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HomeMy WebLinkAbout2022.09.26 Council Workshop Packet AGENDA City Council Workshop Meeting 7:00 PM - Monday, September 26, 2022 City Council Chambers & GoToWebinar Page 1. MEETING INSTRUCTIONS for REMOTE ACCESS - The Pasco City Council Workshops are broadcast live on PSC-TV Channel 191 on Charter/Spectrum Cable in Pasco and Richland and streamed at www.pasco-wa.gov/psctvlive and on the City’s Facebook page at www.facebook.com/cityofPasco. To listen to the meeting via phone, call (631) 992-3211 and use access code 613-585-088. 2. CALL TO ORDER 3. ROLL CALL (a) Pledge of Allegiance 4. VERBAL REPORTS FROM COUNCILMEMBERS 5. ITEMS FOR DISCUSSION 3 - 23 (a) Resolution - Award and Acceptance of 2021 SAFER Grant 24 - 30 (b) Ordinance & Resolution - Budget Adjustment & Bid Award for Animal Shelter Offsite Improvements 31 - 74 (c) Discussion - Process Water Reuse Facility – Draft Wastewater Treatment Agreement with Burnham SEV 75 - 93 (d) Resolution - Franklin County Irrigation District (FCID) License Agreement: Transmission Main - WPWTP to Zone 3 Project 94 - 97 (e) Resolution - Funding Application to Ecology for Process Water Reuse Facility Pretreatment Improvements (Phase 2) Winter Storage Ponds Page 1 of 109 98 - 107 (f) Resolution - Change Order No. 7 with Cascade Bridge LLC. for the Lewis Street Overpass Project 6. MISCELLANEOUS COUNCIL DISCUSSION 7. EXECUTIVE SESSION 8. ADJOURNMENT 9. ADDITIONAL NOTES 108 - 109 (a) Adopted 2020-2021 Council Goals (Reference Only) (b) REMINDERS • Monday, September 26, 4:00 PM: Hanford Area Economic Investment Fund Advisory Committee Meeting – Ben Franklin Transit Main Conference Room (COUNCILMEMBER PETE SERRANO, Rep.) • Tuesday, September 27, 5:00 PM: HAPO Center/TRAC Advisory Board Meeting – HAPO Center (COUNCILMEMBER JOSEPH CAMPOS and MAYOR PRO TEM CRAIG MALONEY) • Tuesday, September 27, 6:30 pm, Cannabis Listening Session - HAPO (TRAC) Center, 6600 Burden Boulevard • Wednesday, September 28, 7:30 AM: Visit Tri-Cities Board Meeting – 7130 W. Grandridge Blvd., Kennewick (COUNCILMEMBER ZAHRA ROACH, Rep.; COUNCILMEMBER DAVID MILNE, Alt.) • Tuesday, October 4, 6:30 pm, Cannabis Listening Session - Pasco Police Regional Training Center, 204 W. Clark Street This meeting is broadcast live on PSC-TV Channel 191 on Charter/Spectrum Cable in Pasco and Richland and streamed at www.pasco-wa.gov/psctvlive. Audio equipment available for the hearing impaired; contact the Clerk for assistance. Servicio de intérprete puede estar disponible con aviso. Por favor avisa la Secretaria Municipal dos días antes para garantizar la disponibilidad. (Spanish language interpreter service may be provided upon request. Please provide two business day's notice to the City Clerk to ensure availability.) Page 2 of 109 AGENDA REPORT FOR: City Council September 21, 2022 TO: Dave Zabell, City Manager City Council Workshop Meeting: 9/26/22 FROM: Bob Gear, Fire Chief Fire Department SUBJECT: Resolution - Award and Acceptance of 2021 SAFER Grant I. REFERENCE(S): Draft Resolution with Award Letter II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS: Presentation and discussion III. FISCAL IMPACT: he City applied for and has received notice that its application Federal Fiscal Year (FY) 2021application for a staffing grant though the Staffing for Adequate Fire and Emergency Response (SAFER) Grant funding opportunity has been approved in the amount of $5,045,817.30. The SAFER grant is a three (3) year grant of federal funding with no match requirement from the City for acceptance of the grant. Per the grant request and award, the funding is to hire 15 firefighters to staff future station 85, to be located on the Rd. 100 fire station site, which currently being improved. There are associated personnel related costs anticipated for uniforms, personal protective equipment and associated training costs of approximately $250,000, as well as construction and operation of Station 85, and apparatus/equipment. IV. HISTORY AND FACTS BRIEF: The reaffirmed its commitment through adoption of its 2022 -2023 City Council Goals to maintain/achieve target fire response times and to maintain the current Washington State Ratings Bureau (WSRB) protection class 3 rating. Development and staffing of Station 85 was part of a larger strategy consistent with that goal. The area in the City commonly referred to as the Broadmoor/Road 100 area has consistently had response times that exceed the City Council adopted 6 minutes Page 3 of 109 within 90% time. The recently adopted 2021 Fire Department Master plan identified the need for Station No. 85 to already be in place, as the call volume for the area is over the typical 500 calls in a year. In 2021, the area covered by the planned Fire Station 85 was 520 calls. Development of Station 85 is critical to the development of the Broadmoor area in general. In preparing for the future development of Station 85, the City strategically purchased land on Road 100 for the proposed station several years ago. Following that same strategy, Council approved site improvements to the property earlier this year to prepare the site for construction of the future Fire Station, that work is currently underway. Further, with Council's approval, design of Fire Station No. 85 is complete and the project is out to bid. The aforementioned SAFER grant award is sufficient to staff future Fire Station No. 85 with four people, allowing for operation of a fire engin e and an ambulance. This will significantly improve response times to the area, reduce overlapping call percentages and provide credit from the WSRB for a staffed fire unit; essentially, taking a major step towards meeting the City Council goals. As the community experienced with the addition of Station 84, the reduction in overlapping calls will improve response times across the entire City, not just in the primary Station 85 service area. The SAFER grant provides 100% of the personnel costs for a three (3) year period up to a maximum amount each year. After the third year, the full personnel costs would become the City's responsibility and funded between the ambulance utility and the general fund. The SAFER Grant award, if accepted, represents a unique opportunity to meet the Council goals related to public safety. This opportunity benefits all of Pasco with faster response times and additional personnel, preparing for the growth that is planned in the Broadmoor area. The three year program would allow the City to explore long-term sustainability and make the needed adjustments to assure sustainability to fully fund the personnel for Fire Station No. 85. V. DISCUSSION: Staff recommends approval of the Resolution and acceptance of the SAFER Grant award in the amount of $5,045,817.30. Page 4 of 109 Resolution – 2022 SAFER Grant - 1 RESOLUTION NO. _____ A RESOLUTION OF THE CITY OF PASCO, WASHINGTON, APPROVING THE ACCEPTANCE OF THE STAFFING FOR ADEQUATE FIRE AND EMERGENCY RESPONSE (SAFER) GRANT AWARDED BY THE U.S. DEPARTMENT OF HOMELAND SECURITY FEDERAL EMERGENCY MANAGEMENT AGENCY (FEMA). WHEREAS, it is a 2022-2023 City Council goal to reduce fire and ambulance response times and maintain a Washington State Rating Bureau (WSRB) protection class 3; and WHEREAS, the City of Pasco is accepted a Staffing for Adequate Fire and Emergency Response (SAFER) Grant in September 2022, as the City was unable to fully fund staff for Fire Station 85 at this time; and WHEREAS, the City is currently constructing a new fire station (Fire Station No. 85) in the Broadmoor Boulevard/Road 100 area, an area in the City where response times consistently exceed the City Council adopted 6 minutes 90% of the time; and WHEREAS, the City has been chosen to receive the SAFER Grant in the amount of $5,045,817.30. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PASCO, WASHINGTON: That the City Council guarantees to maintain current staffing levels and incur no layoffs during the period of performance of the SAFER Grant; and Be It Further Resolved, that the City agrees to the SAFER Grant Agreement Articles attached hereto as Exhibit A; and Be It Further Resolved, that the City Manager or his designee is hereby authorized to accept the SAFER Grant. Page 5 of 109 Resolution – 2022 SAFER Grant - 2 PASSED by the City Council of the City of Pasco, Washington, this ___ day of ________, 2022. Blanche Barajas Mayor ATTEST: APPROVED AS TO FORM: _____________________________ ___________________________ Debra Barham, CMC Kerr Ferguson Law, PLLC City Clerk City Attorneys Page 6 of 109 Award Letter U.S. Department of Homeland Security Washington, D.C. 20472 Effective date: 09/15/2022 Edward Dunbar CITY OF PASCO ATTN: RICHA SIGDEL PO BOX 293 PASCO, WA 99301 EMW-2021-FF-00232 Dear Edward Dunbar, Congratulations on behalf of the Department of Homeland Security. Your application submitted for the Fiscal Year (FY) 2021 Staffing for Adequate Fire and Emergency Response (SAFER) Grant funding opportunity has been approved in the amount of $5,045,817.30 in Federal funding. FEMA has waived, in part or in full, one or more requirements for this grant award. See the Summary Award Memo for additional information about Economic Hardship Waivers. Before you request and receive any of the Federal funds awarded to you, you must establish acceptance of the award through the FEMA Grants Outcomes (FEMA GO) system. By accepting this award, you acknowledge that the terms of the following documents are incorporated into the terms of your award: Summary Award Memo - included in this document Agreement Articles - included in this document Obligating Document - included in this document 2021 SAFER Notice of Funding Opportunity (NOFO) - incorporated by reference Please make sure you read, understand, and maintain a copy of these documents in your official file for this award. Sincerely, PAMELA WILLIAMS Page 7 of 109 Assistant Administrator, Grant Programs Summary Award Memo Program: Fiscal Year 2021 Staffing for Adequate Fire and Emergency Response Recipient: CITY OF PASCO UEI-EFT: SLEFSS3F3H88 DUNS number: 009974598 Award number: EMW-2021-FF-00232 Summary description of award The purpose of the SAFER Grant Program is to provide funding directly to fire departments and volunteer firefighter interest organizations to assist in increasing the number of firefighters to help communities meet industry minimum standards and attain 24-hour staffing to provide adequate protection from fire and fire-related hazards, and to fulfill traditional missions of fire departments. After careful consideration, FEMA has determined that the recipient's project or projects submitted as part of the recipient's application and detailed in the project narrative as well as the request details section of the application ― including budget information ― was consistent with the SAFER Grant Program’s purpose and was worthy of award. Except as otherwise approved as noted in this award, the information you provided in your application for Fiscal Year (FY) 2021 Staffing for Adequate Fire and Emergency Response (SAFER) funding is incorporated into the terms and conditions of this award. This includes any documents submitted as part of the application. Approved Economic Hardship Waivers Position cost limit waiver FEMA has waived the position cost limit requirement for this grant award. Costs are limited to the approved budget per position. Cost share waiver FEMA has waived the cost share requirement for this grant award. You are not required to contribute non-Federal funds for this grant award. The recipient is responsible for any costs that exceed the Federal funding provided for this grant award. Minimum budget waiver FEMA has waived the minimum budget requirement for this award. Non-supplanting waiver FEMA has waived the non-supplanting requirement for this award. SAFER grant funds may be used to replace funds that would be available from State or local sources or from the Bureau of Indian Affairs. Amount awarded Page 8 of 109 The amount of the award is detailed in the attached Obligating Document for Award. The cost share amounts described in this award letter are based on the approved total project cost; however, the Federal funding available is limited based on the applicable position cost limit and the applicable cost share as applied to actual costs. The following are the total approved budgeted estimates for object classes for all funded firefighter positions for this award (including Federal share plus your cost share, if applicable, as applied to the estimated costs): Program Income $0.00 Approved scope of work After review of your application, FEMA has approved the below scope of work. Justifications are provided for any differences between the scope of work in the original application and the approved scope of work under this award. You must submit scope or budget revision requests for FEMA's prior approval, via an amendment request, as appropriate per 2 C.F.R. § 200.308 and the FY2021 SAFER NOFO. Approved request details: Object Class First Year Second Year Third Year Total Personnel $1,160,097.75 $1,228,316.25 $1,296,534.75 $3,684,948.75 Fringe benefits $445,506.30 $453,622.80 $461,739.45 $1,360,868.55 Travel $0.00 $0.00 $0.00 $0.00 Equipment $0.00 $0.00 $0.00 $0.00 Supplies $0.00 $0.00 $0.00 $0.00 Contractual $0.00 $0.00 $0.00 $0.00 Construction $0.00 $0.00 $0.00 $0.00 Other $0.00 $0.00 $0.00 $0.00 Indirect charges $0.00 $0.00 $0.00 $0.00 Federal $1,605,604.05 $1,681,939.05 $1,758,274.20 $5,045,817.30 Non-federal $0.00 $0.00 $0.00 $0.00 Total $1,605,604.05 $1,681,939.05 $1,758,274.20 $5,045,817.30 Page 9 of 109 Hiring of Firefighters Agreement Articles Program: Fiscal Year 2021 Staffing for Adequate Fire and Emergency Response Recipient: CITY OF PASCO UEI-EFT: SLEFSS3F3H88 DUNS number: 009974598 Award number: EMW-2021-FF-00232 Table of contents New, Additional Firefighter(s) BENEFITS FUNDED Firefighters within our department receive the following benefits. Reported figures are for first year firefighters and are annual costs. Insurance figures are averages based different familial situations of new hires. -Medical/Vision: $15,233.53 -Dental: $1,252.20 -Life Insurance: $50.40 - Retirement/Pension: $4,099.01 -ICMA: $3,866.99 -Workers Compensation (L&I): $3,962.40 - Paid Family Leave: $114.46 -FICA - $1,121.43 -Medicare - $1,879.98 NUMBER OF FIREFIGHTERS 15 ANNUAL SALARY PRICE ANNUAL BENEFITS TOTAL PER FIREFIGHTER Year 1 $77,339.85 $29,700.42 $107,040.27 Year 2 $81,887.75 $30,241.52 $112,129.27 Year 3 $86,435.65 $30,782.63 $117,218.28 3 Year Total $5,045,817.30 Page 10 of 109 Article 1 Assurances, Administrative Requirements, Cost Principles, Representations and Certifications Article 2 General Acknowledgements and Assurances Article 3 Acknowledgement of Federal Funding from DHS Article 4 Activities Conducted Abroad Article 5 Age Discrimination Act of 1975 Article 6 Americans with Disabilities Act of 1990 Article 7 Best Practices for Collection and Use of Personally Identifiable Information Article 8 Civil Rights Act of 1964 – Title VI Article 9 Civil Rights Act of 1968 Article 10 Copyright Article 11 Debarment and Suspension Article 12 Drug-Free Workplace Regulations Article 13 Duplication of Benefits Article 14 Education Amendments of 1972 (Equal Opportunity in Education Act) – Title IX Article 15 Energy Policy and Conservation Act Article 16 False Claims Act and Program Fraud Civil Remedies Article 17 Federal Debt Status Article 18 Federal Leadership on Reducing Text Messaging while Driving Article 19 Fly America Act of 1974 Article 20 Hotel and Motel Fire Safety Act of 1990 Article 21 John S. McCain National Defense Authorization Act of Fiscal Year 2019 Article 22 Limited English Proficiency (Civil Rights Act of 1964, Title VI) Article 23 Lobbying Prohibitions Article 24 National Environmental Policy Act Article 25 Nondiscrimination in Matters Pertaining to Faith-Based Organizations Article 26 Non-Supplanting Requirement Article 27 Notice of Funding Opportunity Requirements Article 28 Patents and Intellectual Property Rights Article 29 Procurement of Recovered Materials Article 30 Rehabilitation Act of 1973 Article 31 Reporting of Matters Related to Recipient Integrity and Performance Page 11 of 109 Article 32 Reporting Subawards and Executive Compensation Article 33 Required Use of American Iron, Steel, Manufactured Products, and Construction Materials Article 34 SAFECOM Article 35 Terrorist Financing Article 36 Trafficking Victims Protection Act of 2000 (TVPA) Article 37 Universal Identifier and System of Award Management Article 38 USA PATRIOT Act of 2001 Article 39 Use of DHS Seal, Logo and Flags Article 40 Whistleblower Protection Act Article 41 Environmental Planning and Historic Preservation (EHP) Review Article 42 Applicability of DHS Standard Terms and Conditions to Tribes Article 43 Acceptance of Post Award Changes Article 44 Disposition of Equipment Acquired Under the Federal Award Article 45 Prior Approval for Modification of Approved Budget Article 46 Indirect Cost Rate Article 47 Award Performance Goals Page 12 of 109 Article 1 Assurances, Administrative Requirements, Cost Principles, Representations and Certifications I. DHS financial assistance recipients must complete either the Office of Management and Budget (OMB) Standard Form 424B Assurances – Non- Construction Programs, or OMB Standard Form 424D Assurances – Construction Programs, as applicable. Certain assurances in these documents may not be applicable to your program, and the DHS financial assistance office (DHS FAO) may require applicants to certify additional assurances. Applicants are required to fill out the assurances as instructed by the awarding agency. II. DHS financial assistance recipients are required to follow the applicable provisions of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards located at Title 2, Code of Federal Regulations (C.F.R.) Part 200 and adopted by DHS at 2 C.F.R.Part 3002. III. By accepting this agreement, recipients, and their executives, as defined in 2 C.F.R. § 170.315, certify that their policies are in accordance with OMB’s guidance located at 2 C.F.R. Part 200, all applicable federal laws, and relevant Executive guidance. Article 2 General Acknowledgements and Assurances All recipients, subrecipients, successors, transferees, and assignees must acknowledge and agree to comply with applicable provisions governing DHS access to records, accounts, documents, information, facilities, and staff. I. Recipients must cooperate with any DHS compliance reviews or compliance investigations conducted by DHS. II. Recipients must give DHS access to examine and copy records, accounts, and other documents and sources of information related to the federal financial assistance award and permit access to facilities or personnel. III. Recipients must submit timely, complete, and accurate reports to the appropriate DHS officials and maintain appropriate backup documentation to support the reports. IV. Recipients must comply with all other special reporting, data collection, and evaluation requirements, as prescribed by law, or detailed in program guidance. V. Recipients (as defined in 2 C.F.R. Part 200 and including recipients acting as pass-through entities) of federal financial assistance from DHS or one of its awarding component agencies must complete the DHS Civil Rights Evaluation Tool within thirty (30) days of receipt of the Notice of Award for the first award under which this term applies. Recipients of multiple awards of DHS financial assistance should only submit one completed tool for their organization, not per award. After the initial submission, recipients are required to complete the tool once every two (2) years if they have an active award, not every time an award is made. Recipients should submit the completed tool, including supporting materials, to CivilRightsEvaluation@hq.dhs.gov. This tool clarifies the civil rights obligations and related reporting requirements contained in the DHS Standard Terms and Conditions. Subrecipients are not required to complete and submit this tool to DHS. The evaluation tool can be found at https://www.dhs.gov/publication/dhs-civil-rights-evaluation-tool. The DHS Office for Civil Rights and Civil Liberties will consider, in its discretion, granting an extension if the recipient identifies steps and a timeline for completing the tool. Recipients should request extensions by emailing the request to CivilRightsEvaluation@hq.dhs.gov prior to expiration of the 30-day deadline. Page 13 of 109 Article 3 Acknowledgement of Federal Funding from DHS Recipients must acknowledge their use of federal funding when issuing statements, press releases, requests for proposal, bid invitations, and other documents describing projects or programs funded in whole or in part with federal funds. Article 4 Activities Conducted Abroad Recipients must ensure that project activities performed outside the United States are coordinated as necessary with appropriate government authorities and that appropriate licenses, permits, or approvals are obtained. Article 5 Age Discrimination Act of 1975 Recipients must comply with the requirements of the Age Discrimination Act of 1975, Public Law 94-135 (1975) (codified as amended at Title 42, U.S. Code, § 6101 et seq.), which prohibits discrimination on the basis of age in any program or activity receiving federal financial assistance. Article 6 Americans with Disabilities Act of 1990 Recipients must comply with the requirements of Titles I, II, and III of the Americans with Disabilities Act, Pub. L. 101-336 (1990) (codified as amended at 42 U.S.C. §§ 12101– 12213), which prohibits recipients from discriminating on the basis of disability in the operation of public entities, public and private transportation systems, places of public accommodation, and certain testing entities. Article 7 Best Practices for Collection and Use of Personally Identifiable Information Recipients who collect personally identifiable information (PII) are required to have a publicly available privacy policy that describes standards on the usage and maintenance of the PII they collect. DHS defines PII as any information that permits the identity of an individual to be directly or indirectly inferred, including any information that is linked or linkable to that individual. Recipients may also find the DHS Privacy Impact Assessments: Privacy Guidance and Privacy Template as useful resources respectively. Article 8 Civil Rights Act of 1964 – Title VI Recipients must comply with the requirements of Title VI of the Civil Rights Act of 1964 (codified as amended at 42 U.S.C. § 2000d et seq.), which provides that no person in the United States will, on the grounds of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving federal financial assistance. DHS implementing regulations for the Act are found at 6 C.F.R. Part 21 and 44 C.F.R. Part 7. Page 14 of 109 Article 9 Civil Rights Act of 1968 Recipients must comply with Title VIII of the Civil Rights Act of 1968, Pub. L. 90- 284, as amended through Pub. L. 113-4, which prohibits recipients from discriminating in the sale, rental, financing, and advertising of dwellings, or in the provision of services in connection therewith, on the basis of race, color, national origin, religion, disability, familial status, and sex (see 42 U.S.C. § 3601 et seq.), as implemented by the U.S. Department of Housing and Urban Development at 24 C.F.R. Part 100. The prohibition on disability discrimination includes the requirement that new multifamily housing with four or more dwelling units—i.e., the public and common use areas and individual apartment units (all units in buildings with elevators and ground-floor units in buildings without elevators)—be designed and constructed with certain accessible features. (See 24 C.F.R. Part 100, Subpart D.) Article 10 Copyright Recipients must affix the applicable copyright notices of 17 U.S.C. §§ 401 or 402 and an acknowledgement of U.S. Government sponsorship (including the award number) to any work first produced under federal financial assistance awards. Article 11 Debarment and Suspension Recipients are subject to the non-procurement debarment and suspension regulations implementing Executive Orders (E.O.) 12549 and 12689, which are at 2 C.F.R. Part 180 as adopted by DHS at 2 C.F.R. Part 3002. These regulations restrict federal financial assistance awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Article 12 Drug-Free Workplace Regulations Recipients must comply with drug-free workplace requirements in Subpart B (or Subpart C, if the recipient is an individual) of 2 C.F.R. Part 3001, which adopts the Government-wide implementation (2 C.F.R. Part 182) of Sec. 5152-5158 of the Drug-Free Workplace Act of 1988 (41 U.S.C. §§ 8101-8106). Article 13 Duplication of Benefits Any cost allocable to a particular federal financial assistance award provided for in 2 C.F.R. Part 200, Subpart E may not be charged to other federal financial assistance awards to overcome fund deficiencies; to avoid restrictions imposed by federal statutes, regulations, or federal financial assistance award terms and conditions; or for other reasons. However, these prohibitions would not preclude recipients from shifting costs that are allowable under two or more awards in accordance with existing federal statutes, regulations, or the federal financial assistance award terms and conditions. Page 15 of 109 Article 14 Education Amendments of 1972 (Equal Opportunity in Education Act) – Title IX Recipients must comply with the requirements of Title IX of the Education Amendments of 1972, Pub. L. 92-318 (1972) (codified as amended at 20 U.S.C. § 1681 et seq.), which provide that no person in the United States will, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any educational program or activity receiving federal financial assistance. DHS implementing regulations are codified at 6 C.F.R. Part 17 and 44 C.F.R. Part 19. Article 15 Energy Policy and Conservation Act Recipients must comply with the requirements of the Energy Policy and Conservation Act, Pub. L. 94- 163 (1975) (codified as amended at 42 U.S.C. § 6201 et seq.), which contain policies relating to energy efficiency that are defined in the state energy conservation plan issued in compliance with this Act. Article 16 False Claims Act and Program Fraud Civil Remedies Recipients must comply with the requirements of the False Claims Act, 31 U.S.C. §§3729- 3733, which prohibit the submission of false or fraudulent claims for payment to the Federal Government. (See 31 U.S.C. §§ 3801-3812, which details the administrative remedies for false claims and statements made.) Article 17 Federal Debt Status All recipients are required to be non-delinquent in their repayment of any federal debt. Examples of relevant debt include delinquent payroll and other taxes, audit disallowances, and benefit overpayments. (See OMB Circular A-129.) Article 18 Federal Leadership on Reducing Text Messaging while Driving Recipients are encouraged to adopt and enforce policies that ban text messaging while driving as described in E.O. 13513, including conducting initiatives described in Section 3(a) of the Order when on official government business or when performing any work for or on behalf of the Federal Government. Article 19 Fly America Act of 1974 Recipients must comply with Preference for U.S. Flag Air Carriers (air carriers holding certificates under 49 U.S.C.) for international air transportation of people and property to the extent that such service is available, in accordance with the International Air Transportation Fair Competitive Practices Act of 1974, 49 U.S.C. § 40118, and the interpretative guidelines issued by the Comptroller General of the United States in the March 31, 1981, amendment to Comptroller General Decision B-138942. Article 20 Hotel and Motel Fire Safety Act of 1990 Recipients must ensure that all conference, meeting, convention, or training space funded in whole or in part with federal funds complies with the fire prevention and control guidelines of Section 6 of the Hotel and Motel Fire Safety Act of 1990, 15 U.S.C. § 2225a Page 16 of 109 Article 21 John S. McCain National Defense Authorization Act of Fiscal Year 2019 Recipients, subrecipients, and their contractors and subcontractors are subject to the prohibitions described in section 889 of the John S. McCain National Defense Authorization Act for Fiscal Year 2019, Pub. L. No. 115-232 (2018) and 2 C.F.R. §§ 200.216, 200.327, 200.471, and Appendix II to 2 C.F.R. Part 200. Beginning August 13, 2020, the statute – as it applies to DHS recipients, subrecipients, and their contractors and subcontractors – prohibits obligating or expending federal award funds on certain telecommunications and video surveillance products and contracting with certain entities for national security reasons Article 22 Limited English Proficiency (Civil Rights Act of 1964, Title VI) Recipients must comply with Title VI of the Civil Rights Act of 1964, (42 U.S.C. § 2000d et seq.) prohibition against discrimination on the basis of national origin, which requires that recipients of federal financial assistance take reasonable steps to provide meaningful access to persons with limited English proficiency (LEP) to their programs and services. For additional assistance and information regarding language access obligations, please refer to the DHS Recipient Guidance: https://www.dhs.gov/guidance- published-help-department- supported- organizations-provide-meaningful-access-people-limited and additional resources on http://www.lep.gov. Article 23 Lobbying Prohibitions Recipients must comply with 31 U.S.C. § 1352, which provides that none of the funds provided under a federal financial assistance award may be expended by the recipient to pay any person to influence, or attempt to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with any federal action related to a federal award or contract, including any extension, continuation, renewal, amendment, or modification. Article 24 National Environmental Policy Act Recipients must comply with the requirements of the National Environmental Policy Act of 1969, (NEPA) Pub. L. 91-190 (1970) (codified as amended at 42 U.S.C. § 4321 et seq. and the Council on Environmental Quality (CEQ) Regulations for Implementing the Procedural Provisions of NEPA, which require recipients to use all practicable means within their authority, and consistent with other essential considerations of national policy, to create and maintain conditions under which people and nature can exist in productive harmony and fulfill the social, economic, and other needs of present and future generations of Americans Article 25 Nondiscrimination in Matters Pertaining to Faith-Based Organizations It is DHS policy to ensure the equal treatment of faith-based organizations in social service programs administered or supported by DHS or its component agencies, enabling those organizations to participate in providing important social services to beneficiaries. Recipients must comply with the equal treatment policies and requirements contained in 6 C.F.R. Part 19 and other applicable statues, regulations, and guidance governing the participations of faith- based organizations in individual DHS programs. Page 17 of 109 Article 26 Non-Supplanting Requirement Recipients receiving federal financial assistance awards made under programs that prohibit supplanting by law must ensure that federal funds do not replace (supplant) funds that have been budgeted for the same purpose through non-federal sources. Article 27 Notice of Funding Opportunity Requirements All the instructions, guidance, limitations, and other conditions set forth in the Notice of Funding Opportunity (NOFO) for this program are incorporated here by reference in the award terms and conditions. All recipients must comply with any such requirements set forth in the program NOFO. Article 28 Patents and Intellectual Property Rights Recipients are subject to the Bayh-Dole Act, 35 U.S.C. § 200 et seq, unless otherwise provided by law. Recipients are subject to the specific requirements governing the development, reporting, and disposition of rights to inventions and patents resulting from federal financial assistance awards located at 37 C.F.R. Part 401 and the standard patent rights clause located at 37 C.F.R. § 401.14. Article 29 Procurement of Recovered Materials States, political subdivisions of states, and their contractors must comply with Section 6002 of the Solid Waste Disposal Act, Pub. L. 89-272 (1965), (codified as amended by the Resource Conservation and Recovery Act, 42 U.S.C. § 6962.) The requirements of Section 6002 include procuring only items designated in guidelines of the Environmental Protection Agency (EPA) at 40 C.F.R. Part 247 that contain the highest percentage of recovered materials practicable, consistent with maintaining a satisfactory level of competition. Article 30 Rehabilitation Act of 1973 Recipients must comply with the requirements of Section 504 of the Rehabilitation Act of 1973, Pub. L. 93-112 (1973), (codified as amended at 29 U.S.C. § 794,) which provides that no otherwise qualified handicapped individuals in the United States will, solely by reason of the handicap, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving federal financial assistance. Article 31 Reporting of Matters Related to Recipient Integrity and Performance General Reporting Requirements: If the total value of any currently active grants, cooperative agreements, and procurement contracts from all federal awarding agencies exceeds $10,000,000 for any period of time during the period of performance of this federal award, then the recipients must comply with the requirements set forth in the government-wide Award Term and Condition for Recipient Integrity and Performance Matters located at 2 C.F.R. Part 200, Appendix XII, the full text of which is incorporated here by reference in the award terms and conditions. Page 18 of 109 Article 32 Reporting Subawards and Executive Compensation Reporting of first tier subawards. Recipients are required to comply with the requirements set forth in the government-wide award term on Reporting Subawards and Executive Compensation located at 2 C.F.R. Part 170, Appendix A, the full text of which is incorporated here by reference in the award terms and conditions. Article 33 Required Use of American Iron, Steel, Manufactured Products, and Construction Materials Recipients and subrecipients must comply with the Build America, Buy America Act (BABAA), which was enacted as part of the Infrastructure Investment and Jobs Act §§ 70901-70927, Pub. L. No. 117-58 (2021); and Executive Order 14005, Ensuring the Future is Made in All of America by All of America’s Workers. See also Office of Management and Budget (OMB), Memorandum M-22-11, Initial Implementation Guidance on Application of Buy America Preference in Federal Financial Assistance Programs for Infrastructure. Recipients and subrecipients of federal financial assistance programs for infrastructure are hereby notified that none of the funds provided under this award may be used for a project for infrastructure unless: (1) all iron and steel used in the project are produced in the United States--this means all manufacturing processes, from the initial melting stage through the application of coatings, occurred in the United States; (2) all manufactured products used in the project are produced in the United States—this means the manufactured product was manufactured in the United States; and the cost of the components of the manufactured product that are mined, produced, or manufactured in the United States is greater than 55 percent of the total cost of all components of the manufactured product, unless another standard for determining the minimum amount of domestic content of the manufactured product has been established under applicable law or regulation; and (3) all construction materials are manufactured in the United States—this means that all manufacturing processes for the construction material occurred in the United States. The Buy America preference only applies to articles, materials, and supplies that are consumed in, incorporated into, or affixed to an infrastructure project. As such, it does not apply to tools, equipment, and supplies, such as temporary scaffolding, brought to the construction site and removed at or before the completion of the infrastructure project. Nor does a Buy America preference apply to equipment and furnishings, such as movable chairs, desks, and portable computer equipment, that are used at or within the finished infrastructure project, but are not an integral part of the structure or permanently affixed to the infrastructure project. When necessary, recipients may apply for, and the agency may grant, a waiver from these requirements. (a) When the federal agency has made a determination that one of the following exceptions applies, the awarding official may waive the application of the domestic content procurement preference in any case in which the agency determines that: (1) applying the domestic content procurement preference would be inconsistent with the public interest; (2) the types of iron, steel, manufactured products, or construction materials are not produced in the United States in sufficient and reasonably available quantities or of a satisfactory quality; or (3) the inclusion of iron, steel, manufactured products, or construction materials produced in the United States will increase the cost of the overall project by more than 25 percent. A request to waive the application of the domestic content procurement preference must be in writing. The agency will provide instructions on the format, contents, and supporting materials required for any waiver request. Waiver requests are subject to public comment periods of no less than 15 days and Page 19 of 109 must be reviewed by the OMB Made in America Office. There may be instances where an award qualifies, in whole or in part, for an existing waiver described. For awards by the Federal Emergency Management Agency (FEMA), existing waivers are available and the waiver process is described at 'Buy America' Preference in FEMA Financial Assistance Programs for Infrastructure | FEMA.gov. For awards by other DHS components, please contact the applicable DHS FAO. To see whether a particular DHS federal financial assistance program is considered an infrastructure program and thus required to include a Buy America preference, please either contact the applicable DHS FAO, or for FEMA awards, please see Programs and Definitions: Build America, Buy America Act | FEMA.gov. Article 34 SAFECOM Recipients receiving federal financial assistance awards made under programs that provide emergency communication equipment and its related activities must comply with the SAFECOM Guidance for Emergency Communication Grants, including provisions on technical standards that ensure and enhance interoperable communications. Article 35 Terrorist Financing Recipients must comply with E.O. 13224 and U.S. laws that prohibit transactions with, and the provisions of resources and support to, individuals and organizations associated with terrorism. Recipients are legally responsible to ensure compliance with the Order and laws. Article 36 Trafficking Victims Protection Act of 2000 (TVPA) Trafficking in Persons. Recipients must comply with the requirements of the government-wide financial assistance award term which implements Section 106 (g) of the Trafficking Victims Protection Act of 2000 (TVPA), codified as amended at 22 U.S.C. § 7104. The award term is located at 2 C.F.R. § 175.15, the full text of which is incorporated here by reference. Article 37 Universal Identifier and System of Award Management Requirements for System for Award Management and Unique Entity Identifier Recipients are required to comply with the requirements set forth in the government-wide financial assistance award term regarding the System for Award Management and Universal Identifier Requirements located at 2 C.F.R. Part 25, Appendix A, the full text of which is incorporated here by reference. Article 38 USA PATRIOT Act of 2001 Recipients must comply with requirements of Section 817 of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), which amends 18 U.S.C. §§ 175–175c. Article 39 Use of DHS Seal, Logo and Flags Recipients must obtain permission from their DHS FAO prior to using the DHS seal(s), logos, crests or reproductions of flags or likenesses of DHS agency officials, including use of the United States Coast Guard seal, logo, crests or reproductions of flags or likenesses of Coast Guard officials. Page 20 of 109 Article 40 Whistleblower Protection Act Recipients must comply with the statutory requirements for whistleblower protections (if applicable) at 10 U.S.C § 2409, 41 U.S.C. § 4712, and 10 U.S.C. § 2324, 41 U.S.C. §§ 4304 and 4310. Article 41 Environmental Planning and Historic Preservation (EHP) Review DHS/FEMA funded activities that may require an Environmental Planning and Historic Preservation (EHP) review are subject to the FEMA EHP review process. This review does not address all federal, state, and local requirements. Acceptance of federal funding requires the recipient to comply with all federal,state and local laws. DHS/FEMA is required to consider the potential impacts to natural and cultural resources of all projects funded by DHS/FEMA grant funds, through its EHP review process, as mandated by: the National Environmental Policy Act; National Historic Preservation Act of 1966, as amended; National Flood Insurance Program regulations; and any other applicable laws and executive orders. To access the FEMA EHP screening form and instructions, go to the DHS/FEMA website. In order to initiate EHP review of your project(s), you must complete all relevant sections of this form and submit it to the Grant Programs Directorate (GPD) along with all other pertinent project information. The EHP review process must be completed before funds are released to carry out the proposed project; otherwise, DHS/FEMA may not be able to fund the project due to noncompliance with EHP laws, executive orders, regulations, and policies. If ground disturbing activities occur during construction, applicant will monitor ground disturbance, and if any potential archeological resources are discovered the applicant will immediately cease work in that area and notify the pass-through entity, if applicable, and DHS/FEMA. Article 42 Applicability of DHS Standard Terms and Conditions to Tribes The DHS Standard Terms and Conditions are a restatement of general requirements imposed upon recipients and flow down to subrecipients as a matter of law, regulation, or executive order. If the requirement does not apply to Indian tribes or there is a federal law or regulation exempting its application to Indian tribes, then the acceptance by Tribes of, or acquiescence to, DHS Standard Terms and Conditions does not change or alter its inapplicability to an Indian tribe. The execution of grant documents is not intended to change, alter, amend, or impose additional liability or responsibility upon the Tribe where it does not already exist. Article 43 Acceptance of Post Award Changes In the event FEMA determines that changes are necessary to the award document after an award has been made, including changes to period of performance or terms and conditions, recipients will be notified of the changes in writing. Once notification has been made, any subsequent request for funds will indicate recipient acceptance of the changes to the award. Please call the FEMA/GMD Call Center at (866) 927-5646 or via e-mail to ASK-GMD@fema.dhs.gov if you have any questions. Page 21 of 109 Article 44 Disposition of Equipment Acquired Under the Federal Award For purposes of original or replacement equipment acquired under this award by a non-state recipient or non-state subrecipients, when that equipment is no longer needed for the original project or program or for other activities currently or previously supported by a federal awarding agency, you must request instructions from FEMA to make proper disposition of the equipment pursuant to 2 C.F.R. section 200.313. State recipients and state subrecipients must follow the disposition requirements in accordance with state laws and procedures. Article 45 Prior Approval for Modification of Approved Budget Before making any change to the FEMA approved budget for this award, you must request prior written approval from FEMA where required by 2 C.F.R. section 200.308. For purposes of non-construction projects, FEMA is utilizing its discretion to impose an additional restriction under 2 C.F.R. section 200.308(f) regarding the transfer of funds among direct cost categories, programs, functions, or activities. Threfore, for awards with an approved budget where the federal share is greater than the simplified acquisition threshold (currently $250,000), you may not transfer funds among direct cost categories, programs, functions, or activities without prior written approval from FEMA where the cumulative amount of such transfers exceeds or is expected to exceed ten percent (10%) of the total budget FEMA last approved. For purposes of awards that support both construction and non- construction work, FEMA is utilizing its discretion under 2 C.F.R. section 200.308(h)(5) to require the recipient to obtain prior written approval from FEMA before making any fund or budget transfers between the two types of work. You must report any deviations from your FEMA approved budget in the first Federal Financial Report (SF-425) you submit following any budget deviation, regardless of whether the budget deviation requires prior written approval. Article 46 Indirect Cost Rate 2 C.F.R. section 200.211(b)(15) requires the terms of the award to include the indirect cost rate for the federal award. If applicable, the indirect cost rate for this award is stated in the budget documents or other materials approved by FEMA and included in the award file. Article 47 Award Performance Goals FEMA will measure the recipient’s performance of the grant by comparing the firefighter hiring activities of new, additional firefighters, rehire laid off firefighters, or retain firefighters facing layoff OR recruitment and retention activities of volunteer firefighters who are involved with or trained in the operations of firefighting and emergency response as requested in its application. In order to measure performance, FEMA may request information throughout the period of performance. In its final performance report submitted at closeout, the recipient is required to report on the recipients increased compliance with the National standards described in the NOFO. Obligating document 1.Agreement No. EMW-2021-FF- 00232 2. Amendment No. N/A 3. Recipient No. 916001264 4. Type of Action AWARD 5. Control No. WX00670N2022T Page 22 of 109 6. Recipient Name and Address CITY OF PASCO 115 W SYLVESTER ST PASCO, WA 99301 7. Issuing FEMA Office and Address Grant Programs Directorate 500 C Street, S.W. Washington DC, 20528-7000 1-866-927-5646 8. Payment Office and Address FEMA, Financial Services Branch 500 C Street, S.W., Room 723 Washington DC, 20742 9. Name of Recipient Project Officer Edward Dunbar 9a. Phone No. 5095435730 10. Name of FEMA Project Coordinator Staffing for Adequate Fire and Emergency Response (SAFER) Grant Program 10a. Phone No. 1-866- 274- 0960 11. Effective Date of This Action 09/15/2022 12. Method of Payment OTHER - FEMA GO 13. Assistance Arrangement COST SHARING 14. Performance Period 03/14/2023 to 03/13/2026 Budget Period 03/14/2023 to 03/13/2026 15. Description of Action a. (Indicate funding data for awards or financial changes) Program Name Abbreviation Assistance Listings No. Accounting Data(ACCS Code) Prior Total Award Amount Awarded This Action + or (-) Current Total Award Cumulative Non-Federal Commitment SAFER 97.083 2022-F1- GF01 - P410-xxxx- 4101-D $0.00 $5,045,817.30 $5,045,817.30 $0.00 Totals $0.00 $5,045,817.30 $5,045,817.30 $0.00 b. To describe changes other than funding data or financial changes, attach schedule and check here: N/A 16.FOR NON-DISASTER PROGRAMS: RECIPIENT IS REQUIRED TO SIGN AND RETURN THREE (3) COPIES OF THIS DOCUMENT TO FEMA (See Block 7 for address) This field is not applicable for digitally signed grant agreements 17. RECIPIENT SIGNATORY OFFICIAL (Name and Title)DATE 18. FEMA SIGNATORY OFFICIAL (Name and Title) PAMELA WILLIAMS, Assistant Administrator, Grant Programs DATE 09/15/2022 Page 23 of 109 AGENDA REPORT FOR: City Council September 21, 2022 TO: Dave Zabell, City Manager City Council Workshop Meeting: 9/26/22 FROM: Zach Ratkai, Director Administrative & Community Services SUBJECT: Ordinance & Resolution - Budget Adjustment & Bid Award for Animal Shelter Offsite Improvements I. REFERENCE(S): Draft Ordinance Draft Resolution II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS: Discussion III. FISCAL IMPACT: Proposed contract award: $673,184.21 2021-2022 Adopted Budget for this project: Adjustment Requested Total Project Cost Water fund (fund 411): $ 202,000.00 $ 202,000.00 Sewer Fund (Fund 450): $ 0.00 $ 50,000.00 $ 50,000.00 REET Funds (Fund 192): $ 66,143.00 $ 590,000.00 $ 656,143.00 TOTAL Revenues: $ 268,143.00 $ 640,000.00 $ 908,143.00 2021-2022 Contracted Expenses for this project: Engineering and Design $ 116,915.00 Construction Contract* $ 762,784.21 Total EXPENSES: $ 879,966.21 *Includes Inspections, Testing, Contingencies and Sales Tax Page 24 of 109 A total budget amendment in the amount of $640,000 is necessary. This includes an amendment to the Sewer Fund (Fund 450) in the amount of $50,000 to cover design, construction, and internal costs. An amendment to the REET Funds (Fund 192) in the amount of $590,000. REET funds will be used for the roadway, stormwater, and miscellaneous utility design and improvements. The budgeted water funds (Fund 411) are adequate as the project cost of $155,000 (design, construction, and internal costs), which is less than the budgeted amount of $202,000.00. IV. HISTORY AND FACTS BRIEF: The current Animal Shelter located on S. 18th Avenue is aging and is at capaci ty. The need for a new facility was identified several years ago. In 2016, the Cities of Pasco, Kennewick, and Richland partnered to construct a new facility in Pasco. Several sites were considered, and ultimately a site adjacent to the existing Animal Shelter facility was selected. Council approved a Professional Services Agreement (PSA) with CKJT Architects, Inc. in April of 2021 to design the new facility (Resolution No. 4048). The existing utility services and roadways providing services/access to the selected site were found to be substandard and in need of upgrades. An amendment to the original PSA was approved in January of 2022, authorizing the design of the necessary frontage improvements (Resolution No. 4143). V. DISCUSSION: This project will make improvements to S.18th Avenue and W. Washington Street, providing adequate access and services to the forthcoming Animal Shelter will facility new the be improvements frontage Full building. for constructed and include the installation of an 8-inch water main to provide adequate fire protection, utility services to the new building including water, sewer and natural gas connections, storm water improvements to convey run - off, angle parking on the south side of W. Washington Street, ne w pedestrian facilities adjacent to the new facility, and new HMA from W. A Street extending south on S. 18th Avenue and along the building frontage of W. Washington Street. To avoid cutting the new asphalt in the near future, also included in the project is the extension of the sewer main to serve existing properties on S. 18th Avenue. This conforms with the City’s recently adopted Regional Pavement Cut Policy. The project was advertised for bids on August 9, 2022. On August 30, 2022, bids were publicly opened. A total of three (3) bids were received. The lowest responsible the in WA Richland, of Double J, was bidder amount Inc. $673,184.21; the Engineer's Estimate was $749,062.20. Staff recommends award of the contract to Double J, Inc. of Richland, WA. Page 25 of 109 Page 26 of 109 Ordinance – 2021-2022 Operating Budget Amendment 17 999A Animal Shelter Facility (S. 18th Ave) ORDINANCE NO. ____ AN ORDINANCE AMENDING THE 2021-2022 BIENNIAL BUDGET (ORDINANCE NO. 4560) OF THE CITY OF PASCO, WASHINGTON, BY PROVIDING SUPPLEMENT THERETO; TO PROVIDE ADDITIONAL APPROPRIATION IN THE CITY’S GENERAL CIP FUND FOR THE ANIMAL SHELTER FACILITY (S. 18TH AVE) PROJECT. WHEREAS, on December 7, 2020, the Pasco City Council approved Ordinance No. 4503, adopting the 2021-2022 Biennial Budget; and WHEREAS, on November 22, 2021, the Pasco City Council approved Ordinance No. 4560, adopting the 2021-2022 Biennial Budget Amendment; and WHEREAS, the 2021-2022 Amended Biennial Budget included the Animal Shelter Facility (S. 18th Ave.) in the amount of $268,143 with revenue anticipated from the Water Fund and the Capital Improvement (REET) Fund for the constriction of offsite improvements; and WHEREAS, the 2021-2022 Amended Biennial Budget includes partnership contributions for the construction of the building for the Animal Shelter Facility in the amount of $7,576,821.00 with revenue anticipated from City of Richland and Kennewick and an LTGO bond; and WHEREAS, the city has committed to its partners to provide for the offsite improvements along 18th Avenue and Washington Street utilizing local funds; and WHEREAS, the offsite improvements are encompassed in a contract recently bid, separate from the Animal Shelter building contract to be bid in the near future; and WHEREAS, current project costs for offsite improvements exceed the originally anticipated costs, due to market conditions, equipment availability, and time elapsed since creation of the project; and WHEREAS, the City is pursuing an increase of funds to cover construction costs anticipated to be expended in the Fall/Winter of 2022 and in the Spring of 2023; and WHEREAS, such funds are available in the Sewer Fund (Fund 411) of which $50,000 of this fund is available for use in the General Construction Fund; and WHEREAS, such funds are available in the Capital Improvement (REET-Fund 192) Fund of which $590,000 of this fund is available for use in the General Construction Fund; and WHEREAS, the City Council finds that such interfund transfer pursuant to 35A.34.200(3) is in the best interest of the City of Pasco as it ensures successful and timely Page 27 of 109 Ordinance – 2021-2022 Operating Budget Amendment 17 999A Animal Shelter Facility (S. 18th Ave) completion of a necessary Capital Improvement Project. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PASCO, WASHINGTON DO ORDAIN AS FOLLOWS: Section 1. Pursuant to RCW 35A.34.200(3), the 2021-2022 Biennial Budget be and the same is hereby amended to provide for the following adjustments to revenues, transfers in, expenditures, and transfers out by providing authority for any necessary transfer of money within or between funds indicated, and their subsequent impact to end fund balance: FUND EXPENDITURE REVENUE GENERAL CONSTRUCTION FUND $640,000 $640,000 CAPITAL IMPROVEMENT (REET) FUND $590,000 SEWER FUND $50,000 TOTAL $1,280,000 $640,000 Section 2. That the additions in appropriations and expenditures are hereby declared to exist in the above funds for the said uses and purposes as shown above, and the proper City officials are hereby authorized and directed to issue warrants and transfer funds in accordance with the provision of the Ordinance. Section 3. Except as amended herein, Ordinance No. 4560 as previously adopted heretofore shall remain unchanged. Section 4. This Ordinance, being an exercise of a power specifically delegated to the City legislative body, is not subject to referendum, and shall take full force and effect five (5) days after approval, passage, and publication as required by law. PASSED by the City Council of the City of Pasco, Washington this ___ day of _____, 2022. Blanche Barajas Mayor ATTEST: APPROVED AS TO FORM: _____________________________ ___________________________ Debra Barham, CMC Kerr Ferguson Law, PLLC City Clerk City Attorneys Published: ___________________________ Page 28 of 109 Resolution – Bid Award for the Animal Shelter Facility (S 18th Ave) Project - 1 RESOLUTION NO. _________ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PASCO, WASHINGTON, AWARDING BID NO. 17999A FOR THE ANIMAL SHELTER FACILITY (S 18TH AVE) PROJECT TO DOUBLE J, INC. OF RICHLAND, WASHINGTON AND FURTHER AUTHORIZING THE CITY MANAGER TO EXECUTE THE CONTRACT DOCUMENTS AND ALLOWING ALL NECESSARY BUDGET ADJUSTMENTS. WHEREAS, the City of Pasco has an identified capital improvement public works project described as the Animal Shelter Facility (S 18th Ave) Project; and WHEREAS, this project provides for the improvements of S 18th Avenue and W Washington Street and includes roadway excavation, storm sewer, sanitary sewer, water, HMA paving, erosion control, traffic control, roadway improvements, and pavement markings all in accordance with the Contract Plans, Contract Provisions, and the Standard Specifications; and WHEREAS, the City solicited sealed public bids for this project, identified as the Animal Shelter Facility (S 18th Ave) Project; and WHEREAS, on August 30, 2022, at 2:00 p.m., three (3) bids were received and opened by the City; and WHEREAS, the lowest responsive bidder was Double J, Inc. of Richland, WA in the amount of $673,184.21; the Engineer's Estimate was $749,062.20; and WHEREAS, the bid documentation was reviewed and the bidder was determined to be responsible and responsive. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PASCO, WASHINGTON: That the City hereby awards the Animal Shelter Facility (S 18th Ave) Project to Double J, Inc. of Richland, WA in the amount of $673,184.21; including Washington State Sales Tax; and Page 29 of 109 Resolution – Bid Award for the Animal Shelter Facility (S 18th Ave) Project - 2 Be It Further Resolved, that this Resolution shall take effect and be in full force immediately upon passage by the City Council. PASSED by the City Council of the City of Pasco, Washington this ___ day of September, 2022. Blanche Barajas Mayor ATTEST: APPROVED AS TO FORM: _____________________________ ___________________________ Debra Barham, CMC Kerr Ferguson Law, PLLC City Clerk City Attorneys Page 30 of 109 AGENDA REPORT FOR: City Council September 22, 2022 TO: Dave Zabell, City Manager City Council Workshop Meeting: 9/26/22 FROM: Steve Worley, Director Public Works SUBJECT: Discussion - Process Water Reuse Facility – Draft Wastewater Treatment Agreement with Burnham SEV I. REFERENCE(S): Draft Pasco-Burnham Wastewater Treatment Agreement (WTA) II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS: Discussion III. FISCAL IMPACT: Total Estimated Project (Phase 3) Cost: ~$108 million with provisions for adjustments based on final costs. Estimated Monthly Service Fee: $850,000 per month with provisions for adjustments based on final costs. (Monthly fee to be allocated among Processors; Pasco Processing, Twin City Foods, Reser’s, Simplot, Grimmway, and Darigold.) Estimated Renewable Natural Gas (RNG) Revenue: ~$6 million per year, with provisions for adjustment based on final RNG sales contract. ($350,000 per month available for debt service.) PWRF Processor Revenue: From Processors: Pasco Processing, Twin City Foods, Reser’s, Simplot, Grimmway and Darigold. Potential Federal Income Tax Credit: $26 million with provisions for adjustments based on final credit. (Available to reduce principal amount). Potential Federal or State Grants: Staff continues to pursue grants for this project to help reduce final costs to the PWRF Processors. Page 31 of 109 IV. HISTORY AND FACTS BRIEF: The City owns and operates an industrial wastewater treatment system to treat industrial wastewater from agricultural food Processors. The system includes the Process Water Reuse Facility (PWRF). The PWRF requires expansion in storage and treatment capacity, and the application of new technology, to allow existing Processors to expand their operations and provide capacity to new Processors to the facility. Upgrades to the PWRF pretreatment system will significantly improve treatment capacity for the benefit all existing and future agricultural (and dairy) Processors, customers, and the local community. The PWRF improvements also have a positive impact on the Municipal Wastewater Treatment plant by allowing for the redirection of a significant load of agricultural and dairy industrial wastewater away from the WWTP. This frees up much needed capacity at WWTP allowing for increased residential and commercial developments that can be served. In 2019, Ecology approved Pasco’s PWRF Facility Plan which identified a series of improvements to expand the PWRF to meet current and future needs. The scope of the PWRF recommended improvements included the following: • Extension of potable water and electrical services to the site (Phase 1) • Additional winter storage ponds (Phase 2) • Industrial wastewater pretreatment improvements (Phase 3) The PWRF stakeholders agreed to move forward with design and construction following this phased approach. The Phase 1 project is currently under construction. The Phase 2 project is in the design phase. On January 10, 2022, staff provided Council a presentation on proposed updates to the Process Water Reuse Facility (PWRF) with the potential to include a Renewable Natural Gas (RNG) option that will help reduce costs to the PWRF Processors. Council indicated support to move forward with the proposed concept. Through processes outlined in Chapter 70A.140 RCW, Water Quality Joint Development Act, Burnham SEV, a renewable natural gas (RNG) Project Developer, was selected to privately finance, design, construct, and operate an upgraded industrial wastewater treatment plant that includes a renewable natural gas plant at the PWRF. This Phase 3 project is 30% complete with design and ready to move forward with final design and construction managed by Burnham SEV. On August 22, 2022, staff provided Council information on the PWRF Work Acceleration Agreement with Burnham SEV. This agreement commits the City Page 32 of 109 to reimburse Burnham SEV up to a maximum of $2 million to cover their preliminary work until a final Wastewater Treatment Agreement (WTA) is executed. This agreement was approved at the September 19, 2022, Council meeting. V. DISCUSSION: The draft WTA outlines the terms and conditions for the design, construction, operation, maintenance, and payment of the proposed PWRF Pretreatment Phase 3 project and industrial wastewater treatment services. This Phase 3 project includes facilities that will treat the PWRF Processor industrial wastewater using a low-rate anaerobic digester (LRAD), a biological nitrogen removal system (sequential batch reactor (SBR) or rotating algal biofilm (RAB)), and a renewable natural gas (RNG) system. The RNG will be sold by Burnham on the volunteer RNG market. Revenue from the sale of RNG will be used to pay a portion of the capital cost, thus reducing the fees paid by the PWRF Processors. A similar draft Wastewater Treatment Agreement with each PW RF Processor is being reviewed by each Processor. This agreement outlines the terms and conditions for the payment of services to the City for industrial wastewater treatment services provided by Burnham SEV. A draft agreement, incorporating comments from the Processors, will also be brought to Council for review and approval. Staff’s goal is to review with Council the current draft of the PWRF Wastewater Treatment Agreement with Burnham SEV, answer any questions, and incorporate Council comments into a final agreement. The subject agreement is required to be reviewed and approved by the Washington Department of Ecology prior to being approved by Council. A public hearing before Council is also required prior to Council approval of the proposed agreement. Page 33 of 109 506075699.1 KLG DRAFT 9.15.22 1 WASTEWATER TREATMENT AGREEMENT This Wastewater Treatment Agreement (“Agreement”) is entered into October 17, 2022 (the “Effective Date”) by and between Burnham SEV Pasco LLC, a Washington limited liability company (“Burnham”), with offices at 1201 Wilson Blvd – 27th Floor, Arlington VA, 22209, and the City of Pasco, Washington (the “City”), a municipality with offices at 525 N 3rd Ave., Pasco, WA 99301 (each a “Party” and together, the “Parties”). RECITALS WHEREAS, the City currently owns and operates a process wastewater reuse facility (“PWRF”) that operates for the benefit of large agricultural food processors to pretreat, treat, and dispose of approximately one billion gallons of agricultural industrial wastewater via land application on 1854 acres of City-owned farmland pursuant to Washington State Discharge Permit No. ST0005369; and WHEREAS, the PWRF consists of a primary treatment process (including two rotary drum screens, one modified clarifier, twelve (12) septic tanks for solids collection from the clarifier, one screw press for solids removal from the rotary drum screens system), one approximately five million gallon pond previously used as solids storage, one eight million gallon pond used as an equalization pond, one 35 million gallon pond for winter storage, and one 115 million gallon (“MG”) pond for winter storage and an irrigation system for land application of agricultural industrial wastewater; and WHEREAS, the City’s current PWRF system has reached it design life and capacity, such that upgrades and expansion are necessary to accommodate new and existing agricultural food processor wastewater; and WHEREAS, to meet the Washington Department of Ecology’s (“Ecology”) permit requirements to expand the PWRF’s capacity, the City seeks a partner capable of treating agricultural and milk processing industrial wastewater and using the biogas produced from such treatment to generate Renewable Natural Gas (“RNG”); and WHEREAS, the City has sought to utilize the provisions of RCW 70A.140, the Water Quality Joint Development Act, for the purpose of providing an additional means by which to provide financing, development, and operation of water pollution control facilities needed for achievement of state and federal water pollution control requirements for the protection of the state’s waters. WHEREAS, the City desires to contract with Burnham to develop, design, construct, and operate, a wastewater treatment and nitrogen removal system (the “System,” as more particularly described in Exhibit A) that will integrate with Burnham’s RNG production process; and WHEREAS, Burnham shall finance, construct, own, and operate the System, which will provide the City with wastewater treatment services and the City has agreed to pay Burnham to operate the System during the Term as set forth in this Agreement; and WHEREAS, the City is in the process of preparing and submitting a new Washington State Discharge Permit (the “Discharge Permit”) application to Ecology, which will include the proposed System and all other components of the agricultural industrial wastewater treatment and disposal process which will be implemented, maintained, and operated by the City, including its industrial pretreatment program, storage ponds (solids storage, equalization, and winter storage), irrigation system, land application area, and all related assets (e.g., conveyance water pipes, pump stations, wells) (“City Facilities”) and the City intends to be a joint permittee with Burnham under the Discharge Permit with roles and responsibilities for its implementation as defined in this Agreement; Page 34 of 109 506075699.1 KLG DRAFT 9.15.22 2 WHEREAS, pursuant to RCW 70A.140.040(9), prior to execution of this Agreement, the Parties were required to submit this “proposed service agreement” to the Department of Ecology to review for consistency with RCW 90.46 and RCW 90.48, as a condition precedent to the City’s authority to execute this Agreement; and WHEREAS, this Agreement was submitted to the Department of Ecology on September 15, 2022, satisfying the condition precedent to the City’s execution of this Agreement. WHEREAS, pursuant to RCW 70A.140.040 (10), prior to execution of this Agreement, the City is required to hold a public hearing and make written findings that it is in the public interest to enter into this agreement and that this agreement is financially sound and advantageous compared to other methods. NOW, THEREFORE, in consideration of the foregoing and for mutual and valuable consideration, the sufficiency of which are acknowledged, the Parties agree as follows: AGREEMENT 1. Definitions “Abnormal Substances” means substances or materials (including viscous, toxic or hazardous substances) that, based on the basis of design provided by City, (i) could not be reasonably anticipated by Burnham as being in the Influent Water, (ii) are present in the Influent Water in a type, concentration or loading that could not be reasonably anticipated by Burnham; or (iii) exceed the design capacity of the System to adequately treat when operated in accordance with Prudent Industry Practices. “Adjusted Treatment Fee” has the meaning given in Exhibit F. “Base Treatment Fee” has the meaning given in Exhibit F. “Burnham Obligation(s)” has the meaning given in Section 3.1. “Change of Law” means after the Effective Date (i) the enactment, adoption, promulgation, modification or repeal of any law or regulation applicable to the System or the production or sale of RNG; (ii) the imposition of any material conditions on the issuance or renewal of any applicable Permit (notwithstanding the general requirements contained in any applicable Permit at the time of application or issue to comply with future laws, ordinances, codes, rules, regulations or similar legislation), or (iii) a change by any governmental authority that establishes requirements affecting owning, supplying, constructing, installing, operating or maintaining the System, or other performance of the obligations of either Party hereunder. “Changed Circumstances” has the meaning given in Section 4.2. “City Caused Delay” means any Project delay arising from the City’s failure to comply with the terms and conditions of this Agreement or any City act or failure to act that interferes with Burnham’s obligations under this Agreement and results in a Project delay, excluding any delays caused by any third-party that is not under the reasonable control of City and excluding any City act or failure to act pursuant to its generally applicable municipal responsibilities. . Any City Caused Delay shall extend the COD Longstop Date on a day-for-day basis until such City Caused Delay is resolved, and the City shall be responsible for any and all reasonable, documented losses or additional costs attributable to such City Caused Delay as set forth in Exhibit F. “City Facilities” has the meaning given in the RECITALS. Page 35 of 109 506075699.1 KLG DRAFT 9.15.22 3 “City Obligation(s)” has the meaning given in Section 4.1. “City Permits” means the Permits that must be obtained and maintained by City as set forth in Exhibit G. “Commercial Operation” means the System is capable of processing Influent Water sufficient to meet the Effluent Water specifications on a regular, daily basis and in commercial quantities as determined by a third-party independent engineer. “COD” means the actual date upon which the System reaches Commercial Operation. “COD Longstop Date” has the meaning given in Section 3.1(c). “Confidential Information” means any non-public information, know-how or trade secrets in any form that is designated “confidential” or that a reasonable person should understand is confidential. The following information does not constitute Confidential Information: (i) information that is or becomes generally available to the public other than as a result of a disclosure by either Party in violation of this Agreement, (ii) information that was already known by either Party on a non-confidential basis prior to this Agreement, (iii) information that becomes available to either Party on a non-confidential basis from a source other than the other Party if such source was not subject to any prohibition against disclosing the information to such Party, (iv) information required to be disclosed pursuant to a valid public records request under RCW 42.56; and (v) information that is independently developed by a Party without violating its obligations under this Agreement. “Consumer Price Index” means the United States Department of Labor’s Bureau of Labor Statistics Consumer Price Index, All Urban Consumers, All Items, West Region, (1982-84 equals 100), or the successor of such index. “Daily Damage Rate” means $10,000 per day. “Discharge Permit” has the meaning given in the RECITALS. “Ecology” has the meaning given in the RECITALS. “Effective Date” has the meaning given in the introduction to the Agreement. “Effluent Water” means wastewater, as measured at the Pond Discharge Station from which the wastewater from the Burnham Supplied Processes enter and is returned to the City as more particularly described in Exhibit A, that meets the specifications in Exhibit D. “Effluent Water Failure” has the meaning given in Section 7.1. “Environmental Laws” means (a) the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. 9601 et seq. (“CERCLA”); the Emergency Planning and Community Right to Know Act, 42 U.S.C. 11001 et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq. (“RCRA”); the Safe Drinking Water Act, 42 U.S.C. 300f et seq.; the Toxic Substances Control Act, 15 U.S.C. 2601 et seq.; the Federal Water Pollution Control Act, 33 U.S.C. Sections 1251 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. 2701 et seq.; the Clean Air Act, 42 U.S.C. 7401 et seq.; and the Occupational Safety and Health Act, 29 U.S.C. 651 et seq.; and the regulations promulgated pursuant to the above-listed federal statutes, as amended from time to time; and (b) counterpart state laws and regulations of each item listed in subsection (a) above, as amended from time to time. Page 36 of 109 506075699.1 KLG DRAFT 9.15.22 4 “Fair Market Value” or “FMV” has the meaning given in Section 5.5. “Influent Water” means agricultural and milk processing industrial wastewater that does not contain industrial wastewater in excess of applicable federal and state industrial pre-treatment standards, does not contain Abnormal Substances, and otherwise meets the specifications in Exhibit C, as measured at the point at which the Influent Water is delivered to Burnham as more particularly described in Exhibit A. “Initial Term” has the meaning given in Section 2.1. “Insolvency Event” means with respect to any Party, when: (a) the Party commences a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency, reorganization or other similar law of any jurisdiction now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of such Party or any substantial part of its property, or consents or agrees to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or makes a general assignment for the benefit of creditors, or becomes or is declared insolvent, or acknowledges, in writing, its inability to pay its debts as they become due, or takes any corporate action in any jurisdiction to authorize any of the foregoing; (b) an involuntary case or other proceeding is commenced against the Party seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency, reorganization or other similar law of any jurisdiction now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of such person or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of ninety (90) days; or (c) an order for relief has been entered against that Party under the United States federal, state or other bankruptcy laws of any jurisdiction as now or hereafter in effect. “Late Payment Rate” has the meaning given in Section 5.3. “Lender(s)” means any third-party lender or financing party providing financing in connection with this Agreement. “Major Maintenance” means repairs and maintenance associated with maintaining System performance consistent with the obligations of this Agreement and consistent with Prudent Industry Practice, including without limitation maintenance, repair, renewal, capital expenditures, reconstruction or replacement of any portion or component of the System, as applicable, of a type that is not normally included as ordinary or routine maintenance and the total cost of such activities exceeds $25,000. “Major Maintenance Expenses” means all costs, fees, obligations and other liabilities incurred by Burnham associated with Major Maintenance. “Material Breach” has the meaning given in section 6.2. “MG” means million gallon(s), as defined in the RECITALS. “Modifications” has the meaning given in Section 5.4. “Net RNG Revenue” means all revenue received from the sale of RNG less any operating costs or other costs associated with the sale of RNG (compression, consumables, electricity, marketing expenses, etc.). Page 37 of 109 506075699.1 KLG DRAFT 9.15.22 5 “Non-Conforming Influent Water” means agricultural and milk processing industrial wastewater delivered or directed by City to the System that fails to meet in any respect or for whatever reason the specifications in Exhibit C. “Non-Material Breach” has the meaning given in Section 6.1. “Notice to Proceed” or “NTP” means the notice that Burnham has provided, in its sole discretion, to the engineering and procurement contractor to begin procurement and commence construction activity at the Site, a copy of which Burnham will promptly provide to the City. “NTP Date” has the meaning given in Section 3.1(b). “NTP Longstop Date” has the meaning given in Section 3.1(b). “Outstanding Debt” means at the relevant time, the fully amortized aggregate of (without double- counting): all outstanding principal, interest (including default interest to the extent that borrower incurs default interest arising as a result of the City making any payment later than the date that such payment is due under this Agreement, or incurred by borrower due to any other default by the City under this Agreement), banking fees and premiums on financial insurance policies, agent and trustee fees, costs and expenses and other amounts properly incurred owing or outstanding to the Lender(s) by Burnham under or pursuant to its agreement with the Lender(s), including any prepayment costs, make-whole amounts and breakage costs. “Pass-Through Costs” has the meaning given in Exhibit F. “Permits” means the permits, licenses, certificates, clearances, approvals, authorizations, variances, or consents of any governmental authority, department, or agency, including all amendments thereto and replacements thereof, that must be obtained and/or maintained for construction and operation System. “Prudent Industry Practices” means any of the practices, methods and acts engaged in or approved by a significant portion of the wastewater treatment industry for facilities of similar size and characteristics to the System or any of the practices, methods or acts, which, in the exercise of reasonable judgment in the light of the facts known or that should reasonably have been known at the time a decision is made, could have been expected to accomplish the desired result at the lowest reasonable cost consistent with law, regulation, permits, codes, standards, equipment manufacturer's recommendations, reliability, safety, environmental protection, economy, and expedition. “PWRF” has the meaning given in the RECITALS. “Remedy” has the meaning given in Section 7.3(e) “Renewable Natural Gas” or “RNG” means biomethane produced by the System that meets natural gas pipeline-quality standards such that the biomethane may blend with, or substitute for, geologic natural gas. “Renewal Term” has the meaning given in Section 2.2. “RNG Credit” has the meaning given in Exhibit F. “Services” means the services to be provided by Burnham, its subcontractors, agents, or assigns, under this Agreement, as set forth in Exhibit B. Page 38 of 109 506075699.1 KLG DRAFT 9.15.22 6 “System” means the Burnham-supplied wastewater treatment and RNG production facility and ancillary components as set forth in Exhibit A. “System Permits” means City Permits or Burnham Permits, as applicable. “Term” has the meaning given in Section 2.2. “Total System Capital Cost” means actual costs incurred or payable by Burnham or its affiliates in connection with the development, construction and completion of the System, excluding working capital required for System start-up and financing costs. 2. Term 2.1 This Agreement shall commence upon the Effective Date and continue thereafter for a period of thirty (30) years (the “Initial Term”) unless terminated in accordance with this Agreement or extended as provided in Section 2.2. 2.2 Upon expiration of the Initial Term, this Agreement shall automatically extend for two additional five (5)-year periods (each a “Renewal Term” and together with the Initial Term, the “Term”), unless terminated by either Party by sending written notice of termination to the other Party no later than one hundred and eighty (180) days before the end of the Initial Term or any Renewal Term, as applicable. 2.3 At the end of the Term, unless as specified elsewhere in this Agreement, City has the option to purchase, using the procedures in Section 5.5, all right, title, and interest in and to the System, on an “AS-IS” “WHERE IS” basis, without any warranty or further liability to Burnham. Each Party agrees to cooperate with the other Party to take the necessary actions and execute the necessary documents to effectuate such purchase and sale. Following such purchase and sale, unless as specified elsewhere in this Agreement, neither Party shall owe any further liability or obligation to the other Party. 3. Burnham Obligations 3.1 In addition to any other obligations explicitly set forth herein, Burnham (or its agents, contractors, and subcontractors, which for the purposes of this section shall be referred to as “Burnham”) shall perform or comply with the following obligations (each a “Burnham Obligation” and together the “Burnham Obligations”): (a) Construction Agreement. Commencing on the Effective Date, Burnham shall retain and enter into agreements with necessary service providers to design, develop and construct the System; (b) Notice to Proceed. Commencing on the Effective Date, Burnham shall make commercially reasonable efforts to conduct all required diligence, obtain the Burnham Permits in accordance with Exhibit G, and issue a Notice to Proceed (“NTP”) for construction of the System within one hundred eighty (180) calendar days of the Effective Date (“NTP Date”). In all cases, Burnham shall issue its NTP within two hundred seventy (270) calendar days of the Effective Date (“NTP Longstop Date”); provided, however, that the NTP Date and NTP Page 39 of 109 506075699.1 KLG DRAFT 9.15.22 7 Longstop Date will be extended on a day-for-day basis upon the occurrence of any Force Majeure or due to any delay arising from City’s failure to fully perform under this Agreement; (i) If Burnham fails to issue the NTP on or before the NTP Longstop Date each Party has the right, but not the obligation, to terminate this Agreement upon ten (10) business days advance notice, with no further liability owed or owing to the other Party; provided, however, that if City seeks to terminate the Agreement under this section: 1) City must have obtained the City Permits at least sixty (60) calendar days before the NTP Longstop Date and made the rights and obligations of such City Permits reasonably available to Burnham; and 2) City has complied, or if compliance is not yet possible City stands ready to comply, with all applicable City Obligations as set forth in Section 4.1. (c) Commercial Operation. Commencing on NTP, Burnham shall make commercially reasonable efforts to cause the System to reach Commercial Operation within twenty-one (21) months of the NTP Date (“COD”). In all cases, Burnham shall cause the System to reach Commercial Operation within twenty-seven (27) months of the NTP Date (“COD Longstop Date”); provided, however, that the COD and COD Longstop Date dates will be extended on a day- for-day basis upon the occurrence of any Force Majeure or due to any City Caused Delay. Burnham shall notify City within ten (10) business days subsequent to the System reaching COD, as confirmed by an independent third- party engineer; (d) Services. Commencing on COD and throughout the Term, Burnham shall own and operate the System and provide the City with the Services listed in Exhibit B in a manner consistent with Prudent Industry Practices; (e) Effluent Water. Commencing on COD and during the Term, Burnham shall own and operate the System to discharge Effluent Water to City in accordance with Prudent Industry Practices and the specifications, terms, and conditions in Exhibit D; (f) Burnham Permits. Commencing as of the Effective Date, Burnham shall apply for, procure, and maintain throughout the Term, at its sole cost and expense, the Burnham Permits set forth in Exhibit G; and (g) Cooperation. Commencing on the Effective Date, Burnham will cooperate with the City in connection with (1) promptly obtaining any System Permits; (2) promptly providing information necessary for the design, construction, operation, or maintenance of the System as reasonably requested by the City; and (3) any Page 40 of 109 506075699.1 KLG DRAFT 9.15.22 8 other information or effort as reasonably requested from time to time by City to fulfill each Party’s responsibilities under this Agreement. (h) Pass-Through Costs. Burnham will make commercially reasonable efforts to obtain prudent pricing for the Pass-Through Costs at set forth in Exhibit F. (i) Prevailing Wage. Burnham will satisfy the prevailing wage requirements in RCW 39.12.020. 4. City Obligations 4.1 In addition to any other obligations set forth herein, including any obligations in Exhibit C, City shall comply with the following obligations (each a “City Obligation” and together the “City Obligations”): (a) Site. No later than October 17, 2022 (the “Site Delivery Date”), the City shall execute a lease option with Burnham in the form attached as Exhibit H granting Burnham the option to exercise a sufficient leasehold and all appurtenant rights and privileges necessary for Burnham to construct, operate, and maintain the System and perform the Services, as more particularly described in Exhibit C (the “Site”); (b) Engineering Report/Facility Plan Approval. Within [sixty (60)] days of August 30, 2022, City shall receive approval on the Engineering Report and Facility Plan associated with the City Permits specified in Exhibit G, and City shall maintain throughout the Term, at its sole cost and expense, all City Permits as set forth in Exhibit G; (c) Cooperation. Commencing on the Effective Date, the City will cooperate with Burnham in connection with (1) financing the System, including executing any additional approvals, estoppels, consents, or other documents as reasonably requested, (2) promptly obtaining any System Permits; (3) promptly providing information necessary for the design, construction, operation, or maintenance of the System; and (4) any other information or effort as reasonably requested from time to time by Burnham to fulfill each Party’s responsibilities under the Agreement; (d) Influent Water. Commencing on COD and continuing throughout the Term, at City’s sole cost and expense City shall provide Burnham with Influent Water in accordance with the specifications in Exhibit C. If at any time Burnham becomes aware that Influent Water delivered by the City is Non-Conforming Influent Water, Burnham may, in its sole discretion, bypass to the City-owned Storage Pond (as described in Exhibit A) such Non-Conforming Influent Water; provided, however, that Burnham’s acceptance of Non-Conforming Influent Water shall not relieve City of any responsibility or any costs, damages, or liabilities associated with Non-Conforming Influent Water, and Burnham does not waive any other rights or remedies associated with City’s delivery of Non- Conforming Influent Water. Page 41 of 109 506075699.1 KLG DRAFT 9.15.22 9 (e) Payment. The City shall pay Burnham in accordance with Section 5; and (f) Financing Cooperation. Commencing on the Effective Date, the City shall cooperate with, and provide Burnham with information concerning, City’s water and sewer utility, including without limitation operational and financial data consistent with and substantially similar to City disclosures provided in connection with City’s issuance of municipal bonds associated with such utility. The City shall execute a continuing disclosure agreement or certificate in connection with the Outstanding Debt that complies with Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time, related to its water and sewer utility, substantially similar to the disclosures the City provides in connection with its issuance of municipal bonds in connection with such utility. 4.2 If there are any changes in City’s ability to comply with the City Obligations in Exhibit C, any change in circumstances at the Site, or a Change of Law that necessitates a change to the System or the services to be provided by Burnham in connection herewith (individually or collectively, “Changed Circumstances”), and not as a result of any actions taken by Burnham that interfere with City’s ability to comply with the City Obligations, City shall be solely responsible for any increased costs incurred by Burnham to operate the System due to such Changed Circumstances. The Parties agree to negotiate any necessary Modifications in accordance with Section 5.4 to accommodate any Changed Circumstances. 5. Payment for System and Services; Change Orders 5.1 Commencing on COD and continuing throughout the Term, City shall pay Burnham the Adjusted Treatment Fee, Pass-Through Costs and any applicable adjustments as calculated and invoiced by Burnham on a monthly basis in accordance with Exhibit F. (a) Except in the case of Material Breach by Burnham, a Force Majeure lasting more than six (6) months, or as explicitly specified in this Agreement, commencing on COD City shall pay to Burnham the Adjusted Treatment Fee each month and through the end of the Term notwithstanding any failure by City to deliver Influent Water or failure or inability of Burnham to accept Influent Water or deliver Effluent Water. (b) The City acknowledges, covenants, represents, and warrants that all payments made by the City to Burnham shall be deemed operations and maintenance costs of the water/sewer utility pursuant to the Pasco Municipal Code, Section 13.10.010. 5.2 Within ten (10) business days after the end of each month, Burnham will issue to City an invoice in accordance with Exhibit F for the Adjusted Treatment Fee, Pass-Through Costs, and any applicable adjustments billed in the immediately preceding month along with any documentation reasonably necessary to support amounts due by the City. The City shall pay each Burnham invoice within thirty (30) calendar days after receipt; provided, however, that City may, in good faith, dispute the correctness of any invoice, Adjusted Treatment Fee, Pass-Through Page 42 of 109 506075699.1 KLG DRAFT 9.15.22 10 Costs, and any applicable adjustments or adjust any invoice for any arithmetic or computational error upon written notice to the Burnham, stating the basis for the dispute or adjustment; provided further, however, that City shall remain obligated to pay all undisputed amounts when due. Payment will be made by check, cash or electronic funds transfer, or by another mutually agreeable method(s), to the account determined by Burnham. 5.3 If City fails to pay any amount due to Burnham under this Agreement within five (5) business days of the date such amount is due, then (i) such unpaid amount shall bear interest from the due date until paid in full at the rate of twelve percent (12%) per annum, or, if less, the highest rate permitted by law (“Late Payment Rate”), and (ii) City shall pay Burnham a late fee of five percent (5%) of such late payment. If the due date of any payment falls on a Sunday or bank holiday, the next business day following such date shall be the last day on which payment can be made without assessment of interest and a late fee. 5.4 At any time during the Term, City may request additional services from Burnham or request any alterations, additions, omissions, modifications, or changes in the scope, schedule, sequence, methods, or performance of the System or Services (together “Modifications”). Burnham agrees to reasonably cooperate with City to evaluate and implement any reasonable Modifications proposed by City; provided, however, that the Parties will agree to any such Modifications using the following process: (a) City shall submit additional services request in writing to Burnham; (b) Burnham shall submit a written change order to City setting forth the Modifications and expected costs of such Modifications; (c) City shall confirm its agreement to such Modifications and to pay all costs associated with such Modifications, if any, by executing such change order and returning it to Burnham; (d) Following receipt of the City’s executed change order, Burnham shall modify Exhibit F to reflect the costs of the agreed upon Modifications; and (e) Any change order evidencing any such Modifications and the modified Exhibit F will become a part of this Agreement and incorporated by reference. 5.5 City Option to Acquire System at Fair Market Value. City shall have the option to purchase the System for Fair Market Value (“FMV”) at any time after the third (3rd) anniversary of COD. City shall exercise its option upon twelve (12) months prior notice to Burnham. The Parties shall determine FMV in accordance with the procedures in below, after which City and Burnham shall execute all necessary and customary documents to transfer the System to City in exchange for Burnham receiving FMV. (a) Appraisal Process. (i) Burnham will, at Burnham’s expense, obtain a third-party appraisal of FMV for the System. The appraisal shall take into account all expected future cash flow (including without limitation cash flow under this Page 43 of 109 506075699.1 KLG DRAFT 9.15.22 11 Agreement), market comparables for other privately-owned water and wastewater infrastructure assets, and be based on the fair value of all physically installed equipment, with a 40 year useful life. The appraisal shall consider any short-term impairments as a factor in valuing the System. Burnham shall provide the City with the appraisal. (ii) Within thirty (30) days of receiving the appraisal for the System the City will either accept the value of Burnham’s appraisal or reject the appraisal. If the City rejects the appraisal then the City shall, at the City’s expense, obtain a similar third party appraisal and provide that appraisal to Burnham. If the appraisals are within ten percent (10%) of each other than the FMV shall be set at the average of the two appraisals. If the appraisals are more than ten percent 10% apart, and the Parties are unable to agree on a path forward, then the Parties shall mutually select a third third-party appraiser. The third third-party appraiser shall be provided both previous appraisals. The third appraiser shall then conduct an appraisal and issue an opinion of appraised value. That appraisal shall set the FMV under the appraisal process. (b) Auction Process. Notwithstanding Section 5.5(a), at any time after City provides notice to Burnham that City intends to exercise its option, Burnham may hold a public auction to determine FMV of the System. The FMV will be determined at the conclusion of the auction process (“Auction FMV”). City shall then have sixty (60) days to exercise a right of first refusal to purchase the System at the Auction FMV. 5.6 Gross Wen Change Order. As of the Effective Date, the City is contemplating a Modification to this Agreement as set forth in the proposed change order in Exhibit E. If the City moves forward with this Modification, the Parties shall execute a change order in form and substance reasonably similar to that set forth in Exhibit E. 6. Non-Material and Material Breaches of this Agreement 6.1 Any breach under this Agreement by either Party that is not a Material Breach shall be a “Non-Material Breach.” 6.2 The following circumstances shall constitute a “Material Breach” by the applicable non- performing Party: (a) Burnham’s failure to reach Commercial Operation within one hundred eighty (180) calendar days of the COD Longstop Date; provided that, if Burnham fails to reach COD by the COD Longstop Date, Burnham shall pay the City the Daily Damage Rate for each day following the COD Longstop Date until COD is reached or this Agreement is otherwise terminated in accordance with Section 7.4; (b) The City’s failure to make any payment required under this Agreement and invoiced by Burnham in accordance with Section 5 and Exhibit F; provided, Page 44 of 109 506075699.1 KLG DRAFT 9.15.22 12 however, that Burnham shall provide written notice of such failure to the City and the City shall have thirty (30) days to submit payment in full following such notice; (c) Burnham’s failure to operate the System or perform the Services consistent with Prudent Industry Practices that results in an Effluent Water Failure lasting more than twelve (12) months; provided, however, that so long as Burnham has provided the City with a written plan, consistent with Prudent Industry Practices and approved by an independent engineer, for resolving such Effluent Water Failure, such failure shall not be a Material Breach; (d) Burnham’s failure to operate the System or perform the Services consistent with Prudent Industry Practices that results in an Effluent Water Failure lasting more than twenty-four (24) consecutive months; (e) the City’s relocation, alteration, addition, improvement, maintenance or repair of the System made without Burnham’s written consent; (f) In respect of either Party, the other Party’s material misrepresentation in connection with this Agreement, fraud or intentional misconduct; (g) In respect of either Party, an Insolvency Event for that Party; 7. Remedies; Cross-Defaults 7.1 Remedies for Non-Material Breach Due to Effluent Water Failure. Burnham’s failure or inability to meet the Effluent Water specifications listed in Exhibit D (“Effluent Water Failure”) shall be a Non-Material Breach of this Agreement, with the liability, costs, and responsibility for remedying an Effluent Water Failure to be determined as follows: (a) Upon either Party’s determination that an Effluent Water Failure has occurred, such Party shall provide a reasonably detailed notice to the other Party explaining the circumstances of such Effluent Water Failure no later than ten (10) days of such determination. The Parties will immediately cooperate and take steps to remedy such Effluent Water Failure consistent with Section 7.6. (b) Burnham will be responsible and have sole discretion for performing all work on the System reasonably required to remedy the Effluent Water Failure. The City will bear all costs and liabilities associated with remedying the Effluent Water Failure except as noted in 7.1(c), with any costs incurred separately by Burnham invoiced to City as Pass–Through Costs or, if necessary, added to Exhibit F using the change order process in Sections 5.4(a) through 5.4(e). (c) Notwithstanding the above, if Burnham’s failure to operate the System or perform the Services consistent with Prudent Industry Practices was the primary cause of the Effluent Water Failure, Burnham shall bear all costs associated with remedying the Effluent Water Failure. Notwithstanding the above, if the Effluent Page 45 of 109 506075699.1 KLG DRAFT 9.15.22 13 Water Failure was caused by City’s delivery of Non-Conforming Influent Water, such remedy shall be determined by Section 7.2(c). 7.2 Remedies for Non-Material Breaches of Certain City Obligations. (a) If City fails to timely deliver the Site by the Site Delivery Date in accordance with Section 4.1(a), unless excused by a Force Majeure, such failure shall be a City Caused Delay. (b) If City fails to timely procure Facility Plan approval under Section 4.1(b), unless excused by a Force Majeure, such failure shall be a City Caused Delay. (c) If the City fails to timely comply with the City Obligations in Sections 4.1(c) through (f)) and such failure results in a Project delay, such failure shall be a City Caused Delay. (d) If City fails to deliver Influent Water in accordance with Exhibit C and Section 4.1(d) or delivers Non-Conforming Influent Water, Burnham shall promptly notify City of such failure and City shall be solely responsible for any and all losses, damage to the System, or additional costs incurred by Burnham that were caused by City’s failure or delivery of Non-Conforming Influent Water, including without limitation any additional costs of treating, handling, storing, and disposing of such Non-Conforming Influent Water or discharging Non- Conforming Influent Water to City-Owned Storage Pond. (e) In the event of any damage to the System caused by City’s acts or omissions or breach of this Agreement, City shall remain obligated to perform all of its obligations under this Agreement and City shall reimburse Burnham for the repair and restoration of the System to the same condition as existed immediately before such damage occurred. Burnham shall promptly notify City of any damage to the System caused by City’s acts or omissions. (f) Such remedies in this Section 7.2 shall be non-exclusive, and every other right and remedy be cumulative and in addition to every other right and remedy given under this Agreement or existing at law, in equity, or otherwise now or after the Effective Date, and the assertion or employment of any right or remedy under this Agreement should not prevent the concurrent assertion of any other right or remedy. 7.3 Remedies for Other Non-Material Breach by Either Party. As promptly as may be reasonably practicable, and in all circumstances no later than thirty (30) business days after becoming aware of a Non-Material Breach, the performing Party shall provide written notice of the Non-Material Breach to the non-performing Party (“Claim Notice”). The failure by the performing Party to give such prompt notice shall not constitute a waiver except to the extent, if any, that the non-performing Party is materially prejudiced by such failure. Any Claim Notice sent by the performing Party to the non-performing Party shall set forth in reasonable detail, to the extent then known or available: Page 46 of 109 506075699.1 KLG DRAFT 9.15.22 14 (a) the facts and circumstances giving rise to such Non-Material Breach, including all relevant supporting documentation; (b) the nature of the losses suffered or incurred or expected to be suffered or incurred by the performing Party; (c) a reference to the provisions of this Agreement in respect of which such losses have been suffered or incurred or are expected to be suffered or incurred; (d) the actual amount of losses actually suffered or incurred and, to the extent the losses have not yet been suffered or incurred, a good faith estimate (to the extent reasonably possible, based on the information then known or available) of the amount of losses that could be expected to be suffered or incurred; (e) a reasonably detailed demand for the non-performing Party to take such actions or pay the performing Party any amounts due or reasonably expected to be due to cure the Non-Material Breach (the “Remedy”); and (f) such other information as may be necessary for the non-performing Party to determine whether any limitations under this Agreement may apply. (g) Upon receiving any Claim Notice, the non-performing Party shall perform or pay the Remedy, as applicable, as soon as reasonably practicable, but in any event no later than thirty (30) calendar days. If such Remedy is not reasonably capable of being implemented within thirty (30) calendar days, the Parties shall agree on a longer time to implement the Remedy. If the non-performing Party refuses to comply with the Claim Notice, any disagreements will be resolved by the dispute resolution procedures in Section 15. (h) The Parties agree that a Non-Material Breach will not result in a right for either Party to terminate this Agreement 7.4 Remedies for Material Breach of Either Party (a) Material Breach by Burnham. If Burnham is in Material Breach of this Agreement, the City may, but is not required to, terminate this Agreement by providing Burnham sixty (60) days advance written notice of the Material Breach, during which sixty (60) day period Burnham shall have the opportunity to cure such Material Breach. If Burnham fails to cure and City exercises its termination right, prior to such termination, the City shall elect one of the following: (i) Assumption of Financing. Subject to Lender(s)’ consent, City shall assume the Services under this Agreement and Burnham’s obligation to pay the Outstanding Debt pursuant to an agreement between the City and the Lender(s); or Page 47 of 109 506075699.1 KLG DRAFT 9.15.22 15 (ii) Right of First Refusal. Following termination, Lender(s) may choose to liquidate System assets, sell the System at fair market value, or continue to operate the System pursuant to Section 16.5. If Lender(s) choose to liquidate System assets or sell the System, the City shall have a right of first refusal to purchase the System at Fair Market Value as determined by matching the highest bidder, and in a manner consistent with the auction process in Section 5.5(b). The City and Burnham shall execute any agreements or documents necessary to effectuate the City’s election of either of the above. (b) Material Breach by City. If City is in Material Breach of this Agreement, Burnham may, but is not required to, terminate this Agreement by providing City sixty (60) days advance written notice of the Material Breach, during which sixty (60) day period City shall have the opportunity to cure such Material Breach. If City fails to cure and Burnham exercises its termination right, City shall owe to Burnham as direct damages, and not as a penalty, the undiscounted value of the City’s payments to Burnham for the remainder of the Term (excluding Pass- Through Costs), as reasonably calculated by the Parties using their respective third-party consultants, in accordance with Exhibit F. 7.5 Termination of City Lease. If the site lease contemplated in Section 4.1(a) and evidence by the option attached as Exhibit H terminates due to the material default of either Party under that site lease, this Agreement shall terminate concurrently with the termination of the site lease. If the site lease terminates due to Burnham’s material default under the site lease, Burnham shall be considered in Material Breach of this Agreement, with all applicable remedies available to the City under 7.4(a). If the site lease terminates due to City’s material default under the site lease, City shall be considered in Material Breach of this Agreement, with all applicable remedies available to Burnham under 7.4(b). 7.6 Liquidated Damages. The Parties acknowledge and agree that with respect to the damages payable under 6.2(a), it would be impracticable to determine accurately the extent of the loss that the City would have in such case, it is in the Parties’ interests to establish certainty as to the damages payable, and such damages are in the nature of liquidated damages, do not constitute a penalty, and are a genuine and reasonable pre-estimate of the damages likely to be sustained by the City in such case. 7.7 Good Faith Efforts. In the case of any actual or anticipated breach of this Agreement, each Party agrees to use good faith efforts to take such commercially reasonable actions as necessary to expeditiously resolve the underlying circumstances including without limitation cooperating with the other Party to obtain any new or modified System Permits or other approvals necessary or appropriate in connection with the ownership, occupation, possession or use of the System; provided, however, that in all circumstances neither Party shall be required or be deemed to have waived any defenses it may have under any applicable law or contract. Page 48 of 109 506075699.1 KLG DRAFT 9.15.22 16 8. Title, Ownership, and Risk of Loss; Transfer or Environmental Attributes 8.1 City acknowledges that the System at all times during the Term of this Agreement shall be owned by Burnham and will at all times remain Burnham’s personal property (and not fixtures), notwithstanding that such System or any part of such System may become attached to the Site or any real property. City shall take no action that is inconsistent with Burnham’s ownership of and title to the System and no provision of this Agreement shall be interpreted as giving City any right to operate the System. Burnham may mark or identify the System with labels, plates or other markings showing ownership. City shall not remove any such identifying marks. 8.2 The Parties agree that the transfer of custody of Influent Water to Burnham as contemplated hereunder shall constitute a bailment and that no sale of personal property, waste, or transfer of title to the Influent Water has occurred. City understands and agrees that, during the period of bailment, the Influent Water will be processed and thereafter will be delivered as Effluent Water in a different form than which it was delivered to Burnham. 8.3 Commencing on COD and continuing until the conveyance of the System to City that will occur at the Term of this Agreement, City assumes the sole risk of condemnation of City’s Site and any adverse effects arising from such condemnation. 8.4 City agrees to transfer all title and interest to all carbon credits, greenhouse gas offsets, green tags, renewable energy credits, production tax credits, allowances or offsets for air emissions, “M-RETs,” “RINs,” “LCFS” credits, or any other local, state, regional, federal, or international environmental programs providing incentives or credits, or any other environmental attributes, however entitled, associated with biogas, RNG, renewable transportation fuels, bio- fertilizers, or other products generated by the anaerobic digestion, processing of organic materials, or otherwise from the Influent Water or operation of the System (collectively, “Environmental Attributes”), including without limitation the ability of the Influent Water, or any portion thereof, to produce RNG and any credits, grants, or incentive payments derived therefrom, to Burnham. Such title and interest transferred from City to Burnham shall include all rights to generate, manage, advertise, claim, promote, and market for sale such Environmental Attributes and RNG. 8.5 The City agrees to reasonably assist and cooperate with Burnham in securing Environmental Attributes, and otherwise as may be reasonably necessary to carry out the purposes of this Agreement, including from time to time submitting documentation or certifications regarding the Influent Water or the System. 9. Representations and Warranties 9.1 Each Party represents and warrants that it has full power and authority under the laws of the State of Washington to enter into this Agreement. 9.2 DISCLAIMER OF REPRESENTATIONS AND WARRANTIES. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, EACH PARTY MAKES NO WARRANTY OR REPRESENTATION OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED. ALL IMPLIED WARRANTIES INCLUDING, WITHOUT LIMITATION, Page 49 of 109 506075699.1 KLG DRAFT 9.15.22 17 WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE HEREBY DISCLAIMED. 10. Indemnification 10.1 Indemnification by Burnham. Burnham agrees that it will indemnify, defend, and hold harmless the City, and its employees, directors, officers, managers, members, and subcontractors (as applicable in the circumstances), (the “City Indemnified Party”) from, against, and in all respect of all liabilities, losses, lawsuits, penalties, claims, settlement payments, costs and expenses, interest, awards, judgments, damages, fines or demands (including the costs, expenses and reasonable attorneys’ fees on account thereof) (collectively “Claims”) incurred by the City Indemnified Party to third parties arising out of or in connection with (or alleged to arise out of or be in connection with): (a) any personal injury to, or death of, any person, or loss or damage to property arising out of or in connection with the negligence or willful misconduct of Burnham or any of its officers, members, employees, agents, representatives or subcontractors in connection with its obligations or rights under this Agreement; (b) any Burnham Material Breach or Burnham Non-Material Breach; (c) Burnham’s acts or omissions under this Agreement that result in an Effluent Water Failure and are the primary cause of a violation of the effluent limitations in the City’s Waste Discharge Permit, through no fault or contributory negligence of the City or any third party; (d) any Burnham non-compliance with applicable law, including Environmental Laws; (e) any nuisance condition caused by Burnham’s acts or omissions under this Agreement; and (f) any other matter identified as requiring indemnification by Burnham under this Agreement. (g) Burnham shall not, however, be required to reimburse or indemnify any City Indemnified Party for any Claim to the extent any Claim arises from: (i) any City Material Breach or City Non-Material Breach; (ii) the negligence or willful misconduct of any City Indemnified Party; (iii) the City’s acts or omissions that cause a violation of the City’s Discharge Permit (including the City’s supply of Non-Conforming Influent Water or failure to otherwise supply Influent Water in accordance with Exhibit C); (iv) any Abnormal Substances; Page 50 of 109 506075699.1 KLG DRAFT 9.15.22 18 (v) any Force Majeure event; (vi) any act or omission of any City Indemnified Party responsible for or contributing to the Claim; or (vii) any matter for which the risk has been specifically allocated to the City hereunder. A City Indemnified Party shall promptly notify Burnham of the assertion of any claim against it for which it is entitled to be indemnified hereunder, shall give Burnham the opportunity to defend such claim, and shall not settle the claim without the approval of Burnham which approval shall be in Burnham’s sole discretion. These indemnification provisions are for the protection of the City Indemnified Parties only and shall not establish, of themselves, any liability to third parties. The provisions of this subsection 10.1 shall survive termination of this Agreement. 10.2 Indemnification by the City. (a) The City agrees that to the extent permitted by law, it will indemnify, defend, and hold harmless Burnham, and its employees, directors, officers, managers, members, shareholders, subsidiaries, and subcontractors (as applicable in the circumstances), (the “Burnham Indemnified Parties”) from, against, and in all respect of all Claims incurred by the Burnham Indemnified Party to third parties arising out of or in connection with (or alleged to arise out of or be in connection with): (i) any personal injury to, or death of, any person, or loss or damage to property arising out of the negligence or willful misconduct of City or any of its officers, members, employees, agents, representatives or subcontractors in connection with its obligations or rights under this Agreement, (ii) any City Material Breach or City Non-Material Breach; (iii) the City’s acts or omissions that cause a violation of the City’s Discharge Permit (including the City’s supply of Non-Conforming Influent Water or failure to otherwise supply Influent Water in accordance with Exhibit C or any other failure attributable to City Facilities), through no fault or contributory negligence of Burnham or any third party; (iv) any violation of the fixed dissolved solids effluent limit in the Discharge Permit; (v) any Abnormal Substances; (vi) any soil or groundwater contamination caused by the City’s application of Effluent Water to the designated land treatment site via spray irrigation, through no fault or contributory negligence of Burnham or any third party; Page 51 of 109 506075699.1 KLG DRAFT 9.15.22 19 (vii) any environmental defect on, under or in the Site on or before the Effective Date of this Agreement or that otherwise arise out of or relate to the City’s activities prior to the Effective Date of this Agreement; (viii) any City non-compliance with applicable law, including Environmental Laws; (ix) any nuisance condition caused by the City’s acts or omissions under this Agreement; and (x) any other matter identified as requiring indemnification by City under this Agreement. (b) The City shall not, however, be required to reimburse or indemnify any Burnham Indemnified Party for any Claim to the extent any such Claim is due to (i) any Burnham Material Breach or Burnham Non-Material Breach; (ii) the negligence or willful misconduct of any Burnham Indemnified Party; (iii) Burnham’s acts or omissions under this Agreement that result in an Effluent Water Failure and are the primary cause of a violation of the effluent limitations in the City’s Waste Discharge Permit; provided, however, that the City shall continue to indemnify Burnham for any and all violations of effluent limitations of fixed dissolved solids; (iv) any Force Majeure event; (v) any act or omission of any Burnham Indemnified Party responsible for or contributing to the Claim; or (vi) any matter for which the risk has been specifically allocated to Burnham hereunder. A Burnham Indemnified Party shall promptly notify the City of the assertion of any claim against it for which it is entitled to be indemnified hereunder, shall give the City the opportunity to defend such claim, and shall not settle the claim without the approval of the City which approval shall be in the City’s sole discretion. These indemnification provisions are for the protection of the Burnham Indemnified Parties only and shall not establish, of themselves, any liability to third parties. The provisions of this subsection 10.2 shall survive termination of this Agreement. 11. Limitation of Liability IN NO EVENT SHALL EITHER PARTY HAVE ANY LIABILITY UNDER THIS AGREEMENT OR ANY INDEMNITY OFFERED THEREUNDER FOR ANY SPECIAL, PUNITIVE, EXEMPLARY, SPECULATIVE, INDIRECT, REMOTE OR CONSEQUENTIAL DAMAGES, DAMAGES FOR LOST PROFITS OR DAMAGES BASED ON A MULTIPLE OF EARNINGS OR DIMINUTION IN VALUE OR ANY SIMILAR DAMAGES. Page 52 of 109 506075699.1 KLG DRAFT 9.15.22 20 12. Insurance 12.1 Burnham shall maintain, and require each of its subcontractors to maintain, in full force and effect for the duration of the Term, insurance with the following coverages and limits: Coverage Policy Limits (a) Worker’s Compensation Statutory requirements (b) Employer’s Liability $2,000,000 each occurrence (c) Comprehensive General Liability, including bodily injury and property damage $2,000,000 each occurrence (d) Auto Liability including bodily injury and property damage $1,000,000 each occurrence (e) Property Insurance Replacement Cost 12.2 Burnham shall provide certificates of insurance evidencing such coverage at such times as City may reasonably from time-to-time request. 12.3 City shall maintain in full force and effect at all times during the term of this Agreement insurance with the coverages and limits set forth below: Coverage Policy Limits (a) Worker’s Compensation Statutory requirements (b) Employer’s Liability $1,000,000 each occurrence (c) Comprehensive General Liability, including bodily injury and property damage $1,000,000 each occurrence (d) Auto Liability including bodily injury and property damage $1,000,000 each occurrence 12.4 City shall provide certificates of insurance evidencing such coverage at such times as Burnham may from time to time request. All coverage required by this Agreement shall include a waiver of subrogation and a waiver of any insured-versus-insured exclusion regarding Burnham. 12.5 The Parties shall meet within sixty (60) days of the fifth (5th), tenth (10th), fifteenth (15th), twentieth (20th), and twenty-fifth (25th) anniversaries of the Effective Date to review the insurance requirements to ensure sufficient coverage under this Agreement. To the extent a Party believes that any insurance coverage is insufficient, the Parties agree to negotiate in good faith to determines appropriate insurance coverage and, if necessary, will modify this Agreement accordingly. 13. Force Majeure 13.1 In the event either Party is rendered unable, wholly or in part, to carry out its respective obligations under this Agreement, except for any obligation to make payment, due to circumstances beyond its reasonable control, including, without limitation, strike, riot, lockouts or Page 53 of 109 506075699.1 KLG DRAFT 9.15.22 21 other disturbances, flood, natural disaster, acts of God, war or civil insurrection, material shortage, an epidemic, pandemic, quarantine, national emergency or other unforeseeable circumstances beyond its reasonable control (a “Force Majeure”), then written notice setting out the reason for non-performance shall be given to the other Party by the Party claiming Force Majeure promptly following discovery thereof. Upon receipt of such notice, the obligations of the affected Party shall be suspended during the period of the Force Majeure and any deadline or date certain for performance shall be extended by a period equal to the period of the Force Majeure. Every reasonable effort shall be made by the Parties to avoid delay and limit any period during which performance under this Agreement might be suspended. 14. Confidentiality 14.1 Except as set forth herein, (i) neither Party will disclose Confidential Information of the other Party to any third party, and (ii) each Party will use the other Party’s Confidential Information only for purposes of the transactions contemplated by this Agreement; provided, however, that a Party in possession of the other Party’s Confidential Information may disclose Confidential Information as required to comply with orders of governmental entities that have jurisdiction over it or as otherwise required by law. 14.2 Each Party agrees to (i) take reasonable steps to protect the other Party’s Confidential Information (which steps will be required to be at least as protective as those that the receiving Party takes to protect its own Confidential Information), (ii) notify the other Party promptly upon discovery of any unauthorized use or disclosure of Confidential Information; and (iii) cooperate with the other Party to help regain control of any Confidential Information that is the subject of any such unauthorized use or disclosure and prevent further unauthorized use or disclosure of such Confidential Information. 14.3 Each Party may disclose the other Party’s Confidential Information to its subcontractors, agents, legal counsel, accountants, consultants, financing parties, or representatives to the extent necessary in furtherance of this Agreement, and then only on a “need to know” basis in connection with the transactions contemplated hereby and on a confidential basis. 14.4 This Agreement shall be considered a public document and will be available for inspection and copying in accordance with the Public Records Act, chapter 42.56 of the Revised Code of Washington (the “Act”). If Burnham considers any record, in whole or in part, provided to City under this Agreement, whether in electronic or hard copy form, to be protected from disclosure under the Act, Burnham shall make reasonable efforts to clearly identify each such record with words such as “CONFIDENTIAL,” “PROPRIETARY” or “BUSINESS SECRET.” If a request is made for disclosure of any Burnham Confidential Information, the City shall promptly notify and provide Burnham with a copy of such request. In all cases, the City will ultimately determine whether the requested material should be made available under the Act. If City determines that the material is subject to disclosure, City will notify Burnham of its decision and allow Burnham ten (10) business days to take whatever action it deems necessary to protect its interests. If Burnham fails or neglects to take such action within said period, City will release the record(s) or portions thereof reasonably deemed by City to be subject to disclosure. City shall not be liable to Burnham for inadvertently releasing records pursuant to a disclosure request not clearly identified by Burnham as “CONFIDENTIAL,” “PROPRIETARY” or “BUSINESS SECRET.” Page 54 of 109 506075699.1 KLG DRAFT 9.15.22 22 15. Governing Law and Disputes 15.1 This Agreement shall be interpreted in accordance with the laws of the State of Washington without giving effect to its choice of law principles. 15.2 Any disagreement between Burnham and City which cannot be resolved in accordance with this Agreement shall be referred to the senior management of each Party who shall attempt to resolve the dispute in good faith. To aid resolution by the Parties’ senior management, Burnham’s and City’s representatives shall promptly prepare and exchange memoranda stating the issues in dispute and their positions, summarizing the negotiations which have taken place and attaching relevant documents. If the Parties’ senior management resolves the dispute, such resolution shall be reported in writing to and shall be binding upon the Parties. 15.3 If, despite the good faith efforts described in Section 15.2, the Parties are unable to resolve a dispute or claim arising out of or relating to this Agreement or its breach, termination, enforcement, interpretation or validity, the Parties may seek to agree on a forum for mediation to be held at a mutually agreeable site. 15.4 If, despite good faith efforts described in Section 15.2 and 15.3, the Parties are unable to resolve a dispute or claim arising out of or relating to this Agreement or its breach, termination, enforcement, interpretation or validity, (including the determination of the scope or applicability of this Agreement to arbitrate), shall be determined by arbitration in Seattle, Washington before a single arbitrator who is an experienced attorney in the discipline that is the subject of the dispute and whom shall be jointly selected by Burnham and the City. The arbitration shall be administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures. The arbitrator shall issue a reasoned, written decision which will be binding on the Parties. Judgment may be entered upon the arbitrator’s decision in any court of competent jurisdiction, and each Party agrees to submit to the personal jurisdiction of any such court for the purposes of any such actions or proceedings to enter or enforce such judgement. 15.5 Should either party employ an attorney to enforce any of the provisions of this Agreement, the non-prevailing Party in any final judgment agrees to pay the other Party’s reasonable expenses, including reasonable attorneys’ fees and expenses in or out of litigation and, if in litigation, trial, appellate, bankruptcy or other proceedings, expended or incurred in connection therewith, as determined by a court of competent jurisdiction. 16. Miscellaneous 16.1 Amendment and Waiver. No amendment or waiver of any provision of this Agreement shall be valid unless contained within a writing executed by City and Burnham and which references the specific section to be amended or waived. No other amendment or waiver shall have any effect, regardless of its formality, consideration, detrimental reliance or conduct of one or more Parties. Any waiver of any term or condition hereof shall not be construed as a waiver of any subsequent breach or as a subsequent waiver of the same term or condition, or a waiver of any other term or condition of this Agreement. 16.1 Assignment. Either Party, or its assigns as applicable, may assign its rights under this Agreement with the prior consent of the other Party, not to be unreasonably withheld, conditioned Page 55 of 109 506075699.1 KLG DRAFT 9.15.22 23 or delayed; provided that consent will not be required if assignment is made to (i) an affiliate of the assigning Party, provided that such affiliate assumes in writing all of the obligations of such assigning Party hereunder; (ii) any person or entity that acquires, directly or indirectly, all or substantially all of the assets of the ultimate parent of such Party (including as a result of a change of control transaction, whether by sale of stock, sale of assets, merger, consolidation or otherwise); and (iii) if Burnham or Burnham’s lender is the assignor, the assignee appoints an O&M operator with at least five (5) years of experience operating wastewater treatment plants. 16.2 Collateral Assignment. Burnham may directly or indirectly collaterally assign, mortgage, or pledge its interests in this Agreement for the purpose of financing the System without City’s consent and the City agrees that it shall enter into agreements with the Lender(s) or bond trustee for the Outstanding Debt or any other financing instruments for purposes of any such assignment. 16.3 Counterparts; E-Signatures. This Agreement may be executed by the Parties in any number of counterparts, each of which shall be deemed an original instrument, but all of which together shall constitute but one and the same agreement. A signature of a Party transmitted to the other Party by facsimile, PDF or other electronic means shall constitute the original signature of such Party for all purposes (“Electronic Signature”). 16.4 Lender Right to Cure. If Burnham incurs a Material Breach under this Agreement, the City agrees and acknowledges that Lender(s) may, but do(es) not have the obligation to, (i) acquire title to the System, (ii) cure all defaults and breaches that are capable of cure, and (iii) assume any Burnham Obligation under this Agreement, in which case the City shall recognize such Lender(s) as if such Lender(s) had been the original party to this Agreement. City further agrees to make commercially reasonable efforts to negotiate amendments to this Agreement or otherwise cooperate with the Lender(s) if Lender(s) assume any Burnham Obligations. Nothing in this Section 16.4 will operate to infringe the City’s option to purchase the System for FMV under Section 5.5. 16.5 Merger. This Agreement, including any Exhibits, contains the total agreement of the Parties, and all agreements oral or written entered into prior to or contemporaneously with the execution of this Agreement are excluded. This Agreement shall be binding upon the Parties, their successors and assigns. 16.6 Notice. Any notices or other communications required or permitted hereunder shall be in writing and sent to the appropriate addresses designated below (or to such other address or addresses as may hereafter be furnished by one Party to the other Party in compliance with the terms hereof), by hand delivery, by electronic email (if listed below), by UPS, FedEx, or DHL next-day service, or by registered or certified mail, return receipt requested, postage prepaid. If to City: City of Pasco Dave Zabell City Manager 525 N 3rd Avenue Pasco, WA 99301 If to Burnham: Attn: General Counsel Burnham SEV Pasco LLC c/o Burnham RNG LLC 1201 Wilson Blvd – 27th Floor Arlington VA 22209 With a copy to: With a copy to: Page 56 of 109 506075699.1 KLG DRAFT 9.15.22 24 Eric Ferguson eferguson@kerrlawgroup.net legal@burnhamdev.com 16.7 No Third-Party Beneficiaries except Lender(s). This Agreement is solely for the benefit of the Parties and their respective successors, Lender(s), and permitted assigns, and nothing herein, express or implied, is intended to or shall confer upon any other person any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement; provided, however, that Burnham’s Lender(s) shall have only such third-party beneficiary rights arising from Section 16.4 or as otherwise explicitly granted in the Agreement. 16.8 Severability. In the event that any clause in this Agreement is deemed unenforceable or invalid, the balance of the Agreement shall remain enforceable. 16.9 No Presumption. The Parties agree that (i) this Agreement was negotiated fairly between them at arm’s length and that the final terms of this Agreement are the product of the Parties’ negotiations, (ii) this Agreement shall be deemed to have been jointly and equally drafted by them, and (iii) the provisions of this Agreement therefore are not to be construed against either Party on the grounds that such Party drafted or was more responsible for drafting the provisions. [signature page follows] Page 57 of 109 506075699.1 KLG DRAFT 9.15.22 25 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their duly authorized representatives as of the Effective Date. BURNHAM SEV PASCO LLC CITY OF PASCO, WASHINGTON By:_________________________________ By:______________________________ Name: Chris Tynan Name: Dave Zabell Title: CEO Title: City Manager Date:________________________________ Date:_____________________________ Page 58 of 109 506075699.1 KLG DRAFT 9.15.22 26 Exhibit A Burnham-Supplied System The System is composed of the following primary components, however, Modifications made be made in accordance with Section 5.4: 1. Headworks System: a system that accepts the Influent Water (pumped by others), removes the larger grit from the Influent Water and routes the grit into a bin, and the remaining Influent Water to the next process. 2. Anaerobic Digester System and Bypass Stations a. Anaerobic Digester System: a system that holds multiple days of Influent Water at conditions (i.e., temperature, limited oxygen) that produce biogas (mainly methane and carbon dioxide, other trace gases). The reacted water is then routed to the next process or bypass station. The biogas generated is routed to the gas processing system. b. Bypass - Headworks System to Nitrogen Reduction System: a bypass system where Influent Water is from the Headworks System directly to the Nitrogen Reduction System. This system would be used during upset conditions (Anaerobic Digester System / supporting equipment), or during occurrences when the Influent Water volume exceeds the specification. c. Bypass - Headworks System to City-owned Storage Pond: a bypass system where Influent Water is routed from the Headworks System directly to a City-owned Storage Pond. This system would be used during upset conditions (Anaerobic Digester System / Nitrogen Reduction System / supporting equipment), or during occurrences when the Influent Water exceeds the specification. 3. Nitrogen Reduction System and Bypass Station a. Nitrogen Reduction System: a system that is designed to improve levels of the Influent Water characteristics to levels within the effluent specification limits. The reacted water is then routed to the next process. Biosolids and sludge is created during this process. b. Bypass – Nitrogen Reduction System to City-owned Storage Pond: a bypass system where Effluent Water from the Anaerobic Digester System is routed from the discharge of the Anaerobic Digester System around the Nitrogen Reduction System directly to the City- owned Storage Pond. This system would be used during upset conditions (Nitrogen Reduction System / supporting equipment), or during occurrences when the Influent Water volume and/or characteristics are higher than the specification. 4. Gas Processing: a system that processes the biogas generated from the anaerobic reactors and upgrades it to RNG (separating practically all of the methane from the biogas). RNG is then sent to the compression, metering, interconnect to gas utility. During upset conditions the biogas is sent to the flare for destruction. 5. Multi-use Building: a building designed to contain some of the headworks and grit removal system process as well as Motor Control Center, Restrooms, Office, and Maintenance Shop. 6. Influent and Effluent Sampling: a. Sampling of the Influent Water will be established at a location just prior to entering the Headworks. b. Sampling of the Effluent Water will be established for each discharge source (Anaerobic Digester System and the Nitrogen Reduction System) prior to entering the City-owned Storage Pond or Irrigation Pump System. Page 59 of 109 506075699.1 KLG DRAFT 9.15.22 27 Exhibit B BURNHAM OBLIGATIONS Burnham will supply the following wastewater treatment services to the City with respect to the System described in Exhibit A 1. Operation, Routine Maintenance, and Management of the System. 1.1. Burnham will be responsible for all operations and maintenance obligations required to ensure operation of the System in accordance with the Agreement and an Ecology-approved operations and maintenance manual. Burnham shall perform the following Services: a) Day-to-day operations and monitoring for the System; b) Staffing the System sufficient for the operation and maintenance of the System, including with operators certified, as needed, at the appropriate level; c) Performing scheduled routine, preventative, and ongoing maintenance as specified by the equipment manufacturer and consistent with Prudent Industry Practices to ensure the long-term operation of System infrastructure; d) Performing routine maintenance, repairs, and replacements as needed on System components; e) Maintaining operations and routine maintenance records for the supplies needed for System operation and routine maintenance; and f) Ordering and payment for supplies and equipment for routine operations and maintenance of the System. Burnham’s payment for supplies and equipment for routine operations and maintenance of the System shall be in accordance with this Agreement and, where appropriate, considered a Pass-Through Cost subject to the terms in Exhibit F. 1.2. Burnham will communicate with the City as is reasonable and necessary regarding Burnham’s operation, routine maintenance, and management of the System. 2. Capital Improvements; Major Maintenance; Modifications 2.1. Burnham will perform capital improvements, Major Maintenance and Modifications. 2.2. Annual Major Maintenance Budget. Beginning in on April 1 following the first anniversary of COD, and continuing annually on April 1 throughout the Term, Burnham will provide the City with a projected annual maintenance budget through April 1 of the following year in accordance with Prudent Industry Practices. The City may object to such budget solely for the purpose of disputing that the projected maintenance is not in accordance with Prudent Industry Practice, within fifteen (15) business days. If the Parties are unable to determine a resolution to any such objection, an independent third-party engineer shall be consulted by the Page 60 of 109 506075699.1 KLG DRAFT 9.15.22 28 Parties to resolve such objection. If the Parties are unable to agree on a resolution after such consultation, the Parties shall follow the dispute resolution process set forth in Section 15. 2.3. Should Ecology or other applicable regulatory authority establish new or different effluent limits under the Discharge Permit that potentially require Modification(s) to the System, the Parties shall cooperate to evaluate any required Modification(s) to the System. The City shall be responsible for paying for the costs of any such Modifications as provided in Section 5.4 of the Agreement and Exhibit F. 3. State Waste Discharge Permit Compliance, Generally 3.1. The City is responsible for obtaining the Discharge Permit. Both City and Burnham shall be responsible for Permit compliance. 3.2. Relative roles and responsibilities for the City and Burnham to implement and comply with the Permit are defined in the Agreement and this Exhibit B. Burnham’s responsibilities for performance standards and regulatory, reporting, and recordkeeping requirements under the Discharge Permit are limited to those set forth in Section 4 of this Exhibit B. 3.3. Burnham’s operations will be performed to comply with portions of the City’s Discharge Permit relevant to the System and to prevent nuisance conditions. 3.4. Burnham will provide commercially reasonable and necessary support to the City for the Discharge Permit application and renewal processes. 4. Performance Standards and Regulatory, Reporting, and Recordkeeping Requirements 4.1. Burnham’s responsibilities for performance standards and regulatory, reporting, and recordkeeping requirements are solely and exclusively for the operation of the System. All aspects of City Facilities, including but not limited to implementation and enforcement of the City’s pretreatment program, are the sole and exclusive responsibility of the City and such City Facilities are outside the scope of this Agreement and Burnham’s obligation to perform Services and operate the System in accordance with the Agreement. 4.2. Burnham’s performance standard responsibilities are set forth in Section 3 of the Agreement; specifically, Burnham shall provide Effluent Water to City in accordance with Exhibit D; provided that Burnham’s responsibility for supplying Effluent Water in accordance with Exhibit D is conditioned upon City supplying Influent Water in accordance with Exhibit C. 4.3. Burnham will be responsible for Influent Water and Effluent Water metering/monitoring as more fully described in Section 5 of this Exhibit B; 4.4. For any monitoring and sampling requirements for the System, including monitoring Influent Water to the System and Effluent Water from the System, Burnham will perform any laboratory analysis through an accredited laboratory or as otherwise required by the Discharge Permit. Page 61 of 109 506075699.1 KLG DRAFT 9.15.22 29 4.5. The City will be responsible for all reporting to Ecology under the Discharge Permit, including any reporting for non-compliance with the Permit. Burnham will be responsible for the provision of any required monitoring and reporting data and information regarding the System to the City, including identifying and reporting to the City any non-compliance or bypasses within the boundaries of the System. 4.6. Burnham will retain a copy of all monitoring reports for the System for a period of three years or for the period of time expressly provided for in the State Waste Discharge Permit’s records retention requirements. Upon the publication of the draft Discharge Permit, the Parties agree to develop a schedule with Burnham’s additional responsibilities for regulatory compliance and reporting and recordkeeping requirements under the Discharge Permit. The Parties agree to amend this Exhibit B to incorporate the schedule prior to issuance of the final Discharge Permit. 5. Metering; Water Quality 5.1. Burnham will install one or more meters as may be necessary to accurately measure the amount and composition of Influent Water delivered by City to Burnham and the amount and composition of Effluent Water delivered to City for purposes of billing City and other monitoring requirements as established in the Discharge Permit. 5.2. Burnham will calibrate, and maintain Meter devices to ensure the accuracy of the measurements is consistent with Prudent Industry Practices, the manufacturer’s recommendation, and approved operation and maintenance manual procedures for the device and the waste stream. Burnham will establish the calibration frequency for the Meter(s) in the operation and maintenance manual that conforms to the frequency recommended by the manufacturer. 5.3. Subject to reasonable advance notice, Burnham will provide City with access to the Meter(s) during regular business hours for the purpose of inspecting or monitoring the quantity and quality of Influent Water or Effluent Water. 5.4. City may request periodic testing of any Meter by providing written notice of such request to Burnham. Burnham will conduct such testing; provided that the City may, at its sole cost and expense, hire an independent third-party to conduct such testing. If, during any such testing, the Meter is found to be within a five percent (5%) accuracy range, then the cost of such test shall be borne by the City. If the meter is inaccurate by more than five percent (5%), Burnham shall at Burnham’s sole expense, cause the inaccuracy to be promptly corrected, and the Parties agree that any amounts due or paid for any Services shall be adjusted by the same percentage as the inaccuracy of the Meter, from the date of the City’s written request through the date upon which the inaccuracy is corrected, as verified by an independent third-party. 6. Sludge Removal and Disposal 6.1. Burnham will be responsible for removing anaerobic sludge and grit from the System and disposal of such sludge and any associated sludge disposal permits. Page 62 of 109 506075699.1 KLG DRAFT 9.15.22 30 6.2. All sludge and grit removal and disposal related to City Facilities will be the sole and exclusive responsibility of the City. 7. System Access and Inspections 7.1. Burnham shall provide Ecology access to conduct inspections of the System during regular business hours to determine compliance with the Discharge Permit. 7.2. Burnham shall provide the City access and the right to conduct inspections of the System and its records during all hours at the City’s sole expense and risk following reasonable notice to ensure that the System is being properly maintained in accordance with the Agreement and this Exhibit B. 8. Payment of Permit Fees and Fines 8.1. The City is responsible for all Discharge Permit fees. 8.2. If Ecology assesses any fines or penalties under the Discharge Permit as a result of an Effluent Water Failure caused primarily by Burnham, or Burnham’s failure to provide the City with required reporting information regarding the performance of the System, Burnham shall indemnify City under Section 10.1 of the Agreement. 9. System Maintenance 9.1. City acknowledges that each and all of Burnham’s Obligations under Section 3 of the Agreement and this Exhibit B are subject to and conditioned upon Burnham’s right and obligation to perform on the System routine and periodic maintenance, emergency maintenance, and any maintenance necessary to correct anomalies or unanticipated conditions as reasonably required from time to time. In such circumstances, Burnham may direct Influent Water to City-Owned Storage Pond. 9.2. Burnham shall provide City with advance notice of any routine and periodic maintenance activities that require the system to be offline within ten (10) calendar days of the commencement of such routine and periodic maintenance activities. 9.3. Burnham may perform emergency maintenance activities as reasonably required under the circumstances. In the case of emergency maintenance activities, Burnham shall provide notice to City as soon as practicable. 10. Indemnification Burnham’s sole and exclusive responsibility for wastewater treatment services to the City with respect to the System is limited to the services in this Exhibit B. Consistent with the indemnification provisions in Section 10 of the Agreement, the City will indemnify, defend, and hold harmless Burnham against any Claims unrelated to Burnham’s services set forth in this Exhibit B. Page 63 of 109 506075699.1 KLG DRAFT 9.15.22 31 Page 64 of 109 506075699.1 KLG DRAFT 9.15.22 32 Exhibit C City Obligations City shall supply the Site for the System, as more particularly described below: Site Description: The Site is defined as the North-West ~30 acre undeveloped section of parcel # 113090085 in Franklin County, WA; adjacent to the Northern-most and Western-most properly lines, running East to the largest exiting storage pond, and South to the existing service road and IPS boundary. Access: Burnham, including Burnham visitors, contractors, and service providers, shall have unencumbered access to the Site and all associated easements and right-of-ways.. Utilities: 1. Power: a. City to provide adequately sized underground raceway/conduit to Site boundary. b. Burnham responsible to coordinate with utility provider to provide power through City raceway to facility. 2. Communications: a. City to provide adequately sized underground raceway/conduit to Site boundary. b. Burnham responsible to coordinate with communications provider to provide communications through City raceway to facility. 3. Potable Water: City to provide adequate water source (for use: domestic, fire, and process w/in facility) at Site boundary. 4. Effluent Water Disposal: City to provide disposal with connection piping at Site boundary. 5. Influent Water Supply: City to provide supply with connection piping at Site boundary. Page 65 of 109 506075699.1 KLG DRAFT 9.15.22 33 City shall supply Influent Water with flows, constituent concentrations, and loads that do not exceed by ten percent (10%) the following values: Influent Characteristics to Wastewater Treatment System Parameter Influent Avg. Annual Daily Flow (MGD) 4.38 Max. 28-Day Flow (MGD) 8.56 Max. Instantaneous Flow (GPM) 9,200 BOD, Annual Avg. (mg/L) 3,590 BOD, Annual Avg. Daily Load (lb/d) 131,035 BOD, Load Max. 28-Day (lb/d) 300,000 TSS, Annual Avg. (mg/L) 2,140 TSS, Annual Avg. Daily Load (lb/d) 78,170 TSS, Load Max. 28-Day(lb/d) 227,885 TN, Annual Avg. (mg/L) 114 TN, Annual Avg. Daily Load (lb/d) 4,170 TN, Load Max. 28-Day (lb/d) 8,140 Temperature Range (°F) 50- 95 Ph 4-10 Page 66 of 109 506075699.1 KLG DRAFT 9.15.22 34 Exhibit D Burnham-Supplied Effluent Water The System is designed and intended to bypass Influent Water around portions of the process based on the Influent Water characteristics as described below: a) Influent Water flows above the Max. 28-Day Flow (MGD) and Max. Instantaneous Flow (GPM), as stated in Exhibit C, will typically bypass the Anaerobic Digester System. When Influent Water flows are below this threshold, Burnham will typically send materially all Influent Water through the Anaerobic Digester System. b) The SBR nitrogen removal system will typically be bypassed when Influent Water flows are above 4 MGD. When flows are below 4 MGD, Burnham will typically send materially all Effluent Water from the Anaerobic Digester System to the SBR nitrogen removal system. When flows are above 4 MGD, a portion of the Effluent Water from the Anaerobic Digester System will bypass the SBR system and be sent directly to City-owned Storage Pond. Burnham shall supply Effluent Water in accordance with the following specifications, which in all cases shall be conditioned upon City providing Burnham with Influent Water in accordance with the City’s Obligations in Exhibit C. Anaerobic Digester System Effluent Discharge Quality Requirements SBR Effluent Discharge Quality Requirements 1 Based on 28-day average, as measured on BVF reactor system effluent. 2 Based on 28-day average, as measured on SBR effluent (Anaerobic Digester effluent flows >4MGD to bypass SBR to holding ponds). Parameter Design Value 1 BOD. Avg. (mg/L) <350 Parameter Design Value 2 BOD. Avg. (mg/L) <100 TSS, Avg. (mg/L) <100 TN, Avg. (mg/L) <27 Page 67 of 109 506075699.1 KLG DRAFT 9.15.22 35 Exhibit E Potential Gross Wen Change Order The City requests removal and replacement of the proposed SBR nitrogen removal process associated with the System to an algae-based nitrogen removal process (the “Gross Wen Process”), and as such City shall bear the benefit and risk (including performance risk) associated with such change. The Agreement shall be amended to distribute the costs and risks of a change to the Gross Wen Process , including the following: 1. Any Project delays associated with this change order shall be a City Caused Delay. 2. If a change to the Gross Wen Process results in any change in costs (other than from delays), including without limitation, increased costs associated with negotiation, diligence, and design engineering, such change in costs shall be added or subtracted as an additional component of the Total Capital System Costs, however, such costs shall not be subject to any limitation on the increase in the amount of the Adjusted Treatment Fee, but will be passed through to the City in full. This change will be made revising Exhibit F to add a new section under Adjusted Treatment Fee which shall state that the difference in cost of any change to Gross Wen shall be added to or subtracted from the Total Capital System Cost, and the Adjusted Treatment Fee shall be adjusted accordingly, prior to taking into account any other adjustments and without regard to the limitation set forth in Exhibit F, Adjusted Treatment Fee, Section 1. 3. City shall indemnify Burnham for any Discharge Permit violations, including assessed penalties or fines, arising from the Gross Wen Process. 4. Burnham shall have no obligation with respect to any Effluent Discharge Requirements associated with the Gross Wen Process , and SBR Effluent Discharge Quality Requirements table presented in Exhibit D of the Agreement shall be removed. 5. Additional conforming changes will be made to the Agreement, and Exhibits A and B. 6. Any payments made by the City to Burnham prior to the Effective Date, that are associated with the Gross Wen Process shall be subtracted from any amounts due pursuant to this Exhibit E. Page 68 of 109 506075699.1 KLG DRAFT 9.15.22 36 Exhibit F Pricing Schedule Base Treatment Fee: $850,000 per month Adjusted Treatment Fee: 1. Within thirty (30) calendar days of COD, Burnham shall provide the City with an invoice for the first adjusted Base Treatment fee (the “Adjusted Treatment Fee”), which shall be calculated by Burnham as follows, provided that the total amount of any increase in the Adjusted Treatment Fee for items a - c below (and excluding d) may not exceed $170,000 (the “Adjusted Treatment Fee Cap”): a. If the Total System Capital Cost exceeds $108,000,000 (as projected), the Base Treatment Fee will be increased in increments of $9,000 per month for each $1,000,000 of increased costs (rounded to the nearest million). b. If the Total System Capital Cost is less than $108,000,000 (as projected), the Base Treatment Fee will be decreased in increments of $9,000 per month for each $1,000,000 of decreased costs (rounded to the nearest million). c. The Base Treatment Fee assumes that the System is financed with senior debt to cover 80% of total necessary costs (“Loan-to-Value” or “LTV”) (this includes the Total System Capital Cost, financing costs, working capital, commissioning costs, etc.) at a total weighted-average cost of debt at 5.0%. i. For every 10 bps above a total weighted-average cost of debt above 5.0%, the Base Treatment Fee will be increased by $5,250. ii. For every 10 bps below a total weighted-average cost of debt above 5.0%, the Base Treatment Fee will be decreased by $5,250. iii. For every 1% increase in LTV, the Base Treatment Fee will be increased by $12,750. iv. For every 1% decrease in LTV, the Base Treatment Fee will be decreased by $12,750. d. The Base Treatment Fee will be increased by $9,000 per month for each $1,000,000 of increased costs (rounded to the nearest million) attributable to City Caused Delays. 2. If Burnham receives directly or indirectly through one or more owners of equity issued by Burnham in consideration for or otherwise in respect of any U.S. federal income tax credit pursuant to section 48 of the Internal Revenue Code of 1986, as amended and restated, that is available in respect of that portion of the System that constitutes energy property as such term is used in such section, within one hundred eighty (180) days of receiving the tax credit Burnham shall provide City with a calculation decreasing the Base Treatment Fee in increments of $7,200 per month for each $1,000,000 in such federal tax credits received (rounded to the nearest million). Page 69 of 109 506075699.1 KLG DRAFT 9.15.22 37 Annual Modifications to the Adjusted Treatment Fee The Adjusted Treatment Fee will be subject to further modification as follows: 1. Commencing on COD, Burnham will modify the Adjusted Treatment Fee to reflect any percentage adjustment in the Consumer Price Index measured from April 2022 to the month and year immediately preceding the month and year in which COD occurs. This first modification of the Adjusted Treatment Fee will be the Adjusted Treatment Fee calculated and invoiced by Burnham through March 31 of the first calendar year occurring after the calendar year in which COD occurs. 2. Commencing on April 1 of the first calendar year following the year in which COD occurs, and occurring annually on April 1 of each calendar year through the Term, Burnham shall modify the Adjusted Treatment Fee based on changes in the Consumer Price Index and/or increases in the amount of Influent Water or Non-Conforming Influent Water accepted by the System that occurred during the immediately preceding calendar year (e.g., a modified Adjusted Treatment Fee will be calculated and take effect on April 1, 2025 to reflect circumstances occurring from January 1, 2024 through December 31, 2024). Burnham will calculate such annual modifications to Adjusted Treatment Fee as follows: a. The then-current Adjusted Treatment Fee will be adjusted for any change in the Consumer Price Index occurring from January 1 through December 31 of the prior calendar year; provided, however, that on April 1 of the first calendar year occurring after COD, such Consumer Price Index adjustment shall be measured from the month COD occurred through December 31 of the prior year (e.g. if COD occurs Jun 1, 2024, the adjustment will be measured from June 1, 2024 through December 31, 2024); and b. If the System accepted more than 1,600 MG of Influent Water or Non-Conforming Influent Water during the prior calendar year, the Adjusted Treatment Fee will be increased by .03% per MG for each MG accepted above 1,600 MG. There will be no adjustment for volume of water if the total volume of Influent Water or Non-Conforming Influent Water is less than 1,600 MG. Such annually modified Adjusted Treatment Fee shall remain fixed for the next twelve (12) months, through March 31 of the subsequent year. Burnham shall document any annual modifications to the Adjusted Treatment Fee and provide City a form summarizing the annual modification to the Adjusted Treatment Fee with the first invoice issued after such modified Adjusted Treatment Fee goes into effect. Pass-Through Costs: The following costs incurred by Burnham will be passed through to City with a ten-percent (10%) markup for administrative costs, and will be invoiced to the City on a monthly basis: o Electricity o Purchased natural gas for system heating use o Solid waste disposal (including anaerobic sludge; periodic digester scrapes and clean-outs) o Consumables (including replacement parts & associated rental equipment) o Major Maintenance Expenses o Additional City or Pasco PWRF taxes or costs other than costs directly associated with the System Page 70 of 109 506075699.1 KLG DRAFT 9.15.22 38 The following costs incurred by Burnham will be passed through to City with no markup for administrative costs, and will be invoiced to the City on a monthly basis: o All state and local taxes with the exception of income taxes (e.g., sales tax, B&O tax, property tax, as applicable) o Rental payments made to City under the site lease RNG Credit. Burnham shall reduce or increase all invoiced amounts to City by the amount of any RNG Credit, if any, available for the applicable invoiced month. The RNG Credit amount will be the amount greater than or less than $350,000 (as adjusted for 50% of change in Consumer Price Index from April 2022) that Burnham earns in Net RNG Revenue in the previous month. If Burnham’s Net RNG Revenue is greater than $350,000, the City’s invoiced amount will be reduced by the amount that the Net RNG Revenue exceeds $350,000. If the Burnham’s Net RNG Revenue is less than $350,000, the City’s invoiced amount will increase by the amount that the Net RNG Revenue is below $350,000. Page 71 of 109 506075699.1 KLG DRAFT 9.15.22 39 Exhibit G System Permits City Permits City will procure and maintain, as necessary, the following Permits for the System (the “City Permits”): Permit Name Permit Type Agency State Wastewater Discharge Permit Water Ecology Burnham Permits Burnham will procure and maintain, as necessary, the following Permits for the System (the “Burnham Permits”): Permit Name Permit Type Agency Notice of Construction Air Ecology SEPA Review General Franklin Co. Conditional Use (CUP) Use Franklin Co. Industrial Storm Water Water Ecology Solid Waste Permit (If Necessary) Waste Ecology Dam Safety (If Necessary) Water Ecology Page 72 of 109 506075699.1 KLG DRAFT 9.15.22 40 EXHIBIT H [[Form of Site Lease Option]] \ Page 73 of 109 Summary report: Litera Compare for Word 11.2.0.54 Document comparison done on 9/13/2022 2:48:22 PM Style name: KL Standard Intelligent Table Comparison: Active Original filename: Chris.Steve Comments (all accepted).docx Modified DMS: iw://USWWRKDMS.IMANAGE.KLDOMAIN.COM/USW_Active01/5060669 43/4 Changes: Add 180 Delete 206 Move From 7 Move To 7 Table Insert 1 Table Delete 1 Table moves to 0 Table moves from 0 Embedded Graphics (Visio, ChemDraw, Images etc.) 0 Embedded Excel 0 Format changes 0 Total Changes: 402 Page 74 of 109 AGENDA REPORT FOR: City Council September 20, 2022 TO: Dave Zabell, City Manager City Council Workshop Meeting: 9/26/22 FROM: Steve Worley, Director Public Works SUBJECT: Resolution - Franklin County Irrigation District (FCID) License Agreement: Transmission Main - WPWTP to Zone 3 Project I. REFERENCE(S): Vicinity Map Resolution FCID License Agreement II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS: Discussion III. FISCAL IMPACT: License Agreement $700 IV. HISTORY AND FACTS BRIEF: The water Transmission Main - WPWTP (West Pasco Water Treatment Plant) to Zone 3 project is included in the 2021-2022 adopted budget and approved CIP. This project provides a needed connection from the WPWTP to Pressure Zone 3 of the City's potable water system. This will provide additional potable water to current and future ratepayers. The proposed water main will convey water from the new booster pump station at WPWTP, currently under construction, to the existing water distribution system located at the intersection of Broadmoor Blvd and Chapel Hill Blvd. The project will also provide a water main up to Harris Road to serve new developments in the Broadmoor area. The transmission main project is nearing design completion. Advertisement for bids is tentatively scheduled for October of 2022. Acquisition of required permanent and temporary easements acquisition is advancing. Page 75 of 109 V. DISCUSSION: The alignment for the proposed transmission main will extend through Franklin County Irrigation District (FCID) parcels. Through coordination with the District, the preferred alignment was defined to strategically avoid crossing their existing 54-inch irrigation pipe located along Road 111, its extension, and FCID's right - of-way east of Chapel Hill Blvd. and installation, the for operation franchise a requires FCID agreement maintenance of the proposed water transmission main when located within FCID parcels. The franchise agreement establishes roles and responsibilities of the parties notification, including but not limited to: construction advance construction standards and requirements, inspection coordination, repair requirements and access related conditions. City staff, the City's design consultant, and FCID staff have coordinated to include all requirements related to construction phase in the bid documents. A key component is the protection of the existing FCID -owned and operated 54- inch irrigation line during construction of the City's 24-inch transmission main. City staff has reviewed the post-construction requirements included in the Franchise agreement and find them acceptable. Staff recommends approval of the franchise agreement for execution. Page 76 of 109 Resolution – License Agreement for the City’s Zone 3 Transmission Main Project - 1 RESOLUTION NO. ____ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PASCO, WASHINGTON, AUTHORIZING THE EXECUTION OF A LICENSE AGREEMENT BETWEEN THE CITY OF PASCO AND THE FRANKLIN COUNTY IRRIGATION DISTRICT FOR EASEMENT ACCESS DURING CONSTRUCTION OF THE CITY’S ZONE 3 TRANSMISSION MAIN. WHEREAS, the City of Pasco desires to construct and inst all a potable water main adjacent to the Franklin County Irrigation District’s (FCID) 54” irrigation line for the Zone 3 Transmission Main project; and WHEREAS, the City of Pasco has condemnation authority pursuant to RCW 54.16.020 for the development and distribution of water for domestic use; and WHEREAS, FCID has expressed its desire to avoid condemnation proceeding by executing a License Agreement with the City of Pasco allowing for the construction and installation of said zone 3 transmission main adjacent to FCID’s 54” irrigation line; and NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Pasco that the City Manager, or their designee, is authorized to execute a License Agreement between the City and FCID, attached hereto as Exhibit A, for the purpose of construction and installation of the Zone 3 Transmission Main adjacent to the FCID’s existing irrigation line. BE IT FURTHER RESOLVED that this Resolution shall take effect immediately. ADOPTED by the City Council of the City of Pasco, Washington, on the ____ day of ______________, 2022. _____________________________ Blanche Barajas Mayor ATTEST: APPROVED AS TO FORM: _____________________________ ___________________________ Debra Barham, CMC Kerr Ferguson Law, PLLC City Clerk City Attorneys Page 77 of 109 Exhibit A Page 78 of 109 Exhibit A Page 79 of 109 Exhibit A Page 80 of 109 Exhibit A Page 81 of 109 Exhibit A Page 82 of 109 Exhibit A Page 83 of 109 Exhibit A Page 84 of 109 Exhibit A Page 85 of 109 Exhibit A Page 86 of 109 Exhibit A Page 87 of 109 Exhibit A Page 88 of 109 Exhibit A Page 89 of 109 Exhibit A Page 90 of 109 Exhibit A Page 91 of 109 Exhibit A Page 92 of 109 BORCHERS, STEVEN & D'ANNAGOODWIN LANDS LLCSG LANDMANAGEMENT LLCHARRIS, DAVID WREAL PROPERTYACQUISITIONS LLCROCKEY HILLSMANAGEMENT LPFCIDCITY OF PASCOGAGE PROPERTIES LLCWALKER, ROGERS & KAYCOMMUNITY FIRST BANKIN BALANCE AT BROADMOOR LLCRV RETAILERWASHINGTONREAL ESTATE LLCBROADMOOR LLCFISCHER (SR),DAVID WBISHOP OFLDSCITY OF PASCOTRANSMISSION MAIN - WPWTP TO ZONE 3PRELIMINARYPRELIMINARY90% REVIEW DRAWINGSJZLRMWSep 2, 2022Sep 21, 2022CITY OF PASCO21-0264TMWP-P-COV.DWGSHOWNEXHIBIT 11DWG NO.:DATEDESCRIPTIONREVISIONSBYREVIEWENGINEER: SAVE DATE:REVIEWED: PLOT DATE:CLIENT:FILENAME:SHEET NO.:JOB NO.:NO.0" 1"2"DRAWING IS FULL SCALE WHENBAR MEASURES 2"SCALE:PROJECT OVERVIEWCHAPEL HILL BLVDBROADMOOR BLVDROAD 111W COURT STHARRIS RDI-182I-182CITY OF PASCOGOODWIN LANDS LLCBORCHERS, STEVEN & D'ANNAWALKER, ROGERS & KAYPROJECT OVERVIEWPage 93 of 109 AGENDA REPORT FOR: City Council September 20, 2022 TO: Dave Zabell, City Manager City Council Workshop Meeting: 9/26/22 FROM: Steve Worley, Director Public Works SUBJECT: Resolution - Funding Application to Ecology for Process Water Reuse Facility Pretreatment Improvements (Phase 2) Winter Storage Ponds I. REFERENCE(S): Resolution II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS: Discussion III. FISCAL IMPACT: Staff seeks permission to pursue funding for the full estimated construction phase cost of the PWRF PH2 project in the form of a 1.2% interest rate, 20 - year loan term from the Department of Ecology. Table: State Fiscal Year 2024 Interest Rates for Standard CWSRF Loans Loan Term Interest Rate for Most Projects Interest Rate for OSS/Nonpoint Source Activity Projects 5 Years 0.6% 0.2% 20 Years 1.2% 0.4% 30 Years 1.6% 0.8% IV. HISTORY AND FACTS BRIEF: The City operates the Process Water Reuse Facility (PWRF) to efficiently treat and re-use over 900 million gallons annually of industrial wastewater generated by the local food processing industry. During the irrigation season (spring, summer, fall), the wastewater is processed at the PWRF pre-treatment facility then dispersed as irrigation water over 1,850 acres (14 farm circles) of cropland that constitute the PWRF land treatment system and provide the final treatment and disposal. Wastewater generated during the winter months is stored onsite Page 94 of 109 in ponds until the following spring when irrigation begins and the water can be applied to the farm circles. To accommodate the demand generated by the expansion of existing food processors and future system users, such as the Darigold plant, winter storage capacity needs to be increased at the PWRF. The existing PWRF facility has three storage lagoons totaling 150 million gallons of winter storage. The design team assessed the current and future system needs, an d determined that an approximately 330 million gallons of additional winter storage are need to be added. This additional winter storage will help ensure that surplus industrial wastewater can be stored onsite at the PWRF during the non -growing season, and will not need to be diverted to the municipal sewer treatment plant. Staff requests authorization to submit an application for a low-interest loan from Washington State Department of Ecology Clean Water State Revolving Fund (CWSRF) program. CWSRF program makes funds available to municipalities to pay for infrastructure improvements with the ultimate purpose of protecting surface and ground water. This program is funded through federal and state money and subject to state and federal regulations. The program provides low-interest construction loans to fund wastewater treatment systems and stormwater system improvements, etc. As currently advertised, CWSRF 20-year Construction loans have a 1.2% interest rate. Applications are due on October 12, 2022. V. DISCUSSION: Staff requests support from City Council to submit an application for a low - interest loan from the Washington State Department of Ecology Clean Water State Revolving Fund (CWSRF) program for the construction of the PWRF - Phase 2 project. Page 95 of 109 Resolution: Funding Application to DOE for PWRF Pretreatment Improvements (Phase 2) Winter Storage Ponds - 1 RESOLUTION NO. _______ A RESOLUTION OF THE CITY OF PASCO, WASHINGTON, AUTHORIZING THE SUBMITTAL OF A DEPARTMENT OF ECOLOGY (DOE) CLEAN WATER STATE REVOLVING FUND (CWSRF) LOAN APPLICATION FOR THE PROCESS WATER REUSE FACILITY (PWRF) PHASE 2 PROJECT. WHEREAS, the PWRF facility is being improved in a multi-phase project that will increase the treatment and storage capacity of industrial wastewater for Pasco; and WHEREAS, Phase II is currently approaching 100% level of development and will be reviewed by the Department of Ecology; and WHEREAS, to help fund these improvements, the City is requesting authorization to submit an application for a low-interest loan with the DOE through the CWSRF program; and WHEREAS, the CWSRF program makes funds available to municipalities to pay for infrastructure improvements with the ultimate purpose of protecting surface and ground water. This program is funded through federal and state money and subject to state and federal regulations; and WHEREAS, As currently advertised, CWSRF 20-year Construction loans have a 1.2% interest rate; and WHEREAS, if the City is selected as a recipient for the CWSRF 20-year construction loan, the loan agreement will be subject to council review and approval. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PASCO, WASHINGTON: That the City Manager authorizes the submittal of a low-interest loan CWSRF application to the Department of Ecology for the Process Water Reuse Facility Phase 2 Improvements project. Page 96 of 109 Resolution: Funding Application to DOE for PWRF Pretreatment Improvements (Phase 2) Winter Storage Ponds - 2 Be It Further Resolved, that this Resolution shall take effect immediately. PASSED by the City Council of the City of Pasco, Washington, this ______ day of September, 2022. _____________________________ Blanche Barajas Mayor ATTEST: APPROVED AS TO FORM: _____________________________ __________________________ Debra Barham, CMC Kerr Ferguson Law, PLLC City Clerk City Attorneys Page 97 of 109 AGENDA REPORT FOR: City Council September 19, 2022 TO: Dave Zabell, City Manager City Council Workshop Meeting: 9/26/22 FROM: Steve Worley, Director Public Works SUBJECT: Resolution - Change Order No. 7 with Cascade Bridge LLC. for the Lewis Street Overpass Project I. REFERENCE(S): Resolution Change Order No. 7 Change Order 1 - 6 Details II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS: Discussion III. FISCAL IMPACT: Original Agreement $22,344,999.88 Previously Approved Change Orders 1-6 $208,739.34 Change Order No. 7 (proposed) $153,555.91 New Agreement Total $22,707,295.13 IV. HISTORY AND FACTS BRIEF: Street Lewis existing the replaces Overpass Street Lewis The project undercrossing, constructed under the BNSF Railyard in 1937, with a new bridge over the railyard. On March 1, 2021, Council awarded the Lewis Street Overpass construction contract Casto LLC the in WA Vancouver, Bridge, amount cade of of $22,344,999.88. Since construction began, the project has required six minor change orders for a total of $208,739.34. See the attached summary of previously approved change orders. The currently approved change order amount represents 0.9% of the original contract amount for the project. Page 98 of 109 V. DISCUSSION: Change Order No. 7 represents additional work requested of the contractor by the City. Specifically, the replacement of an existing waterline in an a lley adjacent to the project. While older, the waterline had 5 -10 years of useful life remaining. During the project design phase it was thought that to control project cost and scope, the waterline be replaced on schedule at a later date. Upon further review during the construction phase, and in consideration of the proximity of the waterline to the new vertical walls associated with the project, staff reevaluated the possibility of replacing the waterline now, as future replacement once the walls were in place would require specialized and expensive construction methods such as directional drilling, significantly increasing the future replacement cost. In comparing the value of the remaining life of the waterline to the aforementioned increased replace ment costs, it was determined that replacement now, as part of the project where conventional open trench construction methods could be employed, would be more cost effective. Given the dynamics of a construction project, and the need for this work to be completed prior to construction of the walls, staff had to authorize the replacement of the waterline, which has since occurred at a cost of $153,555.91. The City and its construction management consultant, WSP, communicated with the contractor that this work would only be requested if there would be no impact to the critical path of the bridge project schedule. At the time this work was requested, Cascade Bridge’s subcontractor, KLB Construction, had no ‘critical path’ items to be done. WSP and the City determined there would be no impact to the overall project schedule. Cascade Bridge claims there may be future schedule impacts later in the project related to this change order work; impacts they are not yet able to identify. Cascade Bridge requested the change order include a statement indicating additional working days be held open until they can better understand the full project schedule impact at some later date, which has yet to be determined. The City and WSP disagree with the requested stateme nt on the change order. Therefore, the change order has been held up for many months unable to get resolved. In situations such as this, the contract specifications allow project owners to issue a ‘unilateral’ change order. A unilateral change order allows the City to add additional work to the contract without needing to have an agreement from the Contractor. This allows the work to be completed and the Contractor to be paid while the issue of added working days can continue to be debated. Page 99 of 109 Approval of this unilateral change order will allow the Contractor to be paid for acceptable work already performed. With p reviously approved change orders, this newest change order pushes the total change order amount above the authorized City Manager approval level of $300,000. City staff recommends approval of the proposed Change Order No. 7 for the Lewis Street Overpass project in the amount of $153,555.91. Page 100 of 109 Resolution – Lewis Street Overpass project - CO 7 with Cascade Bridge, LLC. - 1 RESOLUTION NO. _________ A RESOLUTION OF THE CITY OF PASCO, WASHINGTON, AUTHORIZING THE CITY MANAGER TO EXECUTE CHANGE ORDER NO. 7 TO THE CONSTRUCTION CONTRACT WITH CASCADE BRIDGE, LLC. FOR THE LEWIS STREET OVERPASS PROJECT. WHEREAS, the City and Cascade Bridge, LLC. entered into a Construction Contract on March 1, 2021, to provide for the construction of the Lewis Street Overpass Project; and WHEREAS, this project involves the construction of a new 562-foot, 4-span, pre- stressed concrete overpass, over the BNSF Railway yard and a new 63-foot, voided slab, overpass over First Avenue. Along with roadway improvements, backfilling, partial structure removal, retaining wall construction, earthwork, paving with HMA, landscaping, storm drainage, illumination, water mains, sanitary sewer, and other associated work; and WHEREAS, the City and Cascade Bridge, LLC. executed Change Order No. 1 through Change Order No. 6 to provide for additional work not included in the original contract; and WHEREAS, Change Order No. 7 relates to additional work related to the replacement of a waterline within the project site between Alleys C & D; and WHEREAS, previously approved change orders were authorized under the authority provided to the City Manager and the Public Works Director; and WHEREAS, the $153,555.91 amount of Change Order No. 7, added to the cumulative sum of previously approved change orders, exceeds the City Manager’s authority and thus requires Council approval. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PASCO, WASHINGTON: Section 1. That Change Order No. 7 to Cascade Bridge, LLC. is hereby approved by City Council. Section 2. The City Manager of the City of Pasco, Washington, is hereby authorized, empowered, and directed to execute Change Order No. 7, a copy of which is attached hereto, and incorporated herein by this reference as Exhibit A, on behalf of the City of Pasco. Page 101 of 109 Resolution – Lewis Street Overpass project - CO 7 with Cascade Bridge, LLC. - 2 PASSED by the City Council of the City of Pasco, Washington, and approved as provided by law this _____ day of October 2022. _____________________________ Blanche Barajas Mayor ATTEST: APPROVED AS TO FORM: _____________________________ ___________________________ Debra Barham, CMC Kerr Ferguson Law, PLLC City Clerk City Attorney Page 102 of 109 EXHIBIT A Page 103 of 109 Page 104 of 109 Page 105 of 109 Page 106 of 109 Lewis Street Overpass Project Contract Change Order Summary • Change Order No. 1: Office Trailer for Construction Management Team, $38,711.58 This change compensates the contractor for providing the Construction Management team with an on-site 12x56’ trailer with work areas and a dedicated meeting room for regular project meetings. Pricing includes all associated costs such as heat/ac and setup and removal. This change order covers 24 months of use. Contractors such as Cascade Bridge, LLC. receive significantly better pricing than infrequent users like the City or the construction management team. Pricing from the construction management team was compared with contractor pricing and the most cost -effective option was for the contractor to supply the trailer. • Change Order No. 2: DBE COA Deletion, $0 WSDOT errored in requiring a Disadvantaged Business Enterprise (DBE) Condition of Award (COA) requirement of 7% even though it should not have been required by the funding source. This change reduces the DBE goal to 0% and reduces the apprentice training hour requirement from 2,000 to 0; however, the DBE firms associated with the project are still performing all anticipated work. • Change Order No. 3: BNSF Crossing Permit, $100,000 This change order is required for the contractor to construct required cro ssings over BNSF rail tracks. BNSF requires concrete panels and fencing be placed at a designated crossing to protect the tracks and decrease the likelihood of improper crossings. To protect the City from added risk associated with an incident at the crossings, the contractor was required to obtain the crossing permit and is reimbursed for actual costs per the contract specifications. • Change Order No. 4: Girder Embedded Plates and Sole Plates, $33,112.33 Girders on spans 1 and 4 of the Lewis Street Overpass bridge were originally designed with bearing recesses between 1/8” and 7/8”. Due to required reinforcement spacing in the pre -stressed girders, most of the girders required reinforcement modifications and additional reinforcement (rebar and plates) to provide the structural bearing capacity. This change order compensates the contractor for materials and labor to modify the structural reinforcement. • Change Order No. 5: Added Drainage and Drywell at Bridge Abutments, $16,915.44 During design of the project, an expansion joint was modified by the Engineer of Record. As the result of the bridge expansion joint modification, additional perforated drainpipes, trenches, and drywells were required at each of the BNSF Bridge abutments. This change order compensates the contractor for all costs associated with providing the new drainage features. • Change Order No. 6: BNSF Force Account/Minor Changes, $20,000 BNSF requires the City and Contractor to complete/provide many small, unforeseen items on the project (minor grading, placement of small amounts of materials, adding security fencing, relocating utilities, etc.). The existing Overpass Agreement allows BSNF to direct work as they deem necessary to maintain safe operations. This change order reimburses the contractor for this work on an actual costs basis per the contract specifications. Page 107 of 109 QUALITY OF LIFE Promote a high-quality of life through quality programs, services and appropriate investment and re- investment in community infrastructure including, but not limited to: • Completion of Transportation System Master Plan and design standard updates to promote greater neighborhood cohesion in new and re-developed neighborhoods through design elements, e.g.; connectivity, walkability, aesthetics, sustainability, and community gathering spaces. • Completion of the Parks, Recreation and Open Space Plan and development of an implementation strategy to enhance such services equitably across the community. • Completion of the Housing Action and Implementation Plan with a focus on a variety of housing to address the needs of the growing population. FINANCIAL SUSTAINABILITY Enhance the long-term viability, value, and service levels of services and programs, including, but not limited to: • Adopting policies and strategic investment standards to assure consistency of long-range planning to include update of impact fees, area fees to specific infrastructure, and SEPA mitigation measures related to new development, e.g.; schools, traffic, parks, and fire. COMMUNITY TRANSPORTATION NETWORK Promote a highly functional multi-modal transportation system including, but not limited to: • Application of the adopted Transportation System Master Plan including development of policies, regulations, programs, and projects that provide for greater connectivity, strategic investment, mobility, multi -modal systems, accessibility, efficiency, and safety. COMMUNITY SAFETY Promote proactive approaches for the strategic investment of infrastructure, staffing, and equipment including, but not limited to: • Adoption and develop implementation strategies for Comprehensive Fire Master Plan aimed at maintaining the current Washington State Rating Bureau Class 3 community rating. • Collaboration with regional partners to influence strategies to reduce incidences of homeless by leveraging existing resources such as the newly implemented 0.1% mental health sales tax, use of resource navigator programs, and other efforts. • Development of an implementation strategy for the Comprehensive Police Master Plan to support future service levels of the department to assure sustainability, public safety, officer safety, crime control, and compliance with legislative mandates. ECONOMIC VITALITY Promote and encourage economic vitality including, but not limited to: • Implementation of the Comprehensive Land Use Plan through related actions including zoning code changes, phased sign code update, and development regulations and standards. • Completion of Area Master Plans and environmental analysis complementing the Comprehensive Land Use Plan such as Downtown and Broadmoor Master Plans. • Development of an Economic Development Plan, including revitalization efforts. COMMUNITY IDENTITY Identify opportunities to enhance community identity, cohesion, and image including, but not limited to: • Development of a Community Engagement Plan to evaluate strategies, technologies, and other opportunities to further inclusivity, community engagement, and inter-agency and constituent coordination efforts. • Support of the Arts and Culture Commission in promoting unity and the celebration of diversity through art and culture programs, recognition of significant events or occurrences, and participation/sponsorship of events within the community. Page 108 of 109 CALIDAD DE VIDA Promover una calidad de vida alta a través de programas de calidad, servicios, inversiones y reinversiones apropiadas en la infraestructura de la comunidad incluyendo, pero no limitado a: • Terminar el Plan de Transportación para promover más cohesión entre nuestras vecindades actuales y re-desarrolladas a través de elementos de diseño, p.ej. conectividad, transitabilidad, sostenibilidad estética, y espacios para reuniones comunitarias. • Terminar el Plan de los Parques, la Recreación, y los Espacios Vacíos y el desarrollo de una estrategia de implementación para mejorar tales servicios justamente a lo largo de la comunidad. • Terminar el Plan de Acción e Implementación de Viviendas con un enfoque en una variedad de viviendas para tratar las necesidades del aumento en la población. SOSTENIBIILIDAD FINANCIERA Mejorar la viabilidad a largo plazo, el valor, y los niveles de los servicios y los programas, incluyendo, pero no limitado a: • Adoptar las políticas y los estándares de inversión estratégica para asegurar consistencia en la planificación a largo plazo para incluir la actualización de las tarifas de impacto, las tarifas en áreas de infraestructura específica, y las medidas de mitigación SEPA relacionadas con el nuevo desarrollo, p.ej. escuelas, tráfico, parques, e incendios. RED DE TRANSPORTACION COMUNITARIA Promover un sistema de transportación multimodal en alta operación incluyendo, pero no limitado a: • Aplicar el Plan de Transportación que fue adoptado, incluyendo el desarrollo de las políticas, las reglas, los programas, y los proyectos que proporcionan más conectividad, inversión estratégica, movilidad, sistemas multimodales, accesibilidad, eficiencia, y seguridad. SEGURIDAD COMUNITARIA Promover métodos proactivos para la inversión estratégica en la infraestructura, el personal, y el equipo incluyendo, pero no limitado a: • Adoptar y desarrollar estrategias de implementación para el Plan Comprehensivo para Incendios. Con el propósito de mantener la clasificación comunitaria actual en la tercera Clase del Departamento de Clasificación del Estado de Washington. • Colaborar con socios regionales para influenciar estrategias que reduzcan los incidentes de personas sin hogar al hacer uso de los recursos actuales como el impuesto de ventas de 0.1% implementado recientemente para la salud mental, el uso de programas para navegar los recursos, y otros esfuerzos. • Desarrollar una estrategia de implementación para el Plan Comprehensivo de la Policía para apoyar los niveles futuros de servicio del departamento para asegurar la sostenibilidad, la seguridad pública, la seguridad de los policías, el control de crímenes, y el cumplimiento con los mandatos legislativos. VITALIDAD ECONOMICA Promover y fomentar vitalidad económica incluyendo, pero no limitado a: • Implementar el Plan Comprehensivo del Uso de Terreno a través de acciones relacionadas, incluyendo cambios de los códigos de zonificación, actualización en las etapas de los códigos de las señales, y el desarrollo de las reglas y los estándares. • Terminar los Planes de las Áreas y un análisis ambiental el cual complementa al plan integral de uso de la tierra como a los Planes del Centro y de Broadmoor. • Desarrollar un Plan de Desarrollo Económico, el cual incluya esfuerzos de revitalización. IDENTIDAD COMUNITARIA Identificar oportunidades para mejorar la identidad comunitaria, la cohesión, y la imagen incluyendo, pero no limitado a: • Desarrollar un Plan de Participación de la Comunidad para evaluar las estrategias, las tecnologías, y otras oportunidades para promover la inclusividad, la participación de la comunidad, y los esfuerzos interdepartamentales y de coordinación de los constituyentes. • Apoyar a la Comisión de las Artes y Cultura al promover la unidad y la celebración de la diversidad a través de programas de arte y cultura, reconocer eventos o acontecimientos significantes, y participar/patrocinar eventos dentro de la comunidad. Page 109 of 109