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HomeMy WebLinkAbout2015.06.08 Council Workshop PacketAGENDA PASCO CITY COUNCIL Workshop Meeting 7:00 p.m. June 8, 2015 Page 1. CALL TO ORDER 2. ROLL CALL: (a) Pledge of Allegiance. 3. VERBAL REPORTS FROM COUNCILMEMBERS: 4. ITEMS FOR DISCUSSION: (a) Benton & Franklin Counties Department of Human Services Presentation Presented by Linda Robb, Administrator, BF Department of Human Services. (b) Municipal Court Facility Presentation Presented by Dot French, Court Administrator, Municipal Court. 3 (c) 2016 Budget Schedule Presentation Presented by Eva Lindgren, Deputy Director, Administrative & Community Services. 4-69 (d) LTGO Bonds for Police Community Services Building 70-74 (e) Code Amendment: Solid Waste Scavenging and Compaction (CA 2015- 004) 75-81 (f) 20th Avenue Safety Improvements - Lewis Street to Sun Willows Boulevard 82-85 (g) Sacagawea Heritage Trail Underpass 86-92 (h) Six-year Transportation Improvement Plan 2016-2021 5. MISCELLANEOUS COUNCIL DISCUSSION: Page 1 of 92 Workshop Meeting June 8, 2015 6. EXECUTIVE SESSION: 7. ADJOURNMENT. REMINDERS: 11:45am, Monday, June 8, Holiday Inn - Pasco Chamber of Commerce Membership Luncheon Meeting. (WA Policy Center Legislative Session Wrap-up presented by Chris Cargill) 7:00am, Thursday, June 11 - Tri -Mats Policy Advisory Committee Meeting. (COUNCILMEMBER BOB HOFFMANN, Rep.; REBECCA FRANCIK, Alt.) 7:00pm, Thursday, June 11, Transit Facility - Ben -Franklin Transit Board Meeting. (MAYOR MATT WATKINS, Rep.; COUNCILMEMBER MIKE GARRISON, Alt.) 1:30pm, Friday, June 12, 2004 N. 22nd, Pasco - Avalon Health & Rehab Center's "National Nursing Assistants Week" Proclamation Presentation. (MAYOR MATT WATKINS) This meeting is broadcast live on PSC -TV Channel 191 on Charter Cable and streamed at www.pasco-wa.gov/psctvlive. Audio equipment available for the hearing impaired; contact the Clerk for assistance. Page 2 of 92 CITY OF PASCO 2016 OPERATING & CAPITAL BUDGET CALENDAR Transportation Improvements Plan presented to City Council for approval Capital Improvements Plan (CIP) Workshop CIP presented to City Council for approval Request by ACS Deputy Director (DD) to all Department Heads and those in charge of municipal offices to prepare detailed estimates of Revenues and Expenditures for the year 2016. (RCW 35.33.031 & 35A.33.030) Estimates, organizational charts, goals and major objectives are to be filed with the DD. (RCW 35.33.031 & 35A.33.030) Estimates are presented to City Manager for modifications, revisions, or additions. (RCW 35.33.051 & 35A.33.050) Department Heads meet with City Manager to review modified budget City Manager provides Council with the proposed preliminary budget, setting forth the complete financial program, showing expenditures by each department and sources of revenues for financial operations. (RCW 35.33.135 and 35A.33.135) City Manager files preliminary budget and budget message with the City Clerk and the City Council. (RCW 35.33.055 & 35A33.052) 2016 Budget Workshop with all Department Heads Copies of preliminary budget made available to the public. The City Council holds a PUBLIC HEARING on Revenue Sources for the 2016 Budget, and considers possible changes to property tax revenues. (RCW 84.55.120) Property Tax Levies are set for 2016. (RCW 84.52.020, .070 and 35A.33.135) LEGAL CITY OF PASCO DEADLINE DATE June 30, 2015 June 15, 2015 July 13, 2015 July 20, 2015 On or before the August 3, 2015 second Monday in (Training for new staff September (14th) will be offered.) On or before the Friday fourth Monday in August 28, 2015 September (28rd) Before the first Tuesday business day in September 2, 2015 October (1 st) September 8-11, 201 Monday first Monday in October 5, 2015 October At least 60 days Friday before end of the fiscal year October 30, 2015 Prior to Final Hearing Tuesday November 10, 2015 Not later than six Thursday weeks before Jan. 1 st November 12, 2015 Before Council votes on property tax levy November 30th Monday, November 16, 2015 Monday, November 16, 2015 Final PUBLIC HEARING on proposed 2016 Operating and Capital Projects On or before the first Monday, Budget. First reading of budget ordinance. (RCW 35.33.071 & 35A.33.070) Monday in December November 23, 2015 Adoption of 2016 Budgets. (RCW 35.33.075 & 35A.33.075) Prior to the beginning Monday, of the new year December 21, 2015 2015 OPERATING & CAPITAL SUPPLEMENTAL BUDGETS CALENDAR City Council discussion of 1st 2015 Operating and Capital July 27, 2015 Projects Budget Supplement. 2015 PUBLIC HEARING of 1st Operating and Capital Projects July 27, 2015 Budget Supplements approved by Council. Department Heads submit Supplemental Budget Requests Nov. 10, 2015 City Council discussion of 2nd 2015 Operating and Capital Projects Supplemental Budget Monday, December 14, 2015 2015 PUBLIC HEARING of 2nd Operating and Capital Projects Supplemental Monday, Budget. Supplemental Budget presented to City Council for approval. December 14, 2015 Color Key: Council Action Staff Action Page 3 of 92 AGENDA REPORT FOR: City Council June 1, 2015 TO: Dave Zabell, City Manager Workshop Meeting: 6/8/15 FROM: Stan Strebel, Deputy City Manager SUBJECT: LTGO Bonds for Police Community Services Building I. REFERENCE(S): Proposed Ordinance (5/28/15 Draft) Preliminary Official Statement Bond Summary Statistics (5/22/15 Conditions) II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS: Discussion III. FISCAL IMPACT: Estimated total project costs of $8.5 million. Debt service requirements can be met with the City's portion of the 3/10ths of one percent Public Safety Sales Tax approved by voters in 2011. IV. HISTORY AND FACTS BRIEF: The proposed LTGO bonds will finance the design, construction, equipment and furnishings for the Pasco Police Community Services Building plus anticipated expenditures for City information systems space and equipment to be housed in the building. Bonds are expected to be repaid over a 20 -year period. Council recently authorized the construction contract for the building in the amount of $7.148 million; construction is anticipated to be completed by early summer 2016. The City has retained the services of a financial advisor to assist with decisions relating to the structuring and sale of the bonds. The City has also applied for a bond rating with Standard and Poor's which is expected to be beneficial to the City in time of sale and interest on the bonds. The proposed ordinance designates the City Manager as the City's Designated Page 4 of 92 Representative to conduct the bond sale in the manner and upon the terms deemed most advantageous to the City. The ordinance provides the parameters within which the Designated Representative may act in Exhibit A, attached to the ordinance. The attachment provides some flexibility to the Designated Representative in making final sale decisions, in the event that conditions change prior to the actual date of the sale (anticipated to take place during the 4th week of June, with closing early in July). 1. While the total principal amount needed is anticipated to be $8.5 million, should estimates of the need change, the ordinance allows the Designated Representative to authorize up to $9 million in bonds. 2. While the current rate of interest is expected to be near 4%, the Exhibit sets an upper limit of 5.0%. 3. While it is expected to finance the repayment of the bonds over 20 years, the Exhibit provides for up to 21 years in the event that such proves advantageous to the City at the time of the sale. 4. The attached, proposed ordinance is the most current draft, it is possible that minor edits may be suggested for the final ordinance to be considered on June 15. V. DISCUSSION: Page 5 of 92 DRAFT DATED 05/28/15 CITY OF PASCO, WASHINGTON AN ORDINANCE of the City of Pasco, Washington, relating to contracting indebtedness; providing for the issuance, sale and delivery of not to exceed $9,000,000 aggregate principal amount of limited tax general obligation bonds to provide funds to design, construct and equip a new police facility and other capital purposes, as deemed necessary and advisable by the City, and to pay the costs of issuance and sale of the bonds; fixing or setting parameters with respect to certain terms and covenants of the bonds; appointing the City's designated representative to approve the final terms of the sale of the bonds; and providing for other related matters. Passed June 15, 2015 This document prepared by: Foster Pepper PLLC 1111 Third Avenue, Suite 3400 Seattle, Washington 98101 (206) 447-4400 51398050.3 Page 6 of 92 TABLE OF CONTENTS* Page Section1 . Definitions...............................................................................................................1 Section 2 . Findings and Determinations...................................................................................4 Section 3 . Authorization of Bonds............................................................................................4 Section 4 . Description of Bonds; Appointment of Designated Representative ........................5 Section 5 . Bond Registrar; Registration and Transfer of Bonds..............................................5 Section 6 . Form and Execution of Bonds.................................................................................6 Section 7 . Payment of Bonds....................................................................................................6 Section 8 . Funds and Accounts; Deposit of Proceeds..............................................................7 Section 9 . Redemption Provisions and Purchase of Bonds......................................................7 Section 10 . Failure To Pay Bonds..............................................................................................8 Section11 . Pledge of Taxes........................................................................................................8 Section 12 . Tax Covenants.........................................................................................................9 Section 13 . Refunding or Defeasance of the Bonds...................................................................9 Section 14 . Sale and Delivery of the Bonds.............................................................................10 Section 15 . Official Statement; Continuing Disclosure............................................................10 Section 16 . Supplemental and Amendatory Ordinances..........................................................10 Section 17 . General Authorization and Ratification.................................................................1 l Section18 . Severability............................................................................................................11 Section 19 . Effective Date of Ordinance..................................................................................12 Exhibit A Parameters for Final Terms Exhibit B Form of Undertaking to Provide Continuing Disclosure *The coverpage, table of contents and section headings of this ordinance are for convenience of reference only, and shall not be used to resolve any question of interpretation of this ordinance. -1- 51398050.3 Page 7 of 92 CITY OF PASCO, WASHINGTON ORDINANCE NO. AN ORDINANCE of the City of Pasco, Washington, relating to contracting indebtedness; providing for the issuance, sale and delivery of not to exceed $9,000,000 aggregate principal amount of limited tax general obligation bonds to provide funds to design, construct and equip a new police facility and other capital purposes, as deemed necessary and advisable by the City, and to pay the costs of issuance and sale of the bonds; fixing or setting parameters with respect to certain terms and covenants of the bonds; appointing the City's designated representative to approve the final terms of the sale of the bonds; and providing for other related matters. THE CITY COUNCIL OF THE CITY OF PASCO, WASHINGTON, DO ORDAIN as follows: Section 1. Definitions. As used in this ordinance, the following capitalized terms shall have the following meanings: (a) "Authorized Denomination" means $5,000 or any integral multiple thereof within a maturity. (b) "Beneficial Owner" means, with respect to a Bond, the owner of any beneficial interest in that Bond. (c) "Bond" means each bond issued pursuant to and for the purposes provided in this ordinance. (d) "Bond Counsel" means the firm of Foster Pepper PLLC, its successor, or any other attorney or firm of attorneys selected by the City with a nationally recognized standing as bond counsel in the field of municipal finance. (e) "Bond Fund" means the Limited Tax General Obligation Bond Fund, 2015, of the City created for the payment of the principal of and interest on the Bonds. (f) "Bond Purchase Agreement" means an offer to purchase the Bonds setting forth certain terms and conditions of the issuance, sale and delivery of those Bonds, which offer is authorized to be accepted by the Designated Representative on behalf of the City, if consistent with this ordinance. (g) "Bond Register" means the books or records maintained by the Bond Registrar for the purpose of identifying ownership of each Bond. (h) "Bond Registrar" means the Fiscal Agent, or any successor bond registrar selected by the City. -1- 51398050.3 Page 8 of 92 (i) "City" means the City of Pasco, Washington, a municipal corporation duly organized and existing under the laws of the State. 0) "City Council" means the legislative authority of the City, as duly and regularly constituted from time to time. (k) "Code" means the United States Internal Revenue Code of 1986, as amended, and applicable rules and regulations promulgated thereunder. (1) "DTC" means The Depository Trust Company, New York, New York, or its nominee. (m) "Designated Representative" means the officer of the City appointed in Section 4 of this ordinance to serve as the City's designated representative in accordance with RCW 39.46.040(2). (n) "Final Terms" means the terms and conditions for the sale of the Bonds including the amount, date or dates, denominations, interest rate or rates (or mechanism for determining interest rate or rates), payment dates, final maturity, redemption rights, price, and other terms or covenants. (o) "Deputy Director" means the City's Deputy Director of Administrative and Community Services or such other officer of the City who succeeds to substantially all of the responsibilities of that office. (p) "Fiscal Agent" means the fiscal agent of the State, as the same may be designated by the State from time to time. (q) "Government Obligations" has the meaning given in RCW 39.53.010, as now in effect or as may hereafter be amended. (r) "Issue Date" means, with respect to a Bond, the date of initial issuance and delivery of that Bond to the Purchaser in exchange for the purchase price of that Bond. (s) "Letter of Representations" means the Blanket Issuer Letter of Representations between the City and DTC, dated August 31, 1998, as it may be amended from time to time, and any successor or substitute letter relating to the operational procedures of the Securities Depository. (t) "MSRB" means the Municipal Securities Rulemaking Board. (u) "Official Statement" means an offering document, disclosure document, private placement memorandum or substantially similar disclosure document provided to purchasers and potential purchasers in connection with the initial offering of the Bonds in conformance with Rule 15c2-12 or other applicable regulations of the SEC. (v) "Owner" means, without distinction, the Registered Owner and the Beneficial Owner. -2- 51398050.3 Page 9 of 92 (w) "Project" means the design, construction and equipping of a new police facility located on property owned by the City adjacent to City Hall, and other capital purposes, as deemed necessary and advisable by the City. Incidental costs incurred in connection with carrying out and accomplishing the Project, consistent with RCW 39.46.070, may be included as costs of the Project. The Project includes acquisition, construction and installation of all necessary furniture, equipment, apparatus, accessories, fixtures and appurtenances. (x) "Project Account" means the Police Community Services Building Account of the City created for the purpose of carrying out the Project. (y) "Purchaser" means Piper Jaffray & Co. of Seattle, Washington, or such other purchaser of the Bonds whose offer is accepted by the Designated Representative in accordance with this ordinance. (z) "Rating Agency" means any nationally recognized rating agency then maintaining a rating on the Bonds at the request of the City. (aa) "Record Date" means the Bond Registrar's close of business on the 15th day of the month preceding an interest payment date. With respect to redemption of a Bond prior to its maturity, the Record Date shall mean the Bond Registrar's close of business on the date on which the Bond Registrar sends the notice of redemption in accordance with Section 9. (bb) "Registered Owner" means, with respect to a Bond, the person in whose name that Bond is registered on the Bond Register. For so long as the City utilizes the book -entry only system for the Bonds under the Letter of Representations, Registered Owner shall mean the Securities Depository. (cc) "Rule I5c2-12" means Rule 15c2-12 promulgated by the SEC under the Securities Exchange Act of 1934, as amended. (dd) "SEC" means the United States Securities and Exchange Commission. (ee) "Securities Depository" means DTC, any successor thereto, any substitute securities depository selected by the City that is qualified under applicable laws and regulations to provide the services proposed to be provided by it, or the nominee of any of the foregoing. (ff) "State" means the State of Washington. (gg) "System of Registration" means the system of registration for the City's bonds and other obligations set forth in Ordinance No. 2845 of the City. (hh) "Term Bond" means each Bond designated as a Term Bond and subject to mandatory redemption in the years and amounts set forth in the Bond Purchase Agreement. (ii) "Undertaking" means the undertaking to provide continuing disclosure entered into pursuant to Section 15(c) of this ordinance. 51398050.3 -3 Page 10 of 92 Section 2. Findings and Determinations. The City takes note of the following facts and makes the following findings and determinations: (a) Authority and Description of Project. The City is in need of a new police facility, and the City under State law has broad authority to acquire and construct facilities appropriate to the good government of the City. The City Council therefore finds that it is in the best interests of the City to carry out the Project. (b) Plan of Financing. Pursuant to applicable law, including without limitation chapters 39.36 and 39.46 RCW, the City is authorized to issue general obligation bonds for the purpose of financing the Project. The total expected cost of the Project is approximately $8,500,000, which is expected to be made up of proceeds of the Bonds. (c) Debt Capacity. The maximum amount of indebtedness authorized by this ordinance is $9,000,000. Based on the following facts, this amount is to be issued within the amount permitted to be issued by the City for general municipal purposes without a vote: (1) The assessed valuation of the taxable property within the City as ascertained by the last preceding assessment for City purposes for collection in the calendar year 2015 is $3,679,413,343. (2) As of December 31, 2014, the City has limited tax general obligation indebtedness, consisting of bonds, notes, leases and conditional sales contracts outstanding in the principal amount of $4,063,122, which is incurred within the limit of up to 11/2% of the value of the taxable property within the City permitted for general municipal purposes without a vote. (3) As of May 1, 2015, the City has unlimited tax general obligation indebtedness for capital purposes only outstanding in the principal amount of $500,000 for general municipal purposes. The indebtedness described in this paragraph has been incurred with the approval of the requisite proportion of the City's qualified voters at an election meeting the minimum turnout requirements, within the limit of up to 21/2% of the value of the taxable property within the City for general municipal purposes (when combined with the outstanding limited tax general obligation indebtedness), 21/2% for utility purposes and 2%2% for open space, parks and economic development purposes. (d) The Bonds. For the purpose of providing the funds necessary to carry out the Project and to pay the costs of issuance and sale of the Bonds, the City Council finds that it is in the best interests of the City and its taxpayers to issue and sell the Bonds to the Purchaser, pursuant to the terms set forth in the Bond Purchase Agreement as approved by the City's Designated Representative consistent with this ordinance. Section 3. Authorization of Bonds. The City is authorized to borrow money on the credit of the City and issue negotiable limited tax general obligation bonds evidencing indebtedness in the principal amount not to exceed $9,000,000 to provide funds necessary to carry out the Project and to pay the costs of issuance and sale of the Bonds. The proceeds of the 51398050.3 _4 Page 11 of 92 Bonds allocated to paying the cost of the Project shall be deposited as set forth in Section 8 of this ordinance and shall be used to carry out the Project, or a portion of the Project, in such order of time as the City determines is advisable and practicable. Section 4. Description of Bonds; Appointment of Designated Representative. The City Manager is appointed as the Designated Representative of the City and is authorized and directed to conduct the sale of the Bonds in the manner and upon the terms deemed most advantageous to the City, and to approve the Final Terms of the Bonds, with such additional terms and covenants as the Designated Representative deems advisable, within the parameters set forth in Exhibit A, which is attached to this ordinance and incorporated by this reference. Section 5. Bond Registrar; Registration and Transfer of Bonds. (a) Registration of Bonds; Bond Register. Each Bond shall be issued only in registered form as to both principal and interest and the ownership of each Bond shall be recorded on the Bond Register. The Bond Register shall contain the name and mailing address of each Registered Owner and the principal amount and number of each Bond held by each Registered Owner. (b) Bond Registrar; Duties. The Fiscal Agent is appointed as initial Bond Registrar. The Bond Registrar shall keep, or cause to be kept, sufficient books for the registration and transfer of the Bonds, which shall be open to inspection by the City at all times. The Bond Registrar is authorized, on behalf of the City, to authenticate and deliver Bonds transferred or exchanged in accordance with the provisions of the Bonds and this ordinance, to serve as the City's paying agent for the Bonds and to carry out all of the Bond Registrar's powers and duties under this ordinance and the System of Registration. The Bond Registrar shall be responsible for its representations contained in the Bond Registrar's Certificate of Authentication on each Bond. The Bond Registrar may become an Owner with the same rights it would have if it were not the Bond Registrar and, to the extent permitted by law, may act as depository for and permit any of its officers or directors to act as members of, or in any other capacity with respect to, any committee formed to protect the rights of Owners. (c) Transfer or Exchange. A Bond surrendered to the Bond Registrar may be exchanged for a Bond or Bonds in any Authorized Denomination of an equal aggregate principal amount and of the same interest rate and maturity. A Bond may be transferred only if endorsed in the manner provided thereon and surrendered to the Bond Registrar. Any exchange or transfer shall be without cost to the Owner or transferee. The Bond Registrar shall not be obligated to exchange any Bond or transfer registered ownership during the period between the applicable Record Date and the next upcoming interest payment or redemption date. (d) Securities Depository; Book -Entry Only Form. DTC is appointed as initial Securities Depository. Each Bond initially shall be registered in the name of Cede & Co., as the nominee of DTC. Each Bond registered in the name of the Securities Depository shall be held fully immobilized in book -entry only form by the Securities Depository in accordance with the provisions of the Letter of Representations. Registered ownership of any Bond registered in the name of the Securities Depository may not be transferred except: (i) to any successor Securities Depository; (ii) to any substitute Securities Depository appointed by the City; or (iii) to any 51398050.3 -5 Page 12 of 92 person if the Bond is no longer to be held in book -entry only form. Upon the resignation of the Securities Depository, or upon a termination of the services of the Securities Depository by the City, the City may appoint a substitute Securities Depository. If (i) the Securities Depository resigns and the City does not appoint a substitute Securities Depository, or (ii) the City terminates the services of the Securities Depository, the Bonds no longer shall be held in book - entry only form and the registered ownership of each Bond may be transferred to any person as provided in this ordinance. Neither the City nor the Bond Registrar shall have any obligation to participants of any Securities Depository or the persons for whom they act as nominees regarding accuracy of any records maintained by the Securities Depository or its participants. Neither the City nor the Bond Registrar shall be responsible for any notice that is permitted or required to be given to a Registered Owner except such notice as is required to be given by the Bond Registrar to the Securities Depository. Section 6. Form and Execution of Bonds. (a) Form of Bonds; Signatures and Seal. Each Bond shall be prepared in a form consistent with the provisions of this ordinance and State law. Each Bond shall be signed by the Mayor and the City Clerk, either or both of whose signatures may be manual or in facsimile, and the seal of the City or a facsimile reproduction thereof shall be impressed or printed thereon. If any officer whose manual or facsimile signature appears on a Bond ceases to be an officer of the City authorized to sign bonds before the Bond bearing his or her manual or facsimile signature is authenticated by the Bond Registrar, or issued or delivered by the City, that Bond nevertheless may be authenticated, issued and delivered and, when authenticated, issued and delivered, shall be as binding on the City as though that person had continued to be an officer of the City authorized to sign bonds. Any Bond also may be signed on behalf of the City by any person who, on the actual date of signing of the Bond, is an officer of the City authorized to sign bonds, although he or she did not hold the required office on its Issue Date. (b) Authentication. Only a Bond bearing a Certificate of Authentication in substantially the following form, manually signed by the Bond Registrar, shall be valid or obligatory for any purpose or entitled to the benefits of this ordinance: "Certificate Of Authentication. This Bond is one of the fully registered City of Pasco, Washington, Limited Tax General Obligation Bonds, 2015, described in the Bond Ordinance." The authorized signing of a Certificate of Authentication shall be conclusive evidence that the Bond so authenticated has been duly executed, authenticated and delivered and is entitled to the benefits of this ordinance. Section 7. Payment of Bonds. Principal of and interest on each Bond shall be payable in lawful money of the United States of America. Principal of and interest on each Bond registered in the name of the Securities Depository is payable in the manner set forth in the Letter of Representations. Interest on each Bond not registered in the name of the Securities Depository is payable by electronic transfer on the interest payment date, or by check or draft of the Bond Registrar mailed on the interest payment date to the Registered Owner at the address appearing on the Bond Register on the Record Date. However, the City is not required to make electronic transfers except pursuant to a request by a Registered Owner in writing received on or prior to the Record Date and at the sole expense of the Registered Owner. Principal of each 51398050.3 -6 Page 13 of 92 Bond not registered in the name of the Securities Depository is payable upon presentation and surrender of the Bond by the Registered Owner to the Bond Registrar. The Bonds are not subject to acceleration under any circumstances. Section 8. Funds and Accounts; Deposit of Proceeds. (a) Bond Fund. The Bond Fund is created as a special fund of the City for the sole purpose of paying principal of and interest on the Bonds. Accrued interest on the Bonds, if any, shall be deposited into the Bond Fund. All amounts allocated to the payment of the principal of and interest on the Bonds shall be deposited in the Bond Fund as necessary for the timely payment of amounts due with respect to the Bonds. The principal of and interest on the Bonds shall be paid out of the Bond Fund. Until needed for that purpose, the City may invest money in the Bond Fund temporarily in any legal investment, and the investment earnings shall be retained in the Bond Fund and used for the purposes of that fund. (b) Project Account. The Project Account has been previously created as an account of the City for the purpose of paying the costs of the Project. Proceeds received from the sale and delivery of the Bonds shall be deposited into the Project Account and used to pay the costs of the Project and costs of issuance of the Bonds. Until needed to pay such costs, the City may invest those proceeds temporarily in any legal investment, and the investment earnings shall be retained in the Project Account and used for the purposes of that fund, except that earnings subject to a federal tax or rebate requirement (if applicable) may be withdrawn from the Project Account and used for those tax or rebate purposes. Section 9. Redemption Provisions and Purchase of Bonds. (a) Optional Redemption. The Bonds shall be subject to redemption at the option of the City on terms acceptable to the Designated Representative, as set forth in the Bond Purchase Agreement, consistent with the parameters set forth in Exhibit A. (b) Mandatory Redemption. Each Bond that is designated as a Term Bond in the Bond Purchase Agreement, consistent with the parameters set forth in Exhibit A and except as set forth below, shall be called for redemption at a price equal to the stated principal amount to be redeemed, plus accrued interest, on the dates and in the amounts as set forth in the Bond Purchase Agreement. If a Term Bond is redeemed under the optional redemption provisions, defeased or purchased by the City and surrendered for cancellation, the principal amount of the Term Bond so redeemed, defeased or purchased (irrespective of its actual redemption or purchase price) shall be credited against one or more scheduled mandatory redemption installments for that Term Bond. The City shall determine the manner in which the credit is to be allocated and shall notify the Bond Registrar in writing of its allocation prior to the earliest mandatory redemption date for that Term Bond for which notice of redemption has not already been given. (c) Selection of Bonds for Redemption; Partial Redemption. If fewer than all of the outstanding Bonds are to be redeemed at the option of the City, the City shall select the maturities to be redeemed. If fewer than all of the outstanding Bonds of a maturity are to be redeemed, the Securities Depository shall select Bonds registered in the name of the Securities 51398050.3 - / Page 14 of 92 Depository to be redeemed in accordance with the Letter of Representations, and the Bond Registrar shall select all other Bonds to be redeemed randomly in such manner as the Bond Registrar shall determine. All or a portion of the principal amount of any Bond that is to be redeemed may be redeemed in any Authorized Denomination. If less than all of the outstanding principal amount of any Bond is redeemed, upon surrender of that Bond to the Bond Registrar, there shall be issued to the Registered Owner, without charge, a new Bond (or Bonds, at the option of the Registered Owner) of the same maturity and interest rate in any Authorized Denomination in the aggregate principal amount to remain outstanding. (d) Notice of Redemption. Notice of redemption of each Bond registered in the name of the Securities Depository shall be given in accordance with the Letter of Representations. Notice of redemption of each other Bond, unless waived by the Registered Owner, shall be given by the Bond Registrar not less than 20 nor more than 60 days prior to the date fixed for redemption by first-class mail, postage prepaid, to the Registered Owner at the address appearing on the Bond Register on the Record Date. The requirements of the preceding sentence shall be satisfied when notice has been mailed as so provided, whether or not it is actually received by an Owner. In addition, the redemption notice shall be mailed or sent electronically within the same period to the MSRB (if required under the Undertaking), to each Rating Agency, and to such other persons and with such additional information as the Deputy Director shall determine, but these additional mailings shall not be a condition precedent to the redemption of any Bond. (e) Rescission of Optional Redemption Notice. In the case of an optional redemption, the notice of redemption may state that the City retains the right to rescind the redemption notice and the redemption by giving a notice of rescission to the affected Registered Owners at any time on or prior to the date fixed for redemption. Any notice of optional redemption that is so rescinded shall be of no effect, and each Bond for which a notice of redemption has been rescinded shall remain outstanding. (f) Effect of Redemption. Interest on each Bond called for redemption shall cease to accrue on the date fixed for redemption, unless either the notice of optional redemption is rescinded as set forth above, or money sufficient to effect such redemption is not on deposit in the Bond Fund or in a trust account established to refund or defease the Bond. (g) Purchase of Bonds. The City reserves the right to purchase any or all of the Bonds offered to the City at any time at any price acceptable to the City plus accrued interest to the date of purchase. Section 10. Failure To Pay Bonds. If the principal of any Bond is not paid when the Bond is properly presented at its maturity or date fixed for redemption, the City shall be obligated to pay interest on that Bond at the same rate provided in the Bond from and after its maturity or date fixed for redemption until that Bond, both principal and interest, is paid in full or until sufficient money for its payment in full is on deposit in the Bond Fund, or in a trust account established to refund or defease the Bond, and the Bond has been called for payment by giving notice of that call to the Registered Owner. Section 11. Pledge of Taxes. The Bonds constitute a general indebtedness of the City and are payable from tax revenues of the City and such other money as is lawfully available and 51398050.3 -o Page 15 of 92 pledged by the City for the payment of principal of and interest on the Bonds. For as long as any of the Bonds are outstanding, the City irrevocably pledges that it shall, in the manner provided by law within the constitutional and statutory limitations provided by law without the assent of the voters, include in its annual property tax levy amounts sufficient, together with other money that is lawfully available, to pay principal of and interest on the Bonds as the same become due. The full faith, credit and resources of the City are pledged irrevocably for the prompt payment of the principal of and interest on the Bonds and such pledge shall be enforceable in mandamus against the City. Section 12. Tax Covenants. (a) Preservation of Tax Exemption for Interest on Bonds. The City covenants that it will take all actions necessary to prevent interest on the Bonds from being included in gross income for federal income tax purposes, and it will neither take any action nor make or permit any use of proceeds of the Bonds or other funds of the City treated as proceeds of the Bonds that will cause interest on the Bonds to be included in gross income for federal income tax purposes. The City also covenants that it will, to the extent the arbitrage rebate requirements of Section 148 of the Code are applicable to the Bonds, take all actions necessary to comply (or to be treated as having complied) with those requirements in connection with the Bonds. (b) Post -Issuance Compliance. The Deputy Director is authorized and directed to review and update the City's written procedures to facilitate compliance by the City with the covenants in this ordinance and the applicable requirements of the Code that must be satisfied after the Issue Date to prevent interest on the Bonds from being included in gross income for federal tax purposes. Section 13. Refunding or Defeasance of the Bonds. The City may issue refunding bonds pursuant to State law or use money available from any other lawful source to carry out a refunding or defeasance plan, which may include (a) paying when due the principal of and interest on any or all of the Bonds (the "defeased Bonds"); (b) redeeming the defeased Bonds prior to their maturity; and (c) paying the costs of the refunding or defeasance. If the City sets aside in a special trust fund or escrow account irrevocably pledged to that redemption or defeasance (the "trust account"), money and/or Government Obligations maturing at a time or times and bearing interest in amounts sufficient to redeem, refund or defease the defeased Bonds in accordance with their terms, then all right and interest of the Owners of the defeased Bonds in the covenants of this ordinance and in the funds and accounts obligated to the payment of the defeased Bonds shall cease and become void. Thereafter, the Owners of defeased Bonds shall have the right to receive payment of the principal of and interest on the defeased Bonds solely from the trust account and the defeased Bonds shall be deemed no longer outstanding. In that event, the City may apply money remaining in any fund or account (other than the trust account) established for the payment or redemption of the defeased Bonds to any lawful purpose. Unless otherwise specified by the City in a refunding or defeasance plan, notice of refunding or defeasance shall be given, and selection of Bonds for any partial refunding or defeasance shall be conducted, in the manner prescribed in this ordinance for the redemption of Bonds. 51398050.3 -� Page 16 of 92 Section 14. Sale and Delivery of the Bonds. (a) Manner of Sale of Bonds; Delivery of Bonds. The Designated Representative is authorized to sell the Bonds by negotiated sale to the Purchaser, based on the assessment of the Designated Representative of market conditions, in consultation with appropriate City officials and staff, Bond Counsel and other advisors. In accepting the Final Terms, the Designated Representative shall take into account those factors that, in the judgment of the Designated Representative, may be expected to result in the lowest true interest cost to the City. The Bond Purchase Agreement for the Bonds shall set forth the Final Terms. The Designated Representative is authorized to execute the Bond Purchase Agreement on behalf of the City, so long as the terms provided therein are consistent with the terms of this ordinance. (b) Preparation, Execution and Delivery of the Bonds. The Bonds will be prepared at City expense and will be delivered to the Purchaser in accordance with the Bond Purchase Agreement, together with the approving legal opinion of Bond Counsel regarding the Bonds. Section 15. Official Statement; Continuing Disclosure. (a) Preliminary Official Statement Deemed Final. The Designated Representative shall review and, if acceptable to him or her, approve the preliminary Official Statement prepared in connection with the sale of the Bonds to the public. For the sole purpose of the Purchaser's compliance with paragraph (b)(1) of Rule 15c2-12, the Designated Representative is authorized to deem that preliminary Official Statement final as of its date, except for the omission of information permitted to be omitted by Rule 15c2-12. The City approves the distribution to potential purchasers of the Bonds of a preliminary Official Statement that has been approved by the Designated Representative and been deemed final, if applicable, in accordance with this subsection. (b) Approval of Final Official Statement. The City approves the preparation of a final Official Statement for the Bonds to be sold to the public in the form of the preliminary Official Statement that has been approved and deemed final in accordance with subsection (a), with such modifications and amendments as the Designated Representative deems necessary or desirable, and further authorizes the Designated Representative to execute and deliver such final Official Statement to the Purchaser if required under Rule 15c2-12. The City authorizes and approves the distribution by the Purchaser of the final Official Statement so executed and delivered to purchasers and potential purchasers of the Bonds. (c) Undertaking to Provide Continuing Disclosure. If necessary to meet the requirements of paragraph (b)(5) of Rule 15c2-12, as applicable to the Purchaser acting as a participating underwriter for the Bonds, the Designated Representative is authorized to execute a written undertaking to provide continuing disclosure for the benefit of holders of the Bonds in substantially the form attached as Exhibit B. Section 16. Supplemental and Amendatory Ordinances. The City may supplement or amend this ordinance for any one or more of the following purposes without the consent of any Owners of the Bonds: 51398050.3 -10Page 17 of 92 (a) To add covenants and agreements that do not materially adversely affect the interests of Owners, or to surrender any right or power reserved to or conferred upon the City. (b) To cure any ambiguities, or to cure, correct or supplement any defective provision contained in this ordinance in a manner that does not materially adversely affect the interest of the Beneficial Owners of the Bonds. Section 17. General Authorization and Ratification. The Designated Representative and other appropriate officers of the City are severally authorized to take such actions and to execute such documents as in their judgment may be necessary or desirable to carry out the transactions contemplated in connection with this ordinance, and to do everything necessary for the prompt delivery of the Bonds to the Purchaser thereof and for the proper application, use and investment of the proceeds of the Bonds. All actions taken prior to the effective date of this ordinance in furtherance of the purposes described in this ordinance and not inconsistent with the terms of this ordinance are ratified and confirmed in all respects. Section 18. Severability. The provisions of this ordinance are declared to be separate and severable. If a court of competent jurisdiction, all appeals having been exhausted or all appeal periods having run, finds any provision of this ordinance to be invalid or unenforceable as to any person or circumstance, such offending provision shall, if feasible, be deemed to be modified to be within the limits of enforceability or validity. However, if the offending provision cannot be so modified, it shall be null and void with respect to the particular person or circumstance, and all other provisions of this ordinance in all other respects, and the offending provision with respect to all other persons and all other circumstances, shall remain valid and enforceable. 51398050.3 11 Page 18 Of 92 Section 19. Effective Date of Ordinance. This ordinance shall take effect and be in force from and after its passage and five days following its publication as required by law. PASSED by the City Council and APPROVED by the Mayor of the City of Pasco, Washington, at a regular open public meeting thereof, this 15th day of June, 2015. Matt Watkins, Mayor ATTEST: Debra L. Clark, City Clerk APPROVED AS TO FORM: Foster Pepper PLLC Bond Counsel 51398050.3 12 Page 19 Of 92 Exhibit A EXHIBIT A DESCRIPTION OF THE BONDS (a) Principal Amount. The Bonds may be issued in an amount not to exceed the aggregate principal amount of $9,000,000. (b) Date or Dates. Each Bond shall be dated its Issue Date, which date may not be later than one year after the effective date of this ordinance. (c) Denominations, Name, etc. The Bonds shall be issued in Authorized Denominations and shall be numbered separately in the manner and shall bear any name and additional designation as deemed necessary or appropriate by the Designated Representative. (d) Interest Rate(s). Each Bond shall bear interest at a fixed rate per annum (computed on the basis of a 360 -day year of twelve 30 - day months) from the Issue Date or from the most recent date for which interest has been paid or duly provided for, whichever is later. One or more rates of interest may be fixed for the Bonds. No rate of interest for any Bond may exceed 5.0%, and the true interest cost to the City for the Bonds may not exceed 5.0%. (e) Payment Dates. Interest shall be payable at fixed rates semiannually on dates acceptable to the Designated Representative, commencing no later than December 1, 2015. Principal payments shall commence on a date acceptable to the Designated Representative and shall be payable at maturity or in mandatory redemption installments annually thereafter, on dates acceptable to the Designated Representative. (f) Final Maturity. The Bonds shall mature no later than the date that is 21 years after the Issue Date. (g) Redemption Rights. The Designated Representative may approve in the Bond Purchase Agreement provisions for the optional and mandatory redemption of Bonds, subject to the following: (1) Optional Redemption. Any Bond may be designated as being (A) subject to redemption at the option of the City prior to its maturity date on the dates and at the prices set forth in the Bond Purchase Agreement; or (B) not subject to A-1 51398050.3 Page 20 of 92 redemption prior to its maturity date. If a Bond is subject to optional redemption prior to its maturity, it must be subject to such redemption on one or more dates occurring not more than 101/2 years after the Issue Date. (2) Mandatory Redemption. Any Bond may be designated as a Term Bond, subject to mandatory redemption prior to its maturity on the dates and in the amounts set forth in the Bond Purchase Agreement. (h) Price. The purchase price for the Bonds may not be less than 96% or more than 120% of the stated principal amount of the Bonds. (i) Other Terms and Conditions. (1) The Bonds may not be issued if it would cause the indebtedness of the City to exceed the City's legal debt capacity on the Issue Date. (2) The Designated Representative may determine whether it is in the City's best interest to provide for bond insurance or other credit enhancement; and may accept such additional terms, conditions and covenants as he or she may determine are in the best interests of the City, consistent with this ordinance. 51398050.3 A-2 Page 21 of 92 Exhibit B [Form of] UNDERTAKING TO PROVIDE CONTINUING DISCLOSURE City of Pasco, Washington Limited Tax General Obligation Bonds, 2015 The City of Pasco, Washington (the "City"), makes the following written Undertaking for the benefit of holders of the above -referenced bonds (the "Bonds"), for the sole purpose of assisting the Purchaser in meeting the requirements of paragraph (b)(5) of Rule 15c2-12, as applicable to a participating underwriter for the Bonds. Capitalized terms used but not defined below shall have the meanings given in Ordinance No. of the City (the "Bond Ordinance"). (a) Undertaking to Provide Annual Financial Information and Notice of Listed Events. The City undertakes to provide or cause to be provided, either directly or through a designated agent, to the MSRB, in an electronic format as prescribed by the MSRB, accompanied by identifying information as prescribed by the MSRB: (i) Annual financial information and operating data of the type included in the final official statement for the Bonds and described in paragraph (b) ("annual financial information"); (ii) Timely notice (not in excess of 10 business days after the occurrence of the event) of the occurrence of any of the following events with respect to the Bonds: (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notice of Proposed Issue (IRS Form 5701 — TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds; (7) modifications to rights of holders of the Bonds, if material; (8) bond calls (other than scheduled mandatory redemptions of Term Bonds), if material, and tender offers; (9) defeasances; (10) release, substitution, or sale of property securing repayment of the Bonds, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the City, as such "Bankruptcy Events" are defined in Rule 15c2-12; (13) the consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of the assets of the City other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and (14) appointment of a successor or additional trustee or the change of name of a trustee, if material. (iii) Timely notice of a failure by the City to provide required annual financial information on or before the date specified in paragraph (b). 51398050.3 B-1 Page 22 of 92 (b) Type of Annual Financial Information Undertaken to be Provided. The annual financial information that the City undertakes to provide in paragraph (a): (i) Shall consist of (1) annual financial statements prepared (except as noted in the financial statements) in accordance with applicable generally accepted accounting principles applicable to local governmental units of the State such as the City, as such principles may be changed from time to time, which statements may be unaudited, provided, that if and when audited financial statements are prepared and available to the City they will be provided; (2) principal amount of general obligation bonds outstanding at the end of the applicable fiscal year; (3) assessed valuation for that fiscal year; (4) property tax levy amounts and rates for that fiscal year; and (5) a statement of revenues for that fiscal year from any other revenue sources pledged to the Bonds; (ii) Shall be provided not later than the last day of the ninth month after the end of each fiscal year of the City (currently, a fiscal year ending December 31), as such fiscal year may be changed as required or permitted by State law, commencing with the City's fiscal year ending December 31, 2014; and (iii) May be provided in a single or multiple documents, and may be incorporated by specific reference to documents available to the public on the Internet website of the MSRB or filed with the SEC. (c) Amendment of Undertaking. This Undertaking is subject to amendment after the primary offering of the Bonds without the consent of any holder of any Bond, or of any broker, dealer, municipal securities dealer, participating underwriter, Rating Agency or the MSRB, under the circumstances and in the manner permitted by Rule 15c2-12. The City will give notice to the MSRB of the substance (or provide a copy) of any amendment to the Undertaking and a brief statement of the reasons for the amendment. If the amendment changes the type of annual financial information to be provided, the annual financial information containing the amended financial information will include a narrative explanation of the effect of that change on the type of information to be provided. (d) Beneficiaries. This Undertaking shall inure to the benefit of the City and the holder of each Bond, and shall not inure to the benefit of or create any rights in any other person. (e) Termination of Undertaking. The City's obligations under this Undertaking shall terminate upon the legal defeasance of all of the Bonds. In addition, the City's obligations under this Undertaking shall terminate if the provisions of Rule 15c2-12 that require the City to comply with this Undertaking become legally inapplicable in respect of the Bonds for any reason, as confirmed by an opinion of Bond Counsel delivered to the City, and the City provides timely notice of such termination to the MSRB. (f) Remedy for Failure to Comply with Undertaking. As soon as practicable after the City learns of any failure to comply with this Undertaking, the City will proceed with due diligence to cause such noncompliance to be corrected. No failure by the City or other obligated person to comply with this Undertaking shall constitute a default in respect of the Bonds. The 51398050.3 B-2 Page 23 of 92 sole remedy of any holder of a Bond shall be to take action to compel the City or other obligated person to comply with this Undertaking, including seeking an order of specific performance from an appropriate court. (g) Designation of Official Responsible to Administer Undertaking. The Deputy Director or his or her designee is the person designated, in accordance with the Bond Ordinance, to carry out the Undertaking in accordance with Rule 15c2-12, including, without limitation, the following actions: (i) Preparing and filing the annual financial information undertaken to be provided; (ii) Determining whether any event specified in paragraph (a) has occurred, assessing its materiality, where necessary, with respect to the Bonds, and preparing and disseminating any required notice of its occurrence; (iii) Determining whether any person other than the City is an "obligated person" within the meaning of Rule 15c2-12 with respect to the Bonds, and obtaining from such person an undertaking to provide any annual financial information and notice of listed events for that person required under Rule 15c2-12; (iv) Selecting, engaging and compensating designated agents and consultants, including financial advisors and legal counsel, to assist and advise the City in carrying out this Undertaking; and (v) Effecting any necessary amendment of this Undertaking. 51398050.3 B-3 Page 24 Of 92 CERTIFICATION I, the undersigned, City Clerk of the City of Pasco, Washington (the "City"), hereby certify as follows: 1. The attached copy of Ordinance No. (the "Ordinance") is a full, true and correct copy of an ordinance duly passed at a regular meeting of the City Council of the City held at the regular meeting place thereof on June 15, 2015, as that ordinance appears on the minute book of the City. 2. The Ordinance will be in full force and effect five days after publication in the City's official newspaper, which publication date is , 2015. 5. A quorum of the members of the City Council was present throughout the meeting and a majority of the members voted in the proper manner for the passage of the Ordinance. Dated: , 2015. CITY OF PASCO, WASHINGTON Debra L. Clark, City Clerk 51398050.3 Page 25 of 92 PRELIMINARY OFFICIAL STATEMENT DATED JUNE —, 2015 NEW ISSUE BOOK -ENTRY ONLY RATING REQUESTED: STANDARD & POOR'S In the opinion of Foster Pepper PLLC, Seattle, 1Vashington (`Bond Counsel', under existing federal law and assuming compliance with applicable requirements of the Internal Revenue Code of 9986, as amended (the "Code'q, that must be satisfied subsequent to the issue date of the Bonds, interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the alternative minimum tax applicable to individuals. However, while interest on the Bonds also is not an item of tax preference forpurposes of the alternative minimum tax applicable to corporations, interest on the Bonds received by corporations is taken into account in the computation of adjusted current earnings for purposes of the alternative minimum tax applicable to corporations, interest on Bonds received by certain S corporations may be subject to tax, and interest on the Bonds received by foreign corporations with United States branches may be subject to a foreign branch profits tax. Receipt of interest on the Bonds may have other federal tax consequences for certain taxpayers. See the captions `Tax Exemption" and "Certain Other Federal Tax Consequences" herein. DATED: Date of Delivery CITY OF PASCO, WASHINGTON $7,730,000* Limited Tax General Obligation Bonds, 2015 DUE: December 1, as shown on inside cover The City of Pasco, Washington (the "City") Limited Tax General Obligation Bonds, 2015 (the "Bonds"), will be issued in fully registered form and, when issued, will be registered in the name of Cede & Co., as bond owner and nominee for The Depository Trust Company, New York, New York ("DTC'. DTC will act as securities depository for the Bonds. The Bonds will be initially issued in book -entry form only in the denomination of $5,000 or any integral multiple thereof within a single maturity. Purchasers will not receive certificates representing their interest in the Bonds purchased. The Bonds will bear interest payable on December 1, 2015 and semiannually thereafter on June 1 and December 1 of each year, to the maturity or early redemption of the Bonds. The principal of and interest on the Bonds are payable by the fiscal agency of the State of Washington, currently, U.S. Bank National Association, Seattle, Washington (the "Bond Registrar'. For so long as the Bonds remain in a "book -entry only" transfer system, the Bond Registrar will make such payments only to DTC, which will in turn remit such principal and interest to the DTC participants for subsequent disbursement to Beneficial Owners of the Bonds. See Appendix B—"BOOK-ENTRY TRANSFER SYSTEM" hereto. MATURITY SCHEDULE - SEE INSIDE COVER The Bonds are subject to redemption prior to maturity. See "DESCRIPTION OF THE BONDS – Redemption Provisions" herein. The Bonds constitute a general indebtedness of the City and are payable from tax revenues of the City and such other money as is lawfully available and pledged by the City for the payment of principal of and interest on the Bonds. For as long as any of the Bonds are outstanding, the City irrevocably pledges that it shall, in the manner provided by law within the constitutional and statutory limitations provided by law without the assent of the voters, include in its annual property tax levy amounts sufficient, together with other money that is lawfully available, to pay principal of and interest on the Bonds as the same become due. The full faith, credit and resources of the City are pledged irrevocably for the prompt payment of the principal of and interest on the Bonds and such pledge shall be enforceable in mandamus against the City. See "DESCRIPTION OF THE BONDS—Security." The Bonds are offered for sale to Piper Jaffray & Co. (the "Underwriter'D subject to the final approving legal opinion of Bond Counsel. The form of Bond Counsel's opinion is attached hereto as Appendix A. It is expected that the Bonds will be ready for delivery to the Bond Registrar on behalf of DTC by Fast Automated Securities Transfer, on or around July 14, 2015 (the "Date of Delivery"). This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must read the entire Octal Statement to obtain information essential to the making of an informed investment decision. * Preliminary, subject to change. Piperjaffray. Page 26 of 92 CITY OF PASCO, WASHINGTON $7,730,000* LIMITED TAX GENERAL OBLIGATION BONDS, 2015 MATURITY SCHEDULE Serial Maturities Due Interest CUSIP No. Dec. 1 Amount* Rate Yield (Base 702554)(1) 2016 2017 2018 2019 2020 2011 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 (1) The CUSIP data herein is provided by CUSIP Global Services, managed on behalf of the America Bankers Association by Standard & Poor's. The CUSIP numbers are not intended to create a database and do not serve in any way as a substitute for CUSIP service. CUSIP numbers have been assigned by an independent company not affiliated with the City and are provided solely for convenience and reference. The CUSIP numbers for a specific maturity are subject to change after the issuance of the Bonds. Neither the City nor the Underwriter takes any responsibility for the accuracy of the CUSIP numbers. * Preliminary, subject to change. -1- Page 27 of 92 This Official Statement does not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. No dealer, broker, salesperson, or other person has been authorized by the City or the Underwriter to give any information or to make any representations with respect to the Bonds other than those contained in this Official Statement and, if given or made, such information or representations must not be relied upon. The City makes no representation regarding the accuracy or completeness of Bond Counsel's form of opinion, information related to the Underwriter or information provided by the Underwriter regarding the reoffering prices, or the information in Appendix B—"Book-Entry Transfer System," which has been provided by DTC. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement not any sale made by use of this Official Statement shall, under any circumstances, create any implication that there has been no change in the affairs of the City since the date hereof. The Underwriter has provided the following sentence for inclusion in this Official Statement. The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. Certain statements contained in this Official Statement do not reflect historical facts, but are forecasts and "forward- looking statements." No assurance can be given that the future results discussed herein will be achieved, and actual results may differ materially from the forecasts described herein. In this respect, words such as "estimated," "projected," "anticipate," "expect," "intend," "plan," "believe" and similar expressions are intended to identify forward-looking statements. All projections, assumptions and other forward-looking statements are expressly qualified in their entirety by the cautionary statements set forth in this Official Statement. These forward-looking statements speak only as of the date they were prepared. The City specifically disclaims any obligation to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of this Official Statement, except as otherwise expressly provided in "CONTINUING DISCLOSURE." The presentation of certain information, including tables of receipts from taxes and other revenues, is intended to show recent historic information and is not intended to indicate future or continuing trends in the financial position or other affairs of the City. No representation is made that past experience, as it might be shown by such financial and other information, will necessarily continue or be repeated in the future. Information relating to debt and tax limitations is based on existing statutes and constitutional provisions. Changes in State law could also alter these provisions. The order and placement of materials in this Official Statement, including the appendices, are not to be deemed to be a determination of relevance, materiality or importance, and this Official Statement, including the appendices, must be considered in its entirety. The offering of the Bonds is made only by means of this entire Official Statement. The Bonds have not been registered under the Securities Act of 1933, as amended, and the Bond Ordinance has not been qualified under the Trust Indenture Act of 1939, as amended, in reliance upon exemptions contained in such acts. The registration or qualification of the Bonds in accordance with applicable provisions of securities laws of the state in which the Bonds have been registered or qualified and the exemption from the registration or qualification in other states cannot be regarded as a recommendation thereof. Neither these states nor any of their agencies have passed upon the merits of the Bonds or the accuracy or completeness of this Official Statement. Any representation to the contrary may be a criminal offense. The connection with this offering, the Underwriter pay over -allot or effect transactions that stabilize or maintain the market price of the Bonds at levels above those which might otherwise prevail in the open market. Such stabilization, if commenced, may be discontinued at any time without prior notice to any person. This Preliminary Official Statement, as of its date, is in a form deemed final by the City for purposes of Securities and Exchange Commission Rule 15c2 -12(b)(1) but is subject to revision, amendment, and completion in a final Official Statement which will be available within seven business days after the sale date. -it- Page 28 of 92 Members Matt Watkins Rebecca Francik Robert Hoffmann Michael Garrison Saul Martinez Tom Larsen Al Yenney Dave Zabell Stan Strebel Rick Terway Eva Lindgren CITY OF PASCO, WASHINGTON 525 NORTH THIRD AVENUE P.O. Box 293 PASCO, WA 99301 (509) 545-3404 www.pasco-wa.gov* ELECTED OFFICIALS Position Mayor Mayor Pro -Tem Council Member Council Member Council Member Council Member Council Member CITY ADMINISTRATIVE STAFF Term Expires December 31, 2015 December 31, 2015 December 31, 2017 December 31, 2017 December 31, 2017 December 31, 2017 December 31, 2015 City Manager Deputy City Manager Administrative and Community Services Director Administrative and Community Services Deputy Director BOND REGISTRAR AND PAYING AGENT U.S. Bank National Association Seattle, Washington BOND COUNSEL Foster Pepper PLLC Seattle, Washington FINANCIAL ADVISOR A. Dashen & Associates Bellevue, Washington UNDERWRITER Piper Jaffray & Co. Portland, Washington The City's website is not part of this Official Statement, and investors should not rely on information which is presented in the City's website in determining whetber to purchase the Bonds. This inactive textual reference to the City's website is not a hyperlink and does not incorporate the City's website by reference. -iii- Page 29 of 92 TABLE OF CONTENTS [will update when final] Page INTRODUCTION.......................................................................1 DESCRIPTION OF THE BONDS........................................1 Authorization of Bonds............................................................... 1 Principal Amounts, Dates, Interest Rates, and Maturities ..... 1 Bond Registrar and Registration Features ................................ 1 Redemption Provisions................................................................. 2 Effect of Redemption.................................................................. 3 Purchase.......................................................................................... 3 Failure to Pay Bonds.................................................................... 3 Refunding or Defeasance............................................................ 3 PURPOSE AND USE OF BOND PROCEEDS .................. 4 Purpose...........................................................................................4 Sources and Uses of Bond Proceeds .......................................... 4 SECURITY FOR THE BONDS ............................................... 4 BONDED INDEBTEDNESS...................................................5 Authorization of Debt................................................................... 5 Limitations on Indebtedness........................................................ 5 Bonded Debt and Other Outstanding Obligations ................. 6 Debt Capacity Computation........................................................ 6 Limited Tax General Obligation Debt Service ......................... 7 Unlimited Tax General Obligation Debt Service ..................... 7 Net Direct and Overlapping Debt .............................................. 8 Bonded Debt Ratios...................................................................... 8 DebtPayment Record................................................................... 8 FutureFinancings........................................................................... 8 TAXING AUTHORITY............................................................... 9 Authorized Property Tax Levies ................................................. 9 Property Taxes and Limitations................................................... 9 Regular Property Tax Limitations.............................................10 Litigation.....................................................................................30 Overlapping Taxing Districts.....................................................11 Underwriting...............................................................................30 Assessed Valuation Determination...........................................12 Conflicts of Interest..................................................................30 Property Tax Collection Procedure..........................................12 LargestTaxpayers.........................................................................13 Collection of Other Taxes..........................................................13 FINANCIAL INFORMATION..............................................15 Statement of Revenues, Expenditures and Changes in Fund Balances....................................................................15 General Fund Budget Summary................................................16 Paye CITYPROFILE.........................................................................17 CityCouncil................................................................................17 Approval of Counsel.................................................................29 Key Administrative Personnel..................................................17 Financial Advisor.......................................................................29 LaborRelations..........................................................................18 Litigation.....................................................................................30 RetirementPlans........................................................................18 Underwriting...............................................................................30 Firemen's Pension.....................................................................19 Conflicts of Interest..................................................................30 Other Post Employment Benefits...........................................20 RiskManagement.......................................................................20 Accounting and Budgeting Policies.........................................21 Auditing of City Finances........................................................21 Authorized Investments...........................................................21 GENERAL AND ECONOMIC INFORMATION .......23 Population....................................................................................23 Largest Employers.....................................................................23 EconomicData..........................................................................23 TAX EXEMPTION..................................................................26 TaxExemption..........................................................................26 Certain Other Federal Tax Consequences ............................27 Preservation of Tax Exemption.............................................27 RATING........................................................................................27 CONTINUING DISCLOSURE............................................27 CERTAIN INVESTMENT CONSIDERATIONS ........28 INITIATIVE AND REFERENDUM.................................29 LEGAL AND UNDERWRITING ........................................29 Approval of Counsel.................................................................29 Financial Advisor.......................................................................29 Litigation.....................................................................................30 Underwriting...............................................................................30 Conflicts of Interest..................................................................30 CONCLUDING STATEMENT............................................30 APPENDIX A - FORM OF LEGAL OPINION APPENDIX B - BOOK -ENTRY TRANSFER SYSTEM APPENDIX C - 2013 AUDITED FINANCIAL STATEMENTS -tv- Page 30 of 92 OFFICIAL STATEMENT CITY OF PASCO, WASHINGTON $7,730,000* Limited Tax General Obligation Bonds, 2015 INTRODUCTION The City of Pasco, Washington (the "City"), a municipal corporation duly organized and existing under and by virtue of the laws of the State of Washington (the "State', furnishes this Official Statement in connection with the offering of $7,730,000* principal amount of Limited Tax General Obligation Bonds, 2015 (the `Bonds'. This Official Statement provides information concerning the City and the Bonds. All of the summaries of provisions of the Constitution and laws of the State, of ordinances and resolutions of the City, and of other documents contained herein are subject to the complete provisions thereof and do not purport to be complete statements of such laws or documents, copies of which may be obtained from the City upon request. A full review should be made of the entire Official Statement. The offering of the Bonds to prospective investors is made only by means of the entire Official Statement. DESCRIPTION OF THE BONDS Authorization of Bonds The Bonds are issued in accordance with the provisions of the Constitution and chapter 39.36 and 39.46 of the Revised Code of Washington and other applicable statutes of the State, and pursuant to Ordinance No. (the "Bond Ordinance") of the City Council, passed on June 15, 2015. Principal Amounts, Dates, Interest Rates, and Maturities The Bonds are dated and bear interest from their date of initial delivery to the Underwriter. The Bonds mature on the dates and in the principal amounts as set forth on the inside cover of this Official Statement. The Bonds will bear interest payable semiannually, on each June 1 and December 1, commencing December 1, 2015, at the rates set forth on the inside cover of this Official Statement. Interest on the Bonds will be computed on the basis of a 360 -day year of twelve 30 -day months. Bond Registrar and Registration Features Bond Registrar. The State's fiscal agent, currently U.S. Bank National Association (the "Bond Registrar"), will authenticate the Bonds and act as the paying agent and registrar for the purpose of paying the principal of and interest on the Bonds, recording the purchase and registration, exchange or transfer, and payment of Bonds and performing the other respective obligations of the paying agent and registrar. No resignation or removal of the Bond Registrar shall become effective until a successor has been appointed and has accepted the duties of Bond Registrar. Book Entry System. The Bonds will be issued as fully registered bonds and, when issued, will be initially registered in the name of Cede & Co., as the nominee of DTC. DTC will act as initial securities depository for the Bonds. Individual purchases and sales of the Bonds may be made in book -entry form only in denominations of $5,000 or integral multiples thereof within a maturity ("Authorized Denominations"). So long as the Bonds are in book -entry only form, principal of and interest on the Bonds will be payable as required by the operational arrangements of DTC referenced in the Letter of Representations. The Beneficial Owners will not receive certificates representing their interest in the Bonds (see Appendix B attached hereto). The City makes no representation as to the accuracy or completeness of the information in Appendix B provided by DTC. Purchasers of the Bonds should confirm this information with DTC or its broker-dealer participants. * Preliminary, subyect to change. -1- Page 31 of 92 No Book -Entry System. During any period in which the Bonds are not in book -entry only form, principal of and interest on the Bonds will be payable by the Bond Registrar. Interest on the Bonds will be payable by check mailed to the Registered Owners, at the addresses appearing on the Bond Register on the 15th day of the month preceding an interest payment date or by electronic transfer on the interest payment date. The City is not required to make electronic transfers except to a Registered Owner of the Bonds pursuant to a request in writing (and at the sole expense of that Registered Owner) received at least 15 days before an interest payment date. Principal of the Bonds will be payable upon presentation and surrender of the Bond by the Registered Owner to the Bond Registrar. Procedure in the Event of Revisions of Book -Entry System. If (i) DTC resigns as the securities depository and the City does not appoint a substitute securities depository, or (ii) the City terminates the services of DTC, the City will execute, authenticate and deliver at no cost to the Beneficial Owners of the Bonds or their nominees, Bonds in fully registered form, in Authorized Denominations. Transfer and Exchange of Bonds. The Bonds will be subject to transfer and exchange as provided in the Bond Ordinance. Redemption Provisions Optional Redemption. The Bonds maturing on or after December 1, 20_ are subject to redemption prior to their stated maturity dates, at the option of the City, at any time on or after December 1, 20_, as a whole or in part at par plus accrued interest to the date fixed for redemption. [Mandatory Redemption. The Bonds maturing on December 1, 20_ are term bonds (the "Term Bonds', and, if not optionally redeemed or purchased, will be called for redemption at a price equal to the principal amount to be redeemed plus accrued interest, if any, to the date fixed for redemption on December 1 in the years and principal amount as follows: Term Bonds Redemption Date Principal Redemption Date Principal (December 1) Amount (December 1) Amount H (1) Final maturity.] Selection of Bonds for Redemption. If fewer than all of the outstanding Bonds are to be redeemed at the option of the City, the City will select the maturities to be redeemed. For as long as the Bonds are in book -entry only form, if fewer than all of the Bonds of a maturity are called for redemption, the selection of Bonds within a maturity to be redeemed will be made by DTC in accordance with its operational procedures then in effect. See Appendix B attached hereto. If the Bonds are no longer held in book -entry only form, then the Bond Registrar would select Bonds for redemption randomly within a maturity in such manner as the Bond Registrar determines. Partial Redemption. All or a portion of the principal amount of any Bond that is to be redeemed may be redeemed in any Authorized Denomination. If less than all of the outstanding principal amount of any Bond is redeemed, upon surrender of that Bond to the Bond Registrar, there will be issued to the person in whose name a Bond is registered (the "Registered Owner', without charge a new Bond (or Bonds, at the option of the Registered Owner) of the same maturity and interest rate in any Authorized Denomination in the aggregate principal amount remaining unredeemed. Notice of Redemption (Book Enty). So long as the Bonds are in book -entry only form, notice of any redemption of Bonds will be given as required by the Blanket Issuer Letter of Representations between the City and DTC, dated August 31, 1998, (the "Letter of Representations"). Notice of Redemption (No Book -Entry). During any period in which the Bonds are not in book -entry only form, unless waived by any Registered Owner of the Bonds to be redeemed, official notice of any redemption of Bonds will be given by the Bond Registrar on behalf of the City by mailing a copy of an official redemption notice by first -2- Page 32 of 92 class mail, postage prepaid, at least 20 days and not more than 60 days prior to the date fixed for redemption, to the Registered Owners of the Bonds to be redeemed at the address shown on the books or records maintained by the Bond Registrar for the purpose of identifying ownership of the Bonds (the "Bond Register") on the date the Bond Registrar sends the notice, and such requirement will be satisfied when notice has been mailed as so provided, whether or not it is actually received by the Registered Owner or Beneficial Owner. Conditional Notice of Redemption. The City reserves the right to provide conditional notice and to rescind any optional redemption notice as provided in the Bond Ordinance (defined herein). Effect of Redemption Interest on each Bond called for redemption will cease to accrue on the date fixed for redemption, unless either the notice of optional redemption is rescinded, or money sufficient to effect such redemption is not on deposit in the City's Limited Tax General Obligation Bond Fund 2015 (the "Bond Fund'D or in a trust account established to refund or defease the Bond. Purchase The City reserves the right to purchase any or all of the Bonds offered to the City at any time at any price acceptable to the City plus accrued interest to the date of purchase. Failure to Pay Bonds If the principal of any Bond is not paid when the Bond is properly presented at its maturity or date fixed for redemption, as applicable, the City will be obligated to pay interest on that Bond at the same rate provided in the Bond from and after its maturity or date fixed for redemption until that Bond, both principal and interest, is paid in full or until sufficient money for its payment in full is on deposit in the City's Bond Fund, or in a trust account established to refund or defease the Bond, and the Bond has been called for payment by giving notice of that call to the Registered Owner. Refunding or Defeasance The City may issue refunding bonds pursuant to State law or use money available from any other lawful source to carry out a refunding or defeasance plan, which may include (a) paying when due the principal of and interest on any or all of the Bonds (the "defeased Bonds"); (b) redeeming the defeased Bonds prior to their maturity; and (c) paying the costs of the refunding or defeasance. If the City sets aside in a special trust fund or escrow account irrevocably pledged to that redemption or defeasance (the "trust account' money and/or "government obligations" (as defined by chapter 39.53 RCW, as now in effect or hereafter amended) maturing at a time or times and bearing interest in amounts sufficient to redeem, refund or defease the defeased Bonds in accordance with their terms, then all right and interest of the owners of the defeased Bonds in the covenants of the Bond Ordinance and in the funds and accounts obligated to the payment of the defeased Bonds will cease and become void. Thereafter, the owners of defeased Bonds will have the right to receive payment of the principal of and interest on the defeased Bonds solely from the trust account and the defeased Bonds will be deemed no longer outstanding. In that event, the City may apply money remaining in any fund or account (other than the trust account) established for the payment or redemption of the defeased Bonds to any lawful purpose. Unless otherwise specified by the City in a refunding or defeasance plan, notice of refunding or defeasance will be given, and selection of Bonds for any partial refunding or defeasance will be conducted, in the manner prescribed in the Bond Ordinance for the redemption of Bonds. As currently defined in RCW 39.53.010(4), "government obligations" means (a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America and bank certificates of deposit secured by such obligations; (b) bonds, debentures, notes, participation certificates or other obligations issued by the Banks for Cooperatives, the Federal Intermediate Credit Bank, the Federal Home Loan Bank System, the Export -Import Bank of the United States, federal land banks or the Federal National Mortgage Association; (c) public housing bonds and project notes fully secured by contracts with the United States; and (d) obligations of financial institutions insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation, to the extent insured or guaranteed as permitted under any other provision of State law. -3- Page 33 of 92 PURPOSE AND USE OF BOND PROCEEDS Purpose The Bonds are being issued to provide funds to pay the costs of designing, constructing and equipping a new police facility located on property owned by the City adjacent to City Hall and other capital purposes deemed necessary and advisable by the City, and to pay the costs of issuance and sale of the Bonds. Sources and Uses of Bond Proceeds Proceeds of the Bonds are to be applied as follows: Sources of Funds Principal Amount of the Bonds Original Issue Premium/Discount Total Sources of Funds Uses of Funds Deposit to Project Account Costs of Issuance (l) Total Uses of Funds (1) Includes legal fees, rating agency fees, printing costs, and other costs associated with the issuance of the Bonds. SECURITY FOR THE BONDS The Bonds constitute a general indebtedness of the City and are payable from tax revenues of the City and such other money as is lawfully available and pledged by the City for the payment of principal of and interest on the Bonds. For as long as any of the Bonds are outstanding, the City irrevocably pledges that it shall, in the manner provided by law within the constitutional and statutory limitations provided by law without the assent of the voters, include in its annual property tax levy amounts sufficient, together with other money that is lawfully available, to pay principal of and interest on the Bonds as the same become due. The full faith, credit and resources of the City are pledged irrevocably for the prompt payment of the principal of and interest on the Bonds and such pledge shall be enforceable in mandamus against the City. The City may, subject to applicable laws, apply other funds available to make payments with respect to the Bonds. Bond owners do not have a security interest in revenues or assets of the City. The Bonds do not constitute a debt or indebtedness of the State or any political subdivision thereof other than the City. The Bonds do not constitute a debt or indebtedness of the State or any political subdivision thereof other than the City and are not payable from any proprietary or enterprise fund of the City (including the City's utilities). The Bonds are not secured by any lien or any other security interest in City property. The Bonds are not subject to acceleration upon the occurrence of a default. The City therefore would be liable only for principal and interest payments as they become due. In the event of multiple defaults in payment of principal of or interest on the Bonds, the Registered Owner of each Bond would be required to bring a separate action for each such payment not made. This could give rise to a difference in interests between Registered Owners of earlier and later maturing Bonds. State law provides that the payment of general obligation bonds shall be enforceable in mandamus against the issuer. There is no express provision in the State Constitution or statutes on the priority of payment of debt service on general obligations incurred by a Washington municipality. Additionally, certain taxes and other money deposited in the City's governmental funds are restricted by State law to specific purposes and may not be available to pay debt service on the Bonds. The rights and remedies of anyone seeking enforcement of the Bonds are subject to laws of bankruptcy and insolvency and to other laws affecting the rights and remedies of creditors and to the exercise of judicial discretion. See "CERTAIN INVESTMENT CONSIDERATIONS—Limitations on Remedies." -4- Page 34 of 92 BONDED INDEBTEDNESS Authorization of Debt The power of the City to incur debt of any kind is controlled and limited by State law. All debt must be incurred in accordance with detailed budget procedures and paid for out of identifiable receipts and revenues. The budget must be balanced for each fiscal year. It is unlawful for an officer or employee of the City to incur liabilities in excess of budgetary appropriations. In an emergency, the City Council may put a plan into effect and authorize indebtedness outside the current budget. All expenditures for emergency purposes must be paid by checks from any available money in the fund properly chargeable with such expenditures. Limitations on Indebtedness The State Constitution and statutes limit the City's ability to incur general obligation indebtedness based on a percentage of the assessed value of the taxable property within the City at the time the indebtedness is incurred. See "TAXING AUTHORITY Assessed Value." Non -Voted Debt. The Bonds are issued as non -voted debt. State law provides that the City may, without voter approval, incur general obligation debt in an amount not to exceed 1.5% of the assessed value of all taxable property within the City. The amount of non -voted debt plus the outstanding voter -approved debt for general municipal purposes also is subject to the aggregate debt limitation described below. Non -voted general obligation debt may be issued as follows: (1) pursuant to an ordinance specifying the amount and object of the expenditure of the proceeds, the City may borrow money for corporate purposes and issue bonds or notes within the constitutional and statutory limitations on indebtedness; (2) the City may execute conditional sales contracts for the purchase of real or personal property; and (3) the City may execute financing leases with or without an option to purchase. Voter Approved Debt. Subject to 60% voter approval meeting minimum voter turnout requirements, the City may incur general obligation debt in an amount not to exceed 2.5% of assessed value for general municipal purposes (when combined with any outstanding non -voted debt), 2.5% for certain utility purposes, and 2.5% for certain parks, open space, and economic development purposes. The minimum turnout must be at least 40% of City voters who voted at the last preceding State general election. If the ballot proposition approving the issuance of voter -approved debt also approved the levy of taxes without limitation in amounts sufficient to repay those voter - approved bonds, then the bonds will be payable from a special excess tax levy. See "TAXING AUTHORITY— Property Taxes and Limitations." Aggregate Debt Limitations. The combination of voter -approved and non -voted general obligation debt for "general" municipal purposes may not exceed 2.5% of assessed value. The total of all general obligation debt for all purposes may not exceed 7.5% of the City's assessed value. Short -Term Obligations. Within the limitations described above, State law permits municipal corporations to borrow money and issue short-term obligations for any lawful purpose and in anticipation of the receipt of revenues, taxes, grants or the sale of bonds, if the bonds have been authorized by the governing body or the voters, as applicable. Short-term obligations issued in anticipation of taxes must be repaid within six months after the end of the fiscal year in which they are issued. [REMAINDER OF PAGE LEFT BLANK INTENTIONALLY] -5- Page 35 of 92 Bonded Debt and Other Outstanding Obligations * Pnliminag, subject to change. Debt Capacity Computation The City may incur general obligation debt only if, at the time debt is incurred, the City has sufficient debt capacity. Once the debt has been incurred, changes in assessed value have no effect on the validity of outstanding debt or the City's ability to refund outstanding debt. Declines in assessed value can limit the ability to incur additional general obligation debt. The following information shows the assessed value of property within the City and the outstanding general obligation debt of the City. GENERAL OBLIGATION DEBT CAPACITY (As of July 14, 2015) Assessed Valuation for 2015 Tax Collections Non -Voted Debt Ca�iayA1'/z % ofAsse sed Value) Less: Non -Voted Bonds Outstanding (1) Less: Other Non -Voted Obligations Outstanding (2) Less: the Bonds * Remaining Non -Voted Debt Capacity Voted and Non -Voted Debt Ca acib — 2% of Assessed Value Less: Voted Bonds Outstanding (3)(3) Less: Non -Voted Bonds Outstanding (1) Less: Other Non -Voted Obligations Outstanding (2) Less: the Bonds * Remaining Voted and Non -Voted Debt Capacity $3,679,413,343 $55,191,200 (2,815,000) (76,696) (7,730,000) $44,569,504 $91,985,334 (500,000) (2,815,000) (76,696) (7,730,000) $80,863,638 (1) Includes the City's Limited Tax General Obligation Refunding Bonds, Series 2011. (2) Includes the City's portion of a Port of Pasco Airport Fire Building Loan (" PPAFB Loan") and State Local Option Capital Asset Lending Program Loans ("State LOCAL Loan'). (3) Includes the City's Unlimited Tax General Obligation Bonds, Series 1999. * Preliminary, subject to change. Source: City of Pasco -6- Page 36 of 92 Amount Outstanding Dated Maturity Amount as of General Obligation Debt - Non -Voted and Voted Date Date Issued 07/14/15 Non -Voted LTGO Bonds - LTGO Refunding Bonds, Series 2011 09/15/11 12/01/20 $4,110,000 $2,815,000 LTGO Bonds, Series 2015* 07/14/15 12/01/35 7,980,000 7,730,000 Total LTGO Bonds $12,090,000 $10,545,000 Other Non -Voted LTGO Obligations - 2001 State LOCAL - Animal Control Facility Land 11/01/01 12/01/16 $275,500 $58,948 2006 Port Airport Fire Building 07/12/06 07/12/16 120,000 17,748 Total Other Non -Voted Obligations $395,500 $76,696 Voted UTGO Bonds - UTGO Bonds, Series 1999 10/01/99 12/01/19 $1,700,000 $500,000 Total UTGO Bonds $1,700,000 $500,000 Total Outstanding General Obligation Debt $14,185,500 $11,121,696 * Pnliminag, subject to change. Debt Capacity Computation The City may incur general obligation debt only if, at the time debt is incurred, the City has sufficient debt capacity. Once the debt has been incurred, changes in assessed value have no effect on the validity of outstanding debt or the City's ability to refund outstanding debt. Declines in assessed value can limit the ability to incur additional general obligation debt. The following information shows the assessed value of property within the City and the outstanding general obligation debt of the City. GENERAL OBLIGATION DEBT CAPACITY (As of July 14, 2015) Assessed Valuation for 2015 Tax Collections Non -Voted Debt Ca�iayA1'/z % ofAsse sed Value) Less: Non -Voted Bonds Outstanding (1) Less: Other Non -Voted Obligations Outstanding (2) Less: the Bonds * Remaining Non -Voted Debt Capacity Voted and Non -Voted Debt Ca acib — 2% of Assessed Value Less: Voted Bonds Outstanding (3)(3) Less: Non -Voted Bonds Outstanding (1) Less: Other Non -Voted Obligations Outstanding (2) Less: the Bonds * Remaining Voted and Non -Voted Debt Capacity $3,679,413,343 $55,191,200 (2,815,000) (76,696) (7,730,000) $44,569,504 $91,985,334 (500,000) (2,815,000) (76,696) (7,730,000) $80,863,638 (1) Includes the City's Limited Tax General Obligation Refunding Bonds, Series 2011. (2) Includes the City's portion of a Port of Pasco Airport Fire Building Loan (" PPAFB Loan") and State Local Option Capital Asset Lending Program Loans ("State LOCAL Loan'). (3) Includes the City's Unlimited Tax General Obligation Bonds, Series 1999. * Preliminary, subject to change. Source: City of Pasco -6- Page 36 of 92 Limited Tax General Obligation Debt Service Unlimited Tax General Obligation Debt Service Outstanding LTGO Bonds(') The Bonds(z) Total Year Principal Interest Principal Interest Debt Service 2015 $430,000 $103,850 2016 445,000 90,950 2017 460,000 77,600 2018 475,000 59,200 2019 495,000 40,200 2020 510,000 20,400 2021 - - 2022 - - 2023 - - 2024 - - 2025 - - 2026 - - 2027 - - 2028 - - 2029 - - 2030 - - 2031 - - 2032 - - 2033 - - 2034 - - $2,815,000 $392,200 (1) Does not include the outstanding PPAFB loan and outstanding State LOCAL loan. (2) Preliminary, subject to change; assumes interest rates range from _% to _% Unlimited Tax General Obligation Debt Service [REMAINDER OF PAGE LEFT BLANK INTENTIONALLY] -7- Page 37 of 92 Outstanding UTGO Bonds Total Year Principal Interest Debt Service 2015 $100,000 $27,750 $127,750 2016 100,000 22,300 122,300 2017 100,000 16,800 116,800 2018 100,000 11,200 111,200 2019 100,000 5,600 105,600 $500,000 $83,650 $583,650 [REMAINDER OF PAGE LEFT BLANK INTENTIONALLY] -7- Page 37 of 92 Net Direct and Overlapping Debt The following tables show the outstanding principal amount of general obligation debt incurred by the City ("Direct Debt") and the estimated allocable share of the outstanding principal amount of general obligation bonds of other taxing districts whose boundaries overlap a part or all of the City ("Overlapping Debt"). The estimated allocable share of Overlapping Debt is calculated based on a percentage of the overlapping taxing district's assessed value that lies within the boundaries of the City. The tables below are adjusted to reflect the issuance of the Bonds where indicated. The City has obtained the information regarding the Overlapping Debt from the overlapping taxing districts and Franklin County (the "County' and other sources the City believes to be reliable, but has not independently verified the accuracy or completeness of such information. The amounts described below show general obligation bonds issued by the various taxing districts and may not reflect certain leases or other contracts that may constitute indebtedness under State law. The tables below do not reflect any special revenue obligations (e.g., utility revenue bonds) issued by any taxing district. The taxing districts listed below may have issued additional general obligation debt since the dates indicated below and may have plans to issue future general obligation debt. Direct Debt (as of July 14, 2015) Non -Voted General Obligation Bonds Outstanding (1) $10,621,696 Voted General Obligation Bonds Outstanding 500,000 Net Direct Debt $11,121,696 Overlapping Debt Qune 1, 2015) (2) Principal Balance Net 2015 Percent of of G.O. Debt Overlapping Assessed Value Overlap Outstanding Debt Franklin County $6,077,967,248 53.77% $30,130,000 $16,200,901 Pasco School District No. 1 4,944,378,712 63.75 148,143,723 94,441,623 Port of Pasco 5,999,449,471 53.97 61710,000 3,621,387 Total Overlapping Debt $114,263,911 Total Direct and Overlapping Debt $125,385,607 (1) Preliminary; subject to change. (2) Represents the percentage of each taking district's assessed value within the City. Source: Franklin County Treasurer's Office and EMMA, a service of the Municipal Securities Rulemaking Board Bonded Debt Ratios (1) Assessed Valuation for 2015 Tax Collections $3,679,413,343 2014 City Population 67,700 Direct Debt as a Percentage of Assessed Valuation 0.30% Direct & Overlapping Debt as a Percentage of Assessed Valuation 3.41% Per Capita Assessed Valuation $54,349 Per Capita Direct Debt $164 Per Capita Direct & Estimated Overlapping Debt $1,852 (1) Preliminary; subject to change Debt Payment Record The City has promptly met all debt service payments on outstanding obligations. Additionally, no refunding bonds have been issued to prevent an impending default. Future Financings Other than the Bonds, the City has no authorized but unissued general obligation bonds, nor does it anticipate issuing additional long-term general obligation debt within the next 12 months. The City anticipates issuing water and sewer revenue bonds within the next 12 months, but the date and amount of issuance are not known at this time. -8- Page 38 of 92 TAXING AUTHORITY Below are general descriptions of the City's taxing authority and relevant statutory and constitutional limitations and descriptions of tax revenues other than property taxes. The City is authorized to levy regular property tax levies and excess property tax levies, and to impose various other taxes described below. See "Property Taxes and Limitations" and "Collection of Other Taxes." In some cases, State law specifies the purposes for which various taxes can be used. The City's major sources of governmental fund tax revenue are its regular property tax levy, sales and use taxes, and utility taxes. Neither the State nor any municipal corporation collects a tax on net income. Authorized Property Tax Levies For general city purposes, a city may levy regular property taxes up to $3.375/$1,000 of assessed value. The maximum levy rate for a city that is annexed into a library district or a fire protection district is $3.60/$1,000, less the levy rates imposed by those districts (up to a maximum of $1.50/$1,000 for a fire protection district and $0.50/$1000 for a library district). For 2015, the City's regular levy rate is $1.9563/$1,000 on all taxable property within the City. Cities are also permitted to impose certain additional levies for specific purposes, each of which is subject to its own statutory limitations. Examples of these include a levy for a firefighter pension fund (which may be used for general municipal purposes if not needed for the pension fund), for the maintenance of a local improvement guaranty fund and a voter -approved levy for emergency medical services. For the purpose of maintaining a local improvement guaranty fund (the "guaranty fund"), a city or town is required to provide for the levy of a sum sufficient to pay warrants or obligations issued against the guaranty fund during the prior fiscal year and not paid by other revenue sources of the guaranty fund. The levy must not exceed the greater of (i) 12 percent of the outstanding obligations guaranteed by the guaranty fund, or (ii) the total amount of delinquent assessments and interest accumulated on the delinquent assessments. The taxes levied for the maintenance of the guaranty fund will be in addition to and, if need be, in excess of all statutory and charter limitations applicable to tax levies in any city or town. The City's Local Improvement District No. 145 has assessments currently outstanding in the amount of $135,165. The following table shows the City's property tax levy rates and dollar amounts levied since 2011. AD VALOREMTAx LEVIES (Dollars per $1,000 of Assessed Value) Collection $127,750 Levy Rates 6,931,249 Year Regular Bond Total 2015 $1.945632 $0.042010 $1.987642 2014 1.956301 0.045243 2.001544 2013 1.967327 0.197397 2.164724 2012 1.968362 0.203188 2.171550 2011 1.971575 0.211860 2.183435 Source; Franklin County Assessor's Office Property Taxes and Limitations Levy Amounts Regular Bond Total $7,158,785 $127,750 $7,286,535 6,931,249 133,150 7,064,399 6,492,512 518,099 7,010,611 6,327,851 522,400 6,850,251 6,112,376 526,050 6,638,426 The following provides a general description of the City's authority to levy property taxes and limitations thereon, the method of determining the assessed value of real and personal property. In General. Under the State's laws and Constitution, property taxes are classified as either "regular" property taxes or "excess" property taxes. The City is authorized to levy both types of taxes. The City adopts a levy ordinance each November, in conjunction with its annual budget process. It submits a levy amount request to the County Assessor, who calculates the levy rate by spreading the levy amount on the tax rolls, following procedures established by the State Department of Revenue ("DOR"). The County Assessor confirms that the levy is within applicable statutory and constitutional limitations and makes any necessary reductions before the County Treasurer may begin to collect the levy on behalf of the City. See "Property Tax Collection Procedures." -9- Page 39 of 92 Regular Property Taxes. Regular property taxes are subject to constitutional and statutory limitations as to rate and amount. See "Regular Property Tax Limitations" below. They are usually levied for any general municipal purposes, although certain statutes authorize additional levies for particular limited purposes. General purpose levies may be used for the payment of debt service on limited tax general obligation indebtedness, such as the Bonds, but State law does not provide any priority of use. In general, regular property taxes for general purposes do not require voter approval, though certain statutes authorizing limited purpose levies may require voter approval. Certain tax limitations may be exceeded upon voter approval. Excess Properly Taxes. Excess property taxes are not subject to constitutional or statutory limitation as to rate or amount, but must be authorized by a 60% approving vote meeting minimum voter turnout requirements (expect for certain levies by school districts, which require only a simple majority approval). Excess property tax levies may be made (1) by any taxing district for the repayment of voter -approved general obligation bonds issued for capital purposes, excluding replacement of equipment; (2) by any taxing district for one year for any governmental purpose; or (3) without a vote when necessary to prevent impairment of an obligation of contract, if ordered by a court of last resort. Excess levies for the repayment of voter -approved general obligation bonds must meet a minimum voter turnout of 40% of the number who voted at the last November general election. Regular Property Tax Limitations Aggregate Levy Rate Limitation. The State Constitution and statutes limit the aggregate of all regular property tax levies imposed on any tax parcel by the State and all overlapping taxing districts, except port districts and public utility districts, to 1% of the true and fair value of property. Within the 1% limitation, the levy by the State may not exceed $3.60/$1,000 and the aggregate of all regular levies by all taxing districts (other than the State and other than certain specified levies) may not exceed $5.90/$1,000 of assessed value. Those specified levies excluded from the $5.90/$1,000 limitation include port or public utility district levies; excess property tax levies; levies for acquiring conservation futures; levies for emergency medical care or emergency medical services; levies to finance affordable housing for low-income housing; certain portions of levies by metropolitan park districts; certain levies imposed by ferry districts; levies for criminal justice purposes; certain portions of levies by fire protection districts; levies by counties for transit -related purposes; and portions of certain levies by certain flood control zone districts. Because various taxing districts may overlap, the aggregate levy rate applied to any two tax parcels within a single taxing district may not be identical. If the aggregate levy rate exceeds the aggregate rate limitation on any single parcel within a taxing district, the regular levy rates of each taxing district that includes that parcel may be reduced. Because of the constitutional requirement for uniformity of taxation within a taxing district (described below), any reduction affects the entire taxing district. If reductions are required, they are made by the County Assessor, in accordance with State statutes and guidance from the DOR setting forth a prioritization of regular levies. The regular levies of the State, counties, road districts, cities, towns, port districts, and public utility districts are considered "senior" levies; the regular levies of all other taxing districts are considered ` junior" levies. State statute prescribes the order in which the levies of the various junior levies are reduced or eliminated in order to comply with the aggregate rate limitations. Senior levies, such as the City's, are not subject to reduction or elimination based on aggregate rate limitations. Maximum Rate Limitation. State law also limits the amount of a regular levy for any particular year to the highest amount that could have been levied in any prior year, multiplied by a specified percentage (the "limit factor") plus an adjustment for new construction, annexations, certain improvements to property, and state assessed property. The limit factor is defined as the greater of (1) the least of 101% or 100% plus inflation or (2) if approved by a majority plus one vote of the governing body upon a finding of substantial need, any percentage up to 101%. If a taxing district levies less than its highest allowable levy, the amount not levied is nonetheless included in the base for determining the maximum amount increase limitation for succeeding years. This difference between the highest allowable levy amount and the amount actually levied is sometimes referred to as "banked" levy capacity. The City's banked levy capacity for 2015 is $388,859. The maximum amount increase limitation may be exceeded upon approval of a simple majority of voters. This is known as a "levy lid lift." A levy lid lift permits a levy amount increase greater than would otherwise be allowed, which increase may be effective indefinitely or for a limited period of time. Tax receipts from the incremental increase may be (but are not required to be) restricted in the ballot proposition to satisfy a limited purpose. A levy lid lift will not increase the levy if it would cause the taxing district's levy to exceed the applicable maximum rate limitations or the aggregate rate limitations described above. [City to provide info if levy lid lift is/is not in effect] -10- Page 40 of 92 Relationshp Between Rate and Amount Limitations. Regular levies are limited by both the rate limitation and the amount limitations described above and, therefore, may need to be reduced below one threshold to avoid exceeding the other. Because the regular property tax increase limitation applies to the total dollar amount levied rather than to the levy rate, increases in the assessed value of all property in the taxing district (excluding new construction, improvements and State -assessed property), which exceed the rate of growth in taxes allowed by the limit factor, may result in decreased regular tax levy rates, unless voters authorize a higher levy or the taxing district uses banked levy capacity. Decreases in the assessed value of all property in the taxing district (including new construction, improvements and State -assessed property) or increases in such assessed value that are less than the rate of growth in taxes imposed, among other events, may result in increased regular tax levy rates. As assessed values rise, the levy amount increase limitation may restrict levy growth. As assessed values fall, the levy rate limitation may restrict levy growth. Uniformity Requirement. The State Constitution requires that property taxes be levied at a uniform rate upon the same class of property within the territorial limits of a taxing district levying the tax. The Constitution also provides that all real estate constitutes a single class, except for certain agricultural properties eligible for special use classification, which may be valued based on current use. It is possible, because of overlapping taxing district boundaries, the maximum permissible levy might vary within the boundaries of a particular taxing district. In that event, to comply with the constitutional requirement for uniformity of taxation, the lowest permissible rate for any part of the taxing district would be applied to the entire taxing district. Overlapping Taxing Districts The overlapping taxing districts within the City have the statutory power to levy regular property taxes at the following rates subject to the limitations provided by chapter 84.55 RCW, and to levy certain other voter approved property taxes. For purposes of demonstration, representative levy rates for "levy code 101" of the County, as well as the statutory regular levy rate limitation of each type of potential overlapping district, are listed below. Levy code 101 is wholly within the City, however, it does not include all of the property within the City; as a result, additional taxing districts, not listed below, levy taxes within the City. REPRESENTATIVE LEVY RATES FOR THE 2015 TAX COLLECTION YEAR (1) Statutory Representative Regular Rate Levy Rates Rate Limit Per $1,000 of Per $1,000 of Taxing Authority Assessed Value Assessed Value Franklin County $1.43177 $1.80 (2) Port of Pasco 0.31343 0.45(3) The City 1.98764 3.60(4) State Schools 2.35553 3.60(5) School District No. 1 6.88560 n/a (6) Total Rate for the County levy code 101: $12.97397 (1) Rates levied for collection in 2015, shown in dollars per $1,000 of assessed value. Levy rates vary from year to year due to changes in assessed value and in application of the rate and amount limitations discussed above. (2) Pursuant to RCW 84.52.043(1), a county may increase its levy from $1.80 per $1,000 of assessed value to a rate not to exceed $2.475 per $1,000 of assessed value for general county purposes if (i) the total levies for both the county and any road levy imposed within the county do not exceed $4.05 per $1,000 of assessed value and (ii) no other taxing district has its levy reduced as a result of the increased county levy. Road levies are collected only within the unincorporated portions of a county and therefore do not apply to any territory within the City. The County does not impose a road levy. (3) Port districts have available four different levies of up to $0.450 each. Each levy carries a specific purpose, and some require voter approval or other special circumstances. (4) Pursuant to RCW 41.16.060, $0.225 of the total $3.60 must be used for fire pension funding purposes, if required; otherwise this tax may be levied and used for any other municipal purpose. (5) Pursuant to RCW 84.52.043(1), the levy by the State may not exceed $3.60 per $1,000 of assessed value adjusted to the State equalized value in accordance with the indicated ratio fixed by the State Department of Revenue, which levy is to be used exclusively for the support of the common schools. (6) Washington school districts do not have nonvoted regular levy authority. Source: Franklin County Assessor's Office -11- Page 41 of 92 Assessed Valuation Determination The County Assessor (the "Assessor") determines the value of all real and personal property throughout the County (including the City) which is subject to ad valorem taxation. The Assessor's duties and methods of determining value are prescribed and controlled by statute and by detailed regulations promulgated by the DOR. For tax purposes the assessed value of property is currently set at 100% of its actual value. By State statute all property is subject to revaluation at least every four years. The County revalues property every four years such that one-fourth of the property in the County is revalued every year. The property is listed by the Assessor on a tax roll at its current assessed value and the tax roll is filed in the Assessor's office. The Assessor's determinations are subject to revision by the County Board of Equalization and, for certain property, subject to further revision by the State Board of Equalization. After all administrative procedures are completed, the taxing unit receives the Assessor's final certificate of assessed value of property within the taxing district. Property Tax Collection Procedure Property taxes are levied in specific amounts, and the rate for all taxes levied for all taxing districts in the County (including the City) are determined, calculated and fixed by the Assessor based upon the assessed valuation of the property within the various taxing districts. The Assessor extends the taxes to be levied within each taxing district upon a tax roll which contains the total amount of taxes to be so levied and collected and assigns a tax account number to each tax lot. The tax roll is delivered to the County Treasurer by January 15 of each year, and an abstract of the tax roll, showing the total amount of taxes collectible in each of the taxing districts for the year, is delivered to the County Executive (an elected official) at the same time. All taxes are due and payable on April 30 of each year, but if the amount due from a taxpayer exceeds $50, one-half may be paid then and the balance no later than October 31 of that year. The method of giving notice of payment of taxes due, accounting for the money collected, the division of the taxes among the various taxing districts, giving notice of delinquency, and collection procedures are all covered by detailed statutes. The lien for property taxes is prior to all other liens or encumbrances of any kind on real or personal property subject to taxation except for federal civil judgment liens and the possible application of the State "homestead exemption" described below. A federal lien on personal property that is filed before the personal property tax is levied is senior to the local personal property tax lien. In addition, a federal civil judgment lien (but not a federal tax lien) is senior to real property taxes that are levied after the judgment lien has been recorded. By law the Treasurer may not commence foreclosure of a tax lien on real property until three years have passed since the first delinquency. The State's courts have not decided whether the Homestead Law (chapter 6.13 RCW) may give the occupying homeowner a right to retain the first $125,000 of proceeds of the forced sale of the family residence or other "homestead" property for delinquent general property taxes. The United States Bankruptcy Court for the Western District of Washington has held that the homestead exemption applies to the lien securing property taxes, while the State Attorney General has taken the position that it does not. See also Algona v. Sharp, 30 Wn. App. 837, 638 P.2d 627 (1982) (holding that liens securing improvement district assessments are subject to the homestead exemption). The following table shows the current and historical assessed value, property tax levy amounts and property tax collection record for the City from 2011 to 2015. Percent Percent Assessed Collected In Collected as of Year Valuation(') Tax Levy Year of Levy 2015 $3,679,413,343 $7,286,535 49.88%(1) 2014 3,543,038,495 7,064,399 98.20 2013 3,300,169,365 7,010,611 97.50 2012 3,214,780,310 6,850,251 97.70 2011 3,100,250,228 6,638,425 97.60 (1) Assessed value is based upon 100% of estimated actual valuation. (2) As of 05/01/15. Source: Franklin Cound v Assessor's and Treasurer's Offices. 05/01/15 49.88% 99.01 99.46 99.85 99.91 -12- Page 42 of 92 Largest Taxpayers The following lists the ten largest property taxpayers within the City for tax collection year 2015. 2015 MAJOR PROPERTY TAXPAYERS Taxpayer Type of Business Syngenta Seeds Inc. Pasco Processing LLC Twin City Foods Bybee Foods LLC Grimmway Enterprises Inc. The Crossing at Chapel Hill LLC Broadmoor LLC Wal-Mart, Inc. Reser's Fine Foods Kenyon Zero Storage Inc. Subtotal - 10 Largest Taxpayers All Other City Taxpayers Total City Taxpayers Source: Franklin County Assessor's Office Collection of Other Taxes 2015 % of Total Assessed Assessed Value Value Seed Producer $36,442,105 0.99% Food Processing 29,574,000 0.80 Food Processing 21,360,227 0.58 Food Processing 20,981,000 0.57 Food Processing 17,819,803 0.48 Real Estate 16,174,000 0.44 Real Estate (Apt. Complex) 15,382,400 0.42 Retail department/food store 14,056,300 0.38 Food Processing 13,662,200 0.37 Sub -zero and cold storage 12,997,600 0.35 198,449,635 5.39 3,480,963,708 94.61 $3,679,413,343 100.00% In addition to regular property tax levies, the City is also authorized to impose various other taxes, including those described below. Neither the State nor any municipal corporation of the State is authorized under the Constitution to impose a tax on net income. Retail Sales and Use Tax Distributions. In addition to the State rate of 6.5%, the City, County and other local taxing jurisdictions can impose a sales and use tax as a percent of the selling price for value on any retail sale or use of tangible personal property within the City. A portion of the total sales and use tax collected is a local tax and is returned to the City or County or certain other local jurisdictions where the sales transaction took place. The City's sales and use tax is collected by the DOR under a contract with the City that provides for a deduction by the DOR of 1 percent (not exceeding 2 percent of the tax collected) for the DOR's administration costs. Of the remaining 99 percent, the DOR distributes 15 percent to the County and distributes the remaining 84 percent to the City on a monthly basis. The criminal justice tax is an additional local sales and use tax of 0.1 percent for funding criminal justice programs. The criminal justice sales tax distribution is based on population. This tax is levied only by the County and is imposed countywide, but the receipts are shared with the cities. The adoption of this tax does not require a vote of the people. Of the revenue collected for criminal justice, 1 percent is retained for administration. Of the amount remaining, 10 percent is distributed to the county and 89 percent to cities and counties on a per capita basis based on their official April 1 populations Streamlined Sales and Use. In 2003, the State Legislature approved legislation authorizing the State's membership in the Streamlined Sales and Use Tax Agreement (the "SSUTA'�, in an effort to make sales and use taxes in the State more uniform with other states. Congress has required that state sales taxes be more uniform before Congress will permit taxation of interstate catalogue and Internet sales. In 2007, the State Legislature adopted legislation fully conforming to the SSUTA. Effective July 1, 2008, the sales tax system changed in the State from an origin -based system to a destination -based system. Under destination sourcing, sales taxes on goods delivered to customers in the State are credited to the taxing jurisdiction where the goods are delivered (as opposed to the point of sale) and the rate of the tax is determined by the local rate in the destination taxing jurisdiction. In 2014, the amount of the mitigation for the impact of the SSUTA received by the City was $173,100. -13- Page 43 of 92 The State Legislature enacted certain provisions to mitigate net losses in sales and use tax collections of local taxing jurisdictions resulting from the change to a destination -based system. To qualify, the local taxing jurisdiction must be negatively impacted by the legislation and the local sales tax must be in effect before July 1, 2008, among other requirements. Money for mitigation is subject to appropriation by the State Legislature. Under the mitigation legislation, on each July 1, the State Treasurer is required to transfer an amount deternlined by the DOR to fully mitigate negatively impacted local jurisdictions. Mitigation for the first year is determined by the DOR from tax reporting data to determine actual losses less gains from voluntarily registered sellers. Beginning December 31, 2008, distributions from the account are required to be made quarterly. After the first year, the DOR is required to determine each local jurisdiction's annual losses, and distributions are required to be made quarterly representing one-fourth of a jurisdiction's annual loss less voluntary compliance revenue from the previous quarter. Losses in sales tax revenues are based on a business by business comparison of sales patterns in each jurisdiction before and after the change to destination -based sales tax. "Voluntary compliance revenue" is the local sales tax revenue gain to each local taxing jurisdiction reported to the DOR by sellers in other states voluntarily registered through the SSUTA. Utilities Tax. Utility taxes may be levied on the gross operating revenues earned by private utilities performing operations within the boundaries of a city and by a city's own municipal utilities. Utilities on which taxes are currently levied include electric, water, irrigation, sewer, storm water, solid waste, gas, telephone, cable TV and cellular phone service. There are no restrictions on the tax rates for water, irrigation, sewer, solid waste and storm water utilities. Legislation passed in 1982 limits the tax rate that a city may impose on electric, gas, steam and telephone utility services to six percent; the city may impose a higher tax if first approved by a majority of the city voters. The City levies an additional 2.5% for a total of 8.5% on these utilities Cellular telephone and pager services may be taxed at the same rate as other telephone services from these utilities. The City also imposed an 8.5% levy on the other utilities. Beal Estate Excise Tax Distributions. Another source of tax revenue for the City is a real estate sale excise tax, which is levied on each sale of real property within the City which is currently at the rate of 0.50 percent of the selling price. Prior to 2010, the City levied only 0.25 percent of the selling price. The following table shows the historical and budgeted revenues from these taxes. Historical and Budgeted Tax Collections (Amount in Thousands) Budget Actual General Tax Revenues 2015 2014 2013 2012 2011 2010 Property Taxes $7,298 $7,179 $7,149 $6,659 $6,847 $6,080 Sales Taxes 9,841 12,695 11,472 10,284 9,403 8,245 Utility Taxes 9,390 9,592 8,894 8,843 8,914 8,917 Excise & Admissions Taxes 1,046 2,290 2,117 2,046 1,838 1,739 Total Taxes $27,575 $31,756 $29,632 $27,832 $27,002 $24,981 * NOTE: The "Total Taxes" does not equal the taxes shown as General Fund taxes on the following table because the number shown here includes tax revenues in other funds such as real estate excise taxes and fuel taxes that are reported in Special Revenue Funds. Source: City of Pasco -14- Page 44 of 92 FINANCIAL INFORMATION Statement of Revenues, Expenditures and Changes in Fund Balances (1) (2) As restated. Source: City of Para Audited Financial Statements -15- Page 45 of 92 Year Ended December 31 Unaudited Audited 2014 2013 2012 2011 2010 2009 REVENUES Taxes $28,523,685 $26,345,139 $24,846,828 $23,671,711 $21,761,029 $22,614,629 Licenses and permits 1,587,826 1,466,675 1,571,850 1,589,554 1,674,474 1,586,917 Intergovernmental revenue 1,960,962 1,796,829 1,838,746 2,087,937 1,887,298 1,852,035 Charges for services 5,683,455 4,737,688 4,125,398 3,511,244 2,932,969 2,839,213 Fines and forfeits 868,689 937,047 849,631 902,265 898,383 1,012,084 Miscellaneous 619,031 624,571 783,492 785,500 771,016 831,708 Total Revenues 39,243,648 35,907,949 34,015,945 32,548,211 29,925,169 30,736,586 EXPENDITURES Current: General government 7,673,927 6,705,485 6,380,710 6,086,874 6,547,150 5,846,586 Public safety 18,764,221 18,675,555 16,766,090 16,101,436 16,503,753 16,327,460 Natural & economic environment 1,756,317 1,648,750 2,908,254 2,271,570 2,082,336 2,284,011 Transportation 1,669,217 1,545,972 - - - - Health and human services 0 - 18,614 14,252 10,707 12,400 Culture and recreation 4,455,433 4,260,846 4,070,144 3,899,162 3,794,352 3,771,508 Capital outlay 0 296,892 257,193 177,390 186,876 1,180,315 Debt Service: Principal 457,316 468,042 2,132,463 645,312 550,363 657,732 Interest 122,514 133,172 180,056 341,265 335,719 227,655 Total Expenditures 34,898,945 33,734,714 32,713,524 29,537,261 30,011,256 30,307,667 Excess Revenues Over (Under) Expenditures 4,344,703 2,173,235 1,302,421 3,010,950 (86,087) 428,919 OTHER FINANCING SOURCES (USES) Debt proceeds from refinancing - - - 4,443,726 - - Debt proceeds used in refinancing - - (4,280,000) - - Insurance recoveries/other sources - - - - 59 212,312 Transfer in 138,000 138,000 539,090 370,712 459,791 119,676 Transfer out (2,475,940) (5,608,583) (3,563,677) (1,445,605) (815,800) (1,950,796) Total Other Financing Sources (Uses) (2,337,940) (5,470,583) (3,024,587) (911,167) (355,950) (1,618,808) Net Change in Fund Balance 2,006,763 (3,297,348) (1,722,166) 2,099,783 (442,037) (1,189,889) Prior Year Adjustments(1) 1,054,831 - - - - 42,654 FUND BALANCE - BEGINNING OF YEAR 6,245,219 9,542,567 11,264,734 (2) 9,158,689 (2) 9,856,336 (2) 10,962,088 FUND BALANCE - END OF YEAR $9,306,813 $6,245,219 $9,542,568 $11,258,472 $9,414,299 $9,814,853 (1) (2) As restated. Source: City of Para Audited Financial Statements -15- Page 45 of 92 General Fund Budget Summary The following table shows a summary of the City's 2015 and 2014 General Fund budgets. Expenditures Salary & Wages Adopted Adopted Personnel Benefits 2015 2014 Revenues 1,170,014 1,443,892 Taxes $26,395,272 $27,176,714 Licenses & Permits 1,304,500 1,424,800 Intergovernmental 1,566,170 1,496,000 Charges for Services 6,224,521 5,751,233 Fines & Forfeitures 806,650 837,000 Miscellaneous Revenues 437,465 329,160 Interfund Transfers & Other Financing 8,471,423 4,077,956 Total Revenues 45,206,001 41,092,863 Beginning Fund Balance 6,501,765 5,902,824 Total General Fund Resources $51,707,766 $46,995,687 Expenditures Salary & Wages $18,121,861 $17,465,233 Personnel Benefits 6,956,111 6,643,770 Supplies 1,170,014 1,443,892 Services 8,363,274 8,981,087 Capital Outlay 512,550 189,800 Debt Service 575,030 3,593,518 Interfund Payments for Services & Equipment 1,523,458 1,387,523 Interfund Transfers 8,790,266 2,598,942 Total Expenditures 46,012,564 42,303,765 Ending Fund Balance 5,695,202 5,422,206 Total General Fund Expenditures $51,707,766 $47,725,971 -16- Page 46 of 92 CITY PROFILE The City, located in southeastern Washington, encompasses approximately 33.6 square miles and has a 2014 estimated population of 67,700. The City and the adjacent cities of Richland and Kennewick make up what is known as the Tri -Cities. The City serves as the Franklin County seat and is the largest city in the County. The City was incorporated in 1891. The City has a Council -Manager form of government. The City Manager is appointed by the City Council and is responsible for the administration of all aspects of City operations. Council members are part-time officials, elected every four years through city-wide elections. The Council is comprised of seven members, one of whom is selected by the members to serve as Mayor for a two-year term. The City provides a full range of services normally associated with a municipality. These services include police and fire protection, ambulance service, parks and recreational activities, street maintenance and construction, planning and zoning and general administrative services. The City owns and operates water, sewer and stormwater utility and a cemetery. The City owns and operates a golf course. City Council Following are the current members of the City Council and their term expiration dates. Members Position Term Expires Matt Watkins Mayor December 31, 2015 Rebecca Francik Mayor Pro -Tem December 31, 2017 Robert Hoffmann Council Member December 31, 2017 Michael Garrison Council Member December 31, 2017 Saul Martinez Council Member December 31, 2017 Tom Larsen Council Member December 31, 2017 Al Yenney Council Member December 31, 2015 Key Administrative Staff Dave Zabell, City Manager, assumed his position with the City in August 2014. Mr. Zabell has been in local government for over 33 years, and was formerly the City Manager for the City of Fife, Washington, a position he held since 2011. Prior to that he was Assistant City Manager for Yakima, Washington, from 2005-2011 and Public Works Director for the City of Bothell, Washington, from 2000-2005. Mr. Zabell also worked for the City of Marysville, Washington, from 1985 - 2000, serving in positions including Engineer, Public Works Director and City Administrator for the last seven years. Mr. Zabell has a Master of Public Administration degree from the University of Washington and a Bachelor of Science degree in Public Administration from Upper Iowa University. Stan Strebel, Douty City Manager, assumed his current responsibilities in July 2009. Prior to then, he served as City's Director of Administrative and Community Services from 1999. Mr. Strebel has also served as City Manager of the City of Ferndale, Washington for seven years and as City Manager of the City of Bisbee, Arizona for four years. He has a total of 35 years experience in local government administration. He holds a Bachelor of Arts Degree in Urban Planning from the University of Washington and an MPA from Brigham Young University. Rick Terway, Administrative and Community Services Director, began serving as the Director of the City's Department of Administrative and Community Services Department in July 2009. The department consists of five service divisions: Administration, Facilities, Finance, Information Systems, and Recreation. Prior to coming to the City, Mr. Terway served as Parks, Recreation and Forestry Manager for the City of Fergus Falls, Minnesota for three years and as Public Service Director for the City of Vadnais Heights, Minnesota. His experience also includes more than 12 years working for Washington State Parks. Mr. Terway holds a Bachelor of Science in Applied Management from National American University and an Associate of Applied Science in Natural Resources from the University of Minnesota. Eva Lindgren, Depito Director Administrative and Community Services Department, served for a brief period as the City's Interim Finance Manager beginning in the fall of 2014. She was appointed to her current position in early 2015, where she has primary responsibility to oversee the finance operations of the City. Ms. Lindgren is a Certified Public Accountant, licensed in both Washington and Alaska. She has over two decades of experience auditing and working for local governments. She was a Staff Accountant for four years, the Accounting Manager for the City of Ketchikan, Alaska for nine years; the Controller for the North Slope Borough, Alaska for three years; and the Finance Manager for the City of Chehalis, Washington for six years. -17- Page 47 of 92 Labor Relations The City currently employs 336 employees (316 full time equivalents, not including 32 seasonal employees) people including part-time workers. There are 210 employees represented by 5 bargaining units as follows: No. of Current Contract Bargaining Unit Employees Expiration Date International Union of Operating Engineers, Local No. 280 International Association of Firefighters Pasco Police Officers Assoc. "Uniformed" Employee Pasco Police Officers Assoc. "Non -uniformed" Employee Pasco Code Enforcement Officer's and Permit Technicians 72 December 31, 2015 57 December 31, 2015 67 December 31, 2015 8 December 31, 2016 6 December 31, 2015 210 0.00 The City considers labor relations with its bargaining units to be good. There have been no recent strikes or major labor relations problems. Retirement Plans Substantially all of the City's employees are enrolled in one of the following cost-sharing, multiple -employer pension plans administered by the Washington State Department of Retirement Systems: Public Employees' Retirement System ("PERS") and Law Enforcement Officers and Fire Fighters Retirement System ("LEOFF"). Contributions by both employee and employer are based upon gross wages. PERS and LEOFF participants who joined the system by September 30, 1977 are Plan 1 members. Those PERS participants who joined on or after October 1, 1977 are Plan 2 members, unless they exercise an option to transfer to Plan 3. PERS participants joining on or after September 1, 2002 have the irrevocable option of choosing membership in PERS Plan 2 or PERS Plan 3. LEOFF participants who joined on or after October 1, 1977 are Plan 2 members. PERS Plan 3 is a hybrid defined -benefit and defined -contribution pension plan. The City contributed $807,853 in 2013 and $996,260 to PERS in 2014, and $573,271 in 2013 and $549,792 in 2014 to LEOFF for all of the City's employees that are covered under PERS and LEOFF. The following tables outline the contribution rates, expressed as a percentage of covered payroll, under PERS and LEOFF. CONTRIBUTION RATES Employer(1) Employee PERS Plan 1 9.21% 6.00% PERS Plan 2 9.21 4.92 PERS Plan 3 9.21 Variable(2) LEOFF Plan 1 0.18 0.00 LEOFF Plan 2 5.23 8.41(3) (1) Includes a 0.18% DS administration expense fee. (2) Rates vary from 5.0% minimum to 15.0% maximum based on rate selected by the PERS 3 member. (3) The State also contributes 3.36% to this plan. Source: Washington State Department of Retirement Systems Information regarding all of these plans is presented in annual financial report of the State Department of Retirement Systems, which may be obtained from: Department of Retirement Systems 1025 East Union Street P.O. Box 48380 Olympia, WA 98504-8380 Internet Address: www.drs.wa.gov (which website is not incorporated herein by reference) While the City's contributions in 2014 represented its full current liability under PERS, LEOFF and PSERS, any unfunded pension benefit obligations within the systems could be reflected in future years as higher contribution rates. The website of the Office of the State Actuary ("OSA' includes information regarding the values and funding levels of these retirement plans. -1s- Page 48 of 92 According to OSA, as of June 30, 2013, PERS Plans 2 and 3 and LEOFF Plans 1 and 2 had no unfunded actuarial accrued liability. However, during the years 2001 through 2010 the rates adopted by the Legislature were lower than those that would have been required to produce actuarially required contributions to PERS Plan 1, a closed plan with a large proportion of the retirees. According to a report issued by OSA in September 2014, and subject to the assumptions therein, the total unfunded actuarial accrued liability of PERS Plan 1 was $4.831 billion (63% funded on an actuarial basis) as of June 30, 2013. The assumptions used by OSA in calculating the unfunded liability as of June 30, 2013 of PERS and LEOFF are 7.8 percent annual rate of investment return (7.5% for LEOFF Plan 2), 3.75 percent salary increases, 3.0 percent inflation and 0.95 percent growth in membership (1.25% for LEOFF). To report funded status, liabilities were valued using the "Projected Unit Credit" cost method and assets valued using the actuarial value of assets. In July 2014, the Pension Funding Council (the "PFC") adopted contribution rate increases to be phased in over three biennia, beginning with the 2015-17 biennium. For the 2015-17 biennium employer rates will be 11 percent for PERS Plans 1, 2 and 3 (net of DRS administrative fees) and employee rates for PERS Plan 2 will be 6.12 percent. PERS Plan 1 and 3 remain unchanged from the table above. The LEOFF 2 Board did not adopt a rate increase for the 2015-17 biennium. The rates adopted by the PFC and LEOFF 2 Board are subject to revision by the State legislature. Other than PERS Plans 2 and 3, which are combined for reporting purposes, assets for one plan may not be used to fund benefits for another plan; however, all employers in PERS are required to make contributions at rates (percentage of payroll) determined by the OSA every two years for the purpose of amortizing within a rolling 10 - year period the unfunded actuarial accrued liability in PERS Plan 1. The State Legislature in 2009 established certain maximum contribution rates that began in 2009 and continue until 2015 and certain minimum contribution rates that are to become effective in 2015 and remain in effect until the actuarial value of assets in PERS Plan 1 equal 100 percent of actuarial accrued liability of PERS Plan 1. These rates are subject to change by future legislation enacted by the State Legislature to address future changes in actuarial and economic assumptions and investment performance. For more detailed information on the City's retirement plan, see Note 5(C) of Appendix C. Firemen's Pension The City administers a closed, small single -employer defined benefit plan called the Firemen's Pension Fund. GASB Statements No 25 and 27 require performance of biennial actuarial valuations. The most recent actuarial study of the system was performed to determine the funding requirements as of September 30, 2010. The City of Pasco's obligations under the Firemen's Pension Fund are limited to the benefits provided to firefighters retired prior to March 1, 1970. As of December 31, 2011, there were a total of 12 individuals covered by this system, and 4 of the 12 are widows. To meet these obligations, the City may contribute annually to the Fund the amount raised by levying all or part of a tax of up to $0.45 per $1,000 of true and fair market value, the maximum provided by law for maintaining the Fund. Contributions also include income from state fire insurance premium collections. All actuarial calculations are based on RCW 41.16 and 41.18, the statutes establishing the Firefighter's Pension Fund, and RCW 41.26, the statute establishing the Washington Law Enforcement Officers' and Firefighters' Retirement System. Benefit provisions are established in state statute and may be amended only by the State Legislature. Each retiree receives the greater of the benefit payable under the Washington Law Enforcement Officers' and Firefighters' Retirement System and the benefits available under the provisions of prior law. Where benefits under the old law exceed those under the new for any firefighter, the excess benefits are paid from the Firefighter's Pension Fund of the city employing them on March 1, 1970. For a service retirement the member's benefit is 50% of salary plus an additional 2% for each year of service in excess of 25 years. The maximum benefit is 60% of salary. The survivor benefit is the same as the member's. The spouse is the same plus additional 5% of salary per child. The maximum benefit in either case is 60% of salary. For a duty disability retirement the member must be disabled for a six-month waiting period, during which time salary is payable from the Fund. The amount of the benefit is 50% of salary plus an additional 5% for each unmarried child under the age of 18. For a non -duty disability retirement the member must be disabled after a 90 -day waiting period, during which time salary is payable from the Fund. For non -duty related disability the benefit is the same as duty related disability. For both the duty related and non -duty related disabilities the survivor benefits to spouse and/or child are as follows: -19- Page 49 of 92 DISABILITY BENEFITS Percentage of Salary To Widow Only 33.3% To Widow and One Child 45.8 To Widow and Two Children 47.6 To Widow and Three Children 50.0 To Children Only 33.33 For purposes of retirement benefit payments, salaries are escalated in proportion to the current salary of the rank from which the firefighter retired. After April 25, 1973 a minimum benefit of $300 per month to all retired firefighters and their survivors apply. A funeral benefit of $500 is provided to defray funeral expenses. For more detailed information on the City's Firemen's Pension plan, see Note 5(C) of Appendix C. Other Post -Employment Benefits In accordance with chapter 41.26 RCW, the City provides continuation of medical insurance coverage to employees that retire under the LEOFF retirement system, which includes all police officers and fire fighters who were hired prior to October 1, 1977. Medical coverage continues for the life of the retiree. The plan is a closed, single employer defined benefit healthcare plan administered by the City. As of December 31, 2013, there were 29 retirees and four active employees in this plan. The City's annual other postemployment benefit ("OPEB') cost is calculated based on the annual required contribution ("ARC"), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and to amortize any unfunded actuarial liabilities over a period not to exceed thirty years. The following table shows the components of the City's annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the City's net OPEB obligation. The tables in Note 15 of Appendix C show the components of the City's annual OPEB cost for 2013, the amount actually contributed to the plan and changes in the City's net OPEB. The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for the years 2012 through 2014 were as follows: Fiscal Year Annual % of Annual Ended Cost OPEB Contributed Net OPEB Obligation 12/31/2014 $1,091,609 59% $2,423,910 12/31/2013 856,028 60 1,981,585 12/31/2012 948,878 45 1,695,149 The City currently funds post -employment healthcare benefits on a pay-as-you-go basis. The City finances the plan by purchasing medical insurance and self -funding vision and medical benefits not covered by the insurance. For more detailed information on the City's OPEB obligation, see Note 5(F) of Appendix C. Risk Management The City is a member of the Washington Cities Insurance Authority ("WCIA"). Nine cities originally formed WCIA in 1981 for the purpose of providing a pooling mechanism for jointly purchasing insurance, jointly self- insuring, and/or jointly contracting for risk management services. WCIA currently has over 175 members. New members initially contract for a three-year term, and thereafter automatically renew on an annual basis. A one-year withdrawal notice is required before membership can be terminated. Termination does not relieve a former member from its unresolved loss history incurred during membership. Liability coverage is written on an occurrence basis, without deductibles. Coverage includes general, automobile, police, public officials' errors or omissions, stop gap, and employee benefits liability. Limits are $4 million per occurrence self insured layer, and $16 million per occurrence in the re -insured excess layer. The excess layer is insured by the purchase of reinsurance and insurance. Total limits are $20 million per occurrence, subject to aggregate sublimits in the excess layers. The WCIA Board of Directors determines the limits and terms of coverage annually. -20- Page 50 of 92 In-house services include risk management consultation, loss control field services, claims and litigation administration, and loss analyses. WCIA contracts for the claims investigation consultants for personnel issues and land use problems, insurance brokerage, and lobbyist services. WCIA is fully funded by its members, who make annual assessments on a prospectively rated basis, as determined by an outside, independent actuary. The assessment covers loss, loss adjustment, and administrative expenses. WCIA retains the right to additionally assess the membership for any funding shortfall. An investment committee, using investment brokers, produces additional revenue by investment of WCIA's assets in financial instruments which comply with all State guidelines. These revenues directly offset portions of the membership's annual assessment. A Board of Directors governs WCIA, which is comprised of one designated representative from each member. The Board elects an Executive Committee and appoints a Treasurer to provide general policy direction for the organization. The WCIA Executive Director reports to the Executive Committee and is responsible for conducting the day to day operations of WCIA. Accounting and Budgeting Process Basis of Accounting. The accounting and reporting policies of the City conform to the Budgeting, Accounting and Reporting System (`BARS' as prescribed by the State Auditor. The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. Each fund is accounted for with a separate set of self -balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures, as appropriate. The City's resources are allocated to and accounted for in individual funds depending on their intended purpose. The Budget Process: Washington law, chapter 35A.33 RCW, prescribes the method and schedule for annual budgeting for the City. Annual appropriated budgets are adopted at the fund level. Local improvement district debt service and certain custodial agency funds, however, are not budgeted. A budget increase or decrease to a fund must be authorized by the City Council, while appropriation transfers within a fund may be authorized by the City Manager. All budgets are controlled on an organizational basis. The budgets constitute the legal authority for expenditures at that level. Annual appropriations for all funds lapse at the fiscal period end. Auditing of City Finances The City's financial statements are prepared in conformity with generally accepted accounting principles ("GAAP") as applied to governmental units, and are regulated by the Washington State Auditor's Office, division of Audit. The Government Accounting Standards Board ("GASB'D is the accepted standard setting body for establishing governmental accounting and financial reporting principles. Accounting systems and budgetary controls are prescribed by the Office of the State Auditor ("SAO") in accordance with RCW 43.09.200, RCW 43.09.230 and GAAP. State statutes require audits for cities to be conducted by the SAO. The City complies with the systems and controls prescribed by the SAO and establishes procedures and records which reasonably assure safeguarding of assets and the reliability of financial reporting. The SAO is required to examine the affairs of cities. The City is audited annually. The examination must include, among other things, the financial condition and resources of the City, whether the laws and constitution of the State are being complied with, and the methods and accuracy of the accounts and reports of the City. The SAO reviewed the City's financial statements and accounting practices for fiscal year 2013, and issued an unqualified opinion on the financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information. The City's audited financial statements for the year ended December 31, 2013 are attached herein as Appendix C. Authorized Investments Chapter 35.39 RCW limits the investment by cities and towns of its inactive funds or other funds in excess of current needs to the following authorized investments: United States bonds; United States certificates of indebtedness; bonds or warrants of the State and any local government in the State; its own bonds or warrants of a local improvement district which are within the protection of the local improvement guaranty fund law; and any other investment authorized by law for any other taxing district or the State Treasurer. Under chapter 43.84 RCW, the State Treasurer may invest in non-negotiable certificates of deposit in designated qualified public depositories; -21- Page 51 of 92 in obligations of the US government, its agencies and wholly owned corporations; in bankers' acceptances; in commercial paper; in the obligations of the federal home loan bank, federal national mortgage association and other government corporations subject to statutory provisions and may enter into repurchase agreements. Utility revenue bonds and warrants of any city and bonds or warrants of a local improvement district are also eligible investments (RCW 35.39.030). Money available for investment may be invested on an individual fund basis or may, unless otherwise restricted by law, be commingled within one common investment portfolio. All income derived from such investment may be either apportioned to and used by the various participating funds or for the benefit of the general government in accordance with city ordinances or resolutions. Funds derived from the sale of bonds or other instruments of indebtedness will be invested or used in such manner as the authorizing ordinances, resolutions or bond covenants may lawfully prescribe. Local Government Investment Pool. The State Treasurer's Office administers the Washington State Local Government Investment Pool (the "LGIP', which invests money on behalf of more than 450 cities, counties and special taxing districts. In its management of LGIP, the State Treasurer is required to adhere, at all times, to the principles appropriate for the prudent investment of public funds. These are, in priority order, (i) the safety of principal; (ii) the assurance of sufficient liquidity to meet cash flow demands; and (iii) to attain the highest possible yield within the constraints of the first two goals. Historically, the LGIP has had sufficient liquidity to meet all cash flow demands. The LGIP, authorized by chapter 43.250 RCW, is a voluntary pool which provides its participants the opportunity to benefit from the economies of scale inherent in pooling. It is also intended to offer participants increased safety of principal and the ability to achieve a higher investment yield than would otherwise be available to them. The pool is restricted to investments with maturities of one year or less, and the average life typically is less than 90 days. Investments permitted under the pool's guidelines include U.S. government and agency securities, bankers' acceptances, high quality commercial paper, repurchase and reverse repurchase agreements, motor vehicle fund warrants, and certificates of deposit issued by qualified Washington State depositories. The City may withdraw its funds in whole or in part on less than 24 hours notice. Authorised Investments for Bond Proceeds. In addition to the eligible investments discussed above, bond proceeds may also be invested in mutual funds with portfolios consisting of U.S. government and guaranteed agency securities with average maturities of less than four years; municipal securities rated in one of the four highest categories; and money market funds consisting of the same, so long as municipal securities held in the fund(s) are in one of the two highest rating categories of a nationally recognized rating agency. Bond proceeds may also be invested in shares of money market funds with portfolios of securities otherwise authorized by law for investment by local governments (RCW 39.59.030). City Investments. The City's investments are categorized to give an indication of the risk assumed at year-end. The following summary shows the City's investments at year-end categorized by risk. Category 1 includes investments that are either insured or registered and held by the City or its agent in the City's name. Category 2 includes uninsured and unregistered investments that are held by the counterparty's trust department or agent in the City's name. Category 3 includes uninsured and unregistered investments for which the securities are held by the counterparty, or its trust department or agent, but not in the City's name. As of March 31 2015, the City's investments, excluding investments held in trust funds, at market value totaled $41,022,300. The concentration of credit risk as a percentage of total investments is as follows: % of Issuer Total Fair Value U.S. Government Securities 25.3% Local Govt. Investment Pool 74.7 100.00% $10,370,061 30,652,239 $41,022,300 -22- Page 52 of 92 GENERAL. AND ECONOMIC INFORMATION The City is located in southeastern Washington in Franklin County (the "County") at the confluence of the Columbia and the Yakima rivers, approximately 200 miles southeast of Seattle, 150 miles southwest of Spokane and 200 miles northeast of Portland, Oregon. Pasco is one of three cities which make up the urban area known as the Tri -Cities, the others being Kennewick and Richland in neighboring Benton County. Population With a 2014 estimated population of 67,700, the City is the largest of four incorporated communities in Franklin County. Historical populations for the City and Franklin County are as follows: Year City of Pasco Franklin County 2014 67,700 86,600 2013 65,600 84,800 2012 62,670 82,500 2011 61,000 80,500 2010 59,781 78,163 Source: Wlasbington State Office of Financial Management Largest Employers The table below shows a list of the top ten employers ranked by number of employees. PASCO AREA MAJOR EMPLOYERS Employer Service/Product Employees Pasco School District Schools - K-12 2,717 Columbia Basin College Schools - Universities 834 Lourdes Health Network Health Care 635 Boise Cascade Manufacturing 575 Pasco Processing Frozen Food Processing 400 City of Pasco Government 336 Douglas Fruit Tree Fruit Grower 280 Franklin County Government 267 Tri -Cities Airport Airport 250 Reser's Fine Foods Food Processing 214 Source: City of Pasco Economic Data Following are additional economic indicators for the City, the County and the Tri -Cities Area. CITY OF PASCO BUILDING PERMITS Residential(') Commercial/Industrial Total Year Permits Value(2) Permits Value(2) Permits Value(2) 2015(3) 547 $22,960 119 $21,710 666 $44,670 2014 1,525 73,319 353 90,492 1,878 163,811 2013 1,705 73,701 408 51,035 2,113 124,736 2012 1,507 85,314 382 56,677 1,889 141,991 2011 1,817 113,320 317 20,110 2,134 133,430 (1) Includes Single Family, Two Family, Three or more families, accessory structures and alterations (2) Expressed in thousands. (3) As of May 1, 2015. Source. City of Pasco Building Department -23- Page 53 of 92 TAXABLE RETAIL SALES -24- Page 54 of 92 City of Franklin Year Pasco County 2014(1) $1,016,794,531 $1,196,017,085 2013 933,301,675 1,110,256,894 2012 861,063,279 1,037,096,265 2011 839,174,157 1,007,226,336 2010 825,267,219 964,584,879 (1) Most recent data available. Source: Washington State Department of Revenue PERSONAL AND PER CAPITA INCOME Franklin County State of Washington Total Personal Per Capita Total Personal Per Capita Year Income ($0001s) Personal Income Income ($000's) Personal Income 2013(1) $2,645,389 $30,534 $332,654,857 $47,717 2012 2,587,381 30,164 324,458,394 47,055 2011 2,569,484 30,904 303,999,485 44,565 2010 2,331,604 29,463 286,862,463 42,547 2009 2,136,678 28,689 280,943,954 42,137 (2) Most recent data available. Source: U.S. Department of Commerce, Bureau of Economic Analysis. ESTIMATED MEDIAN HOUSEHOLD INCOME (1) Year Franklin County Washington State 2014(1) $58,188 $58,686 2013(2) 57,196 57,544 2012 56,221 56,444 2011 53,644 55,500 2010 53,355 54,888 (1) The Revenue Forecast Council's November 2014 forecast of the state personal income is used in the projection of 2013 median household income. (2) In addition to the state personal income data published by BEA, the payroll data compiled by the state Employment Security Department are used in the Preliminary estimates of 2010 median household income. Source: Washington State Department of Revenue. -24- Page 54 of 92 RESIDENT CIVILIAN LABOR FORCE AND EMPLOYMENT AND CIVILIAN NON -AGRICULTURE WAGE AND SALARY EMPLOYMENT(1) -25- Page 55 of 92 Annual Average 2015(2) 2014 2013 2012 2011 Kennewick -Richland -Pasco MSA Labor Force 127,220 128,320 129,860 132,440 133,100 Total Employment 116,010 118,100 118,680 120,640 122,430 Total Unemployment 11,210 10,130 11,180 11,790 10,670 Unemployment Rate 8.8% 7.9% 8.6% 8.9% 8.0% Franklin County Labor Force 37,130 38,240 37,390 38,050 37,870 Total Employment 33,300 35,000 33,930 34,490 34,530 Total Unemployment 3,830 3,240 3,460 3,560 3,340 Unemployment Rate 10.3% 8.5% 9.3% 9.4% 8.8% NAICS INDUSTRY(3) Kennewick -Richland -Pasco MSA Total Nonfarm 104,300 104,300 101,700 101,300 104,000 Total Private 85,100 85,600 83,400 83,100 85,900 Goods Producing 13,900 14,300 13,600 13,400 13,600 Mining, Logging & Construction 6,200 6,300 6,200 6,000 6,500 Manufacturing 7,800 8,000 7,400 7,400 7,100 Service Providing 90,400 89,900 88,100 87,900 90,300 Trade, Transportation & Utilities 17,500 18,000 17,500 17,100 16,700 Financial Activities 4,400 4,300 4,200 3,900 3,700 Professional & Business Services 20,700 20,700 20,800 21,700 24,900 Educational & Health Services 14,700 14,400 13,700 13,400 13,300 Leisure & Hospitality 9,600 9,800 9,600 9,500 9,400 Government 19,200 18,600 18,300 18,200 18,100 Workers in Labor/Management Disputes 0 0 0 0 0 (1) Detail may not add to indicated totals due to rounding. Excludes proprietors, agriculture, self-employed, unpaid family, domestic workers and military. Includes all full -and part-time wage and salary workers receiving pay during the pay period including the 12th of the month by place of work. (2) Preliminary report as of March 2015. (3) North American Industry Classification System. Source: Washington State EVIoyment Seeurity Department. -25- Page 55 of 92 TAX EXEMPTION Exclusion From Gross Income. In the opinion of Bond Counsel, under existing federal law and assuming compliance by the City with applicable requirements of the Internal Revenue Code of 1986, as amended (the "Code"), that must be satisfied subsequent to the issue date of the Bonds, interest on the Bonds will be excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the alternative minimum tax applicable to individuals. Continuing Requirements. The City is required to comply with certain requirements of the Code after the date of issuance of the Bonds in order to maintain the exclusion of the interest on the Bonds from gross income for federal income tax purposes, including, without limitation, requirements concerning the qualified use of Bond proceeds and the facilities financed or refinanced with Bond proceeds, limitations on investing gross proceeds of the Bonds in higher yielding investments in certain circumstances, and the requirement to comply with the arbitrage rebate requirement to the extent applicable to the Bonds. The City has covenanted in the Bond Ordinance to comply with those requirements, but if the City fails to comply with those requirements, interest on the Bonds could become taxable retroactive to the date of issuance of the Bonds. Bond Counsel has not undertaken and does not undertake to monitor the City's compliance with such requirements. Cor orate Alternative Minimum Tax. While interest on the Bonds also is not an item of tax preference for purposes of the alternative minimum tax applicable to corporations, under Section 55 of the Code, tax exempt interest, including interest on the Bonds, received by corporations is taken into account in the computation of adjusted current earnings for purposes of the alternative minimum tax applicable to corporations (as defined for federal income tax purposes). Under the Code, alternative minimum taxable income of a corporation will be increased by 75% of the excess of the corporation's adjusted current earnings (including any tax exempt interest) over the corporation's alternative minimum taxable income determined without regard to such increase. A corporation's alternative minimum taxable income, so computed, that is in excess of an exemption of $40,000, which exemption will be reduced (but not below zero) by 25% of the amount by which the corporation's alternative minimum taxable income exceeds $150,000, is then subject to a 20% minimum tax. A small business corporation is exempt from the corporate alternative minimum tax for any taxable year beginning after December 31, 1997, if its average annual gross receipts during the three -taxable -year period beginning after December 31, 1993, did not exceed $5,000,000, and its average annual gross receipts during each successive three - taxable -year period thereafter ending before the relevant taxable year did not exceed $7,500,000. Tax on Certain Passive Investment Income of S Corporations. Under Section 1375 of the Code, certain excess net passive investment income, including interest on the Bonds, received by an S corporation (a corporation treated as a partnership for most federal tax purposes) that has Subchapter C earnings and profits at the close of the taxable year may be subject to federal income taxation at the highest rate applicable to corporations if more than 25% of the gross receipts of such S corporation is passive investment income. Foreign Brancb Profits Tax. Interest on the Bonds may be subject to the foreign branch profits tax imposed by Section 884 of the Code when the Bonds are owned by, and effectively connected with a trade or business of, a United States branch of a foreign corporation. Possible Consequences of Tax Compliance Audit. The Internal Revenue Service (the "IRS") has established a general audit program to determine whether issuers of tax-exempt obligations, such as the Bonds, are in compliance with requirements of the Code that must be satisfied in order for interest on those obligations to be, and continue to be, excluded from gross income for federal income tax purposes. Bond Counsel cannot predict whether the IRS would commence an audit of the Bonds. Depending on all the facts and circumstances and the type of audit involved, it is possible that commencement of an audit of the Bonds could adversely affect the market value and liquidity of the Bonds until the audit is concluded, regardless of its ultimate outcome. Certain Other Federal Tax Consequences Bonds `NotQualified Tax -Exempt Obligations"for Financial Institutions. Section 265 of the Code provides that 100% of any interest expense incurred by banks and other financial institutions for interest is allocable to tax-exempt obligations acquired after August 7, 1986, will be disallowed as a tax deduction. However, if the tax-exempt obligations are obligations other than private activity bonds, are issued by a governmental unit that, together with all entities subordinate to it, does not reasonably anticipate issuing more than $10,000,000 of tax-exempt obligations (other than private activity bonds and other obligations not required to be included in such calculation) in the current calendar year, and are designated by the governmental unit as "qualified tax-exempt obligations," only 20% of any interest expense deduction allocable to those obligations will be disallowed. -26- Page 56 of 92 The City is a governmental unit that, together with all subordinate entities, reasonably anticipates issuing more than $10,000,000 of tax-exempt obligations (other than private activity bonds and other obligations not required to be included in such calculation) during the current calendar year and has not designated the Bonds as "qualified tax-exempt obligations" for purposes of the 80% financial institution interest expense deduction. Therefore, no interest expense of a financial institution allocable to the Bonds is deductible for federal income tax purposes. Reduction of Loss Reserve Deductions for Property and Casualty Insurance Companies. Under Section 832 of the Code, interest on the Bonds received by property and casualty insurance companies will reduce tax deductions for loss reserves otherwise available to such companies by an amount equal to 15 percent of tax exempt interest received during the taxable year. Effect on Certain Social Security and Retirement Benefits. Section 86 of the Code requires recipients of certain Social Security and certain Railroad Retirement benefits to take receipts or accruals of interest on the Bonds into account in determining gross income. Other Possible Federal Tax Consequences. Receipt of interest on the Bonds may have other federal tax consequences as to which prospective purchasers of the Bonds may wish to consult their own tax advisors. Potential Future Federal Tax Lazy Changes. From time to time, there are legislative proposals in Congress which, if enacted, could adversely affect the tax treatment market value or marketability of the Bonds. It cannot be predicted whether future legislation may be proposed or enacted that would affect the federal tax treatment of interest received on the Bonds. Prospective purchasers of the Bonds should consult with their own tax advisors regarding any proposed or pending legislation that would change the federal tax treatment of interest on the Bonds. Preservation of Tax Exemption The City has covenanted in the Bond Ordinance that it will take all actions necessary to prevent interest on the Bonds from being included in gross income for federal income tax purposes, and it will neither take any action nor make or permit any use of proceeds of the Bonds or other funds of the City treated as proceeds of the Bonds at any time during the term of the Bonds which will cause interest on the Bonds to be included in gross income for federal income tax purposes. RATING Standard & Poor's Rating Services has assigned a rating of "_" to the Bonds. The rating was applied for by the City and certain information was supplied by the City to the rating agency to be considered in evaluating the Bonds. The rating reflects only the view of the rating agency and an explanation of the significance of the rating may be obtained from the rating agency. There is no assurance that the rating will be retained for any given period of time or that the rating will not be revised downward or withdrawn entirely by the rating agency if, in its judgment, circumstances so warrant. Any such downward revision or withdrawal of the rating would be likely to have an adverse effect on the market price of the Bonds. CONTINUING DISCLOSURE Basic Undertaking to Provide Annual Financial Information and Notice of Listed Events. To meet the requirements of the United States Securities and Exchange Commission ("SEC") Rule 15c2 -12(b)(5) (the "Rule"), as applicable to a participating underwriter for the Bonds, the City will undertake (the "Undertaking's for the benefit of holders of the Bonds to provide or cause to be provided, either directly or through a designated agent, to the Municipal Securities Rulemaking Board ("MSRB"), in an electronic format as prescribed by the MSRB, accompanied by identifying information as prescribed by the MSRB: (a) annual financial information and operating data of the type included in this Official Statement as general described below ("annual financial information's and (b) timely notice (not in excess of 10 business days after the occurrence of the event) of the occurrence of any of the following events with respect to the Bonds: (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notice of Proposed Issue (IRS Form 5701 — TEB) or other material notices or determinations with respect to the tax status of the Bonds; (7) modifications to rights of holders of the Bonds, if material; (8) Bond calls (other than scheduled mandatory redemptions of Term Bonds), if material, and -27- Page 57 of 92 tender offers; (9) defeasances; (10) release, substitution, or sale of property securing repayment of the Bonds, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership or similar event of the City, as such "Bankruptcy Events" are defined in Rule 15c2-12; (13) the consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of the assets of the City, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and (14) appointment of a successor or additional trustee or the change of name of a trustee, if material. Type of Annual Financial Information Undertaken to be Provided. The annual financial information that the City undertakes to provide will consist of. (1) annual financial statements prepared (except as noted in the financial statements) in accordance with generally accepted accounting principles applicable to local governmental units of the State such as the City, as such principles may be changed from time to time, which statements may be unaudited, provided, that if and when audited financial statements are prepared and available they will be provided; (2) principal amount of general obligation bonds outstanding at the end of the applicable fiscal year; (3) assessed valuation for that fiscal year; (4) property tax levy amounts and rates for that fiscal year; and (5) a statement of revenues for that fiscal year from any other revenue sources pledged to the Bonds. The annual financial information will be provided to the MSRB not later than the last day of the ninth month after the end of each fiscal year of the City (currently, a fiscal year ending December 31), as such fiscal year may be changed as required or permitted by State law, commencing with the City's fiscal year ending December 31, 2014. The annual financial information may be provided in a single or multiple documents, and may be incorporated by specific reference to documents available to the public on the Internet website of the MSRB or filed with the SEC. Amendment of Undertaking. The Undertaking is subject to amendment after the primary offering of the Bonds without the consent of any holder of any Bond, or of any broker, dealer, municipal securities dealer, participating underwriter, rating agency or the MSRB, under the circumstances and in the manner permitted by the Rule. The City will give notice to the MSRB of the substance (or provide a copy) of any amendment to the Undertaking and a brief statement of the reasons for the amendment. If the amendment changes the type of annual financial information to be provided, the annual financial information containing the amended financial information will include a narrative explanation of the effect of that change on the type of information to be provided. Termination of Undertaking. The City's obligations under the Undertaking will terminate upon the legal defeasance of all of the Bonds. In addition, the City's obligations under the Undertaking will terminate if those provisions of the Rule which require the City to comply with the Undertaking become legally inapplicable in respect of the Bonds for any reason, as confirmed by an opinion of nationally recognized bond counsel or other counsel familiar with federal securities laws delivered to the City, and the City provides timely notice of such termination to the MSRB. Remedy for Failure to CoVywitb Undertaking. As soon as practicable after the City learns of any failure to comply with the Undertaking, the City will proceed with due diligence to cause such noncompliance to be corrected. No failure by the City or other obligated person to comply with the Undertaking shall constitute a default in respect of the Bonds. The sole remedy of any holder of a Bond shall be to take such actions as that holder deems necessary, including seeking an order of specific performance from an appropriate court, to compel the City or other obligated person to comply with the Undertaking. Prior Compliance with Continuing Disclosure Undertakings. The City previously entered into undertakings under the Rule with respect to certain of its outstanding bonds. In October of 2013, the City discovered that it failed to (1) submit event notices with respect to downgrades to the insured ratings on its Unlimited Tax General Obligation Bonds, 1999, Unlimited Tax General Obligation Refunding Bonds, 2002, and Water and Sewer Revenue Bonds, 2009, and (2) timely file certain financial information as required by undertakings entered into in connection with certain outstanding bonds. The City filed with EMMA event notices with respect to these items on October 30, 2013. The City has otherwise complied in all material respects with the provisions of its various continuing disclosure undertakings, and has taken affirmative action to ensure full compliance with the undertakings by assigning appropriate staff to the tasks and enrolling in the MSRB's e-mail reminder system. CERTAIN INVESTMENT CONSIDERATIONS Limitations on Remedies. Any remedies available to the owners of the Bonds are in many respects dependent upon judicial actions, which are in turn often subject to discretion and delay and could be both expensive and time consuming to obtain. If the City fails to comply with its covenants under the Bond Ordinance or to pay principal of or interest on the Bonds, there can be no assurance that available remedies will be adequate to fully protect the -28- Page 58 of 92 interests of the owners of the Bonds. In addition to the limitations on remedies contained in State law, the rights and obligations under the Bonds and the Bond Ordinance may be limited by and are subject to bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium, and other laws relating to or affecting creditors' rights, to the application of equitable principles, and to the exercise of judicial discretion in appropriate cases. The legal opinion of Bond Counsel regarding the validity of the Bonds will be qualified by reference to bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium and other similar laws affecting the rights of creditors generally, and by general principles of equity. Bankruptcy. A municipality, such as the City, must be specifically authorized under State law in order to seek relief under Chapter 9 of the U.S. Bankruptcy Code (the "Bankruptcy Code"). Chapter 39.64 RCW, entitled the "Taxing Relief Bankruptcy Act," appears to permit any "taxing district" (defined to include any municipality or political subdivision, including cities) to voluntarily petition for relief under the Bankruptcy Code. A creditor cannot bring an involuntarily bankruptcy proceeding against a municipality, including cities. Under Chapter 9, a federal bankruptcy court may not appoint a receiver for a municipality or order the dissolution or liquidation of the municipality. If a municipality filed for bankruptcy, the bankruptcy court would have some discretion with respect to how to treat past and future obligations of such municipality regarding priority of payment to creditors under a plan for adjustment of debt under Chapter 9 of the Bankruptcy Code. INITIATIVE AND REFERENDUM General. Under the State constitution, the voters of the State have the ability to initiate legislation and to modify existing statutes through the powers of initiative and referendum. Initiatives and referenda are submitted to the voters upon receipt of a petition signed by at least eight percent (initiatives) and four percent (referenda) of the number of voters registered and voting for the office of Governor at the preceding regular gubernatorial election. Any law approved through the power of initiative by a majority of the voters may not be amended or repealed by the Legislature within a period of two years following enactment, except by a vote of two-thirds of all the members elected to each house of the Legislature, but thereafter is subject to amendment or repeal by the Legislature in the same manner as other laws. Future Initiatives. Initiative petitions affecting tax collections and levy rates (not including the taxes pledged to the repayment of the Bonds) and other matters may be filed in the future. The City cannot predict whether any such initiatives will qualify to be submitted to the voters or, if submitted, will be approved. Likewise, the City cannot predict what actions the Legislature might take, if any, regarding future initiatives approved by voters. LEGAL AND UNDERWRITING Approval of Counsel Legal matters incident to the authorization, issuance and sale of the Bonds by the City are subject to the approving legal opinion of Bond Counsel. The form of the opinion of Bond Counsel with respect to the Bonds is attached as Appendix A. The opinion of Bond Counsel is given based on factual representations made to Bond Counsel, and under existing law, as of the date of initial delivery of the Bonds, and Bond Counsel assumes no obligation to revise or supplement its opinion to reflect any facts or circumstances that may thereafter come to its attention, or any changes in law that may thereafter occur. The opinion of Bond Counsel is an expression of its professional judgment on the matters expressly addressed in its opinion and does not constitute a guarantee of result. Bond Counsel will be compensated only upon the issuance and sale of the Bonds. Financial Advisor A. Dashen & Associates, Bellevue, Washington, serves as financial advisor to the City in conjunction with the issuance of the Bonds (the "Financial Advisor"). The Financial Advisor has not audited, authenticated or otherwise verified the information set forth in this Official Statement or any other related information available to the City with respect to the accuracy and completeness of disclosure of such information, and no guaranty, warranty or other representation is made by the Financial Advisor respecting the accuracy and completeness of this Official Statement or any other matter related to this Official Statement. The Financial Advisor is an independent financial advisory firm and is not engaged in the business of underwriting, marketing, trading or distributing municipal securities. -29- Page 59 of 92 Litigation There is no litigation pending or threatened questioning the validity of the Bonds nor the power and authority of the City to issue the Bonds. There is no litigation pending or threatened that would materially affect the finances of the City or affect the City's ability to meet debt service requirements on the Bonds. Conflicts of Interest All or a portion of the fees of the Underwriter, Financial Advisor and Bond Counsel are contingent upon the issuance and sale of the Bonds. In addition, Bond Counsel from time to time serves as counsel to the Underwriter with respect to bonds issued by issuers other than the City. None of the Council members or other officers of the City have any conflict of interest in the issuance of the Bonds that is prohibited by applicable law. Underwriting The Bonds are being purchased by the Underwriter. The purchase contract provides that the Underwriter will purchase all of the Bonds, if any are purchased, at a price of percent of the par value of the Bonds. The Bonds will be reoffered at an average price of percent of the par value of the Bonds. After the initial public offering, the public offering prices may be varied from time to time. Piper Jaffray & Co. and Pershing LLC, a subsidiary of The Bank of New York Mellon Corporation, entered into an agreement (the "Agreement") which enables Pershing LLC to distribute certain new issue municipal securities underwritten by or allocated to Piper Jaffray & Co., including the Bonds. Under the Agreement, Piper Jaffray & Co. will share with Pershing LLC a portion of the fee or commission paid to Piper Jaffray & Co. Piper Jaffray & Co. has entered into a distribution agreement ("Distribution Agreement") with Charles Schwab & Co., Inc. ("CS&Co") for the retail distribution of certain securities offerings at the original issue prices. Pursuant to the Distribution Agreement, CS&Co. may purchase Bonds from Piper Jaffray & Co. at the original issue price less a negotiated portion of the selling concession applicable to any Bonds that CS&Co. sells. CONCLUDING STATEMENT So far as any statement herein includes matters of opinion, or estimates of future expenses and income, whether or not expressly so stated, they are intended merely as such and not as representations of fact. The information contained herein should not be construed as representing all conditions affecting the City or the Bonds. Additional information may be obtained from the City. The statements relating to the Ordinance are in summarized form, and in all respects are subject to and qualified in their entirety by express reference to the provisions of such document in its complete form. The agreements of the City are set forth in such documents, and the information assembled herein is not to be construed as a contract with Owners of the Bonds. The preparation and distribution of this Official Statement have been authorized by the City. -30- Page 60 of 92 APPENDIX A FORM OF LEGAL OPINION Page 61 of 92 APPENDIX B The Depository Trust Company A subsidiary of The Depository Trust & Clearing Corporation 1. The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the securities (the "Securities"). The Securities will be issued as fully - registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully -registered Security certificate will be issued for [each issue of] the Securities, [each] in the aggregate principal amount of such issue, and will be deposited with DTC. [If, however, the aggregate principal amount of [any] issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue.] 2. DTC, the world's largest securities depository, is a limited -purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non - U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post -trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book -entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor's rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. 60 DTCC. The Depository Trust & Clearing Corporation Page 62 of 92 3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC's records. The ownership interest of each actual purchaser of each Security (`Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book -entry system for the Securities is discontinued. 4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC's records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. 5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subj ect to any statutory or regulatory requirements as may be in effect from time to time. [Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.] 6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. The Depository Frust & Clearing Corporation Page 63 of 92 7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). 8. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from Issuer or Agent, on payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, Agent, or Issuer, subject to any statutory or regulatory requirements as maybe in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of Issuer or Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. 9. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to [Tender/Remarketing] Agent, and shall effect delivery of such Securities by causing the Direct Participant to transferthe Participant's interest in the Securities, on DTC's records, to [Tender/Remarketing] Agent. The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC's records and followed by a book -entry credit of tendered Securities to [Tender/Remarketing] Agent's DTC account. 10. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to Issuer or Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered. 11. Issuer may decide to discontinue use of the system of book -entry -only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC. 12. The information in this section concerning DTC and DTC's book -entry system has been obtained from sources that Issuer believes tobe reliable, but Issuer takes no responsibility for the accuracy thereof. 40 DTCCm The Depository Trust & Clearing Corporation Page 64 of 92 APPENDIX C 2013 AUDITED FINANCIAL STATEMENTS Page 65 of 92 May 22, 2015 3:3S pm Prepared by Piper Jaffray & Co. - BPW (Pasco:PASCO-15_LTGO) Page 66 of 92 BOND SUMMARY STATISTICS City of Pasco, Washington Limited Tax General Obligation Bonds, Series 2015 Current Market Rates (5-22-15) Dated Date 07/14/2015 Delivery Date 07/14/2015 Last Maturity 12/01/2035 Arbitrage Yield 2.527104% True Interest Cost (TIC) 2.916817% Net Interest Cost (NIC) 3.123026% All -In TIC 2.980662% Average Coupon 4.000000% Average Life (years) 12.171 Duration of Issue (years) 9.701 Par Amount 7,730,000.00 Bond Proceeds 8,605,317.00 Total Interest 3,763,267.78 Net Interest 2,938,195.78 Total Debt Service 11,493,267.78 Maximum Annual Debt Service 571,600.00 Average Annual Debt Service 563,933.00 Par Average Average PV of I by Bond Component Value Price Coupon Life change 2016-2035 Serial Bonds 7,730,000.00 111.324 4.000% 12.171 6,300.45 7,730,000.00 12.171 6,300.45 All -In Arbitrage TIC TIC "field Par Value 7,730,000.00 7,730,000.00 7,730,000.00 f Accrued Interest - - - + Premium (Discount) 875,317.00 875,317.00 875,317.00 - Underwriter's Discount -S0,245.00 -50,245.00 - Cost of Issuance Expense -52,000.00 - Other Amounts - - - Target Value 8,555,072.00 8,503,072.00 8,605,317.00 Target Date 07/14/2015 07/14/2015 07/14/2015 Yield 2.916817% 2.980662% 2.527104% May 22, 2015 3:3S pm Prepared by Piper Jaffray & Co. - BPW (Pasco:PASCO-15_LTGO) Page 66 of 92 BOND PRICING City of Pasco, Washington Limited Tax General Obligation Bonds, Series 2015 Current Market Rates (5-22-15) Maturity Yield to Call Call Premium Bond Component Date Amount Pate Yield Price Maturity Date Price (-Discount) 2016-2035 Serial Bands: 12/01/2016 260,000 4.000% 0.680% 104.553 11,837.80 12/01/2017 270,000 4.000% 0.980% 107.088 19,137.60 12101/2018 280,000 4.000% 1.280% 108.969 - 25,113.20 17101/2019 290,000 4.000% 1.440% 110.828 31,401.20 12/01/2020 305,000 4.000% 1.620% 112.214 - 37,252.70 12/01/2021 315,000 4.000% 1.850% 112.881 40,575.15 12/01/2022 330,000 4.000% 1.950% 114.026 - 46,285.80 12/01/2023 340,000 4.000% 2.090% 114.611 - 49,677.40 12/01/2025 355,000 4.000% 2.180% 115.362 54,535.10 12/01/2025 370,000 4.000% 2.300% 115.616 - 57,779.20 12/01/2026 385,000 4.000% 2.430% 114.325 C 2.542% 12/01/2025 100.000 55,151.25 12/01/2027 400,000 4.000% 2.530% 113.344 C 2.7239'0 12/01/2025 100.000 53,376.00 12/01/2028 415,000 4.000% 2.630% 112.372 C 2.879% 12/01/2025 100.000 51,343.80 12/01/2029 435,000 4.000% 2.690% 111.793 C 2.985% 12!4112025 100.000 51,299.55 12/01/2030 450,000 4.000% 2.770% 111.028 C 3.093% 12/01/2025 100.000 49,626.00 12/01/2031 470,000 4.000% 2.830% 110.457 C 3.176% 12/01/2025 100.000 49,147.90 12/01/2032 485,000 4.000% 2.890% 109.890 C 3.250% 12/01/2025 100.000 47,966.50 12/01/2033 505,000 4.000% 2.930% 109.514 C 3.305% 12/01/2025 100.000 48,045.70 12/01/2034 525,000 4.000% 2.970% 109.140 C 3.355% 12/01/2025 100.000 47,98S.00 12/01/2035 545,000 4.000% 3.010% 108.767 C 3.400% 12/01/2025 100.000 47,780.15 7,730,000 875,317.00 Dated Date Delivery Dare First Coupon Par Amount Premium Production Underwriter's Discount Purchase Price Accrued Interest Net Proceeds May 22, 2015 3:35 pm Prepared by Piper )'affray & Co. - BPW 0711412015 07/14/2015 12/01/2015 7,730,000.00 875,317.00 8,605,317.00 111.323635% -50,245.00 -0.650000% 8,555,072.00 110.673635% 8,5S5,072.00 (Pasco:PAS CO-15_LTG O ) Page 67 of 92 SOURCES AND USES OF FUNDS City of Basco, Washington Limited Tax General Obligation Bonds, Series 2015 Current Market Rates (5-22-15) Dated Date 07/14/2015 Delivery Date 07/14/2015 Sources: Bond Proceeds: 30,000.00 Par Amount 7,730,000.00 Premium 875,317.00 Financial Advisor 8,605,317.00 Uses: Project Fund Deposits: Project Fund 8,500,000.00 Cost of Issuance: Bond Counsel 30,000.00 S&P Rating Fee 11,000.00 Paying Agent 1,000.00 Financial Advisor 10.000.00 52,000.00 Underwriter's Discount: Other Underwriter's Discount 50,245.00 Other Uses of Funds: Additional Proceeds 3,072.00 8,605,317.00 May 22, 2015 3:35 pm Prepared by Piper Jaffray & Co. - BPW (Pasco:PASCO-15_LTGO) Page 68 of 92 BOND DEBT SERVICE City of Pasco, Washington Limited Tax General Obligation Bonds, Series 2015 Current Market Rates (5-22-15) Dated Date 07/14/2015 Delivery Date 07/14/2015 Period Ending Principal Coupon Interest Debt Service Annual Debt Service 12/01/2015 - 117,667.78 117,667.78 117,667.78 06/01/2016 - - 154,600.00 154,600.00 - 12/01/2016 260,000 4.000% 154,600.00 414,600.00 569,200.00 06/01/2017 - - 149,400.00 149,400.00 - 12/01/2017 270,000 4.000% 149,400.00 419,400.00 568,800.00 06/01/2018 - - 144,000.00 144,000.00 - 12/01/2018 280,000 4.000% 144,000.00 424,000.00 568,000.00 06/01/2019 - 138,400.00 138,400.00 - 12/01/2019 290,000 4.000% 138,400.00 428,400.00 566,800.00 06/01/2020 - - 132,600.00 132,600.00 - 12/01/2020 305,000 4.000% 132,600.00 437,600.00 570,200.00 06/01/2021 - - 126,500.00 126,500.00 - 12/01/2021 315,000 4.000% 126,500.00 441,500.00 568,000.00 06/0112022 - - 120,200.00 120,200.00 - 12/01/2022 330,000 4.000% 120,200.00 450,200.00 570,400.00 06/01/2023 - 113,600.00 113,600.00 - 12/01/2023 340,000 4.000% 113,600.00 453,600.00 567,200.00 06/01/2024 - - 106,800.00 106,800.00 - 12/01/2024 355,000 4.000% 106,800.00 461,800.00 568,600.00 06/01/2025 - - 99,700.00 99,700.00 - 12/01/2025 370,000 4.000% 49,700.00 469,700.00 569,400.00 06/01/2026 - - 92,300.00 92,300.00 - 12/01/2026 385,000 4.000% 92,300.00 477,300.00 569,600.00 06/01/2027 - - 84,600.00 84,600.00 - 12/01/2027 400,000 4.000% 84,600.00 484,600.00 569,200.00 06/01/2028 - - 76,600.00 76,600.00 - 12/01/2028 415,000 4.000% 76,600.00 491,600.00 568,200.00 06/01/2029 - - 68,300.00 68,300.00 - 12/01/2029 435,000 4.000% 68,300.00 503,300.00 571,600.00 06/01/2030 - - 59,600.00 59,600.00 - 12/01/2030 450,000 4.000% 59,600.00 509,600.00 569,200.00 06/01/2031 - - 50,600.00 50,600.00 - 12/01/2031 470,000 4.000% 50,600.00 520,600.00 571,200.00 06/01/2032 - - 41,200.00 41,200.00 - 12/01/2032 485,000 4.000% 41,200.00 526,200.00 567,400.00 06/01/2033 - - 31,500.00 31,500.00 - 12/01/2033 505,000 4.000% 31,500.00 536,500.00 568„000.00 06/01/2034 - - 21,400.00 21,400.00 - 12/01/2034 525,000 4.000% 21,400.00 546,400.00 567,800.00 06/01/2035 - - 10,900.00 10,900.00 - 12/01/2035 545,000 4.000% 10,900.00 555,900.00 566,800.00 7,730,000 3,763,267.78 11,493,267.78 11,493,267.78 May 22, 2015 3.35 pm Prepared by Piper Jaffray & Co. - BPW (Pasco:PASCO-15_LTGO) Page 69 of 92 AGENDA REPORT FOR: City Council June 4, 2015 TO: Dave Zabell, City Manager Workshop Meeting: 6/8/15 Rick White, Director Community & Economic Development FROM: Jeff Adams, Associate Planner Community & Economic Development SUBJECT: Proposed Code Amendment: Solid Waste Scavenging and Compaction (MF# CA 2015-004) I. REFERENCE(S): Draft Ordinance II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS: Discussion III. FISCAL IMPACT: None IV. HISTORY AND FACTS BRIEF: In December of 2014 it was discovered that an Oregon firm, GreenSpace Recycling, was operating in Pasco without a business license. Staff notified the operator of the licensing requirement. The license application subsequently submitted to the City listed their type of business as "Junk Hauling." Their business model apparently includes, scavenging commercial waste receptacles for recyclables, manual compaction of the contents of containers in order to reduce the required dumpster size and transferring materials from one container to another. There is no way of determining where the residue from their scavenging, removal, and recycling activities is being taken, particularly as many of the items claimed to be recycled (such as couches), are generally not welcomed by any donation centers in town. The applicant also noted that they practiced "equalizing" which seems to indicate taking waste from one dumpster to another dumpster - location unknown. However it appears this practice is not limited to the same business. Page 70 of 92 The City's waste disposal franchisee, Basin Disposal Inc. (BDI), has raised liability concerns with GreenSpace Recycling employees entering BDI-owned waste receptacles without expressed permission from BDI. BDI receptacles are all marked with labels prohibiting entry. Furthermore, these receptacles are considered "confined spaces" by the State Health Department and State health regulations require special preparation, clothing, and equipment before entering. A significant portion of the Franchisee's (BDI) disposal costs are based on weight ("Tipping Fees") but their pricing model for dumpster size is determined by their experience of decades of operations as to what they expect for specific container sizes of un -compacted waste. Part of GreenSpace Recycling's business model appears to be to convince apartment owners to order a smaller volume dumpster; they then contract to manually compact the contents of that dumpster, thus loading the weight expected of a larger container into a smaller volume container. As BDI's fee structure is regulated by ordinance, they cannot simply adjust the fees to accommodate this unapproved external compaction activity. As a result these increased costs are being absorbed by BDI, creating an unsustainable revenue shortfall for them that, if not addressed, will ultimately need to be passed on to all rate classifications. Based on the City's obligations under the franchise agreement and in the interests of public health and sanitation, City Staff's is proposing that commercial recycling activities outside the franchise agreement be limited to the following conditions: 1. A business must furnish separate, appropriately marked receptacles for recyclable materials on-site; 2. A business must perform any compaction prior to deposit into a garbage receptacle with no personal entry into receptacles; an added compaction fee, as specified in the franchise agreement, may apply; 3. A business must report the location of any and all deposit locations of all materials, recycled or otherwise removed from customer pickup sites; and 4. A business may not engage in the collection or transport of solid waste within the City of Pasco outside of the franchise agreement. V. DISCUSSION: Though the unlicensed activities of the applicant were determined to be in violation of the franchise agreement, City Code is vague in dealing with this type of activity generally. As a result, a code amendment has been crafted to strengthen the language of the code (see attached draft Code Amendment). Page 71 of 92 ORDINANCE NO. AN ORDINANCE of the City of Pasco, Washington Amending PMC Chapter 6.04 entitled "Solid Waste Disposal" WHEREAS, the City pursuant to RCW 35A.21.060, has the authority to regulate the collection of solid waste and recyclable materials including the granting of a franchise contract for solid waste and recyclable materials collection by a qualified contractor conducting business in accordance with the rules of the Washington Utilities and Transportation Commission; and WHEREAS, the regulation of solid waste and recyclable material is necessary to provide for the health and safety of the citizens of the City of Pasco, and to provide for a comfortable and attractive living environment; and WHEREAS, interference with solid waste and recyclable material collection, and intrusion into solid waste and recyclable materials collection devices presents a risk to the health and safety of those who intrude and interfere with collection process as well as nearby residents and the duly authorized solid waste and recyclable materials collector for the City; and WHEREAS, to minimize this risk to health and safety, regulations are necessary regarding the access to, use of, and removal of solid waste and recyclable materials from such devices. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PASCO, WASHINGTON, DO ORDAIN AS FOLLOWS: Section 1. That Section 6.04.060 of the Pasco Municipal Code entitled "Collection Contracts - Compulsory Service" shall be and hereby is amended and shall read as follows: 6.04.060 COLLECTION CONTRACTS - COMPULSORY SERVICE. It is unlawful for any person, other than the City or its contractor, if any, to engage in the business of collecting, removing, transporting, processing, coMpacting, or disposing of solid waste in the City, unless specifically provided for in this chapter. All property owners, occupants of premises and persons responsible for the control of premises that have solid waste for disposal must pay for the solid waste disposal service provided for in this chapter. " t.:elatio of this seeti .,, shall be a violation ofthis ,.hapte, (Ord. 2037 Sec. 1, 1979; Ord. 1537 Sec. 6(a), 1972.) Section 2. That a new Section 6.04.115 of the Pasco Municipal Code entitled "Can, Container - Scavenging Prohibited" shall be and hereby is created and shall read as follows: 6.04.115 CAN, CONTAINER - SCAVENGING PROHIBITED. A) It is unlawful for any person to scavenge or salvage solid waste or recyclable materials from any waste cans or containers required under this chapter except for an agent of the City or contractor. No unauthorized person shall take or remove any solid waste placed out for collection by the contractor, including recyclable materials. Ordinance Amending PMC 6.04 - 1 Page 72 of 92 B) No person shall enter into a can, container, or other solid waste receptacle for the purpose of removing materials, compacting the contents of the receptacle, or any other unlawful purpose. This section shall not apply to: 1) Agents or employees of the City; or 2) Contractor when: i. Acting to remove solid waste; ii. Abatement of a present or imminent dangerous condition; iii. Investigation; or 3) The owner of personal property inadvertently deposited into the receptacle. C) Except as provided in subsection B) above, all solid waste and recyclable materials shall be presumed abandoned by the owner upon deposit into the can, container or receptacle, and title thereto shall vest to the contractor which shall have exclusive rights to its possession. Section 3. That Section 6.04.330 of the Pasco Municipal Code entitled "Penalties" shall be and hereby is amended and shall read as follows: 6.04.330 PENALTIES. Any person, or entity, found to be in violation of any provisions of this chapter, including violation of PMC 6.04.060 by engaging in the business of collecting, removing, transportingor r disposing of solid waste in the City, shall be deemed to have committed a civil infraction and f r eaeh infi,e fieft for each violation and for each day of violation, and shall be subject to a civil penalty as set forth in PMC 11.02.050(5), plus court costs and statutory assessments. (Ord. 3562 Sec. 17, 2002; Ord. 2562 Sec. 6, 1985; Ord. 1968 Sec. 4, 1978; Ord. 1537 Sec. 13, 1972.) Section 4. That Section 6.04.340 of the Pasco Municipal Code entitled "Enforcement" shall be and hereby is amended and shall read as follows: 6.04.340 ENFORCEMENT. A) Whenever the owner or occupant of any residence, multi -family residence, public food establishment or commercial establishment or enti1y does not comply with the regulations as set forth in this chapter, including operation of a solid waste and recycling material collection business without a valid business license, the City may elect to enforce the provisions of this seetieChapter by tmif f eitat o„ aHaler civil complaint filed in the Municipal Court; or it may take administrative enforcement action through the City's Code Enforcement Board, pursuant to Title 11 of this code. For purposes of issuing eitMiens complaints to alleged violators of the provisions of this section, the person(s) designated by the City Manager of the City to enforce the Ordinance Amending PMC 6.04 - 2 Page 73 of 92 provisions of this section shall have the specific authority to issue said tfflifefffl eita an&e complaint to the said alleged violators and file the same in the Municipal Court in accordance with its procedures. B) Whenever, in any action brought in the Municipal Court, it is established that the residence, multi -family residence, public food establishment or commercial establishment does not comply with this section, the Court shall, together with the €nie penal imposed, if any, enter an order of abatement as part of the judgment in the case, which order shall direct either: 1) That any such violation of the provisions of this section shall be abated or removed by the defendant within the time limit set by the Court, and not exceed thirty days; and 2) That the violation of the provisions of this section may be abated by the City at the cost of the defendant. G)Eyefy per -sen who tes any of f this section is guilty of Cotmty jail for- a maximum tefm fixed by the Gout4 of not more than ninety days, or- -a -Pira of net mef-e than one thousand ($1,000) dollarsor- by (Ord. 3562 Sec. 18, 2002.) Section 5. This Ordinance shall take full force and effect five (5) days after its approval, passage and publication as required by law. PASSED by the City Council of the City of Pasco, Washington, and approved as provided by law this day of 12015. Matt Watkins, Mayor ATTEST: APPROVED AS TO FORM: Debra L. Clark, City Clerk Leland B. Kerr, City Attorney Ordinance Amending PMC 6.04 - 3 Page 74 of 92 AGENDA REPORT FOR: City Council TO: Dave Zabell, City Manager FROM: Ahmad Qayoumi, Director Public Works May 28, 2015 Workshop Meeting: 6/8/15 SUBJECT: 20th Avenue Safety Improvements - Lewis Street to Sun Willows Boulevard I. REFERENCE(S): Vicinity Map Federal Highway Safety Improvement Program (HSIP) Grant Award Professional Services Agreement Summary II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS: Discussion III. FISCAL IMPACT: HSIP Grant Fund - $150,300 Design cost Arterial Street Fund - $6,118 Design cost IV. HISTORY AND FACTS BRIEF: 20th Avenue is a principal north/south transportation corridor in the City. It serves one of the City's larger commercial districts and provides regional access to Columbia Basin College and the Pasco Airport. Based on current traffic counts, approximately 20,000 vehicles travel daily through the 20th Avenue corridor. The corridor also experiences the second highest pedestrian volume, after downtown, for users accessing the college, schools and retail activities. Beginning in 2013, staff identified several areas within the 20th Avenue corridor in need of improvements for both vehicular and pedestrian traffic. Due to structural, American Disabilities Act (ADA) non-compliance and general safety concerns, in June of 2014, the Pasco School District removed the pedestrian overpass on 20th Avenue, north of Pearl Street. Page 75 of 92 Last year, staff applied for a competitive federal safety grant and as a result the City was awarded $1,373,500 in a Federal HSIP grant for design and safety improvements to the 20th Avenue corridor on December 31, 2014. Staff has completed the initial preliminary conceptual engineering. A consultant has been selected through the Request for Proposal process to complete the design. Staff interviewed and selected the most qualified consultant to complete the design for the improvements. Construction is expected to be complete by Fall 2016. V. DISCUSSION: In February 2015, staff issued a Request for Proposals for the design of the 20th Avenue Safety Improvements project. The City received proposals from two consultants. Staff subsequently evaluated the proposals, including interviews with each of the design teams. DKS Associates was selected to be the most qualified to complete the design of this project. The project will include the following elements in the design: Raised medians to provide access management at Lewis Street, Court Street and Sun Willows Boulevard (as currently designed by the City Engineering staff); Widening at Pearl Street to I-182 (in the vicinity of the recently removed pedestrian overpass); Traffic signal improvements and ADA ramp improvements at Lewis Street, Sylvester Street, Henry Street, Pearl Street, I-182 Eastbound ramp, I-182 Westbound ramp and Sun Willows Boulevard; Installation of hybrid pedestrian signals and ADA ramp improvements at Marie Street and Yakima Street; Traffic signal improvements at Court Street to include the removal of split phasing and the addition of flashing yellow arrow left turn phasing; Safety analysis to be conducted for the intersections along 20th Avenue between Lewis Street and Sun Willows Boulevard; and Operational analysis to be conducted for the intersection of 20th Avenue and Court Street to confirm the proposed lane configuration changes will operate at an acceptable level of service. While design needs to be more complete before final cost estimates can be prepared, staff is anticipating constructions costs to be approximately $1.2 million. The 2015 budget allocates $600,000 for this project, of which $6,118 will be used for finalizing the design process. The remaining $150,300 needed to complete the design will be funded by the HSIP grant awarded to the City. Page 76 of 92 Page 77 of 92 TRI -CITIES AIRPORT d COLUMBIA BASIN S WI COLLEGE BL VD PROJECT 1-182 L OCA TION w AJIL T EST L� s 'A" ST C OL BIA RlV�R 20th AVENUE SAFETY IMPROVEMENTS CVDW206 ue�iixerm�01S VICINITY MAP SCALE: NONE 1 , L. NO SAE Page 77 of 92 Washington State Transportation Building MAP Department oTransportation 310 Maple Park Avenue S.E. f p P.O. Box 47300 Olympia, WA 98504-7300 Lynn Peterson 360-705-7000 Secretary of Transportation TTY: 1-800-833-6388 December 31, 2014 www.wsdot.wa.gov Mr. Ahmad Oayoumi Public Works Director City of Pasco 525 N. Third Avenue Pasco, Washington 99301 N. 20th Avenue Safety Improvements — W. Lewis Street to Sun Willows Blvd. FFY 2014 Ciiy Safety Program Federal Highway Safety Improvement Program (HSIP) Funding Dear Mr. Oq�u WSDOT is pleased to advise you that the above mentioned safety project was recently selected. The federal funding is limited to the amount shown below: Project Title: N. 20th Avenue Safety Improvements — W. Lewis Street to Sun Willows Blvd. $1,373,500 Scope: See enclosed Detailed Project Description Note: Safety projects require a 10 percent local match for design and right of way; projects that obtain construction authorization by September 30, 2017, are eligible for 100 percent federal funding for the construction phase. In order to meet state and federal requirements, the following are required: ■ Projects utilizing federal funds must be included in your current Transportation Improvement Program (TIP) as a complete programmed project. Once your TIP amendment is approved, WSDOT will amend the Statewide Transportation Improvement Program (STIP). ■ Project expenditures incurred before receiving notice from Local Programs of federal fund obligation are not eligible for reimbursement. ■ Any changes in scope, schedule, or budget will require approval from HQ Local Programs. ■ To maintain funding, a Quarterly Project Report form (including schedule, scopes, and budget) must be completed by the end of March, June, September, and December each year. The online database can be found at: htti)://www.wsdot.wa.gov/locall2rograms/. To access the database you will need an account name and password. Your account name is Pasco and your password is Pasco408. The password is case sensitive. To obligate funding for the project, please refer to the information above and your Local Agency Guidelines (LAG) manual for additional information. As a reminder, Local Programs encourages all agencies to submit monthly progress billings to ensure timely reimbursement of eligible federal expenditures. For assistance please contact Roger Arms, your Region Local Programs Engineer, at 509.577.1780. Sincerely, Kathleen B. Davis Director KBD:km:sas Local Programs Enclosure cc: Roger Arms, Region Local Programs Engineer Page 78 of 92 Project Summary Program: 2014 City Safety Program Date: December 2014 Agency: City of Pasco Project Title: N. 201h Ave. Safety Improvements — W. Lewis St. to Sun Willows Blvd. Project Number: Not assigned Project Type: Spot location (corridor) Project Description: Lengthen a left turn lane, widen lanes to tie into existing lane widths, install a curbed median and pedestrian hybrid beacons, install accessible countdown pedestrian signals and push buttons, realign crosswalks, upgrade curb ramps, and modify traffic signal phasing. Detailed Project Description: A. Install a curbed median on both legs of N. 20th Ave. in advance of the following intersections: 1. Sun Willows Blvd. 2. Court St. 3. Lewis St. B. Convert from traditional pedestrian signals to accessible countdown pedestrian signals (signals and pushbuttons) on N. 20th Ave. at the following intersections: 1. Sun Willows Blvd. (8 pedestrian signals) 2. 1-82/US 12 WB ramps (4 pedestrian signals) 3. 1-82/US 12 EB ramps (2 pedestrian signals) 4. W. Pearl St. (8 pedestrian signals) 5. W. Henry St. (6 pedestrian signals) Q. W. Sylvester St. (8 pedestrian signals) 7. W. Lewis St. (8 pedestrian signals) C. At the following intersections on. N. 20th Ave., remove existing curb ramps and crosswalks. Install crosswalks on a new alignment and install new ADA compliant ramps. 1. Sun Willows Blvd. (includes 8 new ramps) 2. 1-82/US 12 WB ramps (includes 4 new ramps) 3. 1-82/US 12 EB ramps(includes 2 new ramps) 4. W. Pearl St. (includes 8 new ramps) 5. W. Henry St. (includes 6 new ramps) 6. W. Sylvester St. (includes 8 new ramps) 7. W. Lewis St. (includes 8 new ramps) D. Remove existing curb ramps, install a pedestrian hybrid beacon, and install 4 new ADA compliant curb ramps on N. 201h Ave. at Marie St. E. On N. 20th Ave. at Yakima St. remove one existing crosswalk. Remove existing curb ramps. Install a pedestrian hybrid beacon and install 4, new ADA compliant curb ramps. F. At the intersection of N. 20th Ave. and Court St.: 1. Modify the north -south signal heads on N. 20th Ave. to eliminate split phasing. 2. Replace the east -west protected -permitted signal heads on Court. St. with flashing yellow signal operation. 3. Lengthen the north -south left tum lane. G. On N. 20th Ave. between W. Pearl St. and 1-182 where a pedestrian overpass was recently removed: 1. Widen from 10-10'% foot -wide lanes to 12 foot -wide lanes (the existing lane width on each end of the widening). 2. Widen from 5 foot -wide to 7 foot -wide sidewalks. 3. Remove fixed objects and change to crashworthy features at the edge of the roadway. Page 1 of 2 Page 79 of 92 Proiect Schedule (Estimated): Project added to local agency Transportation Improvement Plan TIP 812014 Project added to regional TIP 10/2014 Project added to Statewide Transportation Improvement Plan STIP 112015 Project definition/Begin preliminary engineering PEphase 212015 NEPA kickoff 312015 Environmental documents approved 6/2015 Rig ht -of -way start NA Right-of-way complete certification NA Geometric/30% design complete 5/2015 General Ian/60% design complete 7/2015 Advertisement 9/2015 Contract awarded 11/2015 Open to traffic (operationally complete) 7/2016 Proiect Cost and Award Amount: Phase Total cost 10% local Amount funded Match Amount Amount match from previous provided requested awarded required federal funds (Amount (Does not count funded from toward the local other sources) match Preliminary $167,000 $16,700 $0 $16,700 $150,300 $150,300 Engineering Right -of -Way $0 $0 $0 $0 $0 $0 Construction $1,223,200 $0* $0 $0* $1,223,200* $1,223,200* Total $1,390,200 $16,700 $0 $16,700 $1,373,500 $1,373,500 *Project must be advertised by September 30, 2017 to waive the 10% local match requirement for the construction phase. Page 2 of 2 Page 80 of 92 Professional Services Agreement (Summary Sheet) Project: 201h Avenue Safety Improvements — Lewis Street to Sun Willows Blvd. Consultant: DKS Associates Address: 720 SW Washington Street, Suite 500, Portland, OR 97025 Scope of Services: Complete the design for the 20th Avenue Safety Improvements project focusing on traffic signal and ADA improvements along the corridor. The improvements include traffic signal improvements and ADA directional ramp improvements at seven locations, hybrid pedestrian signal and directional ADA ramp improvements at two locations, traffic signal improvements at Court Street, as well as the design of other upgrades. The proposed tasks include Project Management & Administration, Safety Review and Operations Analysis, Traffic Signal Modification Design,Hybrid Beacon Design, Civil Final plans specifications and costs estimate, Traffic Signal Timing Conversions and Bidding Support. Term: 8 months Completion Date: February 28, 2016 Payments to Consultant: 0 Hourly Rate: not to exceed $156,418.18 ❑ Fixed Sum of. $ ❑ Other: Insurance to be Provided: 1. Commercial General Liability: ❑ $1,000,000 each occurrence; ❑ $2,000,000 general aggregate; or FX1 $1,000,000 each occurrence; and $2,000,000 general aggregate 2. Professional Liability: 0 $1,000,000 per claim; ❑ $1,000,000 policy aggregate limit; or ❑ $ Other Information: Signature by: per claim; and $ per policy aggregate limit ❑ Mayor X City Manager Page 81 of 92 AGENDA REPORT FOR: City Council March 6, 2015 TO: Dave Zabell, City Manager Workshop Meeting: 6/8/15 FROM: Ahmad Qayoumi, Director Public Works SUBJECT: Sacagawea Heritage Trail Underpass I. REFERENCE(S): Vicinity Map Professional Services Agreement Summary II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS: Discussion III. FISCAL IMPACT: Capital Improvements Projects Fund - not to exceed $35,000 IV. HISTORY AND FACTS BRIEF: Approximately 10 years ago, the City approached Burlington Northern Santa Fe (BNSF) regarding improving and expending an underpass along the Heritage Trail at the BNSF bridge structure located at the Columbia River. At that time, BNSF would not consider permission to design and complete the project. The BNSF bridge structure is a main line connecting the West Coast to Chicago. The City's initial trail plan included the construction of the BNSF underpass, which would have extended the Heritage Trail under the BNSF bridge and connected it to the Marina. Following the BNSF denial, as part of initial trail construction, the trail was constructed with a detour north to Ainsworth, across approximately 4 blocks, and then returning south to connect to the remainder of the Heritage Trail, ending at Sacajawea Park. Through recent and productive dialogue with BNSF, staff has been able to obtain a written commitment to the Heritage Trail Underpass Project from Richard Wagner, a BNSF representative, in order to move forward with the design. Page 82 of 92 Rather than investing considerable funds to complete full project design and specifications, staff is proposing to contract engineering services to develop preliminary plans sufficient to meet BNSF requirements regarding the underpass and use of BNSF right-of-way. The design will require significant changes to the bridge abutment in order to lower the trail down to a 12' clearance. Another hurdle associated with the underpass will be to obtain approval of the pedestrian underpass by the Washington State Utilities and Transportation Commission (UTC). Once we have the permit approval of BNSF and the UTC, the City would then complete full design. This approach reduces the risk of significant investment with the possibility of a denial, while still working to tackle one of the more challenging aspects of the project, BNSF approval of an underpass. Further, this approach will provide BNSF an opportunity for early input on one of their most important mail line rails. V. DISCUSSION: The proposed preliminary design will include sufficient design information and detail to obtain permits and approvals from BNSF and the UTC. While design needs to be more complete before final cost estimates can be prepared, staff is anticipating constructions costs to be approximately $1,450,000. The 2015 budget allocates $40,000 for preliminary design of this project. Upon BNSF's issuance of a crossing permit and approval by the UTC for an underpass, Phase 2 engineering will be completed, most likely, in 2016. Subject to available funding and appropriation by the City Council, construction of the underpass trail could commence as early as 2017. Page 83 of 92 ,1 . .I - MIMY 17— 10 I.�! •' f � � gyp` �. / � r_xi - ri I � I r Y,� w .s { 1 F f F 9r f G r n t ] mbia Marine Cent_ 4e�shF�` + 14 , ir k 4tQ,� rJ &' ru it Ca sc"r age! ark Aw , Professional Services Agreement (Summary Sheet) Project: Sacagawea Heritage Trail Underpass (at BNSF Bridge) Consultant: Trantech Enaineerina. LLC Address: 1915 Sun Willows Blvd.. Suite B. Pasco. WA 99301 Scope of Services: Prepare Preliminary Design Report, including survey and mapping information within the project site limits, to extend the existing trail to the east for its ultimate connectivity to the Sacagawea State Park. Term: Completion Date: December 31, 2015 Payments to Consultant: ❑X Hourly Rate: not to exceed $35, 000 ❑ Fixed Sum of: $ ❑ Other: Insurance to be Provided: 1. Commercial General Liability: ❑ $1,000,000 each occurrence; ❑ $2,000,000 general aggregate; or ❑X $1,000,000 each occurrence; and $2,000,000 general aggregate 2. Professional Liability: ❑X $1,000,000 per claim; ❑ $1,000,000 policy aggregate limit; or ❑ $ per claim; and $ per policy aggregate limit Other Information: Signature by: ❑ Mayor © City Manager Page 85 of 92 AGENDA REPORT FOR: City Council TO: Dave Zabell, City Manager FROM: Ahmad Qayoumi, Director Public Works May 13, 2015 Workshop Meeting: 6/8/15 SUBJECT: Six-year Transportation Improvement Plan 2016-2021 I. REFERENCE(S): Proposed Plan Project Map Proposed Resolution II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS: Discussion item III. FISCAL IMPACT: None IV. HISTORY AND FACTS BRIEF: Cities and counties in the State are required annually to adopt an updated Six-year Transportation Improvement Plan. The plan update is also necessary to qualify for federal and state funding. The proposed plan update includes small and large projects varying from street overlays, street widening, traffic signal projects, and ADA improvements to pedestrian facilities, as well as larger projects, such as the Lewis Street Overpass. These projects are included in the project list and depicted on the project map. The proposed six-year program update represents those projects that are anticipated to be needed within six years. Several projects will need to be coordinated with utility projects which could change the actual timing of the projects. Although this process of adopting a six-year plan is a State requirement, the plan is not fiscally constrained. The Council will review a more refined project list as part of the annual Six-year Capital Improvement Project plan and budgeting process. Page 86 of 92 The project worksheets provide important project information such as scope, schedule and potential funding sources. Most of the projects listed will be dependent upon competitive funding, which, if not available, will impact schedule, scope or both. Staff has been successful in obtaining state and federal grants and will continue to aggressively pursue all avenues. V. DISCUSSION: The Plan will be presented to the public in the form of a public hearing scheduled for June 15, 2015. An adopted plan update is due to Washington State by June 30, 2015. Page 87 of 92 v 00 00 0 Q0 N City of Pasco - Six Year Transportation Improvement Plan Year 2016-2021 6/3/2015 Project Name Location Project Cost jPotential Funding Sources YEAR 2016 2016 Pavement Preservation Program (Crack Seal, Overlay, Microsurfacing) Various Locations $ 1,000,000.00 Overlay Funds Powerline Road Feasibility Plan (Road 52 to Foster Wells Road) Road 52 to Foster Wells Road $ 100,000.00 Arterial Funds Pavement Rating Update (last rating in 2011) Citywide $ 100,000.00 Overlay Funds Alley Hard Surface Maintenance & Preservations Various Locations $ 80,000.00 Local Funds Transportation System Plan Various Locations $ 200,000.00 Arterial Funds/STP Annual ADA Access Handicap Ramp Retrofit Various Locations $ 60,000.00 CDBG and Local Funds Wrigley Drive Extension (Design & Construction) Wrigley Drive $ 250,000.00 Arterial/TIF Traffic Signal Controller Upgrades (Construction) Various Locations $ 2,200,000.00 STP/Arterial Argent Road Widening (Construction) Road 40 to 20th Ave $ 4,000,000.00 LID Funds/STP/TIB Dual RT SB Road 68 (Construction) Burden Blvd to 1-182 $ 486,000.00 STP/TIF Interchange Feasibility Study & IJR US 395 to Road 100 $ 500,000.00 STP Oregon Ave (US 397) Phase I (Construction) 1-182/US 395 to "A" Street $ 7,000,000.00 STP/TIB/Arterial Funds/Federal Safety Funds Chapel Hill (Design) Road 68 to Road 84 $ 300,000.00 Arterial/Utility 50k Sandifer Parkway Widening (Design & Construction) Convention to Road 68 $ 300,000.00 Arterial/TIF/STP Burden & Road 60 Traffic Signal (Design) Burden Blvd and Road 60 $ 30,000.00 General/TIF/Overlay Road 68 Triple Right (Construction) Road 68/West Bound Off Ramp $ 350,000.00 STP/Arterial Lewis Street Overpass Design & NEPA Update 12nd Avenue to Oregon Avenue I $ 1,200,000.00 STP 20th Ave (Construction) Marie to Argent Road I $ 1,600,000.00 STP/Arterial/Federal Safety Funds $ 19,756,000.00 TOTAL FOR 2016 YEAR 2017 2017 Pavement Preservation Program (Crack Seal, Overlay, Microsurfacing) Various Locations $ 1,000,000.00 Overlay Funds Powerline Road 50% Design Road 52 to Foster Wells $ 150,000.00 Arterial Funds Powerline Road 100% Design & Right -of -Way Acquisition Road 68 to Convention Road $ 200,000.00 Arterial Funds/TIF Alley Hard Surface Maintenance & Preservations Various Locations $ 100,000.00 Local Funds Annual ADA Access Handicap Ramp Retrofit Various Locations $ 60,000.00 CDBG and Local Funds I-182 Interchange Study (US 395 to Road 68) JUS 395 to Road 68 $ 250,000.00 STP/Arterial/TIF v CD 00 co 0 N Road 68 Widening - South of I-182 (Design) I-182 to Argent Road $ 100,000.00 Arterial Downtown Street (Construction) Lewis, Columbia, 3rd Ave & 4th Ave $ 2,500,000.00 TIB/Safety/Arterial/STP Lewis Street Downtown Circulation Plan 2nd Avenue to 10th Avenue $ 2,000,000.00 Arterial/STP Sandifur Parkway from Road 52 - Road 60 (Construction) Road 52 to Road 60 $ 398,000.00 TIF/STP Harris Road Realignment (Design & Construction) Sandifur Parkway & Broadmoor Blvd $ 250,000.00 Private Developer Chapel Hill (Construction) Road 68 to Road 84 $ 1,363,000.00 TIF/Overlay/STP Oregon Ave (US 397) Entrance Phase II (Construction) Oregon Ave and Ainsworth Ave $ 500,000.00 LID Oregon Ave (US 397) Phase II (Construction) "A" Street to Ainsworth Ave $ 1,030,000.00 STP/LID Funds "M Argent Road to Burden Blvd 1 $ 9,901,000.00 1 TOTAL FOR 2017 YEAR 2018 2018 Pavement Preservation Program (Crack Seal, Overlay, Microsurfacing) Various Locations $ 1,000,000.00 Overlay Funds I-182 Interchange Study & Environmental Study (US 395 to Road 68) US 395 to Road 68 $ 200,000.00 Arterial/TIF/STP Oregon Ave (US 397) Phase II (Construction) "A" Street to Ainsworth Ave. $ 1,000,000.00 STP/LID Funds Alley Hard Surface Maintenance & Preservations Various Locations $ 100,000.00 Local Funds Annual ADA Access Handicap Ramp Retrofit Various Locations $ 60,000.00 CDBG and Local Funds Sacajawea Heritage Trail/Levee (Construction) Road 52 to Road 72 $ 850,000.00 General/STP/WA Grant Lewis Street Overpass Design & NEPA Update 2nd Avenue to Oregon Avenue $ 200,000.00 STP Road 68 Widening - South of I-182 (Construction) Argent Road to I-182 $ 600,000.00 Capital Improvement Funds/STP Road 76 Overpass - Argent to Burden (Design) Argent Road to Burden Blvd $ 100,000.00 STP Road 68 & Court Street Signal (Construction) Road 68 to Court Street $ 250,000.00 TIF Funds Sidewalk on Sylvester Street Overpass Sylvester Street at US 395 Overpass $ 1,500,000.00 TIB/Safety/STP $ 5,860,000.00 TOTAL FOR 2018 YEAR 2019 2019 Pavement Preservation Program (Crack Seal, Overlay, Microsurfacing) Various Locations $ 1,000,000.00 Overlay Funds Alley Hard Surface Maintenance & Preservations Various Locations $ 100,000.00 Local Funds Annual ADA Access Handicap Ramp Retrofit Various Locations $ 60,000.00 CDBG and Local Funds Lewis Street Overpass 2nd Ave to Oregon Street $ 15,000,000.00 WA State Transportation Funds Off Ramp at Road 44 WB IRoad 44 & I-182 $ 200,000.00 Arterial/Overlay/STP I-182 Interchange Study & Environmental Study (US 395 to Road 68) JUS 395 to Road 68 $ 200,000.00 Arterial/TIF/STP Argent & Road 100 Traffic Signal (Design & Construction) I Argent Road and Road 100 $ 250,000.00 TIF Funds YEAR 2020 2020 Pavement Preservation Program (Crack Seal, Overlay, Microsurfacing) Various Locations $ 1,000,000.00 Overlay Funds Alley Hard Surface Maintenance & Preservations Various Locations $ 100,000.00 Local Funds Annual ADA Access Handicap Ramp Retrofit Various Locations $ 60,000.00 CDBG and Local Funds Road 76 Overpass - Argent to Burden (Construction) Argent Ave to Burden Blvd $ 10,680,000.00 STP/ WA Grant Road 44 & Burden Traffic Signal Road 44 and Burden Blvd $ 160,000.00 TIF Funds Madison Ave & Burden Blvd Traffic Signal Madison Ave and Burden Blvd $ 190,000.00 TIF Funds Sidewalk on Road 68 Overpass I-182 Overpass $ 1,025,000.00 Arterial/State Grant/STP Lewis Street Overpass (Design, NEPA & Railroad Easement) 2nd Ave to Oregon Avenue $ 2,000,000.00 State Grant/STP/Arterial $ 15,215,000.00 1 TOTAL FOR 2020 YEAR 2021 2021 Pavement Preservation Program (Crack Seal, Overlay, Microsurfacin Various Locations $ 1,000,000.00 Overlay Funds Alley Hard Surface Maintenance & Preservations Various Locations $ 100,000.00 Local Funds Annual ADA Access Handicap Ramp Retrofit Various Locations $ 60,000.00 CDBG and Local Funds Foster Wells Interchange (Design) Foster Wells/SR 395 $ 500,000.00 State Grant/STP US -12 & "A" Street (Construction) US -12 & "A" Street $ 3,000,000.00 State Grant/STP Lewis Street Overpass (Construction) 2nd Ave to Oregon Ave $ 23,000,000.00 State Grant/STP/Arterial Road 100 Widening - South of Chapel Hill (Design & Construction) Chapel Hill Blvd to Court St $ 1,220,000.00 STP/Arterial $ 28,880,000.00 TOTAL FOR 2021 ,$ 96,992,000.00 GRAND TOTAL FOR 6 -YEAR TIP v CD (o 0 0 N No N 1 '• 1 • I � I 0 � _ moi= �e mm on !IMI, _ E IM �`� YJ'!• \�r<.•� . =!lr=iir,: �eAl.rAlf� ��II�11�`-� \ � ,■ j, �, CC■IIC\���.. ■■ —ten+ ., ■�■t■■■�1++ ll �11�1 1 +■J- . IYIIIIAMEMO �► ++ �� � � '��=�'■�--i= _ �� -+ �+-- --- +iI :E�� � 11111111 v �� ' ■■ =: m EY1�CC �. �•. _ ..'1111 7 ':yr r� yraa.vr�l■��� --t:��, �4 ��liii� i� ' '�1'I11■/I� ------- .� � -....._.... � fit• ♦'� 1' til I CITY OF •,•`/ ® m �Pavement Preservationrm. Overlay, r rfi i_ ®•'.r (Construction) M Dovvntoonseuction)®•. :• & Chapel HA Traffic AWHard Suttee Maintenance & Preservations [Gbnq�e (US 397) Phase 11 (Congtruction) js� I �,, Road 44 & Burden Traffic Signal mr-r.71mr.11 IIIIIIIIM Chapel Hill (Design & Construction) ED Madison Ave & Burden Blvd Traffic Signal Traffic Signal Controller Upgrades (Construction) M Sandifir Parkway Widening (Design & Construction) m Sidewak on Road 68 Overpass Powerfine Road Feasibility Plan SandifuI Parkway MPo Roar ♦ L � R'JI � . nlr mi .' •r.. .I 1 J �" _J Ramp at Road 44WB mStreet (Construction) y o (Designm R o.. .i Rig(Construction)® —EMO Argent* Road II.rI J .-ITT mg, . - Lewis Street Overpass (Design Update, NEPA, RR Estut & Construction) MOIR M!o r.1 DualR1.1• rnl o m(Construction)m I.R"Street•.11 _ Pitvernent Rating Update RWInterctmigebiNy Study & 1JR & Faviromnental1 m m LewE St & Hertage Avef ETransporlation System Plan No N RESOLUTION NO. A RESOLUTION adopting the revised and extended Comprehensive Street, Storm Drain and Bridge Programs for the City of Pasco. WHEREAS, RCW 35.77.010 provides for annual revision and extension of the Comprehensive Street Program of each city and town, after public hearing thereon; and WHEREAS, it is now time to revise and extend the Comprehensive Street, Storm Drain and Bridge Programs; and NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PASCO, that the City Council of the City of Pasco hereby adopts the revision and extension of the Comprehensive Street, Storm Drain and Bridge Programs for the ensuing six years as attached hereto and labeled "Six -Year Transportation Improvement Plan 2016 - 2021" incorporated by this reference as though fully set forth herein; and Be It Further Resolved, that the Comprehensive Street, Storm Drain and Bridge Programs shall be filed with the Benton -Franklin Regional Council and the State of Washington. PASSED by the City Council of the City of Pasco this 15th day of June, 2015. Matt Watkins Mayor ATTEST: Debra L. Clark City Clerk APPROVED AS TO FORM: Leland B. Kerr City Attorney Page 92 of 92