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HomeMy WebLinkAbout01-28-14 Agenda PacketPasco Public Facilities District Building Regional Facilities through Community Partnerships January 28, 2014 4:00 p.m. Pasco City Hall - Conference Room #1 AGENDA 1. Call to order and roll call 2. Approval of minutes: * Regular Meeting October 23, 2013 3. Claims Approval: * 4th Quarter 2013: $69,535.67 4. Financial Report: * 4th Quarter: • Operating Statement • Net Assets Statement 5. Old Business: * Convention Center Advisory Board Membership * 2014 Association of Washington State Public Facilities Districts Membership dues 6. New Business: * Presentation by Matt Watkins re: RPFD 7. Other Business: 8. Adjournment (* indicates documents mailed with agenda) PUBLIC FACILITIES DISTRICT BOARD October 23, 2013 MINUTES Call To Order: The meeting was called to order at 4:01 p.m., by PFD President Mark Morrissette, in Conference Room #1 at Pasco City Hall. Roll Call: Board Members Present: Spence Jilek, Mark Morrissette, John Merk, Leonard Dietrich and Craig Maloney. Also Present: Gary Crutchfield, PFD Chief Administrative Officer, and Stan Strebel, Deputy City Manager. Visitor: Kirk Williamson President Morrissette, with Board Member approval, introduced Mr. Williamson and invited Mr. Williamson to make his presentation. Mr. Williamson shared his personal observations and insight regarding the recent Public Facility District campaign. Approval of Minutes: It was motioned by Dr. Jilek, seconded by Mr. Dietrich, and carried to approve the minutes of the July 24, 2013 Regular Meeting. Claims Approval: Mr. Crutchfield presented third quarter Claims History, and Expenditure Activity per the Account History. Following discussion, it was motioned by Mr. Merk seconded by Dr. Jilek and carried to approve payment of third quarter claims in the total amount of $100,109.25. Financial Report: Mr. Crutchfield presented the third quarter Operating Statement reflecting Total Sources of Funds $291,535 and Total Uses of Funds $284,240. The third quarter Net Assets Statement was also presented reflecting an actual Net Asset balance of $50,613. Following discussion, the Financial Report was accepted as presented. Old Business: • Status Report re: Regional Convention Center President Morrissette had requested that staff clarify the participation requirements of Pasco PFD for the Convention Center Advisory Board and report back to the Pasco PFD board. PUBLIC FACILITIES DISTRICT BOARD Minutes — October 23, 2013 Page - 1 Mr. Maloney stated the PFD board member orientation handbook reflected two members of the Pasco PFD were required as representatives to the Convention Center Advisory Board. Mr. Merk shared that Mr. Morrissette and Dr. Jilek had been appointed by the Pasco PFD as representatives. Dr. Jilek stated he would like to offer his verbal resignation as a Pasco PFD representative to the Convention Center Advisory Board due to scheduling difficulties. President Morrissette asked board members if any member present would be interested to serve as a representative to the Convention Center Advisory Board. Mr. Maloney stated he would be interested in the position. President Morrissette along with all board members unanimously appointed Mr. Maloney as a representative to the Convention Center Advisory Board. Status Report re: Regional PFD Mr. Strebel shared at the August RPFD meeting he had been asked to prepare a post mortem report regarding the recent voter defeat of the aquatic center proposal. Once the report has been reviewed and accepted by the Regional PFD a copy would be made available to this board. New Business: • 2014 Operating Budget Mr. Crutchfield presented the 2014 Pasco Public Facilities District operating budget. It was motioned by Dr. Jilek, seconded by Mr. Merk, and carried to approve the 2014 Pasco Public Facilities District Operating Budget as presented. Other Business • Mr. Maloney shared he had attended the Regional Public Facilities District meeting and had heard the post mortem report regarding the recent voter defeat of the aquatic center proposal. Mr. Maloney stated his personal opinion was: no strong step forward and no quick resolution. Adjournment: There being no other business, President Morrissette adjourned the meeting at 4:58 p.m. Mark Morrissette, President Debra L. Clark, PFD Secretary PUBLIC FACILITIES DISTRICT BOARD Minutes — October 23, 2013 Page - 2 N N 00 00 C C mm 01 H H O O 00 O U 00 00 NN mm m 00 O O 00 m . . . .. . N nn 00 0101 mm rl mm O O 00 N rl m m I(1 1A 01 01 O O N d� p O o 0 o m m mm nr LF L} tD 1D C bb O O 00 p m �� NN ri mm 01 O Q Nl? r O O N rl 'i 'i fi W N m m (? f?N m N N(? 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R ; kO; k! !! §! gg2m Em\ B; �\ \\ \\ \ } / \\§ ! \ \ \k(\ I k _\\ § f E z ! coo )=f ,_ p 2 / / \ _ 0 N q kE ;); \E 0- ai : )§ !ko- - ! $ ! C3 -$ _ cc� co cq act & G k \ Gj\ ) ) /)! ) / �k m w §w w�{ ,w a a; Lq 7 \) a Ei \ \ \ \\ j \ \\ \\\ \ \ \� } \ ) )\ \ f { ) / )) \ {w $/. k) � E )\ . R ; kO; k! !! §! B; #(L ! °J I k § f E z ! coo )=f ,_ p 2 / / �( _ 0 N q kE ;); \E 0- : )§ !ko- - ! $ ! C3 -$ _ & G k \ Gj\ /)! �k m w §w w�{ ,w \) \ \ \ \ } \ ) )\ \ ) \ \ )\ \ , g LLI co cli ) !1!222 ,� ; ƒ =!z3 \ { ) PASCO PUBLIC FACILITIES DISTRICT BALANCESHEET As of December 31, 2013 ASSETS Cash $ 78,439 TOTAL ASSETS 78,439 LIABILITIES Accounts Payable 30,845 TOTAL LIABILITIES 30,845 TOTAL NET ASSETS $ 47,594 \ \nu \Finance\A FINANCE MANAGER\PASCO PUBLIC FACIL DISTR - DM\2013\2013 Qtrly Pasco Public Facility Dishict.Asx PASCO PUBLIC FACILITIES DISTRICT STATEMENT OF REVENUES, EXPENDITURES & CHANGES IN FUND BALANCE Year to Date Ending December 31, 2013 REVENUES Sales Tax Transfers In - City of Pasco Interest Income Total Revenues EXPENDITURES Legal Services Professional Services Advertising/Publications hisurance Kennewick PFD Administrative Services Total Expenditures Net Change in Fund Balances Beginning Fund Balance, January 1 Ending Fund Balance Annual 2013 2013 Budget Actual $ 325,000 $ 337,949 20,000 20,000 95 103 $ 345,095 $ 358,052 $ 1,000 $ 337 20,000 750 1,000 137 2,800 2,603 325,000 337,949 12,000 12,000 361,800 353,776 (16,705) 4,276 68,338 43,318 $ 51,633 $ 47,594 \\nu \Finance\A FINANCE MANAGER\PASCO PUBLIC FACIL DISTR - DM\2013\2013 Qtrly Pasco Public Facility District.xlsx MEMORANDUM January 23, 2014 TO: Pasco Public Facilities District Board FROM: Gary RE: Convention Coter Advisory Board The "Joint Regional Convention Center Advisory Board" was created by interlocal agreement between the Kennewick PFD and the Pasco PFD (copy attached). Section VII creates the board and provides that the Pasco PFD shall have two seats on the advisory board, each having one vote, while each Kennewick PFD member will have two votes. That section further spells out the duties of the advisory board — essentially to advise the Kennewick PFD on the design, construction and subsequent operation of the Regional Convention Center. We have been unable to find a confirmed final version of the bylaws adopted by the Advisory board. We have advised the Kennewick PFD that it would be good to either find the original or establish new ones so that there is a clear record of the operating rules for the advisory board. I will place this matter on the January 28 agenda for further board discussion. GC /tlz attachment INTERLOCAL AGREEMENT PROVIDING FOR THE JOINT DEVELOPMENT OF A REGIONAL CENTER SERVING COMMUNITIES IN THE TRI- CITIES REGION THIS INTERLOCAL AGREEMENT ( "Agreement ") is entered into this �'' day of r,, 2003, by and among the Kennewick Public Facilities District, a Municipal Corporation of the State of Washington organized pursuant to Chapter 35.57 RCW ( "Kennewick PFD' ), and the Pasco Public Facilities District, a Municipal Corporation ofthe State of Washington organized pursuant to Chapter 35.57 RCW ( "Pasco PFD'), for the purpose of making the most efficient use oftheir powers and in cooperation for the joint acquisition, construction, operation and maintenance ofaregional center (as defined by RCW 35.57.020 (1)) serving communities in the Tri - City region. The Kennewick PFD and the Pasco PFD are referred to herein as the "Parties." RECITALS WHEREAS, the Parties are authorized to exercise their powers jointly pursuant to the Interlocal Cooperation Act (Chapter 39.34 RCW); and WHEREAS, the Parties share the common goal of acquiring, constructing, operating and maintaining a "regional center" to serve the communities within the Tri- Cities region; and WHEREAS, the Kennewick PFD and the Pasco PFD are authorized by Chapter 35.57 RCW to acquire, construct, operate and maintain a "regional center"; and WHEREAS, the Parties have determined to proceed with the improvement and construction of the Kennewick Convention Center and its related facilities (the "Regional Center ") to provide for quality convention and conference services to the Tri-City region; and WHEREAS, the Kennewick PFD has initiated a contract for the improvement and construction of the Regional Center; and WHEREAS, the City of Kennewick will transfer or lease all or a portion of property upon which the Regional Center shall be constructed to the Parties; and WHEREAS, each of the Parties has imposed a sales and use tax under the authority of RCW 82.14.390 to support the development of the Regional Center; and WHEREAS, the Parties have determined that a mutual benefit will be achieved by the regional planning, construction, maintenance and operation of the Regional Center and such additional facilities serving the Tri City Region, and the Parties were organized in part for the purpose of exploring with other public facilities districts serving the Tri-City area, the joint acquisition, construction, operation, and financing of one or more Regional Centers serving this Interlocal Agreement Providing for the Joint Development of a Regional Center Serving Communities in the Tri - Cities Region - I i c, ,, region; and WHEREAS, the Parties each have determined that the development of the Regional Center will benefit not only their respective jurisdictions, but also the entire Southeast Washington region; and WHEREAS, the Board of Directors of the Kennewick PFD, by its Resolution No. 032, and the Board of Directors of the Pasco PFD, by its Resolution No. 2003 -02, have authorized the execution of this Agreement; NOW, THEREFORE, the Parties enter into this Agreement for the purpose of outlining the responsibilities and commitments of each Party for the successful development, acquisition, construction, maintenance and operation of the Regional Center according to the following terms and conditions: SECTION I PURPOSE - - DEVELOPMENT OF A REGIONAL CENTER The Parties shall jointly develop and operate the Regional Center to serve as a convention, conference and special events center that has capacity sufficient to provide a venue for conferences, conventions, community events, sporting events, trade shows, artistic or other cultural exhibitions, presentations or performances. The Parties shall commence construction of the Regional Center prior to January 1, 2004. Kennewick PFD shall, on behalf of itself and the other Parties, be the agency with primary responsibility for the finance, acquisition, design, construction, operation and maintenance of the Regional Center, and otherwise administer its development and operation for the benefit of and in cooperation with the other Parties to this Agreement. SECTION II RESPONSIBILITY OF KENNEWICK PFD Kennewick PFD shall perform the following responsibilities: A. On behalf of the other Parties, Kennewick PFD shall negotiate with the City of Kennewick and all other necessary parties to acquire (by lease or other means) all real property necessary to serve as a site for the Regional Center. The Kennewick PFD shall have no authority to bind the other Parties to any such lease or other contract relating to the acquisition of real property. Interlocal Agreement Providing for the Joint Development of a Regional Center Serving Communities in the Tri- Cities Region - 2 B. Kennewick PFD shall let and administer all construction and construction management contracts necessary for the development and construction of the Regional Center in accordance with the accepted design/build contract as previously approved by the Kennewick PFD. C. The Kennewick PFD shall supervise the development and construction of the Regional Center having full authority for the prosecution of the construction, authorization for changes, and final acceptance upon completion for and on behalf of the Parties to this Agreement. D. Kennewick PFD shall operate the Regional Center in a business like manner and provide a level of service equivalent to or better than the services provided by comparable facilities within the State of Washington. The Regional Center shall be available for use by the general public and by governmental entities. The rates and the scheduling for such uses shall be determined by the Kennewick PFD in consultation with the Joint Regional Board. E. The Kennewick PFD will provide for the 33 percent local match as required by RCW 82.14.390 (4) from all eligible taxing sources, revenues from the operation of the Regional Center, cash and in -kind contributions from public or private sector participants. F. Kennewick PFD shall provide representatives and participate in the Joint Regional Board as provided below. SECTION III RESPONSIBILITY OF PASCO PFD Pasco PFD shall perform the following responsibilities: A. Pasco PFD shall impose and continuously maintain a sales and use tax authorized by RCW 82.14.390 to finance the joint acquisition, construction, operation and maintenance of the Regional Center. B. Pasco PFD may provide such additional funding or contribution including but not limited to cash, in -kind contributions, donated real or personal property, or other revenue sources from public or private foundations, or from private sector partners as a part of a public and private partnership agreement negotiated by the Kennewick PFD. C. All such funds and in -kind contributions provided in paragraphs 1 and 2 above, shall be designated "intergovernmental project payments" and shall be remitted to Kennewick PFD, normally, within thirty (30) days of their receipt by the Pasco PFD unless a Lease requires for such amount to be remitted in another manner. Interlocal Agreement Providing for the Joint Development of a Regional Center Serving Communities in the Tri- Cities Region - 3 D. Pasco PFD shall provide representatives and participate in the Joint Regional Board as provided below. SECTION IV KENNEWICKPFD'S RESPONSIBILITY FOR OVERALL FUNDING A. Kennewick PFD shall impose and continuously maintain a sales and use tax authorized by RCW 82.14.390 to finance the joint acquisition, construction, operation and maintenance of the Regional Center. B. Kennewick PFD shall issue such short-term and/or long -term obligations for the design and construction of the Regional Center in such amounts as may be necessary as determined in its sole discretion to fund the Design/Build Contract, together with any such modifications or additions thereto. The authorization, issuance, and redemption of such obligations shall be the sole responsibility ofthe Kennewick PFD. The Parties acknowledge that the City ofKennewick also may issue short-term and/or long -term obligations to finance the Regional Center. SECTION V LIMITATIONS OF LIABILITY The obligation of Pasco PFD to make the governmental project payments as set forth in Section III above, is limited to the sources specifically described in Section III above. Such obligations are not and shall not be deemed general obligations or debt of the Pasco PFD. The Parties consider this Agreement to be a binding contract and acknowledge that lenders to the Kennewick PFD, including bond holders, will rely on the terms of this Agreement, including the pledges of Pasco PFD to allocate funds to the Regional Center project, in deciding to make loans to the Kennewick PFD or in purchasing bonds for the funding of the Regional Center. SECTION VI INDEMNIFICATION To the extent permitted by law, the Kennewick PFD shall indemnify, defend and hold harmless the Pasco PFD, their officials, officers and employees, when acting within such designated capacity (collectively, the "Indemnified Parties"), from all claims, losses, suits, actions, legal or administrative proceedings, costs, attorneys' fees, litigation costs, expenses, damages, penalties, fines, judgments or decrees by reason of any death, injury or disability to or of any person or parry, including employees, and /or damage to any property or business, including loss of use (collectively "damages') caused by any negligent act, error or omission of the Kennewick PFD or its officials, officers, employees, agents, contractors or subcontractors, when acting within such designated capacity (collectively, the "Kennewick PFD'S Functionaries "), arising out of the development, Interlocal Agreement Providing for the Joint Development of a Regional Center Serving Communities in the Tri- Cities Region - 4 financing, acquisition, design, construction, ownership, operation, ormaintenance of the Convention Center. The KennewickPFD's obligation shall include, but not be limited to, defending all the claims alleging damages from any negligent action, error or omission or breach of any common law, statutory or other delegated duty by the Kennewick PFD, and the Kennewick PFD's Functionaries. The Pasco PFD has a direct interest in any settlement agreement that the City PFD may obtain while defending under this hold harmless and indemnity. The Kennewick PFD grants to the Pasco PFD veto authority regarding any settlement proposal. However, if the Kennewick PFD agrees to a settlement proposal and any of the Pasco PFD vetoes the proposal, then the vetoing Party shall, immediately after vetoing the settlement proposal, assume the defense including the cost of the KennewickPFD's personnel time at then current billing rates in support of the defense and any cost of judgment or settlement in excess ofpayments and terms provided in the settlement proposal. The Kennewick PFD will provide information to the Pasco PFD regarding all claims. The KennewickPFD's obligation to indemnify, defend and hold harmless shall apply except and to the extent where caused by the sole or concurrent negligence and/or willful misconduct ofany of the Indemnified Parties. If the claim, suite, or action for injuries, death, or damages as provided above is caused by or results from the concurrent negligence of (i) any of the Indemnified Parties; and (ii) the Kennewick PFD'S Functionaries, the Indemnity provisions provided for above shall be valid and enforceable only to the extent of the negligence of the Kennewick PFD or the Kennewick PFD'S Functionaries. The Kennewick PFD agrees to acquire and maintain insurance in form and amounts as are approved by the Joint Regional Board and that are consistent with the coverage of comparable regional center facilities and undertakings related to said facilities as contemplated under this Agreement and to name the Pasco PFD as additional insured. SECTION VII ADMINISTRATION A. Kennewick PFD by its President, shall be the designated Administrator (within the meaning of RCW 39.34.030) of the cooperative undertakings provided for in this Agreement. B. There is hereby created a Joint Regional Board consisting ofthree (3) representatives appointed by the Kennewick PFD; two (2) representatives appointed by the Pasco PFD; and two (2) representatives appointed by the Benton County PFD. At least one (1) appointee shall be appointed from the membership of each respective Facilities Board and the other appointee(s) shall be appointed from each jurisdiction at large. The Joint Regional Board shall meet quarterly upon such dates, times and places as designed in its bylaws. Each member appointed by the Kennewick PFD shall have two (2) votes; and each member appointed by the Pasco PFD and the Benton County PFD Interlocal Agreement Providing for the Joint Development of a Regional Center Serving Communities in the Tri- Cities Region - 5 shall each have one (1) vote. C. The Joint Regional Board shall: 1. Advise the Kennewick PFD with respect to the design, construction and operation of the Regional Center. 2. Receive, during the course of construction, periodic reports on the progress of the Regional Center from the Kennewick PFD. 3. Provide review and consideration of proposals received under the Design/Build process and finalization of the Regional Center's final design. 4. Consider and recommend to theKennewickPFD funding or in-kind donation sources to meet the local match requirements as required by RCW 82.14.390. 5. Advise the Kennewick PFD on the operation, scheduling and promotion of the Regional Center. 6. To consult, recommend and/or formulate a regional plan to maximize the use of the Regional Center for the benefit of the entire Tri-City region and to coordinate the utilization and promotion of other community, athletic, cultural or performing arts facilities within the region. Identify the need and feasibility of other regional centers with the Tri-City region. D. In the performance of this Agreement, no independent separate legal entity is intended to be created. Unless otherwise specified in a lease, all property acquired by each Party in the performance of this Agreement shall remain the property of the acquiring Party and upon the termination or expiration of this Agreement, such property shall remain that of the acquiring Party. No special funds or budgets expressly for the purpose of the administration of this Agreement are anticipated nor shall be created. SECTION VIII DURATION This Agreement shall commence on the date first written above and shall continue in full force and effect until the earlier of (i) December 31, 2099; (ii) such time as all bonds issued by the Kennewick PFD or the City of Kennewick for the construction of the Regional Center are fully paid Interlocal Agreement Providing for the Joint Development of a Regional Center Serving Communities in the Tri- CIties Region - 6 and retired; or (iii) the loss of funding or eligibility of a party to receive sales and use tax revenues under the authority of RCW 82.14.390 or its successor legislation. SECTION IX APPLICABLE LAW This Agreement is governed, construed and enforced in accordance with the substantive laws of the State of Washington. Should any dispute arise concerning the enforcement, breach or interpretation of this Agreement, venue shall be placed in Benton County, Washington, and the prevailing parties shall be entitled to its reasonable attorney fees and costs as additional judgment. SECTION X SEVERABILITY In the event any term or condition of this Agreement or application thereof to any person, entity or circumstance is held invalid, such invalidity shall not effect any other terms, conditions or applications of this Agreement which can be given effect without the invalid term, condition or application. To this end, the terms and conditions of this Agreement are declared severable. SECTION XI AUTHORITY FOR EXECUTION Each or the parties warrants and represents that its representatives, whose signatures are below, possess all required authority to sign this Agreement and such powers have not, as of the date of this Agreement, been revoked or revised. IN WITNESS WHEREOF, the parties have executed this Agreement by the duly authorized officers on the day and year fast written above. KENNEWICK PUBLIC FACILITIES DIS T, a Municipal rporation of the St of Washington Dean Strawn, Chairm PASCO PUBLIC FACILITIES DISTRICT, a Municipal Corporation of the State of Washington Bob Tippett, Chairman Interlocal Agreement Providing for the Joint Development of a Regional Center Serving Communities in the Tri- Cities Region - 7 STATE OF WASHINGTON ) ss. County of Benton On this day personally appeared before me DEAN STRAWN, Chairman of the Kennewick Public Facilities District, to be known to be the individual described in and who executed the within and foregoing instrument, and on oath stated that he was authorized to execute to instrument, and acknowledged it as the Chairman of the Kennewick Public Facilities District, a Municipal Corporation of the State of Washington, to be the free and voluntary act and deed of such municipal corporation for the uses and purposes therein mentioned. GIVEN under my hand and offici is 5 day of 2003. ENT. 9 NOTARY PUBLIC in and for the State of W2 . •Oni A R y9N 9 ' Residing at: My Commission Expires: 3 ? 2 U80 STATE OF WASHINGTON ss. County of ) On this day personally appeared before me BOB TIPPETT, Chairman of the Pasco Public Facilities District, to be known to be the individual described in and who executed the within and foregoing instrument, and on oath stated that he was authorized to execute to instrument, and acknowledged it as the Chairman of the Pasco Public Facilities District, a Municipal Corporation of the State of Washington, to be the free and voluntary act and deed of such municipal corporation for the uses and purposes therein mentioned. GIVEN under my hand and official seal this Z a day of NOTARY PUBLIC in and Residing at: Wvvi,ttncb My Commission Expires: _ Interlocal Agreement Providing for the Joint Development of a Regional Center Serving Communities in the Tri- Cities Region - 8 State ofWaRVA' $1U80 P:0 'Ei QF WAS�`� ,• Asotin County PFD Benton County PFD Capital Area PFD Clark County PFD Cowlitz County PFD Edmonds PFD Everett PFD Grays Harbor County PFD Kennewick PFD Kent PFD Kitsap County PFD Lewis County PFD Lynnwood PFD Pasco PFD Richland RFD Skagit Regional PFD Snohomish PFD Spokane PFD Tacoma PFD Tri Cities Regional PFD Vancouver PFD Washington State CC PFD Wenatchee PFD Whatcom Co. Bellingham PFD Yakima PFD INVOICE Pasco PFD Invoice #14 -14 11/06/2013 Due: 12/06/2013 Annual Association of Washington State Public Facilities Districts Membership Dues Membership Year: January 1 — December 31, 2014 2014 Annual Dues: $750.00 'Amount Paid: $ For further information from the ASWPFD please visit www.awspfd.org. Please make checks payable to: Association of Washington State Public Facilities Districts 720 West Mallon - Spokane, Washington 99201 (509) 279 -7000 FAX (509) 279 -7050 RPFD RESPONSE PAPER (December 17, 2013) On August 6, 2013, voters in the cities of Kennewick, Pasco and Richland, voting as citizens of the Tri- Cities Regional Public Facilities District ( TCRPFD), rejected a ballot proposition which would have allowed the TCRPFD to levy a sales tax of 1 /10`b of one - percent on retail sales for the purpose of constructing and operating a regional indoor /outdoor aquatics facility and water park. Certified election results show that the ballot issue was defeated in Benton County (Kennewick, Richland) by a margin of 59-41% while it was approved by Pasco voters 57 -43 %. Given the rather mixed results of the election, the TCRPFD Board met on August 14 to receive public input and to undertake discussion of what the election results mean for the future of the TCRPFD. (It might be noted that 2011 survey respondents indicated by 79% that it was a good idea for the Tri- Cities to work in cooperation in the study, funding, development and operation of regional centers to serve area residents. Of those surveyed, 16% indicated "not sure" with 5% indicating "no. ") The TCRPFD Board felt that it was important to discuss the major reasons that have been identified by residents for the negative votes cast, in order to learn the basis for the difference in the survey data and the actual vote counts, to the extent possible. The following reasons have been placed in order of importance, as viewed by the TCRPFD Board, SUMMARY OF IDENTIFIED REASONS FOR "NO" VOTE 1. No New Taxes Voters, oppose new taxes, particularly in Kennewick and Richland. (The vote for the convention center in Kennewick failed by approximately the same margin as the aquatic center failed in Kennewick and Richland. Pasco voters saw enough benefit [demographics, location] to favor it.) 2. No Sunset Clause on Tax Voters did not understand or did not agree with the reasoning of the TCRPFD that the tax would have to be continued even after the bonds were repaid in order to guarantee continued coverage of any possible operational losses as well as replacement over time. 3. No Need Generally more affluent (and more likely to have access to private pools or clubs) voters in Benton County were less supportive of the facility. The case for the broader benefit to the community was not made. 4. Conflict with Private Enterprise Some voters felt that the outdoor recreational features, in particular, should be privately financed and operated. The combination of the recreational (revenue generating) features and the competitive (net operating loss) features was viewed as essential by the TCRPFD in order to offer a public facility within the tax capacity and create the best chance for enough customer revenue to break even on the operating cost. RPFD Response Paper - Page 1 5. No 50 -Meter Facility Voters may have been misled to believe that a 50 meter facility was a firm requirement for all competitive swim meets. It is not generally understood that most swimming competitions, other than during the summer long course season, are held in 25yd facilities. 6. Pasco Location Benton County voters were less supportive of the facility as described above, reflecting some possible bias, however, the site was central and easily accessible. No possible sites in Kennewick and/or Richland were offered. 7. Election Timing While the issue of an aquatic facility has been discussed for several years, perhaps there was not sufficient time to develop public awareness and support of the project in the May — August timeframe. The Kennewick results suggest that this made little, if any, difference. 8. Length of Information Campaign There clearly was not enough time to answer legitimate questions. (See Attachment "A" for background information and a more complete discussion on each of the identified "no" vote reasons.) OPTIONS FOR FUTURE DIRECTION OF REGIONAL PFD This section identifies possible future courses of direction for TCRPFD, considering the fact that the interlocal agreement between the three cities provides that, while the agreement may not be terminated prior to January 1, 2015 without the agreement of each of the cities, the district, may be terminated after that date, by any of the cities' passage of a resolution of the City Council, provided that such termination may not impair the rights of any bond holders or similar others. 1. Dissolution Perhaps the easiest direction for the TCRPFD to take would be to dissolve. This would be a statement that Board members believe that the regional PFD concept is hopeless or no value to the area. Without returning to the cities for additional operating revenues and with the interlocal agreement dictating "...not to continue the TCRPFD, in the absence of a project, for an unreasonable period of time." There may be no reason to continue the organization for the near term, however it may be prudent to define a process for reviving the district when/if sufficient interest arises. 2. One More Try Many of the supporters of the aquatics facility urged the Board to take the proposed facility back to the voters for a subsequent election. Some suggested that the public was not sufficiently aware or comfortable with the idea of a regional facility and added that it would take additional time for the public to be adequately informed on the proposed plan. From most of the prior discussions on reasons that have been expressed for "no" votes, perhaps the condition that can most easily be changed to effect a different outcome in the public vote is to implement a sunset clause on the proposed tax: Voters 20 years from now should be able to figure out if they wanted to extend the tax (if needed) to keep a facility operational or expand, demolish or? RPFD Response Paper - Page 2 While it appears that the Pasco City Council will exercise its option to purchase the property on which the district planned to construct the facility, the City's purpose is to pursue economic development. The same site may not be available in 2014. Is another suitable site available? Should a site be identified prior to a vote? These are questions that would need to be considered before any decision on a possible `rerun" of the election. At this point it would seem that 2014 would not be the best year to attempt another election, given that these and other questions will need to be addressed. The Board made a calculated choice to present the tax proposal in August, knowing that the possible costs of the election (due to uncertainty in the number of required ballot races) could exceed those of a November election by many times. In the end, the August election cost was close to $80,000. Based on January 2013 estimates, a November election would likely cost in the range of $5,000. 3. Minimalization The TCRPFD can continue to exist, assuming the absence of a termination resolution by one of the cities, in a state of minimal activity. Without spending a lot of money, the Board can continue to meet, perhaps less frequently than the current monthly schedule, to compile and review updated sales tax revenue assumptions and to consider possible future opportunities and alternatives. The Board would consult with the other three PFDs, City Councils and project advocates, to recommend a path forward, in 2015 and beyond, to deal with major public recreation facilities. 4. The Grand Bargain To some, the regional effort will only appeal to a majority of voters if each community was to share in the overall regional "pie" - having some project located within each jurisdiction. Proponents of the "grand bargain" suggest that if each community were to be able to see this type of benefit, voters might be more inclined to support a package of regional facilities. There are a number of possible packages that could be considered including the aquatics facility. Perhaps the KPFD convention center expansion project could include a first phase of a performing arts center while funding for the Hanford Reach Interpretive Center of the Richland PFD (to support the Manhattan District National Park and the Ice Age Floods exhibits) could be added to complete the package. In order to fund these projects at the `regional" level, it would require the entire .2% sales tax authority, however, if each community (and each local PFD) ended up with its preferred project, there would be no need to consider future projects for many years; until debt service was repaid, or capacity to issue new debt increased through growth. RPFD Response Paper - Page 3 Attachment A BACKGROUND AND ANALYSIS In a 2011 random survey (conducted by Leisure Vision for TCRPFD) of residents in the three cities (a total of 666 households or enough for a 95% confidence level +/- 3.8 %), an aquatics facility was the highest -rated project, according to those surveyed, with 72% indicating they were either "very supportive" or "somewhat supportive" of construction and operation of such a facility. While 20% of those surveyed indicated they would not be willing to support a tax for a regional project, 80% indicated support for either of .2% tax (48 %) or a.1% tax (32 %). Believing, based on the survey and numerous public meetings, that there was reasonable support throughout the community for an aquatics facility funded by a .1% sales tax, the TCRPFD Board voted in January 2013 to prepare for a ballot issue sometime during the year; in May the decision was made to place the issue on the August primary election ballot. IDENTIFIED REASONS FOR "NO" VOTE The following is provided to discuss, more fully, the TCRPFD response to issues most often cited by residents for a vote to reject the ballot proposal as listed above. 1. No Sunset Clause on Tax Critics of the ballot issue frequently pointed to the fact that the tax was not set to end after the term of the original bonds (issued for construction of the facility) were paid off. The TCRPFD Board discussed this issue at great length before ultimately deciding not to sunset the tax on the ballot. The pivotal reasoning was that, other than the tax and revenue from operation of the aquatics facility itself, the District would have no other source of revenue with which to maintain the facility over time. Public facilities such as pools, parks, libraries, schools, etc., almost always require tax dollars for continued operations after facilities are originally constructed. A regional facility would be no different. The exception is that, unlike a city or school district, the Regional PFD does not have general tax revenues available to it for operations aside from the sales tax which would be used to fund (initially) construction. When city or school district bonds for new facilities are retired and the property tax assessed for bond repayment is therefore eliminated, the city or district will use general fund or operating levy tax funds to maintain and operate such facilities over their useful lives. The TCRPFD Board wanted to make sure that, if the public approved of a regional aquatic facility, it would have the ability to maintain and operate such facility beyond the period for repayment of the construction debt (assumed to be 25 years). While it was anticipated that admission and other facility - generated revenue would cover most of the operational expense (88 %), the Board wanted to provide a steady funding stream, if needed, to repair, replace or expand the facility, beyond the projected 25 -year term of the bonds. If the taxpayers are willing to build and operate a facility for 25 years, why would it not be reasonable for the next generation of taxpayers to pay (at the same rate) to continue to maintain and use the facility beyond that term? Of course, it is possible that the .1 % tax, given prudent management of operations and growth in the community, could prove to be more than would be needed to maintain and operate the aquatics facility after 25 years. With a track record of costs and revenues, the TCRPFD would RPFD Response Paper, Attachment A - Page 1 Attachment A be in a position to offer different approaches such as: reductions of admission or use fees; adding to the facility or asking the voters if they wanted to approve an entirely different project to be funded with the unneeded sales tax proceeds. (State law does not allow the tax amount to be reduced below .1 %.) Another option would have been for the TCRPFD Board to have avoided the potential issue of future repair, replacement and maintenance by sun - setting the tax, thereby leaving future board/voters to make such decisions. 2. No 50 -Meter Facility Another reason expressed by many who opposed the aquatic facility as presented was the fact that a 25mx25y indoor competition and diving pool was proposed, as opposed to a 50m Olympic -sized pool. To some, the smaller size was viewed as falling short of the need in the community. Again, this was the subject of considerable debate by the Board, as well as by the public, at several meetings of the TCRPFD. There were a number of factors that shaped the decision, reached by the Board, not to propose the larger pool, including: a. Capital Cost. As estimated by the TCRPFD's aquatics consultant, replacing the 25mx25y pool with a 50 -meter pool would have added $7.1 million to the total cost of the facility. This would have strained the ability of the District to finance the increased cost or, in the alternative, would have required the elimination of other features proposed in the aquatics facility. To the extent that the more contemporary recreational or water park features were eliminated, the ability to attract family recreational users and associated revenue would be diminished. b. Operational Cost. The tradeoff outlined above would then have a corresponding effect of operational costs with a more expensive (both at the construction stage and operationally) 50 -meter pool and less revenue - generating facilities, resulting in a larger than proposed operations deficit. By way of illustration, the King County Aquatics Center — the only public indoor 50 meter pool in the state, and one which is devoid of any recreation features except for a small (25x15yd) recreation pool, runs an operating deficit of more than $2 million ($2.3 million in 2011, $2.17 million in 2012) per year, attracting annual attendees (including spectators) of 350,000 on an annual basis. While the facility (which is in the heart of the most populous area of the state) hosts about one competitive event per week, this world -class facility covers only 32% of its operational expenses with revenues generated from users of the facility. Admission prices run from $3.75 to $5.00 for lap or public swim sessions. c. Marginal Benefit. While supporters of the larger pool were disappointed in the TCRPFD's decision not to include the larger competition pool, it was noted that, save for Olympic qualifying and similar level competition, most swim meets operate with a short course (25 meter) format. This is hue for high school and college competition (local Tri-City teams usually travel to CWU at Ellensburg for competition swim meets at CWU's 25mx25y indoor facility). Long course competitions, which typically take place during summer months, can continue to be accommodated (as has been the case for years) in the Tri- Cities at Pasco's 50 meter outdoor pool at Memorial Park. It has been estimated by local swim competition enthusiasts that, with existing high school teams, the 25mx25y pool would have been available to host approximately 20 dual meets each year; while upgrading to a 50m size may have provided the opportunity to attract only another 2 or 3 meets per year or every other year. RPFD Response Paper, Attachment A - Page 2 Attachment A Because the Tri-City area lacks any type of indoor competition swimming venue, there have been limited opportunities for high school or college swim teams to develop. The consultant who prepared the feasibility study for the proposed facility (Ballard *King 2012) noted "if a new indoor pool with a strong competitive orientation is added, it would be expected that there would be strong growth in high school swimming." The recommended 25mx25y pool was designed to accommodate the short course competition which is standard at the high school and college levels. While it was not determined that the extra cost of constructing a 50 -meter pool would have been the best decision for the community at this time, the design of the proposed facility anticipated the possible expansion of the competition pool to a 50 meter standard in the event that growth in the competitive community and future demand were sufficient to justify the added expense. 3. Conflict with Private Enterprise The TCRPFD Board understood that the facility, as proposed with indoor and outdoor water park features, might be viewed as competing or infringing on private business opportunities. However, the community and the Board witnessed the failure of two separate groups, one in Kennewick and one in Pasco, to secure financing to construct proposed private outdoor water parks in the years preceding the formation of the TCRPFD and overlapping the first two years of its existence. It is not unheard of for local governments to provide public recreational facilities, particularly in areas where there is a possibility of an operating loss, in order to enhance the quality of life in the community. Notable examples are golf courses, stadiums, sports fields and traditional swimming pool facilities. Indeed, the 2011 survey of residents, cited earlier, noted in the question regarding support for a regional aquatic facility that features would include: "... a leisure pool with waves, slides and a lazy river that would be accessible to the public daily..." The survey results suggested that the public was not concerned with the addition of recreational facilities beyond the conventional, rectangular pool. While the water park type recreational features proposed for the aquatic facility may have been viewed as competition for private facilities, the Board viewed their inclusion as a natural marriage with the competition venue, which would assuredly always need an operational subsidy, but which could be minimized with the inclusion of water park features where net operating income would more likely be generated. The effect of blending the two types of facilities would result in a one -stop facility which would take advantage of common systems (water filtration and disinfection) for efficiency in operation, while providing a variety of features, appealing to all ages; further resulting in the ability for the District to keep net operating costs to a minimum (resulting in less subsidy required) and lower admission rates than would be possible under private ownership. Because the operating costs of a competition -only facility would not be as recoverable through reasonable admission prices, it would not be expected (and, in fact, has been experienced throughout the country and as shown for King County, earlier herein) that a private interest would undertake the building of such a facility. 4. No New Taxes Of all of the arguments for voting against the proposed aquatics facility and the one -tenth of one - percent sales tax necessary to fund the same, the position against new taxation is the easiest to understand. Some may argue that since the US economy has struggled so much over the past RPFD Response Paper, Attachment A - Page 3 Attachment A few years that now is not the time to raise taxes. It is suspected that for most who oppose new taxes, timing is seldom the critical issue. While the 2011 survey showed significant support for a sales tax to support the aquatics facility, it also showed that 20% of those surveyed would not support any tax increase. What continues to be puzzling about the vote in this context is that one community approved the facility by a fair margin while the other two communities rejected it by a similar margin. 5. No Need The argument that an aquatics facility is not needed in the community has been advanced by some opponents. To many, there are ample opportunities for aquatic recreation in existing pools, the Columbia and Snake Rivers which adjoin the communities, at private facilities (homes or clubs) or in other communities. That the demographics of Pasco differ somewhat from Richland and Kennewick (lower household income, larger family size, greater minority population) might also suggest why Pasco voters were more likely to support a publicly - owned, funded facility. 6. Pasco Location It, of course, is notable that the sales tax measure was approved by Pasco voters (as earlier referenced) and rejected by Kennewick and Richland voters. As stated in the prior section, Pasco voters are more likely to be of lower income, of a greater household size and of a racial minority. Some may translate these demographic differences into a community more likely to approve of publicly funded (subsidized) recreational facilities. However, there is also the factor of proximity (either actual or perceived). The proposed location of the aquatics facility was not known or identified at the time the community survey was conducted in 2011. The subsequent proposal for the facility to be constructed in Pasco may therefore be considered to be, at least, a partial cause for the disparity of the vote between the two counties for approval of the facility, versus the results of the survey which did not suggest such a disparity. While some would argue that the proposed site was not central enough to appeal to voters of the Tri- Cities, it would have been difficult to identify another developable location with adequate size (13 acres) or better accessibility (near I -182 and Road 100) and visibility (I -182 frontage) than the selected site. No other sites were offered by the cities of Kennewick or Richland. Several have wondered if the vote illustrates that the community at large is too "parochial," when it comes to siting of regional facilities, to ever come together. 7. Election Timing Some have noted the timing of the election, which was held in August, as problematic for families given the summer season, vacation, etc. It has been suggested that holding the election in November would have been a more convenient time and thus would have assured a better voter turnout. Given the fact that ballots were mailed to voters three weeks prior to the election and that the current vote -by -mail system requires investment of only a few cents for postage and a few minutes to complete the ballot, it is hard to believe that election timing was a factor in the ultimate outcome. The decision by the TCRPFD Board to place the issue on the August ballot was calculated: 1) to provide for the most - timely decision, which, in the event of approval, would have allowed for completion of the aquatic facility in time for summer 2015; 2) as the Board had become aware that the Kennewick Public Facilities District was considering placing a sales tax issue on the November ballot, there was some concern about having both issues on the same ballot. RPFD Response Paper, Attachment A - Page 4 Attachment A As the TCRPFD mailed an information flyer to the address of each registered voter prior to the mailing of ballots, it is difficult to accept the notion that voters did not know about the project or the timing of the election. Response to Vic Epperly Proposal Though not listed as one of the reasons identified by voters for rejection of the proposed sales tax for the aquatic facility, it is perhaps worthwhile to discuss the proposal offered by Vic Epperly, former Mayor of Kennewick, who emerged as the most vocal critic of the TCRPFD proposal. He proposed an alternative to that proposed by the District outlined as follows: a. Conversion of the existing swimming pools in each of the cities [Kennewick -25 meter pool, Richland -25 meter pool and Pasco -50 meter pool with zero depth leisure pool /slides (2) pool] into indoor "regional aquatic centers." b. Proposing the maximum .2% sales tax to fund the capital costs of conversion and operating expenses for all three facilities. Mr. Epperly contended that the park and recreation plans for each of the three cities outline an "urgent" need for year -round swimming facilities — yet, their capital plans do not include such facilities within the (typical) five -year planning period. He also contended, that if each of the cities had its own indoor (regional) aquatics center there would be "economic development" (shopping, fast food restaurants, etc.) that would develop in the area around each of the newly renovated and expanded facilities. As each of the proposed facilities envisioned by Mr. Epperly would be sited at existing community swimming pools, it is difficult to imagine that any of them could be seriously marketed as a `regional aquatics facility." Nor, since all of the existing pools are in well - established/developed neighborhoods, would there likely be the kind of "economic development" following their renovation, as suggested by Mr. Epperly. Indeed, to suggest that the public would rather have more, smaller, less feature -rich facilities (if they were just closer) is a bit like suggesting that the public really would like to see a return of the neighborhood hardware (or other) store with its limited selection of goods and reduced hours of service; together with inevitably higher prices, occasioned by limited access to volume buying power. If, instead of building `regional facilities" the goal is to construct only "neighborhood facilities, "what," one might ask, "is the purpose for having the Regional Public Facilities District ?" Mr. Epperly's proposed package of improvements was estimated by him to cost $69 million and the .2% tax that would be required to fund that proposal would limit the ability of each of the three city public facility districts to seek voter authorization to access any of the sales tax options (.2% max) which the local PFDs effectively must share with the regional PFD. Both of the recent votes suggest that Epperly's proposal, with a higher tax rate than proposed by either the TCRPFD or the KPFD, would likely fail. Additionally, given the potential for considerably higher operational costs, his proposal is unlikely to be supported by any of the three cities. Mr. Epperly suggests that the comprehensive park and recreation plans underscore the "urgent" need for swimming facilities. It should be noted that both the Kennewick and Pasco plans point to the efforts of the Regional PFD as the current focus of those cities for providing additional swimming capacity. The cities have not included new community swimming facilities in their respective park and capital plans because under current conditions, they cannot afford the RPFD Response Paper, Attachment A - Page 5 Attachment A construction expense, let alone the ongoing operational losses (which each of the cities currently absorb each year) associated with additional, conventional swimming facilities. One only needs to review the economics of the King County indoor aquatics facility, as referenced above [see 2(b)], to gain an understanding of the magnitude of potential operating deficits which characterize aquatic facilities that focus only on the narrow competitive segment of the swimming community. In 2013 the three cities were able to offer a combined total of 7,200 swim lesson spots through the limited summer season [a spot averages one person participating in nine 30- minute (approximate) lessons]. It is conservatively estimated that the facility proposed by the TCRPFD could have easily been programmed to provide over 19,000 spots for swimming lessons, due to its variety of water features and year -round availability. It is hard to imagine that the significant potential for swim lessons, not to mention the added availability of an indoor competitive facility and year -round recreational features would not be able to meet the needs of the Tri- Cities community without the need to fund smaller, less efficient and less attractive swim facilities. Kroc Corps Community Centers Note. during some of the deliberations of the TCRPFD, it was noted that several communities in the county had benefited by the construction of community centers, including both aquatics facilities and performing arts venues, funded, in part, by grants from the foundation created by the Kroc family. The following summarizes the program: Joan Kroc, widow of Ray Kroc, founder of McDonalds, donated $90 million to the Salvation Army to build a comprehensive community center in San Diego. Completed in 2001, the center includes an ice arena, gymnasium, three swimming pools, a performing arts theater, as well as other offerings for visual and performing arts. When Mrs. Kroc passed away in 2003, she left $1.5 billion to the Salvation Army to build a series of centers patterned after the San Diego center. To date, 23 Kroc Corporation Community Centers are operating nationwide with four additional centers scheduled for completion in 2013. Center sites were chosen in a competitive process with a local match of 60% of the funds required for the 40% Kroc dollars. Having fully committed all of the funds from Mr. Kroc's generous bequest, the Salvation Army has no additional construction plans for Kroc community centers. RPFD Response Paper, Attachment A - Page 6