HomeMy WebLinkAboutHanford Area Economic Investment Fund Advisory Committee - Financing AgreementHANFORD AREA ECONOMIC INVESTMENT FUND ADVISORY
COMMITTEE CLIFTONLARSONALLEN LLP
FINANCING AGREEMENT
THIS AGREEMENT made and entered into this 15th day of February 2018, by and
between HANFORD AREA ECONOMIC INVESTMENT FUND ADVISORY
HAEiFAC"); and the City of Pasco, a Washington municipal
COMMITTEE hereinafter ("
corporation, hereinafter ("Borrower").
WITNESSETH
Throughout the term of this Agreement and related documents, the following terms are
and hereinafter referred to as follows:
LENDER: Hanford Area Economic Investment Fund Advisory Committee,
established pursuant to RCW 43.31.422
ADMINISTRATOR: CliftonLarsonAllen LLP
BORROWER: City of Pasco
PROJECT: Infrastructure to expand the Industrial Wastewater facility in
Pasco, Washington
PROJECT AREA: Franklin County
WHEREAS, HAEIFAC and CliftonLarsonAllen LLP (hereinafter "CLA") have entered
into an administrative agreement whereby CLA will administer the loan covered by this
Financing Agreement on behalf of HAEIFAC under the terms of this Agreement. and
WHEREAS, Borrower has filed with HAEIFAC its formal application for financing
through HAEIFAC's Hanford Area Economic Investment Fund; and
WHEREAS, the purpose of the financing is for the construction of infrastructure to
expand the Industrial Wastewater facility in Pasco, Washington; and
WHEREAS, HAEIFAC, in reliance on information submitted by Borrower in its
application, financial records, and supporting documentation has determined to advance funds to
Borrower in accordance with the terns of this Agreement and supporting documents,
FINANCING AGREEMENT - 1
AAG Rev. 0"2-10
NOW, THEREFORE, the parties agree as follows:
I.
TERM OF AGREEMENT
The term of this Agreement shall be for a period of approximately ten (10) years and
shall commence on the 15th day of February, 2018, and terminate, unless otherwise extended in
writing by mutual agreement of the parties, upon fulfillment of this Agreement by Borrower.
IL
FUNDING PROVISIONS
1. HAEIFAC will lend to borrower the maximum sum of One Million Five Hundred
Thousand Dollars ($1,500,000.00), which will be paid to Borrower in accordance with the terms
of this Agreement and as follows:
(a) Borrower shall provide to CLA, within six (6) months of date hereof,
evidence that loan funds were used for the purpose set forthhereinabove.
(b) The receipt of funds by Borrower shall be evidenced by a Promissory
Note, a copy of which is attached hereto, marked Exhibit "A", and by this reference incorporated
herein.
(c) Funds due under this Agreement shall be repaid in accordance with the
terms of this Agreement and the Promissory Note.
(d) Requests for disbursement shall be submitted on the form specified by
HAEIFAC, attached hereto as Exhibit `B", along with supporting documentation satisfactory to
HAEIFAC, as requested. Disbursements are anticipated to occur in accordance with Exhibit "C",
Scope of Work.
No more than one (1) disbursement of loan funds will be made, and all disbursements of funds
will be accomplished by February 15, 2018. CLA is under no obligation to disburse funds to
Borrower after that date. Additionally, if at any time during that period there remain funds un -
disbursed and, in the sole opinion of CLA, the Borrower is failing to meet any terms of this loan
agreement and its exhibits, including the promissory note, CLA has the option of refusing to
disburse the balance of the funds and the Borrower will be obligated only for the funds drawn to
date plus interest.
(e) No funds shall be disbursed to Borrower until the Lender has received the
Attorney's Certificate signed by Borrower's Attorney in the form attached hereto.
2. Funds disbursed hereunder must be used by the Borrower consistent with those
costs identified in the loan application.
3. Borrower may, at its option, at any time and without penalty, make advance
payments on all or any part of the principal of the loan then remaining unpaid.
FINANCING AGREEMENT - 2
AAG Rev. 08-02-10
4. Payments shall be made payable to the order of and sent to:
Hanford Area Economic Investment Fund Advisory Committee
P.O.Box 3580
Pasco, WA 99302
or to such other address as CLA may direct in writing.
5. Any payment to be made by Borrower on the Promissory Notethat bas not bee
received by CLA within fifteen (15) days of the payment due date, shall be den
emed late and a
Penalty of five percent (5%) of the current payment due will be assessed as a late charge and
shall be deducted from such payment before interest or principal
IIL
PRIORITY OF PROMISSORY NOTE
The Agreement between Borrower and HAEIFAC shall be as set forth herein and in the
Promissory Note of even date (Exhibit "A"), and other terms and conditions set forth herein.
Any conflict between said Promissory Note and this Agreement shall be resolved in favor of the
terms contained in the Promissory Note.
IV.
COVENANTS
Borrower will comply with the following covenants:
1. It will not incur any indebtedness that would result in violation of Article XI,
Section 12 of the Washington State Constitution or any statutory limitations on
debt for municipalities.
2. It will not incur any indebtedness that would result in violation of Article VIII,
Section 7 of the Washington State Constitution
3. Borrower agrees that in any public announcements, other than paid advertising,
concerning the subject project the financial support of the CLA and the Hanford Area Economic
Investment Fund shall be acknowledged.
4. CLA shall make no disbursements to Borrower under the terms of this Agreement
prior to receipt of evidence, satisfactory to HAEIFAC, of Borrower's interest in and/or control of
the real property, which is part of the Project Such evidence may include a lease, a policy of
title insurance, or other evidence satisfactory to CLA indicating that Borrower hsuch interest
of
in property as necessary for the operation of the Project during the term rothis Agreement. as
5. Borrower warrants that there is no encumbrance, lien, easement, license, title
cloud, or outstanding interest of any type which may in any way interfere with operations and/or
FINANCING AGREEMENT - 3
AAG Rev. 08-02-10
maintenance of Project contemplated herein. The fact that CLA has required, examined, and/or
passes on any document of title as described in paragraph 4 above shall in no manner diminish
the effect of the preceding warranty, nor create any liability on the part of CLA, it being
understood and agreed that the facts relating to control of the Project Area and related real estate
interest are more readily available to Borrower than to CLA.
6. Borrower warrants that there has been no un -remedied adverse change since the
date of the application for this financing in the financial or any other condition of Borrower that
would warrant withholding or not making any disbursements under this Agreement.
7. During the term of this Agreement, Borrower shall not sell, transfer, exchange,
mortgage, lease, hypothecate, or otherwise encumber in any manner, all or a portion of the
personal property, real property, or improvements now existing or hereafter acquired by
Borrower as a part of Project, without prior written consent of HAEIFAC except for the property
sold in the ordinary course of business.
8. Borrower agrees that all contracts between Borrower and any other contractor or
contractors related to Project shall:
(a) Be awarded in accordance with all applicable laws and regulations.
(b) Prohibit discrimination against any person who is employed in the work
covered by such contracts, or who is a candidate for such employment, because of sex, race, age,
religion, color, physical handicap, national origin, veteran status, sexual orientation, use of a
service animal or guide dog, or marital status. Such provisions shall include, but not be limited
to, the following: employment upgrading, promotion or transfer, recruitment, advertising, layoff
or termination, rates of pay or other forms of compensation, and selection for training, including
apprenticeship.
(c) Require contractor compliance with all air pollution and environmental
control rules, regulations, ordinances, and statutes which apply to work performed pursuant to
the contract, including, but not limited to, both the National Environmental Protection Act and
the Washington State Environmental Protection Act.
9. CLA may, at all reasonable times during the term of this Agreement enter the
Project premises for the purpose of inspecting the Project during the course of or following the
completion of the Project thereon, and for any other purpose arising from the performance of this
Agreement.
10. The respective successors and assigns of Borrower shall be bound to observe the
terms of this agreement, and Borrower shall deliver to CLA evidence that any successor or
assign has agreed, in writing, to assume Borrower's responsibilities hereunder.
11. In the event that Borrower fails to make any payment as provided, or if Borrower
fails to efficiently operate and/or maintain the Project, or breaches this Agreement in any other
manner and has been given fifteen (15) days' written notice of such breach, non-payment, or
FINANCING AGREEMENT - 4
AAG Rev. 08-02-10
inefficient operation or maintenance, and has failed to correct the same, then all outstanding
amounts of principal and interest on this Promissory Note shall become due and payable
immediately, and HAEIFAC and/or CLA may pursue any legal remedy available to them to
secure prompt payment of any and all monies owed by Borrower- Nothing herein shall preclude
CLA and/or HAEIFAC from waiving any breach or breaches, which, in the sole judgment of
CLA and/or HAEIFAC, are not substantial or do not affect the repayment of the Promissory
Note herein prescribed. Waiver by CLA and/or HAEIFAC of any one or more breaches shall
not be deemed a waiver of the right of CLA and/or HAEIFAC to pursue any legal remedy
which either or both may have with regard to say other breach or breaches. The remedies
provided by this paragraph are cumulative and in addition to and independent of any other
remedies given CLA and HAEIFAC by law.
12. Borrower shall indemnify, hold harmless, and defend CLA and HAEIFAC, their
officers, agents, and employees against all claims, demands, damages, and costs arising out of
the acquisition, development, operation, or maintenance of the property or Project described
herein, except for liability arising out of the concurrent or sole negligence of the CLA or
HAEIFAC, their officers, agents, or employees -
13. In the event either CLA or HAEIFAC is named as codefendant with Borrower in
any court proceeding, Borrower shall bear any CLA and HAEIFAC costs incurred for any
representation that CLA or HAEIFAC may require. In this regard, CLA shall include its
associated entities.
14. Borrower warrants:
County. (a) That this Project is or will be located within the boundaries of Franklin
(b) That this Project complies with all applicable local, state, and federal land
use and permit requirements.
(c) That if the Project involves construction, then, if applicable, accessibility
to the handicapped is assured by compliance with the standards of 41 CFR, Part 60.
(d) It shall prohibit discrimination against any person who is employed in the
work covered by such contracts, or who is a candidate for such employment, because of sex,
race, age, religion, color, physical handicap, national origin, veteran status, sexual orientation,
use of a service animal or guide dog, or marital status. Such provisions shall include, but not be
limited to, the following: employment upgrading, promotion or transfer, recruitment,
advertising, layoff or termination, rates ofpay or other forms of compensation, and selection for
training, including apprenticeship.
15. In the event either party desires or is required to send notice to the other, such
notice shall be deemed to have been given when mailed to the address set out below with first
class postage fully prepaid thereon:
FINANCING AGREEMENT - 5
AAG Rev. 08-02-10
TO LENDER: Hanford Area Economic Investment Fund Advisory Committee
P.O.Box 3580
Pasco, Wa. 99302
TO BORROWER City of Pasco
P.O. Box 293
Pasco, Washington
99301 Atte: City
Manager
16. Borrower warrants that, because of this financing, it intends to be able to
increase employment of companies served by the Project by 250 additional persons within
twenty (20) years. This intent has been taken into consideration in making this financing, and if
Borrower is unable, for any reason, to attain this employment increase, CLA and/or HAEIFAC
may, at its option, increase the interest on any amount due by one percenter (1 %) per annum.
17. This Agreement has been submitted to the scrutiny of all parties and their
respective legal counsel and shall be given a fair and reasonable interpretation in accordance
with the words hereof without consideration or weight being given to its being drafted by or for
one of the parties. If in fact one of the parties has not submitted this Agreement to the scrutiny
of their legal counsel, such party stipulates that, despite having had the opportunity to do so,
they waived the same and elected to proceed without the benefit of such legal review.
18. Time is of the essence in this Agreement and its supporting documentation,
including the Promissory Note, This Agreement constitutes the only agreement between the
parties and there are no other agreements, either oral or written, pertaining to the subject
matter herein.
19. ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN
MONEY, EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT
OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTONLAW.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year fust above written.
HANFORD AREA ECONOMIC CITY OF
PAS CO INV TMENT FUND COMMITTEE
By: BY
Rob rt Koch, Chair ave Zabel anager
FINANCING AGREEMENT - 6
AAG Rev. 08-02-10
HANFORD AREA ECONOMIC INVESTMENT FUND ADVISORY COMMITTEE
EXHIBIT B
DISBURSEMENT OF FUNDS (check option 1 or 2)
OPTION 1: 2L -(advance of funds)
The precise terms of disbursement shall be as follows:
No funds will be disbursed for construction expenses until a bid is awarded for the Project.
The initial installment will be payable upon HAEIFAC's receipt and acceptance of
documentation acceptable to HAEIFAC certifying the project starting date, and the amounts that
will be due and payable by the Contractor within ninety (90) days of the request for the initial
installment.
Documentation of funds expended will be required on an advance of funds request within ninety
(90) days of the request. In the event the advanced funds have not been expended with ninety
(90) days, a written explanation as to why funds have not been used and a timetable as to when
funds are anticipated to be expended shall be submitted no later than ninety (90) days from
disbursement.
All other payments shall be made on a reimbursement bases only upon HAEIFAC's receipt and
acceptance of documentation acceptable to HAEIFAC and a recap of expenditures providing a
breakdown of funds disbursed in the previous instalhnent and documentation of funds expended.
OPTION 2: (reimbursement of funds)
The precise terms of disbursement shall be as follows
Funds will be disbursed on a reimbursable basis only.
The initial installment shall be payable upon HAEIFAC's receipt and acceptance of
documentation certifying the project starting date and appropriate certification of amounts paid
to date. The second and any additional payments will be made in a similar manner and will
include a recap of expenditures providing a breakdown of funds disbursed in the previous
installment.
FINANCING AGREEMENT - 7
AAG Rev. 08-02-10
HANFORD AREA ECONOMIC INVESTMENT FUND ADVISORY COMMITTEE
EXHIBIT C
SCOPE OF WORK
Project Description:
The City of Pasco is seeking funding to assist with the planning, engineering, and construction of
projects that address both immediate and future facility needs of the Process Water Resource
Facility (PWRF) and facilities servicing it. The project includes planning, engineering,
environmental review and construction of the Kahlotus-Pasco Regional Pump Station and
Forecemain, Foster Wells Forcemain, irrigation Pump Station, and general facilities upgrades.
Many key components within the current PWRF facilities are nearing or have exceeded their
original design capacity and there is significant demand from current users for expansion as well
as strong interest from others to access the facility for expansion purposes.
Anticipated Completion Date:
December 31, 2023
Work to be accomplished:
The City is requesting finds to complete a comprehensive Capital Facilities Plan and
Engineering Report to address both immediate and future facility needs for the PWRF.
Capital Facilities Planning
Capital Facilities Planning will require coordination with Washington Department of Ecology to
assure compliance with the Industrial Waste Discharge Permit. The City's Capital Facilities Plan
will include a regional planning -level document for the programmed expansion of the Process
Water Resource Facility (PWRF) to accommodate increasing demand for agricultural process
water disposal and address more immediate operational constraints due to aging equipment and
capacity. The planning horizon is intended to carry through 2036 (20 years) and will be intended
to encourage continues growth in the City's food processing corridor on the north side of the
City (FW Basin) and the Pasco Kahlotus Industrial Basin (PK Basin).
Engineering Report
An engineering report will be consistent with WAC 173-240 and will evaluate the condition and
capacity of the Foster Wells Lift Station and force main; a regional lift station in the PK basis
area; and address more immediate improvements at the PWRF including the Insdustrial Pump
Station. The regional life station plans and specification will coordinate with the PK Basin Force
Main Routing Study currently in progress. Also, this will include preparing plans and
specifications for immediate needs defined in the engineering report at the PWRF. At a
minimum, this scope of work will include PS&E for the Industrial Pump Station.
Disbursement Schedule:
Disbursement will occur when all of the funding provisions of I in the Financing Agreement are
completed.
FINANCING AGREEMENT - 8
AAG Rev. 08-02-10
EXHIBIT A
HANFORD AREA ECONOMIC INVESTMENT FUND ADVISORY COMMITTEE
HAEIFAC
PROMISSORY NOTE
$1,500,000.00
Richland, Washington
February 15,2018
This Promissory Note is given as evidence of the obligation of the undersigned to repay all
sums which the HANFORD AREA ECONOMIC INVESTMENT FUND ADVISORY
COMMITTEE (HAEIFAC) may advance to the City of Pasco, (BORROWER), pursuant to the
terms of a Financing Agreement between HAEIFAC and BORROWER dated the 15th day of
February 2018 for One Million Five Hundred thousand and no/100, which is the maximum amount to
be loaned.
For value received, the undersigned promises to pay to the order of the HANFORD AREA
ECONOMIC INVESTMENT FUND ADVISORY COMMITTEE at P.O .Box 3580, Pasco,
Washington 99302, or such other address as may be directed, the total unpaid principal balance of all
advances, plus interest thereon at the rate of Three & two tenths percent (3.2%) per arm= from the
date funds are advanced
Principal and interest are payable in installments as follows:
L Commencing on the I st day of July 2018, and twice annually for 120 consecutive months
thereafter, there shall be due semiannually the payment of Eighty Four Thousand Three
Hundred Fourteen and Eighty Four Cents, ($84,314.84), a dollar amount which shall equal the
amount required to fully amortize the then -outstanding principal balance plus interest, on the
loan over the remaining tam of theloan.
Each semiannual payment shall be due on the I" day of the month, six months after the
previous payment. Each semiannual payment shall be applied fust to interest, and then to principal.
The entire balance, including principal and interest shall be payable in full on or before the 1" day of
January 2028.
Z HAEIFAC reserves the right to require additional education /training for the Bonuwe , as a
stipulation of granting this loan. HAEIFAC mayrequire the additional education/training at any time,
as long as there is a balance owing by the Borrower. (Initials) OIA
The Borrower will make available to HAEIFAC, on request, any and all financial information
pW
to the business for the benefit of which the proceeds of this loan are advanced. (Initials)
ert
Borrower further agrees to comply with any and all financial reporting requirements requested by
lender for the life of this loan. Borrower further agrees to comply with any continuing education
requirements set forth by lender for the life of the loan.
Any payment hereunder that has not been received by HAEIFAC within fifteen (15) days of
the due date shall be deemed to be late and a penalty of five percent (5e/a) of the payment due will be
assessed as a late charge and shall be deducted before any application of the funds to principal or
interest or service charges.
Disbursements under this loan shall be made in accordance with the Financing Agreement
Any such disbursements in conformity with the Financing Agreement shall be conclusively presumed
to have been made to, or for the benefit of, City of Pasco. The undersigned warrants that this loan is,
and the disbursements hereunder are, for the purposes set forth in the Financing Agreement.
For value received, each party signing or endorsing this Promissory Note waives presentment,
demand, protest and notice of non-payment and agrees to be bound as a principal and not as a surety
and promises to pay all costs of collection, including reasonable attorney fees, whether or not suit is
commenced Should default be made in payment of any installment when due, the whole sum of
principal, interest, late fees, and loan maintenance fees shall become immediately due at the option of
HAEIFAC, without notice.
Page I 1
In case of suit or action to enforce the terms of this Promissory Note, each party signing or
endorsing this Promissory Note consents to the personal jurisdiction of the Washington courts and
the federal courts located in the State of Washington and, at the option of theholderof this Promissory
Note, venue may be in. either F'r'
,,Janklin or Thurston County, Washington.
DATED this_day of rycrYC - 718.
Borrower.
CITY OF PASCO, Wa Kington
DWv
e—Zabefl, (glityWan4er
cage 1 2
Compounding Period: Semiannual
Nominal Annual Rate: 3.200%
Flow Data - Loans and
02/01/2018 9:32 AM
1 Loan 02/15/2018 1,500,000.00 1
2 Payment 07/01/2018 87,878.25 20 Semiannual 01/01/2028
Value Amortization Schedule - Normal, 365 Dav Year
Loan 02/15/2018
1,500,000.00
1 07/01/2018
87,878.25
17,884.93
69,993.32
1,430,006.68
2018 Totals
87,878.25
17,884.93
69,993.32
2 01/01/2019
87,878.25
22,880.11
64,998.14
1,365,008.54
3 07/01/2019
87,878.25
21,840.14
66,038.11
1,298,970.43
2019 Totals
175,756.50
44,720.25
131,036.25
4 01/01/2020
87,878.25
20,783.53
67,094.72
1,231,875.71
5 07/01/2020
87,878.25
19,710.01
68,168.24
1,163,707.47
2020 Totals
175,756.50
40,493.54
135,262.96
6 01/01/2021
87,878.25
18,61932
69,258.93
1,094,448.54
7 07/01/2021
87,878.25
17,511.18
70,367.07
1,024,081.47
2021 Totals
175,756.50
36,130.50
139,626.00
8 01/01/2022
87,878.25
16,385.30
71,492.95
952,588.52
9 07/01/2022
87,878.25
15,241.42
72,636.83
879,951.69
2022 Totals
175,756.50
31,626.72
144,129.78
10 01/01/2023
87,878.25
14,079.23
73,799.02
806,152.67
it 07/01/2023
87,878.25
12,898.44
74,979.81
731,172.86
2023 Totals
175,756.50
26,977.67
148,778.83
12 01/01/2024
87,878.25
11,698.77
76,179.48
654,993.38
13 07/01/2024
87,878.25
10,479.89
77,398.36
577,595.02
2024 Totals
175,756.50
22,178.66
153,577.84
14 01/01/2025
87,878.25
9,241.52
78,636.73
498,958.29
15 07/01/2025
87,878.25
7,983.33
79,894.92
419,063.37
2025 Totals
175,756.50
17,224.85
158,531.65
Page 1 of 2
02/01/2018 9:32 AM
►.
FINANCE
Amount Financed
..
Balance
16 01/01/2026
87,878.25
6,705.01
81,173.24
337,890.13
17 07/01/2026
87,878.25
5,406.24
82,472.01
255,418.12
2026 Totals
175,756.50
12,111.25
163,645.25
have made all
18 01/01/2027
87,878.25
4,086.69
83,791.56
171,626.56
19 07/01/2027
87,878.25
2,746.02
85,132.23
86,494.33
2027 Totals
175,756.50
6,832.71
168,923.79
20 01/01/2028
87,878.25
1,383.92
86,494.33
0.00
2028 Totals
87,878.25
1,383.92
86,494.33
Grand Totals
1,757,565.00
257,565.00
1,500,000.00.
Last interest amount increased by 0.01 due to rounding. .
ANNUAL
FINANCE
Amount Financed
Total of Payments
PERCENTAGE
CHARGE
RATE
The amount of credit
The amount you will
The dollar amount the
provided to you or on
have paid after you
The cost of your credit
credit will cost you.
your behalf.
have made all
as a yearly rate.
payments as
scheduled.
3.197%
$257,565.00
$1,500,000.00
$1,757,565.00
Page 2 of 2
ATTORNEY CERTIFICATE OF STATUS AND AUTHORITY
LELAND B. KERR, being first duly sworn, upon oath, deposes and says: That your
affiant is an attorney licensed and authorized to practice law in the State of Washington, and serves
as the City Attorney for the City of Pasco, Washington. The City of Pasco, Washington, is a
municipal corporation organized as a non -charter code city under the laws of the State of
Washington. It has, by its City Council, statutory authority to enter into contracts including that
Hanford Area Economic Investment Fund Committee Financing Agreement and attached
Promissory Note dated February 15, 2018.
The Pasco City Council, by action taken on the 18th day of September, 2017, by which
action, the City Manager, Dave ZabelI, is authorized to sign such documents which would be
binding upon the City of Pasco, Washington. Upon his signature, the transaction has been lawfully
consummated and the City of Pasco is legally authorized to operate the project which is identified
in the "Financing Agreement' and is obligated to abide by the term thereof.
DATED this _ 7fn day of February, 2018.
Leland 4KA�ffiant�
City Attorney for the City of Pasco, WA
SUBSCRIBED and SWORN to before me this —I--- day of February, 2018.
``",,,,,i,",ISI,),,,, • /
PAY
POO pte<k' Notary Publicm1 an,dgor the State of Washington
SHERMEASHLEY ' Residing at
COMM.EXpOBES _ My Commission expires onv}}�r;� /P9
;" APRIt 16, 2019