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HomeMy WebLinkAbout2021.03.08 Council Workshop Packet AGENDA City Council Workshop Meeting 7:00 PM - Monday, March 8, 2021 GoToWebinar Page 1. REMOTE MEETING INSTRUCTIONS - The Pasco City Council Workshops are broadcast live on PSC-TV Channel 191 on Charter/Spectrum Cable in Pasco and Richland and streamed at www.pasco-wa.gov/psctvlive and on the City’s Facebook page at www.facebook.com/cityofPasco. Call-in information to GoToWebinar for "listen-only" mode is: (562) 247-8422 and use access code 465-398-545. 2. CALL TO ORDER 3. ROLL CALL (a) Pledge of Allegiance 4. VERBAL REPORTS FROM COUNCILMEMBERS 5. ITEMS FOR DISCUSSION 3 - 19 (a) 2020 Hanford Communities Update 20 - 27 (b) DPDA Funding Agreement Extension 28 - 70 (c) 2019 City of Pasco Financial Audit Recap 71 - 74 (d) Ordinance - Budget Adjustment for Fire Equipment Purchase 75 - 83 (e) Ordinance - Amending PMC Title 23 Related to SEPA 6. MISCELLANEOUS COUNCIL DISCUSSION 7. EXECUTIVE SESSION 8. ADJOURNMENT Page 1 of 83 9. ADDITIONAL NOTES (a) Adopted 2020-2021 Council Goals (Reference Only) (b) REMINDERS • Tuesday, March 9, 2021, 5:30 PM: HAPO Center Boardroom or Conference Call (MAYOR SAUL MARTINEZ and COUNCILMEMBER CRAIG MALONEY) • Thursday, March 11, 7:00 PM: Ben Franklin Transit Board Meeting – Transit Facility (COUNCILMEMBER RUBEN ALVARADO, Rep.; COUNCILMEMBER ZAHRA ROACH, Alt.) • Monday, March 15, 6:00 PM: LEOFF Disability Board – Virtual Meeting (MAYOR SAUL MARTINEZ, Rep.; MAYOR PRO TEM BLANCHE BARAJAS, Alt.) 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 2 of 83 AGENDA REPORT FOR: City Council March 3, 2021 TO: Dave Zabell, City Manager City Council Workshop Meeting: 3/8/21 FROM: Dave Zabell, City Manager Executive SUBJECT: 2020 Hanford Communities Update I. REFERENCE(S): PowerPoint Presentation DHanford Communities Issue Agenda for 2021 II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS: None III. FISCAL IMPACT: None IV. HISTORY AND FACTS BRIEF: Hanford Communities was formed and exists to facilitate a coordinated local government Nuclear Hanford regarding decision in involvement making Reservation's environmental contamination, remediation, waste management, emergency response, and work force, as well as site transition issues on issues affecting the surrounding jurisdictions. The organization advocates for increased public awareness and involvement in Hanford's cleanup issues. Board members interact with the U.S. Department of Energy (DOE), the Washington State Department of Ecology, the U.S. Department of Environmental Protection Agency (EPA) and others to further the interests of the Tri-Cities region. Hanford Communities member agencies consist of the Cities of Kennewick, Pasco, Richland and We st Richland, Benton and Franklin Counties and the Port of Benton. Councilmember Roach serves as the Pasco City Council representative on the Hanford Communities Governing Board. Page 3 of 83 V. DISCUSSION: Hanford Communities Executive Director David Reeploeg, will provide the annual Hanford Communities report to Council. Page 4 of 83 David Reeploeg, Executive Director Pasco City Council Annual Update March 8, 2021Page 5 of 83 About Hanford Communities •Formed in 1994 •Objectives: •Coordinate local government involvement on Hanford issues •Increase public awareness and involvement in Hanford cleanup issues •Advocate for community priorities re. Hanford •Provide technical and analytical resources to review, evaluate and monitor conditions and policies at HanfordPage 6 of 83 • • • • • • •Governing BoardPage 7 of 83 • • • • • • •Administrative BoardPage 8 of 83 2020 Changes May 2020: Transition to TRIDEC Operation September 2020: Signed Ecology Grant with Updated Scope of Work New Website: www.HanfordCommunities.org Communications: Social Media (Facebook/Instagram/YouTube) & Quarterly NewslettersPage 9 of 83 2021 Outlook •New Administration –DOE Changes •Gov. Jennifer Granholm –Secretary •Dave Huizenga –Acting Secretary •David Turk –Deputy Secretary nominee •Assistant Secretary for Environmental Management –TBD •Prioritization/Approach to Hanford cleanup –TBD •DOE Reorganization •Office of Environmental Management reports to SecretaryPage 10 of 83 2021 Outlook: New Congress •Sen. Patty Murray •Energy & Water Appropriations Subcommittee •Sen. Maria Cantwell •Energy & Natural Resources Committee •Rep. Dan Newhouse •Energy & Water Appropriations Subcommittee •Congressional Western Caucus Chair •Rep. Cathy McMorris Rodgers •Energy & Commerce Committee (Ranking)Page 11 of 83 2021 Outlook: Hanford Site Contract Changes •Two prime contract transitions complete Jan. 25 •Mission Support Alliance (MSA) –to – Hanford Mission Integration Solutions (HMIS) •CH2MHill Plateau Remediation Company (CHPRC) –to –Central Plateau Cleanup Company (CPCCo.) •Tank Closure Contract award canceled –will be combined with vitrification facility operations in future solicitationPage 12 of 83 Priorities •2021 Issue Agenda •High Level Waste Interpretation •Hanford Regulatory Approach •Direct Feed Low Activity Waste Facility (DFLAW) •Waste Encapsulation Storage Facility (WESF) •324 Building (300-296 Waste Site) •Local Business SubcontractingPage 13 of 83 David Reeploeg dreeploeg@hanfordcommunities.org www.hanfordcommunities.org / @HanfordCommunitiesThank You!Page 14 of 83 1 Hanford Communities Issue Agenda for 2021 Priority Issues: Progress on HLW Interpretation, and a Regulatory Environment that Enables Cleanup Section I. Top Priorities High Level Waste (HLW) Interpretation: The Hanford Communities is encouraged by a recent DOE report which indicates that up to $210 billion could be saved, and the timeline to complete tank waste treatment could be reduced by 10 years if the revised HLW interpretation is applied at the Hanford Site. This science-based approach would allow DOE to manage and treat waste according to its physical characteristics and risk, rather than simply based on where it originated. If applied at Hanford, this process would open up disposal options other than a deep geologic repository, along with opportunities to permanently ship waste out of Washington state. DOE should continue working with its regulators, the Tri-City community and regional tribes to further pursue this approach. Regulatory Environment: The Hanford Communities is very concerned that the current regulatory environment delays rather than enables cleanup progress at Hanford, which ultimately serves to prolong risks to the Tri-City community. DOE and its regulators should emulate successful cleanup efforts elsewhere in the DOE complex where alignment was reached on cleanup priorities, and the appropriate use of regulatory discretion was applied, in order to expedite cleanup progress. Movement of Cesium/Strontium Capsules to Dry Storage: The Waste Encapsulation and Storage Facility (WESF) in the Central Plateau holds 1,936 capsules of cesium and strontium that were removed from tank waste and stored underwater. These capsules represent approximately one-third of the total amount of curies at the Hanford Site. WESF was not built for permanent storage of cesium and strontium and the facility presents a significant risk and long-term mortgage cost. The Hanford Communities support the ongoing effort to move the capsules to dry interim storage as soon as possible. Tank Farm Operations: Funding for tank farm operations must be adequate to prepare for waste treatment and ensure maintenance of the aging infrastructure in a safe configuration while waste is removed from tanks. Many of the tanks are well beyond their design life, and many single shell tanks plus at least one double shell tank are known to have leaked. Elimination, or at least reduction of risks must continue to be a top priority. DOE and its regulators must also proceed with closing tanks with grout, this will prevent tank collapses and intruder possibilities. The Hanford Communities support adding Washington to the list of states that can use the Sec. 3116 provision to close tanks. Adequate funding is essential to support tank farm upgrades as necessary to protect the workforce and reduce the potential for vapor exposures. Sustained Progress on Environmental Cleanup Tangible progress is being made to clean up the Hanford Site and meet the requirements of the Tri-Party Agreement and Consent Decree. Adequate funding must be budgeted to keep the progress on track and not continue to drive lifecycle costs higher. Community Vision The people of the Tri-Cities region have risen to meet some of our nation’s highest priority needs, and we are now ready to take on the challenges of the future. We request DOE’s continued partnership as we seek to leverage the highly- skilled workforce and federal assets that our region possesses to leave a legacy of economic prosperity for all the citizens we serve. Page 15 of 83 2 Groundwater Remediation: Great progress had been made in recent years on groundwater remediation with the completion of pump and treat facilities. However, groundwater remediation is far from complete, and these efforts must be continued across the Hanford Site. In addition, the existing systems should be optimized to reach their full capacity and be able to respond to emerging conditions in the tank farms or elsewhere in the Central Plateau. This is essential to ensure the protection of the Columbia River and prevent the migration of contamination from the Central Plateau to the River Corridor. Sustained Cleanup Progress: The Hanford Communities believe that cleanup of the Hanford site should be risk based and reflect the community’s concerns and priorities. It should also be cost-effective and based on compliance with cleanup regulations utilizing the best available science, state of the art processes and technologies. To sustain congressional support for cleanup funding, the Department of Energy’s Richland Operations Office (RL) and the Office of River Protection (ORP) must continue to demonstrate that taxpayer dollars are effectively managed, produce the desired results, comply with Tri-Party Agreement (TPA) requirements and other legal commitments. FY 2022 Hanford Budget Request: While recognizing that there are budgetary realities, the Hanford Communities supports funding for the Hanford cleanup that adequately funds community cleanup priorities. The TPA and Consent Decree require that DOE request adequate funding to meet legal requirements in the President’s budget. Life-cycle cost analysis should also be provided to communicate the impacts of delaying cleanup work due to less than required funding levels. The Hanford Communities will work with the Energy Communities Alliance and others to request and promote sustained funding levels necessary to meet Environmental Management program commitments. Both DOE-RL and DOE-ORP should receive adequate funding to continue key cleanup activities. All parties need to recognize that the budget request must be realistic and achievable. Hanford lifecycle cleanup cost estimates released in 2019 indicate that it could require over $11 billion a year for 60 years to complete cleanup as presently envisioned. Funding at that level is not feasible so it will be necessary for DOE, EPA and the State of Washington to identify new strategies that will maximize cleanup progress at realistically achievable funding levels. Given these funding realities, the Tri-Party Agencies should actively pursue promising new technologies and cleanup options which have the potential to expedite cleanup and reduce costs while meeting realistically achievable cleanup goals. Additionally, adequate funding for startup and commissioning of the Direct Feed Low Activity Waste Facility (DFLAW) is essential, and funding for technologies to pretreat and grout tank waste for shipment to appropriate licensed facilities out of state should be supported. Tank Waste Treatment: The Hanford Communities believe that removing waste from the tanks, stabilizing and immobilizing the material, and putting it into safe storage to reduce risk must continue to be a high priority for the cleanup effort. The tanks are aged and there is a possibility that there could be another leak in a Double Shell Tank (DST) that could significantly impact available tank space. It is also imperative that the Tank Farms are prepared to safely and reliably deliver waste feed to the WTP. Great progress is being made at WTP with commissioning and the transition to start-up of the Direct Feed Low Activity Waste Facility (DFLAW) and we support initiatives such as the Tank-Side Cesium Removal System (TSCR) will aid in addressing the tank waste issues and prevent unnecessary spending to construct new tanks. River Corridor: The Hanford Communities believe it is critical for DOE to remediate the radiological waste site underneath the 324 Building as quickly as possible given its close proximity to the Columbia River and the City of Richland. Continued efforts to monitor and remediate contaminant plumes must also be a priority. Plutonium Finishing Plant: Completion of the Plutonium Finishing Plant demolition has been a high priority for the Hanford Communities for many years. We support the completion of stabilization of the site and adjacent structures and continued remediation efforts in the area. Page 16 of 83 3 Legacy Facilities/High Risk Mitigation: Subsequent to the PUREX tunnel collapse additional high risk situations have been identified as requiring mitigation. The Hanford Communities believe it is critical for DOE to continue to proactively address the highest risks across the Hanford Site. Tri-Party Agreement (TPA): Much of the Hanford cleanup strategy falls under the "Tri-Party Agreement" between DOE, EPA and the State of Washington’s Department of Ecology. The Hanford Communities strongly support the intention of the Tri-Party Agreement including changes and amendments, as appropriate, to incorporate such issues as improved technology developments, better scientific understanding and options for efficiencies. The Tri-Party Agreement was entered into by the parties in May of 1989. There have been six amendments and numerous modifications over the past thirty-one years. The Hanford Communities are concerned that the structure of the Agreement may have outlasted its usefulness in moving toward the shared goal of cleanup and removal of waste from the Site. Strict adherence to the Agreement has led various parties to use its terms as a cudgel which has prevented the parties from achieving their shared goals. Additionally, the commitments in the TPA are out of date and no longer meet the needs of local communities.. The time is right for the Tri-Parties to reexamine the milestones in the agreement, taking into consideration the current site conditions and prioritized risks the next decade, using realistic budget assumptions and achievable schedules. Hanford Workforce: The Hanford workforce is aging and it is essential to recruit and train new employees. Hanford workers are well trained and experienced to perform these complex work activities but their safety must be the highest priority. In order to prepare individuals for future Hanford jobs there needs to be a concerted effort to expand STEM education from primary grades through post-secondary programs. Apprenticeships and internships should be developed in partnership with local union programs, K-12 and Community Colleges. As DOE and their contractors reach out to hire individuals from outside of this area we should assist them by providing information about the quality of life of our region and communities. Workforce should be provided back the ability to have payroll deductions that support local needs such as the United Way. Professional and Technical local business are being impacted by DOE contracting- We support DOE in competing of contracts however we believe the current process has resulted in unintended consequences to local businesses that have been a foundation of the technical and professional workforce at Hanford. ECA and Hanford communities request that DOE does not implement this new policy at any other EM site until an analysis has been made outlining the potential short- and long-term impacts of DOE on the community at large. DOE should then implement a plan to ensure a smoother transition that will not unnecessarily jeopardize the viability of local small businesses. Infrastructure: Critical infrastructure systems including water, fire protection, sewer systems, primary electrical power, and roads require ongoing maintenance to ensure safety and reliability. Additionally, the focus of work to the Central Plateau and startup of operational facilities on-site creates the need for updates and modifications of the systems to support future operations. Page 17 of 83 4 Section II. Local Priority Issues Manhattan Project National Historical Park and B Reactor: The Hanford Communities strongly supports efforts to grow and maximize the potential of the Manhattan Project National Historical Park at Hanford. In particular it is critical that the B Reactor roof be replaced, and that other facility maintenance activities and efforts to expand tour access be continued. An amendment to expand the boundary of the park at Hanford and a funding request for infrastructure improvements is also supported, as are preservation and restoration efforts for pre-Manhattan Project facilities located on the Hanford Site. It is important that these facilities, archives as well as the B Reactor be made accessible to the public through the combined efforts of the DOE and the National Parks Service. HAMMER Training Center: Consistent and highly effective site-wide training requirements should apply to all contractors and subcontractors. HAMMER has repeatedly demonstrated its value to meet Hanford’s comprehensive training needs. The upcoming change in operational focus will increase the need for site- wide training programs to ensure the safety and efficiency of workers on site. The Hanford Communities encourage DOE to explore opportunities to continue to enhance the facility’s missions and capabilities in the future Economic Development and Diversification: The Hanford Communities support transferring surplus Hanford assets, including land and excess personal property to TRIDEC/TARC to foster creation of private- sector jobs and diversification of the regional economy. We encourage TRIDEC and DOE to put in place a new agreement and procedure to replace the previous program. Our community seeks future missions in the areas of clean energy, biosciences, environmental and computational sciences, grid and cybersecurity. Waste Treatment Plant (WTP) Diesel: The Hanford Communities remains concerned about plans to burn approximately 45,000 gallons of diesel per day at full operation of the WTP. A natural gas pipeline to supply the Central Plateau is a much better alternative and the EIS should be completed. DOE is also encouraged to explore opportunities to use process heat from proposed new advanced nuclear reactors (supported by DOE’s Advanced Reactor Demonstration Program) to provide steam for the WTP as well. Both of these options will provide substantial environmental benefits, reduce wear and tear on regional highways, and support statewide desires to reduce carbon emissions that align with DOE’s mission. Payment in Lieu of Taxes (PILT) In 1996, DOE entered into agreements with Benton, Franklin, and Grant counties to provide PILT payments based on historical use of the site before the lands were expropriated by the Manhattan Project. PILT funds are distributed by the counties to local entities including school districts, library districts, and hospital districts, among others, to support the provision of basic public services. A new formula for calculating Hanford PILT billings has been developed and accepted by all parties. DOE should request funding to meet the commitment in their federal budget request. The Hanford Communities support payment levels that are on-time, in-whole, and are otherwise consistent with the agreements. Public Information and Involvement: In 1998, the Hanford Communities and the Washington State Department of Ecology identified the need to more fully engage the Tri-Cities metropolitan region in the Hanford cleanup. A program was developed to inform area residents and stimulate meaningful involvement. The Hanford Communities recognize that this program will continue to be a high priority during 2021. It is the goal of the Hanford Communities to renew the program and contract with the Department of Ecology for the next state fiscal year. We also encourage DOE to refocus their outreach to the residents of the region closest to, and most directly impacted by, the Hanford Site. Yucca Mountain: Yucca Mountain was originally designated to receive high -level defense waste from DOE sites around the country including Hanford’s high-level vitrified tank waste and spent nuclear fuel that has been packaged and stored in the Canister Storage Building. It is also intended as a repository for the commercial spent fuel which is currently being stored north of Richland near the Columbia Generating Station. Without Yucca Mountain, Hanford will become a de -facto high level waste repository. We support congressional funding efforts to complete necessary analysis and get Yucca Mountain open for business. Page 18 of 83 5 High Level Nuclear Waste: The Blue Ribbon Commission Recommendation to establish a new entity dedicated solely to implement the nation’s high level waste management program is endorsed by the Hanford Communities. The establishment of a licensed nuclear repository and an interim storage facility in Eddy County, New Mexico, or in another community interested in hosting a site is also supported. Local Governments as Host Communities and Service Providers: Although good relationships exist between local area governments and local DOE offices, ports, cities and counties adjoining DOE sites are often relegated to the subordinate role of special interest groups. It is important the DOE acknowledge that local elected officials have authority and responsibility for services used by DOE such as sewer, water, electricity, roads, law enforcement, and emergency response. Local elected officials also have regulatory authority over land use planning and economic development on land adjacent to the Hanford Site. DOE-RL, DOE-ORP and their contractors should partner with local government to make maximum use of their capabilities. DOE must also work to address traffic congestion generated by the Hanford commute, along with wear and tear of roads caused by activities at the Hanford Site. Emergency Management: Whether a large brushfire, a transportation accident involving hazardous waste, or a radioactive materials incident, emergencies at Hanford directly affect our local communities and its citizens. Cooperation and coordination between DOE and local emergency responders is essential. DOE provides funding for emergency management to the State of Washington and the state passes these funds on to county emergency management agencies including Benton and Franklin counties. Funding for local emergency preparedness necessary to coordinate with Hanford has not kept pace with inflation, and costs such as PERS and health insurance continue to rise much faster than the available funding from DOE. The Hanford Communities believe that DOE should increase its funding to the Benton and Franklin Emergency Management Agencies, either through its allocation to the state or directly to the local counties. Use of CERCLA in place of RCRA for Nuclear Waste Remediation; The Consortium for Risk Evaluation with Stakeholder Participation (CRESP) Omnibus report suggested that using CERCLA (Superfund) regulations in place of RCRA makes more sense for radioactive contamination. We were encouraged that state regulators and EPA have met to explore this and other opportunities to seek solutions for management and disposal of waste that reduces cost and improves schedules. We are concerned about the overly burdensome regulatory and permitting processes, and an unwillingness to exercise appropriate regulatory discretion. There are numerous examples at other sites within the DOE-EM complex where this appropriate use of regulatory discretion has led to expedited cleanup progress. Ultimately, we hope that these and other efforts will reduce unnecessary delays in making cleanup progress. Page 19 of 83 AGENDA REPORT FOR: City Council March 2, 2021 TO: Dave Zabell, City Manager City Council Workshop Meeting: 3/8/21 FROM: Rick White, Director Community & Economic Development SUBJECT: DPDA Funding Agreement Extension I. REFERENCE(S): 2020 Funding Agreement Proposed 2021 Funding Agreement II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS: Discussion III. FISCAL IMPACT: Expense: Remaining $75,000 of an annual contribution $100,000 for 2021. Program Revenue: The City receives a credit on its Utility Tax obligations as a result Development Pasco the to Downtown annual the of contribution Authority (DPDA) through the Main Street tax incentive provisions in $100,000 from resulting 2021, in for $64,000 (approximately credit contributions in 2020. Approximately the same Utility Tax credit is expected in 2022 for contributions in 2021. The balance of the funding, approximate ly $36,000 will be funded from the Economic Development (!94) Fund. IV. HISTORY AND FACTS BRIEF: In January 2021, the 2020 Funding agreement for the DPDA was extended through this year's first quarter by Council action. Also in 2020, the effect of the COVID-19 pandemic had a negative influence on the DPDA operations and Downtown commerce. The typical gathering events including Cinco de Mayo, Fiery Food Festival, Christmas Tree Lighting and Farmers Market have all been reduced in size, scale and attendance. Page 20 of 83 DPDA COVIDon focusing the with pivoted conditions -related business assistance. Over the past year, the DPDA Executive Director has worked extensively on a financial clean up of the organization's books; dealing with ramifications of the COVID-19 pandemic and had implemented a business assistance grant program using funding from the City's CDBG - CV and CARES sources, as well as from a financial contribution from Group Health Northwest. V. DISCUSSION: Both the existing and proposed Funding Agreement for 2021 contains the following activity requirements for the DPDA: • Develop and adopt a new 5-year Strategic Plan; • Organize quarterly downtown business and property owner meetings; • Organize, finance and manage Cinco De Mayo Festival; • Organize, finance and manage Fiery Foods Festival; • Organize and manage the Pasco Farmers Market each Saturday from May through October; • Manage the operations of the Pasco Specialty Kitchen; • Provide a scholarship grant program consistent with the DPDA’s 501(c)(3) status, • Continue recruitment for vacant downtown business space; • Create and maintain a Downtown Property Inventory; • Business recruitment, development and engagement activities. New tasks in this year's proposed Agreement include: outreach to Downtown businesses related to the schedule and possible impacts related to the Lewis Street Overpass project; Lewis Street Improvement Project; and Farmers Market/Peanut Park Revitalization Project. Also, additional new tasks include: expanded DPDA outreach to the Downtown business community (Webpage, Podcast, Radio, Weekly Informational Emails and Flyers) and coordination of efforts related to preparation of a Downtown Master Plan The City has typically funded the DPDA)in two-year increments; however, because of the effects of the COVID-19 pandemic, staff is recommending the Funding Agreement be effective only through 2021 so the above tasks receive further review based on public health and any applicable circumstances. Council discussion of this approach is appreciated. Page 21 of 83 DPDA Funding Agreement - 1 DOWNTOWN PASCO DEVELOPMENT AUTHORITY FUNDING AGREEMENT THIS AGREEMENT is made and entered into this ______ day of ______________ 2020, by and between the City of Pasco, Washington, a Municipal Corporation, hereinafter referred to as “City,” and the Downtown Pasco Development Authority, a non-profit Washington Corporation, hereinafter referred to as “DPDA.” WHEREAS, the City Council desires to foster revitalization of the downtown business area and created the Downtown Pasco Development Authority (DPDA) in December 2010 under Ordinance No. 3985, with the expectation of providing a three-year funding commitment to permit the new agency to establish operations and demonstrate its ability to fulfill the revitalization goals enunciated in Ordinance No. 3985 and the DPDA Charter; and WHEREAS, DPDA has received a certificate of incorporation from the State of Washington as a non-profit corporation; and WHEREAS, DPDA has organized and developed operating procedures, hired an executive director, reinitiated public events in Downtown Pasco (Cinco de Mayo and the Fiery Foods Festival), undertaken management of the Pasco Farmers Market and Pasco Commercial Kitchen, became a 501(c) (3) organization, became a certified Washington State Main Street organization, conducted several business education classes and Downtown clean-up events, and participated in the development of a Peanuts Park and Pasco Farmers Market refurbishment, and (with City financial assistance) completed a 5 year Strategic Work Plan including website revisions and “branding;” and WHEREAS, DPDA tasks for 2020 include: 1. Develop and adopt a new 5-year Strategic Plan; 2. Organize quarterly downtown business and property owner meetings: 3. Organize, finance and manage Cinco De Mayo Festival; 4. Organize, finance and manage Fiery Foods Festival; 5. Organize and manage the Pasco Farmers Market each Saturday from May through October; 6. Manage the operations of the Pasco Specialty Kitchen; 7. Provide a scholarship grant program consistent with the DPDA’s 501(c)(3) status, 8. Continue recruitment for vacant downtown business space; 9. Create and maintain a Downtown Property Inventory; 10. Business recruitment, development and engagement activities. WHEREAS, DPDA has requested that additional City funding be made available to develop resources to eventually reduce the amount of the City subsidy; NOW THEREFORE, IN CONSIDERATION of the mutual covenants contained herein and other valuable consideration, it is agreed as follows: Section 1: DPDA Responsibilities The DPDA shall conduct its activities and efforts that further the purpose of the DPDA as identified in Pasco Ordinance 3985 and Article IV of its Charter to include but not be limited to: Page 22 of 83 DPDA Funding Agreement - 2  Review of City plans and policies. The DPDA shall review existing and evolving City land use and capital improvement plans and policies affecting the Downtown Area and advise the city of appropriate considerations.  Façade Improvement Program. The DPDA shall provide information, applications and professional assistance to Downtown Area property owners wishing to participate in an approved and funded Community Development Block Grant façade program.  Promotional Events. The DPDA should conduct or implement an additional promotional or special event in addition to Cinco de Mayo and the Fiery Foods Festival that contribute to the success of the Downtown Area or otherwise advance the goals of the DPDA.  Financing Strategy. In collaboration with City staff and/or other professionals, the DPDA will develop a comprehensive inventory of public and private capital and development financing tools and incentives that may be available to foster and support its revitalization efforts. These should include tax credits or other incentives and identification of infrastructure and other public capital investments that may be necessary to support private redevelopment projects.  Marketing. The DPDA shall develop a strategy to identify and promote economic vitality of the Downtown Area including the opportunities associated with the Farmer’s Market and Specialty Kitchen. These strategies may include: creation of a Downtown Calendar, quarterly business meetings for Downtown businesses, restaurant recruitment for vacant or available properties and completion of the Downtown Survey.  Farmer’s Market and Pasco Specialty Kitchen. The DPDA shall optimize the opportunities associated with the Farmer’s Market and Specialty Kitchen to increase economic activity and promote recognition of the Downtown. Operation of these facilities must be in accordance with the associated lease agreement. Reports: A formal presentation to the City Council by the DPDA board shall be given on or before December 1 each year. The DPDA shall deliver quarterly written status reports to the Pasco City Manager detailing the activities, accomplishments and financial status of the DPDA. Section 2: City Responsibilities The City of Pasco will remit to DPDA or its designated bank up to $25,000 per quarter by the 10th day of the first month of said quarter. Section 3: Term This agreement shall be effective January 1, 2020 and shall expire on December 31, 2020; provided, however, either party may terminate the agreement with at least 180 days written notice delivered to the President of the DPDA or the Pasco City Manager. It is further provided that this agreement is predicated on the DPDA maintaining its Main Street status for calendar year 2020, and the City’s contribution, as described in Section 2, is deemed eligible for Main Street tax credits by the State Department of Revenue. Should the DPDA become ineligible for Main Street tax credits, this Agreement may be returned to the Pasco City Council for determining its continuation. The agreement may be extended up to 24 additional months, by mutual agreement of the parties, subject to budget authority of the city manager. Page 23 of 83 DPDA Funding Agreement - 3 Section 4: General Provisions For the purpose of this Agreement, time is of the essence. Failure of the DPDA to either provide the accounting or remit disallowed funds as required herein shall constitute a breach of this agreement. The remedies available to the City shall include but not be limited to, return of all funds delivered to the DPDA and denial of the right of the DPDA to apply for any future funding. In the event of a dispute regarding the enforcement, breach, default or interpretation of this Agreement, the parties shall first meet in a good faith effort to resolve suc h dispute. In the event the dispute cannot be resolved by agreement of the parties, said dispute shall be resolved by arbitration pursuant to RCW 7.04A, as amended, and the Mandatory Arbitration Rules (MAR); venue shall be placed in Franklin County, Washington, the laws of the State of Washington shall apply; and the prevailing party shall be entitled to its reasonable attorney fees and costs. IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed this ______, day of ______________, 2020. CITY OF PASCO DOWNTOWN PASCO DEVELOPMENT AUTHORITY _______________________________ _______________________________ Dave Zabell, City Manager Gabriel Portugal, President Page 24 of 83 DPDA Funding Agreement - 1 DOWNTOWN PASCO DEVELOPMENT AUTHORITY FUNDING AGREEMENT THIS AGREEMENT is made and entered into this ______ day of ______________ 2021, by and between the City of Pasco, Washington, a Municipal Corporation, hereinafter referred to as “City,” and the Downtown Pasco Development Authority, a non-profit Washington Corporation, hereinafter referred to as “DPDA.” WHEREAS, the City Council desires to foster revitalization of the downtown business area and created the Downtown Pasco Development Authority (DPDA) in December 2010 under Ordinance No. 3985, with the expectation of providing funding commitments to permit the new agency to establish operations and demonstrate its ability to fulfill the revitalization goals enunciated in Ordinance No. 3985 and the DPDA Charter; and WHEREAS, DPDA has received a certificate of incorporation from the State of Washington as a non-profit corporation; and WHEREAS, DPDA has organized and developed operating procedures, hired an executive director, reinitiated public events in Downtown Pasco (Cinco de Mayo and the Fiery Foods Festival), undertaken management of the Pasco Farmers Market and Pasco Commercial Kitchen, became a 501(c) (3) organization, became a certified Washington State Main Street organization, conducted several business education classes and Downtown clean-up events, and participated in the development of a Peanuts Park and Pasco Farmers Market refurbishment, and completed a 5 year Strategic Work Plan including website revisions and “branding;” and WHEREAS, DPDA tasks for 2020 and 2021 include: 1. Develop and adopt a new 5-year Strategic Plan; 2. Organize quarterly downtown business and property owner meetings: 3. Organize, finance and manage Cinco De Mayo Festival; 4. Organize, finance and manage Fiery Foods Festival; 5. Organize and manage the Pasco Farmers Market each Saturday from May through October; 6. Manage the operations of the Pasco Specialty Kitchen; 7. Provide a scholarship grant program consistent with the DPDA’s 501(c)(3) status, 8. Continue recruitment for vacant downtown business space; 9. Create and maintain a Downtown Property Inventory; 10. Business recruitment, development and engagement activities; and WHEREAS, DPDA has requested that City funding be made available to develop resources to eventually reduce the amount of the City subsidy; NOW THEREFORE, IN CONSIDERATION of the mutual covenants contained herein and other valuable consideration, it is agreed as follows: Section 1: DPDA Responsibilities The DPDA shall conduct its activities and efforts that further the purpose of the DPDA as identified in Pasco Ordinance 3985 and Article IV of its Charter to include but not be limited to: Page 25 of 83 DPDA Funding Agreement - 2  Review of City plans and policies. The DPDA shall review existing and evolving City land use and capital improvement plans and policies affecting the Downtown Area and advise the city of appropriate considerations. In 2021 this task includes specific collaboration and outreach efforts with the City regarding communication, preparation and analysis efforts for a Downtown Master Plan.  Façade Improvement Program. The DPDA shall provide information, applications and professional assistance to Downtown Area property owners wishing to participate in an approved and funded Community Development Block Grant façade program.  Promotional Events. The DPDA should conduct or implement an additional promotional or special event in addition to Cinco de Mayo and the Fiery Foods Festival that contribute to the success of the Downtown Area or otherwise advance the goals of the DPDA.  Financing Strategy. In collaboration with City staff and/or other professionals, the DPDA will develop a comprehensive inventory of public and private capital and development financing tools and incentives that may be available to foster and support its revitalization efforts. These should include tax credits or other incentives and identification of infrastructure and other public capital investments that may be necessary to support private redevelopment projects.  Marketing. The DPDA shall develop a strategy to identify and promote economic vitality of the Downtown Area including the opportunities associated with the Farmer’s Market and Specialty Kitchen. These strategies may include: creation of a Downtown Calendar, quarterly business meetings for Downtown businesses, restaurant recruitment for vacant or available properties and other similar activities.  Farmer’s Market and Pasco Specialty Kitchen. The DPDA shall optimize the opportunities associated with the Farmer’s Market and Specialty Kitchen to increase economic activity and promote recognition of the Downtown. Operation of these facilities must be in accordance with the associated lease agreement. Reports: A formal presentation to the City Council by the DPDA board shall be given on or before December 1 each year. The DPDA shall deliver quarterly written status reports to the Pasco City Manager detailing the activities, accomplishments and financial status of the DPDA. Section 3: Additional DPDA Tasks for 2021 The following Tasks are added for the 2021 Funding Agreement:  Outreach for Downtown Improvements. The DPDA shall conduct specific outreach efforts to apprise the Downtown business community of the status and impacts of the Lewis Street Overpass Project; Lewis Street Improvement Project; Farmers Market and Peanuts Park Revitalization Project.  Expanded Public Communications. The DPDA shall initiate an expanded public communication effort related to Downtown events and opportunities through enhanced webpage information, podcasts, radio communications, weekly informational emails and flyers. Page 26 of 83 DPDA Funding Agreement - 3 Section 3: City Responsibilities The City of Pasco will remit to DPDA or its designated bank up to $25,000 per quarter by the 10th day of the first month of said quarter. Section 3: Term This agreement shall be effective April 1, 2021 and shall expire on December 31, 2021; provided, however, either party may terminate the agreement with at least 180 days written notice delivered to the President of the DPDA or the Pasco City Manager. It is further provided that this agreement is predicated on the DPDA maintaining its Main Street status for calendar year 2021, and the City’s contribution, as described in Section 2, is deemed eligible for Main Street tax credits by the State Department of Revenue. Should the DPDA become ineligible for Main Street tax credits, this Agreement may be returned to the Pasco City Council for determining its continuation. The agreement may be extended up to 12 additional months, by mutual agreement of the parties, subject to budget authority of the City Manager. Section 4: General Provisions For the purpose of this Agreement, time is of the essence. Failure of the DPDA to either provide the accounting or remit disallowed funds as required herein shall constitute a breach of this agreement. The remedies available to the City shall include but not be limited to, return of all funds delivered to the DPDA and denial of the right of the DPDA to apply for any future funding. In the event of a dispute regarding the enforcement, breach, default or interpretation of this Agreement, the parties shall first meet in a good faith effort to resolve such dispute. In the event the dispute cannot be resolved by agreement of the parties, said dispute shall be resolved by arbitration pursuant to RCW 7.04A, as amended, and the Mandatory Arbitration Rules (MAR); venue shall be placed in Franklin County, Washington, the laws of the State of Washington shall apply; and the prevailing party shall be entitled to its reasonable attorney fees and costs. IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed this ______, day of ______________, 2021. CITY OF PASCO DOWNTOWN PASCO DEVELOPMENT AUTHORITY _______________________________ _______________________________ Dave Zabell, City Manager Gabriel Portugal, President Page 27 of 83 2/24/2021 1 Exit Conference City of Pasco December 16, 2019 1 Disclaimer: This presentation is intended to be viewed in conjunction with the complete packet of exit materials provided. A copy of those materials may be requested by contacting the presenters listed or by emailing PublicRecords@sao.wa.gov. Ginny Waltman Program Manager Deborah O’Leary Audit Lead 2 Results that Matter Increased trust in government Independent, transparent examinations Improved efficiency and effectiveness of government Pat McCarthy State Auditor Page 28 of 83 2/24/2021 2 Accountability Audit Results 3 Results in Brief This report describes the overall results and conclusions for the areas we examined. January 1, 2019 through December 31, 2019 In keeping with general auditing practices, we do not examine every transaction, activity, policy, internal control, or area. As a result, no information is provided on the areas that were not examined. In those selected areas, City operations complied, in all material respects, with applicable state laws, regulations, and its own policies, and provided adequate controls over the safeguarding of public resources. Accountability Audit Results 4 Using a risk-based audit approach, for the City, we examined the following areas during the period: •Cash receipting – timeliness and completeness of deposits at the Police Department •Accounts payable – general disbursements, travel expenditures and electronic funds transfers •Payroll – gross wages, leave cash outs and overtime •Procurement – public works, purchases, professional services and personal service contracts •Self-insurance for unemployment and health and welfare •Use of restricted funds – building permit revenue and hotel/motel taxes Page 29 of 83 2/24/2021 3 Financial Audit Results 5 • Opinion issued in accordance with U.S. GAAP • Audit conducted in accordance with Government Auditing Standards Unmodified Opinion Issued • We reported no significant deficiencies in internal control • We identified deficiencies that we consider to be material weaknesses. • We noted no instances of noncompliance that were material to the financial statements of the City Internal Control and Compliance over Financial Reporting January 1, 2019 through December 31, 2019 Financial Statement Preparation - Finding 2019-001: The City’s internal controls over financial reporting were inadequate to ensure accurate reporting. 6 Page 30 of 83 2/24/2021 4 Financial Audit Results 7 • Uncorrected misstatements have been provided for review Required Communications Federal Grant Compliance Audit Results 8 • Opinion issued on the City’s compliance with requirements applicable to its major programs • Audit conducted in accordance with Government Audit Standards and the Uniform Guidance Unmodified Opinion Issued • We reported no significant deficiencies in internal control • We identified no deficiencies that we consider to be material weaknesses. • We noted no instances of noncompliance that are required to be reported Internal Control and Compliance over Major Programs January 1, 2019 through December 31, 2019 Page 31 of 83 2/24/2021 5 Major Programs Selected for Audit 9 CFDA No. Program or Cluster Title Total Amount Expended 14.218 CDBG - Entitlement Grants Cluster - Community Development Block Grants/Entitlement Grants $739,180 20.205 Highway Planning and Construction Cluster - Highway Planning and Construction $866,734 These costs amount to approximately 68 percent of the total federal expenditures for 2019 Single Audit Scope •Performed risk assessments on all City awards over $187,500 •Selected two major programs and determined compliance requirements for each program •Assessed design of internal controls, and tested controls, over each compliance requirement •Tested applicable compliance requirements for each of the City’s two federal major programs 1010 Page 32 of 83 2/24/2021 6 11 Tracker: A clear path to all your audit information Using tracker, your government can: •Get up to speed more quickly when turnover occurs •Better and more quickly prepare for upcoming audits •More easily identify and resolve issues •Enter a status update at the time of the change •Show quickly that it resolved an issue – and get the credit for that expedient resolution Closing Remarks •Audit costs are in alignment with our original estimate •Next audit: April 2021 •Accountability for public resources •Financial statement •Federal programs An estimated cost for the next audit has been provided in our exit packet 12 Page 33 of 83 2/24/2021 7 Report Publication Audit reports are published on our website. Sign up to be notified by email when audit reports are posted to our website: https://sao.wa.gov/about- sao/sign-up- for-news-alerts/ Audit Survey When your report is released, you will receive an audit survey from us. We value your opinions on our audit services and hope you provide feedback. 13 14 Thank You! •We thank City officials and staff for timely communications throughout the audit process. •In particular, we would like to thank Griselda Garcia, Lead Accountant for facilitating a smooth audit process as well as the Information Services staff for working with us to ensure our audit staff had remote access to the City’s database. Page 34 of 83 2/24/2021 8 15 Questions? Contact Ginny Waltman, Program Manager Ginny.Waltman@sao.wa.gov (509) 734-7104 15 15 Page 35 of 83 Accountability Audit Report City of Pasco For the period January 1, 2019 through December 31, 2019 Published (Inserted by OS) Report No. 1027416 Page 4 of 46Page 36 of 83 Insurance Building, P.O. Box 40021  Olympia, Washington 98504-0021  (564) 999-0950  Pat.McCarthy@sao.wa.gov Office of the Washington State Auditor Pat McCarthy Issue Date – (Inserted by OS) Mayor and City Council City of Pasco Pasco, Washington Report on Accountability Thank you for the opportunity to work with you to promote accountability, integrity and openness in government. The Office of the Washington State Auditor takes seriously our role of providing state and local governments with assurance and accountability as the independent auditor of public accounts. In this way, we strive to help government work better, cost less, deliver higher value and earn greater public trust. Independent audits provide essential accountability and transparency for City operations. This information is valuable to management, the governing body and public stakeholders when assessing the government’s stewardship of public resources. Attached is our independent audit report on the City’s compliance with applicable requirements and safeguarding of public resources for the areas we examined. We appreciate the opportunity to work with your staff, and we value your cooperation during the audit. Sincerely, Pat McCarthy State Auditor Olympia, WA Americans with Disabilities In accordance with the Americans with Disabilities Act, we will make this document available in alternative formats. For more information, please contact our Office at (564) 999-0950, TDD Relay at (800) 833-6388, or email our webmaster at webmaster@sao.wa.gov. Page 5 of 46Page 37 of 83 Office of the Washington State Auditor Page 3 TABLE OF CONTENTS Audit Results ................................................................................................................................... 4 Related Reports ............................................................................................................................... 5 Information about the City .............................................................................................................. 6 About the State Auditor's Office ..................................................................................................... 7 Page 6 of 46Page 38 of 83 Office of the Washington State Auditor Page 4 AUDIT RESULTS Results in brief This report describes the overall results and conclusions for the areas we examined. In those selected areas, City operations complied, in all material respects, with applicable state laws, regulations, and its own policies, and provided adequate controls over the safeguarding of public resources. In keeping with general auditing practices, we do not examine every transaction, activity, policy, internal control, or area. As a result, no information is provided on the areas that were not examined. About the audit This report contains the results of our independent accountability audit of the City of Pasco from January 1, 2019 through December 31, 2019. Management is responsible for ensuring compliance and adequate safeguarding of public resources from fraud, loss or abuse. This includes the design, implementation and maintenance of internal controls relevant to these objectives. This audit was conducted under the authority of RCW 43.09.260, which requires the Office of the State Auditor to examine the financial affairs of all local governments. Our audit involved obtaining evidence about the City’s use of public resources, compliance with state laws and regulations and its own policies and procedures, and internal controls over such matters. The procedures performed were based on our assessment of risks in the areas we examined. Based on our risk assessment for the year ended December 31, 2019, the areas examined were those representing the highest risk of fraud, loss, abuse, or noncompliance. We examined the following areas during this audit period:  Cash receipting – timeliness and completeness of deposits at the Police Department  Accounts payable – general disbursements, travel expenditures and electronic funds transfers  Payroll – gross wages, leave cash outs and overtime  Procurement – public works, purchases, professional services and personal service contracts  Self-insurance for unemployment and health and welfare  Use of restricted funds – building permit revenues and hotel/motel taxes Page 7 of 46Page 39 of 83 Office of the Washington State Auditor Page 5 RELATED REPORTS Financial Our opinion on the City’s financial statements and compliance with federal grant program requirements is provided in a separate report, which includes the City’s financial statements. That report is available on our website, http://portal.sao.wa.gov/ReportSearch. That report includes a finding for a material weakness in internal controls over financial reporting regarding financial statement preparation. Federal grant programs We evaluated internal controls and tested compliance with the federal program requirements, as applicable, for the City’s major federal programs, which are listed in the Schedule of Findings and Questioned Costs section of the separate financial statement and single audit report. That report is available on our website, http://portal.sao.wa.gov/ReportSearch. Page 8 of 46Page 40 of 83 Office of the Washington State Auditor Page 6 INFORMATION ABOUT THE CITY The City of Pasco, incorporated in 1891, and serves about 75,000 Franklin County citizens. The City provides services including police, fire, Municipal Court, emergency response, parks and recreation, a senior center, a golf course, public works, and planning and economic development. The City also operates a cemetery, a water system, sewer system and an irrigation system. An elected, seven-member Council governs the City. The Council selects one of its members to serve as Mayor. The Council also appoints management to oversee the City’s daily operations and about 365 employees. The City had about $87 million in expenditures for 2019. Contact information related to this report Address: City of Pasco 525 N. 3rd P.O. Box 293 Pasco, WA 99301 Contact: Richa Sigdel, Finance Director Telephone: (509) 545-3488 Website: www.pasco-wa.gov Information current as of report publish date. Audit history You can find current and past audit reports for the City of Pasco at http://portal.sao.wa.gov/ReportSearch. Page 9 of 46Page 41 of 83 Office of the Washington State Auditor Page 7 ABOUT THE STATE AUDITOR’S OFFICE The State Auditor’s Office is established in the state’s Constitution and is part of the executive branch of state government. The State Auditor is elected by the citizens of Washington and serves four-year terms. We work with our audit clients and citizens to achieve our vision of government that works for citizens, by helping governments work better, cost less, deliver higher value, and earn greater public trust. In fulfilling our mission to hold state and local governments accountable for the use of public resources, we also hold ourselves accountable by continually improving our audit quality and operational efficiency and developing highly engaged and committed employees. As an elected agency, the State Auditor’s Office has the independence necessary to objectively perform audits and investigations. Our audits are designed to comply with professional standards as well as to satisfy the requirements of federal, state, and local laws. Our audits look at financial information and compliance with state, federal and local laws on the part of all local governments, including schools, and all state agencies, including institutions of higher education. In addition, we conduct performance audits of state agencies and local governments as well as fraud, state whistleblower and citizen hotline investigations. The results of our work are widely distributed through a variety of reports, which are available on our website and through our free, electronic subscription service. We take our role as partners in accountability seriously, and provide training and technical assistance to governments, and have an extensive quality assurance program. Contact information for the State Auditor’s Office Public Records requests PublicRecords@sao.wa.gov Main telephone (564) 999-0950 Toll-free Citizen Hotline (866) 902-3900 Website www.sao.wa.gov Page 10 of 46Page 42 of 83 Financial Statements and Federal Single Audit Report City of Pasco For the period January 1, 2019 through December 31, 2019 Published (Inserted by OS) Report No. 1027509 Page 11 of 46Page 43 of 83 Insurance Building, P.O. Box 40021  Olympia, Washington 98504-0021  (564) 999-0950  Pat.McCarthy@sao.wa.gov Office of the Washington State Auditor Pat McCarthy Issue Date – (Inserted by OS) Mayor and City Council City of Pasco Pasco, Washington Report on Financial Statements and Federal Single Audit Please find attached our report on the City of Pasco’s financial statements and compliance with federal laws and regulations. We are issuing this report in order to provide information on the City’s financial condition. Sincerely, Pat McCarthy State Auditor Olympia, WA Americans with Disabilities In accordance with the Americans with Disabilities Act, we will make this document available in alternative formats. For more information, please contact our Office at (564) 999-0950, TDD Relay at (800) 833-6388, or email our webmaster at webmaster@sao.wa.gov. Page 12 of 46Page 44 of 83 Office of the Washington State Auditor TABLE OF CONTENTS Schedule of Findings and Questioned Costs ................................................................................... 4 Schedule of Audit Findings and Responses .................................................................................... 6 Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards..................................................................................................... 9 Independent Auditor's Report on Compliance for Each Major Federal Program and Report on Internal Control Over Compliance in Accordance With the Uniform Guidance ......................... 12 Independent Auditor's Report on Financial Statements ................................................................ 15 Financial Section ........................................................................................................................... 19 Corrective Action Plan for Findings Reported Under Uniform Guidance ................................... 21 About the State Auditor's Office ................................................................................................... 22 Page 13 of 46Page 45 of 83 Office of the Washington State Auditor SCHEDULE OF FINDINGS AND QUESTIONED COSTS City of Pasco January 1, 2019 through December 31, 2019 SECTION I – SUMMARY OF AUDITOR’S RESULTS The results of our audit of the City of Pasco are summarized below in accordance with Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Financial Statements We issued an unmodified opinion on the fair presentation of the financial statements of the governmental activities, the business-type activities, each major fund and the aggregate discretely presented component units and remaining fund information in accordance with accounting principles generally accepted in the United States of America (GAAP). Internal Control over Financial Reporting:  Significant Deficiencies: We reported no deficiencies in the design or operation of internal control over financial reporting that we consider to be significant deficiencies.  Material Weaknesses: We identified deficiencies that we consider to be material weaknesses. We noted no instances of noncompliance that were material to the financial statements of the City. Federal Awards Internal Control over Major Programs:  Significant Deficiencies: We reported no deficiencies in the design or operation of internal control over major federal programs that we consider to be significant deficiencies.  Material Weaknesses: We identified no deficiencies that we consider to be material weaknesses. Page 14 of 46Page 46 of 83 Office of the Washington State Auditor We issued an unmodified opinion on the City’s compliance with requirements applicable to each of its major federal programs. We reported no findings that are required to be disclosed in accordance with 2 CFR 200.516(a). Identification of Major Federal Programs The following programs were selected as major programs in our audit of compliance in accordance with the Uniform Guidance. CFDA No. Program or Cluster Title 14.218 CDBG – Entitlement Grants Cluster – Community Development Block Grants/Entitlement Grants 20.205 Highway Planning and Construction Cluster – Highway Planning and Construction The dollar threshold used to distinguish between Type A and Type B programs, as prescribed by the Uniform Guidance, was $750,000. The City did not qualify as a low-risk auditee under the Uniform Guidance. SECTION II – FINANCIAL STATEMENT FINDINGS See Finding 2019-001. SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS None reported. Page 15 of 46Page 47 of 83 Office of the Washington State Auditor SCHEDULE OF AUDIT FINDINGS AND RESPONSES City of Pasco January 1, 2019 through December 31, 2019 2019-001 The City’s internal controls over financial reporting were inadequate to ensure accurate reporting. Background The City’s elected officials, state, and federal agencies, and the public rely on the information included in the financial statements and reports to make decisions. City management is responsible for designing, implementing and maintaining internal controls that provide reasonable assurance regarding the reliability of financial reporting. Government Auditing Standards, prescribed by the Comptroller General of the United States, requires the auditor to communicate material weaknesses, defined below in the Applicable Laws and Regulations section, as a finding. Description of Condition Our audit identified the following deficiencies in internal controls over financial reporting that, when taken together, represent a material weakness:  Governmental Accounting Standards Board Statement No. 34 (GASB 34) outlines the criteria for reporting a major fund on the financial statements. Governmental and proprietary fund financial statements focus on major funds. The financial statements should present major funds individually and non-major funds in aggregate. Accounting standards provide quantitative thresholds for identifying which funds must be reported as major. The City prepared a calculation to determine its major funds. However, the City missed two major funds because it did not incorporate current guidance in the tool it used to determine the criteria for reporting a major fund.  The City did not have an effective process in place to review the financial statements to ensure they were accurate and complete. Cause of Condition The City uses a spreadsheet to help with the calculation and determination of major funds. The City did not update the spreadsheet to align with current guidance and ensure the calculation of major funds included all applicable criteria. In addition, the City did not dedicate adequate resources to perform a detailed review of the financial statements. Page 16 of 46Page 48 of 83 Office of the Washington State Auditor Effect of Condition The material weakness in internal controls caused the following material errors found in the financial statements submitted for audit:  The City did not report the Ambulance Fund or the Local Improvement District Loan Fund as major funds, as required by GASB 34.  Our audit identified several other, less significant errors in the statements, notes, and schedules. Recommendation We recommend the City dedicate sufficient resources to preparing accurate financial statements under generally accepted accounting practices (GAAP), including ensuring that tools used to prepare the financial statements reflect current guidance. In addition, the City should establish a robust process to review the final financial statements to ensure they are accurate and complete. City’s Response The City is appreciative of the work of the State Auditor’s Office, and agrees with their finding. The City recognizes the importance of accurate reporting and strives to continuously improve reporting. Upon notification of the error, the spreadsheet calculation was corrected and the 2019 report recreated to provide correct presentation. Since the finding notification, the City has implemented a software solution that integrates with our accounting program. This program will support the production of future annual statements. Use of the program, will standardize incorporation of all financial information for report preparation. Additionally, the software is updated annually to reflect new accounting pronouncements. Auditor’s Remarks We appreciate the City’s commitment to resolve this finding and thank the City for its cooperation and assistance during the audit. We will review the corrective action taken during our next regular audit. Applicable Laws and Regulations Government Auditing Standards, December 2011 Revision, paragraph 4.23 establishes reporting requirements related to significant deficiencies or material weaknesses in internal control, instances of fraud or abuse, and noncompliance with provisions of law, regulations, contracts, or grant agreements. Page 17 of 46Page 49 of 83 Office of the Washington State Auditor The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 265, Communicating Internal Control Related Matters Identified in an Audit, paragraph 7. Page 18 of 46Page 50 of 83 Office of the Washington State Auditor INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS City of Pasco January 1, 2019 through December 31, 2019 Mayor and City Council City of Pasco Pasco, Washington We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund and the aggregate discretely presented component units and remaining fund information of the City of Pasco, as of and for the year ended December 31, 2019, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated December 16, 2020. As discussed in Note 16 to the 2019 financial statements, in February 2020, a state of emergency was declared that could have a negative financial effect on the City. Management’s plans in response to this matter are also described in Note 16. INTERNAL CONTROL OVER FINANCIAL REPORTING In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control. Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant Page 19 of 46Page 51 of 83 Office of the Washington State Auditor deficiencies may exist that were not identified. However, as described in the accompanying Schedule of Audit Findings and Responses, we identified certain deficiencies in internal control that we consider to be material weaknesses. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the City’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. We consider the deficiencies described in the accompanying Schedule of Audit Findings and Responses as Finding 2019-001 to be material weaknesses. COMPLIANCE AND OTHER MATTERS As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of the City’s compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. CITY’S RESPONSE TO FINDINGS The City’s response to the findings identified in our audit is described in the accompanying Schedule of Audit Findings and Responses. The City’s response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the response. PURPOSE OF THIS REPORT The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in Page 20 of 46Page 52 of 83 Office of the Washington State Auditor accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. However, this report is a matter of public record and its distribution is not limited. It also serves to disseminate information to the public as a reporting tool to help citizens assess government operations. Pat McCarthy State Auditor Olympia, WA December 16, 2020 Page 21 of 46Page 53 of 83 Office of the Washington State Auditor INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND REPORT ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH THE UNIFORM GUIDANCE City of Pasco January 1, 2019 through December 31, 2019 Mayor and City Council City of Pasco Pasco, Washington REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM We have audited the compliance of the City of Pasco, with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Compliance Supplement that could have a direct and material effect on each of the City’s major federal programs for the year ended December 31, 2019. The City’s major federal programs are identified in the accompanying Schedule of Findings and Questioned Costs. Management’s Responsibility Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditor’s Responsibility Our responsibility is to express an opinion on compliance for each of the City’s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements Page 22 of 46Page 54 of 83 Office of the Washington State Auditor referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination on the City’s compliance. Opinion on Each Major Federal Program In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended December 31, 2019. REPORT ON INTERNAL CONTROL OVER COMPLIANCE Management of the City is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the City’s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program in order to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Page 23 of 46Page 55 of 83 Office of the Washington State Auditor Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Purpose of this Report The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. However, this report is a matter of public record and its distribution is not limited. It also serves to disseminate information to the public as a reporting tool to help citizens assess government operations. Pat McCarthy State Auditor Olympia, WA December 16, 2020 Page 24 of 46Page 56 of 83 Office of the Washington State Auditor INDEPENDENT AUDITOR’S REPORT ON FINANCIAL STATEMENTS City of Pasco January 1, 2019 through December 31, 2019 Mayor and City Council City of Pasco Pasco, Washington REPORT ON THE FINANCIAL STATEMENTS We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund and the discretely presented component units and remaining fund information of the City of Pasco, as of and for the year ended December 31, 2019, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed on page 19. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. Page 25 of 46Page 57 of 83 Office of the Washington State Auditor An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund and the aggregate discretely presented component units and remaining fund information of the City of Pasco, as of December 31, 2019, and the respective changes in financial position and, where applicable, cash flows thereof, and the budgetary comparison for the General and Ambulance funds, for the year then ended in accordance with accounting principles generally accepted in the United States of America. Matters of Emphasis As discussed in Note 16 to the 2019 financial statements, in February 2020, a state of emergency was declared that could have a negative financial effect on the City. Management’s plans in response to this matter are also described in Note 16. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and required supplementary information listed on page 19 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board Page 26 of 46Page 58 of 83 Office of the Washington State Auditor who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary and Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements as a whole. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). This schedule is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS In accordance with Government Auditing Standards, we have also issued our report dated December 16, 2020 on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an Page 27 of 46Page 59 of 83 Office of the Washington State Auditor integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance. Pat McCarthy State Auditor Olympia, WA December 16, 2020 Page 28 of 46Page 60 of 83 Office of the Washington State Auditor FINANCIAL SECTION City of Pasco January 1, 2019 through December 31, 2019 REQUIRED SUPPLEMENTARY INFORMATION Management’s Discussion and Analysis – 2019 BASIC FINANCIAL STATEMENTS Statement of Net Position – 2019 Statement of Activities – 2019 Balance Sheet – Governmental Funds – 2019 Statement of Revenues, Expenditures and Changes in Fund Balance – Governmental Funds – 2019 Reconciliation of Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balance to the Statement of Activities – 2019 Statement of Revenues, Expenditures, and Changes in Fund Balances – Budget to Actual – General Fund – 2019 Statement of Revenues, Expenditures, and Changes in Fund Balances – Budget to Actual – Ambulance Fund – 2019 Statement of Net Position – Proprietary Funds – 2019 Statement of Revenues, Expenses and Changes in Fund Net Position – Proprietary Funds – 2019 Statement of Cash Flows – Proprietary Funds – 2019 Statement of Net Position – Fiduciary Funds – 2019 Statement of Changes in Fiduciary Net Position – 2019 Notes to Financial Statements – 2019 REQUIRED SUPPLEMENTARY INFORMATION Schedule of Changes in the Net OPEB Liability and Related Ratios – Old Fire OPEB – 2019 Schedule of Investment Returns – Old Fire OPEB – 2019 Schedule of City Contributions – LEOFF 1 OPEB – 2019 Page 29 of 46Page 61 of 83 Office of the Washington State Auditor Schedule of Changes in the Total OPEB Liability and Related Ratios – LEOFF 1 OPEB – 2019 Schedule of Changes in the City’s Net Pension Liability and Related Ratios – Old Fire Pension Fund – 2019 Schedule of Contributions – Fire Pension Fund – 2019 Schedule of Investment Returns – Fire Pension Plan – 2019 Schedule of Proportionate Share of the Net Pension Liability (Asset) – PERS 1, PERS 2/3, LEOFF 1, LEOFF 2 Schedule of Employer Contributions – PERS 1, PERS 2/3, LEOFF 1, LEOFF 2 – 2019 SUPPLEMENTARY AND OTHER INFORMATION Schedule of Expenditures of Federal Awards – 2019 Notes to the Schedule of Expenditures of Federal Awards – 2019 Page 30 of 46Page 62 of 83 Office of the Washington State Auditor CORRECTIVE ACTION PLAN FOR FINDINGS REPORTED UNDER UNIFORM GUIDANCE City of Pasco January 1, 2019 through December 31, 2019 This schedule presents the corrective action planned by the City for findings reported in this report in accordance with Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Finding ref number: 2019-001 Finding caption: The City’s internal controls over financial reporting were inadequate to ensure accurate reporting. Name, address, and telephone of City contact person: Richa Sigdel, Finance Director; 525 N 3rd, Pasco, WA 99301; (509) 545-3488 Corrective action the auditee plans to take in response to the finding: The City has updated its major fund calculation spreadsheet as well as implemented a software system which will complete a separate major fund calculation to ensure accuracy. Further, independent review of the major fund calculations is an itemized step in the City’s CAFR Checklist. Anticipated date to complete the corrective action: Completed Finance Department  (509) 545-3420  Fax (509) 544-3082 P.O. Box 293  525 N. Third Ave.  Pasco, WA 99301 Page 31 of 46Page 63 of 83 Office of the Washington State Auditor ABOUT THE STATE AUDITOR’S OFFICE The State Auditor’s Office is established in the state’s Constitution and is part of the executive branch of state government. The State Auditor is elected by the citizens of Washington and serves four-year terms. We work with our audit clients and citizens to achieve our vision of government that works for citizens, by helping governments work better, cost less, deliver higher value, and earn greater public trust. In fulfilling our mission to hold state and local governments accountable for the use of public resources, we also hold ourselves accountable by continually improving our audit quality and operational efficiency and developing highly engaged and committed employees. As an elected agency, the State Auditor’s Office has the independence necessary to objectively perform audits and investigations. Our audits are designed to comply with professional standards as well as to satisfy the requirements of federal, state, and local laws. Our audits look at financial information and compliance with state, federal and local laws on the part of all local governments, including schools, and all state agencies, including institutions of higher education. In addition, we conduct performance audits of state agencies and local governments as well as fraud, state whistleblower and citizen hotline investigations. The results of our work are widely distributed through a variety of reports, which are available on our website and through our free, electronic subscription service. We take our role as partners in accountability seriously, and provide training and technical assistance to governments, and have an extensive quality assurance program. Contact information for the State Auditor’s Office Public Records requests PublicRecords@sao.wa.gov Main telephone (564) 999-0950 Toll-free Citizen Hotline (866) 902-3900 Website www.sao.wa.gov Page 32 of 46Page 64 of 83 Page 33 of 46Page 65 of 83 Page 34 of 46Page 66 of 83 Page 35 of 46Page 67 of 83 Page 36 of 46Page 68 of 83 Page 37 of 46Page 69 of 83 Page 38 of 46Page 70 of 83 AGENDA REPORT FOR: City Council March 3, 2021 TO: Dave Zabell, City Manager City Council Workshop Meeting: 3/8/21 FROM: Bob Gear, Fire Chief Fire Department SUBJECT: Ordinance - Budget Adjustment for Fire Equipment Purchase I. REFERENCE(S): Draft Ordinance II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS: Discussion III. FISCAL IMPACT: $310,000 Funding Available for Fire Equipment $ 95,000 Funding Available for Ambulance Equipment $405,000 Transfer from Equipment Rental Replacement Fund to PFD's Operating Budget IV. HISTORY AND FACTS BRIEF: The City of Pasco Fire Department (PFD) maintains compliance with NFPA 1561, 1710, 1061, and WAC 296-305-05000 and NIMS. To maintain compliance the PFD has need to replace its portable radios which have reached the end of their service life. The current portable radios that are in use by the PFD are over fifteen (15) years of age and are not serviced or supported by the manufacturer. Additionally, the current PFD radios do not meet the current Federal Communications Commission (FCC) for interoperability and digital radio technology. Purchasing updated radios will ensure that PFD has interoperability radio communications with the local and state fire and police agencies across our Tri-County region. The City of PFD maintains its authorized EMS certified provider (EMT and Paramedic) scope of practice provisions in accordance with RCW 18.71.205, Page 71 of 83 RCW 246WAC 246.976.920 WAC 18.73.081, and -976-the One 182. of medical tools used by PFD to provide the service is a portable combination EKG monitor and external heart defibrillator. Some of the portable combination EKG monitor and external heart defibrillator that PFD is using have reached their end of life cycle and the vendor is no longer providing the softwa re updates or technical support to these medical devices. To ensure PFD can meet the service deliver requirements the portable combination EKG monitor and external heart defibrillator are in need of replacement. V. DISCUSSION: Following of review a the and Equipment Services Emergency Fire Replacement fund, where anticipated cost and timing of planned purchases was evaluated, a surplus of $310,000, was determined to be available in accordance with the projected equipment replacement schedule. • This funding will allow the purchase of 100 replacement portable radios, spare batteries for the portable radios, battery chargers and external microphones/speakers. Following a review of the Ambulance Equipment Replacement fund, where anticipated cost and timing of planned purchases was evaluated, a surplus $95,000, was determined to be available in accordance with the projected equipment replacement schedule. • This funding will allow the purchase of four (4) replacement portable combination EKG monitor and external heart defibrillators. Staff recommends Council adopt the Ordinance for the budget adjustment and use of funds from equipment replacement fund to allow for the purchase of new portable radios and portable combination EKG monitor and external heart defibrillators. Page 72 of 83 Ordinance – 2021 Operating Budget Amendment - 1 ORDINANCE NO. _______ AN ORDINANCE AMENDING THE 2021-2022 BIENNIAL OPERATING BUDGET (ORDINANCE NO. 4503) OF THE CITY OF PASCO, WASHINGTON, BY PROVIDING SUPPLEMENT THERETO; TO PROVIDE ADDITIONAL APPROPRIATION IN THE CITY’S GENERAL FUND FOR THE PURCHASE OF NEEDED FIRE DEPARTMENT EQUIPMENT. WHEREAS, on December 7, 2021, the Pasco City Council approved Ordinance No. 4503, adopting the 2021-2022 Biennial Budget. WHEREAS, the Pasco Fire Department staff have determined the need to purchase new, replacement, portable radios, as well as purchase replacements of the combination EKG monitors and heart defibrillators. WHEREAS, no funds were appropriated in the 2021-2022 Equipment Rental Replacement Fund to purchase the needed equipment. WHEREAS, the Pasco Fire Department staff have determined sufficient funds are available in the Equipment Rental Replacement Fund to purchase the needed equipment and recommend amendment to such budget. WHEREAS, the application of funds have been identified and the City Council of the City of Pasco finds and determines that such amendment of the 2021-2022 Biennial Budget is in the best interests of residents of the City of Pasco and will promote the general health, safety and welfare. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PASCO, WASHINGTON DO ORDAIN AS FOLLOWS: Section 1. Pursuant to RCW 35A.33.120, the 2021-2022 Operating Budget be and the same is hereby amended to provide for the following adjustments to revenues, transfers in, expenditures, and transfers out b y providing authority for any necessar y transfer of money within or between funds indicated, and their subsequent impact to end fund balance: Fund Revenue Expense Net Change EQUIPMENT RENTAL REPLACEMENT FUND - GOVERNMENT TYPE 0 405,000 (405,000) Total 0 405,000 (405,000) Section 2. That the additions in appropriations and expenditures are hereb y declared to exist in the above funds for the said uses and purposes as shown above and the proper City officials are hereby authorized and directed to issue warrants and transfer funds in accordance with the provision of the Ordinance. Page 73 of 83 Ordinance – 2021 Operating Budget Amendment - 2 Section 3. Except as amended herein, Ordinance 4503 as previously adopted heretofore shall remain unchanged Section 4. This ordinance, being an exercise of a power specifically delegated to the City legislative body, is not subject to referendum, and shall take full force and effect five (5) days after approval, passage and publication as required by law. Adopted by the City Council of the City of Pasco, this ___ day of __________, 2021. Saul Martinez Mayor ATTEST: APPROVED AS TO FORM: _____________________________ ___________________________ Debra Barham, CMC Kerr Ferguson Law, PLLC City Clerk City Attorney Published: ___________________________ Page 74 of 83 AGENDA REPORT FOR: City Council March 4, 2021 TO: Dave Zabell, City Manager City Council Workshop Meeting: 3/8/21 FROM: Rick White, Director Community & Economic Development SUBJECT: Ordinance - Amending PMC Title 23 Related to SEPA I. REFERENCE(S): Hearing Examiner 2020 Annual Report Proposed Ordinance Amending Title 23 PMC II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS: Discussion III. FISCAL IMPACT: IV. HISTORY AND FACTS BRIEF: In mid 2019, City Council approved use of a Hearing Examiner system to conduct public hearings and process various land use permits and rezone requests. Previously the City's Planning Commission conducted these processes with final decisions provided by Council. Use of a Hearing Examiner has been positively received by the community and development industry and has provided a much needed reduction in potential liability for contentious land use decisions. Each year, Pasco's Hearing Examiner submits an annual report summarizing the year's activities and notes any areas of potential concern. This year the Examiner has provided the attached Annual Report and has recommended review of existing Pasco Municipal Code (PMC) regulations Page 75 of 83 incorporating applicable provisions of the Washington Administrative Code (WAC) regarding the State Environmental Policy Act (SEPA) protocols. V. DISCUSSION: The City Attorney's office has prepared the attached ordinance revising the dated SEPA Appeal provisions in the PMC after considerable discussions with staff and the Pasco Hearing Examiner. The revisions are compliant with State law and the WAC and affe ct clarity; notice requirements; appeal deadlines and the scope and consolidation of appealable actions. The City Attorney's office and staff will be available to discuss the revisions at the Council Workshop. Page 76 of 83 Page 77 of 83 City of Pasco Hearing Examiner Services, 2020 Report Page 2 5400 Carillon Point, Bldg. 5000, Ste. 476 Kirkland, Washington 98033 (206) 682-0767 • susan@susandrummond.com The Hearing Examiner conditionally approved the special permits and preliminary plat applications. The variance requests were denied. The Hearing Examiner recommended approval of the five rezones. The SEPA appeal was granted in part (fire fee), with one issue found to be moot (traffic impact analysis). The short plat appeal on a project condition was granted. In addition, two administrative exception requests were granted. All recommendations and decisions were issued on or before ten business days of record closure. 2. Overview of 2020 Hearing Examiner Review Process The City is familiar with the Hearing Examiner review process. However, in general, the City's independent Examiner reviews the administrative documents, including the Staff Report, which are transmitted to the Examiner before the hearing. On permit applications, at the hearing the Planning Department summarizes the proposal. This summary is followed by applicant presentation and citizen comment. The applicant often addresses questions and concerns raised in comment, and staff may provide clarification or technical input. When necessary to further address concerns raised, the record is kept open for a set number of days. For all remote application hearings, the record is kept open for at least two days, just in case there was anyone who wished to comment but had technical difficulties. There have been no reported difficulties, but this allowance is still made. Within ten business days of record closure, a decision is issued. An appeal hearing can be more complex. Two appeals were heard this past year. As on previous appeals, the appellant presented first, followed by the Planning Department. The appeals were somewhat more complex than in the past, with a focus on project conditions. Decisions issued within ten business days following record closure (on the appeal, or on the underlying permit when applicable). 3. Issues of Local Concern The hearing system allows for the submission of citizen and agency comment to inform the review of certain land use applications and for conditions to be tailored to development proposals to address their impacts. The Examiner understands the extensive background work involved in submitting an application to the Examiner, so pays particular attention to the record prepared before the hearing, which typically comprises the majority of the evidence reviewed. At the hearing, these materials are supplemented with additional documents and testimony. The Examiner considers the evidence submitted and regulatory requirements. Matters such as height and lot size are often not credibly subject to dispute. But, for matters requiring that the evidence be weighed, evidence submitted by a qualified professional with expertise on the issue is useful, although most evidence is not from expert witnesses. The entire record is considered to ensure local concerns and impacts are adequately accounted for. Page 78 of 83 City of Pasco Hearing Examiner Services, 2020 Report Page 3 5400 Carillon Point, Bldg. 5000, Ste. 476 Kirkland, Washington 98033 (206) 682-0767 • susan@susandrummond.com 4. Suggestions Overall, from the Examiner's perspective, the hearing examiner process has worked well. The City may wish to update its SEPA code and procedures to provide standard 14-day comment and appeal periods.2 And, in addressing SEPA mitigation, it would be worth considering whether City SEPA procedures and policies should be adjusted. In an appeal, these procedures can be particularly important. Also, the record is central is determining both application and appeal issues, so developing sufficient information before a decision is made, and then providing same to the Examiner, is important. 5. Conclusion Going forward, the Examiner will continue to endeavor to provide parties an adequate opportunity to raise concerns and to efficiently render decisions based on the record and local requirements. The City is constantly evaluating its approach to land use review, and the Examiner is always open to improvements to same. Thank you for the opportunity to serve as your Hearing Examiner. Please let me know if there are questions. 2 See e.g., RCW 43.21C.060, .075; WAC 197-11-340, 680. Page 79 of 83 Ordinance Amending PMC 23.35.070 - 1 ORDINANCE NO. _______ AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PASCO, WASHINGTON, AMENDING PMC SECTION 23.35.070 “APPEALS” WHEREAS, the State Environmental Policy Act RCW 43.21C. (SEPA) authorizes cities to draft local SEPA policies; and WHEREAS, SEPA requires that all local SEPA policies comply with the Department of Ecology’s model SEPA rules; and WHEREAS, the Department of Ecology’s model SEPA rules permit the City to provide for a SEPA appeals process; and WHEREAS, the City has previously adopted a SEPA appeal process; and WHEREAS, the City has now determined it is appropriate to modify its SEPA appeal process in order to clarify the procedural rights of parties commencing SEPA appeals. NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF PASCO, WASHINGTON, DO ORDAIN AS FOLLOWS: Section 1. That Section 23.35.070 entitled “Appeals” of the Pasco Municipal Code shall be and hereby is amended and shall read as follows: 23.35.070 Appeals. (1) Except for permits and variances issued pursuant to Chapter 90.58 RCW (Shoreline Management Act), When any nonexempt action, not requiring a decision of the City Council, is conditioned or denied or after a threshold determination is made on the basis of SEPA by a nonelected official, the decision may be appealed to the Hearing Examiner. (2)  Such appeal may be perfected by the proponent or an aggrieved party by giving notice to the responsible official. Appeals on threshold determinations shall be filed within 10 days or prior to the lapse of any comment period on a threshold determination under WAC 197-11- 340(20). All other appeals shall be filed within 10 days. The appeals shall be filed by the required deadlines of this chapter. (a) The appeal shall be filed in writing and shall contain the name and address of the person filing the appeal and the name of the organization or agency represented, if any. (b) The appeal shall set forth the specific reason, rationale, and/or basis for the appeal. Page 80 of 83 Ordinance Amending PMC 23.35.070 - 2 (c) Payment of the appeal fee in the amount of $200.00 shall occur at the time the appeal is filed. (3) In addition to the exhibits submitted, the City may submit a responsive memorandum to the Hearing Examiner and provide copies to the other parties at least one (1) day prior to the hearing. (34) If the appeal has been timely filed and complies with the requirements of subsection (2) of this section, the Hearing Examiner shall conduct an open record appeal hearing into the merits of the appeal, at which time the Hearing Examiner shall hear and receive testimony, documentary evidence, and arguments from the appellant(s) parties solely on the issues raised or identified by the appeal. (a) The person(s) filing the appeal shall have the burden of going forward with the evidence and the ultimate burden of persuasion. (b) Notice of any open record appeal hearing held pursuant to this section shall be provided as specified in PMC 25.210.040to the parties at least fourteen (14) days prior to the hearing. (c) The Hearing Examiner may continue the open record appeal hearing from time to time without further mail or delivered notice. (d) The Hearing Examiner shall maintain an electronic record of the testimony and arguments presented and a record of any physical evidence/documents presented. (e) The Hearing Examiner’s decision shall be rendered within ten (10) working days of the conclusion of an open record appeal hearing unless a longer period is agreed to by the appellant parties. This will be the effective date of the decision. (f) The Hearing Examiner’s decision shall include findings of fact and conclusions in support of the decision. (g) The Hearing Examiner’s decision under this section may be to grant or deny the appeal in whole or in part, or to remand the threshold determination to the responsible official for reconsideration. (h) Appeal hearings held by the Hearing Examiner pursuant to this section shall be de novo. (i) The Hearing Examiner’s decision shall become final unless timely appealed by an aggrieved party within 10 working days from the effective date of the decision. (45) Appeal of the final decision of the Hearing Examiner under this section shall be to the superior court of Franklin County. Page 81 of 83 Ordinance Amending PMC 23.35.070 - 3 (56) Substantial Weight Accorded Responsible Official. The procedural determinations made by the City’s responsible official shall carry substantial weight in any appeal proceeding under this chapter. (67) Record. For any appeal to superior court under this chapter, the City shall provide for a record that shall consist of the following: (a) Findings and conclusions; (b) Testimony under oath; and (c) A taped or written transcript, the cost of which shall be borne by the appellant; and (d) Admitted exhibits. (78) Exhaustion of Remedies. SEPA appeal procedures, as provided herein, must be utilized prior to judicial review of the SEPA decision. (9) Appeal of intermediate steps prohibited. Appeal of the intermediate steps under SEPA (e.g., lead agency determination, scoping, draft EIS adequacy) shall not be allowed. (10) One administrative appeal permitted. Only one administrative appeal of a threshold determination or of the adequacy of an EIS shall be permitted under these rules; successive administrative appeals on these issues are not allowed. This limitation does not apply to administrative appeals before another agency. (11) Scope of appeals limited. Appeals on SEPA procedures shall be limited to review of a final threshold determination and final EIS. These appeals may occur prior to an agency's final decision on a proposed action. (12) Appeal to be consolidated with underlying permitted action. In any appeal, except that of a threshold determination, the appeal shall consolidate any allowed appeals of procedural and substantive determinations under SEPA with a hearing or appeal on the underlying governmental action in a single simultaneous hearing before the Hearing Examiner. This hearing shall be one at which the Hearing Examiner will consider either the agency's decision or a recommendation on the proposed underlying governmental action. (13) Consolidated appeals required. Any appeal of a procedural or substantive determination under SEPA issued at the same time as the decision on a project action shall be filed within fourteen (14) days after a notice of decision under RCW 36.70B.130 or after other notice that the decision has been made and is appealable. In order to allow public comment on a DNS prior to requiring an administrative appeal to be filed, this appeal period shall be extended for an additional seven days if the appeal is of a DNS for which public comment is required under this chapter. For threshold determinations issued prior to a decision on a project action, any Page 82 of 83 Ordinance Amending PMC 23.35.070 - 4 administrative appeal shall be filed within fourteen (14) days after notice that the determination has been made and is appealable. (14) Conflict with other City rules. In the event any of the SEPA appeal rules conflict with other sections of Pasco Municipal Code, the SEPA appeal rules shall govern, except for consolidated appeals. For consolidated appeals, the timelines here shall govern unless PMC 4.02.100 provides for a longer time period, in which case the longer period shall govern. (15) Conflict with SEPA statute and regulations. In the event any of the City’s SEPA rules conflict with any portion of WAC 197-11, RCW 43.21C, or RCW 36.70B, the rules contained in the State statutes and regulations shall govern. [Ord. 3765 § 2, 2006; Ord. 3297 § 8, 1998; Ord. 2886 § 1, 1992; Ord. 2512 § 1, 1984; Code 1970 § 23.07.070.] Section 2. This ordinance shall take full force and effect five (5) days after its approval, passage and publication as required by law. PASSED by the City Council of the City of Pasco, this ______ day of __________ 2021. Saul Martinez Mayor ATTEST: APPROVED AS TO FORM: _____________________________ ____________________________ Debra Barham, CMC Kerr Ferguson Law, PLLC City Clerk City Attorney Published: _____________________ Page 83 of 83