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04-16-2024 Council Packet - RegularCITY OF Federal Way Centered on Opportunity CITY COUNCIL REGULAR MEETING AGENDA City Hall - Council Chambers April 16, 2024 - 6:30 p.m. CALL MEETING TO ORDER 2. PLEDGE OF ALLEGIANCE 3. CEREMONIES & RECOGNITION a. Proclamation: Black Wellness Week 4. MAYOR'S EMERGING ISSUES AND REPORT • Violent Crime Task Force • Senior Programs at the Federal Way Community Center • Recent Events: Diaper Drive Report (3/23), Washington State History at Sequoyah Middle School (4/9-11) FUSION Groundbreaking (4/11), Federal Way Korean Association Open House (4/11), Celebration of Festival Vaisakhi with Sikh Community (4/13), Federal Way Audiology - Grand Opening & Ribbon Cutting (4/15) • Upcoming Events: Federal Way Little League Jamboree (4/20); Parks Appreciation Day (4/20); I'm Hooked on Fishing Event (5/4) 5. PUBLIC COMMENT RULES: In accordance with State Law, the City of Federal Way prohibits any testimony regarding any campaign for election or promotion of, or opposition to, any ballot proposition during the public comment. Council Rules prohibit any personal, impertinent, threatening or slanderous remarks, and no speaker may convey or donate their time for speaking to another speaker. All individual comments are limited to 3 minutes each. The Mayor may interrupt any speaker whose comments continue too long, relate negatively to others, disparage people based on race, national origin, gender, sexual orientation or other protected status, or are otherwise unconducive to a civil meeting. The Mayor has the authority to preserve order at all meetings of the Council, and to cause the removal of any person from any meeting for disorderly conduct. The City Council may amend this agenda and take action on items not currently listed. Regular Meetings are recorded and televised on Government Access Channel 21 and viewable on FW YouTube. For more information, or to view agenda materials and access public comment sign-up options, please visit www.citvoffederalway.com. To request accommodations or assisted listening devices, please contact the City Clerk prior to the meeting. *Remote attendance available via Zoom meeting code: 363 503 282 and passcode: 738163; or https://cityoffederalway.zoom.us/j/363503282?pwd=VmlocGOrd FVVTU RaQnloRUIQOTQ4Zz09 6. COUNCIL COMMITTEE AND REGIONAL COMMITTEE REPORTS • Parks/Recreation/Human Services/Public Safety Committee (PRHSPS) • Land Use/Transportation Committee (LUTC) • Finance, Economic Development Regional Affairs Committee (FEDRAC) • Lodging Tax Advisory Committee (LTAC) • Regional Committees Report • Council President Report 7. CONSENT AGENDA Items listed below have been previously reviewed in their entirety by a Council Committee of three members and brought before full Council for approval; all items are enacted by one motion. Individual items may be removed by a Councilmember for separate discussion and subsequent motion. a. Minutes: April 2, 2024 Special and Regular Meetings b. Street Light Infill - Approval to Award c. Fiber Optic Loop (S 317 Street to S 272 Street) - Approval to Bid d. Former Target Building Demolition - Project Acceptance e. Authorization to Apply for Transportation Grants f. Accept Transportation Grant and Authorize the Execution of the Associated Agreements — SR 99 at FWHS Pedestrian Improvements (Design & Construction) g. Washington State Department of Commerce Planning Grant and Interagency Agreement h. Joint Use Operations and Maintenance Facility - 85% Design Report and Authorization to Bid i. Joint Use Operations and Maintenance Facility Frontage Improvements - 85% Design Report, Transfer Capital Improvement Funds, and Authorization to Bid j. RESOLUTION: Authorizing the Allocation of Funds in Accordance with 2023 South King Housing and Homelessness Partners (SKHHP) Housing Capital Fund k. Internet Crimes Against Children (ICAC) Memorandum of Understanding between Seattle Police Department (SPD) and FWPD I. Parks Signage Contract Amendment m. Electrical Line & Fiber Optic Easement on Lakota Park Property n. Department of Commerce Grant Acceptance — Celebration Park Field 8 Turf o. RESOLUTION: Celebration Park Field 8 Artificial Turf Funding p. MOU with the Historical Society of Federal Way — Amendment 2 The City Council may amend this agenda and take action on items not currently listed. Regular Meetings are recorded and televised on Government Access Channel 21 and viewable on FW YouTube. For more information, or to view agenda materials and access public comment sign-up options, please visit www.cityoffederalway.com. To request accommodations or assisted listening devices, please contact the City Clerk prior to the meeting. *Remote attendance available via Zoom meeting code: 363 503 282 and passcode: 738163; or https://citVoffederalway.zoom. us/j/363503282?pwd=VmlocGOrd FVVTU RaQn]oRUIQOTQ4Zz09 8. COUNCIL BUSINESS a. Port of Seattle Economic Development Grant Presentation: Tanja Carter, Economic Development Director b. Energy Efficiency and Conservation Block Grant (EECBG) Grant • Presentation: Tanja Carter, Economic Development Director 9. ORDINANCE Second Reading/Enactment a. Council Bill #876/Authorizing the Execution of the Town Center 3 (TC-3) Development Agreement AN ORDINANCE OF THE CITY OF FEDERAL WAY, WASHINGTON, RELATING TO ENTERING INTO A DEVELOPMENT AGREEMENT WITH TRENT DEVELOPMENT INC. FOR THE TC-3 PROPERTIES PURSUANT TO THE PROVISIONS OF CHAPTER 19.85 FEDERAL WAY REVISED CODE. b. Council Bill #877/Tax Increment Financing AN ORDINANCE OF THE CITY OF FEDERAL WAY, WASHINGTON, DESIGNATING THE DOWNTOWN TAX INCREMENT AREA; SETTING A SUNSET DATE FOR THE INCREMENT AREA; IDENTIFYING THE PUBLIC IMPROVEMENTS TO BE FINANCED; IMPOSING A DEADLINE FOR COMMENCEMENT OF CONSTRUCTION; INDICATING THE CITY'S INTENT TO ISSUE BONDS TO FINANCE PUBLIC PROJECTS; PROVIDING THAT THE INCREMENT AREA WILL TAKE EFFECT JUNE 1, 2024; AND PROVIDING FOR RELATED MATTERS. 10. COUNCIL REPORTS 11. EXECUTIVE SESSION • Property Acquisition Pursuant to RCW 42.30.110(1)(b) • Pending/Potential Litigation Pursuant to RCW 42.30.110(1)(i) 12. ADJOURNMENT The City Council may amend this agenda and take action on items not currently listed. Regular Meetings are recorded and televised on Government Access Channel 21 and viewable on FW YouTube. For more information, or to view agenda materials and access public comment sign-up options, please visit www.cityoffederalway.com. To request accommodations or assisted listening devices, please contact the City Clerk prior to the meeting. *Remote attendance available via Zoom meeting code: 363 503 282 and passcode: 738163; or https://citVoffederalway.zoom. us/j/363503282?pwd=VmlocGOrd FVVTU RaQn]oRUIQOTQ4Zz09 ,� Federal Way PROCLAMATION "Black Wellness Week" WHEREAS, Black Wellness Week began in 1915 to promote community -driven health and wellness goals that are tailored to the needs of the Black community; and WHEREAS, Black Wellness Week fosters advocacy, education, holistic well- being, and promoting physical, mental, emotional and social health for all communities; and WHEREAS, a community -driven approach, focusing on leveraging existing resources and capacities, is essential for the effective implementation of Black Wellness Week; and WHEREAS, Black Wellness Week reminds us that health is the building block on which everything —including political rights and economic self -sufficiency — rest. NOW, THEREFORE, we the undersigned Mayor and City Councilmembers of the City of Federal Way, do hereby proclaim April 15-April 19, 2024 as BLACK WELLNESS WEEK, and encourage the community to advocate for health as a human right for all. SIGNED, this 16th day of April, 2024. FEDERAL WA YMA YOR AND CITY COUNCIL Jim Ferrell, Mayor Lydia Assefa-Dawson, Councilmember Susan Honda, Councilmember Jack Walsh, Councilmember Linda Kochmar, Council President Paul McDaniel, Councilmember Hoang V. Tran, Councilmember Jack Dovey, Councilmember COUNCIL MEETING DATE: April 16, 2024 ITEM CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL SUBJECT: CITY COUNCIL MEETING MINUTES POLICY QUESTION: Should the City Council approve the draft minutes for the March 5, 2024 Regular and Special Meetings? COMMITTEE: N/A MEETING DATE: N/A CATEGORY: ® Consent ❑ Ordinance ❑ Public Hearing ❑ City Council Business ❑ Resolution ❑ Other STAFF REPORT BY: Jennifer Marshall, Deputy City Clerk DEPT: City Clerk Attachments: April 2, 2024 Regular Meeting Draft Minutes April 2, 2024 Special Meeting Draft Minutes Options Considered: 1. Approve the minutes as presented. 2. Amend the minutes as necessary. MAYOR'S RECOMMENDATION: N/A MAYOR APPROVAL: N/A N/A DIRECTOR APPROVAL: ,1w \ Ifs{ Committee Council lT jT-Initial/Date Initial/Date InitiaUDate COMMITTEE RECOMMENDATION: N/A N/A N/A N/A Committee Chair Committee Member Committee Member PROPOSED COUNCIL MOTION: "I move approval of the minutes as presented. " (BELOW TO BE COMPLETED BY CITY CLERK'S OFFICE) COUNCIL ACTION: ❑ APPROVED COUNCIL BILL # ❑ DENIED First reading ❑ TABLED/DEFERRED/NO ACTION Enactment reading 0 MOVED TO SECOND READING (ordinances only) ORDINANCE # REVISED - 4/2019 RESOLUTION # CITY OF �. Federal Way Centered on Opportunity CITY COUNCIL REGULAR MEETING MINUTES City Hall — Council Chambers April 2, 2024 — 6:30 p.m. 1. CALL MEETING TO ORDER Mayor Ferrell called the meeting to order at 6:36 p.m. bft*4Arr City officials in attendance: Mayor Jim Ferrell, Council President Linda Kochmar, Councilmember Lydia Assefa-Dawson, Councilmember Paul McDaniel, Councilmember Susan Honda, Councilmember Hoang Tran, Councilmember Jack Walsh, and Councilmember Jack Dovey. City staff in attendance: City Administrator Brian Davis, Assistant City Attorney Kent van Alstyne, and Deputy City Clerk Jennifer Marshall. 2. PLEDGE OF ALLEGIANCE Mayor Ferrell led the flag salute. COUNCIL PRESIDENT KOCHMAR MOVED TO ADD THE FOLLOWING ITEMS TO COUNCIL BUSINESS: ITEM 9A YOUTH COMMISSION APPOINTMENTS, ITEM 913 NORTH LAKE MANAGEMENT DISTRICT ADVISORY COMMITTEE APPOINTMENTS AND 9C HISTORIC LANDMARKS COMMITTEE; SECOND BY COUNCILMEMBER TRAN. The motion passed unanimously as follows: Council President Kochmar yes Councilmember Tran yes Councilmember Assefa-Dawson yes Councilmember Walsh yes Councilmember McDaniel yes Councilmember Dovey yes Councilmember Honda yes 3. CEREMONIES & RECOGNITION a. Proclamation: Financial Literacy Month —April 2024 Councilmember Dovey explained the need for this the city -sponsored class and shared success stories. He read and presented proclamation to Reverend George Houston, Paul Norlund, and Jeff Wall. b. Proclamation: Sexual Assault Awareness Month — April 2024 Councilmember Honda read and presented the the proclamation to Haley Lampman, Legal Advocate with King County Sexual Assault Resource Center (KCSARC). Ms. Lampman Federal Way City Council Regular Minutes Page 1 of 7 April 2, 2024 explained her role in KCSARC and highlighted the prevalence of sexual assault offering hope for healing through free and confidential help. c. Certificate of Recognition: Jace Johnson as Young Malcom in X The Life and Times of Malcom X Councilmember Assefa-Dawson introduced Jace Johnson sharing how she first met him after his performance at McCaw Theater in Seattle. His teacher, Tanya Goodwillie from Allegro, reviewed the process Jace participated in to be selected for this role and asked him questions about his experience. 4. MAYOR'S EMERGING ISSUES AND REPORT Airport Expansion Master Plan Public Process Update — Policy Advisor Bill Vadino provided an update for the Sustainable Airport Master Plan (SAMP) process and outlined the main objectives of city participation. He referenced this being considered as an option for Council Goals noting it will be added to the next LUTC meeting for discussion. Recent Events — Mayor Ferrell overviewed his recent attendance at the Korean Quarterly Meeting on March 21, Diaper Drive at Twin Lakes Fred Meyer March 23, Young Life Federal Way Camp Fundraiser March 23; and Lions 70 Years of Service Celebration on March 23. He also attended the Highline Forum March 27 held at City Hall and the St. Francis Hospital New Family Birth Center Grand Opening on March 28. Upcoming Events — Mayor Ferrell announced both the Federal Way Little League Jamboree and Parks Appreciation Day on April 20. 5. PUBLIC COMMENT Susan Strong thanked the mayor for the no parking signs on the streets near the Day Center and reported the parking lot was empty of people and trash. Ken Blevens spoke against the Health through Housing project noting their presentation lacked preparation which does not bode well for the handing of the facility. Bob Darrigan invited members of the Council and Mayor Ferrell to attend the Special Needs Youth Fishing Derby being held April 27 at Auburn Mill Pond Park. Betty Taylor expressed her sorrow after the death of her grandson and wants to know what can be done to spread awareness of gun violence. Geoffrey Tancredi thanked the Council for the March 16 City Council Meeting Presentation regarding Health Through Housing and reiterated his concerns. Stephen Meier, Marine Hills Resident, shared he is greatly impacted by the airplanes flying over his house and volunteered to be a technical advisor to any committee. Jan Barber advertised that the Federal Way Lion's Club will be holding their annual Flap Jacks at Jimmy Mac's on May. This is a fundraiser for Make Music and the Sight & Hearing Program. Craig Patrick spoke about the success of their St. Patrick's Day event and invited those in attendance to participate in the Parks Appreciation day clean up on April 20. Federal Way City Council Regular Minutes Page 2 of 7 April2, 2024 Trenise Rogers asked questions regarding the currently vacant Diversity, Equity and Inclusion (DEI) Analyst position and how the city might be able to fill the position with adequate compensation and support. Anna Patrick addressed violence in Federal Way and overviewed programs that had been used and are currently being used to promote safety within the city. 6. COUNCIL COMMITTEE AND REGIONAL COMMITTEE REPORTS Parks/ Recreation/Human Services/Public Safety Committee (PRHSPS): Councilmember Walsh shared the next meeting will be April 9 and Councilmember Assefa-Dawson will chair in his absence. He encouraged participation for Parks Appreciation Day on April 20. Land Use/Transportation Committee (LUTC): Councilmember Dovey announced their upcoming meeting May 6 when they will discuss parking requirements in neighborhoods. Finance, Economic Development Regional Affairs Committee (FEDRAC): Councilmember Tran noted the March 26 meeting had all councilmembers in attendance. He reviewed the three items forwarded from this meeting on the consent agenda and announced the next meeting on April 23. Lodging Tax Advisory Committee (LTAC): Councilmember Assefa-Dawson announced the next meeting scheduled on April 10 where they will review the Tourism Enhancement Grant Applications and committee bylaws. Regional Committees Report: Councilmember Honda reported on attending the Women in Municipal Government Meeting with the National League of Cities (NLC). She announced the Senior Health and Resource Fair on Thursday, May 16 at the Performing Arts and Event Center (PAEC) and the Service Club Membership Meeting which will be taking place at City Hall on April 16 at 9:30 a.m. Council President Report: Council President Kochmar noted an upcoming collaborative meeting with School Board Directors scheduled for April 24. She highlighted the information provided in by Legal Advocate Haley Lampman for KCSARC emphasizing the sexual assault numbers and her desire for perpetrators to be caught. 7. CONSENT AGENDA a. Minutes: March 19, 2024 Special and Regular Meetings b. Monthly Financial Report — February 2024 c. AP Vouchers for 02/17/2024 thru 03/15/2024 and Payroll Vouchers 02/01/2024 thru 02/29/2024 d. Washington State Criminal Justice Training Commission Teacher Administrator Coach Officer Interagency Agreement COUNCIL PRESIDENT KOCHMAR MOVED APPROVAL OF THE CONSENT AGENDA ITEMS (A) THROUGH (D); SECOND BY COUNCILMEMBER ASSEFA-DAWSON. The motion passed unanimously as follows: Council President Kochmar yes Councilmember Tran yes Councilmember Assefa-Dawson yes Councilmember Walsh yes Councilmember McDaniel yes Councilmember Dovey yes Councilmember Honda yes Federal Way City Council Regular Minutes Page 3 of 7 April2, 2024 8. PUBLIC HEARING a. Ordinance: Town Center 3 (TC-3) Development Agreement Mayor Ferrell opened the public hearing at 7:59 p.m. Community Development Director Keith Niven overviewed the existing layout of the property and highlighted which portions will to be sold to the developer and those that would remain city -owned. He overviewed the proposed agreement including the phasing plan developed to ensure the property gets redeveloped in a timely fashion. Mr. Niven highlighted the significant impact and public benefit that will result from this development including job creation, residential ownership opportunities, city -sponsored interim uses on property, opportunity for civic building, no multi -family tax exempt properties, and subsidized retail space. Public Comment Ron Walker provided council a spiral bound proposal of his ideas for the Town Center property. Alex Milsten commended staff on their efforts to date and suggested street cars be added to the area to facilitate movement downtown. Council asked questions surrounding the phasing and timing of the project. Discussion continued with information related to subsidized retail space, phase order, and street improvements. COUNCILMEMBER DOVEY MOVED TO CLOSE THE PUBLIC HEARING; SECOND BY COUNCILMEMBER WALSH. The motion passed unanimously as follows: Council President Kochmar yes Councilmember Tran yes Councilmember Assefa-Dawson yes Councilmember Walsh yes Councilmember McDaniel yes Councilmember Dovey yes Councilmember Honda yes Mayor Ferrell took the First Reading/Ordinance related to this item out of order after receiving Council consensus. 10. ORDINANCE —ITEM TAKEN OUT OF ORDER First Reading a. Council Bill #876/Authorizina the Execution of the Town Center 3 (TC-3) Develooment Agreement AN ORDINANCE OF THE CITY OF FEDERAL WAY, WASHINGTON, RELATING TO ENTERING INTO A DEVELOPMENT AGREEMENT WITH TRENT DEVELOPMENT INC. FOR THE TC-3 PROPERTIES PURSUANT TO THE PROVISIONS OF CHAPTER 19.85 FEDERAL WAY REVISED CODE. Deputy City Clerk Jennifer Marshall read the ordinance title into the record Federal Way City Council Regular Minutes Page 4 of 7 April 2, 2024 COUNCILMEMBER DOVEY MOVED TO FORWARD THE PROPOSED ORDINANCE TO THE APRIL 16, 2024 COUNCIL MEETING FOR SECOND READING AND ENACTMENT; SECOND BY COUNCILMEMBER WALSH. The motion passed unanimously as follows: Council President Kochmar yes Councilmember Tran yes CouncilmemberAssefa-Dawson yes Councilmember Walsh yes Councilmember McDaniel yes Councilmember Dovey yes Councilmember Honda yes Mayor Ferrell announced a recess at 8:50 p.m.; the meeting reconvened at 8:58 p.m. 9. COUNCIL BUSINESS ADDED ITEM - Youth Commission Appointments COUNCILMEMBER WALSH MOVED THE FOLLOWING APPOINTMENTS TO THE YOUTH COMMISSION: MARY MBUGUA TO A VOTING POSITION DUE TO EXPIRE AUGUST 31, 2025 AND WALTER CARIAS TO AN ALTERNATE POSITION DUE TO EXPIRE AUGUST 31, 2024; SECOND BY COUNCILMEMBER DOVEY. The motion passed unanimously as follows: Council President Kochmar yes Councilmember Tran yes CouncilmemberAssefa-Dawson yes Councilmember Walsh yes Councilmember McDaniel yes Councilmember Dovey yes Councilmember Honda yes b. ADDED ITEM - North Lake Management District Advisory Committee Appointments COUNCILMEMBER DOVEY MOVED THE FOLLOWING APPOINTMENTS TO THE NORTH LAKE MANAGEMENT DISTRICT ADVISORY COMMITTEE: LARRY FLESHER, DARRON NASH, AND DAVID HEIMER TO VOTING POSITIONS DUE EXPIRE MARCH 31, 2026; SECOND BY COUNCILMEMBER TRAN. The motion passed unanimously as follows: Council President Kochmar yes Councilmember Tran yes CouncilmemberAssefa-Dawson yes Councilmember Walsh yes Councilmember McDaniel yes Councilmember Dovey yes Councilmember Honda yes c. ADDED ITEM - Historic Landmarks Committee COUNCILMEMBER DOVEY MOVED TO APPOINT MARIE SCIACQUA TO A VOTING POSITION FOR THE HISTORIC LANDMARKS COMMITTEE WITH A TERM TO EXPIRE NOVEMBER 30, 2024; SECOND BY COUNCILMEMBER ASSEFA-DAWSON. The motion passed unanimously as follows: Council President Kochmar yes Councilmember Tran yes CouncilmemberAssefa-Dawson yes Councilmember Walsh yes Councilmember McDaniel yes Councilmember Dovey yes Councilmember Honda yes 10. ORDINANCE First Reading a. eunril L2i11 #876 Ai thrtriZin the EX-eG Lien ef_ the Town Center 3 'TQ 3) DevelepmeRt 7-l�jf'CA q reem--i ZTTRrTS Federal Way City Council Regular Minutes Page 5 of 7 April2, 2024 A a ■ A � ■ ■ ■ ■ ■ � Action on this item was taken immediately following the Public Hearing (Item 8a). b. Council Bill #8771Designating the Downtown Tax Increment Area AN ORDINANCE OF THE CITY OF FEDERAL WAY, WASHINGTON, DESIGNATING THE DOWNTOWN TAX INCREMENT AREA; SETTING A SUNSET DATE FOR THE INCREMENT AREA; IDENTIFYING THE PUBLIC IMPROVEMENTS TO BE FINANCED; IMPOSING A DEADLINE FOR COMMENCEMENT OF CONSTRUCTION; INDICATING THE CITY'S INTENT TO ISSUE BONDS TO FINANCE PUBLIC PROJECTS; PROVIDING THAT THE INCREMENT AREA WILL TAKE EFFECT JUNE 1, 2024; AND PROVIDING FOR RELATED MATTERS. Community Development Director Keith Niven provided background information on the authority granted by the state to enable municipalities to establish Tax Improvement Areas (TIAs). He explained these areas are created in order to generate funding for public improvements that in turn will stimulate private development and redevelopment. Director Niven shared the map identifying which properties are being considered as part of the TIA as well as a list of potential projects. It was noted the TIA does not increase taxes on any of these properties, rather the current assessed value is captured and the taxes on the additional assessed value would be collected by the city. Mr. Niven highlighted which levies and bonds would not be affected by the implementation of a TIA. Mayor Ferrell indicated he had been in discussions with the only agency that has reached out with concerns, South King Fire, noting there has been a discussion regarding lessening the financial impact by returning a portion of the tax. Council asked questions regarding selection of projects and whether projects would need to be fully funded by this tax increment. Additional discussion continued regarding the noticing completed, potential risks of adopting this process, and which agencies locally have had success with TIAs. No public comment was provided. Deputy City Clerk Jennifer Marshall read the ordinance title into the record. COUNCILMEMBER TRAN MOVED TO FORWARD THE PROPOSED ORDINANCE TO THE APRIL 16, 2024 COUNCIL MEETING FOR SECOND READING AND ENACTMENT; SECOND BY COUNCILMEMBER WALSH. Councilmember Dovey confirmed the ordinance does not include portions related to lessening the financial impacts for any agency or jurisdiction. City Administrator Brian Davis confirmed stating any such agreement would be brought before Council as a separate item. Federal Way City Council Regular Minutes Page 6 of 7 April 2, 2024 The motion passed unanimously as follows: Council President Kochmar yes Councilmember Tran yes Councilmember Assefa-Dawson yes Councilmember Walsh yes Councilmember McDaniel yes Councilmember Dovey yes Councilmember Honda yes 11. COUNCIL REPORTS Councilmember Assefa-Dawson notified she will not be in town on April 20 and therefore not able to participate in Parks Appreciation Day on April 20. Councilmember McDaniel reported on reading through Council Rules of Procedure and noted he will be reaching out to Council President Kochmar with some ideas for updates. Councilmember Honda encouraged residents to apply for the Utility Tax Rebate Program before the end of May. Councilmember Tran announced he will be retiring from King County Department of Social and Health Services (DSHS) after working thirty-two years. He invited Mayor Ferrell and Council to visit the DSHS mobile community office at the King County Library on April 4. Councilmember Walsh congratulated Councilmember Tran on his upcoming retirement and highlighted a variety of volunteer ventures he could participate in to fill up his time. He provided a final reminder of Parks Appreciation Day on April 20. Councilmember Dovey shared an experience of teaching John Hoskins' granddaughter skiing and hearing her fond memories of time spent in Federal Way. Council President Kochmar reminisced about her retirement before she had secured the State Representative position. She invited Councilmember McDaniel to attend the AWC Conference held at the Port of Vancouver in order to see what that city had accomplished with Tax Increment Financing. 12. EXECUTIVE SESSION • GR PUFSUant tO RGW 4 30.1�b) —not needed 13. ADJOURNMENT There being nothing further on the agenda; the regular meeting was adjourned at 9:56 p.m. Attest: Jennifer Marshall, CMC Deputy City Clerk Approved by Council: Federal Way City Council Regular Minutes Page 7 of 7 April Z 2024 CITY OF Federal Way Centered on Opportunity CITY COUNCIL SPECIAL MEETING MINUTES City Hall - Council Chambers April 2, 2024 - 5:00 p.m. 1. CALL MEETING TO ORDER Councilmember Honda called the meeting to order at 5:00 p.m. 12M City officials in attendance: Council President Linda Kochmar, Councilmember Lydia Assefa-Dawson, Councilmember Paul McDaniel, Councilmember Susan Honda, Councilmember Hoang Tran, Councilmember Jack Walsh, and Councilmember Jack Dovey. City staff in attendance: City Attorney Ryan Call and Deputy City Clerk Jennifer Marshall, 2. PLEDGE OF ALLEGIANCE Councilmember Honda led the flag salute. 3. COMMISSION INTERVIEWS Council interviewed applicants for the Youth Commission, North Lake Management District Advisory Committee, and Historic Landmarks Commission. 4. EXECUTIVE SESSION At 6:03 p.m. Councilmember Honda announced the Council would recess into Executive Session for the purpose of discussing property acquisition pursuant to RCW 42.30.110(1)(b) for approximately twenty minutes. The executive session ended at 6:26 p.m. Mayor Ferrell joined the meeting at 6:03 p.m. for the Executive Session. 5. ADJOURNMENT There being nothing further on the agenda; the meeting was adjourned at 6:26 p.m. Attest: Jennifer Marshall, CMC Deputy City Clerk Approved by Council: Federal Way City Council Special Minutes Page 1 of 1 April 2, 2024 COUNCIL MEETING DATE: April 16, 2024 ITEM #: CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL SUBJECT: STREET LIGHT INFILL — APPROVAL TO AWARD POLICY QUESTION: Should the City Council award the Street Light Infill project to the lowest responsive, responsible bidder? COMMITTEE: Land Use and Transportation MEETING DATE: April 1, 2024 CATEGORY: N Consent ❑ Ordinance ❑ Public Hearing ❑ City Council Business ❑ Resolution ❑ Other STAFF REPORT BY: Kathy Davis, P.E., Senior Traffic Engineer ,DEPT: Public Works Attachments: 1. Staff Report 2. Bid Tabulation Options Considered: 1. Approve the proposed award of the Street Light Infill project to the lowest responsive, responsible bidder, Active Construction Inc, in the amount of $1,722,637, approve a contingency of $177,363, for a total amount of $1,900,000 for Schedules A and B, authorize an additional $20,000 of ARPA funding to be transferred into the project, and authorize the Mayor to execute the Contract. 2. Do not approve proposed award of the project and provide direction to staff. MAYOR'S RECOMM MAYOR APPROVAL: : Option 1. APPROVAL:iZs'I2c�Y I ni i al; tau COMMITTEE RECOMMENDATION: I move to forward the proposed Option I to the April 16, 2024 consent Chair ,tack Walsh, Committee. Member Hoang Tran ommittee Member r PROPOSED COUTN�Pd MOTION: "I movF)approval of the proposed award of the Street Light Infill project to the lowest resp 'qpffrve, responsible bidder, Active Construction Inc, in the amount of $1,722,637, approve a Wonting cy of $177,363, for a total amount of $1,900,000 for Schedules A and B, and authorize an additional $20, 0000 of ARPA funding to be transferred into the project, and authorize the Mayor to execute the Contract. " (BELOW TO BE COMPLETED BY CITY CLERK'S OFFICE) COUNCIL ACTION: ❑ APPROVED COUNCIL BILL # ❑ DENIED First reading ❑ TABLED/DEFERRED/NO ACTION Enactment reading ❑ MOVED TO SECOND READING (ordinances only) ORDINANCE # REVISED - 4/2019 RESOLUTION # CITY OF FEDERAL WAY MEMORANDUM DATE: April 1, 2024 TO: City Council Members VIA: Jim Ferrell, Mayor _ /� FROM: EJ Walsh, P.E., Public Works Director Kathy Davis, P.E., Senior Traffic Engineer SUBJECT: Street Light Infill — Approval to Award Financial Impacts: The cost to the City for the Street Light Infill project was included within the approved budget under the Public Works Street Capital budget, fund 306. In accordance with the approved budget, this item is funded by a grant from the American Rescue Plan Act (ARPA) in the amount of $2,150,000, plus $20,000 in additional ARPA funds. Upon completion of the Street Light Infill project, ongoing costs associated with operations and maintenance will be performed and funded through streets maintenance. Funding requirements from operations and maintenance of infrastructure is reviewed and adjusted as required during the budget process. Background Information: In October 2022, Council authorized spending of $2,150,000 for street light improvements. The locations for the lights were based on requests received from residents, in conjunction with prioritization criteria approved by the City Council. Additional ARPA funds in the amount of $20,000 were reclaimed from other projects that had small amounts of funding remaining. Proieet Estimated Expenditures: Design $ 25,000 Right of Way $ 0 Construction Cost (Schedules A and B) $1,722,637 Construction Contingency $ 177,363 Construction Management and Ins ection $ 245.000 Total Estimated Expenditures $2,170,000 Rev. 7/18 Proiect Available Funding: ARPA Funds $2,150,000 Additional ARPA Funds $ 20,000 Total Available Funding $2,170,000 The project is intended to begin in the Spring of 2024, with construction continuing through approximately August 2025. Due to the number of requests and the bids received, some bid groups will be held over until additional funding can be secured. Rev. 7/18 Street Light infiii RFB No. 24-002 BID OPENING DATE: March 19. 2024 Vendor Name -> Location > Bid 1 Bid 2 Bid 3 Engineer's Estimate Aclr�a ConSI=Ijon Inc. Irdrl5porio[,on Systems, Inc Cannon Constructton, LLC Pt, alliao. WA Auburn, WA Millon, WA Bid hem Amount Unit Price Total Price Tout Price Total Price Iotal No SCHEDULE A -GROUP A STREET LIGHTS IBASE BID] 1 MINOR CHANGE SAUILT SURVEY AND RECORD DRAWINGS - GROUP A MOBILIZATION PROJECT TEMPORARY TRAFFIC CONTROL SPCC PLAN EROSION CONTROL AND WATER POLLUTION PREVENTION INLET PROTECTION ILLUMINATION SYSTEM - GROUP A SERVICE CONNECTION FEE - GROUP A 1 FA S1O,D00.00 $10.000,001 $10,000.001 $10.000.00 S10.000.0u slu,uouAu $1D,000.00$10,000-00 2 1 LS $5.505,00 $5.500.001 $9,000.001 $9.000,00 $11.049.11 S11,049.11 $5.000.001 $5.000.00 3 1 LS $157.205.00 $157 205.00 $133-900-ODI $133.90D.0 $5.087,37 $5,087.37 $90,470,00 $90:470,00 4 1 LS S250,000.00 $250.000.00 $134,27-001 $134.277.00 $117.400.15 $117.400.15 S95.000-001 $95,000.00 5 1 LS $150.00 5150-UOL 34,000-00 $4,MO- 00 $1,159.67 $1,159-67 52-500-001 $2,600.00 6 i LS $75,000.00 S75.0DO.0 $11-OW.001 S1 1,000.00. $18 73u.76 S18,730.76 S25.000.0D 825,000.00 7 72 FA 575.00 $1,650. 31,000.00 $22 D00. $248.53 $5,467. S1D0.00 $2,200.00 8 JELECTRICAL 1 LS $800.000.DD 5800,DDO.0 S1.022A92.00 $1.022.892.0 S1,388,3D3.70 $1.388,303.7 S760,000.D0 S7W,0D0.D0 9 1 FA 55,00D.O0 SS.ODO. S5,DDD.00 S5,0OO. $$,000.OD 55.000, 35.000.00 S5,000.00 1 MINOR CHANGE AS -BUILT SURVEY AND RECORD DRAWINGS - GROUP B MOBILIZATION PROJECT TEMPORARY TRAFFIC CONTROL SPCC PLAN EROSION CONTROL AND WATER POLLUTION PREVENTION INLET PROTECTION ILLUMINAiIONSYSTEM- GROUPB ELECTRICAL SERVICE CONNECTION FEE - GROUP B 1 FA S6,000.00 $6.000.00 $6.000.00 $s.000.0 $6,000.00 $6,000d1 56.000.001 S6,00D.00 2 1 LS $1,650A0 $1.650,00 sbxou.uuj 85,000.0 $5,292 51 55,292,51 83,000,0o 93.000,00 3 1 LS $40,000.00 $40.000.00 845.000.00$45.DDD.D $3391,59 $3.391.59 843690.00 $43.690.0D 4 1 LS 525.000.00 $25,000,00 $25,344.00 $25.344.0 $58.230.47 S58.230.47 $56.000.00 $56,000.0 5 1 LS S150.00 $150.00 $1.500.00 $1.500,0 $687.11 $07,11 $1,500-ODI $1,500.00 6 1 LS $5.000,00 $5.000.00 $2.000.00 $2.OD0.90 $14,272.79 S14.272.7 $15.000,00 $15.000.D0 7 4 EA 563.00 8332.D0 $550.DD 82.200.0 $248.54 $994.16 sluu.001 8400.00 8 1 LS S335.000.00 $335,000. 5424,658. $424,658. $647,110.47 $647.110.47 8350000.00 $35`0,000.0 9 1 LS 55,DDD.DD $5.000.OD $5,000.00 S5,000 DD S5,000.pO S5,O0D.00 SS,ODD.00 SS,i rO.DD SUBTOTAL SCHEUM $740,979.11 s Ts-b, 90.00 1 MINOR CHANGE AS -BUILT SURVEY AND RECORD DRAWINGS - GROUP C MOBILIZATION PROJECT TEMPORARY TRAFFIC CONTROL SPCC PLAN EROSION CONTROL AND WATER POLLUTION PREVENTION INLET PROTECTION ILLUMINATION SYSTEM - GROUPC ELECTRICAL SERVICE CONNECTION FEE GROUP C 1 FA $8.000.00 $8.000.001 $8 000.00 $8.000.00 $8X00.00 $13,00D.00 $8.000.00 $8.000,00 2 1 LS $2 250,00 $2,250.00 $3.500.00 $3,500.00 $5.622,87 S5,622.87 $4.00OX01 $4.000,00 3 1 LS S50,000.0D $50,000.001 $50.000.00 $50,000.01) $3,391,59 $3.391,59 $53,020.001 $53,020.Ir0 4 1 LS $35.000,00 $35.uuu.uyl $8.500.00 $8-500.OD $75.136.07 $75,136.07 $75.000.0o s75.DDo.00 5 1 LS $150,00 $150_00 $2.000.00 $2,000,O(' $687,11 $687,11 $2.DDO.00 $2.000.00 6 7 1 LS 55,000.01) S5.000,00 $2,000.00 $2,000.00 814,066.73 $14,D66.73 $20,000.00 $20,000,DD 12 to $70.00 $840,OD $1.DDD.DD 8i2 DOD.DD 8248.55 $2 982.6D 8100.00 $i,200,00 8 1 LS $475.000.OD $475,DOD.00 $481.000.00 $481.000.00 $805.751.95 SB85751,95 $410.000.00 5410,000.0 9 + LS $10,000,00 $10,CDO.DD S10.D00.00 510,000,00 310,DOQAO S10,000.00 $1D,000.00 $10,0130,00 6,2 1 MINOR CHANGE AS -BUILT SURVEY AND RECORD DRAWINGS - GROUP D MOBILIZATION PROJECT TEMPORARY TRAFFIC CONTROL SPCC PLAN EROSION CONTROL AND WATER POLLUTION PREVENTION INLET PROTECTION ILLUMINATION SYSTEM - GROUPD ELECTRICAL SERVICE CONNECTION FEE - GROUP D 1 FA $2.000.00 82.000AD s2.uuu-uuj 82,000.00 $2,000.00 32,000.00 $2,000.0o $2.000.00 S 3 1 LS $800.00 8600.0p $2,500.0D $`2,5DD:D0 $2.277.94 $2 2ii.94 $i.uuu.uu 81 00(wo 1 LS $15.000.00 $15,000.001 $15,000,0101 $15,000.00 $3,39i.59 33.39i.59 $1b.Nu.uuI $15790.00 4 1 LS $20,00D.D0 $20.000.02 $15.000-001 $15.000.00 $15.966,43 315.966.43 $19,000.001 $19.000.00 5 1 LS $150.00 $150.00 $2 000.00 $2, ODO.00 $678.11 S678.11 $50M00 $50M00 6 t LS $4,ODD.00 $4.000.00 $1.000.00 $1,000_DO $4,821.o7 S4.621.07 $5.000m $5.000.00 7 4 EA $-".I'D 8312.OD $350.00 $1.400,00 $248.54 $994.16 $iOo.oD $400AD B 1 LS $i35,uu0.00 $135.000.00 $i13.1i8,0D $113.11B.Du $i97.024.B3 S197,024.83 8125,uuu.'uu $1z5,uuu.'u0 9 1 LS 55,000.00 $5,000.00 $5,000.00 $5.000.00 $5,000.Do $5,000,00 SS,000AO 55.000.00 $173,690.011 1 MINOR CHANGE AS -BUILT SURVEY AND RECORD DRAWINGS -GROUP E i1 FA $4,0DD.OD $4.000.00 $4.000.00 $4,000.00 $4.000.00 $4.00D.QO $4.000.00 $4.000.OLI 2 i LB $8uu.uu 88DD.Du 82.uuu.uu1 $2.000.001 $3,814.Il 53.814.13 $2,000.001 $2,000.00 3 JMOBILIZATION 1 LS U0.000.001 520.000,00 $29.400.00 $29-400-001 $3.391 Rki S3.M,591 $25.960-001 $25.960,00 Page 1 of 2 Street Light Infill RFB No. 24-002 BID OPENING DATE: March 19, 2024 Vendor Name Location Bid 1 Bid 2 Bid 3 Engineer's Estimate Active Constructmn InC. Transportation 5 stems, tnc. Cannon Conslruclion, LLC Puyallup. WA Auburn, WA Milton, WA Bid Item Amount Unit Price Total Price Total Prise Total Price Total 4 PROJECT TEMPORARY TRAFFIC CONTROL SPCC PLAN ERDSION CONTROL AND WATER POLLUTION PREVENTION INLET PROTECTION ILLUMINATION SYSTEM - GROUP E ELECTRICAL SERVICE CONNECTION FEE - GROUP E 1 LS 510,000.D0 510,000.00 $29.920-00 $29,92O.00 536,628.B5 $36,628.85 532,ODD.1)O S32,O00.00 5 1 LS 5150.00 $150.00 $1,500.00 51.5D100 $587.11 5687.11 $1.000.OD 51,000.00 5 1 LS 54.000.00 $4.000,06 5750.0D $750.00 59,344,76 59.344.76 $10,W0.00 510.ODI).DO 7 6 EA S70.00 S42100 S1.000.00 56.O00.00 $248.47 $1,490.82 S100.00 SS00.00 B 1 LS $19930D.00 $199.500-00 5254,709-00 $254.709-00 $411.341.81 $411,341,81 $205,000.00 $205,000.00 9 1 LS $5.0D0.00 $5.000.00 $S.DDO.DO S5,00D.00 $$,DDO.00 55.000.00 $5=00 $5.W0.00 1 MINOR CHANGE SURVEY AND RECORD DRAWINGS - GROUP F MOBILIZATION PROJECT TEMPORARY TRAFFIC CONTROL SPCC PLAN EROSION CONTROL AND WATER POLLUTION PREVENTION INLET PROTECTION 1LLUMINATI0NSYSTEM - GROUP F 1 FA 34.OD0.00 S4_0=00 $4pW.W $4,0M.00 $4,000-00 $4.000.00 54.0DO.00 $4.000AO 2AS-BUILT 1 LS SBDD.00 $800.00 $2.000.00 $2.000.00 $2.880.85 $2.880,85 52 g00.00 $2.WC.00 3 1 LS 514,000.00 S14,000.00 514,000.00 $14.000.00 $3.391.59 $3.391,59 $16.300,00 $15,300.00 4 1 LS 510.00D.00 510.ODO.00 $15,000.00 $15,000.00 $20,662A3 $20.662-4 $20,000-00 $20.000-00 5 1 LS $15D.00 $150. $75010 $750. $687,11 $687.11 s1,000.00 51.000-00 6 1 LS 53.DD0.00 $3.00cloo S2,D00.00 $2.0010.00 54,779.65 $4,77B. $5.000-00 $5.000.00 7 10 EA 574,00 3740. $1,000.00 SIO-000. $248.51 $2.485,1 $100.00 $1,000.00 8 1 LS $129.500-00 5129,500. $153,284.00 5153.2a .00 5241,901.26 $241.901.2 5130,OOO.OD 5130,000. 1 MINOR CHANGE AS -BUILT SURVEY AND RECORD DRAWINGS - GROUP G MOBILIZATION PROJECT TEMPORARY TRAFFIC CONTROL SPCC PLAN EROSION CONTROL AND WATER POLLUTION PREVENTION INLET PROTECTION ILLUMINATION SYSTEM - GROUP G ELECTRICAL SERVICE CONNECTION FEE - GROUP G 1 FA 32.000.00 $2.01MOD $2,000.00 S2_W0.9D $2.000.00 S2.00D.00 52.000.0D $2,000,00 2 1 LS 5800-00 $SOO.OD $2,000.00 52.000.0D 52,277.94 $2.277.9 31=0,00 $1.000,00 3 1 LS $15.000.0D $15=.0D $20,000.00 $20,000.00 $3,391-59 $3.391.59 $16720.00 $16,790.00 4 1 LS 55,000.00 55.0D0,00 56.000.00 $B4OOO.OD $30.054.44 590.054.44 S19,ODO.DO 519,000;00 5 1 LS $150E $150.50 $75c.00 5750.DD SS87-11 5687.11 $MOO,OD $500.OD 6 1 LS $3.000.00 S3,0D0.00 S2.D00.00 32.ODD.00 $9,443-87 $9443-87 $5.ODD_00 35.aD9.00 7 4 EA 576-00 $312-00 $1.000.00 54,OD0.00 $248,54 $994,16 $100.00 $400-00 B 1 LS $145.500.go! $145,500.00 S1fi0.fi9O.UD 5160,890.00 5334.129.72 5334.129.72 1135.000.00 5135,000.00 9 I LS $5.000.00 55.0D0.00 55.000.00 55,000.0 $S.g00.00 56,DD0.OD 55,ODD.DD 55,DOO.OD T MINOR CHANGE AS -BUILT SURVEY AND RECORD DRAWINGS - GROUP H MOBILIZATION PROJECT TEMPORARY TRAFFIC CONTROL SPCC PLAN EROSION CONTROL AND WATER POLLUTION PREVENTION INLET PROTECTION ILLUMINATION SYSTEM - GROUPH ELECTRICAL SERVICE CONNECTION FEE - GROUP H 1 FA 52,000.00 52.000.00 $2.000.D0 S2.ODO-00 $2.0OO.DD 52.000.00 $2,9D0.00 $2.000.00 2 3 1 LS $800,GD SBOD.00 $2.=oD S2.oD0.O0 52,277.94 52,277.94 $1,000,00 $1,OOq.00 1 LS $10,000.00 $10,000.00 $1g500,O5 $10.500,00 $3,391,59 $3.391.59 $13,790.00 513,790.00 4 1 LS $1,OD0.OD $1,0 Lao $15,000.00 $15000. $15966.43 $15.966.43 S19.000.DO $19.000.05 5 1 LS $150.00 $150.00 $500.00 5500.00 5687.11 3687.11 &500,Qo $500.DG 6 7 1 LS $1,000.00 sum.0o 81,0W DD $1.0Q0.00 $4,86227 $4.862-27 $5,OOG.c0 $5.000.00 4 EA $70,00 3280.00 51.00O.DD $4,OOO.0 $248.64 $994.16 5100.00 $400.00 8 LS $97,000.00 $97.000. $111.385.00 $111.385.00 1173.526,77 $1T3,S28.T7 5105,OOO,OU S105.000,00 9 LS $S,GOD,UD 55.c00,00 $5,000.00 55Ac0.0 $5,000.00 SS.D00.00 55,000-00 $5,OOO.UO SUBTOTAL, 5117.239.01 0 TOTAL $3,191,191.001 $3,490,92T.4 54,874,i42.9 $3,033,970.g0 Page 2 of 2 7C COUNCIL MEETING DATE: April 16, 2024 ITEM #: CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL SUBJECT: FIBER OPTIC LOOP (S 317TH ST TO S 272ND ST) - APPROVAL TO AWARD POLICY QUESTION: Should the Council award the Fiber Optic Loop (S 317th St to S 272nd St) project to Cannon Construction, LLC, the lowest responsive, responsible bidder? COMMITTEE: Land Use and Transportation MEETING DATE: April 1, 2024 CATEGORY: ® Consent ❑ Ordinance ❑ Public Hearing ❑ City Council Business ❑ Resalu 'on ❑ Other STAFF REPORT BY: John Cole, E.I.T., Civil Engineer DEPT: Public Works Attachments: 1. LUTC Memo dated April 1, 2024 2. Bid Tabulation Options Considered: 1. Award the Fiber Optic Loop (S 317th St to S 272nd St) project to Cannon Construction, LLC, the lowest responsive, responsible bidder, in the amount of $1,720,162.98 and approve a contingency of $430,000.00, for a maximum contract amount of $2,150,162.98. 2. Reject all bids for the Fiber Optic Loop (S 317th St to S 272nd St) project and provide direction to staff to rebid the project and return to Committee for further action. MAYOR'S RECOMMENDATION: Option 1 MAYOR APPROVAL: DIRECTOR APPROVAL: InilialiDate COMMITTEE RECOMMENDATION: I move to forward the award of the Fiber Optic Loop (S 317th St to S 272nd St) PI-0/I'cl to . April 16, 2024, consent agenda for approval. lack N4ev. Co ittee Chair 'Jad Walsh, Commi a Member Hoang Tran, ommittee Member PROIPdSED COUNCIL MOTION: "I mo e- to authorize staff to award the Fiber Optic Loop (S 317th St to S 272nd St) project to Cannon Construction, LLC, the lowest responsive, responsible bidder, in the amount of $1, 720,162.98 and approve a contingency of $430, 000.00, for a maximum contract amount of $2,150,162.98. " BELOW TO BE COMPLETED BY CITY CLERK'S OFFICE) COUNCIL ACTION: ❑ APPROVED COUNCIL BILL # ❑ DENIED First reading ❑ TABLED/DEFERRED/NO ACTION Enactment reading ❑ MOVED TO SECOND READING (ordinances only) ORDINANCE # REVISED - 4/2019 RESOLUTION # CITY OF FEDERAL WAY MEMORANDUM DATE: April 1, 2024 TO: City Council Members VIA: Jim Ferrell, Mayor FROM: EJ Walsh, P.E., Public Works Direc 04 John Cole, E.I.T., Civil Engineer SUBJECT: Fiber Optic Loop (S 317th St to S 272nd St) - Approval to Award Financial Impacts: The cost to the City for the Fiber Optic Loop (S 317th St to S 272nd St) Project was included within the approved budget under the Public Works Department Capital Project #36239. In accordance with the approved budget, this item is funded with mitigation funds from Sound Transit as part of the FWLE Development Agreement. Upon completion of the project, ongoing costs associated with operations and maintenance will be performed and funded through a combination of Traffic Maintenance and IT Maintenance. Funding requirements for operations and maintenance of infrastructure is reviewed and adjusted as required during the budget process. Background Information: One bid was received and opened on March 21, 2024 for the project. Please see attached Bid Tabulation. The lowest responsive, responsible bidder is Cannon Construction, LLC. ESTIMATED EXPENSES Design $ 163,000.00 Construction Contract $ 1,720,162.98 Contingency $ 430,000.00 Construction Management $ 286,837.02 $ 2,600,000.00 AVAILABLE FUNDING Sound Transit mitigation funds $ 2,600,000.00 Rev. 7/18 BID TABULATION 36239 FIBER OPTIC LOOP (S 317TH ST TO S 272ND ST) BID OPENING DATE: 3/21/2024 Vendor Name ---> Location ------- --> BID #1 Cannon Construction, LLC Milton WA 98364 Engineer Estimate Sch A - FIBER OPTIC LOOP - 317TH TO 272ND Unit Qty Unit Price Total Unit Price Total 1 MINOR CHANGE FA 1 $ 25,000.00 $ 25 000,00 $ 25.000.0D $ 2 .000.00 2 ROADWAY SURVEYING LS 1 $ 23.106.35 $ 23,106.36 S 10.000.00 $ 10,000.00 3 AS -BUILT SURVEY & RECORD DRAWINGS L 1 $ 13.220.B3 $ 13.22D_B3 $ 10,00D.DD $ 10,000.00 4 MOBILIZATION LS 1 $ 3,442.54 S 3,442.54 S 135.000.00 $ 335.000.00 5 PROJECT TEMPORARY TRAFFIC CONTROL LS 1 $ 316 534.86 $ 316.534.86 $ 300OOO.DO $ 3D0 000.D0 6 EROSION CONTROL AND WATER POLLUTION PREVENTION LS 1 $ 17 247.14 $ 17,247,14 $ 5,000.00 $ 5,000.00 7 CEMENT CONC. SIDEWALK SY 24 $ 334.62 1 $ 8,030.88 $ 250.00 S 8 BER SYSTEM. COMPLETE L5 1 $ 858.838.12 $ BS8.83B_12 $ 824.00D.DO 626.000.00 $ 4 000.00 9 RE50LU I ION OF UTILITY CONFLICTS I FA 1 $ 25 000.00 1 5 25 000.00 5 25 D00.00 1 S 25,00D.D0 Sch B - S 312th St from Steel Lake Park to 23rd Ave S Unit Qty Unit Price Total Unit Price Total i MINOR CHANGE FA 1 S 5.000.00 $ 5,0D0.00 $ 5,000.00 $ 5,000.00 2 ROADWAY SURVEYING LS 1 $ 1.939.44 $ 1,939.44 $ 2.000.00 $ 2,000.00 3 AS -BUILT Sll VEr & RECORD DRAWINGS LS 1 $ 464,40 $ 464.40 $ 2.000.00 $ 2,000.00 4 MOBILIZATION LS 1 $ 1,377.02 $ 1,377.02 $ 4.000.00 S 4.0D0.D0 5 PROJECT TEMPORARY TRAFFIC CONTROL LS 1 $ 52.409.26 $ 52.409.26 $ 20.000.00 $ 20.000.00 6 EROSION CONTROL AND WATER POLLUTION PREVENTION LS 1 $ 5.718.75 $ 5.718.75 $ 1.000.0' $ 1,000,00 7 CEMEN7 CONC. SIDEWALK SY 24 $ 334.62 $ 8.030,88 $ NUNN $ 6 000.00 81 FIBER SY TEM COMPLETE L6 1 S 85.96228 1 $ 85 962.28 $ 22.00D.00 S 22,000.00 91 RESOLUTION OF UTILITY CONFLICTS FA 1 1 $ 1.000.00 1 $ 1.000.00 $ 1.000.00 $ 1.000.00 SUBTOTAL SCHEDULE B $ 161,802.0 $ 63.000.00 Sch C - S 312th St from 23rd Ave S to PVR, South to S 314th St Unit Qty Unit Price Total Unit Price Total 1 MINOR CHANGE FA 1 $ 5.000.00 $ 5.000.00 $ 5.0D0.00 $ 5 000.00 2 ROADWAY SURVEYING LS 1 $ 1,978.76 $ 1.978,76 $ 2,000.00 $ 2 000.00 3 AS -BUILT SURVEY & RECORD DRAWINGS LS 1 $ 1,724.80 $ 1,724.80 $ 2,000.00 $ 2,000.00 4 MOBILIZATION LS 1 $ 1,377.02 $ 1,377.02 $ 10,000.00 $ 10.000.00 5 PROJECT TEMPORARY TRAFFIC CONTROL LS 1 $ 36 641.05 $ 36 641.05 $ 30 000,00 $ 30 000.00 6 EROSION CONTROL AND WATER POLLUTION PREVENTION LS 1 $ 2 858.68 $ 2,858.68 S 1.000,00 $ 1 D00.00 7 CEMENT CONC. SIDEWALK SY 24 $ 334.62 $ 8.030.88 $ 250.00 $ 6 000.00 8 FIBER SYSTEM, COMPLETE LS 1 $ 74,645.90 $ 74.845.9D $ 66,00&0. $ 66.000.00 9 RESOLUTION OF UTILITY CONFLICTS FA 1 $ 1 000.00 $ 1.000.00 $ 1,000.00 $ 1.000.00 SUBTOTAL SCHEDULE C $ 133,457.09 S 123,000.00 Sch D - S 312th St from Pete Von Reichbauer to Pacific Hwy S Unit Qty Unit Price Total Unit Price Total 1 MINOR CHANGE FA LS 1 1 $ 5 000.00 $ 1,879.63 $ 5.000,00 $ 1,879.63 $ 5.000.00 S 2,000.00 $ 5.000.00 $ 2 000.00 2 ROADWAY SURVEYING 3 AS -BUILT SURVEY & RECORD DRAWINGS LS 1 $ 1,250.67 $ 1,250.67 $ 21000.00 S 2,000,00 4 MOBILIZATION LS 1 $ 1 377.02 $ 1,377.02 $ 8,000.00 $ 8,000.00 5 PROJECT TEMPORARY TRAFFIC CONTROL LS 1 $ 17 258.15 $ 17 258.15 S 25 000,00 $ 25,000 6 EROSION CONTROL AND WATER POLLUTION PREVENTION LS 1 $ 575.59 $ 575.59 $ 1.000.00 $ 1.000.00 7 CEMENT CONC. SIDEWALK SY 24 $ 297.44 $ 7 138.56 $ 250.00 $ 6.OD0.00 8 FIBER SYSTEM, COMPLETE LS 1 $ 23.394,59 1 $ 23,394.59 $ 21,000.00 1 $ 21,000.00 9 RESOLUTION OF UTILITY CONFLICTS FA 1 $ 1,000.00 1 $ 1,000.00 $ 1,000.00 1 $ 1,000.00 SUBTOTAL SCHEDULE D $ 58,874.21 $ 71,000.00 Sch E - S 288th St from Md4 Rd g to Paclfc H S Unit Q Unit Price Total Unit Price Total 1 MINOR CHANGE FA 1 1 $ 5,000.00 $ 5.000,00 $ 5,000,00 $ 5,000.00 2 ROADWAY SURVEYING LS 1 $ 3,799,53 $ 3.799.53 $ 2 000.00 $ 2,000.00 3 AS -BUILT SURVEY & RECORD DRAWINGS LS 1 $ 2,201.49 $ 2.201.49 $ 2,000.00 $ 2.000.00 4 MOBILIZATION LS 1 $ 1.377.02 $ 1 377.02 $ 7.000,00 $ 7.000.00 5 PROJECT TEMPORARY TRAFFIC CONTROL LS 1 $ 16 590.30 $ 16 590.30 $ 30.000.01) $ 30.000:00 6 EROSION CONTROL AND WATER POLLUTION PREVENTION LS 1 $ 575.59 $ 575.59 $ 1.000.00 $ 1,000.00 7 CEMENT CONC, SIDEWALK SY 24 $ 297.44 $ 7,138,56 $ 250.00 $ 6,000.00 8 FIBER SYSTEM COMPLETE LS 1 $ 37 826.44 $ 37,826.44 $ 36 000_DO $ 36 000.DD 9 RESOLUTION OF UTILITY CONFLICTS FA 1 $ 1 000.00 $ 1 000.00 $ 1,000.00 1 $ 1,000.00 SUBTOTAL SCHEDULE E $ 75,508.93 S 90,000.00 TOTAL $ 1,720,162.98 $ 1,687,000.00 Amount listed on Bid Form Difference S 1,720,163.98 $. (.I. DO} COUNCIL MEETING DATE: April 16, 2024 CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL SUBJECT: FORMER TARGET BUILDING DEMOLITION - PROJECT ACCEPTANCE ITEM #: POLICY QUESTION: Should the Council accept the Former Target Building Demolition project, performed by Swofford Excavating, LLC, as complete? COMMITTEE: Land Use and Transportation MEETING DATE: April 1, 2024 CATEGORY: ® Consent ❑ Ordinance ❑ Public Hearing ❑ City Council Business ❑ Resolution ❑ Other STAFF REPORT BY: Jonathan Strong, E.I.T., Civil Engineer S DEPT: Public Works Attachments: 1. LUTC Memo dated April 1, 2024 Options Considered: 1. Approve final acceptance of the Former Target Building Demolition project completed by Swofford Excavating, LLC, in the amount of $371,144.80. 2. Do not approve final acceptance of the Former Target Building Demolition project and provide direction to staff. MAYOR'S RECOMMENDATION: Option 1 MAYOR APPROVAL: �'DIRECTORAPPROVAL: -- 31Z>1-207-1 Initial/Date COMMITTEE RECOMMENDATION: I move to forward the final acceptance of the Former Target Building Demolition project to the April 16, 2024 consent agenda for approval. N' jk�� -�H- Committee Chair ck alsh, Committee Member Hoang Tra , Committee Member PROPOSED COUNCIL MOTION: "I move approval of the final acceptance of the Former Target Building Demolition project completed by Swofford Excavating, LLC in the amount of $371,144.80 as complete. " (BELOW TO BE COMPLETED BY CITY CLERK'S OFFICE) COUNCIL ACTION: ❑ APPROVED COUNCIL BILL # ❑ DENIED First reading ❑ TABLED/DEFERRED/NO ACTION Enactment reading ❑ MOVED TO SECOND READING (ordinances only) ORDINANCE # REVISED - 4/2019 RESOLUTION # CITY OF FEDERAL WAY MEMORANDUM DATE: April 1, 2024 TO: City Council Members VIA: Jim Ferrell, Mayor FROM: EJ Walsh, P.E., Public Works Director Jonathan Strong, E.I.T., Civil Engineer SUBJECT: Former Target Building Demolition - Project Acceptance Financial Impacts: This is the acceptance of the project as complete, and therefore no additional funds are proposed to be spent as part of this project. No additional funds are needed for maintenance in the after condition as this project eliminates any ongoing maintenance. Backar©und information: Prior to the release of retainage on a Public Works construction project, the City Council must accept the work as complete to meet the requirements of the State Departments of Revenue, Employment Security, and Labor & Industries. The Former Target Building Demolition Project performed by Swofford Excavating, LLC is complete. The final construction contract amount is $371,144.80. This is $58,713.13 below the authorized maximum contract amount. Rev. 7/18 7e COUNCIL MEETING DATE: April 16, 2024 ITEM #: CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL SUBJECT: AUTHORIZATION TO APPLY FOR TRANSPORTATION GRANTS POLICY QUESTION: Should City Council authorize the Mayor to submit transportation grant applications? COMMITTEE: Land Use and Transportation MEETING DATE: April 1, 2024 CATEGORY: N Consent ❑ Ordinance ❑ Public Hearing ❑ City Council Business ❑ Resolution ❑ Other STAFF REPORT BY: Rick Perez, City Traffic Enaineer � DEPT: Public Works Attachments: 1. Staff Report Options Considered: 1. Approve the proposed submittal of transportation grant applications. 2. Do not approve proposed submittal of transportation grant application and provide direction to staff. MAYOR'S RECOMMENJUA "tON: Option 1. MAYOR APPROVAL: c 3 ZIRECTOR APPROVAL: 317ow'1 Cam ittcc nail "' fnitiavoae fniti is Initial/Date r COMMITTEE RECOMMENDATION: I move to forward the proposed submittal of transportation grant applications to the April 16, 2024 consent agenda for approval. Committee Chair /15-- lWalsh. Committee Member Hoana TraieCommittee Member 1 / PROPOSED COUNCIL MOTION: "I nve approval of the proposed submittal of transportation grant applications. " (BELOW TO BE COMPLETED BY CITY CLERKS OFFICE COUNCIL ACTION: ❑ APPROVED COUNCIL BILL # ❑ DENIED First reading ❑ TABLED/DEFERRED/NO ACTION Enactment reading ❑ MOVED TO SECOND READING (ordinances only) ORDINANCE # REVISED - 4/20 ] 9 RESOLUTION # CITY OF FEDERAL WAY MEMORANDUM DATE: April 1, 2024 TO: City Council Members VIA: Jim Ferrell, Mayor FROM: EJ Walsh, P.E., Public Works Director Rick Perez, P.E., City Traffic Engineer SUBJECT: Authorization to Apply for Transportation Grants Financial Impacts: The street capital program is funded primarily by leveraging of annual city funding to match available grant funding. The street capital program is funded annually by a combination of dedicated funding sources including: $1.5 Million Real Estate Excise Tax (REET), $320,000 Motor Vehicle Excise Tax (MVET), and $300,000 (on average) Traffic Impact Fees (TIF). Proposed city match funds per proposed grant application per year is detailed below. Operations and maintenance of these projects is expected to be minimal and primarily consisting of additional electricity costs associated with added street lighting. Operations and maintenance costs will be considered as part of the future budgets once the construction is completed. The asphalt overlay program is funded annually by a combination of dedicated funding sources including: $1.0 Million REET, $500,000 MVET, and $2.0 M of Solid Waste Excise Tax. These funds are used to leverage for preservation grant funds. There are no additional operations and maintenance costs associated with pavement preservation projects given it is rehabilitation of existing infrastructure. Background Information: This memorandum provides the Council with the current status of new grant funding programs for transportation improvement projects. Staff has evaluated all projects listed on the City's Transportation Improvements Plan (TIP) and concluded that the following projects will likely be competitive in the 2024 Puget Sound Regional Council (PSRC) Countywide Grant Program. P�t (Funding Phase) Estimated Project Cost Possible Grant Funds Estimated City j Grant _ _ _ _ I Match Pacific Hwy Non -Motorized Trail — Phase 3 (Design) S 288`" — S 272nd PSRC — Countywide $800,000 $600,000 $200,000 Non -Motorized (Federal Funds) Rev. 7/18 Project (Funding Phase) Estimated Project Cost Possible Grant Funds Estimated City Grant Match City Center Access — BPA Trail Extension Phase 1(Right-ot-Way) S 3241h — t I Ih PI fi to 23"d Ave'S: 23"4 Ave S — S 32411 to S 3201h PSRC — Countywide $2,000,000 S l .b00.000 $400,000 Non -Motorized Federal Funds) S 3201h Preservation (Construction) Pacific Hwy S —1-5 PSRC -- Countywide $2,300,000 $1,150,000 $1,150,000 Preservation (Federal Funds Rev 7/18 COUNCIL MEETING DATE: April 16, 2024 ITEM #: CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL SUBJECT: ACCEPT TRANSPORTATION GRANT AND AUTHORIZE THE EXECUTION OF THE ASSOCIATED AGREEMENTS POLICY QUESTION: Should Council approve accept the awarded transportation grants and authorize the Mayor to execute the associated Agreements? COMMITTEE: Land Use and Transportation MEETING DATE: April 1, 2024 CATEGORY: ® Consent ❑ Ordinance ❑ Public Hearing ❑ City Council Business ❑ Resolution ❑ Other STAFF REPORT BY: Rick Perez, P.E. DEPT: Public Works Attachments: 1. Staff Report Options Considered: 1. Accept the awarded transportation grant and authorize the Mayor to execute the associated Agreements. 2. Do not accept the award transportation grant and provide direction to staff. MAYOR'S RECOMMENDATION: Option 1. MAYOR APPROVAL: DIRECTOR APPROVAL: 2 31101 WL`I initial/Date COMMITTEE RECOMMENDATION: I move to forward Option 1 to the April 16, 2024 consent agenda for approval. �, 142� - 097) -- mittee Chair Joe-WWdlsh, Committee Member Hoang Tridi. Coizlizlirtee Member PROPOSED COUNCIL MOTION: "I move acceptance of the awarded transportation grant and authorize the Mayor to execute the associated Agreements. " BELOW TO BE COMPLETED BY CITY CLERK'S OFFICE COUNCIL ACTION: ❑ APPROVED COUNCIL BILL # ❑ DENIED First reading ❑ TABLED/DEFERRED/NO ACTION Enactment reading ❑ MOVED TO SECOND READING (ordinances only) ORDINANCE # REVISED - 4/2019 RESOLUTION # CITY OF FEDERAL WAY MEMORANDUM DATE: April 1, 2024 TO: City Council Members VIA: Jim Ferrell, Mayor FROM: E.J. Walsh, P.E., Public Works Director Rick Perez, P.E., City Traffic Engineer SUBJECT: Accept Transportation Grant and Authorize Execution of the Associated Agreements Financial Impacts: SR99 Pedestrian Improvements at Federal Way High School (FWHS): The $30,200.00 match for the SR99 Pedestrian Improvements at FWHS is proposed to be from the unallocated revenue in the Capital Improvement Fund (Fund 306), which is funded annually by a combination of dedicated funding sources including: $1.5 Million Real Estate Excise Tax (BEET), $320,000 Motor Vehicle Excise Tax (MVET), and $300,000 (on average) Traffic Impact Fees (TIF). Operations and maintenance of this project is expected to be minimal and primarily consisting of additional electricity costs associated with street lighting and warning signs. Operations and maintenance costs will be considered as part of the future budgets once the construction is completed. Backp,round Information: The City has been awarded a WA State Transportation Improvement Board (TIB) early opportunity Complete Streets grant for the construction of pedestrian improvements along SR99 in front of Federal Way High School. Improvements include: striping and signing upgrades, increased street lighting, and median fencing to improve driver awareness of pedestrians and pedestrian compliance to using the protected cross walks. Award of these funds required construction to be completed no later than December 31, 2024. Summary The table below is a summary of the funding of this grant. Rev. 7/18 Project (Funding Estimated Possible Grant Estimated City Match Phase) Project Cost Funds Grant SR99 at FWHS Pedestrian Improvements (Design and Construction T[B — Early $151,000 $120,800 $30,200 Opportunity Complete Streets State Funding) Rev. 7118 COUNCIL MEETING DATE: April 16, 2024 CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL 7g ITEM #: SUBJECT: WASHINGTON STATE DEPARTMENT OF COMMERCE PLANNING GRANT AND INTERAGENCY AGREEMENT POLICY QUESTION: Should the City of Federal Way accept a $107,400 Climate Planning Grant to develop Federal Way's Hazard Mitigation Plan and authorize the Mayor to execute the associated Interagency Agreement with the Washington State Department of Commerce? COMMITTEE: Land Use and Transportation MEETING DATE: April 1, 2024 CATEGORY: ® Consent ❑ Ordinance ❑ Public Hearing ❑ City Council Business ❑ Resolution ❑ Other STAFF REPORT BY: Kevin Pelley, Emergency Manager DEPT: Mayor's Office Attachments: 1. Staff Report 2. Interagency Agreement Options Considered: 1. Accept the $107,400 Climate Planning Grant and authorize the Mayor to execute the Interagency Agreement with the Washington State Department of Commerce. 2. Do not accept the Climate Planning grant and provide direction to staff. MAYOR'S RECOMMENDATION: Option 1 MAYOR APPROVALS / 3 �y _ fDIRECTOii APPROVAL: am ae Cannci T nit' Data InitiaVDate COMMITTEE RECOMMENDATION: I move to forward the Climate Planning Grant and associated Interagency Agreement with the Washington State Department of Commerce to the April 16, 2024, Council consent agenda for aDDroval.^ 1 Chair /Co ttee Member Commi tee Member PROPOSED COUNCIL MOTION: "I move gp6roval of the $107,400 Climate Planning Grant and authorize the Mayor to execute the associated Interagency Agreement with the Washington State Department of Commerce. " (BELOW TO BE COMPLETED BY CITY CLERK'S OFFICE) COUNCIL ACTION: ❑ APPROVED COUNCIL BILL # ❑ DENIED First reading ❑ TABLED/DEFERRED/NO ACTION Enactment reading ❑ MOVED TO SECOND READING (ordinances only) ORDINANCE # REVISED - 4/2019 RESOLUTION # CITY OF FEDERAL WAY MEMORANDUM DATE: March 21, 2024 TO: City Council VIA: Jim Ferrell, Mayor FROM: Kevin Pelley, Emergency Manager SUBJECT: Washington State Department of Commerce Climate Planning Grant and . Interagency Agreement FINANCIAL IMPACTS: The City would accept a $107,400 grant from the Washington State Department of Commerce to develop Federal Way's Hazard Mitigation Plan ("HMP"). There is no local match requirement to accept the grant. BACKGROUND INFORMATION: The City of Federal Way has been awarded a Climate Planning Grant, from the Washington State Department of Commerce, to support the development of Federal Way's HMP, which the City intends to develop and adopt by 2025 as an `annex' to King County's Regional HMP. This Climate Planning Grant is funded through the Washington State Climate Commitment Act and is intended to help cities comply with and implement greenhouse gas reduction and hazard resiliency requirements of House Bill 1181. .�►� Washington State Department of Commerce Interagency Agreement with City of Federal Way through Growth Management Services Contract Number: 24-63610-206 For 2023-2025 Climate Planning Grant Dated: Date of Execution a!% VV4shnig:cni Stale bepa-zment of %OF Cvmmer(T Table of Contents TABLEOF CONTENTS............................................................................................................................................. 2 FACESHEET............................................................................................................................................................ 3 SPECIAL TERMS AND CONDITIONS......................................................................................................................... 4 1. AUTHORITY ........................... ............................ ..,............. .......................................................................... ....4 2. CONTRACT MANAGEMENT............................................................................................................................. 4 3. COMPENSATION- ..................... :..................::.......................:.........................:.....................:..:..:...................4 4. BILLING PROCEDURES AND PAYMENT............................................................................................................ 4 5. SUBCONTRACTOR DATA COLLECTION..... ......................... . ................................... ................. 5 6. ENSURE COORDINATED CLIMATE COMMITMENTACT BRANDING ................................................ ....:........... 5 7. INSURANCE..................................................................................................................................................... 6 8. FRAUD AND OTHER LOSS REPORTING.......................................................................... ................ 6 9. ORDER OF PRECEDENCE................................................................................................................................. 6 GENERAL TERMS AND CONDITIONS....................................................................................................................... 7 1. DEFINITIONS............................................................................................................... .. 7 2. ALL WRITINGS CONTAINED HEREIN................................................................................................................ 7 3. AMENDMENTS................................................................................................................................................7 4. ASSIGNMENT..................................................................................................................................................7 5. CONFIDENTIALITY AND SAFEGUARDING OF INFORMATION.......................................................................... 7 6. COPYRIGHT................................................................................................................................................8 7. DISPUTES........................................................................................................................................................8 8. GOVERNING LAW AND VENUE........................................................................................................................ 9 9. INDEMNIFICATION....................................................... .......... ...................... ............................. :..................... 9 10. LICENSING, ACCREDITATION AND REGISTRATION....... ... .................................. ................................. 9 11. RECAPTURE.....................................................................................................................................................9 12. RECORDS MAINTENANCE.............................................................................................................................. . 13. SAVINGS..........................................................................................................................................................9 14. SEVERABILITY..................................................................................................................................................9 15. SUBCONTRACTING....................................................................................................................................... 10 16. SURVIVAL...........................................................................................I.............. ........10 17. TERMINATION FOR CAUSE............................................................................................................................ 10 18. TERMINATION FOR CONVENIENCE— ........................................................ ................................................... 10 19. TERMINATION PROCEDURES........................................................................................................................ 10 20. TREATMENT OF ASSETS .................................. ............. .............................................................11 21. WAIVER.....................................................:........................:...............A........................... ... 12 ATTACHMENTA: SCOPE OF WORK...................................................................................................................... 13 ATTACHMENTB: BUDGET....................................................................................................................................15 Page 2 of 15 .ft�+ Nlashing:on Stale Depa-;ant of Face Sheet Local Government Division Growth Management Services 2023-2025 Climate Planning Grant Contract Number: 24-63610-206 1. Contractor 2. Contractor Doing Business As (as applicable) City of Federal Way N/A 33325 8th Avenue South, 2nd Floor Federal Way WA, 98003 3. Contractor Representative 4. COMMERCE Representative Kevin Pelley Noelle Madera PO Box 42525 Emergency Manager, City of Federal Way Climate Operations Team Lead 1011 Plum St. SE 253-835-2712 509-818-1040 Olympia, WA 98504 Kevin.pelley@cityoffederalway.com noelle.madera@commerce.wa.gov 5. Contract Amount 6. Funding Source 7. Start Date 8. End Date $107,400 Federal: ❑ State: ® Other: ❑ N/A: ❑ Date of Execution June 30, 2025 9. Federal Funds (as applicable) Federal Agency: ALN N/A N/A N/A 10.Tax ID# 11.SWV# 12.UB1# 13.UEl# N/A SWV0015957-00 600-201-517 N/A 14. Contract Purpose For the development of the Growth Management Act (GMA) climate change and resiliency element requirements related to the implementation of HB 1181. COMMERCE, defined as the Department of Commerce, and the Contractor, as defined above, acknowledge and accept the terms of this Contract and Attachments and have executed this Contract on the date below and warrant they are authorized to bind their respective agencies. The rights and obligations of both parties to this Contract are governed by this Contract and the following documents incorporated by reference: Contractor Terms and Conditions including Attachment "A" — Scope of Work and Attachment "B" — Budget. FOR CONTRACTOR FOR COMMERCE Jim Ferrell, Mayor Signature Date <insert name>, <insert title Date APPROVED AS TO FORM OILS BY ASSISTANT ATTORNEY GENERAL APPROVAL ON FILE Page 3 of 15 Nl"Ilrlg:onSlat� .\/, DExTp"menl o` %JV L'6mmem, Special Terms and Conditions 1. AUTHORITY COMMERCE and Contractor enter into this Contract pursuant to the authority granted by Chapter 39.34 RCW. 2. CONTRACT MANAGEMENT The Representative for each of the parties shall be responsible for and shall be the contact person for all communications and billings regarding the performance of this Contract. The Representative for COMMERCE and their contact information are identified on the Face Sheet of this Contract. The Representative for the Contractor and their contact information are identified on the Face Sheet of this Contract. 3. COMPENSATION COMMERCE shall pay an amount not to exceed one hundred seven thousand four hundred dollars ($107,400), for the performance of all things necessary for or incidental to the performance of work under this Contract as set forth in the attached Scope of Work and Budget. 4. BILLING PROCEDURES AND PAYMENT COMMERCE will pay Contractor upon acceptance of services provided and receipt of properly completed invoices, which shall be submitted to the Representative for COMMERCE not more often than monthly nor less than quarterly. The invoices shall describe and document, to COMMERCE's satisfaction, a description of the work performed, the progress of the project, and fees. The invoice shall include the Contract Number 24- 63610-206. A receipt must accompany any single expenses in the amount of $50.00 or more in order to receive reimbursement. Payment shall be considered timely if made by COMMERCE within thirty (30) calendar days after receipt of properly completed invoices. Payment shall be sent to the address designated by the Contractor. COMMERCE may, in its sole discretion, terminate the Contract or withhold payments claimed by the Contractor for services rendered if the Contractor fails to satisfactorily comply with any term or condition of this Contract. No payments in advance or in anticipation of services or supplies to be provided under this Agreement shall be made by COMMERCE. Grant Start Date COMMERCE will pay the Contractor for costs incurred beginning July 1, 2023, for services and deliverables described under this Agreement. State Fiscal Year Payments COMMERCE will reimburse Contractor for State Fiscal Year 2024 (July 1, 2023-June 30, 2024), and State Fiscal Year 2025 (July 1, 2024-June 30, 2025), based on the expenses incurred under this Contract. Invoices and End of Fiscal Year Invoices are due at a minimum of June 15, 2024 and 2025, if not submitted at more frequent intervals. Page 4of15 r� 'V, Washing -on Slate %NS1,(,66Hl7E xll Final invoices for a state fiscal year may be due sooner than the 15th of June and Commerce will provide notification of the end of fiscal year due date. The Contractor must invoice for all expenses from the beginning of the contract through June 30, regardless of the contract start and end date. Duplication of Billed Costs The Contractor shall not bill COMMERCE for services performed under this Agreement, and COMMERCE shall not pay the Contractor, if the Contractor is entitled to payment or has been or will be paid by any other source, including grants, for that service. Disallowed Costs The Contractor is responsible for any audit exceptions or disallowed costs incurred by its own organization or that of its subcontractors. Line Item Modification of Budget A. Notwithstanding any other provision of this contract, the Contractor may, at its discretion, make modifications to line items in the Budget, hereof, that will not increase the line item by more than fifteen percent (15%). B. The Contractor shall notify COMMERCE in writing (by email or regular mail) when proposing any budget modification or modifications to a line item in the Budget (Attachments B) hereof, that would increase the line item by more than fifteen percent (15%). Conversely, COMMERCE may initiate the budget modification approval process if presented with a request for payment under this contract that would cause one or more budget line items to exceed the 15 percent (15%) threshold increase described above. C. Any such budget modification or modifications as described above shall require the written approval of COMMERCE (by email or regular mail), and such written approval shall amend the Project Budget. Each party to this contract will retain and make any and all documents related to such budget modifications a part of their respective contract file. D. Nothing in this section shall be construed to permit an increase in the amount of funds available for the Project, asset forth in Section 3 of this contract, nor does this section allow any proposed changes to the Scope of Work, include Tasks/Work Items and Deliverables under Attachment A, without specific written approval from COMMERCE by amendment to this contract. 5. SUBCONTRACTOR DATA COLLECTION Contractor will submit reports, in a form and format to be provided by COMMERCE and at intervals as agreed by the parties, regarding work under this Contract performed by subcontractors and the portion of Contract funds expended for work performed by subcontractors, including but not necessarily limited to minority -owned, woman -owned, and veteran -owned business subcontractors. "Subcontractors" shall mean subcontractors of any tier. 6. ENSURE COORDINATED CLIMATE COMMITMENT ACT BRANDING COMMERCE received funding from Washington's Climate Commitment Act (CCA). To strengthen public awareness of how CCA funding is used, the Office of the Governor is directing state agencies that administer funding or manage a CCA-supported program to ensure consistent branding and funding acknowledgments are used in all communications and included in funding agreements and contracts. The "Climate Commitment Act" logo and funding acknowledgment make it easy for consumers and the public to see how the state is using CCA funds to reduce climate pollution, create jobs, and improve public health and the environment, particularly for low-income and overburdened populations. Page 5 of 15 wdshingm) Mal - €Yepa ,ment of Comrretre The following provisions apply to all contractors, subcontractors, service providers and others who assist CONTRACTOR in implementing the climate planning grant. Logo requirements. The CCA logo must be used in the following circumstances, consistent with the branding guidelines posted at climate.wa.aovlbrandtoolkit. • Any WA Department of Commerce climate planning grant website or webpage that includes logos from other funding partners. • Any WA Department of Commerce climate planning grant media or public information materials that include logos from other funding partners. Funding source acknowledgement. This standard funding language must be used on websites and included in announcements, press releases and publications used for media -related activities, publicity and public outreach. "The WA Department of Commerce climate planning grant is supported with funding from Washington's Climate Commitment Act. The CCA supports Washington's climate action efforts by putting cap -and -invest dollars to work reducing climate pollution, creating jobs, and improving public health. Information about the CCA is available at 7. INSURANCE Each party certifies that it is self -insured under the State's or local government self-insurance liability program, and shall be responsible for losses for which it is found liable. 8. FRAUD AND OTHER LOSS REPORTING Contractor shall report in writing all known or suspected fraud or other loss of any funds or other property furnished under this Contract immediately or as soon as practicable to the Commerce Representative identified on the Face Sheet. 9. ORDER OF PRECEDENCE In the event of an inconsistency in this Contract, the inconsistency shall be resolved by giving precedence in the following order: • Applicable federal and state of Washington statutes and regulations ■ , Special Terms and Conditions ■ General Terms and Conditions ■ Attachment A — Scope of Work ■ Attachment B — Budget Page 6of15 i*t Wfashiilg.al State DePa,merli 0f ammeixx General Terms and Conditions DEFINITIONS As used throughout this Contract, the following terms shall have the meaning set forth below: A. "Authorized Representative" shall mean the Director and/or the designee authorized in writing to act on the Director's behalf. B. "COMMERCE" shall mean the Washington Department of Commerce. C. "Contract" or "Agreement" or "Grant" means the entire written agreement between COMMERCE and the Contractor, including any Attachments, documents, or materials incorporated by reference. E-mail or Facsimile transmission of a signed copy of this contract shall be the same as delivery of an original. D. "Contractor" or "Grantee" shall mean the entity identified on the face sheet performing service(s) under this Contract, and shall include all employees and agents of the Contractor. E. "Personal Information" shall mean information identifiable to any person, including, but not limited to, information that relates to a person's name, health, finances, education, business, use or receipt of governmental services or other activities, addresses, telephone numbers, social security numbers, driver license numbers, other identifying numbers, and any financial identifiers, and "Protected Health Information" under the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA). F. "State" shall mean the state of Washington. G. "Subcontractor" shall mean one not in the employment of the Contractor, who is performing all or part of those services under this Contract under a separate contract with the Contractor. The terms "subcontractor" and "subcontractors" mean subcontractor(s) in any tier. 2. ALL WRITINGS CONTAINED HEREIN This Contract contains all the terms and conditions agreed upon by the parties. No other understandings, oral or otherwise, regarding the subject matter of this Contract shall be deemed to exist or to bind any of the parties hereto. 3. AMENDMENTS This Contract may be amended by mutual agreement of the parties. Such amendments shall not be binding unless they are in writing and signed by personnel authorized to bind each of the parties. 4. ASSIGNMENT Neither this Contract, work thereunder, nor any claim arising under this Contract, shall be transferred or assigned by the Contractor without prior written consent of COMMERCE. 5. CONFIDENTIALITY AND SAFEGUARDING OF INFORMATION A. "Confidential Information" as used in this section includes: i. All material provided to the Contractor by COMMERCE that is designated as "confidential" by COMMERCE; I!. All material produced by the Contractor that is designated as "confidential" by COMMERCE; and Page 7 of 15 ./►i Washington Slat Qepa-meni of �'cmiM(__T(1(3 iii. All Personal Information in the possession of the Contractor that may not be disclosed under state or federal law. B. The Contractor shall comply with all state and federal laws related to the use, sharing, transfer, sale, or disclosure of Confidential Information. The Contractor shall use Confidential Information solely for the purposes of this Contract and shall not use, share, transfer, sell or disclose any Confidential Information to any third party except with the prior written consent of COMMERCE or as may be required by law. The Contractor shall take all necessary steps to assure that Confidential Information is safeguarded to prevent unauthorized use, sharing, transfer, sale or disclosure of Confidential Information or violation of any state or federal laws related thereto. Upon request, the Contractor shall provide COMMERCE with its policies and procedures on confidentiality. COMMERCE may require changes to such policies and procedures as they apply to this Contract whenever COMMERCE reasonably determines that changes are necessary to prevent unauthorized disclosures. The Contractor shall make the changes within the time period specified by COMMERCE. Upon request, the Contractor shall immediately return to COMMERCE any Confidential Information that COMMERCE reasonably determines has not been adequately protected by the Contractor against unauthorized disclosure. C. Unauthorized Use or Disclosure. The Contractor shall notify COMMERCE within five (5) working days of any unauthorized use or disclosure of any confidential information, and shall take necessary steps to mitigate the harmful effects of such use or disclosure. 6. COPYRIGHT Unless otherwise provided, all Materials produced under this Contract shall be considered "works for hire" as defined by the U.S. Copyright Act and shall be owned by COMMERCE. COMMERCE shall be considered the author of such Materials. In the event the Materials are not considered "works for hire" under the U.S. Copyright laws, the Contractor hereby irrevocably assigns all right, title, and interest in all Materials, including all intellectual property rights, moral rights, and rights of publicity to COMMERCE effective from the moment of creation of such Materials. "Materials" means all items in any format and includes, but is not limited to, data, reports, documents, pamphlets, advertisements, books, magazines, surveys, studies, computer programs, films, tapes, and/or sound reproductions. "Ownership" includes the right to copyright, patent, register and the ability to transfer these rights. For Materials that are delivered under the Contract, but that incorporate pre-existing materials not produced under the Contract, the Contractor hereby grants to COMMERCE a nonexclusive, royalty - free, irrevocable license (with rights to sublicense to others) in such Materials to translate, reproduce, distribute, prepare derivative works, publicly perform, and publicly display. The Contractor warrants and represents that the Contractor has all rights and permissions, including intellectual property rights, moral rights and rights of publicity, necessary to grant such a license to COMMERCE. The Contractor shall exert all reasonable effort to advise COMMERCE, at the time of delivery of Materials furnished under this Contract, of all known or potential invasions of privacy contained therein and of any portion of such document which was not produced in the performance of this Contract. The Contractor shall provide COMMERCE with prompt written notice of each notice or claim of infringement received by the Contractor with respect to any Materials delivered under this Contract. COMMERCE shall have the right to modify or remove any restrictive markings placed upon the Materials by the Contractor. 7. DISPUTES In the event that a dispute arises under this Agreement, it shall be determined by a Dispute Board in the following manner: Each party to this Agreement shall appoint one member to the Dispute Board. The members so appointed shall jointly appoint an additional member to the Dispute Board. The Dispute Board shall review the facts, Agreement terms and applicable statutes and rules and make a determination of the dispute. The Dispute Board shall thereafter decide the dispute with the majority Page 8 of 15 lnlashing.on Slate Depa ,ment of 140 Commerce prevailing. The determination of the Dispute Board shall be final and binding on the parties hereto. As an alternative to this process, either of the parties may request intervention by the Governor, as provided by RCW 43.17.330, in which event the Governor's process will control. 8. GOVERNING LAW AND VENUE This Contract shall be construed and interpreted in accordance with the laws of the state of Washington, and the venue of any action brought hereunder shall be in the Superior Court for Thurston County. 9. INDEMNIFICATION Each party shall be solely responsible for the acts of its employees, officers, and agents. 10. LICENSING, ACCREDITATION AND REGISTRATION The Contractor shall comply with all applicable local, state, and federal licensing, accreditation and registration requirements or standards necessary for the performance of this Contract. 11, RECAPTURE In the event that the Contractor fails to perform this Contract in accordance with state laws, federal laws, and/or the provisions of this Contract, COMMERCE reserves the right to recapture funds in an amount to compensate COMMERCE for the noncompliance in addition to any other remedies available at law or in equity. Repayment by the Contractor of funds under this recapture provision shall occur within the time period specified by COMMERCE. In the alternative, COMMERCE may recapture such funds from payments due under this Contract. 12. RECORDS MAINTENANCE The Contractor shall maintain books, records, documents, data and other evidence relating to this contract and performance of the services described herein, including but not limited to accounting procedures and practices that sufficiently and properly reflect all direct and indirect costs of any nature expended in the performance of this contract. The Contractor shall retain such records for a period of six years following the date of final payment. At no additional cost, these records, including materials generated under the contract, shall be subject at all reasonable times to inspection, review or audit by COMMERCE, personnel duly authorized by COMMERCE, the Office of the State Auditor, and federal and state officials so authorized by law, regulation or agreement. If any litigation, claim or audit is started before the expiration of the six (6) year period, the records shall be retained until all litigation, claims, or audit findings involving the records have been resolved. 13. SAVINGS In the event funding from state, federal, or other sources is withdrawn, reduced, or limited in any way after the effective date of this Contract and prior to normal completion, COMMERCE may suspend or terminate the Contract under the "Termination for Convenience" clause, without the ten calendar day notice requirement. In lieu of termination, the Contract may be amended to reflect the new funding limitations and conditions. 14. SEVERABILITY The provisions of this contract are intended to be severable. If any term or provision is illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity of the remainder of the contract. Page 9 of 15 �0% W851+ing:cXI state Dew:ment of � G[ammt��rc• 15. SUBCONTRACTING The Contractor may only subcontract work contemplated under this Contract if it obtains the prior written approval of COMMERCE. If COMMERCE approves subcontracting, the Contractor shall maintain written procedures related to subcontracting, as well as copies of all subcontracts and records related to subcontracts. For cause, COMMERCE in writing may: (a) require the Contractor to amend its subcontracting procedures as they relate to this Contract; (b) prohibit the Contractor from subcontracting with a particular person or entity; or (c) require the Contractor to rescind or amend a subcontract. Every subcontract shall bind the Subcontractor to follow all applicable terms of this Contract. The Contractor is responsible to COMMERCE if the Subcontractor fails to comply with any applicable term or condition of this Contract. The Contractor shall appropriately monitor the activities of the Subcontractor to assure fiscal conditions of this Contract. In no event shall the existence of a subcontract operate to release or reduce the liability of the Contractor to COMMERCE for any breach in the performance of the Contractor's duties. Every subcontract shall include a term that COMMERCE and the State of Washington are not liable for claims or damages arising from a Subcontractor's performance of the subcontract. 16. SURVIVAL The terms, conditions, and warranties contained in this Contract that by their sense and context are intended to survive the completion of the performance, cancellation or termination of this Contract shall so survive. 17. TERMINATION FOR CAUSE In the event COMMERCE determines the Contractor has failed to comply with the conditions of this contract in a timely manner, COMMERCE has the right to suspend or terminate this contract. Before suspending or terminating the contract, COMMERCE shall notify the Contractor in writing of the need to take corrective action. If corrective action is not taken within 30 calendar days, the contract may be terminated or suspended. In the event of termination or suspension, the Contractor shall be liable for damages as authorized by law including, but not limited to, any cost difference between the original contract and the replacement or cover contract and all administrative costs directly related to the replacement contract, e.g., cost of the competitive bidding, mailing, advertising and staff time. COMMERCE reserves the right to suspend all or part of the contract, withhold further payments, or prohibit the Contractor from incurring additional obligations of funds during investigation of the alleged compliance breach and pending corrective action by the Contractor or a decision by COMMERCE to terminate the contract. A termination shall be deemed a "Termination for Convenience" if it is determined that the Contractor: (1) was not in default; or (2) failure to perform was outside of his or her control, fault or negligence. The rights and remedies of COMMERCE provided in this contract are not exclusive and are, in addition to any other rights and remedies, provided by law. 18. TERMINATION FOR CONVENIENCE Except as otherwise provided in this Contract, COMMERCE may, by ten (10) business days' written notice, beginning on the second day after the mailing, terminate this Contract, in whole or in part. If this Contract is so terminated, COMMERCE shall be liable only for payment required under the terms of this Contract for services rendered or goods delivered prior to the effective date of termination. 19. TERMINATION PROCEDURES Upon termination of this contract, COMMERCE, in addition to any other rights provided in this contract, may require the Contractor to deliver to COMMERCE any property specifically produced or acquired for the performance of such part of this contract as has been terminated. The provisions of the "Treatment of Assets" clause shall apply in such property transfer. Page 10of15 �►r Wasl+IngXXI Slate_ Cumin t�C COMMERCE shall pay to the Contractor the agreed upon price, if separately stated, for completed work and services accepted by COMMERCE, and the amount agreed upon by the Contractor and COMMERCE for (i) completed work and services for which no separate price is stated, (ii) partially completed work and services, (iii) other property or services that are accepted by COMMERCE, and (iv) the protection and preservation of property, unless the termination is for default, in which case the Authorized Representative shall determine the extent of the liability of COMMERCE. Failure to agree with such determination shall be a dispute within the meaning of the "Disputes" clause of this contract. COMMERCE may withhold from any amounts due the Contractor such sum as the Authorized Representative determines to be necessary to protect COMMERCE against potential loss or liability. The rights and remedies of COMMERCE provided in this section shall not be exclusive and are in addition to any other rights and remedies provided by law or under this contract. After receipt of a notice of termination, and except as otherwise directed by the Authorized Representative, the Contractor shall: A. Stop work under the contract on the date, and to the extent specified, in the notice; B. Place no further orders or subcontracts for materials, services, or facilities except as may be necessary for completion of such portion of the work under the contract that is not terminated; C. Assign to COMMERCE, in the manner, at the times, and to the extent directed by the Authorized Representative, all of the rights, title, and interest of the Contractor under the orders and subcontracts so terminated, in which case COMMERCE has the right, at its discretion, to settle or pay any or all claims arising out of the termination of such orders and subcontracts; D. Settle all outstanding liabilities and all claims arising out of such termination of orders and subcontracts, with the approval or ratification of the Authorized Representative to the extent the Authorized Representative may require, which approval or ratification shall be final for all the purposes of this clause; E. Transfer title to COMMERCE and deliver in the manner, at the times, and to the extent directed by the Authorized Representative any property which, if the contract had been completed, would have been required to be furnished to COMMERCE; F. Complete performance of such part of the work as shall not have been terminated by the Authorized Representative; and G. Take such action as may be necessary, or as the Authorized Representative may direct, for the protection and preservation of the property related to this. contract, which is in the possession of the Contractor and in which COMMERCE has or may acquire an interest. 20. TREATMENT OF ASSETS Title to all property furnished by COMMERCE shall remain in COMMERCE. Title to all property furnished by the Contractor, for the cost of which the Contractor is entitled to be reimbursed as a direct item of cost under this contract, shall pass to and vest in COMMERCE upon delivery of such property by the Contractor. Title to other property, the cost of which is reimbursable to the Contractor under this contract, shall pass to and vest in COMMERCE upon (i) issuance for use of such property in the performance of this contract, or (ii) commencement of use of such property in the performance of this contract, or (iii) reimbursement of the cost thereof by COMMERCE in whole or in part, whichever first occurs. A. Any property of COMMERCE furnished to the Contractor shall, unless otherwise provided herein or approved by COMMERCE, be used only for the performance of this contract. B. The Contractor shall be responsible for any loss or damage to property of COMMERCE that results from the negligence of the Contractor or which results from the failure on the part of the Contractor to maintain and administer that property in accordance with sound management Page 11 of 15 practices. C. If any COMMERCE property is lost, destroyed or damaged, the Contractor shall immediately notify COMMERCE and shall take all reasonable steps to protect the property from further damage. D. The Contractor shall surrender to COMMERCE all property of COMMERCE prior to settlement upon completion, termination or cancellation of this contract. E. All reference to the Contractor under this clause shall also include Contractor's employees, agents or Subcontractors. 21. WAIVER Waiver of any default or breach shall not be deemed to be a waiver of any subsequent'default or breach. Any waiver shall not be construed to be a modification of the terms of this Contract unless stated to be such in writing and signed by Authorized Representative of COMMERCE. Page 12of15 d1% Masi+ir1U.M 5laLe ❑e;�a^m,,nl 01 �i�� Commerce Attachment A: Scope of Work Steps, Tasks Description End Date and Deliverables Step 1 Initialize project, background research and consistency 11/2023-06/2024 review for new HMP Task 1.1 Initial HMP annex development with King County, including project scoping Task 1.2 Develop HMP development scope of work Task 1.3 Perform consistency review and audit of existing plans and policies for climate resilience opportunities, gaps, and barriers, and ensure Federal Way's current base studies, plans, and ordinances used in the HMP are consistent with King County's documents Task 1.4 Review for consistency with HB 1181 Deliverable 1 Summary memo summarizing results of project 6/30/2024 initialization, background research and consistency review Support Acquisition for HMP Development 11/2023-06/2024 Step 2 Task 2.1 Recruitment of staff or consultant support for HMP development Deliverable 2 Proof of consultant contract materials or hiring 6/30/2024 materials for HMP development support Step 3 Initial Planning Commission briefing on HMP 1/2024-6/2024 Task 3.1 Develop Planning Commission briefing materials Deliverable 3 Packet and minutes from initial Planning Commission 6/30/2024 briefing Page 13 of 15 A^ Washinymi State Wct1eKu•;ment of Mnn'il.'r ce Steps, Tasks and Deliverables Description End Date Step 4 Conduct a Risk Assessment 1/2024-9/2024 Task 4.1 Conduct Threat and Hazard Assessment Task 4.2 Conduct Vulnerability Assessment Task 4.3 Review for consistency with HB 1181 Deliverable 4 Draft Risk Assessment 9/30/2024 Step 5 Develop an Action Plan to mitigate hazards 8/2024-12/2024 Task 5.1 Identify critical vulnerabilities Task 5.2 Develop goals, policies and plans of action to mitigate hazards Task 5.3 Review for consistency with HB 1181 Deliverable 5 Draft Action Plan 12/31/2024 Step 6 Prioritize actions and develop HMP 1/2024-6/15/2025 Task 6.1 Prioritize actions Task 6.2 Draft HMP Task 6.3 Review for consistency with HB 1181 - Deliverable 6 Draft HMP Annex 6/15/2025 Page 14 of 15 �ii4 a 1Nas11W"I p� SE4[e f3epa~:ment of %0 Commerce Attachment B: Budget Deliverables: Commerce Grant Funds Deliverable 1: Summary memo summarizing results of project initialization, background research and consistency review $10,000 Deliverable 2: Proof of consultant contract materials or hiring materials for HMP development support $2,500 Deliverable 3: Packet and minutes from initial Planning Commission briefing $2,500 Deliverable 4: Draft Risk Assessment $30,800 Deliverable 5: Draft Action Plan $30,800 Deliverable 6: Draft HMP Annex $30,800 Contract Total: $107,400 Page 15 of 15 rye COUNCIL MEETING DATE: April 16, 2024 ITEM 4: CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL SUBJECT: JOINT USE OPERATIONS AND MAINTENANCE FACILITY — 85% DESIGN REPORT AND AUTHORIZATION TO BID POLICY QUESTION: Should City Council authorize staff to proceed with bidding of the Joint Operations and Maintenance Facility and return to Land Use and Transportation Committee and Council for authorization to award? COMMITTEE: Land Use and Transportation MEETING DATE: April 1, 2024 CATEGORY: ® Consent ❑ Ordinance ❑ Public Hearing ❑ City Council Business ❑ Resolution ❑ Other STAFF REPORT BY: Desiree S. Winkler, P.E., Deputy Director DEPT: Public Works Attachments: 1. Staff Memo to LUTC dated April 1, 2024. Options Considered: 1. Authorize staff to proceed with bidding of the Joint Operations and Maintenance Facility and return to Land Use and Transportation Committee and Council for authorization to award. 2. Do not authorize staff to proceed with this project and provide direction to staff. MAYOR'S RECOMMENDATION: Option 1. MAYOR APPROVAL: DIRECTOR APPROVAL: gt- 3^ZA-U i + msnd e • ursci] [nisial117ate Inisiail ate I bu !c COMMITTEE RECOMMENDATION: I move to forward the Option 1 to the April 16, 2024 consent agenda for approval. } c D vey, Ommittee Chair Hoang ran, Committee a& Walsh, Committee Member Member PROPOSED COUNCIL MOTION: "I move to authorize staff to proceed with bidding of the Joint Operations and Maintenance Facility and return to Land Use and Transportation Committee and Council for authorization to award. " (BELOW TO BE COMPLETED BY CITY CLERK'S OFFICE) COUNCIL ACTION: ❑ APPROVED COUNCIL BILL # ❑ DENIED First reading ❑ TABLED/DEFERRED/NO ACTION Enactment reading ❑ MOVED TO SECOND READING (ordinances only) ORDINANCE # REVISED - 4/2019 RESOLUTION # CITY OF FEDERAL WAY MEMORANDUM DATE: April 21, 2024 TO: Land Use & Transportation Committee VIA: Jim Ferrell, Mayor FROM: EJ Walsh, P.E., Public Works Director`s- — Ot J esiree S. Winkler, P.E., Deputy Public Works Director SUBJECT: Joint Use Operations and Maintenance Facility — 85% Design Report and Authorization to Bid Financial Impacts: The cost to the City for the Joint Operations and Maintenance Facility was included within the approved budget under the Public Works Department Capital Budget (Fund 306), Project #610. In accordance with the approved budget, this item is funded by bond proceeds, with payback funds from a combination of Real Estate Excise Tax (REET), Surface Water Management (SWM) fees, and General Fund Revenue. The complete bond package will be presented to City Council at a future date with separate authorization. Upon completion of the Joint Operation and Maintenance Facility future costs will be ongoing operation and maintenance costs associated and are estimated to be consistent with the current costs of several existing facilities. Background Information: In March 2023, council selected the preferred site for the new Joint Operations and Maintenance Facility (O&M Facility), "Site 1: Existing O&M Site — Expand to the North," and authorized staff to move forward with the associated property acquisition and design. Council directed staff to include fleet and fueling in the project as it was identified to "pay for itself' through savings on overhead. Progress to Date: • Completed 85% Design • Property Acquisition (100% complete) • Land Use, Building, and Engineering Permit Submittal Next Steps: • Complete permitting (Land Use, SEPA, and Building) (May 2024) Rev. 7/18 • Complete bid documents (May 2024) • Bond package developed and brought to council (May/June 2024) ■ Advertise and Award (May/June 2024) Budget Base Program Construction, Professional Services, Permitting, FF&E $ 34,000,000 Fleet & Fueling (Construction, Professional Services, Permitting, FF&E) $ 5,000,000 SWAT Vehicle Storage $ 350,000 Property Acquisition $ 8,000,000 TOTAL $ 47,350,000 Fixtures, Furniture, Equipment (FF&E) 85% Estimate Base Program Construction, Professional Services, Permitting, FF&E) $ 37,470,000 Fleet & Fueling (Construction, Professional Services, Permitting, FF&E) $ 5,900,000 SWAT Vehicle Storage $ 480,000 Pro erty Acquisition $ 8,000,000 TOTAL ]__$ 51,850,000 Notes: • Construction contingency at 15% _ $4,700,000. • Design & Professional Fees at 15% _ $4,700,000. • Permits & Utility Fees at 4% _ $1,200,000. • FF&E at 4% _ $1,200,000. Difference $ 4,500,000 Rev. 7/18 %1 COUNCIL MEETING DATE: April 16, 2024 ITEM #: CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL SUBJECT: JOINT USE OPERATIONS AND MAINTENANCE FACILITY — FRONTAGE IMPROVEMENTS - 85% DESIGN REPORT, TRANSFER CAPITAL IMPROVEMENT FUNDS, AND AUTHORIZATION TO BID POLICY QUESTION: Should City Council authorize transfer of Capital Improvement Program transportation funds and bidding of the Joint Operations and Maintenance Facility Frontage Improvements, and return to Land Use and Transportation Committee and Council for bid award? COMMITTEE: Land Use and Transportation MEETING DATE: April 1, 2024 CATEGORY: ® Consent ❑ Ordinance ❑ Public Hearing ❑ City Council Business ❑ Resolution ❑ Other STAFF REPORT BY: esiree S. Winkler. P.E., Deptq Director DEPT: Public Works Attachments: 1. Staff Memo to LUTC dated April 1, 2024. Options Considered: 1. Authorize transfer of Capital Improvement Program transportation funds and bidding of the Joint Operations and Maintenance Facility Frontage Improvements, and return to Land Use and Transportation Committee and Council for bid award. 2. Do not authorize staff to proceed with this project and provide direction to staff. MAYOR'S RECOMMENDATION: Option 1. MAYOR APPROVAL' DIRECTOR APPROVAL: 3i�tE� i'I mmitt C ncii Initial![]ase itiallA c Init all[]a COMMITTEE RECOMMENDATION: I move to forward the Option I to the April 16, 2024 consent agenda for approval. PROPOSED COUNCIL MOTION: "I move to authorize transfer of Capital Improvement Program transportation funds and bidding of the Joint Operations and Maintenance Facility Frontage Improvements, and return to Land Use and Transportation Committee and Council for bid award. " BELOW TO BE COMPLETED BY CITY CLERK'S OFFICE COUNCIL ACTION: ❑ APPROVED COUNCIL BILL # ❑ DENIED First reading ❑ TABLED/DEFERRED/NO ACTION Enactment reading i ❑ MOVED TO SECOND READING (ordinances only) ORDINANCE # REVISED - 4/2019 RESOLUTION # CITY OF FEDERAL WAY MEMORANDUM DATE: April 1, 2024 TO: Land Use & Transportation Committee VIA: Jim Ferrell, Mayor FROM: EJ Walsh, P.E., Public Works Director ` - � &!Desiree S. Winkler, P.E., Deputy Public Works Director SUBJECT: Joint Use Operations and Maintenance Facility — Frontage Improvements — 85% Design Report, Transfer of Capital Improvement Funds, and Authorization to Bid Financial Impacts: The cost for the frontage improvements (roadway and sidewalk improvements along the front of the O&M Facility) are currently included in the adopted 2023-2024 budget under Project 205 for improvements around Steel Lake Annex property. The project site location was moved from Steel Lake Annex to the current location north of the existing Operations and Maintenance Facility after the current budget was adopted: The frontage improvements along 28t" Ave South are included in the current 6-Year Transportation Improvement Plan (2024-2029) (Project 45). The funding for the frontage improvements is from a combination of Transportation Capital Funding (Real Estate Excise Tax (BEET), Motor Vehicle Excise Tax (MVET), and Traffic Impact Fees (TIF)) and Surface Water Management (SWM) Fund capital funds. Upon completion of the project, ongoing costs associated with operations and maintenance will be performed and funded through street maintenance. Funding requirements for operations and maintenance of infrastructure is reviewed and adjusted as required during the budget process. Background Information: In March 2023, council selected the preferred site for the new Joint Operations and Maintenance Facility (O&M Facility), "Site 1: Existing O&M Site — Expand to the North," and authorized staff to move forward with the associated property acquisition and design. Council directed staff to include fleet and fueling in the project as it was identified to "pay for itself' through savings on overhead. Completing frontage improvements (curb and gutter, sidewalk, landscape strip, street lighting, and storm drainage) are required as part of new development. Rev. 7/18 Progress to Date: • Completed 85% Design Next Stens: • Complete bid documents (May 2024) • Advertise and Award (May/June 2024) Budget SWM Funds* $ 1,100,000 Transportation Capital (BEET, MVET, TIF) $ 2,235,000 TOTAL $ 3,335,000 *---30% of O&M Facility is for SWM Programs Expenditures Construction Contract plus Contingency $2,890,000 Design $ 200,000 Construction En ineerin $ 200,000 TOTAL 1 $3,290,000 Rev. 7/18 76 COUNCIL MEETING DATE: April 16, 2024 ITEM #: J CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL SUBJECT: RESOLUTION: AUTHORIZING THE ALLOCATION OF FUNDS IN ACCORDANCE WITH THE 2023 SOUTH KING HOUSING AND HOMELESSNESS PARTNERS (SKHHP) HOUSING CAPITAL FUND RECOMMENDATION POLICY QUESTION: Should City Council approve the proposed 2023 SKIMP Housing Capital Fund recommendation? COMMITTEE: Parks, Recreation, Human Services, and Public Safety MEETING DATE: April 9, 2024 CATEGORY: N Consent ❑ Ordinance ❑ Public Hearing ❑ City Council Business E Resolution ❑ Other STAFF REPORT BY: Sarah Bridgeford, Community Services Manager DEPT: Community Development Attachments: 1. Staff Report 2. Resolution Options Considered: 1. Approve proposed resolution. 2. Do not approve proposed resolution and provide direction to staff. MAYOR'S RECOMMENfpATION: Option 1. MAYOR APPROVAL: / r, '� am illcc CNRC lnitiaUDate 41, InitiaMate �]IRECTOR APPROVAL• f3124 y initial - Date COMMITTEE RECOMMENDATION: I move to forward the proposed resolution to the April 16, 2024, consent agenda for approval. t. Committee Member PROPOSED COUNCIL MOTION: "I move approval of the proposed resolution. " IWE.LOW TO BE COMPLETED BY CITY CLERK'S OFFICE) COUNCIL ACTION: ❑ APPROVED ❑ DENIED ❑ TABLED/DEFERRED/NO ACTION ❑ MOVED TO SECOND READING (ordinances only) REVISED—11/2019 Committee Member COUNCIL BILL # First reading Enactment reading ORDINANCE # RESOLUTION # CITY OF FEDERAL WAY MEMORANDUM DATE: March 6, 2024 TO: City Council Members VIA: Jim Ferrell, Mayor FROM: Brian Davis, City Administrator.' Keith Niven Community p Develo meuector Sarah Bridgeford, Community Services Manager �� SUBJECT: Resolution: Authorizing the Allocation of Funds in Accordance with the 2023 South King Housing and Homeless Partners (SKHHP) Housing Capital Fund Recommendation Financial Impacts: The cost to the City for 2023 SKHHP Housing Capital Fund was included within the approved budget. This budget item is funded by sales tax revenue collected under RCW 82.14.540, which are funds dedicated solely for the purpose of supporting affordable housing. Upon completion of the projects funded, future costs will be minimal and related to ongoing costs associated with monitoring and compliance of projects. Background Information: SKHHP was created in 2019 through an interlocal agreement (Establishing ILA) of city governments and King County to address housing needs in South King County. SKHHP currently has eleven participating member jurisdictions. In 2019, RCW 82.14.540 became law allowing jurisdictions to enact a sales tax to provide fiends for the purpose of affordable housing. The sales tax is a recapture of a portion of taxes collected and does not raise the sales tax. The City enacted the tax and the City Council subsequently authorized an Interlocal Agreement for the Purpose of Pooling Sales Tax Receipts with SKHHP (Pooling ILA) in February 2021. Together, the Pooling ILA and the Establishing ILA established a capital fund, set parameters for the process for the selection of awards involving pooled funds, and determined the approval process. Pursuant to the ILAs, the SKHHP Executive Board provides recommendations to member councils for funding. City Council approval is required to authorize the allocation of funds. The SKHHP and the ILA member jurisdictions have gone through this annual process once before and are now at the recommendations point of the second annual process concerning 2023 funding. Rev. 7/18 As directed in the ILAs, the SKHHP Executive Board identified funding guidelines for 2023 funding. The SKHHP Advisory Board subsequently provided recommendations to the Executive Board on which projects to fund based on those guidelines. After careful deliberation, the SKHHP Executive Board concurred with the recommendation of the SKHHP Advisory Board and recommends funding $4,970,000 for four projects, as described in the SKHHP Executive Board funding recommendations memo dated January 17, 2024. Project Funded with Funds Collected under RCW 82.14.540 (SHB 1406): Of the projects recommended by the SKHHP Executive Board, one is recommended involving the use of sales tax collected under RCW 82.14.540, commonly referred to as SHB 1406 funds. The City of Federal Way contributes sales tax collected under RCW 82.14.540 and this project includes City of Federal Way contributions, so a decision by the City Council is needed on whether to authorize use of its contributions toward the project. Multi -Service Center (MSC) — Victorian Place II. MSC is requesting grant funds in the amount of $500,000 from SKHHP. Victorian Place II is a 20-unit, multifamily preservation project in Des Moines. Since 1996, the nonprofit Multi -Service Center has owned the two adjacent buildings that comprise the project, which includes five units for households earning up to 35% AMI, ten units for households up to 40% AMI, and five units for households up to 50% AMI. The 20 three- bedroom/two-bathroom affordable rental units are in active use and the target population is families with children. Standard conditions will apply and the funding will be a secured grant with no repayment. A covenant will be recorded ensuring affordability for at least 50 years. Projects Funded with Funds Collected under RCW 82.14.530 (HB 1590): Of the projects recommended by the SKHHP Executive Board, three are recommended for sales tax collected under RCW 82.14.530, commonly referred to as HB 1590 funds. The City of Federal Way does not collect and therefore does not contribute sales tax collected under RCW 82.14.530 and will not be contributing funds to these projects. However, the recommendations of the Executive Board are presented to all member jurisdictions. Mercy Housing NW —Kent Multicultural Village. - Mercy Housing NW is requesting grant funds in the amount of $1,000,000 from SKHHP. Kent Multicultural Village is a 199-unit multifamily rental project in Kent adjacent to the future Kent Des Moines Link light rail station. The light rail station is scheduled to open in 2026. The project will support households earning 30% area median income (AMI) to 80% AMI with a 20% set -aside (39 units) for households with an intellectual and/or developmental disability (I/DD). The I/DD units will benefit from on -site supportive services. A 30% set -aside (61 units) will be for families with children. The project includes studios and one -bedroom, two -bedroom, and three -bedroom units. The site is comprised of Rev. 7/18 eight stories and will include a community center, a family resource center, and a licensed early learning facility with six classrooms to accommodate 96 infants and children with a focus on serving children with VDDs. The project was awarded the RFP by Sound Transit to be located on surplus land, but the terms of development are forthcoming, and the final project may be slightly different than described. 39 units are eligible for SKHHP funds sourced from HB 1590 revenue. Standard conditions will apply and the funding will be in the form of a deferred, contingent, forgivable loan. A covenant will be recorded ensuring affordability for at least 50 years. Low Income Housing Institute (LIHI) — Skyway Affordable Housing and Early Learning Center: LIHI is requesting grant funds in the amount of $2,800,000 from SKHHP. Skyway Affordable Housing and Early Learning Center is a multifamily rental project in Unincorporated King County. The project will provide 55 housing units for individuals and families, including 12 studios and 19 one -bedroom, 13 two -bedroom, and 11 three -bedroom units for households earning between 30% and 50% AMI with a 75% set -aside (42 units) for households transitioning out of homelessness. An early learning center will be located on the ground floor of the building, featuring four classrooms to accommodate up to 80 children, a parent resource room, and offices. The surrounding community will be prioritized in the early learning center activities. Additional amenities include a community room, case manager offices, and a roof deck for resident use. LIHI will provide on -site case management. This project has been previously awarded predevelopment and acquisition funds from King County. Standard conditions will apply and the funding will be a deferred, contingent, forgivable loan. A covenant will be recorded ensuring affordability for at least 50 years. TWG — Pandion at Star Lake: LIHI is requesting grant funds in the amount of $2,856,000 from SKHHP. The South Building of Pandion at Star Lake is a multifamily rental, mixed -use project in Kent, which consists of 168 affordable housing units for households earning between 30% and 60% AMI. The project is located adjacent to the Kent/Star Lake Link light rail station. This transit - oriented development (TOD) project will provide a mix of studios and one -bedroom, two - bedroom, and three -bedroom units. The project will include ground floor commercial space consisting of an early learning center for low=income children and other non-profit tenants. The property was purchased by the developer in December 2022. The project is a seven -story building with six stories of affordable housing over one story of commercial space, plus basement level parking. Standard conditions will apply and the funding will be a deferred, 1 % interest, non - forgivable loan. A covenant will be recorded ensuring affordability for at least 50 years. Rev. 7/18 SKHHP Executive Board Recommendations: The SKHHP Executive Board is requesting City of Federal Way funding of $119,468.00 for the following recommended projects: 1. No City of Federal Way funding is requested for Mercy Housing NW — Kent Multicultural Village 2. No City of Federal Way funding is requested for Low Income Housing Institute — Skyway Affordable Housing and Early Learning Center 3. No City of Federal Way funding is requested for TWG — Pandion at Star Lake 4. $119,468 for Multi -Service Center — Victorian Place II a. City of Federal Way represents 15.37% of SKHHP fiends proposed for this project. As outlined in the Executive Board memo included with the materials for this agenda item, sales tax credit receipts in the amount of $133,558 from2023 and $9,196 in 2022 carryover funds have already been contributed to the SKHHP Housing Capital Fund and are currently available to fund projects. As proposed, $119,468 of these funds would be allocated with $23,286 remaining as unallocated. With Council approval, these funds maybe allocated to the projects recommended by the SKHHP Executive Board. Detailed descriptions of the projects, funding requests, rationale, and recommended conditions of funding for projects by the SKHHP Executive Board are included in Exhibit A. Recommendation: Approve the proposed recommendations and Resolution including the 2023 SKHHP Housing Capital Fund Allocations of City of Federal Way funds in the amount of $119,468 for the projects detailed above. Rev. 7/18 RESOLUTION NO. A RESOLUTION of the City of Federal Way, Washington, authorizing the expenditure of $119,168 in funds contributed by the City and held by South King Housing and Homelessness Partners (SKHHP). WHEREAS, effective January 1, 2019, the City of Federal Way entered into an Interlocal Agreement (Establishing ILA, AG19-019) with neighboring cities located in south King County to form South King Housing and Homelessness Partners (SKHHP) to help coordinate the efforts of south King County cities to provide affordable housing; and WHEREAS, effective March 1, 2021, the City of Federal Way entered into an Interlocal Agreement (Pooling ILA, AG21-044) for the purposes of pooling sales tax receipts with SKHHP to administer funds through the SKHHP Housing Capital Funds; and WHEREAS, the SKHHP Executive Board has recommended that the City of Federal Way participate in the funding of certain affordable housing projects and programs hereinafter described; and WHEREAS, the SKHHP Executive Board has developed a number of recommended conditions to ensure that the City's affordable housing funds are used for their intended purpose and that projects maintain their affordability over time; and WHEREAS, pursuant to the SKHHP formation interlocal agreement each legislative body participating in funding a project or program through the SKHHP Housing Capital Fund must authorize the application of a specific amount of the City funds contributed to the SKHHP Housing Capital Fund; and WHEREAS, the City Council finds the project as proposed to be a beneficial investment of Resolution No. 24- Page 1 of 25 Rev 1/22 SKHHP efforts and applicable City of Federal Way sales tax revenue to support affordable housing in the City and South King County in general. NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF FEDERAL WAY, RESOLVES AS FOLLOWS: Section 1. Pursuant to SKHHP 2019 Establishing Interlocal Agreement and the 2021 Pooling Interlocal Agreement, the City Council authorizes the duly appointed administering agency of SKHHP to use $119,468 of funds contributed by the City consistent with the projects and funding allocations as outlined in Exhibit A. Additionally, the City Council authorizes SKHHP to enter into agreements to implement the projects as proposed in Exhibit A. Section 2. The agreements entered into pursuant to Section 1 of this resolution shall include terms and conditions to ensure the City's funds are used for their intended purpose and that the projects maintain affordability over time. Section 3. Severability. If any section, sentence, clause or phrase of this resolution should be held to be invalid or unconstitutional by a court of competent jurisdiction, such invalidity or unconstitutionality shall not affect the validity or constitutionality of any other section, sentence, clause, or phrase of this resolution. Section 4. Corrections. The City Clerk and the codifiers of this resolution are authorized to make necessary corrections to this resolution including, but not limited to, the correction of scrivener/clerical errors, references, resolution numbering, section/subsection numbers and any references thereto. Section 5. Ratification. Any act consistent with the authority and prior to the effective date of this resolution is hereby ratified and affirmed. Resolution No. 24- Page 2 of 25 Rev 1 /22 Section 6. Effective Date. This resolution shall be effective immediately upon passage by the Federal Way City Council. RESOLVED BY THE CITY COUNCIL OF THE CITY OF FEDERAL WAY, WASHINGTON this day of , 2024. CITY OF FEDERAL WAY: JIM FERRELL, MAYOR ATTEST: STEPHANIE COURTNEY, CMC, CITY CLERK APPROVED AS TO FORM: J. RYAN CALL, CITY ATTORNEY FILED WITH THE CITY CLERK: PASSED BY THE CITY COUNCIL: RESOLUTION NO.: Resolution No. 24- Page 3 of 2S Rev 1 /22 EXH I BIT A SK.I. South King Housing and Homelessness Partners TO: City of Auburn City Council City of Burien City Council City of Covington City Council City of Des Moines City Council City of Federal Way City Council FROM: SKHHP Executive Board Memorandum City of Kent City Council City of Normandy Park City Council City of Renton City Council City of Tukwila City Council DATE: January 17, 2024 RE: 2023 SKHHP Housing Capital Fund Recommendation OVERVIEW The 2023 SKHHP Housing Capital Fund was the second funding round made possible by pooling resources among SKHHP member jurisdictions. 2023 was the first year members pooled funds sourced from HB 1590, which led to quadrupling the amount of funding available over the previous year totaling $5,899,297. SKHHP received six applications for funding representing over $8.6 million in requests to develop or preserve 493 units of housing. The SKHHP Executive Board concurred with the majority of the SKHHP Advisory Board's recommendation and recommends funding four projects totaling $5,747,306 (see Table 1). Of this total, the Executive Board recommends using $777,306 of the total $928,812 sourced from SHB 1406 revenue contributions for one preservation project; and $4,970,000 sourced from HB 1590 revenue contributions for three new construction projects. This recommendation leaves a balance of $151,506 in SHB 1406 funds and $485 in HB 1590 funds in the Housing Capital Fund that will rollover into the next funding round in 2024 (see Tables 2 and 3). A summary of the recommended projects, funding rationale, and the conditions for funding are described in this memo. Included as an attachment are the economic summaries of the recommended projects. Table 1: Recommended Projects and Recommended Funding Level F roject l.a.[.�tion ft of PrOjo.ct typo M.0-tint Recommended Recommended Sponsor Unity requested Funding— 1590 Funding JA Mercy Kent 199 New Construction $1,000,000 $1,000,000 - Housing NW Rental LIHI Skyway 55 New Construction Rental TWG Kent 168 New Construction Rental Multi -Service Des Center Moines $2,800,000 $2,856,000 20 Preservation $500,000 Rental TOTAL 442 Resolution No. 24- (Page 4 of 25) $2,800,000 - $1,170,000 - $777,306 Table 2: Proposed HB 1590 Allocations by Jurisdiction for Recommended Projects Jutisdictiorr 1. MGrry Housing-#(MV y 3. TWG- Pai�rJisjn Total Contributed in 2023 Una Ibcated Covington $ 88,126 $ .246,752 $ 103,107 $ 438,028 $ 43 Kent $ 911,874 $ 2,553,248 $ 1,066,893 $ 4,532,457 $ 442 Total $ 1,000,000 $ 2,800,000 $ 1,170,000 $ 4,970,485 $ 485 Table 3: Proposed SHB 1406 Allocations by Jurisdiction for Recommended Projects sdiction rris�- Victorian Piace I:I o.,; 2WO, Carry-Over from Erna ps : a e, Auburn $ 137,595 $ 152,865 $ 11,548 $ 26,819 Burien $ 63,128 $ 69,897 $ 5,535 $ 12,304 Des Moines $ 30,261 $ 34,301 $ 1,858 $ 5,898 Federal Way $ 119,468 $ 133,558 $ 9,196 $ 23,286 Kent $ 188,422 $ 212,655 $ 12,493 $ 36,726 Normandy Park 1 $ 5,942 1 $ 6,992 1 $ 108 $ 1,158 Renton $ 217,088 $ 246,643 $ 12,758 $ 42,313 Tukwila $ 15,402 $ 17,233 $ 1,171 $ 3,002 ,ilml $ 777,306 $ 874,145 $ 54,667 $ 151,506 BACKGROUND The SKHHP Advisory Board met on October 5, 2023 and November 2, 2023 to review project applications and develop a funding recommendation for the SKHHP Executive Board's consideration. The SKHHP Executive Board met on October 20, 2023 and November 17, 2023 to review each project and consider the recommendations of the Advisory Board. The Advisory Board adopted its recommendation on November 2, 2023 and the Executive Board took final action on November 17, 2023. PROCESS Advisory Board recommendation (November 2, 2023) ATTACHMENTS Executive Board finalized recommendation (November 17, 2023 1. Economic summaires for recommended projects Resolution No. 24- (Page 5 of 25) Member Councils to approve funding recommendation (February -April 2024) 1. Mercy Housing NW - Kent Multicultural Village Funding request: $1,000,000 Executive Board recommendation: $1,000,000 (forgivable loan) Address: 23446 Pacific Highway South, Kent, WA 98032 PROJECT SUMMARY Kent Multicultural Village is a 199-unit multifamily rental project in Kent adjacent to the future Kent Des Moines Link light rail station. The light rail station is scheduled to open in 2026. The project will support households earning 30% area median income (AMI) to 80% AMI with a 20% set -aside (39 units) for households with an intellectual and/or developmental disability (I/DD). The I/DD units will benefit from on -site supportive services. A 30% set -aside (61 units) will be for families with children. The project includes studios, 1-bedrooms, 2-bedrooms, and three -bedroom units. The site is comprised of eight stories and will include a community center, a family resource center, and a licensed early learning facility with six classrooms to accommodate 96 infants and children with a focus on serving children with I/DD. The project was awarded the RFP by Sound Transit to be located on surplus land, but the terms of development are forthcoming, and the final project may be slightly different than described. 39 units are eligible for SKHHP funds sourced from HB 1590 revenue. The project is a partnership between Mercy Housing NW and Open Doors for Multicultural Families, who will provide support to the I/DD households and will relocate their headquarters to the property. Open Doors for Multicultural Families will also operate the Community Center which will include space for recreational activities and community -focused programming. Open Doors for Multicultural Families is a non-profit organization dedicated to meeting the needs of persons of color living with I/DD, especially immigrants and refugees. PROJECT SCHEDULE Activity Elate Site Control 2024—to be coordinated in Sound Transit negotiations Building Permits Issued 4/2025 Begin Construction 6/2025 Begin Lease Up 2/2027 Certificate of Occupancy Issued 6/2027 First LIHTC Year Start 6/2027 100% Lease Up 2/2028 FUNDING RATIONALE The Executive Board supports the intent of this application for the following reasons: • The project has a 20% set -aside for households with an I/DD. • The project serves a diverse range of incomes from 30% AMI to 80% AMI. • The project proposal is thorough, well planned, and has funding commitments already established. Resolution No. 24- (Page 6 of 25) The project is located adjacent to the future Kent Des Moines Link light rail station and has convenient access to transit, schools, medical clinics, grocery stores, and services. The project strongly aligns with SKHHP Housing Capital Fund adopted priorities including: being a transit -oriented development (TOD) project, collaboration with local community -based organizations, addressing the needs of populations most disproportionately impacted by housing costs, advancing economic opportunity due to its proximity to the future Link light rail station and other amenities, advancing geographic equity of the Housing Capital Fund, and the leverage of private and public investment. • Mercy Housing NW is a well -established nonprofit developer in the region. • A third -party construction report found the proposed budget to be appropriate. PROPOSED CONDITIONS Standard Conditions Contractor shall provide SKHHP with development and operating budgets based upon actual funding commitments for approval by SKHHP staff. Contractor must notify SKHHP staff immediately if it is unable to adhere to these budgets, and must submit new budget(s) to SKHHP staff for approval. SKHHP staff shall not unreasonably withhold its approval of these budget(s), so long as they do not materially or adversely change the Project. This shall be a continuing obligation of the Contractor. Contractor's failure to adhere to budgets (either original or new/amended) may result in SKHHP's withdrawal of its funding commitment. Contractor must prepare and submit final budgets to SKHHP at the time it starts project construction and at the project's completion. 2. Contractor shall submit to SKHHP evidence of funding commitments from all proposed public and private funding sources. If Contractor cannot secure an identified commitment within an application's time frame, Contractor shall immediately notify SKHHP staff and describe its anticipated actions and time frame for securing alternative funding. 3. Contractor shall use SKHHP provided funds toward specific project costs as included in the funding agreement and consistent with RCW 82.14.530. Contractor may not use SKHHP funds for any other purpose unless SKHHP staff authorizes such alternate use in writing. If budget line items with unexpended balances exist after completion of the project, SKHHP and other public funders shall approve adjustments to the project capital sources (including potential reductions in public fund loan balances). 4. Contractor shall evaluate and consider maximizing sustainability features for the Project (such as an efficient building envelope and heat pumps) and shall propose a plan to maximize the Project's sustainability. 5. If Contractor uses federal funds toward the Project, it must meet applicable federal guidelines, including but not limited to: contractor solicitation; bidding and selection; wage rates; and federal laws and regulations. Resolution No. 24-_ (Page 7 of25) 6. Contractor shall maintain documentation of any necessary land use approvals, permits, and licenses required by the jurisdiction in which the project is located. 7. Quarterly Status Reports. Contractor is required to provide SKHHP with quarterly status reports for projects funded through SKHHP's Housing Capital Fund during the project's development stage (from the time funds are awarded until the project's completion and occupancy). These quarterly reports must include at a minimum the status of funds expended and progress to date. SKHHP will rely on these quarterly reports to determine whether Contractor is making satisfactory progress on the project. Contractor shall submit a final budget to SKHHP upon project completion. If applicable, Contractor shall submit initial tenant information as required by SKHHP. 8. SKHHP will inspect the project site at least once during the project's construction. 9. Ongoing Monitoring. After occupancy, Contractor will submit annual reports to SKHHP summarizing the number of project beneficiaries, housing expenses for the target population, and the proportion of those beneficiaries that are low- and/or moderate - income and that meet other eligibility criteria established in the Contract. In addition, for projects with loan payments, Contractor must annually report financial information to SKHHP that it will use to assess contingent loan payments and project health. These annual reports will be required for the full duration of affordability. SKHHP will also periodically evaluate all projects for long term sustainability. 10. For rental projects, Contractor shall maintain the project in good and habitable condition for the duration of its affordability term. 11. SKHHP shall reimburse the Contractor for satisfactory completion of the requirements specified in the Contract and upon Contractor's submission to SKHHP of invoices and supporting documentation of eligible expenses. 12. A covenant is recorded ensuring affordability for at least 50 years, with unit size, number of units, and affordability distribution established prior to executing Contract. Special Conditions 1. SKHHP will provide project funds to the Contractor in the form of a deferred, contingent, forgivable loan. Loan terms will account for various factors, including loan terms from other fund sources and available cash flow. Final loan terms shall be determined prior to release of funds and must be approved by SKHHP staff. The loan will be secured by a deed of trust recorded against the development property to ensure that Contractor maintains the project's affordability and target population. Contractor shall not be required to repay the loan so long as it maintains these project requirements. 2. Timeframe for funding commitment. The funding commitment continues for thirty-six (36) months from the date of Council approval and shall expire thereafter if all conditions are not satisfied. An extension may be requested to SKHHP staff no later than sixty (60) days prior to the expiration date. At that time, the Agency will provide a Resolution No. 24- (Page 8 of 25) status report on progress to date and expected schedule for start of construction and project completion. The SKHHP Executive Board will consider a twelve-month extension only on the basis of documented, meaningful progress in bringing the project to readiness or completion. At a minimum, the Contractor will demonstrate that all capital funding has been secured or is likely to be secured within a reasonable period of time. 3. At least 39 of the housing units shall be set -aside for households with an I/DD who earn no more than 60% AMI. Use of funds and population eligibility must be in -alignment with RCW 82.14.530. 4. SKHHP funds shall be used solely for new construction, unless otherwise approved by SKHHP staff. 5. Receipt of the documentation of remediation results and Department of Ecology approval of remediation efforts shall be submitted to SKHHP prior to proceeding with construction. Resolution No. 24-_ (Page 9 of 25) 2. Low Income Housing Institute (LIHI) - Skyway Affordable Housing and Early Learning Center Funding request: $2,800,000 Executive Board recommendation: $2,800,000 (forgivable loan) Address: 12712-12724 & 12742 Renton Ave. South, Seattle, WA 98178 PROJECT SUMMARY Skyway Affordable Housing and Early Learning Center is a multifamily rental project in Unincorporated King County. The project will provide 55 housing units for individuals and families, including 12 studios, 19 one -bedroom, 13 two -bedroom, and 11 three -bedroom units for households earning between 30% and 50% AMI with a 75% set -aside (42 units) for households transitioning out of homelessness. An early learning center will be located on the ground floor of the building, featuring four classrooms to accommodate up to 80 children, a parent resource room, and offices. The surrounding community will be prioritized in the early learning center activities. Additional amenities include a community room, case manager offices, and a roof deck for resident use. LIHI will provide on -site case management. This project has been previously awarded predevelopment and acquisition funds from King County. The project will serve individuals (25 units) and families (17 units) exiting homelessness earning 30% AMI (42 total units) and will support general population households earning up to 50% AMI (12 units). A common room will support all residents (1 unit). 42 units are eligible for SKHHP funds sourced from HB 1590 revenue. Childhaven, a nonprofit dedicated to strengthening families and preventing childhood trauma, plans to lease the early learning center and relocate their program to the site and will assist in applying for local funding for this portion of the project. The early learning center will be financed separately from the residential space, without using tax credits on the commercial space. PROJECT SCHEDULE A*ity am Site Control 1/30/2023 Building Permits Issued 1/23/2025 Begin Construction 6/1/2025 Begin Lease Up 9/15/2026 Certificate of Occupancy Issued 10/15/2026 FUNDING RATIONALE The Executive Board supports the intent of this application for the following reasons: ■ The project has a 75% set -aside for households transitioning out of homelessness. • The project brings quality, affordable housing to a historically underserved neighborhood. ■ The project will house Childhaven on -site to run an early learning center. • The project is located near schools, a library, and a future community center. ■ The project strongly aligns with SKHHP Housing Capital Fund adopted priorities including: collaboration with local community -based organizations, addressing the needs of populations Resolution No. 24- (Page 10 of 25) most disproportionately impacted by housing costs, advancing geographic equity of the Housing Capital Fund, leverage of private and public investment, and promoting racial equity by prioritizing residents with a connection to the neighborhood. ■ The project will prioritize residents with a connection to the neighborhood. ■ LIHI is an established developer in the region. • A third -party construction report found the proposed budget to be appropriate. PROPOSED CONDITIONS Standard Conditions 1. Contractor shall provide SKHHP with development and operating budgets based upon actual funding commitments for approval by SKHHP staff. Contractor must notify SKHHP staff immediately if it is unable to adhere to these budgets, and must submit new budget(s) to SKHHP staff for approval. SKHHP staff shall not unreasonably withhold its approval of these budget(s), so long as they do not materially or adversely change the Project. This shall be a continuing obligation of the Contractor. Contractor's failure to adhere to budgets (either original or new/amended) may result in SKHHP's withdrawal of its funding commitment. Contractor must prepare and submit final budgets to SKHHP at the time it starts project construction and at the project's completion. 2. Contractor shall submit to SKHHP evidence of funding commitments from all proposed public and private funding sources. If Contractor cannot secure an identified commitment within an application's time frame, Contractor shall immediately notify SKHHP staff and describe its anticipated actions and time frame for securing alternative funding. 3. Contractor shall use SKHHP provided funds toward specific project costs as included in the funding agreement and consistent with RCW 82.14.530. Contractor may not use SKHHP funds for any other purpose unless SKHHP staff authorizes such alternate use in writing. If budget line items with unexpended balances exist after completion of the project, SKHHP and other public funders shall approve adjustments to the project capital sources (including potential reductions in public fund loan balances). 4. Contractor shall evaluate and consider maximizing sustainability features for the Project (such as an efficient building envelope and heat pumps) and shall propose a plan to maximize the Project's sustainability. 5. If Contractor uses federal funds toward the Project, it must meet applicable federal guidelines, including but not limited to: contractor solicitation; bidding and selection; wage rates; and federal laws and regulations. 6. Contractor shall maintain documentation of any necessary land use approvals, permits, and licenses required by the jurisdiction in which the project is located. 7. Quarterly Status Reports. Contractor is required to provide SKHHP with quarterly status reports for projects funded through SKHHP's Housing Capital Fund during the project's Resolution No. 24-_ (Page I of 25) development stage (from the time funds are awarded until the project's completion and occupancy). These quarterly reports must include at a minimum the status of funds expended and progress to date. SKHHP will rely on these quarterly reports to determine whether Contractor is making satisfactory progress on the project. Contractor shall submit a final budget to SKHHP upon project completion. If applicable, Contractor shall submit initial tenant information as required by SKHHP. 8. SKHHP will inspect the project site at least once during the project's construction. 9. Ongoing Monitoring. After occupancy, Contractor will submit annual reports to SKHHP summarizing the number of project beneficiaries, housing expenses for the target population, and the proportion of those beneficiaries that are low- and/or moderate - income and that meet other eligibility criteria established in the Contract. In addition, for projects with loan payments, Contractor must annually report financial information to SKHHP that it will use to assess contingent loan payments and project health. These annual reports will be required for the full duration of affordability. SKHHP will also periodically evaluate all projects for long term sustainability. 10. For rental projects, Contractor shall maintain the project in good and habitable condition for the duration of its affordability term. 11. SKHHP shall reimburse the Contractor for satisfactory completion of the requirements specified in the Contract and upon Contractor's submission to SKHHP of invoices and supporting documentation of eligible expenses. 12. A covenant is recorded ensuring affordability for at least 50 years, with unit size, number of units, and affordability distribution established prior to executing Contract. Special Conditions SKHHP will provide project funds to the Contractor in the form of a deferred, contingent, forgivable loan. Loan terms will account for various factors, including loan terms from other fund sources and available cash flow. Final loan terms shall be determined prior to release of funds and must be approved by SKHHP staff. The loan will be secured by a deed of trust recorded against the development property to ensure that Contractor maintains the project's affordability and target population. Contractor shall not be required to repay the loan so long as it maintains these project requirements. Timeframe for funding commitment. The funding commitment continues for thirty-six (36) months from the date of Council approval and shall expire thereafter if all conditions are not satisfied. An extension may be requested to SKHHP staff no later than sixty (60) days prior to the expiration date. At that time, the Agency will provide a status report on progress to date and expected schedule for start of construction and project completion. The SKHHP Executive Board will consider a twelve-month extension only on the basis of documented, meaningful progress in bringing the project to readiness or completion. At a minimum, the Contractor will demonstrate that all capital funding has been secured or is likely to be secured within a reasonable period of time. Resolution No. 24- (Page 12 of25) 3. At least 75% of the housing units shall be set -aside for households transitioning out of homelessness and be for an eligible population defined in RCW 82.14.530 and who earn no more than 60% AML 4. SKHHP funds shall be used solely for new construction, unless otherwise approved by SKHHP staff. 5. LIHI shall reexamine the guest policy allowing only one guest at a time to determine if it is necessary. Resolution No. 24-_ (Page 13 of 25) 3. TWG — Pandion at Star Lake Funding request: $2,856,000 Executive Board recommendation: $1,170,000 (loan) Address: 2526 S 272nd Street, Kent, WA 98059 PROJECT SUMMARY The South Building (building one of two) of Pandion at Star Lake is a multifamily rental, mixed use project consisting of 168 affordable housing units for households earning between 30% and 60% AMI in Kent. The project is located adjacent to the Kent/Star Lake Link light rail station. This transit -oriented development (TOD) project will provide a mix of studio, one, two and three -bedroom units. The project will include ground floor commercial space consisting of an early learning center for low-income children and other non-profit tenants. The property was purchased by the developer in December 2022. The project is a seven -story building with six stories of affordable housing over one story of commercial space, plus basement level parking. The 168 units includes 109 units for the general population, 30 units for families with children, 25 units for families with children that require permanent supportive services and who are transitioning out of homelessness or are at -risk of homelessness, and 4 units supporting households with an intellectual and/or developmental disability (I/DD) requiring supportive services. Pandion at Star Lake is a partnership between TWG Development and Vision House, with Vision House providing on -site supportive serves for 140 units or those receiving 4% LIHTC support. In collaboration with the City of Kent, an additional service provider will be selected to serve residents of the remaining 28 units or those receiving 9% LIHTC support. 29 units of the project are eligible for HB 1590 funds which includes 25 units for families with children transitioning out of homelessness or are at -risk of homelessness and require permanent supportive services and the four units set -aside for I/DD households. PROJECT SCHEDULE Activity Site Control 12/6/2022 Building Permits Issued 10/1/2025 Begin Construction 12/31/2025 Certificate of Occupancy Issued 12/31/2027 Placed in service 1/1/2028 First LIHTC Year 2028 FUNDING RATIONALE The Executive Board supports the intent of this application for the following reasons: ■ The project is located adjacent to the future Kent/Star Lake Link light rail station and has convenient access to transit, schools, grocery stores, and services. Resolution No. 24-_ (Page 14 of 25) • The project strongly aligns with SKHHP Housing Capital Fund adopted priorities including: being a transit -oriented development (TOD) project, collaboration with local community -based organizations, addressing the needs of populations most disproportionately impacted by housing costs, advancing economic opportunity due to its proximity to the future Link light rail station and other amenities, advancing geographic equity of the Housing Capital Fund, and the leverage of private and public investment. • The project construction start date is anticipated by early 2026, six months later than other recommended projects. The sponsor may have more time to secure the additional funds than other projects prior to beginning construction. • The project has a strong partnership with Vision House who will provide on -site supportive services for 140 households. • A second building supporting 173 units for seniors earning 80% to 100% AMI is part of the overall project, but is not part of the application to public funders. The overall project supports mixed -income housing from 30% AMI-100% AMI. ■ The project sponsor has been in close communication with the City of Kent on project feasibility and zoning requirements since the property was purchased in December 2022. • The project sponsor has agreed to voluntarily meet the design standards for properties zoned as 'Midway Transit Community,' which is a higher degree of development than what is required under general mixed -use commercial standards for the City of Kent. • A third -party construction report found the proposed budget to be appropriate. PROPOSED CONDITIONS Standard Conditions 1. Contractor shall provide SKHHP with development and operating budgets based upon actual funding commitments for approval by SKHHP staff. Contractor must notify SKHHP staff immediately if it is unable to adhere to these budgets, and must submit new budget(s) to SKHHP staff for approval. SKHHP staff shall not unreasonably withhold its approval of these budget(s), so long as they do not materially or adversely change the Project. This shall be a continuing obligation of the Contractor. Contractor's failure to adhere to budgets (either original or new/amended) may result in SKHHP's withdrawal of its funding commitment. Contractor must prepare and submit final budgets to SKHHP at the time it starts project construction and at the project's completion. Contractor shall submit to SKHHP evidence of funding commitments from all proposed public and private funding sources. If Contractor cannot secure an identified commitment within an application's time frame, Contractor shall immediately notify SKHHP staff and describe its anticipated actions and time frame for securing alternative funding. 3. Contractor shall use SKHHP provided funds toward specific project costs as included in the funding agreement and consistent with RCW 82.14.530. Contractor may not use SKHHP funds for any other purpose unless SKHHP staff authorizes such alternate use in writing. If budget line items with unexpended balances exist after completion of the Resolution No. 24-_ (Page 15 of 25) project, SKHHP and other public funders shall approve adjustments to the project capital sources (including potential reductions in public fund loan balances). 4. Contractor shall evaluate and consider maximizing sustainability features for the Project (such as an efficient building envelope and heat pumps) and shall propose a plan to maximize the Project's sustainability. 5. If Contractor uses federal funds toward the Project, it must meet applicable federal guidelines, including but not limited to: contractor solicitation; bidding and selection; wage rates; and federal laws and regulations. 6. Contractor shall maintain documentation of any necessary land use approvals, permits, and licenses required by the jurisdiction in which the project is located. 7. Quarterly Status Reports. Contractor is required to provide SKHHP with quarterly status reports for projects funded through SKHHP's Housing Capital Fund during the project's development stage (from the time funds are awarded until the project's completion and occupancy). These quarterly reports must include at a minimum the status of funds expended and progress to date. SKHHP will rely on these quarterly reports to determine whether Contractor is making satisfactory progress on the project. Contractor shall submit a final budget to SKHHP upon project completion. If applicable, Contractor shall submit initial tenant information as required by SKHHP. 8. SKHHP will inspect the project site at least once during the project's construction. 9. Ongoing Monitoring. After occupancy, Contractor will submit annual reports to SKHHP summarizing the number of project beneficiaries, housing expenses for the target population, and the proportion of those beneficiaries that are low- and/or moderate - income and that meet other eligibility criteria established in the Contract. In addition, for projects with loan payments, Contractor must annually report financial information to SKHHP that it will use to assess contingent loan payments and project health. These annual reports will be required for the full duration of affordability. SKHHP will also periodically evaluate all projects for long term sustainability. 10. For rental projects, Contractor shall maintain the project in good and habitable condition for the duration of its affordability term. 11. SKHHP shall reimburse the Contractor for satisfactory completion of the requirements specified in the Contract and upon Contractor's submission to SKHHP of invoices and supporting documentation of eligible expenses. 12. A covenant is recorded ensuring affordability for at least 50 years, with unit size, number of units, and affordability distribution established prior to executing Contract. Special Conditions 1. SKHHP will provide project funds to the Contractor in the form of a deferred, 1% interest, non -forgivable loan to the LIHTC partnership. The form of the funds are subject to change, but shall be agreed upon prior to contract execution. Loan terms will Resolution No. 24- (Page 16 of 25) account for various factors, including loan terms from other fund sources and available cash flow. Final loan terms shall be determined prior to release of funds and must be approved by SKHHP staff. The loan will be secured by a deed of trust recorded against the development property to ensure that Contractor maintains the project's affordability and target population. 2. Timeframe for funding commitment. The funding commitment continues for thirty-six (36) months from the date of Council approval and shall expire thereafter if all conditions are not satisfied. An extension may be requested to SKHHP staff no later than sixty (60) days prior to the expiration date. At that time, the Agency will provide a status report on progress to date and expected schedule for start of construction and project completion. The SKHHP Executive Board will consider a twelve-month extension only on the basis of documented, meaningful progress in bringing the project to readiness or completion. At a minimum, the Contractor will demonstrate that all capital funding has been secured or is likely to be secured within a reasonable period of time. 3. At least 29 housing units of the total shall be for an eligible population defined in RCW 82.14.530 including households transitioning out of homelessness or are at -risk of homelessness or households with an I/DD and who also earn no more than 60% AMI. 4. SKHHP funds shall be used solely for new construction of the South Building, unless otherwise approved by SKHHP staff. Resolution No. 24- (Page 17 of 25) 4. Multi -Service Center -Victorian Place II Funding request: $500,000 Executive Board recommendation: $777,306 (grant) Address: 24517 26th Place South, Des Moines, WA 98198 PROJECT SUMMARY Victorian Place II is a multifamily, preservation 20-unit rental project in Des Moines. Since 1996, the nonprofit Multi -Service Center has owned the two adjacent buildings that comprise the project which includes five units for households earning up to 35% AMI, ten units for households up to 40% AMI, and five units for households up to 50% AMI. The 20 three bedroom/two bath affordable rental units are in active use and the target population is families with children. The original request was for $500,000 in the form of a grant. Initial estimates were based on a 2018 construction estimate. An updated cost estimate of the project received on October 25, 2023 totaled $675,918. The Advisory Board recommended fully funding the project at the revised amount, however, after the recommendation was made, it was discovered that the revised estimate did not include contingency funding. The Executive Board recommend funding the project with a 15% contingency which totals $777,306. SKHHP funds are requested to support the rehabilitation of the two buildings including: landscape improvements, staircase repairs, installation of new railings, seal coating the parking lot, upgrading external lighting, recoating tenant decks, installation of new siding, replacing gutters and downspouts, replacing windows, replacing sliding glass doors, replacing unit entry doors, and replacing baseboard heating with energy -efficient heating systems. PROJECT SCHEDULE Activity IDtte Site Control 1/1/2000 Building Permit Issued Mid-2024 Begin Rehabilitation and Renovation Mid -late 2024 End Rehabilitation and Renovation Mid -late 2025 FUNDING RATIONALE The Advisory Board supports the intent of this application for the following reasons: • There are limited funding sources available for preservation and rehabilitation. The focus for larger public funders has historically been on creating new units of affordable housing. Smaller preservation projects like this one are not as competitive against larger preservation projects competing for the same funds. ■ The property is in need of rehabilitation to support the health and safety of residents which are families with children. • Preservation of affordable housing is a high -priority for SKHHP. • 75% of the households earn no more than 40% AMI. Resolution No. 24-_ (Page 18 of 25) • The project's proximity to the future Kent Des Moines Link light rail station an asset (1.3 miles). • Multi -Service Center is a well -established South King County -based nonprofit that owns and operates over 650 units of affordable housing. • Multi -Service Center's housing programs have a history of serving BIPOC community members with 72% of clients self -identifying as BIPOC. • The project strongly aligns with SKHHP Housing Capital Fund adopted priorities including: the project sponsor's community connection and engagement with the populations they intend to serve, advancing racial equity, addressing the needs of populations most disproportionately impacted by housing costs, advancing geographic equity of the Housing Capital Fund, and preservation. ■ Of.the two applications submitted by the project sponsor, this project is the higher of the two priorities as the larger housing units are more difficult for families in need to access, and the current safety concerns at the project site are more immediate. PROPOSED CONDITIONS Standard Conditions 1. Contractor shall provide SKHHP with development and operating budgets based upon actual funding commitments for approval by SKHHP staff. Contractor must notify SKHHP staff immediately if it is unable to adhere to these budgets, and must submit new budget(s) to SKHHP staff for approval. SKHHP staff shall not unreasonably withhold its approval of these budget(s), so long as they do not materially or adversely change the Project. This shall be a continuing obligation of the Contractor. Contractor's failure to adhere to budgets (either original or new/amended) may result in SKHHP's withdrawal of its funding commitment. Contractor must prepare and submit final budgets to SKHHP at the time it starts project rehabilitation and at the project's completion. 2. Contractor shall submit to SKHHP evidence of funding commitments from all proposed public and private funding sources. If Contractor cannot secure an identified commitment within an application's time frame, Contractor shall immediately notify SKHHP staff and describe its anticipated actions and time frame for securing alternative funding. Contractor shall use SKHHP provided funds toward specific project costs as included in the funding agreement and consistent with RCW 82.14.540. Contractor may not use SKHHP funds for any other purpose unless SKHHP staff authorizes such alternate use in writing. If budget line items with unexpended balances exist after completion of the project, SKHHP shall approve adjustments to the project capital sources (including potential reductions in public fund loan balances). 4. Contractor shall evaluate and consider maximizing sustainability features for the Project (such as an efficient building envelope and heat pumps) and shall propose a plan to maximize the Project's sustainability. Resolution No. 24- (Page 19 of 25) 5. If Contractor uses federal funds toward the Project, it must meet applicable federal guidelines, including but not limited to: contractor solicitation; bidding and selection; wage rates; and federal laws and regulations. 6. Contractor shall maintain documentation of any necessary land use approvals, permits, and licenses required by the jurisdiction in which the project is located. Quarterly Status Reports. Contractor is required to provide SKHHP with quarterly status reports for projects funded through SKHHP's Housing Capital Fund during the project's development stage (from the time funds are awarded until the project's completion). These quarterly reports must include at a minimum the status of funds expended and progress to date. SKHHP will rely on these quarterly reports to determine whether Contractor is making satisfactory progress on the project. Contractor shall submit a final budget to SKHHP upon project completion. If applicable, Contractor shall submit initial tenant information as required by SKHHP. 8. SKHHP will inspect the project site at least once during the project's rehabilitation. 9. Ongoing Monitoring. After occupancy, Contractor will submit annual reports to SKHHP summarizing the number of project beneficiaries, housing expenses for the target population, and the proportion of those beneficiaries that are low- and/or moderate- income and that meet other eligibility criteria established in the Contract. In addition, for projects with loan payments, Contractor must annually report financial information to SKHHP that it will use to assess contingent loan payments and project health. These annual reports will be required for the full duration of affordability. SKHHP will also periodically evaluate all projects for long term sustainability. 10. For rental projects, Contractor shall maintain the project in good and habitable condition for the duration of its affordability term. 11. SKHHP shall reimburse the Contractor for satisfactory completion of the requirements specified in the Contract and upon Contractor's submission to SKHHP of invoices and supporting documentation of eligible expenses. 12. A covenant is recorded ensuring affordability for at least 50 years, with unit size, number of units, and affordability distribution established prior to executing Contract. Special Conditions 1. SKHHP will provide project funds to the Contractor in the form of a secured grant with no repayment. Final Contract terms shall be determined prior to release of funds and must be approved by SKHHP staff. The grant will be secured by a deed of trust recorded against the property to ensure that Contractor maintains the project's affordability and target population. Contractor shall not be required to repay the grant so long as it maintains these project requirements. 2. Timeframe for funding commitment. The funding commitment continues for thirty-six (36) months from the date of Council approval and shall expire thereafter if all Resolution No. 24- (Page 20 of 25) conditions are not satisfied. An extension may be requested to SKHHP staff no later than sixty (60) days prior to the expiration date. At that time, the Agency will provide a status report on progress to date and expected schedule for start of construction and project completion. The SKHHP Executive Board will consider a twelve-month extension only on the basis of documented, meaningful progress in bringing the project to readiness or completion. At a minimum, the Contractor will demonstrate that all capital funding has been secured or is likely to be secured within a reasonable period of time. 3. SKHHP funds shall be used solely for the rehabilitation of the property to include, but not be limited to, the following, unless otherwise approved by SKHHP staff: a. landscape improvements b. staircase repairs c. installation of new railings d. seal coating the parking lot e. upgrading external lighting f. recoating tenant decks g. installation of new siding h. applying exterior paint i. replacing gutters and downspouts j. replacing windows k. replacing sliding glass doors I. replacing unit entry doors m. replacing baseboard heating with energy -efficient heating systems 4. SKHHP and Contractor shall agree to the specifics on what will be funded prior to executing a contract to ensure eligibility of expenses in alignment with RCW 82.14.540 and to mitigate cost -overruns. 5. Five housing units shall serve households earning up to 35% AMI, ten units for households up to 40% AMI, and five units for households up to 50% AMI for the duration of the term of affordability. 6. Should cost overruns occur that require funds above SKHHP's contribution, sponsor will work towards filling the funding need through their capital budget process or seeking funds through other sources. Resolution No. 24- (Page 21 of 25) ATTACHMENT 1: Economic Summaries of Recommended Projects Project: Mercy Housing NW — Kent Multicultural Village Proposed Funding Sources by Amounts and Status Funding - Proposed A-WIVM- 5t:11tWS SKHHP $1,000,000 Applied 4% LIHTC Equity $48,849,278 Applied King County (2022) $5,000,000 Committed GP Equity $1,000 Self -funded [ Permanent Loan $23,500,000 Applied State HTF $8,000,000 Awarded Deferred Fee $4,850,000 Self -funded Amazon Grant $2,000,000 Applied Amazon Loan $11,369,574 Applied Private: Non -Residential $7,841,869 Will Apply State: Non -Residential $1.0,735,000 Will Apply Federal: Non -Residential $2,552,000 Will Apply County: Non -Residential $3,150,000 Will Apply Debt: Non -Residential $5,474,735 Will Apply TOTAL $134,323,456 Proposed Use of Funds and Total Residential Cost Per Unit Proposed use +�Wtt (Pe_t RI' dit Land acquisition $384,504 Construction costs $98,698,553 - Soft costs $12,761,870 Development costs $8,372,636 Other development costs $4,002,261 -- Community facility $9,402,356 4% bond issuance 5701,276 TOTAL. $134,323,456 TOTAL $29, 753, 604 TOTAL RESIDENTIAL (Includes common areas) $104,569,852 $525,476 Residential Cost Per Square Foot Ifs AIM NRtit Residential square footage 246,019 Residential development cost $104,569,852 Cost per square foot $425.05 Residential Cost Per Unit Based on Unit Size Qm* Number of LU VM$quare Footage Cost per UOR Average Studio 54 392 $166,619 Average 1-bedroom 40 484 $205,724 Average 2-bedroom 65 710 $301,785 Average 3-bedroom 40 982 $4171399 Common area and other residential spaces, including parking 85,700 $36,426,785 Resolution No. 24- (Page 22 of 25) Project: LIHI — Skyway Affordable Housing and Early Learning Center Proposed Funding Sources by Amounts and Status Funding source Proposed Amount Status SKHHP $2,800,000 Applied State HTF 57,465,748 Will apply in fall 2024 King County 2023 $2,500,000 Awarded $2.1M 9% LIHTC 513,080,144 Will apply in fall 2024 King County 2022 (ere -development funds) $2,500,000 Received Direct Appropriations -Federal $700,000 Received Direct Appropriations -State $3,000,000 Received Wyncote Foundation $1,000,000 Received PSTAA $300,000 Received TA4 $36,295,892 Proposed Use of Funds and Totat Residential Cost Per Unit Propqsed:wo Cost perI"niit Land acquisition $2,041,000 — Construction costs $26;761,254 - Soft costs $4,624,073 - Development costs $1,737,565 Other development costs $1.,132,000 WAL $36,295,892 V*TAt INGWRESIDIBMIAL $3, 250,000 TOM RESIDENTIAL (Includes common areas) $33,045,892 $60Q,A34 Residential Cost Per 5auare Foot _ Item Amount Residential square footage 50,608 Residential development cost $33,045,892 Cost per square foot $652.97 Residential Cost Per Unit Based on Unit Size Unit Size PV ,,, bW#fU �iN Unit Square Footage o .ntu_= Average studio square footage 12 400 $261,188 Average 1-bedroom square footage 19 516 $336,932 Average 2-bedroom square footage 13 816 $532,823 Average 3-bedroom square footage 11 900 587,673 Common area and other residential spaces, including parking -- 12,121 $7,914,649 Resolution No. 24- (Page 23 of 25) Project: TWG — Pandion at Star Lake Proposed Fundinr~ Sources by Arnounts and Status Funding source Proposed Amount Status SKHHP $2,856,000 Applied LIHTC & Energy Credits $31,023,163 Applied Amazon $22,000,000 Applied Permanent Loan $15,340,000 Applied State HTF $4,218,915 Applied -Not awarded in 2023 King County $4,500,000 Applied -Not awarded in 2023 Deferred Development Fee $2,355,370 Self -funded Non -Residential Commercial $4,856.,260 TOTAL $87,149,708 Proposed Use of Funds and Total _Res_identia_1_Cost _Per Unit Proposed use Amount Per Unit Land acquisition $3,435,523 - Construction costs $63,626,629 Soft costs $9,689,519 -- Development costs $6,902,268 Other Development costs $3,154,594 - 4% Bond Issuance $341,175 - TO �_ $87,149,708 — TOTAL NUN-REsibEN'I`IAL $4,856,260 TOTA RESIDENTIAL [Includes common areas) $82,293,448 $48%8.41 Residential Cost Per Souare Foot item Amount Residential square footage 180,197 Residential development cost $82,293,448 Cost per square foot $456.68 Residential Cost Per Unit Based on Unit Size Unit Size Number of Units Unit Square Footage Cost per Unit Average Studio 30 381 $173,995 Average 1-bedroom 78 615 $280,858 Average 2-bedroom 24 950 $433,846 Average 3-bedroom 36 1,0.95 $500,064 Common area and other residential spaces, including parking -- 59,772 $27,296,676 Resolution No. 24- (Page 24 of 25) Project: Multi -Service Center - Victorian Place II Proposed Funding Sources by Amounts and Status FundingFunctingawm Proposed 0.01 a; t"s SKHHP $777,306 Applied Multi -Service Center $7,819- Self -Funded TOTAL $.785,12 5 Proposed Use of Funds and Total Residential Cost Per Unit Proposed we krcur}t i' Title document recording fees $5,000 $250 Rehabilitation costs $780,125 $39,006 TOTAL 5785,125 539,256 Resolution No. 24- (Page 25 of 25) 1(# COUNCIL MEETING DATE: April 2024 ITEM #: 7k CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL SUBJECT: INTERNET CRIMES AGAINST CHILDREN ("ICAO") MEMORANDUM OF UNDERSTANDING BETWEEN SEATTLE POLICE DEPARTMENT (SPD) AND FWPD. POLICY QUESTION: Should the City of Federal Way / Federal Way Police Department enter into a Memorandum of Understanding with the City of Seattle Police Department to accept up to $10,000 in funding for participation in the ICAC Task Force? COMMITTEE: PRHS&PSC MEETING DATE: April 9, 2024 CATEGORY: ® Consent ❑ Ordinance ❑ Public Hearing ❑ City Council Business ❑ Resolution ❑ Other STAFF REPORT BY: Commander Thad Hodge DEPT: PD Attachments: 1. Staff Report 2. Seattle Police Memorandum of Understanding Options Considered: 1. Approve the proposed Memorandum of Understanding. 2. Do not approve the proposed Memorandum of Understanding and provide direction to staff. MAYOR'S RECOMMENDATION: Option 1. MAYOR APPROVAL: 3 5 S DIRECTOR APPROVAL: 3 �slaf/ omi ltcef . .... �Counag Initial ate CO ami �L, _9, 2024 61%"'OMMENDATION: I move to forward the proposed Memorandum of Understanding to the April agenda far approval. Committee Chair Committee Member Committee Member PROPOSED COUNCIL MOTION: I move to approval of the proposed Memorandum of Understanding and authorize the Chief of Police to execute said MOU. BELOW TO BE COMPLETED BY CITY CLERK'S OFFICE COUNCIL ACTION: ❑ APPROVED COUNCIL BILL # ❑ DENIED First reading ❑ TABLED/DEFERRED/NO ACTION Enactment reading ❑ MOVED TO SECOND READING (ordinances only) ORDINANCE # REVISED — 11/2019 RESOLUTION # CITY OF FEDERAL WAY MEMORANDUM DATE: March 13, 2024 TO: City Council Members VIA: Jim Ferrell, Mayor FROM: Andy J. Hwang, Chief of Police SUBJECT: Internet Crimes Against Children (ICAC) Memorandum of Understanding Between Seattle Police Department and Federal Way Police Department Financial Impacts: The Federal Way Police Department (FWPD) does not incur any cost to enter into this agreement with the City of Seattle Police Department (SPD). The agreement allows FWPD to receive up to $10,000 for costs of travel/training, equipment, and supplies necessary for participating in the Internet Crimes Against Children (ICAC) Task Force, administered by the Seattle Police Department. Background Information: FWPD is part of the regional Internet Crimes Against Children (ICAC) Task Force, which investigates crimes involving sensitive material as part of the National ICAC Task Force Program. This regional ICAC task force is maintained by an Interlocal Agreement (AG22-130), for which the Seattle Police Department is the lead agency. This MOU between the Federal Way Police Department and the Seattle Police Department will allow FWPD to receive up to a maximum of $10,000 for the costs of travel/training, equipment, and supplies for conducting and participating in ICAC investigations. The source of the funds provided under this MOU is a federal grant award. Rev. 7/18 MEMORANDUM OF UNDERSTANDING s�dlW City of Federal Way Feder 4� al Way Police Department 33325 8tn Ave S Federal Way, WA 98003 THIS AGREEMENT is made and entered into by and between the City of Seattle Police Department, hereinafter referred to as "SPD" and the City of Federal Way Police Department, hereinafter referred to as "FWPD". WHEREAS, The Seattle Police Department is the Lead Agency for Washington State's Internet Crimes Against Children (ICAC) Task Force; WHEREAS, FWPD, is a member of the ICAC Task Force and requires funding to support its investigation and prosecution of ICAC crimes; WHEREAS, The Seattle Police Department receives funding to support investigation and prosecution of ICAC crimes and wishes to share this funding with Task Force Members to further the mission of the Task Force; NOW, THEREFORE, in consideration of the terms, conditions, covenants, and performance of the scope of work contained herein, or as attached and made a part hereof, the parties hereto agree as follows: IT IS THEREFORE MUTUALLY AGREED THAT: This agreement is to support FWPD's ICAC overtime, travel/training, equipment, and software necessary for ICAC investigations. In the event the MOU requires a change in scope or an increase in cost beyond the amount agreed to, the SPD and FWPD shall agree to any such changes in writing prior to the commencement of Services requiring the change in the scope or cost increase. TERM OF AGREEMENT This Agreement shall begin January 1, 2024, and terminates September 30, 2024. This agreement may be modified and continued, by amendment, for work beyond this date, by mutual agreement of the parties. PAYMENT SPD will FWPD for work covered in the Scope of Work for actual costs incurred by FWPD. The funding limit shall not exceed $10,000 and shall reflect the Parties' best estimate of the cost of work to be accomplished under this Agreement. SPD shall not be obligated for any expenditure in excess of the funding limit unless prior written authorization is received. Actual amounts reimbursed under this Agreement shall be based on actual costs incurred by FWPD. In no event, shall any Party be paid for costs that are not documented pursuant to the requirements of this Agreement. SPD will pay FWPD pursuant to the following provisions, unless otherwise agreed in writing: 1. FWPD shall submit to SPD an invoice for Services performed no later than thirty (30) calendar days following the month in which the Services were performed. Invoice shall include a summary of total costs billed to date. Any request for payment for work performed prior to the issuance of a notice to begin work, or work billed later than ninety (90) calendar days after its completion shall not be eligible for payment. 24-00422 Page 1 of 3 2. Unless otherwise directed, Federal Way Police Department shall submit invoices and appropriate supporting materials to: Seattle Police Department Attn: Fiscal Office PO Box 34986 Seattle, WA 98124-4986 s da seattle. ov 3. FWPD agrees to submit a final bill to SPD within thirty (30) calendar days after the end date of this Contract, and will label the invoice "FINAL BILL." ,+. ruiwitiU ouwmC. FEDERAL AWARD INFORMATION GRANT AWARD TITLE: 16.543 - Guidance for Invited Applications for Internet Crimes Against Children (ICAC) Task Forces (FY21 ICAC) FEDERAL AWARD ID # 15PJ DP-21-G K-03807-M ECP FEDERAL AWARD DATE 12/6/21 TOTAL GRANT AWARD COMMITTED TO THIS ENTITY $21,785 TOTAL FEDERAL FUNDS OBLIGATED TO THIS ENTITY $144,180 FEDERAL AWARDING AGENCY SUBRECIPIENT NAME UEI NUMBER Federal Way Police Department (Federal Way, City of) YCXHVULLN4C5 SUBAWARD PERIOD OF PERFORMANCE START DATE 01 /01 /2024 SUBAWARD BUDGET PERIOD START DATE 01/01/2024 RESEARCH & DEVELOPMENT N PASS -THROUGH ENTITY FUNDS OBLIGATED FOR THIS AGREEMENT $10,000 SUBAWARD PERIOD OF PERFORMANCE END DATE 09/30/2024 SUBAWARD BUDGET PERIOD END DATE 09/30/2024 INDIRECT COST RATE N PASS -THROUGH AWARDING OFFICIAL DOJ/OJP/OJJDP Seattle Police Department Brian G. Maxey (Seattle, City of) l3rian,maxey�seattle.gov AWARD PROJECT DESCRIPTION: The National Internet Crimes Against Children (ICAC) Task Force Program, consists of state and local law enforcement task forces dedicated to developing effective responses to online enticement of children by sexual predators, child exploitation, and child obscenity and pornography cases. Each State and local task force that is part of the national program shall: 1) consist of State and local investigators, prosecutors, forensic specialists, and education specialists who are dedicated to addressing the goals of the task force; 2) engage in proactive investigations, forensic examinations, and effective prosecutions of Internet crimes against children; 3) provide forensic, preventive, and investigative assistance to parents, educators, prosecutors, law enforcement, and others concerned with Internet crimes against children; 4) develop multijurisdictional, multiagency partnerships and responses to Internet crimes against children offenses through ongoing informational, administrative, and technological support to other State and local law enforcement agencies, as a means for such agencies to acquire the necessary knowledge, personnel, and specialized equipment to investigate and prosecute such offenses; 5) participate in nationally coordinated investigations in any case in which the Attorney General determines such participation to be necessary, as permitted by the available resources of such task force; 6) establish or adopt investigative and prosecution standards consistent with established norms, to which such task force shall comply; 7) investigate, and seek prosecution on tips related to Internet crimes against children, including tips from Operation Fairplay, the National Internet Crimes Against Children Data System, the National Center for Missing and Exploited Children's CyberTipline, ICAC task forces, and other Federal, State, and local agencies, with priority being given to investigate leads that indicate the possibility of identifying or rescuing child victims, including investigative leads that indicate a likelihood of seriousness of offense or dangerousness to the community; 8) develop procedures for handling seized evidence for ICAC task force lead agencies and affiliate agencies; 9) maintain reports required by OJJDP and other reports and records as determined by the Attorney General; and, 10) seek to comply with national standards regarding the investigation and prosecution of Internet 24-00422 Page 2 of 3 crimes against children, as set forth by the Attorney General, to the extent such standards are consistent with the law of the State where the task force is located. INDEMNIFICATION AND HOLD HARMLESS FWPD shall defend, indemnify, and hold the City harmless from and against all claims, demands, losses, damages or costs, including but not limited to damages arising out of bodily injury or death to persons and damage to property, caused by or resulting from: • The sole negligence or willful misconduct of FWPD, its officials, officers, employees, and agents; • The concurrent negligence of FWPD, its officials, officers, employees, or agents but only to the extent of the negligence of FWPD, its officials, officers, employees, and agents; • The negligent performance of non-performance of the contract by FWPD; and FWPD waives its immunity under Title 51 RCW to the extent it is required to indemnify, defend and hold harmless the City and its officials, agents, and employees. INSURANCE The FWPD agrees that it will maintain premises operations and vehicle liability insurance in force with coverages and limits of liability typically maintained by consultants performing work of a scope and nature similar to that called for under this Agreement, but in no event less than the coverages and/or limits required by Washington state law. Such insurance shall include "The City of Seattle" as an additional insured for primary and non-contributory limits of liability. Workers compensation insurance shall also be maintained if required by Washington state law. TERMINATION Either party may terminate this Agreement without recourse by the other party upon written notice to terminate. Notice of termination shall be given by the party terminating this Agreement to the other not fewer than fifteen (15) business days prior to the effective date of termination. AGENCY CONTACTS Contact between the Parties regarding Agreement administration will be between the resentatives of eacn Fariy or tneir aesi nee as toiiows Federal Way Police Department Seattle Police Department Name: Thaddeus Hodge Name: Kelly Crouch Phone: 253-835-6764 Phone: 206.386.9140 Email: Thaddeus. Hod ge a@cityoffederalway-com Email: Kelly.crouchC seattie.gov IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the latest day and year written below. FEDERAL WAY POLICE DEPARTMENT SEATTLE POLICE DEPARTMENT Andy Hwang Date Brian G. Maxey Date Chief of Police Chief Operating Officer 24-00422 Page 3 of 3 71 COUNCIL MEETING DATE: April 16, 2024 ITEM #: CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL SUBJECT: PARKS SIGNAGE CONTRACT AMENDMENT POLICY QUESTION: Should the City Council approve the proposed amendment to the contract with Xtreme Graphics for Parks and Facilities signage services and authorize staff to execute the contract? COMMITTEE: PRHSPSC MEETING DATE: April 9, 2024 CATEGORY: ® Consent ❑ Ordinance ❑ Public Hearing ❑ City Council Business ❑ Resolution ❑ Other STAFF REPORT BY: Autumn Gressett,_ Contract Administrator DEPT: Parks Attachments: 1. Staff Report 2. Parks Signage Contract Amendment Options Considered: 1. Approve the proposed contract amendment. 2. Do not approve proposed contract amendment and provide direction to staff. MAYOR'S MAYOR APPROVAL: TION: Option 1. DIRECTOR APPROVAL: L /L0Z y Initial/Date COMMITTEE RECOMMENDATION: I move to forward the proposed parks and facilities signage contract amendment to the April 16, 2024, consent agenda for approval. Chair ! Committee Member Committee Member PROPOSED COUNCIL MOTION: "I move approval of the parks and facilities signage contract amendment. BELOW TO BE COMPLETED BY CITY CLERIC'S OFFICE COUNCIL ACTION: ❑ APPROVED COUNCIL BILL # ❑ DENIED First reading ❑ TABLED/DEFERRED/NO ACTION Enactment reading ❑ MOVED TO SECOND READING (ordinances only) ORDINANCE # REVISED - 4/2019 RESOLUTION # CITY OF FEDERAL WAY MEMORANDUM DATE: April 9, 2024 TO: City Council Members VIA: Jim Ferrell, Mayor FROM: John Hutton, Parks Director SUBJECT: Parks and Facilities Signage Contract Amendment Financial Ini acts: The cost to the City for Parks Signage was included within the approved budget under the Parks Department, budget line 001-7100-331-576-80-312. In accordance with the approved budget, this item is funded by the General Fund. Upon completion of the term, there will be future signage costs due to ongoing operations and maintenance. Background information: Staff solicited signage quotes in March 2023 from vendors for signage needs for Federal Way Parks and Facilities. Xtreme Graphix was the responsive low bidder and a contract was entered into in June 2023. Staff proposes a term and compensation amendment to extend the length of the contract and continue purchasing signs from Xtreme Graphics. Rev. 7/18 CITY of CITY HALL �F��! ra [ WayFeder 8th Avenue South Aftil!Federal Way, WA 98003-6325 (253) 835-7000 www.ci ffecteralway..com AMENDMENT NO.1 TO GOODS AND SERVICES AGREEMENT FOR PARKS SIGNAGE This Amendment ("Amendment No. 1") is made between the City of Federal Way, a Washington municipal corporation ("City"), and Xtreme Graphix Inc, a Washington corporation ("Contractor"). The City and Contractor (together "Parties"), for valuable consideration and by mutual consent of the Parties, agree to amend the original Agreement for Parks Signage ("Agreement") dated effective July 26, 2023, as follows: 1. AMENDED TERM. The term of the Agreement, as referenced by Section 1 of the Agreement and any prior amendments thereto, shall be amended and shall continue until the completion of the Services, but in any event no later than May 31, 2027 ("Amended Term"). This agreement may be extended for additional periods of time upon the mutual written agreement of the City and the Contractor. 2. AMENDED COMPENSATION. The amount of compensation, as referenced by Section 4 of the Agreement, shall be amended to change the total compensation the City shall pay the Contractor and the rate or method of payment, as delineated in Exhibit B-1, attached hereto and incorporated by this reference. The Contractor agrees that any hourly or flat rate charged by it for its services contracted for herein shall remain locked at the negotiated rate(s) for the Amended Term. Except as otherwise provided in an attached Exhibit, the Contractor shall be solely responsible for the payment of any taxes imposed by any lawful jurisdiction as a result of the performance and payment of this Agreement. 3. GENERAL PROVISIONS. All other terms and provisions of the Agreement, together with any prior amendments thereto, not modified by this Amendment, shall remain in full force and effect. Any and all acts done by either Party consistent with the authority of the Agreement, together with any prior amendments thereto, after the previous expiration date and prior to the effective , date of this Amendment, are hereby ratified as having been performed under the Agreement, as modified by any prior amendments, as it existed prior to this Amendment. The provisions of Section 13 of the Agreement shall apply to and govern this Amendment. The Parties whose names appear below swear under penalty of perjury that they are authorized to enter into this Amendment, which is binding on the parties of this contract. [Signature page follows] AMENDMENT - 1 - 4/2023 CITY OF Federal Way CITY HALL 33325 8th Avenue South Federal Way. WA 98003-6325 (253) 835-7000 www cityoffederahvay. com IN WITNESS, the Parties execute this Agreement below, effective the last date written below. CITY OF FEDERAL WAY: By: Jim Ferrell, Mayor DATE: XTREME GRAPHIX INC: By: Printed Name: Title: Date: STATE OF WASHINGTON ) ss. COUNTY OF ) ATTEST: Stephanie Courtney, CMC, City Clerk APPROVED AS TO FORM: J. Ryan Call, City Attorney On this day personally appeared before me to me known to be the of Xtreme Graphix Inc that executed the within and foregoing instrument, and acknowledged the said instrument to be the free and voluntary act and deed of said corporation, for the uses and purposes therein mentioned, and on oath stated that he or she was authorized to execute said instrument and that the seal affixed, if any, is the corporate seal of said corporation. GIVEN under my hand and official seal this day of GI Notary's signature Notary's printed name Notary Public in and for the State of Washington. My commission expires AMENDMENT - 2 - 4/2023 CITY OF CITY HALL Fe d e ra I Way Feder 8th Avenue South Federal Way, WA 98003-6325 (253) 835-7000 www cityoffedera/way com EXHIBIT B-1 ADDITIONAL COMPENSATION 1. Total Compensation: In return for the Services, the City shall pay the Contractor an additional amount not to exceed Seventy -Five Thousand and 00/100 Dollars ($75,000.00). The total amount payable to Contractor pursuant to the original Agreement, all previous Amendments, and this Amendment shall be an amount not to exceed Ninety - Four Thousand Nine Hundred Ninety -Nine and 99/100 Dollars ($94,999.99). AMENDMENT - 3 - 4/2023 COUNCIL MEETING DATE: April 16, 2024 CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL SUBJECT: ELECTRICAL LINE & FIBER OPTIC EASEMENT ON LAKOTA PARK PROPERTY 7m ITEM #: POLICY QUESTION: Should the City Council authorize the Mayor to execute an easement on Lakota Park property for a PSE electrical line to supply power and a fiber optic line to the approved DISH Wireless cellular site and accept the compensation as proposed? COMMITTEE: PRHSPS MEETING DATE: April 9, 2023 CATEGORY: ® Consent ❑ Ordinance ❑ Public Hearing ❑ City Council Business ❑ Resolution ❑ Other STAFF REPORT BY: Jason H. Gerwen, Deputy Parks Director DEPT: Parks Department Attachments: 1. Staff Report 2. Easement Agreement 3. Exhibit A — Legal Descriptions 4. Exhibit B - Survey Options Considered: 1. Approve and authorize the Mayor to execute the proposed easement on Lakota Park property to DISH in exchange for $15,531.50. 2. Do not approve the proposed easement on Lakota Park and provide direction to staff. MAYOR'S RECOMMENDATION: jOpttiion 1. MAYOR APPROVAL: 1 7 I q y Initial/Date APPROVAL: 3 191201- Y Initial/Date COMMITTEE RECOMMENDATION: "I move to forward approval of the Lakota Park electrical line & fiber optic easements and compensation as proposed to the April 16, 2024, consent agenda. " Commit Chair Committee Member Committee Member PROPOSED COUNCIL MOTION: "I move approval of and authorize the Mayor to execute the Lakota Park electrical line & fiber optic easements and compensation as proposed. " (BELOW TO BE COMPLETED BY CITY CLERK'S OFFICE) COUNCIL ACTION: ❑ APPROVED COUNCIL BILL # ❑ DENIED First reading ❑ TABLED/DEFERRED/NO ACTION Enactment reading ❑ MOVED TO SECOND READING (ordinances only) ORDINANCE # REVISED - 4/2019 RESOLUTION # CITY OF FEDERAL WAY MEMORANDUM DATE: April 9, 2024 TO: City Council Members VIA: Jim Ferrell, Mayor FROM: Jason H. Gerwen, Parks Deputy Director SUBJECT: Electrical Line & Fiber Optic Easement on Lakota Park Property Financial Impacts: In exchange for granting the proposed easement for the additional electrical line and fiber optic line on Lakota Park property, the City will be compensated in the amount of $15,531.50, which will be deposited into the General Fund. There is no cost to the City for granting the easement as proposed. Background Information: City Council previously approved and the City entered into a five-year lease agreement for a cellular site and the expansion of the pre-existing cellular site at Lakota Park. During construction, DISH Wireless, LLC discovered a need to expand the fiber optic and electrical service to the cellular site to ensure full operational capability. DISH contacted City staff to request obtaining an additional easement on Lakota Park property, for the needed electrical line and fiber optic. Since the additional easement was not part of the previously negotiated agreement and involves impacts to and encumbering of City property, staff communicated the need for additional compensation for the proposed additional easement. After some negotiation on the value of the easement, DISH ultimately accepted the City's proposed compensation for the easement at $15,531.50, calculated using the formula regularly employed by the Public Works Department for similar easements. Upon review of the title report and the appraisal report, the Mayor recommends the Council approve granting the easement to DISH for $15,531.50. Rev. 7/18 When Recorded Mail To: DISH Wireless L.L.C. Attention: Lease Administration 5701 S Santa Fe Drive Littleton, CO 80120 Re: SESEA00041B (Space above for Recorder's Office) EASEMENT AGREEMENT Grantor (s): CITY OF FEDERAL WAY, a Washington municipal corporation Grantee (s): DISH WIRELESS L.L.C., a Colorado limited liability company Property Legal Description (abbreviated): NE 1/4 OF SE 1/4 LESS POR NWLY OF ROBT MALTBY RD & SWLY OF CO RD # 980 & NLY OF DUMAS BAY RD LESS CO RDS & LESS NW LY 22 FT FOR RD PER REC #20160620000489 Additional Legal Description: Portion of NE 1/4 of SE '/4, Section 12, Township 21 North, Range 3 East, W.M., lying Southeasterly of the Robert Maltby Road AND ALSO portion of said subdivision lying Northeasterly of County Road No. 980 and Northwesterly of Robert Maltby Road. LESS AND. EXCEPT the property conveyed in the Deeds in Instrument No. 20101210000907 and 20160620000489. Easement Legal Description: See Exhibit A Easement Depiction: See Exhibit B Assessor's Tax Parcel ID#(s): 1221039016 THIS EASEMENT AGREEMENT (the "Agreement") is made and entered into as of the date the last Party executes this Agreement (the "Effective Date") Grantor and Grantee. Grantor and Grantee are at times collectively referred to hereinafter as the "Parties" or individually as 1 a "Party". For and in consideration of the premises and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, upon the Effective. Date, the City of Federal Way, a Washington municipal corporation„ ("Grantor") grants, conveys and warrants to DISH Wireless L.L.C., a Colorado limited liability company, ("Grantee") for the purposes hereinafter set forth a perpetual easement under, across and over certain real property (the "Property") located in Federal Way, Washington, legally described as follows: Portion of NE 1/4 of SE 1/4, Section 12, Township 21 North, Range 3 East, W.M., lying Southeasterly of the Robert Maltby Road AND ALSO portion of said subdivision lying Northeasterly of County Road No. 980 and Northwesterly of Robert Maltby Road. LESS AND EXCEPT the property conveyed in the Deeds in Instrument No. 20101210000907 and 20160620000489. Except as may be otherwise set forth herein, Grantee's rights shall be exercised upon that portion of the Property consisting of a utility easement C'Easement") described as follows: Legal Description of Easement attached hereto as Exhibit "A" and incorporated herein by this reference. 1. Purpose. Grantee and its agents, designees and/or assigns shall have the right, without prior notice to Grantor, at such times as deemed necessary by Grantee, to enter upon the Property to purpose of ingress and egress and for the installation, use, operation, modification, maintenance and removal of utility lines, utility wires, fiber, cables, conduits, pipes and related communications equipment, either aboveground or underground, including, but not limited to, electrical, gas, fiber connectivity, fiber-optic cabling and lines, underground coax cable, underground conduit, junction boxes and appurtenant equipment, along with other. necessary utility services and personal property that may be installed from time to time (hereafter referred to as "Grantee Improvements") as depicted in Exhibit B, attached hereto and incorporated �o lll.l elll. 2. Access. Grantee shall have the right of access to the Easement over and across the Property to enable Grantee to exercise its rights hereunder by utilizing the improved driveway on the Property or by any other method mutually agreeable to Grantor and Grantee. 3. Consideration. In consideration of the rights granted herein, Grantee shall pay the Easement Payment in the amount as set forth in Exhibit C, attached hereto and incorporated herein by reference. Exhibit C may be removed for recording purposes. 4. Obstructions; Landscaping. Grantee may from time to time remove vegetation, trees, or other obstructions within the Easement, and may level and grade the Easement to the extent reasonably necessary to carry out the purposes set forth in paragraph 1 hereof, provided, that following any such work, Grantee shall, to the extent reasonably practicable, restore the Easement to a condition similar to its condition prior to such work. Following the installation of the Facilities, Grantor may undertake any ordinary improvements to the landscaping of the Easement, provided that no trees or other plants shall be placed thereon, which would be unreasonably expensive or impractical for Grantee to remove and restore. 5. Grantor's Use of Easement. This Easement shall be exclusive to Grantee; provided, however, Grantor reserves the right to use the Easement for any purpose not inconsistent with Grantee's rights provided: further, that Grantor shall not construct or maintain any buildings or other structures on the Easement, that Grantor shall not perform grading, digging, tunneling, or other form of construction activity on the Property, which would alter the functioning of the Facilities, and that Grantor shall not blast within fifteen (15) feet of the Easement. 6. Indemnification. Grantor agrees to indemnify, defend, and hold Grantee, its elected officials, officers, employees, agents, and volunteers harmless from any and all claims, demands, losses, actions and liabilities (including costs and all attorney fees) to or by any and all persons or entities, including, without limitation, their respective agents, licensees, or representatives, arising from, resulting from, or connected with this Easement, including without limitation, any damage to the Easement area resulting from surface water flooding except to the extent caused by the sole negligence of the Grantor. 7. Successors and Assigns. The rights and obligations ofthe parties shall inure to the benefit of and be binding upon their respective successors in interest, heirs and assigns. 8. Payment Documentation. As a condition precedent to Grantee paying the Easement Payment or any electrical payments required under Section 5, Grantor shall provide Grantee with a validly completed IRS Form W-9 (or its equivalent). 9. Miscellaneous. a. Entire Agreement. This Agreement, and all Exhibits incorporated hereto, constitutes the entire agreement and understanding between the Parties. Any amendments to this Agreement must be in writing and executed by both Parties. b. Severability. If any provision of this Agreement is invalid or unenforceable with respect to any Party, the reminder of this Agreement, or the application of such provision to persons other than,those as to whom it is held invalid or unenforceable, shall not be affected, and each provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. c. Due Authorization. Each Party hereto represents and warrants that it has obtained all required consents and authorizations to enter into this Agreement. d. Governing Law. This Agreement shall be governed by the laws of the State in which the Property is located. e. Notices. All notices or requests that are required or permitted to be given pursuant to this Agreement must be given in writing by certified US mail (postage pre -paid), with return receipt requested, or by courier service (charges pre -paid to the party to -- ---be- notified), to-Grantorat-City-ofFederal- Way, Attn. Jason -Gerwen,-33325--8th-- Avenue South, Federal Way, Washington 98003 and to Grantee at DISH Wireless L.L.C., Attn: Lease Administration, 5.701 South Santa Fe Drive, Littleton, Colorado 80120. f. Assignment. Grantee may, upon written notification to Grantor and upon Grantor's written consent which shall not unreasonably be withheld, assign and delegate all or any portion of its rights and liabilities under this Agreement to any third party. Grantee shall be released from its obligations hereunder only with the prior written consent of Grantor. Notwithstanding the foregoing, Grantee may assign or transfer some or all of its rights and/or obligations under the Agreement to: (i) an Affiliate; (ii) a successor entity to its business, whether by merger, consolidation, reorganization, or by sale of all or substantially all of its assets or stock; (iii) any entity in which a Grantee or its Affiliates have any direct or indirect equity investment; and/or (iv) any other entity directly or indirectly controlling, controlled by or under common control with any of the fnreuoinu_ and in eanh Gage. -,iwh assignment, transfer or other such transaction shall not be considered an assignment under this Section 9.f requiring consent and Grantor shall have no right to delay, alter or impede such assignment or transfer. For the purposes of this Agreement, "Affiliate(s)" means, with respect to a Party; any person or entity, directly or indirectly, controlling, controlled by, or under common control with such Party, in each case for so long as such control continues. For purposes of this definition, "control" shall mean (i) the ownership, directly or indirectly, or at least fifty percent (50%) of either: (a) the voting rights attached to issued voting shares; or (b) the power to elect fifty percent (50%) of the directors of such entity, or (ii) the ability to direct the actions of the entity. [Signature pages follow.] GRANTOR(S): By (signature) Jim Ferrell (name) Ma or (title) STATE OF WASHINGTON ) ) ss. COUNTY OF KING ) On this day personally appeared before me Jim Ferrell, to me known to be the Mayor of the City of Federal Way that executed the within and foregoing instrument, and acknowledged the said instrument to be the free and voluntary act and deed of said corporation, for the uses and purposes therein mentioned, and on oath stated that he or she was authorized to execute said instrument and that the seal affixed, if any, is the corporate seal of said corporation. GIVEN under my hand and official seal this day of Notary's signature Notary's printed name Notary Public in and for the State of Washington. 5 ►.1 My commission expires GRANTEE(S): By (signature) (name) (title) STATE OF ) ss. CIM TATTV !1F l On this day personally appeared before me , to me known to be the of DISH Wireless, L.L.C. that executed the within and foregoing instrument, and acknowledged the said instrument to be the free and voluntary act and deed of said limited liability company, for the uses and purposes therein mentioned, and on oath stated that he or she was authorized to execute said instrument. GIVEN under my hand and official seal this day of , 20_ Notary's signature Notary's printed name Notary Public in and for the State of My commission expires _ EXHIBIT A LEGAL DESCRIPTION OF THE EASEMENT POWER EASEMENT LEGAL DESCRIPTION A PORTION OF NE 1/4 OF SE 1/4, SECTION 12, TOWNSHIP 21 NORTH, RANGE 3 EAST, W.M, KING COUNTY, WASHINGTON, BEING A STRIP OF LAND 10.00 FEET WIDE, LYING 5.00 FEET ON BOTH SIDES OF THE FOLLOWING DESCRIBED CENTERLINE; COMMENCING AT THE EAST 1/4 CORNER OF SAID SECTION 12, BEING MONUMENTED BY A BRASS CAP, FROM WHICH A LEAD AND TACK IN THE CONCRETE MONUMENTING THE SOUTHEAST CORNER OF SAID SECTION 12, BEARS SOUTH 01 ° 12' 45" WEST, 2632.03 FEET; THENCE ALONG THE EAST LINE OF SAID SECTION, SOUTH 01 ° 12' 45" WEST, 669.12 FEET; THENCE DEPARTING SAID EAST LINE, NORTH 89' 1 O' 39" WEST, 1125.66 FEET; THENCE NORTH 26° 49' 51" WEST, 5.00 FEET TO THE POINT OF BEGINNING; THENCE SOUTH 630 10' 09" WEST, 16.43 FEET; THENCE SOUTH 470 07' 09" WEST, 160.97 FEET; THENCE SOUTH 31 ° 43' 41" WEST, 49.91 FEET TO THE POINT OF TERMINUS. EXCEPTING THEREFROM ANY PORTION LYING WITHIN THE SW DASH POINT ROAD/21 ST. AVE. S.W. RIGHT OF WAY. THE SIDELINES OF SAID STRIP OF LAND ARE TO INTERSECT AT ALL ANGLE POINTS TO PROVIDE THE SPECIFIED WIDTH THROUGHOUT SO AS TO NOT CAUSE ANY GAPS OR OVERLAPS IN SAID EASEMENT. FIBER EASEMENT LEGAL DESCRIPTION A PORTION OF NE 1/4 OF SE 1/4, SECTION 12, TOWNSHIP 21 NORTH, RANGE 3 EAST, W.M, KING COUNTY, WASHINGTON, BEING A STRIP OF LAND 10.00 FEET WIDE, LYING 5.00 FEET ON BOTH SIDES OF THE FOLLOWING DESCRIBED CENTERLINE: COMMENCING AT THE EAST 1/4 CORNER OF SAID SECTION 12, BEING MONUMENTED BY A BRASS CAP, FROM WHICH A LEAD AND TACK IN THE CONCRETE MONUMENTING THE SOUTHEAST CORNER OF SAID SECTION 12, BEARS SOUTH 01 ° 12' 45" WEST, 2632.03 FEET; THENCE ALONG THE EAST LINE OF SAID SECTION, SOUTH 01 ° 12' 45" WEST, 669.12 FEET; THENCE DEPARTING SAID EAST LINE, NORTH 89' 10' 39" WEST, 1125.66 FEET; THENCE NORTH 26° 49' 51" WEST, 5.00 FEET TO THE POINT OF BEGINNING; THENCE NORTH 84° 25' 55" WEST, 74.63 FEET TO THE POINT OF TERMINUS. THE SIDELINES OF SAID STRIP OF LAND SHALL TERMINATE AT LINE THAT BEARS NORTH 26° 49' 51" WEST RUNNING THROUGH SAID POINT OF BEGINNING AND ARE TO BE LENGTHENED OR SHORTENED TO TERMINATE ON SAID SOUTHEASTERLY RIGHT OF WAY OF SW DASH POINT ROAD/21 ST. AVE. S.W. EXHIBIT B SURVEY [Please see attached.] f / EXHIBIT B �v �.L. uuNem a ° ° a sn e":,r s.NlAl NIM e ® I e+ �•�wa- °� .Eo aa<°w"Da�ie 111 awN.6wo 9/20/22 D ,OjiVn TITLE/ DESIGN r 7 I 1711T] ww[ m / •NE1u�lMfl.l `�i ua 11 lkm PORE 506 SECOND AVE. SUITE 1533 Ta SEATTLE. M 98- xv1 wWR91M. ambil consulting OAxP111L 9LxLD LEGEND a h �` aw o n w1VI OT.n aM— own[.- ON[s `M— oM�oM— oM— oM— SURVEY DETAIL LS-3 TO BE REMOVED PRIOR TO RECORDING EXHIBIT C CONSIDERATION In accordance with Section 3 of this Agreement, Grantee shall make to Grantor a one-time lump sum payment in the amount of Fifteen Thousand Five Hundred Thirty -One and 501100 Dollars ($15,531.50) ("Easement Payment"). The Easement Payment shall be made to Grantor within ninety (90) business days of the Effective Date. Grantee shall require receipt of a validly completed IRS approved W-9 form (or its equivalent) prior to making the Easement Payment or any other amount(s) due under this Agreement. - - - 7n COUNCIL MEETING DATE: April 16, 2024 ITEM #: CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL SUBJECT: DEPARTMENT OF COMMERCE GRANT ACCEPTANCE — CELEBRATION PARK FIELD 8 TURF POLICY QUESTION: Should the City Council accept the Department of Commerce grant for Celebration Park artificial turf conversion in the amount of $797,340 and authorize the Mayor to execute the associated grant agreement? COMMITTEE: PRHSPSC MEETING DATE: April 9, 2024 CATEGORY: ® Consent ❑ Ordinance ❑ Public Hearing ❑ City Council Business ❑ Resolution ❑ Other STAFF REPORT BY: Jason H. Gerwen lk DEPT: Parks Department Attachments: 1. Staff Report 2. Department of Commerce Grant Award Letter Options Considered: 1. Accept the grant and authorize staff to execute the associated agreement. 2. Do not accept the grant and provide direction to staff. MAYOR'S RECOMMENDATION: Option 1. MAYOR APPROVAL: Initial/Date DIRECTOR APPROVAL.,: ;punei InitiaMa[e Initial/Date COMMITTEE RECOMMENDATION: "I move to forward the proposed acceptance of the Department of Commerce grant to the April 16, 2024, consent agenda for approval. " Committee Member Committee Member PROPOSED COUNCIL MOTION: "I move approval of the Department of Commerce grant acceptance and authorize the Mayor to execute the associated agreement. " BELOW TO BE COMPLETED BY CITY CLERK'S OFFICE) COUNCIL ACTION: ❑ APPROVED COUNCIL BILL # ❑ DENIED First reading ❑ TABLED/DEFERRED/NO ACTION Enactment reading _ ❑ MOVED TO SECOND READING (ordinances only) ORDINANCE # REVISED - 4/2019 RESOLUTION # CITY OF FEDERAL WAY MEMORANDUM DATE: April 9, 2024 TO: City Council Members VIA: Jim Ferrell, Mayor FROM: Jason H. Gerwen, Parks Deputy Director SUBJECT: Department of Commerce Grant Acceptance — Celebration Park Field & Turf Financial Impacts: The revenue to the City for the Department of Commerce Grant regarding Celebration Park artificial turf conversion will be $797,340 (net proceeds after 3% of $822,000 reserved by the Department of Commerce to administer the grant) and will be credited to the Parks Department Capital budget (303-7100-xxx). There is no cost to the City to receive the funds. Upon completion of the Celebration Park artificial turf conversion, future costs will include ongoing costs associated with operations and maintenance and its eventual replacement at the end of its life cycle, which is approximately 12 -14 years. Background Information: The City has been awarded a Department of Commerce grant to support the conversion of a natural grass field in Celebration Park to artificial turf, a project that has been a longstanding priority for both the City Council and the Parks Department. This grant will serve as a significant step forward in realizing the goal of enhancing recreational facilities and opportunities for our community. For years, the City has recognized the importance of converting the Celebration Park fields to artificial turf to improve their durability, accessibility, and overall usability. However, there have been challenges in securing the necessary funding to proceed with this project. The receipt of this grant presents an opportunity to accelerate efforts and leverage additional resources. The grant funding being awarded can be utilized as matching funds, helpful as the working towards another grant from the Washington State Recreation and Conservation Office that, if awarded, will help cover most of the remaining costs for the project if approved by Council. By accepting this grant, the City commits to responsible stewardship of these funds and to the successful implementation of the phased artificial turf conversion project. Rev. 7/18 STATE OF WASHINGTON DEPARTMENT OF COMMERCE 1011 Plum Street SE • PO Box 42525. Olympia, Washington 98504-2525 • (360) 725-4000 July 3, 2023 Cody Geddes City of Federal Way 33325 8th Avenue South Federal Way WA, WA 98003 Dear Cody: Congratulations! Governor Inslee recently signed the 2023-25 State Capital Budget, which includes an appropriation of $822,000 for the Celebration Park Synthetic Turf Upgrade (Federal Way) Project. The Department of Commerce, which will administer the project, will retain three percent (up to a maximum of $50,000) to cover our administrative costs. Accordingly, your net grant award will be $797,340. Prior to receiving funds, your organization will need to fulfill the following requirements: ■ Provide documentation of your organization's financial ability to complete the project. All funds from sources other than the state must be expended, raised, or secured by documented pledges or loans. • For nonprofit grantees, any property relevant to the project must be owned or secured by a long- term lease that remains in effect for a minimum of ten years following the final payment date the date the facility becomes usable by the public, whichever is later. A lien on owned property is also required when receiving grants over $250,000. • Prevailing wages must be paid for all construction labor costs incurred as of May 16, 2023. • Review by the Washington State Department of Archaeology and Historic Preservation and any affected Tribes (Governor's Executive Order 21-02). • Your project may also need to comply with the state's green buildings standards (RCW 39.35D). Please fill out the linked Contract Readiness Survey and submit at your earliest convenience. Also enclosed is a comprehensive set of contracting guidelines to assist you with the process. If you have any questions or need additional information, please contact your Project Manager, Chuck Hunter, at (360) 764-3312 or chuck.hunter@commerce.wa.gov. Sincerely, Tony Hanson, Deputy Assistant Director Local Government Division CITY OF 'k Federal Way�_ Centered on Opportumty This page was intentionally left blank. COUNCIL MEETING DATE: April 16, 2024 ITEM #: 7o CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL SUBJECT: RESOLUTION: CELEBRATION PARK FIELD 8 ARTIFICIAL TURF FUNDING POLICY QUESTION: Should City Council approve a resolution to authorize all documents and actions necessary to accept the RCO Youth Athletic Facility Grant, including matching fund identification, for the Celebration Park field 8 artificial turf conversion? COMMITTEE: PRHSPSC CATEGORY: X Consent ❑ City Council Business MEETING DATE: April 9, 2024 ❑ Ordinance ❑ Public Hearing ® Resolution ❑ Other STAFF REPORT BY: George Richen, Parks Manager Attachments: 1. Staff Report 2. Resolution DEPT: Parks Options Considered: 1. Approve proposed resolution. 2. Do not approve proposed resolution and provide direction to staff. MAYOR'S TION: Option 1. MAYOR APPRO'VAiit DIRECTOR APPROVAL: Co mitt,- noun InuiallBate [nit a}If3aic ]nitia 19 atc COMMITTEE RECOMMENDATION: I move to forward the proposed resolution to the April 16, 2024, consent agenda for approval. Committee Member Committee Member PROPOSED COUNCIL MOTION: "I move approval of the proposed resolution. (BELOW TO BE COMPLETED BY CITY CLERK'S OFFICE) COUNCIL ACTION: ❑ APPROVED COUNCIL BILL # ❑ DENIED First reading ❑ TABLED/DEFERRED/NO ACTION Enactment reading ❑ MOVED TO SECOND READING (ordinances only) ORDINANCE # REVISED—11/2019 RESOLUTION # CITY OF FEDERAL WAY MEMORANDUM DATE: April 9, 2024 TO: City Council Members VIA: Jim Ferrell, Mayor FROM: George Richen, Parks Manager SUBJECT: Resolution — Celebration Park Field 8 Artificial Turf Funding Financial Impacts: The Celebration Park Field 8 artificial turf conversion project was not included within the approved budget. As proposed, it will be funded by Washington State Recreation and Conservation Office (RCO) Youth Athletic Facilities Grant funds, with the City -provided matched funds required by the RCO grant appropriated from a Department of Commerce grant and general funds. Upon completion of the Celebration Park Field 8 artificial turf conversion, future costs will be due to ongoing costs associated with operations and maintenance, but will be less than those normally required if the field was natural grass. Background Information: City Council has expressed desire in the past to convert natural turf fields to artificial turf at Celebration Park. This same hope is backed by the players, organizations, and community members that use the existing natural turf so the increased recreation opportunities that artificial turf will allow can be achieved. The grant funding opportunity through the RCO Youth Athletic Facilities Grant presents the opportunity to make this dream a reality. This agenda item incorporates all documents needed to formally accept the RCO grant, as well as the request for authorization to provide the matching funds, from Department of Commerce grant and general funds as proposed, as required to be eligible for the RCO grant award. Rev. 7/18 Celebration Park CITY OF Federal Way 47' 16'44.16292"N IN L Vicinity Exit 147 L Map Pugei C � Sound �L _ 0— Exit 143 �.i f•� f.......,; �_ FEBERAC WAY Exir 142— , Softball Softball Field Field #2 #3 Softball Softball Field Field #4 L. Soccer—= Field f #6 Soccer _ Field Main #5 Parking Lot I � Children's ff Play Area i 5 :i Soccer r Federal Way Field - Community #7 ' C ter � •;g� 5� ° � � c Soccer q Field �' + ii #8 jI .. -A ditional 47' 1811 20540"N 47"18' 11.20 h4U"N 0 250 500 Feet ' Concessions D Parking � �; Restrooms Celebration Park - 1024 S 324th St City of Federal Way, Department of N 0 1 2 Minutes Hikingl Play Parks, Recreation and Cultural Services: 835-6901 WMinu Time Walking Area (253) -www.cityoffederalway.com RESOLUTION NO. A RESOLUTION of the City of Federal Way, Washington, authorizing the Recreation and Conservation Office (RCO) Youth Athletic Facilities Grant 24-1539 in the amount of $1,500,000 for the purpose of converting Celebration Park Field 8 to artificial turf and matching the grant funds with $347,000 derived from the Department of Commerce awarded grant funds and $3,000 from general funds. WHEREAS, Celebration Park provides our community the space and facilities to play and exercise, which are critical to the wellbeing of residents and youth, as well as enhances the City by providing a central location for community gathering and activities; and WHEREAS, open space, parks, and low- to no -cost opportunities for recreation, play, and exercise provide important opportunities for youth, especially traditionally disadvantaged and underserved youth in the City of Federal Way; and WHEREAS, natural turf fields like Celebration Park field 8 require increased costs of maintenance, including water, mowing, fertilizer application, etc., and are more heavily impacted by wear and tear and weather conditions, limiting their availability for consistent use and often requiring closures for periods of time to recover their condition or conduct repairs which impacts recreation availability; and WHEREAS, artificial turf fields offer a reliable, durable playing surface that can withstand heavy use in all weather conditions and require less frequent closures and costs for maintenance, expanding the hours of operation and increasing the number of teams and individuals able to use the field, providing more opportunities for youth and community sports leagues, practices, and games; and WHEREAS, converting field 8 to artificial turf will create opportunities for increased Resolution No. 24- Page 1 of 9 economic benefits to the City by increasing tourism and other economic and revenue generating activities corresponding with sports competitions and other athletic and recreation events, and may benefit from the conversion right away given its existing hotel and hospitality infrastructure, all of which will allow for important reinvestments in the community; and WHEREAS, the City has the opportunity to convert Celebration Park field 8 to artificial turf through an awarded grant from the Washington State Recreation and Conservation Office (RCO) if the City provides matching funds to capitalize on this chance to further benefit the community and its youth. NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF FEDERAL WAY, RESOLVES AS FOLLOWS: Section 1. Pursuant to the Washington State Recreation and Conservation Office (RCO) Youth Athletic Grant requirements, the City Council authorizes the Mayor to enter into RCO Resolution/Authorization agreement shown as Exhibit A, Certification of Applicant Match shown as Exhibit B, and Electronic Signature Authorization shown as Exhibit C, and any other documents necessary to formally accept and receive grant funding for the Celebration Park field 8 artificial turf conversion project. Section 2. To provide the matching funds required for the City to be eligible to receive the RCO Youth Athletic Grant monies to fully fund the Celebration Park field 8 artificial turf, the City Council authorizes the use of $347,000 in awarded Department of Commerce grant funds and $3000 from general funds, for a total matching contribution of $350,000. Section 3. Severability. If any section, sentence, clause or phrase of this resolution should be held to be invalid or unconstitutional by a court of competent jurisdiction, such invalidity or Resolution No. 24- Page 2 of 9 unconstitutionality shall not affect the validity or constitutionality of any other section, sentence, clause, or phrase of this resolution. Section 4. Corrections. The City Clerk and the codifiers of this resolution are authorized to make necessary corrections to this resolution including, but not limited to, the correction of scrivener/clerical errors, references, resolution numbering, section/subsection numbers and any references thereto. Section S. Ratification. Any act consistent with the authority and prior to the effective date of this resolution is hereby ratified and affirmed. Section 6. Effective Date. This resolution shall be effective immediately upon passage by the Federal Way City Council. RESOLVED BY THE CITY COUNCIL OF THE CITY OF FEDERAL WAY, WASHINGTON this day of , 2024. [signature page to follow] Resolution No. 24- Page 3 of 9 CITY OF FEDERAL WAY: JIM FERRELL, MAYOR ATTEST: STEPHANIE COURTNEY, CMC, CITY CLERK APPROVED AS TO FORM: RYAN CALL, CITY ATTORNEY FILED WITH THE CITY CLERK: PASSED BY THE CITY COUNCIL: RESOLUTION NO.: Resolution No. 24- Page 4 of 9 Exhibit A "_i� WASHINGTON STATE Recreation and Conservation Office Applicant Resolution/Authorization Organization Name (sponsor) City of Federal Way Resolution No. or Document Project(s) Number(s), and Names) RCO 24-1539, Celebration Field 8 Artificial Turf This resolution/authorization authorizes the person(s) identified below (in Section 2) to act as the authorized representative/agent on behalf of our organization and to legally bind our organization with respect to the above Project(s) for which we seek grant funding assistance managed through the Recreation and Conservation Office (Office). WHEREAS, grant assistance is requested by our organization to aid in financing the cost of the Project(s) referenced above; NOW, THEREFORE, BE IT RESOLVED that: Our organization has applied for or intends to apply for funding assistance managed by the Office for the above "Project(s)." 2. Our organization authorizes the following persons or persons holding specified titles/positions (and subsequent holders of those titles/positions) to execute the following documents binding our organization on the above projects: Granter Ip ication (submission thereof) Project contact (day-to-day administering of the grant and communicating with the RCO) RCO Grant Agreement (Agreement) Agreement amendments Authorizing property and real estate documents (Notice of Grant, Deed of Right or Assignment of Rights if applicable). These are items that are typical recorded on the property with the county. Name of Signatory or Title of Person Authorized to Sign GeorgeRichen i George Richen Jason Gerwen John Hutton Jim Ferrell Jim Ferrell Jim Ferrell The above persons are considered an "authorized representative(s)/agent(s)" for purposes of the documents indicated. Our organization shall comply with a request from the RCO to provide documentation of persons who may be authorized to execute documents related to the grant. Resolution No. 24-. Page 5 of 9 3. Our organization has reviewed the sample RCO Grant Agreement on the Recreation and Conservation Office's WEB SITE at: httpsJlrco.wa.gov/wp-content/uploads/2019/06/S,3mplePromAgreement.pdf. We understand and acknowledge that if offered an agreement to sign in the future, it will contain an indemnification and legal venue stipulation and other terms and conditions substantially in the form contained in the sample Agreement and that such terms and conditions of any signed Agreement shall be legally binding on the sponsor if our representative/agent enters into an Agreement on our behalf. The Office reserves the right to revise the Agreement prior to execution. 4. Our organization acknowledges and warrants, after conferring with its legal counsel, that its authorized rep rese ntative(s)/agent(s) have full legal authority to act and sign on behalf of the organization for their assigned role/document. 5. Grant assistance is contingent on a signed Agreement. Entering into any Agreement with the Office is purely voluntary on our part. 6. Our organization understands that grant policies and requirements vary depending on the grant program applied to, the grant program and source of funding in the Agreement, the characteristics of the project, and the characteristics of our organization. 7. Our organization further understands that prior to our authorized representative(s)/agent(s) executing any of the documents listed above, the RCO may make revisions to its sample Agreement and that such revisions could include the indemnification and the legal venue stipulation. Our organization accepts the legal obligation that we shall, prior to execution of the Agreement(s), confer with our authorized rep rese ntative(s)/a gent(s) as to any revisions to the project Agreement from that of the sample Agreement. We also acknowledge and accept that if our authorized representative(s)/agent(s) executes the Agreement(s) with any such revisions, all terms and conditions of the executed Agreement shall be conclusively deemed to be executed with our authorization. 8. Any grant assistance received will be used for only direct eligible and allowable costs that are reasonable and necessary to implement the project(s) referenced above. 9. [for Recreation and Conservation Funding Board Grant Programs Only] If match is required for the grant, we understand our organization must certify the availability of match at least one month before funding approval. In addition, our organization understands it is responsible for supporting all non -cash matching share commitments to this project should they not materialize. 10. Our organization acknowledges that if it receives grant funds managed by the Office, the Office will pay us on only a reimbursement basis. We understand reimbursement basis means that we will only request payment from the Office after we incur grant eligible and allowable costs and pay them. The Office may also determine an amount of retainage and hold that amount until all project deliverables, grant reports, or other responsibilities are complete. 11. [for Acquisition Projects Only] Our organization acknowledges that any property acquired with grant assistance must be dedicated for the purposes of the grant in perpetuity unless otherwise agreed to in writing by our organization and the Office. We agree to dedicate the property in a signed "Deed of Right" for fee acquisitions, or an "Assignment of Rights" for other than fee acquisitions (which documents will be based upon the Office's standard versions of those documents), to be recorded on the title of the property with the county auditor. Our organization acknowledges that any property Resolution No. 24 Page 6 of 9 acquired in fee title must be immediately made available to the public unless otherwise provided for in policy, the Agreement, or authorized in writing by the Office Director. 12. [for Development, Renovation, Enhancement, and Restoration Projects Only -If our organization owns the project property] Our organization acknowledges that any property owned by our organization that is developed, renovated, enhanced, or restored with grant assistance must be dedicated for the purpose of the grant in perpetuity unless otherwise allowed by grant program policy, or Office in writing and per the Agreement or an amendment thereto. 13. [for Development, Renovation, Enhancement, and Restoration Projects Only -If your organization DOES NOT own the property] Our organization acknowledges that any property not owned by our organization that is developed, renovated, enhanced, or restored with grant assistance must be dedicated for the purpose of the grant as required by grant program policies unless otherwise provided for per the Agreement or an amendment thereto. 14. [Only for Projects located in Water Resources Inventory Areas 1-19 that are applying for funds from the Critical Habitat, Natural Areas, State Lands Restoration and Enhancement, Riparian Protection, or Urban Wildlife Habitat grant categories; Aquatic Lands Enhancement Account; or the Puget Sound Acquisition and Restoration program, or a Salmon Recovery Funding Board approved grant] Our organization certifies the following: the Project does not conflict with the Puget Sound Action Agenda developed by the Puget Sound Partnership under RCW 90.71.310. 15. This resolution/authorization is deemed to be part of the formal grant application to the Office. 16. Our organization warrants and certifies that this resolution/authorization was properly and lawfully adopted following the requirements of our organization and applicable laws and policies and that our organization has full legal authority to commit our organization to the warranties, certifications, promises and obligations set forth herein. This resolution/authorization is signed and approved on behalf of the resolving body of our organization by the following authorized member(s): Signed Title On File Date This Applicant Resolution/Authorization was adopted by our organization during the meeting held: (Local Governments and Nonprofit Organizations Only): Location: Washington State Attorney General's Office Approved as to form ��u- 2/13/2020 Assistant Attorney General Date You may reproduce the above language in your own format; however, text may not change. Resolution No. 24- Page 7 of 9 Certification of Applicant Match Exhibit-B Organization Name City Of Federal Way Project Name Celebration Field 8 Artificial Turf Project Number RCO 24-1539 The sources and amounts of our matching share will be - I Levy - Voter Approved $ 578,000 Source of Match — Grant Additional Information about Grant Department Of Commerce Amount Total: $ 925,000 As the authorized financial representative for the above identified organization, I here- by certify that the sponsor matching resources are available for the project referenced above. I further acknowledge that our organization is responsible for supporting all non - cash commitments and donations should they not materialize. Signature Printed Name Title Date Certification of Applicant Match Form 3/31 /2021 Resolution No. 24- Page 8 of 9 Exhibit C Electronic Signature Authorization Project Number Project Name RCO 24-1539 Celebration Field 8 Artificial Turf Sponsor Name City of Federal Way Please fill out the table below to identify the specific individuals who will review or approve and the individual who will sign the agreement and any amendments. List the names in the appropriate order. You must have a designated signer listed in this table. The name of the designated signer must be consistent with the authorized signer in the "Applicant Resolution/Authorization". Definitions of Roles Approver: Reviews and approves the electronic document and contacts RCO if corrections are needed. The approver does not sign the document. Signer: Must officially sign the document with an electronic signature and may be required to enter data such as title, date, agency name, etc. into fields. 1 Approver 0 george.richen@cityoffederalway.com 2 Approver 0 jason.gerwen@cityoffederalway.com 3 Approver []john.hutton@cityoffederalway.com 4 Signer Q jim.ferrell@cityoffederalway.com 5 � vr:,5111NG-014 sTaTe Recreation and Conservation Office Resolution No. 24- Page 9 of 9 4/1 /2021 COUNCIL MEETING DATE: April 16, 2024 CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL SUBJECT: MOU WITH THE HISTORICAL SOCIETY OF FEDERAL WAY — AMENDMENT 2 ITEM #: 7p POLICY QUESTION: Should the City Council approve the memorandum of understanding amendment 2 with the Historical Society of Federal Way? COMMITTEE: PRHSPS CATEGORY: ® Consent ❑ City Council Business MEETING DATE: April 9, 2024 ❑ Ordinance ❑ ❑ Resolution ❑ STAFF REPORT BY: John Hutton, Parks Director Public Hearing Other DEPT: Parks Attachments: 1. Staff Report 2. MOU Amendment 2 between the City of Federal Way and the Historical Society of Federal Way Options Considered: 1. Approve the proposed MOU amendment. 2. Do not approve proposed MOU amendment and provide direction to staff. MAYOR'S RECOMMENDATION: Option 1 MAYOR APPROVAL: DIRECTOR APPROVAL: Gam inee ' Cq, ncil !n tial. i]atc initi (Base [nit, COMMITTEE RECOMMENDATION: I move to forward the proposed MOU amendment 2 to the April 16, 2024, consent agenda for approval. A'�� +Lj- Committee Member Committee Member PROPOSED COUNCIL MOTION: "I move approval of the proposed MOU amendment 2. " (BELOW TO BE COMPLETED BY CITY CLERK'S OFFICE) COUNCIL ACTION: ❑ APPROVED COUNCIL BILL # ❑ DENIED First reading ❑ TABLED/DEFERRED/NO ACTION Enactment reading ❑ MOVED TO SECOND READING (ordinances only) ORDINANCE # REVISED - 4/2019 RESOLUTION # CITY OF FEDERAL WAY MEMORANDUM DATE: March 25, 2024 TO: City Council Members VIA: Mayor Ferrell and John Hutton, Parks Director FROM: John Hutton, Parks Directoto SUBJECT: Memorandum of Understanding with the Historical Society of Federal Way — Amendment 2 Financial Impacts: The financial impacts of the Memorandum of Understanding Amendment 2 with the Historical Society of Federal Way (MOU) include an increase to the compensation by an additional $15,000, making the total impact of the MOU $107,500.00. Background Information: The City of Federal Way has had a long-standing positive relationship with the Historical Society of Federal Way that is mutually beneficial to both parties and citizens and visitors of the City. Both parties desire to continue the current relationship, which the attached Amendment to the MOU will achieve through extending the term to December 31, 2024, and adding to the compensation. Rev. 7/18 CITY OF CITY HALL 4 33325Federal Way Feder Sth Avenue South Federal Way, WA 98003-6325 (253) 835-7000 www cityoffederalway. com AMENDMENT NO.2 TO MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF FEDERAL WAY AND HISTORICAL SOCIETY OF FEDERAL WAY This Amendment ("Amendment No. 2") is made between the City of Federal Way, a Washington municipal corporation ("City"), and the Historical Society of Federal Way, a Washington State nonprofit corporation ("Society"). The City and Society (together "Parties"), for valuable consideration and by mutual consent of the Parties, agree to amend the original Memorandum of Understanding ("MOU") dated effective March 2, 2021, as amended by Amendment No. 1 as follows: 1. AMENDED TERM. The term of the Agreement, as referenced by Section 3 of the Agreement and any prior amendments thereto, shall be amended and shall continue until the completion of the Services, but in any event no later than December 31, 2024 ("Amended Term"). 2. AMENDED COMPENSATION. The amount of compensation, as referenced by Section 2 of the Agreement, shall be amended to change the total compensation the City shall pay the Society and the rate or method of payment, as delineated in Exhibit A, attached hereto and incorporated by this reference. The Society agrees that this negotiated rate shall remain locked for the Amended Term. 4. GENERAL PROVISIONS. All other terms and provisions of the MOU, together with any prior amendments thereto, not modified by this Amendment, shall remain in full force and effect. Any and all acts done by either Party consistent with the authority of the Agreement, together with any prior amendments thereto, after the previous expiration date and prior to the effective date of this Amendment, are hereby ratified as having been performed under the Agreement, as modified by any prior amendments, as it existed prior to this Amendment. The Parties whose names appear below swear under penalty of perjury that they are. authorized to enter into this Amendment, which is binding on the parties of this contract. [Signature page follows] MOU AMENDMENT - 1 - 4/2023 CITY OF ,., Federal Way CITY HALL 33325 8th Avenue South Federal Way, WA 98003-6325 (253) 835-7000 www.cayoffederalway com IN WITNESS, the Parties execute this Agreement below, effective the last date written below. CITY OF FEDERAL WAY: Jim Ferrell, Mayor DATE HISTORICAL SOCIETY OF FEDERAL WAY: By: Printed Name: Title: Date: STATE OF WASHINGTON ) ss. COUNTY OF ATTEST: Stephanie Courtney, CMC, City Clerk APPROVED AS TO FORM: J. Ryan Call, City Attorney On this day personally appeared before me to me known to be the of Historical Society of Federal Way that executed the within and foregoing instrument, and acknowledged the said instrument to be the free and voluntary act and deed of said corporation, for the uses and purposes therein mentioned, and on oath stated that he or she was authorized to execute said instrument and that the seal affixed, if any, is the corporate seal of said corporation. GIVEN under my hand and official seal this day of 2024. Notary's signature Notary's printed name Notary Public in and for the State of Washington. My commission expires MOU AMENDMENT - 2 - 4/2023 'S AN CITY Way EXHIBIT A ADDITIONAL COMPENSATION CITY HALL 33325 8th Avenue South Federal Way, WA 98003-6325 (253) 835-7000 www cityoffederalway com 1. Total Compensation: In return for the Services, the City shall pay the Society an additional amount not to exceed Fifteen Thousand and NO/100 Dollars ($15,000.00). The total amount payable to the Society pursuant to the original Agreement, all previous Amendments, and this Amendment shall be an amount not to exceed One Hundred Seven Thousand Five Hundred and NO/100 Dollars ($107,500.00). MOU AMENDMENT - 3 - 4/2023 NO COUNCIL MEETING DATE: APRIL 16; 2024 ITEM #: CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL SUBJECT: 2024 PORT OF SEATTLE ANNUAL ECONOMIC DEVELOPMENT GRANT POLICY QUESTION: Should the City Council authorize staff to apply for the 2024 Port of Seattle Economic Development Partnership Program Grant? COMMITTEE: ' MEETING DATE: CATEGORY: ❑ Consent ❑ Ordinance ❑ Public Hearing XCity Council Business ❑ Resolution ❑ Other STAFF REPORT BY: TANJA CARTER DEPT: ECONOMIC DEVELOPMENT Attachments: 1. Staff Report 2.2024 Economic Development Partnership Program City Application Options Considered: 1. Approve the proposed application for the 2024 Port of Seattle Economic Development Partnership Program Grant. 2. Do not approve proposed application for the 2024 Port of Seattle Economic Development Partnership Program Grant and provide direction to staff. MAYOR'S RECOMMENDATION: Wtion 1. MAYOR APPROVAL: DIRECTOR APPROVAL: U .'). , tial Da[ COMMITTEE RECOMMENDATION: N/A Committee Chair Committee Member Committee Member PROPOSED COUNCIL MOTION: "I move approval of the proposed application for the 2024 Port of Seattle Economic Development Partnership Program Grant. " (BELOW TO BE COMPLETED BY CITY CLERK'S OFFICE) COUNCIL ACTION: ❑ APPROVED COUNCIL BILL # ❑ DENIED First reading ❑ TABLED/DEFERRED/NO ACTION Enactment reading ❑ MOVED TO SECOND READING (ordinances only) ORDINANCE # REVISED - 4/2019 RESOLUTION # CITY OF FEDERAL WAY MEMORANDUM DATE: April 16, 2024 TO: City Council Members VIA: Jim Ferrell, Mayor�C/ FROM: Tanja Carter, Economic Development Director SUBJECT: Port of Seattle Economic Development Grant Financial Inipacts: The Port of Seattle Economic Development Grant is a matching grant. Grant funds require a 50 percent match of dollars or in -kind resources. In -kind resources can only be used for up to 25 percent of the grant award amount. For example, a grant request for $40,000 in Port funds would require the city to commit $20,000 in matching dollars and/or in -kind resources. Of that $20,000, up to $10,000 of in -kind resources could be applied toward the match requirement. The cost to the City will be $40,000 to avail of the match grant funding available ($20,000). The matching requirement is included within the Economic Development budget for 2024 and is comprised of $15,000 in consulting, and $5,000 in- kind/staff resource and time. Overview The Port of Seattle Economic Development Partnership Program is a cooperative economic development grant program to help support local and regional economic development initiatives across King County. How much fundin is available? Based on a per -capita calculation, King County cities (except Seattle) may each receive up to $60,000 based on the city's population. Federal Way is eligible for $60,000. The grant program requires Federal Way to contribute a 50 percent match of dollars / in -kind resources. In -kind resources (i.e. staff time) can only be used for up to 25 percent of the grant award amount. For example, a grant for $60,000 in Port funds would require the City to commit $30,000 additionally as a combination of matching dollars and/or in -kind resources. Of that $30,000, up to $15,000 could be applied toward the match requirement as in -kind resources. What will the funding be used for? The Economic Development Department plans to use the funds for the following programs: 1. Outreach & Survey a. Business outreach to up to 500 businesses in Federal Way where participation in a simple anonymous baseline business survey will be requested. The goal is to analyze Rev. 7/18 the survey results and subsequently provide a data driven pilot business support program tailored to the stated business needs. b. Additionally, repeating the same survey annually will highlight any changes/improvements in the business climate year over year; which provides a better picture of business growth and resiliency. 2. Tourism & Marketing Materials a. Economic Development endeavors to establish a comprehensive media repository for municipal use, ensuring accessible and current visual documentation of the City's physical and capital assets. This encompasses imagery capturing tourism landmarks, commercial enterprises, and promotional material aimed at fostering developer, investor and tourist interest. b. The media repository will extend to encompass videography tailored to diverse audience segments, facilitating targeted outreach initiatives tailored to specific departmental objectives. Through dynamic visual narratives, Federal Ways videography will spotlight its unique assets and the array of opportunities available within the city Program Start Date The program will commence subsequent to the City's execution of the grant contract with the Port of Seattle and is expected to span approximately nine months. Rev. 7/18 Po rt �. of Seattle;, 2024 Economic Development Partnership Application Instructions Overview The Port of Seattle Economic Development Partnership Program is a cooperative economic development grant program to help support local and regional economic development initiatives across King County. The Port is offering participating King County cities awards to fund projects and initiatives that address economic growth, encourage the use of the Port's facilities, and diversify the business ecosystem by increasing access and support for disadvantaged businesses, women -owned, and/or minority -owned business enterprises (WMBE). Funding Eligibility Grants are made to King County cities on a per -capita calculation based on Washington State Office of Financial Management annual population estimates. Cities with populations less than 10,000 people are eligible to receive $10,000 in grant funds and cities with populations more than 60,000 people are eligible to receive $60,000 annually. 2024 Maximum Grant Award Amounts by City* City Grant Award city Grant Award Algona $10,000 Lake Forest Park $13,630 Auburn art $60,000 Maple Valley $28,640 Beaux Arts Village $10,000 Medina $10,000 Bellevue $60,000 Mercer Island $25,790 Black Diamond $10,000 Milton art $10,000 Bothell art $29,280 1 Newcastle $13,610 Burien $52,560 Normand Park $10,000 Carnation $10,000 North Bend $10,000 Clyde Hill $10,000 Pacific art $10,000 Covington $21,600 Redmond $60,000 Des Moines $33,260 1 Renton $60,000 Duvall $10,000 Sammamish $60,000 Enumclaw art $13,090 SeaTac $31,740 Federal Way $60,000 Shoreline $60,000 Hunts Point $10,000 Sk komish $10,000 Issaquah 41,2901 Sno ualmie $14,500 Kenmore $24,230 Tukwila $22,780 Kent $60,000 Woodinville Yarrow Point $13,830 $10,000 Kirkland $60,000 *Based on 2023 OFM Population estimate Page 1 of 11 Program Application - 2024 Port of Seattle Economic Development Partnership Program Modified 02/16/2024 i Port �. of Seattle - Match Requirement Grant funds require a 50 percent match of dollars or in -kind resources. In -kind resources can only be used for up to 25 percent of the grant award amount. For example, a grant request for $50,000 in Port funds would require the city to commit $25,000 in matching dollars and/or in - kind resources. Of that $25,000, up to $12,500 of in -kind resources could be applied toward the match requirement. New this year - For smaller cities receiving Port grants of $10,000, cities may use in -kind resources to supplement up to the 50 percent of the match requirement. For example, if a grant request is for $10,000 in Port funds, 50 percent of the grant could be matched by up to $5,000 by in -kind resources. Who can apply and how may the funds be used? Eligible Applicants City governments in King County with populations less than 200,000. Eligible Projects Port of Seattle funds must be used on projects that tie to the Port of Seattle's business interests. Eligible projects include: Small Business Assistance • Accelerator/Incubator support • Business outreach and referrals to technical assistance (including surveys*) • Business planning/counseling • Marketing/market development, etc. • Government procurement • Financing assistance Business Recruitment • Marketing/Attraction campaigns • Prospecting missions • Trade show marketing • Other marketing and sales initiatives Industry Retention/Expansion • Business outreach and referrals to technical assistance (including surveys*) • Industry roundtables • Industry seminars • Government procurement Tourism • Traditional/Digital marketing campaigns • Video/Photo/Collateral production and deployment • Event development to attract non -local visitors Page 2 of 11 Program Application — 2024 Port of Seattle Economic Development Partnership Program Modified 02/16/2024 Port of Seattle Buy Local/Placemaking • Farmers Markets/Local Marketplaces/Pop-ups/Merchant Events • Buy Local campaigns • Arts/Culture Events • Leakage Prevention Workforce Development • Industry Training • Occupational Training (ex. welders) • Preapprentice/Apprenticeship programs Planning/Feasibility Studies** • Economic development comprehensive plans • Feasibility studies supporting business and/or government investment in facilities (ex. Marina) *Surveys — If you are conducting business surveys, the Port will want city partners to ask a common (core) set up questions to aggregate survey results across the region. Port staff will set up a meeting with cities conducting surveys to develop these common questions. Cities can add questions beyond these basic core questions. **Cities may only use Port funding for planning/feasibility studies once every three years, starting this year. Ineligible Projects • Signage and wayfinding projects (cities can instead use investments in signage/wayfinding towards their matching fund requirements) • Direct cash grants or loans made to businesses or organizations • Capital projects including projects to construct either new facilities or make significant, long-term improvements to existing facilities • Underwriting general or capital expenses associated with an event or program already in progress Metrics and Outcomes The Port of Seattle is interested in partnering with cities on programs and partnerships that advance economic growth. Cities should use Port grant funding to provide businesses with assistance, create jobs, promote tourism, and encourage economic growth. New this year — In an effort to capture project results and impacts, the Port is asking Cities to select from the list of defined metrics below and base their reporting requirements for their programs using these metrics. Please use the list of metrics below and include at a minimum one of the standardized metrics per project when planning programs or initiatives. Specific metrics around number of women - owned and minority -businesses (WMBE) supported should also be included and considered. Page 3 of 11 Program Application — 2024 Port of Seattle Economic Development Partnership Program Modified 02/16/2024 Port of Seattle) Table of Metrics Small Business Assistance • # Businesses assisted o # of WMBE served ■ $ of funding secured for businesses o $ funding secured for WMBE # Jobs created/retained o # of jobs created/retained for WMBE • # Businesses expanded o # of WMBE expanded • # of Attendees to events • # of Surveys collected o Businessowner demographics o Surveys completed in different languages o Surveys completed by WMBE • # of Trainings offered • # of Individuals trained o # of WMBE trained Workforce Development ■ # of Trainings offered • # of Individuals trained o # of WMBE individuals trained • # of Certificates, degrees or credits earned $ Wages paid to training graduates • Placement % of training graduates ■ % and # of WMBE participants Tourism ■ # of Non -local visitors • # of Hotel room nights • # of Businesses participating o # of WMBE participating • $ of Increased ticket sales • # of Website visits, impressions, page visits, links clicked, etc. Buy Local/Placemakina • # of Attendees/participants in events or campaigns ■ # of Businesses engaged in farmer's markets, Buy Local campaigns, and similar initiatives o # of WMBE participating • $ of Revenue generated (per business or in total) Page 4 of 11 Program Application — 2024 Port of Seattle Economic Development Partnership Program Modified 02/16/2024 Po rt of Seattle Port of Seattle 2024 Economic Development Partnership Program City: Contact Name: Title: Telephone: Email: Address: City, State, Zip: Alternate Contact: Alternate Telephone: Alternate Email: City Application City of Federal Way Tanja Carter Economic Development Director 206-445-2706 tanja.carter@cityoffederalway.com 33325 8th Ave S Federal Way, WA 98003 Julianna La Brake 253-835-2402 Julianna.labrake@cityoffederalway.com Declaration: I HEREBY CERTIFY THAT THE INFORMATION GIVEN /N THIS APPLICATION TO THE PORT OF SEATTLE /S TRUE AND CORRECT TO THE BEST OF MY KNOWLEDGE. Signature of Responsible Official: Print or Category Name and Title: Tanja Carter, Economic Development Director Date: 03/25/2024 Deadline: The program application must be submitted electronically to the Port of Seattle by Friday, April 12, 2024 by 3:00 pm. Submit the application to: e-submittals- purchCa)_portseattle.org and copy Annie Tran at tran.aAportseattle.org. Page 5of11 Program Application — 2024 Port of Seattle Economic Development Partnership Program Modified 02/16/2024 Port of Seattle - Project Description, Goals, Timeline, and Metrics Please describe each initiative you plan to implement using Port of Seattle funds. Project categories may include: • Small Business Assistance • Tourism • Workforce Development • Buy local/Placemaking • Plans/Special Projects (please consult with Port staff) See Port Metrics table and be sure to include any WMBE specific metrics. Project One: Pro'ect Category_: Plans/Special Projects Proiect Overview/Description: PROJECT 1: OUTREACH & SURVEY • In many cases contact data for businesses throughout Federal Way are out of date preventing any city staff from being able to reach and communicate with businesses. Reaching out annually to businesses in order to verify and update contact data enables the City to support small businesses, provide resources and address their critical needs. Future outreach from various City Departments is also necessary for various City driven projects, to inform businesses of any related issues or opportunities; thus minimizing impacts to normal business. • In addition, regularly connecting with businesses enables the city to anonymously survey business sentiment and use this feedback to create programs that directly and immediately address surveyed business needs. Smart Goal (Specific. Measurable. Achievable, Relevant, Time -bound): Specific: The goal clearly outlines the objectives of building an accurate up to date business contact list, conducting an anonymous survey on retention and recovery needs, and connecting businesses with support resources. Measurable: The goal specifies the number of businesses to be surveyed annually (up to 500 licensed businesses), allowing for quantifiable measurement of outreach efforts and business sentiment. Attainable: The goal is achievable within the resources and capabilities of the City, utilizing and collaborating with Direct Interactions, a regional call center for outreach of the businesses in Federal Way (up to 500 licensed businesses). Page 6 of 11 Program Application — 2024 Port of Seattle Economic Development Partnership Program Modified 02/16/2024 Port of Seattle, Relevant: The goal addresses the pressing need for supporting businesses in Federal Way by identifying their needs, connecting them with resources, and measuring sentiment to inform ongoing support efforts. Including connection with those who may be economically, socially disadvantaged communities, or WMBE businesses within our City. Time Bound: The goal indicates that the anonymous survey will be conducted annually, but will also provide results by the eighth month of 2024 providing a clear timeframe for measurement and evaluation of business sentiment within the city. Timelines: • April 16th — Council approves application ■ April 171h — Turn in application to POS ■ April — Await approval or direction from POS • May 7th — Council approves acceptance of grant • May 7th — Kick off meeting with Collaboration Partners begin outreach and survey (biweekly meetings and updates there on out) • August — Check progress and begin data library — begin sending supportive resources to those requesting as well as connecting with programs • September — Final results should be reported — begin sending supportive resources to those requesting as well as connecting with programs • October — December Begin final reports and — begin sending supportive resources to those requesting as well as connecting with programs • December — Final presentation to Council Project Metrics: Utilizing data accrued in 2023, an analysis will be conducted to ascertain whether businesses are noticing similar challenges or sharing their concerns for new ones. Additionally, an evaluation will be undertaken to determine if businesses are indicating an enhanced sense of support from the City or conversely expressing additional support and in what specific areas. Furthermore, leveraging contact information acquired in 2023 will serve to authenticate and further grow the current database created. Project Two: Project Category: Buy Local/Placemaking Project Overview/Description: PROJECT 2: PROMOTING THE CITY OF FEDERAL WAY The City aims to create a comprehensive media repository to market the City of Federal Way, focusing on capturing and documenting visual assets of the City. This repository will Page 7 of 11 Program Application — 2024 Port of Seattle Economic Development Partnership Program Modified 02/16/2024 Po rt of Seatt I e ensure accessibility to up-to-date imagery representing tourism landmarks, commercial enterprises, and promotional materials designed to stimulate developer and investor interest. The project encompasses the development of a centralized media repository containing both imagery and videography. The visual content will be tailored to showcase Federal Way's diverse assets and opportunities, including tourism landmarks, commercial establishments, and promotional material. Smart Goal (Specific, Measurable, Achievable, Relevant, Time -bound Specific: Develop and establish a comprehensive media repository for City use, encompassing high -quality imagery and videography to showcase Federal Way's assets and opportunities for economic development and our target audiences. Measurable: Curate and maintain a repository containing a minimum of 30 high -quality images and 2 dynamic videography narratives highlighting Federal Way's businesses, tourism landmarks, commercial enterprises, and promotional material. Attainable: We have already designated assets and partners to collaborate with to ensure the production and maintenance of visual content aligns with available budget and timelines. While also having other contractors and partners working on the dissemination of the product for the promotion of the City. Relevant: The initiative aligns with the Economic Development Department's objectives to attract investment, promote tourism, and enhance Federal Way's visibility and attractiveness as a destination for developers, investors, and businesses (as well as business tourists). Time Bound: Complete the development and establishment of the comprehensive media repository within 4 months, with ongoing maintenance and updates thereafter to ensure its continued relevance and effectiveness in promoting Federal Way's economic development goals. While DCI (Development Counsellors International) will begin utilizing this repository to create marketing collateral and promote beginning between the August — September of 2024. Timelines- • April 16th — Council approves application • April 17th — Turn in application to POS • April — Await approval or direction from POS • May 7th — Council approves acceptance of grant • May 7th — Kick off meeting with contractor to begin picking dates for photography/video • August — Check progress and create media repository — DCI promotion marketing collateral begins have biweekly check in on analytics Page 8 of 11 Program Application — 2024 Port of Seattle Economic Development Partnership Program Modified 02/16/2024 Po I''t of Seattle, • September — Final results should be reported — DCI promotion marketing collateral data • October — December Begin final reports and gather data from pipeline ■ December— Final presentation to Council Pro'ect Metrics: The project metrics entail a comprehensive strategy focusing on several key areas. Firstly, through Impressions, we aim to effectively engage our target audience by deploying our marketing collateral composed by the photos and videos. Secondly, engagement represents our commitment to delivering relevant and sought-after information to our designated demographic. Finally, our call to action initiative encourages individuals to download materials, providing us with valuable insights into user interaction and engagement levels. By strategically aligning these metrics, we aim to optimize our outreach efforts and enhance overall project effectiveness. We will have analytics on the interactions mentioned above. Project Budget Identify each project budget category, total funds (including the monetary value of in -kind resources), Port -of Seattle funds and City monetary and in -kind matching funds. Include the total funds from each column in the second to last row. Include the percentage contributions to the Port of Seattle's contribution in the last row. "This table will be used in the contract agreement between the Port of Seattle and each city. Project Name: Project Category Port of Seattle City Monetary City In- kind Total Funds (Please select one of the categories Funds Awarded: Matching Funds: Matching Funds: (Including In -Kind): • -Plans/Special provided) 111 11 10,000.00 5,000.00 30,000.00 Projects 2,500.00 2,500.00 10,000.00 • - Local/Placemaking Project•• - an item. Total• 1 1 1 1 I I I I 1 1 I I I I 1 III I I Page 9 of 11 Program Application — 2024 Port of Seattle Economic Development Partnership Program Modified 02/16/2024 Po I'-t of Seattle Percentage 50% 25% 25% contribution to Port Funds*: *City monetary and in -kind matching funds must add up to at least 50% of the Port of Seattle funds awarded. In -kind resources can only be used for up to 25 percent of the grant award amount. New this year - For smaller cities receiving Port grants up to $10,000, cities may use in -kind resources to supplement up to the 50 percent match requirement. For example, if a grant request is for $10,000 in Port funds, 50 percent of the grant could be matched by up to $5,000 by in -kind resources. 1. Collaboration with partners: Please identify any community organizations (chamber of commerce, neighborhood associations, Small Business Development Centers, SCORE, Greater Seattle Partners, etc.) you plan to work with to complete all or part of your project(s)? In conjunction with these contractors, the project will engage in collaborative efforts with various community organizations to enhance project execution and achieve objectives. Specifically, we will partner with the Small Business Development Center, leveraging their expertise and resources to support any of the businesses in Federal Way as well as connecting the businesses that respond in the outreach and survey portion of this project. Additionally, our collaboration with DCI (Development Counsellors Initiative) will involve utilizing the data and media repository to create compelling marketing materials aimed at promoting Federal Way. This partnership will leverage the expertise and capabilities of these programs to enhance the visibility and attractiveness of the region to potential stakeholders and investors which in turn supports and promotes our businesses. We will also engage with a Grant Writing consultancy to provide essential workshops on grant application and fundraising strategies. These workshops will empower business owners who requested support with the necessary knowledge and skills to secure funding opportunities and support project sustainability and growth. 2. Use of consultants or contractors: If you plan to use consultants or contractors to complete all or part of the project, please identify the firm or type of firm you plan to hire for this project. The project will engage with Direct Interactions, a firm specializing in omnichannel customer service solutions, to provide support for outreach and promoting the business survey. Additionally, the second project will collaborate with a Professional Photographer to facilitate the collection and management of media assets for the media repository. Page 10 of 11 Program Application — 2024 Port of Seattle Economic Development Partnership Program Modified 02/16/2024 Po rt of Seattle 3. Equity: Provide an overview of how intended projects support economically, socially disadvantaged communities, or WMBE businesses within your city or region. As part of our commitment to equity, the initiatives undertaken aim to foster the economic empowerment of economically and socially disadvantaged communities as well as Women, Minority, and Disadvantaged Business Enterprises (WMBEs) within our City. In our outreach efforts within Federal Way, we recognize the importance of amplifying the voices of hardworking business owners who may not traditionally engage in civic discourse or participate in Council meetings. Through extensive outreach and surveys conducted, we provide a platform for these entrepreneurs to express their needs, challenges, and aspirations. By establishing and maintaining a continuous line of communication through our annual outreach and survey, we cultivate relationships with these businesses. This ongoing engagement allows us to discern their specific needs, such as assistance in improving marketing strategies or navigating the complexities of applying for grants and other resources. Furthermore, through collaborative partnerships with organizations specializing in business support and guidance, we facilitate access to knowledge and entrepreneurship opportunities sought by these communities. By leveraging these partnerships, we ensure that tailored assistance and mentorship are provided to meet the unique needs of WMBEs and economically disadvantaged entrepreneurs. There are organizations, we contract with annually to ensure free support to these business owners. And by collecting and updating accurate contact information through annual outreach efforts, we ensure sustained support and connectivity with these businesses. This proactive approach enables us to remain responsive to their evolving needs and challenges, thereby fostering a conducive environment for their growth and success. In essence, our approach underscores a commitment to inclusivity and empowerment, wherein every business owner, regardless of background or circumstance, has equitable access to resources, support, and opportunities for economic advancement within our city or region. Page 11 of 11 Program Application — 2024 Port of Seattle Economic Development Partnership Program Modified 02/16/2024 we COUNCIL MEETING DATE: APRIL 16TH, 2024 CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL SUBJECT: ENERGY EFFICIENCY AND CONSERVATION BLOCK GRANT ITEM #: POLICY QUESTION: Should the City Council authorize staff to apply for the 2024 Energy Efficiency and Conservation Block Grant Program? COMMITTEE: N/A MEETING DATE: N/A CATEGORY: ® Consent ❑ Ordinance ❑ Public Hearing ❑ City Council Business ❑ Resolution ❑ Other - INFORMATION ONLY STAFF REPORT BY: TANJA CARTER, DIRECTOR DEPT: ECONOMIC DEVELOPMENT Attachments: 1. Staff Report Options Considered: 1. Approve the proposed application for the 2024 Energy Efficiency and Conservation Block Grant Program. 2. Do not approve proposed application for the 2024 Energy Efficiency and Conservation Block Grant Program and provide direction to staff. MAYOR'S RECOMMENDATION: Option 1. MAYOR APPROV COMMITTEE RECOMMENDATION: N/A L APPROVAL: �• \�-V ni�ial Dale Committee Chair Committee Member Committee Member PROPOSED COUNCIL MOTION: "I move approval of the proposed application for the 2024 Energy Efficiency and Conservation Block Grant. " (BELOW TO BE COWL ETED BY CITY CLERK'S OFFICE) COUNCIL ACTION: ❑ APPROVED COUNCIL BILL # ❑ DENIED First reading ❑ TABLED/DEFERRED/NO ACTION Enactment reading ❑ MOVED TO SECOND READING (ordinances only) ORDINANCE # REVISED - 4/2019 RESOLUTION # DATE: TO: VIA: FROM: SUBJECT: CITY OF FEDERAL WAY MEMORANDUM April 16`h, 2024 City Council Members Jim Ferrell, Mayor �2/, Tanja Carter, Economic Development Director Energy Efficiency and Conservation Block Grant Financial Impacts: The revenue to the City for from the Energy Efficiency and Conservation Block Grant (EECBG) will be $147,860 and will be credited to the Economic Development Department budget for administration. This is a regular grant, not a reimbursable or matching grant. The cost to the City, to receive the funds would be staff time in providing the required administrative and reporting documents that the grant stipulates. Background Information: Economic Development recognizes that there are many grant opportunities potentially available to the City. Based on this, Council approved allocation of ARPA funding to hire a grant finding and grant writing consultancy. The goal of this engagement is to set up a grant finding structure and use the structure to identify and apply for grants for various City departments. The structure of the pilot is as follows: • Collaborate with Finance and use the budget wait list to identify projects which need funding. _ ■ Economic Development requested CPIN to build a grant tracker, grant library, and project descriptions template in order to provide a work flow and structure in finding and applying for grants in the citywide pilot grant program. • CPIN will present a monthly update starting March 2024 at the FEDRAC regular meeting. This update will include the grants that are being analyzed and applied for. The goal at the end of this collaboration will be to analyze the pilot grant program and its progress to determine if a position or future consultant engagement is warranted for the City in the 2025 and 2026 biennial budget. Rev. 7/18 EECBG Grant Information: The $147,860 EECBG grant aligned with an Economic Development Department project/program and the department is requesting permission to apply for the grant in order to finance the program. The grant supports: Building a clean and equitable energy economy that prioritizes disadvantaged communities and promotes equit2 and inclusion in workforce oppormnities and deployment activities. What will the grant pay for? Pacific Raceways, identified as a site of statewide significance in Washington State, is undergoing transformative development initiatives led by track owners. Notably, construction endeavors are nearing completion for advanced manufacturing facilities and research and development projects focused on sustainable mobility and energy. However, a pressing challenge arises due to the insufficient availability of office and laboratory space on the Pacific Raceways property to accommodate prospective tenants. To address this challenge, the proposed utilization of the EECBG funding entails the planning for conversion of 50-100% of the vacant 330,000 square foot IRG/former Weyerhaeuser headquarters building in Federal Way into office and laboratory spaces tailored for Pacific Raceways' advanced manufacturing businesses and projects. The planned conversion would include establishing a workforce development/education program within the campus in collaboration with multiple higher education institutions and businesses on campus. This workforce development programming will facilitate seamless integration for businesses relocating to Clean Tech Innovation Corridor. This comprehensive initiative not only fosters the creation of clean energy jobs but also cultivates a robust job pipeline and will provide job training opportunities for individuals hailing from disadvantaged communities and populations. What are the backend requirements? The EECBG backend requirements identified must be completed to fulfill the grant, if accepted. Below is a summary: Financial Metrics: There are several buckets that EECBG funding can be applied towards -- Program Design, Curriculum Development, Stakeholder Engagement. Tracking includes: the number of hours of technical assistance, average cost incurred for engaging each stakeholder in the planning process and/or the average cost incurred for designing each component of the curriculum. Rev. 7/18 Process Metrics: Examples of process metrics include the following — a. Planning Cycle Time: Average time taken to complete a planning cycle, from initial assessment to final plan. b. Program Design Effectiveness: Percentage of program design elements that align with the grant objectives and stakeholder needs. c. Stakeholder Engagement Rate: Percentage of key stakeholders actively engaged in the planning process. d. Curriculum Design Iterations: Number of iterations required to finalize the curriculum design based on stakeholder feedback. Rev. 7/18 COUNCIL MEETING DATE: j s�, \ Vo t 9c ,S*i CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL SUBJECT: ORDINANCE: TC-3 DEVELOPMENT AGREEMENT ITEM #: r To POLICY QUESTION: Should the City enter into a development agreement with Trent Development Inc. for the acquisition and development of the City -owned TC-3 properties? COMMITTEE: Land Use & Transportation CATEGORY: ❑ Consent ® Ordinance ❑ City Council Business ❑ Resolution STAFF REPORT BY: Keith Niven Attachments: 1. Staff Report MEETING DATE: March 4, 2024 ❑ Public hearing ❑ Other DEPT: CD 2. Ordinance Options Considered: 1. Adopt the proposed ordinance. 2. Do not adopt the proposed ordinance and provide direction to staff. MAYOR'S RECOMMENDATION: Option 1. MAYORAPPROVAL: r DIRECTOR APPROVAL: W 2.26.24 omm' ee Council InitiallDate [nisiat ❑atc lnilial' ie COMMITTEE RECOMMENDATION: I move to forward the proposed ordinance to first reading on March 19, 2024. Conln-ii tee Member Tran PROPOSED COUNCIL MOTION(S): fov�r kk(A,. mom Colin' i�Member Walsh FIRST READING OF ORDINANCE (3/19/24): `I move to forward the proposed ordinance to the April 'fV 2024 Council Meeting for second reading and enactment. " SECOND READING OF ORDINANCE (4/2/24): "I move approval of the proposed ordinance and authorize the Mayor to execute the proposed development agreement with Trent Development Inc. for the TC-3 properties. " (BELOW TO BE COMPLETED BY CITY CLERK'S OFFICE) COUNCIL ACTION: ❑ APPROVED COUNCIL BILL # ❑ DENIED First reading ❑ TABLED/DEFERRED/NO ACTION Enactment reading ❑ MOVED TO SECOND READING (ordinances only) ORDINANCE # REVISED—11/2019 RESOLUTION # CITY OF FEDERAL WAY MEMORANDUM DATE: January 24, 2024 TO: Land Use & Transportation Committee VIA: Jim Ferrell, Mayor FROM: Keith Niven, AICP, CEcD W .1 SUBJECT: TC-3 Development Agreement (DA) Financial Impacts: The execution of the proposed development agreement will lead to the sale of the TC-3 properties to Trent Development, LLC. for $10,000,000. In addition, development of the properties will lead to one-time sales tax on construction and on -going sales tax from future residents and businesses. Also, the developer will fund design of the Civic Plaza; incorporate public art; incorporate enhanced design of street fixtures, furniture, and lighting; provide an enhanced Road A design; maintain public access to remaining surface parking stalls North of the PAEC and on the west leg of Road A on the property during Phase I construction; allow public access to surface parking stalls in the Northwest Block during Phase II and III construction at no cost to the City; and, will construct an elevator in the Southeast Block building that will connect the sidewalk on 316th St. to the Civic Plaza, which will be available to the public. Background Information: In November 2014, the Mayor and City Council voted for the acquisition of a 7.48 acre parcel adjacent to the soon to be developed Performing Arts and Conference Center in downtown. The effort envisioned eventual development of a dense mix of uses featuring a conference hotel for the Performing Arts and Conference Center along with housing, educational/classroom space, specialty retail, civic uses and open space. A primary goal for the town center redevelopment consists of encouraging strategic investment in a compact environment that contains a variety of uses and creates a unique sense of place. In November 2022, the City issued a Request for Proposals (RFP) to solicit proposals from developers looking to purchase the property from the City and develop it. The City received six qualified proposals and selected Trent Development as the preferred developer. In April 2023, the City Council authorized the Mayor to execute a Letter of Intent to Award with Trent Development for the TC-3 properties. B. PROPOSED DEVELOPMENT AGREEMENT (SUMMARY) Rev. 7/18 Section 2 — Project Description and Entitlements Residential: up to 1,600 units Office: up to 175,000 sf Entertainment: up to 170,000 sf Lodging: up to 75 rooms and 50,000 sf of accessory space Civic Plaza: up to $5M in cost to the City Civic Buildings: option for City (at cost) until 1/1/2028 Section 3 — Civil Improvements Street and ROW improvements are depicted in an Exhibit to the DA Phasing is depicted in an Exhibit to the DA Road A is a circular road that connects to S 314t' Street in two locations. Section 4 — Public Benefits Catalyst project for Downtown Tax revenue to the City Residential ownership opportunities (approximately 38 units) Developer will pay for Civic Plaza design Allowing parking for PAEC on unused portion of the property for 5+ years Providing public art as part of the project Helping to design downtown street furniture No 12-year MFTE unless 8-year MFTE is terminated by the State Section 5 -- Property Acquisition Trent Development will pay the City $10,000,000 Section 7 — Development Regulation Modification Ground floor residential uses in lieu of non-residential around perimeter Allow S 314t' Street improvements to sync with project phases Road A street section deviations Exchange of Inclusionary requirement Allow the ground floor non-residential use to be calculated on a project basis, and not building -by -building Rev. 7/18 Allow portions of the non -driving surface of Road A to count toward required open space Allow building lengths to exceed 250 feet Section 10 — Vesting School Impact fees = $0 Park Impact fee = $2,200 Transportation Impact fee = vested to current rates for 10 years. Section 12 — Flexibility and Future Agreement Amendments Increase to project entitlement of 20% or less, developer discretion Increase in project phase by up to 3 years, developer discretion Change of Term of the DA, City Council Substantive change to the Conceptual Plan, City Council Substantive change to the Phasing and Timing Plan, City Council Section 18 — Term The DA is for 30 years C. DECISION CRITERIA FWRC 19.85.120 provides factors to be considered in review of a development agreement (DA). The City may consider, but is not limited to, the following factors when considering a DA: (1) Compatibility with and impact on adjacent land uses and surrounding neighborhoods; The City is looking to the development that is envisioned for these properties to set an example of future redevelopment for Downtown Federal Way. Mid -rise, mixed use buildings meet many of the expectations set in the City's Comprehensive Plan for this area. (See applicable Goals and Policies below under #4). (2) Adequacy of and impact on community facilities including utilities, roads, public transportation, parks, recreation, and schools; The development that is entitled with this DA will be required to provide street improvements, stormwater improvements, and open space consistent with the City's codes, unless explicitly modified under Section 7 (see summary above). It is not anticipated development entitled by this DA will have unmitigated impacts on community facilities. Prior to the construction of any of the entitlement, the developer must obtain a project -level Rev. 7/18 SEPA decision and land use permit. These processes will ensure that there are no unanticipated impacts on community facilities. (3) Potential benefits of the proposal to the community; and The public benefits are summarized above under Section 4. For a detailed description of these benefits, refer to the draft DA. (4) Effect upon the comprehensive plan. The proposed DA is consistent with the City's Comprehensive Plan. Specifically, the following Goals and Policies are supported by its adoption: CCG1 Create an identifiable City Center that serves as the social, cultural, and economic focus of the City. Define a City Center with distinct boundaries, unique building types, and special features. CCG4 Encourage a mix of compatible uses to maintain a lively, attractive, and safe place to live, work, and visit. CCG8 Develop land use patterns that will encourage less dependency on the single occupant automobile. CCG9 Provide a balanced transportation network that accommodates public transportation, high occupancy vehicles, pedestrians, bicyclists, automobiles, and integrated parking. CCG10Create an environment that attracts high quality housing, commercial, and office uses. Continue to enforce requirements for quality design in buildings, streetscape, and site planning. CCG12Focus new growth in the City Center and allow for higher intensity uses and densities. CCP2 Develop an attractive City Center that will attract quality development. CCP3 Continue to support land use regulations that allow the higher intensity development expected over the next 15 to 30 years. CCP5 Utilize the SEPA Planned Action to provide streamlined permit review in the City Center in order to accelerate progress towards meeting the vision. CCP7 Allow for a variety of uses and mixed -use development within buildings, or complexes. Ensure that mixed -use development complements and enhances the character of the surrounding residential and commercial areas. CCP8 Provide incentives to encourage residential development in City Center. CCP9 Promote the siting of cultural and civic uses within the City Center. The City should always consider City Center sites in siting analyses and decisions regarding potential civic and cultural uses that it develops. In addition, incentives should be explored that could attract cultural and civic uses over which the City does not have direct control. CCPI1 Continue to provide amenities such as community services, parks, and public spaces to meet residential needs. CCG14Promote and facilitate the effective use of non -motorized transportation. Create a safe, efficient, and enjoyable pedestrian and bicycle system. CCP15 Emphasize pedestrian and bicycle circulation, as well as other travel modes in all aspects of developing the City Center transportation system. Include public sidewalks, street trees, and other pedestrian amenities for streets. CCP16 Continue to enforce and refine zoning codes, site planning requirements, and street design standards, as necessary, to establish a more pedestrian and bicycle friendly environment. Rev. 7/18 CCP17 Encourage new development to include active ground floor uses such as shops, community services, office, and restaurants. CCP18 Provide pedestrian connections between adjacent buildings where possible to provide for streetscape continuity and develop clear and safe pedestrian paths through large parcels to enhance the pedestrian network. CCG16Develop civic and cultural facilities in addition to a public space and park system within the City Center to meet the needs of residents, employees, and visitors. These facilities and spaces should connect to the Citywide and regional system of public spaces, parks, and trails. CCP31 Promote a diversity of public and privately funded recreational and cultural facilities throughout the City Center. Promote partnerships between the City and other agencies, private organizations, and individuals to develop and meet the needs of the community for these types of facilities. CCG17Encourage the development of a higher -density, mixed -use City Center that in turn will reduce parking demand per square foot or per unit. CCP34 Encourage the provision of structured parking. CCP38 Encourage shared parking between uses to maximize the use of available parking within the City Center. Rev. 7/18 ORDINANCE NO.24- AN ORDINANCE of the City of Federal Way, Washington, relating to entering into a development agreement with Trent Development Inc. for the TC-3 properties pursuant to the provisions of Chapter 19.85 Federal Way Revised Code. WHEREAS, the Washington State legislature has authorized local governments to enter into development agreements under state law pursuant to RCW 36.70B.170 through 36.7013.210; and WHEREAS, the City of Federal Way ("City") has authorized the use of development agreements in the City pursuant to Chapter 19.85 Federal Way Revised Code ("FWRC"); and WHEREAS, in November, 2014, the City approved acquisition of a 7.48-acre property ("TC-3") adjacent to the then soon to be developed Performing Arts and Event Center in the City's downtown; and WHEREAS, in February, 2022, the City contracted with Perkins Eastman Architects to work with the City in creating a land use and development plan for the City -owned TC-3 properties; and WHEREAS, on November 23, 2022, the City issued a request for proposals ("RFP") to find a developer for the TC-3 properties; and WHEREAS, Trent Development Inc. submitted a proposal for development of the TC-3 properties; and WHEREAS, on April 18, 2023, the City Council selected Trent Development Inc. ("Trent") as the City's preferred developer, and authorized execution of a Letter of Intent to Award and initiation of development agreement negotiations with Trent; and Ordinance No. 24- Page I of 34 WHEREAS, on April 21, 2023, the City and Trent executed an Agreement Regarding Intent to Award; and WHEREAS, as part of that agreement the City and Trent Development Inc. jointly agreed to negotiate in good faith a development agreement to present to the City Council governing the development of TC-3; and WHEREAS, on May 12, 2023, the City received an appraisal report from CBRE determining the market value of the TC-3 properties, which was subsequently revised and updated on January 5, 2024; and WHEREAS, an Environmental Determination of Nonsignificance ("DNS") was properly issued for the proposed development agreement on October 6, 2023, the City received no comments and the DNS was finalized on October 20, 2023, and no appeals were filed and the appeal period expired on November 10, 2023; and WHEREAS, on March 8, 2024, the Director of Community Development provided public notice for the public hearing consistent with the provisions of FWRC 19.85.130; and WHEREAS, the proposed development agreement is consistent with the Federal Way Comprehensive Plan; and WHEREAS, the Land Use & Transportation Committee of the Federal Way City Council was briefed on the proposed development agreement on March 4, 2024; and WHEREAS, the City Council held a public hearing on April 2, 2024, and reviewed the staff report and considered all of the testimony provided. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF FEDERAL WAY, WASHINGTON, DO ORDAIN AS FOLLOWS: Ordinance No. 24- Page 2 of 34 Section I . Findings and Conclusions. The City Council of the City of Federal Way makes the following findings and conclusions with respect to the proposed development agreement attached as Exhibit A: (a) The recitals set forth above are hereby adopted and restated as findings of fact. (b) The City is authorized to enter into a development agreement pursuant to the provisions of Chapter 36.70B.170 RCW, Growth Management. (c) The development agreement review process has followed the proper procedures required under FWRC 19.85. (d) The development agreement, as set forth in Exhibit A, is consistent with RCW 36.70B, RCW 43.21 C, and FWRC 19.85. (e) The development envisioned under the development agreement is compatible with and results in positive impacts on adjacent land uses and surrounding neighborhoods because it will set an example for future redevelopment for downtown Federal Way, and mid -rise, mixed use buildings meet many of the expectations set in the City's Comprehensive Plan for the area. (f) Community facilities including utilities, roads, public transportation, parks, recreation, and schools are adequate to support the development, and the development will not have a negative impact on such community facilities. Development under the development agreement will be required to provide street improvements, stormwater improvements, and open space consistent with FWRC, with some explicit modifications under the development agreement. Prior to the construction of any of the entitlements under the development agreement, the developer must obtain applicable project -level SEPA decisions and land use permits, which will ensure there are no unanticipated or unmitigated impacts on community facilities. Ordinance No. 24- Page 3 of 34 (g) Approving the development agreement is in the best interest of the residents of the City and will benefit the City as a whole because the proposed development agreement provides for the investment of approximately $450,000,000 of private capital into the city of Federal Way; includes the provision of opportunities for home ownership in addition to rental housing options; will result in the increased production of housing and employment opportunities thereby adding to the public health, safety, and welfare of the community; will act as a catalyst for public and private investment in the City's downtown; and, contains several other public benefits as detailed in Section 4 of the development agreement. (h) The proposed development agreement is consistent with, and substantially implements, the Federal Way Comprehensive Plan, including the following specific goals and policies: CCG1 Create an identifiable City Center that serves as the social, cultural, and economic focus of the City. Define a City Center with distinct boundaries, unique building types, and special features. CCG4 Encourage a mix of compatible uses to maintain a lively, attractive, and safe place to live, work, and visit. CCG8 Develop land use patterns that will encourage less dependency on the single occupant automobile. CCG9 Provide a balanced transportation network that accommodates public transportation, high occupancy vehicles, pedestrians, bicyclists, automobiles, and integrated parking. CCG10 Create an environment that attracts high quality housing, commercial, and office uses. Continue to enforce requirements for quality design in buildings, streetscape, and site planning. CCG12 Focus new growth in the City Center and allow for higher intensity uses and densities. CCP2 Develop an attractive City Center that will attract quality development. Ordinance No. 24- Page 4 of 34 CCP3 Continue to support land use regulations that allow the higher intensity development expected over the next 15 to 30 years. CCPS Utilize the SEPA Planned Action to provide streamlined permit review in the City Center in order to accelerate progress towards meeting the vision. CCP7 Allow for a variety of uses and mixed -use development within buildings, or complexes. Ensure that mixed -use development complements and enhances the character of the surrounding residential and commercial areas. CCP8 Provide incentives to encourage residential development in City Center. CCP9 Promote the siting of cultural and civic uses within the City Center. The City should always consider City Center sites in siting analyses and decisions regarding potential civic and cultural uses that it develops. In addition, incentives should be explored that could attract cultural and civic uses over which the City does not have direct control. CCP11 Continue to provide amenities such as community services, parks, and public spaces to meet residential needs. CCG14 Promote and facilitate the effective use of non -motorized transportation. Create a safe, efficient, and enjoyable pedestrian and bicycle system. CCP15 Emphasize pedestrian and bicycle circulation, as well as other travel modes in all aspects of developing the City Center transportation system. Include public sidewalks, street trees, and other pedestrian amenities for streets. CCP16 Continue to enforce and refine zoning codes, site planning requirements, and street design standards, as necessary, to establish a more pedestrian and bicycle friendly environment. CCP17 Encourage new development to include active ground floor uses such as shops, community services, office, and restaurants. CCP18 Provide pedestrian connections between adjacent buildings where possible to provide for streetscape continuity and develop clear and safe pedestrian paths through large parcels to enhance the pedestrian network. CCG16 Develop civic and cultural facilities in addition to a public space and park system within the City Center to meet the needs of residents, employees, and visitors. These facilities and spaces should connect to the Citywide and regional system of public spaces, parks, and trails. CCP31 Promote a diversity of public and privately funded recreational and cultural facilities throughout the City Center. Promote partnerships between the City and other Ordinance No. 24- Page 5 of 34 agencies, private organizations, and individuals to develop and meet the needs of the community for these types of facilities. CCG17 Encourage the development of a higher -density, mixed -use City Center that in turn will reduce parking demand per square foot or per unit. CCP34 Encourage the provision of structured parking. CCP38 Encourage shared parking between uses to maximize the use of available parking within the City Center. Section 3. Development Agreement Adapted. The City of Federal Way hereby adopts the development agreement attached as Exhibit A ("Development Agreement") by and between the City of Federal Way and Trent Development Inc., for the purchase and sale of the City -owned TC- 3 properties and the development of the properties. Section 4. Severability. The provisions of this ordinance are declared separate and severable. The invalidity of any clause, sentence, paragraph, subdivision, section, or portion of this ordinance, or the invalidity of the application thereof to any person or circumstance, shall not affect the validity of the remainder of the ordinance, or the validity of its application to any other persons or circumstances. Section 5. Corrections. 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/clerical errors, references, ordinance numbering, section/subsection numbers and any references thereto. Section 6. Effective Date. This ordinance shall be effective five (5) days after passage and publication as provided by law. PASSED by the City Council of the City of Federal Way this day of , 2024. Ordinance No. 24- Page 6 of 34 CITY OF FEDERAL WAY: JIM FERRELL, MAYOR ATTEST: STEPHANIE COURTNEY, CMC, CITY CLERK APPROVED AS TO FORM: J. RYAN CALL, CITY ATTORNEY FILED WITH THE CITY CLERK: PASSED BY THE CITY COUNCIL: PUBLISHED: EFFECTIVE DATE: ORDINANCE NO.: Ordinance No. 24- Page 7 of 34 DEVELOPMENT AGREEMENT THIS AGREEMENT is entered into this day of , 2024 (the "Effective Date") by and between Trent Development Inc., a Washington corporation ("Developer"), or its assignee, and the City of Federal Way, a Washington municipal corporation ("City"). Developer and the City are each a "Party" and collectively the "Parties" to this Agreement. RECITALS A. The Washington State Legislature has authorized the execution of development agreements between a local government and an entity having ownership or control of real property within its jurisdiction, pursuant to RCW 36.70B.170 through 36.7013.210 ("Development Agreement Statute"). This Agreement is authorized pursuant to the Development Agreement Statute and Chapter 19.85 of the Federal Way Revised Code ("FWRC"). B. The City of Federal Way owns parcels 857500-0010, 857500-0020, and 092104- 9017, commonly referred to as Town Center 3 ("TC-3 Property"), located generally at the southwest corner of 23rd Avenue S and S 314th Street, legally described on Exhibit A, which is attached hereto and incorporated herein by reference. The TC-3 Property is designated City Center Core in the City's Comprehensive Plan, located in the City Center Core zone ("CC-C"), and located within the Downtown Architectural Overlay ("Downtown"). C. In September 2006, the City adopted a planned action Environmental Impact Statement for the City Center. The City subsequently adopted a Supplemental Environmental Impact Statement ("SEIS") via Ordinance 16-811, which contemplated 475,000 sq. ft. of retail, 400,000 sq. ft. of office, 600 hotel rooms, and 2,400 housing units (collectively "Planned Action EIS"). The TC-3 Property is located within the Planned Action EIS boundary and the Planned Action EIS has been incorporated into the SEPA decision (DNS 23-102418-SE) for this Agreement. D. In 2022, the City contracted with VIA Architecture, a Perkins Eastman Studio, to prepare a preferred redevelopment plan ("Master Development Plan") for an approximately 7.45- acre portion of the TC-3 Property ("Property"), as depicted in the January 5, 2024, appraisal conducted by CBRE ("Appraisal"). The Master Development Plan envisioned five privately - owned building parcels to be developed with office, retail, hotel, residential units, a civic plaza and community building, and a public parking garage. The City and community expressed support for the Master Development Plan, believing it would create a sense of place and civic identity, reflective of the growing and diverse community; provide a catalyst for mixed use residential and pedestrian -focused retail; anchor the north downtown with a pedestrian -scale block structure, with smaller, active public spaces; and capitalize on momentum and timing of recent investments. -1- E. In November 2022, the City issued a Request for Proposals ("RFP") to identify a purchaser and developer for the Property. Developer submitted a proposal, which was selected by the City. In April 2023, the City Council authorized the Mayor to execute the Letter of Intent ("LOI") to authorize the Developer to initiate a Development Agreement with the City. F. The Developer is planning a phased redevelopment of the Property with a mix of land uses, generally consistent with the Master Development Plan ("Project"). The Developer has prepared a Conceptual Plan (Exhibit B), Phasing and Timing Plan (Exhibit C), and Conceptual Improvement Plan Exhibit D to provide for the coordinated redevelopment of the Property. These Exhibits are incorporated herein by reference. The Parties agree the Conceptual Plan is a conceptual guide for the Project as defined in this Agreement but does not constitute a "Development Plan" under FWRC 19.85.100. G. Redevelopment of the Property will be a substantial benefit to the City through implementation of the vision of the City Center Sub -Area Plan, new transit -oriented housing and job opportunities, and new destination retail and restaurants in , Downtown. However, redevelopment of the Property entails significant financial, entitlement, and construction risk to Developer over the course of a multi -phased development. The City's partnership in the execution of this catalyst project is critical for success of the Project and Downtown. This Agreement is intended to ensure that public decisions regarding public investment and cooperation, and Developer predictability during the planning, entitlement and redevelopment of the Property, benefit both Parties in supporting the timely and cost-efficient delivery of housing, jobs, and other public benefits to the City of Federal Way. H. Environmental impacts of the Agreement were identified, considered and mitigation measures proposed through the provisions of this Agreement. The City issued a Determination of Non -Significance on October 6, 2023. I. Completion of the Project in accordance with the Conceptual Plan will promote the goals and policies of the Comprehensive Plan. J. By this Agreement, the Parties intend to set forth their mutual agreement and understandings as they relate to the development and sale of the Property and the Project. NOW THEREFORE, in consideration of the mutual benefits and agreements contained herein, as well as other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows: AGREEMENT 1. Definitions. Each term identified in this Section shall have the specific meaning identified in this Section. Each term defined elsewhere in this Agreement shall have the specific -2- meaning identified elsewhere in this Agreement. Undefined terms shall have their common and ordinary meanings. 1.1. "City Council" means the City Council of the City of Federal Way. 1.2. "Development Regulations" means those sections of the Federal Way Revised Code, Federal Way Zoning and Development Code, Federal Way Comprehensive Plan, Federal Way Zoning Map, and any implementing policies, regulations, procedures or guidelines addressing the zoning, building and site design, -utilities, environmental review (including SEPA procedures and substantive authority), transportation concurrency, multifamily dwelling unit limited property tax exemption regulations, impact fees and any other elements that govern the development of real property within the City. A term defined in the Development Regulations shall have the meaning assigned to it within the Development Regulations. 1.3. "FWRC" means the Federal Way Revised Code. 1.4. "MDP" means the Master Development Plan prepared for the City in preparation for releasing the Request for Proposals for the Property. 1.5 "MFTE" means the Multifamily Dwelling Unit Limited Property Tax Exemption program administered by the City pursuant to FWRC 3.30. 1.6. "Developer" means Trent Development Inc., a Washington corporation, and its successors and permitted assigns pursuant to Section 26. 1.7. "SEPA" means the State Environmental Policy Act, RCW 43.21 C, and implementing regulations at WAC Ch.197-11. 1.8. "Development Director" or "Designated Official" is the Director of the Department of Community Development, also known as the Department of Community Development Services.- 1.9. "Designer" means the consultant hired to prepare design and associated documents for the Civic Plaza. 2. Project Description. Developer proposes to develop the Project as depicted in the Conceptual Site Plan. 2.1 Entitlement. The Project is entitled for the following uses, which may be constructed at the discretion of Developer: -3- a. Residential. Up to 1,600 traditional, non -subsidized housing units. Residential uses may include a combination of apartments, townhomes, and condominium units. b. Retail (FWRC 19.225.020). Up to 50,000 sq. ft. C. Office (FWRC 19.225.010). Up to 175,000 sq. ft. d. Entertainment (FWRC 19.225.040). Up to 170,000 sq. ft. e. Lodging (FWRC 19.225.050). Up to 175 rooms and 50,000 sq. ft. accessory spaces. f. All required utilities; streets, drives, parking and other transportation facilities; park and open space improvements, and all other improvements needed to support and complete the development, including on -site and off -site improvements. 2.2 Civic Plaza. a. Design. The Parties shall collaborate on the design of a civic plaza ("Civic Plaza") to be located on City property, South of Road A and South and West of the Property as generally depicted on the Conceptual Plan. Developer shall select the Designer for the Civic Plaza, subject to City agreement, who will prepare a design for the Civic Plaza. The City shall incorporate community outreach as part of the design process. The design of the Civic Plaza must be approved by the Developer and City Council ("Approved Design"). After approval, Designer shall prepare a complete set of plans and specifications conforming to City standards for City's use in construction bidding. Developer shall provide a budget of no less than $350,000 for the development of, and modifications to, the Approved Design. Developer shall pay all reasonable costs to Designer associated with developing the Approved Design, and any required modifications to the Approved Design under section 2.2.b. b. City Construction. The City shall request competitive bids for construction of the Civic Plaza in accordance with Washington State public works contracting requirements based on the Approved Design. Bids shall be requested within six (6) months of completion of the Approved Design, or at a later time mutually agreed to by the Parties. Developer may submit a bid for construction. The City shall provide a project budget sufficient to fund construction of the Civic Plaza based on the Approved Design. If the lowest responsive, responsible bidder's bid would result in a project budget in excess of $5,000,000, the Approved Design must be modified in accordance with the process outlined in section 2.2.a to allow -4- for bids resulting in a lower project budget; the City Council must approve additional project budget to cover the additional amount; or the Developer can pay the City the additional amount. The City may, at its sole discretion, hire a consultant to manage construction of the Civic Plaza ("Construction Manager"). City shall include Developer in the selection process for the Construction Manager. The City's contract with the Construction Manager will require construction coordination with Developer, so that Civic Plaza construction is integrated with Developer's Phase I construction, which are both anticipated to occur at the same time. The City shall commence construction of the Civic Plaza within six (6) months of bid award. C. Developer Construction. Should the City not fulfill its obligations to secure sufficient funds to construct the Civic Plaza, request competitive bids for Civic Plaza construction within the timeline set forth in subsection b., and/or commence construction within the timeline set forth in subsection b., Developer may, at its sole discretion, proceed with construction of the Civic Plaza in accordance with standard Public Works contracting requirements. The City shall provide all necessary approvals and easements necessary to authorize and facilitate such construction. City shall reimburse Developer for actual project costs as they are incurred up to $5,000,000. City will pay Developer 5% of the actual construction costs for construction management costs, which will be in addition to the Plaza construction budget. d. Maintenance and Operation. Prior to completion of the Civic Plaza, the Parties shall negotiate a separate operational and maintenance agreement for the Civic Plaza ("Operational Agreement"). The Operational Agreement will allow Developer to supplement the City's maintenance and security measures and will provide for the Parties to coordinate on event programming. 2.3. Civic Buildings. a. City Hall and Community Space. The Northwest Block of the Project may include a City Hall and Community Space, as depicted on the Conceptual Plan. Unless otherwise agreed to by the Parties, the City shall notify Developer by January 1, 2028, whether or not to construct the City Hall and Community Space. Prior to commencing design, the Parties shall negotiate and execute an agreement that will include lease and/or future acquisition terms acceptable to the Parties. If the City notifies Developer not to construct the City Hall and Community Space; or, fails to notify Developer pursuant to the terms of this subsection; or, if the Parties cannot agree to the terms of lease or acquisition, Developer can, at its sole discretion, construct any improvements in the Northwest Block authorized by this Agreement. -5- b. Public Parking Garage. The Project may include a Public Parking Garage ("Garage"). Unless otherwise agreed to by the Parties, the City shall notify Developer by January 1, 2028, whether or not to construct the Garage. If Developer receives timely notice from the City, Developer shall construct approximately 365 public parking spaces at a location within the Project determined by Developer subject to Public Works contracting requirements. The City shall reimburse Developer for actual costs of construction within six (6) months of completion of construction. Prior to commencing design, the Parties shall negotiate and execute an agreement that will include lease and/or future acquisition terms acceptable to the Parties. If the City notifies Developer not to construct the Garage; or, if the City fails to notify Developer pursuant to the terms of this subsection; or, if the Parties cannot agree to the terms of lease or acquisition, Developer has no obligation to build the Garage. 2.4 Hotel. If a suitable Hotel, as determined by the Parties, seeks to locate in the Project, and Developer in its sole discretion determines that the Hotel will be economically -viable for the Project, Developer will build, sell the Phase, or execute an agreement to facilitate the construction of the Hotel in Phase II, III, or IV of the Project. 3. Civil improvements. Developer will construct on -site street and right-of-way improvements as depicted on Exhibit D, the Conceptual Improvements Plan. Minor modifications to Exhibit D may be made if approved by the City through the Project Entitlement process at the Developer's option or as required by Project -specific technical analysis without amendment of this Agreement. Should Exhibit D be so modified, Developer shall submit revisions to Exhibit D. Such revisions will be processed as Developer Discretion amendments under Section 12.1. Amendments to Exhibit D may also be made outside of the Project Entitlement process through the provisions of Section 12. Developer shall provide a traffic impact analysis ("TIA") for the entire Project with the first implementing land use permit to evaluate consistency with the SEPA Planned Action and compliance with concurrency requirements. Exhibit D represents the Parties agreement on the scope and extent of required improvements and dedications, subject to additional project -level requirements required by future SEPA review/decisions and/or the TIA. The construction of any frontage improvement, and the dedication to the City of each completed frontage improvement, shall be completed prior to the occupancy of any building phase for which the improvement is required. Should Developer choose to construct improvements designed for future phases at an earlier time, such work shall be coordinated with the City. The Conceptual Improvements Plan outlines the following improvements per phase: 3.1 Site Access Driveways. The following proposed site access driveways will be provided for each phase: a. The Southeast Block will have three (3) curb cuts: one on 23rd Ave S. providing access to the upper level parking garage; one on S. 3161h Street providing parking garage access to the lower -level garage; and one loading driveway on S. 316th Street. b. The North Block will have two (2) curb cuts: one on the east side of Road A providing access to the parking garage, which will also accommodate loading; and one on S. 314th Street for loading. C. The Northeast Block will have a single curb cut on 23rd Ave S. providing access to the parking garage, which will also accommodate loading. d. The Northwest Block will have two (2) curb cuts: one on Pete von Reichbauer Way (existing driveway shared with the PAEC) providing access to the parking garage, which may also accommodate loading; and one on either S. 310, Street or the west side of Road A, subject to City approval and associated conditions, which may provide access to the parking garage and which may also accommodate loading. 3.2 Frontage Improvements and Dedications if the Southeast Block is Phase I: a. The following improvements will occur in Phase I: i. Street improvements abutting the Southeast Block along S. 316th St. and 23rd Ave S. will be constructed per City standards; ii. The east portion of Road A will have a permanent street connection to S. 314th St.; iii. , The existing curb cut in the middle of S. 314th St. west of Road A East Portion will be filled in with a new curb; iv. A new curb and sidewalk matching the existing curb and sidewalk will be constructed along S. 314th St. adjacent to the Northeast Block; V. If determined to be necessary by the TIA, street widening along S. 314th St. to City standards; vi. If determined to be necessary by the TIA, traffic signalization modification at S. 314th St./23rd Ave S. -7- Block): b. The following improvements will occur in Phase II (North Block): i. If street widening along S. 314th St. to City standards was not completed as part of Phase I, complete street widening along S. 314th St. to City standards; ii. New curb, streetlights and sidewalks on S. 314th St.; iii. Street trees added only to frontage abutting the North Block; iv. Access to Pete von Reichbauer Way from west leg of Road A will be preserved; V. If traffic signalization modification at S. 314th St./23rd Ave S. was not completed as part of Phase I, traffic signalization modification at S. 314th St./23rd Ave S. C. The following improvements will occur in Phase III (Northeast i. Street improvements adjacent to Northeast Block frontage along 23rd Ave S. to City standards; ii. Street trees will be added on S. 314th St. on Northeast Block frontage. 3.3 Frontage Improvements and Dedications if the North Block is Phase I: a. The following improvements will occur in Phase I: i. Street widening on S. 314th St. adjacent to the North Block; ii. New curb and sidewalk to match existing curb/sidewalk abutting Northeast Block; iii. Road A will be built with permanent connection to S. 314th St.; iv. If determined to be necessary by the TIA, street widening and new curb and sidewalks along S. 314th St. adjacent to the Northeast Block; V. If determined to be necessary by the TIA, traffic signalization modification at S. 314th St.23rd Ave S. b. The following improvements will occur in Phase II (Southeast Block): Street improvements adjacent to site along S. 316th St. and 23rd Ave S. will be brought up to City standards; ii. If not completed as part of Phase I, street widening along S. 314th St adjacent to the Northeast Block and new curb and sidewalks; iii. If not completed as part of Phase I, traffic signalization modification at S. 3141h St./23rd Ave S. c. The following improvements will occur in Phase III (Northeast Block): Street improvements adjacent to site along 23rd Ave S.; ii. Street trees added on S. 314th St. adjacent to the Northeast Block. 3.4 _Utility Infrastructure. Developer shall provide necessary utility infrastructure to support each phase prior to the occupancy of that phase, as determined through project-specific'review and coordination with Lakehaven. Developer anticipates that all required utility work for each phase will occur within the phasing limits depicted on Exhibit D, based on preliminary review by its civil engineer and initial feedback from Lakehaven. Should utility extensions be required for a specific phase that extend beyond the phasing limits identified on Exhibit D, the City will allow Developer to construct an appropriate, interim level of improvements in the utility extension area, provided that a full curb to curb overlay will be provided, and provided that the interim improvement be in place no longer than seven years from the date of issuance of the associated right-of-way permit. After seven years, Developer will be required to install permanent improvements, regardless of timing of the phase for which that frontage is required in Section 3.2 or 3.3, and Exhibit D. Developer may elect to build additional infrastructure in earlier phases to support future phases, subject to Developer's execution of necessary easements to allow utility infrastructure to serve buildings and improvements on separate parcels. 4. Public Benefits. The Parties acknowledge that the Project will advance the City's vision for the Property, as expressed in the City's Comprehensive Plan, City -Center Sub -Area Plan, and MDP for the Property. The Project will benefit the City through the redevelopment of key contiguous parcels in the City Center Core with multifamily housing, retail, entertainment and office uses that will support the vision of mixed -use, transit -oriented development ("TOD") and catalyze future investment and high -quality development in the vicinity. Specifically, the Project will provide the following public benefits: In 4.1 Pioneering TOD Neighborhood. 'This Project will fulfill the City's Comprehensive Plan Goals (See adopting ordinance for applicable Goals and Policies) and MDP Vision by creating the City's first high -density, transit -oriented neighborhood. It will improve, activate, and create an identifiable Downtown to serve as the social, cultural, civic, and economic hub of the City, establishing a sense of identity and place and attracting capital for future high -quality TOD development. 4.2 Job Creation and Revenue. The Project will create temporary jobs and significant construction tax revenue. Once completed, it will generate permanent jobs close to housing, add to the City's tax base, and generate an estimated $55-plus million in local, state, and federal taxes and revenue. 4.3 Residential Ownership Opportunities. The Project proposes approximately 38 for -sale residences, which will diversify the City's housing stock and increase ownership opportunities for City residents. 4.4 PAEC Parking. To the extent feasible, in addition to the access to surface parking stalls described in Section 5, Developer will maintain access to remaining surface parking stalls utilized by the PAEC on the Property during Project construction. 4.5 Public Art. Developer will coordinate with the City's Arts Commission to incorporate public art into the Project, further establishing the Downtown's unique identity and sense of place. 4.6 Interim Uses. Developer will work with the City to identify interim uses (pop -ups, food trucks, etc.) to energize the site during the entitlement and construction period. Developer shall control location and timing of interim uses but will allow their use of the Property at no cost. 4.7 Civic Buildings. Developer has offered to incorporate the City Hall, Community Space building and Public Parking Garage into the Project, as outlined in this Agreement. 4.8 Street Furniture. Developer, as part of the Designer's work for the Civic Plaza, will provide enhanced design for street fixtures, furniture, and lighting. These designs, approved by the City, shall be utilized throughout the Project for consistency with those provided in the Civic Plaza. 4.9 Enhanced Road A Design. The Project will incorporate a two-way "woonerf lane" ("Road A"), as depicted on Exhibit B. Road A's enhanced design and functionality will integrate the surrounding blocks with the Civic Plaza, which will be shared by pedestrians, bicyclists, and vehicles. -10- The City agrees that the public benefits listed in Section 4 are sufficient to meet or exceed the public benefit requirement in FWRC 19.85.120(3). No additional public benefits or voluntary mitigation shall be required for the Project or any Project -phases, except as mutually agreed by the Parties. 5. Property Acquisition. As a condition of issuance of the first construction permit for the residential building in Phase I, or earlier at Developer's sole discretion, Developer shall acquire the approximately 7.45-acre Property, as depicted in the Appraisal ("Closing"). The exact legal boundaries of the Property to be acquired shall be determined via the subdivision process in Section 6. Closing shall occur pursuant to a Purchase and Sale Agreement ("PSA") acceptable to the Parties. The Property will be conveyed by Statutory Warranty Deed, with standard contingencies, and acquisition will occur through escrow, with escrow agent and title company to be selected by Developer. If the Parties are unable to negotiate an acceptable PSA, either Party may terminate this Agreement. 5.1 The purchase price is $10,000,000. The purchase price is derived from, and takes into account, the following: a. The appraised value of the Property is $12,800,000 to $13,800,000, based on the Appraisal. b. Developer shall fund design of the Civic Plaza in an amount no lower than $350,000, as further detailed in Section 2.2.a. c. Developer shall incorporate public art into the Project at Developer's expense, and in an amount no lower than $750,000, at least half of which will be expended during Phases I and II. d. Developer shall incorporate enhanced design of street fixtures, furniture, and lighting into the Project at Developer's expense, the cost of which shall be no lower than $200,000 including design and implementation. e. Developer shall provide an enhanced Road A design at Developer's expense, and the overall cost of design and implementation of the enhanced Road A design shall be no less than $480,000. f. Developer shall maintain public access to remaining surface parking stalls North of the PAEC and on the west leg of Road A on the Property during Phase I construction at no cost to the City. The estimated value of that parking is $600 per stall per year, and the total value of the one -hundred twenty-four (124) stalls over the estimated duration of six years is $446,400. -11- g. Until construction in that area commences, Developer. shall allow public access to surface parking stalls in the Northeast Block during Phase II and III construction at no cost to the City. The estimated value of that parking is $900 per stall per year, and the total value of the ninety-six (96) stalls over the estimated duration of seven years is $604,800. h. Public Elevator. Developer will construct an elevator near the Southeast Block building that will connect the sidewalk on 316th St. to the Civic Plaza, which will be available to the public and tenants of the building. Construction of the elevator is anticipated to cost $250,000, half of which ($125,000) represents value to the public. 5.2 At Closing, Developer shall execute an easement to benefit the City, in a form agreed to by Developer and City, allowing for continued public access and travel to and from the PAEC and the south leg of Road A north to 314th Street and west to Pete von Reichbauer Way. 5.3 Should Developer not submit its first Phase I building permit by January 1, 2027, the City shall have the option to terminate this Agreement. Similarly, should Developer not commence each Phase (acquire its first building or construction permit) within two years of the Phase date listed on Exhibit C (unless the failure to commence is caused by force majeure, or events outside Developer's reasonable control), the City may purchase the parcel at a price determined by a new appraisal approved by both Parties. 6. Subdivision. Prior to Closing, Developer will record a subdivision creating legal lots for transfer of the approximately 7.45-acre Property and development of the Project, which will generally be consistent with the Phasing and Timing Plan in Exhibit C. The size, configuration and number of legal lots or development parcels within the Property may be modified if approved by the City without amendment of this Agreement through boundary line adjustments ("BLA"), lot consolidations, binding site plans (`BSP"), short plats, or subdivisions. Should the legal lots or development parcels within the Property be so modified, Developer shall submit revisions to all Exhibits to this Agreement. Such revisions will be processed as Developer Discretion amendments under Section 12.1. 7. Development Regulation Modifications. As a component of this Agreement, the City Council approves the following modifications from City Development Regulations for this Project: 7.1 Perimeter Residential Uses Permitted. Residential units will be permitted along the perimeter streets of the Project as depicted in the Conceptual Plan (in addition to all other permitted uses, to include retail and live/work). These units shall be allowed in lieu of the entertainment or retail uses which would otherwise be required per FWRC 19.225.070. -12- 7.2 Road A. The City will authorize reasonable deviations from public road standards to accommodate the enhanced design of Road A. Temporary parking spaces may be located along Road A right-of-way but shall be reviewed and approved by the City. 7.3 S. 314"' Street. The City will authorize reasonable deviations necessary to accommodate access points and curb separation on S. 314t' Street, as 'depicted in Exhibit D. 7.4 Inclusionar. Zoning. Deviation from FWRC 19.110.010 shall be authorized as described in Section 15. 7.5 Non -Residential Ground Floor space. The City will allow the 15% non- residential ground level space requirement in FWRC 19.225.070 to be met on a cumulative basis, considering all Project phases. 7.6 Open Space. Calculation of the open space requirement in FWRC 19.225.070 will include pedestrian areas of Road A (areas not including the driving surface or parking stalls), and any future open space fee in lieu will be based on the Appraisal. 7.7 Building Length. Building lengths in excess of 250' shall be allowed and are consistent with the community design guidelines in FWRC 19.115.020(5). 8. Density and Intensity of Uses. The Entitlements approved through this Agreement (Section 2.1) shall be allowed on the Property without limit to maximum density or intensity of the CC-C zone. 9. Phasin . The Project is anticipated to be built in phases. The Phasing and Timing Plan provided in Exhibit C ("Phasing and Timing Plan"), establishes outside construction dates. Developer will work in good faith to initiate construction as soon as practicable, subject to market conditions and financing. Regardless of whether the Southeast or North Block is Phase I, Phase I is proposed to be constructed first, but the other phases may be constructed out of order (i.e., Phase III or IV may precede Phase II), as long as adequate infrastructure is provided to support each constructed phase. If the phases are constructed out of order, the frontage improvements and dedications detailed in Sections 3.2 and 3.3, and depicted in Exhibit D, shall be adjusted to reflect the new phase order. Such an adjustment to the frontage improvements and dedications shall be processed as a Minor Amendment. If the phases are constructed out of order, the phasing timeline will automatically adjust to reflect the constructed order of phases. 10. Vesting. Developer is entitled to develop the Project under the Development Regulations and land use controls in effect as of the Effective Date of this Agreement ("Vested Code Provisions"), which shall apply for the Term of this Agreement. 10.1. Exemptions. The following are exempt from vesting under this Agreement: -13- a. Plan review fees, inspection fees, and land use application fees; b. Connection charges, general facilities charges and monthly service charges; C. Amendments to building, plumbing, fire and other construction codes adopted pursuant to RCW Ch. 19.27 or 19.27A; d. Impact fees, except as modified in Section 10.3 of this Agreement; C. City enactments that are adopted pursuant to state or federal mandates (such as the City's NPDES Municipal Stormwater Permits) that preempt the City's authority to vest regulations; f. City enactments regarding MFTE required to be adopted pursuant to a state repeal, amendment, or modification of RCW Ch. 84.14 or other applicable state law terminating the City's authority to implement an MFTE program. 10.2. Reserved Rights. Notwithstanding any provision in this Agreement, the City reserves authority pursuant to RCW 36.70B.170(4) to impose new or different Development Regulations to the extent required by a serious threat to public health or safety, as determined by the City Council after written notice and an opportunity to be heard by Developer. 10.3 Impact Fees. The Project is vested to the following impact fees in effect on the date this Agreement is executed: a. A school impact fee of zero; b. A park impact fee of $2,200/ residential unit. C. The transportation impact fee in place as of the Effective Date of this Agreement, for a period of ten (10) years after the Effective Date, with yearly increases based on CPI, as allowed in FWRC 19.85. 10.4 Property Tax Exemption. The Project qualifies for a Multifamily Dwelling Unit Tax Exemption under FWRC 3.30 and is vested to the provisions of Chapter 3.30 FWRC as of the Effective Date of this Agreement for the term of the Agreement. The Parties acknowledge that the Project is located within an eligible residential targeted area for participation in the tax exemption program for both the 8 and 12-year option. Developer may elect, at its sole discretion, to apply for the 8-year MFTE program. The 12-year option (FWRC 3.30.040(1)(b)(ii)) shall not be utilized for the Project, unless a repeal, amendment, or modification of RCW Ch. 84.14 or other applicable state law terminates the City's -14- authority to implement the 8-year MFTE program, in which case Developer will be entitled to utilize the 12-year option. At the end of the initial exemption period, Developer may elect to apply for a 12-year extension to the exemption period as authorized by RCW 84.14.020(6), provided that the City has adopted provisions in FWRC authorizing the 12- year extension within the City. 11. Future Code Amendments. Developer may request to develop the Property or Project -phases thereof in accordance with new Code provisions, Development Regulations and other regulations, policies, or guidelines hereinafter adopted by the City after the Effective Date, including but not limited to future SEPA and/or Planned Action amendments for City Center, without obligation to bring other portions of the Property into conformance with newly -adopted Code provisions, Development Regulations and other regulations. Application of any future Code amendments under this provision shall be on a Project -phase basis and shall be processed as a Minor Amendment, unless expressly listed as a Major Amendment. Application of any future state legislation and/or implementing Code amendments under this provision shall be on a Project -phase basis and shall be processed as a Minor Amendment, unless expressly listed as a Major Amendment. 12. Flexibility and Future Agreement Amendments. During the Term of this Agreement, Developer or City may request amendments to this Agreement. Developer -requested Amendments will be classified as: 1) "Developer Discretion"; 2) "Minor Amendments" subject to review and approval by the Designated Official; or 3) "Major Amendments" requiring City Council approval. As a rule of construction, all ambiguities with respect to whether a Developer - requested amendment is classified as Developer Discretion, a Minor Amendment, or a Major Amendment shall be resolved in favor of treating the proposed amendment as a Minor Amendment. 12.1 Developer Discretion amendments are: a. Any increase to any aspect of the Entitlement of 20% or less. b. An increase to the timeline for any Project Phase by up to three years. C. All other Developer -requested amendments that result, as determined by the Designated Official, in comparable benefit or functional equivalence with no more than a de-minimis reduction of public benefits, reduction in environmental protection, or increase in material public cost. City review of Developer Discretion amendments is limited only to determining whether a requested amendment is properly categorized as Developer Discretion under this subsection. -15- 12.2 Minor Amendments are all amendments that are not Developer Discretion or Major Amendments. 12.3 Major Amendments are: a. Changes to the Term of the Agreement. b. Substantive change, as determined by the Designated Official, to the Conceptual Plan (Exhibit B). Substantive changes to the Conceptual Plan are changes that (1) propose a land use that is not included in the current Entitlement, as set forth in Section 2.1 of this Agreement; or (2) propose an increase to any aspect of the Entitlement in excess of 20%. C. Substantive change, as determined by the Designated Official, to the Phasing and Timing Plan Exhibit C . A substantive change is one that would increase the timeline for any Project Phase by more than three years. 13. Project Review. Developer shall be responsible to apply for all required City permits, including but not limited to applications for planning and zoning permits, clearing and grading permits, building permits and other such permits and approvals required under the FWRC and necessary to authorize development of the Project or each respective Project -phase ("Project Entitlement"). Each Project Entitlement application must demonstrate consistency with the vested Development Regulations and this Agreement, including any Modifications as provided herein. The City will review the application as provided by the FWRC. The Parties may agree to expedited review procedures for a Project Entitlement Application subject to Developer's commitment to fund expedited review and City's ability to secure resources necessary for permit issuance. 14. SEPA Compliance. SEPA review for this Agreement is a non -project level review. Project -level SEPA review will be required as part of the Project Entitlement Application process unless exempt under FWRC 14.15.030. 15. InclusiopM Zoning. The Project is subject to affordable housing requirements in Chapter 19.110 FWRC. The City is accepting a retail subsidy in satisfaction of this requirement. Developer will provide a 20% discount from market retail lease rates for at least 12,000 sq. ft. of leasable space in the Project, at least half of which will be provided during Phases I and II, for a period of 50 years. Developer will use best faith efforts to lease retail spaces to businesses incorporated in and/or primarily operating in Washington state. 16. Coneurrency Review. The Project will be subject to transportation concurrency review under Chapter 19.90 of the FWRC. Concurrency review will be conducted during Project Entitlement review for each Project Phase. Any Project Entitlement application submitted while the City Center Planned Action is in effect will be evaluated under the Planned Action and will be exempt from concurrency review if the trip generation is below the Planned Action threshold. -16- 17. Agreement to Run with the Land. For the term of this Agreement, the benefits and obligations of this Agreement shall run with the land and continue following the subdivision, leasing, or transfer of ownership to Developer's successors and assigns. 18. Term. The term of this Agreement shall be thirty (30) years from the Effective Date of this Agreement ("Expiration Date") unless the Term is modified under the provisions of Section 12 of this Agreement. The Parties recognize that neither Party can anticipate all of the potential changes in Developer's business needs, lease matters, construction techniques, or architectural design that may occur during that time period. The Vested Code Provisions are not intended to preclude future interpretations and adjustments in conjunction with specific development applications for a Project -phase. 19. Construction of Documents. In the event there are any conflicts or ambiguities between the terms of the body of this Agreement and the terms in any of the Exhibits, the terms of the body of this Agreement shall control. 20. Recitals. The Recitals are incorporated herein as material terms of this Agreement. 21. Indemnification. Except as otherwise specifically provided elsewhere in this Agreement and any Exhibits hereto, each Party shall protect, defend, indemnify and hold harmless the other Party and their officers, agents, and employees, or any of them, from and against any and all claims, actions, suits, liability, loss, costs, expenses, and damages of any nature whatsoever, which are caused by or result from any negligent act or omission of the Party's own officers, agents, and employees in performing services pursuant to this Agreement. In the event that any suit based upon such a claim, action, loss, or damage is brought against a Party, the Party whose sole negligent actions or omissions gave rise to the claim shall defend the other Party at the indemnifying Party's sole cost and expense; and if final judgment be rendered against the other Party and its officers, agents, and employees or be rendered jointly against the Parties and their respective officers, agents, and employees, the Party whose sole negligent actions or omissions gave rise to the claim shall satisfy the same; provided that, in the event of concurrent negligence, each Party shall indemnify and hold the other Party harmless only to the extent of the indemnifying Party's negligence. The indemnification to the City hereunder shall be for the benefit of the City as an entity, and not for members of the general public. 22. Agreement Consistency with RCW 82.02.020. The Developer agrees that the improvements, mitigation payments and dedications established by this Agreement shall be consistent with the requirements of RCW 82.02.020 and mitigate the Project's direct impacts. 23. _Recording. This Agreement shall be recorded by Developer with the King County Recorder's Office. 24. Binding Effect; Assignability. This Agreement shall bind and inure to the benefit of the Parties hereto and their respective successors, heirs, legatees, representatives, receivers, -17- trustees, successors, transferees and assigns. Developer shall have the right to assign or transfer its rights, subject to approval of the Designated Official which shall not be unreasonably withheld, in whole or in part, under this Agreement. Developer shall provide City with written notice of any transfer or assignment at least thirty (30) days prior to the closing of any transaction. 25. Interpretation. This Agreement has been reviewed and revised by legal counsel for both Parties, and no presumption or rule construing ambiguity against the drafter of the document shall apply to the interpretation or enforcement of this Agreement. Nothing herein shall be construed as a waiver of the City's constitutional and statutory powers. Nothing herein shall be construed or implied that the City is contracting away its constitutional and statutory powers, except as otherwise authorized by law. 26. Authority. Each signatory to this Agreement represents and warrants that he or she has full power and authority to execute and deliver this Agreement on behalf of the Party for which he or she is signing, and that he or she will defend and hold harmless the other Parties and signatories from any claim that he or she was not fully authorized to execute this Agreement on behalf of the person or entity for whom he or she signed. Upon proper execution and delivery, this Agreement will have been duly entered into by the Parties, will constitute as against each Party a valid, legal and binding obligation that shall run with the land, and will be enforceable against each Party in accordance with the terms herein. 27. Delays. If either Party is delayed in the performance of its obligations in this Agreement due to Force Majeure, then performance of such obligation shall be excused for the period of delay. Force Majeure means extraordinary natural events or conditions such as war, riot, pandemic (including but not limited to COVID-19 or its variants) or other causes beyond the reasonable control of the Developer, but does not include labor disputes. The City's or Developer's inability to fund, or decision not to fund, any of its obligations shall not be an acceptable reason for delay. 28. Notices. All notices, requests, demands, and other communications called for or contemplated by this Agreement shall be in writing, and shall be duly given by mailing the same by certified mail, return receipt requested; or by delivering the same by hand, to the following addresses, or to such other addresses as the Parties may designate by written notice in the manner aforesaid: Owner: Trent Development Inc. Attn: Trent Mummery 166 Roy Street Seattle, WA 98109 Phone: 206-234-6543 Email: trentRonetrent.com And to its Attorney: McCullough Hill PLLC Attn: Courtney Flora 701 5th Avenue, Suite 6600 Seattle, WA 98104 Phone: 206-812-3376 Email: cflora _,mhseattle.cvm City of Federal Way: Designated Official Attn: Keith Niven 33325 81h Avenue South Federal Way, WA Phone: 253-835-2612 Email: keith.nivenWederalwaywa.gov And to its Attorney: City Attorney Attn: Ryan Call 33325 8th Avenue South Phone: 253-835- Email: ryan.call@federalwaywa.gov 29. Dispute Resolution. It is the Parties' intent to work cooperatively and to resolve disputes in an efficient and cost-effective manner. All disputes arising out of or relating to this Agreement shall be resolved as follows: 29.1. Settlement Meeting. If any dispute arises between the parties relating to this Agreement, then the parties shall meet and seek to resolve the dispute, in good faith, within ten (10) days after a Party's request for such a meeting. The City shall send the Designated Official and persons with information relating to the dispute, and Developer shall send a representative and any consultant or other person with technical information or expertise related to the dispute. 29.2 Mediation. If the Parties cannot resolve the issue within ten (10) days then they shall mediate the matter using a mediator from Judicial Dispute Resolution, LLC or if that entity fails or declines to serve, such other similar service or organization as agreed by the parties, or as appointed by the court if the parties cannot agree (collectively "JDR"), within seven (7) days of their failure to agree pursuant to Section 29.L The Parties shall evenly split any fees charged by JDR, regardless of the outcome of the mediation. Each Party shall bear its own attorneys' fees in connection with the mediation. 29.3. Arbitration. If the Parties have still not resolved the matter, then and only then shall arbitration be permitted. "Arbitration" for purposes of this Agreement shall be limited exclusively to arbitration by one arbitrator, administered by JDR in accordance -19- with the rules of practice and procedure from the American Association of Arbitration. The arbitrator shall be someone other than the mediator who served under Section 29.2. The arbitrator shall establish the procedures and allow presentation of written and oral information but shall render its final decision within thirty (30) days after the matter is referred to arbitration. The Parties shall pay equally the cost of the arbitration. Pursuant to Section 32, the prevailing Party (or the substantially prevailing Party, if no one Party prevails entirely) shall be entitled to an award of reasonable attorneys' and expert witness fees and costs. The arbitration proceedings shall be binding, conclusive and, except as provided below, not appealable, and any Party to any award rendered in any such arbitration proceeding shall be entitled to have judgment entered thereon. In no event, however, shall mediation or arbitration be available pursuant to this Section after the date when institution of legal or equitable proceedings based on such claim, dispute, or other matter in question would be barred by the applicable statute of limitations. 30. Governing Law and Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington. To extent permitted, venue for any judicial action arising out of or relating to this Agreement shall lie in King County Superior Court. 31. Specific Perforn7ance. The Parties specifically agree that damages are not an adequate remedy for breach of this Agreement and that the Parties are entitled to compel specific performance of all material terms of this Agreement by any Party in default hereof. All terms and provisions of this Agreement are material. 32. Attorneys" Fees. In any arbitration or judicial action to enforce or determine a Party's rights under this Agreement, the prevailing Party (or the substantially prevailing Party, if no one Party prevails entirely) shall be entitled to reasonable attorneys' fees, expert witness fees, and costs, including fees and costs incurred in the appeal of any ruling of a lower court. 33. No Third -Party Beneficiary. This Agreement is made and entered into for the sole protection and benefit of the Parties hereto and their successors and assigns. No other person shall have any right of action based upon any provision of this Agreement. 34. Severability. This Agreement does not violate any federal or state statute, rule, regulation or common law known; but any provision which is found to be invalid or in violation of any statute, rule, regulation or common law shall be considered null and void, with the remaining provisions remaining viable and in effect. 35. Cooperation in Execution of Documents. The Parties agree to properly and promptly execute and deliver any and all additional documents that may be necessary to render this Agreement practically effective. This Paragraph shall not require the execution of any document that expands, alters or in any way changes the terms of this Agreement. -20- 36. Exhibits. This Agreement includes the following exhibits which are incorporated by reference herein: Exhibit A - Legal Description of TC-3 Property Exhibit B — Conceptual Plan Exhibit C — Phasing- and Timing Plan Exhibit D - Conceptual Improvement Plan 37. Full Understanding. The Parties each acknowledge, represent and agree that they have read this Agreement; that they fully understand the terms thereof, that they have had the opportunity to be fully advised by their legal counsel and any other advisors with respect thereto; and that they are executing this Agreement after sufficient review and understanding of its contents. 38. No Joint Venture. This Agreement is not intended to and nothing in this Agreement shall create any partnership, joint venture or other arrangement between the Parties. 39. Final and Complete Agreement. This Agreement is integrated and constitutes the final and complete expression of the Parties on all subjects relating to the development of the Project. This Agreement may not be modified, interpreted, amended, waived or revoked orally, but only by a writing signed by all Parties. This Agreement supersedes and replaces all prior agreements, discussions and representations on all subjects discussed herein, without limitation. No Party is entering into this Agreement in reliance on any oral or written promises, inducements, representations, understandings, interpretations or agreements other than those contained in this Agreement and the Exhibits hereto. 40. Covenant of Good Faith and Cooperation. The Parties agree to take further actions and execute further documents, either jointly or within their respective power and authority, to implement the intent of this Agreement. Each Party covenants to use its best efforts and work cooperatively in order to secure the benefits and rights under this Agreement. The Parties shall not unreasonably withhold approvals or consents provided for in this Agreement. [SIGNATURE PAGES FOLLOW] -21- IN WITNESS, the Parties execute this Agreement below. CITY OF FEDERAL WAY: ATTEST: Jim Ferrell, Mayor DATE: -22- Stephanie Courtney, CMC, City Clerk APPROVED AS TO FORM: J. Ryan Call, City Attorney TRENT DEVELOPMENT INC.: Trent Mummery, President DATE: STATE OF WASHINGTON ) ) ss. COUNTY OF APPROVED AS TO FORM: Courtney Flora, Attorney On this day personally appeared before me Trent Mummery, to me known to be the President of Trent Development Inc. that executed the within and foregoing instrument, and acknowledged the said instrument to be the free and voluntary act and deed of said corporation, for the uses and purposes therein mentioned, and on oath stated that he or she was authorized to execute said instrument and that the seal affixed, if any, is the corporate seal of said corporation. GIVEN under my hand and official seal this day of , 20 . Notary's signature Notary's printed name Notary Public in and for the State of Washington. My commission expires -23- rr • V ' Northwest Block Potential City Hall Offices I 9 AF Awn 1khow 1 S. 314th Street I - Y..'tl ►' (NLY! Ii Y_'tl ,ye.'..t! � �L�y �.Y.t� • • •• _awl '_•�j j_•� j_►1 !_•il North Block +4! _ I( _- E Q ' W � Q o _ mo�o// LL - +n. t _ RoarT«raoe - Pk= �w.0 MLRwd 3 Level 3 F,' Rod Garden Roof Garden Road 6 - — Ono Way -C_ +475- — — — Road A — — +47s ' U O 10O - ks L.i • u Truck P A E C SE 1 Event Pavilion LJ - - o- _- O+4 74' • - p _ - _ - N J all.. am - - 'ft f - . � -. ��• m - Roof Grdeu _ r _• , +• - �a .. eN• AA � � qua A 01116 l i• Exhibit B CONCEPTUAL SITE PLAN - FULL BUILD OUT 0' 100' N I., 0 Northeast Block p C - Lod R� Garden V�J •.�mews Southeast Block -J - LrM Qm"rd �41 0 0 o� I� �. POTENTIAL PEDESTRIAN Sound Transit BRIDGE TO ST GARAGE - FEASIBILITY TBD Parking Garage . _ I C +475' 0 �- SE 2 +472' (- PZ�otlnp — r —1 +44r S . 316th Street _- - 71' i A PERKIN% FASTMAN STL DID 1809 7TH AVE SUITE 800 SEATTLE 98101 PROJECT: TC-3 Masterplan Federal Way, WA C� 1 Q Preliminary - :- Planning �-- Concept CIO Development Agreement 1 Exhibits •'' Dec. 4, 2023 1- Ire �s `h III��= per. Illustrations shown here are preliminary and conceptual only to show general massing, planning intent and design direction. Information shown is subject to change with more detailed design, engineering, development agreement negotiations and municipal review. 01 � JF c � L Ca V /Vc:> -t%7 S t C/ty /-/za// Oti9'ces wow rw. 111 i .r Truck • Pin= . Y J � +4 74 An �qb North Block Northeast 8\oc\c _ ^ 1 _ v 114. �- 111 r 1 AAL Southeast - Civic .,• _ Plaza , SE 1 -- Event Pavilion ■ 1 Level:.l - � 1 Roof Oofdan _� •1 , v J I, ai sr +474' 0 lob qb L iv 0 P2 Parkln Acco Ground level Courtyard 9 ,I 1 Mr Pry AW O For16th Sir eel Sound Transit Parking Garage IV VIA 1809 7TH AVE SUITE 800 SEATTLE 98101 PROJECT: TC-3 Masterplan Federal Way, WA Preliminary Planning Concept Development Agreement NOV. 30, 2023 Illustrative Drawings CONCEPTUAL BUILDING MASSING - AERIAL VIEW Illustrations shown here are preliminary and conceptual only to show general massing, planning intent and design direction. Information shown is subject to change with more detailed design, engineering, development agreement negotiations and municipal review. 02 r Northwest - Block m Potential City Hall Offices Q L.L f / +4 rr ` L 1 �•47�' \ L" 4 \ Ro01 T�rtste PM . Access La" '— — - `1 fR Level 3 •••• Rod Garden S. 314th Street +481.5 1 1 y +480' . �.-� - ` . u E L• W � North Block Q o _ . 1 Level I 1 Roof Garden .UJ Li\� t 4 a r *47 O .� ♦ O \ FoTruod' ' •I Plaza Q ..... ' O O Southeast Block I GrouM Level courtyard y f474'-- \ SE 1 490; Event Pavilion 0 I� VIA r� —A PFRIKINS FA.5TMAN STUQ1Q �-. `•r,. - 1809 7TH AVE SUITE 800 y - ` SEATTLE 98101 c +477 4 Northeast Block V� O o c UW 30 Garden P A E C 1 -. • O . � +474• .J � ♦ ';�w ��_ _ � - ter...__ .-- .-- , Oft M-011111.. 'i 4-_ +�449' *4W AIffa ■ICINA -ter Qi II� 11 Sound Transit Parking Garage C n um" A. K I _ r 6 +4W -iA 14 SE 2 �S. 316th Street II Illustrations shown here are preliminary and conceptual only to show general massing, planning intent and design direction. Information shown is subject to change with more detailed design, engineering, development agreement negotiations and municipal review. PROJECT: TC-3 Masterplan Federal Way, WA Preliminary Planning Concept Development Agreement Exhibits Dec. 4, 2023 - I - _ _ I • ` s i ..;:.. .. •. ,.:.mow► T♦ —V A A RFRIKINS FA.5TMAN STUQ1fi 1809 7TH AVE ` •_+ SUITE 800 SEATTLE 98101 irk 0MOWN, ittr •r.,x�- PROJECT: TC-3 Master Ian kra i Federal Way, WA ,` •' A : .� • • - ' }• ice, . _ } Uj •• ; >DEVELOPMENT " irTRENT lb of r 1----•� ,.ram S/ F Preliminary - • -- - Planning ':f - . • , , , • . Concept ,uv, •�;� _ ;,-- _ :-�• - Development Agreement '--. ,;'� _ - _ • �;` Exhibits Dec. 4, 2023 S. 316th Street - Exhibit C Im F Vr PHASE ImSE (AS SOUTHEAST BLOCK OPTION) PHASING & TIMING PLAN 0' 100' N Sound Transit Parking Garage II lustrations shown here are preliminary and conceptual only to show eneral massing, planning intent and design direction. Information hown is subject to change with more detailed design, engineering, evelopment agreement negotiations and municipal review. 02 - I - _ _ I • ` s i ..;:.. .. •. ,.:.mow► T♦ —V A A RFRIKINS FA.5TMAN STUQ1fi 1809 7TH AVE ` SUITE 800 SEATTLE 98101 irk 0MOWN, itt r • •�_ PROJECT: • tV vv' = ' ` TC-3 — Masterplan kra Federal Way, WA Uj •• >DEVELOPMENT irTRENT lb of r • 0 Preliminary - • -- - �.Planning �.."'- ---_ ':f - . • , , , • . Concept ,uv, •�;� _ ;,-- _ :-�• - Development Agreement '--. ,;'� _ - _ • �;` Exhibits Dec. 4, 2023 S. 316th Street - Exhibit C Im F Vr law- � ---- --- � � 111 PHASE ImSE (AS SOUTHEAST BLOCK OPTION) PHASING & TIMING PLAN 0' 100' N Sound Transit Parking Garage II lustrations shown here are preliminary and conceptual only to show eneral massing, planning intent and design direction. Information hown is subject to change with more detailed design, engineering, evelopment agreement negotiations and municipal review. 03 - I - _ _ I • ` s i ..;:.. .. •. ,.:.mow► T♦ -V A A RFRIKINS FA.5TMAN STUQ1fi 1809 7TH AVE ` SUITE 800 SEATTLE 98101 irk 0MOWN, itt r •r.•�_ _ PROJECT: • tV vv' = ' ` TC-3 — Masterplan kra Federal Way, WA Uj •• >DEVELOPMENT irTRENT lb of r • 0 Preliminary - • -- - �. Planning �..� "'- ---_ ':f - . • , , , • . Concept �,uv, •�;� _ ;,-- _ :-�• - Development Agreement '--. ,;�'� _ - _ • �;` Exhibits Dec. 4, 2023 S. 316th Street _ to �� • � •- Sound Transit , Parking Garage e PHASE ImN (AS NORTH BLOCK OPTION) PHASING & TIMING PLAN Illustrations shown here are preliminary and conceptual only to show general massing, planning Intent and design direction. Information .* shown is subject to change with more detailed design, engineering, 04 o' 100' N development agreement negotiations and municipal review. - I - _ _ I • ` s i ..;:.. .. •. ,.:.mow► T♦ -V A A RFRIKINS FA.5TMAN STUQ1fi 1809 7TH AVE ` SUITE 800 SEATTLE 98101 irk 0MOWN, itt r •r.•�_ _ PROJECT: • tV vv' = ' ` TC-3 — Masterplan kra Federal Way, WA Uj •• >DEVELOPMENT irTRENT lb of r • 0 Preliminary - • -- - �.Planning �..� "'- ---_ ':f - . • , , , • . Concept �,uv, •�;� _ ;,-- _ :-�• - Development Agreement '--. ,;�'� _ - _ • �;` Exhibits Dec. 4, 2023 S. 316th Street _ to �� • � •- Sound Transit , Parking Garage e PHASE IImSE SOUTHEAST BLOCK OPTION) PHASING & TIMING PLAN Illustrations shown here are preliminary and conceptual only to show general massing, planning Intent and design direction. Information ME + shown is subject to change with more detailed design, engineering, 06 o' 100' N development agreement negotiations and municipal review. - I - _ _ I • ` s i ..;:.. .. •. ,.:.mow► T♦ -V A A RFRIKINS FA.5TMAN STUQ1fi 1809 7TH AVE ` SUITE 800 SEATTLE 98101 irk 0MOWN, itt r •r.•�_ _ PROJECT: • tV vv' = ' ` TC-3 — Masterplan kra Federal Way, WA Uj •• >DEVELOPMENT irTRENT lb of r • 0 Preliminary - • -- - �.Planning �..� "'- ---_ ':f - . • , , , • . Concept �,uv, •�;� _ ;,-- _ :-�• - Development Agreement '--. ,;�'� _ - _ • �;` Exhibits Dec. 4, 2023 S. 316th Street _ to �� • � •- Sound Transit , Parking Garage e PHASE IImSE SOUTHEAST BLOCK OPTION) PHASING & TIMING PLAN Illustrations shown here are preliminary and conceptual only to show general massing, planning Intent and design direction. Information ME + shown is subject to change with more detailed design, engineering, 06 o' 100' N development agreement negotiations and municipal review. - I - _ _ I • ` s i ..;:.. .. •. ,.:.mow► T♦ —V A A RFRIKINS FA.5TMAN STUQ1fi 1809 7TH AVE ` SUITE 800 SEATTLE 98101 irk 0MOWN, itt r • •�_ PROJECT: • tV vv' = ' ` TC-3 — Masterplan kra Federal Way, WA Uj •• >DEVELOPMENT irTRENT lb of r • 0 Preliminary - • -- - �.Planning �.."'- ---_ ':f - . • , , , • . Concept ,uv, •�;� _ ;,-- _ :-�• - Development Agreement '--. ,;'� _ - _ • �;` Exhibits Dec. 4, 2023 S. 316th Street - Exhibit C PHASE III - SITE PLAN (PHASING & TIMING PLAN 0' 100' N law- � ---- --- � ._ �. Sound Transit Parking Garage II Illustrations shown here are preliminary and conceptual only to show general massing, planning intent and design direction. Information shown is subject to change with more detailed design, engineering, development agreement negotiations and municipal review. 07 - I - _ _ I • ` s i ..;:.. .. •. ,.:.mow► T♦ —V A A RFRIKINS FA.5TMAN STUQ1fi 1809 7TH AVE ` SUITE 800 SEATTLE 98101 irk 0MOWN, itt r • •�_ PROJECT: • tV vv' = ' ` TC-3 — Masterplan kra Federal Way, WA Uj •• >DEVELOPMENT irTRENT lb of r • 0 Preliminary - • -- - �.Planning �.."'- ---_ ':f - . • , , , • . Concept ,uv, •�;� _ ;,-- _ :-�• - Development Agreement '--. ,;'� _ - _ • �;` Exhibits Dec. 4, 2023 S. 316th Street - Exhibit C Im F Vr law- � ---- --- � ._ �. PHASE IV - SITE PLAN (PHASING & TIMING PLAN) Sound Transit Parking Garage II Illustrations shown here are preliminary and conceptual only to show general massing, planning intent and design direction. Information shown is subject to change with more detailed design, engineering, development agreement negotiations and municipal review. r Northwest - Block m Potential City Hall Offices Q L.L f / +4 rr ` L 1 �•47�' \ L" 4 \ Ro01 T�rtste PM . Access La" '— — - `1 fR Level 3 •••• Rod Garden S. 314th Street +481.5 1 1 y +480' . �.-� - ` . u E L• W � North Block Q o _ . 1 Level I 1 Roof Garden .UJ Li\� t 4 a r *47 O .� ♦ O \ FoTruod' ' •I Plaza Q ..... ' O O Southeast Block I GrouM Level courtyard y f474'-- \ SE 1 490; Event Pavilion 0 I� VIA r� —A PFRIKINS FA.5TMAN STUQ1Q �-. `•r,. - 1809 7TH AVE SUITE 800 y - ` SEATTLE 98101 c +477 4 Northeast Block V� O o c UW 30 Garden P A E C 1 -. • O . � +474• .J � ♦ ';�w ��_ _ � - ter...__ .-- .-- , Oft M-011111.. 'i 4-_ +�449' *4W AIffa ■ICINA -ter Qi II� 11 Sound Transit Parking Garage C n um" A. K I _ r 6 +4W -iA 14 SE 2 �S. 316th Street II Illustrations shown here are preliminary and conceptual only to show general massing, planning intent and design direction. Information shown is subject to change with more detailed design, engineering, development agreement negotiations and municipal review. PROJECT: TC-3 Masterplan Federal Way, WA Preliminary Planning Concept Development Agreement Exhibits Dec. 4, 2023 EWL�.--� . I. PRECEDENT EXAMPLE -ROAD A r FP Sidewalk & Tree Street Trees mAm 12' to 14' ►--Q 9 Planter Or Par' STRFFT1% � � 0 SECTION1W - ROAD A ,%W 0 0 Exhibit D Two Way Travel Lane Planter Or Parking No Street Parking This Side Road A West Arm Only 0iaewa1K a Tree Street Trees 12' to 14' Illustrations shown here are preliminary and conceptual only to show general massing, planning intent and design direction. Information shown is subject to change with more detailed design, engineering, development agreement negotiations and municipal review. VIA 1809 7TH AVE SUITE 800 SEATTLE 98101 PROJECT: TC-3 Masterplan Federal Way, WA Preliminary Planning Concept Development Agreement Exhibits Dec. 4, 2023 10 COUNCIL MEETING DATE: ITEM #: CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL SUBJECT: ORDINANCE: TAX INCREMENT FINANCING POLICY QUESTION: Should the City create a Tax Increment Area to help fund public projects in the Downtown/City Center area? COMMITTEE: N/A MEETING DATE: N/A CATEGORY: ❑ Consent ® Ordinance ❑ Public Hearing ❑ City Council Business ❑ Resolution ❑ Other STAFF REPORT BY: Keith Niven DEPT: CD Attachments: 1. Staff Report 2. Ordinance Options Considered: 1. Adopt the proposed ordinance. 2. Do not adopt the proposed ordinance and provide direction to staff. MAYOR'S RECOMMENDATION: Option 1. MAYOR APPROVAL: N/A Committee InitiaVDate COMMITTEE RECOMMENDATION: N/A F071M DIRECTOR APPROVAL: W 2.26.24 Initial/Date Committee Chair Dovey Committee Member Tran Committee Member Walsh PROPOSED COUNCIL MOTION(S): FIRST READING OF ORDINANCE (4/2/24): `1 move to forward the proposed ordinance to the April 16, 2024 Council Meeting for second reading and enactment. " SECOND READING OF ORDINANCE (4/16/24): "I move approval of the proposed ordinance to create a Tax Increment Area in Federal Way. " (BELOW TO BE COMPLETED BY CITY CLERK'S OFFICE) COUNCIL ACTION: ❑ APPROVED COUNCIL BILL # ❑ DENIED First reading ❑ TABLED/DEFERRED/NO ACTION Enactment reading ❑ MOVED TO SECOND READING (ordinances only) ORDINANCE # REVISED—11/2019 RESOLUTION # i CITY OF FEDERAL WAY MEMORANDUM DATE: 27 March 2024 TO: City Council VIA: Jim Ferrell, Mayor FROM: Keith Niven, AICP, CEcD Community Development Director SUBJECT: Tax Increment Financing Financial Impacts: The financial impact to the City for consideration of a Tax Increment Financing district contemplates both future property tax revenues, as a result of private development and investment, and the construction of public improvements and their associated costs, without which development would not occur at the rate and scale anticipated. It has been forecast that the Tax Increment Area (TIA) will generate between $30M and $65M over a 25-year period. A portion of this property tax revenue, approximately $6.5M - $13.7 M, would have gone to the City's General Fund without the creation of the TIA. Introduction• The purpose of this staff report is to provide an overview of the proposed Tax Increment Financing (TIF) initiative for Downtown Federal Way, including background information, outlining the TIF purpose, and detailing the adoption process to create a Tax Increment Area (TIA) in accordance with the Revised Code of Washington (RCW) 39.114. Background Information: In 2021, the Washington State Legislature passed House Bill 1189, granting municipalities the authority to establish Tax Increment Areas (TIAs). These areas enable the funding of public improvements to facilitate new private development. The City of Federal Way has long pursued a vision of creating a vibrant, mixed -use downtown and regional destination. Significant efforts have been made to plan, design, and execute key infrastructure improvements and amenities to realize this vision. The assist the City with this effort, the City hired Tiberius Solutions, a consulting firm from Portland specializing in Tax Increment Financing. TIA Implementation in Downtown Federal Way: The TIA for Downtown Federal Way aims to revitalize the currently suburban, auto -centric, and unremarkable downtown area into a vibrant and walkable neighborhood and regional destination. By utilizing tax increment financing, the city intends to generate funding for public improvements that will facilitate private development and create a distinct urban environment. On January 21, 2023, the concept of implementing a TIA for Downtown Federal Way was introduced at the Council Retreat. The proposal received initial support and marked the beginning of the comprehensive analysis and planning process. The soon -to -be -opened Sound Transit station in downtown Federal Way, coupled with the City's investment, presents an unprecedented opportunity to redefine the pace and character of downtown growth and redevelopment. By leveraging TIF funding, the City aims to implement transformative changes that will shape downtown Federal Way into a distinctive, mixed -use, and walkable central hub in the community. The transformation of City -owned property Downtown (TC-3) is already underway with the Development Agreement negotiations currently occurring between City staff and One Trent, the selected developer. A number of the conditions of the agreement are contingent on the timing of the public improvements such as the public parking garage, plaza, associated infrastructure. The draft City of Federal Way Tax Increment Area - Project Analysis Report, prepared by Tiberius Solutions (attached), plays a crucial role in providing a thorough evaluation of the TIA's feasibility and potential impact. This report assesses various aspects, including projected tax revenues, infrastructure improvements, and the overall viability of TIF for this area of Federal Way. Adoption Process: The adoption of a TIA in Washington State must adhere to the procedures outlined in the Revised Code of Washington (RCW) 39.114. These requirements emphasize the need for community engagement, review by the Office of Treasurer (Attachment 2), and a transparent adoption process. The Public Outreach conducted is presented in Appendix B of the Tax Increment Report (Attachment 1 of this Staff Report). City of Federal Way March 27, 2024 11 Attachment 1: TIA Report City of Federal Way Tax Increment Area Project Analysis Report CITY OF Federal Way Centered on Opportunity City of Federal Way March 27, 2024 iii Acknowledgments This report was prepared for the City of Federal Way by Tiberius Solutions, a limited liability corporation headquartered in Portland, Oregon. Tiberius Solutions specializes in infrastructure funding and tax increment financing analysis, helping clients achieve their economic and financial goals. Tiberius Solutions is not a registered municipal advisor as defined in Section 15B of the Securities Exchange Act, as amended by Section 975 of the Dodd -Frank Wall Street Reform and Consumer Protection Act. The contents of this report are intended to provide factual information and is not intended to be construed as advice or recommendations regarding any specific municipal financial products. The City should discuss any information and material contained in this report with any and all internal or external advisors and experts that the City deems appropriate before acting on this information. Other firms that contributed to this report include: ■ Elaine Howard Consulting, LLC led the City's efforts for public outreach and community engagement on this project. ■ Johnson Economics conducted technical analysis related to the forecast of future private development in the area, and economic impacts related to job creation and housing affordability. ■ PFM Financial Advisors LLC (PFM) served as the City's municipal financial advisor, providing advice on reasonable assumptions for the terms of future indebtedness. Tiberius Solutions acknowledges the assistance and data provided by staff at the City who were deeply involved in the preparation of this report, providing input on key assumptions and review of all analysis. Tiberius Solutions would also like to thank the valuable contributions made by the King County Assessor's Office and the Office of the Washington State Treasurer, who provided data used in the analysis and guidance on the content of this report. Despite the assistance of other public and private -sector entities, Tiberius Solutions is responsible for the contents of this report. TIBERIUS P ELAINE HOWARD x SOLUTIONS CONSULTING, LLC f' JOHNSON ECONOMICS City of Federal Way March 27, 2024 iv Table of Contents SUMMARY 1 BACKGROUND _ I 1.1 BACKGROUND AND PURPOSE I 1.2 BOUNDARY I 1.3 OBJECTIVES III 2 ANTICIPATED DEVELOPMENT _ IV 2.1 PUBLIC IMPROVEMENTS IV 2.2 PRIVATE DEVELOPMENT VI 2.3 IMPACT OF PUBLIC PROJECTS ON PRIVATE DEVELOPMENT VIII 3 FINANCE PLAN IX 3.1 FORECAST OF TAX ALLOCATION REVENUES IX 3.2 PROPOSED INDEBTEDNESS XXII 4 ECONOMIC IMPACTS XXV 4.1 JOB CREATION XXV 4.2 FISCAL IMPACTS XXIX 4.3 AFFORDABLE AND LOW-INCOME HOUSING XXXI 4.4 LOCAL BUSINESS COMMUNITY XXXIV 4.5 LOCAL SCHOOL DISTRICT XXXIV 4.6 LOCAL FIRE SERVICE XXXVI 5 EVALUATION OF RISK FACTORS xxxviII 5.1 GENERAL ECONOMIC CONDITIONS XXXVIII 5.2 FUTURE ASSESSED VALUES AND TAX RATES XL 5.3 FUTURE PUBLIC COSTS OF CONSTRUCTION AND/OR BORROWING XLI 5.4 OTHER CITY REVENUES XLI 5.5 NON -VOTED DEBT LIMIT XLII 5.6 SEISMIC ACTIVITY AND OTHER NATURAL DISASTERS XLII 5.7 INITIATIVES AND REFERENDA XLII 5.8 CITY OF FEDERAL WAY'S APPROACH TO FINANCIAL UNCERTAINTY XLII APPENDIX A: TAX LOTS INCLUDED IN THE PROPOSED FEDERAL WAY TIA BOUNDARY XLIV APPENDIX B: SUMMARY OF PUBLIC OUTREACH XLVI APPENDIX C: ALTERNATE SCENARIO VII City of Federal Way March 27, 2024 v Summary How Tax Increment Financing Works In 2021, the Washington State Legislature passed House Bill 1189, allowing some municipalities (cities, counties, and ports) to establish Tax Increment Areas (TIAs) to fund public improvements that allow for new private development to occur.I Revised Code of Washington (RCW) 39.114 describes the legislative requirements for tax increment financing in Washington. Each TIA must have a clearly defined boundary and a list of public improvement projects to be funded in the area. Some of the property taxes generated by increases in assessed value in a TIA are allocated to the TIA to help pay for the public projects in the area. The result is each TIA redirects some of the taxes that would have been collected by other taxing districts for the TIA projects instead. Revenues generated from the growth in assessed value within a TIA are not restricted by other RCW provisions that would otherwise limit the jurisdiction's levy amount to no more than 101 percent of the prior year's levy authority. With a TIA, a municipality can borrow money to fund important public projects in an area, and then pay back the cost of those projects with property tax revenues generated by the increased property value of new private development inside the TIA. TIAs can collect property taxes for no more than 25 years. The projects funded by a TIA are intended to stimulate new construction that occurs sooner or with higher values than would otherwise be expected to occur. Thus, some of the property taxes received by TIAs would not exist without the new public projects paid for by the TIA. When a municipality establishes a TIA, the current value of property in the TIA is "frozen" and called the base value. Property taxes paid on the base value are paid as usual to the taxing districts that collect property taxes in the area. Over time, the property values in the TIA are expected to increase. Property value above the base value is called the increment value. Some property taxes paid on the increment value are distributed to the TIA, called tax allocation revenues. Some taxes, like school district excess levies, are identified in RCW as not impacted by TIAs. Thus, some taxing districts continue to receive taxes paid on the increment value, like usual. Anticipated Public Improvements The proposed City of Federal Way (City) TIA includes 233.7 acres and is generally bordered by Interstate 5 to the East, S 312"' Street to the North, Highway 99 to the West, and S 330"' Street to the South. The development of this area is vital to the City's goal to transform a suburban, auto - centric and non -remarkable area of Federal Way into a distinct, vibrant, and walkable downtown, For this development to occur, the City must complete many significant infrastructure projects, including: ■ Public Parking ■ Recreation Projects ■ Mobility Projects 1 The tax increment financing program was subsequently amended by house bill 1527 in 2023. City of Federal Way March 27, 2024 vi ■ Community Building ■ Public Safety Projects a Placemaking Projects The cost of these projects is estimated to range between $72 and $170 million in 2023 dollars, and tax allocation revenues from the proposed TIA would provide essential funding for these projects. When considering the impacts of inflation and interest on debt, the cost of the public projects would be more than the amount of tax allocation revenues generated in the proposed TIA. The City assumes some of the project costs would need to be paid for by additional funding sources. Anticipated Private Development In 2023 the City issued a request for proposals for professional services to prepare a Town Center Master Development Plan for City -owned property that will be a cornerstone project in the City's effort to revitalize the downtown. As a result of this process, the City accepted a proposal from One Trent, a Seattle -based real estate development firm. As of the writing of this report, the City is currently negotiating a development agreement with One Trent, who plan to develop a four - phase mixed -use project within the proposed TIA, including residential opportunities in the form of rental apartments and townhomes for homeownership, retail and office, with an expected taxable value of $472 million (in 2023 dollars). Additional market analysis was completed to identify speculative future development opportunities based on current market conditions. It is estimated that future speculative development in the proposed TIA would result in an additional $1.1 billion (in 2023 dollars) in improvement value being added to the tax rolls over the life of the proposed TIA (by 2049). Impacts to Taxing Districts The proposed TIA is forecast to receive $68.9 million in tax allocation revenues over the course of 25 years, ending in 2049. This would result in an equal amount of "foregone" property tax revenues from impacted taxing district levies. However, RCW 84.55.010 allows taxing districts to increase the amount of their levy to account for growth in assessed value inside a TIA. This would result in slightly higher overall levy amounts and tax rates for impacted taxing districts. Thus, the net impact the TIA would have on taxing district levies is $64.1 million, which is less than the total amount of tax allocation revenues received. The proposed TIA would receive tax allocation revenues from the following levies: ■ King County: Regular, Lid Lifts, Transportation, Conservation Futures ■ County Flood Zone ■ County Ferry District ■ Port of Seattle: General Fund ■ EMS ■ Sound Transit it City of Federal Way City of Federal Way March 27, 2024 vii • King County Library System: General Fund ■ South King Fire & Rescue (Fire District 39) The following levies are not impacted by the proposed TIA, and therefore would receive additional property tax revenues from new private development in the proposed TIA as soon as construction is complete: ■ State Schools (Part 1 and 2) ■ King County Bonds (voted) levy ■ Port Bond Fund levy ■ Federal Way Public Schools (Maintenance & Operations, Construction, and Bond levies) ■ Library GO Bond levy ■ Fire District 39 / South King Fire and Rescue (Maintenance & Operations and GO Bond levies) Economic Impacts The proposed TIA is expected to generate substantial economic impacts for the local and regional economy. The infrastructure investments supported by the proposed TIA would support a significant level of development, with substantial employment from construction as well as ongoing business activity. The total estimated economic impacts (direct, indirect, and induced) from the construction phase are roughly 4,201 FTE positions and $351.3 million in labor income (2023 dollars). Following development, the completed structures are expected to generate ongoing impacts to the local and regional economy. Employees at the office and retail spaces are expected to generate income that would circulate in the local economy, supporting additional employment and tax revenues. The overall level of employment in the proposed TIA is estimated at 632 when completed and tenanted. The remainder of this Report details all assumptions used for the analysis of the potential TIA. City of Federal Way March 27, 2024 viii I Background 1.1 Background and Purpose The City of Federal Way incorporated as a city in 1990 in response to the community desire to take more control over how the city would develop and grow over time, as opposed to leaving the decisions to King County. Included in that vision was a recognizable downtown. The downtown, or "City Center" does not currently present an identifiable sense of a downtown or urban center. However, things are changing. With a population just over 100,000, the City is actively taking steps to transform itself into a welcoming city in the Puget Sound region, with an identifiable and memorable downtown. The City has taken initial steps in transforming the City Center into a true downtown for the community. The City built the Performing Arts & Entertainment Center (PAEC) and the Town Square Park as initial cornerstone elements aimed at defining the City Center neighborhood. In 2026, a Sound Transit light rail station will allow residents, employees, and visitors greater transit access to and from the City Center. As part of the station opening, Sound Transit will be selling approximately six acres in this neighborhood for transit -oriented development. The City owns approximately 7.5 acres of redevelopable property east of the PAEC and north of Town Square Park and the Federal Way Transit Center. The City sees the Town Center as a central gathering place for community where the whole_ community can congregate and celebrate. Civic and cultural facilities, including the PAEC, park, and open -space system, will meet the needs of residents, employees and visitors. These amenities will connect to the citywide and regional system of open spaces, parks, and trails. Public and private projects will contain design elements such as wayfinding, public art pieces, iconic infrastructure and decorative landscaping. 1.2 Boundary Exhibit 1 shows a map of the boundary for the proposed Federal Way Tax Increment Area (TIA), including all tax lots included within the boundary. The boundary includes 229 acres and is generally bordered by Interstate 5 to the East, S 312t' Street to the North, Highway 99 to the West, and S 330t' Street to the South. All parcels are zoned City Center Core, City Center -Frame, Community Business, or Multi -Family Residential. Excluding rights -of -way, parcels zoned City Center Core compose 52% of the acreage and 58% of the current taxable assessed real -property value. Parcels zoned RM3600 (1 unit/3,600 square feet), a Multi -Family Residential zone, compose 30% of acreage and 23% of taxable assessed value. Parcels zoned City Center Frame compose 14% of acreage and 17% of taxable assessed real property value, and parcels zoned Community Business compose 4% of acreage, and 2% of taxable assessed real property value. Exhibit 1. Pro JiJTH 5' )osed Federal Way TIA Boun 320TH n• Tax Increment Area Boundary (229 acres) Tax Increment Area Parcels Miles 0 0.5 HERE, Garmin, (c) OpenStreetMep contributors, and the user community Source: Tiberius Solutions with data from the King County Assessor's Office Appendix A provides a list of all 130 tax lots included within the proposed TIA boundary. These properties are located within tax code areas 1202 and 1205. They had a combined appraised value of $407,958,900 and assessed value of $196,019,600 for tax year 2024.2 RCW 39.114 establishes limits for the taxable assessed value of all property included within 2 This document was originally prepared in 2023 using tax year 2023 data. Portions of the analysis were subsequently updated in March 2024 with tax year 2024 data. Rev. 7/18 TIAs for a jurisdiction. When the ordinance establishing the TIA is passed, the TIA may not have an assessed valuation of more than $200 million or 20 percent of the total assessed valuation of the City of Federal Way (whichever is less). The total assessed valuation of the City in tax year 2023 was $17,270,222,086, which means that 20 percent of that assessed valuation is $3,454,044,417. Thus, $200 million is the applicable threshold for the maximum amount of assessed value that can be included in the proposed TIA. As stated previously, all of the tax lots within the proposed TIA boundary have a total taxable assessed value of $196,019,600 in tax year 2024. Thus, the proposed TIA boundary complies with the limitations on assessed value described in RCW. These calculations are shown below in Exhibit 2. Exhibit 2. Calculations of Limitations on Assessed Value, Proposed Federal Way TIA Total Assessed Value, City of Federal Way, 2023 $17,270,222,086 20% of Total Assessed Value Statutory Limit Assessed Value of TIA, 2024 In Compliance with RCW? Remaining Capacity $ 3,454,044,417 $ 200,000,000 $ 196, 019, 600 Yes 3,980,400 Source: Tiberius Solutions with data provided by the King County Assessor's Office RCW 39.114 requires the City to identify any property that it intends to acquire within the proposed TIA boundary. At the time of writing this report, the City has not identified any specific properties it intends to acquire within the proposed TIA boundary. 1.3 Objectives The City has identified the following goal and objectives for the proposed TIA: Goal Transform a suburban, auto -centric and non -remarkable area of Federal Way into a distinct, vibrant, and walkable downtown. Objectives 10 Utilize creative funding tools to help achieve the Goal. 10 Leverage the regional investment in high -capacity transit; the sale of City -owned property; and, local investment to attract high -quality, private development that will catalyze redevelopment. Prioritize walkability and enhanced non -motorized connections. Construct pedestrian - oriented infrastructure improvements that that improve mobility. ■ Invest in community gathering areas and placemaking to define the area and create a destination for the community. Rev. 7/18 2 Anticipated ❑evelopment 2.1 Public Improvements The following public improvements may be funded in part or whole by tax allocation revenues generated by the proposed TIA: A. Public Parking. These projects may include: • Land acquisition • A stand-alone parking garage • Public parking integrated into a private garage ■ Shared parking agreements w/ other parties ■ Other equivalent projects that would add parking B. Recreation Projects. These projects may include: ■ Land acquisition ■ New park or park expansion ■ Civic plaza ■ Park improvements ■ Other equivalent projects that would add recreational amenities C. Mobility Projects. These projects may include: • S 320th Dip (Dipping S 320th Street under 215t Ave S for a pedestrian/bicycle at -grade crossing) • Pedestrian promenade ■ Protected bike lanes ■ Transit shelters • Bicycle lockers ■ City Center Access ■ Other equivalent projects that would increase mobility D. Community Building. These projects may include: ■ Land acquisition • Public market ■ Senior center ■ City Hall Rev. 7/18 • Community Center north * Downtown meeting room • Other equivalent projects that would add an indoor community space to the district E. Public Safety Projects. These projects may include: • Land acquisition ■ Improvements to benefit Federal Way Police Department • Improvements to benefit South King Fire & Rescue • Improvements to lessen code compliance issues • Other equivalent projects that would improve public safety F. Placemaking Projects. These projects may include: • Gateway features • Wayfinding signs • Pedestrian nodes/public spaces • Public art • Lighting (e.g. catenary lights, etc.) ■ Special street furniture • Other equivalent projects that would improve placemaking Exhibit 3 summarizes the estimated cost and prioritization for each of these public improvements. Collectively, these projects are estimated to between $72 million and $170 million in 2023 dollars. Exhibit 3. Public Improvements to be Funded with Tax Allocation Revenues, Proposed Federal Way TIA (2023 $) Estimated Project Cost Range (2023$) Project Low High Priority A Public Parking $ 27,000,000 $ 30,000,000 High B Recreation $ 10,000,000 $ 16,000,000 High C Mobility $ 30,000,000 $ 60,000,000 Medium D Community Building $ 3,000,000 $ 60,000,000 Medium E Public Safety $ 1,000,000 $ 1,000,000 Low F Placemaking $ 1,000,000 $ 3,000,000 Low Total $ 72,000,000 $ 170,000,000 Source: City of Federal Way RCW 39.114.020 requires the City to impose a deadline by which commencement of construction of the public improvements shall begin, "which deadline must be at least five years into the future..." Thus, for the proposed Federal Way TIA, the deadline for construction of public improvements to begin is 2028. Rev. 7/18 2.2 Private Development In 2023 the City issued a request for proposals for professional services to prepare a Town Center Master Development Plan for City -owned property that will be a cornerstone project in the City's effort to revitalize the downtown. As a result of this process, the City accepted a proposal from One Trent, a Seattle -based real estate development company. As of the writing of this report, the City is currently negotiating a development agreement with One Trent, who plan to develop a four -phase project within the proposed TIA (apartments and office or condos), with an expected taxable value of $472 million (in 2023 dollars). One Trent intends to apply for the City's Multifamily Tax Exemption (MFTE), which would result in an eight -year tax exemption on eligible value. The City's MFTE program is authorized by RCW 84.14 to incentivize residential construction in urban centers. The City has designated certain "residential targeted areas," where new construction is eligible for MFTE benefits. The proposed TIA overlaps with a designated residential targeted area. To qualify, new construction projects must be located within the designated residential targeted areas, and must include at least 16 new multifamily units. There are no affordability restrictions related to the 8-year exemption. However, to qualify for a 12-year exemption, projects must meet certain thresholds for housing affordability, as described in City code. This analysis assumes that for Phases 1, 2, and 3 of the One Trent development, over 95% of total taxable value would be eligible for the exemption. This analysis assumes Phase 4 would not be eligible for the exemption. Exhibit 4 summarizes the forecast assessed value from this development. Exhibit 4. One Trent Development Plan Taxable Value of Development Completion Development MFTE-Eligible Non MFTE- Phase Type Year (2023 $) Value Eligible Value Phase 1 Apartments 2027 $ 179,827,337 $ 172,312,858 $ 7,514,479 Phase 2 Apartments 2028 $ 110,900,540 $ 107,920,895 $ 2,979,645 Phase 3 Apartments 2030 $ 118,393,420 $ 115,507,471 $ 2,885,949 Phase 4 Condos 2032 $ 63,355,171 $ - $ 63,355,171 Total $ 472,476,468 $ 395,741,224 $ 76,735,244 Source: Tiberius Solutions with data and input from the City of Federal Way Additional market analysis was completed to identify speculative future development opportunities based on current market conditions. The analysis was conducted by Johnson Economics, using proprietary development models to evaluate the likelihood of future development on all tax accounts inside the proposed TIA that were not associated with the One Trent development. The analysis estimated the residual land value of each tax lot, based on zoning and current market conditions. Properties with the lowest ratio of real market value to estimated residual land value were forecast to have the highest likelihood of future development. The likelihood of development for each parcel over the 25-year forecast period ranged from 1 % to 22%. Of the 9.4 million square feet of potentially developable or redevelopable properties in the proposed TIA, the analysis estimates 17% would experience new development over the 25- year forecast period, resulting in a total of 5,208 new housing units, and $1.60 billion in speculative new construction value (in 2023 dollars). The analysis conservatively assumes that no speculative development would occur until the One Rev. 7/18 Trent development has broken ground (estimated 2026). Based on conversations with City staff regarding expectations of the use of the MFTE, this analysis assumes that 80% of new construction value within the proposed TIA would be multifamily, and that 100% of that value would be eligible for the 8-year MFTE. It is estimated that future speculative development in the proposed TIA would result in an additional $1.14 billion in improvement value (in tax year 2023 dollars) being added to the tax rolls over the life of the proposed TIA (construction occurring through 2047, and coming on the tax roll through 2049). Exhibit 5 summarizes the private development forecast to occur in the proposed TIA, both from One Trent and the speculative development through 2049. When new projects complete construction, there is a delay before that increase in assessed value is reflected on the tax roll. This evaluation conservatively assumes that new construction in the proposed TIA is added to the tax roll two years after construction is completed. Property value that qualifies for the MFTE exemption would have an additional eight -year delay (ten years after construction is completed) before being added to the tax roll. Exhibit S. Summary of Estimated Private Development, Proposed Federal Way TIA (2023 $) Taxable Assesed Value (2023 $) Year on OneTrent Speculative Tax Roll Development Development 2028 $ - $ 14, 583, 047 2029 $ 7,514,479 $ 14,583,047 2030 $ 2,979,645 $ 14, 583, 047 2031 $ - $ 14, 583, 047 2032 $ 2,885,949 $ 14, 583, 047 2033 $ - $ 14, 583, 047 2034 $ 63,355,171 $ 14,583,047 2035 $ $ 14, 583, 047 2036 $ - $ 72,915,233 2037 $ 172,312,858 $ 72,915,233 2038 $ 107,920,895 $ 72,915,233 2039 $ - $ 72,915,233 2040 $ 115, 507,471 $ 72, 915, 233 2041 $ $ 72,915,233 2042 $ $ 72,915,233 2043 $ $ 72,915,233 2044 $ $ 72, 915, 233 2045 $ $ 72, 915, 233 2046 $ $ 72, 915, 233 2047 $ $ 72, 915, 233 2048 $ $ 72, 915, 233 2049 $ - $ 72, 915, 233 Total '$ 472,476,468 $ 1,137,477,637 Source: Johnson Economics and Tiberius Solutions with data and input from City of Federal Way Rev. 7/18 2.3 Impact of Public Projects on Private Development The development assumptions included in this analysis reflect a scenario where the TIA provides funding for a portion of the public projects identified in this report. Without these vital infrastructure improvements, we do not anticipate significant new construction to occur within the proposed TIA boundary in the near future. The private development forecast in this analysis would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future without the proposed public improvements. The increase in assessed value within the increment area that could reasonably be expected to occur without the proposed public improvements would be less than the increase in the assessed value estimated to result from the proposed development with the proposed public improvements. There are currently no projects in the proposed TIA boundary under construction, or with approved permits for construction. The City -owned property within the boundary is anticipated to be the site best situated for new private construction. The City received six responses to. its RFP for a master developer for the City -owned property, and all respondents determined that public investments would be necessary on the part of the City to make private development feasible on the site. Additional speculative development is not expected to occur in the area until after construction begins on the City -owned property, which would include City investment in public infrastructure and amenities in the area. With these proposed investments in public projects, the City -owned site should act as a catalyst project for private development in the surrounding area, encouraging more private development activity to occur. Even with the projected public improvements, this analysis assumes that only 17% of the properties within the proposed TIA boundary would experience speculative future development over the 25-year life of the proposed TIA. Rev. 7/18 3 Finance Plan 3.1 Forecast of Tax Allocation Revenues Tax allocation revenues generated within the proposed TIA would provide a critical source of funding to pay for the public improvements identified in this report. The tax increment area is expected to take effect on June 1, 2024, following the adoption of the ordinance establishing the proposed TIA. Based on this timing, the first year the proposed TIA would be eligible to receive tax allocation revenues is 2025. The duration of the proposed TIA shall be no more than 25 years after the first year in which tax allocation revenues are collected. This analysis assumes that the final year the proposed TIA would be eligible to receive tax allocation revenues is 2049. In the remainder of this section, the assumptions and methods for forecasting future tax allocation revenues are described. Determine the Annual Levy Rates Property tax levies included in the calculation of tax allocation revenues are limited to "regular property taxes" as defined in RCW 84.04.140, except regular property taxes levied by port districts and public utility districts to repay general obligation debt and regular property taxes levied by the state for the support of common schools. Regular property taxes also do not include any levies that are exempt from aggregate limits for junior/senior limits in RCW 84.52.043 or excess property taxes levied by local school districts. Exhibit 6 shows the regular property tax levies that are included in the calculation of tax allocation revenues for the proposed TIA, and the rates associated with each of these levies in 2023. Although the proposed TIA overlaps two individual tax code areas (1202 and 1205), the property tax levies included in each are the same. This report therefore does not calculate tax allocation revenues nor report values by individual tax code area, but instead groups all tax code areas together. Rev. 7/18 Exhibit 6. Levies Included in Calculation of Tax Allocation Revenues, Proposed Federal Way TIA, All Tax Code Areas, Tax Year 2023 2023 Levy Rate(Per Taxing District $1,000 AV) County -wide regular levy (non -voted) $ 0.481920 AFIS (Fingerprint ID) Lid Lift $ 0.026810 Parks Lid Lift $ 0.171430 Human SrvsNets Lid Lift $ 0.078790 Children/FamiltyJustice Ctr. Lid Lift $ - Best Start for Kids Lid Lift $ 0.162970 Radio Communications Lid Lift $ 0.041310 County -wide Transport levy $ 0.037210 County Cons. Futures $ 0.062500 County Flood Zone $ 0.067170 County Ferry District $ 0.007780 Port General Fund $ 0.054730 EMS (voted) $ 0.209220 Sound Transit $ 0.155760 City General Fund $ 0.687290 Library General Fund $ 0.234330 Fire 39 General Fund $ 1.251370 Total $ 3.730590 Source: Tiberius Solutions with data provided by the King County Assessor's Office - These levy rates are expected to change over time, based on increases in each jurisdiction's levy authority and changes in assessed value of property within those jurisdictions. Historically, these tax rates have decreased over time, as growth in assessed value has outpaced growth in levy authority. This analysis assumes that those historical trends would continue, with rates decreasing over time. To forecast future changes in tax rates for jurisdictions impacted by the proposed Federal Way TIA, we forecast growth in assessed value for each jurisdiction, distinguishing between growth from appreciation of existing property and growth from new construction. Recent historical trends for assessed value growth in King County have been unsustainably high and are unrealistic to assume will continue for the 25-year duration of the proposed TIA. Instead, we look at long- term historical trends for per capita personal income growth as the basis for forecasting appreciation of existing property values, and we look at forecasts of population growth as the basis for forecasting the increase in assessed value from new construction. Per capita personal income growth is strongly correlated with growth in property values. Data from the Federal Reserve for personal income growth in King County shows that the five-year rolling average from 1977 to 2012 was between 4.4% to 6.6% per year.3 Growth has been more rapid over the last decade, but that rapid growth is unlikely to be sustainable in the future. Based on the long-term trends, we assume average annual growth of 5.1 % for personal income, and thus 3 U.S. Bureau of Economic Analysis, Per Capita Personal Income in King County, WA [PCP153033], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/PCP[53033, June 12, 2023. Rev. 7/18 5.1 % annual growth in assessed value from appreciation of existing properties for all years of the forecast period. Assessed value growth from new construction is correlated with population growth. The most recent State Growth Management Act (GMA) population forecasts for King County were conducted in 2022 and cover the period from 2025 to 2050. This forecast calls for gradual slowing of population growth in the County, with an average annual growth rate of 0.9% from 2025 to 2031, 0.8% from 2031 to 2038, 0.7% from 2039 to 2049, and 0.6% in 2049. We apply those same percentage growth assumptions to our forecast of assessed value from new construction countywide (and apply the 0.9% growth rate for the years before this forecast, 2023- 2025). This forecast of future growth in assessed value from new construction countywide is not directly tied to forecasts of construction activity within the proposed TIA, as the annual growth in assessed value in the proposed TIA is estimated to be only a fraction of the total forecast countywide in any given year. Exhibit 7, Exhibit 8, and Exhibit 9 show the forecast of future levy rates applicable for the TIA. The total applicable levy rate for the proposed TIA is forecast to decrease from $3.730590 in 2023 to $1.158482 in 2049. This analysis conservatively assumes that no potential future levies or extensions of current levy lid lifts would be approved by voters. Rev. 7/18 Exhibit 7. Forecast of Future Levy Rates, Proposed Federal Way TIA (1 of 3) County -wide AFIS Human Children/Fam Tax regular levy (Fingerprint Srvs/Vets Lid ily justice Ctr. Best Start for Year (non -voted) ID) Lid Lift Parks Lid Lift Lift Lid Lift Kids Lid Lift 2b23 $ 0.481920 $ 0.026810 $ 0.171430 $ 0.078790 $ $ 0.162970 2024 $ 0.461511 $ 0.025676 $ 0.163327 $ - $ $ 0.155267 2025 $ 0.443665 $ $ 0.157011 $ $ $ 0:149263 2026 $ 0.426504 $ $ - $ $ $ 0.143489 2027 $ 0.410007 $ $ $ $ $ 0.137939 2028 $ 0.394149 $ $ $ $ $ - 2029 $ 0.378904 $ $ $ $ $ 2030 $ 0.364248 $ $ $ $ $ 2031 $ 0.350160 $ $ $ $ $ 2032 $ 0.336603 $ $ $ $ $ 2033 $ 0.323572 $ $ $ $ $ 2034 $ 0.311045 $ $ $ $ $ 2035 $ 0.299003 $ $ $ $ $ 2036 $ 0.287427 $ $ $ $ $ 2037 $ 0.276300 $ $ $ $ $ 2038 $ 0.265606 $ $ $ $ $ 2039 $ 0.255316 $ $ $ $ $ 2040 $ 0.245423 $ $ $ $ $ 2041 $ 0.235914 $ $ $ $ $ 2042 $ 0.226773 $ $ $ $ $ 2043 $ 0.217985 $ $ $ $ $ 2044 $ 0.209539 $ $ $ $ $ 2045 $ 0.201419 $ $ $ $ $ 2046 $ 0.193614 $ $ $ $ $ 2047 $ 0.186112 $ $ $ $ $ 2048 $ 0.178900 $ $ $ $ $ 2049 $ '0.171961 $ $ $ $ $ Source: Tiberius Solutions Rev. 7/18 Exhibit Tax Year 8. Forecast of Radio Communicat- ions Lid Lift Future Levy Rates, Proposed Federal Way TIA (2 of 3) County -wide Transport County Cons. County Flood County Ferry levy Futures zone District Port General Fund 2023 $ 0.041310 $ 0.037210 $ 0.062500 $ 0.067170 $ 0.007780 $ 0.054730 2024 $ 0.039561 $ 0.035634 $ 0.059675 $ 0.064341 $ 0.007452 $ 0.052412 2025 $ - $ 0.034257 $ 0.057367 $ 0.061853 $ 0.007163 $ 0.050385 2026 $ $ 0.032932 $ 0.055148 $ 0.059461 $ 0.006886 $ 0.048437 2027 $ $ 0.031658 $ 0.053015 $ 0.057161 $ 0.006620 $ 0.046563 2028 $ $ 0.030433 $ 0.050965 $ 0.054950 $ 0.006364 $ 0.044762 2029 $ - $ 0.029256 $ 0.048993 $ 0.052824 $ 0.006118 $ 0.043031 2030 $ $ 0.028125 $ 0.047098 $ 0.050781 $ 0.005881 $ 0.041366 2031 $ $ 0.027037 $ 0.045277 $ 0.048817 $ 0.005654 $. 0.039766 2032 $ - $ 0.025990 $ 0.043524 $ 0.046927 $ 0.005435 $ 0.038227 2033 $ - $ 0.024984 $ 0.041839 $ 0.045110 $ 0.005224 $ 0.036747 2034 $ - $ 0.024017 $ 0.040219 $ 0.043364 $ 0.005022 $ 0.035324 2035 $ $ 0.023087 $ 0.038662 $ 0.041685 $ 0.004828 $ 0.033957 2036 $ - $ 0.022193 $ 0.037165 $ 0.040071 $ 0.004641 $ 0.032642 2037 $ $ 0.021334 $ 0.035726 $ 0.038520 $ 0.004461 $ 0.031378 2038 $ $ 0.020508 $ 0.034344 $ 0.037029 $ 0.004289 $ 0.030164 2039 $ $ 0.019714 $ 0.033013 $ 0.035595 $ 0.004122 $ 0.028995 2040 $ - $ 0.018950 $ 0.031734 $ 0.034215 $ 0.003963 $ 0.027872 2041 $ $ 0.018216 $ 0.030504 $ 0.032890 $ 0.003809 $ 0.026792 2042 $ $ 0.017510 $ 0.029322 $ 0.031615 $ 0.003661 $ 0.025754 2043 $ - $ 0.016831 $ 0.028186 $ 0.030390 $ 0.003520 $ 0.024756 2044 $ - $ 0.016179 $ 0.027094 $ 0.029213 $ 0.003383 $ 0.023797 2045 $ $ 0.015552 $ 0.026044 $ 0.028081 $ 0.003252 $ 0.022874 2046 $ $ 0.014949 $ 0.025035 $ 0.026993 $ 0.003126 $ 0.021988 2047 $ $ 0.014370 $ 0.024065 , $ 0.025947 $ 0.003005 $ 0.021136 2048 $ $ 0.013813 $ 0.023132 $ 0.024941 $ 0.002889 $ 0.020317 2049 $ $ 0.013278 $ 0.022235 $ 0.023974 $ 0.002777 $ 0.019529 Source: Tiberius Solutions Rev. 7/18 Exhibit 9. Forecast of Future Levy Rates, Proposed Federal Way TIA (3 of 3) Tax EMS City General Library Fire 39 Year (Voted) Sound Transit Fund General Fund General Fund Total 2023 $ 0.209220 $ 0.155760 $ 0.687290 $ 0.234330 $ 1.251370 $ 3.730590 2024 $ 0.200362 $ 0.149187 $ 0.656254 $ 0.224234 $ 1.192334 $ 3.487226 2025 $ 0.192614 $ 0.143418 $ 0.631209 $ 0.215564 $ 1.146586 $ 3.290355 2026 $ 0.185164 $ 0.137871 $ 0.606795 $ 0.207226 $ 1.102237 $ 3.012149 2027 $ 0.178002 $ 0.132538 $ 0.583324 $ 0.199211 $ 1.059604 $ 2.895642 2028 $ 0.171117 $ 0.127411 $ 0.560762 $ 0.191506 $ 1.018619 $ 2.651037 2029 $ 0.164498 $ 0.122483 $ 0.539093 $ 0.184098 $ 0.979242 $ 2.548541 2030 $ 0.158136 $ 0.117746 $ 0.518271 $ 0.176978 $ 0.941399 $ 2.450030 2031 $ 0.152019 $ 0.113192 $ 0.498248 $ 0.170133 $ 0.905011 $ 2.355313 2032 $ 0.146134 $ 0.108810 $ 0.478976 $ 0.163546 $ 0.869993 $ 2.264164 2033 $ 0.140476 $ 0.104597 $ 0.460453 $ 0.157215 $ 0.836333 $ 2.176550 2034 $ 0.135038 $ 0.100548 $ 0.442642 $ 0.151128 $ 0.803972 $ 2.092318 2035 $ 0.129810 $ 0.096655 $ 0.425589 $ 0.145278 $ 0.772937 $ 2.011491 2036 $ 0.124784 $ 0.092913 $ 0.409127 $ 0.139654 $ 0.743029 $ 1.933647 2037 $ 0.119954 $ 0.089316 $ 0.393359 $ 0.134247 $ 0.714340 $ 1.858937 2038 $ 0.115311 $ 0.085860 $ 0.378358 $ 0.129052 $ 0.686934 $ 1.787455 2039 ' $ 0.110843 $ 0.082533 $ 0.363857 $ 0.124053 $ 0.660490 $ 1.718532 2040 $ 0.106548 $ 0.079335 $ 0.349820 $ 0.119246 $ 0.634963 $ 1.652068 2041 $ 0.102420 $ 0.076261 $ 0.336417 $ 0.114627 $ 0.610525 $ 1.588374 2042 $ 0.098452 $ 0.073306 $ 0.323437 $ 0.110185 $ 0.586928 $ 1.526943 2043 $ 0.094637 $ 0.070466 $ 0.310957 $ 0.105916 $ 0.564242 $ 1.467886 2044 $ 0.090970 $ 0.067735 $ 0.298959 $ 0.101812 $ 0.542433 $ 1.411113 2045 $ 0.087445 $ 0.065111 $ 0.287423 $ 0.097867 $ 0.521467 $ 1.356535 2046 $ 0.084056 $ 0.062588 $ 0.276332 $ 0.094075 $ 0.501311 $ 1.304068 2047 $ 0.080799 $ 0.060163 $ 0.265669 $ 0.090430 $ 0.481933 $ 1.253629 2048 $ 0.077668 $ 0.057831 $ 0.255417 $ 0.086926 $ 0.463305 $ 1.205140 2049 $ 0.074656 $ 0.055588 $ 0.245551 $ 0.083555 $ 0.445379 $ 1.158482 Source: Tiberius Solutions Forecast Future Assessed Value in TIA Future growth in assessed value in the proposed TIA would come from new construction and the appreciation of existing property. This report assumes 5.1 % annual growth assessed value for existing property value, based on long-term trends in personal income for King County as described above. As stated previously, much of the new construction forecast to occur in the proposed TIA is predicated on City providing adequate infrastructure, including some of the projects identified in this report. The expected increases in assessed value from new construction anticipated to occur in the proposed TIA over its lifetime were shown previously in Exhibit 5. Exhibit 10 summarizes all of the anticipated increases in assessed value from new construction, including known development and speculative development. This exhibit includes the value of Rev. 7/18 new development in both constant 2023 dollars and nominal dollars, which account for appreciation of property values between now and when the projects complete construction.4 Assuming annual appreciation of 5.1 % as described above, the total increase in assessed value from new construction in estimated to be $1.6 billion constant 2023 dollars, and $3.7 billion in nominal dollars. Exhibit 10. Assessed Value from New Construction, Proposed Federal Way TIA Year Taxable Assesed Value (2023 $) Taxable Assesed Value (Nominal $) on Tax OneTrent Speculative OneTrent Speculative Roll Development Development Total Development Development Total 2028 $ $ 14,583,047 $ 14,583,047 $ - $ 17,793,408 $ 17,793,408 2029 $ 7,514,479 $ 14,583,047 $ 22,097,526 $ 9,636,348 $ 18,700,871 $ 28,337.220 2030 $ 2,979,645 $ 14,583,047 $ 17,562,692 $ 4,015,881 $ 19,654,616 $ 23,670,497 2031 $ - $ 14,583,047 $ 14,583,047 $ $ 20,657,001 $ 20,657,001 2032 $ 2,885,949 $ 14,583,047 $ 17,468,995 $ 4,296,456 $ 21,710,508 $ 26,006,964 2033 $ - $ 14,583,047 $ 14,583,047 $ $ 22,817,744 $ 22,817,744 2034 $ 63,355,171 $ 14,583,047 $ 77,938,218 $ 104,185,967 $ 23,981,449 $ 128,167,416 2035 $ - $ 14,583,047 $ 14,583,047 $ - $ 25,204,503 $ 25,204,503 2036 $ - $ 72,915,233 $ 72,915,233 $ $ 132,449,664 $ 132,449,664 2037 $ 172,312,858 $ 72,915,233 $ 245,228,091 $ 328,967,499 $ 139,204,597 $ 468,172,096 2038 $ 107,920,895 $ 72,915,233 $ 180,836,128 $ 216,542,707 $ 146,304,031 $ 362,946,738 2039 $ - $ 72,915,233 $ 72,915,233 $ - $ 153,765,537 $ 153,765,537 2040 $ 115,507,471 $ 72,915,233 $ 188,422,704 $ 256,007,998 $ 161,607,579 $ 417,615.577 2041 $ - $ 72,915,233 $ 72,915,233 $ - $ 169,849,566 $ 169,849,566 2042 $ $ 72,915,233 $ 72,915,233 $ - $ 178,511,894 $ 178,511,894 2043 $ $ 72,915,233 $ 72,915,233 $ - $ 187,616,000 $ 187,616,000 2044 $ $ 72,915,233 $ 72,915,233 $ - $ 197,184,416 $ 197,184,416 2045 $ $ 72,915,233 $ 72,915,233 $ - $ 207,240,822 $ 207,240,822 2046 $ $ 72,915,233 $ 72,915,233 $ - $ 217,810,103 $ 217,810,103 2047 $ $ 72,915,233 $ 72,915,233 $ - $ 228,918,419 $ 228,918,419 2048 $ $ 72,915,233 $ 72,915,233 $ $ 240,593,258 $ 240,593,258 2049 $ $ 72,915,233 $ 72,915,233 $ - $ 252,863,514 $ 252,863,514 Total $ 472,476,468 $ 1,137,477,637 $ 1,609,954,105 1 $ 923,652,856 $ 2,784,439,502 $ 3,708,092,358 Source: Tiberius Solutions with data and input from the City uf Federal Way and Johnson Economics In addition to increases in assessed value from new construction, all property values in the proposed TIA are estimated to increase by 5.1 % per year from appreciation. Exhibit 11 summarizes the forecast total growth in assessed value in the TIA from new construction and appreciation. 4 Note that no additional inflation is assumed between the date the construction is completed and the date the increased value appears on the tax roll based'on conversations with county assessors in Washington. Rev. 7/I8 Exhibit 11. Assessed Value Forecast, Proposed Federal Way TIA (Nominal $) Tax Year Prior Year PLUS: Appreciation of Existing Property PLUS: New Construction Total 2024 $ 196,019,600 2025 $ 196,019,600 $ 9,997,000 $ $ 206,016,600 2026 $ 206, 016, 600 $ 10, 506, 847 $ $ 216,523,447 2027 $ 216, 523,447 $ 11, 042, 696 $ $ 227,566,143 2028 $ 227,566,143 $ 11,605,873 $ 17,793,408 $ 256,965,424 2029 $ 256,965,424 $ 13,105,237 $ 28,337,220 $ 298,407,881 2030 $ 298,407,881 $ 15,218,802 $ 23,670,497 $ 337,297,180 2031 $ 337,297,180 $ 17,202,156 $ 20,657,001 $ 375,156,337 2032 $ 375,156,337 $ 19,132,973 $ 26,006,964 $ 420,296,274 2033 $ 420,296,274 $ 21,435,110 $ 22,817,744 $ 464,549,128 2034 $ 464,549,128 $ 23,692,006 $ 128,167,416 $ 616,408,550 2035 $ 616,408,550 $ 31,436,836 $ 25,204,503 $ 673,049,889 2036 $ 673,049,889 $ 34,325,544 $ 132,449,664 $ 839,825,097 2037 $ 839,825,097 $ 42,831,080 $ 468,172,096 $ 1,350,828,273 2038 $ 1,350,828,273 $ 68,892,242 $ 362,846,738 $ 1,782,567,253 2039 $ 1,782,567,253 $ 90,910,930 $ 153,765,537 $ 2,027,243,720 2040 $ 2,027,243,720 $ 103,389,430 $ 417,615,577 $ 2,548,248,727 2041 $ 2,548,248,727 $ 129,960,685 $ 169,849,566 $ 2,848,058,978 2042 $ 2,848,058,978 $ 145,251,008 $ 178,511,894 $ 3,171,821,880 2043 $ 3,171,821,880 $ 161,762,916 $ 187,616,000 $ 3,521,200,796 2044 $ 3,521,200,796 $ 179,581,241 $ 197,184,416 $ 3,897,966,453 2045 $ 3,897,966,453 $ 198,796,289 $ 207,240,822 $ 4,304,003,564 2046 $ 4,304,003,564 $ 219,504,182 $ 217,810,103 $ 4,741,317,849 2047 $ 4,741,317,849 $ 241,807,210 $ 228,918,419 $ 5,212,043,478 2048 $ 5,212,043,478 $ 265,814,217 $ 240,593,258 $ 5,718,450,953 2049 $ 5,718,450,953 $ 291,640,999 $ 252,863,514 $ 6,262,955,466 N,te: Dollar values in this summary exhibit may differ than other exhibits in the report due to rounding Source: Tiberius Solutions Forecast of Tax Allocation Revenues Exhibit 12 shows the forecast of annual tax allocation revenues, combining the forecasts of future assessed value in the proposed TIA and applicable tax rates. Annual tax allocation revenues are expected to be $32,894 in 2025, increasing to over $7.0 million in its final year in 2049. Total tax allocation revenue over 25 years is expected to equal $67.9 million. Exhibit 12. Tax Allocation Revenues, Proposed Federal Way TIA (Nominal $) Tax Assessed Value Tax Allocation Year Total Base Value Increment Levy Rate Revenues 2023 $ 195,802,900 $ 3.730590 $ - 2024 $ 196, 019, 600 $ 196,019,600 $ 3.487226 $ - 2025 $ 206,016,600 $196,019,600 $ 9,997,000 $ 3.290355 $ 321-894 2026 $ 216,523,447 $196,019,600 $ 20,503,847 $ 3.012149 $ 61,761 2027 $ 227,566,143 $196,019,600 $ 31,546,543 $ 2.895642 $ 91,347 2028 $ 256,965,424 $196,019,600 $ 60,945,824 $ 2.651037 $ 161,570 2029 $ 298,407,881 $196,019,600 $ 102,388,281 $ 2.548541 $ 260,941 2030 $ 337,297,180 $196,019,600 $ 141,277,580 $ 2.450030 $ 346,134 2031 $ 375,156,337 $196,019,600 $ 179,136,737 $ 2.355313 $ 421,923 2032 $ 420,296,274 $196,019,600 $ 224,276,674 $ 2.264164 $ 507,799 2033 $ 464,549,128 $196,019,600 $ 268,529,528 $ 2.176550 $ 584,468 2034 $ 616,408,549 $196,019,600 $ 420,388,949 $ 2.092318 $ 879,587 2035 $ 673,049,888 $196,019,600 $ 477,030,288 $ 2,011491 $ 959,542 2036 $ 839,825,096 $196,019,600 $ 643,805,496 $ 1.933647 $ 1,244,893 2037 $ 1,350,828,272 $196,019,600 $ 1,154,808,672 $ 1.858937 $ 2,146,716 2038 $ 1,782, 567, 251 $196,019,600 $ 1, 586, 547, 651 $ 1.787455 $ 2,835,883 2039 $ 2, 027, 243, 718 $196,019,600 $ 1, 831, 224,118 $ 1.718532 $ 3,147, 017 2040 $ 2,548,248,724 $196,019,600 $ 2,352,229,124 $ 1.652068 $ 3,886,043 2041 $ 2,848,058,975 $196,019,600 $ 2,652,039,375 $ 1.588374 $ 4,212,431 2042 $ 3,171, 821, 877 $ 196,019,600 $ 2, 975, 802, 277 $ 1.526943 $ 4,543,880 2043 $ 3, 521, 200,793 $196,019,600 $ 3,325,181,193 $ 1.467886 $ 4,880,988 2044 $ 3, 897, 966, 449 $ 196,019,600 $ 3, 701, 946, 849 $ 1.411113 $ 5,223,867 2045 $ 4,304,003,560 $196,019,600 $ 4,107,983,960 $ 1.356535 $ 5,572,626 2046 $ 4,741,317,844 $196,019,600 $ 4,545,298,244 $ 1.304068 $ 5,927,377 2047 $ 5,212,043,474 $196,019,600 $ 5,016,023,874 $ 1.253629 $ 6,288,232 2048 $ 5,718,450,949 $196,019,600 $ 5,522,431,349 $ 1.205140 $ 6,655,304 2049 $ 6,262,955,461 $196,019,600 $ 6,066,985,861 $ 1.158482 $ 7,028,439 Total $ 67,901,663 Source: Tibi us Solutions Factors Affecting the Accuracy of the Forecast The biggest factor affecting the accuracy of the tax allocation revenues forecast is the value and timing of new construction in the proposed TIA. The amount of future tax allocation revenues is, in part, dependent upon new construction. If that construction occurs on a different schedule, or with different values than has been assumed, it could impact the accuracy of the forecast. In addition to the timing and value of new construction, actual tax allocation revenues for the proposed TIA would depend upon the actual appreciation/depreciation in assessed value in the area as well as the actual levy rates imposed. There is significant uncertainty with these factors over the next 25 years. However, these factors are related in ways that help to provide some confidence for this forecast. Changes in property values in the proposed TIA from appreciation/depreciation are likely to follow a similar pattern to changes in property values from Rev. 7/18 appreciation/depreciation countywide. And, those countywide changes in appreciation/depreciation would determine annual changes in the levy rates imposed. If property values increase faster than forecasted, it would result in lower levy rates and a similar forecast of annual tax allocation revenues. Similarly, if property values increase slower than forecasted (or decrease), it would result in higher levy rates and a similar forecast of annual tax allocation revenues. The accuracy of the tax allocation revenues forecast is more impacted by the relative growth in assessed value within the proposed TIA versus countywide. In theory, rates of appreciation/depreciation in these two geographies should be similar over time. However, if they do differ, it has the potential to significantly impact the tax allocation revenues forecast. If properties within the proposed TIA appreciate faster than the county as a whole, it would lead to more tax allocation revenues than what is forecasted. Conversely, if properties within the proposed TIA appreciate slower than the county as a whole, it would lead to less tax allocation revenues than what is forecasted. Impact on Overlapping Tax Levies Tax allocation revenues are generated through the reallocation of tax levies. In other words, the financial impact of the proposed TIA is primarily borne by the affected, overlapping taxing districts. These impacts occur as "foregone" tax revenues. Thus, these jurisdictions are not losing revenue relative to what they collect today, but instead these districts would temporarily forego the future increase in revenue generated within the proposed TIA. Once the -proposed TIA ceases to collect tax allocation revenues (limited to no more than 25 years), then these impacted jurisdictions would begin to receive the full amount of annual taxes from the new construction that has occurred within the proposed TIA. RCW 84.55.010 allows taxing districts to increase the amount of their levy to account for growth in assessed value inside a TIA. This would result in slightly higher overall levy amounts and tax rates for impacted taxing districts. Thus, the net impact the TIA would have on taxing district levies is less than the total amount of tax allocation revenues received. Exhibit 13 summarizes the annual tax revenues forecast to be foregone by the affected taxing districts. All jurisdictions are collectively expected to forego $64,087,724 in tax revenue over the life of the proposed TIA. While this is a significant amount of foregone tax revenues, it is not expected that much of this private development could or would occur within this area without the public investments proposed to be funded by the proposed TIA. Thus, a portion of these foregone revenues likely would not exist but for the investments made by the proposed TIA. Following the expiration of the proposed TIA, these revenues would be redirected to the overlapping taxing districts. Rev. 7/18 Exhibit 13. Impact on Overlapping Tax Levies, Proposed Federal Way TIA (Nominal $) (1 of 3) Tax Year County -Wide Regular Levy (Non -Voted) AFIS (Fingerprint ID) Lid Lift Parks Lid Lift Human Srvs/Vets Lid Lift Children/ Family Justice Ctr. Lid Lift Best Start for Kids Lid Lift 2023 $ - $ $ $ $ $ 2024 $ - $ $ $ $ $ 2025 $ 178 $ $ 63 $ $ $ 60 2026 $ (4,042) $ $ $ $ $ (1,360) 2027 $ (8,140) $ $ $ $ $ (2,739) 2028 $ (19,135) $ $ $ $ $ 2029 $ (33,456) $ $ $ $ $ 2030 $ (45,470) $ $ $ $ $ 2031 $ (56,181) $ $ $ $ $ 2032 $ (68,458) $ $ $ $ $ 2033 $ (79,279) $ $ $ $ $ 2034 $ (122,635) $ $ $ $ $ 2035 $ (132,327) $ $ $ $ $ 2036 $ (174,168) $ $ $ $ $ 2037 $ (306,054) $ $ $ $ $ 2038 $ (401,541) $ $ $ $ $ 2039 $ (442,426) $ $ $ $ $ 2040 $ (549,740) $ $ $ $ $ 2041 $ (592,400) $ $ $ $ $ 2042 $ (638,959) $ $ $ $ $ 2043 $ (686,286) $ $ $ $ $ 2044 $ (734,395) $ $ $ $ $ 2045 $ (783,300) $ $ $ $ $ 2046 $ (833,018) $ $ $ $ $ 2047 $ (883,563) $ $ $ $ $ 2048 $ (934,950) $ $ $ $ $ 2049 $ (987,208) $ $ $ $ $ Total $ (9,516,953) $ $ 63 $ $ $ (4,038) Source: Tiberius Solutions Exhibit 14. Impact on Overlapping Tax Levies, Proposed Federal Way TIA (Nominal $) (2 of 3) Tax Year Radio Communicat- ions Lid Lift County -wide Transport Levy County Cons. Futures County Flood Zone County Ferry District Port General Fund 2023 $ $ - $ - $ $ $ 2024 $ $ - $ - $ $ $ - 2025 $ $ 14 $ 23 $ 25 $ 3 $ 20 2026 $ $ (312) $ (523) $ (564) $ (65) $ (459) 2027 $ - $ (629) $ (1,053) $ (1,135) $ (131) $ (924) 2028 $ - $ (1,477) $ (2,474) $ (2,668) $ (309) $ (2,173) 2029 $ $ (2,583) $ (4,326) $ (4,664) $ (540) $ (3,800) 2030 $ $ (3,511) $ (5,879) $ (6,339) $ (734) $ (5,164) 2031 $ $ (4,338) $ (7,264) $ (7,832) $ (907) $ (6,380) 2032 $ $ (5,286) $ (8,852) $ (9,544) $ (1,105) $ (7,775) 2033 $ $ (6,121) $ (10,251) $ (11,053) $ (1,280) $ (9,003) 2034 $ $ (9,469) $ (15,857) $ (17,097) $ (1,980) $ (13,927) 2035 $ $ (10,217) $ (17,110) $ (18,448) $ (2,137) $ (15,028) 2036 $ $ (13,448) $ (22,520) $ (24,281) $ (2,812) $ (19,780) 2037 $ $ (23,631) $ (39,574) $ (42,668) $ (4,942) $ (34,757) 2038 $ $ (31,004) $ (51,920) $ (55,981) $ (6,483) $ (45,602) 2039 $ $ (34,161) $ (57,207) $ (61,680) $ (7,143) $ (50,245) 2040 $ $ (42,447) $ (71,083) $ (76,642) $ (8,876) $ (62,432) 2041 $ $ (45,741) $. (76,599) $ (82,589) $ (9,565) $ (67,277) 2042 $ $ (49,336) $ (82,619) $ (89,080) $ (10,317) $ (72,564) 2043 $ $ (52,990) $ (88,739) $ (95,678) $ (11,081) $ (77,939) 2044 $ $ (56,705) $ (94,959) $- (102,385) $ (11,858) $ (83,403) 2045 $ $ (60,481) $ (101,283) $ (109,203) $ (12,647) $ (88,957) 2046 $ $ (64,320) $ (107,712) $ (116,135) $ (13,450) $ (94,603) 2047 $ $ (68,222) $ (114,247) $ (123,182) $ (14,266) $ (100,343) 2048 $ $ (72,190) $ (120,892) $ (130,346) $ (15,096) $ (106,179) 2049 $ $ (76,225) $ (127,649) $ (137,631) $ (15,940) $ (112,114) Total $ - $ (734,829) $ (1,230,570) $ (1,326,801) $ (153,661) $ (1,080,806) Source: Tiberius Solutions Rev- 7/18 Exhibit 15. Impact on Overlapping Tax Levies, Proposed Federal Way TIA (Nominal $) (3 of 3) Tax City General Library Fire 39 Year EMS (Voted) Sound Transit Fund General Fund General Fund Total 2023 $ $ - $ $ $ $ - 2024 $ $ - $ $ $ $ - 2025 $ 77 $ 58 $ 250 $ 87 $ 457 $ 1,316 2026 $ (1,755) $- (1,307) $ (5,751) $ (1,964) $ (10,446) $ (28,546) 2027 $ (3,534) $ (2,631) $ (11,581) $ (3,955) $ (21,037) $ (57,490) 2028 $ (8,307) $ (6,186) $ (27,224) $ (9,297) $ (49,452) $ (128,702) 2029 $ (14,525) $ (10,815) $ (47,601) $ (16,255) $ (86,465) $ (225,031) 2030 $ (19,741) $ (14,699) $ (64,698) $ (22,093) $ (117,519) $ (305,847) 2031 $ (24,391) $ (18,161) $ (79,942) $ (27,297) $ (145,205) $ (377,898) 2032 $ (29,721) $ (22,130) $ (97,414) $ (33,262) $ (176,939) $ (460,485) 2033 $ (34,418) $ (25,628) $ (112,817) $ (38,520) $ (204,913) $ (533,284) 2034 $ (53,241) $ (39,643) $ (174,520) $ (59,585) $ (316,980) $ (824,933) 2035 $ (57,449) $ (42,776) $ (188,351) $ (64,294) $ (342,074) $ (890,211) 2036 $ (75,614) $ (56,301) $ (247,913) $ (84,623) $ (450,242) $ (1,171,701) 2037 $ (132,871) $ (98,934) $ (435,721) $ (148,704) $ (791,267) $ (2,059,123) 2038 $ (174,326) $ (129,802) $ (572,016) $ (195,100) $ (1,038,520) $ (2,702,295) 2039 $ (192,076) $ (143,018) $ (630,530) $ (214,966) $ (1,144,554) $ (2,978,006) 2040 $ (238,665) $ (177,708) $ (783,595) $ (267,108) $ (1,422,309) $ (3,700,605) 2041 $ (257,186) $ (191,499) $ (844,794) $ (287,838) $ (1,533,105) $ (3,988,592) 2042 $ (277,399) $ (206,549) $ (911,335) $ (310,461) $ (1,653,754) $ (4,302,374) 2043 $ (297,946) $ (221,848) $ (979,004) $ (333,456) $ (1,776,426) $ (4,621,394) 2044 $ (318,832) $ (237,400) $ (1,047,812) $ (356,832) $ (1,901,147) $ (4,945,727) 2045 $ (340,064) $ (253,209) $ (1,117,779) $ (380,596) $ (2,027,955) $ (5,275,474) 2046 $ (361,649) $ (269,281) $ (1,188,927) $ (404,754) $ (2,156,890) $ (5,610,738) 2047 $ (383,592) $ (285,621) $ (1,261,279) $ (429,314) $ (2,287,991) $ (5,951,620) 2048 $ (405,902) $ (302,232) $ (1,334,856) $ (454,283) $ (2,421,298) $ (6,298,224) 2049 $ (428,589) $ (319,125) $ (1,409,700) $ (479,676) $ (2,556,885) $ (6,650,741) Total $ (4,131,714) $ (3,076,444) $ (13,574,911) $ (4,624,146) $ (24,632,914) $ (64,087,724) Source: Tiberius Solutions Not all overlapping taxing districts would be impacted by the proposed TIA. The following property tax levies would be excluded from the calculation of tax allocation revenues: • State Schools (Part 1 and 2) • King County Bonds (voted) levy ■ Port Bond Fund levy ■ Federal Way Public Schools (Maintenance & Operations, Construction, and Bond levies) ■ Library GO Bond levy • Fire District 39/ South King Fire and Rescue (Maintenance & Operations and GO Bond levies) All taxing districts listed above, whose rates would be excluded in the calculation of tax Rev. 7/18 allocation revenues would not experience any foregone revenues from the proposed TIA. This includes the Federal Way Public Schools. For these jurisdictions, the proposed TIA would generate increased property tax revenues once the anticipated private development comes on the tax roll, or would reduce the property tax rate needed to produce the authorized levy amount. 3.2 Proposed Indebtedness To finance the public improvements identified in this report, the City anticipates issuing limited tax general obligation bonds. These bonds would be secured by a pledge of the City's full faith and credit, including its regular property tax levy, and would be subject to statutory limitations and constraints on general obligation indebtedness. City staff have identified two highest -priority projects that would need funding early in the life of the TIA to facilitate Phase 1 development of the One Trent project: a public parking garage, and a civic plaza. Combined, these projects are currently estimated to cost $36,000,000. This analysis assumes One Trent would pay the City $10,000,000 to acquire the Town Center property and a $4.8 million interfund loan on that property would be extinguished; therefore, the project funds needed would be $30,800,000. The calculation of estimated funding requirements for the proposed initial TIA borrowing is shown in Exhibit 16. Exhibit 16. Estimated Project Funding Requirements for Initial Indebtedness, Proposed Federal Way TIA (nominal $) Funding Project Requirement Parking Garage $ 30,000,000 Civic Plaza $ 6,000,000 Interfund Loan Repayment $ 4,800,000 Developer Contribution $ (10,000,000) Tota 1 $ 30,800,000 Source: City of Federal Way The actual terms of indebtedness are uncertain and would be based upon the ultimate timing and amount of indebtedness the City chooses to incur, tax allocation revenues collected, and financial market conditions at the time of issuance. For the purposes of this analysis, the City consulted with their municipal financial advisors, PFM to estimate terms of indebtedness based upon current market conditions and the proposed timing and amount of future indebtedness. Key terms of the proposed indebtedness are shown in Exhibit 17. The proposed financing terms are based on the assumption that the debt would be tax-exempt, including interest rates as of 7/12/2023 plus 50 basis points. Appendix C includes an evaluation of an alternative finance plan with more conservative assumptions, assuming that the debt is taxable. Rev. 7/18 Exhibit 17. Estimated Terms of Indebtedness for Proposed Federal Way TIA Public Improvements (nominal $) Series 2024 Closing Month December2024 Taxable Status Exempt True Interest Cost 4.67% Aggregate Par (Principal) $ 29,630,000 Project Funds from Bond Proceeds $ 30,800,000 Source: PFM Financial Advisors LLC The public improvements within the Proposed TIA are anticipated to be funded through limited tax general obligation bonds, which are constrained by the City's statutory capacity for non -voted general obligation indebtedness. Exhibit 18 shows the calculated statutory authority for non - voted general obligation indebtedness for the City in 2023, estimated to be $257,137,929. The City has $27,983,000 of outstanding non -voted general obligation indebtedness, and a cash reserve of 363,121 resulting in $229,518,050 of remaining debt capacity. This remaining capacity is substantially larger than the amount of indebtedness being contemplated by the City for the proposed TIA. Exhibit 18. Statutory Authority for Non -Voted General Obligation Indebtedness, City of Federal Way, 2023 Total Assessed Value $17,142,528,580 Limit: Percent 1.50% Limit: Amount $ 257,137,929 Add Cash Reserve $ 363,121 Less Outstanding Principal $ (27,983,000) Remaining Capacity $ 229,518,050 Source: City of Federal Way Based on the assumed terms of indebtedness shown in Exhibit 17, the City's financial advisors have estimated annual debt service payments as shown in Exhibit 19. Annual payments are assumed to be interest only for the first 15 years, with principal payments being amortized over the final 10 years of the TIA. This structure is intended to better align the projected debt service payments with tax allocation revenues, given the delayed growth in tax revenues due to the expectation that new construction in the area will qualify for the eight -year property tax exemption through the MFTE program. While this approach results in a higher overall cost of interest to the City, it is the City's preferred approach at this time, due to minimizing the amount of general fund resources needed to cover debt service. Rev. 7/18 Exhibit 19. Estimated Debt Service Payments, LTGO Debt for Proposed Federal Way TIA Public Projects (Nominal $) Year Principal Interest Total 2025 $ - $ 1,481,500 $ 1,481,500 2026 $ - $ 1,481,500 $ 1,481,500 2027 $ - $ 1,481,500 $ 1,481,500 2028 $ - $ 1,481,500 $ 1,481,500 2029 $ - $ 1,481,500 $ 1,481,500 2030 $ - $ 1,481,500 $ 1,481,500 2031 $ $ 1,481,500 $ 1,481,500 2032 $ - $ 1,481,500 $ 1,481,500 2033 $ $ 1,481,500 $ 1,481,500 2034 $ - $ 1,481,500 $ 1,481,500 2035 $ $ 1,481,500 $ 1,481,500 2036 $ - $ 1,481,500 $ 1,481,500 2037 $ $ 1,481,500 $ 1,481,500 2038 $ - $ 1,481,500 $ 1,481,500 2039 $ - $ 1,481,500 $ 1,481,500 2040 $ 935,000 $ 1,481,500 $ 2,416,500 2041 $ 1,315,000 $ 1,434,750 $ 2,749,750 2042 $ 1,720,000 $ 1,369,000 $ 3,089,000 2043 $ 2,145,000 $ 1,283,000 $ 3,428,000 2044 $ 2,605,000 $ 1,175,750 $ 3,780,750 2045 $ 3,085,000 $ 1,045,500 $ 4,130,500 2046 $ 3,600,000. $ 891,250 $ 4,491,250 2047 $ 4,150,000 $ 711,250 $ 4,861,250 2048 $ 4,730,000 $ 503,750 $ 5,233,750 2049 $ 5,345,000 $ 267,250 $ 5,612,250 Total $ 29,630,000 $ 32,385,500 $ 62,015,500 Source: PFM Financial Advisors LLC Exhibit 20 shows the combination of revenue sources expected to cover the debt service payments. It is expected that $49,935,821 of tax allocation revenues and $12,079,679 of the City's regular property tax levy or other available revenues would be required to cover the full amount of debt service payments. It is anticipated that the City will need to rely on some level of general fund revenues to pay a portion of the annual debt service payments through 2036. After 2036, tax allocation revenues are estimated to be sufficient to cover future debt service payments with surplus tax allocation revenues being used to reimburse the City general fund for earlier debt service payments. Total tax allocation revenues are expected to exceed the total debt service payments by $5,886,163, which represents the anticipated amount of tax allocation revenue that could potentially be used to fiend additional projects within the TIA. Rev. 7/18 Exhibit 20. Tax Allocation Revenues and Debt Service Payments (Nominal $) Revenue Source Tax Allocation Tax General Revenue Debt Allocation Fund Service Year Payment Revenue Resources Coverage 2025 $ 1,481,500 $ 32,894 $ 1,448,606 0.02 2026 $ 1,481,500 $ 61,761 $ 1,419,739 0.04 2027 $ 1,481,500 $ 91,347 $ 1,390,153 0.06 2028 $ 1,481,500 $ 161,570 $ 1,319,930 0.11 2029 $ 1,481,500 $ 260,941 $ 1,220,559 0.18 2030 $ 1,481,500 $ 346,134 $ 1,135,366 0.23 2031 $ 1,481, 500 $ 421,923 $ 1,059,577 0.28 2032 $ 1,481,500 $ 507,799 $ 973,701 0.34 2033 $ 1,481,500 $ 584,468 $ 897,032 0.39 2034 $ 1,481, 500 $ 879,587 $ 601,913 0.59 2035 $ 1,481,500 $ 959,542 $ 521,958 0.65 2036 $ 1,481,500 $ 1,244,893 $ 236,607 0.84 2037 $ 1,481,500 $ 2,146,716 $ - 1.45 2038 $ 1,481, 500 $ 2,835,883 $ 1.91 2039 $ 1,481,500 $ 3,147, 017 $ - 2.12 2040 $ 2,416,500 $ 3,886,043 $ - 1.61 2041 $ 2,749,750 $ 4,212,431 $ 1.53 2042 $ 3,089,000 $ 4,543,880 $ - 1.47 2043 $ 3,428,000 $ 4,880,988 $ - 1.42 2044 $ 3,780,750 $ 5,223,867 $ 1.38 2045 $ 4,130, 500 $ 5,572,626 $ 1.35 2046 $ 4,491, 250 $ 5,927,377 $ - 1.32 2047 $ 4,861,250 $ 6,288,232 $ - 1.29 2048 $ 5,233,750 $ 6,655,304 $ 1.27 2049 $ 5,612,250 $ 7,028,439 $ 1.25 Total $62,015,500 $ 67,901,663 $12,225,141 1.09 Source: PFM Financial Advisors LLC and Tiberius Solutions 4 Economic Impacts 4.1 Job Creation The proposed TIA would be expected to generate substantial economic impacts for the local and regional economy. The infrastructure investments supported by the proposed TIA would support a significant level of development, with substantial employment from construction as well as ongoing business activity. Impacts during the construction phase would be temporary, while the impacts from operations once construction is complete would be ongoing. These impacts include direct impacts (jobs and spending occurring directly in the TIA), as well indirect and induced impacts. Indirect impacts are secondary impacts generated by the portion of direct expenditures that are spent on goods and services provided by local businesses. Induced impacts are secondary impacts generated by local expenditures made by employees who received personal income from the direct and indirect expenditures. The induced impacts are often referred to as the "multiplier effect" as the initial direct expenditures are re -spent multiple times, rippling through the local economy. To model the economic impacts of various activities, Johnson Economics utilized the IMPLAN (IMPact for PLANning)5 economic multiplier model. IMPLAN is an economic impact model designed for analyzing the effects of industry activity (employment, income, or business revenues) upon all other industries in an economic area. Development activity in the area is expected to exceed $1.1 billion in current dollars over the next 25 years.6 Of that, over $472 million is proposed as part of the One Trent Development agreement. This development is expected to be introduced to the tax rolls in phases through 2040. Exhibit 21. Summary of Predicted Construction Investment by Year, Proposed Federal Way TIA (2023 $) Construction Investment by Year Cumulative Investment (Millions) (Millions) $1,800 $1,200 $1,600 $1,000 $800 $600 $400 $200 $0 11-1-1-.-A `T Ln W r` W M o N m v N N N N N N M m M M M M O O O O O O O O O O O O N N N N N N N N N N N N M O N Source: Johnson Economics $1,400 $1,2Q0 $1,000 $800 $600 $400 $200 $0 N N N N N N M M M M M M O O O O O O O O O O O O N N N N N N N N N N N N m O N 5 Minnesota IMPLAN Group (MIG), Stillwater, Minnesota 6 Analysis completed in 2023. In March 2024, one parcel with was removed from the proposed TIA boundary, but is still included in this analysis. The parcel had an assumed speculative construction investment of $25.3 million. Rev. 7/18 To evaluate the temporary construction impacts of the proposed development programs, we calculated the total anticipated construction spending of the project measured as a direct industry change in construction of new nonresidential and residential commercial structures. Estimated construction expenditures were converted into estimated contributions to employment income and output within the "South King County" study area, including the communities of Federal Way, SeaTac, Burien, Tukwilla, Des Moines, Renton, Kent, and Auburn (Exhibit 22). Key findings include: • Construction spending would translate into an estimated 2,474 direct full time equivalent (FTE) jobs over the construction period. Direct jobs would pay an estimated average of roughly $89,749 per FTE for wages and benefits. • Because the development period is estimated to extend over multiple years, the direct construction jobs projected likely represent some of the same employees, employed throughout the project lifecycle over multiple buildings/phases. ■ Each direct construction job would support approximately 0.7 indirect and induced jobs during the construction period. This translates into roughly 1,727 FTE jobs and labor income of $129.2 million during the construction period. • The total estimated economic impacts (direct, indirect, and induced) from the construction phase are roughly 4,201 FTE positions and $351.5 million in labor income (2023 dollars). The average annual impact over the 25-year period would be 168 FTE positions and $14.1 million in labor income. Exhibit 22. Summary of Projected Impacts During Construction Phase, Proposed Federal Way TIA (2023 $) Projected Impacts, South King County (2023 $) Employment Labor Income Value Added Output Construction Direct Effect 2,474 $ 222, 049, 076 $ 227, 051, 649 $ 577, 857, 372 Indirect Effect 869 $ 70,356,124 $ 109,309,026 $ 187,777,651 Induced Effect 858 $ 58,884,248 $ 109,902,280 $ 178,660,834 Total Effect 4,201 $ 351,289,448 $ 446,262,955 $ 944,295,857 Source: Johnson Economics, based on assumed futi velopment forecasts The preceding table also summarizes projected impacts on value added and output. The following is a brief description of what these terms represent: Output is the value of an industry's production. It can be measured in two ways: from the sales (income) perspective or the expenditures (spending) perspective. From the income perspective, output is the sum of sales to final users in the economy (gross domestic product or "GDP"), sales to other industrial (intermediate inputs), and inventory change. From the spending perspective, output is the sum of an industry's "value added" and intermediate inputs. Value added is defined as the total market value of all final goods and services produced within a region in a given period of time. It is the sum of all added value at every stage of production of all final goods and services produced within a country in a given period of time. Rev. 7/18 In other words, it is the wealth created by industry activity. Value added in a social accounting matrix model such as IMPLAN is equal to GDP. Following development, the completed structures would be expected to provide for ongoing impacts to the local and regional economy. Employees at the office and retail spaces would be expected to generate income that would circulate in the local economy, supporting additional employment and tax revenues. At full buildout the TIA is expected to contain a mix of residential units and commercial space, with an overall direct investment approaching $1.7 billion in construction. • On an ongoing basis, the study area is expected to accommodate direct employment of 632, of which 299 will reside in the South King County study area. The direct labor income is projected at $13.8 million and $40.6 million in economic output. The associated ancillary indirect and induced impacts are estimated to account for 88 jobs and $6.8 million in labor income. • The total annual impact is estimated at 387 full-time equivalent positions with annual labor income in 2023 dollars over $20.3 million. Exhibit 23. Summary of Projected Ongoing Impacts from Operations, Proposed Federal Way TIA (2023 $) Projected Annual Impacts, South King County (2023 $) Employment Labor Income Value Added Output Ongoing- Annual Direct Effect 299 $ 13,790,960 $ 28,404,985 $ 40,584,414 Indirect Effect 38 $ 3,027,797 $ 5,357,769 $ 8,628,203 Induced Effect 50 $ 3,444,770 $ 6,432,982 $ 10,460,218 Total Effect 387 $ 20,263,528 $ 40,195,735 $ 59,672,835 Source: Johnson Economics, based on assumed future development forecasts The overall impacts have been additionally broken out for the project planned by One Trent, as well as assumed speculative projects. While the TIA is expected to realize the level of development summarized previously, this known development has a higher level of certainty. As summarized in Exhibit 24, known projects and infrastructure investments are expected to support 1,290 full time equivalent positions and $107.9 million in labor income during construction, with ongoing annual employment of 119 with associated labor income of $6.2 million. Rev. 7/18 Exhibit 24. Summary of Impacts, Known Projects and Infrastructure, Federal Way TIA (2023 $) Projected Impacts, South King County (2023 $) Employment Labor Income Value Added Output Construction - Known Projects Direct Effect 760 $ 68,186,156 $ 69,722,331 $ 177,446,688 Indirect Effect 267 $ 21,604,745 $ 33,566,284 $ 57,662,191 Induced Effect 263 $ 18,081,996 $ 33,748,459 $ 54,862,627 Total Effect 1,290 $ 107,872,898 $ 137,037,074 $ 289,971,506 Projected Annual Impacts, South King County (2023 $) Employment Labor Income Value Added Output Ongoing - Annual - Known Projects Direct Effect 92 $ 4,234,886 $ 8,722,517 $ 12,462,539 Indirect Effect 12 $ 929,767 $ 1,645,247 $ 2,649,522 Induced Effect 15 $ 1,057,810 $ 1,975,421 $ 31212,092 Total Effect 119 $ 6,222,463 $ 12,343,184 $ 18,324,153 Source: Johnson Economics, based on assumed future development forecasts Construction and operation of the multiple development programs in the study area will support a sizable number of jobs directly, as well as having significant indirect and induced impacts. The construction and ongoing operation of developments in the area is estimated to support roughly 7,326 full time equivalent positions through 2049, reflecting average annual support of approximately 277.6 jobs, with roughly $17.7 million per year in labor income in 2023 dollars. These figures are lower than the impacts after full build -out, as the impacts in earlier years are lower than in later years, due to the phasing of new construction and employment in the area. Exhibit 25. Summary of Average Annual Impacts Through 2049, Federal Way TIA (2023 $) Employment Payroll Direct Effect 200.4 $ 11,728,951 Indirect Effect 35.5 $ 2,961,833 Induced Effect 41.6 $ 2,990,928 Total 277.6 $ 17,681,713 Source: Johnson Economics, based on assumed future development forecasts 4.2 Fiscal Impacts i In addition to economic impacts, development, and operation of the various development parcels in the proposed TIA would have fiscal implications for the City of Federal Way, King County, other local service providers, and the State of Washington. These impacts include sales tax, property taxes, income and business taxes, and development charges and fees. Sales taxes will represent the most significant fiscal contribution, during both the construction and ongoing phases. -The next largest source of local and state tax revenue would be property taxes, while the federal government is expected to realize a substantive level in income taxes. Exhibit 26 and Exhibit 27 present an estimate of tax contributions, such as income and business Rev. 7/18 taxes, from the construction and operations based on the modeling assumptions in the IMPLAN scenarios. Estimates are broken down by federal vs. state and local contributions. These fiscal impacts exclude direct property taxes, as property tax revenue from the planned development within the TIA is calculated and reported separately in this report. While direct property taxes are excluded from the tables below, the analysis does include some property taxes from indirect and induced activity that occurs outside of the proposed TIA. Key findings include: ■ Through the construction period, the project is expected to contribute $164.9 million at the federal level, and $56.4 million in state and local tax revenues (excluding property taxes). ■ When completed and operational, the combined program is expected to generate $3.4 million per year in state and local taxes (excluding property taxes), while generating $9.6 million in federal taxes. ■ Sales taxes represent the largest source of state and local revenue, with close to $38.0 million in sales taxes during construction and an additional $4.7 million per year going forward. Exhibit 26. Summary of Anticipated One -Time Tax Revenues Associated with Construction Employee & Tax on Proprietor Production omoensation and Imparts Households Cornorations Total Federal Social Ins Tax- Employee Contribution $ 6,274,986 $ 6,274,986 Social Ins Tax- Employer Contribution $ 56,101,535 $ 56,101,535 Tax on Production and Imports: Excise Taxes $ 3,991,096 $ 3,991,096 Tax on Production and Imports: Custom Duty $ 1,858,692 $ 1,858,692 Tax on Production and Imports: Fed NonTaxes $ 3,068,112 $ 3,068,112 Corporate Profits Tax $ 9,944,982 $ 9,944,982 Personal Tax: Income Tax $ 83,641,230 $ 83,641,230 Total Federal Tax $ 62,376,521 $ 8,917,900 $83,641,230 $ 9,944,982 $164,880,633 State and Local Dividends $ 3,835,602 $ 3,835,602 Social Ins Tax- Employee Contribution $ 87,432 S 87,432 Social Ins Tax- Employer Contribution $ 376,159 , $ 376,159 Tax on Production and Imports: Sales Tax $ 37,993,947 $ 37,993,947 Tax on Production and Imports: Motor Vehicle Lic $ 440,052 S 440.052 Tax on Production and Imports: Severance Tax $ 290,022 S 290,022 Tax on Production and Imports: Other Taxes $ 5,677,459 S 5,677,459 Tax on Production and Imports: S/L NonTaxes $ 2,773,385 S 2,773,385 Corporate Profits Tax S Personal Tax: Income Tax S Personal Tax: NonTaxes (Fines- Fees $ 3,504,953 S 3,504,953 Personal Tax: Motor Vehicle License $ 1,002,088 S 1,002,088 Personal Tax: Other Tax (Fish/Hunt) $ 414,560 $ 414,560 Total State and Local $ 463,591 $47,174,866 $ 4,921,602 $ 3,835,602 S 56,395,660 Note: Excludes Property Taxes Source: Johnson Economics, Minnesota IMPlan Group, based on assumed future development forecasts Rev. 7/18 Exhibit 27. n of Anticipated Ongoing Tax Revenues,Excluding P Employee & Tax on Proprietor Production Compensation and Imports Households Taxes tions I Total Federal Social Ins Tax- Employee Contribution $ 1,871,461 $ 1,871,461 Social Ins Tax- Employer Contribution $ 1,892,615 $ 1,892.615 Tax on Production and Imports: Excise Taxes $ 498,134 $ 498,134 Tax on Production and Imports: Custom Duty $ 231,988 $ 231,988 Tax on Production and Imports: Fed NonTaxes $ Corporate Profits Tax $ 1,589,447 $ 1,589,447 Personal Tax: Income Tax $ 3,551,354 $ 3,551,354 Total Federal Tax $ 3,764,075 $ 730,121 $ 3,551,354 $ 1,589,447 $ 9,634,998 State and Local Dividends $ 613,020 $ 613,020 Social Ins Tax- Employee Contribution $ 2,948 $ 2,948 Social Ins Tax- Employer Contribution $ 12,694 $ 12,694 Tax on Production and Imports: Sales Tax $ 4,742,090 $ 4,742,090 Tax on Production and Imports: Motor Vehicle Lic $ 54,927 $ 54,927 Tax on Production and Imports: Severance Tax $ 7,455 $ 7,455 Tax on Production and Imports: Other Taxes $ 708,611 $ 708,611 Tax on Production and Imports: S/L NonTaxes $ 346,151 $ 346,151 Corporate Profits Tax $ - PersonalTax:IncomeTax $ - Personal Tax: NonTaxes (Fines- Fees $ 114,120 $ 114,120 Personal Tax: Motor Vehicle License $ 35,734 $ 35,734 Personal Tax: Other Tax (Fish/Hunt) $ 17,605 $ 17,605 Total State and Local $ 15,642 $ 5,859,233 $ 167,459 $ 613,020 $ 6,655,354 Note: Excludes Property Taxes Source: Johnson Economics, Minnesota IMPlan Group, based on assumed future development forecasts 4.3 Affordable and Low -Income Housing The TIA is not anticipated to have a substantial negative impact on affordable and low-income housing in the region and is more likely to increase affordability through the expansion of residential opportunities. The TIA may have minor impacts on housing affordability due to indirect impacts on housing affordability associated with economic activity generated within the TIA. Housing Construction in the TIA There are a number of existing affordable housing complexes within and around the TIA (Traditions, Senior City, Uptown Square). Income restricted affordable housing units are required to make up 4% of the total units within' any new housing project with 25 units or more. The City of Federal, Way's development regulations requiring mixed -income housing projects through the affordable housing regulations ensure long-term production of income restricted units. The Sound Transit surplus property within the TIA is subject to the Washington State Statute RCW 81.112.350 to offer 80 percent of its surplus property that is suitable for housing to qualified entities to develop housing affordable to families at 80 percent of area median income Rev. 7/18 or less. New construction within the TIA is expected to primarily consist of residential developments, as well as some commercial development. Our land use modeling indicates that residential uses currently represent the highest and best use for most parcels in the TIA, and the office market is expected to remain challenging for the next decade. As a result, most of the projected development activity is expected to be primarily residential with some ground floor commercial uses, as well as redevelopment and/or reconfiguration of retail space. While the new projects are expected to provide largely market rate units with relatively high rent levels, the market -rate construction within the TIA can still help to improve housing affordability in the region. Housing prices are determined based on the factors of supply and demand. Thus, any new construction of housing units in the region that increases housing supply should reduce price pressure in the local housing market. Indeed, most housing economists identify a persistent lack of new construction in past years for the rapid increases in home values in recent years. The process by which construction of new market -rate homes helps to improve housing affordability is known as "filtering." Construction of a new market -rate home allows a household to move out of a lower -quality, existing home to purchase the new home. The previous home occupied by that household is now vacant, and available to another household at a lower price than the new home. Thus, constructing new homes at virtually any price point should ultimately improve the availability of homes at all income levels. Impacts on Housing Affordability from Economic Activity Evaluations of housing affordability often focus on the cost of housing, but affordability is defined as the ability of someone to pay for a good or service. Thus, this evaluation of housing affordability also considers household incomes. Increases in household income will increase the ability of households to pay for housing, thus increasing housing affordability. The economic impacts generated by the new development anticipated within the TIA are expected to support marginal increases in local household incomes, helping to support regional housing affordability. The City of Federal Way is a relatively well-balanced community in terms of jobs and housing, although the workforce commuting outside of the City for employment exceeds those commuting in by almost 12,000. An estimated 26,490 workers were estimated to commute into the City for employment in 2020, while 38,201 commuted to jobs outside of the community. These commuting patterns are shown in Exhibit 28. Rev. 7/18 Exhibit 28. Estimated Workers Commu =owlp Source: US Census Bureau, LEHD Database Into and Out of the City of Federal Way, 2020 i AO" Nfti Federal Way residents who commute out of the City of employment are largely employed in Seattle (21.9%) to the north, as well as Tacoma (7.5%) and Kent (7.4%). Developing additional residential capacity near the new transit infrastructure should reduce commuting costs for local residents, which can have a substantive financial impact. Exhibit 29 shows the locations of employment for Federal Way residents. Rev. 7/18 Exhibit 29. Location of Employment for Federal Way Residents, 2020 °aB ` • °°• 522 ;011a p•O ° 4�ir Ol Y o p"•° ;a. o � 528 - cx�{ieCiTf1W O �.. Bremerton" 5 t#00. •p a °^, :: p•'. ° p 4 r� r �.0 , 8elleG}�e ° Sammamish 590 y -- p Q `�• � H ❑p O � Q p 18- °,tl po • . e ° ❑ u6um 4 nlve�rs j;P%ee So ° p a; o �® • • -' -'�{` p '�°.°*.fir'_. ❑ �.n"' O4Zn Source: US Census Bureau, LEHD Database 4.4 Local Business Community City staff and the consultant team provided a virtual briefing to property owners and businesses within the TIA on August 2, 2023. Information was provided on the Sound Transit project, the Town Center 3 project, and the proposed TIA. Questions centered around City improvements and the City's development project. There was no concern voiced about the TIA. The City's Economic Development Director followed up with the attendees to answer any specific questions. 4.5 -Local School District As stated earlier in this report, the property tax levies for Federal Way Public Schools and the State Schools fund would not be included in the calculation of tax allocation revenues, and Rev. 7/18 therefore would not experience any foregone revenues from the TIA. Private development anticipated to occur as a result of public improvements within the proposed TIA would generate increased property tax revenues for state school funding reduce the levy rate for local school levies. Exhibit 30 shows the forecasts of the future property tax revenues that could be generated for state levies over the 25-year duration of the proposed TIA. Development within the proposed TIA would be estimated to generate $48.3 million in property tax revenues for State school funding over the 25-year forecast period. Exhibit 30. Property Tax Revenues for State Schools, Proposed Federal Way TIA (Nominal $) Tax Increment State Schools (Parts 1 and 2) Year Value Levy Rate Revenue 2023 $ $ 2.311040 $ 2024 $ $ 2.209181 $ 2025 $ 9,997,000 $ 2.123754 $ 21,231 2026 $ 20,503,847 $ 2.041609 $ 41,861 2027 $ 31,546,543 $ 1.962641 $ 61,915 2028 $ 60,945,824 $ 1.886728 $ 114,988 2029 $ 102,388,281 $ 1.813752 $ 185,707 2030 $ 141,277,580 $ 1.743599 $ 246,331 2031 $ 179,136,737 $ 1.676160 $ 300,262 2032 $ 224,276,674 $ 1.611267 $ 361,370 2033 $ 268,529,528 $ 1.548887 $ 415,922 2034 $ 420,388,949 $ 1.488922 $ 625,926 2035 $ 477,030,288 $ 1.431283 $ 682,765 2036 $ 643,805,496 $ 1.375870 $ 885,793 2037 $ 1,154,808,672 $ 1.322607 $ 1,527,358 2038 $ 1,586,547,651 $ 1.271416 $ 2,017,163 2039 $ 1,831,224,118 $ 1.222157 $ 2,238,043 2040 $ 2,352,229,124 $ 1.174799 $ 2,763,397 2041 $ 2,652,039,375 $ 1.129283 $ 2,994,904 2042 $ 2,975,802,277 $ 1.085525 $ 3,230,306 2043 $ 3,325,181,193 $ 1.043461 $ 3,469,699 2044 $ 3,701,946,849 $ 1.003028 $ 3,713,158 2045 $ 4,107,983,960 $ 0.964162 $ 3,960,761 2046 $ 4,545,298,244 $ 0.926801 $ 4,212,589 2047 $ 5,016,023,874 $ 0.890889 $ 4,468,719 2048 $ 5,522,431,349 $ 0.856367 $ 4,729,230 2049 $ 6,066,935,861 $ 0.823153 $ 4,994,014 Total $ 48,263,411 Source: Tiberius Solutions Development within the proposed TIA would be estimated to generate additional assessed value for local school funding over the 25-year forecast period. This assessed value would not result in a net increase in total tax revenue for the local school district, but rather would reduce the levy Rev. 7/18 rate that the school district imposes to produce the approved annual levy amounts for debt service and enrichment. 4.6 Local Fire Service This section can be expanded upon to include a summary of any feedback received directly from the Fire District during the outreach phase of the project. Exhibit 13 shown earlier in this report summarizes the impact from foregone property tax revenue the proposed TIA is expected to have on each taxing district, including Fire District 39/ South King Fire and Rescue. These annual impacts would be estimated to begin at $11,000 per year in 2026, increasing over time to $2,590,000 in 2049, the final year of the proposed TIA. Cumulatively, it is estimated Fire District 39/South King Fire and Rescue would forego $25.0 million of property tax revenue over the 25-year life of the TIA, or an average of $1.0 million per year. The TIA would not impact the district's other two levies: the Maintenance & Operations and GO Bond levies. RCW requires any TIA to include the negotiation of a mitigation plan if the TIA will impact at least 20 percent of the assessed value of an impacted fire district. South King Fire and Rescue provides service within the proposed TIA boundary and would be the only fire service provider impacted by the proposed TIA. The total assessed value of the South King Fire and Rescue is $28.7 billion in 2023, and is forecast to grow to $126.7 billion by 2049. Increment value for the proposed TIA would be $0 in 2024 and is forecast to grow gradually over time to nearly $6.1 billion in 2049. Thus, the proposed TIA increment value is estimated to be less than 5% of the total assessed value for South King Fire and Rescue in each year of the proposed TIA, and therefore would not require the negotiation of a mitigation plan. The ratio of increment value to total value for South King Fire and Rescue is shown in Exhibit 31. Rev. 7/18 Exhibit 31. Forecast Proposed Federal Way TIA Increment Value as a Share of South King Fire and Rescue Total Assessed Value (Tax Year 2023 to 2049). % of Tax Federal WayTIA District Year District Total AV Increment Total 2023 $ 28,647,944,719 $ - 0.0% 2024 $ 30,366,821,402 $ 0.0% 2025 $ 32,188,830,686 $ 9,997,000 0.0% 2026 $ 34,120,160, 527 $ 20, 503, 847 0.1 2027 $ 36,167, 370,159 $ 31, 546, 543 0.1 2028 $ 38,337,412,368 $ 60,945,824 0.2% 2029 $ 40,637,657,110 $ 102,388,281 0.3% 2030 $ 43, 075, 916, 537 $ 141, 277, 580 0.3% 2031 $ 45, 660,471, 529 $ 179,136, 737 0.4% 2032 $ 48,354,439,349 $ 224,276,674 0.5% 2033 $ 51,207,351,271 $ 268,529,528 0.5% 2034 $ 54,228,584,995 $ 420,388,949 0.8% 2035 $ 57,428,071,510 $ 477,030,288 0.8% 2036 $ 60,816,327,729 $ 643,805,496 1.1% 2037 $ 64,404,491, 065 $ 1,154, 808, 672 1.8% 2038 $ 68,204,356,039 $ 1,586,547,651 2.3% 2039 $ 72,160,208,689 $ 1,831,224,118 2.5% 2040 $ 76,345,500,793 $ 2,352,229,124 3.1% 2041 $ 80,773,539,839 $ 2,652,039,375 3.3% 2042 $ 85,458,405,150 $ 2,975,802,277 3.5% 2043 $ 90,414,992,649 $ 3,325,181,193 3.7% 2044 $ 95,659,062,223 $ 3,701,946,849 3.9% 2045 $ 101,207,287,832 $ 4,107,983,960 4.1% 2046 $ 107, 077, 310, 527 $ 4, 545, 298, 244 4.2 % 2047 $ 113, 287, 794, 538 $ 5, 016, 023, 874 4.4% 2048 $ 119,858,486,621 $ 5,522,431,349 4.6% 2049 $ 126,690,420,359 $ 6,066,935,861 4.8% ,ce: Tiberius Rev. 7/18 5 Evaluation of Risk Factors Certain statements contained in this document reflect not historical facts but forecasts and forward -looking statements. All projections, forecasts, assumptions, and other forward -looking statements are expressly qualified in their entirety by the cautionary statements set forth in this report. All forward -looking statements are inherently subject to a variety of risks and uncertainties that could cause actual results or performance to differ materially from those that have been projected. Such risks and uncertainties include, among others, changes in regional, domestic, and international political, social, and economic conditions; federal, state, and local statutory and regulatory initiatives; litigation, population changes; technological change; and various other events, conditions, and circumstances, many of which are beyond the control of the City. 5.1 General Economic Conditions The City monitors economic changes in the region and on the national landscape. The City has seen reduced single-family residential permits issued in 2022 when compared to the previous two years. Current land use applications are up for commercial retail projects. Many businesses continue to struggle to fill job openings and supply chain issues have caused inflationary pressures on residents and the City. The City has seen increased costs for public works construction projects, basic services and supplies that support the public services provided to Federal Way residents. Historical Sales Tax has trended positively. Factors such as inflation, growth of the underlying retail base and economic uncertainty all contribute to a climate suggesting caution. That said, 2023 YTD Sales Tax is trending 14% over prior year. A cautious 5% increase in future years has been budgeted, which would yield the following City -provided forecast for budgetary purposes in the 2023-24 biennium and following year. Exhibit 32. Sales Tax Revenue. Actual and Forecast, City of Federal Way $25 IA c 0 $20 3 $15 c v $10 x M ~ $5 v M Ln $- 2016 Act 2017 Act 2018 Act 2019 Act 2020 Act 2021 Act 2022 Act 2023 Est $14.2 $14.2 $14.7 $15.9 $16.1 $17.5 $19.2 $21.1 Source: City of Federal Way 2024 2025 forecast forecast $22.6 $23.7 Historical assessed value of property citywide has trended positively since 2013, as shown in Rev. 7/18 Exhibit 33. Exhibit 33. Property Value, City of Federal Way $20 c 0 $15 'm v $10 a $5 0 a $0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Source: City of Federal Way Due to the 1 % cap on property tax levy for existing property, the increase in the City's annual levy has of course not kept pace with the increase in assessed value. Exhibit 34. Total Annual Levy, City of Federal Way N $12 c $10 $8 $6 �a 3 $4 �o $2 w 12 $0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Source: City of Federal Way The actual historical trend in Property Tax Rate has resulted in a decrease which creates a theoretical capacity for voted lid lift. The General Fund levy maximum of $3.60 per $1,000 of assessed value is reduced by $1.50 for the levy rate available for the overlapping fire district and $0.50 for the overlapping library district, leaving a practical cap of $1.60 available to the City. Rev. 7/18 Exhibit 35. Property Tax Rate, City of Federal Way $2.00 o $1.80 0 Irl $1.60 $1.40 > $1.20 M v $1.00 x v $0.80 $0.60 a, G $0.40 o $0.20 a $- 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Source: City of Federal Way The City Finance Department embarked on creating an investment portfolio of Treasuries and uncallable Agencies for a substantial portion of City reserves. By evaluating historical and forecasted cashflow needs, the finance staff commenced investing $ 5 5 million in $ 1 M increments, maturing $1 M monthly. Historically, the City's cash was invested exclusively in the State Treasurer's Local Government Investment Pool, which has an average maturity cap of 60 days. The City's laddered investment portfolio purchased longer maturities, up to 48 months, allowing investing farther up the yield curve than the State Pool is able to. This, coupled with the recent rise in underlying investment rates, has created a substantial, predictable and budgetable income stream to the City's General Fund. Exhibit 36. Past and Projected Investment Revenue, City of Federal Way $3.0 c $2.5 v $2.0 c v >CU $1.5 Cr aci $1.0 E 0 c $0.5 ■ $0.0 2017 Act 2018 Act 2019 Act 2020 Act 2021 Act 2022 Act 2023 Est $0.50 $0.88 $1.25 Source: City of Federal Way $0.43 $0.08 $1.43 $2.95 5.2 Future Assessed Values and Tax Rates 2024 Adopted $2.95 This report forecasts future property tax allocation revenues based on the assumed timing and value of new construction in the proposed TIA, future appreciation of those properties once they Rev.7/18 - have been constructed, and future changes in property tax rates applicable to the calculation of tax allocation revenues. All of these factors are subject to uncertainty, and future tax allocation revenues could be higher or lower than forecast in this report. Factors that could result in lower collections of tax allocation revenues include: Delays in construction of private projects in the proposed TIA. The proposed TIA is limited to 25 years of tax allocation revenue collection. Any delay in private construction would reduce the total amount of tax allocation revenues collected during the 25-year duration. Lower than anticipated valuation of private projects in the proposed TIA. This report estimates the value of new construction based on assumed construction costs. The King County Assessor would ultimately determine the value of new construction, in part, based on the net operating income of the properties at stabilization. It is likely that the Assessor would determine the market value of improvements in the proposed TIA would exceed their construction costs, but the actual determination of value depends on market conditions at the time the new construction is added to the tax roll. If the Assessor values new construction in the proposed TIA at less than the amounts assumed in this report, it would reduce the total amount of tax allocation revenues collected during the 25-year duration. Lower appreciation of property values for properties inside the proposed TIA than countywide. The rate of appreciation of property values countywide determines annual changes in applicable tax rates. This report assumes property values inside the proposed TIA would appreciate at the same rate as properties countywide. If properties in the proposed TIA appreciate at a faster rate than countywide, it would increase the total amount of tax allocation revenues collected during the 25-year duration. However, if properties in the proposed TIA appreciate more slowly than properties countywide, it would reduce the total amount of tax allocation revenues collected during the 25-year duration. 5.3 Future Public Costs of Construction and/or Borrowing This report estimates the future timing and value of construction of public projects partially or fully funded by the proposed TIA. The actual timing and cost of these projects is uncertain and could be affected by factors outside of the City's control. The terms of future indebtedness are also uncertain. Changes in interest rate, amortization period, and other factors could result in a total cost of borrowing that exceeds the assumptions used in this report. Borrowing assumptions in this report were developed with the assistance of the City's financial advisors and reflect conservative financing assumptions based on current market conditions. Ultimately, if public construction costs are higher than anticipated or the cost, of borrowing is higher than anticipated in this report, the City could cover those higher costs by allocating more of its general tax levy than is forecast in this report. Alternatively, the City could seek other funding sources or eliminate or redesign elements of the public improvements to reduce the total cost to the City. 5.4 Other City Revenues The City would expect to pay a portion of the costs of the public infrastructure in the proposed TIA with other legally available City revenues. General economic conditions, in addition to Rev. 7/18 conditions within the proposed TIA could affect taxable sales, real estate transactions, and other taxable events. The City would be obligated to pay debt service on its limited tax general obligation bonds even if City revenues are negatively affected by these or other conditions. 5.5 Non -Voted Debt Limit The City's ability to issue limited tax general obligation bonds is limited by assessed value within the City at the time the bonds are issued. A decline in assessed value in the City, or growth that is slower than expected, could constrain the City's non -voted debt capacity and ability to finance proposed TIA (and other) projects with non -voted debt. If the City is required to fund a greater share of project costs on a pay -go basis due to debt capacity constraints, the pace of the investment may be slowed with resulting impacts on private development. 5.6 Seismic Activity and Other Natural Disasters The City can give no assurance regarding the effect of an earthquake, a tsunami from seismic activity in Washington or in other areas, a volcano, mudslide, or other natural disaster, or that surrounding facilities and infrastructure could or would be rebuilt and reopened in a timely manner following a major earthquake or other natural disaster. 5.7 Initiatives and Referenda In recent years, there have been a number of initiatives filed in the State, including initiatives targeting fees and taxes imposed by local governments or subjecting local governments to additional requirements. The City cannot predict whether this trend will continue, whether any filed initiatives will receive the requisite signatures to be certified for the ballot, whether such initiatives will be approved by the voters, whether, if challenged, such initiatives will be upheld by the courts and whether any current or future initiative could have a material adverse impact on the City's finances or operations. 5.8 City of Federal Way's Approach to Financial Uncertainty The City has considered all of the issues identified above. The City intends to secure the debt with a pledge of both tax allocation revenues and the City's general tax levy. The City maintains reserve fund balances in fourteen funds in addition to the General Fund. Current fund balance policy requires one year of debt service as a transfer in to the Debt Service Fund covering the next year's debt service amount, in advance. The City has a separate Strategic Reserve Fund of $3 million to accommodate unexpected operational changes, legislative impacts, or other economic events affecting the City's operations which could not have been reasonably anticipated at the time the budget was prepared. Some of the potential risk factors could be addressed by delaying the timing of the proposed indebtedness or reducing the list of projects to be funded by the indebtedness. The City anticipates incurring the indebtedness in 2024 when multiple private development projects within the proposed TIA should either be completed or under construction. If those private construction efforts are delayed or substantially reduced in value, the City could choose to alter their approach to the planned indebtedness. The City has considered, and will continue to consider alternative Rev. 7/18 financing structures that may be employed to address any of the risk factors identified in this report. Rev. 7/18 Appendix A: Tax lots included in the Pro osed Federal Way TIA Boundgry Property Total Identification Levy Appraised Total Taxable Number Code Value (2024) Value (2024) Zone Acres 8665030000 1202 $0 $0 City Center Core 1.7 8665030010 1202 $5,378,600 $0 City Center Core 0.0 8655030020 1202 $6,640,700 $0 City Center Core 0.0 8655030030 1202 $5,378,600 $0 City Center Core 0.0 8655030040 1202 $6,640,700 $0 City Center Core 0.0 8665030050 1202 $5,378,600 $0 City Center Core 0.0 8665030060 1202 $6,640,700 $0 City Center Core 0.0 8665030070 1205 $5,378,600 $0 City Center Core 0.0 8665030080 1205 $6,640,700 $0 City Center Core 0.0 8665030090 1202 $5,378,600 $0 City Center Core 0.0 8665030100 1202 $6,640,700 $0 City Center Core 0.0 8575000020 1202 $2,430,800 $0 City Center Frame 1.9 8575000010 1202 $21,559,700 $0 City Center Frame 3.1 7978200526 1202 $14,949,700 $0 City Center Core 11.4 7978200525 1202 $6,986,000 $0 City Center Core 4.4 7622400025 1202 $2,245,600 $2,245,600 City Center Core 1.8 7622400020 1202 $84,400 $84,400 City Center Core 1.0 7622400019 1205 $12,725,100 $12,725,100 City Center Core 10.4 7622400011 1205 $1,807,100 $1,807,100 City Center Core 1.5 7622400010 1205 $38,514,100 $38,514,100 City Center Core 31.6 2423200070 1205 $870,000 $0 City Center Core 0.5 2423200060 1202 $103,600 $0 City Center Core 1.2 2423200055 1202 $896,300 $0 City Center Core 0.5 2423200050 1202 $10,485,700 $0 City Center Core 7.5 2423200040 1202 $1,853,900 $0 City Center Core 0.9 2423200030 1202 $826,600 $0 City Center Core 0.4 2423200020 1202 $1,133,100 $0 City Center Core 0.5 2423200010 1202 $11,000 $0 City Center Core 0.1 Community 1621049039 1202 $1,917,700 $0 Business 2.2 1621049037 1202 $44,685,000 $44,685,000 RM3600 62.7 1621049028 1202 $7,892,800 $7,892,800 City Center Core 2.0 Community 1621049023 1202 $4,216,600 $4,216,600 Business 6.1 921049337 1205 $44,200 $0 City Center Core 1.0 921049321 1202 $1,570,600 $0 City Center Core 2.3 Rev. 7/18 Property Total Identification Levy Appraised Total Taxable Number Code Value (2024) Value (2024) Zone Acres 921049304 1202 $5,751,500 $5,751,500 City Center Core 1.5 City Center 921049302 1202 $14,150,900 $14,150,900 Frame 7.0 0921049299- 03 1202 $7,867,900 $361,800 Citv Center Core 0.4 0921049299- 94 1202 $7,505,900 $0 City Center Core 0.3 , 921049298 1202 $54,635,900 $0 City Center Core 4.8 921049297 1202 $26,397,000 $26,397,000 City Center Core 6.0 921049296 1202 $832,200 $832,200 City Center Core 0.4 921049280 1202 $679,600 $0 City Center Frame 0.8 921049276 1202 $3,331,900 $3,331,900 City Center Core 1.9 921049271 1202 $1,955,500 $1,955,500 City Center Core 0.5 921049270 1202 $2,204,100 $2,204,100 City Center Core 0.9 921049172 1202 $3,536,900 $3,536,900 City Center Core 1.5 921049163 1202 $15711,900 $1,711,900 City Center Frame 1.3 921049111 1202 $864,500 $864,500 City Center Frame 0.7 921049057 1202 $661,400 $0 City Center Core 0.5 921049053 1202 $14,334,100 $14,334,100 City Center Frame 8.9 921049042 1202 $558,700 $0 City Center Core 0.8 921049035 1202 $2,790,500 $2,790,500 City Center Core 2.4 921049030 1202 $2,634,400 $2,634,400 City Center Core 1.9 921049027 1202 $1,848,200 $0 City Center Core 1.3 921049021 1202 $5,487,400 $0 City Center Core 3.9 921049020 1202 $1,536,000 $1,536,000 City Center Core 0.3 921049019 1202 $1,455,700 $1,455,700 City Center Frame 0.6 921049017 1202 $7,320,700 $0 City Center Frame 5.6 Total $407,958,900 $196,019,600 210.8 Source: Tiberius Solutions with data provided by the King County Assessor's Office Rev. 7/18 Appendix B: Summary of Public Outreach Public outreach included briefings with the City Council, general public, placing information on the City of Federal Way website, interviews and updates with local businesses, community organizations and taxing districts. A.1 General Public & City Council: Two advertised public briefings were held on August 15, 2023 and October 24, 2023. Both briefings were advertised in the Federal Way Mirror (the legal newspaper of general circulation in Federal Way) and advertised on the City of Federal Way website and through the City's social media platforms. The notices were provided two weeks in advance of the meetings. The public briefings covered the reason behind creating a tax increment area, a description of the tax increment area, how tax increment financing works, the public improvements proposed to be financed with the tax allocation revenues and a detailed estimate of tax revenues for the participating local governments and taxing districts including the amounts allocated to the public improvements. The following summarizes the input at Public Briefing 1: The two attendees representing South King Fire & Rescue were interested in the potential impacts on the fire district and the foregone revenues to the fire district. They stated that with the proposed new development there would be new demands on their services but not associated new funding to pay for those services. They asked about required mitigation in the statute. We noted that the estimated impact on South King Fire & Rescue did not reach the required mitigation levels specified in RCW Chapter 39. There were no questions or comments at Public Briefing 2. A Frequently Asked Questions (FAQs) was published on City of Federal Way website, www,engagefw.com/tif„ as well as notices of the Public Briefings. Additional information was posted to the website after Public Briefing 1. Tax Increment Financing was discussed with the Federal Way City Council on: 1/21/23: City Council Retreat 6/27/23: City Council Finance Economic Development & Regional Affairs Committee 2/3/24: City Council Retreat 4/2/24: City Council 1 st Reading 4/16/24: City Council 2nd Reading (tentative) Rev. 7/18 A.2 Local property owners and businesses: City staff and the consulting team provided a virtual briefing to property owners and businesses within the TIA on August 2, 2023. Information was provided on the Sound Transit project, the Town Center 3 redevelopment project and the proposed Tax Increment Area. Questions centered on the improvements the City was making and the City's development project. There was no concern voiced about the tax increment area financing tool. The City's Economic Development Director followed up with the attendees to answer any specific questions. A.3 Taxing Districts/other governmental agencies: The taxing districts were formally informed of the City of Federal Way's consideration of a TIA in letters sent on July 24, 2023 and October 6, 2023. The letters explained the City's intent to form a TIA and offered individual briefings for any parties interested in receiving more information. The City received a response from King County and King County Library System. Neither entity expressed concern, but additional information was requested and provided. The City also has had a number of exchanges with South King Fire regarding the TIA. The City initially expected to bring an ordinance to the Council for action in 2023. However, the Mayor tasked the City Administrator with opening a direct dialogue with South King Fire to alleviate or reduce any concerns they might have about the City forming a TIA. Staff presented to the Fire Commissioners at a special Commission Meeting on March 4, 2024. These conversations are continuing currently. In addition, there were meetings with the Washington State Treasurer's office and the Washington Department of Revenue to ensure coordination on the project and identification of issues for the project. Rev. 7/18 AWendix C: Alternate Scenario The City evaluated a more conservative financial scenario, with the same assumptions on tax allocation revenues, project funds, and amortization period, but assuming taxable debt rather than tax exempt. This alternate scenario results in a true interest cost of 5.50%, which 83 basis points higher than the tax-exempt scenario included in the main body of this report. Exhibit 37 shows the estimated terms of indebtedness for the alternate scenario. Exhibit 37. Estimated Terms of Indebtedness for Proposed Federal Way TIA Public_ Improvements, Alternate Scenario (Nominal $) Series 2024 Closing Month Taxable Status True Interest Cost December 2024 Taxable 5.50% Aggregate Par (Principal) $ 31,150,000 Project Funds from Bond Proceeds $ 30,800,000 Source: PFM Financial Advisors LLC Exhibit 38 shows the estimated debt service payments in the alternate scenario. Total debt service payments are estimated to cost $68,270,964 over the life of the TIA, compared to $62,015,500 in the baseline scenario. Rev. 7/18 Exhibit 38. Estimated Debt Service Payments, LTGO Debt for Proposed Federal Way TIA Public Projects, Alternate Scenario (Nominal $) Year Principal Interest Total 2025 $ - $ 1,696,984 $ 1,696,984 2026 $ - $ 1,696,984 $ 1,696,984 2027 $ - $ 1,696,984 $ 1,696,984 2028 $ - $ 1,696,984 $ 1,696,984 2029 $ - $ 1,696,984 $ 1,696,984 2030 $ - $ 1,696,984 $ 1,696,984 2031 $ - $ 1,696,984 $ 1,696,984 2032 $ - $ 1,696,984 $ 1,696,984 2033 $ - $ 1,696,984 $ 1,696,984 2034 $ - $ 1,696,984 $ 1,696,984 2035 $ - $ 1,696,984 $ 1,696,984 2036 $ $ 1,696,984 $ 1,696,984 2037 $ - $ 1;696,984 $ 1,696,984 2038 $ - $ 1,696,984 $ 1,696,984 2039 $ - $ 1,696,984 $ 1,696,984 2040 $ 1,020,000 $ 1,696,984 $ 2,716,984 2041 $ 1,410, 000 $ 1,642,853 $ 3,052,853 2042 $ 1,820,000 $ 1,567,812 $ 3,387,812 2043 $ 2,260,000 $ 1,470,424 $ 3,730,424 2044 $ 2,730,000 $ 1,348,972 $ 4,078,972 2045 $ 3,235,000 $ 1,201,606 $ 4,436,606 2046 $ 3,770,000 $ 1,025,946 $ 4,795,946 2047 $ 4,345,000 $ 820,368 $ 5,165,368 2048 $ 4,955,000 $ 581,958 $ 5,536,958 2049 $ 5,605,000 $ 309,284 $ 5,914,284 Total $ 31,150,000 $ 37,120,964 $ 68,270,964 Source: PFM Financial Advisors LLC Exhibit 39 shows the estimated annual debt service payments in the alternate scenario alongside the projected tax allocation revenues and the other general fund resources that would be required to cover debt service payments. Over the 25-year maximum duration of the proposed TIA, projected tax allocation revenues are expected to be equal to the total cost of debt service in the alternate scenario. However, annual tax allocation revenues are not anticipated to be sufficient to cover annual debt service payments until 2037, requiring contributions of other general fund resources to cover the debt service in earlier years. The total amount of general fund contribution is forecast to be $14,810,948 in the alternate scenario, which would be repaid over time with surplus tax allocation revenues in later years. Rev. 7/18 Exhibit 39. Tax Allocation Revenues and Debt Service Payments, Proposed Federal Way TIA, Alternate Scenario (Nominal $) Revenue Source Tax Allocation Tax General Revenue Debt Allocation Fund Service Year Payment Revenue Resources Coverage 2025 $ 1,696,984 $ 32,894 $ 1,664,090 0.02 2026 $ 1,696,984 $ 61,761 $ 1,635,223 0.04 2027 $ 1,696,984 $ 91,347 $ 1,605,636 0.05 2028 $ 1,696,984 $ 161,570 $ 1,535,414 0.10 2029 $ 1,696,984 $ 260,941 $ 1,436,043 0.15 2030 $ 1,696,984 $ 346,134 $ 1,350,850 0.20 2031 $ 1,696,984 $ 421,923 $ 1,275,061 0.25 2032 $ 1,696,984 $ 507,799 $ 1,189,185 0.30 2033 $ 1,696,984 $ 584,468 $ 1,112, 516 0.34 2034 $ 1,696,984 $ 879,587 $ 817,396 0.52 2035 $ 1,696,984 $ 959,542 $ 737,442 0.57 2036 $ 1,696,984 $ 1,244,893 $ 452,091 0.73 2037 $ 1,696,984 $ 2,146, 716 $ - 1.27 2038 $ 1,696,984 $ 2,835,883 $ 1.67 2039 $ 1,696,984 $ 3,147,017 $ 1.85 2040 $ 2,716,984 $ 3,886,043 $ 1.43 2041 $ 3,052,853 $ 4,212,431 $ 1.38 2042 $ 3,387,812 $ 4,543,880 $ 1.34 2043 $ 3,730,424 $ 4,880,988 $ 1.31 2044 $ 4,078,972 $ 5,223,867 $ 1.28 2045 $ 4,436,606 $ 5,572,626 $ 1.26 2046 $ 4,795,946 $ 5,927,377 $ 1.24 2047 $ 5,165, 368 $ 6,288,232 $ 1.22 2048 $ 5,536,958 $ 6,655,304 $ 1.20 2049 $ 5,914,284 $ .7,028,439 $ 1.19 Total $ 68,270,964 $ 67,901,663 $14,810,948 0.99 Source: PFM Financial Advisors LLC and Tiberius Solutions Rev. 7/18 Attachment 2: Letter from State Treasurer TAx INCREMENT FINANCING PROJECT ANALYSIS REVIEW CITY OF FEDERAL WAY OCTO BER 12, 2023 OFFICE OF THE TREASURER STATE OF WASHINGTON Mike Pellicciotti Rev. 7/18 OFFICE OF THE TREASURER STATE OF WASHINGTON 0 Mike Pellicciotti October 12, 2023 Steve Groom, Finance Director City of Federal Way 33325 8th Avenue South Federal Way, WA 98003 Dear Mr. Groom: This letter confirms the Office of the State Treasurer's ("OST") receipt and review of the City of Federal Way's (the "City") tax increment financing ("TIF") Project Analysis provided on July 19, 2023. OST and Montague DeRose and Associates, the state's municipal advisor, have reviewed the provided material. Based on our review, which is detailed in the sections to follow, we believe the City's Project Analysis generally addresses the topics listed in section 020(2) of RCW 39.114 (the "TIF Statute"). Please note, this review is based on the information, projections, and assumptions provided by the City and its consultants in the Project Analysis. OST has not independently verified the data or its accuracy or performed any feasibility analyses or projections of its own. Executive Summary According to the City, its downtown area, or "City Center," does not currently present an identifiable sense of an urban center. To improve this, the City is taking steps to transform its City Center into a walkable downtown and destination for the community. The City built the Performing Arts & Entertainment Center and the Town Square Park as initial cornerstone elements to the City Center. Additionally, a Sound Transit light rail station is scheduled to open in 2026, which will allow residents, employees, and visitors greater transit access to/from the City Center. The City's proposed tax increment area (the "TIA") will include 215 acres surrounding these three community improvements and will be generally bordered by 1-5 to the east, South 312t" Street to the north, Highway 99 to the west, and South 330" Street to the south. The Project Analysis identifies a set of public improvement projects estimated to cost between $72 million and $170 million in total (2023 dollars). The City plans to fund these projects directly with tax increment revenues collected over time or in the near -term from the issuance of bonds to be repaid with tax increment revenues. The City specifically identified two high -priority projects requiring funding early in the life of the TIA in order to facilitate the Phase 1 development of a planned mixed -use development: a civic plaza estimated to cost $6.0 million and a public parking garage estimated to cost $30.0 million. Including the developer's contribution to the public improvements, the net funding requirement for these two. public improvements is equal to $30.8 million and would be partially financed from the City's issuance of Limited Tax General Obligation Bonds in late 2024. Legislative Building, P.O. Box 40200 Olympia. Washington 98504-0200 (360) 902-9000 • TTY USERS: CALL 711 • FAX (360) 902-9037 www.lre.wa.gov Rev. 7/18 PAGE 2 OF 14 OST's primary goal in our statutorily mandated review of the Project Analysis is to ensure that the Project Analysis addresses the topics listed in the TIF statute and that risks to the City that might result from the implementation of the project are adequately disclosed. Our review of the Project Analysis found potential risks worth consideration. Most notably, after the issuance of bonds, the City will be obligated to pay any deficiency between tax increment revenues and debt service. The City anticipates issuing $29.6 million of tax-exempt bonds to finance the $30.8 million of Public Improvements at a true interest cost of 4.67°y. In the Baseline Development Scenario, the City projects twelve years of annual deficiencies between tax increment revenues and debt service, averaging $1.0 million per year, resulting in an accumulated deficit of $12.1 million by 2036. The City expects to draw from general revenues and reserves to fund these annual shortfalls through 2036, and then reimburse itself over nine years from 2037-2045, when annual tax increment revenues are projected to exceed annual debt service. Certain other factors, including the following, could negatively impact tax increment revenues, potentially causing them to be inadequate to fully reimburse the City for funds advanced to pay debt service on the Bonds: (1) increases in the cost of the Public Improvements; (2) delayed or less than expected private development within the TIA; (3) lower -than -expected future assessed values within the TIA; and, (4) higher than expected borrowing cost for the bonds issued to finance the Public Improvements. Because of the project's potential cost to the City's general fund, it is essential that decision makers understand and accept the project's risks and potential long-term costs in comparison to its benefits. Statutory Role and Purpose of Review As enacted by the 2021 Washington State Legislature, section RCW 39.114.020(7)(b) requires that prior to,the adoption of an ordinance authorizing the creation of a TIA, the local government proposing the TIA must provide a project analysis to OST for review. OST must complete the review within 90 days of receipt of the project analysis. Upon completing the review, OST must promptly provide to the local government any comments regarding suggested revisions or enhancements to the project analysis that OST deems appropriate. OST received the City's Project Analysis (dated July 18, 2023) on July 19, 2023. Rev. 7/18 PAGE 3 OF 14 Project Team Jurisdiction: County: City of Federal Way King County Project Title: Development Areas: City Center TIA The TIA boundary includes 215 acres and is generally bordered by 1-5 to the east, South 312th Street to the north, Highway 99 to the west, and South 330th Street to the south. City of Federal Way: Consultants: Steve Groom, Finance Director Tiberius Solutions LLC Nick Popenuk, Principal PFM Financial Advisors LLC Duncan Brown, Director Matt Schoenfeld, Sr. Managing Director Foster Garvey PC Bill Tonkin Proposed Tax Increment Area Federal Way's TIA will include 215 acres and is generally bordered by 1-5 to the east, South 3121" Street to the north, Highway 99 to the west, and South 330' Street to the south. The City's downtown, or "City Center," does not currently present an identifiable sense of an urban center. To improve this, the City is taking steps to transform its City Center into a walkable downtown and destination for the community. The City built the Performing Arts & Entertainment Center and the Town Square Park as initial cornerstone elements aimed at defining the City Center neighborhood. A Sound Transit light rail station opening in 2026 will allow residents, employees, and visitors greater transit access to/from the City Center. Figure 1 below shows the boundary map for the TIA. Rev. 7/18 In tax year 2023, the 58 tax lots within the TIA had total taxable assessed value of approximately $195.8 million, compared to a total market value of $267.3 million. All parcels in the TIA are zoned City Center Core, City Center -Frame, Community Business, or Multi - Family Residential with respective 53%,14%, 4% and 29% shares of the total 215 acres. Of the $195.8 million of total taxable assessed value, 62% is from the City Center Core parcels, 15% is from the City Center -Frame parcels, 2% is from the Community Business parcels and 21% from the Multi -Family Residential parcel. PAGE 4 OF 14 Figure 1- Map of the City Center TIA - ( # :y : or r-eaeret way T r Tax increment Area ..� ••�� - � June 20T9 Ij Tax trxcrmnerd Area Parcels _ 500 0 5001[ • �- �T11�ERlUN } I i 1 There are 17 taxing districts whose property tax levy would be directly impacted by TIA. These districts are: (1) County -wide regular levy (non - voted), (2) AFIS (Fingerprint ID) Lid Lift, (3) Parks Lid Lift, (4) Human Srvs/Vets Lid Lift, (5) y 1 r' Children/Famil Justice Ctr. Lid Lift, (6) Best Start for Kids Lid Lift, (7) — " '-If— Radio Communications Lid Lift, (8) i County -wide Transport levy, (9) j County Cons. Futures, (10) County source. City of Federal Way Flood Zone, (11) County Ferry District, (12) Port General Fund, (13) EMS (voted), (14) Sound Transit, (15) City General Fund, (16) Library General Fund and (17) Fire 39 General Fund. The levy rate for each of these jurisdictions will be applied to the increased assessed valuation within the TIA and remitted to the City to pay debt service on the bonds. Project Description Public Improvements within the TIA The Project Analysis identifies numerous public improvement projects related to public parking, recreation, mobility, community building, public safety, and placemaking which are estimated to cost between $72 million and $170 million in total (2023 dollars). The City plans to fund these projects directly with tax increment revenues collected over time or in the near -term from the issuance of bonds to by repaid with tax increment revenues. The City specifically identified a civic plaza estimated to cost $6.0 million and a public parking garage estimated to cost $30.0 million as two high -priority projects requiring funding early in the life of the TIA Rev. 7/18 PAGE 5 OF 14 to facilitate the Phase 1 development of the One Trent project (an apartment and condominium development).. The City's Project Analysis assumes One Trent will pay the City $10.0 million to acquire the City -owned Town Center property located within the TIA, with $4.8 million of the $10.0 million being used to repay an interfund loan on the property. The net funding requirement for these two public improvements of $30.8 million would be financed from the City's issuance of Bonds in late 2024. Private Development within the TIA There are currently no projects in the TIA under construction or with approved permits for construction. The City -owned property within the boundary is anticipated to be the site best situated for new private construction. The City is negotiating an agreement with One Trent, a Seattle -based real estate developer, for the execution of four -phase development project on 10.6 acres of the TIA to construct apartments and condominiums with an expected taxable assessed value of $472.5 million in 2023 dollars and $923.7 million in nominal dollars. Table 1, as prepared by the City, shows the expected phasing of the One Trent Development Plan from 2027 through 2032. The City's tax increment revenue projections anticipate that One Trent will apply for the City's Multifamily Tax Exemption (MFTE) exempting new construction projects located in designated areas with at least 16 multifamily units from property taxes for an eight -year period. For phases 1, 2, and 3 of the development, over 95% of total taxable value is assumed to be eligible for the MFTE exemption, with phase 4 assumed to be not MFTE eligible. Table 1— One Trent Development Plan (in $ 2023) Taxa ble Va lue of Development Completion Development MFTE-Eligible Non MFTE- Phase Type Year (2023 4) Value Eligible Value Phase 1 Apartments 2027 $ 179,827,337 $ 172,312,858 $ 7,514,479 Phase 2 Apartments 2028 $ 110,900,540 $ 107,920,895 $ 2,979,645 Phase 3 Apartments 2030 $ 118,393,420 $ 115,507,471 $ 2,885,949 Phase 4 Condos 2032 $ 63,355,171 $ - $ 63,355,171 Total $ 472,476,468 $ 395,741,224 $ 76,735,244 Source: City of Federal Way A market analysis identified speculative development opportunities for properties located in the TIA but not associated with One Trent. These potential developments are expected to occur in the TIA after construction begins on One Trent and the bond -financed civic plaza and public parking garage. Of the 9.4 million square feet of potentially developable properties in the TIA, the market analysis estimated 17% would experience new development over the 25-year forecast period, resulting in a total of 5,300 new housing units with $1.6 billion in speculative new taxable assessed value (2023 dollars). The analysis assumed that 80% of new value would be multifamily properties, with 100% of this value eligible for the 8-year MFTE, reducing the taxable assessed value from $1.6 billion to $1.2 billion. Table 2, as prepared by the City, forecasts the baseline scenario of private development projected to occur in the TIA both from One Trent and speculative development. Rev. 7/18 PAGE 6 OF 14 Table 2 — Projected Increased Real Property in the TIA (in $ 2023) Baseline Development Scenario Year on Tax Rolll OneTrent Development Speculative Development 2028 $ - $ 14,819,826 2029 $ 7,514,479 $ 14,819,826 2030 $ 2,979,645 $ 14,819,826 2031 $ $ 14,819,826 2032 $ 2,885,949 $ 14,819,826 2033 $ - $ 14,819,826 2034 $ 63,355,171 $ 14,819,826 2035 $ - $ 14,819,826 2036 $ - $ 74, 099,129 2037 $ 172,312,858 $ 74,099,129 2038 $ 107,920,895 $ 74,099,129 2039 $ - $ 74, 099,129 2040 $ 115,507,471 $ 74,099,129 2041 $ - $ 74, 099,129 2042 $ $ 74,099,129 2043 $ $ 74,099,129 2044 $ $ 74, 099,129 2045 $ $ 74,099,129 2046 $ $ 74,099,129 2047 $ $ 74,099,129 2048 $ $ 74,099,129 2049 $ $ 74, 099,129 Total $ 472,476,468 $ 1,155,946,409 Source., City of Federal Way In its Project Analysis, the City prepared an Alternate Development Scenario which retains the anticipated taxable value of the One Trent project but excludes all speculative development. In the Alternate Development Scenario, the City issues bonds only to finance the $6.0 million cost of the civic plaza, not the $24.8 million cost of the public parking garage, as existing surface parking capacity is deemed adequate to support the One Trent development. Assessed Value of the TIA The assessed valuation of the TIA for the 2023 tax year is approximately $195.8 million, below both statutory limits of $200 million in assessed valuation and 20% of the City's total assessed valuation of $17.3 billion ($3.5 billion). The TIA's 2023 assessed value represents 1.1% of the City's total assessed valuation. The magnitude and timing of real property development in the TIA will drive growth in incremental assessed value and therefore tax increment revenues. For the two development scenarios provided by the City, the incremental taxable assessed value of the TIA is estimated by assigning market -based improvement prices reflecting the land use, size of the proposed development and the City's Multifamily Tax Exemption. The City assumed the TIA base value and the assessed values of newly developed properties both increase by 5.1% annually. This assumption uses long-term historical trends for per -capita personal income growth for King County as the basis for forecasting appreciation of existing assessed Rev. 7/18 PAGE 7 OF 14 values and employs forecasts of population growth as the basis for projecting the increase in assessed value from new construction. Tax Increment Revenue Projections The TIA is expected to take effect on June 1, 2024, and 2025 will be the first year that the TIA will receive tax increment revenues. The term of the TIA is assumed at 25 years (the maximum allowed) with 2049 as the final year the TIA will receive tax increment revenues. The City estimated the 2024 tax increment base assessed value at $205.8 million and prepared the Baseline Development Scenario with $6.2 billion of additional assessed value added to the TIA between 2025 and 2049 through new construction and appreciation. Under the Baseline Development Scenario, $68.9 million of tax increment revenues are projected to be collected over the 25-year term of the TIA. See Table 3 — Tax Allocation Revenues of the TIA (Baseline Development Scenario). Table 3 — Tax Allocation Revenues of the TIA (Nominal $) Baseline Development Scenario Tax Assessed Value Tax Allocation Year Total Base Value Increment Levy Rate Revenues 2023 $ 195, 802, 900 $ - $ $ $ 2024 $ 205,788,848 $205,788,848 $ $ $ - 2025 $ 216,284,079 $205,798,848 $ 10,495,231 $3.290400 $ 34,533 2026 $ 227,314,567 $ 205,798,848 $ 21,525,719 $ 3,012200 $ 64,839 2027 $ 238,907,610 $205,798,848 $ 33,118,762 $2.895700 $ 95,901 2028 $ 269,174,210 $205,798,848 $ 63,385,362 $2.651100 $ 168;039 2029 $ 311, 542, 953 $ 205, 788, 848 $ 105, 754,105 $ 2.548600 $ 269,522 2030 $ 351,421,265 $205,788,848 $ 145,632,417 $2.450100 $ 356,808 2031 $ 390,336,150 $ 205,788,848 $ 184,547,302 $ 2.355300 $ 434,672 2032 $ 436,602,762 $ 205,788,848 $ 230,813,914 $ 2.264200 $ 522,608 2033 $ 482,057,730 $205,788,848 $ 276,268,882 $ 2.176600 $ 601,321 2034 $ 635,199,468 $205,788,848 $ 429,410,620 $2.092300 $ 898,476 2035 $ 693,208,380 $ 205,788,848 $ 487,419,532 $ 2.011500 $ 980,454 2036 $ 863,162,204 $205,788,848 $ 657,373,356 $ 1.933700 $ 1,271,146 2037 $ 1, 377, 615, 782 $ 205, 788, 848 $ 1,171, 826, 934 $ 1.859000 $ 2,178, 386 2038 $ 1,813,096,405 $205,788,848 $ 1,607,307,557 $ 1.787500 $ 2,873,039 2039 $ 2,061,826,488 $205,788,848 $ 1,856,037,640 $ 1.718600 $ 3,189,718 2040 $ 2,587,219,174 $205,788,848 $ 2,381,430,326 $ 1.652100 $ 3,934,363 2041 $ 2,891,774,698 $205,788,848 $ 2,685,985,850 $ 1.588400 $ 4,266,440 2042 $ 3, 220, 665, 528 $ 205, 788, 848 $ 3, 014, 876, 680 $ 1.527000 $ 4,603,647 2043 $ 3,575,581,717 $205,788,848 $ 3,369,792,869 $ 1.467900 $ 4,946,590 2044 $ 3,958,322,406 $205,788,848 $ 3,752,533,558 $ 1.411100 $ 5,295,382 2045 $ 4,370,802,557 $205,788,848 $ 4,165,013,709 $ 1.356600 $ 5,650,136 2046 $ 4,815,060,087 $205,788,848 $ 4,609,271,239 $ 1.304100 $ 6,010,966 2047 $ 5,293,263,427 $205,788,848 $ 5,087,474,579 $ 1,253700 $ 6,377,987 2048 $ 5, 807, 719, 537 $ 205, 788, 848 $ 5, 601, 930, 689 $ 1.205200 $ 6,751,314 2049 $ 6,360,882,392 $205,788,848 $ 6,155,093,544 $ 1.158500 $ 7,130,790 Total $ 68,907,079 Source: City of Federal Way As noted above, the City prepared an Alternate Development Scenario which retains the anticipated taxable value of the One Trent development but excludes all speculative development. With the Alternate Rev. 7/18 PAGE 8 OF 14 Development Scenario, $2.2 billion of assessed value is added to the TIA between 2025 and 2049 through new construction and appreciation. Under the Alternate Development Scenario, $30.9 million of tax increment revenues are projected to be collected overthe TIA term. See Table 4 —Tax Allocation Revenues of the TIA (Alternate Development Scenario). Table 4 — Tax Allocation Revenues of the TIA (Nominal $) Alternate Development Scenario Tax Assessed Value Tax Allocation Year Total Base Value Increment Levy Rate Revenues 2023 $ 195,802,900 $ 3.730590 $ - 2024 S 20.5,788,848 S 205,788,848 S 3.487226 $ - 2025 $ 216,284,079 $205,788,848 $ 10,495,231 $ 3.290391 $ 34,533 2026 $ 227,314,567 5205,788,848 $ 21,525,719 $ 3.012184 $ 64,839 2027 $ 238,907,610 $ 205,788,848 $ 33,118,762 $ 2.895675 $ 95,901 2028 $ 251,091,898 5205,788,848 $ 45,303,050 $ 2.651069 $ 120,102 2029 $ 273,533,933 $205,788,848 $ 67,745,085 $ 2.548528 $ 172,650 2030 $ 291,500,045 $205,788,848 $ 85,711,197 $ 2.449975 $ 209,990 2031 $ 306,366,547 $ 205,788,848 $ 100,577,699 $ 2.355220 $ 236,883 2032 $ 326,287,697 $ 205,788,848 $ 120,498,849 $ 2.264036 $ 272,814 2033 $ 342,928,370 $205,788,848 $ 137,139,522 $ 2.176389 $ 298,469 2034 $ 464,603,684 $205,788,848 $ 258,814,836 $ 2.092129 $ 541,474 2035 $ 488,298,472 $ 205,788,848 $ 282,509,624 $ 2.011276 $ 568,205 2036 S 513,201,694 $205,788,848 $ 307,412,846 S 1.933408 $ 594,354 2037 S 868,342,479 5205,788,848 $ 662,553,631 $ 1.858555 $ 1,231,392 2038 51,129,170,653 $205,788,848 $ 923,381,805 $ 1.786943 $ 1,650,030 2039 $1,186,758,356 $ 205,788,848 $ 980,969,508 $ 1.717900 $ 1,685,207 2040 $1,503,291,030 $205,788,848 $1,297,502,182 $ 1.651328 $ 2,142,601 2041 $1,579,958,873 $ 205,788,848 $1,374,170,025 $ 1.587535 $ 2,181,543 2042 $1,660,536,776 $205,788,848 $1,454,747,928 $ 1.526015 $ 2,219,967 2043 $1,745,224,151 $205,788,848 $1,539,435,303 $ 1.466879 $ 2,258,165 2044 S 1,834,230,583 $ 205,788,848 $ 1,628,441,735 $ 1.410034 $ 2,296,158 2045 $1,927,776,343 S 205,788,848 $ 1,721,987,495 $ 1.355392 $ 2,333,968 2046 $2,026,092,936 $205,788,848 $1,820,304,088 $ 1.302868 $ 2,371,615 2047 $2,129,423,675 5205,788,848 $1,923,634,827 $ 1.252379 $ 2,409,119 2048 $2,238,024,283 5205,788,848 $2,032,235,435 $ 1.203846 $ 2,446,499 2049 $2,352,163,521 $205,788,848 $2,146,374,673 S 1.157151 $ 2,483,679 Total $ 30,920,161 Source., Oty of Federol Woy Under the TIF Statute, only certain regular tax levies are available to the TIA. The taxes applied with regular levies must conform with the constitutional 1% limit as well as the $5.90 aggregate limits. Both parts of the State School levy, local school district excess levies, voted bond levies, and levies of port districts for bond payments are excluded from the TIA levy rate. The TIA's annual levy rate may change from one year to the next based on factors includingfuture incremental assessed value of the TIA, future assessed values of the taxing districts, and relevant levy limits. For the two development scenarios, the City's analysis calculated the levy rate for each of these jurisdictions and applied the levy rates to the incremental assessed valuation within the TIA. The City created a multi -year cash flow model to estimate the annual tax increment revenues for the two development scenarios; Figure 2 below provides a visual comparison. Collection of tax increment Rev. 7/18 PAGE 9 of 14 revenues is projected for the 2025-2049 period, with total revenues for the Baseline Development and Alternate Development scenarios at $68.9 million and $30.9 million, respectively. The total tax increment revenues of the Alternate Development Scenario are equivalent to 45% of the total for the Baseline Development Scenario. 8,000 7,000 6,000 5,000 8 4,000 3,000 2.000 1,000 Figure 2 — Projected Tax Increment Revenues Baseline and Alternate Development Scenarios a Baseline Development Scenario . Alternate Development Scenario 2025 2026 2027 202E 2029 2030 2031 2032 2033 2034 2035 2D36 2037 2039 2039 2040 2041 2042 2043 2044 204S 2046 2047 2048 2049 Source. City of Federal Way Financing Plan for Public Improvements As stated in the Project Analysis, because of their general obligation pledge, the City will be required to pay the full debt service due on the Bonds from available resources, regardless of the amount of tax increment revenues generated within the TIA. The City acknowledged that tax increment revenues early in the life of the TIA are projected to be insufficient to fully cover debt service payments in both development scenarios. In the Baseline Development Scenario, the City anticipates issuing $29.6 million of tax-exempt bonds in December 2024 to finance the $30.8 million of Public Improvements. The City's structure for the bonds assumes interest rates as of July 12, 2023, plus a 0.50% cushion, resulting in a true interest cost of 4.67%. In this scenario, total principal and interest is projected to be $62.0 million. The City plans to structure its bonds with interest -only payments from 2025 through 2039 to better align debt service payments with anticipated tax increment revenues, and to minimize the amount of general fund resources that the City will need to use to pay debt service in full each year. From 2040 through 2049, annual debt service payments are projected to escalate from $2.4 million to $5.6 million. In the Baseline Development Scenario, the City projects twelve years of annual deficiencies between tax increment revenues and debt service, averaging $1.0 million per year, resulting in an accumulated deficit Rev. 7/18 PAGE 10 OF 14 of $12.1 million by 2036. The City expects to draw from general revenues and reserves to fund these annual shortfalls through 2036, then reimburse itself over nine years from 2037-2045, when annual tax increment revenues are projected to exceed annual debt service by $6.9 million. The City indicated it may apply the $6.9 million surplus to fund additional public improvement projects within the TIA. Regarding the City's projected annual shortages between tax increment revenues and debt service costs, the Project Analysis notes: (1) the City maintains reserve fund balances in 14 funds in addition to its general fund; (2) the City's current fund balance policy requires transferring the subsequent year's debt service payment into the debt service fund during the current year; and (3) the City has a separate Strategic Reserve Fund of $3 million to accommodate unexpected operational changes, legislative impacts, or other economic events affecting the City's operations which could not have been reasonably anticipated at the time of budget preparation. In the Alternate Development Scenario, the City reduces its bond issuance to $6.0 million to finance the cost of the civic plaza (roughly 19.5% of the $30.8 million), excluding the $24.8 million cost of the public parking garage. This approach would allow the City to retain flexibility to adjust the amount of debt to better reflect the amount of actual development during the first few years of the TIA. In our cash flow analysis, we applied the 19.5% share,to the Baseline Development Scenario's $62.0 million in total debt service, maintaining the same amortization structure as the larger bond issue. The total amount of principal and interest due under this scenario totals $12.1 million to finance the $6.0 million in civic plaza improvements. In the Alternate Development Scenario, the City projects eight years of insufficient tax increment revenues compared to debt service, averaging $138,000 per year, resulting in an accumulated deficit of $1.1 million by 2032. The City expects to cover these annual shortfalls with City general revenues and reserves through 2032, then reimburse itself over five years from 2033-2037 as total tax increment revenues are projected to exceed total debt service by $18.8 million. Rev. 7/18 PAGE 1 1 OF 14 Debt Capacity Based on the City's total 2023 assessed value of $17,270,222,086, the City has $259,053,331 in total non - voted debt capacity (1.5%of 2023 AV). The City currently has $27,983,000 in outstanding non -voted debt, leaving sufficient non -voted debt capacity of $231,070,331 before issuing the $29,630,000 of bonds described in the Baseline Development Scenario in December 2024. See Table 5 — Debt Capacity in 2023. Table 5 — Debt Capacity in 2023 2023 Assessed Valuation $17,270,222,086 Non -Voted Debt Capacity (1.5% of AV) 259,053,331 Less: Outstanding Non -Voted Debt (27,983,000) Remaining Non -Voted Debt Capacity 231,070,331 Less: Financing Proposed (29,630,000) Projected Remaining Non -Voted Capacity $201,440,331 Projected Remaining Non -Voted Capacity % 77.8% Source: City of Federal Way Projected Debt Service Coverage Tables 6 and 7 below summarize the total tax increment revenues, revenue shortfalls and debt service coverage for the two development scenarios. In the Baseline Development Scenario, the City would be required to fund a portion of the annual debt service payments from general revenues or reserves due to insufficient tax increment revenue from 2025 through 2036. Full reimbursement of the $12.1 million cumulative shortfall is projected by 2045. • In the Alternate Development Scenario, the City would be required to fund a portion of the annual debt service payments from 2025 through 2032, with a cumulative shortfall of $1.1 million, and full reimbursement anticipated by 2037. Rev. 7/18 PAGE 12 of 14 Table 6 — Summary of Tax Increment Revenue Shortfalls and Average Debt Service Coverage First Year Tax Year That Tax Total Projected Total Projected Projected Total Surplus/ Aggregate Development Increment Revenues Increment Revenues Tax Increment Debt Service Cumulative (Shortfall) Debt Service Scenario Exceed TIF Debt Fully Reimburse Debt Revenue ($MMs) Shortfall ($MMs) Coverage Ratio Service Service Shortfalls ($MMs)' ($MMs) Baseline 2037 2045 $68.907 _ $62.016 i>12080) $6.892 MIX Alternate 2033 2037 $30.920 $12.081 WADI) $18.839 2.56x 1. Projected over the term of repayment at the Bonds, 2025-2049 Table 7 — Annual Tax Increment Revenue Shortfalls and Average Debt Service Coverage Baseline Development Scenario (5M51 Alternate Oevetopment Scenario j5Msj Year »0 2024 0 0 0 0 -- 0 0 0 — 2025 1 35 1,482 (1,447) (1,447) 0.02x 35 289 (254) (2541 0.12x 2026 65 1,482 (1,417) (2,864) 0,04x 65 289 (224) (4781 0.22x 2027 96 1,482 (1,386) (4,249) 0.06x 96 289 (193) (6711 0.33x 2028 168 1,482 (1,313) (5,563) 0-11x 120 289 (169) (839) a42x 2029 270 1,482 (1,212) (6,775) 0.18x 173 289 (116) (955) 0. 60x 2030 357 1,482 (1,125) (7,899) 0.24x 210 289 (79) (1,034) 0.73x 2031 435 1,482 (1,047) (8,946) 0.29x 237 289 (52) (1,085) 0.82x 2032 523 1,482 (959) (9,905) 0.35x 273 289 (16) (1,101) 0.95x 2033 601 1,482 (880) (10,785) 0.41x 298 289 10 (1,0911 1.03x 2034 898 1,482 (583) (11,368) 0.61x 541 289 253 (8381 1.88x 2035 990 1,482 (501) (11,869) 0.66x 568 289 290 (5591 1.97x 2036 1,271 1,492 (210) (12,080) 1186x 594 289 306 (253) 2.06x 2037 2,178 1,482 697 (11,383) 1.47x 1,231 289 943 690 4.27x 2038 2,873 1,482 1,392 (9,991) 1.94x 1,650 289 1,361 2,051 5.72x 2039 3,190 1,482 1,708 (8_283) 2.15x 1,685 289 1,397 3,448 5.84x 2040 3,934 2,417 1,518 (6,765) 1.63x 2,143 471 1,672 5,120 4.55x 2041 4,266 2,750 1,517 (5,248) ^(3,734) 1.55x 2,182 536 1,646 6,766 4.07x 2042 4,604 3,089 1,515 1.49x 2,220 602 1,618 8,384 3.69x 2043 4,947 3,428 1,519 (2,215) 1.44x 2,258 668 1,590 9,974 3.38x 2044 5,295 3,781 1,515 (701) 1.40x 2,296 737 1,560 11,534 3.12x 2045 5,650 4,131 1,520 819 1.37x 2,334 805 1,529 13,063 2.90x 2046 6,011 4,491 1,520 2,339 1.34x 2,372 875 1,497 14,560 2.71x 2047 6,378 4,961 1,517 3,855 1.31x 2,409 947 1,462 16,022 2.54x 2048 6,751 5,234 1,518 5,373 1.29x 2,446 1,020 1,427 17,449 2.40x 2049 7,131 5,612 1,519 61892 1.27x 2,484 1,093 ].390 18,839 2.27x Total 68.907 62. 016 6,892 30.920 12,081 A,839 Rev. 7/18 PAGE 13 of 14 Key Risks to the City From our review of the Project Analysis, it appears that the anticipated Public Improvements and economic development will provide significant benefit to the City. Nonetheless, the financial plan comes with certain risks and costs to the City, primarily related to the projected annual tax increment revenues being insufficient to fully pay the debt service due on the bonds the City plans to issue to finance a portion of the Public Improvements, especially in the early years of the project. During years with revenue shortfalls, the City will be required to pay any difference between the debt service due and tax increment revenues collected using general City resources. While the City plans to reimburse itself for debt service payments made from general City revenues and reserves, it is important for decision makers to be aware of the potential magnitude and timing of such payments and reimbursements. Since the TIF legislation limits the ability to collect tax increment revenues to a period of not more than 25 years, delays could reduce the City's ability to fully reimburse itself from tax increment revenues. Additional factors that could impactthe amount of tax increment revenues collected are described below: Escalation of Protect Costs. With the Public Improvements projected to be completed over a number of years, inflation could have a significant impact on the final cost. The City did not disclose if a construction cost inflator was included in its cost range for the Public Improvements. Economic Conditions: Growth in the TIA's assessed value could be negatively impacted by a downturn in the economy. A variety of economic factors could negatively impact the timeline and ultimate demand for development, jeopardizing the rate and scale of private development, potentially reducing tax increment revenues. Permits: Unforeseen delays in permits could negatively impact the construction of private developments within the TIA. Such delays could negatively impact the timing and/or amount of tax increment revenues generated by the TIA. Construction Delpvs: Any delay in the construction timelines of the private development projects could reduce the amount of tax increment revenues produced by the TIA. Similarly, any delay by the City in completing the planned Public Improvements could delay private developers' abilities to complete their private developments, potentially reducing the amount of tax increment revenues. Assessed Valuations: As private developments are completed, tax increment revenues may be lower than projected if the assessed values of the projects are lower than expected or take more time to be reflected on the county's tax rolls than expected. Interest Rote Risk: The City is exposed to interest rate risk until its bonds are sold. The Project Analysis assumes interest rates as of July 12 plus a 0.50% cushion, resulting in a true interest cost of 4.67%. However, between July 12 and September 25, tax-exempt interest rates rose by an average of 0.60% in the 2025-2049 maturity range expected for repayment of the bonds. The current borrowing cost for the bonds is higher than the 4.67% true interest cost assumed in the Project Analysis. Risk Summary: The general impact to the City from any of the risk factors outlined above could be lower than projected tax increment revenues and a greater than expected reliance on the City's general revenues and reserves to pay the debt service due on the bonds issued to fund the Public Improvements in the TIA. If tax increment revenues are lower than expected, it will force the City to apply more of its available funds towards repayment of the bonds, reducing the City's ability to allocate those funds to other projects or operations. Rev. 7/18 PAGE 14 of 14 Recommendations To help ensure the financial success of the project and to minimize unanticipated costs, we recommend the City consider the following measures: 1. Prior to approving the TIA, we recommend that the City discuss and establish a policy regarding how much debt service it is willing to pay from City general revenues and reserves on an annual basis to offset years of tax increment revenue shortfalls. 2. We recommend that the City conservatively budget for and set funds aside to cover any projected tax increment revenue shortfalls. 3. Prior to approving the TIA, we recommend that the City coordinate closely with other taxing districts impacted by the project, and the County Assessor's Office, to ensure that all parties have an accurate understanding of how the TIA will impact them, and to provide sufficient time to work through any concerns. 4. As the project moves forward, we recommend that the City coordinate closely with the County Assessor's Office to help ensure that the tax increment revenue projections match the County's assessment process and are as accurate as possible. 5. The City's interest rate assumptions for its planned 2024 Bond issuance are below current tax- exempt interest rates. We recommend that the City consider using more conservative interest rate assumptions. 6. We recommend the City revisit public improvement cost projections frequently and utilize a publicly recognized inflation index to inform inflation projections. Thank you for the opportunity to review the City's Project Analysis. Based upon the information provided to date in connection with this project, this concludes our review. If there are material changes in the scope, timing, or cost of the project, please let us know. We wish the City all the best with the project. Respectfully, Mike Pellicciotti Washington State Treasurer Jason Richter Deputy Treasurer Rev. 7/18 ORDINANCE NO.24- AN ORDINANCE of the City of Federal Way, Washington, designating the Downtown Tax Increment area; setting a sunset date for the increment area; identifying the public improvements to be financed; imposing a deadline for commencement of construction; indicating the City's intent to issue bonds to fmance public projects; providing that the increment area will take effect June 1, 2024; and providing for related matters. WHEREAS, the City has previously taken action to facilitate the redevelopment of its downtown including the construction of the Performing Arts & Event Center, Town Square Park, the Grand Staircase, the designation of an Opportunity Zone, and the adoption of a Planned Action Environmental Impact Statement ("Planned Action EIS"); and WHEREAS, the Washington State Legislature, during its 2021 legislative session, enacted Engrossed Substitute House Bill 1189 as Chapter 207, Laws of 2021, titled "AN ACT Relating to tax increment financing" and codified as -RCW 39.114 (the "TIF Act"), which authorizes local governments, including cities, to carry out tax increment financing of public improvements needed to support vital private economic development projects; and WHEREAS, the TIF Act was thereafter amended by Engrossed House Bill 1527 during the 2023 legislative session; and WHEREAS, it is desirable and in the best interest of the residents of Federal Way for the City to continue taking action to facilitate the redevelopment of its downtown including adopting tax increment allocation financing to fund public improvements in the downtown area; and WHEREAS, the purpose of this ordinance is to designate an increment area that will enable the City to carry out tax increment financing of the public improvements needed to serve the resulting private development within that increment area; and Ordinance No. 24- Page I of 27 WHEREAS, the City correctly followed the designation procedures identified in RCW 39.114.020(7); and WHEREAS, subsequent to the briefings and review by the State Treasurer, the City revised its proposed designation area (Exhibit B) in 2024, removing a property (parcel #0921049137), to ensure the assessed value of the area was less than $200,000,000. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF FEDERAL WAY, WASHINGTON, DO ORDAIN AS FOLLOWS: Section 1. Tax Increment Area designated. Tax Increment Allocation Financing is hereby adopted to pay for public investment project costs as provided for in 39.114 RCW, as described and illustrated within the Project Area delineated in Exhibits A and B attached hereto and incorporated herein by this reference ("Increment Area"). In making this designation, the City finds that the Increment Area (i) is the only increment area designated by the City; (ii) is located within the jurisdictional boundaries of the City; (iii) does not include the entire City; and (iv) does not exceed an assessed valuation of $200,000,000 or 20% of the City's current assessed valuation. Section 2. Commencement & Sunset date of the Increment Area. The Increment Area shall take effect June 1, 2024. The sunset date of the Increment Area created by this ordinance is (i) December 31, 2049, which is the date no later than 25 years after the first year (calendar year 2025) in which tax allocation revenues will be collected on taxable property located in the Increment Area; or, (ii) if earlier, the date on which the City certifies to the County Assessor that all public improvement costs to be paid or reimbursed with tax allocation revenues derived from the Increment Area have been fully paid, including but not limited to reimbursements to the City for principal and interest payments required to be made by the City from revenue sources other than tax allocation revenues on general obligation bonds issued to finance the portion of public Ordinance No. 24- Page 2 of 27 improvement costs that are intended to be paid or retired, in whole, from tax allocation revenues, as authorized by RCW 39.114.060(1). Section 3. Project List. A list of improvements to be financed is provided in Exhibit C attached hereto and incorporated herein by this reference. The City intends to issue bonds or other obligations, payable in whole or in part, from tax allocation revenues to finance the public improvement costs. The maximum estimated amount of bonds or obligations contemplated is $36,000,000. Section 4. Project Start Date. The City establishes a deadline of June 1, 2029, for commencement of construction of the first public project identified in Exhibit C. In no event will construction of the first project selected from the Project List commence later than June 1, 2029, unless that deadline is extended for good cause. Section 5. Findings. Based upon the Project Analysis conducted by the City's Consultant Tiberius Solutions LLC, the City Council hereby makes the following findings: (i) The public improvements proposed to be paid or financed with tax allocation revenues are expected to encourage private development within the increment area and to increase the assessed value of real property within the increment area; (ii) Private development that is anticipated to occur within the increment area as a result of the proposed public improvements will be permitted consistent with the permitting jurisdiction's applicable zoning and development standards; (iii) The private development would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future without the proposed public improvements; and Ordinance No. 24- Page 3 of 27 (iv) The increased assessed value within the increment area that could reasonably be expected to occur without the proposed public improvements would be less than the increase in the assessed value estimated to result from the proposed development with the proposed public improvements. Section 6. Preparation & Consideration of Project Analysis. As required by RCW 39.114.020(2), the City has caused to be prepared a Project Analysis to describe and analyze, among other matters, the factors and considerations listed in that statute. The Project Analysis is on file with the City Clerk. The City Council takes note of the conclusion expressed in the Treasurer's Review Letter, which is attached as Exhibit D and incorporated herein by this reference, that the City's Project Analysis addresses the requirements of RCW 39.114.020. In its consideration and adoption of this ordinance, the City Council has reviewed and considered, among other things, the Project Analysis and the Treasurer's Review Letter, including the "Risk Factors" and "Recommendations" noted in the Treasurer's Review Letter. Section 7. Reimbursement of Expenses. Pursuant to RCW 39.114.020(6), the City will reimburse the County Assessor and County Treasurer for the direct expenses incurred with the implementation and ongoing administration of the City's Increment Area. Such expenses shall be deemed part of the public improvement costs and may be paid from the tax allocation revenues. Section 8. Public Briefings Held by the City. As required by RCW 39.114.020(7)(a), the City has held two public briefings for the community regarding the proposed public improvements needed to serve the Increment Area. Public briefings were held on August 15, 2023, at 5:30 pm at City Hall, and October 24, 2023, at 3:30 pm at City Hall, and announced to the public at least two weeks prior to the date each briefing was held by publishing in the Federal Way mirror, and by posting information on the City's website and on social media. Each public briefing included a Ordinance No. 24- Page 4 of 27 description of the proposed Increment Area, the public improvements proposed to be financed with tax allocation revenues, and an estimate of tax revenues provided by each impacted taxing district. Additional briefings were held by the City Council at their annual retreat on January 21, 2023, at the Dumas Bay Center; before the full Council on September 5, 2023; and, at the City's Finance, Economic Development and Regional Affairs Council Committee on June 27, 2023, October 24, 2023, and March 26, 2024. Section 9. Degpatiqg the Increment Area. Following the adoption of this ordinance, the City will deliver a certified copy of this ordinance to the County Treasurer, the County Assessor, and the governing body of each taxing district within the Increment Area at their respective addresses. Section 10. SeverabilitY. The provisions of this ordinance are declared separate and severable. The invalidity of any clause, sentence, paragraph, subdivision, section, or portion of this ordinance, or the invalidity of the application thereof to any person or circumstance, shall not affect the validity of the remainder of the ordinance, or the validity of its application to any other persons or circumstances. Section 11. Corrections. 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/clerical errors, references, ordinance numbering, section/subsection numbers and any references thereto. Section 12. Ratification. Any act consistent with the authority and prior to the effective date of this ordinance is hereby ratified and affirmed. Section 13. Effective Date. This ordinance shall be effective thirty (30) days after passage and publication as provided by law. Ordinance No. 24- Page 5 of 27 PASSED by the City Council of the City of Federal Way this day of _ 2024. CITY OF FEDERAL WAY: JIM FERRELL, MAYOR ATTEST: STEPHANIE COURTNEY, CMC, CITY CLERK APPROVED AS TO FORM: RYAN CALL, CITY ATTORNEY FILED WITH THE CITY CLERK: PASSED BY THE CITY COUNCIL: PUBLISHED: EFFECTIVE DATE: ORDINANCE NO.: Ordinance No. 24- Page 6 of 27 Exhibit A - Legal Description Proposed Federal Way TIA Affected Parcels Property Total Total Identification Levy Appraised Taxable Number Code Value Value Zone Acres 921049057 1202 $0 $0 City Center Core 0.5 921049111 1202 $806,900 $806,900 City Center Frame 0.7 921049019 1202 $1,420,500 $1,420,500 City Center Frame 0.6 921049020 1202 _ _ $1,344,000 $1,344,000 City Center Core 0.4 921049030 1202 $2,305,100 $2,305,100 City Center Core 1.9 921049035 1202 $2,674,300 _ $2,674,300 City Center Core 2.4 7978200525 1205 $6,308,600 $0 City Center Core 4.4 7978200526 1205 $0 $0 City Center Core 11.5 921049163 1202 $1,597,700 $1,5977700 City Center Frame 1.3 921049172 1202 $3,242,200 $3,242,200 City Center Core 1.5 921049270 1202 $2,119,300 $2,119,300 City Center Core 0.9 921049271 1202 $1,722,700 $1,722,700 City Center Core 0.5 921049276 1202 $2,932,100 $2,932,100 City Center Core 1.9 921049280 1202 $0 $0 City _ Center Frame 0.8 921049296 1202 $749,000 $749,000 City Center Core 0.4 921049302 1202 $13,626,800 $13,626,800 City Center Frame 7.0 1621049023 1205 $3,689,500 $3,689,500 Commercial 6.5 1621049028 1205 $7,404,700 $7,404,700 City Center Core 2.0 1621049037 1205 $41,375,000 $41,375,000 Commercial 62.2 1621049039 1205 $0 $0 Commercial 2.2 2423200010 1202 $0 $0 City Center Core 0.1 2423200020 1202 $0 $0 City Center Core 0.5 2423200030 1202 $0 $0 City Center Core 0.4 2423200040 1202 $0 $0 City Center Core 0.8 2423200050 1202 $0 $0 City Center Core 7.5 2423200055 1202 $0 $0 City Center Core 0.5 2423200060 1202 $0 $0 City Center Core 0.9 2423200070 1202 $0 $0 City Center Core 0.5 7622400011 1202 $1,761,300 $1,761,300 City Center Core 1.5 7622400025 1202 $2,164,700 $2,164,700 City Center Core 1.8 7622400010 1202 $33,573,000 $33,573,000 City Center Core 31.7 7622400020 1205 $84,400 $84,400 City Center Core 0.9 921049299 1202 $5,452,800 $250,900 City Center Core _ 0.7 921049053 1202 $11,543,100 $11,543,100 City Center Frame 8.8 921049021 1202 $0 $0 City Center Core 3.9 921049297 1202 $23,856,200 $23,856,200 City Center Core 6.0 8575000010 1202 $0 $0 City Center Frame 3.1 Ordinance No. 24- Page 7 of 27 Property Total Total Identification Levy Appraised Taxable Number Code Value Value Zone Acres 8575000020 1202 $0 $0 City Center Frame 1.8 921049017 1202 $0 $0 Cif Center Frame 5.6 921049042 1202 $488,900 $0 City Center Core 0.8 921049321 1202 $1,374,300 $0 City Center Core _ 2.2 921049337 1202 $0 $0 _ City Center Core 1.0 921049027 1202 $1,617,100 $0 City Center Core _ 1.3 921049298 1202 $0 $0 City Center Core 4.8 7622400019 1202 $10,732,900 $10,732,900 City Center Core 10.4 8665030000 1202 $5,623,600 $0 City Center Core 1.7 921049304 1202 $5,5232700 $5,523,700 City Center Core 1.5 Total $216,417,300 $195,802,900 215.0 Source: Tiberius Solutions with data provided by the King County Assessor's Office Ordinance No. 24- Page 8 of 27 Levy Property 2022for Zone Acres 2023for 2023for Tax Code Identification 2023 payable 2024 payable 2024 payable Status Number -Total - Total - Total Taxable Appraised Taxable Value Value Value 1202 921049017 $0 City Center 5.6 $7,320,700 $0 X GOV Frame 1202 921049019 $1,420,500 City Center 0.6 $1,455,700 $1,455,700 T Frame 1202 921049020 $1,344,000 City Center 0.4 $1,536,000 $1,536,000 T Core 1202 921049021 $0 City Center 3.9 $5,487,400 $0 X GOV Core 1202 921049027 $0 City Center 1.3 $1,848,200 $0 X GOV Core 1202 921049030 $2,305,100 City Center 1.9 $2,634,400 $2,634,400 T Core 1202 921049035 $2,674,300 City Center 2.4 $2,790,500 $2,790,500 T Core 1202 921049042 $0 City Center 0.9 $558,700 $0 X GOV Core 1202 921049053 $11,543,100 City Center 8.8 $14,334,100 $14,334,100 T Frame 1202 921049057 $0 City Center 0.5 $661,400 $0 X GOV Core 1202 921049111 $806,900 City Center 0.7 $864,500 $864,500 T Frame 1202 921049163 $1,597,700 City Center 1.3 $1,711,900 $1,711,900 T Frame 1202 921049172 $3,242,200 City Center 1.5 $3,536,900 $3,536,900 T Core 1202 921049270 $2,119,300 City Center 0.9 $2,204,100 $2,204,100 T Core 1202 921049271 $1,722,700 City Center 0.5 $1,955,500 $1,955,500 T Core 1202 921049276 $2,932,100 City Center 1.9 $3,331,900 $3,331,900 T Core 1202 921049280 $0 City Center 0.8 $679,600 $0 X GOV Frame 1202 921049296 $749,000 City Center 0.4 $832,200 $832,200 T Core 1202 921049297 $23,856,200 City Center 6.0 $26,397,000 $26,397,000 T Core 1202 921049298 $0 City Center 4.8 $54,635,900 $0 X GOV Core 1202 921049299 $250,900 City Center 0.7 $12,193,000 $303,500 T PARTIALLY Core EXEMPT - NP 1202 921049302 $13,626,800 City Center 7.0 $14,150,900 $14,150,900 T Frame 1202 921049304 $5,523,700 City Center 1.5 $5,751,500 $5,751,500 T Core 1202 921049321 $0 City Center 2.2 $1,S70,600 $0 X GOV Core 1202 921049337 $0 City Center 1.0 $44,200 $0 X GOV Core 1205 1621049023 $3,689,500 Commercial 6.5 $4,216,600 $4,216,600 T 1205 1621049028 $7,404,700 City Center 2.0 $7,892,800 $7,892,800 T Core 1205 1621049037 $41,375,000 Commercial 62.2 $44,685,000 $44,685,000 T 1205 1621049039 $0 Commercial 2.2 $1,917,700 $0 X GOV 1202 2423200010 $0 City Center 0.1 $11,000 $0 X GOV Core 1202 2423200020 $0 City Center 0.5 $1,133,100 $0 X GOV Core 1202 2423200030 $0 City Center 0.4 $826,600 $0 X GOV Core 1202 2423200040 $0 City Center 0.8 $1,853,900 $0 X GOV Core 1202 2423200050 $0 City Center 7.5 $10,485,700 $0 X GOV Core 1202 2423200055 $0 City Center 0.5 $896,300 $0 X GOV Core 1202 2423200060 $0 City Center 0.9 $103,600 $0 X GOV Core 1202 2423200070 $0 City Center 0.5 $870,000 $0 X GOV Core Ordinance No. 24- Page 9 of 27 1202 7622400010 $33,573,000 City Center 31.7 $38,514;100 $38,514,100 T Core 1202 7622400011 $1,761,300 City Center 1.5 $1,807,200 $1,807,100 T Core 1202 7622400019 $10,732,900 City Center 10.4 $12,725,100 $12,725,100 T Core 1205 7622400020 $84,400 City Center 0.9 $84,400 $84,400 T Core 1202 7622400025 $2,164,700 City Center 1.8 $2,245,600 $2,245,600 T Core 1205 7978200525 $0 City Center 4.4 $6,986,000 $0 X Core 1205 7978200526 50 City Center 11.5 $14,949,700 $0 X Core 1202 8575000010 $0 City Center 3.1 $21,559,700 $0 X Frame 1202 8575000020 $0 City Center 1.8 $2,430,800 $0 X Frame 1202 8665030000 $0 City Center 1.7 $0 $0 NA Core 1202 8665030010 ,$0 City Center $5,378,600 $0 X Core 1202 8665030020 $0 City Center $6,640,700 $0 X Core 1202 8665030030 $0 City Center $5,379,600 $0 X Core 1202 8665030040 $0 City Center $6,640,700 $0 X Core 1202 8665030050 $0 City Center $5,378,600 $0 x Core 1202 8665030060 $0 City Center $6,640,700 $0 X Core 1202 8665030070 $0 City Center $5,378,600 $0 X Core 1202 8665030080 $0 City Center $6,640,700 $0 X Core 1202 8665030090 $0 City Center $5,378,600 $0 X Core 1202 8665030100 $0 City Center $6,640,700 $0 X Core Total $176,500,000 210.4 $404,778,100 $195,961,300 NP NP GOV GOV Condo Parent Parcel NP NP NP NP NP NP NP NP NP NP Ordinance No. 24- Page 10 of 27 Exhibit B — Area Boundary Map Ordinance No. 24- Page 11 of 27 W RA Project List 5.4.23 1. Public Parking 2. Recreation 3. Mobility 4_ Community Building 5. Public Safety 6_ Placemaking • A stand-alone parking gaaeaage $27 - $30M 2024- 2026 • Public parking integrated into a private garage ■ Shared parking agreements w/ other parties (388-420 stalls @ $70k1stall) ■ Omer equivalent projects that would add parking • New park or park expansion 510 - 5 I &M 20Z4 - 2026 ■ Civic plaza • Park improvements [$1 OM for civic plaza (Yakima • Other equivalent projects that would add Central Plaza) & $6M for new recreational amenities park (PIF study)] • S 320"' dip S 30M - $60M 2026 - 2035 • Pedestrian promenade • Protected bike lanes • Transit shelters • Bicycle lockers • City Center Access • Other equivalent projects that would increase mobility • Public market S3M - $60M 2024 - 2035 ■ Senior center City Hall ■ Community Center north • Downtown meeting room ■ Other equivalent projects that would add an indoor community space to the district • Improvements to benefit FWPD S 1 M 2030 - 2045 • Improvements to benefit So_ King Fire ■ Improvements to lessen code compliance issues • Other equivalent projects that would improve public safety • Gateway features S I M - S 3M 2030 - 2045 • Wayfinding signs • Pedestrian nodes/public spaces • Public art ■ Lighting (e.g. catenary lights, etc.) • Special street furniture • Other equivalent projects that would improve placemaking Exhibit D — State Treasurer's Letter TAX INCREMENT FINANCING. PROJECT ANALYSIS REVIEW CITY OF FEDERAL WAY 0 - OCTOBER 12, 2023 OFFICE OF THE TREASURER STATE OF WASHINGTON Mike Pellicciotti Ordinance No. 24- Page 13 of 27 OFFICE OF THE TREASURER STATE OF WASHINGTON 0 Mike Pellicciotti October 12, 2023 Steve Groom, Finance Director City of Federal Way 33325 8th Avenue South Federal Way, WA 98003 Dear Mr. Groom: This letter confirms the Office of the State Treasurer's ("OST") receipt and review of the City of Federal Way's (the "City") tax increment financing ('TIF") Project Analysis provided on July 19, 2023. OST and Montague DeRose and Associates, the state's municipal advisor, have reviewed the provided material. Based on our review, which is detailed in the sections to follow, we believe the City's Project Analysis generally addresses the topics listed in section 020(2) of RCW 39.114 (the "TIF Statute"). Please note, this review is based on the information, projections, and assumptions provided by the City and its consultants in the Project Analysis. OST has not independently verified the data or its accuracy or performed any feasibility analyses or projections of its own. Executive Summary According to the City, its downtown area, or "City Center," does not currently present an identifiable sense of an urban center. To improve this, the City is taking steps to transform its City Center into a walkable downtown and destination forthe community. The City built the Performing Arts & Entertainment Center and the Town Square Park as initial cornerstone elements to the City Center. Additionally, a Sound Transit light rail station is scheduled to open in 2026, which will allow residents, employees, and visitors greater transit access to/from the City Center. The City's proposed tax increment area (the "TIA") will include 215 acres surrounding these three community improvements and will be generally bordered by 1-5 to the east, South 312" Street to the north, Highway 99 to the west, and South 3301h Street to the south. The Project Analysis identifies a set of public improvement projects estimated to cost between $72 million and $170 million in total (2023 dollars). The City plans to fund these projects directly with tax increment revenues collected over time or in the near -term from the issuance of bonds to be repaid with tax increment revenues. The City specifically identified two high -priority projects requiring funding early in the life of the TIA in order to facilitate the Phase 1 development of a planned mixed -use development: a civic plaza estimated to cost $6.0 million and a public parking garage estimated to cost $30.0 million. Including the developer's contribution to the public improvements, the net funding requirement for these two public improvements is equal to $30.8 million and would be partially financed from the City's issuance of Limited Tax General Obligation Bonds in late 2024. Legislative Building. P.O. Box 40200 Olympia, Washington 98504-0200 (360) 902-9000 • TTY USERS: CALL 711 • FAX (360) 902-9037 «mw.1rcnva.gov Ordinance No. 24- — Page 14 of 27 PAGE 2 OF 14 OST's primary goal in our statutorily mandated review of the Project Analysis is to ensure that the Project Analysis addresses the topics listed in the TIF statute and that risks to the City that might result from the implementation of the project are adequately disclosed. Our review of the Project Analysis found potential risks worth consideration. Most notably, after the issuance of bonds, the City will be obligated to pay any deficiency between tax increment revenues and debt service. The City anticipates issuing $29.6 million of tax-exempt bonds to finance the $30.8 million of Public Improvements at a true interest cost of 4.67%. In the Baseline Development Scenario, the City projects twelve years of annual deficiencies between tax increment revenues and debt service, averaging $1.0 million per year, resulting in an accumulated deficit of $12.1 million by 2036. The City expects to draw from general revenues and reserves to fund these annual shortfalls through 2036, and then reimburse itself over nine years from 2037-2045, when annual tax increment revenues are projected to exceed annual debt service. Certain other factors, including the following, could negatively impact tax increment revenues, potentially causing them to be inadequate to fully reimburse the City for funds advanced to pay debt service on the Bonds: (1) increases in the cost of the Public Improvements; (2) delayed or less than expected private development within the TIA; (3) lower -than -expected future assessed values within the TIA; and, (4) higher than expected borrowing cost for the bonds issued to finance the Public Improvements. Because of the project's potential cost to the City's general fund, it is essential that decision makers understand and accept the projects risks and potential long-term costs in comparison to its benefits. Statutory Role and Purpose of Review As enacted by the 2021 Washington State Legislature, section RCW 39.114.020(7)(b) requires that prior to the adoption of an ordinance authorizing the creation of a TIA, the local government proposing the TIA must provide a project analysis to OST for review. OST must complete the review within 90 days of receipt of the project analysis. Upon completing the review, OST must promptly provide to the local government any comments regarding suggested revisions or enhancements to the project analysis that OST deems appropriate. OST received the City's Project Analysis (dated July 18, 2023) on July 19, 2023. Ordinance No. 24- Page 15 of 27 Project Team Jurisdiction: City of Federal Way Project Title: City Center TIA City of Federal Way: Steve Groom, Finance Director Proposed Tax Increment Area PAGE 3 OF 14 County: King County Development Areas: The TIA boundary includes 215 acres and is generally bordered by 1-5 to the east, South 312th Street to the north, Highway 99 to the west, and South 330th Street to the south. Consultants: Tiberius Solutions LLC Nick Popenuk, Principal PFM Financial Advisors LLC Duncan Brown, Director Matt Schoenfeld, Sr. Managing Director Foster Garvey PC Bill Tonkin Federal Way's TIA will include 215 acres and is generally bordered by 1-5 to the east, South 3121h Street to the north, Highway 99 to the west, and South 3301h Street to the south. The City's downtown, or "City Center," does not currently present an identifiable sense of an urban center. To improve this, the City is taking steps to transform its City Center into a walkable downtown and destination for the community. The City built the Performing Arts & Entertainment Center and the Town Square Park as initial cornerstone elements aimed at defining the City Center neighborhood. A Sound Transit light rail station opening in 2026 will allow residents, employees, and visitors greater transit access to/from the City Center. Figure 1 below shows the boundary map for the TIA. Ordinance No. 24- Page 16 of 27 In tax year 2023, the 58 tax lots within the TIA had total taxable assessed value of approximately $195.8 million, compared to a total market value of $267.3 million. All parcels in the TIA are zoned City Center Core, City Center -Frame, Community Business, or Multi - Family Residential with respective 53%, 14%, 4% and 29% shares of the total 215 acres. Of the $195.8 million of total taxable assessed value, 62% is from the City Center Core parcels, 15% is from the City Center -Frame parcels, 2% is from the Community Business parcels and 21% from the Multi -Family Residential parcel. PAGE 4 OF 14 Figure 1- Map of the City Center TIA �y� -• r City of Federal Way �• ' Tax Increment Area gems �� w' • [ Tax Irtcrement Area Parcels soo o soo n �.I j L There are 17 taxing districts whose 7 ___L�- property tax levy would be directly impacted by TIA. These districts are: (1) County -wide regular levy (non- 7 voted), (2) AFIS (Fingerprint ID) Lid f� Lift, (3) Parks Lid Lift, (4) Human - Srvs/Vets Lid Lift, (5) Children/Family Justice Ctr. Lid Lift, -i + (6) Best Start for Kids Lid Lift, (7) Radio Communications Lid Lift, (8) County -wide Transport levy, (9) County Cons. Futures, (10) County Source: City of Federo+ way Flood Zone, (11) County Ferry District, (12) Port General Fund, (13) EMS (voted), (14) Sound Transit, (15) City General Fund, (16) Library General Fund and (17) Fire 39 General Fund. The levy rate for each of these jurisdictions will be applied to the increased assessed valuation within the TIA and remitted to the City to pay debt service on the bonds. Project Description Public Improvements within the TIA The Project Analysis identifies numerous public improvement projects related to public parking, recreation, mobility, community building, public safety, and placemaking which are estimated to cost between $72 million and $170 million in total (2023 dollars). The City plans to fund these projects directly with tax increment revenues collected over time or in the near -term from the issuance of bonds to be repaid with tax increment revenues. The City specifically identified a civic plaza estimated to cost $6.0 million and a public parking garage estimated to cost $30.0 million as two high -priority projects requiring funding early in the life of the TIA Ordinance No. 24- - Page 17 of 27 PAGE 5 OF 14 to facilitate the Phase 1 development of the One Trent project (an apartment and condominium development).. The City's Project Analysis assumes One Trent will pay the City $10.0 million to acquire the City -owned Town Center property located within the TIA, with $4.8 million of the $10.0 million being used to repay an interfund loan on the property. The net funding requirement for these two public improvements of $30.8 million would be financed from the City's issuance of Bonds in late 2024. Private Development Within the TIA There are currently no projects in the TIA under construction or with approved permits for construction. The City -owned property within the boundary is anticipated to be the site best situated for new private construction. The City is negotiating an agreement with One Trent, a Seattle -based real estate developer, for the execution of four -phase development project on 10.6 acres of the TIA to construct apartments and condominiums with an expected taxable assessed value of $472.5 million in 2023 dollars and $923.7 million in nominal dollars. Table 1, as prepared by the City, shows the expected phasing of the One Trent Development Plan from 2027 through 2032. The City's tax increment revenue projections anticipate that One Trent will apply for the City's Multifamily Tax Exemption (METE) exempting new construction projects located in designated areas with at least 16 multifamily units from property taxes for an eight -year period. For phases 1, 2, and 3 of the development, over 95% of total taxable value is assumed to be eligible for the MFTE exemption, with phase 4 assumed to be not MFTE eligible. Table i — One Trent Development Plan (in $ 2023) Taxable Value of Development Completion Development MFTE-Eligible Non MFTE- Phase Type Year (2023 $) Value Eligible Value Phase 1 Apartments 2027 $ 179,827,337 $ 172,312,858 $ 7,514,479 Phase 2 Apartments 2028 $ 110,900,540 $ 107,920,895 $ 2,979,645 Phase 3 Apartments 2030 $ 118,393,420 $ 115,507,471 $ 2,885,949 Phase 4 Condos 2032 $ 63,355,171 $ - $ 63,355,171 Total $ 472,476,468 $ 395,741,224 $ 76,735,244 Source: City of Federal Way A market analysis identified speculative development opportunities for properties located in the TIA but not associated with One Trent. These potential developments are expected to occur in the TIA after construction begins on One Trent and the bond -financed civic plaza and public parking garage. Of the 9.4 million square feet of potentially developable properties in the TIA, the market analysis estimated 17% would experience new development over the 25-year forecast period, resulting in a total of 5,300 new housing units with $1.6 billion in speculative new taxable assessed value (2023 dollars). The analysis assumed that 80% of new value would be multifamily properties, with 100% of this value eligible for the 8-year MFTE, reducing the taxable assessed value from $1.6 billion to $1.2 billion. Table 2, as prepared by the City, forecasts the baseline scenario of private development projected to occur in the TIA both from One Trent and speculative development. Ordinance No. 24- Page 18 of 27 PAGE 6 OF 14 Table 2 — Projected Increased Real Property in the TIA (in $ 2023) Baseline Development Scenario Year on OneTrent Speculative Tax Rolll Development Development 2028 S $ 14, 819, 826 2029 S 7,514,479 $ 14, 819, 826 2030 S 2,979,645 $ 14,819,826 2031 S - $ 14,819,826 2032 S 2,885,949 $ 14,819,826 2033 S - $ 14,819,826 2034 S 63,355,171 $ 14,819,826 2035 S - $ 14, 819, 826 2036 S - $ 74,099,129 2037 $ 172,312,858 $ 74,099,129 2038 S 107,920, 895 $ 74, 099,129 2039 S $ 74, 099,129 2040 $ 115,507,471 $ 74,099,129 2041 S - $ 74, 099,129 2042 $ $ 74, 099,129 2043 S $ 74, 099,129 2044 S $ 74, 099,129 2045 S $ 74,099,129 2046 S $ 74, 099,129 2047 S $ 74, 099,129 2048 S $ 74,099,129 2049 S $ 74, 099,129 Total $ 472,476,468 $ 1,155,946,409 Source: City of Federal Way In its Project Analysis, the City prepared an Alternate Development Scenario which retains the anticipated taxable value of the One Trent project but excludes all speculative development. In the Alternate Development Scenario, the City issues bonds only to finance the $6.0 million cost of the civic plaza, not the $24.8 million cost of the public parking garage, as existing surface parking capacity is deemed adequate to support the One Trent development. Assessed Value of the TIA The assessed valuation of the TIA for the 2023 tax year is approximately $195.8 million, below both statutory limits of $200 million in assessed valuation and 20% of the City's total assessed valuation of $17.3 billion ($3.5 billion). The TIA's 2023 assessed value represents 1.1% of the City's total assessed valuation. The magnitude and timing of real property development in the TIA will drive growth in incremental assessed value and therefore tax increment revenues. For the two development scenarios provided by the City, the incremental taxable assessed value of the TIA is estimated by assigning market -based improvement prices reflecting the land use, size of the proposed development and the City's Multifamily Tax Exemption. The City assumed the TIA base value and the assessed values of newly developed properties both increase by 5.1% annually. This assumption uses long-term historical trends for per -capita personal income growth for King County as the basis for forecasting appreciation of existing assessed Ordinance No. 24- Page 19 of 27 PAGE 7 OF 14 values and employs forecasts of population growth as the basis for projecting the increase in assessed value from new construction. Tax Increment Revenue Projections The TIA is expected to take effect on June 1, 2024, and 2025 will be the first year that the TIA will receive tax increment revenues. The term of the TIA is assumed at 25 years (the maximum allowed) with 2049 as the final year the TIA will receive tax increment revenues. The City estimated the 2024 tax increment base assessed value at $205.8 million and prepared the Baseline Development Scenario with $6.2 billion of additional assessed value added to the TIA between 2025 and 2049 through new construction and appreciation. Under the Baseline Development Scenario, $68.9 million of tax increment revenues are projected to be collected over the 25-year term of the TIA. See Table 3 — Tax Allocation Revenues of the TIA (Baseline Development Scenario). Table 3 —Tax Allocation Revenues of the TIA (Nominal $) Baseline Development Scenario Tax Assessed Value Tax Allocation Year Total Base Value Increment Levy Rate Revenues 2023 $ 195,802,900 $ - $ $ $ 2024 $ 205,788,848 $ 205,788,848 $ $ $ 2025 $ 216,284,079 $ 205,788,848 $ 10,495,231 $ 3.290400 $ 34,533 2026 $ 227,314,567 $205,788,848 $ 21,525,719 $3.012200 $ 64,839 2027 $ 238,907,610 $205,788,848 $ 33,118,762 $2.895700 $ 95,901 2028 $ 269,174,210 $205,788,848 $ 63,385,362 $2.651100 $ 168,039 2029 $ 311,542,953 $205,788,848 $ 105,754,105 $2.548600 $ 269,522 2030 $ 351,421,265 $205,788,848 $ 145,632,417 $2.450100 $ 356,808 2031 $ 390,336,150 $205,788,848 $ 184,547,302 $2.355300 $ 434,672 2032 $ 436,602,762 $205,788,848 $ 230,813,914 $2.264200 $ 522,608 2033 $ 482,057,730 $205,788,848 $ 276,268,882 $2.176600 $ 601,321 2034 $ 635,199,468 $205,788,848 $ 429,410,620 $2.092300 $ 898,476 2035 $ 693,208,380 $205,788,848 $ 487,419,532 $2.011500 $ 980,454 2036 $ 863,162,204 $205,788,848 $ 657,373,356 $ 1.933700 $ 1,271,146 2037 $ 1,377,615,782 $205,788,848 $ 1,171,826,934 $ 1.859000 $ 2,178,386 2038 $ 1,813,096,405 $ 205,788,848 $ 1,607,307,557 $ 1.787500 $ 2,873,039 2039 $ 2,061,826,488 $205,788,848 $ 1,856,037,640 $ 1.718600 $ 3,189,718 2040 $ 2,587,219,174 $205,788,848 $ 2,381,430,326 $ 1.652100 $ 3,934,363 2041 $ 2,891,774,698 $205,788,848 $ 2,685,985,850 $ 1.588400 $ 4,266,440 2042 $ 3, 220, 665, 528 $ 205, 788, 848 $ 3, 014, 876, 680 $ 1.527000 $ 4,603,647 2043 $ 3,575,581,717 $205,788,848 $ 3,369,792,869 $ 1.467900 $ 4,946,590 2044 $ 3,958,322,406 $205,788,848 $ 3,752,533,558 $ 1.411100 $ 5,295,382 2045 $ 4,370,802,557 $205,788,848 $ 4,165,013,709 $ 1.356600 $ 5,650,136 2046 $ 4,815,060,087 $205,788,848 $ 4,609,271,239 $ 1.304100 $ 6,010,966 2047 $ 5,293,263,427 $205,788,848 $ 5,087,474,579 $ 1.253700 $ 6,377,987 2048 $ 5,807,719,537 $205,788,848 $ 5,601,930,689 $ 1.205200 $ 6,751,314 2049 $ 6,360,882,392 $205,788,848 $ 6,155,093,544 $ 1.158500 $ 7,130,790 Total $ 68,907,079 Source: City of Federal Way As noted above, the City prepared an Alternate Development Scenario which retains the anticipated taxable value of the One Trent development but excludes all speculative development. With the Alternate Ordinance No. 24- Page 20 of 27 PAGE 8 OF 14 Development Scenario, $2.2 billion of assessed value is added to the TIA between 2025 and 2049 through new construction and appreciation. Under the Alternate Development Scenario, $30.9 million of tax increment revenues are projected to be collected overthe TIA term. See Table 4—Tax Allocation Revenues of the TIA (Alternate Development Scenario). Table 4—Tax Allocation Revenues of the TIA (Nominal $) Alternate Development Scenario Tax Assessed Value Tax Allocation Year Total Base Value Increment Levy Rate Revenues 2023 $ 195,802,900 $ 3.730590 $ 2024 $ 205,788,848 $ 205,788,848 S 3.487226 $ - 2025 S 216,284,079 $ 205,788,848 S 10,495,231 S 3.290391 $ 34,533 2026 $ 227,314,567 $205,788,848 S 21,525,719 S 3.012184 S 64,839 2027 $ 238,907,610 $ 205,788,848 S 33,118,762 S 2.895675 $ 95,901 2028 $ 251,091,898 $205,788,848 $ 45,303,050 $ 2.651069 $ 120,102 2029 $ 273,533,933 $ 205,788,848 $ 67,745,085 $ 2.548528 $ 172,650 2030 $ 291,500,045 $ 205,788,848 S 85,711,197 S 2.449975 $ 209,990 2031 S 306,366,547 S 205,788,848 S 100,577,099 S 2.355220 $ 236,883 2032 $ 326,287,697 $ 205,788,848 S 120,498,849 $ 2.264036 $ 272,814 2033 $ 342,928,370 S 205,788,848 S 137,139,522 S 2.176389 $ 298,469 2034 $ 464,603,684 S20.5,788,848 S 258,814,836 $ 2.092129 $ 541,474 2035 $ 488,298,472 $ 205,788,848 S 282,509,624 $ 2.011276 $ 568,205 2036 $ 513,201,694 S205,788,848 S 307,412,846 S 1.933408 S 594,354 2037 5 868,342,479 5205,788,848 S 662,553,631 $ 1.858555 S 1,231,392 2038 $1,129,170,653 S205,788,848 S 923,381,80.5 S 1.786943 $ 1,650,030 2039 $1,186,758,356 S205,788,848 S 980,969,508 S 1.717900 $ 1,685,207 2040 $ 1,503,291,030 S205,788,848 S 1,297,502,182 S 1.651328 $ 2,142,601 2041 $1,579,958,873 S205,788,848 S1,374,170,025 51.587535 $ 2,181,543 2042 $ 1,660,536,776 $205,788,848 S 1,454,747,928 S 1.526015 $ 2,219,967 2043 $1,745,224,151 S205,788,848 S1,539,435,303 S 1.466879 $ 2,258,165 2044 S 1,834,230,583 S 205,788,848 S 1,628,441,735 S 1.410034 $ 2,296,158 2045 5 1,927,776,343 S 205,788,848 S 1,721,987,495 S 1.355392 $ 2,333,968 2046 S2,026,092,936 S205,788,848 S1,820,304,088 $ 1.302868 S 2,371,615 2047 $2,129,423,675 S205,788,848 S1,923,634,827 S 1.252379 S 2,409,119 2048 $ 2,238,024,283 S 205,788,848 S 2,032,235,435 S 1.203846 $ 2,446,499 2049 S 2,352,163,521 S 205,788,848 S 2.146.374.673 S 1.157151 S 2,483.679 Total $ 30,920,161 Source: City of Federal Way Under the TIF Statute, only certain regular tax levies are available to the TIA. The taxes applied with regular levies must conform with the constitutional 1% limit as well as the $5.90 aggregate limits. Both parts of the State School levy, local school district excess levies, voted bond levies, and levies of port districts for bond payments are excluded from the TIA levy rate. The TIA's annual levy rate may change from one year to the next based on factors including future incremental assessed value of the TIA, future assessed values of the taxing districts, and relevant levy limits. For the two development scenarios, the City's analysis calculated the levy rate for each of these jurisdictions and applied the levy rates to the incremental assessed valuation within the TIA. The City created a multi -year cash flow model to estimate the annual tax increment revenues for the two development scenarios; Figure 2 below provides a visual comparison. Collection of tax increment Ordinance No. 24- Page 21 of 27 PAGE 9 of 14 revenues is projected for the 2025-2049 period, with total revenues for the Baseline Development and Alternate Development scenarios at $68.9 million and $30.9 million, respectively. The total tax increment revenues of the Alternate Development Scenario are equivalent to 45% of the total for the Baseline Development Scenario. Figure 2 — Projected Tax Increment Revenues Baseline and Alternate Development Scenarios a Baseline Development Scenario . Alternate Development Scenario 5,000 4.000 3,000 z000 1,000 ■L L 2025 2026 2027 2028 2029 2030 2031 2032 2033 203, 2035 2036 2037 2038 2039 2040 2041 2042 Z043 2044 2045 2046 2047 2048 2049 Source: Cray of Federal Way Financing Plan for Public Improvements As stated in the Project Analysis, because of their general obligation pledge, the City will be required to pay the full debt service due on the Bonds from available resources, regardless of the amount of tax increment revenues generated within the TIA. The City acknowledged that tax increment revenues early in the life of the TIA are projected to be insufficient to fully cover debt service payments in both development scenarios. In the Baseline Development Scenario, the City anticipates issuing $29.6 million of tax-exempt bonds in December 2024 to finance the $30.8 million of Public Improvements. The City's structure for the bonds assumes interest rates as of July 12, 2023, plus a 0.50% cushion, resulting in a true interest cost of 4.67%. In this scenario, total principal and interest is projected to be $62.0 million. The City plans to structure its bonds with interest -only payments from 2025 through 2039 to better align debt service payments with anticipated tax increment revenues, and to minimize the amount of general fund resources that the City will need to use to pay debt service in full each year. From 2040 through 2049, annual debt service payments are projected to escalate from $2.4 million to $5.6 million. In the Baseline Development Scenario, the City projects twelve years of annual deficiencies between tax increment revenues and debt service, averaging $1.0 million per year, resulting in an accumulated deficit Ordinance No. 24- Page 22 of 27 PAGE 10 OF 14 of $12.1 million by 2036. The City expects to draw from general revenues and reserves to fund these annual shortfalls through 2036, then reimburse itself over nine years from 2037-2045, when annual tax increment revenues are projected to exceed annual debt service by $6.9 million. The City indicated it may apply the $6.9 million surplus to fund additional public improvement projects within the TIA. Regarding the City's projected annual shortages between tax increment revenues and debt service costs, the Project Analysis notes: (1) the City maintains reserve fund balances in 14 funds in addition to its general fund; (2) the City's current fund balance policy requires transferring the subsequent year's debt service payment into the debt service fund during the current year; and (3) the City has a separate Strategic Reserve Fund of $3 million to accommodate unexpected operational changes, legislative impacts, or other economic events affecting the City's operations which could not have been reasonably anticipated at the time of budget preparation. In the Alternate Development Scenario, the City reduces its bond issuance to $6.0 million to finance the cost of the civic plaza (roughly 19.5% of the $30.8 million), excluding the $24.8 million cost of the public parking garage. This approach would allow the City to retain flexibility to adjust the amount of debt to better reflect the amount of actual development during the first few years of the TIA. In our cash flow analysis, we applied the 19.5% share to the Baseline Development Scenario's $62.0 million in total debt service, maintaining the same amortization structure as the larger bond issue. The total amount of principal and interest due under this scenario totals $12.1 million to finance the $6.0 million in civic plaza improvements. In the Alternate Development Scenario, the City projects eight years of insufficient tax increment revenues compared to debt service, averaging $138,000 per year, resulting in an accumulated deficit of $1.1 million by 2032. The City expects to cover these annual shortfalls with City general revenues and reserves through 2032, then reimburse itself over five years from 2033-2037 as total tax increment revenues are projected to exceed total debt service by $18.8 million. Ordinance No. 24- - Page 23 of27 PAGE 1 1 OF 14 Debt Capacity Based on the City's total 2023 assessed value of $17,270,222,086, the City has $259,053,331 in total non - voted debt capacity (1.5%of 2023 AV). The City currently has $27,983,000 in outstanding non -voted debt, leaving sufficient non -voted debt capacity of $231,070,331 before issuing the $29,630,000 of bonds described in the Baseline Development Scenario in December 2024. See Table 5 — Debt Capacity in 2023. Table 5 — Debt Capacity in 2023 2023 Assessed Valuation $17,270,222,086 Non -Voted Debt Capacity (1.5% of AV) 259,053,331 Less: Outstanding Non -Voted Debt (27,983,000) Remaining Non -Voted Debt Capacity 231,070,331 Less: Financing Proposed (29,630,000) Projected Remaining Non -Voted Capacity $201,440,331 Projected Remaining Non -Voted Capacity % 77.8% Source: City of Federal Way Projected Debt Service Coverage Tables 6 and 7 below summarize the total tax increment revenues, revenue shortfalls and debt service coverage for the two development scenarios. In the Baseline Development Scenario, the City would be required to fund a portion of the annual debt service payments from general revenues or reserves due to insufficient tax increment revenue from 2025 through 2036. Full reimbursement of the $12.1 million cumulative shortfall is projected by 2045. ■ In the Alternate Development Scenario, the City would be required to fund a portion of the annual debt service payments from 2025 through 2032, with a cumulative shortfall of $1.1 million, and full reimbursement anticipated by 2037. Ordinance No. 24- Page 24 of 27 Development Scenario Baseline Alternate Table 6 — Summary of Tax Increment Revenue Shortfalls and Average Total Projected Total Projected Debt Service Coverage Projected Total Surplus/ First Year Tax Year That Tax Increment Revenues Increment Revenues Tax Increment Debt Service Cumulative (Shortfall) Exceed TIF Debt Fully Reimburse Debt Revenue ($MMs) Shortfall ($MMs) Service Service Shortfalls ($MMs)1 ($MMs) 2037 2045 $68.907 $62.016 ($12.080) $6.892 ($1.101) $18.839 2033 2037 $30.920 $12.081 1. Projected over the term of repayment of the Bonds, 2025-2049 Table 7 — Annual Tax Increment Revenue Shortfalls and Average Debt Service Coverage PAGE 12 OF 14 r\ N O h Aggregate Debt Servicetj Coverage Ratio 1.11x 2.56x Baseline Development Scenario (SMsJ Alternate Development Scenario (SMs) Year Tax Increment Revenues 0 Debt Service on Bonds (Shortfall) 0 Curnlative Surplus (Shortfall) 0 Surplus 0 D. Service Coverage -- 2024 0 0 0 0 2025 35 1,482 (1,447) (1,447) 0.02x 35 289 (254) (254) 0.12x 2026 65 1,482 (1,417) (2,864) 0.04x 65 289 (224) (478) 0.22x 2027 96 1,482 (1,386) (4,249) 0.06x 96 289 (193) (671) 0.33x 2028 168 1,482 (1,313) (5,563) 0.11x 120 289 (169) (839) 0.42x 2029 270 1,482 (1,212) (6,775) 0.18x 173 289 (116) (955) 0.60x 2030 357 1,482 (1,125) (7,899) 0.24x 210 289 (79) (1,034) 0.73x 2031 435 1,482 (1,047) (8,946) 0.29x 237 289 (52) (1,085) 0.82x 2032 523 1,482 (959) (9,905) 0.35x 273 289 (16) (1,101) 0.95x 2033 601 1,482 (880) (10,785) 0.41x 298 289 10 (1,091) 1.03x 2034 898 1,482 (583) (11,368) 0.61x 541 289 253 (838) 1.88x 2035 980 1,482 (501) (11,869) 0.66x 568 289 280 (559) 1.97x 2036 1,271 1,482 (210) (12,080) 0.86x 594 289 306 (253) 2.06x 2037 2,178 1,482 697 (11,383) 1.47x 1,231 289 943 690 4.27x 2038 2,873 1,482 1,392 (9,991) 1.94x 1,650 289 1,361 2,051 5.72x 2039 3,190 1,482 1,708 (8,283) 2.15x 1,685 289 1,397 3,448 5.84x 2040 3,934 2,417 1,518 (6,765) 1.63x 2,143 471 1,672 5,120 4.55x 2041 4,266 2,750 1,517 (5,248) 1.55x 2,182 536 1,646 6,766 4.07x 2042 4,604 3,089 1,515 (3,734) 1.49x 2,220 602 1,618 8,384 3.69x 2043 4,947 3,428 1,519 (2,215) 1.44x 2,258 668 1,590 9,974 3.38x 2044 5,295 3,781 1,515 (701) 1.40x 2,296 737 1,560 11,534 3.12x 2045 5,650 4,131 1,520 819 1.37x 2,334 805 1,529 13,063 2.90x 2046 6,011 4,491 1,520 2,339 1.34x 2,372 875 1,497 14,560 2.71x 2047 6,378 4,861 1,517 3,855 1.31x 2,409 947 1,462 16,022 2.54x 2048 6,751 5,234 1,518 5,373 1.29x 2,446 1,020 1,427 17,449 2.40x 2049 7,131 5,612 1.519 6.892 1.27x 1 2,484 1,093 1;390 18.839 227x Total 68,907 62.016 6.892 1 30.920 12.081 18.839 M PAGE 13 OF 14 Key Risks to the City From our review of the Project Analysis, it appears that the anticipated Public Improvements and economic development will provide significant benefit to the City. Nonetheless, the financial plan comes with certain risks and costs to the City, primarily related to the projected annual tax increment revenues being insufficient to fully pay the debt service due on the bonds the City plans to issue to finance a portion of the Public Improvements, especially in the early years of the project. During years with revenue shortfalls, the City will be required to pay any difference between the debt service due and tax increment revenues collected using general City resources. While the City plans to reimburse itself for debt service payments made from general City revenues and reserves, it is important for decision makers to be aware of the potential magnitude and timing of such payments and reimbursements. Since the TIF legislation limits the ability to collect tax increment revenues to a period of not more than 25 years, delays could reduce the City's ability to fully reimburse itself from tax increment revenues. Additional factors that could impact the amount of tax increment revenues collected are described below: Escalation of Praiect Costs: With the Public Improvements projected to be completed over a number of years, inflation could have a significant impact on the final cost. The City did not disclose if a construction cost inflator was included in its cost range for the Public Improvements. Economic Conditions: Growth in the TIA's assessed value could be negatively impacted by a downturn in the economy. A variety of economic factors could negatively impact the timeline and ultimate demand for development, jeopardizing the rate and scale of private development, potentially reducing tax increment revenues. Permits: Unforeseen delays in permits could negatively impact the construction of private developments within the TIA. Such delays could negatively impact the timing and/or amount of tax increment revenues generated by the TIA. Construction Delays: Any delay in the construction timelines of the private development projects could reduce the amount of tax increment revenues produced by the TIA. Similarly, any delay by the City in completing the planned Public Improvements could delay private developers' abilities to complete their private developments, potentially reducing the amount of tax increment revenues. Assessed Valuations: As private developments are completed, tax increment revenues may be lower than projected if the assessed values of the projects are lower than expected or take more time to be reflected on the county's tax rolls than expected. Interest Rate Risk: The City is exposed to interest rate risk until its bonds are sold. The Project Analysis assumes interest rates as of July 12 plus a 0.50% cushion, resulting in a true interest cost of 4.67%. However, between July 12 and September 25, tax-exempt interest rates rose by an average of 0.60% in the 2025-2049 maturity range expected for repayment of the bonds. The current borrowing cost for the bonds is higher than the 4.67% true interest cost assumed in the Project Analysis. Risk Summary: The general impact to the City from any of the risk factors outlined above could be lower than projected tax increment revenues and a greater than expected reliance on the City's general revenues and reserves to pay the debt service due on the bonds issued to fund the Public Improvements in the TIA. If tax increment revenues are lower than expected, it will force the City to apply more of its available funds towards repayment of the bonds, reducing the City's ability to allocate those funds to other projects or operations. Ordinance No. 24- — Page 26 of 27 PAGE 14 OF 14 Recommendations To help ensure the financial success of the project and to minimize unanticipated costs, we recommend the City consider the following measures: 1. Prior to approving the TIA, we recommend that the City discuss and establish a policy regarding how much debt service it is willing to pay from City general revenues and reserves on an annual basis to offset years of tax increment revenue shortfalls. 2. We recommend that the City conservatively budget for and set funds aside to cover any projected tax increment revenue shortfalls. 3. Prior to approving the TIA, we recommend that the City coordinate closely with other taxing districts impacted by the project, and the County Assessor's Office, to ensure that all parties have an accurate understanding of how the TIA will impact them, and to provide sufficient time to work through any concerns. 4. As the project moves forward, we recommend that the City coordinate closely with the County Assessor's Office to help ensure that the tax increment revenue projections match the County's assessment process and are as accurate as possible. 5. The City's interest rate assumptions for its planned 2024 Bond issuance are below current tax- exempt interest rates. We recommend that the City consider using more conservative interest rate assumptions. 6. We recommend the City revisit public improvement cost projections frequently and utilize a publicly recognized inflation index to inform inflation projections. Thank you for the opportunity to review the City's Project Analysis. Based upon the information provided to date in connection with this project, this concludes our review. If there are material changes in the scope, timing, or cost of the project, please let us know. We wish the City all the best with the project. Respectfully, Mike Pellicciotti Washington State Treasurer Jason Richter Deputy Treasurer Ordinance No. 24- Page 27 of 27