HomeMy WebLinkAboutR-2003-079 SunDome Agreement w/ Yakima CountyRESOLUTION NO. R-2003- 79
A RESOLUTION authorizing: (a) an Ag, eement with Yakima County regarding
the allocation to the City of savings resulting from refunding
of the 1988 & 1989 SunDome Construction Bonds and (b) an
Interlocal Agreement between the City; and Yakima County
regarding the issuance of SunDome Expansion bonds by the
City and the use of the related bond proceeds by the County.
WHEREAS, the City and County entered into the Agplex Modification of
the Convention Center interlocal agreement executed on November 10, 1987 and
amended on December 19, 1989 (the Agplex Center Construction Agreements) in
which the County agreed to issue bonds to fund the construction of the
SunDome and the City agreed to make semi-annual payments to the County to
assist the County in paying debt service on the bonds; and
WHEREAS, in 1992 and 2001 the County refunded all, or portions thereof,
of the 1988 and 1989 Agplex bonds, resulting in a reduction in the County's total
debt service payments; and
WHEREAS, the Central Washington Fair Association Board has
determined that certain modifications to the SunDome are necessary to maintain
and grow tourism in the Yakima area; and
WHEREAS, the County has asked the City of Yakima to contribute
approximately $1.2 million to the County's SunDome Expansion Project, Phase I;
and
WHEREAS, the City of Yakima intends to issue zero coupon bonds to
assist the County with the financing of Phase I of the SunDome expansion
project; and
WHEREAS, the County and the City agree that both parties should share
in the savings resulting from the refundings of the 1988 and 1989 Agplex bonds;
and
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V 1-1EKEAS, 1Ile City slid L1_ C -
Collin!' Have each ueterlitineu Li Idt LI le
SunDome Expansion Project will benefit their respective jurisdictions and the
City desires to participate in the financing of Phase I of this project, now,
therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
YAKIMA:
The City Manager of the City of Yakima is hereby authorized and directed
to finalize negotiations execute the (a) "Agreement Relating to Agplex Bond
Payments" and (b) "Interlocal Agreement for the SunDome Expansion Project,
Phase I" in substantially the same form and intent as exists in the attached
proposed documents.
ADOPTED BY CITY COUNCIT this 20th day o f Ma �' 2003.
i]LVl 1 L L 1 THE `.11 1 t..V 1 Y �..1L this � � / �
/7;//
ATTEST:
ary Place, Mayor
City Clerk
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INTERLOCAL AGREEMENT
FOR THE SUNDOME EXPANSION PROJECT, PHASE I
This Interlocal Agreement ("Agreement") is entered into this /2.1' day of ,
2003, between the City of Yakima, a city duly organized and existing under and by virtue of the
laws of the state of Washington (the "City") and Yakima County, a political subdivision of and
duly organized and existing under the laws of the state of Washington (the "County").
RECITALS
WHEREAS, the City of Yakima and Yakima County entered into an interlocal agreement
(for the Agplex Modification of the Convention Center), executed on November 10, 1987 (and
amended on December 19, 1989) under which the City agreed to assist in the financing of
construction of the SunDome (together, "the Agplex Center Construction Agreements").
WHEREAS, the City has imposed a Business Licensing Fee under RCW 35.22.280 and
Ordinance No. 3060, and has dedicated a portion of that fee (along with some revenues from its
real estate excise tax) to make payments to the County to be used for debt service on the bonds
that the County had issued to finance SunDome construction.
WHEREAS, the SunDome is owned by the County and its operation is delegated to the
Central Washington Fair Association, whose Board has determined that certain modifications to
the SunDome are necessary, including increased seating capacity and the addition of
approximately 16,000 square feet of additional space that will provide for additional locker
rooms, dressing rooms and other related facilities, to be completed in three Phases (as described
further in Exhibit A), and the County intends to undertake the SunDome Expansion Project
Phase I improvements with the cooperation of the City of Yakima, the State of Washington and
the City of Union Gap.
WHEREAS, the City and County have resolved an issue relating to the Agplex Center
Construction Agreements by executing a Settlement Agreement on June 1 a-. , 2003. In
that Settlement Agreement, the Parties specifically contemplate that the City will, beginning in
the year that the City is to be released from its earlier obligation, use those newly available funds
for debt service on the City's SunDome Expansion Bonds issued pursuant to this Agreement.
WHEREAS, the County has asked the City of Yakima to contribute approximately $1.2
million to the County's SunDome Expansion Project Phase I, and the City of Yakima intends to
issue its SunDome Expansion Bonds for this purpose payable from revenues of the City Business
Licensing Fee and other legally available money of the City.
WHEREAS, the City and the County have the authority to enter into interlocal
agreements under chapter 39.34 RCW, chapter 67.28 RCW and chapter 35.59 RCW for joint and
cooperative action, including provisions to finance joint or cooperative undertakings, multi-
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purpose community centers, regional centers and other facilities and to provide for services to be
provided by one government to another.
WHEREAS, the City and the County have the authority, pursuant to applicable
provisions of state law, to acquire, design, construct, own, remodel, maintain, equip, re-equip,
repair, finance and operate public stadium, sports, conference and convention centers, including
related parking facilities; and these agencies propose to use one or more interlocal agreements to
make effective and efficient use of the powers and authorities granted to them to construct,
remodel, expand, own and operate convention and other tourism -related facilities such as the
SunDome to serve the City, the County and adjacent regional areas.
WHEREAS, the City and the County have each determined that the SunDome Expansion
Project will benefit and is in the best interests of their respective jurisdictions and the City
desires to participate in the fmancing of Phase I of this project in order to provide an increased
level of conference, sports, arts, cultural and community services to City and County residents as
well as to a wider regional community.
NOW, THEREFORE, the City and the County enter into this Agreement which outlines
the responsibilities and commitments of each Party in the SunDome Expansion Project Phase I:
A. DEFINITIONS
For the purposes of this Agreement, the terms defined in this Section shall have the
following meanings:
Agreement is this Interlocal Agreement entered into between the City and the County
under the authority of chapters 35.59 RCW, 39.34 RCW and 67.28 RCW for the SunDome
Expansion Project.
Bond means any short-term or long-term bond, note, warrant, certificate of indebtedness,
or other obligation.
Bond Proceeds means all funds received by the City as a result of the sale of the City's
SunDome Expansion Bonds after payment of all costs of issuance, including but not limited to
underwriter's discount, bond counsel fees, rating agency fees, bond insurance premium, and all
other costs or fees incurred in issuing the bonds.
Business Licensing Fees are those fees imposed, received and applied by the City
pursuant to the authority of RCW 35.22.280 and Ordinances No. 3060 & No. 2003-05 of the
City.
City is the City of Yakima, a municipal corporation of the state of Washington.
County is Yakima County, a political subdivision of the state of Washington.
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Expansion includes any one or more of the following: reconstructing, expanding,
remodeling, maintaining, equipping, re-equipping and repairing the SunDome as specified in
Exhibit A and undertaken by the County under this Agreement.
Parties means the City and the County.
Phase I means improvements to the SunDome as defined in Exhibit A, including an
increase of seating capacity to approximately 7,030 seats, a two-story addition on the north end
with approximately 16,000 square feet of space, and the addition of locker rooms and dressing
rooms.
Project means the expansion and improvement of the SunDome, including all three
phases, as described in Exhibit A.
SunDome is the multi-purpose arena facility, formerly referred to as the Agplex, located
in Yakima County as a tourism -related facility as defined in RCW 67.28.080, being expanded by
the County to better serve the City, the County, and the state.
SunDome Expansion Bonds means the City's Limited Tax General Obligation Bonds,
2003 Series A, issued pursuant to this Agreement for the purpose of assisting the County in
financing the SunDome Expansion Project Phase I, and payable from revenues of the City's
Business Licensing Fee and other legally available money of the City.
B. COUNTY RESPONSIBILITIES: SUNDOME EXPANSION PROJECT
B.1. General
The SunDome is intended to directly serve the residents of the City and the County as
well as serving a broader population in the region and the state. The total cost of Phase I is
expected to be approximately $2.8 million, and the County expects this amount to be financed by
funds received by the County from the cooperating governmental entities and/or other sources
identified in Exhibit A.
To assist the County in financing Phase I of the Project, the City intends to issue the
SunDome Expansion Bonds, as described in Section C of this Agreement, and the Bond
Proceeds shall be transferred to the County to be applied to Phase I of the Project.
B.2. Expansion Project, Phase I
The County agrees to complete all elements of Phase I of the Expansion Project as
described in and in accordance with the timelines contained in Exhibit A, and shall not alter or
delete any element of Phase I as described in Exhibit A without prior written notice to and
consent of the City. The County shall provide the City with a reasonable opportunity to review
and comment on preliminary designs, specifications and construction schedules for the Phase I
improvements, and shall submit to the City copies of the approved design plans and construction
schedules which shall be incorporated into Exhibit A and this Agreement as if originally set forth
herein.
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The County further agrees to use the Bond Proceeds only for Phase I of the Expansion
Project, and shall not use the Bond Proceeds for any purpose not included in Exhibit A without
the prior notice to and written consent of the City. The County shall, upon request, provide to the
City all records necessary to verify the use of the Bond Proceeds.
The County agrees to administer the Expansion Project, Phase I and the SunDome's
operation for the benefit of the County, the City and other cooperating governmental entities,
subject to the limitations set forth in this Agreement. The County further agrees to continue:
a. To operate, or provide for the operation of, the SunDome in a businesslike
manner and provide a level of service equivalent to or better than the services provided by
comparable public facilities in the state;
b. To make the SunDome available for use by the general public at reasonable
rates and subject to reasonable conditions established by the County, and similar to the rates and
conditions for similar public facilities. The County shall also make SunDome facilities available
for use by governmental and nonprofit entities at special rates, recognizing that such special rates
may be available only at certain specified times;
c. In the event the SunDome is damaged or destroyed, to restore the SunDome to
operational condition and place it in operation as quickly as reasonably possible, but in any event
within 3 years of the event causing the damage or destruction. Failure to do so shall result in
default of this Agreement unless the County begins making payments to the City in such
amount(s) and at such time(s) as are necessary to meet the City's debt service obligations on the
City's SunDome Expansion Bonds. If the County subsequently restores the SunDome to
operational condition and places it in operation, the County may cease making such payments to
the City;
d. To obtain and maintain, or cause to be obtained and maintained, insurance
in amounts sufficient to protect the County and give full effect to the indemnification required
under Section E of this Agreement; and
e. To obtain and maintain, or cause to be obtained and maintained, insurance or
self-insurance in form and amounts as are consistent with the coverage of comparable facilities
and undertakings, to name the City as an additional named insured, and to provide the City with
a certificate or certificates that the following minimum requirements and coverages as to
insurance have been met:
(i) A comprehensive general liability policy with limits of at least $5
million in aggregate, naming the City, its officers, elected officials, employees and agents as
additional insureds;
(ii) Property insurance, earthquake insurance, and flood insurance (if
such earthquake insurance and/or flood insurance is commercially available at reasonable cost)
equal to the replacement value of the SunDome and its contents; and
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(iii) Builder's risk insurance (also naming the City, its officers, elected
officials, employees and agents as additional insureds) to be obtained by the general contractor
for the Project, which shall be in an amount equal at least to the replacement cost of Phase I of
the Expansion Project, and shall include earthquake insurance and flood insurance if
commercially available at reasonable cost.
All insurance policies must require at least 30 days written notice of cancellation and the insurer
must be required to give written notice to all insureds of any changes in the policy. If the
standard policy includes language to the effect that the insurer "will endeavor" to give such
notice, that language must be stricken.
B.3. County Breach
a. Failure to Meet Construction Schedule.
(i) The timelines for completion of Phase I stated in Exhibit A and
other design plans and timelines as may be approved by the County and submitted to the City
under Section B.2 of this Agreement are of the essence. If the County fails to meet these
timelines for any reason other than an event of force majeure (i.e., an event entirely beyond the
County's control) for which insurance could not be obtained at reasonable cost, the County shall
pay to the City liquidated damages for each working day that the County continues with
diligence toward completion of Phase I until Phase I is either substantially completed or
abandoned. Once substantial completion is achieved, if fmal completion is not achieved within
thirty days, then the County shall pay additional liquidated damages to the City for each and
every day that actual fmal completion is delayed after thirty days of the required substantial
completion date.
The provision for liquidated damages in this Section is not and shall not be construed as a
penalty, but instead relates to the detriment felt by the City due to its obligation to continue to
make payments on the SunDome Expansion Bonds at a time during which the City is not
receiving the benefits of the Expansion Project in terms of the Expansion Project's contribution
to and enhancement of the City's economic base. Furthermore, liquidated damages are separate
from and in addition to any tax or arbitrage liability that may be incurred by the City due to the
County's failure to meet construction deadlines, which (if incurred) shall be governed in
subsection (c), below.
(ii) Liquidated damages shall be calculated as follows:
LD=0.15 * C/T
Where LD = Liquidated damages per working day (rounded to nearest dollar)
C = The original principal amount of the SunDome Expansion Bonds
T = The number of days calculated from the date of issuance of the
SunDome Expansion Bonds to the date for substantial
completion of Phase 1 under this Section
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The total amount of liquidated damages paid by the County to the City shall not exceed the sum
of: (A) the amount of SunDome Expansion Bond proceeds, and (B) all costs incurred by the City
for the issuance of these bonds (and any refunding bonds), and (C) any interest paid and accreted
on the bonds (or refunding bonds) to the date of the breach, and (D) all interest payments due on
the bonds from the time of the breach until the breach has been cured, and (E) all other costs
(including arbitrage liability, if any) incurred by the City as a result of the County's failure to
meet the construction deadlines.
(iii) For the purposes of this Section B.3, the terms "substantial
completion" and "final completion" shall have the meanings ascribed these or similar terms in
the relevant contract(s) for the construction of Phase I of the Expansion Project.
b. Other Breach.
(i) In the case of other material breach of this Agreement by the
County, the County shall (A) assume responsibility for providing the remaining debt service on
the City's SunDome Expansion Bonds by paying to the City, at least 30 days prior to each
principal or interest payment date, amounts sufficient to pay, when due, all remaining principal
of and interest on the Bonds (or refunding bonds, if any), and (B) pay all costs and damages
incurred by the City as a direct result of that material breach.
(ii) "Material breach" shall include, but not be limited to: (A) failure to
complete, or abandonment of, Phase I of the Expansion Project as described in Section B.2 and
Exhibit A, for any reason other than an event of force majeure (i.e., an event entirely beyond the
County's control) for which insurance could not be obtained at reasonable cost; and (B) ceasing
to operate the SunDome in accordance with this Agreement for more than 60 consecutive days
for any reason other than upon an event of force majeure (i.e., an event entirely beyond the
County's control) for which insurance could not be obtained at reasonable cost, and (C) failure to
rebuild the SunDome if wholly or partially destroyed according to paragraph B.2.c of the
Agreement.
c. Tax -Exempt Status of SunDome Expansion Bonds; Arbitrage Liability. In
addition to any other damages specified in this Agreement (including liquidated damages if the
liquidated damages cap in Section B.3.a.ii, above, has not been met), if the County, at any time
during which any portion of the City's SunDome Expansion Bonds (or refunding bonds, if
applicable) remains outstanding, takes any action or fails to take any action:
(i) Which adversely affects the tax-exempt status of the City's
SunDome Expansion Bonds, including but not limited to the sale or lease of the SunDome or any
portion thereof, in which event the County shall pay to the City: (A) an amount sufficient to
defease those outstanding bonds at their scheduled maturity; and (B) an amount sufficient to
satisfy any tax liability (and incidental costs and direct damages) incurred, as a result of the loss
of the tax-exempt status of the bonds, by the City or by any person who is entitled to payment or
compensation from the City for that tax liability; or
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(ii) Creating arbitrage liability for the City, including failure to meet
the construction timelines contained in Exhibit A, in which event the County agrees to pay any
resulting arbitrage liability incurred by the City.
C. CITY RESPONSIBILITIES - FINANCING ASSISTANCE FOR PHASE I
C.1. Bond Issuance; Transfer of Bond Proceeds to County.
a. The City shall issue its SunDome Expansion Bonds in an original principal
amount resulting in annual debt service payments not to exceed $150,000 and a total debt service
over life of the bonds not less than $2.3 million nor greater than $2.5 million, and shall transfer
the Bond Proceeds to the County to be used for Phase I of the SunDome Expansion Project. This
obligation shall be payable solely from the Bond Proceeds. The Parties recognize and agree that
the actual amount of Bond Proceeds will not be determined until after the bonds have been sold,
and that nothing in this Agreement shall give rise to any claim alleging that the City may have
been able to obtain a better sale price or additional Bond Proceeds.
b. The City reserves the right to determine all terms and conditions of the
SunDome Expansion Bonds, including but not limited to: the total principal amount to be
borrowed, the interest rate or rates, the debt service payment schedule, the options of redemption,
and the acquisition of bond insurance. The City's right to redeem or refund the SunDome
Expansion Bonds may be exercised at the City's option at any time consistent with the terms of
the bonds without notice to or consultation with the County. If the City issues general obligation
bonds for this purpose, the bonds themselves and any accompanying disclosure documents shall
state that they are obligations of the City, payable solely from the specified tax sources and other
legally available money of the City, and that they are not obligations of the County.
c. Although nothing in this Agreement obligates the City to issue bonds, the City
agrees to use its best efforts to market and sell these bonds at rates and conditions favorable to
both parties.
d. The Parties reserve the right to make additional payments or transfers among
themselves with respect to the SunDome, so long as such agreements and/or payments are
consistent with the terms of this Agreement.
D. NATURE OF OBLIGATIONS
The Parties agree and understand that the City's obligation to transfer funds to the County
for Phase I of the SunDome Expansion Project is solely payable out of the Bond Proceeds, and
that the City shall have no liability to fund operating costs or revenue shortfalls, or have any
other fmancial commitments relating to the SunDome Expansion Project Phase I.
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E. INDEMNIFICATION
E.1. County
To the extent permitted by law, the County shall indemnify, defend and hold harmless
the City, its officers, elected officials, employees, and agents (except that the County shall not be
considered an agent of the City for the purposes of this Section) from all claims, losses, suits,
actions, legal or administrative proceedings, costs, attorneys' fees, litigation costs, expenses,
damages, penalties, fines, judgments or decrees by reason of any death, injury or disability to or
of any person or party, including employees, and/or damage to any property or business,
including loss of use (collectively "damages") caused by any negligent act, error or omission of
the County or its officials, officers, employees, agents, contractors or subcontractors
(collectively, the "County's Functionaries") arising out of the expansion, financing, acquisition,
design, construction, ownership, operation, or maintenance of the SunDome.
The County's obligation shall include, but shall not be limited to, defending all claims
alleging damages from any negligent action, error or omission or breach of any common law,
statutory or other delegated duty by the County, and the County's Functionaries. The City has a
direct interest in any settlement agreement that the County may obtain while defending any such
claim naming the City under this hold harmless and indemnity. Accordingly, the County will
provide timely information to the City regarding all such claims.
The County's obligation to indemnify, defend, and hold harmless shall apply except and
to the extent where caused by the sole or concurrent negligence and/or willful misconduct of the
City. If the claim, suit, or action for injuries, death, or damages as provided for in this Section is
caused by or results from the concurrent negligence of (i) the City; and (ii) the County or the
County's Functionaries, the indemnity provisions provided for in this Section shall be valid and
enforceable only to the extent of the negligence of the County or the County's Functionaries.
E.2. City
To the extent permitted by law, the City shall indemnify, defend and hold harmless the
County, its officers, elected officials, employees, and agents (except that the City shall not be
considered an agent of the County for the purposes of this Section) from all claims, losses, suits,
actions, legal or administrative proceedings, costs, attorneys' fees, litigation costs, expenses,
damages, penalties, fines, judgments or decrees by reason of loss caused by the City's failure to
make the payments required by Section C.
F. SUPPLEMENTAL DOCUMENTS
The Parties agree to complete and execute all supplemental documents necessary or
appropriate to fully implement the terms of this Agreement.
G. DURATION OF AGREEMENT
This Agreement shall continue in full force and effect until such time as the City's
obligation to make payments on the SunDome Expansion Bonds (and any refunding bonds)
issued to fund the transfer(s) to the County under Section C shall have ceased.
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EFFECTIVE DATE; FILING WITH COUNTY AUDITOR
This Interlocal Agreement shall be effective upon such execution and filing with the
Yakima County Auditor as required by the provisions of RCW 39.34.040.
IN WITNESS WHEREOF, the Parties have executed this Agreement by their duly
authorized officers and representatives as of the day indicated below.
Dated Tuk-,,..� 1 - , 2003.
CITY OF YAKIMA
City Manager
YAKIMA COUNTY
ATTESTED: APPROVED AS TO FORM ONLY:
City Clerk s= I, ^A 1, 4 N:, ,Deputy Prosecuting Attorney
,s ,.�
CITY CONTRACT NO: 0 0 3- Z
RESOLUTION NO: / OO 0- 03 9
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EXHIBIT A
DESCRIPTION OF SUNDOME EXPANSION PROJECT
Phase I:
A. Elements:
1. The initial element of this phase is the addition of seating that will bring total seating
capacity to at least 7,100 for a single basketball court configuration as well as revamping the
entrances to the existing locker rooms. This part of Phase I is to be completed by June 30,
2003.
2. The second element of Phase I is a 16,000 square foot two-story addition at the north end of
the Dome. The first floor will house four additional locker rooms and two team rooms, an
elevator and stairs to the second floor, and a new ticket sales area. The second floor will
house both men's and women's restrooms and a large meeting room. Phase I is to be
completed by December 31, 2003.
B. Financing: The financing sources for Phase I are expected to include:
State of Washington $ 1,240,000
City of Union Gap 200,000
City of Yakima 1,275,000
Total $ 2,715,000
The contribution shown in this chart for the City of Yakima is an estimate only. The City
of Yakima's estimated contribution reflects current bond market conditions and expectations
and does not bind the City to contribute more than the actual Bond Proceeds, if any, as
reflected in Section C.1 of this Agreement. The City of Yakima's actual contribution is to be
determined after the issuance of bonds to reflect the actual amount of Bond Proceeds
available for Phase I. If the cost to complete Phase I is greater than the total fmancing
sources identified above, the County expects to address this by: soliciting additional funding
from other sources; utilizing contingency dollars included in the budget; and/or transferring
certain portions of the Expansion Project from Phase I to Phase II.
Phase II:*
This phase will include a new two story radiused glass entrance on the north/west corner of
the dome, the addition of a new storage and commissary on the north/east corner of the
dome, the removal of the existing commissary and lockers, and the addition of a concessions
storage area and a men's restroom and two women's restrooms.
Phase III:*
This phase will provide for the addition of a food court on the west side of the Dome, and a
new concession area and fenced in outdoor courtyard on the east side of the Dome.
* The inclusion of Phases II and III in this Exhibit A are for informational purposes only.
A-1
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AGREEMENT RELATING TO AGPLEX BOND PAYMENTS
This Agreement is entered into this IX day of Tu -41 e- , 2003, between the City
of Yakima, a city duly organized and existing under and by virtue of the laws of the state of
Washington (the "City") and Yakima County, a political subdivision of and duly organized and
existing under the laws of the state of Washington (the "County").
1. Recitals.
a. The City and County entered into the Agplex Modification of the Convention Center
interlocal agreement executed on November 10, 1987 and amended on December 19,
1989 (the "Agplex Center Construction Agreements").
b. The Agplex Center, also known as the SunDome, (the "Facility") is the multi-purpose
arena facility located in Yakima County as a tourism -related facility as defined in RCW
67.28.080, owned by the County and operated by its lessee, the Central Washington Fair
Association.
c. Under the Agplex Center Construction Agreements (1) the County agreed to issue bonds
to fund construction of the Facility (collectively, the "Construction Bonds"), and (2) the
City agreed, based on the amortization schedules for the Construction Bonds and the
City's proportionate share thereof', to make semi-annual payments to the County to assist
the County in paying debt service on the 1988 & 1989 Construction Bonds. These
payments were approximately $75,000 annually for each bond issue, commencing in
1988 and 1990 respectively and continuing until their final maturity on November 1,
2007 and November 1, 2009, respectively.
d. The County issued the Construction Bonds on February 1, 1988 and November 1, 1989,
and the City began making the payments contemplated in the Agplex Center Construction
Agreements on May 1, 1988 and May 1, 1990, respectively.
e.
In 1992 and 2001 the County refunded all, or portions thereof, of the 1988 and 1989
Construction Bonds, resulting in a reduction in the County's total debt service payments.
f. Given that the Parties intend to enter into an Interlocal Agreement providing for the City
to assist the County in financing Phase I of the SunDome Expansion Project (as defined
in that Interlocal Agreement), and in order to reflect the original intent that each parties'
obligations under the Agplex Construction Agreements should relate to the actual costs
incurred in issuing the Construction Bonds and constructing the Facility, the parties agree
that both parties should share in the savings resulting from the refunding of the
Construction Bonds.
g.
The parties therefore wish to enter into this Agreement in order to allocate to the City a
portion of the savings (i.e., a reduction in debt service payments) realized by the County
as a result of refunding the bonds and to expand the City's options in assisting with the
financing of Phase I of the Expansion Project.
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2. Modification of Agplex Center Construction Agreements. The Agplex Center Construction
Agreements are modified as follows:
a. The County agrees that the City's obligation to make payments for each issue of
Construction Bonds under the Agplex Center Construction Agreements shall cease one
year earlier than originally agreed; and the City agrees to continue making annual
payments to the County per the amortization schedules in the original 1988 and 1989
Construction Bond issues up to and including the payment on November 1, 2006 for the
1988 bond issue and November 1, 2008 for the 1989 bond issue, which shall conclude
any and all obligations of the City to the County under these Agreements.
b. The Parties intend to enter into an Interlocal Agreement for the SunDome Expansion
Project, Phase I, providing for the City to assist the County in financing Phase I of that
Expansion Project, as those terms are defined in that Interlocal Agreement.
3. Mutual General Releases. The City hereby releases the county, and the. County hereby
releases the City, from any and all claims relating to past payments from the City to the County
under the terms of the Agplex Center Construction Agreements.
a. These releases shall not extend to any claims that arise out of this Agreement.
b. The parties represent and warrant that they have full right, power and authority to enter
into these releases, that they own or have the right to release each and all of the claims
that they purport to release, and that they have not transferred any interest in any of those
potential claims to any third party.
c. The parties represent, warrant and agree: (i) that they understand they are releasing
potentially unknown claims; (ii) that these releases are fairly and knowingly made;
(iii) that they are aware that they have limited knowledge with respect to certain of the
claims; and (iv) that each party has assumed the risk of any mistakes offact or law it has
made in entering into this agreement and has waived any future claims that it operated
under any mistake of fact or law in entering into this agreement.
4. Authority. The parties each represent and warrant that they have full power and actual
authority to enter into this Agreement and to carry out all actions required of them by this
Agreement. All persons executing this Agreement in representative capacities represent and
warrant that they have full power and authority to bind their respective entities.
5. Binding Effect; Assignability. This Agreement shall bind and inure to the benefit of the
parties hereto and their respective heirs, legatees, representatives, receivers, trustees, successors,
transferees and assigns.
6. No Third Party Beneficiaries. This Agreement is for the exclusive benefit of the parties and
is not intended, nor shall it be construed to create any rights in third parties.
7. Severability. If any provision of this Agreement is found by a court of competent jurisdiction
to be invalid or in violation of any statute, rule, regulation or common law such provision shall
be considered null and void, with the remaining provisions remaining viable and in effect.
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{KL.
Notwithstanding the foregoing, the parties acknowledge and agree that this Agreement and the
releases provided for above are each necessary to this settlement; without these the parties would
not agree to this settlement.
8. Counterparts. This Agreement may be executed in two identical counterparts,
notwithstanding that both parties have not signed the same counterpart, with the same effect as if
both parties had signed the same document. Both counterparts shall be construed as and shall
constitute one and the same agreement.
9. Entire Agreement. This Agreement constitutes the entire agreement of the parties. This
Agreement may not be modified, interpreted, amended, waived or revoked orally, but only by a
writing signed by all parties. This Agreement supersedes and replaces all prior agreements,
discussions and representations, all of which are merged into, and superseded by, this
Agreement; no party is entering into this Agreement in reliance on any oral or written promises,
inducements, representations, understandings, interpretations or agreements other than those
contained in this Agreement.
10. Effective Date; Filing With County Auditor. This Interlocal Agreement shall be effective
upon (1) such execution and filing with the Yakima County Auditor as required by the
provisions of RCW 39.34.040, and (2) the City's issuance of its Limited Tax General Obligation
Bonds, 2003 Series A and delivery to the County of the Bond Proceeds as defined in and
pursuant to the terms of the Interlocal Agreement for the SunDome Expansion Project, Phase I,
dated Ayay /3. , 2003.
IN WITNESS WHEREOF, the Parties have executed this Agreement by their duly
authorized officers and representatives as of the day indicated below.
Y Dated -May I a , 2003.
CITY OF YAKIMA YAKIMA COUNTY
City Manager
ATTESTED:
unty ministrator
APPROVED AS TO FORM ONLY:
City Clerk
CITY COMAC► Na a oo 3 - �t7o I
RESOLUTION NO: it -2003 - ` 9
3'/!? IV ids.0
eputy Prosecuting Attorney
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BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No. ?/y
For Meeting Of: May 20, 2003
ITEM TITLE: SunDome Agreements: - A Resolution authorizing: (a) an Agreement with
Yakima County regarding the allocation to the City of savings resulting from
refunding of the 1988 and 1989 SunDome Construction Bonds, and (b) an
Interlocal Agreement between the City and Yakima County regarding the
issuance of SunDome Expansion Bonds by the City and the use of the related
bond proceeds by the County.
SUBMITTED BY: Dick Zais, City Manager
Rita Anson, Finance Director
CONTACT PERSON/TELEPHONE: Rita Anson, Finance Director; #575-6070
Tim Jensen, Treasury Services Officer; #575-607
SUMMARY EXPLANATION:
Background:
1. The City and the County entered into the Agplex Modification of the Convention Center
interlocal agreement, executed on November 10, 1987 and amended on December 19, 1989.
Under these agreements, the County agreed to issue bonds to fund construction of the
SunDome and the City agreed to make semi-annual payments to the County to assist the
County in paying debt service on the 1988 and 1989 Agplex Bonds. These payments were
approximately $75,000 annually for each bond issue, commencing in 1988 and 1990, and
continuing until their final maturity on November 1, 2007 and 2009, respectively.
2. In 1992 and 2001 the County refunded all, or portions thereof, of the 1988 and 1989 Agplex
Bonds, resulting in a reduction in the County's total debt service payments. (The City
became aware of these refundings in late 2002.)
3. In 2002, the County and the board of the Central Washington State Fair Association
determined that certain modifications to the SunDome are necessary to ensure its' viability
as a desirable amateur sports venue into the future and requested the City's financial
assistance in funding a portion of the cost of an expansion project. The original request was
$1.1 million (or greater) and was later increased to $1.2 million (or greater).
Continued ...
Resolution X Ordinance Other (Specify)
Contract Mail to (name and address): Phone:
Funding Source N/A
APPROVED FOR SUBMITTAL: ��-----Z*Siz,
City Manager
STAFF RECOMMENDATION: Adopt Resolution (part a and b)
BOARD/COMMISSION RECOMMENDATION:
COUNCIL ACTION: Resolution adopted. RESOLUTION NO. R-2003-79
Page 2 of 3
Background, Cont.:
4. On February 4, 2003, Council authorized, among other things: (a) staff to complete their legal and
financial review of the County's refunding of the existing SunDome bonds and negotiate a reduction
in the aggregate debt service payments to the County. (b) staff to execute an interlocal agreement with
the County for the financing and repayment of Phase I of the SunDome expansion project (at that time
it was thought that the County — not the City — would issue the bonds); and (c) the extension of the
collection of the additional 50% business license fee past the original sunset date of 2009 through the
year 2025.
5. On May 6, 2003, Council authorized, among other things: (a) the issuance of long-term general
obligation (LTGO) bonds in a sum not to exceed $1.5 million to fund a portion of the cost of Phase I
of the Sundome expansion project and (b) the City Manager to execute an interlocal agreement with
Yakima County governing the use of the bond proceeds.
Overview of the Proposed Refunding Settlement Agreement:
In order to allocate to the City a portion of the savings (i.e.: reduction in debt service payments) realized
by the County as a result of refunding the bonds and to assist the City in their financing options of Phase
I of the SunDome Expansion Project, the City and the County propose the following modifications to the
Agplex Center (SunDome) Construction Agreements:
• The County agrees that the City's obligation to make payments under the Agplex Center
Construction Agreements shall cease one year earlier, on each bond, than originally agreed.
(Note: the 1988 & 1989 bonds are currently scheduled to mature in 2007 & 2009, respectively.)
• The City agrees to continue making annual payments to the County per the amortization
schedules in the original 1988 and 1989 Agplex bond issues up to and including the payment on
November 1, 2006 for the 1988 bond issue and November 1, 2008 for the 1989 bond issue,
which shall conclude any and all obligations of the City to the County under these Agreements.
Under this agreement, the City would save a total of approximately $150,000 as a result of the
County foregoing the last annual payment otherwise due on each of these bond issues,
(approximately $75,000 in 2007 and an additional $75,000 in 2009). (The City currently pays
approx. $75,000 annually to the County for each bond issue.) Note: staff believes this is a
reasonable approximation of the savings that should be allocated to the City as a result of the
County's two refundings of these bonds.
• The City and the County intend to enter into an Interlocal Agreement for the SunDome
Expansion Project, Phase I, providing for the City to assist the County in financing Phase I of
that Expansion Project, as those terms are defined in that interlocal Agreement.
• Each party releases the other from any and all claims relating to payments from the City to the
County under the terms of the Agplex Center Construction Agreements.
Continued...
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Overview of the Proposed Interlocal Agreement:
The City agrees to assist the County with the funding of a portion of Phase I of the SunDome Expansion
project, subject to the City and the County executing a settlement agreement regarding the payment of the
Agplex bonds (as outlined above) under the terms and conditions of the Interlocal Agreement as outlined
below:
City Agrees to:
• Issue zero coupon bonds in an original principal amount resulting in annual debt service
payments not to exceed $150,000 (The parties recognize and agree that (1) the actual amount of
the bond proceeds will not be determined until after the bonds have been sold, and (2) if the bond
market moves to an unfavorable position, the City is under no obligation to issue bonds.)
• Transfer the net bond proceeds to the County to be used to help finance Phase I of the SunDome
Expansion Project
• Begin debt service payments on the new bonds the year after the existing bond commitment to
the County has been satisfied. (Based on the proposed settlement agreement with the County,
the debt service payments on the new bond issue will be approx. $75,000 in 2007 and 2008 and
go up to $150,000 in 2009 and thereafter until paid in full in 2023.
County Agrees to:
• Complete all elements of Phase I of the Expansion Project as describe in and in accordance with
the timeline contained in Exhibit A of the Interlocal Agreement, and shall not alter or delete any
element of Phase I without prior written notice to and consent by the City
• Provide the City with reasonable opportunity to review and comment on preliminary designs and
specifications for the Phase I improvements.
• Use bond proceeds only for Phase I of the Expansion Project and shall not use the Bond
Proceeds for any purpose not include in Exhibit A without the prior written notice to and consent
by the City
• Operate the SunDome in a businesslike manner and provide a level of service equivalent to or
better than the services provided by comparable public facilities in the state.
• Various other requirements are included in the Agreement regarding insurance coverages,
indemnifications, replacement of the SunDome should it be destroyed, maintain tax exempt
status of bonds, etc.
Resolution: the enclosed resolution authorizes the City Manager to finalize negotiations and execute a
settlement agreement and an interlocal agreement with the County regarding the allocation to the City of the
savings resulting from refunding of the 1988 and 1989 SunDome Construction Bonds and regarding the
issuance of the SunDome Expansion Bonds in a form that is substantially the same as the enclosed
documents but provides the City Manager with the latitude to make adjustments to the documents based on
the results of the current negotiations.
Note: City and County staff have met and discussed the two enclosed proposed agreements; the County requested
modifications in several areas; City finance staff is amenable to most of these requests and is further researching a few
issues. The primary change requested by the County is to make each of these agreements subject to the other (ie: if the
City does not sell the bonds, the County does not agree to the negotiated settlement of the allocation of savings to the
City regarding the refunding of the existing bonds). Staff did not have time to get the enclosed proposals updated for
these discussions prior to distribution to Council.
Enclosed:
• Resolution Authorizing the two agreements
• Proposed Refunding Settlement Agreement
• Proposed Interlocal Agreement
• Draft SunDome Bond Amortization Schedule
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