HomeMy WebLinkAbout4547 Resolution - City of Richland Financing Agreement for BCES 800 MHz Radio ProjectResolution – 800 MHz Radio Project Financing Agreement - 1
RESOLUTION NO. 4547
A RESOLUTION OF THE CITY OF PASCO, WASHINGTON,
AUTHORIZING THE CITY MANAGER TO EXECUTE A FINANCING
AGREEMENT WITH THE CITIES OF RICHLAND AND KENNEWICK AND
COUNTIES OF BENTON AND FRANKLIN FOR CAPITAL FINANCING ON
BEHALF OF BENTON COUNTY EMERGENCY SERVICES FOR 800 MHz
RADIO PROJECT.
WHEREAS, Benton County Emergency Services (BCES) is a local organization created
in 1996 pursuant to the Interlocal Cooperation Act (Ch. 39.34 RCW) and RCW 38.52.070 related
to Emergency Management; and
WHEREAS, the current members of BCES have agreed that the City of Richland, as the
Administrative Jurisdiction, shall continue to serve as the legal entity responsible for employing
staff and providing necessary support services for BCES operations; and
WHEREAS, through establishment of the Southeast Communications Center
(SECOMM), BCES provides communication and dispatching for public safety and emergencies
for jurisdictions located in incorporated and unincorporated Benton and Franklin Counties, and for
any agencies subscribing to BCES for such services; and
WHEREAS, regional public safety communications equipment is in dire need of
replacement and upgrade; and
WHEREAS, the acquisition and ownership allocation of public safety radio equipment,
specifically the 800 MHz Radio Project, is of regional concern, and the terms and conditions of
the replacement system’s acquisition and ownership will be addressed in the proposed Fourth
Amended and Restated Interlocal Agreement for Benton County Emergency Services; and
WHEREAS, the Cities of Richland, Pasco, and Kennewick, and the Counties of Benton
and Franklin will share the cost of the 800 MHz Radio Project, with each jurisdiction responsible
for one-fifth of the total cost; and
WHEREAS, the City of Richland, as the Administrative Jurisdiction for BCES, is
responsible for entering into the Finance Agreement with Motorola on behalf of BCES for the total
cost of the project; and
WHEREAS, the Capital Financing Agreement guarantees that each Financing Participant
is responsible for its one-fifth portion of the total cost associated with the 800 MHz Radio Project
over the course of a 10-year period consistent with the terms of the Motorola Finance Agreement;
and
Resolution – 800 MHz Radio Project Financing Agreement - 2
WHEREAS, the Motorola Financing Agreement will be considered for approval by
Richland City Council on behalf of BCES only if all five (5) jurisdictions named in the Capital
Financing Agreement and the BCES Executive Board approves the 800MHz Radio Project to
move forward; and
WHEREAS, the City Council of the City of Pasco, Washington, has after due
consideration, determined that it is in the best interest of the City of Pasco to enter into the
Financing Agreement for the 800 MHz Radio Project with the City of Richland on behalf of BCES.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
THE CITY OF PASCO, WASHINGTON:
That the City Council of the City of Pasco approves the terms and conditions of the
Financing Agreement between the Cities of Pasco, Kennewick, and Richland and the Counties of
Benton and Franklin, Washington as attached hereto and in substantial conformity therewith and
incorporated herein as Exhibit A.
Be It Further Resolved, that the City Manager of the City of Pasco, Washington, is hereby
authorized, empowered, and directed to execute said Financing Agreement on behalf of the City
of Pasco.
Be It Further Resolved, that this Resolution shall take effect immediately.
PASSED by the City Council of the City of Pasco, Washington, on this 9th day of
December, 2024.
_____________________________
Pete Serrano
Mayor
ATTEST: APPROVED AS TO FORM:
_____________________________ ___________________________
Debra Barham, MMC Kerr Ferguson Law, PLLC
City Clerk City Attorneys
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FINANCING AGREEMENT
REGARDING CAPITAL FINANCING BY THE
CITY OF RICHLAND
ON BEHALF OF BENTON COUNTY EMERGENCY SERVICES (BCES)
For the 800 MHz Radio Project
Motorola Project Nos. WA-23P072 (infrastructure) and WA-24P073M (subscriber units)
This Financing Agreement (the “Financing Agreement”) is dated for reference purposes as
of this _____ day of _______________, 2024, and is entered into among the Capital Financing
Member identified below, and each of the Financing Participants identified below, for the purpose
of financing the 800MHz Radio Project (the “Project”).
Pursuant to Revised Code of Washington (RCW) 38.52.070 and the Interlocal Agreement,
the BCES Members have established a local organization for emergency management in
accordance with the State Emergency Management Plan and Program. This Financing Agreement
is entered into as a condition precedent to execution of the Fourth Amended and Restated Interlocal
Agreement for Benton County Emergency Services (the “BCES Interlocal Agreement”) by and
among the following parties: Benton County, a political subdivision of the State of Washington;
Franklin County, a political subdivision of the State of Washington; City of Kennewick, a
Washington municipal corporation; City of Richland, a Washington municipal corporation; City
of West Richland, a Washington municipal corporation; City of Prosser, a Washington municipal
corporation; City of Benton City, a Washington municipal corporation; City of Pasco, a
Washington municipal corporation; and Benton County Fire Protection District Nos. 1, 2, and 4,
all of which are Washington special purpose districts (collectively, the “BCES Members”).
For purposes of this Financing Agreement, the City of Richland is the “Capital Financing
Member” and City of Kennewick, City of Pasco, Benton County, and Franklin County are referred
to collectively as the “Financing Participants” and individually as “Financing Participant.” No
other members of BCES are participating in this Financing Agreement.
Section 1. Definitions.
Capitalized terms used in this Financing Agreement shall have the meanings given such terms in
the recitals hereof and as follows:
“Executive Board” means the governing board of BCES created pursuant to the BCES
Interlocal Agreement.
“Bonds” mean bonds, notes or other evidences of borrowing issued by a Capital Financing
Member to finance and/or refinance capital assets on behalf of BCES and its Members.
“Budget” means the budget prepared by the BCES Director in consultation with the
Administrative Jurisdiction, and submitted to the Executive Board for its approval in accordance
with Section 4.F of the BCES Interlocal Agreement, which budget shall set forth (a) an estimate
of the costs of capital improvements or acquisitions required to be made to BCES Capital Facilities
and Assets within the applicable year, (b) on a line item basis, all anticipated revenues and
Exhibit A
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expenses for the operation and maintenance of existing BCES Capital Facilities and Assets for the
applicable year, and (c) any information required by policies adopted by the Executive Board.
“Capital Contribution” means, for each Financing Participant, that Financing
Participant’s Capital Contribution Percentage multiplied by the Capital Project Cost, plus interest
and administrative fees calculated in accordance with Section 2.1 of this Financing Agreement.
“Capital Contribution Percentage” means the percentage of the Capital Project Cost
allocated to the Capital Financing Member and each Financing Participant, as follows:
Participant
Contribution
Percentage Role
City of Richland 20% Capital Financing Member
City of Kennewick 20% Financing Participant
City of Pasco 20% Financing Participant
Benton County 20% Financing Participant
Franklin County 20% Financing Participant
Total 100.00%
“Capital Project Cost” means the principal cost of the Project (not including interest) plus
all costs of issuance, administrative expense, and similar costs incident to obtaining such financing,
as described in Section 2.1 of this Financing Agreement.
“Code” means the Internal Revenue Code of 1986, as amended.
“Costs of Maintenance and Operation” means all reasonable expenses incurred by BCES
in causing the Project to be operated and maintained in good repair, working order and condition
over the financing period.
“Designated Representative” means the Mayor, City Manager, or other Executive or
Finance Officer, as selected by each Financing Participant to act as its authorized representative
for purposes of this Financing Agreement, or the designee of such person.
“Effective Date” has the meaning set forth in Section 4.7 of this Financing Agreement.
“BCES Director” means the director selected by the Administrative Jurisdiction and
confirmed by the Executive Board pursuant to Section 3.A.2 of the BCES Interlocal Agreement.
“Project” means the expansion and upgrade of the existing Benton County ASTRO 25
800MHz trunking radio system by adding up to eleven (11) additional radio sites across Benton
and Franklin counties to provide the required coverage, functionality and interoperability needed
for effective public safety response. The Project includes the purchase and commissioning of
necessary subscriber radios (mobiles and portables) for all users transitioning from the VHF
system to the expanded 800MHz system.
Section 2. Financing of the Project
2.1. Responsibilities of Capital Financing Member. The Capital Financing Member
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agrees to obtain or provide financing for the Project, in the manner determined by it, in its sole
discretion, as providing the most efficient method to finance the Project.
(a) Capital Project Cost. The Capital Project Cost shall be determined based on
the actual Project cost, including all costs of issuance, administrative costs, reserves, or other
expenses associated with such obtaining the financing.
(b) Interest Determination and Calculation of Capital Contributions. Each
Financing Participant’s Capital Contribution shall include its allocable share of the Capital Project
Cost plus interest as identified in the agreement with Motorola for Project Nos. WA-23P072
(infrastructure) and WA-24P073M (subscriber units). The Capital Financing Member agrees not
to charge the Financing Participants a separate administrative fee related solely to its role as Capital
Financing Member. If the Capital Financing Member utilizes internal funds to provide such
financing, the interest rate shall be equal to the rate earned on the Local Government Investment
Pool (or other similar investment strategy utilized by the Capital Financing Member for the
investment of idle funds). If the Capital Financing Member chooses, in its sole discretion, to
finance the Project through the issuance of Bonds or another form of borrowing, the interest rate
shall be equal to the interest rate owed on the borrowing.
2.2. Responsibilities of Financing Participants
(a) Capital Contributions. Each Financing Participant shall be obligated to pay
an amount equal to its Capital Contribution without regard to the payment or lack thereof by any
other Financing Participant. No Financing Participant shall be obligated to pay the Capital
Contribution of any other Financing Participant, and each Financing Participant shall be obligated
to budget for and pay its Capital Contribution. The obligation of each Financing Participant to pay
its Capital Contribution shall be an irrevocable full faith and credit obligation of such Financing
Participant, payable from property taxes levied within the constitutional and statutory authority
provided without a vote of the electors of the Financing Participant on all of the taxable property
within the Financing Participant and other sources of revenues available therefor. Each Financing
Participant has or will set aside and include in its calculation of outstanding non-voted general
obligation indebtedness an amount equal to the principal component of its outstanding Capital
Contribution. Each Financing Participant’s obligation to pay the Capital Contribution shall not be
contingent on the receipt of any revenues from other sources.
Any Financing Participant may prepay its Capital Contribution. Any such prepayment of
one or more Financing Participants shall not affect the Capital Contribution Percentages of the
remaining Financing Participants. Any Financing Participant that elects to prepay its Capital
Contribution shall be responsible for paying all costs associated with such prepayment, if any.
2.3. Reserved.
2.4. Billing of Financing Participants. Each Financing Participant shall be billed for
its Capital Contribution, plus interest, based on the established repayment schedule in the
contract(s) executed between Capital Financing Member and Motorola for Project Nos. WA-
23P072 (infrastructure) and WA-24P073M (subscriber units), or more frequently as determined
by the Executive Board, calculated as provided above, and due within 30 days of the receipt.
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2.5. Tax Exempt Financing.
If the Capital Financing Member, in its sole discretion, determines to issue tax-exempt or
tax-advantaged bonds, notes, or other obligations, to obtain financing or refinancing for the
Project, the Financing Participants acknowledge that the Project will be subject to restrictions on
private business use under Section 141 of the Internal Revenue Code of 1986, as amended, and
applicable IRS thereunder. Each of the Financing Participants agrees that it will not provide to
nongovernmental persons special legal entitlements to use the Project under contractual
arrangements providing preferential or exclusive right to use all or part of the Project without the
written consent of the Capital Financing Member.
A “nongovernmental person” means any person other than a State or local government
unit, including the United States of America and any federal department or agency, an Indian tribal
government not carrying out essential governmental functions, any nonprofit corporation
(including any 501(c)(3) organization), any other private entity, such as a business corporation,
partnership, limited liability company or association, and a natural person engaged in a trade or
business activity. Another state or local government unit is not a nongovernmental person.
Under current IRS regulations, some use arrangements with nongovernmental persons
result in “private business use” and others do not. For example, private business use would result
from: a lease with a term longer than two hundred (200) days (including renewal options); a
management or service contract, such as a concession contract, that does not meet the “safe harbor”
conditions of IRS Revenue Procedure 2017-13; or a “naming rights” contract with a corporate
sponsor whose value (measured by the present value of the corporate sponsor’s payments to the
issuer under the contract) exceeds ten percent (10%) of the cost of the bond-financed property.
Other use arrangements with nongovernmental persons would not result in private business use,
such as: an arrangement that is not available to the general public at generally applicable and
uniformly applied rates but whose term of use is not longer than one hundred (100) days (including
renewal options); a specially negotiated, arm’s-length contract whose term of use is not longer
than fifty (50) days and requires fair market value payment for use, such as contracts with special
event sponsors; or a management or service contract that meets the “safe harbor” conditions of
IRS Revenue Procedure 2017-13. All private business uses of bond-financed property must be
aggregated to determine the total amount of private business use that must be taken into account
under the federal tax law restriction that no more than ten percent (10%) of the proceeds of a tax-
exempt bond issue (including the Project being refinanced with the issue) may be used for any
“related” private business use, which restriction is reduced to five percent (5%) for any “unrelated”
private business use.
If the Financing Participants would like to obtain the Capital Financing Member’s consent
to “private business use” of the Project, they must inform the Capital Financing Member in writing
(addressed by mail and email to the Mayor and Finance Director of the Capital Financing Member)
as to the proposed “private business use.” The Capital Financing Member shall consult with its
bond counsel as to whether such “private business use” will impact the tax-exempt status of any
bonds issued to finance or refinance the Project. The Capital Financing Member shall provide
written notice to the Financing Participants of the Capital Financing Member’s bond counsel’s
conclusion within thirty (30) days of receiving the request. If the Capital Financing Member’s
bond counsel concludes that the “private business use” will adversely impact the tax-exempt status
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of such financing or refinancing, the Financing Participants shall not allow such “private business
use.”
Section 3. Ownership of the Project
3.1 Ownership Interests. The 800MHz Radio System identified in this Financial
Agreement shall be owned in equal shares of one-fifth (20%) by the following member agencies:
Benton County, Franklin County, and the cities of Kennewick, Richland, and Pasco. Ownership is
governed by the Interlocal Agreement. No non-participating members have an ownership interest.
Section 4. Miscellaneous.
4.1. Interlocal Agreement. The Capital Financing Member and the Financing
Participants agree:
(a) This Financing Agreement is intended to supplement the BCES Interlocal
Agreement only. It does not create any separate administrative entity within the meaning of RCW
39.34.030(3)(b) or a “joint board” within the meaning of RCW 39.34.030(4)(a).
(b) The Designated Representative of each Financing Participant is appointed as
the “administrator” within the meaning of RCW 39.34.030(4)(a) responsible for administering the
Financing Participant’s rights and duties set forth in this Financing Agreement; and
(c) The parties will file or post this Financing Agreement as required by RCW
39.34.040.
4.2. Governing Law. This Financing Agreement shall be governed by and construed in
accordance with the laws of the State of Washington. If any dispute arises between the Financing
Participants under any of the provisions of this Financing Agreement, resolution of that dispute
shall be available only through the jurisdiction, venue and rules of the Benton County Superior
Court, Benton County, Washington.
4.3. No Waiver of Breach. The failure of any party hereto to insist upon strict
performance of any provision of this Financing Agreement or to exercise any right based upon a
breach thereof or the acceptance of any performance during such breach shall not constitute a
waiver of any right hereunder.
4.4. Compliance with all Laws. The Capital Financing Member and the Financing
Participants shall comply with all federal, state and local laws, rules, regulations, resolutions and
ordinances applicable to the performance of this Financing Agreement.
4.5. Continuation of Performance. In the event that any dispute or conflict arises
among the parties hereto while this Financing Agreement is in effect, the parties hereto agree that,
notwithstanding such dispute or conflict, they shall continue to make a good faith effort to
cooperate and continue work toward successful completion of assigned duties and responsibilities.
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4.6. Severability. If any part, paragraph, section or provision of this Financing
Agreement is adjudged to be invalid by any court of competent jurisdiction such adjudication shall
not affect the validity of any remaining section, part or provision of this Financing Agreement.
4.7. Effective Date; Supplemental Nature. This Financing Agreement shall become
effective on the date of the last signing party, (the “Effective Date”) and shall be deemed a
supplement to the BCES Interlocal Agreement.
Section 5. Execution and Amendment.
5.1. Form of Execution. This Financing Agreement shall be executed on behalf of each
party hereto by its Designated Representative, or other authorized officer, and pursuant to an
appropriate motion, resolution or ordinance of such party.
5.2 Amendments. This Financing Agreement may not be effectively amended,
changed, modified or altered, except by an instrument in writing duly executed by the Designated
Representative, or other authorized officer, of each party hereto and pursuant to an appropriate
motion, resolution or ordinance of such party. Notwithstanding the foregoing, so long as any
Bonds issued for the Project by the Capital Financing Member are outstanding, any such
amendment shall not be permitted if, in the opinion of the Capital Financing Member and its
counsel, it materially adversely affects the owners of the Bonds or affects the tax-exempt status of
the interest paid on the Bonds.
5.3 Execution in Counterparts. This Financing Agreement may be executed in any
number of counterparts, each of which shall be an original, but those counterparts will constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Financing Agreement as
of the day and year first written above.
[Signature pages to follow]
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CITY OF RICHLAND, WASHINGTON
as CAPITAL FINANCING MEMBER
By
Jon Amundson, ICMA-CM, City Manager
Attest:
______________________________
Jennifer Rogers, City Clerk
Approved as to form:
______________________________
Heather Kintzley, City Attorney
CITY OF KENNEWICK, WASHINGTON
as FINANCING PARTICIPANT
By
Erin Erdman, City Manager
Attest:
______________________________
Krystal Townsend, City Clerk
Approved as to form:
______________________________
Laurencio Sanguino, City Attorney
[Signatures continue below]
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CITY OF PASCO, WASHINGTON as
FINANCING PARTICIPANT
By
Adam Lincoln, City Manager
Attest:
______________________________
Debby Barham, City Clerk
Approved as to form:
______________________________
Eric Ferguson, City Attorney
COUNTY OF BENTON, WASHINGTON
as FINANCING PARTICIPANT
By
Jerome Delvin, Chair Date
Benton County Commission
Attest: By _________________________________
Michael Alvarez, Pro Tem Date
Benton County Commission
_____________________________
Clerk of the Board By _________________________________
William McKay, Member Date
Approved as to form:
______________________________
Jeff Aultman, Chief Deputy Prosecuting
Attorney, Civil
[Signatures continue below]
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COUNTY OF FRANKIN, WASHINGTON
as FINANCING PARTICIPANT
By
Rocky Mullen, Chair Date
Franklin County Commission
Attest: By _________________________________
Clint Didier, Pro Tem Date
Franklin County Commission
_____________________________
Clerk of the Board By _________________________________
Steve Bauman, Member Date
Franklin County Commission
Approved as to form:
______________________________
Jeff Briggs, Franklin County Chief
Civil Deputy Prosecutor