 9L Y ¢ YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT Approved as to form: By hai r _B„a D - to: City Attorney � arty =mar oo /— 9 XVKLUTIONI Certified to be a true and correct copy of the original filed in my office. • f�5Y0Z • CITY CLERK By /- ,i _ .Clr . / J Deputy SEAL _ • �— i ' ' 4 s ) -27- PASC1SC09H 01 /06/14 • EXHIBIT A • LEGAL DESCRIPTION OF PROPERTY Real property located at 10 No. 8th Street, Yakima, Washington, including accompanying parking lots: Lot 1 and the E 60 feet of Lots 15 & 16, Block 149, together with vacated alley; and Lots 1 -8 & the E 60 feet of Lots 9 -16, Block 150; together with vacated alley, and the E 220 feet of vacated "A" Street; and Lots 1 -4, 6 -8 and 9 -14, Block 170, together with vacated alley; and Lots 1 -3 and 14 -16, Block 169; All in Husons Addition to North Yakima as recorded in Vol. "A" of Plats, pg. 11, records of Yakima County, Washington. A -1 EXHIBIT B DEBT SERVICE SCHEDULE (To be attached and incorporated into the Agreement at the time that the Bonds and any Additional Bonds are issued) B -1 P:1SC\SC0911 01/06/14 • RESOLUTION NO. 2001 -01 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT ESTABLISHING A PRINCIPAL CORPORATE OFFICE FOR THE DISTRICT. WHEREAS, the Yakima Regional Public Facilities District (the "District ") is a public facilities district formed by the Cities of Yakima, Selah and Union Gap pursuant to Chap. 35.57 RCW; WHEREAS, pursuant to Section 5.3 of the District's bylaws, the principal office of the District shall be located within the District; WHEREAS, also pursuant to Section 5.3, the Board shall establish the principal office by resolution; NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT, as follows: Section 1. Principal Corporate Office. The principal corporate office of the District • shall be located at the following address: 10 North 8 Street, Yakima WA 98901 Section 2 . This resolution shall be effective immediately. ADOPTED this 24 day of July, 2001. BOARD OF DIRECTORS, YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT By: 1 c� ��/ ;�� , f i _� �i - - - Preside • t ATTEST: Approved by a vote of the Directors: 7 Ayes; b Nay Secretary • K:\25739 \000491SC\SC_R2OUZ -1- RESOLUTION NO. 2001 -02 • A RESOLUTION OF THE BOARD OF DIRECTORS OF THE YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT SETTING A DATE AND PLACE FOR MEETINGS OF THE BOARD OF DIRECTORS. WHEREAS, the Yakima Regional Public Facilities District (the "District ") is a public facilities district formed by the Cities of Yakima, Selah and Union Gap pursuant to Chap. 35.57 RCW; WHEREAS, pursuant to Section 3.1 of the District's bylaws, regular meetings of the Board of Directors of the District (the "Board ") shall be held at least once every quarter at a location within the District; WHEREAS, also pursuant to Section 3.1, the Board shall establish such regular meeting time and place by resolution; NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT, as follows: Section 1. Regular Meeting Date. Regular Board meetings shall be held at least once every quarter, on each Third Tuesday of the month at 8:30 AM. Section 2. Regular Meeting Place. Regular Board meetings shall be held at the following location:108 North 8 Street Yakima. WA 98901. Section 3. Effective Date. This resolution shall be effective immediately. ADOPTED this 24th day of July, 2001. BOARD OF DIRECTORS, YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT .f , �. „ A Presi • ent ATTEST: Approved by a vote of the Directors: Ayes; _ Nays n • Secretary • RESOLUTION NO. 2001 -03 A RESOLUTION of the Yakima Regional Public Facilities District approving the lease of the Yakima Convention Center from the City of Yakima, Washington; and approving an agreement and sublease between the District and the City for the purpose of financing, expanding, operating and maintaining the Yakima Convention Center. WHEREAS, the City of Yakima ( "Yakima ") currently owns and operates the Yakima Convention Center (the "Convention Center "), providing first -class meeting, ballroom and other event facilities; and WHEREAS, pursuant to Chap. 35.57 RCW (the "Act ") the cities of Yakima, Selah and Union Gap created the Yakima Regional Public Facilities District (the "District ") to assist in expanding the Convention Center to stimulate economic development by creating jobs; realize additional sales tax and lodging tax revenues; attract commercial business and tourism; and provide facilities for convention, special events and community events including public meetings and performing arts events (the "Project "), and 3 WHEREAS, the District has access to several new revenue sources to complete the Project, including a state sales and use tax credit (the "Sales Tax "), which operates to shift 0.033% of the retail sales and use taxes generated within the District boundaries to the District; and 0 WHEREAS, the Act requires a 33% local match in order for the District to impose the Sales Tax and, accordingly, Yakima desires to transfer a leasehold interest in the Convention Center to the District in satisfaction of this match requirement (the value of the Convention Center and the underlying site is approximately $11,800,000), and WHEREAS, the value of the leasehold interest is estimated to be significantly more than 33% of the net present value of projected Sales Taxes of the District (approximately $2.4 million), thereby satisfying the match requirement, and WHEREAS, Yakima intends to issue bonds and apply bond proceeds to finance the Project, in consideration of the District's pledge of all Sales Tax receipts to Yakima to pay debt service on the bonds and other Project costs, and WHEREAS, Yakima also intends to contribute lodging taxes to the District, in an amount, if any, determined annually by the Yakima City Council, to the operation of the Convention Center, and will contribute revenues to the District in the event of a Sales Tax shortfall, and _ WHEREAS, Yakima will design and construct the Project, and will operate and maintain the Convention Center, as expanded by the Project, and WHEREAS, the District desires to lease the Convention Center from Yakima and to enter into an agreement and sublease with Yakima providing for such financing, design, construction, operation and maintenance of the Convention Center, as expanded by the Project, NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF • YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT, as follows: Section 1. Approval of Lease Agreement. The District hereby approves the Lease Agreement with Yakima in substantially the form attached as Appendix A hereto (the 1 • "Lease Agreement "), with such changes consistent with the intent of the attached form as the President of the Board of Directors of the District, or his or her designee, shall approve. Section 2. Approval of Development Agreement. The District hereby approves the Design, Development, Construction, Financing and Operating Agreement with Yakima, in substantially the form attached as Appendix B hereto (the "Development Agreement "), with such changes consistent with the intent of the attached form as the President of the Board of Directors of the District, or his or her designee, shall approve. The Development Agreement also constitutes a sublease of the Convention Center property back to Yakima. Section 3. Authorization of Documents. The President of the Board of Directors of the District is hereby authorized to execute the Lease Agreement and the Development Agreement. The President and his or her designee, and each of the other appropriate officers, agents and representatives of the District are each hereby authorized and directed to take such steps, to do such other acts and things, and to execute such instruments as in their judgment may be necessary, appropriate or desirable in order to carry out the terms and provisions of, and complete the transactions contemplated by this resolution. f Section 4. Effective Date. This Resolution shall be in effect from and after its adoption. ADOPTED this 24 day of July, 2001. II/ BOARD OF DIRECTORS, YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT By: i1 i L_ .,, _ a , , ._ .i P esident ATTEST: Approved by a vote of the Directors: / Aye i,c�.v � Secretary • 2 1 APPENDIX A LEASE AGREEMENT ii LEASE AGREEMENT This LEASE AGREEMENT (the "Lease ") is made as of July 27, 2001, -by and between the CITY OF YAKIMA, WASHINGTON (the "City "), a municipal corporation and first class city of the State of Washington, and the YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT (the "District ", and together with the City, the "Parties "), a public facilities district created by the City and the Cities of Selah and Union Gap, to lease certain real property of the City to the District to assist in the design, development, construction, financing and operation of the Yakima Convention Center, as expanded. Reference is made to that certain Design, Development, Construction and Financing Agreement dated July 27, 2001, between the undersigned (the "Development Agreement "). 1. Effective Date. This Lease and all of the terms and conditions hereof shall become effective as of the date set forth above; provided that all of the rights, duties and obligations of the City and the District, as lessor and lessee, respectively, under this Lease are not and shall not be effective unless and until the Development Agreement becomes effective. 2. Leased Premises. From and after commencement of the Lease Term (as defined herein), the City hereby leases to the District and the District hereby hires from the City certain improved real property located in the City of Yakima, Washington, legally described in Exhibit A attached hereto and by this reference incorporated (the "Premises ") and certain improvements thereon consisting of a convention center, and further improvements to be built on said Premises (the "Improvements "). Such Premises are subject to all easements, reservations, encumbrances and restrictions of record. 3. Term. The Lease Term of this Lease, and all obligation of the parties hereto as lessor and lessee, shall commence on the effective date of the Development Agreement and shall automatically terminate upon expiration or termination of the Development Agreement, unless otherwise terminated or amended as set forth herein. The District shall be entitled to possession of the Premises upon commencement of the Lease Term hereunder. 4. Prepaid Rent. Within 60 days after the commencement of the Lease Term, the District shall pay $50 to the City, which amount represents prepaid rent for the entire Lease Term. The Parties acknowledge that the value of the Premises and Improvements existing as of the date of this Lease is appraised at $11,800,000. The value of the leasehold interest in the Premises hereby transferred is significantly in excess of 33% of the net present value of sales taxes the District projects that it will collect under RCW 82.14.390 (approximately $2.4 million). It is the parties' intent that the City lease the Premises to the District in satisfaction of the local match requirement under RCW 82.14.390. 5. Use of the Premises. The Premises shall be used by the District solely for the operation and maintenance of the Premises and the lease back of the same to the City and for other District purposes consistent with the Development Agreement. At no time during the Lease Term shall the District use the Premises in whole or in part for any unlawful purpose, nor shall the District permit or commit any nuisance or illegal activity on the Premises. 6. Compliance with Laws. The District shall comply with all municipal, county, state and federal laws, rules, regulations or ordinances applicable to the Premises and the Improvements, and the ownership, use and occupancy thereof. 7. Liens and Encumbrances. Except as expressly provided in this Lease, the District shall keep the Premises and the Improvements thereon free of mechanics' and materialmen's liens and other liens of like nature including tax liens, and will defend and hold the City harmless against such liens or claims and against all attorney's fees and other costs and expenses growing out of or incurred as a result of such liens or claims so long as such liens or claims arise from the actions of the District and not the actions of the City. The City shall defend and hold harmless the District against such liens or claims, fees, costs or expenses growing out of or incurred as a result of the actions of the City and not the actions of the District. Provided, however that the District may in good faith and at the District's own expense contest the validity of any such lien or claim, through litigation if necessary. In the event that the District contests any lien or claim, the District shall prosecute the contest with reasonable diligence, and the District shall at all times effectually stay or prevent any official or judicial sale of the Premises and/or Improvements and the District shall pay or otherwise satisfy any final judgment (unless the District shall appeal same, in which event the judgment from the last appeal shall be the applicable judgment), which may be entered against it and thereafter promptly procure record satisfaction of release of the lien or claim. In the event that the District fails to fully discharge or in good faith contest any such lien or claim that has been perfected, the City may pay the same, or any part thereof, and the City shall be the sole judge of the validity of said lien or claim. All amount so paid by the City shall be recoverable against the District. 8. Maintenance and Repair of Premises and Improvements'. The District shall maintain the Premises and Improvements in good repair and working order, and shall make such repairs necessary to so maintain the Premises and Improvements. 9. Taxes and Assessments. The District covenants and agrees to pay all real estate taxes and assessments, if any, levied upon the Premises and Improvements that become due and payable during the Lease Term prior to delinquency, together with any leasehold excise tax that may be assessed against the District's leasehold interest hereunder; provided, that if any such taxes or assessments may be paid in installments without penalty, the District shall have the right to pay any such taxes or assessments in installments. The District may contest the legal validity or amount of any tax, assessment or other charge for which the District may be responsible under this Lease and may institute such proceedings as the District considers necessary. If the District contests any such tax, assessment or other charge, the District may withdraw or defer payment or pay under protest, provided the District shall protect the City and the Premises and Improvements from any lien by adequate surety bond or other appropriate security. The City appoints the District as the City's attorney -in -fact for the purpose of making all payments to any taxing authorities and for the purpose of contesting any taxes, assessments or other charges, conditioned on the District's preventing any lien from being levied on the Premises or Improvements or upon the City. However, if the District chooses not to contest any tax, assessment or charge, the District shall give the City timely notice thereof so that the City may contest any taxes, assessments or charges levied against the Premises or Improvements if the District fails to do so. 10. Utility Charges. The District shall be solely responsible for and shall promptly pay all charges for heat, water, light, gas, electricity, sewer and garbage or any other utility now or hereafter used or consumed on the Premises. In no event shall the City be liable for an interruption or failure in the supply of such utilities to the Premises. 11. Alterations. Except as permitted by the Development Agreement, the District shall not alter the Premises or the Improvements without the prior written consent of the City. 12. Insurance. The District shall, at its sole cost and expense, procure and maintain in force during the Lease Term all liability and other insurance required to be procured and maintained by the City under the Development Agreement. 13. Assignment. Except as otherwise provided in Section 22, the District shall not assign or transfer this Lease or any interest therein, nor shall this Lease or any interest therein be assignable or transferable by operation of law or by any process or proceeding of a court, or otherwise, without the prior written consent of the City, which consent shall not be unreasonably withheld. 14. Eminent Domain. A. The following definitions apply in construing provisions of this Lease relating to a taking of or damages to all or a part of the Premises or Improvements or interest therein by eminent domain or inverse condemnation. i. "Taking" means the taking • or damaging, including severance damage, by eminent domain or inverse condemnation for any public or quasi - public use under any statute or any purchase or other acquisition under threat of condemnation. The taking shall be considered to take place as of the later of the date actual physical possession is taken by the condemnor; and the date on which the right to compensation and damages accrues under the law applicable to the Premises. ii. "Total taking" means the taking of the fee title to all of the Premises. iii. "Substantial taking" means the taking of so much of the Premises or Improvements or both that one or more of the following conditions result: (i) the conduct of the District's use(s) of the Premises would be substantially prevented or impaired, (ii) the remaining Premises could not be • economically and feasibly be made to be so usable by the District, or (iii) the Improvements would be other than reasonably efficient or economic or could not economically and feasibly be made reasonably efficient or economic for the District's use. iv. "Partial taking" means any taking of the fee title that is not either a total taking or a substantial taking. v. "Award" means compensation paid for the taking, whether pursuant to judgment, by agreement or otherwise. B. The party receiving any notice of an intended taking or a willingness to make a negotiated private purchase in lieu of condemnation shall promptly give the other party written notice of the receipt and contents thereof. C. The City and the District shall each have the right to represent separately their respective interest in each proceeding or negotiation with respect to the taking or intended taking and to make full proof of their claim. No agreement, settlement, sale or other transfer to or with the condemning authority shall be made without the consent of the City, the District and all leasehold mortgagees. D. Upon a total taking, the City and the District shall be relieved of all obligations hereunder and this Lease shall terminate. Such termination of obligations shall not prejudice the District's right to recover compensation calculated in accordance with the terms hereof for the taking of the District's interest in the Premises and Improvements. The amount of damages resulting to the City and the District and to the respective interests of the City and the District in the Premises by reason of such taking shall be separately determined and computed by the court having jurisdiction over such eminent domain proceedings. Separate awards and judgment shall be made with respect to the damage to the City and the District and such awards shall be paid separately to the City and the District. If the City's and the District's damages (and awards therefore) cannot or will not be separately determined and computed by such court, then the award granted shall be divided between the City and the District in a fair and equitable manner, it being understood that the District's portion is to compensate the District for the loss of its leasehold interest hereunder, and the City's portion is to compensate the City for the loss of the right of reversion hereunder and its leasehold interest under the Development Agreement. E. Within 45 days after the District receives notice of an intended substantial taking, the District shall provide written notice of the same to the Yakima City Manager. Upon receipt of such notice the City Manager and the District shall confer as to the level of taking. The City shall have the final determination as to whether the taking should be treated as a total taking or partial taking. F. Upon a partial taking, the Lease shall remain in full force and effect, covering the remaining Premises. The amount of damages resulting to the City and the District and their respective interests in the Premises and the Improvements shall be separately determined and computed by the court having jurisdiction over such eminent domain proceedings. Separate awards and judgments shall be made with respect to the damage to the City and the District, and such awards shall be paid separately to the City and the District, respectively. G. If the City's and the District's damages (and the awards therefor) cannot or will not be determined or computed by the court, then all sums, including damages and interest, awarded for the fee title or leasehold, or both, shall be deposited promptly with a mutually agreed upon escrow agent and shall be equitably distributed and disbursed for the following purposes: i. To the District for the purpose of compensating the District for the value of its leasehold interest taken and for restoring any taken Improvements, plus any amount awarded to remove or relocate subtenants, plus any amount specifically awarded to or for the District for detriment to business and severance damages. ii. To the City, a sum equal to the value of the Premises taken. iii. To the City, for the purpose of compensating it for the value of the lost leasehold interest in the Development Agreement. iv. The remainder to the City, to be applied by the City to the repayment of Bonds or Additional Bonds (as defined in the Development Agreement) or to any other lawful use. H. Upon the taking for the temporary use of all or any part of the Premises or Improvements for a period of less than 12 months, the rent under this Lease shall not be affected in any way, and the District shall be entitled to any award for the use or estate taken. I. Nothing in this Lease shall be deemed to limit the City's right of eminent domain. 15. Indemnification. To the extent permitted by law, the District shall defend, indemnify, and hold the City and the Premises harmless from any and all damages or liabilities at any time occasioned by or arising out of (i) any act, activity or omission of the District, or anyone holding themselves out under the District (except the City), or (ii) the occupancy or use of the Premises or any part thereof, by or under the District, excluding the occupancy and use by the City, or (iii) the state or condition of the Premises and the Improvements or any part thereof, except to the extent the City shall itself be grossly negligent in the circumstances. Without limiting in any way the foregoing indemnification, the District agrees that during its use and occupancy of the Premises it shall comply with all laws, regulations, rules and ordinances of the City, the State and the federal government with regard to the use, storage, and disposal of hazardous and toxic substances on the Premises and the Improvements, and the District shall to the fullest extent permitted by law defend, indemnify and hold harmless the City for any and all damages or liabilities with regard to hazardous and toxic substances occasioned by and arising from the District's activities on the Premises and Improvements. 16. Default. Time is of the essence in this Lease, and in the event that (i) the'District shall default in the payment of taxes, assessments, utility charges or any other amounts due hereunder, and such default is not caused by the City's failure to meet its obligations under the Development Agreement, and if such default shall continue for 10 days following written notice and demand; (ii) the District shall default in the performance or observation of any other terms, covenants, conditions or agreements of this Lease for 15 days after written notice and demand, or in the case of such default that cannot with due diligence and in good faith be cured within 15 days, the District fails to proceed promptly after such notice and with due diligence and in good faith, to begin to cure said default, (iii) there shall be filed against the District in any court or other tribunal pursuant to any statute or other rule of law, either of the United States or of any State or of any other authority now or hereafter exercising jurisdiction, a petition in bankruptcy or insolvency proceedings or for reorganization or for the appointment of a receiver or trustee of all or substantially all of the District's property, or for any other form of debtor relief, unless, such petition be filed against the District and if in good faith the District promptly thereafter commences and diligently prosecutes any and all proceedings appropriate to secure the dismissal of such petition and shall secure such dismissal within 60 days after the date of filing or the commencement of such proceedings, (iv) if the District vacates or abandons the Premises or Improvements, or (v) the District defaults under the Development Agreement and such default is not cured within the cure periods set forth in the Development Agreement, then and in any such case, at the City's option and in addition to all other rights and remedies, the City may, following the expiration of the cure period, if any, provided herein for such default, immediately declare the District's rights under this Lease terminated and enter the Premises and the Improvements using such force as may be necessary and repossess itself thereof, as of its former estate, and remove all persons and property from the Premises and the Improvements. Such reentry shall not constitute a termination of this Lease and, notwithstanding any such reentry, the liability of the District to pay amounts hereunder (including taxes, assessments and utilities) shall not be extinguished for the balance of the term of this Lease and the District shall make good to the City any deficiency arising from receipt by the City of any lesser amount than that hereinbefore agreed upon. 17. Waiver. Neither the acceptance of rental nor any other actions or omissions by the City at any time after the happening of any event authorizing the cancellation or forfeiture of this Lease shall operate as a waiver of any past or future violation, breach or failure to keep or perform any covenant hereof, to deprive the City of its right to cancel or forfeit this Lease, upon written notice provided for herein, at any time that cause for cancellation or forfeiture may exist, or be construed so as to at any future time estop the City from promptly exercising any other option, right, or remedy, including the right to declare an event of default hereunder that it may have under any term or provision of this Lease. 18. Force Majeure. Any prevention, delay, nonperformance or stoppage due to a "Force Majeure" shall excuse nonperformance for the period of such prevention, delay, nonperformance or stoppage, except for obligations imposed by this Lease for the payment of taxes or insurance. "Force Majeure" means any causes or conditions beyond a party's reasonable control (including, but not limited to fire, explosion, presence of a hazardous substance, earthquake, storm, flood, wind, drought or act of God or one or more of the elements; court order, legislation, delay or failure to act by civil, military or other governmental authority other than a party; strike, lockout, or other labor dispute; riot, insurrection, sabotage or war; breakdown or destruction of, or damage or casualty to, any equipment, facility or other property; any delay or failure by any third party to provide a necessary service, supply, part, equipment, personnel or other item; or interruption, suspension, curtailment or other disruption of a utility). 19. Access by the City. At any time during the Lease Term, the City and the City's agents shall have the right to enter the Premises and the Improvements on reasonable notice to examine the same. Nothing contained herein shall be construed to impose upon the City a duty to repair the Premises or Improvements. 20. Surrender of Premises. At the expiration or sooner termination of this Lease, the District shall immediately return to the City the Premises and Improvement in its condition following completion of the Project defined in the Development Agreement, except reasonable wear and tear and damage by fire or other casualty. Upon termination of the Lease for any reason the District shall be liable for all costs and expense of restoring the Premises and Improvements to the condition at the time of completion of the Project, but only if such removal and restoration is requested by the City. The District's obligation to perform the covenants of this Section shall survive the expiration or termination of this Lease. 21. Quiet Enjoyment. The District, upon fully complying with and promptly performing all of the terms, conditions, and covenants of this Lease on its part to be performed, shall have and quietly enjoy the Premises for the Lease Term. 22. Leasehold Mortgages. During the term of this Lease, the District shall not encumber its leasehold interest in the Premises or Improvements without the prior written consent of the City. Notwithstanding the foregoing, the District is authorized to assign its rights and interests in this Lease to any financial institution, municipal bond trustee, municipal bond insurer or other entity as may be necessary to accomplish the financing or refinancing of the Project, provided that the District must obtain the prior written consent of the Yakima City Manager. 23. Consent to Lease Back. The parties hereby acknowledge and agree that they would not execute this Lease but for the agreement by the City to operate and maintain the Improvements, finance, construct and operate the Project and lease back the Premises to the City pursuant to the Development Agreement. The obligations of the District under this Section 23 are integral to this Lease and may not be severed herefrom without invalidating the entire Lease. 24. Termination. This Lease may be terminated after notice and opportunity to cure of any event of default in accordance with Section 16. This Lease shall also automatically terminate upon termination p rmination of the Development Agreement. 25. Amendment. This Lease may not be amended except by written instrument approved by resolution duly adopted by the District and approved by City ordinance or resolution. No course of dealing between the parties or delay in exercising any rights hereunder shall operate as a waiver of any rights of any party. 26. Entire Agreement. This Lease and any collateral instruments referenced herein contain the entire agreement between the parties hereto and shall not be modified or amended in any manner except by an instrument in writing executed by the parties hereto. Previous drafts of this Lease or any portions thereof shall not be utilized in any manner by either party should any dispute arise as to the intent of this Lease. 27. Notices. All notices which may be or are requested to be given pursuant to this Lease shall be deemed given when hand delivered, or when deposited in the U.S. Mail, postage prepaid, and marked registered or certified mail, return receipt requested, and addressed to the parties at the following addresses unless otherwise provided for herein: To the City: Richard A. Zais, Jr. City Manager City of Yakima 129 N. 2nd Street Yakima, WA 98901 With a copy to: Raymond L. Paolella, Esq. City Attorney City of Yakima 200 South Third Street Yakima, WA 98901 To the District: Richard E. Ostrander Chair Yakima Regional Public Facilities District 10 N. Bch Street Yakima, WA 98901 28. Severability. If any term or provision of this Lease or the application thereof to any person or circumstances shall, to any extent, be invalid or unenforceable (with the exception of Section 23), the remainder of this Lease or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby and shall continue in full force and effect. 29. No Merger. In no event shall (a) the leasehold interest, estate or rights of the District hereunder, (b) the rights of any leasehold mortgagee upon the District's leasehold interest, estate or rights hereunder, or (c) the leasehold interest, estate or rights of the District as sublessor under the Development Agreement, merge with any interest, estate or rights of the City as fee owner of the Premises and Improvements and lessor under this Lease or as sublessee under the Development Agreement, it being understood that such leasehold interest, estate and rights of the District hereunder and such rights of any leasehold mortgagee shall be deemed to be separate and distinct from the City's interest, estate or rights as fee owner of the Premises and Improvements, and as sublessee under the Development Agreement notwithstanding that any such interests, estate or rights shall at any time be held or vested in the same, person, corporation or other entity. 30. Limited Obligation of the District. The District is organized pursuant to Chapter 35.57 RCW as a municipal corporation, separate and distinct from the City. All liabilities incurred by the District shall be satisfied exclusively from the assets, credit, and properties of the District, and no creditor or other person shall have any right of action against or recourse to the City or the Cities of Selah or Union Gap, their assets, credit, or services, on account of any debts, obligations, liabilities or acts or omissions of the District. 31. Attorneys' Fees. In the event of litigation between the City and the District or their successors or assigns to enforce a right or rights provided by or arising under this Lease, the non - prevailing party shall pay to the prevailing party reasonable attorneys' fees and other costs and expenses of litigation, including appeals. The amount of costs and attorneys' fees shall be included in any judgment or award for the prevailing party and the court or arbitrator in any such litigation shall determine which is the prevailing party. 32. Recording. The District shall not record this Lease without the written consent of the City; however, upon the request of either party hereto the other party shall Y P q P Y P Y join in the execution of a memorandum of this Lease for recording purposes. The memorandum of Lease shall describe the parties, the Premises and Improvements, and the Lease and shall incorporate this Lease and the Development Agreement by reference. • • 1 33.. Goven in Law: Time. This Lease and the rights of the parties hereto shall � be governed and construed in accordance with the laws of the State of Washington. Time is of the essence in this Lease. IN WITNESS WHEREOF, the pies hereto have executed this document as of the day and year first above written. DATED thisZ day of — , 2001. CITY OF YAKIMA YAKIMA REGIONAL PUBLIC S DISTRICT FACILITIES _ ( B , -a Richard A. Chair Zais, Jr. City Manager Board of Directors A ttest: --- ^, . . .- . ` - YA ,t.4 , • r ?. 4. t, g f ;n)4,- City Clerk ; y * y • t. •/AVGTON ` Approved as to form: :_,&===1 ' City _Attorney • _ Certified to be a true and correct copy of the VTy MN 4".7°C) /- 93 original filed in my office. .0/02— PEagoincix M if .7DO /- /ate. CITY CLERK - B A _E 4 1 l.', k∎ Deputy `(A I SEAL - *, ^,, 9S /ING 0. • STATE OF WASHINGTON ) ) ss. COUNTY OF YAKIMA ) I certify that I know or have satisfactory evidence that ?-" ir:i.i- "," is the person who appeared before me, and said person acknowledged that he /she signed this instrument, on oath stated that he /she was authorized to execute the instrument and acknowledged it as the (4 } c- m .‘tovo -' of ; 1, . 1'' { gy ,� to be the free and voluntary act of such party Tor the uses' and purposes me ntioned in the instrument. . Dated: 1 /"7 , 2001. i 0 i-CBRAN Notary Public J , 1 sots EXp1 Print/Type Name C :�' it `y} Z 12- $ -1, 1`,(1 . y My commission expires (0 - �j-C' 9. 1 L IP)', JuN E 5 ' .� . ( Use thi `-} ©p .1.1-...-1-7 1) STATE OF WASHINGTON ) ) ss. COUNTY OF YAKIMA ) I certify that I know or have satisfactory evidence that /6,6 1. 34/ / ?r is the person who appeared before me, and said person acknowledged that he /she signed this instrument, on oath stated that he /she was athorized to ..execute _the instrument and acknowledged it as the eAze -r�� of a, - ity,- : i „e/ <i.h 'o be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. /J , 204;7 Dated: (�C.C.I /,' / ... ,.20Q1. �P� Ex ,� Notary Pudic , °. �� �� �F�, Print/Type Name A. - -z - A S _ P - .. o poTh My commission expires -..q- -4 * — ; • PUBLIC o SEAL ; ' , .SHI NG�_ . til (U this spa O � � S seal) Certified to be a true and eorrec �j � c ®lay ,� ` �e original filed in my office. � Z CITY CLERK 2 By a 1:, 6 / . 2 �3 cp ty • EXHIBIT A LEGAL DESCRIPTION OF PROPERTY Real property located at 10 No. 8th Street, Yakima, Washington, including accompanying parking lots: Lot 1 and the E 60 feet of Lots 15 & 16, Block 149, together with vacated alley; and Lots 1 -8 & the E 60 feet of Lots 9 -16, Block 150; together with vacated alley, and the E 220 feet of vacated "A" Street; and Lots 1 -4, 6 -8 and 9 -14, Block 170, together with vacated alley; and Lots 1 -3 and 14 -16, Block 169; All in Husons Addition to North Yakima as recorded in Vol. "A" of Plats, pg. 11, records of Yakima County, Washington. • • A -1 APPENDIX B DEVELOPMENT AGREEMENT K:\25739 \00049 \S C\SC_N 20UC • DESIGN, DEVELOPMENT, CONSTRUCTION, FINANCING AND OPERATING AGREEMENT BY AND BETWEEN CITY OF YAKIMA, WASHINGTON and YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT July 27, 2001 • Public Facilities District Design, Development, Construction • Financing and Operating Agreement TABLE OF CONTENTS Page I. DEFINITIONS _ 2 II. INTENT AND RELATIONS 7 A. Intent 7 B. Description 8 C. Yakima's Regulatory Role Reserved 8 D. Governing Law and Venue 8 III. SCOPE OF COMMITMENTS 8 A. Commitments by the District 8 1. Repayment Obligation 8 2. District Funds 9 B. Commitments by Yakima 11 y_ 1. Site Availability 11 2. Issuance of the Bonds 11 3. Application of Net Proceeds 11 4. Design, Development and Construction Responsibility 11 5. Operation and Maintenance Responsibility 11 6. Operation and Maintenance Costs 13 C. Commitment by Yakima to Replenish Sales Tax Shortfall 14 1. Funding Commitment 14 IV. .PROJECT COMPONENTS AND OPERATION CRITERIA 14 A. Project Components 14 B. Project Purpose 14 1. Public Access 15 2. Yakima Approval 15 C. Project Contracting and Management 15 V. DEVELOPMENT CRITERIA AND OVERSIGHT 16 A. Generally 16 B. Standards of Performance 16 C. Development Schedule and Substantial Completion Date 16 VI. PROJECT COSTS 17 -1 ' P:lSC1SCO9H 01/06/14 ( • VII. INSURANCE 17 ) A. Insurance Requirements 17 B. Insurance Policies 17 C. Adjustments 18 VIII. AS IS 18 A. Due Diligence 18 B. Acceptance 18 IX. LIABILITY 19 A. Indemnification of Yakima 19 X. DESTRUCTION OR CONDEMNATION 20 A. Total or Partial Destruction 20 B. Condemnation 20 XI. RIGHT TO ASSIGN OR OTHERWISE TRANSFER 21 A. Right to Transfer Agreement 21 XII. DEFAULT 21 _ . A. Event of Default of the District 21 B. Force Majeure 22 XIII. REMEDIES 22 A. Remedies Upon Default 22 B. No Waiver by Yakima 23 C. Termination 23 D. Reversion of the Property to Yakima 23 E. Certain Provisions Survive Termination 24 XIV. REPRESENTATIONS AND WARRANTIES 24 A. Yakima's Representations 24 B. The District's Representations and Warranties 24 C. Tax Covenant 24 XV. LEASE BACK 25 A. Sublease 25 B. Rent 25 C. Lease Obligations Assumed 25 XVI. MISCELLANEOUS 25 A. Captions 25 B. Construction 25 PASC\SC..09H 01/06/14 C. Entire Agreement 25 D. Successors and Assigns 25 E. Notices -- F. 26 F. Incorporation by Reference 26 G. Execution in Counterparts 26 H. Waiver 26 I. Exculpation 27 J. Severability 27 K. Term 27 L. Amendments 27 EXHIBIT A — LEGAL DESCRIPTION OF THE PROPERTY EXHIBIT B — DEBT SERVICE SCHEDULE APPENDIX 1 — PROJECT DOCUMENTS • 0 -111- P:1SClSC09H 01/00/14 • DESIGN, DEVELOPMENT, CONSTRUCTION, FINANCING AND OPERATING AGREEMENT This DESIGN, DEVELOPMENT, CONSTRUCTION, FINANCING AND OPERATING AGREEMENT (the "Agreement ") is made as of July 27, 2001, by and between the CITY OF YAKIMA, WASHINGTON ( "Yakima "), a municipal corporation and first class city of the State of Washington, and the YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT (the "District ", and together with Yakima, the "Parties "), a public facilities district created by Yakima and the Cities of Selah and Union Gap, to provide for the design, development, construction, financing and operation of the Yakima Convention Center, as expanded. WHEREAS, Yakima currently owns and operates the Yakima Convention Center (the "Convention Center "), providing first -class meeting, ballroom and other event facilities; WHEREAS, Yakima desires to expand the Convention Center (the "Project "); WHEREAS, the Convention Center, as expanded by the Project, will serve as a Regional Center under RCW 35.57.030, benefiting the region including residents of Yakima, the City of Selah and the City of Union Gap (the "Cities ") by stimulating economic development, creating jobs, realizing additional sales and lodging tax revenues, attracting commercial business and tourism, and providing facilities for convention, special events and community events including public meetings and performing arts event; WHEREAS, pursuant to Chap. 35.57 RCW (the "Act "), the Cities have entered into an Interlocal Agreement to form the District for the purpose of acquiring (by purchase, lease or otherwise), and assisting with the financing, development and operation of, the Convention Center as expanded by the Project; WHEREAS, under the Act, the District has access to several new revenue sources, including a state sales and use tax credit (the "Sales Tax "), which operates to shift 0.033% of the retail sales and use taxes generated within the District boundaries to the District; WHEREAS, the Act requires a local match of 33% of the net present value of the Sales Tax in order for the District to impose the Sales Tax; WHEREAS, Yakima has entered into a Lease Agreement transferring a leasehold interest in the Convention Center property described in Exhibit A hereto (the "Property ") (the value of the Convention Center property is approximately $11,800,000) to the District in satisfaction of this match requirement (approximately $2.4 million); WHEREAS, the District will lease back the Property to Yakima pursuant to this Agreement; • • WHEREAS, subject to certain limitations set forth herein, Yakima will issue bonds to finance the Project, in consideration for the District's pledge of Sales Tax receipts to pay debt service on the bonds and other Regional Center costs; WHEREAS, Yakima will apply the net proceeds of the bonds to design, develop and construct the Project, under the terms set forth herein; WHEREAS, to provide for stable financing and operation of the Project in light of the cyclical nature of Sales Taxes, Yakima wishes to provide additional funding in the event of a Sales Tax shortfall; and WHEREAS, Yakima will operate the Convention Center, as expanded by the Project, and will apply certain City lodging taxes (in an amount, if any, determined annually by the City Council) to pay a portion of the costs of operation and maintenance; WHEREAS, the Parties desire that Yakima finance, design, develop and operate the Convention Center as expanded by the Project on the terms set forth herein, and the District and Yakima assist in financing the Project, also on the terms set forth herein; NOW, THEREFORE, in consideration of the mutual undertaking and promises contained herein, and the benefits to be realized by each Party including the benefits to the general public in the region by the completion and operation of the Project, the Parties agree as follows: I. DEFINITIONS For purposes of this Agreement, and any agreements supplemental hereto, the terms defined in this Article shall have the following meanings, except as herein otherwise expressly provided: Additional Bonds means Completion Bonds or Refunding Bonds issued by Yakima. Additional Revenue means all revenue received by the District (or by Yakima on behalf of the District), including gifts, grants, donations, Admission Charges, Admission Taxes, Parking Charges, Parking Taxes, Voted Sales Tax, and any other revenue derived from the ownership or operation of the facilities of the District, including investment income; but excluding Sales Tax Revenue and amounts received from Yakima pursuant to Section III(C) (including investment earnings thereon). • Administrative Costs means the costs of the District incurred in administering the District and this Agreement. Administrative Costs shall be specified in the District's annual budget submitted to Yakima for approval and to the Cities of Selah and Union Gap for review and comment. Admission Charge means any charge imposed by the District (or by Yakima on behalf of the District) for admission to its facilities, including charges for season tickets or subscriptions; cover charges, or charges for use of seats and tables, and other similar accommodations; charges -2- P:\SC\SC09H 01/06/14 r k: for food and refreshment if free entertainment, recreation, or amusement is provided; charges for ■ rental or use of equipment or facilities for purposes of recreation or amusement; and automobile parking charges if the amount of the charge is determined according to the number of passengers in the automobile. Admission Tax means any tax imposed by the District pursuant to RCW 35.57.100 to be paid by any person who pays an Admission Charge. Agreement means this Design, Development, Construction, Financing and Operating Agreement. Beneficial Occupancy shall mean when the Project is granted a temporary or permanent Certificate of Occupancy for the Convention Center as expanded by the Project from Yakima's building official. Bond Counsel means a firm of lawyers nationally recognized and accepted as bond counsel and so employed by Yakima. - Bond Ordinance means the ordinance(s) of the Yakima Council authorizing the issuance of the Bonds and any amendments. Bonds means the bonds, notes or other evidences of indebtedness issued by Yakima ) pursuant to and under authority of the Bond Ordinance to finance or refinance the Project. Yakima reserves the right not to issue the Bonds if, at the time the Bonds are to be sold, the total interest cost on the Bonds exceeds 5.55 %, or if the financing is determined to no longer be economical. Board means the governing body vested with the management of the affairs of the District. Charter means the Charter of the District, issued pursuant to the Interlocal Agreement, as • amended from time to time. Code means the Internal Revenue Code of 1986, as amended, and all applicable regulations and rulings thereunder. • Completion Bonds means additional bonds of Yakima issued to pay Costs of the Project. Costs of the Project means all capital costs that are paid or incurred by Yakima in connection with the design, development and construction of the Project, including, but not limited to all or a portion of the interest on Bonds during the period of construction of such improvements, and for a period of time thereafter; amounts required to meet any reserve requirement for the Bonds; the cost of paying or reimbursing Yakima or any fund thereof for expenses, including planning, permitting and design expenses, incident and properly allocable to the Project; and all other items of expense incident and properly allocable to designing, -3- P:4SC\SCO9H 01/06/14 developing and constructing the Project, financing the Project and placing the Project in i operation. f" Debt Service means the amount o nt to be paid on the next succeeding Payment Date to pay the principal of, premium, if any, and interest on Bonds and any Additional Bonds coming due on such Payment Date. A schedule setting forth Debt Service to be paid on the Bonds and any Additional Bonds shall be attached as Exhibit B at such time as the Bonds or any Additional Bonds are issued. Debt Service Fund means the special fund(s) or account(s) established by Yakima under the Bond Ordinance or a Supplemental Bond Ordinance for the purpose of paying the principal of, interest on and redemption price, if any, of Bonds and/or any Additional Bonds. Debt Service Reserve Fund means the Debt Service Reserve Fund (or Account), if any, established by Yakima under the Bond Ordinance or Supplemental Bond Ordinance, which secures the Bonds and/or any Additional Bonds. Debt Service Reserve Fund Requirement means the amount required to be deposited to the Debt Service Reserve Fund, as established in the Bond Ordinance. District means the public facilities district created pursuant to the Interlocal Agreement. Event(s) of Default shall be as defined in Article IV herein. Favorable Opinion of Bond Counsel m eans a written legal gal opinion of Bond Counsel addressed to Yakima, to the effect that such action is permitted under the laws of the State and under applicable ordinances of the Yakima Council, including the Bond Ordinance and any Supplemental Bond Ordinance, and will not impair the exclusion of interest on a Bond or any other bonds of Yakima from gross income for federal income tax purposes under the Code (subject to the inclusion of any exceptions contained in the opinion delivered upon original issuance of such bond). Force Majeure means any causes or conditions beyond a Party's reasonable control (including, but not limited to fire, explosion, presence of a hazardous substance, earthquake, storm, flood, wind, drought or act of God or one or more of the elements; court order, legislation, delay or failure to act by civil, military or other governmental authority other than a party; strike, lockout, or other labor dispute; riot, insurrection, sabotage or war; breakdown or destruction of, or damage or casualty to, any equipment, facility or other property; any delay or failure by any third party to provide a necessary service, supply, part, equipment, personnel or other item; or interruption, suspension, curtailment or other disruption of a utility). Governmental Authority shall mean any board, bureau, commission, department, or body . of any municipal, county, state, or federal governmental or quasi - governmental unit, or any subdivision thereof, having, asserting, or acquiring jurisdiction over the Property or the management, operation, use, or improvement thereof. -4- P:1sc scO9H 01/06/14 Improvements shall mean all buildings, structures, fixtures, improvements and equipment - ) constructed or located on the Property, including, but not limited to, the structure of the Convention Center and the parking facilities, elevator(s), lighting, seating, carpeting, HVAC, plumbing, electrical and mechanical systems. Insurance Proceeds mean the greater of (i) the proceeds from the insurance policies actually maintained by Yakima with respect to the Convention Center or Project; or (ii) the proceeds that would have been available had Yakima maintained the insurance policies required to be maintained by Yakima under this Agreement. Interlocal Agreement means the Interlocal Financing Agreement between the Cities creating the District. Law(s) and Ordinance(s) shall mean all present and future applicable laws, ordinances, rules, regulations, resolutions, permits, authorizations, orders and requirements of all federal, state, county and municipal governments, the departments, bureaus or commissions thereof, authorities, boards or officers, any national or local board of fire underwriters, or any other body or bodies exercising similar functions having or acquiring jurisdiction over all or any part of the Property, including Yakima acting in its governmental capacity. Lodging Taxes means lodging taxes received by Yakima pursuant to Chap. 67 RCW. ) Net Proceeds, when used with reference to the Bonds, means the principal amount of such Bonds, plus original issue premium, if any, and less original issue discount, if any, and less the proceeds of the Bonds used to pay costs of issuance or deposited in the Debt Service Reserve Fund and/or the PFD Revenue Reserve Fund. Operating Manual means the Operating Standards Manual for the expanded Convention Center. Operation and Maintenance Costs means all necessary costs to Yakima of operating and maintaining the Convention Center as expanded by the Project, including but not limited to administrative and general expenses, costs of insurance (including reasonable contributions for self - insurance reserves, if any), consulting technical services and repairs and replacements (to the extent not properly classifiable as capital costs), real estate taxes, if any, but excluding depreciation (or reserves therefor), amortization of intangibles or other bookkeeping entries of a similar nature and debt service on the Bonds and any Additional Bonds. Outstanding, when used as of any particular time with reference to Bonds or Additional Bonds, means all Bonds or Additional Bonds authenticated and delivered by Yakima under the Bond Ordinance or any Supplemental Bond Ordinance except (1) Bonds or Additional Bonds theretofore cancelled by Yakima or surrendered to Yakima for cancellation; (2) Bonds or Additional Bonds with respect to which all liability of Yakima shall have been discharged in accordance with the Bond Ordinance or Supplemental Bond Ordinance, as applicable, and (3) Bonds or Additional Bonds for the transfer or exchange of or in lieu of or in substitution for which other Bonds or Additional Bonds shall have been authenticated and delivered by Yakima pursuant to the Bond Ordinance or Supplemental Bond Ordinance, as applicable. -5- P:■6C\SC09H 01/06/14 Parking Charge means "vehicle parking charges" as defined in RCW 35.57.110. Parking Tax means a tax on any Parking Charge imposed at any parking facility that is owned or leased by the District pursuant to RCW 35.57.110. Payment Date means the dates specified in the Bond Ordinance, or any Supplemental Bond Ordinance, as dates for the payment of interest on, principal of or premium, if any, with respect to the Bonds or any Additional Bonds. Permitted Investments means investments permitted by State law for investment of Yakima and District funds, consistent with the terms of the Bonds and any Additional Bonds. PFD Revenue Reserve Fund means the PFD Revenue Reserve Fund (or Account), if any, established by Yakima under the Bond Ordinance or Supplemental Bond Ordinance. The amount of revenue consisting of the District's Sales Tax Revenue received by Yakima that shall be maintained in the PFD Revenue Reserve Fund shall be established in the Bond Ordinance. Predevelopment Costs means the cost of all planning, legal, architectural, engineering and other services incurred by Yakima in connection with the Project until the date of issuance of the Bonds. Project means the design, gn, construction, and operation of the additions to the Convention Center, as described in the Project Documents. Project Documents means all design documents (including drawings describing the structural, mechanical, acoustical, lighting, and electrical systems of the Project, detailed site plans, preliminary specifications, and schematic design documents), construction documents (including all drawings and specifications necessary to completely describe the Project in detail to a contractor for the purposes of bidding and construction, schedules, plans and specifications, and the construction contract) and Project budgets (setting forth the construction contract cost, taxes, all contingencies, fees and allowances). Property shall mean the real property described in Exhibit A attached hereto or as hereafter amended. Refunding Bonds means bonds, notes or other evidence of indebtedness the proceeds of which will be used to refund Bonds. Sales Tax means the nonvoted sales and use tax to be imposed by the District in accordance with RCW 82.14.390 at a rate not to exceed 0.033% of the selling price in the case of a sales tax dr value of the article used in the case of a use tax, which tax shall be deducted from the amount of tax otherwise required to be collected or paid over to the State's Department of Revenue and shall expire when the Bonds and any Additional Bonds are retired, or, in any event, not more than 25 years after the Sales Tax is first collected. -6- P:1SC1SCO9H 01/06/14 Sales Tax Revenue means all Sales Taxes received by the District. State means the State of Washington. Substantial Completion shall mean when the Beneficial Occupancy of the Convention Center as expanded by the Project is achieved. Supplemental Bond Ordinance means any ordinance adopted by the Yakima Council amending or supplementing the Bond Ordinance, including any ordinance adopted by the Yakima Council in connection with the issuance of Additional Bonds. Voted Sales Tax means any sales and use tax imposed by the District pursuant to RCW 82.14.048 and approved by the voters. Yakima means the City of Yakima, Washington, a municipal corporation of the State, as now or hereafter constituted. Yakima Council means the City Council of Yakima, or any successor thereto as provided by law. IL INTENT AND RELATIONS A. Intent. 1. Financing. It is the intent of this Agreement that the District lease the Property to Yakima and that Yakima finance the Project. In consideration for Yakima's agreement to finance the Project, it is the intent of the Parties that the District transfer all Sales Tax Revenue to Yakima to pay Predevelopment Costs (to the extent not paid from Net Proceeds), Debt Service and other Regional Center costs including but not limited to funding and/or replenishing the Debt Service Reserve Fund and PFD Revenue Reserve Fund and reimbursing Yakima for deposits made to the Debt Service Fund pursuant to Section III(C). It is the intent of the Parties that, in the event that Yakima provides notice that amounts on deposit in the Debt Service Fund and the PFD Revenue Reserve Fund are projected to be insufficient (not taking into account amounts in the Debt Service Reserve Fund) for Yakima to pay Debt Service when due, Yakima will deposit sufficient funds to the Debt Service Fund to remedy such deficiency as set forth in Section III(C). 2. Development. It is the intent of this Agreement that Yakima design, develop and construct the Project in accordance with the Project Documents and the standards of performance set forth in Article V. This Agreement is intended by the Parties to establish the design, development and construction standards and other performance criteria for the Project. 3. Operation. It is the intent of the Parties that Yakima operate and maintain the Convention Center and the Project, and that Yakima retain all rents, receipts, profits and other revenues of the Convention Center as expanded by the Project. In consideration for Yakima's agreement to operate and maintain the Convention Center and the Project, it is the intent of the Parties that the District pay Additional Revenue, if any, to Yakima, and that Yakima -7- - PISCVSC09H 01/06/14 pay the District's Administrative Costs. In addition, the Parties intend that Yakima apply certain ( Lodging Taxes to pay a portion of Operation and Maintenance Costs, in an amount, if any, ( ) determined on an annual basis by Yakima. B. Description. The Property is located at 10 North Eighth Street , Yakima, Washington 98901 -2515, as legally described on the attached Exhibit A. The Convention Center, as improved by the Project, will occupy approximately 47,000 square feet. C. Yakima's Regulatory Role Reserved. Any Yakima design review and approvals provided for herein are independent of, in addition to and do not in any way obligate Yakima with respect to usual and customary Yakima permitting, code compliance and other regulatory reviews. The outcome of any such regulatory review is independent of and is in no way biased, prejudiced or predetermined in any way by this Agreement. Nothing in this Agreement is intended or shall be construed to require that Yakima exercise its discretionary authority under its regulatory ordinances to further the Project nor bind Yakima to do so. Yakima will process applications for permits and approvals associated therewith as if such applications were made without any Yakima participation in such projects. - D. Governing Law and Venue. This Agreement and the rights and obligations of the Parties shall be governed by, and construed and interpreted in accordance with, the laws of the State. Any suit filed between the Parties concerning this Agreement shall be commenced in the Superior Court in Yakima County. z. HL SCOPE OF COMMITMENTS • A. Commitments by the District 1. Payment Obligation. (a) Payment of Debt Service and Predevelopment Costs. In consideration for Yakima's agreement to issue the Bonds and design, develop and construct the Project, the District shall pay all Sales Tax Revenue to Yakima to pay Yakima's Debt Service and Predevelopment Costs (to the extent not paid from Net Proceeds), and other Regional Center costs including but not limited to funding and/or replenishing the Debt Service Reserve Fund and PFD Revenue Reserve Fund and reimbursing Yakima for deposits made to the Debt Service Fund pursuant to Section III(C). (b) Pledge of Sales Tax Revenue, Additional Revenue and other Receipts of the District. The District hereby pledges Sales Tax Revenue and other amounts to be paid by the District to Yakima for payment of Debt Service, Predevelopment Costs (to the extent not paid from Net Proceeds), and other Regional Center costs including but not limited to funding and/or replenishing the Debt Service Reserve Fund and PFD Revenue Reserve Fund and reimbursing Yakima for deposits made to the Debt Service Fund pursuant to Section III(C). The obligation of the District to pay Sales Tax Revenue and other amounts due under the Agreement and to perform and observe the other obligations on its part contained herein shall be absolute ' and unconditional, and shall not be subject to diminution by setoff, counterclaim, abatement or -8- P:SC1SC09H 01/06/14 ( otherwise. The District's obligations under this Agreement shall continue in effect and shall survive the satisfaction of Yakima's obligations under the Bonds, the Bond Ordinance, any Additional Bonds, and any Supplemental Bond Ordinance until such time as all Predevelopment Costs and Debt Service have been paid, together with any other amounts owed to Yakima hereunder. The Parties acknowledge and agree that Yakima will pledge this Agreement, as well as the District's Sales Tax Revenue and other amounts to be paid by the District to Yakima, to the payment of the Bonds and any Additional Bonds. Such pledge will be material to the offer and sale of the Bonds, and will be disclosed to potential purchasers and purchasers of the Bonds. Bondholders will rely on this pledge in purchasing the Bonds. So long as the Bonds or any Additional Bonds are Outstanding, the District shall not issue bonds, or incur any other obligation, secured by Sales Tax Revenue or by Additional Revenue. (c) Revenue and Payment Reports. The District shall file annual financial statements and annual reports with the Cities, as required under Sections 8.5 and 8.6 of the Charter. Each such report shall bear a current date, be signed by an appropriate and duly authorized District officer and be supported by reasonable documentation sufficient to sustain the accuracy of the report. (d) Termination for Failure To Timely Pay. This Agreement is specifically conditioned upon the District's timely payment of amounts due hereunder. In the event that the District fails to transfer amounts as and when required to Yakima, Yakima may • • terminate this Agreement pursuant to the provisions contained in Article XIII. 2. District Funds. The District shall establish the following Funds and accounts: Sales Tax Revenue Fund (or Account), Additional Revenue Fund (or Account), and the Administrative Fund (or Account). The District may, in its discretion, establish such additional accounts and subaccounts as the District deems necessary or useful, but the establishment of any such account or subaccount shall not alter or modify any of the requirements of this Agreement with respect to a deposit or use of money in the funds. (a) Sales Tax Revenue Fund. The District shall establish a Sales Tax Revenue Fund and shall deposit in the Sales Tax Revenue Fund all Sales Tax Revenue and all net earnings on investments of money in the Sales Tax Revenue Fund. Amounts in the Sales Tax Revenue Fund may be invested in Permitted Investments. The District shall maintain records sufficient to permit calculation of the income on investments and interest earned on deposit of amounts held in the Sales Tax Revenue Fund, and such income and interest shall become part of the Sales Tax Revenue Fund unless otherwise applied in accordance with this Section. The money and investments in the Sales Tax Revenue Fund are irrevocably pledged and shall be used and transferred by the District as follows: Within three working days after receipt, all amounts on deposit in the Sales Tax Revenue Fund to Yakima to pay Debt Service, Predevelopment Costs and other Regional Center costs, including but not limited to funding and/or replenishing the Debt Service Reserve Fund and PFD Revenue Reserve Fund and reimbursing Yakima for deposits made to the Debt Service Fund pursuant to Section III(C). -9- PASC1SC09H 01/06/14 (b) Additional Revenue Fund. The District shall deposit in the t Additional Revenue Fund all Additional Revenue received by the District and all net earnings on ? . "- investments of money in the Additional Revenue Fund. Amounts received from Yakima to pay . Administrative Costs shall be deposited to the Additional Revenue Fund. Amounts in the Additional Revenue Fund may be invested in Permitted Investments. The District shall maintain records sufficient to permit calculation of the income on investments and interest earned on deposit of amounts held in the Additional Revenue Fund, and such income and interest shall become part of the Additional Revenue Fund unless otherwise applied in accordance with this Section. The money and investments in the Additional Revenue Fund are irrevocably pledged and shall be used and transferred by the District at least monthly as follows and in the following order of priority: (i) To the Administrative Fund to pay Administrative Costs; and (ii) The remainder, to Yakima to pay Operation and Maintenance Costs. To the extent that Additional Revenues are received by Yakima on behalf of the District, Yakima shall apply such Additional Revenues to pay (i) Administrative Costs and/or (ii) Operation and Maintenance Costs. (c) Administrative Fund. The District shall establish an Administrative Fund. Amounts transferred from the Additional Revenue Fund to pay Administrative Costs pursuant to subsection (b) shall be deposited to the Administrative Fund. shall be used to pay Administrative Costs. Amounts in the Administrative Fund may be invested in Permitted Investments. The District shall maintain records sufficient to permit calculation of the income on investments and interest earned on deposit of amounts held in the Administrative Fund, and such income and interest shall become part of the Administrative Fund unless otherwise applied in accordance with this Section. (d) Liens. Except as permitted under this Agreement, the District shall not create any lien upon funds created hereunder other than the lien hereby created. -10- P:1SC\SC09H 01 /06/14 B. Commitments by Yakima 1. Site Availability. Pursuant to the terms of the Lease Agreement between Yakima and District, dated July 27, 2001, Yakima will lease to the District the Property described in Exhibit A. The Parties agree that the leasehold interest in the Property is donated (for nominal consideration in the form of $50 in rent) by Yakima to the District to be used for the construction of a Regional Center, as defined in RCW 35.57.030. Moreover, the Parties agree that the value of the Property is $11,800,000. The value of the leasehold interest in this Property transferred by the Lease Agreement significantly exceeds 33% of the net present value of the total Sales Taxes projected to be received by the District (approximately $2.4 million). 2. Issuance of the Bonds. Yakima agrees to issue the Bonds and Completion Bonds, if necessary. Yakima reserves the right not to issue the Bonds if, at the time the Bonds are to be sold, the total interest cost on the Bonds exceeds 5.55 %, or if the financing is determined to no longer be economical. The Bonds shall be in an aggregate principal amount to be determined by Yakima, at least equal to the projected Costs of the Project, Predevelopment Costs, amounts to pay costs of issuance and amounts to be deposited to the Debt Service Reserve Fund, if any. 3. Application of Net Proceeds. Yakima agrees to apply Net Proceeds to pay Predevelopment Costs and Costs of the Project as follows. (a) Predevelopment Costs. Yakima has incurred and will continue to incur Predevelopment Costs for the benefit of the District. Yakima will pay these Predevelopment Costs from the District's Sales Tax Revenue received by Yakima to the extent that Predevelopment Costs are not paid from Net Proceeds (at Yakima's election). (b) Costs of the Project. In addition, Yakima will apply Net Proceeds to pay Costs of the Project. 4. Design, Development and Construction Responsibility. Yakima shall design or contract for the design of the Project and construct or contract for the construction of the Project, in accordance with the Project Documents and with the standards of performance set forth in Article V and elsewhere in this Agreement. 5. Operation and Maintenance Responsibility. (a) Operations and Maintenance — Generally. Yakima agrees to operate and maintain the Improvements including the Convention Center, related parking and, upon Substantial Completion, the Project, on the terms and in accordance with the standards set forth herein. Yakima shall operate and maintain the Improvements including the Convention Center, related parking and the Project as a first class convention center facility, to be kept at all times in a safe and clean condition. Yakima shall provide (directly or by contract) all management, supervision, personnel, materials, equipment, services and supplies necessary to operate, maintain and repair of the -11- P:ISCISC09H 01/06/14 Improvements and shall take all reasonable precautions to prevent damage, injury or loss by 1 reason of or related to the operations and maintenance of the Improvements to any person or . ; property. Yakima shall hire an appropriate number of qualified employees to operate and maintain the Improvements consistent with the best management practices. Yakima shall properly supervise and direct its employees and other parties implementing the performance of its duties, obligations and functions under this Agreement. Yakima shall be fully responsible for the performance of such employees and other parties. Yakima shall comply with all applicable Laws and Ordinances relating to the safety of persons or property or their protection from damage, injury or loss. Yakima shall obtain all statements, certificates, permits, licenses, rights, and approvals, whether public, private, local, state or federal, that are necessary or appropriate to the continued operation of the Improvements as a first class convention center. Yakima shall undertake all modifications to the Improvements required to comply with state, federal and local laws, rules, regulations, judgments, orders and decrees. Prior to Substantial Completion of the Project, Yakima shall- provide pre- opening services, including start-up of the Project, mobilization of staff and services, and performance of marketing and booking plans. (b) Compliance with the Operating Manual. Yakima shall maintain the Improvements in substantial compliance with the terms of the Operating Manual during the t term of this Agreement. The Operating Manual shall not be amended except with the written '; approval of the Yakima City Manager or his or her designee. The Operating Manual shall not be g p g revised in a manner that will impair the security of the owners of the Bonds or any Additional Bonds. (c) Insurance. Yakima shall maintain insurance as set forth in Article VII. -12- P:1SC\SC09H 01/06/14 6.. Operation and Maintenance Costs. (a) Obligation To Pay Operation and Maintenance Costs and Administrative Costs; Right to Receive all Rents and Operating Revenues. Yakima shall pay Operation and Maintenance Costs from revenues derived from operation of the Convention Center and the Project, Additional Revenues received from the District, from Lodging Taxes, or other Yakima funds, as set forth below. Within a reasonable period after receipt of an invoice therefor, Yakima shall pay to the District its Administrative Costs as set forth in the District's budget approved by Yakima. All rents, receipts, profits and other revenue derived from the operation of the Convention Center and the Project shall be retained by, and shall be the property of, Yakima, and shall be applied to pay Operation and Maintenance Costs or any other lawful purposes of Yakima. (b) Lodging Taxes. To the extent not paid from revenues derived from operation of the Convention Center and the Project, Additional Revenues received from the District, or other Yakima funds, Yakima will apply Lodging Taxes to pay Operation and Maintenance Costs. The amount of Lodging Taxes to be applied to this purpose in any year shall be determined by the Yakima Council in its sole discretion as part of its annual budget process. The amount of Lodging Taxes to be applied to pay Operation and Maintenance Costs may vary from year to year and may equal zero in some years. In any event, the amount of Lodging Taxes to be applied shall not exceed the amount available after payment of debt service on Yakima's outstanding bonds (including all or a portion of the Bonds) to which these taxes are pledged. Yakima's obligation hereunder is limited only to the amounts designated for this purpose by the Yakima Council. Yakima does not hereby guarantee any obligations or liability of the District. It is expressly understood and agreed that any obligation or liability arising out of and/or incurred by the District by reason of this Agreement, or the carrying out of any activity in connection therewith, shall be satisfied exclusively from the assets and credit of the District, and no creditor or any other person or entity shall have any recourse to any of the assets, credit, or services of Yakima on account of any debts, obligations, or liabilities of the District (c) Amounts Remitted to Yakima. Amounts remitted to Yakima pursuant to Section III(A)(2)(a) and (2)(b)(ii) shall be used by Yakima for the following t that are Sales Tax Revenue shall be used to pay Predevelopment ent Costs (to purposes. Receipts S P Y P the extent not aid from Net Proceeds), Service, and for the purposes set forth in RCW P ), PmP 35.57.020 as the same may be amended (acquiring, constructin , owning, remodeling, Y constructing, equipping, reequipping, repairing, financing, and operating one or more Regional Centers). Receipts that are Additional Revenues shall be applied to pay Operation and Maintenance Costs. Yakima's obligation hereunder is limited only to the amounts received from the District. (° Yakima does not hereby guaranty any debt obligations or liability of the District. -13- P:1SC1SCO9H 01/06/14 All amounts remitted to Yakima pursuant to Section III(A)(2)(a) and 2(b)(ii), together !' with all rents, receipts, profits and other revenues derived by Yakima from its operation of the Center, shall be retained by and be the property of Yakima to be applied to pay • Operation and Maintenance Costs (directly or by contract) or for other lawful purposes of Yakima . It is the Parties intent that all such amounts shall be Yakima funds, accounted for in Yakima's books and accounts. (d) Additional Support. To the extent, as from time to time authorized by the Yakima City Manager, Yakima will utilize its employees to provide oversight and administrative assistance in working with District to achieve the mutual goals and objectives of the Cities and District under this Agreement. Unless otherwise specified in this Agreement or applicable law, actions to be taken or decisions to be made by Yakima will be the responsibility of the Yakima City Manager or his or her designee. Yakima hereby grants to the extent permitted by law such person or persons the power, authority, and right to carry out all such responsibilities. C. Commitment by Yakima to Replenish Sales Tax Shortfall 1. Funding Commitment. Yakima shall provide notice to the District in the event that amounts in the Debt Service Fund and the PFD Revenue Reserve Fund (not taking into account amounts in the Debt Service Reserve Fund) are projected to be insufficient to pay Debt Service on any Payment Date. In such event, Yakima will deposit sufficient funds to the Debt Service Fund to remedy such deficiency. Yakima's obligation hereunder is limited only to the amount to be paid to replenish any projected deficiency in the Debt Service Fund. Yakima does not hereby guarantee any debt obligations or liability of the District. It is expressly understood and agreed that any obligation or liability arising out of and/or incurred by the District by reason of this Agreement, or the carrying out of any activity in connection therewith, shall be satisfied exclusively from the assets and credit of the District, and no creditor or any other person or entity shall have any recourse to any of the assets, credit, or services of Yakima on account of any debts, obligations, or liabilities of District. IV. PROJECT COMPONENTS AND OPERATION CRITERIA A. Project Components. Yakima shall finance, design and construct the Project in accordance with the Project Documents, and in accordance with the performance specifications set forth herein. B. Project Purpose. The Project is being constructed to serve the needs of the region, including the residents of Yakima, the City of Selah and the City of Union Gap. Following Project completion, Yakima shall be solely responsible ble for management, Y P g ment, operation and maintenance of the Convention Center, as expanded by the Project, consistent with the terms of this Agreement and the Operating Manual. -14- 1 01/06/14 ( 1. Public Access. Yakima shall provide regular hours during which the Convention Center will be open to the public (subject to reasonable Admission Charges); provide public programs; and make available for reasonable public use any ballroom, auditorium, meeting rooms or other public spaces in the Convention Center (subject to reasonable security measures). 2. Yakima Approval: In consideration of Yakima's obligations hereunder, the District agrees that the following shall be subject to the approval of the Yakima Council: (a) Approval of the Yakima Council: (i) The District shall not impose Admission Charges or Parking Charges without the prior approval of the Yakima Council, as set forth in the Interlocal Agreement and the Charter. (ii) The District shall not impose Admission Taxes or Parking Taxes without the prior approval of the Yakima Council. (iii) The District's annual budget, including Administrative Costs, shall be subject to the approval of the Yakima Council and to review and comment by the Cities of Selah and Union Gap. (iv) The District shall not authorize or engage in gambling activities or authorize or publicly display any artwork without the prior approval of the Yakima Council. (v) Any acquisition or transfer of real and personal property with a value over $100,000 by lease, sublease, purchase, or sale by the District shall be subject to approval by the Yakima Council. C. Project Contracting and Management 1. Yakima shall construct the Project according to the Project Documents. 2. Yakima will select the contractor(s) for the Project through a competitive bidding process under the Laws of the State, pursuant to procedures designed to provide maximum practical competition by and from qualified contractors. 3. Yakima shall take reasonable precautions to prevent unnecessary damage, injury or loss to property, structures, and vegetation in the Project area and shall at its own expense repair any damage thereto caused by its, or its contractors', actions. Yakima shall require its contractors to take any and all precautions that may be necessary to render all portions of the Project and any adjacent areas affected by the Project secure in every respect, and to decrease the likelihood of accidents from any cause, and to avoid contingencies that are liable to delay the Project. Yakima shall require its contractors to exercise utmost care when using explosives or other hazardous materials or equipment, and when utilizing unusual methods. 15- P:1SC1SCO9H 01/06/14 These requirements shall in no way relieve Yakima of its responsibility for safety on the Project. tY J The District shall not be responsible for any unsafe conditions. ( ---) • V. DEVELOPMENT CRITERIA AND OVERSIGHT A. Generally. Except as otherwise provided in this Section, the Parties hereby agree that Yakima shall have sole responsibility for construction of the Project and shall be responsible for obtaining all necessary land use, building and mechanical permits, and all other required permits or approvals for construction of the Project. Yakima shall promptly comply with all applicable Laws and Ordinances as they relate to the Property and Improvements. Yakima's responsibility to finance such construction is limited to the extent of Net Proceeds. B. Standards of Performance. Yakima shall perform the terms of this Agreement according to the following standards: 1. Performance in a good and workmanlike manner and in compliance with all applicable laws and ordinances, rules, and regulations. 2. Use of materials that are of first class quality and workmanship. 3. Maintenance and warranty of all portions of the Project consistent with the Project Documents. C. Development Schedule and Substantial Completion Date. 1. RCW 82.14.390 currently requires that construction of the Project commence before January 1, 2003. Accordingly, Yakima shall commence construction of the Project before January 1, 2003, or such later start date set forth in any amendment to RCW 82.14.390 (the "Date of Commencement "). 2. Yakima shall pursue the design and construction of the Project to achieve Substantial Completion within 24 months after the Date of Commencement, excluding time periods when the design, construction or development of the Project is unavoidably delayed by reasons of Force Majeure; provided, however, that said date may be extended by the Yakima City Manager. VI. PROJECT COSTS. Yakima shall finance, design, construct, and assume the risk of loss of the Project from Net Proceeds and from other amounts paid by the District to Yakima pursuant to the Agreement. • -16- P:1SClSC09-j 01/06/14 t. VII. INSURANCE A. Insurance Requirements. Yakima shall maintain and keep in force insurance covering all aspects of the construction activity on the Property, including but not limited to the following requirements: 1. Builder's All Risk Comprehensive Coverage. Yakima shall keep, or shall require the construction contractor to keep, all Project components, including but not limited to the Convention Center and parking facilities, insured for Builders All Risk Comprehensive Coverage including earthquake and flood in any event in an amount not less than one hundred percent (100 %) of the then_ full "Replacement Cost," being the cost of replacing the Project components, and all fixtures, equipment, improvements and betterments thereto. 2. Commercial General Liability. Yakima shall carry, and shall require its construction contractor to carry, Commercial General Liability insurance providing coverage against claims for bodily injury, death or property damage on the Property with broad form liability and property damage endorsement, such insurance to afford minimum protection, during the term of the construction phase, and written for combined single limits of liability of no less than Ten Million Dollars ($10,000,000), per occurrence, said amount to be adjusted from time to time with coverage deemed customary under like conditions. 3. Property Damage Insurance. Yakima shall carry property insurance covering the Property including all Improvements, including earthquake, flood, boiler and g a PrtY g P g q machinery insurance, in an amount equal to at least one hundred percent (100 %) of the replacement cost of all Improvements. Such insurance shall contain coverage against loss or damage by perils no less broad than the current edition of the ISO Special Form, 1985 Edition. Yakima shall be responsible for payment of any deductibles under said insurance policies and any costs of restoration resulting from any uninsured or underinsured g y sured losses. B. Insurance Policies. Insurance policies required herein: 1. Shall be issued by companies authorized to do business in the State with the following qualifications: a. The companies must be rated no less than "A," as to general policy holders rating and no less than "X" as to financial category in accordance with the latest edition of Best's Key Rating Guide, published by A.M. Best Company, Incorporated. b. The policies shall be issued as primary policies. 2. Each such policy or certificate of insurance mentioned and required in this Section VII shall have attached thereto (1) an endorsement that such policy shall not be canceled or materially changed without at least 30 days' prior written notice to the District and Yakima; ( (2) an endorsement to the effect that the insurance as to any one insured shall not be invalidated by any act or neglect of any other insured; (3) an endorsement pursuant to which the insurance -1 7- PA,SC1SC09H 01/06/14 carrier waives all rights of subrogation against the Parties hereto; and (4) an endorsement pursuant to which this insurance is primary and noncontributory. • ) 3. The certificates of insurance and insurance policies shall be furnished to the District and Yakima prior to commencing any construction under this Agreement. The certificate(s) shall clearly indicate the insurance and the type, amount and classification, as required for strict compliance with this Section VII. 4. Cancellation of any insurance or non - payment by Yakima of any premium for any insurance policies required by this Agreement shall constitute an Event of Default under Section XII of this Agreement. C. Adjustments. The types of policies, risks insured, coverage amounts, deductibles and endorsements may be adjusted from time to time as the District and Yakima may mutually determine. VIII. AS IS • A. Due Diligence. The District acknowledges that it has diligently investigated to its full satisfaction the physical condition of the Property and all other matters that in the District's judgment affect the District's use of the Property and the District's willingness to enter into this Agreement. The District acknowledges that except as expressly provided for in this Agreement, neither Yakima nor any employee, officer, agent or representative of Yakima has made any t '` c ` representations or warranties whatsoever regarding .: g ng the Property or this transaction or any facts k k„.... relating thereto, including, without limitation, any representations or warranties concerning the physical condition of the Property, access, zoning laws, environmental matters, suitability, feasibility, utilities, or anv other matter affecting the Property or the use thereof. B. Acceptance. Except as expressly provided for in this Agreement, Yakima shall accept the Property "as is" and "where is" with all faults, of any nature or kind, without any representations or warranties, express or implied or statutory of any kind whatsoever by the District or any employee, officer, agent or representative of the District. Upon acceptance by Yakima of the Property under this Agreement, then Yakima shall be deemed to have accepted the Property and to have waived and released its right to recover from the District any and all damages, losses liabilities, costs, or expenses whatsoever (including attorneys' fees and costs) and claims therefor, whether direct or indirect, known or unknown, foreseen or unforeseen, which may arise on account of or in any way arising out of or connected with the physical condition of the Property or any Law or Ordinance. C. Environmental Contamination. Yakima agrees to indemnify and hold harmless the District for any environmental contamination existing as of the date of this Agreement. Yakima agrees to design and develop the Project in such a manner as to minimize, to the extent financially practicable, the excavation of native soils. In the event Yakima encounters contaminated soils, Yakima shall be responsible for all costs of remediating the contaminated soil, and for seeking recovery from responsible parties. -1 P; SC1SCO9H 01/06/14 �." The Parties agree that in the event contaminated soils are encountered and any Party incurs remediation costs, the Parties shall fully cooperate in pursuing claims against those entities that may be liable. IX. LIABILITY A. Indemnification of Yakima. During the term of this Agreement, to the maximum extent not prohibited by law, the District agrees to and shall indemnify and hold Yakima harmless from and against all liability, loss, damage, cost, or expenses (including reasonable attorneys' fees and court costs, amounts paid in settlements and judgment) arising from or as a result of the death of any person or of any accident, injury, loss or damage whatsoever to any person or to the property of any person that occurs on or adjacent to the Property and that is directly or indirectly caused by the acts, errors, or omissions of the District or its officers, agents, servants, employees, officers, contractors or subcontractors. The District shall not be responsible for (and such indemnity shall not apply to) the gross negligence or willful misconduct of Yakima, or their respective officials, servants, employees or officers. X DESTRUCTION OR CONDEMNATION A. Total or Partial Destruction. 1. If the Convention Center or Project is totally or partially destroyed at any time after execution of this Agreement, and the Insurance Proceeds are or would have been sufficient to a the cost of reconstruction or restoration, 0 PY , or if the uninsured cost of reconstruction or restoration is less than Two Hundred Fifty Thousand Dollars ($250,000), and the damage or destruction is such that as a result thereof Yakima cannot meet its obligations under this Agreement, Yakima shall reconstruct or restore the damage consistent with terms of this Agreement within two years of the destruction; provided that, if the damage or destruction is such that Yakima may notwithstanding such damage or destruction continue to fulfill its obligations under this Agreement, Yakima shall have the discretion to use the Insurance Proceeds to restore and repair the Property to the extent necessary and appropriate for its purposes. If the Insurance Proceeds are insufficient and the uninsured cost is more than Two Hundred Fifty Thousand Dollars ($250,000), Yakima may elect to reconstruct or restore the damage or to terminate this Agreement by delivery of .written notice to the District within 30 days after the destruction. 2. If Yakima elects not to reconstruct or restore the damage, this Agreement shall terminate and the Property shall revert to Yakima pursuant to Section XIII. The District shall transfer the Property in its then condition to Yakima, along with any Insurance Proceeds attributable to the damage or destruction of the Project. ( B. Condemnation. If the whole or any substantial part of the Property is taken or condemned in the exercise of eminent domain powers (or by conveyance in lieu thereof), such -19- P:\SC1SCO9H 01/06 /14 that Yakima can no longer meet its obligations under this Agreement, this Agreement shall terminate upon the date when possession of the Property so taken shall be acquired by the condemning authority. As used herein, "substantial" shall be defined as reasonably preventing the conduct of Yakima's activities. Yakima shall have the right to claim and recover from the condemning authority such compensation as may be separately awarded or recoverable by Yakima in Yakima's own right on account of any and all damage to Yakima's activities by reason of the condemnation and on account of any cost or loss Yakima might sustain; provided that, the District shall pay to Yakima that portion of its condemnation proceeds equal to the amount of Debt Service on the Outstanding Bonds and Additional Bonds, if any. XL RIGHT TO ASSIGN OR OTHERWISE TRANSFER A. Right to Transfer Agreement. 1. During the term of this Agreement and at such time as the Bonds or Additional Bonds are no longer Outstanding, the District shall have the right to assign or otherwise transfer the Agreement, to such other persons, firms, corporations, partnerships, joint ventures, and federal, state or municipal government or agency thereof, as the District shall select (the "Transferee "), provided, however, that: a. The District must obtain the prior written consent of Yakima; b. Such assignment or transfer shall be made expressly subject to the terms, covenants and conditions of this Agreement; c. The District shall deliver to Yakima a duly executed and recorded copy of the document evidencing such transfer, including a suitable estoppel agreement(s); and d. Such transfer shall not be effective to bind Yakima until the Transferee has assumed all obligations of the District under this Agreement and notice thereof is given to Yakima, and such notice shall designate the name and address of the Transferee. 2. Said Transferee (and all succeeding and successor Transferees) shall succeed to all rights and obligations of the District under this Agreement, subject, however, to all duties and obligations of the District in and pertaining to the then unperformed provisions of this Agreement. Upon such transfer by the District, or by a successor in accordance with the requirements of this Section, the District (and/or its successor(s)) as Transferor in such a transfer shall not be released and discharged from all of its duties and obligations hereunder which pertain to the then unperformed provisions of this Agreement without the written consent and release of Yakima. XIL DEFAULT A. Event of Default of the District. This section shall apply if the District fails to keep, observe, or perform any of its duties or obligations under this Agreement (an "Event of -20- P:1SC1SC09H 01/06/14 C. Default "). Notwithstanding the generality of this paragraph, an "Event of Default" shall be deemed to occur for any of the following specific events: 1. The failure of the District to pay amounts due to Yakima hereunder when due. 2. Conversion by the District of any portion of the Property to any use other than the uses permitted under the Charter and this Agreement. 3. The making by the District of an assignment for the benefit of creditors contrary to the terms of this Agreement, or filing a petition in bankruptcy or of reorganization under any bankruptcy or insolvency law or filing a petition to effect a composition or extension of time to pay its debts. 4. The appointment of a receiver or trustee of the property of the District, which appointment is not vacated or stayed within ninety days. 5. The filing of a petition in bankruptcy against the District or for its reorganization under any bankruptcy or insolvency law that shall not be dismissed or stayed by the court within ninety days after such filing. B. Force Majeure. The District shall not be considered to be in breach of or default under this Agreement on account of any delay or failure to erform as required by this P q Y Agreement as a result of a Force Majeure event. XIII. REMEDIES A. Remedies Upon Default. If an Event of Default on the part of the District shall occur, then Yakima at any time after periods set forth for the exercise of rights herein shall have the following cumulative rights and remedies: 1. Provide Notice and Time to Cure. If Yakima desires to take action for an Event of Default, Yakima shall provide written notice to the District specifying such Event of Default or Events of Default and stating that Yakima at its option may terminate this Agreement on the date specified in such notice, which shall be at least 30 days, but no more than 90 days, after the giving of such notice, unless the District cures such Event of Default. 2. Injunction. Yakima shall be entitled to restrain, by injunction, the commission of or attempt or threatened commission of an Event of Default and to obtain a judgment or order specifically prohibiting a violation or breach of any such term or provision of this Agreement without, in either case, being required to prove or establish that Yakima does not have an adequate remedy at law. The District hereby waives the requirement of any such proof and acknowledges that Yakima would not have an adequate remedy at law for the District's • commission of an Event of Default hereunder. -21- P:1SC1SCO9H - 01/06/14 3. Terminate for Default. a. Yakima shall be entitled to immediately terminate this Agreement if any Event of Default continues for a period of 30 days after written notice thereof from Yakima to the District, or in the case of such Event of Default which cannot with due diligence and in good faith be cured within 30 days, the District fails to proceed promptly after such notice and with due diligence and in good faith, to begin to cure said Event of Default; provided that, in such event proper time to cure may be extended only by written permission of Yakima. b. In the event that this Agreement terminates for reasons of an Event of Default, Yakima, in its sole discretion, shall have the option of exercising one or both of the following choices: (i) Receive payment from the District in an amount required to pay Predevelopment Costs (to the extent not paid from Net Proceeds), Debt Service on the Outstanding Bonds and any Additional Bonds when due, and the amount necessary to reimburse Yakima for any amounts paid pursuant to Section III(C). • (ii) Immediately terminate the Lease Agreement. 4. Recover Damages, Costs and Expenses. Yakima shall be entitled to proceed against the District for all direct damages, costs and expenses arising from the District's committing an Event of Default hereunder and to recover all such direct damages, costs and expenses, including reasonable attorneys' fees. B. No Waiver by Yakima. No failure by Yakima to insist upon the performance of any of the terms of this Agreement or to exercise any right or remedy consequent upon a breach thereof, shall constitute a waiver of any such breach or of any of the terms of this Agreement. None of the terms of this Agreement to be kept, observed or performed by the District, and no breach thereof, shall be waived, altered or modified except by a written instrument executed by Yakima. No waiver of any breach shall affect or alter this Agreement, but each of the terms of this Agreement shall continue in full force and effect with respect to any other then existing or subsequent breach thereof. No waiver of any default of the District hereunder shall be implied p from any omission by Yakima to take any action on account of such default if such default persists or is repeated, and no express waiver shall affect any default other than the default specified in the express waiver and then only for the time and to the extent therein stated. One or more waivers by Yakima shall not be construed as a waiver of a subsequent breach of the same covenant, term or conditions. -22- P:1SC\SC09H 01/06/14 C. Termination Notwithstanding anything to the contrary contained in this Agreement: 1. Termination by Mutual Agreement Prior to Beneficial Occupancy. This Agreement shall terminate under circumstances where all Parties mutually agree in writing that it is impossible or impractical to design, develop or construct the Project. In the event that one Party determines that it is impossible or impractical to design, develop or construct the Project, the Parties agree to meet and enter into good faith negotiations regarding whether the Project has become impossible or impractical. D. Reversion of the Leasehold Interest to Yakima. In the event that this Agreement terminates prior to Beneficial Occupancy, Yakima may immediately terminate the Lease Agreement and reenter and retake the Property, and the District shall promptly: 1. Remove all of its personal property from the Property; 2. Remove all rubble, debris and unusable improvements from the Property as required by Yakima in its sole discretion; 3. Remove all waste materials and rubbish from and about the Property and adjacent property; and 4. Satisfy or bond all liens upon the Project (or claims which with notice or passage of time or both would mature into a lien). Yakima shall be entitled to retain title to the a Pro and all Improvements, including the Property P � g Convention Center and Project, free and clear ar of any leasehold interest or other claim of the District and anyone claiming by, through or under the District. • E. Certain Provisions Survive Termination. The following provisions of this Agreement shall survive notwithstanding any termination of this Agreement and reversion of the leasehold interest in the Property and Improvements to Yakima: • 1. As Is (Section VIII); 2. Liability (Section IX); and 3. Destruction or Condemnation (Section X). • -23- P:4SC4SC09H 01/06/14 XIV. REPRESENTATIONS AND WARRANTIES • A. Yakima's Representations. Yakima hereby represents and warrants to the District that it has full statutory right, power and authority to enter into this Agreement and perform in accordance with its terms and provisions; that the person signing this Agreement on behalf of Yakima has the authority to bind Yakima and to enter into this transaction; and that Yakima has taken all requisite action and steps to legally authorize the execution, delivery, and performance of this Agreement. B. The District's Representations and Warranties. The District hereby represents and warrants to Yakima that it has full power and authority to enter into this Agreement and perform in accordance with its terms and provisions; that the parties signing this Agreement on behalf of the District have the authority to bind the District and to enter into this transaction; and that the District has taken all requisite action and steps to legally authorize the execution, delivery, and performance of this Agreement. C. Tax Covenant. The District acknowledges that the Bonds are to be issued as tax - exempt obligations. The District covenants that it will not take any action to cause interest on the Bonds or any Additional Bonds to be taxable. XV. LEASE BACK A. Sublease. The District hereby leases to the City and the City hereby hires from the District certain improved real property located in the City of Yakima, Washington, legally described in Exhibit A attached hereto and by this reference incorporated (the "Premises ") and certain improvements thereon consisting of a convention center, and the Project to be built on the Premises (the "Improvements "). Such Premises are subject to all easements, reservations, encumbrances and restrictions of record, including in particular that certain Lease Agreement between the City, as lessor, and the District, as lessee, dated July 27, 2001. B. Rent. Within 60 days of the date of this Agreement, the City shall pay to the District $50, which represents prepaid rent for the entire term of this Agreement. C. Lease Obligations Assumed._Except as other wise provided herein, the District hereby assigns and the City agrees to assume all duties and obligations of the District under the Lease Agreement. XVI. MISCELLANEOUS A. Captions. The headings and captions of this Agreement and the Table of Contents preceding the body of this Agreement are for convenience and reference only and in no way define, limit or describe the scope or intent of this Agreement nor in any way affect this Agreement. -24- P: \SC \SCO9H 01/06/14 B. Construction. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the Party or Parties may require. The Parties hereby acknowledge and agree that each was properly represented by counsel and this Agreement was negotiated and drafted at arms' length so that the judicial rule of construction to the effect that a legal document shall be construed against the draftsman shall be inapplicable to this Agreement. C. Entire Agreement. This Agreement and any collateral instruments referenced herein contain the entire agreement between the Parties hereto and shall not be modified or amended in any manner except by an instrument in writing executed by the Parties hereto. Previous drafts of this Agreement or any portions thereof shall not be utilized in any manner by either Party should any dispute arise as to the intent of this Agreement. D. Successors and Assigns. The terms herein contained shall bind and inure to the benefit of Yakima, its successors and assigns, and the District, its successors and assigns, except as may be otherwise provided herein. E. Notices. All notices which may be or are requested to be given pursuant to this Agreement shall be deemed given when hand delivered, or when deposited in the United States Mail, postage prepaid, and marked registered or certified mail, return receipt requested, and addressed to the Parties at the following addresses unless otherwise provided for herein: To Yakima: Richard A. Zais, Jr. City Manager City of Yakima 129 N. 2nd Street Yakima, WA 98901 With a copy to: Raymond L. Paolella, Esq. City Attorney City of Yakima 200 South Third Street Yakima, WA 98901 To the District: Richard E. Ostrander Chair Yakima Regional Public Facilities District 10 N. 8 Street Yakima, WA 98901 F. Incorporation by Reference. All exhibits and appendices annexed hereto are hereby incorporated by reference herein. -25- P: \SC \SC09H 01/06/14 G. Execution in Counterparts. 1. This Agreement may be executed in any number of counterparts and by . different Parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same Agreement. 2. This Agreement becomes effective when the representatives of the Parties have executed it. H. Waiver. The_waiver by either the District or Yakima of the performance of any covenant, condition, or promise shall not invalidate this Agreement nor shall it be considered a waiver by such Party of any other covenant, condition, or promise hereunder. The waiver by either the District or Yakima of the time for performing any act shall not constitute a waiver of the time for performing any other act or an identical act required to be performed at a later time. The exercise of any remedy provided by law or the provisions of this Agreement shall not exclude other consistent remedies unless they are expressly excluded. I. Exculpation. Notwithstanding anything contained to the contrary in any provision of this Agreement, it is specifically agreed and understood that there shall be absolutely no personal liability on the part of any individual officers or directors of Yakima or the District with respect to any of the obligations, terms, covenants, and conditions of this Agreement. t J. Severability. If any term or provision of this Agreement or the application thereof K `` to any person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Agreement or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby and shall continue in full force and effect. K. Term. This Agreement shall terminate on the later of the date that the Bonds and any Additional Bonds are no longer Outstanding and the date on which the Sales Tax expires. L. Amendments. This Agreement may be amended, only with the written consent of the Parties. • • -26- P:1SC1SC09H 01/06/14 • • r` f IN WITNESS WHEREOF, the Parties hereto have executed this document as of the day and year first above written. DATED this "al day of , 2001. CITY OF YAKIMA By - C' ''�—, ".,� a . - -� Richard A. Zais, Jr. City Manager Attest: d' . • • c i ' N' • City Clerk � ♦ A SEAL 4 'M� .i • 111: Y �- 4;. YAKIMA REGIONAL PUBLIC • ,,' FACILITIES DISTRICT Approved as to form: ,.yam „; By e . S / ^ , hair • n � Bo � f D 7 City Attorney • .., `--=� - ".-6 -^1- � :t a° / - 9 • s if -7a'/-,OZ • Certified to be a true and correct copy of the original filed in my office. . k /a /aZ / . CITY CLERK By /.ik ,✓ _ Al r/ 'i d .. Deputy =;K1 0 PMq 1 it SEAL 1 *' a. .. 4 SNING2 - ` -27- P:\SC \SC09H 01/06/14 EXHIBIT A LEGAL DESCRIPTION OF PROPERTY Real property located at 10 No. 8th Street, Yakima, Washington, including accompanying parking lots: Lot 1 and the E 60 feet of Lots 15 & 16, Block 149, together with vacated alley; y, and Lots 1 -8 & the E 60 feet of Lots 9 -16, Block 150; together with vacated alley, and the E 220 feet of vacated "A" Street; and Lots 1 -4, 6 -8 and 9 -14, Block 170, together with vacated alley; and Lots 1 -3 and 14 -16, Block 169; All in Husons Addition to North Yakima as recorded in Vol. "A" of Plats, pg. 11, records. of Yakima County, Washington. A -1 EXHIBIT B DEBT SERVICE SCHEDULE (To be attached and incorporated into the Agreement at the time that the Bonds and any Additional Bonds are issued) • • B -1 P: \SC\SC09H 01/06/14 RESOLUTION NO. 2001-04 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT, YAKIMA COUNTY, WASHINGTON, IMPOSING A 0.033% RETAIL SALES AND USE TAX. • ADOPTED: JULY 24, 2001 C: \WINDOWS \TEMP \Sales Tax Res 07 -24 -01 final lap.doc Last printed 07/27/01 11:54 AM RESOLUTION NO. 2001 -04 111 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT, YAKIMA COUNTY, WASHINGTON, IMPOSING A 0.033% RETAIL SALES AND USE TAX. WHEREAS, the Yakima Regional Public Facilities District (the "District ") is a public facilities district formed by the Cities of Yakima, Selah and Union Gap pursuant to Chap. 35.57 RCW (the "Act ") to assist in financing the expansion and operation of the Yakima Convention Center; WHEREAS, under the Act, the District is authorized to acquire, construct, own, remodel, maintain, equip, reequip, repair, finance, and operate one or more "regional centers "; WHEREAS, the District wishes to make improvements to the Yakima Convention Center at an estimated cost of over $10,000,000 (the "Project "), stimulating economic development, creating jobs, realizing additional sales and lodging tax revenues, attracting commercial business and tourism, and providing facilities for convention, special events and community events including public meetings and performing arts event; WHEREAS, pursuant to RCW 35.57.040 and to fund regional centers such as the Project, the District is authorized to impose a retail sales and use tax under RCW 82.14.390; WHEREAS, the rate of tax may not exceed 0.033% of the selling price in the case of a • sales tax or the value of the article used in the case of a use tax; WHEREAS, the tax will be deducted from the amount of tax otherwise required to be collected or paid over to the State, operating to shift a share of the sales and use tax revenues to the District; WHEREAS, moneys collected must be matched with a one -third local match from public or private sources including, but not limited to, in -kind contributions used in all phases of the development or improvement of the regional center or land that is donated and used for the siting of the regional center; WHEREAS, pursuant to a Lease Agreement, the City of Yakima intends to lease the Yakima Convention Center to the District, effecting both an in -kind contribution to be used in the development of the regional center and the donation of land to be used for the siting of the regional center; WHEREAS, the value of the Yakima Convention Center is approximately $11,800,000 and the value of the leasehold interest in this property significantly exceeds 33% of the net present value of the total sales and use taxes projected to be received by the District (approximately $2.4 million), and is thus sufficient to satisfy the local match requirement; WHEREAS, pursuant to a Design, Development, Construction, Financing and Operating Agreement between the District and the City of Yakima, the City of Yakima will make other contributions to the Project, including issuing bonds to finance the Project, allocating lodging taxes to the operation of the Project, and providing funding on behalf of District in the event of a • ; Sales Tax shortfall; C:\WINDOWS \TEMP \Sales Tax Res 07 -24 -01 final lap.doc Last printed 07/27/01 11:54 AM District. The tax shall be levied and collected in an amount equal to the value of the article used • by the taxpayer multiplied by the rate in effect for the retail sales tax under Section 2. Section 4. Taxable Events. The taxes imposed pursuant to Sections 2 and 3 shall be in addition to other taxes authorized by law, and shall be collected from those persons who are taxable by the State of Washington under Chaps. 82.08 and 82.12 RCW, respectively, upon the occurrence of any taxable event within the official boundaries of this District. Section 5. Duration of the Tax. The taxes imposed pursuant to Sections 2 and 3 shall be in effect from August 1, 2001 until the earlier of (1) the date on which the bonds issued by the City of Yakima to finance the Project are fully retired, and (2) the date that is 25 years after the date of first collection. Section 6. Consistency with State Tax. The taxes imposed herein shall comply with all applicable rules, regulations, laws, and court decisions regarding sales and use excise taxes as imposed by the State of Washington under Chapters 82.08 and 82.12 RCW and applicable regulations. The provisions of those chapters, to the extent they are not inconsistent with this resolution, shall apply as though fully set forth herein. Section 7. Collection of the Tax. The Secretary of the Board of Directors of the District shall transmit a copy of this resolution to the State Department of Revenue. The District shall contract with the State Department of Revenue for the administration and collection of the taxes imposed herein. The President and/or Secretary of the Board of Directors of the District is hereby authorized to negotiate and execute such agreement on such terms has he or she deems to • j be in the best interests of the District. Section 8. Distribution of Tax Proceeds and Limiting the Use Thereof. The District Treasurer shall deposit the proceeds of the taxes imposed herein and received from the Department of Revenue in the District's Sales Tax Revenue Fund. The Sales Tax Revenue Fund shall be used by the District solely for the purposes set forth in RCW 35.57.020. Section 9. General Authorization. The President of the Board of Directors of the District, and each of the other appropriate officers, agents and representatives of the District are each hereby authorized and directed to take such steps, to do such other acts and things, and to execute such letters, certificates, agreements, papers, financing statements, assignments or instruments as in their judgment may be necessary, appropriate or desirable in order to carry out the terms and provisions of, and complete the transactions contemplated by this resolution. Section 10. Prior Acts. All acts taken pursuant to the authority of this resolution but prior to its effective date are hereby ratified and confirmed. Section 11. Severability. If any provision of this resolution or its application to any person or circumstance is held invalid, the remainder of the resolution or the application of the provision to other persons or circumstances is not affected. • )3 -3- P:\SC\SC090 01/07/27 • Section 12. Effective Date. This resolution shall be effective immediately. ADOPTED this 24th day of July, 2001. BOARD OF DIRECTORS, YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT By: .41° �" , / 7 Pr- sident ATTEST: Approved by a vote of the Directors: 1 Ayes; 0 Nays Wart Secretary • -4- P1SC\SC090 01/07/27 CERTIFICATE • I, the undersigned, Secretary of the Board of Directors of Yakima Regional Public Facilities District (herein called the "Board ") and keeper of the records of the District, DO HEREBY CERTIFY: 1. • That the attached resolution is a true and correct copy of Resolution No. 2001 -04 of the District (herein called the "Resolution "), as finally passed at a meeting of the Board held on the 24th day of July. 2001, and duly recorded in my office. 2. That said meeting was duly convened and held in all respects in accordance with law, and to the extent required by law, due and proper notice of such meeting was given; that quorum of the Board was present throughout the meeting and a legally sufficient number of members of the Board voted in the proper manner for the adoption of said Resolution; that all other requirements and proceedings incident to the proper adoption of said Resolution have been duly fulfilled, carried out and otherwise observed, and that I am authorized to execute this certificate. IN WITNESS WHEREOF, I have hereunto set my hand this 24th day of July 2001. Gi Via Secretary of the Board • • P: \SC \SC090 01/07/27 • LEASE AGREEMENT This LEASE AGREEMENT (the "Lease ") is made as of July 27, 2001, by and between the CITY OF YAKIMA, WASHINGTON (the "City "), a municipal corporation and first class city of the State of Washington, and the YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT (the "District ", and together with the City, the "Parties "), a public facilities district _ created by the City and the Cities of Selah and Union Gap, to lease certain real property of the City to the District to assist in the design, development, construction, financing and operation of the Yakima Convention Center, as expanded. Reference is made to that certain Design, Development, Construction and Financing Agreement dated July 27, 2001, between the undersigned (the "Development Agreement "). 1. Effective Date. This Lease and all of the terms and conditions hereof shall become effective as of the date set forth above; provided that all of the rights, duties and obligations of the City and the District, as lessor and lessee, respectively, under this Lease are not and shall not be effective unless and until the Development Agreement becomes effective. 2. Leased Premises. From and after commencement of the Lease Term (as defined herein), the City hereby leases to the District and the District hereby hires from the City certain improved real property located in the City of Yakima, Washington, legally described in Exhibit A attached hereto and by this reference incorporated (the "Premises ") and certain improvements thereon consisting of a convention center, and further improvements to be built on • said Premises (the "Improvements "). Such Premises are subject to all easements, reservations, encumbrances and restrictions of record. 3. Term. The Lease Term of this Lease, and all obligation of the parties hereto as lessor and lessee, shall commence on the effective date of the Development Agreement and shall automatically terminate upon expiration or termination of the Development Agreement, unless otherwise terminated or amended as set forth herein. The District shall be entitled to possession of the Premises upon commencement of the Lease Term hereunder. 4. Prepaid Rent. Within 60 days after the commencement of the Lease Term, the District shall pay $50 to the City, which amount represents prepaid rent for the entire Lease Term. The Parties acknowledge that the value of the Premises and Improvements existing as of the date of this Lease is appraised at $11,800,000. The value of the leasehold interest in the Premises hereby transferred is significantly in excess of 33% of the net present value of sales taxes the District projects that it will collect under RCW 82.14.390 (approximately $2.4 million). It is the parties' intent that the City lease the Premises to the District in satisfaction of the local match requirement under RCW 82.14.390. 5. Use of the Premises. The Premises shall be used by the District solely for the operation and maintenance of the Premises and the lease back of the same to the City and for other District purposes consistent with the Development Agreement. At no time during the Lease Term shall the District use the Premises in whole or in part for any unlawful purpose, nor • shall the District permit or commit any nuisance or illegal activity on the Premises. • 6. Compliance with Laws. The District shall comply with all municipal, county, state and federal laws, rules, regulations or ordinances applicable to the Premises and the Improvements, and the ownership, use and occupancy thereof. 7. Liens and Encumbrances. Except as expressly provided in this Lease, the District shall keep the Premises and the Improvements thereon free of mechanics' and materialmen's liens and other liens of like nature including tax liens, and will defend and hold the City harmless against such liens or claims and against all attorney's fees and other costs and expenses growing out of or incurred as a result of such liens or claims so long as such liens or claims arise from the actions of the District and not the actions of the City. The City shall defend and hold harmless the District against such liens or claims, fees, costs or expenses growing out of or incurred as a result of the actions of the City and not the actions of the District. Provided, however that the District may in good faith and at the District's own expense contest the validity of any such lien or claim, through litigation if necessary. In the event that the District contests any lien or claim, the District shall prosecute the contest with reasonable diligence, and the District shall at all times effectually stay or prevent any official or judicial sale of the Premises and /or Improvements and the District shall pay or otherwise satisfy any final judgment (unless the District shall appeal same, in which event the judgment from the last appeal shall be the applicable judgment), which may be entered against it and thereafter promptly procure record satisfaction of release of the lien or claim. In the event that the District fails to fully discharge or in good faith contest any such lien or claim that has been perfected, the City may pay the same, or any part thereof, and the City shall be the sole judge of the validity of said lien or claim. All • amount so paid by the City shall be recoverable against the District. 8. Maintenance and Repair of Premises and Improvements. The District shall maintain the Premises and Improvements in good repair and working order, and shall make such repairs necessary to so maintain the Premises and Improvements. 9. Taxes and Assessments. The District covenants and agrees to pay all real estate taxes and assessments, if any, levied upon the Premises and Improvements that become due and payable during the Lease Term prior to delinquency, together with any leasehold excise tax that may be assessed against the District's leasehold interest hereunder; provided, that if any such taxes or assessments may be paid in installments without penalty, the District shall have the right to pay any such taxes or assessments in installments. The District may contest the legal validity or amount of any tax, assessment or other charge for which the District may be responsible under this Lease and may institute such proceedings as the District considers necessary. If the District contests any such tax, assessment or other charge, the District may withdraw or defer payment or pay under protest, provided the District shall protect the City and the Premises and Improvements from any lien by adequate surety bond or other appropriate security. The City appoints the District as the City's attorney -in -fact for the purpose of making all payments to any taxing authorities and for the purpose of contesting any taxes, assessments or • other charges, conditioned on the District's preventing any lien from being levied on the • Premises or Improvements or upon the City. However, if the District chooses not to contest any tax, assessment or charge, the District shall give the City timely notice thereof so that the City may contest any taxes, assessments or charges levied against the Premises or Improvements if the District fails to do so. 10. Utility Charges. The District shall be solely responsible for and shall promptly pay all charges for heat, water, light, gas, electricity, sewer and garbage or any other utility now or hereafter used or consumed on the Premises. In no event shall the City be liable for an interruption or failure in the supply of such utilities to the Premises. 11. Alterations. Except as permitted by the Development Agreement, the District shall not alter the Premises or the Improvements without the prior written consent of the City. 12. Insurance. The District shall, at its sole cost and expense, procure and maintain in force during the Lease Term all liability and other insurance required to be procured and maintained by the City under the Development Agreement. 13. Assignment. Except as otherwise provided in Section 22, the District shall not assign or transfer this Lease or any interest therein, nor shall this Lease or any interest therein be assignable or transferable by operation of law or by any process or proceeding of a court, or otherwise, without the prior written consent of the City, which consent shall not be unreasonably withheld. • 14. Eminent Domain. A. The following definitions apply in construing provisions of this Lease relating to a taking of or damages to all or a part of the Premises or Improvements or interest therein by eminent domain or inverse condemnation. i. "Taking" means the taking or damaging, including severance damage, by eminent domain or inverse condemnation for any public or quasi - public use under any statute or any purchase or other acquisition under threat of condemnation. The taking shall be considered to take place as of the later of the date actual physical possession is taken by the condemnor, and the date on which the right to compensation and damages accrues under the law applicable to the Premises. ii. "Total taking" means the taking of the fee title to all of the Premises. iii. "Substantial taking" means the taking of so much of the Premises or Improvements or both that one or more of the following conditions result: (i) the conduct of the District's use(s) of the Premises would be substantially prevented or • impaired, (ii) the remaining Premises could not be economically and feasibly be made to be so usable by the • District, or (iii) the Improvements would be other than reasonably efficient or economic or could not economically and feasibly be made reasonably efficient or economic for the District's use. iv. "Partial taking" means any taking of the fee title that is not either a total taking or a substantial taking. v. "Award" means compensation paid for the taking, whether pursuant to judgment, by agreement or otherwise. B. The party receiving any notice of an intended taking or a willingness to make a negotiated private purchase in lieu of condemnation shall promptly give the other party written notice of the receipt and contents thereof. C. The City and the District shall each have the right to represent separately their respective interest in each proceeding or negotiation with respect to the taking or intended taking and to make full proof of their claim. No agreement, settlement, sale or other transfer to or with the condemning authority shall be made without the consent of the City, the District and all leasehold mortgagees. D. Upon a total taking, the City and the District shall be relieved of all obligations hereunder and this Lease shall terminate. Such termination of obligations shall not prejudice the District's right to recover compensation calculated in accordance with the terms • hereof for the taking of the District's interest in the Premises and Improvements. The amount of damages resulting to the City and the District and to the respective interests of the City and the District in the Premises by reason of such taking shall be separately determined and computed by the court having jurisdiction over such eminent domain proceedings. Separate awards and judgment shall be made with respect to the damage to the City and the District and such awards shall be paid separately to the City and the District. If the City's and the District's damages (and awards therefore) cannot or will not be separately determined and computed by such court, then the award granted shall be divided between the City and the District in a fair and equitable manner, it being understood that the District's portion is to compensate the District for the loss of its leasehold interest hereunder, and the City's portion is to compensate the City for the loss of the right of reversion hereunder and its leasehold interest under the Development Agreement. E. Within 45 days after the District receives notice of an intended substantial taking, the District shall provide written notice of the same to the Yakima City Manager. Upon receipt of such notice the City Manager and the District shall confer as to the level of taking. The City shall have the final determination as to whether the taking should be treated as a total taking or partial taking. F. Upon a partial taking, the Lease shall remain in full force and effect, covering the remaining Premises. The amount of damages resulting to the City and the District and their respective interests in the Premises and the Improvements shall be separately determined and computed by the court having jurisdiction over such eminent domain • proceedings. Separate awards and judgments shall be made with respect to the damage to the • City and the District, and such awards shall be paid separately to the City and the District, respectively. G. If the City's and the District's damages (and the awards therefor) cannot or will not be determined or computed by the court, then all sums, including damages and interest, awarded for the fee title or leasehold, or both, shall be deposited promptly with a mutually agreed upon escrow agent and shall be equitably distributed and disbursed for the following purposes: i. To the District for the purpose of compensating the District for the value of its leasehold interest taken and for restoring any taken Improvements, plus any amount awarded to remove or relocate subtenants, plus any amount specifically awarded to or for the District for detriment to business and severance damages. ii. To the City, a sum equal to the value of the Premises taken. iii. To the City, for the purpose of compensating it for the value of the lost leasehold interest in the Development Agreement. iv. The remainder to the City, to be applied by the City to the repayment of Bonds or Additional Bonds (as defined in the Development Agreement) or to any other lawful use. H. Upon the taking for the temporary use of all or any part of the Premises or Improvements for a period of less than 12 months, the rent under this Lease shall not be affected • in any way, and the District shall be entitled to any award for the use or estate taken. I. Nothing in this Lease shall be deemed to limit the City's right of eminent domain. 15. Indemnification. To the extent permitted by law, the District shall defend, indemnify, and hold the City and the Premises harmless from any and all damages or liabilities at any time occasioned by or arising out of (i) any act, activity or omission of the District, or anyone holding themselves out under the District (except the City), or (ii) the occupancy or use of the Premises or any part thereof, by or under the District, excluding the occupancy and use by the City, or (iii) the state or condition of the Premises and the Improvements or any part thereof, except to the extent the City shall itself be grossly negligent in the circumstances. Without limiting in any way the foregoing indemnification, the District agrees that during its use and occupancy of the Premises it shall comply with all laws, regulations, rules and ordinances of the City, the State and the federal government with regard to the use, storage, and disposal of hazardous and toxic substances on the Premises and the Improvements, and the District shall to the fullest extent permitted by law defend, indemnify and hold harmless the City for any and all damages or liabilities with regard to hazardous and toxic substances occasioned by and arising from the District's activities on the Premises and Improvements. • 16. Default. Time is of the essence in this Lease, and in the • event that (i) the District shall default in the payment of taxes, assessments, utility charges or any other amounts due hereunder, and such default is not caused by the City's failure to meet its obligations under the Development Agreement, and if such default shall continue for 10 days following written notice and demand; (ii) the District shall default in the performance or observation of any other terms, covenants, conditions or agreements of this Lease for 15 days after written notice and demand,_or in the case of such default that cannot with due diligence and in good faith be cured within 15 days, the District fails to proceed promptly after such notice and with due diligence and in good faith, to begin to cure said default, (iii) there shall be filed against the District in any court or other tribunal pursuant to any statute or other rule of law, either of the United States or of any State or of any other authority now or hereafter exercising jurisdiction, a petition in bankruptcy or insolvency proceedings or for reorganization or for the appointment of a receiver or trustee of all or substantially all of the District's property, or for any other form of debtor relief, unless, such petition be filed against the District and if in good faith the District promptly thereafter commences and diligently prosecutes any and all proceedings appropriate to secure the dismissal of such petition and shall secure such dismissal within 60 days after the date of filing or the commencement of such proceedings, (iv) if the District vacates or abandons the Premises or Improvements, or (v) the District defaults under the Development Agreement and such default is not cured within the cure periods set forth in the Development Agreement, then and in any such case, at the City's option and in addition to all other rights and remedies, the City may, following the expiration of the cure period, if any, provided herein for such default, immediately declare the District's rights under this Lease terminated and enter the Premises and the Improvements using such force as may be necessary and repossess itself thereof, as of its former estate, and remove all persons and property from the Premises and the Improvements. Such reentry shall not constitute a termination of this Lease and, notwithstanding any such reentry, the liability of the District to pay amounts hereunder (including taxes, assessments and utilities) shall not be extinguished for the balance of the term of this Lease and the District shall make good to the City any deficiency arising from receipt by the City of any lesser amount than that hereinbefore agreed upon. 17. Waiver. Neither the acceptance of rental nor any other actions or omissions by the City at any time after the happening of any event authorizing the cancellation or forfeiture of this Lease shall operate as a waiver of any past or future violation, breach or failure to keep or perform any covenant hereof, to deprive the City of its right to cancel or forfeit this Lease, upon written notice provided for herein, at any time that cause for cancellation or forfeiture may exist, or be construed so as to at any future time estop the City from promptly exercising any other option, right, or remedy, including the right to declare an event of default hereunder that it may have under any term or provision of this Lease. 18. Force Majeure. Any prevention, delay, nonperformance or stoppage due to a "Force Majeure" shall excuse nonperformance for the period of such prevention, delay, nonperformance or stoppage, except for obligations imposed by this Lease for the payment of taxes or insurance. "Force Majeure" means any causes or conditions beyond a party's reasonable control (including, but not limited to fire, explosion, presence of a hazardous substance, earthquake, storm, flood, wind, drought or act of God or one or more of the elements; • court order, legislation, delay or failure to act by civil, military or other governmental authority other than a party; strike, lockout, or other labor dispute; riot, insurrection, sabotage or war; • breakdown or destruction of, or damage or casualty to, any equipment, facility or other property; any delay or failure by any third party to provide a necessary service, supply, part, equipment, personnel or other item; or interruption, suspension, curtailment or other disruption of a utility). 19. Access by the City. At any time during the Lease Term, the City and the City's agents shall have the right to enter the Premises and the Improvements on reasonable notice to examine the same. Nothing contained herein shall be construed to impose upon the City a duty to repair the Premises or Improvements. 20. Surrender of Premises. At the expiration or sooner termination of this Lease, the District shall immediately return to the City the Premises and Improvement in its condition following completion of the Project defined in the Development Agreement, except reasonable wear and tear and damage by fire or other casualty. Upon termination of the Lease for any reason the District shall be liable for all costs and expense of restoring the Premises and Improvements to the condition at the time of completion of the Project, but only if such removal and restoration is requested by the City. The District's obligation to perform the covenants of this Section shall survive the expiration or termination of this Lease. 21. Quiet Enjoyment. The District, upon fully complying with and promptly performing all of the terms, conditions, and covenants of this Lease on its part to be performed, shall have and quietly enjoy the Premises for the Lease Term. • 22. Leasehold Mortgages. During the term of this Lease, the District shall not encumber its leasehold interest in the Premises or Improvements without the prior written consent of the City. Notwithstanding the foregoing, the District is authorized to assign its rights and interests in this Lease to any financial institution, municipal bond trustee, municipal bond insurer or other entity as may be necessary to accomplish the financing or refinancing of the Project, provided that the District must obtain the prior written consent of the Yakima City Manager. 23. Consent to Lease Back. The parties hereby acknowledge and agree that they would not execute this Lease but for the agreement by the City to operate and maintain the Improvements, finance, construct and operate the Project and lease back the Premises to the City pursuant to the Development Agreement. The obligations of the District under this Section 23 are integral to this Lease and may not be severed herefrom without invalidating the entire Lease. 24. Termination. This Lease may be terminated after notice and opportunity to cure of any event of default in accordance with Section 16. This Lease shall also automatically terminate upon termination of the Development Agreement. 25. Amendment. This Lease may not be amended except by written instrument approved by resolution duly adopted by the District and approved by City ordinance or resolution. No course of dealing between the parties or delay in exercising any rights hereunder shall operate as a waiver of any rights of any party. • • 26. Entire Agreement. This Lease and any collateral instruments referenced herein contain the entire agreement between the parties hereto and shall not be modified or amended in any manner except by an instrument in writing executed by the parties hereto. Previous drafts of this Lease or any portions thereof shall not be utilized in any manner by either party should any dispute arise as to the intent of this Lease. 27. Notices. All notices which may be or are requested to be given pursuant to this Lease shall be deemed given when hand delivered, or when deposited in the U.S. Mail, postage prepaid, and marked registered or certified mail, return receipt requested, and addressed to the parties at the following addresses unless otherwise provided for herein: To the City: Richard A. Zais, Jr. City Manager City of Yakima 129 N. 2nd Street Yakima, WA 98901 With a copy to: Raymond L. Paolella, Esq. City Attorney City of Yakima 200 South Third Street Yakima, WA 98901 • To the District: Richard E. Ostrander Chair Yakima Regional Public Facilities District 10 N. 8 Street Yakima, WA 98901 28. Severability. If any term or provision of this Lease or the application thereof to any person or circumstances shall, to any extent, be invalid or unenforceable (with the exception of Section 23), the remainder of this Lease or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby and shall continue in full force and effect. 29. No Merger. In no event shall (a) the leasehold interest, estate or rights of the District hereunder, (b) the rights of any leasehold mortgagee upon the District's leasehold interest, estate or rights hereunder, or (c) the leasehold interest, estate or rights of the District as sublessor under the Development Agreement, merge with any interest, estate or rights of the City as fee owner of the Premises and Improvements and lessor under this Lease or as sublessee under the Development Agreement, it being understood that such leasehold interest, estate and rights of the District hereunder and such rights of any leasehold mortgagee shall be deemed to be separate and distinct from the City's interest, estate or rights as fee owner of the Premises and Improvements, and as sublessee under the Development Agreement notwithstanding that any such interests, estate or rights shall at any time be held or vested in the • same, person, corporation or other entity. • 30. Limited Obligation of the District. The District is organized pursuant to Chapter 35.57 RCW as a municipal corporation, separate and distinct from the City. All liabilities incurred by the District shall be satisfied exclusively from the assets, credit, and properties of the District, and no creditor or other person shall have any right of action against or recourse to the City or the Cities of Selah or Union Gap, their assets, credit, or services, on account of any debts, obligations, liabilities or acts or omissions of the District. 31. Attorneys' Fees. In the event of litigation between the City and the District or their successors or assigns to enforce a right or rights provided by or arising under this Lease, the non - prevailing party shall pay to the prevailing party reasonable attorneys' fees and other costs and expenses of litigation, including appeals. The amount of costs and attorneys' fees shall be included in any judgment or award for the prevailing party and the court or arbitrator in any such litigation shall determine which is the prevailing party. 32. Recording. The District shall not record this Lease without the written consent of the City; however, upon the request of either party hereto the other party shall join in the execution of a memorandum of this Lease for recording purposes. The memorandum of Lease shall describe the parties, the Premises and Improvements, and the Lease and shall incorporate this Lease and the Development Agreement by reference. • • • • 33. Gov�La— This Lease and the rights of the parties hereto shall be governed and construed in accordance with the laws of the State of Washington. Time is of the essence in this Lease. IN WITNESS WHEREOF, the parties hereto have executed this document as of the day and year first above written. DATED this day of , 2001. CITY OF' YAKIMVIA YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT B, Chair Richard A. Zais, Jr. City Manager Board of Directors Attest: - ,,, J t 1', 1 s 0.44, ,' Allt, City / Clerk — y 1 i, �\....,..1, rVGTON r: > Approved as to form: I /I 7 .0 0 __ZA , City Attorney _ Certified to be a true and correct copy of the ry 4011000 BO aao / - 9-3 original filed in my office. .9/2/6 Z PtS9LIMON M if 740 / /o.. CITY CLERK By 2th ,/. Deputy NAK/41'. HIND -0 . -\ Ill ~.__ „ • STATE OF WASHINGTON ) IP COUNTY OF YAKIMA ) ) ss. I certify that I know or have satisfactory evidence that Rk ?_ict-d - f,, is the person who appeared before me, and said person acknowledged that he /she signed this instrument, on oath stated that he /she was authorized to execute the instrument and acknowledged it as the },1 K nil it, 'IA.A ay(i n/" of k)(7),(0 to be the free and voluntary act of such party'Tor the use's' and purposes mentioned in the instrument. Dated: 1 I'\ F 7 , 2001. 0 ' . Az,,, e 3-,, . , ,, r / PR• 8 RANp Notary Public �y \yS �oN exP/ Print/Type Name , (� � c �N (� i l\-L! ti c� y My commission exp ts� C -r%/ " 14Vg�C z \ JUNE 5' • . Use thi •, ®p..1.hr pr" I • STATE OF WASHINGTON ) ) ss. COUNTY OF YAKIMA ) I certify that I know or have satisfactory evidence that �r 7 ,a, 2 ,,4 „,hp-is the person who appeared before me, and said person acknowledged that he /she signed this instrument, on oath stated that he /she was athorizeid to, execute .the instrument and acknowledged it as the i [.�fize.iie. of ,, oGG!'�- ' 4 . i.7e 4 . °. Yo be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. , 200Z- Dated: ,72e,(9/02,,,T...2._ ,.2-001. / _ r *. WA r r, ; - -�; .,, ^ � °. (oNE Xp/ ti Nota P lic �` p Z R F v , Print/Type Name . - GC:' . - i /� 01(1 Mq %OM° My commission expires g ' -� '' *� `, PUBLIC o S EAL m� _ *_ 9i• , RCH AS` � ' N G ( (Use this spa' - Certified to be a true and correct, cop;' '.� ' ie original filed in my office. 672 / OZ- • CITY CLERK • Der.ty � By 0 / ., a ..•_ £ • EXHIBIT A LEGAL DESCRIPTION OF PROPERTY Real property located at 10 No. 8th Street, Yakima, Washington, including accompanying parking lots: Lot 1 and the E 60 feet of Lots 15 & 16, Block 149, together with vacated alley; and Lots 1 -8 & the E 60 feet of Lots 9 -16, Block 150; together with vacated alley, and the E 220 feet of vacated "A" Street; and Lots 1 -4, 6 -8 and 9 -14, Block 170, together with vacated alley; and Lots 1 -3 and 14 -16, Block 169; All in Husons Addition to North Yakima as recorded in Vol. "A" of Plats, pg. 11, records of Yakima County, Washington. • A -1 DESIGN, DEVELOPMENT, CONSTRUCTION, FINANCING AND OPERATING AGREEMENT BY AND BETWEEN CITY OF YAKIMA, WASHINGTON • and YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT July 27, 2001 • Public Facilities District • Design, Development, Construction, Financing and Operating Agreement TABLE OF CONTENTS Page • DEFINITIONS _ 2 II. INTENT AND RELATIONS 7 A. Intent 7 B. Description 8 C. Yakima's Regulatory Role Reserved 8 D. Governing Law and Venue 8 III. SCOPE OF COMMITMENTS 8 A. Commitments by the District 8 1. Repayment Obligation 8 2. District Funds 9 r f^ B. Commitments by Yakima 11 - • Lam 1. Site Availability 11 2. Issuance of the Bonds 11 : 3. Application of Net Proceeds 11 4. Design, Development and Construction Responsibility 11 5. Operation and Maintenance Responsibility 11 6. Operation and Maintenance Costs 13 C. Commitment by Yakima to Replenish Sales Tax Shortfall 14 1. Funding Commitment 14 IV. PROJECT COMPONENTS AND OPERATION CRITERIA 14 A. Project Components 14 B. Project Purpose 14 1. Public Access 15 2. Yakima Approval 15 C. Project Contracting and Management 15 V. DEVELOPMENT CRITERIA AND OVERSIGHT 16 A. Generally 16 B. Standards of Performance 16 C. Development Schedule and Substantial Completion Date 16 • VI. PROJECT COSTS 17 -1 ' P:1SC\SC09H 01/06/14 VII. INSURANCE 17 • A. Insurance Requirements 17 B. Insurance Policies 17 C. Adjustments 18 VIII. AS IS 18 A. Due Diligence 18 B. Acceptance 18 IX. LIABILITY _ 19 A. Indemnification of Yakima 19 X. DESTRUCTION OR CONDEMNATION 20 A. Total or Partial Destruction 20 B. Condemnation 20 XI. RIGHT TO ASSIGN OR OTHERWISE TRANSFER 21 A. Right to Transfer Agreement 21 XII. DEFAULT 21 A. Event of Default of the District 21 B. Force Majeure 22 • XIII. REMEDIES 22 A. Remedies Upon Default 22 B. No Waiver by Yakima 23 C. Termination 23 D. Reversion of the Property to Yakima 23 E. Certain Provisions Survive Termination 24 XIV. REPRESENTATIONS AND WARRANTIES 24 A. Yakima's Representations 24 B. The District's Representations and Warranties 24 C. Tax Covenant 24 XV. LEASE BACK 25 A. Sublease 25 B. Rent 25 C. Lease Obligations Assumed 25 XVI. MISCELLANEOUS 25 ( A. Captions 25 • B. Construction 25 -11- P:\SC\SCO9H 01/06/14 C. Entire Agreement 25 D. Successors and Assigns 2 s ue " • E. Notices 26 F. Incorporation by Reference 26 G. Execution in Counterparts 26 H. Waiver 26 I. Exculpation 27 J. Severability 27 K. Term 27 L. Amendments 27 EXHIBIT A — LEGAL DESCRIPTION OF THE PROPERTY EXHIBIT B — DEBT SERVICE SCHEDULE - APPENDIX 1 — PROJECT DOCUMENTS • -111- P:1SC\SC09H 01/06/14 • DESIGN, DEVELOPMENT, CONSTRUCTION, FINANCING AND OPERATING AGREEMENT This DESIGN, DEVELOPMENT, CONSTRUCTION, FINANCING AND OPERATING AGREEMENT (the "Agreement ") is made as of July 27, 2001, by and between the CITY OF YAKIMA, WASHINGTON ( "Yakima "), a municipal corporation and first class city of the State of Washington, and the YAKIMA REGIONAL PUBLIC FACILITIES DISTRICT (the "District ", and together with Yakima, the "Parties "), a public facilities district created by Yakima and the Cities of Selah and Union Gap, to provide for the design, development, construction, financing and operation of the Yakima Convention Center, as expanded. WHEREAS, Yakima currently owns and operates the Yakima Convention Center (the "Convention Center "), providing first -class meeting, ballroom and other event facilities; WHEREAS, Yakima desires to expand the Convention Center (the "Project "); WHEREAS, the Convention Center, as expanded by the Project, will serve as a Regional Center under RCW 35.57.030, benefiting the region including residents of Yakima, the City of Selah and the City of Union Gap (the "Cities ") by stimulating economic development, creating jobs, realizing additional sales and lodging tax revenues, attracting commercial business and tourism, and providing facilities for convention, special events and community events including • public meetings and performing arts event; WHEREAS, pursuant to Chap. 35.57 RCW (the "Act "), the Cities have entered into an Interlocal Agreement to form the District for the purpose of acquiring (by purchase, lease or otherwise), and assisting with the financing, development and operation of, the Convention Center as expanded by the Project; WHEREAS, under the Act, the District has access to several new revenue sources, including a state sales and use tax credit (the "Sales Tax "), which operates to shift 0.033% of the retail sales and use taxes generated within the District boundaries to the District; WHEREAS, the Act requires a local match of 33% of the net present value of the Sales Tax in order for the District to impose the Sales Tax; WHEREAS, Yakima has entered into a Lease Agreement transferring a leasehold interest in the Convention Center property described in Exhibit A hereto (the "Property ") (the value of the Convention Center property is approximately $11,800,000) to the District in satisfaction of this match requirement (approximately $2.4 million); WHEREAS, the District will lease back the Property to Yakima pursuant to this Agreement; • WHEREAS, subject to certain limitations set forth herein, Yakima will issue bonds to ( finance the Project, in consideration for the District's pledge of Sales Tax receipts to pay debt • service on the bonds and other Regional Center costs; WHEREAS, Yakima will apply the net proceeds of the bonds to design, develop and construct the Project, under the terms set forth herein; WHEREAS, to provide for stable financing and operation of the Project in light of the cyclical nature of Sales Taxes, Yakima wishes to provide additional funding in the event of a Sales Tax shortfall; and WHEREAS, Yakima will operate the Convention Center, as expanded by the Project, and will apply certain City lodging taxes (in an amount, if any, determined annually by the City Council) to pay a portion of the costs of operation and maintenance; WHEREAS, the Parties desire that Yakima finance, design, develop and operate the Convention Center as expanded by the Project on the terms set forth herein, and the District and Yakima assist in financing the Project, also on the terms set forth herein; NOW, THEREFORE, in consideration of the mutual undertaking and promises contained herein, and the benefits to be realized by each Party including the benefits to the general public in the region by the completion and operation of the Project, the Parties agree as follows: I. DEFINITIONS • For purposes of this Agreement, and any agreements supplemental hereto, the terms defined in this Article shall have the following meanings, except as herein otherwise expressly provided: Additional Bonds means Completion Bonds or Refunding Bonds issued by Yakima. A Additional Revenue means all revenue received by the District (or by Yakima on behalf of the District), ), g gifts, grants, donations, Admission Charges, Admission Taxes, Parking Charges, Parking Taxes, Voted Sales Tax, and any other revenue derived from the ownership or operation of the facilities of the District, including investment income; but excluding Sales Tax Revenue and amounts received from Yakima pursuant to Section III(C) (including investment earnings thereon). Administrative Costs means the costs of the District incurred in administering the District and this Agreement. Administrative Costs shall be specified in the District's annual budget submitted to Yakima for approval and to the Cities of Selah and Union Gap for review and comment. Admission Charge means any charge imposed by the District (or by Yakima on behalf g P Y ( Y if of the District) for admission to its facilities, including charges for season tickets or subscriptions; cover charges, or charges for use of seats and tables, and other similar accommodations; charges -2- P:1SC \SC09H 01/06/14 for food and refreshment if free entertainment, recreation, or amusement is provided; charges for rental or use of equipment or facilities for purposes of recreation or amusement; and automobile parking charges if the amount of the charge is determined according to the number of passengers in the automobile. Admission Tax means any tax imposed by the District pursuant to RCW 35.57.100 to be paid by any person who pays an Admission Charge. Agreement means this Design, Development, Construction, Financing and Operating Agreement. Beneficial Occupancy shall mean when the Project is granted a temporary or permanent Certificate of Occupancy for the Convention Center as expanded by the Project from Yakima's building official. Bond Counsel means a firm of lawyers nationally recognized and accepted as bond counsel and so employed by Yakima. Bond Ordinance means the ordinance(s) of the Yakima Council authorizing the issuance of the Bonds and any amendments. Bonds means the bonds, notes or other evidences of indebtedness issued by Yakima pursuant to and under authority of the Bond Ordinance to finance or refinance the Project. Proj P ty J Yakima reserves the right not to issue the Bonds if, at the time the Bonds are to be sold, the total • interest cost on the Bonds exceeds 5.55 %, or if the financing is determined to no longer be economical. Board means the governing body vested with the management of the affairs of the District. Charter means the Charter of the District, issued pursuant to the Interlocal Agreement, as amended from time to time. Code means the Internal Revenue Code of 1986, as amended, and all applicable regulations and rulings thereunder. Completion Bonds means additional bonds of Yakima issued to pay Costs of the Project. Costs of the Project means all capital costs that are paid or incurred by Yakima in connection with the design, development and construction of the Project, including, but not limited to all or a portion of the interest on Bonds during the period of construction of such improvements, and for a period of time thereafter; amounts required to meet any reserve requirement for the Bonds; the cost of paying or reimbursing Yakima or any fund thereof for expenses, including planning, permitting and design expenses, incident and properly allocable to the Project; and all other items of expense incident and properly allocable to designing, -3- P:1SC\SC09H 01/06/14 developing and constructing the Project, the Project and placing the Project in r P� g g ect J, financing Project P g Project (7) • Debt Service means the amount to be paid on the next succeeding Payment Date to pay - . the principal of, premium, if any, and interest on Bonds and any Additional Bonds coming due on such Payment Date. A schedule setting forth Debt Service to be paid on the Bonds and any Additional Bonds shall be attached as Exhibit B at such time as the Bonds or any Additional Bonds are issued. Debt Service Fund means the special fund(s) or account(s) established by Yakima under the Bond Ordinance or a Supplemental Bond Ordinance for the purpose of paying the principal of, interest on and redemption price, if any, of Bonds and/or any Additional Bonds. Debt Service Reserve Fund means the Debt Service Reserve Fund (or Account), if any, established by Yakima under the Bond Ordinance or Supplemental Bond Ordinance, which secures the Bonds and/or any Additional Bonds. Debt Service Reserve Fund Requirement means the amount required to be deposited to the Debt Service Reserve Fund, as established in the Bond Ordinance. District means the public facilities district created pursuant to the Interlocal Agreement. Event(s) of Default shall be as defined in Article IV herein. • Favorable Opinion of Bond Counsel means a written legal opinion of Bond Counsel addressed to Yakima, to the effect that such action is permitted under the laws of the State and under applicable ordinances of the Yakima Council, including the Bond Ordinance and any Supplemental Bond Ordinance, and will not impair the exclusion of interest on a Bond or any other bonds of Yakima from gross income for federal income tax purposes under the Code (subject to the inclusion of any exceptions contained in the opinion delivered upon original issuance of such bond). Force Majeure means any y causes or conditions beyond a Party's reasonable control (including, but not limited to fire, explosion, presence of a hazardous substance, earthquake, storm, flood, wind, drought or act of God or one or more of the elements; court order, legislation, delay or failure to act by civil, military or other governmental authority other than a party; strike, lockout, or other labor dispute; riot, insurrection, sabotage or war; breakdown or destruction of, or damage or casualty to, any equipment, facility or other property; any delay or failure by any third party to provide a necessary service, supply, part, equipment, personnel or other item; or interruption, suspension, curtailment or other disruption of a utility). Governmental Authority shall mean any board, bureau, commission, department, or body of any municipal, county, state, or federal governmental or quasi- governmental unit, or any subdivision thereof, having, asserting, or acquiring jurisdiction over the Property or the management, operation, use, or improvement thereof. • -4- P:1SC1.SCO9H 01/06/14 Improvements shall mean all buildings, structures, fixtures, improvements and equipment constructed or located on the Property, including, but not limited to, the structure of the Convention Center and the parking facilities, elevator(s), lighting, seating, carpeting, HVAC, plumbing, electrical and mechanical systems. Insurance Proceeds mean the greater of (i) the proceeds from the insurance policies actually maintained by Yakima with respect to the Convention Center or Project; or (ii) the proceeds that would have been available had Yakima maintained the insurance policies required to be maintained by Yakima under this Agreement. Interlocal Agreement means the Interlocal Financing Agreement between the Cities creating the District. Law(s) and Ordinance(s) shall mean all present and future applicable laws, ordinances, rules, regulations, resolutions, permits, authorizations, orders and requirements of all federal, state, county and municipal governments, the departments, bureaus or commissions thereof, authorities, boards or officers, any national or local board of fire underwriters, or any other body or bodies exercising similar functions having or acquiring jurisdiction over all or any part of the Property, including Yakima acting in its governmental capacity. - Lodging Taxes means lodging taxes received by Yakima pursuant to Chap. 67 RCW. Net Proceeds, when used with reference to the Bonds, means the principal amount of such Bonds, plus original issue premium, if any, and less original issue discount, if any, and less • the proceeds of the Bonds used to pay costs of issuance or deposited in the Debt Service Reserve Fund and/or the PFD Revenue Reserve Fund. Operating Manual means the Operating Standards Manual for the expanded Convention Center. Operation and Maintenance Costs means all necessary costs to Yakima of operating and maintaining the Convention Center as expanded by the Project, including but not limited to administrative and general expenses, costs of insurance (including reasonable contributions for self - insurance reserves, if any), consulting technical services and repairs and replacements (to the extent not properly classifiable as capital costs), real estate taxes, if any, but excluding depreciation (or reserves therefor), amortization of intangibles or other bookkeeping entries of a similar nature and debt service on the Bonds and any Additional Bonds. Outstanding, when used as of any particular time with reference to Bonds or Additional Bonds, means all Bonds or Additional Bonds authenticated and delivered by Yakima under the Bond Ordinance or any Supplemental Bond Ordinance except (1) Bonds or Additional Bonds theretofore cancelled by Yakima or surrendered to Yakima for cancellation; (2) Bonds or Additional Bonds with respect to which all liability of Yakima shall have been discharged in accordance with the Bond Ordinance or Supplemental Bond Ordinance, as applicable, and (3) Bonds or Additional Bonds for the transfer or exchange of or in lieu of or in substitution for 11/ which other Bonds or Additional Bonds shall have been authenticated and delivered by Yakima pursuant to the Bond Ordinance or Supplemental Bond Ordinance, as applicable. - 5 - P:16C\SC09H 01/06/14 Parking Charge means "vehicle parking charges" as defined in RCW 35.57.110. • Parking Tax means a tax on any Parking Charge imposed at any arkin facility that is P g tY owned or leased by the District pursuant to RCW 35.57.110. Payment Date means the dates specified in the Bond Ordinance, or any Supplemental Bond Ordinance, as dates for the payment of interest on, principal of or premium, if any, with respect to the Bonds or any Additional Bonds. Permitted Investments means investments permitted by State law for investment of Yakima and District funds, consistent with the terms of the Bonds and any Additional Bonds. PFD Revenue Reserve Fund means the PFD Revenue Reserve Fund (or Account), if any, established by Yakima under the Bond Ordinance or Supplemental Bond Ordinance. The amount of revenue consisting of the District's Sales Tax Revenue received by Yakima that shall be maintained in the PFD Revenue Reserve Fund shall be established in the Bond Ordinance. Predevelopment Costs means the cost of all planning, legal, architectural, engineering and other services incurred by Yakima in connection with the Project until the date of issuance of the Bonds. Project means the design, construction, and operation of the additions to the Convention ' Center, as described in the Project Documents. Project Documents means all design documents gn (including drawings describing the structural, mechanical, acoustical, lighting, and electrical systems of the Project, detailed site plans, preliminary specifications, and schematic design documents), construction documents (including all drawings and specifications necessary to completely describe the Project in detail to a contractor for the purposes of bidding and construction, schedules, plans and specifications, and the construction contract) and Project budgets (setting forth the construction contract cost, taxes, all contingencies, fees and allowances). Property shall mean the real property described in Exhibit A attached hereto or as hereafter amended. Refunding Bonds means bonds, notes or other evidence of indebtedness the proceeds of which will be used to refund Bonds. Sales Tax means the nonvoted sales and use tax to be imposed by the District in accordance with RCW 82.14.390 at a rate not to exceed 0.033% of the selling price in the case of a sales tax or value of the article used in the case of a use tax, which tax shall be deducted from the amount of tax otherwise required to be collected or paid over to the State's Department of Revenue and shall expire when the Bonds and any Additional Bonds are retired, or, in any event, not more than 25 years after the Sales Tax is first collected. • _�_ PASC\SC09H v 01/06/14 Sales Tax Revenue means all Sales Taxes received by the District. • State means the State of Washington. Substantial Completion shall mean when the Beneficial Occupancy of the Convention Center as expanded by the Project is achieved. Supplemental Bond Ordinance means any ordinance adopted by the Yakima Council amending or supplementing the Bond Ordinance, including any ordinance adopted by the Yakima Council in connection with the issuance of Additional Bonds. Voted Sales Tax means any sales and use tax imposed by the District pursuant to RCW 82.14.048 and approved by the voters. Yakima means the City of Yakima, Washington, a municipal corporation of the State, as now or hereafter constituted. Yakima Council means the City Council of Yakima, or any successor thereto as provided by law. II. INTENT AND RELATIONS (' A. Intent. • 1. Financing. It is the intent of this Agreement that the District lease the Property to Yakima and that Yakima finance the Project. In consideration for Yakima's agreement to finance the Project, it is the intent of the Parties that the District transfer all Sales Tax Revenue to Yakima to pay Predevelopment Costs (to the extent not paid from Net Proceeds), Debt Service and other Regional Center costs including but not limited to funding • and/or replenishing the Debt Service Reserve Fund and PFD Revenue Reserve Fund and { reimbursing Yakima for deposits made to the Debt Service Fund pursuant to Section III(C). It is the intent of the Parties that, in the event that Yakima provides notice that amounts on deposit in the Debt Service Fund and the PFD Revenue Reserve Fund are projected to be insufficient (not taking into account amounts in the Debt Service Reserve Fund) for Yakima to pay Debt Service when due, Yakima will deposit sufficient funds to the Debt Service Fund to remedy such deficiency as set forth in Section III(C). 2. Development. It is the intent of this Agreement that Yakima design, develop and construct the Project in accordance with the Project Documents and the standards of performance set forth in Article V. This Agreement is intended by the Parties to establish the design, development and construction standards and other performance criteria for the Project. 3. Operation. It is the intent of the Parties that Yakima operate and maintain the Convention Center and the Project, and that Yakima retain all rents, receipts, profits and other revenues of the Convention Center as expanded by the Project. In consideration for Yakima's agreement to operate and maintain the Convention Center and the Project, it is the • intent of the Parties that the District pay Additional Revenue, if any, to Yakima, and that Yakima -7- P:1SC\SC09H 01/06/14 pay the District's Administrative Costs. In addition, the Parties intend that Yakima apply certain ( Lodging Taxes to pay a portion of Operation and Maintenance Costs, in an amount, if any, • determined on an annual basis by Yakima. 7 B. Description. The Property is located at 10 North Eighth Street , Yakima, Washington 98901 -2515, as legally described on the attached Exhibit A. The Convention Center, as improved by the Project, will occupy approximately 47,000 square feet. C. Yakima's Regulatory Role Reserved. Any Yakima design review and approvals provided for herein are independent of, in addition to and do not in any way obligate Yakima with respect to usual and customary Yakima permitting, code compliance and other regulatory reviews. The outcome of any such regulatory review is independent of and is in no way biased, prejudiced or predetermined in any way by this Agreement. Nothing in this Agreement is intended or shall be construed to require that Yakima exercise its discretionary authority under its regulatory ordinances to further the Project nor bind Yakima to do so. Yakima will process applications for permits and approvals associated therewith as if such applications were made without any Yakima participation in such projects. - D. Governing Law and Venue. This Agreement and the rights and obligations of the Parties shall be governed by, and construed and interpreted in accordance with, the laws of the State. Any suit filed between the Parties concerning this Agreement shall be commenced in the Superior Court in Yakima County. III. SCOPE OF COMMITMENTS A. Commitments by the District 1. Payment Obligation. (a) Payment of Debt Service and Predevelopment Costs. In consideration for Yakima's agreement to issue the Bonds and design, develop and construct the Project, the District shall pay all Sales Tax Revenue to Yakima to pay Yakima's Debt Service and Predevelopment Costs (to the extent not paid from Net Proceeds), and other Regional Center costs including but not limited to funding and/or replenishing the Debt Service Reserve Fund and PFD Revenue Reserve Fund and reimbursing Yakima for deposits made to the Debt Service Fund pursuant to Section III(C). (b) Pledge of Sales Tax Revenue, Additional Revenue and other Receipts of the District. The District hereby pledges Sales Tax Revenue and other amounts to be paid by the District to Yakima for payment of Debt Service, Predevelopment Costs (to the extent not paid from Net Proceeds), and other Regional Center costs including but not limited to funding and/or replenishing the Debt Service Reserve Fund and PFD Revenue Reserve Fund and reimbursing Yakima for deposits made to the Debt Service Fund pursuant to Section III(C). The obligation of the District to pay Sales Tax Revenue and other amounts due under the Agreement and to perform and observe the other obligations on its part contained herein shall be absolute and unconditional, and shall not be subject to diminution by setoff, counterclaim, abatement or • -8- P:1SC\SC09H 01/06/14 otherwise. The District's obligations under this Agreement shall continue in effect and shall survive the satisfaction of Yakima's obligations under the Bonds, the Bond Ordinance, any • Additional Bonds, and any Supplemental Bond Ordinance until such time as all Predevelopment Costs and Debt Service have been paid, together with any other amounts owed to Yakima hereunder. The Parties acknowledge and agree that Yakima will pledge this Agreement, as well as the District's Sales Tax Revenue and other amounts to be paid by the District to Yakima, to the payment of the Bonds and any Additional Bonds. Such pledge will be material to the offer and sale of the Bonds, and will be disclosed to potential purchasers and purchasers of the Bonds. Bondholders will rely on this pledge in purchasing the Bonds. So long as the Bonds or any Additional Bonds are Outstanding, the District shall not issue bonds, or incur any other obligation, secured by Sales Tax Revenue or by Additional Revenue. (c) Revenue and Payment Reports. The District shall file annual financial statements and annual reports with the Cities, as required under Sections 8.5 and 8.6 of the Charter. Each such report shall bear a current date, be signed by an appropriate and duly authorized District officer and be supported by reasonable documentation sufficient to sustain the accuracy of the report. (d) Termination for Failure To Timely Pay. This Agreement is specifically conditioned upon the District's timely payment of amounts due hereunder. In the event that the District fails to transfer amounts as and when required to Yakima, Yakima may • terminate this Agreement pursuant to the provisions contained in Article XIII. 2. District Funds. The District shall establish the following Funds and accounts: Sales Tax Revenue Fund (or Account), Additional Revenue Fund (or Account), and the Administrative Fund (or Account). The District may, in its discretion, establish such additional accounts and subaccounts as the District deems necessary or useful, but the establishment of any such account or subaccount shall not alter or modify any of the requirements of this Agreement with respect to a deposit or use of money in the funds. (a) Sales Tax Revenue Fund. The District shall establish a Sales Tax Revenue Fund and shall deposit in the Sales Tax Revenue Fund all Sales Tax Revenue and all net earnings on investments of money in the Sales Tax Revenue Fund. Amounts in the Sales Tax Revenue Fund may be invested in Permitted Investments. The District shall maintain records sufficient to permit calculation of the income on investments and interest earned on deposit of amounts held in the Sales Tax Revenue Fund, and such income and interest shall become part of the Sales Tax Revenue Fund unless otherwise applied in accordance with this Section. The money and investments in the Sales Tax Revenue Fund are irrevocably pledged and shall be used and transferred by the District as follows: Within three working days after receipt, all amounts on deposit in the Sales Tax Revenue Fund to Yakima to pay Debt Service, Predevelopment Costs and other Regional Center costs, including but not limited to funding and/or replenishing the Debt Service Reserve Fund and PFD Revenue Reserve Fund and reimbursing Yakima for deposits made to the Debt Service Fund pursuant to Section III(C). -9- P:4SC1.SC09H 01/06/14 (b) Additional Revenue Fund. The District shall deposit in the ■ Additional Revenue Fund all Additional Revenue received by the District and all net earnings on investments of money in the Additional Revenue Fund. Amounts received from Yakima to pay • • Administrative Costs shall be deposited to the Additional Revenue Fund. Amounts in the Additional Revenue Fund may be invested in Permitted Investments. The District shall maintain • records sufficient to permit calculation of the income on investments and interest earned on deposit of amounts held in the Additional Revenue Fund, and such income and interest shall become part of the Additional Revenue Fund unless otherwise applied in accordance with this Section. The money and investments in the Additional Revenue Fund are irrevocably pledged and shall be used and transferred by the District at least monthly as follows and in the following order of priority: (i) To the Administrative Fund to pay Administrative Costs; and (ii) The remainder, to Yakima to pay Operation and Maintenance Costs. To the extent that Additional Revenues are received by Yakima on behalf of the District, Yakima shall apply such Additional Revenues to pay (i) Administrative Costs and/or (ii) Operation and Maintenance Costs. (c) Administrative Fund. The District shall establish an Administrative Fund. Amounts transferred from the Additional Revenue Fund to pay • Administrative Costs pursuant to subsection (b) shall be deposited to the Administrative Fund. shall be used to pay Administrative Costs. Amounts in the Administrative Fund may be invested in Permitted Investments. The District shall maintain records sufficient to permit calculation of the income on investments and interest earned on deposit of amounts held in the Administrative Fund, and such income and interest shall become part of the Administrative Fund unless otherwise applied in accordance with this Section. (d) Liens. Except as permitted under this Agreement, the District shall not create any lien upon funds created hereunder other than the lien hereby created. • -10- P:1SC1SC09H 01/06/14 • B. Commitments by Yakima 1. Site Availability. Pursuant to the terms of the Lease Agreement between Yakima and District, dated July 27, 2001, Yakima will lease to the District the Property described in Exhibit A. The Parties agree that the leasehold interest in the Property is donated (for nominal consideration in the form of $50 in rent) by Yakima to the District to be used for the construction of a Regional Center, as defined in RCW 35.57.030. Moreover, the Parties agree that the value of the Property is $11,800,000. The value of the leasehold interest in this Property transferred by the Lease Agreement significantly exceeds 33% of the net present value of the total Sales Taxes projected to be received by the District (approximately $2.4 million). 2. Issuance of the Bonds. Yakima agrees to issue the Bonds and Completion Bonds, if necessary. Yakima reserves the right not to issue the Bonds if, at the time the Bonds are to be sold, the total interest cost on the Bonds exceeds 5.55 %, or if the financing is determined to no longer be economical. The Bonds shall be in an aggregate principal amount to be determined by Yakima, at least equal to the projected Costs of the Project, Predevelopment Costs, amounts to pay costs of issuance and amounts to be deposited to the Debt Service Reserve Fund, if any. 3. Application of Net Proceeds. Yakima agrees to apply Net Proceeds to pay Predevelopment Costs and Costs of the Project as follows. (a) Predevelopment Costs. Yakima has incurred and will continue to incur Predevelopment Costs for the benefit of the District. Yakima will pay these Predevelopment Costs from the District's Sales Tax Revenue received by Yakima to the extent that Predevelopment Costs are not paid from Net Proceeds (at Yakima's election). (b) Costs of the Project. In addition, Yakima will apply Net Proceeds to pay Costs of the Project. 4. Design, Development and Construction Responsibility. Yakima shall design or contract for the design of the Project and construct or contract for the construction of the Project, in accordance with the Project Documents and with the standards of performance set forth in Article V and elsewhere in this Agreement. 5. Operation and Maintenance Responsibility. (a) Operations and Maintenance — Generally. Yakima agrees to operate and maintain the Improvements including the Convention Center, related parking and, upon Substantial Completion, the Project, on the terms and in accordance with the standards set forth herein. Yakima shall operate and maintain the Improvements including the Convention Center, related parking and the Project as a first class convention center facility, to be kept at all times in a safe and clean condition. • Yakima shall provide (directly or by contract) all management, supervision, personnel, materials, equipment, services and supplies necessary to operate, maintain and repair of the -11- P: \SC \SC09H 01/06/14 Improvements and shall take all reasonable precautions to prevent damage, injury or loss by €,, reason of or related to the operations and maintenance of the Improvements to any person or • property. Yakima shall hire an appropriate number of qualified employees to operate and maintain the Improvements consistent with the best management practices. Yakima shall properly supervise and direct its employees and other parties implementing the performance of its duties, obligations and functions under this Agreement. Yakima shall be fully responsible for the performance of such employees and other parties. Yakima shall comply with all applicable Laws and Ordinances relating to the safety of persons or property or their protection from damage, injury or loss. Yakima shall obtain all statements, certificates, permits, licenses, rights, and approvals, whether public, private, local, state or federal, that are necessary or appropriate to the continued operation of the Improvements as a first class convention center. Yakima shall undertake all modifications to the Improvements required to comply with state, federal and local laws, rules, regulations, judgments, orders and decrees. Prior to Substantial Completion of the Project, Yakima shall- provide pre- opening services, including start-up of the Project, mobilization of staff and services, and performance of marketing and booking plans. (b) Compliance with the Operating Manual. Yakima shall maintain the Improvements in substantial compliance with the terms of the Operating Manual during the term of this Agreement. The Operating Manual shall not be amended except with the written approval of the Yakima City Manager or his or her designee. The Operating Manual shall not be .� • revised in a manner that will impair the security of the owners of the Bonds or any Additional Bonds. ' (c) Insurance. Yakima shall maintain insurance as set forth in Article VII. • -1 2- P:ISCGSCO9H 01/06/14 6.. Operation and Maintenance Costs. • (a) Obligation To Pay Operation and Maintenance Costs and Administrative Costs; Right to Receive all Rents and Operating Revenues. Yakima shall pay Operation and Maintenance Costs from revenues derived from operation of the Convention Center and the Project, Additional Revenues received from the District, from Lodging Taxes, or other Yakima funds, as set forth below. Within a reasonable period after receipt of an invoice therefor, Yakima shall pay to the District its Administrative Costs as set forth in the District's budget approved by Yakima. All rents, receipts, profits and other revenue derived from the operation of the Convention Center and the Project shall be retained by, and shall be the property of, Yakima, and shall be applied to pay Operation and Maintenance Costs or any other lawful purposes of Yakima. (b) Lodging Taxes. To the extent not paid from revenues derived from operation of the Convention Center and the Project, Additional Revenues received from the District, or other Yakima funds, Yakima will apply Lodging Taxes to pay Operation and Maintenance Costs. The amount of Lodging Taxes to be applied to this purpose in any year shall be determined by the Yakima Council in its sole discretion as part of its annual budget process. The amount of Lodging Taxes to be applied to pay Operation and Maintenance Costs may vary from year to year and may equal zero in some years. In any event, the amount of Lodging Taxes • to be applied shall not exceed the amount available after payment of debt service on Yakima's outstanding bonds (including all or a portion of the Bonds) to which these taxes are pledged. Yakima's obligation hereunder is limited only to the amounts designated for this purpose by the Yakima Council. Yakima does not hereby guarantee any obligations or liability of the District. It is expressly understood and agreed that any obligation or liability arising out of and/or incurred by the District by reason of this Agreement, or the carrying out of any activity in connection therewith, shall be satisfied exclusively from the assets and credit of the District, and no creditor or any other person or entity shall have any recourse to any of the assets, credit, or services of Yakima on account of any debts, obligations, or liabilities of the District (c) Amounts Remitted to Yakima. Amounts remitted to Yakima pursuant to Section III(A)(2)(a) and (2)(b)(ii) shall be used by Yakima for the following purposes. Receipts that are Sales Tax Revenue shall be used to pay Predevelopment Costs (to the extent not paid from Net Proceeds), Debt Service, and for the purposes set forth in RCW 35.57.020, as the same may be amended (acquiring, constructing, owning, remodeling, maintaining, equipping, reequipping, repairing, financing, and operating one or more Regional Centers). Receipts that are Additional Revenues shall be applied to pay Operation and Maintenance Costs. Yakima's obligation hereunder is limited only to the amounts received from the District. t Yakima does not hereby guaranty any debt obligations or liability of the District. 1110 -13- PASC\SCO9H 01/06/14 All amounts remitted to Yakima pursuant to Section III(A)(2)(a) and 2(b)(ii), together with all rents, receipts, profits and other revenues derived by Yakima from its operation of the • Convention Center, shall be retained by and be the property of Yakima to be applied to pay Operation and Maintenance Costs (directly or by contract) or for other lawful purposes of Yakima . It is the Parties intent that all such amounts shall be Yakima funds, accounted for in Yakima's books and accounts. (d) Additional Support. To the extent, as from time to time authorized by the Yakima City Manager, Yakima will utilize its employees to provide oversight and administrative assistance in working with District to achieve the mutual goals and objectives of the Cities and District under this Agreement. Unless otherwise specified in this Agreement or applicable law, actions to be taken or decisions to be made by Yakima will be the responsibility of the Yakima City Manager or his or her designee. Yakima hereby grants to the extent permitted by law such person or persons the power, authority, and right to carry out all such responsibilities. C. Commitment by Yakima to Replenish Sales Tax Shortfall 1. Funding Commitment. Yakima shall provide notice to the District in the event that amounts in the Debt Service Fund and the PFD Revenue Reserve Fund (not taking into account amounts in the Debt Service Reserve Fund) are projected to be insufficient to pay Debt Service on any Payment Date. In such rs • event, Yakima will deposit sufficient funds to the Debt Service Fund to remedy such deficiency. Yakima's obligation hereunder is limited only to the amount to be paid y p d to replenish any projected deficiency in the Debt Service Fund. Yakima does not hereby guarantee any debt obligations or liability of the District. It is expressly understood and agreed that any obligation or liability arising out of and/or incurred by the District by reason of this Agreement, or the carrying out of any activity in connection therewith, shall be satisfied exclusively from the assets and credit of the District, and no creditor or any other person or entity shall have any recourse to any of the assets, credit, or services of Yakima on account of any debts, obligations, or liabilities of District. IV. PROJECT COMPONENTS AND OPERATION CRITERIA A. Project Components. Yakima shall finance, design and construct the Project in accordance with the Project Documents, and in accordance with the performance specifications set forth herein. B. Project Purpose. The Project is being constructed to serve the needs of the region, including the residents of Yakima, the City of Selah and the City of Union Gap. Following Project completion, Yakima shall be solely responsible for management, operation and maintenance of the Convention Center, as expanded by the Project, consistent with the terms of this Agreement and the Operating Manual. • -14- P:.SC\SCO9H 01/06/14 l ` 1. Public Access. Yakima shall provide regular hours during which the Convention Center will be open to the public (subject to reasonable Admission Charges); provide public programs; and make available for reasonable public use any ballroom, auditorium, meeting rooms or other public spaces in the Convention Center (subject to reasonable security measures). 2. Yakima Approval. In consideration of Yakima's obligations hereunder, the District agrees that the following shall be subject to the approval of the Yakima Council: (a) Approval of the Yakima Council: (i) The District shall not impose Admission Charges or Parking Charges without the prior approval of the Yakima Council, as set forth in the Interlocal Agreement and the Charter. (ii) The District shall not impose Admission Taxes or Parking Taxes without the prior approval of the Yakima Council. (iii) The District's annual budget, including Administrative Costs, shall be subject to the approval of the Yakima Council and to review and comment by the Cities of Selah and Union Gap. (iv) The District shall not authorize or engage in gambling activities or • authorize or publicly display any artwork without the prior approval of the Yakima Council. (v) Any acquisition or transfer of real and personal property with a value over $100,000 by lease, sublease, purchase, or sale by the District shall be subject to approval by the Yakima Council. C. Project Contracting and Management 1. Yakima shall construct the Project according to the Project Documents. 2. Yakima will select the contractor(s) for the Project through a competitive bidding process under the Laws of the State, pursuant to procedures designed to provide maximum practical competition by and from qualified contractors. 3. Yakima shall take reasonable precautions to prevent unnecessary damage, injury or loss to property, structures, and vegetation in the Project area and shall at its own expense repair any damage thereto caused by its, or its contractors', actions. Yakima shall require its contractors to take any and all precautions that may be necessary to render all portions of the Project and any adjacent areas affected by the Project secure in every respect, and to decrease the likelihood of accidents from any cause, and to avoid contingencies that are liable to delay the Project. Yakima shall require its contractors to exercise utmost care when using • explosives or other hazardous materials or equipment, and when utilizing unusual methods. -15- PASMSC09H 01!06/14 These requirements shall in no way relieve Yakima of its responsibility for safety on the Project. t The District shall not be responsible for any unsafe conditions. V. DEVELOPMENT CRITERIA AND OVERSIGHT A. Generally. Except as otherwise provided in this Section, the Parties hereby agree that Yakima shall have sole responsibility for construction of the Project and shall be responsible for obtaining all necessary land use, building and mechanical permits, and all other required permits or approvals for construction of the Project. Yakima shall promptly comply with all applicable Laws and Ordinances as they relate to the Property and Improvements. Yakima's responsibility to finance such construction is limited to the extent of Net Proceeds. B. Standards of Performance. Yakima shall perform the terms of this Agreement according to the following standards: 1. Performance in a good and workmanlike manner and in compliance with all applicable laws and ordinances, rules, and regulations. 2. Use of materials that are of first class quality and workmanship. 3. Maintenance and warranty of all portions of the Project consistent with the Project Documents. • C. Development Schedule and Substantial Completion Date. 1. RCW 82.14.390 currently requires that construction of the Project commence before January 1, 2003. Accordingly, Yakima shall commence construction of the Project before January 1, 2003, or such later start date set forth in any amendment to RCW 82.14.390 (the "Date of Commencement "). 2. Yakima shall pursue the design and construction of the Project to achieve Substantial Completion within 24 months after the Date of Commencement, excluding time periods when the design, construction or development of the Project is unavoidably delayed by reasons of Force Majeure; provided, however, that said date may be extended by the Yakima City Manager. VL PROJECT COSTS. Yakima shall finance, design, construct, and assume the risk of loss of the Project from Net Proceeds and from other amounts paid by the District to Yakima pursuant to the Agreement. • -16- P:1SC1SCO9H 01/06/14 VII. INSURANCE • A. Insurance Requirements. Yakima shall maintain and keep in force insurance covering all aspects of the construction activity on the Property, including but not limited to the following requirements: 1. Builder's All Risk Comprehensive Coverage. Yakima shall keep, or shall require the construction contractor to keep, all Project components, including but not limited to the Convention Center and parking facilities, insured for Builders All Risk Comprehensive Coverage including earthquake and flood in any event in an amount not less than one hundred percent (100 %) of the then_ full "Replacement Cost," being the cost of replacing the Project components, and all fixtures, equipment, improvements and betterments thereto. 2. Commercial General Liability. Yakima shall carry, and shall require its construction contractor to carry, Commercial General Liability insurance providing coverage against claims for bodily injury, death or property damage on the Property with broad form liability and property damage endorsement, such insurance to afford minimum protection, during the term of the construction phase, and written for combined single limits of liability of no less than Ten Million Dollars ($10,000,000), per occurrence, said amount to be adjusted from time to time with coverage deemed customary under like conditions. 3. Property Damage Insurance. Yakima shall carry , property insurance covering the Property including all Improvements, including earthquake, flood, boiler and • machinery insurance, in an amount equal to at least one hundred percent (100 %) of the replacement cost of all Improvements. Such insurance shall contain coverage against loss or damage by perils no less broad than the current edition of the ISO Special Form, 1985 Edition. Yakima shall be responsible for payment of any deductibles under said insurance policies and any costs of restoration resulting from any uninsured or underinsured losses. B. Insurance Policies. Insurance policies required herein: 1. Shall be issued by companies authorized to do business in the State with the following qualifications: a. The companies must be rated no less than "A," as to general policy holders rating and no less than "X" as to financial category in accordance with the latest edition of Best's Key Rating Guide, published by A.M. Best Company, Incorporated. b. The policies shall be issued as primary policies. 2. Each such policy or certificate of insurance mentioned and required in this Section VII shall have attached thereto (1) an endorsement that such policy shall not be canceled or materially changed without at least 30 days' prior written notice to the District and Yakima; (2) an endorsement to the effect that the insurance as to any one insured shall not be invalidated by any act or neglect of any other insured; (3) an endorsement pursuant to which the insurance -17- - Plsm.SC09H 01/06/14 carrier waives all rights of subrogation against the Parties hereto; and (4) an endorsement pursuant to which this insurance is primary and noncontributory. f ^ • 3. The certificates of insurance and insurance policies shall be furnished to the District and Yakima prior to commencing any construction under this Agreement. The certificate(s) shall clearly indicate the insurance and the type, amount and classification, as required for strict compliance with this Section VII. 4. Cancellation of any insurance or non - payment by Yakima of any premium for any insurance policies required by this Agreement shall constitute an Event of Default under Section XII of this Agreement. C. Adjustments. The types of policies, risks insured, coverage amounts, deductibles and endorsements may be adjusted from time to time as the District and Yakima may mutually determine. VIII. AS IS • A. Due Diligence. The District acknowledges that it has diligently investigated to its full satisfaction the physical condition of the Property and all other matters that in the District's judgment affect the District's use of the Property and the District's willingness to enter into this Agreement. The District acknowledges that except as expressly provided for in this Agreement, neither Yakima nor any employee, officer, agent or representative of Yakima has made any ;r- "'' representations or warranties whatsoever regarding the Property or this transaction or any facts `k;, , 5 • relating thereto, including, without limitation, any representations or warranties concerning the physical condition of the Property, access, zoning laws, environmental matters, suitability, feasibility, utilities, or any other matter affecting the Property or the use thereof. B. Acceptance. Except as expressly provided for in this Agreement, Yakima shall accept the Property "as is" and "where is" with all faults, of any nature or kind, without any • representations or warranties, express or implied or statutory of any kind whatsoever by the District or any employee, officer, agent or representative of the District. Upon acceptance by Yakima of the Property under this Agreement, then Yakima shall be deemed to have accepted the Property and to have waived and released its right to recover from the District any and all damages, losses liabilities, costs, or expenses whatsoever (including attorneys' fees and costs) . and claims therefor, whether direct or indirect, known or unknown, foreseen or unforeseen, which may arise on account of or in any way arising out of or connected with the physical condition of the Property or any Law or Ordinance. C. Environmental Contamination. Yakima agrees to indemnify and hold harmless the District for any environmental contamination existing as of the date of this Agreement. Yakima agrees to design and develop the Project in such a manner as to minimize, to the extent financially practicable, the excavation of native soils. In the event Yakima encounters contaminated soils, Yakima shall be responsible for all costs of remediating the contaminated soil, and for seeking recovery from responsible parties. 1 110 -18- P:1SClSC09H 01/06/14 The Parties agree that in the event contaminated soils are encountered and any Party dik incurs remediation costs, the Parties shall fully cooperate in pursuing claims against those entities that may be liable. IX LIABILITY A. Indemnification of Yakima. During the term of this Agreement, to the maximum extent not prohibited by law, the District agrees to and shall indemnify and hold Yakima harmless from and against all liability, loss, damage, cost, or expenses (including reasonable attorneys' fees and court costs, amounts paid in settlements and judgment) arising from or as a result of the death of any person or of any accident, injury, loss or damage whatsoever to any person or to the property of any person that occurs on or adjacent to the Property and that is directly or indirectly caused by the acts, errors, or omissions of the District or its officers, agents, servants, employees, officers, contractors or subcontractors. The District shall not be responsible for (and such indemnity shall not apply to) the gross negligence or willful misconduct of Yakima, or their respective officials, servants, employees or officers. X. DESTRUCTION OR CONDEMNATION A. Total or Partial Destruction. • 1. If the Convention Center or Project is totally or partially destroyed at any time after execution of this Agreement, and the Insurance Proceeds are or would have been In sufficient to pay the cost of reconstruction or restoration, or if the uninsured cost of reconstruction or restoration is less than Two Hundred Fifty Thousand Dollars ($250,000), and the damage or destruction is such that as a result thereof Yakima cannot meet its obligations under this Agreement, Yakima shall reconstruct or restore the damage consistent with terms of this Agreement within two years of the destruction; provided that, if the damage or destruction is such that Yakima may notwithstanding such damage or destruction continue to fulfill its obligations under this Agreement, Yakima shall have the discretion to use the Insurance Proceeds to restore and repair the Property to the extent necessary and appropriate for its purposes. If the Insurance Proceeds are insufficient and the uninsured cost is more than Two Hundred Fifty Thousand Dollars ($250,000), Yakima may elect to reconstruct or restore the damage or to terminate this Agreement by delivery of written notice to the District within 30 days after the destruction. 2. If Yakima elects not to reconstruct or restore the damage, this Agreement shall terminate and the Property shall revert to Yakima pursuant to Section XIII. The District shall transfer the Property in its then condition to Yakima, along with any Insurance Proceeds attributable to the damage or destruction of the Project. B. Condemnation. If the whole or any substantial part of the Property is taken or condemned in the exercise of eminent domain powers (or by conveyance in lieu thereof), such -19- P:1SC1SC09H 01/06/14 • that Yakima can no longer meet its obligations under this Agreement, this Agreement shall terminate upon the date when possession of the Property so taken shall be acquired by the ' condemning authority. As used herein, "substantial" shall be defined as reasonably preventing the conduct of Yakima's activities. Yakima shall have the right to claim and recover from the condemning authority such compensation as may be separately awarded or recoverable by Yakima in Yakima's own right on account of any and all damage to Yakima's activities by reason of the condemnation and on account of any cost or loss Yakima might sustain; provided that, the District shall pay to Yakima that portion of its condemnation proceeds equal to the amount of Debt Service on the Outstanding Bonds and Additional Bonds, if any. XL RIGHT TO ASSIGN OR OTHERWISE TRANSFER A. Right to Transfer Agreement. 1. During the term of this Agreement and at such time as the Bonds or • Additional Bonds are no longer Outstanding, the District shall have the right to assign or otherwise transfer the Agreement, to such other persons, firms, corporations, partnerships, joint ventures, and federal, state or municipal government or agency thereof, as the District shall select (the "Transferee "), provided, however, that: a. The District must obtain the prior written consent of Yakima; b. Such assignment or transfer shall be made expressly subject to the • - terms, covenants and conditions of this Agreement; • c. The District shall deliver to Yakima a duly executed ed and recorded copy of the document evidencing such transfer, including a suitable estoppel agreement(s); and d. Such transfer shall not be effective to bind Yakima until the Transferee has assumed all obligations of the District under this Agreement and notice thereof is given to Yakima, and such notice shall designate the name and address of the Transferee. 2. Said Transferee (and all succeeding and successor Transferees) shall succeed to all rights and obligations of the District under this Agreement, subject, however, to all duties and obligations of the District in and pertaining to the then unperformed provisions of this Agreement. Upon such transfer by the District, or by a successor in accordance with the requirements of this Section, the District (and/or its successor(s)) as Transferor in such a transfer shall not be released and discharged from all of its duties and obligations hereunder which pertain to the then unperformed provisions of this Agreement without the written consent and release of Yakima. XII. DEFAULT A. Event of Default of the District. This section shall apply if the District fails to keep, observe, or perform any of its duties or obligations under this Agreement (an "Event of -20- P:1SC\SC09H 01/06/14 f . Default "). Notwithstanding the generality of this paragraph, an "Event of Default" shall be deemed to occur for any of the following specific events: 1. The failure of the District to pay amounts due to Yakima hereunder when due. 2. Conversion by the District of any portion of the Property to any use other than the uses permitted under the Charter and this Agreement. 3. The making by the District of an assignment for the benefit of creditors contrary to the terms of this Agreement, or filing a petition in bankruptcy or of reorganization under any bankruptcy or insolvency law or filing a petition to effect a composition or extension of time to pay its debts. 4. The appointment of a receiver or trustee of the property of the District, which appointment is not vacated or stayed within ninety days. 5. The filing of a petition in bankruptcy against the District or for its reorganization under any bankruptcy or insolvency law that shall not be dismissed or stayed by the court within ninety days after such filing. B. Force Majeure. The District shall not be considered to be in breach of or default under this Agreement on account of any delay or failure to perform as required by this q Y Agreement as a result of a Force Majeure event. XIII. REMEDIES A. Remedies Upon Default. If an Event of Default on the part of the District shall occur, then Yakima at any time after periods set forth for the exercise of rights herein shall have the following cumulative rights and remedies: 1. Provide Notice and Time to Cure. If Yakima desires to take action for an Event of Default, Yakima shall provide written notice to the District specifying such Event of Default or Events of Default and stating that Yakima at its option may terminate this Agreement on the date specified in such notice, which shall be at least 30 days, but no more than 90 days, after the giving of such notice, unless the District cures such Event of Default. 2. Injunction. Yakima shall be entitled to restrain, by injunction, the commission of or attempt or threatened commission of an Event of Default and to obtain a judgment or order specifically prohibiting a violation or breach of any such term or provision of this Agreement without, in either case, being required to prove or establish that Yakima does not have an adequate remedy at law. The District hereby waives the requirement of any such proof and acknowledges that Yakima would not have an adequate remedy at law for the District's commission of an Event of Default hereunder. 0 -21- P:1SC\SC09H - 01/06/14 3. Terminate for Default. • a. Yakima shall be entitled to immediately terminate this Agreement if any Event of Default continues for a period of 30 days after written notice thereof from Yakima to the District, or in the case of such Event of Default which cannot with due diligence and in good faith be cured within 30 days, the District fails to proceed promptly after such notice and with due diligence and in good faith, to begin to cure said Event of Default; provided that, in such event proper time to cure may be extended only by written permission of Yakima. b. In the event that this Agreement terminates for reasons of an Event of Default, Yakima, in its sole discretion, shall have the option of exercising one or both of the following choices: (i) Receive payment from the District in an amount required to pay Predevelopment Costs (to the extent not paid from Net Proceeds), Debt Service on the Outstanding Bonds and any Additional Bonds when due, and the amount necessary to reimburse Yakima for any amounts paid pursuant to Section III(C). (ii) Immediately terminate the Lease Agreement. 4. Recover Damages, Costs and Expenses. Yakima shall be entitled to proceed against the District for all direct damages, costs and expenses arising from the District's ( \\ committing an Event of Default hereunder and to recover all such direct damages, costs and expenses, including reasonable attorneys' fees. • B. No Waiver by Yakima. N o failure by Yakima to insist y o nsist upon the performance of any of the terms of this Agreement or to exercise any right or remedy consequent upon a breach thereof, shall constitute a waiver of any such breach or of any of the terms of this Agreement. None of the terms of this Agreement to be kept, observed or performed by the District, and no breach thereof, shall be waived, altered or modified except by a written instrument executed by Yakima. No waiver of any breach shall affect or alter this Agreement, but each of the terms of this Agreement shall continue in full force and effect with respect to any other then existing or subsequent breach thereof. No waiver of any default of the District hereunder shall be implied from any omission by Yakima to take any action on account of such default if such default persists or is repeated, and no express waiver shall affect any default other than the default specified in the express waiver and then only for the time and to the extent therein stated. One or more waivers by Yakima shall not be construed as a waiver of a subsequent breach of the same covenant, term or conditions. - 22- P:1SC1SC09H 01/06/14 C. Termination • Notwithstanding anything to the contrary contained in this Agreement: 1. Termination by Mutual Agreement Prior to Beneficial Occupancy. This Agreement shall terminate under circumstances where all Parties mutually agree in writing that it is impossible or impractical to design, develop or construct the Project. In the event that one Party determines that it is impossible or impractical to design, develop or construct the Project, the Parties agree to meet and enter into good faith negotiations regarding whether the Project has become impossible or impractical. D. Reversion of the Leasehold Interest to Yakima. In the event that this Agreement terminates prior to Beneficial Occupancy, Yakima may immediately terminate the Lease Agreement and reenter and retake the Property, and the District shall promptly: 1. Remove all of its personal property from the Property; 2. Remove all rubble, debris and unusable improvements from the Property as required by Yakima in its sole discretion; 3. Remove all waste materials and rubbish from and about the Property and adjacent property; and • 4. Satisfy or bond all liens upon the Project (or claims which with notice or passage of time or both would mature into a lien). Yakima shall be entitled to retain title to the Property and all Improvements, including the Convention Center and Project, free and clear of any leasehold interest or other claim of the District and anyone claiming by, through or under the District. E. Certain Provisions Survive Termination. The following provisions of this Agreement shall survive notwithstanding any termination of this Agreement and reversion of the leasehold interest in the Property and Improvements to Yakima: 1. As Is (Section VIII); 2. Liability (Section IX); and 3. Destruction or Condemnation (Section X). 0 -23- P:44C\SC09H 01/06/14 • XIV. REPRESENTATIONS AND WARRANTIES A. Yakima's Representations. Yakima hereby represents and warrants to the District that it has full statutory right, power and authority to enter into this Agreement and perform in accordance with its terms and provisions; that the person signing this Agreement on behalf of Yakima has the authority to bind Yakima and to enter into this transaction; and that Yakima has taken all requisite action and steps to legally authorize the execution, delivery, and performance of this Agreement. B. The District's Representations and Warranties. The District hereby represents and warrants to Yakima that it has full power and authority to enter into this Agreement and perform in accordance with its terms and provisions; that the parties signing this Agreement on behalf of the District have the authority to bind the District and to enter into this transaction; and that the District has taken all requisite action and steps to legally authorize the execution, delivery, and performance of this Agreement. C. Tax Covenant. The District acknowledges that the Bonds are to be issued as tax - exempt obligations. The District covenants that it will not take any action to cause interest on the Bonds or any Additional Bonds to be taxable. XV. LEASE BACK • A. Sublease. The District hereby leases to the City and the City hereby hires from the District certain improved real property located in the City of Yakima, Washington, legally described in Exhibit A attached hereto and by this reference incorporated (the "Premises ") and certain improvements thereon consisting of a convention center, and the Project to be built on the Premises (the "Improvements "). Such Premises are subject to all easements, reservations, encumbrances and restrictions of record, including in particular that certain Lease Agreement between the City, as lessor, and the District, as lessee, dated July 27, 2001. B. Rent. Within 60 days of the date of this Agreement, the City shall pay to the District $50, which represents prepaid rent for the entire term of this Agreement. C. Lease Obligations Assumed._ Except as other wise provided herein, the District hereby assigns and the City agrees to assume all duties and obligations of the District under the Lease Agreement. XVL MISCELLANEOUS A. Captions. The headings and captions of this Agreement and the Table of Contents preceding the body of this Agreement are for convenience and reference only and in no way define, limit or describe the scope or intent of this Agreement nor in any way affect this Agreement. -24- P: \SC \SC09H 01/06/14 B. Construction. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the Party or Parties may require. The Parties hereby acknowledge and agree that each was properly represented by counsel and this Agreement was negotiated and drafted at arms' length so that the judicial rule of construction to the effect that a legal document shall be construed against the draftsman shall be inapplicable to this Agreement. C. Entire Agreement. This Agreement and any collateral instruments referenced herein contain the entire agreement between the Parties hereto and shall not be modified or amended in any manner except by an instrument in writing executed by the Parties hereto. Previous drafts of this Agreement or any portions thereof shall not be utilized in any manner by either Party should any dispute arise as to the intent of this Agreement. D. Successors and Assigns. The terms herein contained shall bind and inure to the benefit of Yakima, its successors and assigns, and the District, its successors and assigns, except as may be otherwise provided herein. E. Notices. All notices which may be or are requested to be given pursuant to this Agreement shall be deemed given when hand delivered, or when deposited in the United States Mail, postage prepaid, and marked registered or certified mail, return receipt requested, and addressed to the Parties at the following addresses unless otherwise provided for herein: To Yakima: Richard A. Zais, Jr. City Manager City of Yakima 129 N. 2nd Street Yakima, WA 98901 With a copy to: Raymond L. Paolella, Esq. City Attorney City of Yakima 200 South Third Street Yakima, WA 98901 To the District: Richard E. Ostrander Chair Yakima Regional Public Facilities District 10 N. 8th Street Yakima, WA 98901 F. Incorporation by Reference. All exhibits and appendices annexed hereto are hereby incorporated by reference herein. • -25- P: \SC \SC09H 01/06/14 G. Execution in Counterparts. • 1. This Agreement may be executed in any number of counterparts and by different Parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same Agreement. 2. This Agreement becomes effective when the representatives of the Parties have executed it. H. Waiver. The_waiver by either the District or Yakima of the performance of any covenant, condition, or promise shall not invalidate this Agreement nor shall it be considered a waiver by such Party of any other covenant, condition, or promise hereunder. The waiver by either the District or Yakima of the time for performing any act shall not constitute a waiver of the time for erformin any g y other act or an identical act required to be performed at a later time. The exercise of any remedy provided by law or the provisions of this Agreement shall not exclude other consistent remedies unless they are expressly excluded. I. Exculpation. Notwithstanding anything contained to the contrary in any provision of this Agreement, it is specifically agreed and understood g p y gr s ood that there shall be absolutely no personal liability on the part of any individual officers or directors of Yakima or the District with respect to any of the obligations, terms, covenants, and conditions of this , Agreement. r _ • J. Severability. If any term or provision of this Agreement or the application thereof to any person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Agreement or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby and shall continue in full force and effect. K. Term. This Agreement shall terminate on the later of the date that the Bonds and any Additional Bonds are no longer Outstanding and the date on which the Sales Tax expires. L. Amendments. This Agreement may be amended, only with the written consent of the Parties. • -26- P:1SC\SC09H 01/06/14 1 N WITNESS WHEREOF, the Parties hereto have executed this document as of the day and year first above written. tw- DATED this a:1 day of , 2001. CITY OF YAKIMA By \.. `Ns ■� '•� a . Richard A. Zais, Jr. City Manager Attest: . E st 4 < a). „ 1. , , ,,..., ,2 i e . _ .(54...e.i .,_.--- . ..,,,t,..,,, ,,,, : . . . • iK City Clerk !; �;1 *, , = f ' ,.A1, r< y . 4 '.n - . ° J YAKIMA REGIONAL PUBLIC s� r . yr ` a """��` ' , FACILITIES DISTRICT y a ti t:. i Approved as to form: 42 .-' , -, , ,,..,.55. ,,,, By gh .e. .....-0,-, ... • 4..,......„.///).....,ZW i . � hair City Attorney ._ . , - *�,r-` -a_ - \ i M► , . aoo / - 9y 1a►, ,. ao. o�- ioz Certified to be a true and correct copy of the original filed in my office. . 0-h2_ CITY CLERK / By /I„-0 10,', .# Deputy yp,ltl Mq •' � ...* * / SEAL ., 1 ,. �: -27- P :SC \SCO9H 01/06/14 l STATE OF WASHINGTON) • ) ss. COUNTY OF YAKIMA ) 'm have satisfactory evidence that '(.11!L';1A = °i t'`"'is the person I certify that I know or ha ry who appeared before me, and said person acknowledged that he /she signed this instrument, on oath ,stated that he /she was authorized to execute the instrument and acknowledged it as the ( ;l \-0 V`t),t,(, 0v P of (Al,'i mck... , to be the free and voluntary act of such party for the uses aH[d purposes mentioned in the instrument. Dated: r - , 2001. / .,, t, R. 8 fe4 Notary Public 1� .) ',i (� •-" CP \ SStON F,� Print/Type Nam C }Ili c (� l G 3 1 '�F N M y commission expires / NOTARY • PUBLIC • N� 1 > °NE (Use this '''. 4 wpc, : , k. r'' • STATE OF WASHINGTON) • ) ss. COUNTY OF YAKIMA ) 7 is the person I certify that I know or have satisfactory evidence that 4,cti,3�,:1 �,,,hi� p who appeared before me, and said person acknowledged that he /she signed this instrument, on oath stated that he /she was a thorized to execute the instrument and acknowledged it as the p d to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. Date.d� •4�a.� �� � 200-Y. y‘ l r \ pN E S ;.' <6 i r, ' F Notary P ublic ! l Print/Type Name % /, - )e//6 ) ://../ 4,, z /X G . —I 3 l ost ¢' C I My commission expires 2/, /6)://../X / Q6 1 VI FOFWa N` ' >•; z . r . T. 4� a, t Use this space for notarial stamp /seal) $ : •—•:,:(1.4Yi's.:. . I . _28_ P:1SC \SCO9H 01/06114 • EXHIBIT A LEGAL DESCRIPTION OF PROPERTY Real property located at 10 No. 8th Street, Yakima, Washington, including accompanying parking lots: Lot 1 and the E 60 feet of Lots 15 & 16, Block 149, together with vacated alley; and Lots 1 -8 & the E 60 feet of Lots 9 -16, Block 150; together with vacated alley, and the E 220 feet of vacated "A" Street; and Lots 1 -4, 6 -8 and 9 -14, Block 170, together with vacated alley; and Lots 1 -3 and 14 -16, Block 169; • All in Husons Addition to North Yakima as recorded in Vol. "A" of Plats, pg. 11, records of Yakima County, Washington. • A -1 EXHIBIT B • DEBT SERVICE SCHEDULE (To be attached and incorporated into the Agreement at the time that the Bonds and any Additional Bonds are issued) • • • B-1 P:\SC \SCO9H - 01/06/14 BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON • AGENDA STATEMENT Item No. For Meeting Of: Tuly 10, 2001 ITEM TITLE: Resolution to Appoint five board members to the board of directors of the Yakima Regional Public Facilities District (PFD) SUBMITTED BY: PFD Board of Directors Selection Committee: Mary Place, Mayor; John Puccinelli and Bernie Sims, Council Members; Deb Krautworm, YVV &C Board and Skip Semon, YVV &C Advisory Committee CONTACT PERSON/TELEPHONE: Rita Anson, Finance Director (#575-6070(10 SUMMARY EXPLANATION: At their June 19, 2001 meeting, the Yakima City Council approved Ordinance #2001 -28, and the related interlocal agreement with the Cities of Selah and Union Gap, to establish a three city Public Facilities District. The next step in the formation of the PFD is for the councils of the three cities to appoint the board members. The Yakima City Council, under the terms of the interlocal ii greement and the PFD Charter shall appoint five of the seven board members; at least four of hom must be nominated by local organizations. Notification regarding the board positions and application process was placed in the Yakima Herald Republic newspaper and was sent to the following organizations, Yakima Valley Visitors and Convention Center (YVV &C) Board of Directors and Advisory Committee, Yakima Chamber of Commerce, Yakima Hispanic Chamber of Commerce, Association DeBarrios Hispanos De Yakima, Yakima Washington Lions Club, Kamikian Kiwanis, Yakima Kiwanis, Sunrise Rotary, Yakima Rotary Club, Southwest Rotary, Yakima Downtown Association, Westside Merchants Association, Allied Arts Council, and Capitol Theater. Continued on next page. Resolution X Ordinance Other (Specify) Contract Mail to (name and address): Phone: Funding Source N/A APPROVED FOR SUBMITTAL: r/ ..1., L... _ ' Ad Ci Mana:er O S TAFF RECOMMENDATION: Accept Selection Committee's Recommendation and Adopt Resolution BOARD /COMMISSION RECOMMENDATION: COUNCIL ACTION: 1 Page 2 Seventeen nominations were received by the June 30, 2001 deadline. The selection committee w very pleased with the caliber and qualifications of all of the candidates; however, this made the selection process difficult. The selection committee reviewed all applications and, after significant discussions, narrowed the selection down to eight applicants. All eight applicants were further considered for the five positions, although two were not available for interviews due to scheduling conflicts. Recommendation: The selection committee is recommending to the Yakima City Council the appointment of the following individuals to the Yakima Regional Public Facilities District Board of Directors: Name: Group: Initial Term: Mr. Richard Ostrander Group I 1 year term Mr. Brian Johnson Group II 2 year term Mr. Don Schussler Group III 3 year term Mrs. Wanda Riel Group IV 4 year term Mr. Dan Marples Group IV 4 year term Note: 1. The Group and initial term for each position is defined in the Charter; the Selection Committee recommended the placement of each of the candidates into the various groups 2. Per the PFD Charter, the remaining two positions on the PFD board will be assigned to Group IV with 4 year initial terms and will be appointed by the Selah and Union Gap City Councils. 3. After the initial term, board members will be appointed to four year terms; individuals may serve a maximum of four consecutive terms. C:\Projects\PFD (Public Facility District)\PFD - Info - BOD - Agenda Stmt 4 Resolution BOD Appointments.doc 1111 A • RESOLUTION NO. R-2001- { S A RESOLUTION appointing five board members to the board of directors of the Yakima Regional Public Facilities District. WHEREAS, Chap. 35.57 RCW (the "Act ") authorizes one or more cities located in a county with a population of less than one million to create a public facilities district to acquire, remodel, finance and operate one or more convention, conference or special event centers that serve as "regional centers "; WHEREAS, pursuant to Ordinance No. 2001 -28, the City Council of the City of Yakima, Washington (the "City ") approved the execution of an interlocal agreement (the "Interlocal Agreement ") among the City, the City of Selah and the City of Union Gap creating the Yakima Regional Public Facilities District (the "District ") for the purpose of assisting in the financing, expansion and operation of the Yakima Convention Center; WHEREAS, the Act provides that the District "shall be governed by a board of directors consisting of seven members selected as follows: (i) three members appointed 111 by the legislative authorities of the cities and towns; and (ii) four members appointed by the legislative authority based on recommendations from local organizations; WHEREAS, the Act further provides that the members of the board of directors shall be appointed in accordance with the terms of the Interlocal Agreement and shall serve four -year terms, which terms shall initially be staggered; WHEREAS, the Interlocal Agreement and the District's Charter incorporated by reference therein provide that the initial members of the board of directors shall be appointed as follows: five board members shall be appointed by the Yakima City Council (including four based on recommendations from local organizations), one board member by the Selah City Council, and one board member by the Union Gap City Council; WHEREAS, five initial board members have been identified by the selection committee to serve as the City's appointees to the District's board of directors, including four board members recommended by local organizations; WHEREAS, the City Council now desires to appoint such board members to serve on the board of directors of the District in accordance with the Interlocal • Agreement and the Charter; now, therefore, 1 • BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: The City Council hereby appoints the following persons to serve as board members of the board of directors of the Yakima Regional Public Facilities District. 1. Mr. Richard Ostrander, based on recommendations from local organizations, for a one -year term. Mr. Ostrander shall be designated as a Group I board member for the purposes of Section 6.3 of the Charter; 2. Mr. Brian Johnson, based on applications from community at large and based on Council discretion, for a two -year term. Mr. Johnson shall be designated as a Group II board member for the purposes of Section 6.3 of the Charter; 3. Mr. Don Schussler, based on recommendations from local organizations, for a three -year term. Mr. Schussler shall be designated as a Group III board member for the purposes of Section 6.3 of the Charter; 4. Mrs. Wanda Riel, based on recommendations from local organizations, for a four -year term. Mrs. Riel shall be designated as a Group IV board member for the purposes of Section 6.3 of the Charter; and 5. Mr. Dan Marples, based on recommendations from local organizations, for a four -year term. Mr. Marples shall also be designated as a Group IV board member for the purposes of Section 6.3 of the Charter. ADOPTED BY THE CITY COUNCIL this 10th day of July, 2001. ary Place, Mayor ATTEST: CU B,_ 5 I :. City Clerk K:\25739 \00049\SC \SC R20UQ • 1 Local Improvements - Filling and Draining Lowlands— Waterways 35.56.240 current expense fund of such city or by bonding the city or lowest responsible bidder, after due notice, under such - by pledging revenues to be � derived from rents and issues 4 regulation as may be prescribed by ordinance: PROVIDED, erefrom, lands abutting upon the shore lines or right -of- That the city council or commission may reject all bids ay of such canals or waterways to a distance, depth or presented and readvertise, or, if m the judgment of the city width of not more than three hundred feet back from the council or commission the work can be performed, or banks or shore lines of such canals or waterways on either supplies or materials furnished by the city independent of side or both sides thereof, or not more than three hundred contract, cheaper than under the bid submitted, it may after lineal feet back from and abutting on the outer lines of such having so advertised and examined the bids, cause the work rights -of -way on either side or both sides of such rights -of- to be performed or supplies or materials to be furnished way, and such area of such abutting lands as the council or independent of contract. This section shall be construed as commission may deem necessary for its use for public a concurrent and cumulative power conferred on cities and docks, bridges, wharves, streets and other conveniences of shall not be construed as in any wise repealing or affecting navigation and commerce and for its own use and benefit any law now in force relating to the performing, execution generally. [1965 c 7 § 35.56.240. Prior: 1913 c 16 § 18, and construction of public works. [1965 c 7 § 35.56.270. part; RRS § 9466, part.] Prior: 1913 c 16 § 20; RRS § 9468.] 35.56.250 Waterways — Abutting city owned lands 35.56.280 Reassessments. If any assessment is found Lease of. If the city is not using the abutting lands so to be invalid for any cause or if it is set aside for any reason acquired it may lease any parcels thereof as may be deemed in judicial proceeding, a reassessment may be made and all for the best interest and convenience of navigation, com- laws then in force relative to the reassessment of local merce and the public interest and welfare to private individu- assessments, for street or other improvements, shall, as far als or concerns for terms not exceeding thirty years each at as practical, be applicable hereto. [1965 c 7 § 35.56.280. such annual rate or rental as the city council or commission Prior: 1913 c 16 § 16; RRS § 9464.] of such city may deem just, proper and fair, for the purpose Local improvements, assessments and reassessments: Chapter 35.44 RCW. of erecting wharves for wholesale and retail warehouses and for general commercial purposes and manufacturing sites, 35.56.290 Provisions of chapter not exclusive. The but the said city shall never convey or part with title to the provisions of this chapter shall not be construed as repealing abutting lands above mentioned and so acquired nor with the or in any wise affecting other existing laws relative to the ntrol other than in the manner herein specified. Any lease making of any such improvements but shall be considered as granted by the city on such abutting lands shall concurrent therewith. [1965 c 7 § 35.56.290. Prior: 1929 ever be transferred or assigned without the consent of the c 63 § 5; 1913 c 16 § 22; RRS § 9470.] city council or commission having been first obtained. A city shall never lease to any individual or concern more than four hundred lineal feet of canal or waterway Chapter 35.57 frontage of said land and no individual or concern shall ever PUBLIC FACILITIES DISTRICTS hold or occupy by lease, sublease, or otherwise more than the said four hundred lineal feet of said frontage: PROVID- Sections ED, That any individual or concern may acquire by lease or 35.57.010 Creation — Board of directors — Corporate powers. sublease whatever additional frontage of such abutting land 35.57.020 Regional centers — Charges and fees — Powers. may be in the judgment of the city council or commission 35.57.030 General obligation bonds. m 35.57.040 Authorized charges, fees. and taxes - Gifts. necessary for the use of such individual or concern, upon 35.57.050 Travel. expense reimbursement policy Required. petition presented to the city council or commission therefor 35.57.060 Expenditure of funds — Purposes. signed by not less than five hundred resident freeholders of 35.57.070 Service provider agreements. • such city. [1965 c 7 § 35.56.250. Prior: 1913 c 16 § 18, 35.57.080 Purchases and sales — Procedures. part; RRS § 9466, part.] 35.57.090 Revenue bonds — Limitations. 35.57.100 Tax on admissions. 35.57.110 Tax on vehicle parking charges. 35.56.260 Waterways— Abutting lands— Lessee 35.57.900 Severability -1999 c 165. must lease shoreline property. At the time that the city leases to any individual or concern any of the land abutting 35.57.010 Creation — Board of directors Corporate on the area between the shore lines and the dock lines the powers. (1) The legislative authority of any town or city same individual or concern must likewise for the same located in a county with a population of less than one period of time lease all of the area between the shore line million may create a public facilities district. The legislative and dock line of such canal or waterway lying contiguous to authorities of any contiguous group of towns or cities located and immediately in front of the abutting land so leased. in a county or counties each with a population of less than [1965 c 7 § 35.56.260. Prior: 1913 c 16 § 18, part; RRS § one million may enter an agreement under chapter 39.34 9466, part.] RCW for the creation and joint operation of a public facilities district. 3 5.56.270 Work by day labor. W hen a city under- (2) A public facilities district shall be coextensive with es any improvement authorized by this chapter and the the boundaries of the city or town or contiguous group of expenditures required exceed the sum of five hundred cities or towns that created the district. dollars, it shall be done by contract and shall be let to the j I (2000 Ed.) [Title 35 RCW —page 185] i i I i 35.57.010 Title 35 RCW: Cities and Towns (3)(a) A public facilities district created by a single city acquire, construct, own, remodel, maintain, equip, reequip, 11111 town shall be governed by a board of directors consisting repair, finance, and operate one or more regional centers. r f five members selected as follows: (i) Twp'tmembers For purposes of this chapter, "regional center" means a ppointed by the legislative authority of the city or town; convention, conference, or special events center, or any and (ii) three members appointed by legislative authority combination of facilities, and related parking facilities. based on recommendations from local organizations. The serving a regional population constructed, improved. or members appointed under (a)(i) of this subsection, shall not rehabilitated after July 25. 1999, at a cost of at least ten be members of the legislative authority of the city or town. million dollars, including debt service. "Regional center" • The members appointed under (a)(ii) of this subsection, shall also includes an existing convention. conference, or special be based on recommendations received from local organiza- events center, and related parking facilities. serving a tions that may include, but are not limited to the local regional population, that is improved or rehabilitated after chamber of commerce, local economic development council, July 25. 1999. where the costs of improvement or rehabilita- and local labdr council. The members shall serve four -year tion are at least ten million dollars, including debt service. terms .9 the initial members. one must be appointed for a A regional center is conclusively presumed to serve a one - a r term, one must be appointed for a two -year term, regional population if state and local government investment op must be appointed for a three -year term, and the in the construction, improvement, or rehabilitation of the , femainder must be appointed for four -year terms. regional center is equal to or greater than ten million dollars. (b) A public facilities district created by [a] contiguous (2) A public facilities district may impose charges and group of cities and towns shall be governed by a board of fees for the use of its facilities, and may accept and expend directors consisting of seven members selected as follows: or use gifts, grants, and donations for the purpose of a (i) Three members appointed by the legislative authorities of regional center. the cities and towns; and (ii) four members appointed by the (3) A public facilities district may impose charges. fees, legislative authority based on recommendations from local and taxes authorized in RCW 35.57.040, and use revenues organizations. The members appointed under (b)(i) of this derived therefrom for the purpose of paying principal and subsection shall not be members of the legislative authorities interest payments on bonds issued by the public facilities of the cities and towns. The members appointed under district to construct a regional center. (b)(ii) of this subsection. shall be based on recommendations (4) Notwithstanding the establishment of a career, civil, received from local organizations that include, but are not or merit service system, a public facilities district may rted to the local chamber of commerce. local economic contract with a public or private entity for the operation or v elopment council, local labor council, and a neighbor- management of its public facilities. hood organization that is directly affected by the location of (5) A public facilities district is authorized to use the the regional center in their area. The members of the board supplemental alternative public works contracting procedures of directors shall be appointed in accordance with the terms set forth in chapter 39.10 RCW in connection with the of the agreement under chapter 39.34 RCW for the joint design, construction, reconstruction. remodel, or alteration of operation of the district and shall serve four -year terms. Of any regional center. [1999 c 165 § 2.] • the initial members, one must be appointed for a. one -year term. one must be appointed for a two -year term, one must 35.57.030 General obligation bonds. (1) To carry be appointed for a three -year term. and the remainder must out the purpose of this chapter, a public facilities district be appointed for four -year terms. may issue general obligation bonds, not to exceed an (4) A public facilities district is a municipal corporation, amount, together with any outstanding nonvoter - approved an independent taxing "authority" within the meaning of general obligation indebtedness, equal to one -half of one Article VII, section 1 of the state Constitution, and a "taxing percent of the value of the taxable property within the district" within the meaning of Article VII, section 2 of the district, as the term "value of the taxable property" is defined state Constitution. in RCW 39.36.015. A facilities district additionally may (5) A public facilities district shall constitute a body issue general obligation bonds for capital purposes only, corporate and shall possess all the usual powers of a corpo- together with any outstanding general obligation indebted - ration for public purposes as well as all other powers that ness, not to exceed an amount equal to one and one -fourth may now or hereafter be specifically conferred by statute, percent of the value of the taxable property within the including, but not limited to. the authority to hire employees. district, as the term "value of the taxable property" is defined staff. and services. to enter into contracts, and to sue and be in RCW 39.36.015, when authorized by the voters of the sued. public facilities district pursuant to Article VIII, section 6 of (6) A public facilities district may acquire and transfer the state Constitution, and to provide for the retirement real and personal property by lease, sublease, purchase, or thereof by taxes authorized in chapter 165, Laws of 1999. sale. No direct or collateral attack on any metropolitan (2) General obligation bonds may be issued with a facilities district purported to be authorized or created in maturity of up to thirty years, and shall be issued and sold conformance with this chapter may be commenced more in accordance with the provisions of chapter 39.46 RCW. ai an thirty days after creation by the city legislative authori- (3) The general obligation bonds may be payable from . [ 1999 c 165 § 11 the operating revenues of the public facilities district in addition to the tax receipts of the district. [1999 c 165 § 3.] 35.57.020 Regional centers — Charges and fees — Powers. (1) A public facilities district is authorized to [Title 35 RCW —page 186] (2000 Ed.) . Public Facilities Districts 35.57.040 35.57.040 Authorized charges, fees, and taxes— it is authorized to provide or operate. Whenever revenue Gifts. (1) The board of directors of the public facilities bonds are to be issued, the board of directors of the district Oh strict may impose the following for the purpose of funding shall create or have created a special fund or funds from regional center: which, along with any reserves created pursuant to RCW (a) Charges and fees for the use of any of its facilities; 39.44.140, the principal and interest on such revenue bonds (b) Admission charges under RCW 35.57.100; shall exclusively be payable. The board may obligate the (c) Vehicle parking charges under RCW 35.57.110; and district to set aside and pay into the special fund or funds a (d) Sales and use taxes authorized under RCW fixed proportion or a fixed amount of the revenues from the 82.14.048 and 82.14.390. public improvements, projects. or facilities. and all related (2) The board may accept and expend or use gifts, additions. that are funded by the revenue bonds. This grants, and donations for the purpose of a regional center. amount or proportion shall be a lien and charge against these The revenue from the charges, fees, and taxes imposed under revenues. subject only to operating and maintenance expens- this section shall be used only for the purposes authorized by es. The board shall have due regard for the cost of opera - this chapter. [1999 c 165 § 4.] tion and maintenance of the public improvements. projects. or facilities, or additions. that are funded by the revenue 35.57.050 Travel, expense reimbursement policy— bonds. and shall not set aside into the special fund or funds Required. The board of directors of the public facilities a greater amount or proportion of the revenues that in its district shall adopt a resolution that may be amended from judgment will be available over and above the cost of time to time that shall establish the basic requirements maintenance and operation and the amount or proportion. if governing methods and amounts of reimbursement payable any. of the revenue so previously pledged. The board may to such district officials and employees for travel and other also provide that revenue bonds payable out of the same business expenses incurred on behalf of the district. The source or sources of revenue may later be issued on a parity resolution shall, among other things, establish procedures for with any revenue bonds being issued and sold. approving such expenses; the form of the travel and expense (2) Revenue bonds issued under this section shall not be voucher; and requirements governing the use of credit cards an indebtedness of the district issuing the bonds. and the issued in the name of the district. The resolution may also interest and principal on the bonds shall only be payable establish procedures for payment of per diem to board from the revenues lawfully pledged to meet the principal and members. The state auditor shall. as provided by general interest requirements and any reserves created under RCW aw, cooperate with the public facilities district in establish- 39.44.140. The owner or bearer of a revenue bond or any g adequate procedures for regulating and auditing the interest coupon issued under this section shall not have any etmbursement of all such expenses. [1999 c 165 § 5.] claim against the district arising from the bond or coupon except for payment from the revenues lawfully pledged to 35.57.060 Expenditure of funds — Purposes. The meet the principal and interest requirements and any reserves board of directors of the public facilities district shall have created under RCW 39.44.140. The substance of the authority to authorize the expenditure of funds for the public limitations included in this subsection shall be plainly purposes of preparing and distributing information to the printed, written, or engraved on each bond issued under this general public and promoting, advertising, improving, section. developing. operating, and maintaining a regional center. (3) Revenue bonds with a maturity in excess of thirty Nothing contained in this section may be construed to years shall not be issued. The board of directors of the authorize preparation and distribution of information to the district shall by resolution determine for each revenue bond general public for the purpose of influencing the outcome of issue the amount, date, form, terms, conditions, denomina a district election. [1999 c 165 § 6.] tions, maximum fixed or variable interest rate or rates. maturity or maturities, redemption rights, registration privileges, manner of execution, manner of sale, callable 35.57.070 Service provider agreements. The public provisions, if any, and covenants including the refunding of facilities district may secure services by means of an existing revenue bonds. Facsimile signatures may be used agreement with a service provider. The public facilities on the bonds and any coupons. Refunding revenue bonds district shall publish notice. establish criteria, receive and may be issued in the same manner as revenue bonds are evaluate proposals, and negotiate with respondents under issued. [1999 c 165 § 9.] requirements set forth by district resolution. [ 1999 c 165 § _ 7.] 35.57.100 Tax on admissions. A public facility district may levy and fix a tax of not more than one cent on 35.57.080 Purchases and sales— Procedures. In twenty cents or fraction thereof to be paid by the person who addition to provisions contained in chapter 39.04 RCW, the pays an admission charge to a regional center. This includes public facilities district is authorized to follow procedures a tax on persons who are admitted free of charge or at contained in RCW 43.19.1906 and 43.19.1911 for all reduced rates if other persons pay a charge or a regular purchases. contracts for purchase, and sales. [1999 c 165 § higher charge for the same privileges or accommodations. 1110.] The term "admission charge" includes: (1) A charge made for season tickets or subscriptions; 35.57.090 Revenue bonds — Limitations. (1) A public facilities district may issue revenue bonds to fund revenue - generating facilities, or portions of facilities, which (2000 Ed.) [Title 35 RCW —page 187) l 35.57.100 Title 35 RCW: Cities and Towns (2) A cover charge, or a charge made for use of seats 35.58.160 Metropolitan council— Compensation— Waiver of compensa- and tables reserved or otherwise, and other similar accom- tion. • modations; 35.58.170 Corporation name and seal. (3) A charge made for food and refreshment if free 35.58.180 General powers of corporation. 35.58.190 Performance of ftrnction or functions — Commencement date. entertainment, recreation, or amusement is provided; 35.58.200 Powers relative to water pollution abatement. (4) A charge made for rental or use of equipment or 35.58.210 Metropolitan water pollution abatement advisory committee. facilities for purposes of recreation or amusement; if the 35.58.215 Powers relative to systems of sewerage. rental of the equipment or facilities is necessary to the 35.58.220 Powers relative to water supply. general admission is 35.58.240 Powers water advisory rt committee. enjoyment of a privilege for which a g 35.58.240 Powers relative to transportation. charged, the combined charges shall be considered as the 35.58.245 Public transportation function— Authorization by election admission charge; required — Procedure. (5) Automobile parking charges if the amount of the 35.58.250 Other local public passenger transportation service prohibit - charge is determined according to the number of passengers ed— Agreements— Purchase -- Condemnation. P g 35.58.260 Transportation function— Acquisition of city system. in the automobile. [1999 c 165 § 10.] 35.58.265 Acquisition of existing transportation system— Assumption of labor contracts — Transfer of employees — Preservation 35.57.110 Tax on vehicle parking charges. A ublic of employee benefits — Collective bargaining. P 35.58.268 Public transportation employees — Payroll deduction for facility district may levy and fix a tax on any vehicle political action committees. parking charges imposed at any parking facility that is 35.58.270 Metropolitan transit commission. owned or leased by the public facility district as part of a 35.58.271 Public transportation in municipalities— Financing. regional center. No county or city or town within which the 35.58 Local sales and use taxes for financing public transportation regional center is located may impose a tax of the same or 35.58.2712 Public st transportation feasibility study — Advanced financial similar kind on any vehicle parking charges at the facility. support payments. For the purposes of this section, "vehicle parking charges" 35.58.272 Public transportation systems — Definitions. means only the actual parking charges exclusive of taxes and 35.58.2721 Public transportation systems — Authority of municipalities service charges and the value of any other benefit conferred. to acquire, operate, etc.—Indebtedness—Bond issues. y 35.58.273 Public transportation systems —Motor vehicle excise tax The tax authorized under this section shall be at the rate of authorized — Credits— Public hearing on route and de- not more than ten percent. [1999 c 165 § 11.] sign — Rules —Sales and use tax on rental cars. 35.58.274 Public transportation systems —Motor vehicles exempt from G tax. 35.57.900 Severability-1999 c 165. If any provision 35.58.275 Public transportation systems— Provisions of motor vehicle f this act or its application to any person or circumstance is excise tax chapter applicable. e1d invalid, the remainder of the act or the application of 35.58.276 Public transportation systems —When tax due and payable — Collection. the provision to other persons or circumstances is not 35.58.277 Public transportation systems — Remittance of tax by county affected. [1999 c 165 § 23.] auditor. 35.58.278 Public transportation systems — Distribution of tax. 35.58.279 Public transportation systems — Crediting and use of tax Chapter 35.58 revenues. METROPOLITAN MUNICIPAL CORPORATIONS 35.58.2791 Public transportation systems — Internal combustion equip- ment to comply with pollution control standards. 35.58.2792 Public transportation systems — Parking facilities to be in Sections conjunction with system stations or transfer facilities. 35.58.010 Declaration of policy and purpose. 35.58.2794 Public transportation systems — Research, testing, develop - 35.58.020 Definitions. ment. etc., of systems— Powers to comply with federal 35.58.030 Corporations authorized — Limitation on boundaries. laws. 35.58.040 Territory which must be included or excluded — Boundaries. 35.58.2795 Public transportation systems— Six -year transit plans. 35.58.050 Functions authorized. 35.58.2796 Public transportation systems — Annual report by department. 35.58.060 Unauthorized functions to be performed under other law. 35.58.280 Powers relative to garbage disposal. 35.58.070 Resolution, petition for election — Requirements, procedure. 35.58.290 Powers relative to parks and parkways. 35.58.080 Hearings on petition, resolution — Inclusion, exclusion of 35.58.300 Metropolitan park board. territory— Boundaries —Calling election. 35.58.310 Powers relative to planning. 35.58.090 Election procedure to form corporation and levy tax— 35.58.320 Eminent domain. Qualified voters — Establishment of corporation —First 35.58.330 Powers may be exercised with relation to public rights of meeting of council. way without franchise — Conditions. 35.58.100 Additional functions— Authorized by election. 35.58.340 Disposition of unneeded property. 35.58.110 Additional functions — Authorized without election. 35.58.350 Powers and functions of metropolitan municipal corpora - 35.58.112 Recommended comprehensive plan for performance of addi- tion —Where vested — Powers of metropolitan council. tional function —Study and preparation. 35.58.360 Rules and regulations — Penalties— Enforcement. 35.58.114 Recommended comprehensive plan for performance of addi- 35.58.370 Merit system. tional function — Resolution for special election to autho- 35.58.380 Retention of existing personnel. rize additional function - Contents— Hearings— Election 35.58.390 Prior employees pension rights preserved. procedure. 35.58.400 Prior employees sick leave and vacation rights preserved. 35.58.116 Proposition for issuance of general obligation bonds or levy 35.58.410 Budget — Expenditures — Revenue estimates— Requirements of general tax —Submission at same election or special for a county assuming the powers of a metropolitan election. 0 5 municipal corporation. .58.120 Metropolitan council — Composition. 35.58.420 Supplemental income payments by component city and .58.130 Metropolitan council — Organization, chairman, procedures. county. .58.140 Metropolitan council — Terms. 35.58.430 Funds — Disbursements — Treasurer— Expenses — Election 35.58.150 Metropolitan council — Vacancies. expenses. [Title 35 RCW — page 188] (2000 Ed.) 1 Local Retail Sales and Use Taxes 82.14.370 oaring housing prices. In order to address these problems, the legislature tax receipts as provided in *RCW 82.44.110. At such times tends to use resources strategically to build on our state's strengths while distributions are made under * *RCW 82.44.150, the state dressing threats to our prosperity." [1999 c 311 § 1.] treasurer shall distribute the funds in the distressed county Part headings and subheadings not law -1999 c 311: "Part assistance account to each county imposing the sales and use headings and subheadings used in this act are not any part of the law." [1999 c 311 § 6011 tax authorized under RCW 82.14.370 as of January 1. 1999. Effective date-1999 c 311: "Sections 1, 101, 201, 301 through 305, in the same proportions as distributions of the tax imposed 401, 402, 601, and 605 of this act take effect August 1. 1999." [1999 c 311 under RCW 82.14.370 for these counties for the previous § 6041 quarter. Severability -1999 c 311: "If any provision of this act or its (2) Funds distributed from the distressed county assis- application to any person or circumstance is held invalid, the remainder of tance account shall be expended by the counties for criminal the act or the application of the provision to other persons or circumstances justice and other purposes. [ 1999 c 311 § 201; 1998 c 321 is not affected." [1999 c 311 § 606.] Intent -1997 c 366: "The legislature recognizes the economic § 10 (Referendum Bill No. 49, approved November 3, hardship that rural distressed areas throughout the state have undergone in 1998)1 recent years. Numerous rural distressed areas across the state have Reviser's note: *(1) RCW 82.44.110 was repealed by 2000 c 1 § 3. encountered serious economic downturns resulting in significant job loss effective January 1. 2000. and business failure. In 1991 the Legislature enacted two major pieces of * *(2) RCW 82.44.150 was repealed by 2000 c 1 § 3. effective January legislation to promote economic development and job creation. with 1, 2000, without cognizance of its amendment by 1999 c 94 § 30. particular emphasis on worker training, income. and emergency services Finding— Intent —Part headings and subheadings not law — support. along with community revitalization through planning services and Effective date — Severability -1999 c 311: See notes following RCW infrastructure assistance. However even though these programs have been 82.14.370. of assistance, rural distressed areas still face serious economic problems including: Above- average unemployment rates from job losses and below- Purpose — Severability -1998 c 321: See notes following RCW average employment growth: low rate of business start-ups; and persistent 82.14.045. erosion of vitally important resource -driven industries. Effective dates — Application -1998 c 321 §§ 1 -21, 44, and 45: See The legislature also recognizes that rural distressed areas in Washing- note following RCW 82.14.045. ton have an abiding ability and consistent will to overcome these economic Referral to electorate -1998 c 321 §§ 1 -21 and 44-46: See note obstacles by building upon their historic foundations of business enterprise, following RCW 82.14.045. local leadership. and outstanding work ethic. _. .. _ .... . - ,pagq,-.ten,: ......,>,�,,,.e. .asOIVA �.4261,i ,-.,.- _.. _, The legislature intends to assist rural distressed areas in their ongoing efforts to address these difficult economic problems by providing a 82.14.390 Sales and use tax for regional centers. ilk mprehensive and significant array of economic tools. necessary to harness (1) Except as provided in subsection (6) of this section, the persistent and undaunted spirit of enterprise that resides in the citizens governing body of a public facilities district created under rural distressed areas throughout the state. The further intent of this act is to provide: chapter 35.57 or 36.100 RCW that commences construction (1) A strategically designed plan of assistance, emphasizing state. of a new regional center. or improvement or rehabilitation of local, and private sector leadership and partnership; an existing new regional center, before January I. 2003, may (2) A comprehensive and significant array of business assistance, impose a sales and use tax in accordance with the terms of services, and tax incentives that are accountable and performance driven: this chapter. The tax is in addition to other taxes authorized (3) An array of community assistance including infrastructure development and business retention, attraction. and expansion programs that by law and shall be collected from those persons who are will provide a competitive advantage to rural distressed areas throughout taxable by the state under chapters 82.08 and 82.12 RCW Washington: and upon the occurrence of any taxable event within the public (4) Regulatory relief to reduce and streamline zoning, permitting, and facilities district. The rate of tax shall not exceed 0.033 regulatory requirements in order to enhance the capability of businesses to grow and prosper in rural distressed areas." [1997 c 366 § I.] percent of the selling price in the case of a sales tax or value Goals -1997 c 366: "The primary goals of chapter 366. Laws of of the article used in the case of a use tax. 1997 are to: (2) The tax imposed under subsection (1) of this section (1) Promote the ongoing operation of business in rural distressed shall be deducted from the amount of tax otherwise required areas; to be collected or paid over to the department of revenue (2) Promote the expansion of existing businesses in rural distressed under chapter 82.08 or 82.12 RCW. The department of areas: (3) Attract new businesses to rural distressed areas: revenue shall perform the collection of such taxes on behalf (4) Assist in the development of new businesses from within rural of the county at no cost to the public facilities district. distressed areas: (3) No tax may be collected under this section before (5) Provide family wage jobs to the citizens of rural distressed areas; August 1, 2000. The tax imposed in this section shall expire and (6) Promote the development of communities of excellence in rural when the bonds issued for the construction of the regional m distressed areas." [1997 c 366 § 2.] center and related parking facilities are retired, but not more Severability -1997 c 366: "If any provision of this act or its than twenty -five years after the tax is first collected. application to any person or circumstance is held invalid, the remainder of (4) Moneys collected under this section shall only be the act or the application of the provision to other persons or circumstances used for the purposes set forth in RCW 35.57.020 and must is not affected." [1997 c 366 § 11.] j be matched with an amount from other public or private Captions and part headings not law -1997 c 366: "Section I sources equal to thirty -three percent of the amount collected captions and part headings used in this act are not any part of the law." under this section, provided that amounts generated from 0 997 c .1 § 12.] nonvoter approved taxes authorized under chapter 35.57 82.14.380 Distressed county assistance account— RCW or nonvoter approved taxes authorized under chapter Created — Distributions. (1) The distressed county assis- 36.100 RCW shall not constitute a public or private source. tance account is created in the state treasury. Into this For the purpose of this section, public or private sources account shall be placed a portion of all motor vehicle excise includes, but is not limited to cash or in -kind contributions 4 used in all phases of the development or improvement of the (2000 Ed.) 1 [Tide 82 RCW —page 1011 1 l ■ 82.14.390 Title 82 RCW: Excise Taxes regional center, land that is donated and used for the siting collection of local sales and use taxes under RCW 82.14.050 of the regional center, cash or in -kind contributions from from which the county is exempt under this subsection (5), O p p ublic or private foundations, or amounts attributed to a percentage of the tax revenues authorized by this section rivate sector partners as part of a public and private equal to one -half of the maximum percentage provided in partnership agreement negotiated by the public facilities dis- RCW 82.14.050 shall be transferred annually to the depart- trict. ment of community, trade. and economic development. or its (5) The combined total tax levied under this section successor agency. from the funds allocated under subsection shall not be greater than 0.033 percent. If both a public (6)(b) of this section for a period of twelve years from the facilities district created under chapter 35.57 RCW and a first date of distribution of funds under subsection (6)(b) of public facilities district created under chapter 36.100 RCW this section. The department of community, trade. and impose a tax under this section, the tax imposed by a public economic development. or its successor agency. shall use facilities district created under chapter 35.57 RCW shall be funds transferred to it pursuant to this subsection (5) to credited against the tax imposed by a public facilities district provide. operate. and maintain community -based housing created under chapter 36.100 RCW. under chapter 43.185 RCW for persons who are mentally ill. (6) A public facilities district created under chapter (6) If the joint request and the authorizing proposition 36.100 RCW is not eligible to impose the tax under this include provisions for funding those costs included within section if the legislative authority of the county where the subsection (4)(b) of this section. the tax revenues authorized public facilities district is located has imposed a sales and by this section shall be allocated annually as follows: use tax under RCW 82.14.0485 or 82.14.0494. [1999 c 165 (a) Fifty percent to the zoo and aquarium advisory § 13 .] authority: and , Severability-1999 c 164: See RCW 35.57.900. (b) Fifty percent to be distributed on a per capita basis as set out in the most recent population figures for unincor- 82.14.400 Sales and use tax for zoo, aquarium, and porated and incorporated areas only within that county. as wildlife facilities— Authorizing proposition— determined by the office of financial management. solely for Distributions. (1) Upon the joint request of a metropolitan parks. as follows: To any metropolitan park district. to cities park district. a city with a population of more than one and towns not contained within a metropolitan park district. hundred fifty thousand. and a county legislative authority in and the remainder to the county. Moneys received under a county with a national park and a population of more than this subsection (6)(b) by a county may not be used to replace five hundred thousand and less than one million five hundred or supplant existing per capita funding. housand, the county shall submit an authorizing proposition (7) Funds shall be distributed annually by the county i to the county voters, fixing and imposing a sales and use tax treasurer to the county, and cities and towns located within in accordance with this chapter for the purposes designated the county. in the manner set out in subsection (6)(b) of this in subsection (4) of this section and identified in the joint section. request. Such proposition must be placed on a ballot for a (8) Prior to expenditure of any funds received by the special or general election to be held no later than one year county under subsection (6)(b) of this section. the county after the date of the joint request. shall establish a process which considers needs throughout (2) The proposition is approved if it receives the votes the unincorporated areas of the county in consultation with of a majority of those voting on the proposition. community advisory councils established by ordinance. (3) The tax authorized in this section is in addition to (9) By December 31, 2005, and thereafter. the county or any other taxes authorized by law and shall be collected any city with a population greater than eighty thousand must from those persons who are taxable by the state under provide at least one dollar match for every two dollars chapters 82.08 and 82.12 RCW upon the occurrence of any received under this section. taxable event within the county. The rate of tax shall equal (10) Properties subject to a memorandum of agreement no more than one -tenth of one percent of the selling price in between the federal bureau of land management, the adviso- the case of a sales tax. or value of the article used. in the ry council on historic preservation. and the Washington state case of a use tax. historic preservation officer have priority for funding from (4) Moneys received from any tax imposed under this money received under subsection (6)(b) of this section for section shall be used solely for the purpose of providing implementation of the stipulations in the memorandum of funds for: agreement. (a) Costs associated with financing. design. acquisition. (a) At least one hundred thousand dollars of the first construction. equipping. operating. maintaining, remodeling, four years of allocations under subsection (6)(b) of this repairing. reequipping, or improvement of zoo. aquarium. section. to be matched by the county or city with one dollar and wildlife preservation and display facilities that are for every two dollars received, shall be used to implement currently accredited by the American zoo and aquarium the stipulations of the memorandum of agreement and for association: or other historical, archaeological, architectural, and cultural (b) Those costs associated with (a) of this subsection preservation and improvements related to the properties. and costs related to parks located within a county described (b) The amount in (a) of this subsection shall come n subsection (1) of this section. equally from the allocations to the county and to the city in (5) The department of revenue shall perform the which the properties are located, unless otherwise agreed to collection of such taxes on behalf of the county at no cost to by the county and the city. the county. In lieu of the charge for the administration and (c) The amount in (a) of this subsection shall not be construed to displace or be offered in lieu of any lease [Title 82 RCW —page 102] (2000 Ed.) I I