Finance & Asset Management Committee Meeting Agenda Amended

Transcription

1 Finance & Asset Management Committee Meeting Agenda Amended Date: Tuesday, January 15, 2019 Time: 4:00p.m. 6:00p.m. Location: Economy Building Classroom, 1433 First Avenue (3 rd Floor) Committee Members: Ray Ishii (Chair), Devin McComb (Vice-Chair), Patrice Barrentine, David Ghoddousi, Paul Neal, Mark Brady, JJ McKay 4:00pm I. Administrative: A. Approval of Agenda B. Approval of the Finance & Asset Management Committee November 13 th, 2018 Meeting Minutes Chair 4:05pm II. Announcements and/or Community Comments 4:10pm III. Reports and Discussion Items A. Review of the PDA Financial Statements November 2018 B. Review of the Preliminary PDA Financial Statements December 2018 C. Checking Account Activity Reports November and December 2018 D FAM Calendar E. Capital Projects Update 5:00pm IV. Action Items A. Proposed Resolution 19-02: Authorization for Contract Authority Contract Project Coordinator for LaSalle Replacement Reserves B. Proposed Resolution 19-03: Replacement of Heritage House Domestic Water Boilers C. Proposed Resolution 19-04: Parking Pay Station Software Upgrade and Pay on Foot Machine Replacement Sabina Proto Sabina Proto Sabina Proto Sabina Proto Brady Morrison Kelsey Lindblom John Turnbull Kelsey Lindblom 5:15pm V. Property Management Report A. Residential Property Management Report John Turnbull 5:20pm VI. Public Comment Chair 5:25pm 5:45pm VII. Closed Session A. Property Management Report - RCW (c) B. Review of Lease Proposals Lease Renewal Athenian Inn, 1517 Pike Place #427 Lease Renewal So Much Yarn, 1525 First Ave #4 New Owner(s) Virginia Inn, 1937 First Avenue Vacancy Report i. Current Lease Negotiations VIII. Open Session A. Action Item: Proposed Resolution 19-05: Lease Proposals January 2019 Chair Matthew Holland Chair 5:50pm IX. Resolutions to be added to the Consent Agenda Chair Pike Place Market Preservation & Development Authority (PDA) info@pikeplacemarket.org pikeplacemarket.org P: F: Pike Street, Room 500 Seattle, WA 98101

2 5:55pm X. Concerns of Committee Members Chair 6:00pm XI. Adjournment Chair Pike Place Market Preservation & Development Authority (PDA) pikeplacemarket.org P: F: Pike Street, Room 500 Seattle, WA 98101

3 z Finance & Asset Management Committee Meeting Minutes Tuesday, November 14 th, :00 p.m. to 6:00 p.m. Economy Building Classroom, 1433 First Avenue (3 rd Floor) Committee Members Present: Devin McComb, Patrice Barrentine, David Ghoddousi, Mark Brady, Paul Neal, Kristie Beattie Other Council Members Present: Rico Quirindongo, Ali Mowry Staff/ Consultants Present: Mary Bacarella, Sabina Proto, Amy Wallsmith, Brady Morrison, Matthew Holland, Kelsey Lindblom Others Present: Nick Setten, Joan Paulson, Lillian Sherman The meeting was called to order at 4:02 pm by Devin McComb, Vice Chair. I. Administration A. Approval of the Agenda The agenda was approved by acclamation. B. Approval of the Finance & Asset Management Committee October 16 th, 2018 Minutes The October 16 th, 2018 meeting minutes were approved by acclamation. II. III. Announcements and Community Comments Joan Paulson commented the current budget does not take into account common sense and that the process needs to take that into account when creating the budget. Joan asked several questions that need to be addressed, including how the Market stays relevant, which includes understanding the assets. How does the Market attract the new Seattle customer but also thinks the Market should ask how to attract the old Seattle customer. Joan feels the Market needs to better understand its strengths and weaknesses to develop a program to address those issues compared to the current use of the budget which focuses solely on dollars and cents. Reports & Discussion Items A. Market Foundation 2019 Budget Request Mary Bacarella began by noting the Market Foundation is making an additional ask for the 2019 Budget, which is included in the packet. Lillian Sherman provided an overview of the financial ask and the reason behind it. The proposal acknowledges the new Services Agreement made in 2017 and the intent that the Market Foundation remain an effective way to manage and leverage resources to complete the mission. Part one of the proposal is to request a single line-item in the budget rather than an itemized one which reflects the Services Agreement that states the Foundation receives an annual support payment. Pike Place Market Preservation & Development Authority (PDA) info@pikeplacemarket.org pikeplacemarket.org P: F: Pike Street, Room 500 Seattle, WA 98101

4 Lillian Sherman continued by noting the continued growth of the Market Commons and summarizing what has been learned programmatically over the year. The Market Commons is way beyond expectation and they will be assessing that as they move forward. In order to honor that commitment the Market Foundation is asking for additional support for a Market Commons Resource Coordinator to focus working within the resident advocacy framework. David Ghoddousi asked what the current 2019 PDA allocation for the Market Foundation and how much additional funds is she asking for. Lillian Sherman responded the current budget is $282,555 and with the additional request the budget does up to $344,555, an increase of $62,000. David Ghoddousi noted two options, $62,000 and $31,000. Lillian Sherman responded Option B would help but Option A would change the game. Mary Bacarella noted the way the new Services Agreement is meant to play out means the Market Foundation will work to being more autonomous and will ask for less from the PDA as the Market Foundation raises more. Mary noted the request from the Senior Center for a resident advocate. Lillian Sherman agreed and hopes the financial support goes to support service rather than things. Mary Bacarella added most of the budget supports Market Foundation salaries. Paul Neal asked if there is anything that would keep the Market Foundation and PDA from working together on strategy or policy. Lillian Sherman noted conversations with Mary Bacarella on how to present a more holistic plan for service. Paul Neal noted the conversations from the retreat to expand the Foundation s audience to the merchants and asked if it s Lillian s intent that moves forward with this request. Lillian Sherman responded it s her intent. Mark Brady noted the Market Foundation is losing their two AmeriCorps positions and wants to know how that will affect the Market Foundation. Lillian Sherman noted that ends at the end of 2018 and it s a conversation that needs to take place but it is anticipated system wide. David Ghoddousi asked if an analysis on which option is better, a senior center resident advocate or a Market Commons coordinator. Mary Bacarella responded she me with the team at the Senior Center and there is a succession plan to replace Sandra who has been at the Market for 25 years. Mary sees three options for support, Market Commons Coordinator, replacing Sandra and the support from PDA residential managers. Lillian Sherman added that Sandra cannot do it all and has been sending people to the Commons. What the Commons provides is greater reach to people who are not considered senior. Mary Bacarella noted there is an addition to the 2019 budget for additional staff to assist at the Senior Center. Patrice Barrentine asked if there s any idea how many people are missed by not having the Market Commons open more than 35 hours. She appreciates the work of the Commons and wonders what the need is from the Community and how much more can be done to help. Lillian

5 Sherman responded the more outreach that takes place, the more people show up. With the additional staffing support more outreach can take place. With each recession the need goes up. Patrice Barrentine asked if it s easier to raise salary money than to raise service money. Lillian Sherman responded it s harder to raise unrestricted funds rather than programmatic. Patrice Barrentine asked if it will be easier for the Foundation to raise the money for staff or does the crux lay on the PDA to give the money. Lillian Sherman noted fundraising is always hard and it will be challenging to grow the program without additional support. Mary Bacarella added the PDA is being conservative because the Market is going to be affected by external forces. If the forecast looks great, there will be options to help down the road. David Ghoddousi asked if the PDA is recommending not providing additional support to the Market Foundation. Mary Bacarella responded that is her recommendation but that she would reassess after a few months. Patrice Barrentine wonders what it could look like to combine various seasonal employees from departments such as the farm team into a full time position that encompasses more range. Rico Quirindongo noted the PDA budget is going to take a hit in 2019 in ways that can t be predicted and that he believes the PDA will make less money in 2019 but feels the budget currently doesn t reflect that. He feels the more conservative the PDA can be today, the better it will serve the PDA six months from now. Mary Bacarella noted the budget has changed in consideration of a possible recession, such as percent rent is noted as no growth. Mark Brady asked Kristie Beattie what the city is projecting for Kristie Beattie responded she can t speak for the whole city but that the short term view is unsettling with the viaduct coming down but the long term projects are hoping to be very favorable. She doesn t have a different vision than what is being discussed today. Devin McComb noted that original conversations included a second temporary staff person as the Market Commons but does Lillian feel that now that position needs to be full time to accommodate the now known needs. Lillian Sherman responded that what has been learned over the year is that it s difficult to only have two staff people at the Market Commons and still provide support. Devin McComb noted that this is not a job that can be handled by volunteers. Devin McComb asked for more clarification on what it means to have someone devoted to resident advocacy. Lillian Sherman responded the concept has changed over time to balance what the residents need. The intent going forward is the service plan is a model that serves both the residents and the community. Sabina Proto commented the Market Foundation will be billing the PDA for every expense, providing backup for the spending, as is required by the audit process. David Ghoddousi thanked the Market Foundation for all they do for the Market community. B. PDA Budget Presentation for 2019

6 Mary Bacarella began by noting that she has taken a conservative approach to developing the 2019 budget. The main reasons being uncertainty around the viaduct demolition and construction of Alaskan Way, a predicted recession for 2019, preparing for the LID in 2020, and percentage sales have hit a plateau. Mary reviewed items that have changed in this current version of the budget, which include: Page 42, the CSA Pike Box, shows a grant award from the city to support the school program as well as revenue from the sales of Pike Box. The grant will support the addition of an employee. Seasonal labor for farm will increase to help support the farm team. Daystall permit fees increase by 3%, but will not be assessed until after Daystall Rules review finishes in April. David Ghoddousi asked out revenue from locker fees. Sabina Proto responded that amount is dependent on finishing built-out of storage spaces in MarketFront. Mary Bacarella continued: Percentage rent was decreased from 2% increase to no increase. Page 47, under Management Expenses, Administrative Consultant Fees were increased from $40,000 to $60,000 to help manage various city and state related projects. Patrice Barrentine noted it s helpful to have that additional support. Devin McComb asked if there will be a resolution requesting use of those funds. Mary Bacarella responded yes. $10,000 added to miscellaneous management to attend a conference in London. $3,000 added in Marketing for an additional pedestrian counter under periodical and dues. Those changes, assuming no change to the Market Foundation, result in a reduction of $114,000 to the overall budget compared to the draft shared last month. David Ghoddousi asked if there were any public comments taken into consideration. Mary Bacarella responded at the first public meeting a letter was submitted requesting healthcare and a pension for the tenants, which the PDA cannot do, and at the second public meeting Joan attended and provided comment on having a sufficient reserve. Devin McComb added that another topic at the second public meeting was how to ensure public engagement around the budget process and making sure the PDA is getting feedback. Devin also thinks it s important to keep the one year budget tracks with priorities in the long terms. Mark Brady asked if flaggers will be used for six months. Mary Bacarella noted WSDOT is paying for 30 days and the PDA has added funds to cover the rest of the time they are needed. Devin McComb asked if the amount budgeted for the website new platform is adequate. Mary Bacarella responded it should and our new Marketing staff is trained in being able to do the back end work. Kristie Beattie asked if there are any models predicting the various types of recessions that could hit. Mary Bacarella responded no, but that is on the list of things to look at.

7 i. Proposed Resolution 18-53: Adoption of 2019 PDA Operating and Capital Projects Budget Mary Bacarella introduced Proposed Resolution which states: WHEREAS, the Pike Place Market Preservation and Development Authority (PPMPDA) was chartered by the City of Seattle pursuant to RCW et. Seq with the mission of promoting enterprises essential to the functioning of the Pike Place Market, including the preservation and expansion of the low-income residential community, the promotion and survival of small businesses, and the expansion of services to the public market and community; and, WHEREAS, as a public corporation, the PDA operates on a non-profit basis, where any excess of revenues over expenditures is reinvested in the Market; and, WHEREAS, the PDA desires to communicate to the Market community and the public the bases for its financial, operational and other policy and program decisions; and, WHEREAS, except for HUD contract rents, the PDA s operations are not subsidized by public funds and rely on rental and miscellaneous income for its total operating and capital revenues; and, WHEREAS, the Budget schedule and summary were made available to tenants; the PDA Council's Finance & Asset Management Committee conducted working sessions, considered public testimony, and suggested amendments to the 2019 Proposed Budget and has recommended adoption of the 2019 Budgets; and, WHEREAS, the 2019 Operating and Capital budgets are approved as a whole, with the exception of the Employee Pension contribution which will be determined in February 2019 based on the 2018 Final Operating Statements. NOW, THEREFORE, BE IT RESOLVED, that the PDA Council does hereby adopt the 2019 PDA Operating and Capital Budgets as outlined in the 2019 Budget Document attached hereto as Exhibit A. AND, BE IT FURTHER RESOLVED, that the PDA Council affirms its established budget, revenue and operating policies as follows: (1) All tenant sectors of the Market bear a responsibility for PDA costs incurred to serve the Market's operating and capital needs as a whole, and to fulfill the public interest purposes of the PDA, to preserve and promote the traditional character of the Market; (2) The PDA Council recognizes that external economic conditions and competitive pressures affect Market businesses and residents and attempts to prudently and sensitively take these factors and their potential effects into account in setting revenue estimates and requirements and in conducting its property management responsibilities in the course of the year;

8 (3) The Market is operated as an integrated whole with services distributed in accordance with ongoing maintenance and operations requirements, current and future capital needs, and needs for response to critical or emergency demands. The flexibility created by operating the Market as a whole, instead of as independent and exclusive separate and individual buildings or tenant groups, enables the PDA to maximize efficiency and responsiveness to community-wide and Market-wide needs, while still providing attention to individual tenant needs. This operating mode, combined with the PDA's fulfillment of Charter-mandated public interest and preservation objectives, does not lend itself to a strict relationship between costs and revenues from individual buildings or between costs and revenues from individuals or groups of tenants. While costs and revenues can be estimated for subgroups of Market facilities and tenants, it is not appropriate from a policy or operational standpoint to develop the budget and operate the Market on a strict cost center basis. Sabina Proto noted the budget does not include the Employee Pension which will be reviewed and determined early in David Ghoddousi moved the proposed resolution and Patrice Barrentine seconded the motion. For: Devin McComb, Patrice Barrentine, David Ghoddousi, Paul Neal, Mark Brady Against: 0 Abstain: 0 Proposed Resolution passed by a vote of C Budgets for Discrete Component Units Sabina Proto noted there are several entities the PDA manages as a result of different financing over the years. These are established as corporations or LLC s and the PDA is the manager and responsible for the budget. Those entities include QB3, LaSalle LLC and Western Avenue Senior Housing LLC. Chase Bank is the investor for QB3 and they review and approve, not the PDA so there is no resolution. The investor for the LaSalle LLC is National Equity Fund and the investor for WASH LLC is US Bank. The each come with financial model and budgets and the categories are already decided when the deals are closed. The deadline was November 1 st. D. Review of the PDA Financial Statements October 2018 Sabina Proto began by noting all the financials are looking good. She directed the committee to her notes in the packet, referencing page 61, the balance sheet. In November the QB2 dissolved so that will be reflected in the November balance sheet and everything in the QB2 will be absorbed by the PDA. The operating statement shows the total revenue for the end of October is $17,501,066, $1 million over budget. Commercial is over budget by $252,000, residential over budget by $69,798, daystall over budget by $36,000, surface parking over budget by $22,902, garage parking over budget by $391,840 and miscellaneous revenue over budget by $315,000. Operating expenses are $920,000 under budget. Net result after debt service is $4.1 million, roughly $2 million over budget.

9 Sabina Proto reviewed a couple areas in more detail, including percent rent, event space rental revenue, which is lower due to conversion of that space to commercial, which the revenue for commercial is up. Daystall revenue has had good attendance, resulting in higher revenue was a good year for parking, both surface lots, which stayed open longer than anticipated, and garage parking. Investment income has performed well due to higher rates and trademark revenue is higher due to the renegotiation of Starbucks. Sabina Proto reviewed several expenses, noting security staffing is under budget due to staff vacancies and utilities down due to over estimating anticipated costs. David Ghoddousi asked why Capital Management is over budget. Sabina Proto responded that was due to overlapping staff before Bob Beckstrom s retirement. Sabina Proto noted that marketing expenses will increase over the holidays. Page 8 shows contributions to the Capital Reserve and those numbers will change as work completes at the end of the year. E. Checking Account Activity Report Sabina Proto handed the Checking Account Activity Report to Mary Bacarella. F. 3 rd Quarter Reporting for the Discrete Component Units Sabina Proto noted the reporting is sent to the investors for LaSalle Senior Housing LLC, QB3 and Western Avenue Senior Housing LLC. The balance sheet and operating statements are included in the packets. Change in Net Assets is due to depreciation, which is built into the model, they are not expected to have profit. Each of the entities have their own form the PDA needs to complete each quarter, those are included in the packet. G. Capital Projects Update Brady Morrison noted the projects just completed, including the Corner Market cladding cleaning, IT server AC unit and the pergola gutter repair. The digital radio upgrade needs one more round of tests. The radios that were originally purchased were returned and staff are now testing digital Motorola radios. Devin McComb asked if Brady thinks the radios will be a 2018 expense. Brady Morrison responded he hopes so, assuming the testing works well. The Motorola radios more than double the original radios purchase. Brady Morrison continued by noting the work on the Livingston Baker rooks will start on the 19 th. Mark Brady asked if all the cameras have been completed. Brady Morrison responded they are working on install but not all are finished. Devin McComb noted roughly $33,000 of the $52,000 has been spent to date. Mary Bacarella added a number of projects are in motion and some have been completed but invoices have not been received so they have not been added to the Capital Projects Report yet. Fingers are crossed the skybridge will come down before the end of the year.

10 IV. Action Items A. Proposed Resolution 18-54: Authorization for Contract Authority Term Architect Kelsey Lindblom introduction Proposed Resolution which states: WHEREAS, the Pike Place Market Preservation and Development Authority (PPMPDA) was chartered by the City of Seattle pursuant to RCW et. Seq with the mission of promoting enterprises essential to the functioning of the Pike Place Market, including the preservation and expansion of the low-income residential community, the promotion and survival of small businesses, and the expansion of services to the public market and community; and, WHEREAS, in September 2017 Resolution authorized the PDA to retain SHKS as Term Architect, granting an initial amount of $30,000 for design services for Market projects; and WHEREAS, during that time SKHS provided valuable on-call assistance for a variety of small design projects requiring technical expertise beyond the capacity of PDA staff or projects requiring architectural drawings suitable for permits or bidding; and, WHEREAS, in order to maintain the viability of the Pike Place Market buildings the PPMPDA has determined that additional funds are necessary to address the needs specifically related to the design of various Market Projects. NOW, THEREFORE, BE IT RESOLVED that the PPMPDA Council authorizes the PPMPDA Executive Director or her designee to enter into a contract with SHKS Architecture in an amount not to exceed $30, for the purpose of designing architectural elements within the Market Historical District. The funds for this project will be drawn from the Capital Projects Term Architect. David Ghoddousi asked for clarification on the amount being requested. Mary Bacarella responded $30,000 is being requested. David Ghoddousi moved the proposed resolution and Patrice Barrentine seconded the motion. Devin McComb noted that he appreciates that staff have been judicious in the spending of the original $30,000. Patrice Barrentine added her appreciation for all their work in completing work around the market. For: Devin McComb, Patrice Barrentine, David Ghoddousi, Paul Neal, Mark Brady Against: 0 Abstain: 0 Proposed Resolution passed by a vote of Rico Quirindongo left the meeting at 5:25 pm.

11 V. Property Management A. Residential Property Management Report Mary Bacarella noted vacancies for October remained near 4% but overall, year to date are roughly at 3%. Mary thanked Brady Morrison and his team for their helping in turning over the vacant units, especially those affected by fire. Last week was the Harvest Feast at the Senior Center and there will be another dinner in December. The elevator in the Livingston Baker was closed for three days at which time the resident managers checked in with residents needing assistance with getting in and out of their units. A scope of work is being prepared for the LaSalle unit renovations in 2019 and maintenance will be hiring a project manager for that work. Pre-REAC inspection has taken place in the Stewart House and will be working on the maintenance orders associated with that. Rental policies and procedures are being updated. Mark Brady asked if the two units in Stewart House undergoing pest control are the same that have received extensive treatment in the past. Mary Bacarella responded she believes they are different units. David Ghoddousi asked if all positions are filled for residential managers. Mary Bacarella responded, yes, they are fully staffed for residential manager positions. VI. VII. Public Comment Joan Paulson appreciates the PDA is reviewing rental policies. She would like to see more education for the residents and employees on pest management. Closed Session The Committee Chair stated that the committee would go into closed session at 5:31 p.m. to discuss the property management. The committee entered into closed session at 5:34 p.m. A. Property Management Report - Closed Session (RCW (c)) B. Review of Lease Proposals i. New Tenant Bound by Sky, 1529 Western Avenue ii. Lease Renewal Market Magic & Novelty, Inc., 1501 Pike Place #427 C. Review of Delinquency Report i. Vacancy Report ii. Current Lease Negotiations The committee entered into open session at 5:50 p.m. The committee discussed the property management report which included the delinquency and vacancy report along with the current commercial lease negotiations during the closed session.

12 VIII. Open Session Proposed Resolution 18-55: Lease Proposals November 2018 Tenant Term Start Date Market Magic Shop Five (5) Years November 1, 2018 Market Magic & Novelty Inc. Darryl Beckmann & Sheila Lyon Bound By Sky One (1) Year December 1, 2018 Petite Boutique Kids, LLC. Tammy Stone Paul Neal moved the proposed resolution and David Ghoddousi seconded the motion. For: Devin McComb, Patrice Barrentine, David Ghoddousi, Paul Neal, Mark Brady Against: 0 Abstain: 0 Proposed Resolution passed by a vote of IX. Resolutions to be added to the Consent Agenda Proposed Resolution 18-54: Authorization for Contract Authority Term Architect Proposed Resolution 18-55: Lease Proposals November 2018 Proposed Resolutions was not moved to the Consent Agenda. X. Concerns of Committee Members Patrice Barrentine suggested finding a way to thank tenants that have been at the Market for a long time. Ali Mowry noted the Market Foundation is taking suggestions for their Month of Gratitude and maybe that is a way to recognize tenants. Devin McComb thanked Rico and Ali for attending the FAM meeting. He would like to see the conversation continue regarding the Market Foundation and feels the right decision was made to remain conservative on the 2019 budget. He encouraged councilmembers to remember the goals to provide services to the Foundation and consider how best to accomplish that. XI. Adjournment The meeting was adjourned at 5:54 p.m. by Devin McComb, Vice Chair Meeting minutes submitted by: Karin Moughamer, Executive Administrator

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24 Date: January 15, 2019 To: From: Subject: PPM PDA Council Sabina Proto, Director of Finance December 31, 2018 Preliminary Financial Statements Balance Sheet Notes: Page 1: Designated Cash: Decreased due to capital project expenditures. Restricted Cash: Decreased due to payment of second installment of the retainage to Sellen Fixed Assets: Increase due to Capital Projects expenditures. Net Position Current Year Operating Result: $6,635,083; Non-Operating Result: $6,804,118 Non-operating result includes the Gain from the closing of New Markets Tax Credit transaction. Page 2: Accounts Receivable Activity Report Slight decrease from the prior month. Page 3: PDA Operating Statement Notes: Total Revenue for the end of December 31, 2018 was $20,896,603, over budget by $1,349,939 or 7.0% Total Operating Expense for the end of December 31, 2018 was $13,980,414, under budget by $947,694 or 6.3% Net Result after Debt Service and Reserves was $4,581,857, which is $2,297,633 over budget. We are up to date on all debt payments. Page 4: Footnotes on the Operating Statement Commercial Revenue is over budget by $335,854; it s up in Base Rent-Retail, Percent Rent, Common Area and Direct Utilities. One of the main reasons is that we are collecting rents from spaces not forecasted for period January-March. Also, Percent Rent is $51K over budget.

25 Residential Revenue is over budget by $69,611; Rent revenue is over budget because the actual vacancy is less than budgeted, Stewart building had a higher rent increase than budgeted; Laundry is slightly under budget. Daystall Revenue over budget by $65,177 in Daily Craft and Farmer. We are short in lockers for the crafts, and also permits for the crafts are going at a lower pace than projected. Page 5: Surface Revenue net of City Share is over budget by $53,267. Garage Revenue is over budget by $452,640; for period Jan-Dec is 16% higher than the same period of the last year. Miscellaneous Revenue is over budget in all categories but mostly in Investment Income and Trademark. Page 6: Operating Expenses over all under budget mostly in all departments due to several vacancies in staffing, spending less in Utilities. Page 7: Percent Rent spreadsheet- Percent Rent is $51K over budget YTD, and $314K higher than the actuals of the same period last year. Page 8: The report states the balance of the Capital Replacement Reserve, which was $14.1 M for the end of December 31, Page 9: Capital Projects Report provides the status and YTD spending on different Capital Project we are working on.

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35 Pike Place Market PDA Finance & Asset Management Committee 2019 Calendar JANUARY Discussion of FAM Calendar for year 2019 APRIL FEBRUARY Risk Management Assessment/Plan - Discussion MAY MARCH PDA Purchasing Policy review Audit Reports for LaSalle Senior Housing LLC and WASH LLC LID discussion JUNE Update on the impact from Viaduct removal on the financial performance during 1 st QTR 2019 Insurance Renewal Property and Liability Presentation Commercial rent components introduction: base rent, percent rent, CAM, other PPM PDA Investment Policy review Audit Reports for the PDA and QALICB3 Auditors presentation PDA Pension Plan presentation JULY AUGUST SEPTEMBER Mid-year budget review and discussions Insurance Renewal Medical, dental, vision, and other benefits PDA reserves and 30 year cash flow discussion Capital Assessment Study presentation OCTOBER PDA 2020 Budget Presentation NOVEMBER PDA 2020 Budget Discussion and Approval DECEMBER Upcoming projects Updated 05/11/18

36 PROPOSED RESOLUTION Authorization for Contract Authority Contract Project Coordinator for LaSalle Replacement Reserves January 2019 WHEREAS, WHEREAS, WHEREAS, WHEREAS, WHEREAS, WHEREAS, the Pike Place Market Preservation and Development Authority (PPMPDA) was chartered by the City of Seattle pursuant to RCW et. Seq with the mission of promoting enterprises essential to the functioning of the Pike Place Market, including the preservation and expansion of the low-income residential community, the promotion and survival of small businesses, and the expansion of services to the public market and community; and, in order to maintain the viability of the Pike Place Market buildings the PPMPDA has determined that the LaSalle Apartments LLC., managed by the PDA for low income housing, has a separate Operating and Capital budget; and, that budget now has an accumulated fund for replacement reserves nearing one million dollars which must be spent on improvements to said property; and, identification of improvements that are necessary have been prioritized through a 30 Year Capital Needs Assessment, completed in 2018 in consultation with the PDA Operations Department; and, the management of this work can best be handled by contracting a Project Coordinator to manage the priorities, scheduling, and trades, all consistent with PDA policies; and, the PPMPDA has executed a bid process to hire a Contracted Project Coordinator for the LaSalle Replacement Reserves. NOW, THEREFORE, BE IT RESOLVED that the PPMPDA Council authorizes the PPMPDA Executive Director or her designee to enter into a contract with Jamison Construction Services in an amount not to exceed $50,000 for the purpose of coordinating projects associated with the LaSalle Replacement Reserve spenddown. The funds for this project will be drawn from the COMLAS Mark Brady, Secretary/Treasurer Date Date Approved by Council: For: Against: Abstained: Pike Place Market Preservation & Development Authority (PDA) info@pikeplacemarket.org pikeplacemarket.org P: F: Pike Street, Room 500 Seattle, WA 98101

37 Proposed Resolution Authorization for Contract Authority Contract Project Coordinator for LaSalle Replacement January 2019 Proposed Resolution Costs: $50,000 Project: Account: Project Coordinator Hire for LaSalle Replacement Reserves LaSalle Replacement Reserves Accounting Code: Project Description: Management of LaSalle determined priorities, scheduling, and trades, all consistent with PDA policies. Scope: Identification of improvements that are necessary have been prioritized through a 30 Year Capital Needs Assessment, completed in 2018 in consultation with PDA Operations Department. Contracted Project Coordinator will coordinate projects to the PDA standards, policies, and procedures. Bid Process: Solicited 5 contractors/businesses. Received 2 responses. o Jamison Construction Services $135/hour o Bachman Group $6, Monthly w/ undetermined duration o SHKS Architects Unresponsive o Tony Johnson Declined o Larry Barton Declined

38 PROPOSED RESOLUTION Replacement of Heritage House Domestic Water Boilers January 2019 WHEREAS, WHEREAS, WHEREAS, WHEREAS, WHEREAS, WHEREAS, WHEREAS, the Pike Place Market Preservation and Development Authority (PPMPDA) was chartered by the City of Seattle pursuant to RCW et. Seq with the mission of promoting enterprises essential to the functioning of the Pike Place Market, including the preservation and expansion of the low-income residential community, the promotion and survival of small businesses, and the expansion of services to the public market and community; and, the Pike Place Market owns the building commonly known as Heritage House in the Market located at 1531 Western Avenue and leases the premises to Providence Health and Services for the operation of assisted living for the elderly; and, under the terms of this lease, a ten year term expiring December 31, 2022 were assigned to the PPMPDA in a transfer of the property in 2014 from the Seattle Housing Authority; and, Section 7 of that lease provides that the landlord is responsible for capital repairs to the property, including repairs to the elevate system, plumbing system, electrical system, heating, ventilation and cooling, building envelope system or fire alarm system; and, in 2018 the tenant informed the PPMPDA of a need to make emergency repairs to the building water boiler for the safety and health of the residents; and, the Tenant solicited bids for this work, which required replacement of the 29 year old boiler and received three bids for this work from contractors who have worked on PPMPDA mechanical systems and are qualified for this work; and, in consultation with the PPMPDA the Tenant contracted with Comfort Systems Inc. to perform this work with the replacement of the single boiler with two commercial volume water heaters to provide redundancy in case of future issues and that the work has been completed in coordination of the Tenant and the Tenant has provided evidence of payment in full on this work. NOW, THEREFORE, BE IT RESOLVED that the PPMPDA Council authorizes the PPMPDA Executive Director or her designee to reimburse the Tenant, Providence Health Services, in the amount of $41, with the provision that the capital items be listed as part of the PPMPDA capital inventory and that the Tenant be responsible for ongoing operation and maintenance of this system to keep it in good working order. Funding will be drawn from the PPMPDA Capital Projects Contingency for Unknown Projects, GL Mark Brady, Secretary/Treasurer Date Date Approved by Council: For: Against: Abstained: Pike Place Market Preservation & Development Authority (PDA) info@pikeplacemarket.org pikeplacemarket.org P: F: Pike Street, Room 500 Seattle, WA 98101

39 PROPOSED RESOLUTION RESOLUTION Authorization for Contract Authority Parking Pay Station Software Upgrade and Pay on Foot Machine Replacement January 2019 WHEREAS, WHEREAS, WHEREAS, WHEREAS, WHEREAS, WHEREAS, the Pike Place Market Preservation and Development Authority (PPMPDA) was chartered by the City of Seattle pursuant to RCW et. Seq with the mission of promoting enterprises essential to the functioning of the Pike Place Market, including the preservation and expansion of the low-income residential community, the promotion and survival of small businesses, and the expansion of services to the public market and community; and, in 2009 Resolution passed approving the replacement of the automated parking system, including gates, ticket dispensers, software automatic payment machines and all required hardware; and, in order to maintain the viability of the Pike Place Market buildings the PPMPDA determined that the current garage pay stations require SKIDATA software upgrades; and, the Pay on Foot stations currently in the garages are outdated and do not support the upgraded software, therefore there are four pay stations in need of replacement for a complete Skidata Upgrade; and, due to Credit Card Compliance requirements, existing Pay Stations will require replacement of P2PE EMV on ALL Terminals (6) POF (3) Exit Columns on or before January 2020; and, upgrading the proprietary software is necessary to perform uninterrupted services and revenue collection for parking. NOW, THEREFORE, BE IT RESOLVED that the PPMPDA Council authorizes the PPMPDA Executive Director or her designee to approve payment to Skidata Kudelski Group in an amount not to exceed $331, for the purpose of the upgrade and replacement of Parking Garage Pay Stations. The funds for this project will be drawn from the Capital Projects Budget COMGAR Mark Brady, Secretary/Treasurer Date Date Approved by Council: For: Against: Abstained: Pike Place Market Preservation & Development Authority (PDA) info@pikeplacemarket.org pikeplacemarket.org P: F: Pike Street, Room 500 Seattle, WA 98101

40 PROPOSED RESOLUTION Lease Proposals January 2019 Tenant Term Start Date Athenian Inn Five (5) Years March 1, 2019 Catering Advisors Inc. Scott Rogel So Much Yarn Five (5) Years November, Middle Sister Yarns, Inc. Betty Clune Virginia Inn Five (5) Years February 1, 2019 First and Virginia LLC Craig Perez & Karl Sexton Mark Brady, Secretary/Treasurer Date Date Approved by Council: For: Against: Abstained: Pike Place Market Preservation & Development Authority (PDA) info@pikeplacemarket.org pikeplacemarket.org P: F: Pike Street, Room 500 Seattle, WA 98101

41 Lease Summary Date: January 2019 Business Name and Owner: Athenian Inn / Catering Advisors Inc. / Scott Rogel Address/Building/Square feet: 1517 Pike Place #427/ Fairley /4,613 sf. Tenant Since: 2011 Primary Term: Five (5) Years Use Description: Full Service restaurant serving moderately priced menu with Greek and seafood cuisine. Business Name and Owner: So Much Yarn/Middle Sister Yarns, Inc. /Betty Clune Address/Building/Square feet: 1525 First Ave #4/First and Pine /1,636 sf. Tenant Since: 2013 Primary Term: Five (5) Years Use Description: Business specializing in the sale of specialty yarns and yarn related products including, but not limited to, notions, patterns, books, knitted clothing and clothing bags. Business will also offer classes and special events related to the production of products made from yarn. Business Name and Owner: Address/Building/Square feet: Tenant Since: Primary Term: Option Term: Use Description: Virginia Inn / First and Virginia LLC. Craig Perez & Karl Sexton 1937 First Avenue / Livingston Baker / 2,270 sf. New Owner(s) Five (5) Years Two - Five (5) year options Full service restaurant and bar offering Northwest Cuisine.