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2020.01.21 Council Meeting Packet
Regular Meeting AGENDA PASCO CITY COUNCIL 7:00 p.m. January 21, 2020 Page 1. CALL TO ORDER: 2. ROLL CALL: (a) Pledge of Allegiance 3. CONSENT AGENDA: All items listed under the Consent Agenda are considered to be routine by the City Council and will be enacted by roll call vote as one motion (in the form listed below). There will be no separate discussion of these items. If further discussion is desired by Council members or the public, the item may be removed from the Consent Agenda to the Regular Agenda and considered separately. 5 - 14 (a) Approval of Meeting Minutes To approve the minutes of the Pasco City Council Meeting held on January 6, 2020, Special Meeting held January 13, 2020 and rescheduled Workshop held on January 14, 2020. 15 - 17 (b) Bills and Communications To approve claims in the total amount of $4,787,607.68 ($3,343,312.38 in Check Nos. 233392-233658; $664,687.60 in Electronic Transfer Nos. 827094, 827151-827158, 827161-827163; $16,055.11 in Check Nos. 53149- 53165; $763,552.59 in Electronic Transfer Nos. 30143016-30143525). To approve bad debt write-off for Utility Billing, Ambulance, Cemetery, General Accounts, Miscellaneous Accounts, and Municipal Court (non- criminal, criminal, and parking) accounts receivable in the total amount of $257,094.53 and, of that amount, authorize $134,284.45 to be turned over for collection. MOTION: I move to approve the Consent Calendar as read. 4. PROCLAMATIONS AND ACKNOWLEDGEMENTS: 18 - 19 (a) * Community Risk Reduction Week 5. VISITORS - OTHER THAN AGENDA ITEMS: This item is provided to allow citizens the opportunity to bring items to the attention of the City Council or to Page 1 of 226 Regular Meeting January 21, 2020 express an opinion on an issue. Its purpose is not to provide a venue for debate or for the posing of questions with the expectation of an immediate response. Some questions require consideration by Council over time and after a deliberative process with input from a number of different sources; some questions are best directed to staff members who have access to specific information. Citizen comments will normally be limited to three minutes each by the Mayor. Those with lengthy messages are invited to summarize their comments and/or submit written information for consideration by the Council outside of formal meetings. 6. REPORTS FROM COMMITTEES AND/OR OFFICERS: (a) Verbal Reports from Councilmembers 7. HEARINGS AND COUNCIL ACTION ON ORDINANCES AND RESOLUTIONS RELATING THERETO: 8. ORDINANCES AND RESOLUTIONS NOT RELATING TO HEARINGS: 20 - 21 (a) Designating City-Owned Property (NKA Heritage Blvd) as Surplus to City Needs MOTION: I move to approve Resolution No. 3934, declaring surplus, fixing a minimum price and determining the method of sale of certain real property on Heritage Boulevard. 22 - 47 (b) Purchase and Sale Agreement and Memorandum of Understanding - Catholic Charities MOTION: I move to approve Resolution No. 3935, approving the sale and authorizing the City Manager to sign the purchase and sale agreement for certain real property on Heritage Boulevard. 48 - 50 (c) City Council Representation on Boards and Committees MOTION: I move to approve Resolution No. 3936, confirming Mayoral appointments of Councilmembers to various local and regional boards and committees for years 2020-2021. 51 - 54 (d) House Bill 1406 (MF# INFO 2020-001) MOTION: I move to approve Resolution 3937, authorizing the City of Pasco, Washington declaring the intent to adopt legislation to authorize the use of a portion of the sales and use tax for affordable and supportive housing in accordance with Substitute House Bill 1406 (Chapter 338, Laws of 2019), and other matters related thereto. 55 - 196 (e) HUD Section 108 Loan Contract Closing Documents Page 2 of 226 Regular Meeting January 21, 2020 MOTION: I move to approve Resolution 3938, authorizing the City Manager to execute loan contract documents required by the United States Department of Housing and Urban Development for funding from the Section 108 Loan Guarantee Program, and to take all other actions necessary for the completion of the project. 197 - 226 (f) Water Rights Contract with Washington State Dept. of Ecology MOTION: I move to approve Resolution No. 3939, of the City of Pasco, Washington, authorizing the City Manager to sign the Water Service Contract with Washington Department of Ecology for Pasco's beneficial and permitted use of 5,000 Acre-Feet of water from the Lake Roosevelt incremental storage release program. 9. UNFINISHED BUSINESS: 10. NEW BUSINESS: 11. MISCELLANEOUS DISCUSSION: 12. EXECUTIVE SESSION: 13. ADJOURNMENT: (a) (RC) Roll Call Vote Required * Item not previously discussed Q Quasi-Judicial Matter MF# “Master File #....” (b) REMINDERS: This meeting is broadcast live on PSC-TV Channel 191 on Charter/Spectrum Cable in Pasco and Richland and streamed at www.pasco-wa.gov/psctvlive. Audio equipment available for the hearing impaired; contact the Clerk for assistance. Servicio de intérprete puede estar disponible con aviso. Por favor avisa la Secretaria Municipal dos días antes para garantizar la disponibilidad. (Spanish language interpreter service may be provided upon request. Please provide two business day's notice to the City Clerk to ensure availability.) Page 3 of 226 Regular Meeting January 21, 2020 Page 4 of 226 AGENDA REPORT FOR: City Council January 15, 2020 TO: Dave Zabell, City Manager Regular Meeting: 1/21/20 FROM: Debby Barham, City Clerk Administrative & Community Services SUBJECT: Approval of Meeting Minutes I. REFERENCE(S): 01.06.20, 01.13.20 & 01.14.20 Draft Council Minutes II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS: To approve the minutes of the Pasco City Council Meeting held on January 6, 2020, Special Meeting held January 13, 2020 and rescheduled Workshop held on January 14 , 2020. III. FISCAL IMPACT: None IV. HISTORY AND FACTS BRIEF: V. DISCUSSION: Page 5 of 226 REGULAR MEETING MINUTES PASCO CITY COUNCIL JANUARY 6, 2020 CALL TO ORDER: The meeting was called to order at 7:00 p.m. by Craig Maloney, Mayor Pro Tem from 2018 to 2019. ROLL CALL: Councilmembers present: Ruben Alvarado, Blanche Barajas, Craig Maloney, Saul Martinez, David Milne, Zahra Roach, and Pete Serrano. Staff present: Dave Zabell, City Manager; Eric Ferguson, City Attorney; Zach Ratkai, Administrative & Community Services Director; Ken Roske, Police Chief; Richa Sigdel, Finance Director; Rick White, Community & Economic Development Director; Steve Worley, Public Works Director; and Debby Barham, City Clerk. The meeting was opened with the Pledge of Allegiance. COUNCIL BUSINESS: Mr. Maloney read the guidelines for the election of the Mayor and Mayor Pro Tem. Council agreed that Mr. Maloney would start the election process for Mayor and after the Mayor was selected, then the Mayor would take over the meeting. Election of Mayor Mr. Milne nominated Saul Martinez for Mayor. With no more nominations, Mr. Maloney closed the nominations. Mr. Martinez was declared Mayor for the years 2020 and 2021 by unanimous voice vote. Mr. Maloney handed the gavel to Mayor Martinez. Election of Mayor Pro Tem Ms. Roach nominated Blanche Barajas for Mayor Pro Tem. With no more nominations, Mayor Martinez closed the nominations. Ms. Barajas was declared Mayor Pro Tem for the years 2020 and 2021 by unanimous voice vote. Mayor Martinez declared a 15-minute recess at 7:09 PM to re-position the Councilmembers and assign them new seats at the dais. CONSENT AGENDA: Mr. Serrano requested that Consent Agenda Item C. Downtown Pasco Development Authority 2020 Funding Agreement be moved to business so that Council may discuss the item further. It was determined to move the item to the Unfinished Business section of the meeting agenda. Page 1 of 5 Page 6 of 226 REGULAR MEETING MINUTES PASCO CITY COUNCIL JANUARY 6, 2020 Approval of Meeting Minutes To approve the minutes of the Pasco City Council Meeting held on December 2, 2019 and Special Meetings held on December 9 and 11, 2019. Bills and Communications To approve claims in the total amount of $11,048,397.38 ($4,767,175.64 in Check Nos. 232774-233391; $1,178,258.31 in Electronic Transfer Nos. 826721, 826730-826796, 826800-826991, 827091; $50,738.98 in Check Nos. 53107- 53148; $2,063,353.99 in Electronic Transfer Nos. 30141994-30143015; $2,988,870.46 in Electronic Transfer Nos. 642-648). To approve bad debt write-off for Utility Billing, Ambulance, Cemetery, General Accounts, Miscellaneous Accounts, and Municipal Court (non-criminal, criminal, and parking) accounts receivable in the total amount of $252,847.66 and, of that amount, authorize $144,512.62 to be turned over for collection. Downtown Pasco Development Authority 2020 Funding Agreement - Moved to Unfinished Business (RC) MOTION: Mayor Pro Tem Barajas moved to approve the Consent Agenda, which includes moving the Downtown Pasco Development Authority 2020 Funding Agreement to Item No. 10, to the Unfinished Business section of the meeting. Mr. Alvarado seconded. Motion carried by unanimous vote. VISITORS - OTHER THAN AGENDA ITEMS: Christopher Tucker, Franklin County resident and American Legions Post No. 34 representative, spoke about the American Legions building that is up for sale and expressed concerns about the marketability of the property due to restrictions by the building division. Mayor Martinez directed Mr. Tucker to speak with Rick White, Community & Economic Development Director. Kate Overman, Pasco resident, asked Council to consider allowing a variance in the height of a fence on her property after the fence and irrigation lines were damaged by an individual being chased by the Pasco Police. Mayor Martinez directed Ms. Overman to speak with Rick White, Community & Economic Development Director. Michelle Andres, Pasco resident, requested Council to sign a letter to the Governor of Idaho regarding the Snake River Dams. Julie Webb, Richland resident and Animal Control Shelter volunteer, asked for a new animal shelter that would allow for more dogs and cats then the current shelter plan is allowing. Kristin Engbrecht, Pasco, expressed support for a new animal shelter. Carl Holder, business owner in Pasco, spoke about the tumbleweed issue at 3rd Avenue and Lewis Street. Oscar Martinez, Richland resident, congratulated new elected Mayor Saul Martinez and Mayor Pro Tem Blanche Barajas. Page 2 of 5 Page 7 of 226 REGULAR MEETING MINUTES PASCO CITY COUNCIL JANUARY 6, 2020 REPORTS FROM COMMITTEES AND/OR OFFICERS: Verbal Reports from Councilmembers Mr. Alvarado attended the Good Roads & Transportation Association Meeting in December and they are in the process of reorganizing the association. Mr. Alvarado also attended a recent Catholic Families community outreach meeting regarding the proposed apartment complex to house homeless individuals. Ms. Roach recently attended a Benton Franklin Community Action Committee (BFCAC) doing business as Community Action Connections (CAC) board meeting and asked if she could sit on that board for 2020 through 2021. Mayor Martinez attended the Tri-Cities Hispanic Chamber of Commerce meeting in December and congratulated Dave Zabell, City Manager for receiving the Presidential Award and Michael Morales, Economic Development Consultant for receiving the Amigo Award. General Fund Monthly Report - November 2019 Mayor Martinez asked if there was any additional information to add to the monthly General Fund Report. Ms. Sigdel stated there was no additional information to share with Council. 2019 Hanford Communities Annual Report Ms. Larsen, Hanford Communities Manager provided the 2019 Hanford Communities Annual Report to Council and highlighted the events and plans scheduled for 2020. ORDINANCES AND RESOLUTIONS NOT RELATING TO HEARINGS: *Segregation of Local Improvement District (LID) Assessment Mayor Martinez asked if there was a report from staff. Ms. Sigdel explained the process of the segregation of the Local Improvement District (LID) as the plats within the LID are created. MOTION: Mayor Pro Tem Barajas moved to approve Resolution No. 3932, relating to Local Improvement District No. 150; providing for the segregation of assessments for certain parcels consistent with RCW 35.44.410; and, ratifying and confirming prior acts. Mr. Milne seconded. Motion carried unanimously. NW Area Sanitary Trunk Sewer Local Improvement District Formation Mayor Martinez asked if there was any additional information from staff. Mr. Worley stated that this action before Council is the first formal step for the formation of a Local Improvement District (LID). He stated that this particular LID is supported by many of the affected property owners. A brief discussion ensued between Council and staff. MOTION: Mayor Pro Tem Barajas moved to approve Resolution No.3933, relating to public improvements; declaring its intention to order the improvements of the Northwest Area Sewer Trunk Main (from Harris Road north Page 3 of 5 Page 8 of 226 REGULAR MEETING MINUTES PASCO CITY COUNCIL JANUARY 6, 2020 to one-quarter mile past Burns Road and from Burns Road northeast to Broadmoor Blvd) and to create a local improvement district to assess the cost and expense of carrying out those improvements against the properties specially benefited thereby; notifying all persons who desire to object to the improvements to appear and present their objections at a hearing before the City Council to be held on February 3, 2020; and providing for other properly related matters. Mr. Maloney seconded. Motion carried unanimously. UNFINISHED BUSINESS: Downtown Pasco Development Authority 2020 Funding Agreement Mr. Serrano referred to the proposed funding agreement and expressed concern on how the funding will be utilized and requested scheduled reports/updates. Gustavo Guierrez Gomez, DPDA Executive Director, spoke about Pasco's vibrant downtown, introduced a new DPDA staff member and provided a brief overview of DPDA's plans to execute its vision and mission. Gabriel Portugal, DPDA Board President also commented on the DPDA with its new leadership in place. Council briefly discussed the DPDA and confirmed that Council is supportive of the DPDA looks forward to its success. MOTION: Mayor Pro Tem Barajas moved to approve the 2020 Funding Agreement with the Downtown Pasco Development Authority, and further, authorize the City Manager to execute the Agreement. Mr. Alavardo seconded. Motion carried unanimously. NEW BUSINESS: *Northwest Area Trunk Sewer Design – Approval of Professional Services Agreement with RH2 Engineering Mr. Worley and Maria Serra, Senior Civil Engineer, briefed Council on the proposed professional services agreement for the Northwest Area Trunk Sewer Design. Council and staff briefly discussed the project and the expertise needed for it. MOTION: Mayor Pro Tem Barajas moved to approve the Professional Services Agreement with RH2 Engineering, in the amount of $556,668 for the NW Area Sewer Project and further, authorize the City Manager to execute the Agreement. Mr. Milne sconeded. Motion carried unanimously. *Professional Services Agreement with Murraysmith for the Wastewater Treatment Plant (WWTP) Improvements - Phase 1 Mr. Worley and Maria Serra, Senior Civil Engineer, briefed Council on the proposed professional services agreement for the Phase I improvement to the Wastewater Treatment Plant. Council and staff briefly discussed the project. MOTION: Mayor Pro Tem Barajas moved to approve the Professional Services Agreement for Wastewater Treatment Plant (WWTP) Improvements - Phase 1 with Murraysmith and further, authorize the City Manager to execute the agreement. Mr. Serrano seconded. Motion carried unanimously. Page 4 of 5 Page 9 of 226 REGULAR MEETING MINUTES PASCO CITY COUNCIL JANUARY 6, 2020 MISCELLANEOUS DISCUSSION: Mr. Zabell reminded Council about the special meeting scheduled on Monday, January 13, 2020, at the Pasco Red Lion Hotel to attend Governor Inslee's community meeting regarding the Lower Snake River Dams Stakeholder Engagement Study. The regularly scheduled Council workshop was moved to Tuesday, January 14, 2020. EXECUTIVE SESSION: Council adjourned to Executive Session at 8:29 PM for approximately 20 minutes to consider the acquisition of real estate and establish the sales price or lease amount of real estate and was attended by the City Manager and City Attorney. Mayor Martinez called the meeting back to order at 8:48 PM. ADJOURNMENT: There being no further business, the meeting was adjourned at 8:48 PM. PASSED and APPROVED this 21st day of January, 2020. APPROVED: ATTEST: Saul Martinez, Mayor Debra Barham, City Clerk Page 5 of 5 Page 10 of 226 SPECIAL MEETING MINUTES PASCO CITY COUNCIL JANUARY 13, 2020 COMMUNITY FORUM: Lower Snake River Dams Stakeholder Engagement Study, Hosted by the Washington State Governor's Office Starting at 6:00 PM, the Pasco City Council and key staff attended a community forum to learn about the results of the Lower Snake River Dams Stakeholder Engagement Study. ADJOURNMENT: The Community Forum concluded at 8:30 PM. PASSED AND APPROVED this 21st day of January, 2020. APPROVED: ATTEST: Saul Martinez, Mayor Debra Barham, City Clerk Page 1 of 1 Page 11 of 226 WORKSHOP MEETING MINUTES PASCO CITY COUNCIL JANUARY 14, 2020 CALL TO ORDER: The meeting was called to order at 7:00 p.m. by Saul Martinez, Mayor. ROLL CALL: Councilmembers present: Ruben Alvarado, Blanche Barajas, Craig Maloney, Saul Martinez, David Milne, Zahra Roach, and Pete Serrano. Staff present: Bob Gear, Fire Chief and Acting City Manager; Eric Ferguson, City Attorney; Zach Ratkai, Administrative & Community Services Director; Rick White, Community & Economic Development Director; Steve Worley, Public Works Director; and Debby Barham, City Clerk. The meeting was opened with the Pledge of Allegiance. VERBAL REPORTS FROM COUNCILMEMBERS: Mr. Maloney shared that the Pasco Public Facilities District Board met on January 7 and they are making headway on the aquatic facility ballot issue. Another special meeting is scheduled for January 28, 2020. Mr. Alavardo recently attended the Ben Franklin Transit Board meeting, which focused on Dial-a-Ride issues. Mr. Serrano attended the Lower Snake River Dams Study community forum held on Monday evening, January 13, 2020 and encouraged community members provide comments regarding the study to the Governor's Office. Mr. Milne recently attended the Pasco Parks and Recreation Advisory Council meeting, which provided updates regarding the traffic island improvements on 20th Avenue, the Farmers Market and Peanuts Park. Mayor Martinez also commented about the Lower Snake River Dams Study community forum. ITEMS FOR DISCUSSION: HUD Section 108 Loan Contract Documents for Pasco Market Plaza Construction Mr. Morales, Tonalli Development Strategies, LLC, provided a brief presentation on the background of the Pasco Market Plaza project and the proposed HUD Section 108 loan. Council, Mr. White and Mr. Morales discussed the proposed loan, contract process and Pasco Market Plaza construction project. Council confirmed that this item will be placed on the January 21, 2020 Council Agenda. Purchase and Sale Agreement and Memorandum of Understanding - Catholic Charities Mayor Martinez announced that typically the Council does not take public comment during their scheduled workshops; however, Council will make an exception for this item. Page 1 of 3 Page 12 of 226 WORKSHOP MEETING MINUTES PASCO CITY COUNCIL JANUARY 14, 2020 Mr. Ratkai provided a brief overview of the proposed purchase and sale agreement with Catholic Charities. Next, Mr. Ratkai introduced Johnathan Mallahan, Vice President Housing for Catholic Charities of Eastern Washington. Mr. Mallahan explained the intended use of the property is to provide housing to the chronic homeless and individuals will need to qualify for housing and services. He provided statistics on the positive impacts for the "housing first" model. It will be a 50-unit apartment building on Heritage Boulevard, Pasco, WA. The following individuals expressed support of the Catholic Charities housing development at its proposed site: Wes Luckey Becky Gross Ronnie Bachelor Reggie Panches Rhonda Hauff Martin Sanchez Carol Moser Dana Otis Rob Koenis The following individuals expressed opposition to the Catholic Charities housing development at its proposed site: Alyssa Mercado Russell Glatt Veronia Perez Karina Hernandez Demetris Kinsey Dallas Barnes Yolanda Pimentel Rolando Rodriguez Luis Pedroza Heather Kinsey Council had a question and answer period with staff, Mr. Mallahan and a few audience members and discussed the use of the property that Catholic Charities intends to purchase. Mr. Serrano requested staff provided the history of past purchase and sale agreements by next meeting. Mr. Milne expressed an interest to visit the Yakima homeless housing facility and asked staff to contact Rhonda Hauff. Council confirmed that this item will be placed on the January 21, 2020 Council Agenda. Short Break Mayor Martinez called a five (5) minutes recess at 9:01 PM. The meeting reconvened at 9:09 PM. City Council Representation on Boards and Committees Mayor Martinez and the Councilmembers discussed the Council assignments for various City and community boards and committees. The new assignments will be placed on the January 21, 2020 Council agenda for formal approval. Page 2 of 3 Page 13 of 226 WORKSHOP MEETING MINUTES PASCO CITY COUNCIL JANUARY 14, 2020 House Bill 1406 (MF# INFO 2020-001) Mr. Gonzalez, Senior Planner, presented the requirements of House Bill 1406 (HB 1409) to Council. Council, Mr. Gonzales and Mr. White discussed the benefits of HB 1406 funding for Pasco. Mr. Serrano asked that the resolution be amended to note that this is not a new tax. Council confirmed that this item will be placed on the January 21, 2020 Council Agenda. Water Rights Contract with Washington State Dept. of Ecology Mr. Worley provided a brief report to Council explaining Pasco's need for additional water rights to meet the needs of its growing population. Council and Mr. Worley discussed the proposed issuance of a water right permit through the Washington State Department of Ecology. Council confirmed that this item will be placed on the January 21, 2020 Council Agenda. MISCELLANEOUS COUNCIL DISCUSSION: Mayor Pro Tem Barajas announced the 2020 Tri-Cities Polar Plunge is scheduled for Saturday, January 25, 2020 and to support the 12 Pasco Police Officers signed up to jump to benefit Special Olympics, Washington organization. EXECUTIVE SESSION: Council adjourned to Executive Session at 9:37 PM for approximately 10 minutes to discuss litigation or potential litigation with legal counsel per RCW 42.30.110(1)(i). At 9:48 PM, Mayor Martinez announced the Executive Session would continue for another 10 minutes. Mayor Martinez call the meeting back to order at 9:59 PM. ADJOURNMENT: There being no further business, the meeting was adjourned at 9:59 PM. PASSED AND APPROVED this 21st day of January, 2020. APPROVED: ATTEST: Saul Martinez, Mayor Debra Barham, City Clerk Page 3 of 3 Page 14 of 226 AGENDA REPORT FOR: City Council January 16, 2020 TO: Dave Zabell, City Manager Regular Meeting: 1/21/20 FROM: Richa Sigdel, Director Finance SUBJECT: Bills and Communications I. REFERENCE(S): Accounts Payable 01.21.20 Bad Debt Write-off/Collection II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS: To approve claims in the total amount of $4,787,607.68 ($3,343,312.38 in Check Nos. 233392-233658; $664,687.60 in Electronic Transfer Nos. 827094, 827151-827158, 827161-827163; $16,055.11 in Check Nos. 53149-53165; $763,552.59 in Electronic Transfer Nos. 30143016-30143525). To approve bad debt write-off for Utility Billing, Ambulance, Cemetery, General Accounts, Miscellaneous Accounts, and Municipal Court (non-criminal, criminal, and parking) accounts receivable in the total amount of $257,094.53 and, of that amount, authorize $134,284.45 to be turned over for collection. III. FISCAL IMPACT: IV. HISTORY AND FACTS BRIEF: V. DISCUSSION: Page 15 of 226 REPORTING PERIOD: January 21, 2020 Claims Bank Payroll Bank Gen'l Bank Electronic Bank Combined Check Numbers 233392-233658 53149-53165 Total Check Amount $3,343,312.38 $16,055.11 Total Checks 3,359,367.49$ Electronic Transfer Numbers 827094 30143016-30143525 827151-827158 827161-827163 Total EFT Amount $664,687.60 $763,552.59 $0.00 $0.00 Total EFTs 1,428,240.19$ Grand Total 4,787,607.68$ Councilmember 1,383,424.17 31,049.53 0.00 0.00 2,436.51 131.54 4,628.33 147,212.04 11,305.23 31,695.11 33,101.65 7,032.72 954.62 0.00 28,449.54 837.00 5,760.17 37,269.94 145,939.59 1,418,503.27 67,017.39 7,709.23 132,653.01 1,647.54 1,288,849.55 GRAND TOTAL ALL FUNDS:4,787,607.68$ MEDICAL/DENTAL INSURANCE FLEX PAYROLL CLEARING GENERAL CAP PROJECT CONSTRUCTION UTILITY, WATER/SEWER EQUIPMENT RENTAL - OPERATING GOVERNMENTAL EQUIPMENT RENTAL - OPERATING BUSINESS SPECIAL ASSESSMENT LODGING LITTER ABATEMENT REVOLVING ABATEMENT ECONOMIC DEVELOPMENT ATHLETIC PROGRAMS GOLF COURSE SENIOR CENTER OPERATING MULTI-MODAL FACILITY RIVERSHORE TRAIL & MARINA MAIN C.D. BLOCK GRANT HOME CONSORTIUM GRANT MARTIN LUTHER KING COMMUNITY CENTER AMBULANCE SERVICE CEMETERY Councilmember SUMMARY OF CLAIMS BY FUND: GENERAL FUND STREET ARTERIAL STREET STREET OVERLAY City of Pasco, Franklin County, Washington We, the undersigned, do hereby certify under penalty of perjury the materials have been furnished, the services rendered or the labor performed as described herein and the claim is a just, due and unpaid obligation against the city and we are authorized to authenticate and certify to such claim. Dave Zabell, City Manager Richa Sigdel, Finance Director We, the undersigned City Councilmembers of the City Council of the City of Pasco, Franklin County, Washington, do hereby certify on this 21st day of January, 2020 that the merchandise or services hereinafter specified have been received and are approved for payment: January 3 - 15, 2020 C I T Y O F P A S C O Council Meeting of: Accounts Payable Approved The City Council Page 16 of 226 BAD DEBT WRITE-OFF/COLLECTION December 1, – December 31, 2019 1. UTILITY BILLING - These are all inactive accounts, 60 days or older. Direct write-off are under $20 with no current forwarding address, or are accounts in "occupant" status. Accounts submitted for collection exceed $20.00. 2. AMBULANCE - These are all delinquent accounts over 90 days past due or statements are returned with no forwarding address. Those submitted for collection exceed $10.00. Direct write off including DSHS and Medicare customers; the law requires that the City accept assignment in these cases. 3. COURT ACCOUNTS RECEIVABLE - These are all delinquent non-criminal and criminal fines, and parking violations over 30 days past due. 4. CODE ENFORCEMENT – LIENS - These are Code Enforcement violation penalties which are either un-collectable or have been assigned for collections because the property owner has not complied or paid the fine. There are still liens in place on these amounts which will continue to be in effect until the property is brought into compliance and the debt associated with these liens are paid. 5. CEMETERY - These are delinquent accounts over 120 days past due or statements are returned with no forwarding address. Those submitted for collection exceed $10.00. 6. GENERAL - These are delinquent accounts over 120 days past due or statements are return ed with no forwarding address. Those submitted for collection exceed $10.00. 7. MISCELLANEOUS - These are delinquent accounts over 120 days past due or statements are returned with no forwarding address. Those submitted for collection exceed $10.00. Direct Write-off Referred to Collection Total Write-off Utility Billing $ 0.00 26.38 26.38 Ambulance $ 122,810.08 7,749.00 130,559.08 Court A/R $ .00 101,727.00 101,727.00 Code Enforcement $ .00 13,685.00 13,685.00 Cemetery $ .00 757.53 757.53 General $ .00 25.00 25.00 Miscellaneous $ .00 10,314.54 10,314.54 TOTAL: $ 122,810.08 134,284.45 257,094.53 Page 17 of 226 AGENDA REPORT FOR: City Council January 14, 2020 TO: Dave Zabell, City Manager Regular Meeting: 1/21/20 FROM: Bob Gear, Fire Chief Fire Department SUBJECT: * Community Risk Reduction Week I. REFERENCE(S): Proposed Proclamation II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS: None III. FISCAL IMPACT: None IV. HISTORY AND FACTS BRIEF: Monday, January 20, 2020 is Martin Luther King Day and is nationally recognized as a National Day of Service and an opportunity for communities to reduce the risk in their community through a series of educational and other programs. The City of Pasco's proclamation will designate the week of January 20, 2020 as "Community Risk Reduction Week," a grassroots initiative of fire service professionals across the nation designed to raise awareness of the importance of Community Risk Reduction in the fire service community and an opportunity to make communities safer. V. DISCUSSION: None Page 18 of 226 cÜÉvÄtÅtà|ÉÇ “Community Risk Reduction Week” January 20-24, 2020 WHEREAS, every 24 seconds, a fire department in the United States responds to a fire somewhere in the nation, a fire occurs in a structure at the rate of one every 63 seconds, and a home fire occurs every 88 seconds; and WHEREAS, 77% percent of all fire deaths occurred in the home in 2017 and home fires were responsible for 10,600 civilian injuries and 72% of all civilian injuries in 2017; and WHEREAS, an estimated $23 billion in property damage occurred as a result of fire in 2017 and more than 58,000 wildfires burned nearly nine million acres and destroyed 25,000 structures in 2018; and WHEREAS, the fire service responds to a growing number of medical calls for service, surpassing 80% of total call volume in some jurisdictions; and WHEREAS, the fire service strives to reduce the impact of anticipated man-made and natural disasters, including fires, emergency medical calls, hurricanes, tornados, earthquakes, floods and other hazardous events that have the potential to cause loss of life and damage to property, community infrastructure, and the environment; and WHEREAS, the fire service plays an integral role in community preparedness, as the President declared 118 major disasters in 2017 and 2018, which resulted in more than 3,500 deaths, countless injured, and over $400 billion in property damage; and WHEREAS, Community Risk Reduction is a data-informed process to identify and prioritize local risks, followed by integrated and strategic investment of resources to reduce their occurrence and impact; and WHEREAS, the value of community support from local, state, and national partners to address community risks is recognized to meet the demands on paid, combination, and volunteer members of the fire service; and WHEREAS, the goal of Community Risk Reduction is to reduce the occurrence and impact of emergency events for both community members and emergency responders through deliberate action in the areas of the five E’s of Education, Engineering, Enforcement, Emergency response, and Economic incentive; and WHEREAS, most fire-related and many medical calls for service are preventable, with the five E’s performed as part of an integrated Community Risk Reduction program; and WHEREAS, Monday, January 20, 2020 is Martin Luther King Day and is nationally recognized as a National Day of Service and an opportunity for communities to reduce the risk in their community through a series of educational and other programs. WHEREAS, the value of community support from local, state, and national partners to address community risks is recognized to meet the demands on paid, combination, and volunteer members of the fire service. NOW, THEREFORE, I, Saul Martinez, Mayor of the City of Pasco, Washington, do hereby proclaim January 20-24, 2020 as “Community Risk Reduction Week” in the City of Pasco. IN WITNESS WHEREOF, I have hereunto set my hand and caused the Official Seal of the City of Pasco, State of Washington, to be affixed this 21st Day of January 2020. ____________________________ Saul Martinez, Mayor City of Pasco Page 19 of 226 AGENDA REPORT FOR: City Council January 17, 2020 TO: Dave Zabell, City Manager Regular Meeting: 1/21/20 FROM: Zach Ratkai, Director Administrative & Community Services SUBJECT: Designating City-Owned Property (NKA Heritage Blvd) as Surplus to City Needs I. REFERENCE(S): Proposed Resolution II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS: MOTION: I move to approve Resolution No. 3934, declaring surplus, fixing a minimum price and determining the method of sale of certain real property on Heritage Boulevard. III. FISCAL IMPACT: None IV. HISTORY AND FACTS BRIEF: In accordance with PMC Chapter 2.120, the City of Pasco must establish, through a resolution, a designation of City-owned property to be surplus to the City's need and therefore eligible for sale at an established price. The subject property to this resolution, located along Heritage Boulevard, and more specifically known as Franklin County Parcel No. 113900092, has been determined to be surplus to City need and therefore listed for sale at $127,413 per market analysis. V. DISCUSSION: Page 20 of 226 RESOLUTION NO. 3934 A RESOLUTION OF THE CITY OF PASCO, WASHINGTON, DECLARING SURPLUS, FIXING A MINIMUM PRICE AND DETERMINING THE METHOD OF SALE OF CERTAIN REAL PROPERTY ON HERITAGE BOULEVARD. WHEREAS, the City owns vacant real property located along Heritage Boulevard, more specifically described as Franklin County Parcel No. 113900092 which is surplus to City needs; and WHEREAS, the City has had the property for sale at an established price based upon a market analysis through its real estate broker; and WHEREAS, the City Council now finds as follows: 1. That the property has no value for a municipal use; 2. That the proposed market price of $127,413.00 is in line with the market analysis value of the Property; and 3. That the benefits to be derived from the sale of the property, demonstrate a value in excess of the value of continuous ownership/maintenance by the City. 4. That a listed sale is the most likely method of sale for the City to receive the most value of the sale of the property. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PASCO, WASHINGTON: That the City-owned property located on Heritage Boulevard, more specifically known as Franklin County Parcel No. 113900092, is hereby declared surplus to the needs of the City of Pasco, and Be It Further Resolved, that the listing price for the aforementioned property be accepted as $127,413.00 as determined through market analysis. Be It Further Resolved, that the City has determined that the best method to sell this property is by listed sale. PASSED by the City Council of the City of Pasco, Washington this ____day of ______________, 2020. _____________________________ Saul Martinez Mayor ATTEST: APPROVED AS TO FORM: _____________________________ ___________________________ Debra Barham, CMC Kerr Ferguson Law PLLC City Clerk City Attorney Page 21 of 226 AGENDA REPORT FOR: City Council January 15, 2020 TO: Dave Zabell, City Manager Regular Meeting: 1/21/20 FROM: Zach Ratkai, Director Administrative & Community Services SUBJECT: Purchase and Sale Agreement and Memorandum of Understanding - Catholic Charities I. REFERENCE(S): Proposed Resolution Purchase and Sale Agreement - Exhibit A Memorandum of Understanding - Exhibit B Letter of Intent to Purchase II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS: MOTION: I move to approve Resolution No. 3935, approving the sale and authorizing the City Manager to sign the purchase and sale agreement for certain real property on Heritage Boulevard. III. FISCAL IMPACT: Revenue of $127,413 IV. HISTORY AND FACTS BRIEF: On August 20, 2019, the City of Pasco received a letter of interest from realtors, representing Catholic Charities - Eastern Washington, offering to purchase City-owned property along Heritage Blvd (Parcel No. 113900092) for $127,413 for future development. The amount represented a full price offer as marketed through the City's contracted real estate broker. On August 27, the City accepted the offer for purchase, thus commencing a feasibility period for the buyer to conduct their due diligence for the purchase. On December 19, 2019, the City received a Purchase and Sale Agreement from the buyer (attached) in order to complete the sale. Based upon the intended development of the buyer, a Memorandum of Understanding was negotiated, which outlines future conditions on the use of property (attached). Page 22 of 226 V. DISCUSSION: Staff recommends consideration of the Purchase and Sale Agreement. This item was discussed at the January 14 Workshop meeting. Page 23 of 226 Resolution - 1 RESOLUTION NO. 3935 A RESOLUTION OF THE CITY OF PASCO, WASHINGTON, APPROVING THE SALE AND AUTHORIZING THE CITY MANAGER TO SIGN THE PURCHASE AND SALE AGREEMENT FOR CERTAIN REAL PROPERTY ON HERITAGE BOULEVARD. WHEREAS, through the passage of Resolution No. 3934, the City Council declared the subject property surplus to the needs of the City of Pasco, established a market price of $127,413.00 based on a Market Analysis, and determined the best method of sale was a listed sale; and WHEREAS, the City has received a purchase offer on the property through a Purchase and Sale Agreement from the Buyer, attached hereto; and NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PASCO, WASHINGTON: That the proposed purchase price of $127,413.00 by Catholic Charities of Eastern Washington at the City’s listed price, has been determined to be acceptable to the City, and is fully accepted, and Be It Further Resolved, that the City Manager is hereby authorized to sign the Purchase and Sale Agreement attached as Exhibit “A” and Memorandum of Understanding attached as Exhibit “B” and to take all other necessary steps to complete the sale transaction. PASSED by the City Council of the City of Pasco, Washington this 2st day of January, 2020. _____________________________ Saul Martinez Mayor ATTEST: APPROVED AS TO FORM: _____________________________ ___________________________ Debra Barham, CMC Kerr Ferguson Law, PLLC City Clerk City Attorney Page 24 of 226 s;e(]Jsuas s;eq Js/(na 9190 “"98 l?I[LI{z[“E0 w We ?S1V|ilN| 3!U9U199J5V5!l4lJ0 WadE QPEUJ9-'9 EPUSPPVPUBS¥!q!HX3 5U!N\°||0J QUJ.'VONEIGGV CINV SJJEIIHXEI '8 soud sseqamd sq;0;s|qeog|dde sq neqs Asuou1;ssuJes sq;‘;usu1s9J6V sgq;ugpep!/\01d ssg/vusq;o sss|un ‘JQKHQAq psunoug s;soo sseqcnnd pue Bugoueug;/(ed o;sssJBe Js/(ng 'Js;e;smaoo J9/\8qf)[l.|M ‘souezdsoov ;en;nw JO ;d;s:>sJJsue s/iep 9 ugq;gM uugj Bumsg Aq p]sq sq o;qosqo /Que;]sodap neqs LUJ!:]Bumss ';ssJs;ug o;pe|;1;ua s;I(suouJ;ssu1es sq;o;ps;;;;us sg Js/xsoqm 'sso;a 0;sue;s|es s;q;;;us?nao;Sugsop ;e pe1!p8J3 sq neqs ‘Aue;;‘;ssJs;ug sqJ_sweu s,uug:;Bugusg u;zunoooe ;snJ;Bupesq ;ssJs;ug s;eJedss VE;(J9JnSB9JJ_s;e;s sq;0;pged ;ssJs;ug q;;/vx);uno:2:>e ;sm;pslood s,uug:; 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ONITIES ‘E-EIMOHEI9NlJ.S|'l EIZIEIOHJIIVEEXTIEISCINV EEIAFIEI(Z)GNV A_LEEldOEld EIHJ.9NLLO3:l:i\7’ SJ.HE)|Ei NEH ON!/\\‘/HSHEICII/\OHdA.L|'|lJ.n TIV :10 SEISSEIHCICIVCINVSEIWVNEIHJ.H.l_|I\/\J.NEI9V ONISOWO HO 'HEl>iOE!ElONFHEIS 'HE!)iO?:l8 E)N|J.S|'|3H_L 3C||/\OEId TIVHS HETIEIS ‘LNEIWEIBHSVSIHJ.:IO ElON‘v’J_d3OOV ‘|V?i?W :iO (NI CIEITIH_LON :l|SAVG 9)SAVCI NIHJJM (L)NEIHL‘LNEIWEIEIEIOVSIHJ. :lO ElON\7’J.dElOOV'|Vl'1l?W :IO EIWIJ.EIHLJ.V NI CIEITIHNEEIEI.LON SVH NO|_LVWHO:!N|3/\OEIV EHJ.:l| d!2 ‘SIEIS‘mo “WW (1U9LU3I\O.ldLU]|e::o|/(mun JO WEN s13!J;sgp1ueuJeAoJdLug|eao[) :(s):0!J:s!a l9!33dS dlz ‘ems ‘Ana ssmppv (CIElr'1N|J.NOO) WHCINEICICIVSEIEJHVHOAmun z ;o z 3655 |LutnoF§L;;;:§sWn 91209-vez-999 :><e:I W,mm ’L992-L99-609 ieuoud9N,m3H L0i-266v/v\eased J.83BElA‘| Ga/xaasau swam 11v 3 918 I-pmg uepma GHQ UOI EIDOSS/x?-Dsxéitdlal9:>J9“1|11°CJ©919153 I993 5"!Pl9!:l1J9Cl<M'|Page 43 of 226 MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF PASCO AND CATHOLIC CHARITIES – EASTERN WASHINGTON OUTLINING FUTURE CONDITIONS FOR PROPERTY USAGE THIS MEMORANDUM OF UNDERSTANDING (MOU) is entered into this date by and between the City of Pasco, a Washington Municipal Corporation, (hereinafter “City”) and Catholic Charities Eastern Washington (hereinafter “Buyer”), a 501c3, non-profit . WHEREAS, the City and Buyer are agencies who wish to enter into a Memorandum of Understanding; and, WHEREAS, on August 20, 2019, Buyer submitted a letter of intent to purchase land owned by the City of Pasco; and, WHEREAS, it is the buyer’s intent to construct a 52-unit apartment building on the site to provide supportive housing to the chronically homeless and/or people possessing significant barriers to successful housing; and, WHEREAS, it is in intent of Catholic Charities to provide secure, supportive housing for the Pasco community in harmony with, and not adverse to, the functioning of the community at large. For and in consideration of the agreements contained herein, the parties agree as follows: 1.AGREEMENTS: a.Buyer will not conduct, sponsor, support, or facilitate a drug syringe exchange program associated with the development of the property. b.Buyer will promote their residents to be good neighbors in the community and agree to accountability for their residents’ conduct within two miles of the facility. c.Buyer shall secure the building and monitor the site and residents in a manner consistent with their business practices. d.Property shall be staffed to meet the security and safety needs of the residents and manage the operations of the property. Buyer shall provide a means by which staff can be summoned quickly when not on site. e.Property shall be designed and developed to incorporate safety and security. Usage of the principles of Crime Prevention Through Environmental Design (CPTED) and working with the Pasco Police Department during the design process is encouraged. f.Buyer shall provide transportation to its residents for daily needs, appointments, and other associated errands. 2.TERM. Aforementioned agreement shall bind to the property regardless of ownership or until a mutually agreed on termination by both signatories. DATED this ______ day of _______________________, 2020. CATHOLIC CHARITIES CITY OF PASCO By: ___________________________ BY: ___________________________ Exhibit B Page 44 of 226 Page 45 of 226 Page 46 of 226 Page 47 of 226 AGENDA REPORT FOR: City Council January 15, 2020 TO: Dave Zabell, City Manager Regular Meeting: 1/21/20 FROM: Dave Zabell, City Manager Executive SUBJECT: City Council Representation on Boards and Committees I. REFERENCE(S): Proposed Resolution II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS: MOTION: Mayoral confirming _______, No. approve to move I Resolution appointments of Councilmembers to various local and regional boards and committees for years 2020-2021. III. FISCAL IMPACT: IV. HISTORY AND FACTS BRIEF: Pasco City Council representation is required on a number of municipal and regional boards and committees. The practice of the City Council has been to have the Mayor recommend the Councilmembers appointments to the various boards and committees on a biennial basis; thus, appointments generally are for a two-year period. Changes to these appointments, if necessary, can be made at any time by action of the Mayor and City Council. V. DISCUSSION: This item was discussed at the January 14 Council meeting. Staff recommends approval of the proposed resolution. Page 48 of 226 Resolution - 1 RESOLUTION NO. _________ A RESOLUTION CONFIRMING MAYORAL ASSIGNMENTS OF COUNCILMEMBERS TO VARIOUS BOARDS AND COMMITTEES FOR THE YEARS 2020-2021. WHEREAS, various boards and committees, serving both local and regional purposes, require representation by the Pasco City Council; and WHEREAS, PMC 2.10.020 reserves authority to the Mayor for appointment of Councilmembers to advisory committees, subject to confirmation of the City Council; and WHEREAS, Mayor Martinez, after consultation with Councilmembers, has declared appointments to the respective boards and committees reflected in the list attached as EXHIBIT A; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PASCO, WASHINGTON: Section 1: The Pasco City Council hereby confirms the appointments to the respective boards, commissions and committees in the list attached as EXHIBIT A, until otherwise modified by action of the Mayor and City Council. PASSED by the City Council of the City of Pasco, Washington this 21st day of January, 2020. Saul Martinez Mayor ATTEST: APPROVED AS TO FORM: _____________________________ ___________________________ Debra Barham, CMC Kerr Ferguson Law, PLLC City Clerk City Attorney Page 49 of 226 CITY COUNCIL BOARD AND COMMITTEE ASSIGNMENTS - CALENDAR YEARS 2020-2021 Mayoral Appointments to Board and Committee Membership BOARD/COMMITTEE DAY TIME LOCATION REP ALT Emergency Medical Services 1st Monday, Even-Months 1:30 pm Fire Training Center 1811 S. Ely Blanche Barajas David Milne Parks & Recreation Advisory Council * 1st Thursday 5:30 pm Parks & Rec. Classroom David Milne Saul Martinez Old Fire Pension Board 2nd Monday, Quarterly 6:00 pm Conference Room #1 Saul Martinez Blanche Barajas Ben-Franklin Transit Board 2nd Thursday 7:00 pm Ben-Franklin Transit Ruben Alvarado Zahra Roach Reserve Officers Board 3rd Monday, as needed 5:30 pm Conference Room #1 Saul Martinez Blanche Barajas LEOFF Disability Board 3rd Monday 6:00 pm Conference Room #1 Saul Martinez Blanche Barajas Good Roads & Transportation Association * 3rd Wednesday, Bi-Monthly 5:30 pm Clover Island Inn Ruben Alvarado Saul Martinez Greater Col. Accountable Community of Health 3rd Thursday 12:00pm CBC Vacant Tri-Cities National Park Committee 3rd Thursday 4:00 pm 7130 W. Grandridge Saul Martinez Blanche Barajas Franklin County Emergency Management Council 3rd Thursday, Quarterly 3:30 pm EMS Office Craig Maloney Saul Martinez Benton Franklin Council of Governments 3rd Friday 11:30 am Ben-Franklin Transit Ruben Alvarado Blanche Barajas Hanford Area Economic Investment Fund 4th Monday 4:00 pm Ben-Franklin Transit Pete Serrano TRAC (now HAPO Center) Advisory Board * 4th Tuesday, Quarterly 5:00 pm HAPO Center Saul Martinez, Craig Maloney Visit Tri-Cities Board 4th Wednesday 7:30 am 7130 W. Grandridge Zahra Roach Craig Maloney TRIDEC Board of Directors 4th Thursday 4:00 pm 7130 W. Grandridge David Milne Craig Maloney Hanford Communities Governing Board (and ECA) 4th Thursday, Quarterly 7:30 am Richland Council Chambers Zahra Roach Saul Martinez Downtown Pasco Development Authority 3rd Thursday 4:00 pm DPDA Zahra Roach David Milne Pasco Public Facilities District 3rd Tuesday 4:00 pm Conference Room #1 Craig Maloney David Milne Tri-Cities Regional PFD Board As called Varies Saul Martinez, Craig Maloney, Zahra Roach Franklin County Solid Waste Advisory Committee As called FC Public Works Saul Martinez Blanche Barajas Franklin County Law & Justice Council As called FC Courthouse Pete Serrano Blanche Barajas Local Housing Trust Fund Oversight Committee As called David Milne *Voluntary (does not require elected official as representative) 01/15/2020 deleted Tri-City Public Market. Approved: _____________ Page 50 of 226 AGENDA REPORT FOR: City Council January 15, 2020 TO: Dave Zabell, City Manager Rick White, Director Community & Economic Development Regular Meeting: 1/21/20 FROM: Jacob Gonzalez, Senior Planner Community & Economic Development SUBJECT: House Bill 1406 (MF# INFO 2020-001) I. REFERENCE(S): Purposed Resolution of Intent II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS: MOTION: I move to approve Resolution _____, authorizing the City of Pasco, Washington declaring the intent to adopt legislation to authorize the use of a portion of the sales and use tax for affordable and supportive housing in accordance with Substitute House Bill 1406 (Chapter 338, Laws of 2019), and other matters related thereto. III. FISCAL IMPACT: Approximately $105,000 annually for 20 years for affordable housing opportunities. IV. HISTORY AND FACTS BRIEF: The 2019 Washington State Legislature passed Substitute House Bill (SHB) 1406 creating a a sales tax revenue sharing program that allows cities and counties to access a portion of the state sales tax revenue to make local investments in affordable housing. Over a 20-year commitment, the state will be sharing more than $500 million with local governments. This is a credit against the state sales tax, and will not increase the tax rate for consumers. A city or county that participates must first pass a resolution of intent by January 27th, 2020. The resolution of intent indicates the intention to impose the sales tax credit. This must be followed by the adoption of legislation via ordinance authorizing the sales tax credit. The ordinance must be adopted by July 27th, 2020. Both are required to access the sales tax credit. Page 51 of 226 For Pasco, the estimated (maximum) funds would be equal to $105,714 annually, or $2,114,279 over the 20-year duration. This estimate was provided by the Association of Washington Cities (AWC) using the taxable retail sales for cities, towns and counties for state fiscal year 2019. This amount is based on the tax credit rate of 0.0073%, as stated in SHB 1406. For cities under 100,000 (such as Pasco), the funds may be used for the following: the acquisition, rehabilitation or construction of affordable housing, which may include new units within an existing structure or facilities providing supportive housing services under RCW 71.24.385; the operation and maintenance cost of new units of affordable or supportive housing; or rental assistance to tenants that are at or below the 60% of the area median income. Additionally, participating jurisdictions may finance loans or grants to nonprofit organizations or public housing authorities to carry out the purposes of the bill. Any participating city may also enter into an interlocal agreement with other cities, counties and/or housing authorities to pool and allocate the tax revenues received under SHB 1406 to fulfill the intent of the legislation. Council considered this issue at the Workshop meeting of January 14, 2020. V. DISCUSSION: Staff has identified that the revenues provided by SHB 1406 would assist with local and regional housing efforts, including supplementing existing plans and projects in place. Staff is proposing to align funding of these programs in alignment with the goals and priorities identified in the 2020-2024 Tri-Cities Consortium Consolidated Plan which was adopted by Council in November 2019. Page 52 of 226 Resolution - 1 RESOLUTION NO. _____ A RESOLUTION OF THE CITY OF PASCO, WASHINGTON DECLARING THE INTENT TO ADOPT LEGISLATION TO AUTHORIZE THE USE OF A PORTION OF THE SALES AND USE TAX FOR AFFORDABLE AND SUPPORTIVE HOUSING IN ACCORDANCE WITH SUBSTITUTE HOUSE BILL 1406 (CHAPTER 338, LAWS OF 2019), AND OTHER MATTERS RELATED THERETO. WHEREAS, in the 2019 Regular Session, the Washington State Legislature approved, and the Governor signed, Substitute House Bill 1406 (Chapter 338, Laws of 2019) (“SHB 1406”); and WHEREAS, SHB 1406 authorizes the governing body of a city or county to allocate a portion of the local sales and use tax for the acquisition, construction or rehabilitation of affordable housing or facilities providing supportive housing, and for the operations and maintenance costs of affordable or supportive housing. The City of Pasco has a population less than 100,000, which makes rental assistance another eligible expense; and WHEREAS, the tax will be credited against state sales taxes collected within the City of Pasco, Washington and, therefore, will not result in higher sales and use taxes within the City of Pasco, Washington, and will represent an additional source of funding to address housing needs in the City of Pasco, Washington; and WHEREAS, the tax must be used to assist persons whose income is at or below sixty percent of the City of Pasco median income; and WHEREAS, the City of Pasco has a need to provide a range of affordable and supportive housing and has determined that imposing the sales and use tax to address this need will benefit its citizens; and WHEREAS, in order for a city or county to impose the tax, within six months of the effective date of SHB 1406, or January 28, 2020, the governing body must adopt a resolution of intent to authorize the maximum capacity of the tax, and within twelve months of the effective date of SHB 1406, or July 28, 2020, must adopt legislation to authorize the maximum capacity of the tax; and WHEREAS, this resolution constitutes the resolution of intent required by SHB 1406; and WHEREAS, the Pasco City Council now desires to declare its intent to impose a local sales and use tax as authorized by SHB 1406 as set forth herein; NOW, THEREFORE, Page 53 of 226 Resolution - 2 BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PASCO, WASHINGTON: Section 1.Resolution of Intent. The City Council of the City of Pasco declares its intent to adopt legislation to authorize the maximum capacity of the sales and use tax authorized by SHB 1406 within one year of the effective date of SHB 1406, or by July 28, 2020. Section 2.Further Authority; Ratification. All City officials, their agents, and representatives are hereby authorized and directed to undertake all action necessary or desirable from time to time to carry out the terms of, and complete the actions contemplated by, this resolution. All acts taken pursuant to the authority of this resolution but prior to its effective date are hereby ratified. Section 3. Effective Date. This resolution shall take effect immediately upon its passage and adoption. PASSED by the City Council of the City of Pasco, Washington on this _____ day of __________, 2020. ____________________________ Saul Martinez Mayor ATTEST: APPROVED AS TO FORM: ____________________________ __________________________________ Debra Barham, CMC Kerr Ferguson Law, PLLC City Clerk City Attorney Page 54 of 226 AGENDA REPORT FOR: City Council January 15, 2020 TO: Dave Zabell, City Manager Regular Meeting: 1/21/20 FROM: Rick White, Director Community & Economic Development SUBJECT: HUD Section 108 Loan Contract Closing Documents I. REFERENCE(S): Resolution Authorizing City Manager to execute Section 108 Loan Contract Closing Documents II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS: I move to approve Resolution _______, authorizing the City Manager to execute loan contract documents required by the United States Department of Housing and Urban Development for funding from the Section 108 Loan Guarantee Program, and to take all other actions necessary for the completion of the project. III. FISCAL IMPACT: $190,000 annual obligation of CDBG funds for debt service. First lien mortgage on Crop Circle #4 of the PWRF farm land. IV. HISTORY AND FACTS BRIEF: The City Council authorized application for $3,781,000 to the U.S. Department of Housing Urban Development Section 108 loan program in August 2018 by Resolution 3855 for revitalization/construction of the Pasco Market Plaza and related infrastructure. HUD approved the application in March 2019. The closing documents were reviewed by City Council at the January 14, 2020 Workshop. V. DISCUSSION: Page 55 of 226 Upon City Council approval, staff will notify HUD of the City's authorization and intent to close. Loan funds will be requested in coordination with the bid award for the Pasco Market Plaza, scheduled for March 2020. All costs and fees associated with the loan will be paid from loan proceeds. Page 56 of 226 Resolution - 1 RESOLUTION NO. ________ A RESOLUTION OF THE PASCO CITY COUNCIL AUTHORIZING THE CITY MANAGER TO EXECUTE LOAN CONTRACT DOCUMENTS REQUIRED BY THE UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT FOR FUNDING FROM THE SECTION 108 LOAN GUARANTEE PROGRAM, AND TO TAKE ALL OTHER ACTIONS NECESSARY FOR THE COMPLETION OF THE PROJECT. WHEREAS, the City of Pasco has identified opportunities for redevelopment consistent with the CDBG Entitlement and Section 108 Loan Guarantee programs of the U.S. Department of Housing and Urban Development (HUD); and WHEREAS, public hearings were held on December 21, 2017 and January 16, 2018 to discuss community and economic development and housing needs, and WHEREAS, the City Council authorized an application to HUD for Section 108 funding with Resolution 3814, and amended the application to increase the total amount $3,781,000 by passage of Resolution 3855; WHEREAS, Section 108 loan funds will be used for the redevelopment of the Pasco Farmers Market, Peanuts Park and related infrastructure.; and WHEREAS, the application for Section 108 funds was reviewed and approved by HUD on March 18, 2019; and WHEREAS, the City Manager is the designated Certifying Official, authorized to sign and submit applications, certifications and funding agreements with the U.S. Department of Housing and Urban Development on behalf of the City of Pasco and to act on behalf of the City of Pasco with regard to the applications, and to provide such additional information as may be required, NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PASCO, WASHINGTON DOES RESOLVE AS FOLLOWS: Section 1. The City Manager is hereby authorized and directed to execute loan contract documents for $3,781,000 in Section 108 loan funds from the U.S. Department of Housing and Urban Development. The City Manager is further authorized to execute any documents related to the completion of this project, including, but not limited to: 1. Variable/Fixed Rate Note 2. Contracts for Loan Guarantee Assistance 3. Custodial Agreement Page 57 of 226 Resolution - 2 4. Request for Advance Letter 5. Mortgage as to real property legally described as the SE 1/4, Sec. 11, Twn. 9 N, R. 30 E.W.M., Franklin County, WA. PASSED by the City Council of the City of Pasco, Washington, this ____ day of _______, 2020. Saul Martinez Mayor ATTEST: APPROVED AS TO FORM: _____________________________ ___________________________ Debra Barham, CMC Kerr Ferguson Law, PLLC City Clerk City Attorney Page 58 of 226 U.S.DEPARTMENTOFHOUSINGANDURBANDEVELOPMENTWASHINGTON,D.C.20410-7000OFFICEOFCOMMUNITYPLANNINGANDDEVELOPMENTMr.DaveZabellCityManagerCityofPascoMAR182019525N.ThirdAvenuePasco,WA99301DearMr.Zabell:Congratulations!IampleasedtoinformyouthattheCityofPasco’s(hereafter,the“City”)requestforloanguaranteeassistanceunderSection108oftheHousingandCommunityDevelopmentActof1974,asamended,hasbeenapproved.Suchassistanceistoconsistoftheguaranteeofnotesorotherobligationsintheprincipalamountof$3,781,000,plusinterestthereon,whichshallbeissuedtofinanceactivitiesdescribedintheCity’sapplication(B-18-MC-53-0009)forthePascoMarketRedevelopmentProject.Thisofferofcommitment(“Commitment”)issubject,however,totheconditionsspecifiedinItem8oftheFundingApproval(FormHUD-7082).ThefirstconditionprovidesthatintheeventtheCityfailstosubmitnotesorotherobligationsforinspectionandguaranteebytheSecretaryofHousingandUrbanDevelopment(HUD)beforeMarch31,2020,theCommitmentwillexpireasofsuchdate.Thesecondconditionprovidesthattherepaymentschedulefortheindebtednessevidencedbythenotesorotherobligations(the“GuaranteedLoan”)mustbeacceptabletoHUD.ThethirdconditionprovidesthattheCityshallprovideadditionalsecurityfortheGuaranteedLoanandsuchadditionalsecuritymustbeacceptabletoHUD.TheadditionalsecurityshallbeidentifiedintheContractforLoanGuaranteeAssistance(“Contract”),specifiedby24CFR570.705(b)(1),whichwillbeexecutedatthetimetheguaranteedobligationsareissued.TheCity’sapplicationandothersupportingmaterialidentifytheCity’spledgeofrealpropertyasadditionalsecurityfortheGuaranteedLoan.NotethatanypropertyofferedassecurityshallbesubjecttoloantovalueratiostobeidentifiedintheContract.Inaddition,theContractshallprovidethatHUDmayuseexistingpledgedgrantstoprepay(ordefease)theGuaranteedLoanifHUDdeterminesthatthestandardpledgeoffutureCommunityDevelopmentBlockGrant(“CDBG”)fundsisinsufficienttoassurepaymentofamountsduethereunder.HUDreservestherighttorequirefurthersecurityuponevaluationoftheforegoingsecurityarrangementsandtheCitymaysubstituteothercollateralsecurityforsucharrangements,subjecttoHUD’sapprovalofsuchsubstitution.Page 59 of 226 ThefourthconditionprovidesthatpriortosubmittingnotesorotherobligationsforinspectionandguaranteebyHUD,theCityshallsubmitinformationrequiredunderSection102(b)oftheDepartmentofHousingandUrbanDevelopmentReformActof1989(42U.S.C.3545).ThisinformationshallbesubmittedonFormHUD-2880toHUD’sSeattleRegionalOffice.AcopyofFormHUD-2880isenclosedforthispurpose.ThefifthconditionprovidesthattheCityisrequiredtopayafeeof2.23%oftheprincipalamountofloanguaranteedunderthisCommitmenttocoverthecreditsubsidycostsasannouncedintheFederalRegisteronOctober5,2018(83FR50257).ThisfeeappliestoallSection108guaranteedloancommitmentsissuedinFiscalYear2019.Thefeeisappliedonlyatthetimeofloandisbursements.Theamounttobepaidatthattimeisequalto2.23%oftheprincipalamountoftherequestedGuaranteedLoanadvance.ThefeemaybepaiddirectlybytheCityor,alternatively,itmaybedeductedfromtheGuaranteedLoanadvance(s).IfthefeeispaiddirectlybytheCity,itmaybepaidfromCDBGgrantfundsdrawndownundertheCDBGlineofcreditorwithanothersource.Inadditiontothespecialconditionscitedabove,thereleaseoffundsfortheprojecttobecarriedoutwithloanguaranteeassistanceisconditioneduponcompliancebytheCitywithallapplicableprovisionsoftheHUDEnvironmentalReviewProcedures(24CFRPart58).TheCityisremindedthattheseProceduresincludelimitationsonthecommitmentofHUDandnonHUDfundsonanactivityorprojectpriortoHUD’sapprovaloftherequestforreleaseoffundsandrelatedcertificationofcompliancewithenvironmentalrequirements.Pleasereferto24CFR58.22foradescriptionofthelimitationsandtheentitiestowhomtheyapply.Pleasefurnishus,attheaddressspecifiedbelow,yourtimetableforexecutionoftheactivitiesdescribedinyourapplication.TheseactivitieswillbefinancedthroughapublicofferingofSection108obligations.Ifyouneedfundspriortothenextpublicoffering,pleasenotifyHUDattheaddressbelowandinstructionsforobtaininginterimfinancingwillbeprovided.PleaseexecutethethreeenclosedcopiesoftheFundingApproval(FormHUD-7082)andreturntwocopiestotheDepartmentofHousingandUrbanDevelopment,FinancialManagementDivision,Room7282,451SeventhStreet,S.W.,Washington,D.C.20410.Onecopyshouldberetainedforyourfiles.TheFundingApprovalamendstheGrantAgreementauthorizedbyHUDonAugust7,2018,undertheFundingApprovalforgrantnumberB-18-MC-53-0009toincludeloanguaranteeassistance.TheGrantAgreementtherebyincorporatesthisFundingApproval,theloanguaranteeapplication,andSubpartMoftheblockgrantregulationsgoverningloanguarantees,aswellassuchagreements,schedules,andotherdocumentationrequiredforsubmissionorexecutioninconnectiontherewith.2Page 60 of 226 PleasedonothesitatetoreachoutifwecansupportyouintheuseofyourSection108funds.PleasecontactPaulD.Webster,Director,FinancialManagementDivisionat(202)402-4563,ifyouneedassistance.Sincerely,StanleyDeputyAssistantSecretaryforGrantProgramsEnclosures(2)3Page 61 of 226 LEGAL OPINION LETTER Page 62 of 226 opinion-VFR entitlement 3-26-13 Secretary of Housing and Urban Development 451 7th Street, SW Washington, DC 20410 Dear Sir or Madam: The undersigned, being duly licensed and in good standing to practice law in the State of Washington, is legal counsel to the City of Pasco ("Borrower"). As such, I have represented Borrower regarding that certain Variable/Fixed Rate Note, referred to as Note No. B-18-MC-53-0009 in the Maximum Commitment Amount of $3,781,000(the "Note"), to be executed by Borrower payable to the order of the Registered Holder thereof, and to be guaranteed by the Secretary of Housing and Urban Development ("HUD") under section 108 of the Housing and Community Development Act of 1974, as amended, 42 U.S.C. 5308 ("Section 108"). The Note will initially be issued to the interim lender, which will make advances to the Borrower in the amount requested by the Borrower under the Note. HUD's guarantee of the Note will be governed by the Contract for Loan Guarantee Assistance under Section 108 between the Borrower and HUD (the "Contract"), in which the Borrower pledges Community Development Block Grants pursuant to 24 CFR 570.705(b)(2), as well as any other security specified therein, as security for HUD's guarantee. It is anticipated that the Note, as authorized by the Contract, will be included in a future trust created by HUD (together with other Section 108 Notes issued by other borrowers), and participation certificates based on the trust will ultimately be sold in a future public offering by the underwriters selected by HUD. Page 63 of 226 2 In my capacity as legal counsel, I have made an examination and investigation of all such matters of fact and questions of law as I consider necessary or advisable to enable me to render the opinion hereafter set forth. Specifically, and without limiting the generality of the foregoing, I have examined: 1. Authority granted by State of Washington A. Washington State Constitution: Article 8, Section 6 – Limitations on Municipal Indebtedness. B. Washington State Statutes (Revised of Washington): RCW 35.22.280 - Specific powers enumerated (2) to provide for payment of debts; (4) To borrow money for corporate purposes on the credit of the corporation RCW 35.21.735 – Use of HUD 108 funds to secure HUD loan. RCW 39.36.020. Limitation of indebtedness prescribed. 2. City of Pasco Municipal Code: Ordinance 4073, 2012; Ordinance 3557 § 58, 2002; Ordinance 1773 § 3, 1976; Code 1970 § 3.90.030. 3. Resolution No. 3855 of the governing body of Borrower, dated August 18, 2018, authorizing Borrower to enter into this transaction, and authorizing Dave Zabell, City Manager to execute on behalf of Borrower all documents necessary or desirable to accomplish the transaction. 4. The Contract. 5. The Note. 6. The Amended and Restated Master Fiscal Agency Agreement dated as of May 17, 2000, the Trust Agreement dated as of January 1, 1995, together with Amendment No. 1 thereto, dated as of June 30, 2004, and the form of Supplement to the Trust Agreement. Based on the foregoing investigation and authorities, I am of the opinion that: Page 64 of 226 3 1. Borrower has authorized in accordance with applicable State and local law, the transaction, including issuance of the Note, the pledge of grant funds, and the execution of all documents necessary or desirable to accomplish the transaction. 2. Borrower has authorized Dave Zabell, in his capacity as City Manager, to execute the Contract, the Note and all other documents necessary or desirable to accomplish the transaction. 3. The Note and the Contract have been duly executed by the aforementioned authorized representative of the Borrower, and upon delivery thereof, due execution of the Contract and the Guarantee on behalf of HUD, and receipt of the loan proceeds on behalf of the Borrower, the Note and the Contract, including the provisions for compensation of the Fiscal Agent/Trustee from funds pledged under the Contract (as incorporated therein), shall be valid, binding and enforceable obligations of the Borrower. 4. The pledge of present and future Community Development Block Grants by the Borrower pursuant to 24 CFR 570.705(b)(2) and the Contract is valid and binding. 5. There is no outstanding, or to my knowledge threatened, action, suit, proceeding, investigation or litigation by or against the Borrower which will affect the validity of the Note or the security therefor. Sincerely, Page 65 of 226 SECTION 108 LOAN CONTRACT Page 66 of 226 VFR Contract - Entitlement 7-2-07 U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT CONTRACT FOR LOAN GUARANTEE ASSISTANCE UNDER SECTION 108 OF THE HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1974, AS AMENDED, 42 U.S.C. §5308 Date of Contract_______________ This Contract for Loan Guarantee Assistance ("Contract") is entered into between City of Pasco, Washington, as Borrower (the "Borrower"), and the Secretary of Housing and Urban Development ("Secretary"), as guarantor for the Guarantee made pursuant to section 108 ("Section 108") of title I of the Housing and Community Development Act of 1974, as amended (the "Act") and 24 CFR Part 570, Subpart M, of the promissory note executed contemporaneously herewith and numbered B-18-MC-53-0009 [Pasco Market Redevelopment Project], in the Maximum Commitment Amount of $3,781,000, and any amended note or note issued in substitution for such note and having the same note number (the "Note"). This is the first Contract under the Funding Approval ("Commitment") of the same number, which was approved by the Secretary on March 18, 2019. The funds paid or credited to the account of the Borrower pursuant to the Note are referred to herein as the "Guaranteed Loan Funds." The Note (including the Fiscal Agency Agreement and the Trust Agreement as defined in Section I.A. of the Note and incorporated therein) is hereby incorporated into the Contract. Terms used in the Contract with initial capital letters and not otherwise defined in the text hereof shall have the respective meanings given thereto in the Note. The Fiscal Agency Agreement and the Trust Agreement are sometimes collectively referred to herein as the "Fiscal Agency/Trust Agreements," and the Fiscal Agent and the Trustee respectively are sometimes collectively referred to as the "Fiscal Agent/Trustee." PART I A. The Note: Advances and Records. The Note provides that Advances and Conversion Date Advances shall be made thereunder upon the written request of the Borrower and the approval of the Secretary, pursuant to this Contract and the Fiscal Agency Agreement. The Commitment Schedule attached to the Note represents the principal repayment schedule for the Maximum Commitment Amount of the Note. At all times, the total amount of all Advances and Conversion Date Advances under the Note for all Principal Due Dates shall not exceed the Maximum Commitment Amount of the Note. Prior to the Conversion Date (as defined in the Note, Section I.A.), the total amount of Advances made by the Holder for each Principal Due Date under the Note shall not exceed the applicable Commitment Amount for such Principal Due Date set forth in the Commitment Schedule of the Note. Prior to the Page 67 of 226 2 Conversion Date, the Borrower agrees that the Fiscal Agent pursuant to the Fiscal Agency Agreement shall record the date and amount of each payment and Advance under the Note and shall maintain the books and records of all Advances and Conversion Date Advances for each Principal Due Date, interest rates on Advances, payments, and Principal Amounts outstanding for each Principal Due Date. On and after the Conversion Date, the Borrower agrees that the Trustee pursuant to the Trust Agreement will maintain the books and records of all payments on the Note and all Principal Amounts and interest rates on such Principal Amounts (each as to be set forth on Schedule P&I to the Note). No advances of any kind may be made on the Note after its Conversion Date. B. Borrower’s Requests for Advances. All requests for Advances or Conversion Date Advances by the Borrower under the Note shall: be in writing; specify the amount of the Advance requested; identify the Note by Borrower, number and Maximum Commitment Amount; be addressed to the Secretary at the address for notices specified in paragraph 12(f) of this Contract; be signed by an authorized official of the Borrower; and otherwise be in the form prescribed by the Secretary. Advances and Conversion Date Advances shall be requested and will only be approved and made in increments of not less than $1,000 for any Principal Due Date. A request for an initial Advance under a Note, or a request for a Conversion Date Advance, shall be received by the Secretary at least ten Business Days prior to the Borrower’s proposed Funding Date or Conversion Date, as applicable. All other requests for Advances shall be received by the Secretary not less than five Business Days prior to the proposed Funding Date. The Borrower may not deliver a Note or a request for an Advance or Conversion Date Advance to the Secretary more than two calendar months prior to the Borrower’s proposed Funding Date. At least two Business Days prior to the proposed Funding Date or Conversion Date if the Borrower’s request was timely received, or the next available Funding Date for which the request was timely received, the Secretary shall, except as otherwise provided in paragraph 11(c) or 12 hereof, deliver a corresponding Authorization Order or Advance Order (as applicable) to the Fiscal Agent in accordance with Section 2.03 or 2.04 of the Fiscal Agency Agreement for the applicable Funding Date or Conversion Date. If the Borrower requests an Advance or Conversion Date Advance of less than the outstanding Maximum Commitment Amount under the Note, the Borrower may also specify in its written request the amount of the Advance or Conversion Date Advance to be allocated to each Commitment Amount or Principal Amount per Principal Due Date under the Note. If the Borrower does not specify how the Advance or Conversion Date Advance should be allocated among Commitment Amounts/Principal Due Dates, the Borrower hereby authorizes the Secretary to direct the Fiscal Agent to allocate the Page 68 of 226 3 Advance to the respective Commitment Amounts or Principal Amounts in order of the earliest Principal Due Date(s). C. Guarantee Fee. The Borrower shall pay to the Secretary a fee equal to 2.23% of each Advance to offset the credit subsidy cost of the guaranteed loan. This fee, which was announced on October 5, 2018, 83 Fed. Reg. 50257, for Section 108 loan guarantee disbursements under loan guarantee commitments awarded in FY 2019 is due to the Secretary no later than the time of the disbursement of each Advance to the Borrower. The fee is payable from allocations or grants which have been made to Borrower under Section 106 of the Act (including program income derived therefrom) or from other sources, but is only payable from Guaranteed Loan Funds if the fee is deducted from the Advance. D. Conversion; Public Offering. On the Conversion Date (if any), trust certificates backed by the Note (and similar notes issued by other Section 108 borrowers) will be purchased for a purchase price of the full principal amount thereof by underwriters selected by the Secretary (the "Underwriters") pursuant to an Underwriting Agreement between the Underwriters and the Secretary, at a closing on such Conversion Date as determined by the Secretary and the Underwriters. The Borrower agrees that the interest rate at which the trust certificate of a specified maturity is sold to the Underwriters shall govern the interest rate inserted on the Conversion Date in Schedule P&I of the Note for the Principal Amount of corresponding maturity. E. Consents. By execution of this Contract, the Borrower ratifies and consents to the Secretary's selection of the Underwriters and authorizes the Secretary to negotiate with the Underwriters the terms of the Underwriting Agreement and of the public offering of interests in the trust certificates to investors (including the applicable interest rates). In addition, by execution hereof the Borrower ratifies and consents to the Secretary's selection of the Fiscal Agent/Trustee and agrees to the respective terms of the Fiscal Agency/Trust Agreements. If Advances have been made in the Maximum Commitment Amount of the Note not less than ten Business Days prior to the proposed Conversion Date, or if the Borrower requests a Conversion Date Advance, the Borrower authorizes the Secretary to deliver Schedule P&I to the Note completed in accordance herewith to the Fiscal Agent/Trustee on the Conversion Date in accordance with the Fiscal Agency/Trust Agreements, concurrent with delivery of the Secretary's Guarantee of the trust certificates at the closing on the Conversion Date, and thereafter the Note shall be enforceable in accordance with its terms including Schedule P&I. In addition, the Secretary reserves the right to notify the Borrower not less than one calendar month in advance of a specified Conversion Page 69 of 226 4 Date that the Note will be sold to the Underwriters on such date, if the Secretary in his sole discretion determines that market conditions or program needs require the participation in the proposed public offering of all or substantially all Borrowers with outstanding Advances. [Rest of Page Intentionally Left Blank] Page 70 of 226 5 PART II 1. Receipt, Deposit and Use of Guaranteed Loan Funds. (a) Except for funds deducted on the Conversion Date pursuant to paragraph 4(b) and fees and charges deducted by the Fiscal Agent/Trustee pursuant to paragraph 4(a), the Guaranteed Loan Funds shall be electronically transferred in accordance with the Borrower's instructions for deposit in a separate, identifiable account (the "Guaranteed Loan Funds Account") with a financial institution whose deposits or accounts are Federally insured. The Guaranteed Loan Funds Account shall be established and designated as prescribed in the attached form document entitled "Letter Agreement for Section 108 Loan Guarantee Program Deposit Account" (Attachment 1) and shall be continuously maintained for the Guaranteed Loan Funds. Such Letter Agreement must be executed when the Guaranteed Loan Funds Account is established, and an original of this Letter Agreement, signed by the Borrower and the financial institution shall be submitted by the Borrower to the Secretary with this signed Contract. The Borrower shall make withdrawals from said account only for payment of the costs of approved Section 108 activities, for transfer to the Loan Repayment Account or for the temporary investment of funds pursuant to this paragraph 1(a). Such temporary investment of funds into the Guaranteed Loan Funds Investment Account shall be required within three Business Days after the balance of deposited funds exceeds the amount of the Federal deposit insurance on the Guaranteed Loan Funds Account. At that time, any balance of funds in the Guaranteed Loan Funds Account exceeding such insurance coverage shall be fully (100%) and continuously invested in Government Obligations, as defined in paragraph 10 hereof, held in the Guaranteed Loan Funds Investment Account. All temporary investments, whether or not required as above, shall be limited to Government Obligations having maturities that are consistent with the cash requirements of the approved activities. In no event shall the investments mature on or after June 30, 2021 or have maturities which exceed one year. All such investments shall be held in trust for the benefit of the Secretary by the above financial institution in an account (the "Guaranteed Loan Funds Investment Account") established and designated as prescribed in the attached form document entitled "Letter Agreement for Section 108 Loan Guarantee Program Investment Account" (Attachment 2), which account shall be maintained for all Government Obligations purchased with funds from the Guaranteed Loan Funds Account. The Guaranteed Loan Funds Investment Account need only be established if and when the Borrower is required to invest, or otherwise invests, the Page 71 of 226 6 Guaranteed Loan Funds in Government Obligations. Such Letter Agreement must be executed when the Guaranteed Loan Funds Investment Account is established. (All proceeds and income derived from such investments shall be returned to the Guaranteed Loan Funds Account. All funds in the Guaranteed Loan Funds Account or the Guaranteed Loan Funds Investment Account must be withdrawn and disbursed by the Borrower for approved activities by June 30, 2021. Any funds remaining in either Account after this date shall be immediately transferred to the Loan Repayment Account established pursuant to paragraph 6 of this Contract. (b) The Borrower shall by the fifteenth day of each month provide the Secretary with an electronic copy of a statement showing the balance of funds in the Guaranteed Loan Funds Account and the withdrawals from such account during the preceding calendar month, and an electronic copy of a statement identifying the obligations and their assignments in the Guaranteed Loan Funds Investment Account. Borrower shall e-mail the electronic copies to 108reports@hud.gov. (c) Upon the Secretary giving notice that the Borrower is in Default under this Contract or the Note, all right, title, and interest of the Borrower in and to the Guaranteed Loan Funds and Guaranteed Loan Funds Investment Accounts shall immediately vest in the Secretary for use in making payment on the Note, purchase of Government Obligations in accordance with paragraph 10, or payment of any other obligations of the Borrower under this Contract or the Fiscal Agency/Trust Agreements. 2. Payments Due on Note; Final Payment and Discharge. The Borrower shall pay to the Fiscal Agent/Trustee, as collection agent for the Note, all amounts due pursuant to the terms of the Note. In accordance with the Note and the Fiscal Agency/Trust Agreements, payment shall be made by 3:00 P.M. (New York City time) on the seventh Business Day (the "Note Payment Date") preceding the relevant Interest Due Date or Principal Due Date (each as defined in the Note). If any Note Payment Date falls on a day that is not a Business Day, then the required payment shall be made on the next Business Day. Payment may be made by check or wire transfer. Upon final payment of all amounts due to Holders under the Note, including any payment made by the Secretary pursuant to the Guarantee, the Fiscal Agent/Trustee is required by the Fiscal Agency/Trust Agreements to return the Note to the Secretary. Upon final payment to the Secretary of any amounts due as a result of Guarantee Payments or otherwise due under this Contract, the Secretary will cancel and return the Note to the Borrower in discharge of the Page 72 of 226 7 Borrower’s obligations under the Note. 3. Selection of New Fiscal Agent or Trustee. The Secretary shall select a new Fiscal Agent or Trustee if the Fiscal Agent or Trustee resigns or is removed by the Secretary. The Borrower hereby consents in advance to any such selection and to any changes in the Fiscal Agency/Trust Agreements agreed to by any Fiscal Agent or Trustee and the Secretary, subject to paragraph 4(e) of this Contract. 4. Payments Due Fiscal Agent or Trustee; Documents to the Secretary. (a) The Borrower agrees to pay the fees of the Fiscal Agent as required by Exhibit G to the Fiscal Agency Agreement, and any additional amounts that may be due pursuant to Section 6.01 of the Fiscal Agency Agreement. If not paid by the Borrower by any other means prior thereto, the Borrower agrees that any such fees or additional amounts that have been incurred prior to an Advance or a Conversion Date Advance may be deducted by the Fiscal Agent/Trustee from the proceeds of the Advance or Conversion Date Advance, as applicable. (b) The Borrower agrees to pay the Borrower’s share, as determined by the Secretary, of the customary and usual issuance, underwriting, and other costs related to the public offering and future administration of the Note and the trust certificates, as approved by the Secretary, including the cost of reimbursement and/or compensation of the Trustee pursuant to the Trust Agreement, including Sections 3.11 and 7.01 thereof. In connection with the public offering on the Conversion Date, such payment shall either be made by wire transfer to the Trustee on the day prior to the Conversion Date or shall be deducted from the Guaranteed Loan Funds on the Conversion Date. (c) The Borrower shall submit to the Secretary not later than ten Business Days prior to the Funding Date for the initial Advance hereunder, or if not submitted earlier, prior to any Conversion Date or Public Offering Date applicable to the Note, this executed Contract, the executed Note, a request for an Advance or a Conversion Date Advance (as applicable) in proper form, and an opinion acceptable to the Secretary from the Borrower's counsel to the effect that: (i) the governing body of the Borrower has authorized by resolution or ordinance, in accordance with applicable State and local law, the issuance of the Note and the execution of this Contract; (ii) the Note and this Contract are valid, binding, and enforceable obligations of the Borrower; (iii) the pledge of funds pursuant to 24 CFR 570.705(b)(2) and paragraph 5(a) of this Contract is valid and binding; and (iv) there is no outstanding litigation that will affect the validity of the Note or this Contract. In addition, the Borrower shall submit Page 73 of 226 8 any other additional documents or opinions specifically required by this Contract (e.g., paragraph 5(c), or paragraph 15, et seq.), at the time required thereby. (d) The Borrower agrees to reimburse the Underwriters upon demand by the Secretary for the Borrower’s share, as determined by the Secretary, of all reasonable out-of-pocket expenses (including reasonable fees and disbursements of counsel) incurred in connection with a proposed public offering, if the Underwriters incur such additional costs for the public offering because of any refusal, inability, or failure on the part of the Borrower timely to submit in acceptable form any document required by this Contract (including paragraph 4(c)), or because of any withdrawal by the Borrower from the public offering, after the Borrower has submitted a request for a Conversion Date Advance hereunder. By execution and delivery of this Contract to the Secretary, the Borrower hereby expressly authorizes the Secretary to pay amounts due under this paragraph from funds pledged under paragraph 5(a) of this Contract. (e) The undertakings in paragraphs 3 and 4 of this Contract are expressly subject to the requirement that the Fiscal Agency/Trust Agreements shall in no event require payment of fees or charges, reimbursement of expenses, or any indemnification by the Borrower from any source other than funds pledged pursuant to paragraphs 5 or 15 et seq. of this Contract. 5. Security. The Borrower hereby pledges as security for repayment of the Note, and such other charges as may be authorized in this Contract, the following: (a) All allocations or grants which have been made or for which the Borrower may become eligible under Section 106 of the Act, as well as any grants which are or may become available to the Borrower pursuant to Section 108(q). (b) Program income, as defined at 24 CFR 570.500(a)(or any successor regulation), directly generated from the use of the Guaranteed Loan Funds. (c) Other security as described in paragraph 15, et seq. (d) All proceeds (including insurance and condemnation proceeds) from any of the foregoing. (e) All funds or investments in the accounts established pursuant to paragraphs 1 and 6 of this Contract. 6. Loan Repayment Account. (a) All amounts pledged pursuant to paragraphs 5(b), 5(c), and 5(d) of this Contract shall be deposited immediately on Page 74 of 226 9 receipt in a separate identifiable account (the "Loan Repayment Account") with a financial institution whose deposits or accounts are Federally insured. The Loan Repayment Account shall be established and designated as prescribed in the attached form document entitled "Letter Agreement for Section 108 Loan Guarantee Program Deposit Account" (Attachment l) and shall be maintained for such pledged funds. The Loan Repayment Account need only be established if and when the Borrower receives amounts pledged pursuant to paragraph 5(b), 5(c) or 5(d). Such Letter Agreement must be executed when the Loan Repayment Account is established, and an original of this Letter Agreement, signed by the Borrower and the financial institution shall be submitted by the Borrower to the Secretary with this signed Contract. Borrower shall make withdrawals from said account only for the purpose of paying interest and principal due on the Note (including the purchase of Government Obligations in accordance with paragraph 10 hereof), for payment of any other obligation of the Borrower under this Contract or the Fiscal Agency/Trust Agreements, or for the temporary investment of funds pursuant to this paragraph, until final payment and discharge of the indebtedness evidenced by the Note, unless otherwise expressly authorized by the Secretary in writing. Such temporary investment of funds shall be required within three Business Days after the balance of deposited funds exceeds the amount of the Federal deposit insurance on the Loan Repayment Account. At that time, the balance of funds in the Loan Repayment Account exceeding such insurance coverage shall be fully (100%) and continuously invested in Government Obligations, as defined in paragraph 10 hereof. All temporary investments, whether or not required as above, shall be limited to Government Obligations having maturities that are consistent with cash requirements for payment of principal and interest as required under the Note. In no event shall the maturities of such investments exceed one year. All such investments shall be held in trust for the benefit of the Secretary by the above financial institution in an account (the "Loan Repayment Investment Account") established and designated as prescribed in the attached form document entitled "Letter Agreement for Section 108 Loan Guarantee Program Investment Account" (Attachment 2), which account shall be maintained for all Government Obligations purchased with funds from the Loan Repayment Account. Such Letter Agreement must be executed when the Loan Repayment Investment Account is established. (A fully executed copy of such Letter Agreement shall be submitted to the Secretary within thirty days of its execution.) All proceeds and income derived from such investments shall be returned to the Loan Repayment Account. (b) Borrower shall by the fifteenth day of each month, provide the Secretary with an electronic copy of a statement Page 75 of 226 10 showing the balance of funds in the Loan Repayment Account and the deposits and withdrawals of all funds in such account during the preceding calendar month and an electronic copy of a statement identifying the obligations and their assignments in the Loan Repayment Investment Account. Borrower shall e-mail the electronic copies to 108reports@hud.gov. (c) Upon the Secretary giving notice that the Borrower is in Default under this Contract or the Note, all right, title, and interest of the Borrower in and to the Loan Repayment and Loan Repayment Investment Accounts shall immediately vest in the Secretary for use in making payment on the Note, purchase of Government Obligations in accordance with paragraph 10, or payment of any other obligation of the Borrower under this Contract or the Fiscal Agency/Trust Agreements. 7. Use of CDBG, EDI or BEDI Funds for Repayment. Any funds available to the Borrower under Section 106 of the Act (including program income derived therefrom) are authorized to be used by the Borrower for payments due on the Note, Optional Redemption (as defined in the Note), payment of any other obligation of the Borrower under this Contract or the Fiscal Agency/Trust Agreements, or the purchase of Government Obligations in accordance with paragraph 10. Any funds specifically available to the Borrower for such payments or as a debt service reserve under an EDI or BEDI Grant Agreement pursuant to Section 108(q) of the Act which supports the eligible project(s) and activities financed by the Note may also be used therefor; any other use of Section 108(q) funds for such purposes shall require the prior written approval of the Secretary. Unless otherwise specifically provided herein or unless otherwise expressly authorized by the Secretary in writing, the Borrower shall substantially disburse funds available in the Loan Repayment or the Loan Repayment Investment Accounts before funds from grants under Section 106 of the Act are withdrawn from the U.S. Treasury for such purposes. 8. Secretary’s Right to Restrict Use of CDBG Funds to Repayment. Upon a determination by the Secretary that payments required by paragraph 2 and/or paragraph 4 of this Contract are unlikely to be made as specified, the Secretary may give the Borrower notice that the availability to the Borrower of funds pledged under paragraph 5(a) of this Contract for purposes other than satisfaction of the pledge is being restricted. This restriction shall be in an amount estimated by the Secretary to be sufficient to ensure that the payments referred to in paragraph 2 and/or paragraph 4 hereof are made when due. This restriction may be given effect by conditioning the restricted amounts to prohibit disbursement for purposes other than satisfaction of the pledge at the time such restricted funds are approved as grants, by limiting the Borrower's ability to Page 76 of 226 11 draw down or expend the restricted funds for other purposes, and by disapproving payment requests submitted with respect to such grants for purposes other than satisfaction of the pledge. 9. Secretary’s Right to Use Pledged Funds for Repayment. The Secretary may use funds pledged under paragraph 5(a) of this Contract or funds restricted under grants pursuant to paragraph 8 of this Contract to make any payment required of the Borrower under paragraph 2 and/or paragraph 4, if such payment has not been timely made by the Borrower. 10. Defeasance. For purposes of this Contract, after the Conversion Date the Note shall be deemed to have been paid (defeased) if there shall have been deposited with the Trustee either moneys or Government Obligations (as defined below), which in the sole determination of the Secretary, mature and bear interest at times and in amounts sufficient, together with any other moneys on deposit with the Trustee for such purpose, to pay when due the principal and interest to become due on the Note. The Aggregate Principal Amount of the Note or any unpaid Principal Amount may be so defeased, in whole or in part, as of any Interest Due Date, or any other Business Day acceptable to both HUD and the Borrower. In accordance with the Note and the Trust Agreement, the Borrower shall give timely notice and written instructions to the Secretary and the Trustee concerning any principal amounts proposed to be defeased, including any Optional Redemptions proposed, which instructions shall be approved by the Secretary. If the unpaid Aggregate Principal Amount of the Note guaranteed pursuant to this Contract shall be defeased and deemed to have been paid in full, then the Borrower shall be released from all agreements, covenants, and further obligations under the Note. "Government Obligation" means a direct obligation of, or any obligation for which the full and timely payment of principal and interest is guaranteed by, the United States of America, including but not limited to, United States Treasury Certificates of Indebtedness, Notes and Bonds - State and Local Government Series or certificates of ownership of the principal of or interest on direct obligations of, or obligations unconditionally guaranteed by, the United States of America, which obligations are held in trust by a commercial bank which is a member of the Federal Reserve System and has capital and surplus (exclusive of undivided profits) in excess of $100,000,000. 11. Default. (a) A Default under the Note and this Contract shall occur upon failure by the Borrower to: (i) pay when due an installment of principal or interest on the Note; or (ii) punctually and properly perform, observe, and comply with any covenant, agreement, or condition contained in: (A) this Contract, (B) any security agreement, deed of trust, Page 77 of 226 12 mortgage, assignment, guarantee, or other contract securing payment of indebtedness evidenced by the Note, or (C) any future amendments, modifications, restatements, renewals, or extensions of any such documents. (b) The Borrower waives notice of Default and opportunity for hearing with respect to a Default under paragraph 11(a). (c) In addition to Defaults under paragraph 11(a), the Secretary may declare the Note in Default if the Secretary makes a final decision in accordance with the provisions of section 111 of the Act and 24 CFR 570.913 (or any successor provisions), including requirements for reasonable notice and opportunity for hearing, that the Borrower has failed to comply substantially with title I of the Act. Notwithstanding any other provision, following the giving of such reasonable notice, the Secretary may, in the Secretary’s sole discretion pending the Secretary’s final decision, withhold the guarantee of any or all obligations not yet guaranteed on behalf of the Borrower under outstanding commitments, suspend approval of any further Advances or Conversion Date Advances under the Note, and/or direct the Borrower's financial institution to: refuse to honor any instruments drawn upon, or withdrawals from, the Guaranteed Loan Funds Account or the Loan Repayment Account initiated by the Borrower, and/or refuse to release obligations and assignments by the Borrower from the Guaranteed Loan Funds Investment Account or the Loan Repayment Investment Account. 12. Remedial Actions. Upon a Default or declaration of Default under this Contract, the Secretary may, in the Secretary’s sole discretion, take any or all of the following remedial actions: (a) With any funds or security pledged under this Contract, the Secretary may: (i) continue to make payments due on the Note, (ii) make a prepayment under Section I.D. of the Note or make an acceleration payment with respect to the principal amount of the Note subject to Optional Redemption as provided in Section III of the Note, (iii) purchase Government Obligations in accordance with paragraph 10 of this Contract, (iv) pay any interest due for late payment as provided in the Note, this Contract, or the Fiscal Agency/Trust Agreements, (v) pay any other obligation of the Borrower under this Contract or the Fiscal Agency/Trust Agreements, and/or (vi) pay any reasonable expenses incurred by the Secretary or the Fiscal Agent/Trustee as result of the Borrower's Default. (b) The Secretary may withhold the guarantee of any or all obligations not yet guaranteed or the disbursement of any or all grants not yet disbursed in full under outstanding guarantee commitments or grant approvals for the Borrower under Sections 108 and/or 106 of the Act. Page 78 of 226 13 (c) The Secretary may withhold approval of any or all further Advances or Conversion Date Advances under the Note (if applicable); direct the Borrower's financial institution to refuse to: honor any instruments drawn upon, or withdrawals from, the Guaranteed Loan Funds Account or the Loan Repayment Account by the Borrower, and/or to release obligations and assignments by the Borrower from the Guaranteed Loan Funds Investment Account or the Loan Repayment Investment Account; and/or direct the Borrower and/or the Borrower’s financial institution to transfer remaining balances from the Guaranteed Loan Funds Account to the Loan Repayment Account. (d) Until the Conversion Date, or with respect to amounts subject to Optional Redemption, the Secretary may accelerate the Note. (e) The Secretary may exercise any other appropriate remedies or sanctions available by law or regulation applicable to the assistance provided under this Contract, or may institute any other action available under law to recover Guaranteed Loan Funds or to reimburse the Secretary for any payment under the Secretary's Guarantee or any reasonable expenses incurred by the Secretary as a result of the Default. (f) All notices and submissions provided for hereunder shall be in writing (including by telex, telecopier or any other form of facsimile communication) and mailed or sent or delivered, as to each party hereto, at its address set forth below or at such other address as shall be designated by such party in a written notice to the other party hereto. All such notices and other communications shall be effective when received as follows: (i) if sent by hand delivery, upon delivery; (ii) if sent by mail, upon the earlier of the date of receipt or five Business Days after deposit in the mail, postage prepaid; (iii) if sent by telex, upon receipt by the sender of an answer back; and (iv) if sent by telecopier, upon receipt. The Secretary: U.S. Dept. of Housing and Urban Development Attention: Paul Webster, Director Financial Management Division 451 7th Street SW, Room 7282 Washington, DC 20410 Borrower: City of Pasco Attention: Michael Morales, Deputy Director Community & Economic Development Department 525 N. 3rd Avenue Pasco, WA 99301 Page 79 of 226 14 13. Limited Liability. Notwithstanding any other provision of this Contract, the Fiscal Agency/Trust Agreements or the Note, any recovery against the Borrower for any liability for amounts due pursuant to the Note, the Fiscal Agency/Trust Agreements or this Contract shall be limited to the sources of security pledged in paragraph 5 or any Special Conditions of this Contract. Neither the general credit nor the taxing power of the Borrower, or of the State in which the Borrower is located, is pledged for any payment due under the Note, the Contract, or the Fiscal Agency/Trust Agreements. 14. Incorporated Grant Agreement. The Contract and the Note are hereby incorporated in and made a part of the Grant Agreement authorized by the Secretary on August 7, 2018 under the Funding Approval for grant number B-18-MC-53-0009 to the Borrower. In carrying out activities with the Guaranteed Loan Funds hereunder, the Borrower agrees to comply with the Act and 24 CFR Part 570, as provided in Subpart M thereof. 15. Special Conditions and Modifications: (a)As provided for in paragraph 5(c) and (d) of this Contract, the Borrower pledges the following security (including insurance and condemnation proceeds therefrom) to secure the repayment of the Note and all other charges authorized in this Contract and in all related future contracts or amendments between Borrower and the Secretary pertaining to the Note: (i)A sole first priority lien in the name of the Secretary on the real property described in Attachment 3 hereof, including all air rights, water rights, and other real property interests (the “Property”); (ii)A collateral assignment to the Secretary of all rights, titles, and interests in and to any leases covering the Property and any rents derived from the Property; (iii)A collateral assignment to the Secretary of all rights, titles, and interests, whether now owned or hereafter acquired, in and to any fixtures located on the Property and any personal property affixed to, installed in, or attached to the Property; and (iv)A collateral assignment to the Secretary of all rights, titles, and interests in and to permits, licenses, agreements, and other intangible personal property rights covering the Property, including but not limited to utility connection rights, or insurance policies held by the Borrower with respect to the Property, whether Page 80 of 226 15 now owned or hereafter acquired, and which are used in connection with the maintenance, use, occupancy or enjoyment of the Property. The Borrower shall pledge and assign this security in one more appropriate instruments (collectively, the “Mortgage, Assignment, Security Agreement, and Fixture Filing”), which shall contain any provisions the Secretary deems necessary. The Borrower shall take all steps necessary to attach, perfect, and maintain the perfection and priority of the Secretary’s lien, assignment, and security interests, including proper recordation and filing and re-filing UCC financing statements. (b)Guaranteed Loan Funds shall be used by the Borrower to carry out the following activities in connection with the Pasco Market Redevelopment Project (the "Project"): (i)Construction of public facilities, pursuant to 24 CFR 570.703(l); (ii)Payment of issuance and other costs pursuant to 24 CFR 570.703(g); and (iii)Payment of fees charged by HUD pursuant to 24 CFR 570.712. (c)Unless otherwise agreed to by the Secretary in writing, the Borrower shall select a financial institution acceptable to the Secretary (the "Custodian") to act as custodian for the documents specified in (d) below (hereinafter referred to as the "Security Documents"). The Borrower and the Custodian shall enter into a written agreement containing such provisions as the Secretary deems necessary. An original of the agreement, signed by the Borrower and the Custodian, shall be submitted by the Borrower to the Secretary with this signed Contract. The Borrower shall consult with the Secretary before amending this agreement with the Custodian for any reason, and amendments shall contain provisions the Secretary deems necessary. The Borrower shall provide the Secretary with original signed amendments within five business days after they are signed. (d)Not later than five business days after receipt by the Borrower of the Guaranteed Loan Funds, or as otherwise agreed to by the Secretary, the Borrower shall deliver to the Custodian, the following: (i)The original recorded Mortgage, Assignment, Page 81 of 226 16 Security Agreement, and Fixture Filing signed by the Borrower as mortgagor and securing repayment of the indebtedness evidenced by the Note, and containing all assignments described in paragraph 15(a) and any other provisions the Secretary deems necessary. (ii)A mortgagee title policy, issued by a company and in a form acceptable to the Secretary, naming the Secretary as the insured party. (iii)A certified survey of the Property with a legal description conforming to the title policy and the Mortgage, Assignment, Security Agreement, and Fixture Filing. (iv)An appraisal of the fee simple ownership interest in the Property specifying an estimate of the fair market value of not less than $4,726,250 ($3,781,000 x 1.25). The appraisal shall be completed by an appraiser who is certified by the state and shall conform to the standards of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA"). (v)Copies of all financing statement filings made by the Borrower pursuant to the Uniform Commercial Code to maintain the Secretary’s security interest in all personal property described in paragraph 15(a). (vi)An opinion of Borrower's counsel on its letterhead, addressed and satisfactory to the Secretary, that the Mortgage, Assignment, Security Agreement, and Fixture Filing, and any financing statements covering other personal property described in paragraph 15(a), are valid and legally binding obligations, enforceable in accordance with their terms, which are properly recorded and together secure all obligations under the Note and this Contract and under any related future contracts or amendments between Borrower and the Secretary pertaining to the Note. (e)Borrower shall deliver to the Custodian all re-filings of UCC financing statements or filings of continuation statements filed to continue the effectiveness of the financing statements made by the Borrower to secure its obligations under the Note and this Contract, within five business days of such filings. (f)Paragraph 12 is amended by adding at the end thereof the following language: Page 82 of 226 17 “(g) The Secretary may exercise any appropriate remedies to enforce the lien on the Property and any collaterally assigned interests in leases, rents, licenses, permits, other agreements, fixtures and other personal property referred to in paragraph 15(a).” (g)If any one or more of the covenants, agreements, provisions, or terms of this Contract shall be for any reason whatsoever held invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions or terms of this Contract and shall in no way affect the validity or enforceability of the other provisions of this Contract or of the Note or the rights of the Holder thereof. (h)Additional Grounds for Default. Notice of Default. Restriction of Pledged Grants. Availability of Other Remedial Actions. (i)The Borrower acknowledges and agrees that the Secretary's guarantee of the Note is made in reliance upon the availability of grants pledged pursuant to paragraph 5(a) (individually, a "Pledged Grant" and, collectively, the "Pledged Grants") in any Federal fiscal year subsequent to the Federal fiscal year ending September 30, 2019 to: (A) pay when due the payments to become due on the Note, or (B) defease (or, if permitted, prepay) the full amount outstanding on the Note. The Borrower further acknowledges and agrees that if the Secretary (in the Secretary's sole discretion) determines that Pledged Grants are unlikely to be available for either of such purposes, such determination shall be a permissible basis for any of the actions specified in paragraphs (ii) and (iii) below (without notice or hearing, which the Borrower expressly waives). (ii) Upon written notice from the Secretary to the Borrower at the address specified in paragraph 12(f) above that the Secretary (in the Secretary's sole discretion) has determined that Pledged Grants are unlikely to be available for either of the purposes specified in (A) and (B) of paragraph (i) above (such notice being hereinafter referred to as the "Notice of Impaired Security"), the Secretary may limit the availability of Pledged Grants by withholding amounts at the time a Pledged Grant is approved or by disapproving payment requests (drawdowns) Page 83 of 226 18 submitted with respect to Pledged Grants. (iv)If after 60 days from the Notice of Impaired Security the Secretary (in the Secretary's sole discretion) determines that Pledged Grants are still unlikely to be available for either of the purposes specified in (A) and (B) of paragraph (i) above, the Secretary may declare the Note in Default and exercise any and all remedies available under paragraph 12. This paragraph (iii) shall not affect the right of the Secretary to declare the Note and/or this Contract in Default pursuant to paragraph 11 and to exercise in connection therewith any and all remedies available under paragraph 12. (v)All notices and submissions provided for hereunder shall be submitted as directed in paragraph 12(f) above. [Rest of Page Intentionally Left Blank] Page 84 of 226 19 THE UNDERSIGNED, as authorized officials on behalf of the Borrower or the Secretary, have executed this Contract for Loan Guarantee Assistance, which shall be effective as of the date of execution hereof on behalf of the Secretary. City of Pasco, Washington BORROWER BY: (Signature) (Name) (Title) (Date) SECRETARY OF HOUSING AND URBAN DEVELOPMENT BY: (Signature) Virginia Sardone (Name) Acting Deputy Assistant Secretary for Grant Programs (Title) (Date) Page 85 of 226 20 Note No. B-18-MC-53-0009 Attachment 1 U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT LETTER AGREEMENT FOR SECTION 108 LOAN GUARANTEE PROGRAM DEPOSIT ACCOUNT Name of Institution (and Branch) Street City, State, Zip Code ************************************************************************ [ ] This account is established for funds received by the Borrower under Note(s) guaranteed by the United States Department of Housing and Urban Development (HUD) under the Section 108 Loan Guarantee Program (Guaranteed Loan Funds Account). [ ] This account is established for repayment of the Note(s) guaranteed by HUD under the Section 108 Loan Guarantee Program (Loan Repayment Account). [ ] This account is established as a debt service reserve under the Section 108 Loan Guarantee Program (Debt Service Reserve Account). You are hereby authorized and requested to establish a deposit account to be specifically designated: "The City of Pasco, Washington ________ , as Trustee of United States Department of Housing and Urban Development." All deposits made into such account shall be subject to withdrawal therefrom by the Borrower named below, unless and until HUD provides you with a notice that it is assuming control over the account. Thereafter withdrawals may not be made by the Borrower. Within a reasonable period of time, not to exceed two business days, after your receipt of such notice from HUD, you shall so prevent such Borrower withdrawals and, if requested by HUD in writing, shall thereafter forward monthly to HUD, to an account it specifies in its notice, the collected and available balance in such account. You are further authorized, after receipt of the notice from HUD, to refuse to honor any instrument drawn upon or withdrawals from such account by parties other than HUD. In no instance shall the funds in the deposit account be used to offset funds which may have been advanced to, or on behalf of, the Borrower by you. You are permitted, however, to debit from Page 86 of 226 21 the account your customary fees and charges for maintaining the account and the amount of any deposits that are made to the account and returned unpaid for any reason. Such account shall also be subject to your standard agreement and documents relating to the opening and maintenance of bank accounts with you. In the event of any conflict between this Letter Agreement and such agreements and documents, this Letter Agreement shall control. This letter is submitted to you in duplicate. Please execute the duplicate copy of the certificate below, acknowledging the existence of such account, so that we may present the copy signed by you to HUD. Name of Borrower: City of Pasco, Washington By: Date: [Signature] Name and Title: ************************************************************************ The undersigned institution certifies to the United States Department of Housing and Urban Development (HUD) that the account identified is in existence in this institution under account number: , and agrees with the Borrower named above and HUD to promptly comply with HUD's notice in the manner provided in the above letter, but in no event to exceed two business days. The undersigned institution further agrees, after receipt of the HUD notice as set forth above, to refuse to honor any instruments drawn upon or withdrawals from such account by parties other than HUD. In no instance shall the funds in the deposit account be used to offset funds which may have been advanced to, or on behalf of, the Borrower by the institution, except as set forth above. Deposits in this institution are insured by the Federal Deposit Insurance Corporation, the Federal Savings and Loan Insurance Corporation, or the National Credit Union Administration up to statutory limits. Name of Institution: By: Date: (Signature) Name and Title: 8-28-08 Page 87 of 226 22 Note No. B-18-MC-53-0009 Attachment 2 U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT LETTER AGREEMENT FOR SECTION 108 LOAN GUARANTEE PROGRAM INVESTMENT ACCOUNT Name of Institution (and Branch) Street City, State, Zip Code ************************************************************************ [ ] This account is established to hold obligations and their assignments, such obligations having been purchased with funds from the Guaranteed Loan Funds Account (Guaranteed Loan Funds Investment Account). [ ] This account is established to hold obligations and their assignments, such obligations having been purchased with funds from the Loan Repayment Account (Loan Repayment Investment Account). [ ] This account is established to hold obligations and their assignments, such obligations having been purchased with funds from the Debt Service Reserve Account (Debt Service Reserve Investment Account). You are hereby authorized and requested to hold obligations and assignments of those obligations in trust for the United States Department of Housing and Urban Development (HUD) in an account specifically designated: "The City of Pasco, Washington , as Trustee of United States Department of Housing and Urban Development." All obligations and assignments shall be subject to release to the Borrower named below, unless and until HUD provides you with a notice that it is assuming control over the account. Thereafter, releases may not be made by the Borrower. Within a reasonable period of time, not to exceed two business days, after your receipt of such notice from HUD, you shall so prevent such Borrower releases and, if requested by HUD in writing, shall thereafter forward monthly to HUD, to an account it specifies in its notice, the collected and available balance in such account. Page 88 of 226 23 You are further authorized, after receipt of the notice from HUD, to refuse to honor any request for release of the obligations and assignments from such account by parties other than HUD. In no instance shall the obligations in this account be used to offset funds which may have been advanced to, or on behalf of, the Borrower by you. You are permitted, however, to debit from the account your customary fees and charges for maintaining the account and the amount of any deposits that are made to the account and returned unpaid for any reason. Such account shall also be subject to your standard agreement and documents relating to the opening and maintenance of bank accounts with you. In the event of any conflict between this Letter Agreement and such agreements and documents, this Letter Agreement shall control. This letter is submitted to you in duplicate. Please execute the duplicate copy of the certificate below, acknowledging the existence of such account, so that we may present the copy signed by you to HUD. Name of Borrower: City of Pasco, Washington ____________ By: Date: [Signature] Name and Title: ************************************************************************ The undersigned institution certifies to the United States Department of Housing and Urban Development (HUD) that the account identified is in existence in this institution under account number: , and agrees with the Borrower named above and HUD to promptly comply with HUD's notice in the manner provided in the above letter, but in no event to exceed two business days. The undersigned institution further agrees, after receipt of the HUD notice as set forth above, to refuse to honor any request for release of the obligations and assignments from such account by parties other than HUD. In no instance shall the obligations in the account be used to offset funds which may have been advanced to, or on behalf of, the Borrower by the financial institution, except as set forth above. Deposits in this institution are insured by the Federal Deposit Insurance Corporation, the Federal Savings and Loan Insurance Corporation, or the National Credit Union Administration up to the statutory limits. Name of Institution: By: Date: (Signature) Name and Title: 8-28-08 Page 89 of 226 24 ATTACHMENT 3 [Description of Real Property] Page 90 of 226 SECTION 108 LOAN NOTE Page 91 of 226 U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT SECTION 108 LOAN GUARANTEE PROGRAM VARIABLE/FIXED RATE NOTE NOTE NUMBER: B-18-MC-53-0009 DATE OF NOTE: _____________________ BORROWER: City of Pasco, Washington [Pasco Market Redevelopment Project] PRINCIPAL DUE DATES AND PRINCIPAL AMOUNT: Before the Conversion Date, the aggregate of Advances made for each applicable Principal Due Date specified in the Commitment Schedule to this Note; on or after the Conversion Date, the Principal Amount (if any) listed for each Principal Due Date in Schedule P & I hereto. MAXIMUM COMMITMENT AMOUNT: $3,781,000 COMMITMENT AMOUNTS: See Commitment Schedule attached hereto. VARIABLE INTEREST RATE: As set forth below. REGISTERED HOLDER: Daedalus & Co As Nominee for Money Market Obligations Trust on behalf of its Government Obligations Fund I. Terms Applicable Before the Conversion Date A. Advances For value received, the undersigned, the City of Pasco (the "Borrower"), which term includes any successors and assigns, a public entity organized and existing under the laws of the State (or Commonwealth as applicable) of Washington, promises to pay to the Registered Holder (the "Holder," which term includes any successors or assigns), at the time, in the manner, and with Page 92 of 226 2 interest at the rate or rates hereinafter provided, such amounts as may be advanced under this Note from time to time by the Holder for disbursement to, or on behalf of, the Borrower (individually, an "Advance", and collectively, "Advances"). The Holder shall make Advances upon the written request of the Borrower and the approval of the Secretary of Housing and Urban Development or his designee (the "Secretary"), pursuant to the Contract for Loan Guarantee Assistance (as further defined in Section IV.A. of this Note, the "Contract"), and the Amended and Restated Master Fiscal Agency Agreement (the "Fiscal Agency Agreement") dated as of May 17, 2000, between The Bank of New York Mellon (successor to The Chase Manhattan Bank and JPMorgan Chase Bank, N.A.), as Fiscal Agent (the "Fiscal Agent"), and the Secretary. The total amount of Advances made for each Principal Due Date under this Note shall not exceed the applicable Commitment Amount for such Principal Due Date set forth on the Commitment Schedule attached hereto. The aggregate of all Advances under this Note for all Principal Due Dates shall not exceed the Maximum Commitment Amount specified on the attached Commitment Schedule. The Fiscal Agent shall record the date and amount of all payments and Advances on this Note and maintain the books and records of all such Advances and Commitment Amounts for each corresponding Principal Due Date, and all payments. No Advances shall be made on this Note after its Conversion Date. As used herein, "Conversion Date" means the date (if any) upon which this Note is (i) delivered by the Holder to the Fiscal Agent against payment therefore by the purchasers selected by the Secretary to make such payment; and (ii) assigned to Bank of New York Mellon (or any successor thereto) acting in its capacity as Trustee (the "Trustee") pursuant to a Trust Agreement between the Secretary and the Trustee, dated as of January 1, 1995, as such agreement may be amended or supplemented (the "Trust Agreement"). Upon the occurrence of both (i) and (ii) in the previous sentence, Section III of this Note applies, thereby converting this Note to a fixed rate obligation. B. Variable Rate of Interest From and including the date of each Advance to but excluding the earlier of (i) the Conversion Date, and (ii) the date of redemption or prepayment of such Advance pursuant to Section I.D. below (each such date of redemption or prepayment, a "Prepayment Date") interest shall be paid quarterly at a variable interest rate (as set forth below) on the unpaid principal balance of each Advance on the first day of each February, May, August and November (each, an "Interim Payment Date"), commencing on the first Interim Payment Date after the initial Advance is made under this Note. Interest also shall be paid on each applicable Conversion Date, Prepayment Date or Principal Due Date. The amount of interest payable on each Interim Payment Date will represent interest accrued during the three-month period ending immediately prior to such Interim Payment Date, or in the case of the first Interim Payment Date following each Advance that is not made on an Interim Payment Date, the period from and including the date of such Advance to but excluding the first Interim Payment Date following such Advance. The amount of interest payable on this Note's Conversion Date, Prepayment Date, or on any Principal Due Date that precedes such Conversion Date will represent interest accrued during the period from the last Interim Payment Date to such Conversion Date, Prepayment Date, or Principal Due Date, respectively. Page 93 of 226 3 The initial variable interest rate for each Advance will be set on the date of such Advance and will be equal to 20 basis points (0.2%) above the Applicable LIBO Rate (as hereinafter defined) and thereafter will be adjusted monthly on the first day of each month (each, a "Reset Date") to a variable interest rate equal to 20 basis points (0.2%) above the Applicable LIBO Rate (such interest rate, as reset from time to time, the "Standard Note Rate"). If the Conversion Date for this Note has not occurred by the March 1 following the initial Advance under this Note, then the terms of Appendix A shall be used to set the variable interest rate. If the Fiscal Agent does not receive notice of either a Negotiated Special Interest Rate or Holder Determined Special Interest Rate (as defined in Appendix A attached hereto) from the Secretary or Holder, respectively, by the times specified in Appendix A to this Note, then the Standard Note Rate shall apply for the period to which such Negotiated Special Interest Rate or Holder Determined Special Interest Rate would otherwise apply. The Fiscal Agent may conclusively rely on any such notice as to the correctness of any matters set forth therein. Appendix A shall be inapplicable to this Note on or after the Conversion Date. "LIBO Rate" for any given Business Day means, except in the case of manifest error, the interest rate per annum published on that day in the Eastern Edition of The Wall Street Journal or any successor publication ("WSJ"), published by Dow Jones & Company, Inc., in the section titled "Money Rates" (or any successor section) and opposite the caption "London Interbank Offered Rates (LIBOR) -- three months" (or any successor caption). If such rate does not appear in WSJ on a given Business Day, for each interest period, the LIBO Rate shall be the interest rate, converted to a bond-equivalent yield basis, for deposits in U.S. dollars for three months which appears on Telerate Page 3750 or such other page as may replace Page 3750 on that service or such other service or services as may be nominated by the British Bankers' Association for the purpose of displaying such rate (together, "Telerate Page 3750") as of 11:00 a.m., London time, on the day (the "Determination Date") that is two London Banking Days preceding the relevant Reset Date or Advance. If such rate does not appear on Telerate Page 3750 on such Determination Date, such rate shall be obtained from the Reuters Screen ISDA Page as of 11:00 a.m., London time, on such Determination Date. If, in turn, such rate does not appear on the Reuters Screen ISDA Page on such Determination Date, the offered quotation from each of four reference banks (expressed as a percentage per annum) as of approximately 11:00 a.m., London time, on such Determination Date for deposits in U.S. dollars to prime banks on the London interbank market for a 3-month period, commencing on the Reset Date or date of such Advance, shall be obtained. If at least two such quotations are provided, the LIBO Rate for such Reset Date or date of such Advance will be the arithmetic mean of the quotations, rounded to five decimal places. If fewer than two such quotations are provided as requested, the LIBO Rate for that Determination Date shall be the rate for the most recent day preceding such Determination Date for which the LIBO Rate shall have been displayed on Telerate Page 3750. The LIBO Rate for any interest period shall be converted to a bond-equivalent yield basis by multiplying such rate by the actual number of days in such interest period and dividing that number by 180. "Applicable LIBO Rate" means: (1) with respect to the initial interest rate for the first Advance hereunder, the LIBO Rate two London Banking Days before the date of such first Page 94 of 226 4 Advance; (2) with respect to the initial interest rate for any subsequent Advance made before the first Reset Date, the interest rate borne by the first Advance; (3) with respect to the initial interest rate for any subsequent Advance made after the first Reset Date, the LIBO Rate two London Banking Days before the immediately preceding Reset Date; and (4) with respect to the subsequent interest rate at any Reset Date for any Advance, the LIBO Rate two London Banking Days before such Reset Date. "London Banking Day" means any day in which dealings in deposits in United States dollars are transacted in the London interbank market. Interest payable on or before the Conversion Date shall be calculated on the basis of a 360-day year and the actual number of days lapsed. C. Principal Amount Prior to the Conversion Date, the aggregate amount of Advances under this Note for each specified Principal Due Date shall be the Principal Amount paid by the Borrower on such Principal Due Date (as assigned to such Advances by the Secretary's instructions to the Fiscal Agent in accordance with the Contract and the Fiscal Agency Agreement), except to the extent such Principal Amount shall have been reduced by redemption before such Principal Due Date as provided below. D. Redemption before Conversion Date At any time on or before the Conversion Date, the Borrower, with the consent of the Secretary, may redeem this Note, in whole or in part, upon fourteen calendar days notice to the Fiscal Agent and the Secretary, at the purchase price of one hundred percent (100%) of the unpaid Principal Amount to be redeemed, plus accrued interest thereon to the date of redemption. Partial redemptions shall be credited against the applicable Principal Amount(s). The related Commitment Amounts and the Maximum Commitment Amount shall be adjusted concurrently with any such redemptions in accordance with the Secretary's instructions to the Fiscal Agent pursuant to the Contract and the Fiscal Agency Agreement. II. Conversion The following events shall occur on the Conversion Date: Page 95 of 226 5 A. Schedule P&I On the Conversion Date all Advances owed by the Borrower under this Note with the same Principal Due Date shall be aggregated into a single Principal Amount which will accrue interest at the fixed rate applicable to such Principal Due Date. Such Principal Amount may be adjusted by the Fiscal Agent in accordance with the following paragraph or paragraph IV.H, as applicable. Whether or not adjusted, each Principal Amount, the fixed rate applicable to each Principal Amount, and the applicable Principal Due Date, shall be listed by the Secretary in Schedule P&I. Schedule P&I will be provided by the Secretary to the Fiscal Agent and attached to this Note by the Fiscal Agent upon the Fiscal Agent's receipt of this Note on the Conversion Date. B. Conversion Date Advances If, on or prior to the Conversion Date, the Borrower has not utilized the entire Commitment Amount indicated on the Commitment Schedule attached hereto for a given Principal Due Date, the Borrower may, in accordance with the Fiscal Agency Agreement and the Contract, and with the approval of the Secretary, utilize such Commitment Amount on the Conversion Date to obtain a Conversion Date Advance. A "Conversion Date Advance" shall mean any amount by which the Secretary instructs the Fiscal Agent to increase a Principal Amount on Schedule P&I for a given Principal Due Date, effective as of the Conversion Date of this Note. Conversion Date Advances shall be funded by the sale of this Note to the purchaser selected by the Secretary. The proceeds of a Conversion Date Advance (net of any applicable fees) shall be distributed to or on behalf of the Borrower on the Conversion Date. The total amount of Conversion Date Advances hereunder shall not exceed the sum of any unused Commitment Amounts for all Principal Due Dates. III. Terms Applicable Upon Conversion The following terms shall apply to this Note from the Conversion Date (if any) until this Note is canceled, or matured and paid in full: Commencing on the Conversion Date, the Borrower promises to pay to the Holder on the applicable Principal Due Date each Principal Amount set forth on the attached Schedule P&I, together with interest on each such Principal Amount at the rate applicable thereto specified on the Schedule P&I. Interest shall be calculated and payments shall be made in the manner set forth below. Interest on each scheduled Principal Amount of this Note due as of a given date specified on Schedule P&I hereto shall accrue at the related per annum rate specified on Schedule P&I from (and including) the Conversion Date to (but excluding) such Principal Due Date or, if applicable, to the applicable Interest Due Date on which an Optional Redemption (as defined below) occurs. Each interest amount accrued on each unpaid Principal Amount of this Note shall be due semiannually as of February 1 and August 1 of each year (each such February 1 and August 1, an "Interest Due Date") commencing on the first such date after the Conversion Date, Page 96 of 226 6 until each Principal Amount listed on Schedule P&I to this Note is paid in full. Interest shall be calculated on the basis of a 360-day year consisting of twelve 30-day months. Certain Principal Amounts that are indicated as being eligible for Optional Redemption on Schedule P&I may be paid, in whole or in part, at the option of the Borrower as of any Interest Due Date on or after the date specified in such schedule (an "Optional Redemption"). In order to elect an Optional Redemption of such a Principal Amount, the Borrower shall give notice of its intention to prepay a Principal Amount to the Trustee and the Secretary not less than 60 days and not more than 90 days prior to the Interest Due Date as of which the Borrower intends to prepay the Principal Amount. The Trustee shall apply any payments received in respect of Optional Redemptions in accordance with written instructions of the Borrower, as approved by the Secretary. Principal Amounts that are not indicated as being eligible for Optional Redemption on Schedule P&I may not be prepaid. IV. General Terms A. Additional Definitions For purposes of this Note, the following terms shall be defined as follows: "Business Day" shall mean a day on which banking institutions in New York City are not required or authorized to remain closed and on which the Federal Reserve Bank and the New York Stock Exchange are not closed. If any payment (including a payment by the Secretary) is required to be made on a day that is not a Business Day, then payment shall be made on the next Business Day. "Contract" shall mean the Contract for Loan Guarantee Assistance, and any amendments thereto, among the Secretary and the Borrower, the designated public entity named therein (if applicable), and the State named therein (if applicable), that refers to and incorporates this Note by the number hereof. "Principal Amount" shall mean: (i) before the Conversion Date for this Note, the aggregate amount of Advances made for each Principal Due Date specified in the Commitment Schedule attached to this Note, less the amount of any redemptions pursuant to Section I.D. hereof, and any principal repayment; and (ii) on or after the Conversion Date, the principal amount (if any) stated for each Principal Due Date in Schedule P&I attached hereto, less the amount of any principal repayment and any Optional Redemptions made pursuant to Section III hereof and the Trust Agreement. Page 97 of 226 7 B. Timely Payment to Fiscal Agent or Trustee Notwithstanding anything contained in Section I, Section II, or Section III, the Borrower, in accordance with the Contract, shall be required to make all payments of interest and principal, including any Optional Redemption payment, directly to the Fiscal Agent or the Trustee (as applicable) on the seventh Business Day prior to the appropriate Interim Payment Date, Interest Due Date, Principal Due Date, Prepayment Date, or date of Optional Redemption, as applicable. C. Interest on Late Payments If a payment of principal or interest herein provided for shall not be made by either (i) 2:30 p.m. on an Interest Due Date or Principal Due Date; or (ii) 2:30 p.m. on the second Business Day (as herein defined) next succeeding an Interim Payment Date, then interest shall accrue on the amount of such payment at the then applicable interest rate or rates payable on this Note, from the relevant due date, as the case may be, until the date such payment is made. Nothing in the immediately preceding sentence shall be construed as permitting or implying that the Borrower may, without the written consent of the Holder and the Secretary, modify, extend, alter or affect in any manner whatsoever the right of the Holder timely to receive any and all payments of principal and interest specified in this Note. D. Applicability of Fiscal Agency Agreement or Trust Agreement Prior to the Conversion Date, this Note and Advances and payments made hereunder shall be administered pursuant to the terms of the Fiscal Agency Agreement and are subject to such agreement. On or after the Conversion Date, this Note and Advances and payments made hereunder shall be administered pursuant to the Trust Agreement and are subject to such agreement. The terms and provisions of the Fiscal Agency Agreement or the Trust Agreement, insofar as they affect the rights, duties and obligations of the Holder and/or the Borrower, are hereby incorporated herein and form a part of this Note. The Borrower hereby agrees to be bound by all obligations of the Borrower to the Fiscal Agent set forth in the Fiscal Agency Agreement. Capitalized terms not defined in this Note shall have the meanings ascribed to them in the Fiscal Agency Agreement or Trust Agreement, as applicable. The Fiscal Agency Agreement provides for the Fiscal Agent to perform certain duties, including the duties of (i) paying agent and calculation agent for this Note until its Conversion Date, and (ii) registrar for this Note until this Note is canceled or a new registrar appointed, each in accordance with the Fiscal Agency Agreement. The Trust Agreement provides for the Trustee to perform certain duties, including the duties of collection agent for this Note after its Conversion Date until a new Trustee is appointed in accordance with the Trust Agreement. This Note may be surrendered to the Fiscal Agent for registration of transfer or exchange, as provided in the Fiscal Agency Agreement. The Fiscal Agent and Trustee each shall permit reasonable inspection to be made of a copy of the Fiscal Agency Agreement or Trust Agreement kept on file at its respective corporate trust office. Neither the Fiscal Agency Agreement nor the Trust Agreement shall change the Borrower's payment obligations under this Note. Page 98 of 226 8 E. Applicability of Contract and Secretary's Guarantee This Note evidences indebtedness incurred pursuant to and in accordance with the Contract and pursuant to Section 108 of Title I of the Housing and Community Development Act of 1974, as amended (42 U.S.C. § 5308) (the "HCD Act"). This Note is subject to the terms and provisions of the Contract, to which Contract reference is hereby made for a statement of said terms and provisions and for a description of the collateral security for this Note. The payment of principal on the applicable Principal Due Dates and interest on the applicable Interim Payment Dates or Interest Due Dates under this Note is unconditionally guaranteed by the Secretary to the Holder through a guarantee (the "Guarantee"). Execution of the Secretary's Guarantee is required before this Note is effective, and such Guarantee shall be issued pursuant to and in accordance with the terms of the Contract and Section 108 of the HCD Act. F. Default A default under this Note shall occur upon failure by the Borrower to pay principal or interest on this Note when due hereunder. If a Borrower defaults on the payment of any interest or Principal Amounts when due, or if the Secretary gives notice of a final decision to declare the Borrower in default pursuant to the following paragraph of this Section IV.F, the Secretary may, but is not obligated to, make on any date on or prior to the Conversion Date with fourteen calendar days prior notice to the Fiscal Agent, or on the seventh Business Day preceding any Interest Due Date on or after the first permissible Optional Redemption date with seven Business Days prior notice to the Trustee, an acceleration payment to the Fiscal Agent or the Trustee, as applicable, equal to the unpaid Aggregate Principal Amount of the Note, together with accrued and unpaid interest thereon to such acceleration payment date or Interest Due Date, as applicable. In the event that any such acceleration payment is made from sources other than funds pledged by the Borrower as security under the Contract (or other Borrower funds), the amounts paid on behalf of the Borrower shall be deemed to be immediately due and payable to the Secretary. Nothing in this paragraph shall be construed as permitting or implying that the Borrower may, without the written consent of the Holder and the Secretary, modify, extend, alter or affect in any manner whatsoever the right of the Holder timely to receive any and all payments of principal and interest specified in this Note. In addition, the Secretary may declare the Borrower in default under this Note if the Secretary makes a final decision in accordance with the provisions of 24 C.F.R. § 570.913 (or any successor regulation thereof), including requirements for reasonable notice and opportunity for hearing, that the Borrower has failed to comply substantially with Title I of the HCD Act. Following the giving of such reasonable notice, the Secretary may take the remedial actions specified as available in the relevant provisions of the Contract pending the Secretary's final decision. Page 99 of 226 9 G. Holder's Reliance on Guarantee Following a default by the Borrower under the terms of this Note, the Holder agrees to rely wholly and exclusively for repayment of this Note upon the Guarantee. The enforcement of any instruments or agreements securing or otherwise related to this Note shall be the sole responsibility of the Secretary, and the Holder shall not be responsible for the preparation, contents or administration of such instruments and agreements, or for any actions taken in connection with such instruments and agreement. The Holder, to the extent it is legally able to do so, shall bind or cause to be bound its successors and assigns to all limitations imposed upon the Holder by this Note. H. Amendment This Note may only be amended with the prior written consent of the Secretary and the Borrower. No such amendment shall reduce, without the prior written consent of the Holder of this Note, in any manner the amount of, or delay the timing of, payments required to be received on this Note by the Holder, Fiscal Agent or Trustee, including Guarantee Payments; provided that prior to the Conversion Date, the Commitment Amounts on the Commitment Schedule attached hereto, and the Principal Amounts due on the corresponding Principal Due Dates may be rescheduled pursuant to written instructions given to the Fiscal Agent by the Secretary with the written agreement of the Borrower and the Secretary absent the consent of the Holder. I. Waivers The Borrower hereby waives any requirement for presentment, protest or other demand or notice with respect to this Note. The Borrower hereby waives notice of default and opportunity for hearing for any failure to make a payment when due. J. Delivery and Effective Date This Note is deemed issued, executed, and delivered on behalf of the Borrower by its authorized official as an obligation guaranteed by the Secretary pursuant to Section 108 of the HCD Act, effective as of the date of the Secretary's Guarantee. V. Borrower-Specific Provisions [This space intentionally left blank] Page 100 of 226 10 THE UNDERSIGNED, as an authorized official of the Borrower, has executed and delivered this Note. City of Pasco, Washington BORROWER By: (Signature) (Name) (Title) Page 101 of 226 11 ASSIGNMENT AND TRANSFER For value received, the undersigned assigns and transfers this Note to __________________________________________________________________________ (Name and Address of Assignee) __________________________________________________________________________ __________________________________________________________________________ (Social Security or Other Identifying Number of Assignee) and irrevocably appoints ______________________________________________________ attorney-in-fact to transfer it on the books kept for registration of the Note, with full power of substitution. Dated: _________________________ Note: The signature to this assignment must correspond with the name as written on the face of the Note without alteration or enlargement or other change. Signature Guaranteed: _______________________________ Qualified Financial Institution By: ___________________________ Authorized Signature [This page to be completed by the Fiscal Agent for transfer of the Note by the Holder as of the Conversion Date pursuant to the last paragraph of Section I.A. of this Note.] Page 102 of 226 APPENDIX A Special Pre-Conversion Interest Rates. (a) The Holder and the Secretary contemplate that the majority of the outstanding Variable/Fixed Rate Notes will be purchased by underwriters selected by the Secretary for sale in public offerings to occur each year. If a public offering including this Note has not occurred by each March 1 following the initial Advance under this Note, the Secretary shall, upon request, advise the Holder as to when a public offering including this Note is expected to occur, and the Holder and the Secretary agree to consult with each other as to what the interest rate on this Note will be after May 1 of that year if a public offering has not occurred by such May 1. The Holder shall notify the Secretary if such consultation has not occurred by April 1 of that year. If no public offering including this Note has occurred on or before such May 1, the applicable interest rate on this Note from such May 1 shall be the rate (if any) negotiated and agreed upon by the Secretary and the Holder. Such rate may be the Standard Note Rate or some other rate agreed upon by the Holder and the Secretary at least two Business Days before such May 1 (such other rate, the "Negotiated Special Interest Rate"). The Secretary shall notify the Fiscal Agent and the Holder in writing of any Negotiated Special Interest Rate within two Business Days of the determination thereof. (b) If the Secretary and the Holder do not, by the April 15th preceding such May 1, negotiate and agree under Section (a) of this Appendix on an interest rate applicable to this Note, then the Holder may, on or before the April 20th preceding such May 1, give written notice to the Secretary of its intent to change the interest rate on this Note and, if such notice was given during such period, the Holder may, on such May 1, unilaterally determine (subject to the terms of this paragraph) the interest rate that this Note will bear (such rate, the "Holder Determined Interest Rate") from and including such May 1 to but excluding the earliest of: (i) the Conversion Date; (ii) the date that this Note is purchased by a new Holder (as described in Section (c) below) or (iii) a Monthly Special Reset Date (as defined below). Interest from and including such May 1 to but excluding the Public Offering Date shall be paid on the unpaid principal balance of all outstanding Advances under this Note at the rate(s) to be determined by the Holder which, based upon then prevailing market conditions and taking into account all the circumstances, will enable the Holder to sell this Note at one hundred percent (100%) of the aggregate amount of all Advances hereunder prior to the date of such sale. Such interest rate shall be determined as of such May 1 and shall be determined again on the foregoing basis on the first of each month thereafter (the first of each month after such May 1, a "Monthly Special Reset Date"). The Holder shall notify the Fiscal Agent and the Secretary in writing within two Business Days following such dates of the determination of the Holder Page 103 of 226 2 Determined Interest Rate and each applicable interest rate determined on a Monthly Special Reset Date. (c) If the Secretary and the Holder have failed to agree upon an interest rate pursuant to Section (a) of this Appendix A, the Secretary, upon seven calendar days notice to the Holder, may arrange for the purchase of this Note in full by another entity on the following May 1 or any Business Day thereafter. If such a purchase occurs, the Holder shall sell and assign this Note to the purchaser thereof without recourse to the Holder and deliver this Note and its Guarantee to the Fiscal Agent for registration in the name of the purchaser thereof in accordance with the Secretary's written instructions. The purchase price for this Note shall be 100% of the aggregate amount of all Advances owing hereunder plus accrued interest to the date of purchase. Payment to the Holder of the purchase price for this Note shall be made by the purchaser thereof in Federal funds at the offices of the Holder, or at such other place as shall be agreed upon by the Holder and the Secretary, at 10:00 a.m., New York time, on the date of purchase. After such purchase date this Note shall bear a rate of interest negotiated between the Secretary and the new interim Holder (the "New Purchaser Special Interest Rate"). The Secretary shall notify the Fiscal Agent and the new purchaser in writing of any New Purchaser Special Interest Rate within two Business Days following the date of determination thereof. (d) Notwithstanding Sections (a) through (c) (inclusive) of this Appendix, no Borrower is obligated to pay interest at a variable rate exceeding the maximum rate permitted by generally applicable law of the Borrower's state (such rate, the "Maximum Rate"). If the Borrower receives notice of a variable interest payment that exceeds the Maximum Rate, then the Borrower shall timely pay such amount as does not exceed the Maximum Rate, and concurrently shall notify the Secretary and the Fiscal Agent of the reason for any interest non-payment. Page 104 of 226 COMMITMENT SCHEDULE Note No. B-18-MC-53-0009 Principal Due Date Commitment Amount August 1, 2020 $190,000 August 1, 2021 190,000 August 1, 2022 190,000 August 1, 2023 190,000 August 1, 2024 190,000 August 1, 2025 190,000 August 1, 2026 190,000 August 1, 2027 190,000 August 1, 2028 190,000 August 1, 2029 190,000 August 1, 2030 190,000 August 1, 2031 190,000 August 1, 2032 190,000 August 1, 2033 190,000 August 1, 2034 190,000 August 1, 2035 190,000 August 1, 2036 190,000 August 1, 2037 190,000 August 1, 2038 190,000 August 1, 2039 171,000 Maximum Commitment Amount =$3,781,000 Page 105 of 226 SCHEDULE P&I* Note No. B-18-MC-53-0009 Principal Amount Principal Due Date Interest Rate** Optional Redemption Available YES NO August 1, 2020 X August 1, 2021 X August 1, 2022 X August 1, 2023 X August 1, 2024 X August 1, 2025 X August 1, 2026 X August 1, 2027 X August 1, 2028 X August 1, 2029 X August 1, 2030 X August 1, 2031 X August 1, 2032 X August 1, 2033 X August 1, 2034 X August 1, 2035 X August 1, 2036 X August 1, 2037 X August 1, 2038 X August 1, 2039 X $ = Aggregate Principal Amount Principal Amounts due on or after August 1, 2030, may be redeemed, subject to the terms contained herein and in the Trust Agreement, on any Interest Due Date on or after August 1, 2029. *This schedule will not be completed when initially executed and delivered by the Borrower for Guarantee for interim, variable-rate financing. It will be completed when assigned by the Holder at the request of the Borrower for conversion to Fixed Rates on the Conversion Date. The first date shown above on which Optional Redemption is available is expected to be the same when this schedule is completed, if the Borrower participates in the initial Section 108 public offering after receiving an interim financing Advance hereunder. If the Borrower participates in a later public offering, the first date on which Optional Redemption is available is expected to be correspondingly later. ** The fixed rate applicable to each Principal Amount shall be listed by the Secretary. Page 106 of 226 COLLATERAL MORTGAGE CONTRACT Page 107 of 226 1 FILED FOR RECORD AT REQUEST OF: Donald A. Boyd Hummer Boyd, PLLC 6 South 2nd Street, Suite 1016 Yakima, WA 98901 MORTGAGE Grantor(s): 1. CITY OF PASCO, a Washington municipal corporation. Grantee(s): 1. U.S. Department of Housing and Urban Development, a governmental entity of the United States of America. Legal Description: 1. The SE 1/4, Sec. 11, Twn. 9 N, R. 30 E.W.M., Franklin County, WA. 2. Additional [full] legal description on page 1 of document. Assessor's Property Tax Parcel Number(s): 113160017 ***************************************************************** MORTGAGOR: CITY OF PASCO, a Washington municipal corporation. MORTGAGEE: U.S. Department of Housing and Urban Development, a governmental entity of the United States of America. MORTGAGE: Mortgagor hereby mortgages to Mortgagee, to secure the payment and performance of the secured obligation described below, the following described real property situate in the County of Yakima, State of Washington, to-wit: The SE 1/4, Section 11, Township 9 North, Range 30 East, W.M., Franklin County, WA. SECURED OBLIGATION: This Mortgage is given to secure the payment and performance of that certain Promissory Note executed contemporaneously herewith and numbered B-18-MC-53-0009 [Pasco Market Redevelopment Project], in the Page 108 of 226 2 Maximum Commitment Amount of $ 3,781,000.00, and any amended note or note issued in substitution for such note and having the same note number (the "Note"), including interest thereon. GENERAL TERMS OF MORTGAGE: 1. Mortgagor covenants that she is lawfully seized of the property in fee simple and has good right to mortgage and convey it. 2. This Mortgage not only covers the real property described above, but also all improvements and appurtenances thereto, including all water, water rights, shares of water stock or water memberships appertaining thereto. 3. Mortgagor agrees to pay before delinquency all taxes, special assessments, and other public charges levied, assessed or charged against the mortgaged. 4. Should Mortgagor default in any of the foregoing agreements or covenants, then Mortgagee may perform the same and may pay any part or all of the principal and interest of any charges against the property, and any amount so paid, with interest thereon at the highest legal rate from date of payment, shall be repayable by Mortgagor on demand, and shall also be secured by this Mortgage without waiver of any right or other remedy arising from the breach of the agreements or covenants. 5. In the event of the sale of all or any part of Mortgagor's interest in the mortgaged property, whether voluntarily or involuntarily, or by operation of law, Mortgagee may, at its option, treat such transfers a default by Mortgagor and may resort to the remedies as provided for in this Mortgage or as provided for by law. 6. In the event of default by Mortgagor with respect to any of the obligations secured hereby, Mortgagee shall have, in addition to all other remedies and rights at law or in equity, the following rights and remedies: (a) to declare any and all indebtedness secured by this Mortgage to be immediately due and payable; (b) to apply for, with or without notice to Mortgagor upon filing, a suit to enforce or preserve its rights under this Mortgage; (c) to cause the foreclosure of this Mortgage as a Mortgage under the real property or personal property laws of this state; and (d) all other rights and remedies as provided for in this Mortgage. Page 109 of 226 3 7. All rights and remedies of Mortgagee provided for in this Mortgage are intended to be cumulative and not in substitution for any other right or remedy otherwise available to Mortgagee. 8. Mortgagor agrees to pay to Mortgagee any and all costs and expenses, including attorney's fees, incurred or paid by Mortgagee in protecting or enforcing its rights under the terms of this Mortgage, whether or not a lawsuit is commenced. "Attorney's fees" shall include services rendered before trial, at trial, and on appeal, as well as services rendered subsequent to judgment and obtaining execution thereof. The award of such fees, costs, and expenses shall bear interest at the highest lawful rate until paid in full. DATED this day of , 2020. CITY OF PASCO, a Washington By: ___________________________________ Title: _________________________________ STATE OF WASHINGTON ) ) ss: County of Franklin ) I certify that I know or have satisfactory evidence that personally appeared before me and signed this instrument and acknowledged it as the of the CITY OF PASCO, a Washington, a Washington municipal corporation, to be the free and voluntary act for the uses and purposes of said company mentioned in the instrument. DATED: , 2020. NOTARY PUBLIC in and for the State of Washington Residing at: My Commission Expires: Page 110 of 226 1 FILED FOR RECORD AT REQUEST OF: Donald A. Boyd Hummer Boyd, PLLC 6 South 2nd Street, Suite 1016 Yakima, WA 98901 MORTGAGE Grantor(s): 1. CITY OF PASCO, a Washington municipal corporation. Grantee(s): 1. U.S. Department of Housing and Urban Development, a governmental entity of the United States of America. Legal Description: 1. The SE 1/4, Sec. 11, Twn. 9 N, R. 30 E.W.M., Franklin County, WA. 2. Additional [full] legal description on page 1 of document. Assessor's Property Tax Parcel Number(s): 113160017 ***************************************************************** MORTGAGOR: CITY OF PASCO, a Washington municipal corporation. MORTGAGEE: U.S. Department of Housing and Urban Development, a governmental entity of the United States of America. MORTGAGE: Mortgagor hereby mortgages to Mortgagee, to secure the payment and performance of the secured obligation described below, the following described real property situate in the County of Yakima, State of Washington, to-wit: The SE 1/4, Section 11, Township 9 North, Range 30 East, W.M., Franklin County, WA. SECURED OBLIGATION: This Mortgage is given to secure the payment and performance of that certain Promissory Note executed contemporaneously herewith and numbered B-18-MC-53-0009 [Pasco Market Redevelopment Project], in the Page 111 of 226 2 Maximum Commitment Amount of $ 3,781,000.00, and any amended note or note issued in substitution for such note and having the same note number (the "Note"), including interest thereon. GENERAL TERMS OF MORTGAGE: 1. Mortgagor covenants that she is lawfully seized of the property in fee simple and has good right to mortgage and convey it. 2. This Mortgage not only covers the real property described above, but also all improvements and appurtenances thereto, including all water, water rights, shares of water stock or water memberships appertaining thereto. 3. Mortgagor agrees to pay before delinquency all taxes, special assessments, and other public charges levied, assessed or charged against the mortgaged. 4. Should Mortgagor default in any of the foregoing agreements or covenants, then Mortgagee may perform the same and may pay any part or all of the principal and interest of any charges against the property, and any amount so paid, with interest thereon at the highest legal rate from date of payment, shall be repayable by Mortgagor on demand, and shall also be secured by this Mortgage without waiver of any right or other remedy arising from the breach of the agreements or covenants. 5. In the event of the sale of all or any part of Mortgagor's interest in the mortgaged property, whether voluntarily or involuntarily, or by operation of law, Mortgagee may, at its option, treat such transfers a default by Mortgagor and may resort to the remedies as provided for in this Mortgage or as provided for by law. 6. In the event of default by Mortgagor with respect to any of the obligations secured hereby, Mortgagee shall have, in addition to all other remedies and rights at law or in equity, the following rights and remedies: (a) to declare any and all indebtedness secured by this Mortgage to be immediately due and payable; (b) to apply for, with or without notice to Mortgagor upon filing, a suit to enforce or preserve its rights under this Mortgage; (c) to cause the foreclosure of this Mortgage as a Mortgage under the real property or personal property laws of this state; and (d) all other rights and remedies as provided for in this Mortgage. Page 112 of 226 3 7. All rights and remedies of Mortgagee provided for in this Mortgage are intended to be cumulative and not in substitution for any other right or remedy otherwise available to Mortgagee. 8. Mortgagor agrees to pay to Mortgagee any and all costs and expenses, including attorney's fees, incurred or paid by Mortgagee in protecting or enforcing its rights under the terms of this Mortgage, whether or not a lawsuit is commenced. "Attorney's fees" shall include services rendered before trial, at trial, and on appeal, as well as services rendered subsequent to judgment and obtaining execution thereof. The award of such fees, costs, and expenses shall bear interest at the highest lawful rate until paid in full. DATED this day of , 2020. CITY OF PASCO, a Washington By: ___________________________________ Title: _________________________________ STATE OF WASHINGTON ) ) ss: County of Franklin ) I certify that I know or have satisfactory evidence that personally appeared before me and signed this instrument and acknowledged it as the of the CITY OF PASCO, a Washington, a Washington municipal corporation, to be the free and voluntary act for the uses and purposes of said company mentioned in the instrument. DATED: , 2020. NOTARY PUBLIC in and for the State of Washington Residing at: My Commission Expires: Page 113 of 226 CUSTODIAL AGREEMENT Page 114 of 226 SECTION 108 GUARANTEED LOAN CUSTODIAL AGREEMENT THIS AGREEMENT dated as of this ___ day of , 20 , by and between the , a organized and existing under the laws of the State (or Commonwealth as applicable) of , and having an office for the conduct of business at (“Borrower”), and ______________________________, a _____________________ organized and existing under the laws of ______________________________, and having an office for the conduct of business at __________________________________________________ (“Custodian”), WITNESSETH: WHEREAS, the Borrower will enter into a Contract for Loan Guarantee Assistance Under Section 108 of the Housing and Community Development Act of 1974, as amended, 42 U.S.C. §5308 (“Section 108 Contract”) with the Secretary of Housing and Urban Development (“HUD”) under the authority of section 108 of title I of the Housing and Community Development Act of 1974, as amended (the “Act”); and WHEREAS, the Custodian is a _______________________ institution regulated by the _________________________________________________; and WHEREAS, the parties to this agreement desire to set forth the terms and conditions for the deposit and custodianship of the documents evidencing and relating to the loan to be originated under section 108 of the Act, and 24 CFR part 570, subpart M; and WHEREAS, HUD will guarantee one or more promissory notes issued by the Borrower and numbered _______________ that together do not exceed the principal amount of $_____________ (the “Section 108 Guaranteed Note”). NOW THEREFORE, in consideration of the mutual undertakings expressed in this agreement, the parties agree as follows: 1. The Borrower shall from time to time deliver for deposit with the Custodian certain Security Documents as required under the Section 108 Contract (collectively the “Security Documents”). For each such delivery, the Borrower shall furnish the Custodian with a listing of the Security Documents to be deposited, which listing shall be in the form set forth in the attached Security Document List & Custodial Receipt (the “Receipt” or “Receipt(s)”). In receiving Security Documents, and in maintaining any listing or providing any report or communication with respect to the Security Documents, the Custodian shall be required only to review the face of each document received to determine whether it appears regular on its face, appears to relate to the Section 108 Guaranteed Note, and appears to be a Security Document identified in the Receipt. The Custodian shall complete the Receipt(s) by inserting the date received next to each delivered Security Document. Once signed by the Custodian, the Receipt(s) shall document the Custodian’s receipt(s) of the Security Documents required by the Section 108 Contract to be Page 115 of 226 2 deposited with the Custodian. The Custodian shall maintain each original Receipt together with the Security Documents it identifies, in accordance with the storage requirements in paragraph 3. 2. Borrower’s delivery of the Security Documents will be acknowledged by the Custodian through execution and electronic delivery of a copy of the Receipt(s) to HUD at 108Reports@hud.gov. The Custodian shall also provide copies of Receipt(s) to the Borrower. By its delivery of the Security Documents and Receipt(s) to the Custodian, the Borrower certifies to the Custodian that each Security Document listed in that Receipt is in form and substance acceptable to HUD, as required by the Section 108 Contract. Except for Custodian’s obligations under this paragraph and paragraph 1 and 2 of this Agreement, the Custodian shall not otherwise be under any duty to review, inspect, examine or certify the Security Documents; and without limiting the foregoing, the Custodian shall be entitled to assume the genuineness of each such document and the genuineness and due authority of any signatures appearing thereon, and shall be entitled to assume that each such document is what it purports to be. The Custodian shall have no liability for or obligation with respect to, and shall not be construed or obliged to make any representation or warranty as to: (i) the validity, sufficiency, marketability, genuineness, value, contents or enforceability of any Security Document; (ii) the validity, adequacy or perfection of any lien upon or security interest purported to be evidenced or created thereby; or (iii) to determine that the contents of any Security Document are appropriate for the represented purpose or that any Security Document has actually been recorded or filed, as maybe applicable, or that any Security Document is other than what it purports on its face to be. 3. The Custodian shall segregate and maintain continuous custody and control of all Security Documents on behalf of HUD until the Section 108 Guaranteed Note is paid in full. The Custodian shall hold the Security Documents in secure and fireproof facilities in accordance with customary standards for such storage. The Custodian shall only rely on information pertaining to the payment of the Section 108 Guaranteed Note that is received from or confirmed by the Director of the Financial Management Division of HUD in Washington, DC (“FMD Director”), or another HUD official as may be authorized by HUD in writing (“Other HUD Designee”). 4. At any reasonable time, the Custodian shall make all Security Documents available for examination and audit by representative of the Borrower or HUD. 5. (A) Upon notification to the Custodian by the FMD Director or Other HUD Designee that a default has occurred under the Section 108 Contract, the Custodian shall comply with any request HUD shall make for the delivery to HUD of all Security Documents, and within five business days of any such request by HUD, shall send the Security Documents via courier service to the address identified in paragraph 6 and contemporaneously provide HUD with the tracking information for the package containing the Security Documents. (B) If, following HUD’s notification to Custodian of Borrower’s default under the Section 108 Contract, HUD elects to assume or transfer the duties and obligations of the Borrower and elects to continue the custodial relationship, the Custodian agrees to continue its obligations herein for HUD for a reasonable period, not to exceed 90 days, on the same terms and conditions as set forth in this agreement until it receives instructions for disposition of the Security Documents from the FMD Director or Other HUD Designee, provided, however, that in no event Page 116 of 226 3 shall HUD be obligated to pay compensation or a fee for the holding or release of any Security Documents during such reasonable period. If, however, HUD elects to terminate this agreement, Custodian shall comply with the provisions of this election by HUD. 6. Except for termination or cancellation of this Agreement pursuant to paragraph 5, if during the term of the Section 108 Guaranteed Note the Custodian’s duties under this Agreement are discharged or this Agreement is terminated or cancelled, Custodian may release Security Documents to Borrower or to a successor custodian designated in writing by HUD upon presentation by the Borrower of written approval of the FMD Director or Other HUD Designee for the release of Security Documents to the Borrower. Provided, however, if no written approval is presented, the Custodian shall return to all Security Documents to HUD within 5 business days at the following address: Attention: Paul Webster, Director Financial Management Division U.S. Department of Housing and Urban Development 451 7th Street SW – Room 7180 Washington, DC 20410 7. Consideration for services to be performed by the Custodian under this agreement shall be: [INSERT AMOUNT OR IF NECESSARY, INCORPORATE FEE SCHEDULE AS AN ATTACHMENT TO THIS AGREEMENT]. 8. This Agreement confers rights and remedies upon HUD, and HUD shall be an intended third-party beneficiary of this Agreement. The parties may not amend or terminate this Agreement without the prior written consent of HUD provided, however, that the Custodian may at any time resign under this Agreement by giving not less than sixty (60) days advance written notice thereof to the Borrower and HUD. Prior to the effective date of the resignation, the Borrower shall give written instruction to the Custodian designating a successor Custodian, if applicable. 9. The Custodian shall be entitled to rely on any written instructions or certifications delivered to the Custodian by the Borrower or HUD pursuant to this Agreement, in each case without any independent verification or investigation of the matters set forth therein. 10. Custodian shall not be liable to anyone for anything which it may do or refrain from doing in connection with this agreement, unless such action constitutes negligence in accordance with customary standards for document storage, gross negligence, willful misconduct, or bad faith on its part. 11. To the extent permitted by applicable law, the Borrower shall indemnify the Custodian and any director, officer, agent or employee of the Custodian from all liability, obligations, losses, claims, damages, actions, suits, proceedings, costs and expenses, including reasonable attorneys’ fees, arising out of, connected with, or resulting, directly or indirectly, from the execution, delivery and performance of this Agreement. Page 117 of 226 4 12. The Custodian shall be without liability to the Borrower for any damage or loss resulting from or caused by events or circumstances beyond the Custodian’s reasonable control including nationalization, expropriation, currency restrictions, the interruption, disruption or suspension of the normal procedures and practices of any securities market, power, mechanical, communications or other technological failures or interruptions, computer viruses or the like, fires, floods, earthquakes or other natural disasters, civil and military disturbance, acts of war or terrorism, riots, revolution, acts of God, work stoppages, strikes, national disasters of any kind, or other similar events or acts; errors by any party in its instructions to the Custodian; or changes in applicable law, regulation or orders. 13. This Agreement may be executed in any number of counterparts and all counterparts taken together shall constitute one and the same instrument. The exchange of copies of this Agreement and of signature pages by facsimile transmission or pdf shall constitute effective execution and delivery of this Agreement as to the parties and may be used in lieu of the original Agreement for all purposes. Signatures of the parties transmitted by facsimile or pdf shall be deemed to be their original signatures for all purposes. 14. The terms of this Agreement are hereby declared to be severable, such that if any term hereof is determined to be invalid or unenforceable, such determination shall not affect the remaining terms. 15. The covenants and agreements set forth herein shall be binding upon and inure to the benefit of each of the parties and their respective successors and permitted assigns. No party shall be permitted to assign their rights under this Agreement without the written consent of the parties and the FMD Director or Other HUD Designee, except that any corporation or association into which the Custodian may be merged or converted or with which it may be consolidated, or any corporation or association resulting from any merger, conversion or consolidation to which the Custodian shall be a party, or any corporation or association to which the Custodian transfers all or substantially all of its corporate trust business, shall be the successor of the Custodian hereunder, and shall succeed to all of the rights, powers and duties of the Custodian hereunder, without the execution or filing of any paper or any further act on the part of any of the parties hereto. 16. This Agreement constitutes the complete and exclusive agreement of the parties with regard to the matters addressed herein and supersedes and terminates as of the date hereof, all prior agreements, agreements or understandings, oral or written between the parties to this Agreement relating to such matters. [Remainder of Page Intentionally Left Blank – Signature Page Follows] Page 118 of 226 5 THIS AGREEMENT is hereby executed on behalf of the parties as follows: Borrower: By: (Signature) Name: Title: Date: Custodian: By: (Signature) Name: Title: Date: Page 119 of 226 Note to Borrowers: the form below is a form of Security Document List & Custodial Receipt that must be completed by the Borrower and submitted to the Custodian for use as a receipt whenever Borrower is required by the Section 108 Contract to submit additional Security Documents (identified in the Section 108 Contract as “Security Documents”). SECURITY DOCUMENT LIST & CUSTODIAL RECEIPT The following documents were delivered in accordance with the agreement dated , between the undersigned (“Custodian”), and __________________(“Borrower”), and which is known as the “Section 108 Guaranteed Loan Custodial Agreement”: This is the _________ [Borrower to insert “first,” “second,” “third,” etc. as appropriate] Security Document List & Custodial Receipt under the Section 108 Guaranteed Loan Custodial Agreement between Custodian and Borrower dated the ___ day of , 20__ . [Remainder of Page Intentionally Left Blank – Signature Page Follows] Mark with “X” if received by Custodian Name of Security Document Date Received [HUD to COPY DOCUMENTS FROM PARAGRAPH 15, insert one in each line] Page 120 of 226 The undersigned hereby acknowledges receipt of the documents indicated with an ‘X’ in the table above, on the dates acknowledged in the table: Custodian: By: (Signature) Name: Title: Date: Page 121 of 226 FISCAL AGENCY AGREEMENT Page 122 of 226 Page 123 of 226 Page 124 of 226 Page 125 of 226 Page 126 of 226 Page 127 of 226 Page 128 of 226 Page 129 of 226 Page 130 of 226 Page 131 of 226 Page 132 of 226 Page 133 of 226 Page 134 of 226 Page 135 of 226 Page 136 of 226 Page 137 of 226 Page 138 of 226 Page 139 of 226 Page 140 of 226 Page 141 of 226 Page 142 of 226 Page 143 of 226 Page 144 of 226 Page 145 of 226 Page 146 of 226 Page 147 of 226 Page 148 of 226 Page 149 of 226 Page 150 of 226 Page 151 of 226 Page 152 of 226 Page 153 of 226 Page 154 of 226 Page 155 of 226 Page 156 of 226 Page 157 of 226 Page 158 of 226 Page 159 of 226 Page 160 of 226 Page 161 of 226 Page 162 of 226 Page 163 of 226 Page 164 of 226 Page 165 of 226 Page 166 of 226 Page 167 of 226 Page 168 of 226 Page 169 of 226 Page 170 of 226 Page 171 of 226 Page 172 of 226 Page 173 of 226 Page 174 of 226 Page 175 of 226 Page 176 of 226 Page 177 of 226 Page 178 of 226 Page 179 of 226 Page 180 of 226 Page 181 of 226 Page 182 of 226 Page 183 of 226 Page 184 of 226 Page 185 of 226 Page 186 of 226 Page 187 of 226 Page 188 of 226 Page 189 of 226 Page 190 of 226 Page 191 of 226 Page 192 of 226 Page 193 of 226 Page 194 of 226 Page 195 of 226 Page 196 of 226 AGENDA REPORT FOR: City Council January 15, 2020 TO: Dave Zabell, City Manager Regular Meeting: 1/21/20 FROM: Steve Worley, Director Public Works SUBJECT: Water Rights Contract with Washington State Dept. of Ecology I. REFERENCE(S): Resolution Water Service Contract - Washington Department of Ecology and City of Pasco II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS: MOTION: I move to approve Resolution No. ________ of the City of Pasco, Washington, authorizing the City Manager to sign the Water Service Contract with Washington Department of Ecology for Pasco's beneficial and permitted use of 5,000 Acre-Feet of water from the Lake Roosevelt incremental storage release program. III. FISCAL IMPACT: Water Fund 411: $175,000 annually to the Department of Ecology effective November 2020 until such time as the water rights are no longer needed. ($35 per acre-foot for 5,000 acre-feet of annual water usage). IV. HISTORY AND FACTS BRIEF: It is necessary for the City to limit its use of water from any source to an amount authorized by permit. As a growing community the demands on the municipal domestic water system have and continue to increase. It is necessary for the City to pursue authority for additional sources of supply. As previously discussed during development of the Comprehensive Water System Plan Update and subsequent source of supply discussions, an economical source is Ecology's Lake Roosevelt Incremental Storage Releases Program (Program). To that end, in November 2011, the City of Pasco submitted to the Washington State Department of Ecology (Ecology) Water Right Application S4-33044(A) requesting a Water Right Permit for 5,000 acre-feet annual (6.9 cubic feet per second) withdrawal through the Program, from the Columbia River for Municipal Water Supply Purposes. Page 197 of 226 Ecology accepted the permit, subsequently prepared the required Report of Examination documenting the need and beneficial use of the requested water rights, and is now ready to move forward with issuance of the Water Right Permit. V. DISCUSSION: From a fiscal standpoint, the 2019-2020 budget includes $550,000 for the purchase of water rights. With current commitments associated with the recently acquired Burbank water rights along with the proposed annual payment of $175,000 to Ecology, the total annual payment for water rights will be $315,000 per year for the next few years at which point the financial commitment associated with the Burbank water right purchase will be satisfied. Once Ecology receives the executed contracts, the Record Of Examination (ROE) can be finalized. The ROE contains appeal language that allows for parties to appeal the decision. Once the 30-day appeal period is over, Ecology may then issue the Water Right Permit. While within the City Manager's delegated financial approval authority, the purchase of water rights is a real estate transaction requiring Council approval. Staff recommends approval of the subject contract. This item was discussed at the January 14, 2020 Council Workshop. Page 198 of 226 Resolution - 1 RESOLUTION NO. ________ A RESOLUTION OF THE CITY OF PASCO, WASHINGTON, AUTHORIZING THE CITY MANAGER TO SIGN THE WATER SERVICE CONTRACT WITH WASHINGTON STATE DEPARTMENT OF ECOLOGY FOR PASCO’S BENEFICIAL AND PERMITTED USE OF 5,000 ACRE-FEET OF WATER FROM THE LAKE ROOSEVELT INCREMENTAL STORAGE RELEASE PROGRAM. WHEREAS, RCW 90.90.010 authorizes the Department of Ecology's Office of Columbia River (OCR) to enter into water service contracts to recover all or a portion of the cost of developing water supplies; and WHEREAS, Chapters 90.03 and 90.44 RCW authorize the appropriation of public water for beneficial use and describe the process for obtaining water rights; and WHEREAS, laws governing the water right permitting process are contained in RCW 90.03.250 through 90.03.340 and RCW 90.44.050; and WHEREAS, on December 21, 2010, Department of Ecology (Ecology) issued Surface Water Certificate S3-30556 authorizing Reclamation to release 37,500 acre-feet of water from the Lake Roosevelt Incremental Storage Release Program (Program) for the purpose of instream flow purposes, with 25,000 acre-feet to be used as replacement water for out-of-stream municipal and industrial uses; and WHEREAS, The City of Pasco submitted and Ecology accepted Water Right application S4-33044(A) to receive 5,000 acre-feet of water under the Program for use within the municipal water supply area served by the City of Pasco; and WHEREAS, in accordance with RCW 90.03.290, Ecology has determined that the requirements for approval of the requested water right have all been met; and WHEREAS, Ecology requires the execution of a Water Service Contract prior to issuing the Record of Examination (for 30-day public comment) and final Water Right Permit; and WHEREAS, the City Council does authorize and direct the City Manager to sign the above-mentioned Water Service Contract, and grants the City Manager authority to negotiate and make any minor changes to said Water Service Contract in the best interest of the City. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PASCO, WASHINGTON, DOES RESOLVE AS FOLLOWS: Section 1. The City Manager of the City of Pasco, Washington, is hereby authorized and directed to negotiate, make minor changes to, and sign the Water Service Contract between the City of Pasco and the Washington State Department of Ecology, copies of which are attached Page 199 of 226 Resolution - 2 hereto and incorporated herein by this reference as Exhibit A; and to take all necessary steps required to complete this transaction. PASSED by the City Council of the City of Pasco, Washington, as its regular meeting dated this _____ day of January, 2020. ___________________________________ Saul Martinez, Mayor ATTEST: APPROVED AS TO FORM: ___________________________________ ___________________________________ Debra Barham, CMC Kerr Ferguson Law, PLLC City Clerk City Attorney Page 200 of 226 Water Service Contract Ecology/City - 1 WATER SERVICE CONTRACT BETWEEN OFFICE OF THE COLUMBIA RIVER WASHINGTON DEPARTMENT OF ECOLOGY AND CITY OF PASCO WHEREAS, the following preliminary statements are made in explanation: 1. RCW 90.90.010 authorizes the Department of Ecology's Office of Columbia River (OCR) to enter into water service contracts to recover all or a portion of the cost of developing water supplies. 2. Since 2004, OCR has partnered with the United States Bureau of Reclamation (Reclamation) on releasing additional water from Lake Roosevelt for new water supplies. 3. On December 21, 2010, Ecology issued Surface Water Certificate S3-30556 authorizing Reclamation to release 37,500 acre-feet of water from Lake Roosevelt for the purpose of instream flow purposes, with 25,000 acre-feet to be used as replacement water for out-of-stream municipal and industrial uses. 4. On December 21, 2010, Ecology issued Trust Water Certificate S3-30556, accepting 37,500 acre-feet of water into the Trust Water Rights Program. 5. OCR entered into a Federal water service contract with Reclamation on August 2, 2011, Contract No. 11XX101734 (Reclamation Contract). The Reclamation Contract is attached hereto as Exhibit A. The Reclamation Contract relates to the 37,500 acre-feet of water supply released for instream flows and new municipal and industrial permits. The Reclamation Contract has a term of 40 years, expiring on August 2, 2051, unless it is renewed pursuant to its terms. The City of Pasco holds an application for a water right (Application No.____) that was filed with Ecology on _________________. 1. Contract. This Water Service Contract (Agreement) is made and entered into by and between the Washington State Department of Ecology, hereinafter referred to as "Ecology", and the City of Pasco, Washington, hereinafter referred to as "Applicant." 2 Purpose. It is the purpose of this Agreement to establish a contractual framework for the Applicant to reimburse the State of Washington through Ecology an agreed upon annual sum to utilize permitted waters of the State of Washington under Water Right Permit No. ____ (Appendix B) for beneficial use of that water. This Agreement is intended to describe the annual costs, the conditions to the Agreement and the term of service for the use of that water. This Page 201 of 226 Water Service Contract Ecology/City - 2 Agreement contains all the terms and conditions agreed upon by the parties. No other understandings, oral or otherwise, regarding the subject matter of this Agreement shall be deemed to exist or to bind any of the parties hereto. 3. Statement of Performance. Ecology has conducted a water right investigation and will issue a Report of Examination (ROE) approving the application after the Applicant signs this Agreement. In the event of an appeal, Ecology shall defend the RO E at its sole expense. After an appeal of the ROE is concluded, Ecology will issue a permit (unless the ROE is vacated upon appeal). All provisions, conditions and limitations of water use identified in Attachment B are incorporated into this Contract. The supply of water authorized in Attachment B is a permanent authorization. However, it is mitigated by a non-permanent Federal water service contract. In the future, either the Reclamation Contract will be renewed, or OCR will make best efforts to replace it with another water supply source that provides equal mitigation value. 4. Period of Performance. A. Subject to its other provisions, the period of performance of this Agreement shall commence on the date of permit issuance, and run as long as the Applicant receives water pursuant to Attachment B, unless amended or terminated sooner as provided herein. B. Pursuant to RCW 90.90.010(6), Ecology shall not impose any charge or fee greater than the amount imposed by the Bureau of Reclamation. 5. Terms of Payment. Cost recovery payments for this Agreement are based on costs incurred by Ecology as a result of the Reclamation Contract, unless otherwise amended. The Reclamation Contract and its terms and conditions are incorporated by reference into this Agreement. Annual payments due by the Applicant to Ecology are as follows: A. Applicant shall pay Ecology an annual sum of $35 per acre-foot per year based on the permitted or certificated quantity described in Exhibit B. Ecology may at its sole discretion adjust this rate if Reclamation exercises Provision 14(2)(b) of the Reclamation Contract, which provides for periodic review of payments for water service contracts under Federal Reclamation law. Ecology shall not adjust its rat e unless it provides Applicant with ninety (90) days notice of said rate adjustment. 6. Billing Procedure. Payment shall be based on the full permitted quantity in Appendix B. At such time as the permit is superseded, or perfected and replaced by a certificate, then the payment shall be based upon the superseding permit or certificated quantity. Payment shall be due by November 1st each year for the subsequent year's water use. Ecology shall send a notice of payment due to the Applicant by September 15th of each year. Page 202 of 226 Water Service Contract Ecology/City - 3 7. Agreement Alterations, Amendments and Assignments. This Agreement may be amended or assigned by mutual agreement of the parties. Such amendments shall not be binding unless they are in writing and signed by personnel authorized to bind each of the parties. Exceptions to mutual agreement amendments and assignments: A. When a certificate issues for the permit in Appendix B, said certificate shall automatically replace the permit and become the basis for this Agreement in Appendix B. B. This Agreement is assignable if accompanied by an equivalent assignment of the subject permit. A superseding permit issued in such event will become the basis for this Agreement in Appendix B. C. In the event a superseding permit issues based on an approved change decision by Ecology, said superseding permit will become the basis for this Agreement in Appendix B. However, in addition to other applicable criteria and transfer statutes, a change application shall only be approved for the permit or certificate if the new use, point of withdrawal, or other proposed change is capable of being mitigated through the Reclamation Contract. D. In the event a certificate has issued and the entire property to which the certificate is appurtenant is transferred to another party, this Agreement is assignable if agreed to by the current and proposed certificate holder. 8. Termination. A. The Applicant may terminate this Agreement upon thirty (30) calendar days' prior written notification to Ecology. In that event, the subject permit shall be cancelled by Ecology if still in effect. If a certificate is in effect, such termination shall constitute the certificate holder's intent to abandon the certificate and Ecology shall promptly revoke same. B. Ecology shall not terminate this Agreement unless: 1) The Reclamation Contract is renewed and Ecology is subjected to different or additional conditions for the water releases not covered by this Ecology-Applicant Water Service Contract. 2) The Reclamation Contract is terminated and Ecology has secured alternate mitigation for the permit or certificate. Page 203 of 226 Water Service Contract Ecology/City - 4 3) The Reclamation Contract is terminated and Ecology has not secured alternate mitigation for the permit or certificate1. 4) The Applicant fails to honor the terms of this Agreement, including payment. C. Prior to terminating this Agreement as described in 1) and 2) above, Ecology shall provide to the Applicant a new water service contract for review and execution at least ninety (90) calendar days prior to such termination. The goal of such notice is to provide informed and uninterrupted mitigation throughout the life of the permit of certificate. If Ecology terminates this Agreement as described in 1) and 2) above, the Applicant may: 1) Accept the terms of the new water service contract; or 2) Abandon use of the permit or certificate and either: a) Cease beneficial use associated with said right (e.g., no longer divert or withdraw water); or b) Continue the beneficial use under another suitable water right. D. Ecology shall not terminate this Agreement as described in B.4) above, unless it has taken the following steps: 1) Ecology must provide notice to the Applicant of Applicant's failure to comply with this Agreement and provide for 30 calendar days response by the Applicant. If the Applicant corrects such noncompliance within said 30 day period, Ecology shall not terminate this Agreement. Except, however, that if such noncompliance is due to failure to promptly provide annual payments as required herein, a late penalty of 5% shall be assessed. 2) If noncompliance persists beyond the 30 day notice period, Ecology may initiate termination of the Agreement by providing a ninety (90) calendar day Notice of Intent to Terminate. However, in the event the failure to comply cannot be reasonably corrected within 90 days, such period may be extended if the Applicant has commenced actions necessary for compliance and diligently pursues compliance to completion. 1 See the Reclamation Contract termination clause. Page 204 of 226 Water Service Contract Ecology/City - 5 3) Prior to termination, Ecology shall meet with Applicant in a good faith effort to resolve any dispute regarding the enforcement, interpretation, or breach of this Agreement. In the event the dispute is not resolved by agreement of the parties, with or without the assistance of mediation, such dispute shall be resolved by binding arbitration pursuant to RCW 7.04A, as amended, with both parties waiving the right of a jury trial upon trial de novo, with venue placed in Pasco, Franklin County, Washington. The substantially prevailing party shall be entitled to its reasonable attorney fees and costs as additional award and judgment against the other. E. In the event of termination by either party, all payments paid in advance for the coming calendar year shall remain with Ecology without refund. F. Ecology and the Applicant are each responsible for their own respective costs and attorney's fees in connection with this Agreement and any dispute related to the proper interpretation or implementation of this Agreement. No damages, direct or indirect, may be awarded to the Applicant due to failure of Ecology, or Ecology's officers, agents, or employees, to perform any obligation under this Agreement. G. The Applicant is not a third party beneficiary of the Reclamation Contract. 9. Governance. This Agreement is entered into pursuant to and under the authority granted by the laws of the State of Washington, and any applicable Federal laws. The provisions of this Agreement shall be construed to conform to those laws. In the event of an inconsistency in the terms of this Agreement, or between its terms and any applicable statute or rule, the inconsistency shall be resolved by giving precedence in the following order: A. Applicable State and Federal statutes and rules. B. Any other provisions of the Agreement, including material incorporated by reference. 10. Waiver. A failure by either party to exercise its rights under this Agreement shall not preclude that party from subsequent exercise of such rights and shall not constitute a waiver of any other rights under this Agreement unless stated to be such in writing signed by an authorized representative of the party and attached to the original Agreement. 11. All Writings Contained Herein. This Agreement contains all the terms and conditions agreed upon by the parties. No other understandings, oral or otherwise, regarding the subject matter of this Agreement shall be deemed to exist or to bind any of the parties hereto. IN WITNESS WHEREOF, the parties have executed this Agreement on the ____ day of ______________________, 20 _____. Page 205 of 226 Water Service Contract Ecology/City - 6 STATE OF WASHINGTON CITY OF PASCO, WASHINGTON DEPARTMENT OF ECOLOGY ___________________________________ ___________________________________ Tom Tebb, Director Dave Zabell, City Manager Office of Columbia River Approved as to Form: Approved as to Form: ____________________________________ ___________________________________ Assistant Attorney General Kerr Ferguson Law, PLLC, City Attorney Page 206 of 226 Page 207 of 226 Page 208 of 226 Page 209 of 226 Page 210 of 226 Page 211 of 226 Page 212 of 226 Page 213 of 226 Page 214 of 226 Page 215 of 226 Page 216 of 226 Page 217 of 226 Page 218 of 226 Page 219 of 226 Page 220 of 226 Page 221 of 226 Page 222 of 226 Page 223 of 226 Page 224 of 226 Page 225 of 226 Page 226 of 226