LACEY CITY COUNCIL AGENDA SEPTEMBER 28, :00 P.M. 420 COLLEGE STREET, LACEY CITY HALL

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1 LACEY CITY COUNCIL AGENDA SEPTEMBER 28, :00 P.M. 420 COLLEGE STREET, LACEY CITY HALL CITY COUNCIL ANDY RYDER Mayor CYNTHIA PRATT Deputy Mayor VIRGIL CLARKSON LENNY GREENSTEIN JASON HEARN MICHAEL STEADMAN RACHEL YOUNG CITY MANAGER SCOTT SPENCE CALL TO ORDER: 1. PLEDGE OF ALLEGIANCE 2. APPROVAL OF AGENDA & CONSENT AGENDA ITEMS* A. Council meeting minutes of September 14, 2017 B. A motion to approve payment of claims, wages, and transfers for 9/7/2017 through 9/20/2017. * Items listed under the consent agenda are considered to be routine and will be enacted by one motion and one vote. There will be no separate discussion of these items. If discussion is desired, that item will be removed from the Consent Agenda and will be considered separately. 3. PUBLIC RECOGNITIONS AND PRESENTATIONS: A. Compassion is Contagious Recognition (Steve Kirkman) 4. PUBLIC COMMENT ON ITEMS NOT ON THE AGENDA* *The City Council will allow comments under this section on items NOT already on the agenda. Where appropriate, the public will be allowed to comment on agenda items as they are addressed during the meeting. 5. PUBLIC HEARING: 6. PROCLAMATION: A. National Disability Employment Awareness Month Proclamation (Patrick Dymond & LaDell Lockwood, Communications Manager, WA State Dept. of Services for the Blind) 7. REFERRAL FROM PLANNING COMMISSION: 8. REFERRAL FROM HEARINGS EXAMINER: 9. RESOLUTIONS: 10. ORDINANCES: A Budget Amendment Ordinance (Troy Woo) 11. MAYOR'S REPORT:

2 12. CITY MANAGER'S REPORT: A. Authorize City Manager to Approve Investment Advisory Services PSA (Troy Woo) B. Authorize City Manager to Approve the Lacey Veterans Services Hub MOU (Scott Spence) C. Gateway Division 2 Annexation (Rick Walk) D. Approve Renaming of Woodland Trail as the Karen Fraser Trail (Scott Spence) 13. STANDING GENERAL COMMITTEE A. Finance Committee (9.06) B. Utilities Committee (9.08) C. General Government Committee (9.11) Action: Consider Resolution Supporting LFD3 Bond Measure 14. OTHER BUSINESS: 15. BOARDS, COMMISSIONS, AND COMMITTEE REPORTS: A. Mayor Andy Ryder: 1. Mayors Forum 2. Transportation Policy Board (TPB) 3. Thurston Chamber Shared Legislative Committee B. Deputy Mayor Cynthia Pratt: 1. Olympic Region Clean Air Agency (ORCAA) 2. LOTT 3. Thurston Thrives C. Councilmember Virgil Clarkson: 1. Intercity Transit (IT) 2. Health & Human Services Council (HHSC) 3. Thurston Regional Planning Council (TRPC) D. Councilmember Rachel Young 1. Economic Development Council (EDC) 2. Joint Animal Services Commission (JASCOM) E. Councilmember Lenny Greenstein 1. Olympia-Lacey-Tumwater Visitor & Convention Bureau (VCB) 2. Solid Waste Advisory Committee (SWAC) 3. TCOMM911 F. Councilmember Jason Hearn: 1. Thurston County Coalition Against Trafficking (TCCAT) 2. Lacey South Sound Chamber 3. Lodging Tax Advisory Committee G. Councilmember Michael Steadman: 1. Community Action Council (CAC) 2. Emergency Medical Services (EMS) 3. Thurston County Law & Justice 16. ADJOURN MEETING

3 MINUTES OF A REGULAR MEETING OF THE LACEY CITY COUNCIL HELD THURSDAY, SEPTEMBER 14, 2017, IN LACEY COUNCIL CHAMBERS. CALL TO ORDER: Deputy Mayor Pratt called the meeting to order at 7:00 p.m. PLEDGE OF ALLEGIANCE: Deputy Mayor Pratt led the Pledge of Allegiance. COUNCIL PRESENT: C. Pratt, V. Clarkson, M. Steadman, R. Young, L. Greenstein COUNCIL EXCUSED: A. Ryder, J. Hearn STAFF PRESENT: S. Spence, D. Schneider, J. Mack, S. Egger, J. Burbidge, C. Litten, R. Andrews, C. Osborn APPROVAL OF AGENDA AND CONSENT AGENDA: Consent Agenda Items: A. Council worksession minutes of August 17, 2017 B. Council meeting minutes of August 24, 2017 C. A motion to approve payment of claims, wages, and transfers for 8/16/17 through 9/6/17. COUNCILMEMBER GREENSTEIN MOVED TO APPROVE THE CONSENT AGENDA AND AGENDA. COUNCILMEMBER CLARKSON SECONDED. MOTION CARRIED. PROCLAMATION Deputy Mayor Pratt and the Lacey City Council proclaimed the City of Lacey as a participant in the Purple Heart City Project, recognizing residents of the community who have received the Purple Heart Award. Colonel James Sims, USMC, RET, expressed the military s appreciation for the support of the Lacey City Council and the community. REFERRAL FROM PLANNING COMMISSION Ordinance No approves the proposed 2017 Parks and Recreation Comprehensive Plan. Page 1 of 5

4 This update effort has identified a shift of some key goals and policies that should be considered by the City. Those include amending the plan to establish the policy for Lacey to move from an acquisition phase of park property to that of development of existing park properties and facilities, solidifying a funding strategy, prioritizing and identifying development projects based on public input, and providing adequate facilities to keep up with the population growth ahead of us. The policy of developing park properties which are inside the City of Lacey boundary first will be replaced with a policy that moves toward developing those properties that fit the needs of the greater Lacey community first. In 2019, the Community & Economic Development Department will submit a Bike & Pedestrian Plan for adoption that will be incorporated into the 2107 Parks & Recreation Comprehensive Plan. COUNCILMEMBER STEADMAN MOVED TO ADOPT ORDINANCE NO TO APPROVE THE 2017 PARKS AND RECREATION COMPREHENSIVE PLAN. COUNCILMEMBER CLARKSON SECONDED. MOTION CARRIED. MAYOR S REPORT: DEPUTY MAYOR PRATT MOVED TO REAPPOINT KRISTINA TREBIL TO A 2 ND TERM ON HISTORICAL COMMISSION. COUNCILMEMBER STEADMAN SECONDED. MOTION CARRIED. DEPUTY MAYOR PRATT MOVED TO REAPPOINT VIRGIL CLARKSON TO A 10 TH TERM ON THE LEOFF 1 DISABILITY BOARD. COUNCILMEMBER GREENSTEIN SECONDED. MOTION CARRIED. DEPUTY MAYOR PRATT MOVED TO APPOINT LENNY GREENSTEIN TO A 1 ST TERM ON THE LEOFF 1 DISABILITY BOARD. COUNCILMEMBER CLARKSON SECONDED. MOTION CARRIED. Deputy Mayor Pratt recognized Paul Enns, Planning Commission member, in attendance. Page 2 of 5

5 CITY MANAGER S REPORT: Ryan Andrews, Planning Manager, briefed Council on the Gateway Division 2 Annexation Project No The City has received a notice of intent to commence annexation proceedings filed by SSHI, LLC to annex their property, parcel # into the City of Lacey. The filing of the notice is the first step in the annexation process under the petition method (RCW 35A ), which requires a petition filed by property owners representing a minimum of 10% of the valuation of the area proposed for annexation. The City has verified that the ownership does comprise a minimum of more than 10% of the assessed valuation for general taxation purposes of the properties for which annexation is requested. The City Council will review the annexation request under the 60% petition method and is requested to pass a motion to reject the notice of intent to annex submitted by SSHI, LLC. COUNCILMEMBER GREENSTEIN MOVED TO REJECT THE NOTICE OF INTENT TO ANNEX SUBMITTED BY SSHI, LLC. COUNCILMEMBER CLARKSON SECONDED. MOTION CARRIED. The City Council will review the annexation request under the 60% petition method and is requested to pass a motion to prepare a resolution to annex the property pursuant to the annexation of unincorporated islands method. COUNCILMEMBER STEADMAN MOVED TO DIRECT STAFF TO PREPARE A RESOLUTION TO ANNEX THE PROPERTY PURSUANT TO THE ANNEXATION OF UNINCORPORATED ISLANDS METHOD TO BE CONSIDERED BY THIS COUNCIL AT THE NEXT REGULAR MEETING. COUNCILMEMBER GREENSTEIN SECONDED. MOTION CARRIED.. Scott Egger, Public Works Director, provided an update of the Hogum Bay Road paving project. It is anticipated the project will be completed by late spring / early summer of Page 3 of 5

6 STANDING GENERAL COMMITTEES: Utilities Committee Councilmember Young reported the committee met on August 16, 2017, to discuss the city s current Water Utilities Leak Adjustment Policy. The Committee recommends that full Council reaffirm the policy without any changes. COUNCILMEMBER YOUNG MOVED TO REAFFIRM THE WATER UTILITIES LEAK ADJUSTMENT POLICY WITHOUT CHANGES. COUNCILMEMBER CLARKSON SECONDED. MOTION CARRIED. General Government & Public Safety Committee Deputy Mayor Pratt reported the Committee met on August 14, 2017, to discuss enforcement of fireworks violation and to authorize the City Manager to sign an interlocal agreement for the use of the 633 Training Center. BOARDS & COMMISSIONS: ORCAA Deputy Mayor Pratt reported the Board received an update related to revenue for homegrown marijuana, odor control, and an air quality report during the recent fires in Washington State. CIP Councilmember Clarkson reported the Board met to discuss several issues. LOTT Deputy Mayor Pratt reported the Board discussed the Strategic Plan Development, Martin Way Reclaimed Water Plant Improvements, the Mullen Road surplus pipeline, and Squaxin Tribe comments on burning. TRPC Councilmember Clarkson reported the Board supports the Climate Adaption Plan to limit the effects of climate change, and received a report on the state of the transportation system. An amendment to the TIP will fund Lacey s project at the intersection of the Yelm Highway and College Street. Page 4 of 5

7 VCB Councilmember Greenstein reported the Board participated in a retreat. Deputy Mayor Pratt adjourned the meeting at 8:40 p.m. MAYOR: ATTESTED BY CITY CLERK: DATE APPROVED: Page 5 of 5

8 LACEY CITY COUNCIL MEETING September 28, 2017 SUBJECT: Disbursement Approval RECOMMENDATION: By motion, approve payment of claims, wages, and transfers. STAFF CONTACT: Troy Woo, Finance Director ORIGINATED BY: Troy Woo, Finance Department BACKGROUND: The action requested of the City Council is by motion to approve payment of claims, wages and transfers for 9/7/2017 through 9/20/2017. The disbursements consist of the following: Checks: Week of Beg. Check No. End. Check No. Amount 9/8/ ,295, /15/ , /15/ Electronic Transfers: Week of Amount 9/5/ /5/2017 1, /8/ , /8/ , /11/ , /15/ , /19/ Payroll: Month Ended: Wages Significant Disbursements: Vendor Amount Description Cerium Networks $ 150, Phone system upgrade LOTT $1,134, Rates & Capacity Development Charges * Disbursements for employee out-of-pocket deductions and employee benefits. Page 1 of 1

9 , Official Proclamation WHEREAS, the National Disability Employment Awareness Month celebrates and recognizes the accomplishments in the workplace of men and women with disabilities, and reaffirms the commitment to ensuring equal employment opportunities to all citizens; and WHEREAS, in 1945, Congress enacted a law declaring the first week in October each year as unational Employ the Physically Handicapped Week"; and WHEREAS, in 1962, the word "physically" was removed to acknowledge the employment needs and contributions of individuals with all types of disabilities; and WHEREAS, in 1988, Congress expanded the week to a month, and changed the name to National Disability Employment Awareness Month; and WHEREAS, workplaces welcoming of the talents of all people, including people with disabilities, are a critical part of our efforts to build an inclusive community and strong economy; and WHEREAS, Washington law calls upon employers, both public and private, to be aware of and utilize the employment skills of our disabled citizens by recognizing their worth as individuals and their productive capacities; and WHEREAS, the City of Lacey, through the Department of Services for the Blind and other public agencies, and with the cooperative assistance of numerous civic and non-profit groups, can look forward to a continued expansion of employment opportunities for the greater acceptance of disabled persons in the competitive labor market. Now THEREFORE, I, Andy Ryder, Mayor of the City of Lacey, do hereby proclaim October 2017 as National Disability Employment Awareness Month in the City of Lacey, and call upon employers, schools and other community organizations to celebrate the many and varied contributions of people with disabilities, reinforce the value and talent people with disabilities add to our workplaces and communities, and affirm the City of Lacey's commitment to an inclusive community. ~ i>.~ja_m=== Ma or AndYYdef September 28, 2017

10 LACEY CITY COUNCIL MEETING September 28, 2017 SUBJECT: 2017 Budget Amendments RECOMMENDATION: Adopt ordinance amending the 2017 Budget. STAFF CONTACT: Scott Spence, City Manager Troy Woo, Finance Director ORIGINATED BY: Troy Woo, Finance Department ATTACHMENTS: 1. Ordinance No Summary for Proposed Ordinance FISCAL NOTE: See attached Ordinance Exhibit A PRIOR REVIEW: Finance and Economic Development Committee on September 6, BACKGROUND: Throughout the year adjustments to the budget become necessary as a result of City Council actions, activity levels that were not anticipated during budget development, and grant awards (or other receipts of outside funding). Historically, the budget has been amended once per year prior to the development of the next year s proposed budget document. Staff has provided periodic budget amendment updates to the Finance and Economic Development Committee to help maintain the integrity of the budget and to provide more timely information. Staff is requesting full Council adoption during September to assist with the development of the 2018 Proposed Budget document. The following are significant budget amendments that have been identified following the adoption of the 2017 Budget. Full details of the proposed budget amendments are attached to the proposed ordinance as exhibit A. Page 1 of 4

11 Current Expense Fund (General Fund) A Pedestrian and Bicycle Plan is being developed by the Community and Economic Development Department. The plan will inventory existing facilities, travel patterns, identify deficiencies, and identify future capital improvement needs. The Pedestrian and Bicycle Plan is expected to cost $127,600 and is grant funded by the Federal Transportation Alternative Program (TAP). To gain administrative efficiencies, the Public Works Engineering staff will administer the grant through the through College and 22 nd Roundabout project. The success of the Lacey Veterans Service HUB and the level of services warrants its own budget program. Currently, operating costs of the Lacey Veterans Service HUB is budgeted under one budget line (Military Support) within the City Council Budget. For increased accountability and improved tracking, it is proposed that the Lacey Veterans Service HUB budget be moved into the Public Affairs Budget with its own detailed budget line items. Total budget appropriations of $125,000 will be reclassified. The generosity of the attendees of the inaugural Mayor s Gala is providing $36,000, which will be used for the following ( or new program): o Training and meeting room equipment and furniture - $15,000 o Vans for Veterans pilot program - $10,000 o Emergency voucher program - $8,500 o Volunteer recognition program - $2,500 Inmate security at a medical facility became necessary. A combination of Lacey Police Department overtime wages and King County Sheriff personnel provided the security. Adjustments to wages, benefits, and professional services is requested. The recommended adjustments are $7,000 for profession services and $129,375 for wages and benefits. $63,738 is requested for debris cleanup and tree services relating to the May 4, 2017 microburst storm. ( ) Arterial Street Fund (Capital Fund) To take advantage of economies of scale, the Public Works Engineering staff will administer two Federal Transportation Alternative Program (TAP) grants on behalf of the Community and Economic Development staff ($117,600) and the City of Tenino ($25,950). These two grants will be administered through the College and 22 nd Roundabout project. Building Improvement Fund $250,000 has been reserved for the construction of the 50 th Anniversary Train Depot Trail amenity and 5700 Lacey Blvd Museum building improvements. Page 2 of 4

12 Parks and Open Space Fund The completion of the Woodland Creek Community Park asphalt trail connection requires an additional $52,000. This project is funded with a Washington State Recreation and Conservation Office (RCO) grant, in-kind volunteer and staff labor, and Parks and Open Space committed reserves. An additional $50,000 is needed to complete the Pickleball Courts project. There are adequate reserves in the Parks and Open Space Fund to fund the project. Regional Athletic Complex Capital Fund A grant from the Washington State Department of Commerce will match a portion of the Regional Athletic Complex (RAC) bleacher cover project. The grant amount, totaling $25,220, needs to be added to this year s budget. As a result, the Regional Athletic Complex (RAC) will have a total project budget of $125,220. Wastewater M&O Fund A replacement for the Wastewater Maintenance Van was budgeted in the incorrect program. It is requested that the $191,072 originally approved in the Wastewater Main Maintenance program be transferred to the Lift Station Maintenance program. This will have a net zero effect on the budget. Higher than expected LOTT treatment sales have occurred. Both the revenue and expenditure line items utilized to pass through the revenues to LOTT need to be adjusted. Adjustments of $420,760 are requested. Water Capital Fund $50,000 is requested for a consultant study of the 400 pressure zone. There have been a significant number of complaints of discolored water in this pressure zone. This issue was not identified at the time the Water Comprehensive Plan was being developed, so it was not contemplated. An amendment to a Well Source No. 31 professional services agreement is necessary to resolve the sanding screen issue. $161,571 is requested. Wastewater Capital Fund $1,500,000 is requested for the expanded scope of the Steilacoom Road Lift Station and Water Improvement Project. The changes include: Page 3 of 4

13 o Converting two large STEP tank systems to gravity sewer, which include 60 individual STEP tanks. o Change the lift station to a three-pump station to accommodate future growth. The current standard is two-pump stations. The Liftstation #2 project requires an additional $1,352,000. The additional funds are due to increased dewatering costs, upgrading the electrical power from single-phase to three-phase, a property purchase, increased design costs, and construction costs are rising faster than inflation. An additional $310,000 is needed for an opportunity to purchase right-of-way for the Liftstation #3 project. This includes design and structure demolition. Information Services Fund The City s aging phone and voic system is scheduled for replacement for $147,181. The 10-year old system reached its useful life and vendor support is nearing its end. The City Council committed reserves in anticipation of the replacement. This project will also require additional licensing fees for the system and software. These fees will be paid from the operating budget of the Information Services fund. At its September 6, 2017, meeting, the Finance and Economic Development Committee reviewed the proposed amendments and recommended full City Council adoption of the proposed amendments to the 2017 adopted budget. ADVANTAGES: 1. The proposed adjustments to the 2017 Budget reflects more accurately the necessary requirements of each fund or adjustments made by City Council action. 2. The proposed adjustments maintain a balance between the anticipated revenues and expenditures of each of the funds amended. DISADVANTAGES: 1. Generally, budget adjustments must use cash reserves to compensate for expenditures that may exceed budget estimates by the end of the budget year. Page 4 of 4

14 ORDINANCE NO CITY OF LACEY AN ORDINANCE AMENDING THE 2017 FISCAL YEAR BUDGET ADOPTED BY ORDINANCE NO BY REVISING THE BUDGETED AMOUNTS FOR THE CURRENT EXPENSE, CITY STREET, ARTERIAL STREET, BUILDING IMPROVEMENT, CAPITAL EQUIPMENT, PARKS AND OPEN SPACE, REGIONAL ATHLETIC COMPLEX (CAPITAL), WATER M&O, WASTEWATER M&O, STORMWATER M&O, WATER CAPITAL, WASTEWATER CAPITAL, EQUIPMENT RENTAL, AND INFORMATION SERVICES FUNDS AND APPROVING A SUMMARY FOR PUBLICATION. WHEREAS, there is a need for additional expenditures to be budgeted within the Current Expense, City Street, Arterial Street, Building Improvement, Capital Equipment, Parks and Open Space, Regional Athletic Complex (Capital), Water M&O, Wastewater M&O, Stormwater M&O, Water Capital, Wastewater Capital, Equipment Rental, and Information Services Funds for expenditures which could not be contemplated at the time of adopting the 2017 fiscal year budget; and WHEREAS, revenues, as shown on Exhibit "A" attached hereto, are available from the sources indicated on said Exhibit for the making of said expenditures; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LACEY, WASHINGTON, as follows: Section 1. The 2017 fiscal year budget and Ordinance No adopting said budget are hereby amended by making those certain changes to the 2017 fiscal year budget set forth on Exhibit "A", attached hereto and made a part hereof as though fully set forth herein and for all purposes considered to be a portion of this ordinance. Section 2. The City Clerk and the codifiers of this ordinance are authorized to make necessary corrections to this ordinance including, but not limited to, the correction of scrivener's/clerical errors, references, ordinance numbering, section/subsection numbers and any references thereto. Section 3. The summary attached hereto is hereby approved for publication. PASSED BY THE CITY COUNCIL OF THE CITY OF LACEY, WASHINGTON, on this 28 th day of September, Approved as to form: Mayor City Attorney

15 ATTEST: City Clerk

16 SUMMARY FOR PUBLICATION ORDINANCE NO CITY OF LACEY The City Council of the City of Lacey, Washington, passed on September 28, 2017, Ordinance No entitled AN ORDINANCE AMENDING THE 2017 FISCAL YEAR BUDGET ADOPTED BY ORDINANCE NO BY REVISING THE BUDGETED AMOUNTS FOR THE CURRENT EXPENSE, CITY STREET, ARTERIAL STREET, BUILDING IMPROVEMENT, CAPITAL EQUIPMENT, PARKS AND OPEN SPACE, REGIONAL ATHLETIC COMPLEX (CAPITAL), WATER M&O, WASTEWATER M&O, STORMWATER M&O, WATER CAPITAL, WASTEWATER CAPITAL, EQUIPMENT RENTAL, AND INFORMATION SERVICES FUNDS AND APPROVING A SUMMARY FOR PUBLICATION. A section by section summary of this ordinance is as follows: Section 1 revises the amounts which were budgeted for revenues and expenditures within the funds listed above by the 2017 fiscal year budget which had been adopted by Ordinance No The reason for revising the budgeted amounts is the fact that there exists a need for additional expenditures within those funds which could not be contemplated at the time of adopting the 2017 fiscal year budget. Section 2 provides provisions for corrections. Section 3 approves this summary. A copy of the full text of this ordinance will be mailed without charge to any person requesting the same from the City of Lacey. City Clerk Published: October 2, 2017

17 2017 Budget Amendments - Ordinance No Exhibit "A" 2017 Budget 2017 Budget Account Numbers Account Description Budget Amendment as Amended Comments Current Expense Fund Revenues Beginning Cash 160, , ,062 Cash Reserves Beginning Cash 811,062 4, ,062 Cash Reserves - Police seized funds (Narcan) Transfers In Fund - 117, ,600 Pedestrian and Bicycle Plan - Transportation Alternative Program Grant Total Current Expense Fund Revenues 36,303, ,604 37,075,929 Expenditures Military Support 179,468 (125,000) 54,468 Establish separate and detailed budget for the Lacey Veterans Service HUB Other Jail Services 810,129 7, ,129 Inmate security Medical Services 40,000 40,000 80,000 Inmate medical services Agreements - Social Services 47,852 15,600 63,452 Interlocal Agreement - Interfaith Works for winter warming center funding support Salaries - Regular 92,351 42, ,351 Records Coordinator salary and benefits Employer Paid Benefits 30,647 10,000 40,647 Records Coordinator salary and benefits Supplies / Office & Operating Supply - 3,265 3,265 Establish separate and detailed budget for the Lacey Veterans Service HUB operations Supplies / Office & Operating Supply 3,265 7,500 10,765 Mayor's Gala - "Vans for Vets" Program (fuel and volunteer recognition) Supplies / Office & Operating Supply 10,765 8,500 19,265 Mayor's Gala - Emergency Vouchers Program Supplies / Office & Operating Supply 19,265 2,500 21,765 Mayor's Gala - Volunteer Recognition Supplies / Small Tools & Equipment - 7,300 7,300 Establish separate and detailed budget for the Lacey Veterans Service HUB operations Professional Services / Prof. Svc-Other - 60,946 60,946 Establish separate and detailed budget for the Lacey Veterans Service HUB operations Communications / Telecommunications - 2,657 2,657 Establish separate and detailed budget for the Lacey Veterans Service HUB operations Travel / Dues, Subscriptions, Publ - 2,000 2,000 Establish separate and detailed budget for the Lacey Veterans Service HUB operations Travel / Registrations - 1,095 1,095 Establish separate and detailed budget for the Lacey Veterans Service HUB operations Rentals / IMS Rental - 4,000 4,000 Establish separate and detailed budget for the Lacey Veterans Service HUB operations Rentals / Rentals-Other - 1,575 1,575 Establish separate and detailed budget for the Lacey Veterans Service HUB operations Rentals / Lease Miscellaneous - 30,000 30,000 Establish separate and detailed budget for the Lacey Veterans Service HUB operations Utility Services / Utility-Electric - 2,000 2,000 Establish separate and detailed budget for the Lacey Veterans Service HUB operations Repairs & Maintenance / Rep & Maint-Equipment - 2,000 2,000 Establish separate and detailed budget for the Lacey Veterans Service HUB operations Repairs & Maintenance / Rep & Maint-Equipment 2,000 2,500 4,500 Mayor's Gala - "Vans for Vets" Program Miscellaneous / Printing & Binding - 3,537 3,537 Establish separate and detailed budget for the Lacey Veterans Service HUB operations Miscellaneous / Maintenance Contracts - 1,625 1,625 Establish separate and detailed budget for the Lacey Veterans Service HUB operations Miscellaneous / Software Maintenance - 3,000 3,000 Establish separate and detailed budget for the Lacey Veterans Service HUB operations Capital Outlays - Equipment - 15,000 15,000 Mayor's Gala - Training and Meeting Room Equipment Salaries - Overtime 850 6,000 6,850 Overtime due to staff turnover and increasing workloads Professional Services - Investment Advisor - 17,750 17,750 Investment Advisor Services - Request for Proposals facilitator Supplies - Office and Operating Supply 15,156 (6,135) 9,021 Funding for replacement of polygraph machine Salaries - Overtime 695, , ,675 Inmate security Employer Paid Benefits 1,281,905 16,875 1,298,780 Inmate security Supplies - Office and Operating Supply 15,560 4,000 19,560 Narcan purchase for immediate aid for opioid exposures Professional Services - Other 16,882 11,611 28,493 Interlocal Agreement-US Dept of Agriculture Animal & Plant Health Inspection Serv-Wildlife Svs Professional Services - Other 28,493 63,738 92,231 May 2017 storm debris cleanup and tree services Miscellaneous - Special Projects 60, , ,600 Pedestrian and Bicycle Plan Professional Services - Recreational 22,000 13,065 35,065 Increased Recreation program expenses Salaries - Part-Time 15,834 5,000 20,834 July 3 and 50th Anniversary Events Transfer Out 301 Fund 377, , ,317 Funding for 50th Anniversary Train Depot Amenity and 5700 Pacific property improvements. Total Current Expense Fund Expenditures 36,303, ,604 37,075,929

18 2017 Budget 2017 Budget Account Numbers Account Description Budget Amendment as Amended Comments City Street Fund Revenues Beginning Cash 130,026 9, ,026 Cash reserves Total City Street Fund Revenues 3,525,182 9,000 3,534,182 Expenditures Supplies - Office and Operating Supply 27,900 (3,500) 24,400 Purchase brush cutter for right-of-way maintenance (reallocated between budget accounts) Supplies - Small Tools 3,000 3,468 6,468 Replacement of roadway marking arrow board Supplies - Small Tools 6,468 3,500 9,968 Purchase brush cutter for right-of-way maintenance Supplies - Road Marking Supplies 66,000 (3,468) 62,532 Replacement of roadway marking arrow board (reallocated between budget accounts) Professional Services - Tree Inspection 10,000 9,000 19,000 Removal of 35 hazardous trees on Meridian Road NE Total City Street Fund Expenditures 3,525,182 9,000 3,534,182 Arterial Streets Fund Revenues Beginning Cash 2,631,388 49,898 2,681, Federal Grant - 117, ,600 Administration of Federal Trans. Alternative Program for Community & Economic Dev. Dept Federal Grant 117,600 25, ,550 Administration of Federal Trans. Alternative Program for City of Tenino Total Arterial Streets Fund Revenues 10,538, ,448 10,732,103 Expenditures Capital Projects / Road Way 8,432,057 27,577 8,459,634 Single-family residential structure demolition Capital Projects / Road Way 8,459,634 25,950 8,485,584 Administration of Federal Trans. Alternative Program for City of Tenino Capital Projects / Road Way 8,485,584 22,321 8,507,905 Change order for Marvin Road Improvement Project Transfer Out 001 Fund - 117, ,600 Administration of Federal Trans. Alternative Program for Community & Economic Dev. Dept. Total Arterial Streets Fund Expenditures 10,538, ,448 10,732,103 Building Improvement Fund Revenues Transfers In / Transfer In 001,003, , , ,317 Funding for 50th Anniversary Train Depot Amenity and 5700 Pacific property improvements Transfers In / Transfer In 302 Fund - 47,057 47,057 Funding for building improvements Total Building Improvement Fund Revenues 729, ,057 1,047,359 Expenditures Capital Outlay - Improvements 166,200 30, ,200 City Hall security fencing phase 2 - gate to College Street Capital Outlay - Buildings 450,602 13, ,659 City Hall front counter improvements (Community and Economic Development) Capital Outlay - Buildings 463, , ,659 50th Anniversary Train Depot Amenity and 5700 Pacific property improvements Capital Outlay - Buildings 713,659 4, ,659 Window tint improvements at the Timberland Library Capital Outlay - Buildings 717,659 21, ,659 Replace HVAC control system at the Timberland Library Total Building Improvement Fund Expenditures 729, ,057 1,047,359 Capital Equipment Fund Revenues Beginning Cash 377, , ,958 Cash Reserves Total Capital Equipment Fund Revenues 1,359, ,093 1,541,799

19 2017 Budget 2017 Budget Account Numbers Account Description Budget Amendment as Amended Comments Expenditures Capital Outlays / Human Resources - 4,878 4,878 Tablet device resource (2) Capital Outlays / Human Resources 4,878 2,691 7,569 Expand workspaces for new positions Capital Outlays / Community Relations 139,203 2, ,971 Expand workspaces for new positions Capital Outlays / Community Relations 141,971 20, ,971 Public Records Project Capital Outlays / Finance 5,000 12,805 17,805 Credit card purchasing module for financial software - SunGard Naviline Capital Outlays / Common Facilities 48,500 4,298 52,798 City mission statement sign installation Capital Outlays / Common Facilities 52,798 13,047 65,845 Replacement of phone and voic system Capital Outlays / Common Facilities 65,845 40, ,845 Expansion of mobile devices as part of the public records project Capital Outlays / Common Facilities - Library - 6,976 6,976 Replacement of 26 Library windows due to seal failure Capital Outlays / Police 35,686 6,135 41,821 Replacement of polygraph machine Capital Outlays / Community Development 27,173 7,500 34,673 Tanglewilde/Thompson Place annexation study Capital Outlays / Parks and Recreation 3,402 4,415 7,817 Parks and Recreation office cubical improvements Capital Outlays / City Streets 42,750 4,504 47,254 Sidewalk street grinder replacement with OSHA required dust control system Transfers Out Fund - 47,057 47,057 Funding for building improvements Transfers Out Fund - 5,019 5,019 Matching funds for Nisqually Tribal Grant - Police Mobile Unit (all-terrain vehicle) Total Capital Equipment Fund Expenditures 1,359, ,093 1,541,799 Parks & Open Space Fund Revenues Beginning Cash 350, , ,099 Cash Reserves Total Parks & Open Space Fund Revenues 930, ,485 1,066,585 Expenditures Judgements and Settlements - 19,000 19,000 Pleasant Glade Park lease settlement Repairs and Maintenance - Facilities - 10,000 10, Lacey Blvd Museum building operating expenses Capital Outlays / Capital Improvements 268,528 52, ,528 Completion of the Woodland Creek Community Park asphalt trail connection Capital Outlays / Capital Improvements 320,528 50, ,528 Completion of the Rainier Vista Pickleball courts Capital Outlays / Capital Improvements 370,528 5, ,013 Fulfillment of the Lori Flemm Memorial Fund donor wishes Total Parks & Open Space Fund Expenditures 930, ,485 1,066,585 Regional Athletic Complex-Capital Revenues Beginning Cash 142, ,440 Cash Reserves WA State Department of Commerce - 25,220 25,220 State Grant award Total Regional Athletic Complex-Capital Revenue 1,194,940 25,220 1,220,160 Expenditures Capital Outlay/Improvements 92,440 25, ,660 RAC bleacher cover project Total Regional Athletic Complex-Capital Expenditures 1,194,940 25,220 1,220,160 Water Fund Revenues Beginning Cash 145,777 7, ,228 Cash Reserves Total Water Fund Revenues 11,399,400 7,451 11,406,851

20 2017 Budget 2017 Budget Account Numbers Account Description Budget Amendment as Amended Comments Expenditures Capital Outlays - Equipment - 4,951 4,951 SCADA alarm call out system replacement Miscellaneous / Project Green 2,500 2,500 5,000 Project Green 2016 Invoice processed late Total Water Fund Expenditures 11,399,400 7,451 11,406,851 Wastewater Fund Revenues Beginning Cash 14,549 4,951 19,500 Cash Reserves LOTT Sales 10,059, ,760 10,480,042 Adjust LOTT sales projection Total Wastewater Fund Revenues 15,072, ,711 15,498,475 Expenditures Utility Services - LOTT Treatment 10,059, ,760 10,480,042 Higher than expected LOTT revenue collection (pass-through) Capital Outlays - Equipment - 4,951 4,951 SCADA alarm call out system replacement Capital Outlays - Equipment 4, , ,023 Reclassify budget code to proper budget program Capital Outlays - Equipment 191,072 (191,072) - Reclassify budget code to proper budget program Total Wastewater Fund Expenditures 15,072, ,711 15,498,475 Stormwater Fund Revenues Beginning Cash - 8,849 8,849 Cash Reserves Total Stormwater Fund Revenues 3,216,458 8,849 3,225,307 Expenditures Professional Services - PIE Program 23,000 5,000 28,000 PIE Budget Interlocal Agreement Miscellaneous / Project Green 11,900 1,100 13,000 Project Green 2016 Invoice processed late Capital Outlays - Equipment 19,750 2,749 22,499 Crane replacement for Stormwater flatbed truck Total Stormwater Fund Expenditures 3,216,458 8,849 3,225,307 Water Capital Fund Revenues Estimated Beginning Cash / Construction Cash 3,776, ,085 4,039,329 Cash Reserves Total Water Capital Fund Revenues 11,307, ,085 11,570,445 Expenditures Preliminary Engineering 2,268,513 50,000 2,318, pressure zone study - discolored water Preliminary Engineering 2,318,513 42,000 2,360, pressure zone storage study - Hawks Prairie tank offline Preliminary Engineering 2,360, ,571 2,522,084 Well Source No. 31 sanding screen resolution Construction of Utilities 7,804,155 9,514 7,813,669 Control Valve project completion Total Water Capital Fund Expenditures 11,307, ,085 11,570,445

21 2017 Budget 2017 Budget Account Numbers Account Description Budget Amendment as Amended Comments Wastewater Capital Fund Revenues Estimated Beginning Cash / Construction Cash 8,205,076 3,162,000 11,367,076 Cash reserves Total Wastewater Capital Fund Revenues 12,698,439 3,162,000 15,860,439 Expenditures Preliminary Engineering - 101, ,400 Lift Station No. 2 dewatering and electrical upgrade Preliminary Engineering 2,029,655 23,250 2,052,905 Lift Station No. 3 right-of-way purchase and structure demolition Construction Engineering 700, , ,902 Expanded scope for Steilacoom Road Lift Station project Construction Engineering 812, , ,302 Lift Station No. 2 dewatering and electrical upgrade Construction of Utilities 8,028,743 1,387,500 9,416,243 Expanded scope for Steilacoom Road Lift Station project Construction of Utilities 9,416,243 1,149,200 10,565,443 Lift Station No. 2 dewatering and electrical upgrade Construction of Utilities 10,565,443 36,750 10,602,193 Lift Station No. 3 right-of-way purchase and structure demolition Purchase of Land - 250, ,000 Lift Station No. 3 right-of-way purchase and structure demolition Total Wastewater Capital Fund Expenditures 12,698,439 3,162,000 15,860,439 Equipment Rental Fund Revenue Beginning Cash 487,574 55, ,517 Cash reserves Contributions - 10,000 10,000 Nisqually Indian Tribe community grant Contributed Capital from Governmental Funds - 5,019 5,019 Police mobile unit Total Equipment Rental Fund Revenues 2,733,347 65,943 2,799,290 Expenditures Capital Outlay-Replacement 468,774 1, ,325 Sidewalk street grinder replacement with OSHA required dust control system Capital Outlay-Replacement 470,325 5, ,469 Crane replacement for Stormwater flatbed truck Capital Outlay-Replacement 475,469 15, ,488 Parks Maintenance utility vehicle replacement Capital Outlay-Replacement 490,488 15, ,507 Police mobile unit purchase - Nisqually Indian Tribe community grant Capital Outlay-Replacement 505,507 29, ,717 Parks pickup totaled in an accident - replacement Total Equipment Rental Fund Expenditures 2,733,347 65,943 2,799,290 Information Services Fund Revenue Beginning Cash 371, , ,181 Cash reserves Contributed Capital from Governmental Funds - 13,047 13,047 From Capital Equipment Fund Total Information Services Fund Revenues 2,091, ,394 2,244,098 Expenditures Telecommunications 18,120 18,260 36,380 Additional licensing fees associated with new phone and voic system Capital Outlays - Equipment 360, , ,707 Replacement of phone and voic system Total Information Services Fund Expenditures 2,091, ,394 2,244,098

22 LACEY CITY COUNCIL MEETING September 28, 2017 SUBJECT: Non-Discretionary Investment Advisory Services Agreement RECOMMENDATION: Motion to approve and authorize the City Manager to sign three-year non-discretionary investment advisory services agreement with Government Portfolio Advisors (GPA). STAFF CONTACT: Scott Spence, City Manager Troy Woo, Finance Director ORIGINATED BY: Troy Woo, Finance Department ATTACHMENTS: 1. Non-discretionary investment advisory services agreement FISCAL NOTE: Customary expenses associated with advisory services. PRIOR REVIEW: Finance and Economic Development Committee (9/6/17) BACKGROUND: On June 1, 2017, a Non-Discretionary Investment Advisory Services request for proposal (RFP) was issued. The City retains all buy and sell authority under a non-discretionary investment advisory services arrangement. The required services include: Provide Full-time, non-discretionary investment advisory services of the portion of the City s portfolio under advisement. Prepare monthly investment reports. Comply with all Federal and State laws and all City policies relating to public fund investing. Page 1 of 3

23 Assist with implementation of investment strategies will enhance or maintain portfolio performance and quality. Obtain, review, and document competitive pricing for securities transactions. Assist with coordination of trades and deliveries. Review investment policy, internal controls, procedures, and third-party safekeeping services. Review qualified brokers and dealers. Provide training as needed. Proposals were received from five (5) firms in total and three (3) were interviewed. Based on the proposals submitted, an interview process, and guidance provided by the City s investment policy, Government Portfolio Advisors (GPA) was selected as the advisor best suited to provide advisory services for the City s investment portfolio. The proposed agreement will be effective October 1, 2017, with a three-year term and includes an option for a two-year renewal. A complex and robust implementation period will occur prior to the City s first securities purchase under this proposed agreement. The implementation period is typically a five to six month process, so results will not be immediate. It is assumed that the 2018 Budget will be impacted by the proposed investment advisory services agreement. On September 6, 2017, the Finance and Economic Development Committee reviewed the request for proposal and recommended full City Council consideration. ADVANTAGES: 1. Government Portfolio Advisors proposal and interview represents the combination of the securities experience, Washington public entities experience, expected convenience for City staff, broker independence, and ability to meet the City s investment advisory needs. 2. While not guaranteed, interest earnings should be enhanced compared to overnight investments like the Washington State Treasurer s Local Government Investment Pool (LGIP). 3. The investment advisory services will improve the City s investment policy and procedures, active management of the portfolio, reporting, and accounting compliance while improving staff efficiencies. Page 2 of 3

24 DISADVANTAGES: 1. Fees for service will be incurred. However, internal staff dedicated to investment activities could not be retained for the same level of fees and expertise. Page 3 of 3

25 PROFESSIONAL SERVICES AGREEMENT THIS AGREEMENT is made by and between the City of Lacey, a code City of the State of Washington, hereinafter City and Government Portfolio Advisors, hereinafter Consultant, jointly referred to as Parties. IN CONSIDERATION of the terms and conditions contained herein, the Parties agree as follows: 1. Work to Be Performed. The Consultant shall provide all labor, services, and material to satisfactorily complete the required non-discretionary investment advisory services as stated in the Non-Discretionary Investment Advisory Services Request for Proposal, attached as Exhibit A. A. Administration. The City Manager or designee shall administer and be the primary contact for Consultant. Prior to commencement of work, Consultant shall contact the City Manager or designee to review the Scope of Services, schedule, and date of completion. Upon notice from the City Manager or designee, Consultant shall commence work, perform the requested tasks in the Scope of Services, stop work, and promptly cure any failure in performance under this Agreement. B. Representations. City has relied upon the qualifications of Consultant in entering into this Agreement. By execution of this Agreement, Consultant represents it possesses the ability, skill, and resources necessary to perform the work and is familiar with all current laws, rules, and regulations which reasonably relate to the Scope of Services. No substitutions of agreed-upon personnel shall be made without the prior written consent of City. Consultant represents that the compensation as stated in paragraph 3 is adequate and sufficient for the timely provision of all professional services required to complete the Scope of Services under this Agreement. Consultant shall be responsible for the technical accuracy of its services and documents resulting therefrom, and City shall not be responsible for discovering deficiencies therein. Consultant shall correct such deficiencies without additional compensation except to the extent such action is directly attributable to deficiencies in City-furnished information. C. Standard of Care. Consultant shall exercise the degree of skill and diligence normally employed by professional consultants engaged in the same profession, and performing the same or similar services at the time such services are performed. D. Modifications. City may modify this Agreement and order changes in the work whenever necessary or advisable. Consultant shall accept modifications when ordered in writing by the City Manager or designee, so long as the additional Page 1 of 10

26 work is within the scope of Consultant s area of practice. Compensation for such modifications or changes shall be as mutually agreed between the Parties. Consultant shall make such revisions in the work as are necessary to correct errors or omissions appearing therein when required to do so by City without additional compensation. 2. Term of Contract. This Agreement shall be in full force and effect upon execution and shall remain in effect until completion of all contractual requirements have been met as determined by City. Consultant shall complete its work by September 30, Prior to expiration of the term of this Agreement, the City may exercise an option to renew said Agreement for a period of two additional years provided that: 1. the Consultant is in compliance with the terms and conditions of the Agreement, and 2. sufficient funds have been appropriated by the City Council in the Annual Budget for payment of the non-discretionary investment advisory services to be performed by the Consultant under the terms of this Agreement. The total term of the Agreement shall not exceed five (5) years. Either Party may terminate this Agreement for material breach after providing the other Party with at least 10 days prior notice and an opportunity to cure the breach. City may, in addition, terminate this Agreement for any reason by 10 days written notice to Consultant. In the event of termination without breach, City shall pay Consultant for all work previously authorized and satisfactorily performed prior to the termination date. 3. Compensation and Method of Payment. A. The City shall pay Consultant for the performance of those services designated in Exhibit "A" and the addendum to pricing dated August 21, 2017, an amount not to exceed $42,000 annually. If the description of services on Exhibit "A" designates additional services which may be requested by the City, said additional services will be paid for by the City at the rate set forth on Exhibit "A," which sum may exceed the "not to exceed" amount set forth above; however, said services will only be performed and compensated by the City after the City has directed such performance in writing. B. Payment by the City for services will only be made after the services have been performed, a voucher or invoice is submitted in the form specified by the City, and the same is approved by the appropriate City representative. Payment may be made on a monthly or other periodic basis and may be made on the basis of an estimate of the percentage of contract completion accomplished if said procedure Page 2 of 10

27 is approved by the City. C. If an hourly rate of compensation or other means of measurement is set forth on Exhibit "A," the parties intend that said measurement shall be used up to the "not to exceed" figure set forth above. D. The City reserves the right to withhold payment under this Agreement for that portion of the work (if any) which is determined in the reasonable judgment of the City Manager or designee to be noncompliant with the Scope of Services, City standards, City Code, and federal or state standards. 4. Notice. Notices other than applications for payment shall be given in writing as follows: TO THE CITY: TO THE CONSULTANT: Name: Troy Woo, Finance Director Name: Deanne Woodring, President Phone: (360) Phone: (503) Address: 420 College Street SE Address:2188 SW Park Place, Suite 100 Lacey, WA Portland, OR Applicable Laws and Standards. The Parties, in the performance of this Agreement, agree to comply with all applicable federal, state, and local laws and regulations. Consultant warrants that its designs, construction documents, and services shall conform to all federal, state, and local statutes and regulations. 6. Certification Regarding Debarment, Suspension, and Other Responsibility Matters Primary Covered Transactions. A. By executing this Agreement, the Consultant certifies to the best of its knowledge and belief that it and its principals: 1. Are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from covered transactions by any federal department or agency; 2. Have not within a three-year period preceding this proposal been convicted of or had a civil judgment rendered against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (federal, state, or local) transaction or contract under a public transaction; violation of federal or state antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, or receiving stolen property; 3. Are not presently indicted for or otherwise criminally or civilly charged by a governmental entity (federal, state, or local) with commission of any of the Page 3 of 10

28 offenses enumerated in paragraph (A)(2) of this certification; and 4. Have not within a three-year period preceding this application/proposal had one or more public transactions (federal, state, or local) terminated for cause or default. B. Where the prospective primary participant is unable to certify to any of the statements in this certification, such prospective participant shall attach an explanation to this Agreement. 7. Relationship of the Parties. It is understood and agreed that Consultant shall be an independent contractor and not the agent or employee of City, that City is interested in only the results to be achieved, and that the right to control the particular manner, method, and means in which the services are performed is solely within the discretion of Consultant. Any and all employees who provide services to City under this Agreement shall be deemed employees solely of Consultant. The Consultant shall be solely responsible for the conduct and actions of all its employees under this Agreement and any liability that may attach thereto. 8. Ownership of Documents. All drawings, plans, specifications, and other related documents prepared by Consultant under this Agreement are and shall be the property of City, and may be subject to disclosure pursuant to chapter RCW or other applicable public record laws. The written, graphic, mapped, photographic, or visual documents prepared by Consultant under this Agreement shall, unless otherwise provided, be deemed the property of City. City shall be permitted to retain these documents, including reproducible camera-ready originals of reports, reproduction quality mylars of maps, and copies in the form of computer files, for the City s use. City shall have unrestricted authority to publish, disclose, distribute, and otherwise use, in whole or in part, any reports, data, drawings, images, or other material prepared under this Agreement, provided that Consultant shall have no liability for the use of Consultant s work product outside of the scope of its intended purpose. 9. Records. The City or State Auditor or any of their representatives shall have full access to and the right to examine during normal business hours all of Consultant s records with respect to all matters covered in this Agreement. Such representatives shall be permitted to audit, examine, make excerpts or transcripts from such records, and to make audits of all contracts, invoices, materials, payrolls, and record of matters covered by this Agreement for a period of three years from the date final payment is made hereunder. 10. Insurance. Consultant shall procure and maintain for the duration of the Agreement, insurance against claims for injuries to persons or damage to property which may arise from or in connection with the performance of the work hereunder by Consultant, its agents, representatives, employees, or subcontractors. A. Minimum Scope of Insurance. Consultant shall obtain insurance of the types Page 4 of 10

29 described below: 1. Automobile liability insurance covering all owned, non-owned, hired, and leased vehicles. Coverage shall be written on Insurance Services Office (ISO) form CA or a substitute form providing equivalent liability coverage. 2. Commercial general liability insurance shall be at least as broad as ISO occurrence form CG (or a substitute form providing equivalent coverage) and shall cover liability arising from premises, operations, stop-gap independent contractors and personal injury, and advertising injury. City shall be named as an additional insured under Consultant s commercial general liability insurance policy with respect to the work performed for the City using an additional insured endorsement at least as broad as ISO CG (or a substitute form providing equivalent coverage). 3. Workers compensation coverage as required by the industrial insurance laws of the State of Washington. 4. Professional liability insurance appropriate to Consultant s profession. B. Minimum Amounts of Insurance. Consultant shall maintain the following insurance limits: 1. Automobile liability insurance with a minimum combined single limit for bodily injury and property damage of no less than $1,000,000 per accident. 2. Commercial general liability insurance shall be written with limits no less than $1,000,000 for each occurrence, and $2,000,000 for general aggregate. 3. Professional liability insurance shall be written with limits no less than $1,000,000 per claim and $1,000,000 policy aggregate limit. C. Other Insurance Provisions. The policies are to contain, or be endorsed to contain, the following provisions for automobile liability and commercial general liability insurance: 1. Consultant s insurance coverage shall be primary insurance with respect to the City. Any insurance, self-insurance, or insurance pool coverage maintained by City shall be in excess of Consultant s insurance and shall not contribute with it. 2. Consultant shall fax or send electronically in.pdf format a copy of insurer s cancellation notice within two business days of receipt by Consultant. 3. If Consultant maintains higher insurance limits than the minimums shown above, City shall be insured for the full available limits of commercial general and excess or umbrella liability maintained by Consultant, irrespective of whether such limits Page 5 of 10

30 maintained by Consultant are greater than those required by this Agreement or whether any certificate of insurance furnished to the City evidences limits of liability lower than those maintained by Consultant. 4. Failure on the part of Consultant to maintain the insurance as required shall constitute a material breach of the Agreement, upon which the City may, after giving at least five business days notice to Consultant to correct the breach, immediately terminate the Agreement, or at its sole discretion, procure or renew such insurance and pay any and all premiums in connection therewith, with any sums so expended to be repaid to City on demand, or at the sole discretion of the City, offset against funds due Consultant from the City. D. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best rating of not less than A:VII. E. Evidence of Coverage. As evidence of the insurance coverages required by this Agreement, Consultant shall furnish acceptable insurance certificates to the City Clerk at the time Consultant returns the signed Agreement, which shall be Exhibit C. The certificate shall specify all of the parties who are additional insureds, and shall include applicable policy endorsements, and the deduction or retention level. Insuring companies or entities are subject to City acceptance. If requested, complete copies of insurance policies shall be provided to City. Consultant shall be financially responsible for all pertinent deductibles, self-insured retentions, and/or self-insurance. 11. Indemnification and Hold Harmless. Consultant shall, at its sole expense, defend, indemnify, and hold harmless City and its officers, agents, and employees, from any and all claims, actions, suits, liability, loss, costs, attorney's fees, costs of litigation, expenses, injuries, and damages of any nature whatsoever relating to or arising out of the wrongful or negligent acts, errors, or omissions in the services provided by Consultant, Consultant's agents, subcontractors, subconsultants, and employees to the fullest extent permitted by law, subject only to the limitations provided below. Consultant's duty to defend, indemnify, and hold City harmless shall not apply to liability for damages arising out of such services caused by or resulting from the sole negligence of City or City's agents or employees pursuant to RCW Consultant's duty to defend, indemnify, and hold City harmless against liability for damages arising out of such services caused by the concurrent negligence of (a) City or City s agents or employees, and (b) Consultant, Consultant's agents, subcontractors, subconsultants, and employees shall apply only to the extent of the negligence of Consultant, Consultant's agents, subcontractors, subconsultants, and employees. Consultant's duty to defend, indemnify, and hold City harmless shall include, as to all claims, demands, losses, and liability to which it applies, City's personnel-related costs, Page 6 of 10

31 reasonable attorneys' fees, the reasonable value of any services rendered by the office of the City Attorney, outside consultant costs, court costs, fees for collection, and all other claim-related expenses. Consultant specifically and expressly waives any immunity that may be granted it under the Washington State Industrial Insurance Act, Title 51 RCW. These indemnification obligations shall not be limited in any way by any limitation on the amount or type of damages, compensation, or benefits payable to or for any third party under workers' compensation acts, disability benefit acts, or other employee benefits acts. Provided, that Consultant's waiver of immunity under this provision extends only to claims against Consultant by City, and does not include, or extend to, any claims by Consultant's employees directly against Consultant. Consultant hereby certifies that this indemnification provision was mutually negotiated. 12. Waiver. No officer, employee, agent, or other individual acting on behalf of either Party has the power, right, or authority to waive any of the conditions or provisions of this Agreement. A waiver in one instance shall not be held to be a waiver of any other subsequent breach or nonperformance. All remedies afforded in this Agreement or by law shall be taken and construed as cumulative and in addition to every other remedy provided herein or by law. Failure of either Party to enforce at any time any of the provisions of this Agreement or to require at any time performance by the other Party of any provision hereof shall in no way be construed to be a waiver of such provisions nor shall it affect the validity of this Agreement or any part thereof. 13. Assignment and Delegation. Neither Party shall assign, transfer, or delegate any or all of the responsibilities of this Agreement or the benefits received hereunder without prior written consent of the other Party. 14. Subcontracts. Except as otherwise provided herein, Consultant shall not enter into subcontracts for any of the work contemplated under this Agreement without obtaining prior written approval of City. 15. Confidentiality. Consultant may, from time-to-time, receive information which is deemed by City to be confidential. Consultant shall not disclose such information without the prior express written consent of City or upon order of a court of competent jurisdiction. 16. Jurisdiction and Venue. This Agreement is entered into in Thurston County, Washington. Disputes between City and Consultant shall be resolved in the Superior Court of the State of Washington in Thurston County. Notwithstanding the foregoing, Consultant agrees that it may, at City s request, be joined as a party in any arbitration proceeding between City and any third party that includes a claim or claims that arise out of, or that are related to Consultant s services under this Agreement. Consultant further agrees that the Arbitrator(s) decision therein shall be final and binding on Consultant and that judgment may be entered upon it in any court having jurisdiction Page 7 of 10

32 thereof. 17. Cost and Attorney s Fees. The prevailing party in any litigation or arbitration arising out of this Agreement shall be entitled to its attorney s fees and costs of such litigation (including expert witness fees). 18. Entire Agreement. This written Agreement constitutes the entire and complete agreement between the Parties and supersedes any prior oral or written agreements. This Agreement may not be changed, modified, or altered except in writing signed by the Parties hereto. 19. Anti-kickback. No officer or employee of City, having the power or duty to perform an official act or action related to this Agreement shall have or acquire any interest in this Agreement, or have solicited, accepted, or granted a present or future gift, favor, service, or other thing of value from any person with an interest in this Agreement. 20. Business Registration. Consultant shall register with the City as a business prior to commencement of work under this Agreement if it has not already done so. 21. Severability. If any section, sentence, clause, or phrase of this Agreement should be held to be invalid for any reason by a court of competent jurisdiction, such invalidity shall not affect the validity of any other section, sentence, clause, or phrase of this Agreement. 22. Duty of Care. The City understands that Consultant will open accounts on behalf of the City with approved broker dealers. Confirmations will be generated and sent to the City and the Consultant. The Consultant agrees to review the approved broker dealer list annually and allows for the addition and removal of any broker dealer at the directive of the City. All transactions will be executed on competitive pricing basis. The City will provide the Consultant all information and documentation necessary to establish and maintain the ACCOUNT which the Consultant may deem necessary and appropriate. 23. Performance Records. The Consultant maintains composites of returns which are audited performance records that conform to the Global Investment Performance Standards (GIPS). The City acknowledges that the Consultant shall have the right to retain historical performance data from inception date to the termination date of the City s during the term of this agreement and such period thereafter, that the Consultant continues to show performance. Consultant shall defend and indemnify and hold the City harmless for any claims that arise or relate in any way, from Consultant s use of such information. 24. Liability of Loss. The Consultant shall have not be liable for any losses arising out of the delays in performing or inability to perform the services which it renders under this Agreement which result from events beyond its control, including interruption of Page 8 of 10

33 business activities of the Consultant or other financial institutions due to acts of God, acts of governmental authority, acts of war, terrorism, civil riots, labor disputes or any action or inaction due to malfunction. The Consultant does not guarantee future performance or any specific level of performance, and The City understands that the market value of investments may fluctuate and at any point in time be worth more or less than the amount originally invested. 25. Anti-Money Laundering. The City understands that the Consultant prohibits the investment of funds by any persons or entities that are acting, directly or indirectly, in any type of money laundering activities or on behalf of terrorist organizations, including those persons or entities that are included on the List of Specially Designated Nationals and Blocked Persons maintained by the U.S. Treasury Department s Office of Foreign Assets Control ( OFAC ) which is available at The City represents, warrants and covenants that it is not, nor is any person or entity controlling, controlled by or under common control with it a Prohibited Person as identified by the OFAC. 26. Consent to Electronic Delivery of Documents; Other Disclosures. The Consultant is required to provide annual or periodic disclosures to the City and must record and maintain records of its delivery. The City consents to the delivery of documents related to the investment advisory service described within this Agreement in an electronic manner, as described below: Documents subject to this Consent to Electronic Delivery include the Form ADV Part 1, Part 2A, and Part 2B, account reports and reviews and other information about account activity, and any disclosure or notification that is required under applicable regulations, other regulatory communications, and Privacy Policy information. The City agrees and acknowledges that delivery of documents may be via electronic means, including, but not limited to, a PDF file to the addresses provided to the Consultant by client, or via secure online access to such documents. Consultant may use electronic delivery to effectively deliver any or all documents related to the relationship between The City of Lacey Non- Discretionary Investment Advisory Services 55 City and Consultant. The City acknowledges that it has access to this media and the ability to print and/or download the information provided thereby. The City will provide appropriate addresses for sending electronic information consistent with these terms of electronic delivery. The City will notify Consultant in writing if delivery should be made to any additional addresses or if delivery to any of the initially provide addresses should be discontinued. It is The City s responsibility to provide Consultant with updates regarding changes to any authorized addresses. Should it come to the attention of the Consultant that the addresses provided are not functioning, all documents will be sent in paper form. The consent to electronic Page 9 of 10

34 delivery is valid until such consent is revoked, in writing, to the Consultant by the City. Occasional requests for paper documents does not trigger revocation of this consent. 27. Non-Discretionary Services. The Consultant will discuss overall strategy and investment structure with the client. Trade proposals will be sent to the designated authorized person for approval prior to execution of the transaction. Once the approval is provided to the Consultant, the trade will be transacted at the prevailing competitive prices at the time of trade The Parties have executed this Agreement this 1 st day of October, CITY OF LACEY CONSULTANT: By: Scott Spence City Manager By: Deanne Woodring President Approved as to form: David Schneider City Attorney Page 10 of 10

35 1 City of Lacey, Washington Request for Proposals Non-Discretionary Investment Advisory Services Issued June 1, 2017 Proposal Closing: June 22, 2017, 4:00 p.m. Pacific Daylight Time Submit Proposals to: Troy Woo, Finance Director City of Lacey 420 College Street SE, Lacey, WA and Terry McCall Portfolio Services for Government, LLC 704 SE 38 th Drive, Gresham, OR City of Lacey - RFP - Non-Discretionary Investment Advisory Services

36 2 TABLE OF CONTENTS Page Number Introduction/Background 3 Tentative Schedule 3 Scope of Work, Project Description, Services Required 3 Term of Contract 6 Qualifications/Experience 6 Proposal Instructions 6 Pre-Proposal Questions and RFP Addenda 6 Proposal Contents 7 Exceptions to Sample Professional Services Agreement & RFP 7 Evaluation of Proposals 7 General Proposal/Contract Conditions 8 Notice to All Proposers -- Standard Agreement 8 Attachment A - Sample Professional Services Agreement 9 Attachment B - Investment Policy 16 Attachment C - Investment Policy Advisor Certification 22 Attachment D - Questionnaire 23 Attachment E - Checklist of items to be submitted 29 City of Lacey - RFP - Non-Discretionary Investment Advisory Services

37 I. INTRODUCTION The City of Lacey, Washington (City) requests proposals for Non-Discretionary Investment Advisory Services. Proposals will be due as indicated on the Request for Proposals (RFP) cover page. 3 II. BACKGROUND/HISTORY OF PROJECT Lacey, with a current population of approximately 48,000 residents, was settled in the 1850s and incorporated in The City lies approximately 60 miles south of Seattle on Interstate 5 and is 50 miles south of the Seattle-Tacoma International Airport. The City does not currently use an investment advisor. December 31, 2016 cash and investments were approximately $144,661,731. However, the intent is to place approximately $60 million under advisement. Proposers should not expect any significant change in the approach during the contract period. The fiscal year is from January 1 to December 31. The City uses U.S. Bank for safekeeping. A portfolio report is not available but in calendar year 2016, balances ranged from $125.4 million to $145.0 million, and at April 30, 2017, the funds were held accordingly: State of Washington Investment Pool $135,354,554 Bank Deposits 12,647,905 Other Investments 0 Total $148,002,459 The City has contracted with Portfolio Services for Government LLC to facilitate the selection of an investment advisor. III. TENTATIVE SCHEDULE RFP issued and advertised June 1, 2017 Pre-proposal questions due June 8, 2017 RFP closing, proposals due June 22, :00 p.m., Pacific Daylight Time Finalist interview(s) August 21, 2017 Notification to proposers of firm recommended to city council for contract award By August 25, 2017 Contract executed By September 29, 2017 Commencement of Services October 2, 2017 The City reserves the right to change the above tentative schedule. IV. PROPOSED SCOPE OF WORK Detailed Description of the Project The City is committed to excellence in fiscal administration, striving for the highest standards of performance and accountability. Therefore, the City invites competitive proposals from qualified and experienced investment advisory firms to assist with the management and performance of the investment portfolio by providing non-discretionary advisory services. The objective of requesting proposals is to determine which firm can offer the highest quality of service at the most reasonable cost. Summary of Services Required Successful Proposer will provide the City with the following services: a. Provide full-time, non-discretionary investment advisory services of the portion of the City s portfolio under advisement. City of Lacey - RFP - Non-Discretionary Investment Advisory Services

38 b. Be available in a timely manner, in person, by telephone, fax or , for consultation or advice. Meet with and provide information to City staff, City Council and/or City committees such as the Finance Committee, when requested. Meet periodically with staff, including on-site meetings not less than twice annually, to review and refine portfolio strategy and performance. c. Prepare investment reports summarizing that period s financial environment, investment holdings by type, maturity, broker, duration, and benchmark comparables. d. Comply with all federal and State of Washington laws as well as ordinances, resolutions and policies of the City relating to investment of public funds. e. Provide assistance in developing and implementing investment strategies that will maintain or enhance portfolio quality and performance within the parameters of the City s investment policies and cash flow needs, taking into consideration the primary objective, the preservation of principal. f. Work with the staff to assure coordination of investment trades, delivery of the securities and availability of funds. Assist with trade settlements. Obtain and document competitive prices for securities transactions. Provide technical and fundamental market research including yield curve analysis and swap analysis. g. Assist in reviewing and recommending any appropriate amendments to the City s investment policy at the outset of the Agreement term, and assist in the annual review and update of policy. h. Assist in reviewing investment internal controls. i. Assist in reviewing investment procedures and portfolio documentation with a goal of process improvement. j. Assist in the development of investment benchmarks. k. Assist in the review of third-party safekeeping/custodial services. l. Annually perform (and provide supporting documentation to the City) due diligence reviews of current and proposed broker/dealers and financial institutions as described in the City s Investment Policy. m. Monitor repurchase agreement documentation to maintain the necessary paperwork (not currently permissible by the City s investment policy, but this could be discussed during policy review). n. Provide detailed reports of investment portfolio activity and performance at least monthly. Such statements shall be furnished to the City within three (3) business days after the close of each month. Include earnings and accounting methodology. Reports shall follow Generally Accepted Accounting Principles (GAAP) and Governmental Accounting Standards Board (GASB) True-Value reporting and Deposit & Investment Risk Disclosure, and any other reports that may now or later be required. Provide separate quarterly and annual portfolio performance reports based on the City s fiscal year. o. Allow the City to query data and generate internal reports and to be exportable to Excel. p. Participate in the City s evaluation, selection and review of any investment software the City may consider using. q. Provide weekly to City staff, statement of upcoming cash flows that includes maturities, coupons, called securities and potential callables for a period of 45 days. Upon request, have the ability to provide a statement of upcoming cash flows for a six-month period. r. Provide the City investment staff investment training and technical advice as needed. s. Provide periodic status reports on the services provided by the firm. 4 City of Lacey - RFP - Non-Discretionary Investment Advisory Services

39 5 t. Provide itemized invoices of charges either monthly or quarterly, as agreed upon in the Professional Services Agreement. u. Coordinate with the City staff all the activities necessary to ensure a smooth implementation. Such activities will begin upon execution of Agreement and are projected to be completed by September 28, v. Account Management: 1. The City, through its Investment Policies, shall specify the types of securities, amounts, and maturities that can be purchased for the City, and will provide the successful proposer with written notification of such Authorized Securities. 2. The successful proposer agrees to make recommendations to the City as to changes, including the acquisition and sale of securities for the City as the successful proposer from time to time deems appropriate and permissible under the laws governing the City and as specified in the Investment Policies. 3. The City acknowledges that it may act upon the recommendations provided to it by the successful proposer pursuant to an Agreement - or not - at the City s sole discretion. The successful proposer will assist the City in seeking competitive bids and offers from approved broker/dealers for each transaction involving the City. The City further acknowledges that it has the responsibility for establishing all brokerage arrangements and paying all brokerage fees required or incurred in connection with City transactions. 4. By entering into an Agreement, the City in no way surrenders ownership of the cash or securities comprising the City s account. The successful proposer will not act as a custodian of assets for the City or have possession of any such assets. With the successful proposer s assistance the City shall select and authorize a custodian bank to hold all assets of the City in safekeeping. The City shall be solely responsible for all fees involved with any such custodial arrangement. 5. While the City expects the investment advisor s recommendation as to retention or selection of broker/dealers, the City staff retains sole discretion in the final determination. w. In order that the City may be kept informed of the status and activities in its portfolio, the successful proposer will take all steps necessary to ensure that each broker/dealer who executes a transaction on behalf of the City shall furnish a copy of the brokerage account confirmation to the City, as well as any periodic statements relating to the City. In addition, the City agrees to notify the successful proposer promptly of any change in the amount of assets and the withdrawal of any funds. x. The successful proposer agrees to furnish the City with a comprehensive monthly report showing a detail of all transactions involving the City. The report shall include the market value of the securities and cash held for the City, as well as information regarding the performance of the portfolio. Such statement shall be furnished to the City in not more than three (3) business days after the close of each month. y. The successful proposer will at all times render the services called for in this Agreement in a competent, professional manner in accordance with industry standards. However, the successful proposer does not imply or guarantee profits or freedom from loss in connection with its recommendations. The City, realizing that fluctuations in security prices occur, agrees to not hold the successful proposer liable for any losses sustained by the City, except those resulting from the successful proposer negligence, willful or reckless misconduct, or lack of good faith. It is understood that the successful proposer will be acting in a similar capacity for other customers, and that the City s investments and reinvestments may differ in kind and quantity from those made or recommended with respect to other accounts and customers even though the investment objectives may be the same or similar. City of Lacey - RFP - Non-Discretionary Investment Advisory Services

40 6 V. TERM OF CONTRACT (PROFESSIONAL SERVICES AGREEMENT) The City intends to award this contract (Professional Services Agreement) to a single firm to provide the services required. The term of the contract is anticipated to be from October 1, 2017 through September 30, 2020, and may be extended by up to two (2) years, with a maximum combined contract period of five (5) years. VI. QUALIFICATIONS/EXPERIENCE Proposers must meet or exceed the following criteria: a. Be a Registered Investment Advisor as defined and regulated by the Securities and Exchange (SEC), be registered in the State of Washington, and whose primary business is municipal investment advisory or investment management services. b. Be familiar with all applicable Washington statutes with regard to qualified investments for public entities. (See c. Be completely independent of any financial institution or securities brokerage firm, or shall fully disclose any such relationships relevant to the firm s relationship with the City. d. Have a minimum of five years experience in managing municipal funds, including operating and bond funds. e. Have a minimum of $1 billion dollars in municipal assets under ongoing management with at least $500 million under non-discretionary advisement. f. Must meet the requirements as set forth in the attached Sample Professional Services Agreement. VII. PROPOSAL INSTRUCTIONS a. Submission of Proposals: Proposals must be submitted in a sealed envelope or package bearing the title City of Lacey Investment Advisory Services along with the proposer s name and address. Provide to the individuals listed on the cover page: Five (5) spiral-bound copies for the City One (1) spiral bound copy for Portfolio Services for Government (PSG) One electronic copy (CD or USB stick) for City One electronic copy (CD or USB stick) for PSG b. Deadline: Proposals will not be considered if received after the date and time indicated on the RFP cover page. It is the responsibility of the proposer to ensure that the proposal arrives on time and at the correct locations. All proposals received later than date and time indicated will be returned unopened. c. RFP as Basis for Proposals: This Request for Proposals represents the most definitive statement the City will make concerning the information upon which Proposals are to be based. Any verbal information which is not addressed in the RFP will not be considered by the City in evaluating the Proposal. d. Pre-Proposal Questions/RFP Addenda: All questions relating to this RFP should be addressed by to terrymcccall@ps4gov.com by not later than June 8, All answers to questions, which in the opinion of the City, warrant a written reply or RFP addendum will be furnished to all parties receiving this RFP. The City will not respond to questions received after the deadline listed on the estimated schedule. e. Information Release: All Proposers are hereby advised that the City may solicit and secure background information based upon the information, including references, provided in response to this RFP. By submission of a proposal all Proposers agree to such activity and release the City from all claims arising from such activity. All proposals submitted will be considered part of the public record, except to the extent they are exempted from disclosure. City of Lacey - RFP - Non-Discretionary Investment Advisory Services

41 7 VIII. PROPOSAL CONTENTS The proposal should economize on the volume of content to the extent possible, and should describe the ability of the consultant to perform the work requested, as outlined herein. The proposal should be submitted on recyclable, doublesided recycled paper (post consumer content). No non-recyclable materials should be included in the proposal. a. Transmittal Letter: Indicate who will be assigned to the project, who will be project manager, and that the proposal will be valid for ninety (90) days. The letter is also to state that The undersigned is an officer of the firm and is authorized to act in this capacity. b. Table of Contents: Number all pages and include clearly identified attachments and/or exhibits. c. Approach/Project Work Plan: Describe how the work will be done within the given timeframe. Include a proposed work plan and schedule. d. Exceptions to Sample Professional Services Agreement and RFP: Carefully review the Sample Professional Services Agreement attached hereto as Attachment A, and incorporated herein. This is the standard agreement that successful respondents to this RFP will be required to execute. RFP respondents wishing to propose any exceptions or alternative clauses to the agreement or to any specified criteria within this RFP should propose those exceptions or alternative clauses in their proposal; however, the City shall not be required to consider proposed revisions. Proposed exceptions or alternative clauses should be accompanied by explanatory comments that are succinct, thorough and clear. e. Investment Policy - Advisor Certification: By signing the certification form (Attachment C ) and submitting with its proposal, proposer acknowledges it has read and understands the objectives and constraints outlined in the Investment Policy. f. Questionnaire: The questionnaire (Attachment D) is to be completed in its entirety. IX. EVALUATION OF PROPOSALS a. Evaluation Procedure: Proposals received that conform to the proposal instructions will be evaluated. The evaluation will take place using the evaluation criteria identified in the following section. Interviews may be requested prior to final selection of firm(s). Award will be made to the highest ranked Proposer. If contract negotiations are unsuccessful with the highest ranked firm, the City reserves the right to enter into negotiations with the next highest ranked Proposer. b. Evaluation Criteria: This section provides a description of the criteria which is intended to be used in the evaluation of the proposals submitted to accomplish the work defined in the RFP. However, the City may, without notice, at its sole discretion, change the evaluation criteria. 1. Meets Minimum Qualifications/Experience 2. Statement of Understanding Demonstration of a full understanding of the work to be performed. Background and scope of work described in RFP Ability to provide and meet scope of work 3. Approach to the Project Quality of firm s standard statements and reports Ability to ensure a smooth transition/conversion Description of project approach to completing the work 4. Firm s Strength and Stability Firm s stability and past experience working with local governments City of Lacey - RFP - Non-Discretionary Investment Advisory Services

42 8 5. Experience and Qualifications of Assigned Personnel Qualifications of the firm, project leader and project team members for the types of services required 6. Cost Proposal Proposed fee for services in the City s judgment, which will provide the most comprehensive service at the most reasonable cost 7. Interview 8. Reference Checks X. GENERAL PROPOSAL/CONTRACT CONDITIONS a. Award Determination: The award will be made to the Proposer that in the City s opinion, will meet our needs. b. Limitation and Award: This RFP does not commit the City to the award of a contract, nor to pay any costs incurred in the preparation and submission of proposals in anticipation of a contract. The City reserves the right to waive minor irregularities, accept or reject any or all proposals received as the result of this request. c. Dispute Resolution: Any unresolved dispute(s) arising from this RFP will be adjudicated in the State of Washington, County of Thurston. c. Billing Procedures: Proposers are informed that the billing procedures of the selected firm are subject to the review and prior approval of the City before reimbursement of services can occur. Contractor's invoices shall include an itemized statement of the work done during the billing period, and will not be submitted more frequently than once a month. Payment shall be made by the City on a Net 30 day basis upon approval of Contractor invoice. d. Validity Period and Authority: The proposal shall be considered valid for a period of at least ninety (90) days from the date of receipt and shall contain a statement to that effect. The proposal shall contain the name, title, address, and telephone number of an individual or individuals with authority to bind any company contacted during the period in which the City is evaluating the proposal. e. Conflict of Interest: A Proposer submitting a proposal thereby certifies that no officer, agent, or employee of the City or the City has a financial interest in this proposal or has participated in contract negotiations on behalf of the City; that the proposal is made in good faith without fraud, collusion, or connection of any kind with any other Proposer for the same call for proposals; the Proposer is competing solely in its own behalf without connection with, or obligation to, any undisclosed person or firm. f. State and City Licensing/Excise Tax: The successful proposer will be required to be licensed to do business in the State of Washington and in the City of Lacey, and may be subject to the State of Washington excise tax. For website information, go to dor.wa.gov. XI. NOTICE TO ALL PROPOSERS/ STANDARD AGREEMENT The attached Sample Professional Services Agreement included herein reflects preliminary, draft contract language and selected, proposed contract terms for this procurement. Proposers should be aware that such language terms and provisions are for illustrative purposes only and that the City reserves the right, following submission and ranking of all proposals submitted in response to this procurement, to amend, modify or negotiate over any and all such contract language, terms and provisions before making a final determination regarding the execution of the Agreement rising from this procurement. By submitting a proposal in response to this procurement, proposers acknowledge that they are aware of and do not object to any later, potential amendment and modification of such preliminary, draft language and terms. In addition, by responding to this procurement, proposers acknowledge that they are aware of their ability to offer alternatives to any of the preliminary, draft contract language and proposed contract terms set forth herein. City of Lacey - RFP - Non-Discretionary Investment Advisory Services

43 9 ATTACHMENT A SAMPLE PROFESSIONAL SERVICES AGREEMENT THIS AGREEMENT is made by and between the City of Lacey, a code City of the State of Washington, hereinafter City and <name of Consultant>, hereinafter Consultant, jointly referred to as Parties. IN CONSIDERATION of the terms and conditions contained herein, the Parties agree as follows: 1. Work to Be Performed. Consultant shall provide all labor, services, and material to satisfactorily complete the Scope of Services, attached as Exhibit A. 1. Administration. The City Manager or designee shall administer and be the primary contact for Consultant. Prior to commencement of work, Consultant shall contact the City Manager or designee to review the Scope of Services, schedule, and date of completion. Upon notice from the City Manager or designee, Consultant shall commence work, perform the requested tasks in the Scope of Services, stop work, and promptly cure any failure in performance under this Agreement. 2. Representations. City has relied upon the qualifications of Consultant in entering into this Agreement. By execution of this Agreement, Consultant represents it possesses the ability, skill, and resources necessary to perform the work and is familiar with all current laws, rules, and regulations which reasonably relate to the Scope of Services. No substitutions of agreed-upon personnel shall be made without the prior written consent of City. Consultant represents that the compensation as stated in paragraph 3 is adequate and sufficient for the timely provision of all professional services required to complete the Scope of Services under this Agreement. Consultant shall be responsible for the technical accuracy of its services and documents resulting therefrom, and City shall not be responsible for discovering deficiencies therein. Consultant shall correct such deficiencies without additional compensation except to the extent such action is directly attributable to deficiencies in City-furnished information. 3. Standard of Care. Consultant shall exercise the degree of skill and diligence normally employed by professional consultants engaged in the same profession, and performing the same or similar services at the time such services are performed. 4. Modifications. City may modify this Agreement and order changes in the work whenever necessary or advisable. Consultant shall accept modifications when ordered in writing by the City Manager or designee, so long as the additional work is within the scope of Consultant s area of practice. Compensation for such modifications or changes shall be as mutually agreed between the Parties. Consultant shall make such revisions in the work as are necessary to correct errors or omissions appearing therein when required to do so by City without additional compensation. City of Lacey - RFP - Non-Discretionary Investment Advisory Services

44 2. Term of Contract. This Agreement shall be in full force and effect upon execution and shall remain in effect until completion of all contractual requirements have been met as determined by City. Consultant shall complete its work by <date>, 20, unless the time for performance is extended in writing by the Parties. Either Party may terminate this Agreement for material breach after providing the other Party with at least 10 days prior notice and an opportunity to cure the breach. City may, in addition, terminate this Agreement for any reason by 10 days written notice to Consultant. In the event of termination without breach, City shall pay Consultant for all work previously authorized and satisfactorily performed prior to the termination date. 3. Compensation and Method of Payment The City shall pay Consultant for the performance of those services designated in Exhibit "A," an amount not to exceed $**********. If the description of services on Exhibit "A" designates additional services which may be requested by the City, said additional services will be paid for by the City at the rate set forth on Exhibit "A," which sum may exceed the "not to exceed" amount set forth above; however, said services will only be performed and compensated by the City after the City has directed such performance in writing. 2. Payment by the City for services will only be made after the services have been performed, a voucher or invoice is submitted in the form specified by the City, and the same is approved by the appropriate City representative. Payment may be made on a monthly or other periodic basis and may be made on the basis of an estimate of the percentage of contract completion accomplished if said procedure is approved by the City. 3. If an hourly rate of compensation or other means of measurement is set forth on Exhibit "A," the parties intend that said measurement shall be used up to the "not to exceed" figure set forth above. 4. The City reserves the right to withhold payment under this Agreement for that portion of the work (if any) which is determined in the reasonable judgment of the City Manager or designee to be noncompliant with the Scope of Services, City standards, City Code, and federal or state standards. 4. Notice. Notices other than applications for payment shall be given in writing as follows: TO THE CITY: TO THE CONSULTANT: Name: ********** Name: ********** Phone: Phone: Address: Address: 5. Applicable Laws and Standards. The Parties, in the performance of this Agreement, agree to comply with all applicable federal, state, and local laws and regulations. Consultant warrants that its designs, construction documents, and services shall conform to all federal, state, and local statutes and City of Lacey - RFP - Non-Discretionary Investment Advisory Services

45 11 regulations. 6. Certification Regarding Debarment, Suspension, and Other Responsibility Matters Primary Covered Transactions. A. By executing this Agreement, the Consultant certifies to the best of its knowledge and belief that it and its principals: 1. Are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from covered transactions by any federal department or agency; 2. Have not within a three-year period preceding this proposal been convicted of or had a civil judgment rendered against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (federal, state, or local) transaction or contract under a public transaction; violation of federal or state antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, or receiving stolen property; 3. Are not presently indicted for or otherwise criminally or civilly charged by a governmental entity (federal, state, or local) with commission of any of the offenses enumerated in paragraph (A)(2) of this certification; and 4. Have not within a three-year period preceding this application/proposal had one or more public transactions (federal, state, or local) terminated for cause or default. B. Where the prospective primary participant is unable to certify to any of the statements in this certification, such prospective participant shall attach an explanation to this Agreement. 7. Relationship of the Parties. It is understood and agreed that Consultant shall be an independent contractor and not the agent or employee of City, that City is interested in only the results to be achieved, and that the right to control the particular manner, method, and means in which the services are performed is solely within the discretion of Consultant. Any and all employees who provide services to City under this Agreement shall be deemed employees solely of Consultant. The Consultant shall be solely responsible for the conduct and actions of all its employees under this Agreement and any liability that may attach thereto. 8. Ownership of Documents. All drawings, plans, specifications, and other related documents prepared by Consultant under this Agreement are and shall be the property of City, and may be subject to disclosure pursuant to chapter RCW or other applicable public record laws. The written, graphic, mapped, photographic, or visual documents prepared by Consultant under this Agreement shall, unless otherwise provided, be deemed the property of City. City shall be permitted to retain these documents, including reproducible camera-ready originals of reports, reproduction quality mylars of maps, and copies in the form of computer files, for the City s use. City shall have unrestricted authority to publish, disclose, distribute, and otherwise use, in whole or in part, any reports, data, drawings, images, or other material prepared under this Agreement, provided that Consultant shall have no liability for the use of Consultant s work product outside of the scope of its intended purpose. City of Lacey - RFP - Non-Discretionary Investment Advisory Services

46 9. Records. The City or State Auditor or any of their representatives shall have full access to and the right to examine during normal business hours all of Consultant s records with respect to all matters covered in this Agreement. Such representatives shall be permitted to audit, examine, make excerpts or transcripts from such records, and to make audits of all contracts, invoices, materials, payrolls, and record of matters covered by this Agreement for a period of three years from the date final payment is made hereunder. 10. Insurance. Consultant shall procure and maintain for the duration of the Agreement, insurance against claims for injuries to persons or damage to property which may arise from or in connection with the performance of the work hereunder by Consultant, its agents, representatives, employees, or subcontractors. 1. Minimum Scope of Insurance. Consultant shall obtain insurance of the types described below: 1. Automobile liability insurance covering all owned, non-owned, hired, and leased vehicles. Coverage shall be written on Insurance Services Office (ISO) form CA or a substitute form providing equivalent liability coverage. 2. Commercial general liability insurance shall be at least as broad as ISO occurrence form CG and shall cover liability arising from premises, operations, stop-gap independent contractors and personal injury, and advertising injury. City shall be named as an additional insured under Consultant s commercial general liability insurance policy with respect to the work performed for the City using an additional insured endorsement at least as broad as ISO CG Workers compensation coverage as required by the industrial insurance laws of the State of Washington. 4. Professional liability insurance appropriate to Consultant s profession. 2. Minimum Amounts of Insurance. Consultant shall maintain the following insurance limits: 1. Automobile liability insurance with a minimum combined single limit for bodily injury and property damage of no less than $1,000,000 per accident. 2. Commercial general liability insurance shall be written with limits no less than $1,000,000 for each occurrence, and $2,000,000 for general aggregate. 3. Professional liability insurance shall be written with limits no less than $1,000,000 per claim and $1,000,000 policy aggregate limit. 3. Other Insurance Provisions. The policies are to contain, or be endorsed to contain, the following provisions for automobile liability, professional liability, and commercial general liability insurance: 1. Consultant s insurance coverage shall be primary insurance with respect to the City. Any insurance, self-insurance, or insurance pool coverage maintained by City shall be in excess of Consultant s insurance and shall not contribute with it. 12 City of Lacey - RFP - Non-Discretionary Investment Advisory Services

47 2. Consultant shall fax or send electronically in.pdf format a copy of insurer s cancellation notice within two business days of receipt by Consultant. 3. If Consultant maintains higher insurance limits than the minimums shown above, City shall be insured for the full available limits of commercial general and excess or umbrella liability maintained by Consultant, irrespective of whether such limits maintained by Consultant are greater than those required by this Agreement or whether any certificate of insurance furnished to the City evidences limits of liability lower than those maintained by Consultant. 4. Failure on the part of Consultant to maintain the insurance as required shall constitute a material breach of the Agreement, upon which the City may, after giving at least five business days notice to Consultant to correct the breach, immediately terminate the Agreement, or at its sole discretion, procure or renew such insurance and pay any and all premiums in connection therewith, with any sums so expended to be repaid to City on demand, or at the sole discretion of the City, offset against funds due Consultant from the City. 4. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best rating of not less than A:VII. 5. Evidence of Coverage. As evidence of the insurance coverages required by this Agreement, Consultant shall furnish acceptable insurance certificates to the City Clerk at the time Consultant returns the signed Agreement, which shall be Exhibit C. The certificate shall specify all of the parties who are additional insureds, and shall include applicable policy endorsements, and the deduction or retention level. Insuring companies or entities are subject to City acceptance. If requested, complete copies of insurance policies shall be provided to City. Consultant shall be financially responsible for all pertinent deductibles, self-insured retentions, and/or self-insurance. 11. Indemnification and Hold Harmless. Consultant shall, at its sole expense, defend, indemnify, and hold harmless City and its officers, agents, and employees, from any and all claims, actions, suits, liability, loss, costs, attorney's fees, costs of litigation, expenses, injuries, and damages of any nature whatsoever relating to or arising out of the wrongful or negligent acts, errors, or omissions in the services provided by Consultant, Consultant's agents, subcontractors, subconsultants, and employees to the fullest extent permitted by law, subject only to the limitations provided below. Consultant's duty to defend, indemnify, and hold City harmless shall not apply to liability for damages arising out of such services caused by or resulting from the sole negligence of City or City's agents or employees pursuant to RCW Consultant's duty to defend, indemnify, and hold City harmless against liability for damages arising out of such services caused by the concurrent negligence of (a) City or City s agents or employees, and (b) Consultant, Consultant's agents, subcontractors, subconsultants, and employees shall apply only to the extent of the negligence of Consultant, Consultant's agents, subcontractors, subconsultants, and employees. Consultant's duty to defend, indemnify, and hold City harmless shall include, as to all claims, demands, losses, and liability to which it applies, City's personnel-related costs, reasonable attorneys' fees, the reasonable value of any services rendered by the office of the City Attorney, outside consultant costs, court costs, fees for collection, and all other claim-related expenses. 13 City of Lacey - RFP - Non-Discretionary Investment Advisory Services

48 14 Consultant specifically and expressly waives any immunity that may be granted it under the Washington State Industrial Insurance Act, Title 51 RCW. These indemnification obligations shall not be limited in any way by any limitation on the amount or type of damages, compensation, or benefits payable to or for any third party under workers' compensation acts, disability benefit acts, or other employee benefits acts. Provided, that Consultant's waiver of immunity under this provision extends only to claims against Consultant by City, and does not include, or extend to, any claims by Consultant's employees directly against Consultant. Consultant hereby certifies that this indemnification provision was mutually negotiated. 12. Waiver. No officer, employee, agent, or other individual acting on behalf of either Party has the power, right, or authority to waive any of the conditions or provisions of this Agreement. A waiver in one instance shall not be held to be a waiver of any other subsequent breach or nonperformance. All remedies afforded in this Agreement or by law shall be taken and construed as cumulative and in addition to every other remedy provided herein or by law. Failure of either Party to enforce at any time any of the provisions of this Agreement or to require at any time performance by the other Party of any provision hereof shall in no way be construed to be a waiver of such provisions nor shall it affect the validity of this Agreement or any part thereof. 13. Assignment and Delegation. Neither Party shall assign, transfer, or delegate any or all of the responsibilities of this Agreement or the benefits received hereunder without prior written consent of the other Party. 14. Subcontracts. Except as otherwise provided herein, Consultant shall not enter into subcontracts for any of the work contemplated under this Agreement without obtaining prior written approval of City. 15. Confidentiality. Consultant may, from time-to-time, receive information which is deemed by City to be confidential. Consultant shall not disclose such information without the prior express written consent of City or upon order of a court of competent jurisdiction. 16. Jurisdiction and Venue. This Agreement is entered into in Thurston County, Washington. Disputes between City and Consultant shall be resolved in the Superior Court of the State of Washington in Thurston County. Notwithstanding the foregoing, Consultant agrees that it may, at City s request, be joined as a party in any arbitration proceeding between City and any third party that includes a claim or claims that arise out of, or that are related to Consultant s services under this Agreement. Consultant further agrees that the Arbitrator(s) decision therein shall be final and binding on Consultant and that judgment may be entered upon it in any court having jurisdiction thereof. 17. Cost and Attorney s Fees. The prevailing party in any litigation or arbitration arising out of this Agreement shall be entitled to its attorney s fees and costs of such litigation (including expert witness fees). 18. Entire Agreement. This written Agreement constitutes the entire and complete agreement between the Parties and supersedes any prior oral or written agreements. This Agreement may not be changed, modified, or altered except in writing signed by the Parties hereto. 19. Anti-kickback. No officer or employee of City, having the power or duty to perform an official act City of Lacey - RFP - Non-Discretionary Investment Advisory Services

49 or action related to this Agreement shall have or acquire any interest in this Agreement, or have solicited, accepted, or granted a present or future gift, favor, service, or other thing of value from any person with an interest in this Agreement. 20. Business Registration. Consultant shall register with the City as a business prior to commencement of work under this Agreement if it has not already done so. 21. Severability. If any section, sentence, clause, or phrase of this Agreement should be held to be invalid for any reason by a court of competent jurisdiction, such invalidity shall not affect the validity of any other section, sentence, clause, or phrase of this Agreement. 15 The Parties have executed this Agreement this day of, 20. CITY OF LACEY CONSULTANT: By: By: Scott Spence *********** City Manager Approved as to form: David Schneider City Attorney City of Lacey - RFP - Non-Discretionary Investment Advisory Services

50 16 ATTACHMENT B CITY OF LACEY INVESTMENT POLICY 1. GENERAL A. This policy establishes the rules by which the City of Lacey will invest public funds that will provide maximum security with the highest investment return while meeting the daily cash flow demands of the City of Lacey and conforming to all federal, state, and local statutes governing the investment of public funds. B. Any questions or comments should be directed to the Finance Director at (360) C. This investment policy applies to all financial assets of the City of Lacey. These funds are accounted for in the City of Lacey s Annual Financial Report and include: General Fund Special Revenue Funds Capital Project Funds Enterprise Funds Internal Service Funds Debt Service Funds Trust and Agency Funds Retirement/Pension Funds Any new fund created by the City Council, unless specifically exempted D. Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived. The standard of care to be used by investment officials shall be the "prudent person" standard and shall be applied in the context of managing an overall portfolio. Investment officers acting in accordance with written procedures and the investment policy and exercising due diligence shall be relieved of personal responsibility for an individual security's credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse developments. The investment portfolio is subject to public review and evaluation. The program shall be designed and managed with a level of professionalism that is worthy of and maintains the public trust. E. This policy is divided into the following sections: SECTION 1 SECTION 2 SECTION 3 GENERAL OBJECTIVES DELEGATION OF AUTHORITY City of Lacey - RFP - Non-Discretionary Investment Advisory Services

51 17 2. OBJECTIVES SECTION 4 ETHICS AND CONFLICTS OF INTEREST SECTION 5 AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS SECTION 6 AUTHORIZED INVESTMENTS SECTION 7 SAFEKEEPING AND CUSTODY SECTION 8 DIVERSIFICATION SECTION 9 MAXIMUM MATURITIES SECTION 10 INTERNAL CONTROLS SECTION 11 PERFORMANCE STANDARDS SECTION 12 REPORTING SECTION 13 INVESTMENT POLICY ADOPTION A. The primary objectives, in priority order, of the City of Lacey s investment activities shall be: 1. Safety: Safety of the principal is the foremost objective of the investment program. Investments of the City of Lacey shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. To obtain this objective, diversification is required in order that potential losses on individual securities do not exceed the income generated from the remainder of the portfolio. 2. Liquidity: The City of Lacey's investment portfolio will remain sufficiently liquid to enable the City of Lacey to meet all operating requirements that might be reasonably anticipated. 3. Return on Investment: The City of Lacey's investment portfolio shall be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the City of Lacey's investment risk constraints and the cash flow characteristics of the portfolio. 3. DELEGATION OF AUTHORITY A. Authority to manage the City of Lacey's investment program is derived from the following: Revised Code of Washington (RCW), Washington Municipal Treasurer s Association model investment policy, BARS manual, and Resolution No Management responsibility for the investment program is hereby delegated to the Finance Director, who shall establish procedures for the operation of the investment program consistent with this investment policy. B. Procedures should include reference to the following: safekeeping, wire transfer agreements, custody agreements and investment related banking services contracts. Such procedures shall include explicit delegation of authority to persons responsible for investment transactions. No person may engage in an investment transaction except as provided under the terms of this policy and the procedures established by the Finance Director. The Finance Director shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials. 4. ETHICS AND CONFLICTS OF INTEREST City of Lacey - RFP - Non-Discretionary Investment Advisory Services

52 A. Officers and employees involved in the investment process shall refrain from personal business activity that may conflict with the proper execution of the investment program, or may impair their ability to make impartial investment decisions. Employees and investment officials shall disclose to the City Manager or Finance Director any material financial interests in financial institutions that conduct business within this jurisdiction, and they shall further disclose any personal financial/investment positions that could be related to the performance of the City of Lacey's portfolio. Investment officers shall refrain from conducting personal investment transactions with the same individuals with whom the business is conducted on behalf of the City of Lacey and shall subordinate their personal investment transactions to those of the City of Lacey, particularly with regard to the timing of purchases and sales. 5. AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS A. No public deposits shall be made except in qualified public depositaries as provided in Chapter RCW. 18 B. The Finance Director will maintain a list of financial institutions authorized to provide investment services. C. In addition, a list will also be maintained of approved security broker/dealers selected by credit worthiness. The list may include primary dealers (those who as primary government securities dealers report daily to the New York Federal Reserve Bank) or regional dealers that qualify under Securities and Exchange Commission Rule 15C3-1 (uniform net capital rule). Secondary security dealers may be included if they meet all of the following conditions: 1. Have an office in the State of Washington and are currently conducting business with other State of Washington public entities. 2. Have a minimum net worth of $10 million. a) A dealer will not be considered if it has two consecutive quarters of declining net worth or has one quarter with a drop in net worth of five (5) percent or more. D. All brokers/dealers and financial institutions who desire to do business with the City of Lacey must supply the Finance Director with the following: Annual audited financial statements for the last three (3) years. Proof of National Association of Securities Dealers certification. Proof of state registration. Certification of having read the City of Lacey's investment policy. References preferably from governmental entities. E. The Finance Director will conduct an annual review of the financial condition of firms. 6. AUTHORIZED INVESTMENTS A. The City of Lacey is empowered to invest in the following types of securities: City of Lacey - RFP - Non-Discretionary Investment Advisory Services

53 The Washington State Local Government Investment Pool (LGIP) (RCW ). Savings accounts or certificates of deposit issued by Washington State Public Depositories (RCW ). United States bonds (RCW ). United States certificates of indebtedness (RCW ). United States Treasury Bills (RCW ). General obligation or utility revenue bonds or warrants of its own or of any other city or town in the state, which at the time of investment have one of the three highest credit ratings of a nationally recognized rating agency (RCW ). Its own bonds or warrants of a local improvement district which are with the protection of the local improvement guaranty fund law (RCW ). United States Government Agency securities and United States Government-Sponsored Corporations including but not limited to Farmers Home Administration, Federal Land Banks, Federal Home Loan Banks, Federal Home Loan Mortgage Corporation (Freddie Mac), Federal National Mortgage Association (Fannie Mae), Government National Mortgage Association (Ginnie Mae), Student Loan Marketing Association (Sallie Mae) (RCW ). B. The City of Lacey is prohibited from investing in the following types of investments. Corporate Stocks Corporate Bonds Foreign Government Obligations Futures Contracts Guaranteed Investment Contracts Investment in Commodities Limited Partnerships Negotiable Certificates of Deposit Real Estate SAFEKEEPING AND CUSTODY A. To protect against potential fraud, embezzlement, or losses caused by the collapse of individual securities dealers, all investment securities purchased by the City shall be held by the City or in safekeeping by the City s custodian bank or a third party bank trust department, acting as an agent for the City under the terms of a custody or trustee agreement executed by the bank and by the City. The primary agent shall issue a safekeeping receipt to the City listing the specific instrument, rate, maturity, and other pertinent information. B. All security transactions entered into by the City of Lacey shall be conducted on a delivery-versuspayment (DVP) basis. C. Investments and safekeeping procedures are subject to annual review by the Washington State Auditor. 8. DIVERSIFICATION City of Lacey - RFP - Non-Discretionary Investment Advisory Services

54 A. The City of Lacey will diversify its investments by security type and institution to reduce overall portfolio risks. With the exception of U.S. Treasury securities and authorized investment pools, no more than 50 percent of the City of Lacey's total investment portfolio will be invested in a single security type or with a single financial institution. However, 85 percent of the City of Lacey s total investment portfolio may be invested in U.S. Treasury Obligations or 100 percent of the City of Lacey s total investment portfolio may be invested in the Washington State Local Government Investment Pool. B. At least 15 percent of the portfolio shall be invested in overnight instruments or marketable securities which can be sold to raise cash in one day s notice. C. Portfolio maturities shall be staggered to avoid a concentration of assets in a specific maturity period. 9. MAXIMUM MATURITIES A. To the extent possible, the City of Lacey will attempt to match its investments with anticipated cash flow requirements. Unless matched to a specific cash flow, the City of Lacey will not directly invest in securities maturing more than five (5) years from the date of purchase. However, the City of Lacey may invest in securities maturing up to twenty (20) years if they consist solely of the corpus of a perpetual operating fund or consist solely of bond reserve funds. Reserve funds may be invested in securities exceeding five (5) years if the maturity of such investments is made to coincide as nearly as practical with the expected use of the reserve funds. B. It is the intent of the City of Lacey to hold investments to maturity, but security exchanges may be executed to upgrade yield if it maintains cash flow requirements and the overall portfolio quality. 10. INTERNAL CONTROLS A. The Finance Director shall subject the investment policies and procedures to the City of Lacey s annual audit by the Washington State Auditor. This review will provide internal control by assuring compliance with policies and procedures. 11. PERFORMANCE STANDARDS A. The investment portfolio will be designed to obtain an average rate of return during budgetary and economic cycles, consistent with the investment objectives and cash flow needs. B. The portfolio should obtain a market average rate of return during a market/economic environment of stable interest rates. 12. REPORTING A. The Finance Director shall provide the City Manager consistent periodic reporting. These reports shall provide an accurate and meaningful representation of the investment portfolio and proof of compliance with the investment policy. Quarterly reports will include: 20 A listing of individual securities held at the end of the reporting period. City of Lacey - RFP - Non-Discretionary Investment Advisory Services

55 21 Average life and final maturity of all investments listed. Coupon or discount rate. Par value and amortized book value. Percentage of the portfolio in each investment category. Market value versus book value comparisons, which include unrealized gain or loss information. 13. INVESTMENT POLICY ADOPTION A. The City of Lacey's investment policy shall be adopted by resolution of the City Council. The policy shall be reviewed on an annual basis by the approving authority and the same authority must approve any modifications. Note: This policy was adopted by the Lacey City Council on February 13, City of Lacey - RFP - Non-Discretionary Investment Advisory Services

56 22 ATTACHMENT C INVESTMENT POLICY ADVISOR CERTIFICATION INVESTMENT POLICY ADVISOR CERTIFICATION I certify that the firm has received a copy of the City s Investment Policy, adopted February 13, 2014, and I understand the objectives and constraints outlined in the Policy. I further certify that I am authorized, and do commit the firm I represent, to this same understanding and that this commitment applies to all future amended Investment Policies that our firm would advise and assist in developing. Signed Title Firm Date City of Lacey - RFP - Non-Discretionary Investment Advisory Services

57 23 ATTACHMENT D QUESTIONNAIRE Please complete this questionnaire. In order to adequately compare and evaluate proposals objectively, all proposals must be submitted in accordance with this format. While detailed responses are valued here and elsewhere, to the extent possible they should be prepared simply and economically, providing straightforward, concise information. Table A. INFORMATION ABOUT THE INVESTMENT ADVISORY FIRM 1. Briefly describe the evolution of your firm including the date founded, ownership, and any subsidiary relationships. Provide audited financial statements for the past two years and a current interim financial statement. If your firm is privately held and does not produce audited statements, unaudited will be acceptable. 2. State the dollar totals of portfolios and the number of public sector portfolios the firm has under nondiscretionary advisement and discretionary management. Assets Under Non-Discretionary Advisement # of clients Cities $ Counties $ Special Districts $ Other $ Totals Totals $ Assets Under Discretionary Management # of clients Cities $ Counties $ Special Districts $ Other $ Totals $ Totals 3. Non-discretionary accounts a. How many new non-discretionary accounts have been added by your firm in the last three years? b. How many have discontinued your investment advisory services in the last three years? c. Explain why these accounts discontinued service. City of Lacey - RFP - Non-Discretionary Investment Advisory Services

58 24 4. Discretionary accounts a. How many new discretionary accounts have been added by your firm in the last three years? b. How many have discontinued your investment advisory services in the last three years? c. Explain why these accounts discontinued service. 5. Provide a statement of the firm s experience with non-discretionary investment advisory services to entities similar to ours, including the number and dollar totals of your non-discretionary accounts on the West Coast. 6. List the project manager and all key personnel to be utilized for the work. Include résumés, description of education, professional designations, certificates or licenses, professional background, experience, skills, expertise and training for the types of services required. 7. Provide at least three local government non-discretionary client references, including contact information (name, physical address, address & phone number). The references should include at least one entity similar to ours. 8. What is the average number of accounts served per portfolio manager? 9. Who supplies your firm with market value figures? 10. Describe the firm s research capability and resources (e.g., Bloomberg, PMA Ratings, Highline Data Bank Ratings, etc.). 11. Is firm capable of providing all services identified in this request for proposal? 12. In how many days from Professional Services Agreement execution schedule can you (a) begin the transition, (b) complete the transition, and (c) commence services? 13. Has there been any turnover of key personnel in the firm in the past 12 months? If yes, please describe. 14. Describe any Securities and Exchange (SEC) regulatory censure or litigation related to services your firm provides. 15. Provide a copy of the firm s most recent ADV, Part I and II (including Schedule I), as on file with the SEC. a. Is this firm registered with the State of Washington? b. Identify by page and item number, and explain any adverse information in the ADV and how you mitigated it or how you intend to do so. City of Lacey - RFP - Non-Discretionary Investment Advisory Services

59 Benchmarks and Performance: Provide advice as to what benchmark(s) the City should maintain or change in order to evaluate portfolio performance, and why. a. Please complete the following tables. Use Global Investment Performance Standards (GIPS) compliant composite total return gross of fees. If your firm does not report GIPS-compliant results, please state the reason and whether or when it intends to do so. Attach your GIPS-compliant performance presentation as an exhibit to your response. State whether the presentation is verified, and provide the verification letter. State whether your composites have had a performance audit, and provide documentation to support it. It is understood that only discretionary portfolios are reported under GIPS. However, please also provide the number of non-discretionary portfolios that use the selected benchmark. It is also recognized that 2016 GIPS-compliant results are most likely not yet verified or audited. Please note that in your response if that is the case. Calendar Year Performance (GIPS-compliant total return, gross of fees, annual average) Short-Term (18 months & less) Your Firm s Recommended Benchmark: Your Firm s Composite: % % % % % Added Value: % % % % % Annualized Quarterly Standard Deviation: % % % % % Number of clients in composite: Number of non-discretionary clients using this benchmark: Percentage of Total that are Government Clients: % % % % % Calendar Year Performance (GIPS-compliant total return, gross of fees, annual average) Long-Term (18 months & more) Your Firm s Recommended Benchmark: Your Firm s Composite: % % % % % Added Value: % % % % % Annualized Quarterly Standard Deviation: % % % % % Number of clients in composite: Number of non-discretionary clients using this benchmark: Percentage of Total that are Government Clients % % % % % City of Lacey - RFP - Non-Discretionary Investment Advisory Services

60 26 b. Using the following format for your tables, please provide GIPS-compliant composite returns for your clients who use the benchmarks you recommended above: Short- Term Benchmark Index: GIPS-compliant Composite Returns Gross Composite % Benchmark % Added Value % of Fees as of Year % % % 3 Year % % % 5 Year % % % 10 Year % % % Long-Term Benchmark Index: GIPS-compliant Composite Returns Gross Composite % Benchmark % Added Value % of Fees as of Year % % % 3 Year % % % 5 Year % % % 10 Year % % % 17. Please recommend maximum maturities and weighted average maturities for the operating and core portions of the portfolio. Include your rationale. 18. Describe how investment ideas are originated and researched. 19. Explain how investment decisions are monitored and evaluated, including rating changes. 20. Describe your investment management process and how it relates to the client s tasks. Include the step-bystep processes for transaction advice, decisions, execution, safekeeping/custody, and accounting, including who does what. A flow chart is not required but desirable. 21. Describe procedures used to ensure that portfolios comply with client investment objectives and policies. 22. Have you ever attempted to coordinate a trade that failed or was outside the client s investment policy? If yes, how often has this occurred and what did you do to resolve the problem to the client s satisfaction? 23. Describe the strategies that will be used to enhance the performance of the investment portfolio. 24. Describe your procedures for portfolio review, investment management and client contact. 25. How are brokers/dealers selected? When updated, the City s investment policy will require approved broker/dealers to submit and annually update a City-approved Broker/Dealer Information Request Form, which includes the firm s most recent audited financial statements. What process do you have in place to monitor brokers/dealers after they have been approved? City of Lacey - RFP - Non-Discretionary Investment Advisory Services

61 Identify the types of securities held in your portfolios. Describe the types of investment research the firm utilizes and the methodology used to recommend investment decisions (including maturity and investment selection). Table B. COMPUTER REQUIREMENTS 1. What are the specific requirements for remote access? Are there options? Please describe in detail. 2. What security techniques are utilized to protect access to customer data (hardware/software, physical)? 3. Does the firm support the Microsoft Windows environment if it provides software to clients? If no, please explain future support plans. If yes, please provide minimum hardware and software configuration. 4. Describe media specifications for the firm. Include a description of any electronic or software features available that could be used by the City to interface with the firm to determine daily, weekly and/or monthly portfolio activity. 5. How many days/weeks/months of history can be accessed through the system? 6. Does this system require any special hardware or software to access your system? If yes, please describe process, costs and requirements. If there are any third-party product requirements please list those separately and describe your firm s relationship with the third-party company and commitment to support. 7. Describe the features of your system and inquiry capabilities. Does the firm s system offer the ability to inquire about specific transactions? Does the firm s system offer the ability to categorize investments by fund types or special purpose and query and report by these categories? 8. Does your software allow additional users to have read-only dashboard access to reports for viewing? 9. Describe your data back-up and recovery processes and the length of time that a back-up is kept. 10. Disclose standard for notification to clients regarding Proposer s computer down-time for maintenance or other anticipated downtime. Table C. REPORTING 1. Describe the frequency and nature of the reports you provide and enclose examples. Include methods and formulas used to calculate total return and performance. 2. Describe the type and frequency of credit analysis that would be provided on security issuers and financial institutions (e.g. Highline Bank Ratings and PMA Ratings). 3. How often would the representative from your firm meet with the City staff to review portfolio performance and revise investment strategies? City of Lacey - RFP - Non-Discretionary Investment Advisory Services

62 28 4. Does your firm offer reconcilement services for third-party safekeeping? If yes, please describe and include a sample of your standard reports. If no, what alternatives can you offer? TABLE D. TRAINING 1. Describe the on-site training for the City staff that the firm would provide. 2. Describe any off-site (distance learning) training for staff, such as webinars, videos, etc. Table E. OTHER SERVICES 1. Describe services that would assist the City in allocating interest payments to its various sub-categories and funds. 2. Based upon information about the City s investment advisory needs and goals learned during the course of this proposal process, describe any enhancements, technological or otherwise, that the City should consider in order improving efficiencies and portfolio performance. 3. What new services or features does the firm plan to offer in the future? Table F. DISASTER RECOVERY/BUSINESS CONTINUITY PLAN 1. Briefly describe your disaster recovery or business continuity plan. Please provide a copy of the plan. 2. What disaster recovery services can you provide to the City if your firm cannot operate from your own facilities? 3. Is there a hot back-up processing site? How quickly can the site be implemented and accessed in the event of an emergency? Would the City be required to purchase anything additional to access this site? Table G. PROFESSIONAL SERVICES AGREEMENT 1. Please state any objections or proposed changes, if any, to the Professional Services Agreement. (Attachment A) Table H. COST PROPOSAL 1. Provide non-discretionary fee schedules that would apply to the City s account, both in basis point and flat fee options. Apply these fees in a range of from $50 million to $120 million. This wide range is set to gain a feel for your overall pricing strategy, but it is not an indication that the City will significantly expand the balances under advisement. The proposal will be deemed to include all costs unless noted. 2. Include payment terms required for services rendered (e.g., monthly or quarterly, in advance or arrears). City of Lacey - RFP - Non-Discretionary Investment Advisory Services

63 29 ATTACHMENT E COURTESY CHECKLIST OF MATERIALS TO BE SUBMITTED To ensure proper submission of proposal, be sure to enclose all requested materials with your proposal. Following is a list of items to be included: Five (5) spiral-bound copies of proposal - Four (4) to the City, at the address on the cover page - One (1) to Portfolio Services for Government, LLC, at the address on the cover page Two (2) USB stick or CD copies (one to each of the above entities) Transmittal Letter Table of Contents Statement of Understanding Project Team and Qualifications Approach to the Project and Schedule Completed questionnaire, including GIPS supporting documentation Copy of disaster recovery/business continuity plan Cost Proposal GIPS supporting documentation Proposed edits, if any, to the Professional Services Agreement Attachment C - Investment Policy - Advisor Certification Most recent two years financial statement (preferably audited) Copy of the firm s most recent ADV Parts I & II, including Schedule I, as on file with the SEC Sample of all standard reports Please note that this list may not contain all required materials. It is an itemization of key items to assist firms in assembling proposals. Any omission above does not relieve Proposers from providing all required materials and information. Thank You The City of Lacey sincerely appreciates the time and effort expended in responding to this Request for Proposals. City of Lacey - RFP - Non-Discretionary Investment Advisory Services

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65 LACEY CITY COUNCIL MEETING September 28, 2017 SUBJECT: Lacey Veterans Services Hub RECOMMENDATION: Authorize the City Manager to sign a Memorandum of Understanding between the City of Lacey and Thurston County for purpose of supporting the programs and services of the Lacey Veterans Service Hub. STAFF CONTACT: ORIGINATED BY: ATTACHMENTS: FISCAL NOTE: PRIOR REVIEW: Scott Spence, City Manager City Manager s Department 1. Memorandum of Understanding between the City of Lacey and Thurston County in support of the Lacey Veterans Services Hub. Per the Memorandum of Understanding, Thurston County will contribute $60,000 toward Lacey Veterans Services Hub s lease payments over a two-year period. The City Council has had several briefings on the Lacey Veterans Services Hub to include the potential of financial support from Thurston County. BACKGROUND: On October 29, 2014, through a partnership with the Tacoma and Federal Way Vet Centers, the city opened the Lacey Veterans Services Office at the South Puget Sound Community College (SPSCC) Lacey campus in the Woodland District. The facility offered an array of Veterans services, including readjustment counseling; Veterans Affairs benefits explanation and referral; medical referral; Post-Traumatic Stress Disorder (PTSD) assessment; individual, group, and family counseling; and support for successful transition from military to civilian life at the time of its opening. Over the next several months, services at the facility were expanded through a partnership with the Thurston County Veterans Assistance Program to include housing, utility, nutrition, and transportation assistance. Page 1 of 2

66 Programs and services were housed in a 1,200-square-foot office suite. The City paid for the lease, reflecting the City Council s commitment to ensuring a dedicated space was available to allow Veterans services providers to deliver critically-needed services. Almost two years later, on October 7, 2016, the City officially dedicated the Lacey Veterans Services Hub, with an expanded operational footprint of 4,425 square-feet). The City budgeted $90,000 in operations seed money to the Hub in 2016, and $125,000 in 2017 to provide a Hub manager and support related operational expenses. In addition to existing services, the expanded Hub partnered with numerous other Veteran services providers to establish five key pillar services at the facility, including Employment, Housing, Nutrition, Education, and Healthcare. More than half of the Veterans programs and providers in the county, representing nearly thirty non-profits and government agencies, have an established relationship with the Lacey Veterans Services Hub. Some providers occupy permanent satellite offices within the facility on a daily basis. Others utilize shared, rotating office space one or two days a week. Others provide regular training or counseling sessions in the facility s general purpose meeting room. And still others have a warm handoff referral relationship with the Hub for offsite programs and services. The numbers prove the model is meeting a critical need. Since inception, nearly 3,000 client appointments have been booked at the facility, including 350 for housing assistance and a nearly equal number for employment assistance. Thurston County was an important early partner in providing services at the Hub. This year, the Thurston County Board of Commissioners agreed, in addition to the participation of the Thurston County Veterans Assistance Program, to financially support operations at the facility. As a result, a Memorandum of Understanding has been drafted that would commit $60,000 in funds from Thurston County with the knowledge that the City would maintain its commitment to the Lacey Veterans Services Hub. ADVANTAGES: 1. The proposed Memorandum of Understanding recognizes the value of serving local Veterans, which total more than 32,000 in Thurston County alone. 2. Thurston County is a key partner in the future of the Lacey Veterans Services Hub. This financial investment recognizes their commitment to area veterans. DISADVANTAGES: 1. No disadvantages are foreseen. Page 2 of 2

67 Memorandum of Understanding between the City of Lacey and Thurston County Lacey Veterans Services Hub This Memorandum of Understanding is made and entered into as of the date of the last signature hereon by and between the City of Lacey, a municipal corporation (hereinafter referred to as CITY ), and Thurston County, a municipal corporation, (hereinafter referred to as COUNTY ), for the purpose of supporting the provision of critical Veteran programs and services in Thurston County to eligible Veterans; eligible Veteran family members; and eligible transitioning, inactive, and former military service personnel, WITNESSETH: WHEREAS, the City of Lacey officially dedicated the Lacey Veterans Services Hub in October 2016, establishing a centralized location for area veterans to access essential programs and services; and WHEREAS, the Lacey Veterans Services Hub has a primary mission of providing such programs and services to eligible Veterans, their family members, and transitioning, inactive, and former military service personnel; and WHEREAS, the Lacey Veterans Services Hub is currently located at th Avenue SE, Lacey, (hereinafter referred to as PREMISES ); and WHEREAS, the COUNTY shares the CITY S commitment to increasing the accessibility and effectiveness of programs and services in Thurston County that benefit eligible Veterans, their family members, and transitioning, inactive, and former military service personnel; and WHEREAS, it would benefit the CITY and the COUNTY to further the provision of Veterans-related programs and services at the PREMISES; and WHEREAS, the CITY and the COUNTY wish to formalize their relationship for the support of such Veterans-related programs and services; NOW, THEREFORE, the CITY and the COUNTY, in consideration of the mutual terms, conditions, covenants, and provisions contained herein, and the mutual benefits received hereunder, agree as follows: 1. The CITY has budgeted $125,000 in fiscal year 2017, and expects to commit a similar amount in fiscal year 2018, in support of the Lacey Veterans Services Hub, which sustains the administrative functions necessary to deliver programs and services to area veterans. 2. The COUNTY will contribute $60,000 toward the funding of the Lacey Veterans Services Hub, as a onetime contribution in The CITY will apply said funds towards the lease of the PREMISES, which is equivalent to two years of lease payments. MOU (Lacey/Thurston County) 2017 Veterans Hub Page 1 of 2

68 3. The COUNTY will provide the funding called for in Section 2 by a lump sum payment to the CITY. Said payment shall be made within 45-days of the City of Lacey invoicing the COUNTY. In the event the CITY does not budget a similar amount in fiscal year 2018 for administrative support as expected, the CITY shall reimburse the COUNTY $30,000 within the first 45-days of calendar year The COUNTY intends to house a county staff in the PREMISES to operate the county s Veterans Assistance Program. The CITY will provide adequate space within the PREMISE for the county staff at no additional cost to the COUNTY, while the Lacey Veterans Services Hub is located in the PREMISES. 5. This MOU shall remain in effect until December 31, The terms and conditions of this MOU could be amended or extended by mutual consent of the signing representatives from the CITY and the COUNTY. 7. The parties mutually agree to defend, indemnify and hold the other, its officers, officials, employees, and volunteers harmless from any and all claims, injuries, damages, losses or suits, including reasonable attorney fees, to the extent caused by each entity s respective negligence in performance of its responsibilities under this Agreement. 8. Prior to entry into force, this Agreement shall be filed with the Thurston County Auditor s Office or posted upon the websites or other electronically retrievable public source as required by RCW This Agreement shall be governed by the laws of the State of Washington as to interpretation and performance. The parties hereby agree that venue for enforcement of this Agreement shall be the Superior Court of Thurston County. IN WITNESS WHEREOF, the parties hereto have entered into this Memorandum of Understanding this day of June, CITY OF LACEY By: Scott Spence, City Manager Date: Approved as to form: David Schneider, City Attorney THURSTON COUNTY By: Ramiro Chavez, County Manager Date: Approved as to form: JON TUNHEIM Prosecuting Attorney By: Deputy Prosecuting Attorney MOU (Lacey/Thurston County) 2017 Veterans Hub Page 2 of 2

69 LACEY CITY COUNCIL MEETING September 28, 2017 SUBJECT: Resolution to Annex an Unincorporated Island Gateway Division 2. Project no RECOMMENDATION: Adopt a resolution to annex an unincorporated island known as Gateway Division 2, and set a public hearing to accept testimony on the proposed annexation. STAFF CONTACT: ORIGINATED BY: Scott Spence, City Manager Dave Schneider, City Attorney Rick Walk, Community Development Director Ryan Andrews, Long Range Planning Manager Community Development Department ATTACHMENTS: 1. Resolution to annex an unincorporated island 2. Legal Description of Annexation Area 3. Map of Annexation Area 4. Vicinity map FISCAL NOTE: None. PRIOR REVIEW: July 14, Utilities Committee Meeting July 27, City Council Worksession August 24, 2017 City Council Meeting September 14, 2017 City Council Meeting BACKGROUND: The City received a notice of intent to commence annexation proceedings filed by SSHI, LLC to annex their property, parcel # , into the City of Lacey. The City Council subsequently annexed for municipal purposes the Cuoio Park property on August 15, The Cuoio Park property consists of 330 acres and abuts the Gateway Division 2 property to the west effectively creating an unincorporated island. At the September 14, 2017, meeting the City Council took official action to reject the notice of intent to annex submitted by SSHI, LLC and directed staff to prepare the attached resolution to annex the Gateway Division 2 property as an unincorporated island for consideration at the September 28, 2017, regular meeting. Page 1 of 4

70 Proposed Annexation Area The area proposed for annexation is located in the Hawks Prairie Planning Area and within the Lacey Urban Growth Area north of Britton Parkway and west of Gateway Boulevard extended. The property is acres in size. The property is known as the Gateway Division 2 Subdivision, a 460-lot single-family detached subdivision that received preliminary subdivision approval from Thurston County. The Subdivision also includes a multi-family tract 6.6 acres in size under separate ownership. The property owner, SSHI, LLC, is currently constructing the subdivision to meet the conditions of preliminary approval. They are building a subdivision in phases and are currently receiving Final Plat approval for phase 1 of the subdivision, which consists of 28 lots. The 6.6-acre multi-family parcel is owned by Gateway 850 LLC. This parcel is a part of the Gateway Division 2 subdivision and is reserved for future multi-family development with up to 157 units. While under separate ownership, this parcel will be included in the annexation area as it is between the proposed annexation area and the city limit boundary. Abutting the annexation area to the south is the existing City jurisdictional boundary. The Gateway Division 1 Subdivision, a 79 lot development is located within the City, abutting the proposed annexation area and Britton Parkway to the south. The street system constructed with this subdivision extends roadways from Britton Parkway north into the Gateway Division 2 project, including Gateway Boulevard. The only access to the Gateway Division 2 Subdivision will be through city streets and city jurisdiction for several miles. For efficiencies in providing governmental and life safety services as well as neighborhood continuity between Gateway Division 1 and 2 it makes sense for the City to annex this property. The subject property is zoned High Density Residential. The purpose of the High Density zone is to allow for residential development achieving 12 units to the acre or more. The Gateway Division 2 project was developed within the County jurisdiction and vested under the previous High Density Zoning Classification, which required 6 units to the acre or more. In accordance with the Countywide Planning Policies and joint planning agreements with Thurston County, the zoning would remain High Density Residential upon annexation. Annexation Boundary The area proposed for annexation includes the properties owned by SSHI, LLC and Gateway 850 LLC, as described in attachment 2 legal description and attachment 3 annexation area map. This boundary, as proposed, would connect to the current city limits to the north of the Gateway Division 1 property, to the east by the Betti Trust Property and to the west by the Cuoio Park property annexed by the City on August 10 th. More than 80% of the proposed Page 2 of 4

71 annexation area s boundary is bordered by the City of Lacey, which qualifies the area as an unincorporated island as defined by RCW. Utilities The property is located within the City of Lacey s water and sewer service areas. As the subdivision is constructed, the developer will extend public water and sewer mains into the development from Gateway Division 1. The area is also served by private utilities including Puget Sound Energy and Comcast. No issues are expected concerning provision of these utilities to the area. Fire Districts The parcels are wholly within the boundary of Fire District 8 (South Bay). According to RCW , any future annexations into a city that has annexed into a fire district shall also be annexed into that fire district. Since Lacey annexed into Fire District 3 several years ago, any future annexations not currently within Fire District 3 (including the parcels in the Cuoio annexation area) are also annexed into Fire District 3. Staff has provided notice of this annexation proposal to both chiefs from Fire Districts 3 and 8. Both of which had indicated that they did not have any concerns with the annexation. Taxes, Fees, and Services Typically, as part of an annexation proposal, a full annexation study is performed to outline all issues associated with the annexation including taxes and fees. However, because the area to be annexed is under construction as a residential subdivision and future multi-family development, there is little benefit in completing a full study. The city would benefit from additional property and sales taxes associated with the development of the subdivision and revenue associated with any future land use and building permits. This revenue would offset any costs associated with additional law enforcement calls and/or upkeep of street system constructed by the subdivision. It is the City Council s option to require an annexation study; however, staff believes that in this case it can be handled through analysis in the staff report and would recommend that the applicant not be required to complete one. Utilities Committee Review At the July 14, 2017, meeting of the Utilities Committee, staff provided a briefing on the notice of intent to commence annexation proceedings. At the briefing, the committee was made aware of the petition method process. The Committee was also made aware of the Cuoio Park property located adjacent to the Gateway Division 2 site and annexation plans for the Cuoio Park property would result in the Gateway Division 2 property becoming an unincorporated island. The Utilities Committee recommended staff pursue annexing the Cuoio Park property by resolution for municipal purposes. The Utilities Committee then Page 3 of 4

72 recommended to reject the notice of intent to annex submitted by SSHI, LLC in favor of annexing this property through the annexation of unincorporated island method. At the July 27, 2017, Council Worksession, the full City Council was briefed on the notice of intent to commence annexation proceedings and the Utilities Committee recommendation. The Council agreed with the recommendation and requested the notice of intent to commence annexation proceedings be scheduled for consideration at the September 14, 2017, Council Meeting. On September 14, 2017, the City Council took action to reject the notice of intent annex by SSHI, LLC and directed staff to prepare a resolution to annex an unincorporated island to be consider at the September 28, 2017, Council Meeting. Process The annexation of an unincorporated island method follows steps enumerated in RCW 35A ,.297, and.299. The City Council may resolve to annex an unincorporated island by adopting a resolution that describes the boundaries of the area, states the number of registered voters residing in the area and sets a date for public hearing on the resolution for annexation. After the public hearing, the Council may consider an ordinance annexing the unincorporated island. Notice of the City s intent to annex will also need to be submitted to the BRB. If the BRB s jurisdiction is invoked, the Board would have 120 days to make a finding on the annexation. The Board could approve, disapprove or modify the annexation. If approved by the BRB, the annexation would become effective unless a petition requesting a referendum was submitted by registered voters with residency within the annexation area. Currently, there are no residents within the annexation area. Recommendation The City Council will review the attached resolution to annex an unincorporated island and is requested to make a motion to adopt the resolution to annex the unincorporated island known as the Gateway Division 2 property. Page 4 of 4

73 RESOLUTION NO. CITY OF LACEY A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LACEY STATING THE COUNCIL S INTENT TO ANNEX TO LACEY UNINCORPORATED TERRITORY, DESCRIBING THE BOUNDARIES OF THE AREA TO BE ANNEXED, STATING THE NUMBER OF VOTERS RESIDING THEREIN, AND SETTING A DATE FOR A PUBLIC HEARING. (GATEWAY DIVISION 2). WHEREAS, the Washington State Growth Management Act ("the Act"), codified as RCW 36.70A, requires counties planning under the Act to designate urban growth areas "within which urban growth shall be encouraged and outside of which growth can occur only if it is not urban in nature"; and WHEREAS, the Act at RCW 36.70A.110(4) states that within such urban growth areas, "In general, cities are the units of local government most appropriate to provide urban governmental services"; and WHEREAS, the Act at RCW 36.70A.110(7) states, "An urban growth area designated in accordance with this section may include within its boundaries urban service areas or potential annexation areas designated for specific cities or towns within the county"; and WHEREAS, that certain territory known as the Gateway Division 2 is located in the Hawks Prairie Planning Area and within the Lacey Urban Growth Area; and WHEREAS, Gateway Division 2 is a 460-lot single-family detached subdivision that received preliminary subdivision approval from Thurston County and also includes a multifamily tract 6.6 acres in size under separate ownership; and WHEREAS, Gateway Division 2 Subdivision is a logical service area of the city as the only access will be through city streets and city jurisdiction for several miles; and WHEREAS, more than 80% of the proposed annexation area s boundary is bordered by the City of Lacey, which qualifies the area as an unincorporated island as defined by RCW; and WHEREAS, efficiencies in providing governmental and life safety services as well as neighborhood continuity will be increased if the City were to annex Gateway Division 2.

74 NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LACEY, WASHINGTON, Section 1. The Lacey City Council hereby states its intent to annex the unincorporated Thurston County territory known as Gateway Division 2 via the Unincorporated Island process established in RCW 35A ,.297 and.299. In order to qualify for annexation under this method, the territory must contain residential property owners and have at least 80 percent of its boundaries contiguous to the annexing code city. The territory known as Gateway Division 2 contains residential property owners and is contiguous to the City of Lacey on more than 80 percent of its boundaries. Section 2. The boundaries of the proposed Gateway Division 2 Annexation are described on Exhibit A and depicted on Exhibit B, both of which exhibits are attached hereto and incorporated by this reference as if set forth in full herein. Section 3. There are no known voters that reside within the proposed Gateway Division 2 Annexation, according to the Thurston County Auditor. Section 4. The City Council of the City of Lacey will hold a public hearing at Lacey City Hall, 420 College Street S.E., Lacey, Washington, starting at 7:00 p.m or later on October 12, 2017, at which time the Council will hear testimony from residents or property owners of the area included in this resolution for annexation concerning the proposed Gateway Division 2 Annexation. Notice of the hearing will be given by publication of this Resolution in The Olympian at least once a week for two weeks prior to the date of the hearing. Section 5. The City Clerk is authorized to make necessary corrections to this resolution including, but not limited to, the correction of scrivener's/clerical errors, references, resolution numbering, section/subsection numbers and any references thereto. PASSED BY THE CITY COUNCIL OF THE CITY OF LACEY, WASHINGTON, this day of September, LACEY CITY COUNCIL

75 By Mayor Attest: City Clerk Approved as to form: City Attorney

76 EXHIBIT "A" ANNEXATION LEGAL DESCRIPTION Parcel5 A and B of BLA- JG l 02G5GTC recorded on June 2 I, 20 I G, recorded under Aud1tor':i File No , record5 of Thur5ton County, Wa5hington. 51tuate m Section 3, Town5h1p 18 North, Range I We5t. W.M..

77 ~ ----~-.3 I I I I I ---L-~~~ N -- SCALE I"= J 000' I I ~ u I I l ~ 4 3 I ' ~ -~ 3 t r- ~,;;;-Of _/-jilp,-..,.-.,-,_..,..,.&s:... u t 2 I 5ECTION3 I I I ~=.~=~i r r I I I I I I I I '--- 4 LEGEND P?l ANNEXATION SITE b[c!] AC D ljgma CITY Of LACEY, WASH!NGTON DEPT. OF PUBLIC WORKS EXHIBITB MAP OF ANNEXATION SITE DWN. CKD. DATE R SHEET J Of I RN5 MK LACEY

78 SSHI, LLC Proposed Annexation - ~- \ Subject Propeity Lacey Municipal Boundary l:acey UGA 910 ft The Ctty of lacey uses the mos1 current and eomplete data tivalleble Howev-er. GIS dat&.and product aecort1cy may vary GIS d3ta and products may be d~veioped from sources of <hff@rlng 1>CCCJracy. ttwjlt'lto onty t'll eernitn &e8le.s, btis.ed on modeung or f(tlot'pfetat1on. incomplete While bouig cteated or revised, etc. The City ' l.geey reserves the ri9lll to corroot. up<satq-, modify. or replace, GIS p<odu~$ wiuiovt n0tifieat10n. Tne City of L~CGy caf'not a$$\ife lhe atcuraey, complettnffs. reliatilftty. or suitability ot lhis lnformattotl for any particular purpose. U~g GIS data r0t purpooes other than those foi-whioh 1hev wet& Or'ea100 rnay yiesd ltiaccur~na or mislaading results. The reoipi;ent 1nay O$iU1er ass1:1r1 any proprietary 'ights to U~is lnfonnaoon nor rep<asoot i110 aoyoih; as othtf th.an C11y Govern""*nl PfOduced ltlfoon.alk>t'i The City or Laeey Shall not be liabht ror *1'1y activity M'lvolving Uus 1nlormalion with rh~ci to k>st profit. IOit stvll'iqs or.,,.,. other 00nsequen11a1 clam&gu

79 LACEY CITY COUNCIL MEETING September 28, 2017 SUBJECT: Honoring Karen Fraser RECOMMENDATION: Motion to approve naming Lacey Woodland Trail after Karen Fraser. STAFF CONTACT: Scott Spence, City Manager Jen Burbidge, Parks and Recreation Director ORIGINATED BY: 1. Parks and Recreation Department ATTACHMENTS: 1. Letter from Parks Board 2. Policy for Naming Publicly Owned Property PRIOR REVIEW: The Board of Park Commissioners made a motion to approve and forward this recommendation at the August 2, 2017, meeting. September 11, General Government Committee BACKGROUND: Karen Fraser has been a civic leader, dedicating a long career to public service befitting Lacey and the Thurston Country area. On January 22, 1976, the Lacey City Council elected Karen Fraser as Lacey s first female mayor. At 31 years old, she was the youngest mayor elected up until that time. When appointed to fill a vacancy on the city council three years earlier, she was the first female named to that position as well. Even by the time of her first election to the Lacey City Council, Fraser was involved in government. She started her career as an intern at the Washington State legislature and later went on to work as a legislative liaison and policy analyst for several state agencies. During Fraser s tenure as mayor, Lacey built a new city hall, the Lacey Museum was established, and the city s utilities and transportation infrastructure were greatly improved. And, while extremely capable and well-educated in all aspects of governing the city, Fraser took particular interest in advancing the causes of gender equality and human rights. As mayor, she was widely popular and enjoyed strong support from the community. Page 1 of 2

80 After serving two-and-a-half terms as Lacey s mayor, Fraser went on to serve eight years as a Thurston County Commissioner and four years as a state representative. She won a spot in the Washington State Senate in 1993, an office she held until December Karen Fraser has provided exceptional civic service to the City of Lacey and Thurston County, which has both been both considerable and extensive. In consideration of Karen Fraser s service to the public, Lacey s Board of Park Commissioners recommends honoring Karen Fraser by naming Lacey Woodland Trail after her. At its September 11, 2017, meeting, the General Government Committee reviewed the proposal to honor Karen Fraser and recommended approval by the full City Council. ADVANTAGES: 1. Recognize and honor a major contributor of civic service and leadership to the City of Lacey and Thurston County, particularly in the areas of history, transportation, utilities, gender equality and human rights. 2. City of Olympia City Council is also considering honoring Karen Fraser with the Olympia Woodland Trail. If they do, Karen Fraser can be recognized as a trailblazer from Lacey to the State Capital. DISADVANTAGES: 1. As with any change, there could be questions from the public regarding the change in trail name. Page 2 of 2

81 City of Lacey 420 College Street SE Lacey WA July 5, 2017 Dear Mayor Ryder and City of Lacey Councilmembers: We would like to respectfully request that the Woodland Trail be named after Karen Fraser due to the fact that she has contributed outstanding civic service to the City of Lacey. Karen Fraser has truly been a trailblazer in our community. On January 22, 1976, the Lacey City Council elected Karen Fraser as Lacey's first female mayor. At 31 years old, she was the youngest mayor elected up until that time. When appointed to fill a vacancy on the city council three years earlier, she was the first female named to that position as well. Even by the time of her first election to the city council, Fraser was had already been involved in the political scene. She started her career as an intern at the Washington State legislature and later went on to work as a legislative liaison and policy analyst for several state agencies. During Fraser's tenure as mayor, Lacey built a new, permanent city hall, the Lacey Museum was established, and the city's utilities and transportation infrastructure were greatly improved. And, while extremely capable and well-educated in all aspects of governing the city, Fraser took particular interest in advancing the causes of gender equality and human rights. As mayor, she was widely popular and enjoyed strong support from the community. After serving two-and-a-half terms as Lacey's mayor, Fraser went on to serve eight years as a Thurston County Commissioner and four years as a state representative. She won a spot in the Washington State Senate in 1993, an office she held until December Karen Fraser has provided exceptional service to the City of Lacey, which has been of substantial length and leadership, and therefore we recommend the naming of this trail after this trailblazer in our community. We appreciate your consideration in this matter. Sincerely, Board of Park Commissioners City of Lacey

82 CITY OF LACEY POLICY FOR NAMING PUBLIC PARKS, TRAILS, PARKWAYS, RECREATION FACILITIES, COMMUNITY BUILDINGS, OPEN SPACE AREAS, HABITAT RESERVES, MEMORIALS AND FEATURES POLICY It is the policy of the City of Lacey to utilize an established procedure to name public spaces, including public parks, trails, parkways, recreation facilities, community buildings, plazas, open space areas, habitat reserves, memorials, and accessories. PURPOSE To define the criteria and procedures for naming of public spaces. GENERAL CRITERIA In the naming of public spaces, consideration shall be primarily given to: A. Neighborhood, geographic or common name identification; B. A natural or geological feature; C. Significant historical events or cultural attributes; D. A historical figure; E. An individual (living or deceased) who has made a significant land and/or monetary contribution to the park system and who has stipulated the name as a condition of the donation; F. An individual who has contributed outstanding civic service to the City of Lacey; 1. Facilities shall not ordinarily be named for living persons, except under the following conditions: a) The individual in his or her lifetime has provided exceptional service to the City of Lacey. This service should be of substantial length and leadership. b) His or her accomplishments must have had a measurable effect upon the quality of life within the community, and be directly related to the park and recreation movement. 2. Park and recreation facilities may be named for a deceased person subject to the following conditions: a) The person has been deceased for a minimum of two years; or b) The person made a significant direct financial contribution for the development / construction of, or donated land for a park, trail and / or recreation facility. G. An organization that has donated a significant parcel of property or facility, or has provided a majority of the financing for the acquisition of a public space. An organization that provides for significant development of a park and/or element within a park, may receive secondary name recognition as outlined in the Procedure item G. PROCEDURE A. The naming of public spaces should be approached without preconceived notions and with patience and deliberation. B. Timing is important in naming public spaces, since temporary designations tend to be retained. During the development, a number or street designation will be used until the formal naming of the public space. Whenever possible, naming will be made upon closing a purchase or construction of the public space. C. Once a name has been approved, it should be considered permanent. D. Suggestions for names may be solicited from organizations and/or individuals, including residents surrounding the property to be named, at the request of the Lacey Park Board or at the discretion of the City Council. All written suggestions, solicited or not, shall be acknowledged and recorded for consideration. E-4

83 E. To avoid duplication, confusing similarity or inappropriateness, the Lacey Park Board, in considering name suggestions, will review existing names in the park system and surrounding area. F. The City Council, following public review and/or recommendation by the Lacey Park Board, shall designate names for park and recreation facilities. The Lacey City Council will have the prerogative of accepting or rejecting all proposals. G. All portions of a public space will have, as a general rule, the same name as the entire park, trail or facility. However, elements within a public space may be named separately as long as the name does not detract from the intended identity. Thus, the two names can be used in combination, i.e. Beaver Park s Cleaver Field or Riverfront Park s Blooming Arboretum. H. Public spaces shall be identified by the established name, and signs shall be maintained as a source of identity and civic pride. I. Where appropriate, a Contributors Corner may be established to honor those who have made significant contributions to the site. J. Upon approval of the name, the name will be filed with the Fire Department, 911, the Lacey Police Department or any agency/business that would use names as a reference. DEFINITIONS A. Lacey Park Board an appointed board of six members representing the citizens of the City of Lacey. B. Public spaces all City owned, public parks, parkways, trails, recreation facilities, community buildings, plazas, open space areas, habitat reserves, memorials, and features in the park and recreation system of the City of Lacey. C. Memorials all sculptures, permanent artwork, fountains, memorial gardens, plazas, and exhibits which honor or commemorate a person(s), group or event. D. Basic park accessories include typical amenities, i.e. benches, picnic tables, equipment, trees, drinking fountains, game equipment and exhibits. E-4

84 FINANCE & ECONOMIC DEVELOPMENT COMMITTEE SEPTEMBER 6, :00 A.M. TO 8:56 A.M. COUNCIL PRESENT: ANDY RYDER, LENNY GREENSTEIN COUNCIL ABSENT: CYNTHIA PRATT STAFF PRESENT: SCOTT SPENCE, TROY WOO, SCOTT EGGER, DAVE SCHNEIDER, KRISTY WOLF, CHELSEA YARWOOD, PERI EDMONDS ACTION: MOTION: APPROVE FINANCE & ECONOMIC DEVELOPMENT COMMITTEE AGENDA. MOTION WAS MADE, SECONDED, AND CARRIED BY MAYOR RYDER AND COUNCILMEMBER GREENSTEIN TO APPROVE AGENDA. BUDGET REVIEW AND EXPENDITURE ESTIMATES STAFF: ACTION: TROY WOO, FINANCE DIRECTOR INFORMATION ONLY Revenue Outlook General Property Tax Levy $6,438,002 - Overall increase of $252,420 Projected Sales Tax Changes - Overall increase of approximately $800, Stable new construction through 2018; year-to-date increase -24.5%. - General Merchandise Stores inconsistent; year-to-date increase +1.9%, with decrease in February, no change in March/April, and growth in May and June. Utility Funds 2018 Rate Increase for Residential Accounts $0.96/month increase scheduled for water (tentative). $0.83/month increased scheduled for sewer. $0.61/month increase scheduled for stormwater. $0.76/month approved rate increase for LOTT Expenditures Outlook Cost of Labor - Two of three labor contracts expire One contract includes 2018; maintenance of benefits; COLA = 2.9% (90% midyear CPI-W). Employee Benefits (preliminary). - Regence HealthFirst 250 = % increase - Group Health = % increase - Dental and Vision no increase - PERS = 13.8% increase - LEOFF = 4.0% increase Finance Committee September 6, 2017 Page 1 of 5

85 Transportation Benefit District (TBD) Street overlay to return after one-year suspension in 2018 ($1.8 million). - Golf Club Road and Lacey Blvd - 14 th between College Street and Ruddell Road - 17 th, 18 th, and 19 th Avenues off of College Street - Stikes Drive and Stikes Loop Other 2018 Budget Initiatives Budget structure changes: - New fund for TBD - Lacey Veterans Services HUB separate budget under Public Affairs - Public Affairs/HR plus City Clerk to become new Administrative Services Department Public Records Project. Implementation of Indirect Cost charges for Water Utility. Investment Advisory Services. Washington State Budget State Budget Bottled water sales tax exemption repealed cities will receive an estimated additional $7.4 million during biennial. - Municipal Research and Services Center (MRSC) fully funded. - State version of National Marketplace Fairness Act adopted; Lacey s projected impact is $2,018,850; 2018 = $90, Pending Capital Budget (Street Sweeper and Operator Department of Ecology Grant $415,000) BUDGET AMENDMENT ORDINANCES STAFF: ACTION: MOTION: TROY WOO, FINANCE DIRECTOR RECOMMEND FULL COUNCIL ADOPTION OF THE PROPOSED 2017 BUDGET AMENDMENT ORDINANCE MOTION MADE, SECONDED AND CARRIED BY MAYOR RYDER AND COUNCILMEMBER HEARN The following are significant budget amendments that have been identified since the adoption of the 2017 Budget: Current Expense Fund (General Fund) A Pedestrian and Bicycle Plan-Federal Transportation Alternative Program grant funded ($127,600). Move Lacey Veterans Services HUB to Public Affairs budget ($125,000). Mayor s Gala fundraising for Lacey Veterans Services HUB ($36,000). Inmate security at a medical facility ($7,000 profession services; $129,375 wages and benefits). Finance Committee September 6, 2017 Page 2 of 5

86 Arterial Street Fund (Capital Fund) College and 22 nd Roundabout Project-Two Federal Transportation Alternative Program grant funded ($117,600 and $25,950). Building Improvement Fund Reserve for construction of the 50 th Anniversary Train Depot Trail amenity and 5700 Lacey Blvd Museum building improvements ($250,000). Parks and Open Space Fund Completion of the Woodland Creek Community Park asphalt trail connection ($52,000 additional). Completion of the Pickleball Courts project ($50,000). Regional Athletic Complex Capital Fund Regional Athletic Complex bleacher cover project-grant from the Washington State Department of Commerce will match a portion project ($25,220 grant amount; $125,220 total project budget). Wastewater M&O Fund Replacement for Wastewater Maintenance Van budgeted in the incorrect program; request to be transferred from Wastewater Main Maintenance program to Lift Station Maintenance program; net zero effect on the budget ($191,072). Higher than expected LOTT treatment sales have occurred; revenue and expenditure line items utilized to pass through the revenues to LOTT need to be adjusted ($420,760). Water Capital Fund Consultant study of 400 pressure zone ($50,000). Amendment to Well Source No. 31 professional services agreement to resolve sanding screen issue ($161,571). Wastewater Capital Fund Expand scope of Steilacoom Road Lift Station and Water Improvement Project ($1,500,000). Additional funds for Liftstation #2 due to increased dewatering costs, upgrading the electrical power from single-phase to three-phase, a property purchase, increased design costs, and construction costs are rising faster than inflation ($1,352,000). Purchase right-of-way for Liftstation #3 project ($310,000). Information Services Fund Replace aging phone and voic system ($147,181). Finance Committee September 6, 2017 Page 3 of 5

87 INVESTMENT ADVISORY SERVICES RECOMMENDATION STAFF: ACTION: TROY WOO, FINANCE DIRECTOR RECOMMEND FULL COUNCIL APPROVAL OF PROFESSIONAL SERVICES AGREEMENT WITH GOVERNMENT PORTFOLIO ADVISORS On June 1, 2017, a Non-Discretionary Investment Advisory Services request for proposal (RFP) was issued. Proposals were received from five firms in total, and three were interviewed. The City retains all buy and sell authority under a non-discretionary investment advisory services arrangement. Based on the proposals submitted, an interview process, and guidance provided by the City s investment policy, Government Portfolio Advisors (GPA) was selected as the advisor best suited to provide advisory services for the City s investment portfolio. The proposed agreement will be effective October 1, 2017, with a three-year term and includes an option for a two-year renewal. A complex and robust implementation period will occur prior to the City s first securities purchase under this proposed agreement. The implementation period is typically a five to six month process, so results will not be immediate. It is assumed that the 2018 Budget will be impacted by the proposed investment advisory services agreement. Staff requests that the Finance & Economic Development Committee review the proposed professional services agreement and upon concurrence recommend full City Council authorization of the proposed agreement for Investment Advisory Services WATER RATE RECOMMENDATION STAFF: ACTION: TROY WOO, FINANCE DIRECTOR SCHEDULED FOR DISCUSSION AT OCTOBER 5, 2017, COUNCIL WORKSESSION The City Council adopted Ordinance No establishing the current water rate schedule is the final year of the adopted rate schedule. The next scheduled update of the water comprehensive plan will begin in 2018 and is expected to be a two-year project. Based on City Council guidance provided during the 2017 Budget process, staff is developing a two-year rate recommendation until the comprehensive plan can be updated and contemplate a long-term rate schedule. This short-term model uses an average cost methodology rather than a more detailed line-by-line item analysis that is typically performed in a full Comprehensive Plan update. The current rate schedule ( ) was developed based upon the following fiscal policies: Operating reserve level of days. Capital reserve equal to 1.0 percent of the existing plant asset valuation. Debt to equity ratio not to exceed of 50.0 percent. Growth escalator of 1.25 percent. A capital improvement plan that is limited to essential projects (other capital projects are deferred). Maintain current rate structure, low-income discounts, and outside City multiplier. Finance Committee September 6, 2017 Page 4 of 5

88 The rate model maintains the same policies. A combination of a recovering economy and a conservative approach to financial planning has resulted in the improvement to the financial condition of the Water Fund. Stronger than expected growth, delayed General Fund indirect cost plan implementation, slower than planned capital project construction, and two fewer debt issuances than planned for in the comprehensive plan have had positive impacts to the utility s fund balance. These results will give the utility more flexibility and less of a financial burden on the ratepayers. Significant assumptions of the staff developed water rate model include: Historic increases for operational and maintenance expenses including labor No debt issuance required $12 million two-year capital improvement program ( ) Average development levels rather than recent higher levels Maintains fireflow utility tax despite State Legislative fix to the Lane v. City of City court ruling 2018 implementation of the City General Fund indirect cost plan No consideration for the proposed septic to sewer conversion program The proposed water financial model includes a three (3.0) percent inflationary increase. A three percent increase maintains the cost recovery approach for operations and maintenance and maintains the historic capital improvement program funding level. The three percent increase to the 2018 residential water service charge is equal to $0.95 per month (900 cubic feet). The following table illustrates the impact of a 3.0 percent increase for 2018 and 2019: Base Rate $ $ $ $ Consumption Total Monthly Charges $ $ $ $ It is recommended that the Water General Facility Charge (GFC) continue to be increased 6.0 percent or by the Engineering News Record Construction Cost Index (ENR CCI), whichever is higher until the GFC reaches the comprehensive plan calculated level. The Water Comprehensive Plan Update is expected to be completed by the end of 2019, and is expected to fully address the utility needs for the years 2020 through City staff is scheduled to provide the same briefing to the Utilities Committee on September 8, and the final recommendations will be discussed with the full City Council at the October 5 Budget Worksession, so the rate recommendation can be incorporated into the proposed 2018 Budget. The public process will occur through the 2018 Budget public hearings that are scheduled for November and December. Finance Committee September 6, 2017 Page 5 of 5

89 UTILITIES COMMITTEE MINUTES SEPTEMBER 8, :00 4:50 P.M. COUNCIL PRESENT: CHAIR, RACHEL YOUNG, JASON HEARN, VIRGIL CLARKSON STAFF PRESENT: SCOTT SPENCE, TROY WOO, SCOTT EGGER, TERI O NEAL, DOUG CHRISTENSON, EMILY WATTS, CAROL LITTEN SCOTT SPENCE, CITY MANAGER, REQUESTED AN AMENDMENT TO THE AGENDA TO DISCUSS UTILITIES FUNDING FOR THE THURSTON COUNTY FOOD BANK. ACTION: MOTION: APPROVE UTILITIES COMMITTEE AMENDED AGENDA MOTION MADE, SECONDED, AND CARRIED BY COUNCILMEMBERS CLARKSON AND HEARN. AFRICAN CLAWED FROG INVASIVE SPECIES REMOVAL EFFORT - COLLEGE REGIONAL STORM FACILITY STAFF: ACTION: DOUG CHRISTENSON, PW UTILITIES CIVIL ENGINEER INFORMATION ONLY College Regional Stormwater Facility (CRSF): Stormwater runoff from central Lacey & Saint Martin s University (SMU) drains into three ponds on the campus. The CRSF pond system provides water quality treatment prior to discharge downstream to Woodland Creek. In July 2015, the African Clawed Frogs (ACF) was discovered in the large East Pond at CRSF in Lacey. This is the first known occurrence of ACF in the Pacific NW. The frog is a Prohibited Species invasive, adaptable, predatory, prolific, and carries the deadly Ranavirus, skin toxins and parasites. There is no established protocol for dealing with the African Clawed Frog. As a result, multiple agencies were involved with St. Martin s and the City of Lacey to establish and implement a strategy during The process involved containment, control, trapping, and eradication using pond water salinization. Testing by the Washington Department of Fish & Wildlife s Molecular Genetics Lab confirmed the ACF are positive for ranavirus, a highly virulent amphibian pathogen. During the eradication process, 6,106 African Clawed Frogs were captured in the large East Pond at the College Regional Storm Facility and euthanized. Utilities Committee September 8, 2017 Page 1

90 Next steps include monitoring the site for effectiveness, reviewing and assessing the process for improvements, maintaining containment during the winter flow-thru, and planning eradication for the smaller west and east ponds WATER RATE RECOMMENDATION STAFF: ACTION: TROY WOO, FINANCE DIRECTOR SCHEDULED FOR DISCUSSION AT OCTOBER 5, 2017, COUNCIL WORKSESSION The City Council adopted Ordinance No establishing the current water rate schedule. The final year of the adopted rate schedule is The next scheduled update of the water comprehensive plan will begin in 2018 and is expected to be a two-year project. Based on City Council guidance provided during the 2017 Budget process, staff is developing a two-year rate recommendation until the comprehensive plan can be updated and contemplate a long-term rate schedule. This short-term model uses an average cost methodology rather than a more detailed line-by-line item analysis that is typically performed in a full Comprehensive Plan update. The current rate schedule ( ) was developed based upon the following fiscal policies: Operating reserve level of days. Capital reserve equal to 1.0 percent of the existing plant asset valuation. Debt to equity ratio not to exceed of 50.0 percent. Growth escalator of 1.25 percent. A capital improvement plan that is limited to essential projects (other capital projects are deferred). Maintain current rate structure, low-income discounts, and outside City multiplier. The rate model maintains the same policies. A combination of a recovering economy and a conservative approach to financial planning has resulted in the improvement to the financial condition of the Water Fund. Stronger than expected growth, delayed General Fund indirect cost plan implementation, slower than planned capital project construction, and two fewer debt issuances than planned for in the comprehensive plan have had positive impacts to the utility s fund balance. These results will give the utility more flexibility and less of a financial burden on the ratepayers. Significant assumptions of the staff developed water rate model include: Utilities Committee September 8, 2017 Page 2

91 Historic increases for operational and maintenance expenses including labor No debt issuance required $12 million two-year capital improvement program ( ) Average development levels rather than recent higher levels Maintains fire flow utility tax despite State Legislative fix to the Lane v. City of City court ruling 2018 implementation of the City General Fund indirect cost plan No consideration for the proposed septic to sewer conversion program The proposed water financial model includes a three (3.0) percent inflationary increase. A three percent increase maintains the cost recovery approach for operations and maintenance and maintains the historic capital improvement program funding level. It is recommended that the Water General Facility Charge (GFC) continue to be increased 6.0 percent or by the Engineering News Record Construction Cost Index (ENR CCI), whichever is higher until the GFC reaches the comprehensive plan calculated level. The Water Comprehensive Plan Update is expected to be completed by the end of 2019, and is expected to fully address the utility needs for the years 2020 through Final recommendations will be discussed with the full City Council at the October 5 Budget Worksession, so the rate recommendation can be incorporated into the proposed 2018 Budget. The public process will occur through the 2018 Budget public hearings that are scheduled for November and December. THURSTON COUNTY FOOD BANK - COMPASSIONATE PROJECT STAFF: SCOTT SPENCE, CITY MANAGER TROY WOO, FINANCE DIRECTOR ACTION: STAFF WILL PROVIDE ADDITIONAL INFORMATION FOR COMMITTEE REVIEW. The City of Lacey and the North Thurston Public School District are partners in a project to promote compassion in the community. The school district is launching a campaign that would allow students to donate to the Thurston County Food Bank. Staff is looking into the possibility of changing the Utility Online payment service to include this donation option. Following discussion, the Committee was supportive of staff s recommendation, and requested a follow-up to the changes. Utilities Committee September 8, 2017 Page 3

92 GENERAL GOVERNMENT AND PUBLIC SAFETY COMMITTEE MINUTES SEPTEMBER 11, :30 5:59 P.M. COUNCIL PRESENT: ANDY RYDER, CYNTHIA PRATT, RACHEL YOUNG STAFF PRESENT: SCOTT SPENCE, TROY WOO, JEN BURBIDGE, CAROL LITTEN, PHIL WHITE, JENNY BAUERSFELD ACTION: MOTION: APPROVE GENERAL GOVERNMENT & PUBLIC SAFETY COMMITTEE AGENDA. MOTION MADE, SECONDED, AND CARRIED BY DEPUTY MAYOR PRATT AND COUNCILMEMBER YOUNG. RESOLUTION SUPPORTING LFD3 BOND MEASURE STAFF: ACTION: MOTION: STATUS: BARBARA SOVDE, JUBILEE RESIDENT RECOMMEND TO FULL COUNCIL, THE ADOPTION OF A RESOLUTION SUPPORTING LFD3 BOND MEASURE. MADE, SECONDED AND CARRIED BY DEPUTY MAYOR PRATT AND COUNCILMEMBER YOUNG SEPTEMBER 28, 2017 APPROVE RESOLUTION TO SET A PUBLIC HEARING. OCTOBER 12, 2017 HOLD PUBLIC HEARING TO RECEIVE COMMENTS FOR AND AGAINST THE LFD3 BOND MEASURE. The City Council received a request from Barbara Sovde, Lacey resident, requesting Council support of the Fire Protection District 3 General Obligation Bond Proposal for the November 7, 2017 election. Bonds would be used to finance fire stations, vehicles and equipment. This proposition would authorize the District to issue no more than $20M of general obligation bonds maturing within 20 years and levy annual excess property taxes to repay the bonds. The average cost to a homeowner would be 87 cents a month. The cost would be reduced to 47 cents per month in three years. HOMEOWNER ASSOCIATION GRANT APPLICATIONS STAFF: JENNY BAUERSFELD, COMMUNITY RELATIONS SPECIALIST ACTION: COMMITTEE MEMBERS AGREED WITH STAFF RECOMMENDATIONS TO FUND 15 GRANTS. The City Council has approved funding for neighborhoods to apply for resources to improve the quality of their community. Improvements would be made to common areas in the neighborhood, including stormwater ponds, playground equipment, common area maintenance, landscaping, and others. Fifteen grants have been received for the 2017 HOA Grant Application funding cycle. Requests amount to $11, with a matching amount of $21, General Government & Public Safety Committee September 11, 2017 Page 1

93 NLC PRESCRIPTION DISCOUNT PROGRAM STAFF: ACTION: PHIL WHITE, DAIII - HR INFORMATION ONLY The National League of Cities (NLC) offers a prescription discount program to the residents of member cities. The program is free of charge to both the City of Lacey and its residents. It does not act as a replacement to insurance, nor does it act as a rider to a current insurance policy; rather, the use of this card enables residents the opportunity to obtain a reduction in the cost of certain prescription drugs. Lacey residents without insurance coverage or Lacey residents with insurance plans that do not include specific prescriptions will be the prime beneficiaries, saving up to 24 percent. Upon implementation of this service, NLC will work with the City of Lacey to market the program to the public. Once the city receives the discount cards from Caremark, they will be distributed to multiple locations for citizen participation. NAMING LACEY WOODLAND TRAIL AFTER SENATOR KAREN FRASER STAFF: ACTION: MOTION: JEN BURBIDGE, PARKS & RECREATION CENTER FORWARD A RECOMMENDATION TO FULL COUNCIL TO RENAME THE LACEY WOODLAND TRAIL IN RECOGNITION OF THE PUBLIC SERVICE PROVIDED BY FORMER SENATOR KAREN FRASER. MADE, SECONDED, AND CARRIED BY DEPUTY MAYOR PRATT AND COUNCILMEMBER YOUNG In 1976, Karen Fraser was elected as the City of Lacey s first female mayor and served two and half terms before continuing her public service as a Thurston County Commissioner, state representative, and Washington State Senator. In recognition of Karen Fraser s significant contribution to civic service and leadership to the City of Lacey and Thurston County, especially in the areas of history, transportation, utilities, gender equality and human rights, the Lacey Board of Park Commissioners recommends changing the name of the Lacey Woodland Trail to the Karen Fraser Trail. The City of Olympia is also considering renaming their section of the Woodland Trail in recognition of Karen Fraser. General Government & Public Safety Committee September 11, 2017 Page 2

94 City of Lacey 420 College St Lacey, WA APPLICATION REQUESTING COUNCIL ACTION ON A RESOLUTION Requests for Council to pass a Resolution must be submitted six weeks prior to the requested Council Meeting date, unless waived by the General Government & Public Safety Committee. The City Council meets the 2"d & 4th Thursday from January through October; and the 1st & 3rd Thursday during November and December. PURPOSE OF RESOLUTION: ;f:t:~}k;~-~~~f:;asj ACTION REQUESTED: In support of.lec.ci2.'1 F: re JJ/sl. 31n opposition of ~ INDIVIDUAL, AGENCY, OR ORGANIZATION MAKING THE REQUEST: 0arJLf/;r cs21(d!::'.'. Phone COUNCIL MEETING DATE REQUESTED: ~ Attach supporting documentation, materials, and other pertinent information relative to the action requested of the City Council, and mail to the Lacey City Council, 420 College Street SE, Lacey, WA 98503; or drop off at Lacey City Hall, 420 College Street SE, City Council counter. For Office Use On/ : Date Request Received_B...:;-1_.<I~-._.17_ _--: : / Date of General Government Committee q "'//, 17 '... ;, ~ ~ Applicant Notified of Committee decision on Forwarded to Council for action on

95 THURSTON COUNTY m aw: m ~ SINCE 185.? Jon Tunheim PROSECUTING ATTORNEY August 10, 2017 Ms. Tillie Naputi-Pullar, Elections Manager Thurston County Courthouse 2000 Lakeridge Dr SW, Bldg 1 Olympia, WA Re: Fire Protection District No. 3 General Obligation Bonds Election; November 7, 2017 Dear Tillie: Pursuant to RCW 29A , we are certifying the following ballot title for the above-referenced election: BONDS FOR FIRE ST A TIONS, VEHICLES AND EQUIPMENT The Board of Fire Commissioners of Fire Protection District No. 3, Thurston County, Washington adopted Resolution No , concerning a proposition to finance fire stations, vehicles and equipment. This proposition would authorize the District to: construct a new Station 34 and convert the existing Station 34 into a training facility; construct additions to Station 33 and the Vehicle Repair Facility; renovate Station 35; acquire firefighting and emergency medical service vehicles and equipment; make other capital improvements; issue no more than $19,975, 14 7 of general obligation bonds maturing within 20 years; and levy annual excess property taxes to repay the bonds, all as provided in Resolution No Should this proposition be: Approved Rejected D This ballot title should be filed in your office, and then you should notify the persons proposing the measures of the exact language of the ballot title. Sincerely, RECElVED THURSTON COUNTY AUDITOR AT /;liuu) -,y: AUG /:GJ AMlE&i> OE Pl I' JONTUNHEIM PROSECUTING ATTORNEY Elizabeth Petrich Chief Civil Deputy Prosecuting Attorney Civil Division - Bldg. No Lnkeridge Drive SW, Olympia. Washington Phone (360) _. I Fax (360)