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HomeMy WebLinkAboutCity Council Meeting - Council - Agenda - 05/05/2009 oWi i Ulty of Kent Ity 1 Agenda May 5, 2009 Mayor Suzette Cooke Debbie Raplee, Council President Councilmembers Elizabeth Albertson Ron Harmon Tim Clark Deborah Ranniger Jamie Danielson Les Thomas KENT WASHINGTON City Clerk's Office 440 • KENT CITY COUNCIL AGENDAS �� KENT May s, 2009 WASHINGTON Council Chambers MAYOR: Suzette Cooke COUNCILMEMBERS: Debbie Raplee, President Elizabeth Albertson Tim Clark Jamie Danielson Ron Harmon Deborah Ranniger Les Thomas ********************************************************************** COUNCIL WORKSHOP AGENDA Special Time 5:00 p.m. Item Description Speaker Time 1. Transportation Master Plan Funding- Larry Blanchard 80 minutes Transportation Impact Fee Review 2. Intergovernmental Issues Michelle Witham 10 minutes COUNCIL MEETING AGENDA 7:00 p.m. 1. CALL TO ORDER/FLAG SALUTE 2. ROLL CALL 3y CHANGES TO AGENDA A. FROM COUNCIL, ADMINISTRATION, OR STAFF B. FROM THE PUBLIC - Citizens may request that an item be added to the agenda at this time. Please stand or raise your hand to be recognized by the Mayor. J 4. PUBLIC COMMUNICATIONS A. Public Recognition B. Community Events C. Drinking Driver Task Force Poster Contest Awards P D. Letter Carrier's Food Drive Day Proclamation E. Washington State Dept. of Health "Friends of Water" Recognition F Employee of the Month ' G Neighborhood Council Update L gislative Update -I— t w L r\ 'L F I V Lt Pdaf� S. PUBLIC HEARINGS None 6. CONSENT CALENDAR A. Minutes of Previous Meeting - Approve B. Payment of Bills - Approve i (Continued) ■ COUNCIL MEETING AGENDA CONTINUED C. 2009 Group Health Cooperative Contract - Authorize D. ICMA Retirement Corporation Deferred Compensation Contract - Authorize E. South 2681h Street Right-of-Way Dedication Deed - Authorize F. Military Road Right-of-Way Dedication Deed - Authorize G. 2008 Community Development Block Grant Action Plan Amendment - Approve H. 2009 Community Development Block Grant Action Plan Amendment - ' Approve I. Habitat Conservation Plan (HCP) Contract Amendment - Authorize J. Limited Street License between the City and Electric Lightwave, LLC - Authorize K. West Fenwick Park Restroom Building/Park Improvements Project - cept as Complete Ca 7. OTHER BUSINESS A. Professional Consulting Services Contract with AMTEC for Tax-Exempt ,' Bonds and Notes i � Lake Meridian Outlet Project/Cascade Mobile Villa Associates Condemnation Ordinance C. Lake Meridian Outlet Project/Cascade Mobile Villa Associates Agreement for Acquisition of Environmental Easement 8. BIDS A. North Park Sanitary Sewer Rebuild Phase II 9. REPORTS FROM STANDING COMMITTEES, STAFF AND SPECIAL COMMITTEES 10. CONTINUED COMMUNICATIONS 11. EXECUTIVE SESSION AND AFTER EXECUTIVE SESSION A. Property Acquisition B. Pending Litigation 12. ADJOURNMENT NOTE: A copy of the full agenda packet is available for perusal in the City Clerk's Office and the Kent Library. The Agenda Summary page and complete packet are on the City of Kent web site at www.ci.kent.wa.us. An explanation of the agenda format is given on the back of this page. Any person requiring a disability accommodation should contact the City Clerk's Office in advance at (253) 856-5725. For TDD relay service call the Washington Telecommunications Relay Service at 1-800-833-6388. UA =s � o �a >,o r ao T•-Y4v roc E. v v 5., p ro--o ovovoa', V E ¢O_o �a3vo �cAo� o ° C. 09 vUU b y '-0 ,Eve vs avi W` -c ro °s T� 0 ccnww 0 OEcc_ tO = .0;3 EIi: Q, ov m > > 0 -E m v �-avi � ai iOQTE aEi v� E£ .o � ho'c �� Ooa .c mUL" c v aY • u„��:n c 0.� > °.T� 00 v2 o.0 ve. 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O O^ 2 LU c� a°T' WW. .. 3 ba-o V' p � .E mv �v� rz ooN;� m �n om a zro vE, uro dv u E .I Em.c Q m0 Q mV�'S vn'i cI COUNCIL WORKSHOP 1) TRANSPORTATION MASTER PLAN FUNDING - TRANSPORTATION IMPACT FEES 1 2) INTERGOVERNMENTAL ISSUES PUBLIC WORKS DEPARTMENT Larry R.Blanchard Public Works Director 220 4"'Avenue South Kent,WA 98032 Pax:253-856-6500 PHONE: 253-856-5500 Memorandum DATE: April 29, 2009 TO: Council President Debbie Raplee and Councilmembers THROUGH: Larry Blanchard, Public Works Director FROM: Cathy Mooney, Senior Transportation Planner CC: Steve Mullen, Transportation Engineering Manager RE: Transportation Impact Fee discussion at Workshop on May 5, 2009 At Workshop on May 5th we will continue our discussion regarding Transportation Impact Fees. Last month we looked at the level of Impact Fees that other South County cities are charging and compared those to some East County cities who have recently updated/increased their fees. In South County the current fees range from about $2,000 per trip to about $8,000 per peak hour trip. We also discussed some of the other new funding sources that are available in addition to a Transportation Impact Fee to bridge the gap between our funded program and our total program cost. One of those other funding sources was the Reciprocal Impact r-ee with King Bounty for growth which will happen in our Potential Annexation Area. It has been the experience of most cities that this is a bureaucratic headache and we would end up giving King County as much money as we would get in return. Another is the Business License Fee for Transportation. This one would be charged on the basis of employee count and would engage the business community in partnership to help identify those transportation improvements which benefit businesses. The money generated could be spent all or in-part on those business-friendly projects. The City could issue General Obligation Bonds and ask the voters to approve specific transportation improvement projects by taxing themselves for these improvements. This would require approval by 60% or more of the voters. City of Kent Public Works Department i The City has adopted both 0.25% real estate excise taxes ( E7) authorized by the state law. Half of the revenue Kent receives is dedicated to parks and recreation. The other half is not dedicated to any specific project or program. The City could possibly choose to dedicate a small portion of this unrestricted revenue to the transportation capital fund. In 2007 the state legislature passed a law authorizing a Vehicle License Fee. This is also known as a car-tab-fee. The City could impose a fee of $20 per vehicle without going to the voters. Any fee over $20 per vehicle license would require a vote. Generally, this revenue source has been seen as Maintenance and Operations or Preservation revenue source rather than a Capital Facilities funding source, but it could be used either way if a City chooses. Some questions have come up at staff level that may or may-not have reached Council level yet. Let me see if I can get to some of them up front. f It seems as if we're asking new development to Lay a disproportionate amount for our road system. Shouldn't existing users be paying for these roads? After all, everyone uses them. The project list reflects the growth in the transportation system that will be needed over the next 20+ years to meet the needs of the additional population and employment that forecasters tell us will be coming to Kent. We plug these numbers into our transportation model i and find out where our system breaks down. Once we have the projects needed to correct those deficiencies and their costs, we subtract out the amount of traffic on that road that can be attributed to existing users and to pass-through traffic. What is left is the number of trips that are caused by new users who are not here yet. The new growth within the City of Kent accounts for up to 38% of the capital needs. The rest of the capital costs must be paid for by existing users and other funding sources. I Some people saw the article in the paper and tried to apply the stated impact fee to their own development. They were thus alarmed at the high rate. Will this stop development in Kent? Unfortunately a newspaper article cannot explain the nuances of a complicated subject matter such as Transportation Impact Fees. Although the highest allowable fee is $14,934 per trip, even under that 100% schedule, the applications are different for each type of land use. For example, rates for residential land uses are expressed in dollars per dwelling unit, while commercial rates are expressed in dollars per square foot. These rates vary according to the number of trips each type of land use generates. It all depends upon the type of land use and how many new peak hour vehicle trips are generated. To answer the second part of the question, the experience in other cities, around the country, has been 'no', it does not stop development. In our case it would put us on a level playing field with our neighbors. It would also provide some predictability for developers such that they would know what transportation fee to expect before they submit their application. It also assures fairness and equity between developers of all sizes. Last, but not least, the impact fees help pay for the transportation network that attracts new development. If a developer constructs their half-street improvements and other City-directed street improvements such as a traffic sianal or drop lane (turn lane), does the developer get to deduct the cost of those improvements from the Transportation Impact Fee bill? Yes. Section 12.14.090 of our draft Transportation Impact Fee Ordinance allows for credits and spells out the details for how to obtain those credits. If a developer does not believe that his/her particular new development wil! generate as many trips as the Transportation Impact Fee sets, is there a method of appeal? Yes. The Ordinance allows for an independent fee calculation and an appeal through the office of the hearing examiner. (Section 12.14.070) What if we collect Transportation Impact Fees from a series of developments on the East and West hills but we have an opportunity to secure a grant for a Railroad Grade Separation project. Can we use money collected from other parts of the City as matching grant funds or as 'seed'money for a grant even though the project is in a different part of the City? Yes! This is one of the beauties of the Impact Fee system. It recognizes that vehicle trips use more of the system than just the road immediately adjacent to their development. Vehicle trips generally use the entire arterial system. Money that is collected via the Transportation Impact Fee is placed into one account and is accumulated until there is enough to put towards a project. It could any project that is on the eligible list. That means that you could spend as much or as little as needed for any project at a time as long as all of the projects on the list get built within the timeframe of the planning horizon. Attached are some data you requested at your last Workshop. The first one, titled Attachment A - Transportation Impact Fee Projects shows all of the streets capital projects which are eligible for transportation impact fees. The numbers match up with the project map which is also enclosed. The first column following the project description shows the total cost as it was reflected in the 2007 Six Year Transportation Improvement Program (TIP), the document upon which this fee was based. The next column shows the Impact Fee for each project at the highest eligible level. The next three columns show the equivalent amounts of the impact fee cost allocated for each project if we were to adopt the schedule at 67%, 50%, or 33% of the maximum eligible fee. Attachment B - Summary of Kent Impact Fee Options answers your question about keeping a separate accounting of the Railroad Grade Separation projects. This one itemizes the Railroad projects separately, shows their priority, and lumps all other street projects together. It shows how the impact fee revenues would change for each of the four impact fee rates (100%, 67%, 50%, 33%). The bottom line in the table also shows the amount of other funds that would be needed to cover the costs not paid for by impact fees. Attachment C - Impact Fee Schedule (Samples) shows some of the most common types of developments that occur in the City of Kent and the amount ` of the Transportation Impact Fee (TIF) for each—again at the maximum eligible (100 percent) level and at the 67, 50, and 33 percent levels. ` I Attachment D is the Trip Generation and Related Fees for Recent Developments. This spreadsheet lists some developments which occurred in our City over the last year and shows what they would have paid in a Transportation Impact Fee if our Ordinance had been in place at that time. Again, it shows the possible fees at four different levels. The last item in this package is a bar chart comparing transportation funding in seven cities near Kent. The information uses percentages rather than dollar j amounts because percentages are easy to compare among cities, but dollar amounts vary greatly because of different sizes of the cities. The cities are listed alphabetically on the left side of the chart (Auburn, Covington, Des Moines, Federal Way, Maple Valley, Renton, and SeaTac). Each city's section of the chart uses five bars to present five funding sources: local, mitigation, grants, other, and unfunded (see the legend at the right side of the chart). Each bar represents the percent of that City's transportation funds that come from each funding source. The total for each City always adds up to 100%. For example, Auburn is 100% funded by one source (local revenues) but Covington has a mix of 7% local, 38% mitigation, 23% grants, 23% other, and 8% unfunded. There are significant differences among the cities, so the legend box includes the weighted average of all seven cities. The "local" revenues include property taxes, REST, utility taxes, business license fees, parking tax, vehicle fuel taxes, and general fund. The "mitigation" I revenues include traffic impact fees, SEPA, and LIDS. We have the dollar amounts for each specific source for each City if Council wishes more details. Attachment A - Transportation Impact Fee Projects Attachment B - Summary of Kent Impact Fee Options Attachment C - Impact Fee Schedule (Sample) Attachment D - Trip Generation & Related Fees for Recent Developments Chart - Kent Area Cities' Transportation Funding Attachment A.Transportation Impact Fee Projects Option 1 Option 2 Option 3 Option 4 Project 00000 - W-10 MilitaryRoad Widening-S 272nd Street to S 240th Street $13,630,000 $2.382,305 $1,598,010 $1,191,153 $786,161 W 18 S 272nd Street Widening Phase II-Pacific Highway S to Military Road S 13,916,000 2,432,294 1,631,541 $1,216,147 $802,657 1-21 1-51 S 272nd Street Interchange Reconstruction-Phase I-Provide transit and HOV Direct Access between S 272nd Street and 1-5 42,330,000 7,398,605 4,962,858 $3,699,303 $2,441,640 1-17 Military Road S at Reith Road-Intersection Improvement 1,945,000 478,810 321,177 $239,405 $158,007 1-22 S 272nd Street&Military Road 1,540,000 269,167 160,653 $134,584 $88,825 1-9 S 240th Street&SR99 420,000 103,393 69,354 $51,697 $34,120 1-16 S 260th Street&SR99 1,180,000 290,486 194,853 $146,243 $95,860 W-19 132nd Avenue BE Widening-Phase I-BE 286th Street to Kent Kangley Road(SR 516 13,120,000 4,908,677 3,292,657 $2,454,338 $1,619,863 W 17 132nd Avenue BE Widening-Phase II-Kent Kangley Road(SR 516) Ito SE 248th Street 23,200,000 8,671,930 5,816,983 $4,335,965 $2,861,737 W 9 132nd Avenue SE Widening-Phase III-BE 248th Street to BE 236th Street 11,950,000 4,470,936 2,999,028 $2,235,468 $1,475,409 W-15 BE 256th Street Widening-Phase III-132nd Avenue BE to 148th Avenue BE 16,980,000 6,331,145 4,246,824 $3,165,573 $2,089,278 1-20 ISE 256th StamU132nd Ave SE Improvements 302,000 112,989 75,791 $56,495 $37,286 1-23 Kent-Kangley Road&132nd Avenue BE 1,360,000 508,826 341,312 $254,4131 $167,913 W-5 116th Avenue BE(BE 208th Street to BE 256th St)widen to 5lanes- with bicycle lanes 17,730,0001 5,429,931 3,642,306 $2,714,965 $1,791,877 1-11 BE 240th Street&SR 515 1,650,000 505,323 336,962 $252,662 $166,757 W 13 SE 248th Street Improvements-116th Avenue BE to 132nd Avenue SE 5,640,000 2,910,967 1,952,627 $1,455,483 $960,619 W 14 SE 256th Street Widening-Phase It-SR 516(Kent Kangley Road)to 116th Avenue BE 5,100,000 2,632,257 1,765,673 $1,316,129 $868,645 N-5 108th Avenue BE Extension-SE Kent Kangley Road(SR 516)to BE 2561h Street 2,500A00 1,290,322 865,526 $645,161 $425,806 1-18 ISE 256th Street&SR515-Benson 550,000 283,871 190,416 $141,935 $93,677 1-19 Kent-Kangley Road&108th Avenue SE 1,410,000 727,742 488,157 $363,871 $240,155 N-3 S 228th Street Corridor-Phase III/S 224th Street Extension-84th Avenue S to 104th Avenue SE Benson Road)(SR515) 24,983,000 3,349,434 2,246,743 $1,674,717 $1,106,313 N-1 BE 192nd Street(84th Avenue SE to 108th Avenue SE) 14,329,000 3,333,873 2,236,355 $1,666,936 $1,100,178 W-2 S 212th Street(SR 167 to 108th Avenue SE)-Widen to 5-6 lanes 6,046,000 1,448,235 971,452 $724,118 $477,918 1-7 S 212th Street&SR167 Southbound Ramp 400,000 95,814 64,271 $47,907 $31,619 k8 S 212th Street&SR 167 Northbound Ramp 220,000 52,698 35,349 $26,349 $17,396 1-3 S 196th Street&84th Avenue S 1,190,000 285,048 191,205 $142,524 $94,066 1-6 S 212th Street&84th Avenue S 1,710,000 809,268 542,843 $404,634 $267,059 N-2 72nd Avenue S Extension-S 200th Street to S 196th Street 1,015,000 379,140 254,321 $189,570 $126,116 W-1 80th Avenue S Widening-S 196th Street to S 188th St 1,323,000 443,898 297,759 $221,949 $146,486 1-5 S 212th Street&72nd Avenue S 330,000 123,267 82,686 $61,634 $40,678 1-2 S 196th Street&80th Avenue S 250,0001 93,384 62,641 $46,692 $30,817 W 12 W Meeker Street Widening-Phase I-64th Avenue S to the Green River Bridge 5,960,000 3,118,363 2,091,745 $1,559,181 $1,029,060 1-12 Smart Growth Initiative-Add an EBL turn pocket at Smith Street/Lincoln Avenue and at Willis Street/2nd Avenue S 1,990,500 1,041,460 698,594 $520,730 $343,682 Interurban Trail Crossings Signal Interconnect-W Meeker Street and 1-13 W Smith Street 342,000 178,940 120,030 $89,470 $59,050 1-15 Meeker Street&Washington Ave 780,000 408,108 273,752 $204,054 $134,676 1-14 Smith Street&Central Avenue 20,000 10,464 7,019 $5,232 $3,453 W-3 SR 181/West Valley Highway/Washington Avenue Widening-Meeker Street north to approximately the 218th block 16,150,000 7,218,982 4,842,370 $3,609,491 $2,382,264 W 11 W Meeker Street Widening-Phase II-SR 516 to the east side of the Green River,including a new bride 70,000,900 41,574,830 27,887,688 $20,787,415 $13,719,694 R-3 S 288th Street/Union Pacific Railroad Grade Separation-Grade Separation crossing at Union Pacific Railroad 24,200,000 10,494266 '7,039,376 $5,247,133 $3463,108 R-5 Willis Street(SR 516)/Union Pacific Railroad Grade Separation- Grade Separation Crossing at Union Pacific Railroad UPRR 26,500 000 11,491 655 7,708,406 $5,745,827 $3,792,246 Willis Street(SR 516)/Burlington Northern Santa Fe Railroad Grade R-6 Separation-Grade Separation Crossings at Burlington Northern Sant Fe Railroad 22600000 9,800,430 6,573,962 $4,900,215 $3,234,142 R 1 S 212th StreellUnion Pacific Railroad Grade Separation-Grade Separation Crossing at Union Pacific Railroad 33000,000 14,310363 9,599,148 $7,155,181 $4,722,420 S 212th Street)Burlington Northern Santa Fe Railroad Grade R-2 Separation-Grade Separation Crossings at Burlington Northern Sant - Fe Railroad 33,000,0001 14,310,363 9,599,148 $7,155,181 $4,722,420 Total Cost 1 $462,791,5001 $176,512,259 $118,401,417 $88,256,129 $58,249,045 Cost per Trip End $14,934 $10,000 $7,467 $4,928 I ; Attachment B. Summary of Kent Impact Fee Options Option 1 Option 2 Option 3 Option 4 . . 0' Maximum Maximum Maximum Maximum Total Project Eligible for Eligible for Eligible for Eligible for Cost I .. .. pact Fees Impact Fees Type of Projects Grade Separation 1 3231 60 40 301 20 All Other 139 116 78 58 38 Total 462 176 118 88 58 Other Funds Needed 286 344 374 404 c I l I t Attachment C. Impact Fee Schedule (Sample) Option 1 Option 2 Option 3 Option 4 ImpactImpact Fee Impact Fee Impact Cost Per Trip End $14,9341 $10,0001 $7,4671 $4,928 Residential Single Family Detached dwelling 1 $13,5371 $9,0651 $6,7691 $4,467 Multi-Family dwelling $8,785 $5,883 $4,393 $2,899 Commercial- Restaurant Restaurant sfJGFA $78.021 $52,241 $39.011 $25.75 Commercial- Reta! opping Shopping Center I sf/GLA 1 $21.791 $14.591 $10.901 $7.19 Commercial- Office General Office sf/GFA 1 $26.191 $17.541 $13.101 $8.65 Industrial Warehousing sf/GFA 1 $6.251 $4.191 T3.131 $2.07 Notes: sf/GFA=Square feet Gross Floor Area;sf/GLA=Square Feet Gross Leasable Area W 6 I O E C N t M g'. id O T i G O G O T r si 1 `p M a { W m u ay a z m m ato O f v o f m N N a CL ram. 0 0 0 � Y„ om m N C LL ti I, 0 t Y � W W ( W o ia. E� s F- 1il � Q 3 Yn E { c qiY Iv Y N .k W E n s E{ ` U. w .r NI 1-off i �. fi F d w Z N �i� T itu N i' t (� E 6 m 4 V INI, OKA N 1,1Iy v 2 i Z�(I'�) �c �KII cmii),a ll Sgj��'1II1 i1� vwp t4i�ttttj,d LL C C 'ao a G w9 y, v17A cM E _ o w W Q m c i 1 N � ly N m ci II II II II II N u ry C -O O N N � C 0 O _ O iv rir, r s v 1d str V IS f^6' IS W # ye O f A Al µf �t� d C a m r � � S iv t N } 4 i t P a o00 0 LL G 1 rCHANGES TO THE AGENDA rCitizens wishing to address the Council will, at this time, make known the subject of interest, so all may be properly heard. ' A) FROM COUNCIL, ADMINISTRATION, OR STAFF 1 B) FROM THE PUBLIC r r 1 r r r r r i r 1 r PUBLIC COMMUNICATIONS A) PUBLIC RECOGNITION B) COMMUNITY EVENTS C) DRINKING DRIVER TASK FORCE POSTER CONTEST AWARDS D) LETTER CARRIER'S FOOD DRIVE DAY PROCLAMATION E) WASHINGTON STATE DEPT. OF HEALTH "FRIENDS OF WATER" RECOGNITION F) EMPLOYEE OF THE MONTH G) NEIGHBORHOOD COUNCIL UPDATE H) LEGISLATIVE UPDATE PROCLAMATtON "Whereas, the NationaCAssociation of Letter Carriers (NAL0 wid sponsor their AnnuaC WALC Nationwide Food Drive on Saturday, May g, 2oog, and Xent Branch 2038 is joining in the effort to make a significant contribution to Xent Food Banks; and "Whereas, the Xent Branch 2o38 Letter Carriers are joining this food drive in an effort to make a major contribution to the food supply of CocaC foodbanks andto heCp feedthe hungry and those in need and Whereas, Xent residents are encouraged to Leave bags of nonperishable food items by their mail boxes before g:oo AN. on May g, 2009 for .Kent Letter Carriers to coCCect and distribute to CocaCFood Banks; and "Whereas, the City of Xent is proud to recognize the significant and important contributions of NALC Branch 2038; NOW TMERBFORB, 1, Suzette Cooke, .Mayor of Xent, do hereby procCaim the day of.May g, 2009 as LETTER CARRIER'S ,FOOD DRIVE DAY In the City of Xent, "Washington, andl urge residents to gather a bag or two Of nonperishable food items for your Letter Carrier to coCCect andparticipate in this nation-wide effort to heCp feed our hungry. in witness whereof, 1 have hereunto set my hand and caused the seaCof Xent to be affixed this 5th day of May 2009. *ue e, Mayor KE •NT WASHINGTON ' Kent City Council Meeting Date May 5. 2009 Item No. 6A - 6B CONSENT CALENDAR 6. City Council Action: Councilmember G t' moves, Councilmember seconds to approve Conseht Calendar Items A through�l�c- Discussion Action me 6A. ARProyaI of Minutes. Approval of the minutes of the regular Council meeting of April 21, 2009. 1 6B. Auuroval of Bills. Approval of payment of the bills received through March 31 and paid on March 31 after auditing by the Operations Committee on April 21, 2009. Approval of checks issued for vouchers: Date Check Numbers Amount 3/31/09 Wire Transfers 3657-3678 $2,764,781.45 3/31/09 Regular Checks 630619-630996 3,601,931.01 Void Checks 630754-630837 -61.13 Use Tax Payable 952.13 $6,367,603.46 ' Approval of payment of the bills received through April 15 and paid on April 15 after auditing by the Operations Committee on April 21, 2009. Approval of checks issued for vouchers: Date Check Numbers Amount ' 4/15/09 Wire Transfers 3679-3697 $1,882,977.24 4/15/09 Regular Checks 630997-631591 1,077,808.60 Void Checks 639661 -675.00 ' Use Tax Payable 3,532.63 $2,963,643.47 (continued on back) 6B. Approval of Bills. ' Void and Reissue Interim Batch Payroll for April 2, 2009 Date Check Numbers Amount Void Advice # 246925 ($3,171.07) Reissue Check # 311173 1,777.08 ($1,393.99) Void and Reissue Interim Batch Payroll for April 7, 2009: Date Check Numbers Amount ' Void Advice # 310857 ($16.79) Reissue Check # 311174 16.79 $0.00 Approval of checks issued for payroll for April 1 through April 15 and paid on April 20, 2009: Date Check Numbers Amount 4/20/09 Checks 311175-311460 $ 172,761.36 ' 4/20/09 Advices 247307-248080 1564,303.37 $1,737,064.73 Kent City Council Meeting T April 21, 2009 was �,a The regular meeting of the Kent City Council was called to order at 7:00 p.m. by Mayor Cooke. Councilmembers present: Albertson, Clark, Danielson, Harmon, Ranniger, Raplee and Thomas. (CFN-198) CHANGES TO THE AGENDA A. From Council Administration Staff. (CFN-198) CAO Hodgson noted that an Executive Session is not necessary. B. From the Public. (CFN-198) There were no additions from the public. PUBLIC COMMUNICATIONS A. Public Recognition. (CFN-198) Clark commended the Kent residents who recently completed the Boston Marathon. Mayor Cooke recognized the Royal Dynasty Dancers, a hip-hop dance team from Kent Meridian High School, who won the state championship last month. B. Community Events. (CFN-198) Ranniger announced Arbor Day activities and Raplee invited public input at a Town Hall meeting at the Fire Station Headquarters on April 23. C. Records and Information Management Month Proclamation. (CFN-155) Mayor Cooke announced that April is Records and Information Management Month and presented a proclamation to the City's Records Administrator, Sue Hanson. D. Allied Waste Award Presentation. (CFN-155) Matt DeKerrie commended the City for leading South End cities in reducing garbage and doing more recycling and presented the Mayor with a Certificate of Recognition. E. Public Safety Report. (CFN-122) Police Chief Strachan updated the monthly statistics and expressed appreciation for the support of the Tip-A-Cop event at the Red Robin. Fire Chief Schneider invited elected officials to attend the first Elected Officials Academy at Valley Com on June 1st and June 8th. He updated the Council on the reorganization of fire engines to assist in response to calls for service in the North Benson area. Chief Schneider then reviewed the Fire Department 2009 Awards Ceremony which took place in March. F. Legislative Report. (CFN-198) Michelle Witham noted that the Legislature is in its final week of the 2009 session and updated the Council on issues of interest to Kent, including possible tax measures, the prostitution impound bill, infrastructure funding, transportation, the Safe Havens visitation center, streamlined sales tax, funding for levee repairs, annexation funding, and casinos in annexation areas. CONSENT CALENDAR Raplee moved to adopt Consent Calendar Items A through S. Clark seconded and the motion carried. 1 i_ Kent City Council Minutes April 21, 2009 A. Approval of Minutes. (CFN-198) The minutes of the regular Council meeting of April 7, 2009, were approved. B. Approval of Bills. (CFN-104) Payment of the bills received through March 15 and paid on March 15 after auditing by the Operations Committee on April 7, 2009, were approved. f Approval of checks issued for vouchers: Date Check Numbers Amount 3/15/09 Wire Transfers 3638-3656 $1,955,925.37 3/15/09 Regular Checks 630230-630618 2,620,214.29 Use Tax Payable 2,549.78 $4,578,689,44 Checks issued for payroll for on March 20 and paid on March 15, 2009, were approved: Date Check Numbers Amount 3/20/09 Checks 310619-310862 $ 176,950.92 3/20/09 Advices 245758-246532 1,563,984.94 $1,740,935.86 Checks issued for payroll for on March 31 and paid on April 3, 2009, were approved: Date Check Numbers Amount 4/3/09 Checks 310863-311172 $ 175,999.50 { 4/3/09 Advices 246533-247306 1,549,491.25 $1,725,490.75 C. 2009 Premera Blue Cross Administrative Services Contract. (CFN-147) The Mayor was authorized to sign the Premera Blue Cross 2009 administrative contract, subject to final terms and conditions acceptable to the City Attorney. C ' D. Identity Theft Prevention Program Resolution. (CFN-104) Resolution No. 1806, which approves and adopts an Identity Theft Prevention Program as required by the Fair and Accurate Credit Transactions Act of 2003, and the Federal Trade Commission's Identity Theft Rules was adopted. E. Budget Adjustment Ordinance. (CFN-186) Ordinance No.3913 consolidating budget adjustments made between July 1, 2008, and December 31, 2008, totaling $53,994,704 was adopted. F. Permit Timeline Extensions Code Amendment Ordinance. (CFN-186/205) Ordinance No. 3914 amending chapters 12.01 and 14.01 of the Kent City Code to allow extensions of re-submittal times for land use and building permit applications and to extend the term of issued building permits was adopted. 2 Kent City Council Minutes April 21, 2009 G. Washington Traffic Safety Commission Mini-Grant. (CFN-122) The Washington Traffic Safety Commission Mini-grant in the amount of $800, was accepted, and the Police Chief was authorized to sign all necessary documents. H. Washington Traffic Safety Commission Grant. (CFN-122) The Washington Traffic Safety Commission Grant in the amount of $15,000 was accepted, and the Mayor was authorized to sign all necessary documents. I. Bulletproof Vest Program Grants. (CFN-122) The Bureau of Justice Assistance Bulletproof Vest (BVP) grants in an amount not to exceed $11,444.56 was accepted, and the Mayor was authorized to sign all necessary documents. J. Washington Auto Theft Prevention Authority Grant. (CFN-122) The Washington Auto Theft Prevention Authority reimbursement grant in an amount not to exceed $39,170 was accepted, and the Mayor was authorized to sign all necessary documents. K. Washington Auto Theft Prevention Authority Patrol Task Force Grant. (CFN-122) The Washington Auto Theft Prevention Authority grant on behalf of the Patrol Task Force in an amount not to exceed $34,638 was accepted, and the Mayor was authorized to sign all necessary documents. L. Muckleshoot Casino Donation. (CFN-122) The Muckleshoot Casino donation in the amount of $5,000 to the Kent Police Department, Volunteers in Police Services (VIPS) was accepted, and the Police Chief was authorized to sign all necessary documents. M. Corrections Facility Programs and Police Department Fees Resolution. (CFN-122) Resolution No.1807, which repeals Resolution No. 1793, readopts a new fee schedule for the Kent Corrections Facility Programs and the Kent Police Department, and allows staff to waive program fees for indigent inmates was adopted. N. Purchase of Panasonic Toughbook Computers. (CFN-122) The Mayor was authorized to sign a Goods and Services Agreement with CDW-G Corporation in the amount of $199,576.28 to purchase 50 Panasonic CF-19 Toughbook Computers, subject to final terms and conditions acceptable to the City Attorney. O. Purchase of Ledco Docking Stations. (CFN-122) The Mayor was authorized to sign a Goods and Services Agreement with CDW-G Corporation in the amount of $33,319.99 to purchase 48 Ledco docking stations, subject to final terms and conditions acceptable to the City Attorney. P. Purchase of TG3 Backlit Keyboards. (CFN-122) The Mayor was authorized to sign a Goods and Services Agreement with PC Select LLC Corporation in the amount of $12,784 to purchase 50 TG3 backlit keyboards, subject to final terms and conditions acceptable to the City Attorney. 3 Kent City Council Minutes April 21, 2009 Q. Purchase of Havis Shield Mounting Brackets. (CFN-122) The Mayor was authorized to sign a Goods and Services Agreement with FCI Inc. in an amount of $13,520.70 to purchase mixed quantities of Havis Shield mounting brackets and parts to equip the City Patrol Car Fleet, subject to final terms and conditions acceptable to the City Attorney. R. Salmon Recovery Funding Board Proiect Agreement Amendment. (CFN-239) The Mayor was authorized to sign the Project Agreement Amendment with the Salmon Recovery Funding Board in the amount of $60,000, direct staff to accept the grant and establish a budget for the funds to be spent within the Lower Green River Property Acquisition Project, upon concurrence of the language in the agreement by the City Attorney and the Public Works Director. S. Montessori Plus School Lease Agreement. (CFN-1038) The Mayor was authorized to sign the Lease Agreement with Montessori Plus School for the school's lease of parking spaces for its overflow parking needs from property owned by the City's Water Utility at 23825 98th Ave. S., subject to lease terms and conditions acceptable to the City Attorney and the Public Works Director. OTHER BUSINESS A. S. 228`h Street Grade Separation, Burlington Northern Santa Fe Railroad, Easement Agreement. (CFN-1269) This project requires an agreement with the BNSF Railroad which includes the grant of surface, aerial, and construction easement rights to the City. Engineering Supervisor Chad Bieren updated the Council on the progress of construction, which is scheduled for completion in October 2009. Ranniger moved to authorize the Mayor to sign the Easement Agreement and Memorandum of Easement for real property rights acquired from the Burlington Northern Santa Fe Railroad (BNSF) at S. 228th Street at a cost of $22,337.00, in a form acceptable to the City Attorney and the Public Works Director. Raplee seconded and the motion carried. I B. Adiust Water Rates to Fund Water System Plan Ordinance. (CFN-110) Public Works Director Larry Blanchard explained that an evaluation by the Department of Ecology and the Department of Health detected numerous regulatory deficiencies, and that a review of the rate structure is necessary in order to fund improvements to correct those deficiencies. He added that it had been believed that a portion of the City's water could be sold to neighboring water purveyors, but that that is no longer the case. He noted that two rate structure options were presented to the Public Works Committee and that the recommended option is in the Council agenda. Chad Bieren then explained the projects contained in the Water System Plan, and noted that the proposed rate is in the middle range of neighboring water purveyors, who are also looking at water rate adjustments. Upon Clark's request, Blanchard confirmed that Council approved a water rate increase of 79 cents per month in December, explained why the Habitat Conservation Plan must be funded, and noted that fire prevention is also a component. Blanchard explained future funding for the projects for Raplee, noting that the rate structure provides the ability to obtain bonds to construct major projects. 4 I Kent City Council Minutes April 21, 2009 Raplee moved to adopt Ordinance No. 3915 which revises Sections 7.02.300 and 7.02.310 of the Kent City Code to increase water rates and the monthly demand charges for water service both within and outside the city limits of Kent. Harmon seconded. Raplee spoke in favor of the motion because of the filtration issue and savings over the long term; Clark said he will vote in favor with great reluctance, because improvements must be made; Harmon said the city must prepare for the worst; Thomas noted that increases have not been done incrementally in the past, so the increase is large at this time, although it is line with other water providers in the area; Danielson noted that the increase is necessary and that it would be more expensive over the long term. Ranniger and Albertson spoke in opposition to the motion, citing the economic downturn and reluctance to pass the shortfall on to taxpayers. Upon a roll call vote, the motion carried 5-2 with Clark, Danielson, Harmon, Raplee and Thomas in favor, and Albertson and Ranniger opposed. REPORTS A. Council President. (CFN-198) No report was given. B. Mayor. (CFN-198) Mayor Cooke reported on the Washington State Transportation Commission meeting and tour in Kent today. C. Operations Committee. (CFN-198) No report was given. D. Parks and Human Services Committee. (CFN-198) No report was given. E. Planning and Economic Development Committee. (CFN-198) Albertson noted that the next meeting will be on May 11 at 5:00 p.m., and reported on the SCATBd meeting she recently attended. F. Public Safety Committee. (CFN-198) No report was given. G. Public Works Committee. (CFN-198) No report was given. H. Administration. (CFN-198) Hodgson reminded Councilmembers that the executive session has been cancelled. ADJOURNMENT The meeting adjourned at 8:12 p.m. (CFN-198) Brenda Jacober, CIVIC City Clerk 5 Kent City Council Meeting Date May 5, 2009 Category Consent Calendar - 6C 1. SUBJECT: 2009 GROUP HEALTH COOPERATIVE CONTRACT - AUTHORIZE 2. SUMMARY STATEMENT: Authorize the Mayor to sign the 2009 Group Health Cooperative contract for the City's insured HMO plan. Renewal of the Group Health Cooperative of Puget Sound contract for the city's insured health maintenance organization (HMO). The 2009 contract reflects an approximate 13.23% increase in the health care premiums charged by Group Health Cooperative and is budgeted in the health and welfare fund. 3. EXHIBITS: 2009 Group Health Contract 4. RECOMMENDED BY: Operations Committee 4/21/09 (Committee, Staff, Examiner, Commission, etc.) 5. FISCAL IMPACT Expenditure? $454,838 Revenue? Currently in the Budget? Yes X No 6. CITY COUNCIL ACTION: Councilmember moves, Councilmember seconds DISCUSSION: ACTION: GroupHealth Group Medical Coverage Agreement Group Health Cooperative(also referred to as"GHC")is a nonprofit health maintenance organization furnishing health care coverage on a prepayment basis. The Group identified below wishes to purchase such coverage. This Agreement sets forth the terms under which that coverage will be provided,including the rights and responsibilities of the contracting parties;requirements for enrollment and eligibility;and benefits to which those enrolled under this Agreement are entitled. The Agreement between GIIC and the Group consists of the following: • Standard Provisions • Attached Benefit Booklet • Signed Group application • Premium Schedule • All attachments and endorsements included or issued hereafter Group Health Cooperative Signed: Title: President and Chief Executive Officer City of Kent,0036900 Signed: Title: This Agreement will continue in effect until terminated or renewed as herein provided for and is effective January 1,2009. PA-113302 C27615-0036900 1 2009 Evidence of Coverage (EOC) GroupHealth 2009 Medicare Endorsement Group Health Cooperative Medicare Advantage Plan This Endorsement does not constitute a"Medicare Supplemental" contract. The provisions of the Group Medical Coverage Agreement shall remain in effect except as modified by the addition of the provisions, exclusions, and limitations contained in this Medicare €r Endorsement. 't In no event shall the benefits under this Endorsement duplicate the benefits under the Group J Medical Coverage Agreement. The benefits available to persons enrolled in both the Group f- Health Cooperative Medical Coverage Agreement and the Group Health Cooperative Medicare Advantage Plan will be the higher level of benefit available under the plans as determined by Group Health. The benefits and exclusions described in this Endorsement apply only to members who are ( covered under Medicare Part A and Part B, and who are enrolled in the Group Health Cooperative Medicare Advantage Plan as set forth in Section III.D., of the Group Medical Coverage Agreement. This includes those members with Medicare Part B only, who have been continuously enrolled in the Group Health Cooperative Medicare Advantage Plan(formerly known as Medicare+Choice), since December 31, 1998. Except as defined by federal regulations, all members entitled to, or eligible to purchase Medicare and who live in the Group Health Cooperative Medicare Advantage Plan service area, must enroll in the Group Health Cooperative Medicare Advantage Plan upon such entitlement or €' eligibility. r Incorporated into this endorsement is the GHC Medicare Advantage Plan Explanation of Coverage(EOC). The EOC sets forth the benefits, provisions and requirements of the GHC MA plan. The EOC document has been approved by The Centers for Medicare and Medicaid(CMS) Services. k! t, t. 1 H5050 09ANOCE000010908 I 2009 Evidence of Coverage (EOC) This is Your 2009 Evidence of Coverage WOO Table of Contents 1. Introduction..................................................................................................... 3 2. How You Get Care ........................................................................................ 8 3. Your Rights and Responsibilities as a Member of Our Plan.......................... 16 4. How to File a Grievance.................................................................................21 5. Complaints and Appeals about your Part C Medical Care and Service(s) ...............................................................23 6. Ending Your Membership ....................................................... ....................37 7. Definitions of Important Words Used in the EOC .........................................40 8. Helpful Phone Numbers and Resources.........................................................45 9. Legal Notices..................................................................................................49 10. How Much You Pay for Your Part C Medical Benefits ................................52 ■ General Exclusions.............. ........................... .......... 74 Index.......................................................................................................................77 2 H5050 09ANOCE000010908 2009 Evidence of Coverage(EOC) 1. Introduction Thank you for being a member of our Clear Care®Basic Plan! This is your Evidence of Coverage, which explains how to get your Medicare health care coverage through our Plan, a Medicare Advantage Health Maintenance Organization"HMO"; you are still covered by Medicare,but you are getting your health care through our Plan. our enrollment form riders This Evidence of Coverage, together with y , and amendments that we send to you, is our contract with you. The Evidence of Coverage explains your rights, benefits, and responsibilities as a member of our Plan and is in effect from January 1,2009-December 31, 2009. Our plan's contract with the Centers for Medicare &Medicaid Services(CMS) is renewed annually, and availability of coverage beyond the end of the current contract year is not guaranteed. This Evidence of Coverage will explain to you: • What is covered by our Plan and what isn't covered. • How to get the care you need, including some rules you must follow. • What you will have to pay for your health care. • What to do if you are unhappy about something related to getting your covered services. • How to leave our Plan, and other Medicare options that are available. This Section of the EOC has important information about: • Eligibility requirements • The geographic service area of our Plan • Keeping your membership record up-to-date • Materials that you will receive from our Plan • Paying your plan premiums • Late enrollment penalty Eligibility Requirements To be a member of our Plan, you must live in our service area, be entitled to Medicare Part A, and enrolled in Medicare Part B. If you currently pay a premium for Medicare Part A and/or Medicare Part B, you must continue paying your premium in order to keep your Medicare Part A and/or Medicare Part B and remain a member of this plan. The geographic service area for our Plan. The counties and parts of counties in our service area are listed below. Grays Harbor(Group Health Service Area in Grays Harbor County includes only these zip codes: 98541; 98557; 98559; 98568), Mason(Group Health Service Area in Mason County includes only these zip codes: 98524, 98528, 98546, 98548, 98555, 98584, 98588, and 98592), 3 H5050_09ANOCE000010908 2009 Evidence of Coverage(EOC) Island,King, Kitsap,Lewis,Pierce, San Juan, Skagit, Snohomish, Spokane, Thurston,and Whatcom Counties, WA. How do I keep my membership record up to date? We have a membership record about you. Your membership record has information from your enrollment form, including your address and telephone number. It shows your specific Plan coverage, including the Primary Care Physician you chose and other information. Doctors, hospitals, and other network providers use your membership record to know what services are covered for you. Section 3 tells how we protect the privacy of your personal health information. Please help us keep your membership record up to date by telling Customer Service if there are changes to your name, address, or phone number, or if you go into a nursing home. Also, tell Customer Service about any changes in other health insurance coverage you have, such as from your employer, your spouse's employer, workers' compensation, Medicaid, or liability claims such as claims from an automobile accident. Materials that you will receive from our Plan Plan membership card While you are a member of our Plan,you must use our membership card for services covered by this plan. While you are a member of our Plan you must not use your red,white, and blue Medicare card to get covered services, items. Keep your red, white, and blue Medicare card in a safe place in case you need it later. If you get covered services using your red, white, and blue Medicare card instead of using our membership card while you are a plan member,the Medicare Program won't pay for these services and you may have to pay the full cost yourself. Please carry your membership card that we gave you at all times and remember to show your card when you get covered services,items. If your membership card is damaged, lost, or stolen, call Customer Service right away and we will send you a new card. There is a sample card in Section 10 to show you what it looks like. The Provider Directory gives you a list of network providers Every year that you are a member of our Plan, we will send you either a Provider Directory or an update to your Provider Directory, which lists our network providers. If you don't have the Provider Directory, you can get a copy from Customer Service. You may ask Customer Service for more information about our network providers, including their qualifications. Customer Service can give you the most up-to-date information about changes in our network providers and about which ones are accepting new patients. A complete list of network providers is also available on our website,www.ghc.org/medicare. You must use network providers for services to be covered by us at plan cost-sharing levels, except in emergencies, for urgently needed care out-of-area, or for out of the area dialysis 4 H5050_09ANOCE000010908 2009 Evidence of Coverage (EOC) services. See the benefits chart in Section 10 for more specific out-of-network coverage information. Your monthly plan premium As a member of our Plan,you pay: 1) Your monthly Medicare Part B premium. Most people will pay the standard premium amount, which is $96.40 in 2009. (Your Part B premium is typically deducted from your Social Security payment.) (If you receive benefits from your state Medicaid program, all or part of your Part B premium may be paid for you.) e Your monthly premium will b higher if you are single (file an individual tax return) and your yearly income is more than$85,000, or if you are married(file a joint tax return)and your yearly income is more than$170,000.) If your Yearly Income is* In 2009, you a * File individual tax return File joint tax return $85,000 or below $170,000 or below $96.40 $85,0014107,000 $170,0014214,000 $134.90 $107,0014160,000 $214,0014320,000 $192.70 $160,0014213,000 $320,001-$426,000 $250.50 Above$213,000 Above$426,000 $308.30 *If you pay a Part B late-enrollment penalty, the premium amount is higher. 2) Your monthly Medicare Part A premium, if necessary(most people don't have to pay this premium). 3) Your monthly premium for our Plan. Your monthly premium for our Plan is listed in Section 10. (If you signed up for extra benefits, also called"optional supplemental benefits",then you pay an additional premium each month for these extra benefits.) If you have any questions about your Plan premiums or the payment programs, please call Customer Service. Monthly Plan Premium Payment Options There are two ways to pay your monthly plan premium. Option one: Pay your monthly plan premium directly to our Plan. You may decide to pay your monthly plan premium directly to our Plan. You may decide to pay your premium directly to our Plan with a check. You will receive a monthly billing statement, which you may pay by check, credit card or debit card. Checks should be mailed to Group Health, P.O. Box 34900, Seattle, WA 98124-1900 by the I"of each month. A $20 fee will be charged for NSF checks. If you wish to pay your premium by credit card or debit card call Customer Service at the number referenced in Section 1 and they will assist you. 5 H5050 09ANOCE000010908 2009 Evidence of Coverage (EOC) Instead of paying by check,you can have your monthly plan premium automatically withdrawn from your bank account each month. Deductions will be made between the 01' and the 9`t'of each month. If you are interested in the Automatic Payment Plan (APP),please call Customer Service and ask for an application Option two: You may have your monthly plan premium directly deducted from your monthly Social Security payment. Contact Customer Service for more information on how to pay your monthly plan premium this way. Note: We don't recommend this option if you are getting extra help for your monthly plan premium payment from another payer. Social Security can only withhold the full amount of the monthly plan premium and will not recognize any monthly plan premium payments made by other payers as part of this process. What is the Medicare Prescription Drug Plan late enrollment penalty? If you don't join a Medicare drug plan when you are first eligible, and/or you go without creditable prescription drug coverage for a continuous period of 63 days or more, you may have to pay a late enrollment penalty when you enroll in a plan later. The Medicare drug plan will let you know what the amount is and it will be added to your monthly premium. This penalty amount changes every year, and you have to pay it as long as you have Medicare prescription drug coverage. However, if you qualify for extra help,you may not have to pay a penalty. If you must pay a late enrollment penalty, your penalty is calculated when you first join a Medicare drug plan. To estimate your penalty, take 1%of the national base beneficiary premium for the year you join(in 2009,the national base beneficiary premium is $30.36. Multiply it by the number of full months you were eligible to join a Medicare drug plan but didn't, and then round that amount to the nearest ten cents. This is your estimated penalty amount,which is added each month to your Medicare drug plan's premium for as long as you are in that plan. You won't have to pay a late enrollment penalty if: • You had creditable coverage(coverage that expects to pay, on average, at least as much as Medicare's standard prescription drug coverage) • You had prescription drug coverage but you were not adequately informed that the coverage was not creditable (as good as Medicare's drug coverage) • Any period of time that you didn't have creditable prescription drug coverage was less than 63 continuous days • You lived in an area affected by Hurricane Katrina at the time of the hurricane (August 2005)AND you signed up for a Medicare prescription drug plan by December 31, 2006, AND you stay in a Medicare prescription drug plan • You received or are receiving extra help What happens if you don't pay or are late with your monthly plan premiums? 6 H5050 09ANOCE000010908 2009 Evidence of Coverage(EOC) If your monthly plan premiums are late, we will tell you in writing that if you don't pay your monthly plan premium by a certain date,which includes a grace period, we will end your membership in our Plan." Our plan's grace period is 60 calendar days from the date of the past due notice. If we end your membership, you will have Original Medicare Plan coverage. Should you decide later to re-enroll in our Plan,or to enroll in another plan that we offer, you will have to pay any late monthly plan premiums that you didn't pay from your previous enrollment in our Plan. If you signed up for extra benefits("optional supplemental dental benefits"), and you don't pay the additional monthly plan premium for these extra benefits on time,we will tell you in writing that if you don't pay the monthly plan premium for these extra benefits within 60 calendar days, we will end coverage for the extra benefits. If you want to terminate your extra benefits,you must notify us in advance. Important Information We will send you a Medicare COB Questionnaire so that we can know what other health coverage you have besides our Plan. Medicare requires us to collect this information from you, so when you get the survey,please fill it out and send it back. If you have additional health coverage, you must provide that information to our Plan. In addition, if you lose or gain additional health coverage,please call Customer Service to update your membership records. 7 H5050 09.ANOCE000010908 2009 Evidence of Coverage(EOC) 2. How You Get Care How You Get Care What are "p roviders"? roviders"?p "Providers" is the term we use for doctors, other health care professionals,hospitals, and other health care facilities that are licensed by the state and as appropriate eligible to receive payment from Medicare. What are "network providers"? A provider is a"network provider"when they participate in our Plan. When we say that network providers"participate in our Plan,"this means that we have arranged with them (for example, by contracting with them)to coordinate or provide covered services to members in our Plan. Network providers may also be referred to as"plan providers. What are "covered services"? "Covered services"is the term we use for all the medical care,health care services, supplies, and equipment that are covered by our Plan. Covered services are listed in the Benefits Chart in Section 10. What do you pay for "covered services"? The amount you pay for covered services is listed in Section 10. Providers you can use to get services covered by our Plan While you are a member of our Plan, you must use our network providers to get your covered services except in limited cases such as emergency care,urgently needed care when our network is not available, or out of service area dialysis. We list the providers that participate with our Plan in our provider directory. If you get non-emergency care from non-plan(out-of-network) providers without prior authorization you must pay the entire cost yourself, unless the services are urgent and our network is not available, or the services are out-of-area dialysis services. If an out-of-network provider sends you a bill that you think we should pay for emergency services, please contact Customer Service or send the bill to us for payment. Choosing Your Primary Care Physician (PCP) • What is a PCP? When you become a member of our Plan, you must choose a plan provider to be your PCP. Your PCP is a health care professional who meets state requirements and is trained to give you basic medical care. As we explain below, you will get your routine or basic care from your PCP. Your PCP will also coordinate the rest of the covered services you get as a plan member. For example, in order to see a specialist, you usually need to get your PCP's approval first(thus is called getting a"referral"to a specialist). 8 H5050 09ANOCE000010908 2009 Evidence of Coverage(EOC) Your PCP will provide most of your care and will help you arrange or coordinate the rest of the covered services you get as a member of our Plan. • What types of providers may act as a PCP? You may choose a PCP for any of our available Family Medicine or Internal Medicine physicians. • How do you choose/change a PCP if member desires or when PCP leaves plan? To get started using Group Health,the most important thing for you to do first is to choose a Personal Care Physician. You may do this by contacting the Group Health Medicare Customer Service Department at the phone number listed on the front cover of this booklet. Some members choose a PCP close to home; others pick a PCP close to work. There are no special rules to follow. Your PCP should be in a convenient location for you. If there is a particular Group Health specialist or hospital that you want to use, check first to be sure your PCP makes referrals to that specialist, or uses that hospital. You should also ask whether the PCP has a referral relationship with any specialist or hospital you are currently seeing. A list of providers and their telephone numbers are listed in your Provider Directory or you may contact Group Health Medicare Customer Service for details. You may change your PCP at any time. Simply call Group Health Medicare Customer Service and we will check to make sure the doctor you choose is accepting new patients. Please let us know if you are getting home health agency services or using durable medical equipment so we can help with the transfer of your care or equipment. We will make the change for you and tell you over the phone when this change will go into effect. Sometimes a PCP, specialist, clinic,hospital or other plan provider you are using might leave the Plan. If this happens, you will have to switch to another provider who is part of our Plan. If your PCP leaves our Plan, we will let you know and help you choose another PCP so that you can keep getting covered services. • What is the role of a PCP? You will usually see your PCP first for most of your routine health care needs. There are only a few types of covered services you can get on your own, without contacting your PCP first except as we explain below and in Section 3. Your PCP will provide most of your care and will help arrange or coordinate the rest of the covered services you get as a plan member. This includes your x-rays, laboratory tests,therapies, care from doctors who are specialists, hospital admissions, and follow-up care. "Coordinating" your services includes checking or consulting with other plan providers about your care and how it is going. If you need certain types of covered services or supplies, your PCP must give approval in advance (such as giving you a referral to see certain specialist). In some cases, your PCP will also need to get prior authorization(prior approval). Since your PCP will provide and 9 H5050_09ANOCE000010908 2009 Evidence of Coverage (EOC) coordinate your medical care,you should have all of your past medical records sent to your PCP's office. Section 3 tells how we will protect the privacy of your medical records and personal health information. • What services does the PCP furnish(e.g. routine medical care) and what services can members get on their own? Your PCP will provide most of your care and will help you arrange or coordinate the rest of the covered services you get as a member of our Plan. This includes: • your x-rays • laboratory tests • therapies • care from doctors who are specialists • hospital admissions, and • follow-up care You may get the following services on your own without approval in advance: • Routine women's health care, which include breast exams,mammograms (X-rays of the breast),Pap tests, and pelvic exams as long as you get them from a network provider • Flu shots and pneumonia vaccinations as long as you get them from a network provider. • Chiropractic services(as long as you get them from a plan provider.) • Emergency services, whether you get these services from network providers or out-of- network providers • Urgently needed care that you get from out-of-network providers when you are temporarily outside the Plan's service area or when you are in the service area but, because of unusual or extraordinary circumstances,the Network providers are temporarily unavailable or inaccessible. • Dialysis (kidney) services that you get at a Medicare certified dialysis facility when you are temporarily outside the Plan's service area. If possible,please let us know before you leave the service area where you are going to be so we can help arrange for you to have maintenance dialysis while outside the service area. What is the role of the PCP in coordinating covered services? "Coordinating"your services includes checking or consulting with other plan providers about your care and how it is going. If you need certain types of covered services or supplies, you must get approval in advance from your PCP (such as giving you a referral to see a specialist). In some cases, your PCP will need to get prior authorization(prior approval) from us. Since your PCP will provide and coordinate your medical care, you should have all of your past medical records sent to your PCP's office. Section 3 tells you how we will protect the privacy of your medical records and personal health information. When your PCP thinks that you need specialized treatment,he/she will give you a referral (approval in advance)to see a plan specialist or certain other providers. A specialist is a doctor 10 H5050_09ANOCE000010908 2009 Evidence of Coverage(EOC) who provides health care services for a specific disease or part of the body. Specialists that require referrals to visit include but are not limited to such doctors as: • Physical therapists, • Occupational therapists, • Radiologists. It is very important to get a referral (approval in advance) from your PCP before you see certain specialists or certain other providers (there are a few exceptions, including routine women's health care that we explain later in this section). If you don't have a referral(approval in advance)before you get services from a specialist,you may have to pay for these services yourself. If the specialist wants you to come back for more care, check first to be sure that the referral(approval in advance)you got from your PCP for the first visit covers more visits to the specialist. • For what services will the PCP need to et prior authorization from the plan? g p Services that require prior authorization are set forth in Section 10. • Explain if the selection of a PCP results in being limited to specific specialists or hospitals to which that PCP refers, i.e. sub-network,referral circles. Your PCP can refer you to any specialist or hospital within our network. What if your doctor or other provider leaves your plan? Sometimes a network provider you are using might leave the Plan. If this happens, you will have to switch to another provider who is part of our Plan. Customer Service can assist you in finding and selecting another provider. v medical emergency need Getting care 1f you have a med ca ergency or an urgent for care What is a "medical emergency"? A"medical emergency"is when you believe that your health is in serious danger. A medical emergency includes severe pain, a bad injury, a sudden illness, or a medical condition that is quickly getting much worse. If you have a medical emergency: • Get medical help as quickly as possible. Call 911 for help or go to the nearest emergency room,hospital, or urgent care center. You don't need to get approval or a referral first from your doctor or other network provider. 11 H5050_09ANOCE000010908 2009 Evidence of Coverage (EOC) • As soon as possible, make sure that we know about your emergency, because we need to be involved in following up on your emergency care. You or someone else should call to tell us about your emergency care, usually within 48 hours. The number to call is on the back of your membership card. We will talk with the doctors who are giving you emergency care to help manage and follow up on your care. When the doctors who are giving you emergency care say that your condition is stable and the medical emergency is over then you are still entitled to follow-up post stabilization care. Your follow-up post stabilization care will be covered according to Medicare guidelines. In general, if your emergency care is provided out of network we will try to arrange for network providers to take over your care as soon as your medical condition and the circumstances allow. What is covered if you have a medical emergency? • You may get covered emergency medical care whenever you need it, anywhere in the United States. • Ambulance services are covered in situations where other means of transportation in the United States would endanger your health. (See the benefits chart in Section 10 for more detailed information.) • For Emergencies or ambulance services outside of the country, see Section 10 for more information. What if it wasn't a medical emergency? Sometimes it can be hard to know if you have a medical emergency. For example,you might go in for emergency care—thinking that your health is in serious danger—and the doctor may say that it wasn't a medical emergency after all. If this happens, you are still covered for the care you got to determine what was wrong, as long as you thought your health was in serious danger, as explained in"What is a`medical emergency"' above. If you get any extra care after the doctor says it wasn't a medical emergency,the Plan will pay its portion of the covered additional care only if you get it from a network provider. We will pay our portion of the covered additional care from an out-of-network provider if you are out of our service area, as long as the additional care you get meets the definition of"urgently needed care"that is given below. What is urgently needed care? Urgently needed care refers to a non-emergency situation when you are: • Anywhere Worldwide • Temporarily absent from the Plan's authorized service area • In need of medical attention right away for an unforeseen illness, injury, or condition,and • It isn't reasonable given the situation for you to obtain medical care through the Plan's participating provider network. Under unusual and extraordinary circumstances, care may be considered urgently needed and paid for by our Plan when the member is in the service area, but the provider network of the Plan is temporarily unavailable or inaccessible. 12 H5050_09ANOCE000010908 2009 Evidence of Coverage (EOC) What is the difference between a "medical emergency" and "urgently needed care"? The two main differences between urgently needed care and a medical emergency are in the danger to your health and your location. A"medical emergency"occurs when you reasonably believe that your health is in serious danger, whether you are in or outside of the service area. "Urgently needed care" is when you need medical help for an unforeseen illness, injury, or condition,but your health is not in serious danger and you are generally outside of the service area. How to get urgently needed care If, while temporarily outside the Plan's service area, you require urgently needed care, then you may get this care from any provider. Note: If you have a pressing,non-emergency medical need while in the service area, you generally must obtain services from the Plan according to its procedures and requirements as outlined earlier in this section. How to submit a paper claim for emergency or urgently needed care When you receive emergency or urgently needed health care services from a provider who is not part of our network, you are responsible for paying your plan cost sharing amount and you should tell the provider to bill our Plan for the balance of the payment they are due. However, if you have received a bill from the provider, please send that claim to Group Health Claims Department, P.O. Box 34585, Seattle, WA 98124-1585 so we can pay the provider the amount they are owed. If you have any questions about what to pay a provider or where to send a paper claim you may call Customer Service. What is your cost for services that aren't covered by our Plan? Our Plan covers all of the medically-necessary services that are covered under Medicare Part A and Part B. Our Plan uses Medicare's coverage rules to decide what services are medically necessary. You are responsible for paying the full cost of services that aren't covered by our Plan. Other sections of this booklet describe the services that are covered under our Plan and the rules that apply to getting your care as a plan member. Our plan might not cover the costs of services that aren't medically necessary under Medicare, even if the service is listed as covered by our Plan. If you need a service that our Plan decides isn't medically necessary based on Medicare's coverage rules,you may have to pay all of the costs of the service if you didn't ask for an advance coverage determination. However, you have the right to appeal the decision. If you have any questions about whether our Plan will pay for a service or item, including inpatient hospital services, you have the right to have an organization determination made for the service. You may call Customer Service and tell us you would like a decision on whether the service will be covered before you get the service. For covered services that have a benefit limitation, you pay the full cost of any services you get after you have used up your benefit for that type of covered service.These costs will not count 13 H5050 09ANOCEOCOO10908 i 2009 Evidence of Coverage(EOC) toward your out-of-pocket maximum. You can call Customer Service when you want to know how much of your benefit limit you have already used. How can you participate in a clinical trial? A "clinical trial"is a way of testing new types of medical care, like how well a new cancer drug works. A clinical trial is one of the final stages of a research process that helps doctors and researchers see if a new approach works and if it is safe, The Original Medicare Plan pays for routine costs if you take part in a clinical trial that meets Medicare requirements (meaning it's a"qualified" clinical trial and Medicare-approved). Routine costs include costs like room and board for a hospital stay that Medicare would pay for even if you weren't in a trial, an operation to implant an item that is being tested, and items and services to treat side effects and complications arising from the new care. Generally, Medicare will not cover the costs of experimental care, such as the drugs or devices being tested in a clinical trial. There are certain requirements for Medicare coverage of clinical trials. If you participate as a patient in a clinical trial that meets Medicare requirements, the Original Medicare Plan(and not our Plan)pays the clinical trial doctors and other providers for the covered services you get that are related to the clinical trial. When you are in a clinical trial, you may stay enrolled in our Plan and continue to get the rest of your care, like diagnostic services, follow-up care, and care that is unrelated to the clinical trial through our Plan. Our Plan is still responsible for coverage of certain investigational devices exemptions (IDE), called Category B IDE devices,needed by our members. You will have to pay the same coinsurance amounts charged under Original Medicare for the j services you receive when participating in a qualifying clinical trial, but you do not have to pay the Original Medicare Part A or Part B deductibles because you are enrolled in our Plan."] You don't need to get a referral (approval in advance) from a network provider to join a clinical trial, and the clinical trial providers don't need to be network providers. However,please be sure to tell us before you start participation in a clinical trial so that we can keep track of your health care services. When you tell us about starting participation in a clinical trial, we can let you know whether the clinical trial is Medicare-approved, and what services you will get from clinical trial providers instead of from our plan. You may view or download the publication "Medicare and Clinical Trials" at www.medicare.gov under"Search Tools" select"Find a Medicare Publication." Or, call 1-800- MEDICARE (1-800-633-4227). TTY users should call 1-877-486-2048. i How to access care in Religious Non-medical Health Care Institutions Care in a Medicare-certified Religious Non-medical Health Care Institution (RNHCI) is covered by our Plan under certain conditions. Covered services in an RNHCI are limited to non-religious aspects of care. To be eligible for covered services in a RNHCI, you must have a medical condition that would allow you to receive inpatient hospital or skilled nursing facility care. You 14 H5050 09ANOCE000010908 2009 Evidence of Coverage (EOC) may get services furnished in the home, but only items and services ordinarily furnished by home health agencies that are not RNHCIs. In addition, you must sign a legal document that says you are conscientiously opposed to the acceptance of"non-excepted"medical treatment. ("Excepted" medical treatment is medical care or treatment that you receive involuntarily or that is required under federal, state or local law. "Non-excepted"medical treatment is any other medical care or treatment.) Your stay in the RNHCI is not covered by our Plan unless you obtain authorization (approval) in advance from our Plan. Inpatient hospital services are unlimited as long as the criteria for this benefit has been met. 15 H5050 09ANOCE000010908 2009 Evidence of Coverage (EOC) 3. Your Rights and Responsibilities as a Member of our Plan Introduction to your rights and protections Since you have Medicare, you have certain rights to help protect you. In this section,we explain your Medicare rights and protections as a member of our Plan and we explain what you can do if you think you are being treated unfairly or your rights are not being respected. Your right to be treated with dignity, respect and fairness You have the right to be treated with dignity,respect, and fairness at all times. Our Plan must obey laws that protect you from discrimination or unfair treatment. We don't discriminate based on a person's race, disability, religion, sex, sexual orientation, health, ethnicity, creed, age, or national origin. If you need help with communication, such as help from a language interpreter, please call Customer Service. Customer Service can also help if you need to file a complaint about access (such as wheel chair access). You may also call the Office for Civil Rights at 1-800- 368-1019 or TTY/TDD 1-800-537-7697, or your local Office for Civil Rights. Your right to the privacy of your medical records and personal health j information There are federal and state laws that protect the privacy of your medical records and personal health information. We protect your personal health information under these laws. Any personal information that you give us when you enroll in this plan is protected. We will make sure that unauthorized people don't see or change your records. Generally, we must get written permission from you (or from someone you have given legal power to make decisions for you) before we can give your health information to anyone who isn't providing your care or paying for your care. There are exceptions allowed or required by law, such as release of health information to government agencies that are checking on quality of care. The laws that protect your privacy give you rights related to getting information and controlling how your health information is used. We are required to provide you with a notice that tells about these rights and explains how we protect the privacy of your health information. You have the right to look at medical records held at the Plan, and to get a copy of your records (there may be a fee charged for making copies). You also have the right to ask us to make additions or corrections to your medical records (if you ask us to do this, we will review your request and figure out whether the changes are appropriate). You have the right to know how your health information has been given out and used for non-routine purposes. If you have questions or concerns about privacy of your personal information and medical records, please call Customer Service. Your right to see plan providers, get covered services within a reasonable period of time As explained in this booklet, you will get most or all of your care from plan providers,that is, from doctors and other health providers who are part of our Plan. You have the right to choose a 16 H5050 09ANOCE000010908 i 2009 Evidence of Coverage (EOC) plan provider(we will tell you which doctors are accepting new patients). You have the right to go to a women's health specialist in our Plan(such as a gynecologist) without a referral. You have the right to timely access to your providers and to see specialists when care from a specialist is needed. ""Timely access"means that you can get appointments and services within a reasonable amount of time. Your right to know your treatment options and participate in decisions about your health care You have the right to get full information from your providers when you go for medical care, and. the right to participate fully in decisions about your health care. Your providers must explain things in a way that you can understand. Your rights include knowing about all of the treatment options that are recommended for your condition,no matter what they cost or whether they are covered by our Plan. You have the right to be told about any risks involved in your care. You must be told in advance if any proposed medical care or treatment is part of a research experiment, and be given the choice of refusing experimental treatments. You have the right to receive a detailed explanation from us if you believe that a provider has denied care that you believe you were entitled to receive or care you believe you should continue to receive. In these cases, you must request an initial decision called an organization determination. Organization determinations are discussed in Section 5. You have the right to refuse treatment. This includes the right to leave a hospital or other medical facility, even if your doctor advises you not to leave. This includes the right to stop taking your medication. If you refuse treatment, you accept responsibility for what happens as a result of your refusing treatment. Your right to use advance directives (such as a living will or a power of attorney) You have the right to ask someone such as a family member or friend to help you with decisions about your health care. Sometimes,people become unable to make health care decisions for themselves due to accidents or serious illness. If you want to, you can use a special form to give someone the legal authority to make decisions for you if you ever become unable to make decisions for yourself. You also have the right to give your doctors written instructions about how you want them to handle your medical care if you become unable to make decisions for yourself. The legal documents that you can use to give your directions in advance in these situations are called"advance directives." There are different types of advance directives and different names for them. Documents called"living will" and "power of attorney for health care" are examples of advance directives. If you want to have an advance directive, you can get a form from your lawyer, from a social worker, or from some office supply stores. You can sometimes get advance directive forms from organizations that give people information about Medicare. Regardless of where you get this form, keep in mind that it is a legal document. You should consider having a lawyer help you prepare it. It is important to sign this form and keep a copy at home. You should give a copy of 17 H5050 09ANOCE000010908 I 2009 Evidence of Coverage (EOC) the form to your doctor and to the person you name on the form as the one to make decisions for you if you can't. You may want to give copies to close friends or family members as well. I If you know ahead of time that you are going to be hospitalized, and you have signed an advance directive, take a copy with you to the hospital. If you are admitted to the hospital,they will ask you whether you have signed an advance directive form and whether you have it with you. If you have not signed an advance directive form,the hospital has forms available and will ask if you want to sign one. I Remember, it is your choice whether you want to fill out an advance directive (including whether you want to sign one if you are in the hospital). According to law, no one can deny you care or discriminate against you based on whether or not you have signed an advance directive. If you have signed an advance directive, and you believe that a doctor or hospital hasn't followed the instructions in it,you may file a complaint with SHIBA at the Washington State Office of the ` Insurance Commissioner by writing to SHIBA HelpLine, Office of the Insurance Commissioner, P.O. Box 40256, Olympia, WA 98504-0256, or calling the toll-free SHIBA Helpline at 1-800- 562-6900. Your right to get information about our Plan You have the right to get information from us about our Plan. This includes information about our financial condition, and how our Plan compares to other health plans. To get any of this information, call Customer Service. Your right to get information in other formats You have the right to get your questions answered. Our plan must have individuals and translation services available to answer questions from non-English speaking beneficiaries,and must provide information about our benefits that is accessible and appropriate for persons eligible for Medicare because of disability. If you have difficulty obtaining information from your plan based on language or a disability, call 1-800-MEDICARE (1-800-633-4227). TTY users should call1-877-486-2048. s Your right to get information about our plan providers You have the right to get information from us about our plan providers and their qualifications and how we pay our doctors. To get this information, call Customer Service. Your right to get information about your Part C medical care or services and costs You have the right to an explanation from us about any Part C medical care or service not covered by our Plan. We must tell you in writing why we will not pay for or approve a Part C medical care or service, and how you can file an appeal to ask us to change this decision. See ` Section 5 for more information about filing an appeal. You also have the right to this explanation even if you obtain the Pant C medical care or service from a provider not affiliated with our organization. i 18 H5050_09ANOCE000010908 1 2009 Evidence of Coverage (EOC) Your right to make complaints You have the right to make a complaint if you have concerns or problems related to your coverage or care". See Section 4 and Section 5 for more information about complaints. If you make a complaint, we must treat you fairly (i.e., not retaliate against you)because you made a complaint. You have the right to get a summary of information about the appeals and grievances that members have filed against our Plan in the past. To get this information, call Customer Service. How to get more information about your rights If you have questions or concerns about your rights and protections, you can 1. Call Customer Service at the number on the cover of this booklet. 2. Get free help and information from your State Health Insurance Assistance Program (SHIP), Contact information for your SHIP is in Section 8 of this booklet. 3. Visit www.medicare.gov to view or download the publication"Your Medicare Rights & Protections." 4. Call 1-800-MEDICARE (1-800-633-4227). TTY users should call 1-877-486-2048. What can you do if you think you have been treated unfairly or your rights are not being respected? If you think you have been treated unfairly or your rights have not been respected, you may call Customer Service or: • If you think you have been treated unfairly due to your race, color, national origin, disability, age, or religion, you can call the Office for Civil Rights at 1-800-368-1019 or TTY/TDD 1- 800-537-7697, or call your local Office for Civil Rights. • If you have any other kind of concern or problem related to your Medicare rights and protections described in this section, you can also get help from your SHIP. Your responsibilities as a member of our Plan include: • Getting familiar with your coverage and the rules you must follow to get care as a member. You can use this booklet to learn about your coverage, what you have to pay, and the rules you need to follow. Call Customer Service if you have questions. • Using all of your insurance coverage. If you have additional health insurance coverage besides our Plan, it is important that you use your other coverage in combination with your coverage as a member of our Plan to pay your health care expenses. This is called "coordination of benefits" because it involves coordinating all of the health benefits that are available to you. • You are required to tell our Plan if you have additional health insurance. Call Customer Service. • Notifying providers when seeking care (unless it is an emergency)that you are enrolled in our Plan and you must present your plan membership card to the provider. • Giving your doctor and other providers the information they need to care for you, and following the treatment plans and instructions that you and your doctors agree upon. Be sure to ask your doctors and other providers if you have any questions and have them explain your treatment in a way you can understand. 19 H5050 09ANOCE000010908 2009 Evidence of Coverage (EOC) • Acting in a way that supports the care given to other patients and helps the smooth running of your doctor's office, hospitals, and other offices. • Paying your plan premiums and coinsurance or co-payment for your covered services. You must pay for services that aren't covered. • Notifying us if you move. If you move within our service area,we need to keep your membership record up-to-date. If you move outside of our plan service area, you cannot remain a member of our plan,but we can let you know if we have a plan in that area. • Letting us know if you have any questions, concerns,problems, or suggestions. If you do, l please call Customer Service, j I I f I 4 i I j 20 H5050 09ANOCE000010908 2009 Evidence of Coverage (EOC) 4. How to File a Grievance What is a Grievance? A grievance is any complaint, other than one that involves a request for an initial determination or an appeal as described in Section 5 of this manual. Grievances do not involve problems related to approving or paying for Part C medical care or services, problems about having to leave the hospital too soon, and problems about having Sldlled Nursing Facility (SNF),Home Health Agency (HHA), or Comprehensive Outpatient Rehabilitation Facility (CORF) services ending too soon. If we will not pay for or give you the Part C medical care or services you want,you believe that you are being released from the hospital or SNF too soon, or your HHA or CORF services are ending too soon, you must follow the rules outlined in Section 5. What types of problems might lead to your filing a grievance? • Problems with the service you receive from Customer Service. • If you feel that you are being encouraged to leave (disenroll from) the Plan. • If you disagree with our decision not to give you a"fast"decision or a"fast" appeal, We discuss these fast decisions and appeals in Section 5, • We don't give you a decision within the required time frame. • We don't give you required notices. • You believe our notices and other written materials are hard to understand. • Problems with the quality of the medical care or services you receive, including quality of care during a hospital stay. • Problems with how long you have to wait on the phone, in the waiting room, or in the exam room. • Problems getting appointments when you need them, or waiting too long for them. • Rude behavior by doctors, nurses,receptionists, or other staff. • Cleanliness or condition of doctor's offices, clinics, or hospitals. If you have one of these types of problems and want to make a complaint, it is called"filing a grievance." Who may file a grievance You or someone you name may file a grievance. The person you name would be your "representative." You may name a relative, friend, lawyer, advocate, doctor, or anyone else to act for you. Other persons may already be authorized by the Court or in accordance with State law to act for you. If you want someone to act for you who is not already authorized by the Court or under State law, then you and that person must sign and date a statement that gives the person legal permission to be your representative. To learn how to name your representative, you may call Customer Service. 21 H5050 09ANOCE000010908 I ' 2009 Evidence of Coverage (EOC) Filing a grievance with our Plan If you have a complaint, you or your representative may call the phone number for Part C Grievances (for complaints about Part C medical care or services) in Section 8. We will try to resolve your complaint over the phone. If you ask for a written response, file a written grievance, or your complaint is related to quality of care, we will respond in writing to you. If we cannot resolve your complaint over the phone,we have a formal procedure to review your complaints. We call this Group Health's grievance procedure. For this process your grievance requests must be in writing, and mailed to Group Health Medicare Customer Service Medicare Grievance, P.O. Box 34590, Seattle WA 98124-1590 or fax: 206-901-4612, or From www.ghc.org click"Contact Us"or you may call the number in Section 8 of this booklet to contact Group Health Customer Service. We must address your grievance as quickly as your case requires based on your health status, but no later than 30 days after receiving your complaint. We may extend the time frame by up to 14 days if you ask for the extension, or if we justify a need for additional information and the delay is in your best interest. The grievance must be submitted within 60 days of the event or incident. We must address your grievance as quickly as your case requires based on your health status, but no later than 30 days after receiving your complaint. We may extend the time frame by up to 14 days if you ask for the extension, or if we justify a need for additional information and the delay is in your best interest. If we deny your grievance in whole or in part, our written decision will explain why we denied it, and will tell you about any dispute resolution options you may have. Fast Grievances f In certain cases, you have the right to ask for a"fast grievance,"meaning we will answer your grievance within 24 hours. We discuss situations where you may request a fast grievance in Section 5. For quality of care problems, you may also complain to Qualis Health You may complain about the quality of care received under Medicare, including care during a hospital stay. You may complain to us using the grievance process, to the Quality Improvement Organization(QIO), or both. If you file with Qualis Health, we must help Qualis Health resolve the complaint. See Section 8 for more information about Qualis Health and for the,name and phone number of the QIO in your state. i i 22 H5050 09ANOCE000010908 2009 Evidence of Coverage(EOC) 5. Complaints and Appeals about your Part C Medical Care and Service(s) Introduction This section explains how you ask for coverage of your Part C medical care or service(s)or payments in different situations. This section also explains how to make complaints when you think you are being asked to leave the hospital too soon, or you think your skilled nursing facility (SNF), home health(HHA) or comprehensive outpatient rehabilitation facility(CORF) services are ending too soon. These types of requests and complaints are discussed below in Part 1,Part 2, or Part 3. Other complaints that do not involve the types of requests or complaints discussed below in Part 1, Part 2, or Part 3 are considered grievances. You would file a grievance if you have any type of problem with us or one of our network providers that does not relate to coverage for Part C medical care or services. For more information about grievances, see Section 4. Part 1. Requests for Part C medical care or services or payments. Part 2. Complaints if you think you are asked to leave the hospital too soon. Part 3. Complaints if you think your skilled nursing facility (SNF),home health (HHA) or comprehensive outpatient rehabilitation facility (CORF) services are ending too soon. PART 1. Requests for medical care or services or payment This part explains what you can do if you have problems getting the Part C medical care or service you request, or payment(including the amount you paid) for a Part C medical care or service you already received. If you have problems getting the Part C medical care or services you need, or payment for a Part C service you already received, you must request an initial determination with the plan. Initial Determinations The initial determination we make is the starting point for dealing with requests you may have about covering a Part C medical care or service you need, or paying for a Part C medical care or service you already received. Initial decisions about Part C medical care or services are called "organization determinations." With this decision, we explain whether we will provide the Part C medical care or service you are requesting, or pay for the Part C medical care or service you already received. The following are examples of requests for initial determinations: • You are not getting Part C medical care or services you want, and you believe that this care is covered by the Plan. 23 H5050 09ANOCE000010908 2009 Evidence of Coverage (EOC) f • We will not approve the medical treatment your doctor or other medical provider wants to give you, and you believe that this treatment is covered by the Plan. • You are being told that a medical treatment or service you have been getting will be reduced or stopped, and you believe that this could harm your health. • You have received Part C medical care or services that you believe should be covered by the Plan,but we have refused to pay for this care. Who may ask for an initial determination? You, your prescribing physician, or someone you name may ask us for an initial determination. The person you name would be your"appointed representative." You may name a relative, friend, advocate, doctor, or anyone else to act for you. Other persons may already be authorized f under State law to act for you. If you want someone to act for you who is not already authorized under State law,then you and that person must sign and date a statement that gives the person legal permission to be your appointed representative, If you are requesting Part C medical care or services, this statement must be sent to us at the address or fax number listed under "Part C Organization Determinations" in Section 8. To learn how to name your appointed representative, you may call Customer Service. You also have the right to have a lawyer act for you. You may contact your own lawyer, or get the name of a lawyer from your local bar association or other referral service. There are also groups that will give you free legal services if you qualify. Asking for a "standard" or "fast" initial determination A decision about whether we will give you, or pay for, the Part C medical care or service you are requesting can be a"standard" decision that is made within the standard time frame, or it can be ti a"fast" decision that is made more quickly. A fast decision is also called an"expedited" decision. Asking for a standard decision To ask for a standard decision for a Pant C medical care or service you, your doctor, or your representative should fax, or write us at the numbers or address listed under Part C Organization Determinations (for appeals about Part C medical care or services) in Section 8. Asking for a fast decision You may ask for a fast decision only if you or your doctor believe that waiting for a standard decision could seriously harm your health or your ability to function. (Fast decisions apply only to requests for benefits that you have not yet received. You cannot get a fast decision if you are asking us to pay you back for a benefit that you already received.) If you are requesting a Part C medical care or service that you have not yet received, you, your doctor, or your representative may ask us to give you a fast decision by calling, faxing, or writing us at the numbers or address listed under Part C Organization Determinations (for appeals about Part C medical care or services)in Section 8. 24 H5050 09ANOCE000010908 i 2009 Evidence of Coverage (EOC) If you want to request a fast decision after regular weekday business hours, please call us and leave a message when prompted to do so. Group Health Customer Service staff will respond as soon as possible. Be sure to ask for a"fast,"or"expedited" review. If your doctor asks for a fast decision for you, or supports you in asking for one, and the doctor indicates that waiting for a standard decision could seriously harm your health or your ability to function, we will automatically give you a fast decision. If you ask for a fast decision without support from a doctor, we will decide if your health requires a fast decision. If we decide that your medical condition does not meet the requirements for a fast decision, we will send you a letter informing you that if you get a doctor's support for a fast review, we will automatically give you a fast decision. The letter will also tell you how to file a"fast grievance."You have the right to file a fast grievance if you disagree with our decision to deny your request for a fast review(for more information about fast grievances, see Section 4). If we deny your request for a fast initial determination, we will give you a standard decision. What happens when you request an initial determination? • For a decision about payment for Part C medical care or services you already received. If we do not need more information to make a decision, we have up to 30 days to make a decision after we receive your request, although a small number of decisions may take longer. However, if we need more information in order to make a decision, we have up to 60 days from the date of the receipt of your request to make a decision. You will be told in writing when we make a decision. If you have not received an answer from us within 60 days of your request, you have the right to appeal. • For a standard decision about Part C medical care or services you have not yet received. We have 14 days to make a decision after we receive your request. However, we can take up to 14 more days if you ask for additional time, or if we need more information(such as medical records)that may benefit you. If we take additional days, we will notify you in writing. If you believe that we should not take additional days, you can make a specific type of complaint called a "fast grievance". For more information about fast grievances, see Section 4. If you have not received an answer ftom us within 14 days of your request(or by the end of any extended time period), you have the right to appeal. • For a fast decision about Part C medical care or services you have not yet received. 25 H5050 09ANOCE000010908 2009 Evidence of Coverage (EOC) If you receive a"fast"decision,we will give you our decision about your requested medical care or services within 72 hours after we receive the request. However, we can take up to 14 j more days if we find that some information is missing that may benefit you, or if you need more time to prepare for this review. If we take additional days, we will notify you in writing. If you believe that we should not take any extra days, you can file a fast grievance. We will call you as soon as we make the decision. If we do not tell you about our decision within 72 hours (or by the end of any extended time period), you have the right to appeal. If we deny your request for a fast decision, you may file a "fast grievance." For more information about fast grievances, see Section 4. What happens if we decide completely in your favor? • For a decision about payment for Part C medical care or services you already received. Generally, we must send payment no later than 30 days after we receive your request, although a small number of decisions may take up to 60 days. If we need more information in order to make a decision,we have up to 60 days from the date of the receipt of your request to make payment. I • For a standard decision about Part C medical care or services you have not yet received. We must authorize or provide your requested care within 14 days of receiving your request. If we extended the time needed to make our decision, we will authorize or provide your medical care before the extended time period expires. j I • For a fast decision about Part C medical care or services you have not yet received. We must authorize or provide your requested care within 72 hours of receiving your request. If we extended the time needed to make our decision,we will authorize or provide your medical care before the extended time period expires. What happens if we decide against you? If we decide against you, we will send you a written decision explaining why we denied your request. If an initial determination does not give you all that you requested, you have the right to appeal the decision. (See Appeal Level 1.) Appeal Level 1: Appeal to the Plan You may ask us to review our initial determination, even if only part of our decision is not what you requested. An appeal to the plan about Part C medical care or services is also called a plan "reconsideration." When we receive your request to review the initial determination, we give the request to people at our organization who were not involved in making the initial determination. This helps ensure that we will give your request a fresh look Who may file your appeal of the initial determination? 26 H5050 09ANOCE000010908 2009 Evidence of Coverage (EOC) If you are appealing an initial decision about Part C medical care or services, the rules about who may file an appeal are the same as the rules about who may ask for an organization determination. Follow the instructions under"Who may ask for an initial determination?" However,providers who do not have a contract with the Plan may also appeal a payment decision as long as the provider signs a"waiver of payment"statement saying it will not ask you to pay for the Part C medical care or service under review,regardless of the outcome of the appeal. How soon must you file your appeal? You must file the appeal request within 60 calendar days from the date included on the notice of our initial determination. We may give you more time if you have a good reason for missing the deadline. How to file your appeal 1. Asking for a standard appeal To ask for a standard appeal about a Part C medical care or service a signed, written appeal request must be sent to the address listed under Part C Appeals (for appeals about medical care or services) in Section 8. 2. Asking for a fast appeal If you are appealing a decision we made about giving you a Part C medical care or service that you have not received yet, you and/or your doctor will need to decide if you need a fast appeal. The rules about asking for a fast appeal are the same as the rules about asking for a fast initial determination. You, your doctor, or your representative may ask us for a fast appeal by calling, faxing, or writing us at the numbers or address listed under Part C Appeals (for appeals about Part C medical care or services) in Section 8. If you want to request a fast decision after regular weekday business hours,please call us in the Appeals Department at 1-866-458-5479 and leave a message when prompted to do so. Group Health Appeals Department staff will respond as soon as possible. Be sure to ask for a "fast" or "expedited" review. Remember, if your doctor provides a written or oral supporting statement explaining that you need the fast appeal, we will automatically give you a fast appeal. If you ask for a fast decision without support from a doctor, we will decide if your health requires a fast decision. If we decide that your medical condition does not meet the requirements for a fast decision, we will send you a letter informing you that if you get a doctor's support for a fast review, we will automatically give you a fast decision. The letter will also tell you how to file a"fast grievance." You have the right to file a fast grievance if you disagree with our decision to deny your request for a fast review(for more information about fast grievances, see Section 4). If we deny your request for a fast appeal, we will give you a standard appeal. Getting information to support your appeal 27 H5050_09ANOCE000010908 f 2009 Evidence of Coverage(EOC) We must gather all the information we need to make a decision about your appeal. If we need your assistance in gathering this information,we will contact you or your representative. You have the right to obtain and include additional information as part of your appeal. For example, you may already have documents related to your request, or you may want to get your doctor's records or opinion to help support your request, You may need to give the doctor a written request to get information. You may give us your additional information to support your appeal by calling, faxing, or writing us at the numbers or address listed under Part C Appeals (for appeals about Part C medical care or services)in Section 8, You may also deliver additional information in person to the address listed under Part C Appeals (for appeals about Part C medical care or services) in Section 8. You also have the right to ask us for a copy of information regarding your appeal. You may call or write us at the phone number or address listed under Part C Appeals (for appeals about Part C medical care or services) in Section 8. We are allowed to charge a fee for copying and sending this information to you. How soon must we decide on your appeal? • For a decision about payment for Part C medical care or services you already received. I After we receive your appeal request,we have 60 days to decide. If we do not decide within 60 days, your appeal automatically goes to Appeal Level 2. • For a standard decision about Part C medical care or services you have not yet received. After we receive your appeal,we have 30 days to decide, but will decide sooner if your j health condition requires. However, if you ask for more time, or if we find that helpful information is missing, we can take up to 14 more days to make our decision, If we do not tell you our decision within 30 days (or by the end of the extended time period), your request will automatically go to Appeal Level 2. i • For a fast decision about Part C medical care or services you have not yet received. After we receive your appeal, we have 72 hours to decide, but will decide sooner if your health condition requires. However, if you ask for more time, or if we find that helpful information is missing, we can take up to 14 more days to make our decision. If we do not decide within 72 hours (or by the end of the extended time period), your request will automatically go to Appeal Level 2. What happens if we decide completely in your favor? • For a decision about pUment for Part C medical care or services you already received. i 28 H5050 09ANOCE000010908 1 2009 Evidence of Coverage (EOC) We must pay within 60 days of receiving your appeal request. • For a standard decision about Part C medical care or services you have not yet received. We must authorize or provide your requested care within 30 days of receiving your appeal request. If we extended the time needed to decide your appeal, we will authorize or provide your requested care before the extended time period expires. • For a fast decision about Part C medical care or services you have not yet received. We must authorize or provide your requested care within 72 hours of receiving your appeal request. If we extended the time needed to decide your appeal, we will authorize or provide your requested care before the extended time period expires. Appeal Level 2: Independent Review Entity (IRE) At the second level of appeal, your appeal is reviewed by an outside, Independent Review Entity (IRE) that has a contract with the Centers for Medicare & Medicaid Services (CMS), the government agency that runs the Medicare program. The IRE has no connection to us. You have the right to ask us for a copy of your case file that we sent to this entity. We are allowed to charge you a fee for copying and sending this information to you. HOW to file your appeal If you asked for Part C medical care or services, or payment for Part C medical care or services, and we did not rule completely in your favor at Appeal Level 1, your appeal is automatically sent to the IRE. How soon must the IRE decide? The IRE has the same amount of time to make its decision as the plan had at Appeal Level 1. If the IRE decides completely in your favor; The IRE will tell you in writing about its decision and the reasons for it. • For a decision about paymeat for Part C medical care or services you already received. We must pay within 30 days after we receive notice reversing our decision. • For a standard decision about Part C medical care or services you have not yet received. We must authorize your requested Part C medical care or service within 72 hours, or provide it to you within 14 days after we receive notice reversing our decision. • For a fast decision about Pant C medical care or services. 29 H5050_09ANOCE000010908 2009 Evidence of Coverage (EOC) We must authorize or provide your requested Part C medical care or services within 72 hours after we receive notice reversing our decision. Appeal Level 3: Administrative Law Judge (ALJ) If the IRE does not rule completely in your favor, you or your representative may ask for a review by an Administrative Law Judge (ALJ) if the dollar value of the Part C medical care or service you asked for meets the minimum requirement provided in the IRE's decision. During the ALJ review, you may present evidence, review the record(by either receiving a copy of the file or accessing the file in person when feasible), and be represented by counsel. How to file your appeal The request must be filed with an ALJ within 60 calendar days of the date you were notified of the decision made by the IRE(Appeal Level 2). The ALJ may give you more time if you have a good reason for missing the deadline. The decision you receive from the IRE will tell you how to file this appeal, including who can file it. The ALJ will not review your appeal if the dollar value of the requested Part C medical care or service does not meet the minimum requirement specified in the IRE's decision. If the dollar value is less than the minimum requirement, you may not appeal any further. How soon will the Judge make a decision? The ALJ will hear your case, weigh all of the evidence, and make a decision as soon as possible. If the Judge decides in your favor: See the section"Favorable Decisions by the ALJ,MAC, or a Federal Court Judge" below for information about what we must do if our decision denying what you asked for is reversed by an ALJ. Appeal Level 4: Medicare Appeals Council (MAC) If the ALJ does not rule completely in your favor, you or your representative may ask for a review by the Medicare Appeals Council(MAC). How to file your appeal The request must be filed with the MAC within 60 calendar days of the date you were notified of the decision made by the ALJ (Appeal Level 3). The MAC may give you more time if you have a good reason for missing the deadline. The decision you receive from the ALJ will tell you how to file this appeal, including who can file it. How soon will the Council make a decision? The MAC will first decide whether to review your case (it does not review every case it receives). If the MAC reviews your case, it will mare a decision as soon as possible. If it decides not to review your case, you may request a review by a Federal Court Judge (see Appeal Level 5). The MAC will issue a written notice explaining any decision it makes. The notice will tell you how to request a review by a Federal Court Judge. 30 H5050 09ANOCE000010908 2009 Evidence of Coverage (EOC) If Council e hi tdecides in your favor: See the section"Favorable Decisions by the ALJ, MAC,or a Federal Court Judge" below for information about what we must do if our decision denying what you asked for is reversed by the MAC. Appeal Level 5: Federal Court You have the right to continue your appeal by asking a Federal Court Judge to review your case if the amount involved meets the minimum requirement specified in the Medicare Appeals Council's decision, you received a decision from the Medicare Appeals Council (Appeal Level 4), and: • The decision is not completely favorable to you, or • The decision tells you that the MAC decided not to review your appeal request. How to file your appeal In order to request judicial review of your case, you must file a civil action in a United States district court within 60 calendar days after the date you were notified of the decision made by the Medicare Appeals Council (Appeal Level 4). The letter you get from the Medicare Appeals Council will tell you how to request this review, including who can file the appeal. Your appeal request will not be reviewed by a Federal Court if the dollar value of the requested Part C medical care or service does not meet the minimum requirement specified in the MAC's decision. How soon will the Judge make a decision? The Federal Court Judge will first decide whether to review your case. If it reviews your case, a decision will be made according to the rules established by the Federal judiciary. If the Judge decides in your favor: See the section"Favorable Decisions by the ALJ,MAC, or a Federal Court Judge"below for information about what we must do if our decision denying what you asked for is reversed by a Federal Court Judge. If the Judge decides against you: You may have further appeal nights in the Federal Courts. Please refer to the Judge's decision for further information about your appeal rights. Favorable Decisions by the ALJ, MAC, or a Federal Court Judge This section explains what we must do if our initial decision denying what you asked for is reversed by the ALJ, MAC, or a Federal Court Judge. • For a decision about Pant C medical care or services, we must pay for, authorize, or provide the medical care or service you have asked for within 60 days of the date we receive the decision. 31 H5050_09ANOCE000010908 I 2009 Evidence of Coverage (EOC) PART 2. Complaints (appeals) if you think you are being discharged from the hospital too soon When you are admitted to the hospital, you have the right to get all the hospital care covered by the Plan that is necessary to diagnose and treat your illness or injury. The day you leave the hospital (your discharge date)is based on when your stay in the hospital is no longer medically necessary. This part explains what to do if you believe that you are being discharged too soon. Information you should receive during your hospital stay Within two days of admission as an inpatient or during pre-admission, someone at the hospital must give you a notice called the Important Message from Medicare (call Customer Service or 1- 800 MEDICARE (1-800-633-4227)to get a sample notice or see it online at htlp://www.cms.hhs.gov/BNI . This notice explains: • Your right to get all medically necessary hospital services paid for by the Plan(except for any applicable co-payments or deductibles). • Your right to be involved in any decisions that the hospital, your doctor, or anyone else makes about your hospital services and who will pay for them. • Your right to get services you need after you leave the hospital. �- • Your right to appeal a discharge decision and have your hospital services paid for by us during the appeal (except for any applicable co-payments or deductibles). You (or your representative) will be asked to sign the Important Message from Medicare to show f that you received and understood this notice. Signing the notice does not mean that you agree that the coverage for your services should end —only that you received and understand the notice. If the hospital gives you the Important Message from Medicare more than 2 days before your discharge day, it must give you a copy of your signed Important Message from Medicare before you are scheduled to be discharged. f Review of your hospital discharge by the Quality Improvement Organization You have the right to request a review of your discharge. You may ask a Quality Improvement Organization to review whether you are being discharged too soon. What is the "Quality Improvement Organization"? "QIO" stands for Quality Improvement Organization. The QIO is a group of doctors and other health care experts paid by the federal government to check on and help improve the care given to Medicare patients. They are not part of the Plan or the hospital. There is one QIO in each state. QIOs have different names, depending on which state they are in; Qualis Health in the QIO for Washington State. The doctors and other health experts in the QIO review certain types of complaints made by Medicare patients. These include complaints from Medicare patients who think their hospital stay is ending too soon. Getting Qualis Health to review your hospital discharge 32 H5050 09ANOCE000010908 i 2009 Evidence of Coverage (EOC) I '. You must quickly contact Qualis Health. The Important Message from Medicare gives the name and telephone number of Qualis Health and tells you what you must do. • You must ask Qualis Health for a"fast review" of your discharge. This"fast review" is also called an "immediate review." • You must request a review from Qualis Health no later than the day you are scheduled to be discharged from the hospital. If you meet this deadline, you may stay in the hospital after your discharge date without paying for it while you wait to get the decision from Qualis Health. • Qualis Health will look at your medical information provided to the QIO by us and the hospital. • During this process you will get a notice, called the Detailed Notice of Discharge, giving the reasons why we believe that your discharge date is medically appropriate. Call Customer Service or 1-800-MEDICARE (1-800-633-4227 - TTY users should call 1-877-486-2048) to get a sample notice or see it online athttp://www.cms.hhs.aov/BNI . • Qualis Health will decide, within one day after receiving the medical information it needs, whether it is medically appropriate for you to be discharged on the date that has been set for you. What happens if Qualis Health decides in your favor? We will continue to cover your hospital stay (except for any applicable co-payments or deductibles) for as long as it is medically necessary and you have not exceeded our Plan coverage limitations as described in Section 10. What happens if Qualis Health agrees with the discharge? You will not be responsible for paying the hospital charges until noon of the day after Qualis Health gives you its decision. However, you could be financially liable for any inpatient hospital services provided after noon of the day after Qualis Health gives you its decision. You may leave the hospital on or before that time and avoid any possible financial liability. If you remain in the hospital, you may still ask Qualis Health to review its first decision if you make the request within 60 days of receiving Qualis Health's first denial of your request. However, you could be financially liable for any inpatient hospital services provided after noon of the day after Qualis Health gave you its first decision. What happens if you appeal Qualis Health decision? Qualis Health has 14 days to decide whether to uphold its original decision or agree that you should continue to receive inpatient care. If Qualis Health agrees that your care should continue, we must pay for or reimburse you for any care you have received since the discharge date on the Important Message from Medicare, and provide you with inpatient care (except for any applicable co-payments or deductibles) for as long as it is medically necessary and you have not exceeded our Plan coverage limitations as described in Section 10. If Qualis Health upholds its original decision, you may be able to appeal its decision to an Administrative Law Judge (ALJ). Please see Appeal Level 3 in Part 1 of this section for guidance on the ALJ appeal. If the ALJ upholds the decision, you may also be able to ask for a 33 H5050 09ANOCE000010908 2009 Evidence of Coverage(EOC) review by the Medicare Appeals Council (MAC) or a Federal court. If any of these decision makers agree that your stay should continue, we must pay for or reimburse you for any care you have received since the discharge date, and provide you with inpatient care (except for any applicable co-payments or deductibles) for as long as it is medically necessary and you have not exceeded our Plan coverage limitations as described in Section 10. ( I What if you do not ask Qualis Health for a review by the deadline? If you do not ask Qualis Health for a fast review of your discharge by the deadline, you may ask us for a"fast appeal' of your discharge,which is discussed in Part 1 of this section. If you ask us for a fast appeal of your discharge and you stay in the hospital past your discharge date, you may have to pay for the hospital care you receive past your discharge date. whether you have to pay or not depends on the decision we make. • If we decide, based on the fast appeal,that you need to stay in the hospital, we will continue i to cover your hospital care (except for any applicable co-payments or deductibles) for as long as it is medically necessary and you have not exceeded our Plan coverage limitations as described in Section 10. • If we decide that you should not have stayed in the hospital beyond your discharge date, we will not cover any hospital care you received after the discharge date. If we uphold our original decision, we will forward our decision and case file to the Independent Review Entity (IRE) within 24 hours. Please see Appeal Level 2 in Part 1 of this section for guidance on the IRE appeal. If the IRE upholds our decision, you may also be able to ask for a review by an ALJ, MAC, or a Federal court. If any of these decision makers agree that your stay should continue, we must pay for or reimburse you for any care you have received since the discharge date on the notice you got from your provider, and provide you with any services you asked for(except for any applicable co-payments or deductibles) for as long as it is medically necessary and you have not exceeded our Plan coverage limitations as described in Section 10. PART 3. Complaints (appeals) if you think coverage for your skilled nursing facility, home health agency, or comprehensive outpatient rehabilitation facility services, is ending too soon When you are a patient in a Skilled Nursing Facility (SNF),Home Health Agency (HHA), or y Comprehensive Outpatient Rehabilitation Facility (CORE), you have the right to get all the SNF, HHA or CORF care covered by the Plan that is necessary to diagnose and treat your illness or injury. The day we end coverage for your SNF, HHA or CORE services is based on when these services are no longer medically necessary. This part explains what to do if you believe that coverage for your services is ending too soon. Information you will receive during your SNF, HHA or CORF stay Your provider will give you written notice called the Notice of Medicare Non-Coverage at least 2 days before coverage for your services ends (call Customer Service or 1-800 MEDICARE(1- 800-633-4227)to get a sample notice or see it online athtti)://www.ems.hhs.jzov/BN You (or your representative) will be asked to sign and date this notice to show that you received it. 34 H5050 09ANOCE000010908 1 2009 Evidence of Coverage (EOC) Signing the notice does not mean that you agree that coverage for your services should end —only that you received and understood the notice. Getting Qualis Health review of our decision to end coverage You have the right to appeal our decision to end coverage for your services. As explained in the notice you get from your provider, you may ask the Quality Improvement Organization(the "QIO")to do an independent review of whether it is medically appropriate to end coverage for your services, How soon do you have to ask for Qualis Health review? You must quickly contact Qualis Health. The written notice you got from your provider gives the name and telephone number of Qualis Health and tells you what you must do. • If you get the notice 2 days before your coverage ends, you must contact Qualis Health no later than noon of the day after you get the notice. • If you get the notice more than 2 days before your coverage ends, you must make your request no later than noon of the day before the date that your Medicare coverage ends. What will happen during Qualis Health's review? Qualis Health will ask why you believe coverage for the services should continue. You don't have to prepare anything in writing, but you may do so if you wish. Qualis Health will also look at your medical information,talk to your doctor, and review information that we have given to Qualis Health. During this process, you will get a notice called the Detailed Explanation of Non- Coverage giving the reasons why we believe coverage for your services should end. Call Customer Service or 1-800-MEDICARE (1-800-633-4227 - TTY users should call 1-877-486- 2048)to get a sample notice or see it online at hq://www.cros.hhs.gov/BNI/). Qualis Health will make a decision within one full day after it receives all the information it needs. What happens if Qualis Health decides in your favor? We will continue to cover your SNF, HHA or CORF services (except for any applicable co- payments or deductibles) for as long as it is medically necessary and you have not exceeded our Plan coverage limitations as described in Section 10. What happens if Qualis Health agrees that your coverage should end? You will not be responsible for paying for any SNF, HHA, or CORF services provided before the termination date on the notice you get from your provider. You may stop getting services on or before the date given on the notice and avoid any possible financial liability. If you continue receiving services, you may still ask Qualis Health to review its first decision if you make the request within 60 days of receiving Qualis Health's first denial of your request. What happens if you appeal Qualis Health decision? Qualis Health has 14 days to decide whether to uphold its original decision or agree that you should continue to receive services. If Qualis Health agrees that your services should continue, 35 H5050 09ANOCE000010908 2009 Evidence of Coverage (EOC) I we must pay for or reimburse you for any care you have received since the termination date on the notice you got from your provider, and provide you with any services you asked for(except for any applicable co-payments or deductibles) for as long as it is medically necessary and you have not exceeded our Plan coverage limitations as described in Section 10 If Qualls Health upholds its original decision, you may be able to appeal its decision to an Administrative Law Judge(ALJ). Please see Appeal Level 3 in Part 1 of this section for guidance on the ALJ appeal. If the ALJ upholds our decision, you may also be able to ask for a review by the Medicare Appeals Council (MAC) or a Federal Court. If either the MAC or Federal Court agrees that your stay should continue, we must pay for or reimburse you for any care you have received since the termination date on the notice you got from your provider, and provide you with any services you asked for(except for any applicable co-payments or deductibles) for as long as it is medically necessary and you have not exceeded our Plan coverage limitations as described in Section 10. What if you do not ask Qualis Health for a review by the deadline? If you do not ask Qualis Health for a review by the deadline, you may ask us for a fast appeal, which is discussed in Part 1 of this section. If you ask us for a fast appeal of your coverage ending and you continue getting services from the SNF,HHA, or CORF, you may have to pay for the care you get after your termination date. Whether you have to pay or not depends on the decision Ave make. • If we decide, based on the fast appeal,that coverage for your services should continue,we will continue to cover your SNF, HHA, or CORF services (except for any applicable co- payments or deductibles) for as long as it is medically necessary and you have not exceeded i our Plan coverage limitations as described in Section 10. • If we decide that you should not have continued getting services, we will not cover any services you received after the termination date. If we uphold our original decision, we will forward our decision and case file to the Independent Review Entity (IRE)within 24 hours. Please see Appeal Level 2 in Part 1 of this section for guidance on the IRE appeal, If the IRE upholds our decision, you may also be able to ask for a review by an ALJ, MAC, or a Federal court. If any of these decision makers agree that your stay should continue, we must pay for or reimburse you for any care you have received since the discharge date on the notice you got from your provider, and provide you with any services you f asked for (except for any applicable co-payments or deductibles) for as long as it is medically necessary and you have not exceeded our Plan coverage limitations as described in Section 10. I. 36 H5050 09ANOCE000010908 i 2009 Evidence of Coverage (EOC) I 6. Endinfr your Membership Ending your membership in our Plan may be voluntary (your own choice) or involuntary (not your own choice): • You might leave our Plan because you have decided that you want to leave. • There are also limited situations where we are required to end your membership. For example, if you move permanently out of our geographic service area. Voluntarily ending your membership There are only certain times during the year when you may voluntarily end your membership in our Plan. The key time to make changes is the Medicare fall open enrollment period (also known as the "Annual Election Period"), which occurs every year from November 15 through December 31. This is the time to review your health care and drug coverage for the following year and make changes to your Medicare health or prescription drug coverage. Any changes you make during this time will be effective January 1. Certain individuals, such as those with Medicaid, those who get extra help, or who move, can make changes at other times. For more information on when you can make changes see the enrollment period table later in this section. If you want to end your membership in our plan during this time, this is what you need to do: • If you are planning on enrolling in a new Medicare Advantage plan: Simply join the new plan. You will be disemolled from our plan when your new plan's coverage begins on January 1. • If you are planning on switching to the Original Medicare Plan and joining a Medicare Prescription drug plan: Simply join the new Medicare Prescription drug plan:You will be disemolled automatically from our plan when your new coverage begins on January 1. • If you are planning on switching to the Original Medicare Plan without a Medicare Prescription drug plan: Contact Customer Service for information on how to request disemollment. You may also call 1-800-MEDICARE (1-800-633-4227)to request disenrollment from our plan. TTY users should call 1-877-486-2048. Your enrollment in Original Medicare will be effective January 1. Enrollment Period When? Effective Date _ Fall Open Enrollment Every year from November January 1 (Annual Election Period) 15 to December 31 Time to review health and drug coverage and make changes. Medicare Advantage (MA) Every year from January 1 First day of next month after Open Enrollment to March 31 plan receives your enrollment request MA-eligible beneficiaries can make one change to their health plan coverage. However, you 37 H5050 09ANOCE000010908 f 2009 Evidence of Coverage(EOC) cannot use this period to add, drop, or change your Medicare prescription drug coverage. Examples: If you are in a MA plan that does not have Medicare prescription drug coverage, you can switch to another Medicare Advantage plan that does not offer drug coverage or go to Original Medicare If you are in Original Medicare Plan and have a Medicare prescription drug plan, you can join a Medicare Advantage Plan that offers Medicare drug coverage If you are in an MA plan that offers Medicare drug coverage, you can leave and join Original Medicare Plan and a Medicare prescription drug plan Special Enrollment Periods for Determined by exception. Generally, first day of next limited special exceptions, such month after plan receives your as: enrollment request • You have a change in residence • You have Medicaid • You are eligible for extra help with Medicare prescriptions • You live in an institution (such as a nursing home) For more information about the options available to you during these enrollment periods, contact Medicare at 1-800-MEDICARE (1-800-633-4227.) TTY users should call 1-877-486-2048. Additional information can also be found in the "Medicare & You"handbook. This handbook is mailed to everyone with Medicare each fall, You may view or download a copy from www.medicare.eov - under"Search Tools," select "Find a Medicare Publication." I 38 H5050_09ANOCE000010908 l 2009 Evidence of Coverage (EOC) Until your membership ends, you must keep getting your Medicare services through our Plan If you leave our Plan, it may take some time for your membership to end and your new way of getting Medicare to take effect(we discuss when the change takes effect earlier in this section). While you are waiting for your membership to end,you are still a member and must continue to get your care as usual through our Plan. If you happen to be hospitalized on the day your membership ends, generally you will be covered by our Plan until you are discharged. Call Customer Service for more information and to help us coordinate with your new plan. We cannot ask you to leave the Plan because of your health. We cannot ask you to leave your health plan for any health-related reasons. If you ever feel that you are being encouraged or asked to leave our Plan because of your health,you should call 1- 800-MEDICARE (1-800-633-4227), which is the national Medicare help line. TTY users should call 1-877-486-2048. You may call 24 hours a day, 7 days a week. Involuntarily ending your membership If any of the following situations occur, we will end your membership in our Plan. • If you do not stay continuously enrolled in Medicare A and B.Part B-only gratufatkered members need to stay continuously enrolled in Medicare Part B. • If you move out of the service area or are away from the service area for more than 6 months you cannot remain a member of our Plan. And we must end your membership ("disenroll" you)". If you plan to move or take a long trip, please call Customer Service to find out if the place you are moving to or traveling to is in our Plan's service area.. "Section 10 gives more information about getting care when you are away from the service area. If you have been a member of our plan continuously since before January 1999, when you lived outside our service area, you may continue your membership. However, if you move and your move is still outside our service area, will be disenrolled from our Plan, as stated above. • If you intentionally give us incorrect information on your enrollment request that would affect your eligibility to enroll in our Plan. • If you behave in a way that is disruptive, to the extent that you continued enrollment seriously impairs our ability to arrange or provide medical care for you or for others who are members of our Plan. We cannot make you leave our Plan for this reason unless we get permission first from Medicare. • If you let someone else use your plan membership card to get medical care. If you are disenrolled for this reason, CMS may refer your case to the Inspector General for additional investigation. • If you do not pay the Plan premiums, we will tell you in writing that you have a 60-day grace period during which you may pay the Plan premiums before your membership ends. You have the right to make a complaint if we end your membership in our Plan If we end your membership in our Plan we will tell you our reasons in writing and explain how you may file a complaint against us if you want to. 39 H5050 09ANOCE000010908 i 2009 Evidence of Coverage (EOC) 7. Definitions of Important Words Used in the EOC Appeal—An appeal is a special kind of complaint you make if you disagree with a decision to deny a request for health care services or payment for services you already received. You may also make a complaint if you disagree with a decision to stop services that you are receiving. For example,you may ask for an appeal if our Plan doesn't pay for an item/service you think you should be able to receive. Section 5 explains appeals, including the process involved in making an appeal. Benefit period—For both our Plan and the Original Medicare Plan, a benefit period is used to determine coverage for inpatient stays in hospitals and skilled nursing facilities.A benefit period begins on the first day you go to a Medicare-covered inpatient hospital or a skilled nursing facility. The benefit period ends when you haven't been an inpatient at any hospital or SNF for 60 days in a row. If you go to the hospital (or SNF) after one benefit period has ended, a new benefit period begins. There is no limit to the number of benefit periods you can have. The type of care that is covered depends on whether you are considered an inpatient for hospital and SNF stays. You must be admitted to the hospital as an inpatient, not just under observation. You are an inpatient in a SNF only if your care in the SNF meets certain standards for skilled level of care. Specifically, in order to be an inpatient in a SNF,you must need daily skilled- nursing or skilled-rehabilitation care, or both. Centers for Medicare & Medicaid Services (CMS)—The Federal agency that runs the Medicare program. Section 8 explains how to contact CMS. Cost-sharing- Cost-sharing refers to amounts that a member has to pay when services are received. It includes any combination of the following three types of payments: (1) any deductible amount a plan may impose before services are covered; (2) any fixed"co-payment" amounts that a plan may require be paid when specific services are received; or (3) any "coinsurance" amount that must be paid as a percentage of the total amount paid for a service. Covered services—The general term we use in this EOC to mean all of the health care services and supplies that are covered by our Plan. Creditable Prescription Drug Coverage— Coverage (for example, from an employer or union) that is at least as good as Medicare's prescription drug coverage. Custodial care-- Care for personal needs rather than medically necessary needs. Custodial care is care that can be provided by people who don't have professional skills or training. This care includes help with walking, dressing, bathing, eating, preparation of special diets, and taking medication. Medicare does not cover custodial care unless it is provided as other care you are getting in addition to daily skilled nursing care and/or skilled rehabilitation services. 40 H5050 09ANOCE000010908 2009 Evidence of Coverage (EOC) I Disenroll or Disenrollment—The process of ending your membership in our Plan, Disenrollment may be voluntary (your own choice) or involuntary (not your own choice). Section 6 discusses disenrollment, Durable medical equipment—Certain medical equipment that is ordered by your doctor for use in the home. Examples are walkers, wheelchairs, or hospital beds. Emergency care—Covered services that are: 1) rendered by a provider qualified to furnish emergency services; and 2)needed to evaluate or stabilize an emergency medical condition, Evidence of Coverage (EOC) and Disclosure Information—This document, along with your enrollment form and any other attachments, riders, or other optional coverage selected, which explains your coverage, what we must do, your rights, and what you have to do as a member of our Plan. Grievance-A type of complaint you make about us or one of our network providers, including a complaint concerning the quality of your care. This type of complaint does not involve coverage or payment disputes. See Section 4 for more information about grievances. Home health aide—A home health aide provides services that don't need the skills of a licensed nurse or therapist, such as help with personal care (e.g., bathing, using the toilet, dressing, or carrying out the prescribed exercises). Home health aides do not have a nursing license or provide therapy. Home health care -- Skilled nursing care and certain other health care services that you get in your home for the treatment of an illness or injury. Covered services are listed in the Benefits Chart in Section 10 under the heading "Home health care." If you need home health care services, our Plan will cover these services for you provided the Medicare coverage requirements are met. Home health care can include services from a home health aide if the services are part of the home health plan of care for your illness or injury. They aren't covered unless you are also getting a covered skilled service. Home health services don't include the services of housekeepers, food service arrangements, or full-time nursing care at home. Hospice care -- A special way of caring for people who are terminally ill and providing counseling for their families. Hospice care is physical care and counseling that is given by a team of people who are part of a Medicare-certified public agency or private company. Depending on the situation, this care may be given in the home, a hospice facility, a hospital, or a nursing home. Care from a hospice is meant to help patients in the last months of life by giving comfort and relief from pain, The focus is on care, not cure, For more information on hospice care visit www.medicare.gov and under"Search Tools" choose "Find a Medicare Publication" to view or download the publication"Medicare Hospice Benefits." Or, call 1-800-MEDICARE (1-800- 633-4227. TTY users should call 1-877-486-2048) Inpatient Care—Health care that you get when you are admitted to a hospital. 41 145050 09ANOCE000010908 2009 Evidence of Coverage (EOC) e Medically necessary—Services or supplies that are proper and needed for the diagnosis or treatment of your medical condition; are used for the diagnosis, direct care, and treatment of your medical condition; meet the standards of good medical practice in the local community; and are not mainly for your convenience or that of your doctor. Medicare—The Federal health insurance program for people 65 years of age or older, some people under age 65 with certain disabilities, and people with End-Stage Renal Disease (generally those with permanent kidney failure who need dialysis or a kidney transplant). Medicare Advantage (MA) Plan—Sometimes called Medicare Part C. A plan offered by a private company that contracts with Medicare to provide you with all your Medicare Pant A (Hospital) and Part B (Medical) benefits. A MA plan offers a specific set of health benefits at the same premium and level of cost-sharing to all people with Medicare who live in the service area covered by the Plan. Medicare Advantage Organizations can offer one or more Medicare Advantage plan in the same service area. A Medicare Advantage Plan can be an HMO,PPO, a Private Fee-for-Service (PFFS) Plan, or a Medicare Medical Savings Account (MSA) plan. In most cases,Medicare Advantage Plans also offer Medicare Part D (prescription drug coverage). These plans are called Medicare Advantage Plans with Prescription Drug Coverage. Everyone who has Medicare Part A and Part B is eligible to join any Medicare Health Plan that is offered in their area, except people with End-Stage Renal Disease (unless certain exceptions apply). Medicare Prescription Drug Coverage (Medicare Part D)—Insurance to help pay for outpatient prescription drugs, vaccines, biologicals, and some supplies not covered by Medicare Part A or Part B. "Medigap" (Medicare supplement insurance)policy—Medicare supplement insurance sold by private insurance companies to fill "gaps" in the Original Medicare Plan coverage. Medigap policies only work with the Original Medicare Plan. (A Medicare Advantage plan is not a Medigap policy.) Member(member of our Plan, or"plan member")—A person with Medicare who is eligible to get covered services, who has enrolled in our Plan and whose enrollment has been confirmed by the Centers for Medicare &Medicaid Services (CMS). Customer Service—A department within our Plan responsible for answering your questions about your membership, benefits, grievances, and appeals. See Section 8 for information about how to contact Customer Service. Network provider—"Provider" is the general term we use for doctors, other health care professionals, hospitals, and other health care facilities that are licensed or certified by Medicare and by the State to provide health care services. We call them"network providers"when they have an agreement with our Plan to accept our payment as payment in full, and in some cases to coordinate as well as provide covered services to members of our Plan. Our Plan pays network providers based on the agreements it has with the providers or if the providers agree to provide you with plan-covered services.Network providers may also be referred to as "plan providers." 42 H5050 09ANOCE000010908 2009 Evidence of Coverage (EOC) Optional supplemental dental benefits—Non-Medicare-covered benefits that can be purchased for an additional premium and are not included in your package of benefits. If you choose to have optional supplemental dental benefits, you may have to pay an additional premium. You must voluntarily elect Optional Supplemental Dental Benefits in order to get them. Organization Determination - The Medicare Advantage organization has made an organization determination when it, or one of its providers, makes a decision about MA services or payment that you believe you should receive. Original Medicare Plan—("Traditional Medicare" or"Fee-for-service"Medicare) The Original Medicare Plan is the way many people get their health care coverage. It is the national pay-per- visit program that lets you go to any doctor, hospital, or other health care provider that accepts Medicare. You must pay the deductible. Medicare pays its share of the Medicare-approved amount, and you pay your share. Original Medicare has two parts: Part A(Hospital Insurance) and Part B (Medical Insurance) and is available everywhere in the United States. Out-of-network provider or out-of-network facility—A provider or facility with which we have not arranged to coordinate or provide covered services to members of our Plan. Out-of- network providers are providers that are not employed, owned, or operated by our Plan or are not under contract to deliver covered services to you. Using out-of'network providers or facilities is explained in this EOC in Section 2. Part C—see "Medicare Advantage (MA) Plan" Primary Care Physician (PCP)—A health care professional you select to coordinate your health care. Your PCP is responsible for providing or authorizing covered services while you are a plan member. Section 2 tells more about PCPs. Prior authorization—Approval in advance to get services. Some in-network services are covered only if your doctor or other network provider gets "prior authorization"from our Plan. Covered services that need prior authorization are marked in the Benefits Chart in Section 10." Quality Improvement Organization (QIO)—Groups of practicing doctors and other health care experts that are paid by the federal government to check and improve the care given to Medicare patients. They must review your complaints about the quality of care given by Medicare Providers, See Section 8 for information about how to contact the QIO in your state, Qualis Health, and Section 5 for information about making complaints to Qualis Health. Rehabilitation services—These services include physical therapy, speech and language therapy, and occupational therapy. Service area—"Service area"is the geographic area approved by the Centers for Medicare & Medicaid Services (CMS) within which an eligible individual may enroll in a certain plan. 43 H5050 09ANOCE000010908 1 2009 Evidence of Coverage (EOC) Skilled nursing facility (SNF) care-A level of care in a SNF ordered by a doctor that must be given or supervised by licensed health care professionals. It may be skilled nursing care, or i skilled rehabilitation services, or both. Skilled nursing care includes services that require the skills of a licensed nurse to perform or supervise. Skilled rehabilitation services are physical therapy, speech therapy, and occupational therapy. Physical therapy includes exercise to improve the movement and strength of an area of the body, and training on how to use special equipment, such as how to use a walker or get in and out of a wheelchair. Speech therapy includes exercise to regain and strengthen speech and/or swallowing skills. Occupational therapy helps you learn how to perform usual daily activities, such as eating and dressing by yourself. Supplemental Security Income (SSI)—A monthly benefit paid by the Social Security Administration to people with limited income and resources who are disabled,blind, or age 65 and older. SSI benefits are not the same as Social Security benefits. Urgently needed care—Section 2 explains about"urgently needed" services. These are different from emergency services. l I -i 44 H5050_09ANOCE000010908 I 2009 Evidence of Coverage (EOC) 8. Helpful Phone Numbers and Resources Contact Information for our Plan Customer Service If you have any questions or concerns, please call or write to our Plan Customer Service. We will be happy to help you. CALL 1-888-901-4600 Calls to this number are free. Monday through Friday, 8 a.m. to 8 p.m. November 15 through February 28 we offer extended hours from 8 a.m. to 8 p.m. seven days a week TTY/TDD 771-or 1-800-833-6388 Calls to this number are free. FAX 206-901-6205 WRITE Group Health Medicare Customer Service Department, P.O. Box 34590, Seattle, WA 98124-1589 EMAIL www. lic.org—"Contact Us" VISIT 12401 East Marginal Way South, Tukwila, WA 98168 WEBSITE www. he.or Contact Information for Grievances, Organizations Determinations, and Appeals Part C Organization Determinations (about your Medicare Care and Services) CALL 1-888-901-4600. Calls to this number are free. TTY/TDD 711 or 1-800-833-6388. This number requires special telephone equipment. Calls to this number are free. FAX 206-901-6205 WRITE Group Health Medicare Customer Service Department, P.O. Box 34590, Seattle, WA 98124-1589 For information about Part C organization determinations, see Section 5. Part C Grievances (about your Medical Care and Services) 45 H5050 09ANOCE000010908 2009 Evidence of Coverage(EOC) I '. CALL 1-888-901-4600. Calls to this number are free. TTYlTDD 711 or 1-800-833-6388. This number requires special telephone equipment. Calls to this number are free. FAX 206-901-6205 WRITE Group Health Medicare Customer Service Department, P.O. Box 34590, Seattle, WA 98124-1589 For information about Part C grievances, see Section 4. Part C Anneals (about your Medical Care and Services) CALL 1-866-458-5479. Calls to this number are free. TTY 800-833-6388. This number requires special telephone equipment. Calls to this number are free, FAX 206-901-7340 WRITE Group Health, Medicare Appeals Coordinator,P.O. Box 34593, Seattle, WA 981244593 VISIT 12400 East Marginal Way South, Tukwila, WA 98168 For information about Part C appeals, see Section 5. Other important contacts Below is a list of other important contacts. For the most up-to-date contact information, check your Medicare & You Handbook,visit www.medicare.gov and choose"Find Helpful Phone f Numbers and Resources," or call 1-800-Medicare (1-800-633-4227). TTY users should call 1- 877-486-2048. I SHIBA SHIBA is a state program that gets money from the Federal government to give free local health insurance counseling to people with Medicare. SHIBA can explain your Medicare rights and protections, help you make complaints about care or treatment, and help straighten out problems with Medicare bills. SHIBA has information about Medicare Advantage Plans,Medicare Prescription Drug Plans, and about Medigap (Medicare supplement insurance)policies. This includes information about whether to drop your Medigap policy while enrolled in a Medicare Advantage Plan and special Medigap rights for people who have tried a Medicare Advantage Plan for the first time. 46 H5050 09ANOCE000010908 t 2009 Evidence of Coverage(El OC) You may contact SHIBA by writing SIIIBA IIelpLine, Office of Insurance Commissioner, P.O. Box 40256, Olympia, WA 98504-0256. SHIBA can be reached by calling, 1-800-562-6900. You can also find the website for SHIBA at www.insurance.wa.gov on the Web. Select"SHIBA Helpline" on the Washington State Office of the Insurance Commissioner website. Qualis Health/Quality Improvement Organization "QIO" stands for Quality Improvement Organization. The QIO is a group of doctors and health professionals in your state that reviews medical care and handles certain types of complaints from patients with Medicare, and is paid by the federal government to check on and help improve the care given to Medicare patients. There is a QIO in each state. QIOs have different names,depending on which state they are in; Qualis Health is the QIO for Washington state. The doctors and other health experts in Qualis Health review certain types of complaints made by Medicare patients. These include complaints about quality of care and appeals filed by Medicare patients who think the coverage for their hospital, skilled nursing facility, home health agency, or comprehensive outpatient rehabilitation stay is ending too soon. See Sections 4 and 5 for more information about complaints,appeals and grievances. You may contact Qualis Health, the QIO in Washington State, at PO BOX 33400, Seattle, WA 98133-0400 or 10700 Meridian Ave.N., Suite 100, Seattle, WA 98133-9075; telephone number (206) 364-9700 or Fax: (206) 368-2419. How to contact the Medicare program Medicare is the Federal health insurance program for people 65 years of age or older, some people under age 65 with certain disabilities, and people with F,nd-Stage Renal Disease (generally those with permanent kidney failure who need dialysis or a kidney transplant). Our organization contracts with the federal government. • Call 1-800-MEDICARE (1-800-633-4227)to ask questions or get free information booklets from Medicare 24 hours a day, 7 days a week. TTY users should call 1-877-486-2048. Customer service representatives are available 24 hours a day, including weekends. • Visit www.medicare.Rov for information. This is the official government website for Medicare. This website gives you up-to-date information about Medicare and nursing homes and other current Medicare issues. It includes booklets you can print directly from your computer. It has tools to help you compare Medicare Advantage Plans and Medicare Prescription Drug Plans in your area. You can also search under"Search Tools"for Medicare contacts in your state. Select"Helpful Phone Numbers and Websites." If you don't have a computer, your local library or senior center may be able to help you visit this website using its computer. Medicaid Medicaid is a state government program that helps with medical costs for some people with limited incomes and resources. Some people with Medicare are also eligible for Medicaid. Medicaid has programs that can help pay for your Medicare premiums and other costs, if you qualify. To find out more about Medicaid and its programs, contact the Washington State Department of Social and Health Services (DSHS) Medical Assistance Administration at 1-800- 562-3022, or write to the Customer Service Center, P.O. Box 45505, Olympia, WA 98504-5505. 47 H5050 09ANOCE000010908 i_ 2009 Evidence of Coverage(EOC) Social Security Social Security programs include retirement benefits, disability benefits, family benefits, survivors' benefits, and benefits for the aged and blind. You may call Social Security at 1-800- 772-1213. TTY users should call 1-800-325-0778. You may also visit www.socialsecurit_y.gov on the Web. Railroad Retirement Board i If you get benefits from the Railroad Retirement Board, you may call your local Railroad Retirement Board office or 1-800-808-0772. TTY users should call 312-751-4701. You may also visit www.nfb.eov on the Web. Employer (or "Group") Coverage If you get, or your spouse gets, benefits from your current or former employer or union, or from your spouse's current or former employer or union, call the employer/union benefits administrator or Customer Service if you have any questions about your employer/union benefits, plan premiums, or the open enrollment season, Important Note: You(or your spouse's) employer/union benefits may change, or you(or your spouse)may lose the benefits, if you enroll in Medicare Pait D. Call your employer/union benefits administrator or Customer Service to find out whether the benefits will change or be terminated if you or your spouse enrolls in Part D. i_ I 48 H5050 09ANOCE000010908 2009 Evidence of Coverage (EOC) 9. LeLyal Notices Notice about governing law Many laws apply to this Evidence of Coverage and some additional provisions may apply because they are required by law. This may affect your rights and responsibilities even if the laws are not included or explained in this document. The principal law that applies to this document is Title XVIII of the Social Security Act and the regulations created under the Social Security Act by the Centers for Medicare &Medicaid Services, or CMS. In addition, other Federal laws may apply and, under certain circumstances, the laws of the state you live in. Notice about nondiscrimination We don't discriminate based on a person's race, disability, religion, sex, sexual orientation, health, ethnicity, creed, age, or national origin. All organizations that provide Medicare Advantage Plans, like our Plan, must obey federal laws against discrimination, including Title VI of the Civil Rights Act of 1964,the Rehabilitation Act of 1973, the Age Discrimination Act of 1975, the Americans with Disabilities Act, all other laws that apply to organizations that get Federal funding, and any other laws and rules that apply for any other reason. Subrogation and Reimbursement Rights The benefits under this Agreement will be available to a Member for injury or illness caused by another party, subject to the exclusions and limitations of this Agreement. If Group Health provides benefits under this Agreement for the treatment of the injury or illness, Group Health will be subrogated to any rights that the Member may have to recover compensation or damages related to the injury or illness. This section more fully describes Group Health's subrogation and reimbursement rights. "Injured Person"under this section means a Member covered by the Agreement who sustains an injury and any spouse, dependent or other person or entity that may recover on behalf of such Member, including the estate of the Member and, if the Member is a minor, the guardian or parent of the Member. When referred to in this section, "Group Health's Medical Expenses" means the expenses incurred and the reasonable value of the benefits provided by Group Health for the care or treatment of the injury sustained by the Injured Person. If the Injured Person's injuries were caused by a third party giving rise to a claim of legal liability against the third party and/or payment by the third party to the Injured Person and/or a settlement between the third party and the Injured Person, Group Health shall have the right to recover Group Health's Medical Expenses from any source available to the Injured Person as a result of the events causing the injury, including but not limited to funds available through applicable third party liability coverage and uninsured/underinsured motorist coverage. This right is commonly referred to as "subrogation." Group Health shall be subrogated to and may enforce all rights of the Injured Person to the extent of Group Health's Medical Expenses, 49 H5050 09ANOCE000010908 i 2009 Evidence of Coverage (EOC) Group Health's subrogation and reimbursement rights shall be limited to the excess of the amount required to fully compensate the Injured Person for the loss sustained, including general damages. However, in the case of Medicare Advantage Members, Group Health's right of subrogation shall be the full amount of Group Health's Medical Expenses and is limited only as required by Medicare. Subject to the above provisions, if the Injured Person is entitled to or does receive money from any source as a result of the events causing the injury, including but not limited to any party's liability insurance or uninsured/underinsured motorist funds, then Group Health's Medical Expenses provided or to be provided to the Injured Person are secondary, not primary. As a condition of receiving benefits under the Agreement,the Injured Person agrees that acceptance of Group Health services is constructive notice of this provision in its entirety and agrees to reimburse Group Health for the benefits the Injured Person received as a result of the events causing the injury. The Injured Person and his/her agents shall cooperate fully with Group Health in its efforts to collect Group Health's Medical Expenses. This cooperation includes,but is not limited to, supplying Group Health with information about any third parties, defendants and/or insurers related to the Injured Person's claim and informing Group Health of any settlement or other payments relating to the Injured Person's injury. The Injured Person and his/her agents shall permit Group Health, at Group Health's option,to associate with the Injured Person or to intervene in any legal, quasi-legal, agency or any other action or claim filed. If the Injured Person takes no action to recover money from any source,then the Injured Person agrees to allow Group Iealth to initiate its own direct action for reimbursement or subrogation, including, but not limited to, billing the Injured Person directly for Group Health's Medical Expenses. f The Injured Person and his/her agents shall do nothing to prejudice Group Health's subrogation and reimbursement rights. The Injured Person shall promptly notify Group Health of any tentative settlement with a third party and shall not settle a claim without protecting Group Health's interest, If the Injured Person fails to cooperate fully with Group Health in recovery of Group Health's Medical Expenses, the Injured Person shall be responsible for directly reimbursing Group Health for Group Health's Medical Expenses and Group Health retains the right to bill the Injured Person directly for Group Health's Medical Expenses. To the extent that the Injured Person recovers funds from any source that may serve to compensate for medical injuries or medical expenses, the Injured Person agrees to hold such monies in trust or in their possession until Group Health's subrogation and reimbursement rights are fully determined. Group Health shall not pay any attorneys' fees or collection costs to attorneys representing the Injured Person unless there is a written fee agreement signed by Group Health prior to any collection efforts. When reasonable collection costs have been incurred with Group Health's prior written agreement to recover Group Health's Medical Expenses, there shall be an equitable apportionment of such collection costs between Group Health and the Injured Person subject to a maximum responsibility of Group Health equal to one-third of the amount recovered on behalf of Group Health. Under no circumstance will Group Health pay legal fees for services which were 50 H5050 09ANOCEOCOOI0908 2009 Evidence of Coverage (EOC) not reasonably and necessarily incurred to secure recovery, which do not benefit Group Health or where no written fee agreement has been entered into with Group Health. To the extent the provisions of this Subrogation and Reimbursement section are deemed governed by ERISA, implementation of this section shall be deemed a part of claims administration under the Agreement and Group Health shall therefore have sole discretion to interpret its terms. f 51 H5050_09ANOCE000010908 2009 Evidence of Coverage(EOC) 10. How Much You Pay for Your Part C Medical Benefits Your Monthly Premium for Our Plan Your monthly premium for our Plan is$75. If you signed up for extra benefits, also called"optional supplemental dental benefits",then you pay an additional premium each month for these extra benefits. If you have any questions about your Plan premiums or the payment programs,please call Customer Service. If you get your benefits from your current or former employer, or from your spouse's current or former employer, call the employer's benefits administrator for information about your Plan premium. You can find more information about paying your plan premium in Section 1. How Much You Pay for Part C Medical Benefits This section has a Benefits Chart that gives a list of your covered services and tells what you must pay for each covered service. These are the benefits and coverage you get as a member of our Plan. Later in this section under"General Exclusions"you can find information about services that are not covered and limitations on certain services. What do you pay for covered services? "Deductibles," "co-payments," and"coinsurance" are the amounts you pay for covered services. • The "deductible"is the amount you must pay for the health care services you receive before our Plan begins to pay its share of your covered services. • A "co-payment"is a payment you make for your share of the cost of certain covered services you get. A co-payment is a set amount per service. You pay it when you get the service. • "Coinsurance" is a payment you make for your share of the cost of certain covered services you receive. Coinsurance is a percentage of the cost of the service. You pay your coinsurance when you get the service. 4 What is the maximum amount you will pay for covered medical services? There is a limit to how much you have to pay out-of-pocket for covered health care services each i year. Once the total costs for your services, including your co-payments, and coinsurance, reaches $2,500 then you won't have to continue paying for these expenses for the remainder of the year. Cost shares for the following services apply to the out-of-pocket maximum: Inpatient 52 H5050_09ANOCE000010908 2009 Evidence of Coverage (EOC) Hospital Care, Inpatient Mental Health Care, Doctor Office Visits, Chiropractic Services, Podiatry Services, Outpatient Mental Health Care, Outpatient Services/Surgery, Ambulance Services,Emergency Care, Urgently Needed Care, Outpatient Rehabilitation Services, Durable Medical Equipment,Prosthetic Devices,Diabetes Self-Monitoring Training and Supplies, Diagnostic Tests, X-Rays, and Lab Services, Bone Mass Measurement, Colorectal Screening Exam, Mammograms (Annual Screenings),Pap Smears and Pelvic Exams, Prostate Cancer Screening Exams,Hearing Services, Vision Services, Physical Exams, Transportation, Other Health Care Professional and Cardiovascular Screening Blood Tests. Benefits Chart The benefits chart on the following pages lists the services our Plan covers and what you pay for each service. The covered services listed in the Benefits Chart in this section are covered only when all requirements listed below are met: • Services must be provided according to the Medicare coverage guidelines established by the Medicare Program. • The medical care, services, supplies, and equipment that are listed as covered services must be medically necessary. Certain preventive care and screening tests are also covered. • Some of the covered services listed in the Benefits Chart are covered only if your doctor or other network provider gets "prior authorization" (approval in advance) from our Plan. Covered services that need prior authorization are marked in the Benefits Chart in italics. See Section 2 for information on requirements for using network providers. 53 H5050_09ANOCE000010908 2009 Evidence of Coverage(EOC) What you unist pay�vhea you get these Benefits chart — your covered services covered services Inpatient hospital care For a Medicare-covered stay at a network hospital or a hospital authorized by Group Health. You are covered up to 365 days per year. Covered services include: • Semi-private room (or a private room if medically • You pay: necessary) $200 each day for day(s) 1-5 • Meals including special diets $0 each day for day(s) 6-90 • Regular nursing services o There is no copayment for • Costs of special care units (such as intensive or additional days received at a network hospital. coronary care units)• Drugs and medications 0 You are covered for unlimited • Lab tests days each benefit period. 0 0 Except in an emergency, your X-rays and other radiology services provider must obtain 0 Necessary surgical and medical supplies authorization fromGroup • Use of appliances, such as wheelchairs Health. • Operating and recovery room costs o If you get inpatient care at a • Physical, occupational, and speech language therapy non-plan hospital after your • Under certain conditions,the following types of emergency condition is transplants are covered: corneal, kidney,kidney- stabilized, and Group Health pancreatic, heart, liver,lung, heart/lung, bone requests that you transfer to a marrow, stem cell, and intestinal/multivisceral. If network hospital and you you need a transplant, we will arrange to have your refuse to transfer to a network case reviewed by a Medicare-approved transplant hospital,you will be center that will decide whether you are a candidate responsible for 100% of any for a transplant, subsequent patient care. • Blood- including storage and administration begins with the first pint used. • Physician Services 54 H505009ANOCE000010908 2009 Evidence of Coverage (El OC) — yourWhat you must pay Whell you get these Benefits chart 1 1 services covered Inpatient mental health care Covered services include mental health care services that require a hospital stay. • You pay: - $200 each day for day(s) 1-5 • For a Medicare-covered stay at a network hospital, you - $0 each day for day(s) 6-90 are covered up to 365 days per year. for a Medicare-covered stay at • Medicare beneficiaries may only receive 190 days in a a network hospital. You are Psychiatric Hospital in a lifetime. The 190 day limit covered up to 365 days per does not apply to Mental Health services provided in a year. psychiatric unit of a general hospital. • Except in an emergency, your provider must obtain authorization from Group Health. Skilled nursing facility (SNF) care You are covered for 100 days for each benefit period. • There is no copayment for Covered services include: services in a Skilled Nursing • Semiprivate room (or a private room if medically Facility. necessary) • When a 3 day Medicare • Meals, including special diets covered hospital stay does not • Regular nursing services occur and the plan determines • Physical there occupational there that the member otherwise y therapy, p therapy, and speech therapy meets all Medicare criteria for• Drugs administered to you as part an acute inpatient hospital stay of your plan of at the time of admission to a care (This includes substances that are naturally Medicare Certified Skilled present in the body, such as blood clotting factors) Nursing Facility,the plan may • Blood- including storage and administration. authorize Medicare covered Coverage begins with the first pint used. Skilled Nursing Facility Care • Medical and surgical supplies ordinarily provided up to the Medicare skilled by SNFs Nursing Facility day limit per • Laboratory tests ordinarily provided by SNFs benefit period. • X-rays and other radiology services ordinarily • All Medicare criteria must be provided by SNFs met and the stay must be • Use of appliances such as wheelchairs ordinarily authorized in advance by the provided by SNFs plan • Physician services Generally, you will get your SNF care from plan facilities. However,under certain conditions listed below, you may be able to pay in-network cost-sharing for a facility that isn't a plan provider, if the facility accepts our Plan's 55 H5050_09ANOCE000010908 i 2009 Evidence of Coverage(EOC) What you iinust pay Mien you getithese BenpritS chart your covered services covered services amounts for payment. i Inpatient services covered when the hospital When all other Medicare and or SNF days aren't, or are no longer, Group Health criteria have been met, benefits will be covered covered subject to the following copayments and coinsurances: Covered services include: • Physician services • Physician services—covered in full. • Tests (like X-ray or lab tests) . Tests—covered in fill. • X-ray, radium, and isotope therapy including • X-ray and isotope therapy— technician materials and services covered in full • Radium therapy- $20 copayment • Surgical dressings, splints, casts and other devices . Surgical dressings, splints, used to reduce fractures and dislocations casts and other devises—20% coinsurance • Prosthetics and Orthotics devices (other than dental) • Prosthetic devises—20% that replace all or part of an internal body organ coinsurance (including contiguous tissue), or all or part of the function of a permanently inoperative or • Leg, arm, back, and neck malfunctioning internal body organ, including braces; trusses, and artificial replacement or repairs of such devices legs, arms, and eyes including adjustments, repairs and • Leg, aim, back, and neck braces; trusses, and replacements required because ( artificial legs, arms, and eyes including adjustments, of breakage, wear, loss, or a repairs, and replacements required because of change in the patient's breakage, wear, loss, or a change in the patient's physical condition—20% physical condition coinsurance • Physical therapy, speech • Physical therapy, speech therapy, and occupational therapy, and occupational therapy therapy, and speech therapy - $20 copayment per office visit i I ' 56 H5050 09ANOCE000010908 I 2009 Evidence of Coverage (EOC) What you niust pay when you get these Benefits chart — your I services covered Home health agency care Covered services include: • Part-time or intermittent skilled nursing and home There copayment for health aide services (To be covered under the home Medicare--cc overed home health health care benefit, your skilled nursing and home visits. health aide services combined must total less than Prior authorization required. eight hours per day and 35 or fewer hours per week) • Physical therapy, occupational therapy, and speech therapy • Medical social services • Medical equipment and supplies Hospice care When you enroll in a Medicare- You may receive care from any Medicare-certified hospice certified Hospice program, your program. The Original Medicare Plan(rather than our Plan) hospice services are paid for by will pay the hospice provider for the services you receive. the Original Medicare Plan, not Your hospice doctor can be a network provider or an out- your Medicare Advantage plan. of-network provider. You will still be a plan member and will continue to get the rest of your care that is unrelated to your terminal condition through our Plan. Covered services include: • Drugs for symptom control and pain relief, short- term respite care, and other services not otherwise covered by the Original Medicare Plan • Home care Our Plan covers hospice consultation services (one time $20 copayment for each Medicare- only) for a terminally ill person who hasn't elected the covered Consultation hospice benefit ���� �S7_,���$'3�-�" �' '��'� I2,. -a f Yq..P�a7 ✓ 5F xn?�si 's )k'1 �{>a"�' f �"•�sW .'—"a 3 s tt� `It j..�^' .�., t�,l'h Y��-� 57 H5050 09ANOCE000010908 I ` 2009 Evidence of Coverage(EOC) i ' 1 I covered services Physician services, including doctor office ' visits You pay: Covered services include: - $20 for each primary care • Office visits, including medical and surgical care in doctor office visit for Medicare- a physician's office or certified ambulatory surgical covered services. center - $20 copayment for each Medicare-covered Consultation • Consultation, diagnosis, and treatment by a and certain Specialist visits, i specialist - $200 copayment for services • Hearing and balance exams, if your doctor orders it provided in a Medicare-covered to see if you need medical treatment. ambulatory surgical center and • Telehealth office visits including consultation, Medicare-covered Outpatient diagnosis and treatment by a specialist hospital services visit. • Second opinion by another plan provider prior to surgery • Prior authorization required • Outpatient hospital services for ambulatory surgical center • Non-routine dental care (covered services are and outpatient hospital service limited to surgery of the jaw or related structures, visits. setting fractures of the jaw or facial bones, • Prior authorization not extraction of teeth to prepare the jaw for radiation required for self-referral visits treatments of neoplastie cancer disease, or services to certain Group Health that would be covered when provided by a doctor) specialists at Group Health- operated medical centers only. See Section 2 for•more information. ( ' Chiropractic services Covered services include: You pay $20 for each • Manual manipulation of the spine to correct Medicare-covered visit subluxation (manual manipulation of the spine to correct subluxation). • You pay 100% for routine chiropractic services. • Must use plan providers, No referral necessaryfor plan providers. I ' 58 H5050_09ANOCE000010908 2009 Evidence of Coverage (EOC) What you must pay when you get these ! ' ienefits chart — your coveredcovered Podiatry services Covered services include: • You pay$20 for each • Treatment of injuries and diseases of the feet (such Medicare-covered visit as hammer toe or heel spurs). (medically necessary foot • Routine foot care for members with certain medical care). conditions affecting the lower limbs. • You pay 100%for routine [ podiatry care. ! • Prior authorization required. Outpatient mental health care (including Partial Hospitalization Services) • For Medicare-covered Mental Covered services include: Health services, you pay $20 • Mental health services provided by a doctor, clinical for each individual/group E psychologist, clinical social worker, clinical nurse therapy visit, specialist, nurse practitioner,physician assistant, or • Self-referral to Group Health other Medicare-qualified mental health care specialists only at Group professional as allowed under applicable state laws. Health-operated medical "Partial hospitalization"is a structured program of centers only. active treatment that is more intense than the care • Prior authorization required received in your doctor's or therapist's office and is for any services received at an alternative to inpatient hospitalization. non-Group Health-operated medical centers, Outpatient substance abuse services • There is no copayment for each Medicare-covered visit. • Prior authorization required Outpatient Surgery(including services provided at • You pay $200 for each ambulatory surgical centers) Medicare-covered visit to an ambulatory surgical center. • You pay $200 for each Medicare-covered visit to an k.: outpatient hospital facility. • Prior authorization required. r 59 H5050—09ANOCE000010908 i 2009 Evidence of Coverage(EOC) What you intist pay when YOU (let these renefits chart— your covered Ambulance services A$150 co-payment per each one- Covered ambulance services include fixed wing, rotary way trip applies except hospital to wing, and ground ambulance services,to the nearest ' hospital ambulance transfers appropriate facility that can provide care only if they are initiated by Group Health which furnished to a member whose medical condition is such that are covered in full. other means of transportation are contraindicated(could endanger the person's health). The member's condition must require both the ambulance transportation itself and the level of service provided in order for the billed service to be considered medically necessary.Non-emergency transportation by ambulance is appropriate if it is documented that the member's condition is such that other means of transportation are contraindicated(could endanger the person's health) and that transportation by ambulance is medically required. Emergency care You pay$50 for each Medicare-covered emergency Worldwide coverage room visit;you do not pay this amount if you are admitted to the hospital within 1 day for the same condition. If you need inpatient care at a non- plan hospital after your emergency condition is stabilized,you must have your inpatient care at the non-plan hospital authorized by the plan and your cost is the cost- sharing you would pay at a plan hospital. However, if you refuse reasonable,medically appropriate transfer to a plan-contracting inpatient facility,your cost- sharing might be higher Urgently needed care • You pay$20 for each Medicare-covered urgently World wide coverage needed care visit. 60 H5050_09ANOCE000010908 2009 Evidence of Coverage(EOC) BenefitsWhat you must pay when you get these Outpatient rehabilitation services • You pay$20 for each Covered services include: physical therapy, occupational Occupational Therapy, therapy, speech language therapy, and cardiac rehabilitative Physical Therapy and/or therapy Speech/Language Therapy visit. • This is an unlimited benefit. • Prior authorization required Durable medical equipment and related • You pay 20%of the cost for Supplies each Medicare-covered item. Covered items include: wheelchairs,crutches,hospital bed, • prior authorization required. IV infusion pump, oxygen equipment,nebulizer, and walker. (See definition of"durable medical equipment"in Section 7.) Prosthetic devices and related supplies-(other than dental)that replace a body part or function. These • You pay 20%of the cost for include colostomy bags and supplies directly related to each Medicare-covered item. i colostomy care,pacemakers, braces,prosthetic shoes, • Prior authorization required. artificial limbs, and breast prostheses (including a surgical brassiere after a mastectomy). Includes certain supplies related to prosthetic devices, and repair and/or replacement of prosthetic devices. Also includes some coverage following cataract removal or cataract surgery—see "Vision Care"later in this section for more detail. 61 H5050_09ANOCE000010908 2009 Evidence of Coverage (EOC) What YOU MUSt Pay WIICII YOU - t :'el Benefits chart — your covered services covered services Diabetes self-monitoring, training and . There is no copayment for supplies—for all people who have diabetes (insulin and Diabetes self-monitoring non-insulin users). Covered services include: training. • Blood glucose monitor, blood glucose test strips, r lancet devices and lancets, and glucose-control . You pay 20% of the cost for solutions for checking the accuracy of test strips and each Medicare-covered monitors Diabetes supply item. • One pair per calendar year of therapeutic shoes for people with diabetes who have severe diabetic foot • A $20 copayment applies for disease, including fitting of shoes or inserts each separate office visit. • Self-management training is covered under certain conditions • Prior authorization required. • For persons at risk of diabetes: Fasting plasma glucose tests at a frequency determined by you and your physician. You may call the number in Section 8 of this booklet to contact Group Health Customer Service for information on how often we will cover these tests. Medical nutrition therapy—for people with • A$20 copayment applies for diabetes,renal(kidney)disease(but not on dialysis), and each separate office visit. after a transplant when referred by your doctor. • Prior authorization required. Outpatient diagnostic tests and therapeutic • There is no copayment for the services and supplies following Medicare-covered Covered services include: service(s):- Clinical/diagnostic lab • X-rays services • Radiation therapy -Radiation therapy • Surgical supplies, such as dressings -X-ray visits • Supplies, such as splints and casts . A$20 copayment applies for • Laboratory tests each separate physician's • Blood- Coverage of storage and administration office visit. begins with the first pint of blood that you need. . Prior authorization required. • Other outpatient diagnostic tests 62 H5050_09ANOCE000010908 i 2009 Evidence of Coverage (EOC) What you must.pny when you get these ' Benefits chart — yonr covered set-vices covered Services Vision care copayment for the There is no co a Covered services include: p y • Outpatient physician services for eye care. following items: • For people who are at high risk of glaucoma, such - Medicare-covered eye wear as people with a family history of glaucoma,people (one pair of eyeglasses or with diabetes, and African-Americans who are age contact lenses after each 50 and older: glaucoma screening once per year cataract surgery)if obtained • One pair of eyeglasses or contact lenses after each from a Medicare-certified cataract surgery that includes insertion of an facility. intraocular lens. Corrective lenses/frames(and • you pay: replacements)needed after a cataract removal Medicare- without a lens implant. - $20 for each Medicare- • covered eye exam(diagnosis Routine eye exam, limited to 1 exam once every 24 months and treatment for diseases and conditions of the eye). - $20 for each Group Health- covered routine eye exam, limited to 1 exam once every 24-months. ,. ,; ,MIN Al il, Bone-mass measurements For qualified individuals (generally,this means people at • There is no copayment for risk of losing bone mass or at risk of osteoporosis),the Medicare-covered Bone Mass following services are covered every 2 years or more Measurement. frequently if medically necessary: procedures to identify ' A$20 copayment applies for bone mass, detect bone loss, or determine bone quality, each separate office visit. including a physician's interpretation of the results. • Prior authorization required i 63 H5050_09ANOCE000010908 2009 Evidence of Coverage(EOC) What you must pay when yOU -Ct these Benefits chart — your covered services covered services Colorectal screening For people 50 and older, the following are covered: • There is no copayment for • Flexible sigmoidoscopy(or screening barium enema Medicare-covered Colorectal as an alternative) every 48 months Screening Exams. • Fecal occult blood test, every 12 months • A$20 copayment applies for For people at high risk of colorectal cancer,we cover: each separate office visit. • Screening colonoscopy(or screening barium enema ' A$200 copayment applies for as an alternative) every 24 months services provided at either a For people not at high risk of colorectal cancer, we cover: Medicare-covered ambulatory • Screening colonoscopy every 10 years,but not surgical center visit or within 48 months of a screening sigmoidoscopy Medicare-covered Outpatient hospital services visit. • Prior authorization required. Immunizations Covered services include: • There is no copayment for • Pneumonia vaccine Pneumonia and Flu vaccines. • Flu shots, once a year in the fall or winter (No referral necessary). • Hepatitis B vaccine if you are at high or • There is no copayment for the intermediate risk of getting Hepatitis B Hepatitis B vaccine. Referral • Other vaccines if you are at risk required. • Referral required for other immunizations. Please contact the Group Health Medicare Customer Service Department for more information. Mammography screening g copayment for• There is no co a Covered services include: p y • One baseline exam between the ages of 35 and 39 Medicare-covered Screening • One screening every 12 months for women age 40 Mammograms. and older * No referral necessary for Medicare-covered screenings. • A$20 copayment applies for each separate office visit. 64 H5050_09ANOCE000010908 2009 Evidence of Coverage (EOC) What yoll n)list pay When you Oct these Benefits chart — yotir covered services covered S'ervices Pap tests, pelvic exams, and clinical breast • There is no copaymentfor exam Medicare-covered Pap Covered services include: Smears. • For all women, Pap tests, pelvic exams, and clinical • A$20 copayment applies for breast exams are covered once every 24 months each separate office visit for • If you are at high risk of cervical cancer or have had Pelvic Exams. an abnormal Pap test and are of childbearing age: one Pap test every 12 months Prostate cancer screening exams For men age 50 and older, covered services include the • There is no copayment for following-once every 12 months: Medicare-covered Prostate • Digital rectal exam Cancer Screening Exam. • Prostate Specific Antigen (PSA)test • A$20 copayment applies for each separate office visit. • Prior authorization required. Cardiovascular disease testing • There is no copayment for Blood tests for the detection of cardiovascular disease (or Medicare-covered abnormalities associated with an elevated risk of Cardiovascular screening cardiovascular disease). You may call the number in blood tests. Section 8 of this booklet to contact Group Health Medicare • A$20 copayment applies for Customer Service for information on how often we will each separate office visit. cover these tests. • Prior authorization required Physical exams • There is no copayment for routine physical exams. Routine physical exams • You are covered up to I exam(s)every two years. • Must use plan providers, no referral necessary for plan providers 65 H5050_09ANOCE000010908 r 2009 Evidence of Coverage(EOC) What you must pay Whell YOU gCt thCSe Benefits chart — your covered set-vices covered services Dialysis (Kidney) Covered services include: • You are covered in full for • Outpatient dialysis treatments(including dialysis each Medicare-covered visit. treatments when temporarily out of the service area, • Prior authorization required as explained in Section 2) except renal dialysis services • 'Inpatient dialysis treatments (if you are admitted to out of our Plan's service area. a hospital for special care) • Self-dialysis training(includes training for you and anyone helping you with your home dialysis treatments) • Home dialysis equipment and supplies • Certain home support services (such as, when necessary, visits by trained dialysis workers to check on your home dialysis,to help in emergencies, and check your dialysis equipment and water supply) Medicare Part B Prescription Drugs These drugs are covered under Part B of the Original There is no benefit limit on drugs Medicare Plan. Members of our plan receive coverage for covered under original Medicare. these drugs through our plan. Covered drugs include: • Drugs that usually aren't self-administered by the patient and are injected while you are getting physician services • Drugs you take using durable medical equipment (such as nebulizers)that was authorized by the plan • Clotting factors you give yourself by injection if you have hemophilia • Immunosuppressive Drugs, if you were enrolled in Medicare Part A at the time of the organ transplant • Injectable osteoporosis drugs, if you are homebound,have a bone fracture that a doctor certifies was related to post-menopausal osteoporosis,and cannot self-administer the drug • Antigens i • Certain oral anti-cancer drugs and anti-nausea drugs • Certain drugs for home dialysis, including heparin, the antidote for heparin when medically necessary, topical anesthetics, and erythropoisis-stimulating agents (such as Epogen®, Procrit®,Epoetin Alfa, 66 H5050_09ANOCE000010908 2009 Evidence of Coverage (EOC) Benefitsservicesyour Aranesp®, or Darbepoetin Alfa) • Intravenous Immune Globulin for the home treatment of primary immune deficiency diseases i Dental Services • In general, you pay 100%for Services by a dentist or oral surgeon are limited to surgery dental services. of the jaw or related structures, setting fractures of the jaw • See pages 70-74 for additional or facial bones, extraction of teeth to prepare the jaw for information about the Optional radiation treatments of neoplastic disease, or services that Dental Benefit. An additional would be covered when provided by a doctor. premium applies for the Optional Dental Benefit. Hearing Services • Diagnostic hearing exams. • You pay: • Routine hearing test - $20 for each diagnostic hearing exams (every 24 months). - $20 for each routine hearing test up to 1 test once every 24- months. Vision care $20 for each Group Health- Routine eye exam once every 24 months. covered routine eye exam, limited to 1 exam once every 24-months. 67 H5050 09ANOCE000010908 2009 Evidence of Coverage (EOC) BenefitsWhat you must pay when you get these Health and wellness education programs You are covered in full for the SilverSneakers Program Health • Health Club Membership Club Membership. The SilverSneakers fitness program is part of your Group Health Medicare coverage. It's a fitness program designed with you in mind, and comes with a health club membership so you can keep yourself staying fit. For more information, call the Group Health Resource Line toll- free at 1-800-992-2279 or 206- 326-2800, or the TTY line at 711 or 1-800-833-6388. EnhanceFitness • EnhanceFitness Group Health Medicare members can participate at no additional cost in the Lifetime Fitness program. The classes meet three days a week. The hour-long classes are a well-rounded combination of stretching, low- impact aerobics or walking, strength training, and balance taught by professional instructors. Call the Group Health Resource Line toll free at 1-800-992-2279, 206-326-2800 or Senior Services at 206-72 7-6259, or the TTY line at 711 or 1-800-833-6388 to find the participating Lifetime Fitness program facility nearest you. Must use plan providers. 68 H5050_09ANOCE000010908 2009 Evidence of Coverage(EOC) What I Benefits chart — your covered services CoVe1c,"I Services • Smoking& Tobacco Use Cessation (Group Group Health Covered: Health Covered) When member is enrolled and actively participating in the Free and Clear Program®, services provided through Group Health related to smoking and tobacco use cessation are covered, limited to: Participation in individual or group programs;plan approved nicotine replacement therapy (nicotine patches, nicotine gum, and nicotine lozenges)when obtained through the Group Health Mail Order Pharmacy; Educational materials covered in full. • Smoking& Tobacco Use Cessation (Medicare Medicare Covered: Covered) Medicare will pay for two cessation-counseling attempts per year; each attempt includes 4 sessions each of either shorter visits of 3 to 10 minutes each, or longer visits (longer than 10 minutes each)depending on what the member and their doctor decide. Must use plan providers. Transportation (routine) A$150 co-payment per each one-way trip applies. Limited 1 to ambulance services only when medically necessary and authorized in advance by Group Health. • All Group Health criteria must be met. Home Infusion Therapy Services Covered in full. 69 H5050_09ANOCE000010908 2009 Evidence of Coverage(EOC) Benefits chart — your covered services covel,ed set-vices Chemotherapy —Chemotherapy is covered when • A$20 copayment applies for ordered by a Group Health provider and all Group Health each separate office visit. referral protocol has been met. When providing care and a Prior authorization required services to Medicare patients, Group Health MUST use Medicare-certified providers and facilities. Out of Area Travel Non-emergent and/or non-urgently needed care received while temporarily traveling outside Group Health's Medicare Service Area is payable at Medicare benefit levels up to $2,000 per member per calendar year. Our Plan pays 80%of Medicare allowable reimbursement schedules for Medicare covered services ONLY. Enrollee is responsible for all Medicare inpatient and outpatient deductibles and coinsurances Extra "optional supplemental" dental benefits you can buy Our Plan offers some extra benefits that are not covered by the Original Medicare Plan and not included in your benefits package as a Plan member. These extra benefits are called"Optional Supplemental Dental Benefits". If you want these optional supplemental dental benefits, you must sign up for them and you may have to pay an additional premium for them. The optional supplemental dental benefits included in this section are subject to the same appeals process as any other benefits. Optional Supplemental Dental Benefit Premium and Other Important You pay$34 each month,for Optional Information Supplemental Dental Benefit in addition to your monthly plan premium of$75 and the Medicare Part B premium. 70 H5050 09ANOCE000010908 2009 Evidence of Coverage (EOC) Dental Services 0 There is no copayment for the following: - Oral exams up to 2 visit(s) every year. Cleanings up to 2 visit(s)every year. -Dental x-rays up to 1 visit every three years. • You are covered up to a$1000 maximum for Combined Preventive and/or Comprehensive benefit for ALL dental services each calendar year. • A$25 annual deductible applies to dental services,except for preventive dental care. Dental Benefit. The following are Covered Dental Benefits under this Contract and Washington Dental Service (WDS)provides these benefits. These benefits are subject to the limitations and exclusions contained in this Contract. Such benefits (as defined) are available only when rendered by a licensed Dentist or other Washington Dental Service approved Licensed Professional when appropriate and necessary as determined by the standards of generally accepted dental practice and Washington Dental Service. You may contact WDS at their toll-free customer service line, 1-800-554-1907, or TTY: 711, or 1-800-833-6388 (this number requires special telephone equipment and is used by people who have difficulties with hearing or speaking)to reach Group Health Customer service for dental inquiries. A$25 annual deductible applies to dental services, except for preventive dental care. In addition your dental coverage includes a benefit for periodontal cleaning to be paid at the regular cleaning rate. Class I Diagnostic Covered Dental Benefits: Routine examinations,X-rays, emergency examination and examination by a Specialist in an American Dental Association recognized specialty, carries susceptibility tests. Limitations: Examinations are covered twice in a calendar year. Complete series(four bitewing x-rays and up to ten periapical x-rays)or panorex x-rays are covered once in a three (3)-year period. Supplementary bitewing x-rays are covered twice in a calendar year. Exclusions: Diagnostic services and x-rays related to temporomandibular joints(jaw joints), consultations or elective second opinions, study models. Preventive Covered Dental Benefits: Prophylaxis(cleaning). Limitations: Prophylaxis (cleaning) is covered twice in a calendar year. Exclusions: Plaque control program. Oral hygiene instruction, dietary instruction and home fluoride kits and Cleaning of a prosthetic appliances. (Refer also to General Exclusions). Class II Restorative 71 H5050_09ANOCE000010908 2009 Evidence of Coverage(EOC) Covered Dental Benefits: Amalgam, synthetic, composite or filled resin restorations(fillings) for treatment of carious lesions (visible destruction of hard tooth structure resulting from the process of dental decay). Stainless steel crowns. For other restorations such as gold foils,crowns, inlays, or onlays the allowance will be limited to the amount which otherwise would have been allowed for an amalgam restoration. Limitations: Restorations on the same surface(s) of the same tooth are covered once in a two (2)year period. If a synthetic,composite or filled resin restoration is placed in a posterior tooth, an amalgam allowance will be made for such procedure. The difference in cost is the patient's responsibility. Stainless steel crowns are covered once in a two(2)-year period. Exclusions: Restorations necessary to correct vertical dimension or to alter the morphology (shape)or occlusion. Overhang removal,re-contouring or polishing of restoration. Class III Prosthodontics Covered Dental Benefits: Denture adjustments and relines. Limitations: Denture adjustments and relines done more than six(6)months after the initial ' placement are covered. Subsequent relines will be covered once in a twelve (12)month period. Exclusions: Dentures, removable partial dentures, fixed bridges and the repair of an existing prosthetic device, duplicate dentures, personalized dentures, cleaning of prosthetic appliances. (Refer also to General Exclusions). General Exclusions—Dental Benefits • Services for injuries or conditions which are compassable under Worker's Compensation or Employers' Liability laws, services which are provided to the Eligible Person by any federal or state or provincial government agency or provided without cost to the Eligible Person by any municipality, county or other political subdivision, other than medical assistance in this state,under medical assistance RCW 74.09.500, or any other state,under 42 U.S.C., Section 1396a. Section 1902 of the Social Security Act. • Root Canals • Dentistry for cosmetic reasons. • Restorations or appliances necessary to correct vertical dimension or to restore the occlusion; such procedures include restoration of tooth structure lost from attrition, abrasion or erosion and restorations for malalignment of teeth. • Application of desensitizing agents. • Experimental services or supplies. Experimental services or supplies are those whose use and acceptance as a course of dental treatment for a specific condition is still under investigation/observation. In determining whether services are experimental, Washington Dental Service, in conjunction with the American Dental Association, shall consider if: 1)the services are in general use in the dental community in the State of Washington; 2) the services are under continued scientific testing and research; 3)the services show a demonstrable benefit for a particular dental condition;and 4)they are proven to be safe and effective. Any individual whose claim is denied due to this experimental exclusion clause shall be notified of the denial within 20 working days of receipt of a fully documented request. 72 H5050 09ANOCE000010908 i 2009 Evidence of Coverage (EOC) • Any denial of benefits by Washington Dental Service on the grounds that a given procedure is deemed experimental, may be appealed to Washington Dental Service. By law, Washington Dental Service must respond to such appeal within 20 working days after receipt of all documentation reasonably required to make a decision. The 20-day period may be extended only with written consent of the covered individual. Appeals may also be made to Group Health, see Section 5, and Group Health coordinates all appeals with Washington Dental Service • General anesthesia/intravenous (deep) sedation, except as specified by WDS for certain oral, periodontal or endodontic surgical procedures. • Analgesics such as nitrous oxide, conscious sedation, or euphoric dings, injections or prescription drugs. • In the event an Eligible Person fails to obtain a required examination from a Washington Dental Service appointed consultant Dentist for certain treatments,no benefits shall be provided for such treatment. • Hospitalization charges and any additional fees charged by the Dentist for hospital treatment. • Broken appointments. • Patient management problems. • Completing insurance forms, • Habit breaking appliances or orthodontic services or supplies. • WDS shall have the discretionary authority to determine whether services are covered benefits in accordance with the general limitations and exclusions shown in this contract, but it shall not exercise this authority arbitrarily or capriciously or in violation of the provisions of the contract. • This program does not provide benefits for services or supplies to the extent that benefits are payable for them under any motor vehicle medical, motor vehicle no-fault, uninsured motorist, underinsured motorist,personal injury protection (PIP), commercial liability, homeowner's policy, or other similar type of coverage. • All other services not specifically included in this Contract as Covered Dental Benefits. Method of Payment— Dental Benefit Washington Dental Service shall pay one hundred percent (100%) of the Members Dentist's filed fee for allowable Class I Covered Dental Benefits as they are described. Washington Dental Service shall pay eighty (80%) of the Member Dentist's filed fee for allowable Class II covered Dental Benefits as they are described. The amounts payable by Washington Dental Service for Covered Dental Benefits provided by a Dentist who is not a Member Dentist in the State of Washington, shall be the abov e ve applicable cable percentages, applied to the lesser of the Prevailing Fee (the fee which is equivalent to the51" percentile of fees of member Dentists in the State of Washington as determined by Washington Dental Service based upon confidential fee listings filed with and accepted by Washington Dental Service) or such Dentist's actual charges. The amounts payable by Washington Dental Services for Covered Dental Benefits provided by a Dentist outside of Washington state shall be the above applicable percentages, applied to the 73 H5050_09ANOCE000010908 I 2009 Evidence of Coverage (EOC) lesser of the Usual, Customary and Reasonable fees (the 90`i)percentile of the Washington Dental Service approved filed fees for all Member Dentists in the State of Washington) or such Dentist's actual charges. The maximum amount payable by Washington Dental Service for all classes of Covered Dental Benefits per Eligible Person during each twelve (12) month period January 1 through December 31 shall be one thousand dollars ($1,000.00). Charges for dental procedures requiring multiple treatment dates shall be considered incurred on the date the service is completed. Amounts paid for such procedures will be applied to the program maximum based on such incurred date. Getting care using our Plan's traveler benefit Non-emergent and/or non-urgently needed care received while temporarily traveling outside Group Health's Medicare Service Area for up to 6 months at a time is payable at Medicare benefit levels up to $2,000 per member per calendar year. Our Plan pays 80% of Medicare allowable reimbursement schedules for Medicare covered services ONLY. Enrollee is responsible for all Medicare inpatient and outpatient deductibles and coinsurances You may get care when you are outside the service area. You may need to pay higher cost sharing for routine care from non-network providers, but you won't pay extra in a medical emergency or if your care is urgently needed. If you have questions about your medical costs when you travel, please call Customer Service. Sample plan membership card Here is an example of what your plan membership card looks like. See Section 1 for more information on using your plan membership card. _ v 1U 12 A56 t1` 1} aAt FLC rYE•AIHEATENINO MMOINCY CAll Ou V IDOW OM ruinQM, URGENT4'AAE ON)ymrr Uector'&attka,Altarb call VW pvio/i5 (10(211d44 _ coAswuug+larsa was+mry gao•n�r-rgrr 1P 100 Eli 70 - raatarn c-auo•s7n• o T Itx131N 5035Qa 15Uett3 AOMMOronxosruAEYavazar auleua•as7�etG HxPC '9L131 `f ivIftMower ONO aftafadfliwbn. lxGtp 12345G% i _ susnslrewrns enlmsPr ft34M,sealtlaWAM2.4 GMSlkH50Ak 5D � .. .rsf rArsrorAatsesYrEt alas ErEcmatcrAYeo �tssl rrY PRAY t•.. OT711 WEB WE N4Y\4AgInaig General Exclusions i Introduction The purpose of this part of Section 10 is to tell you about medical care and services, and items that aren't covered ("are excluded") or are limited by our Plan. The list below tells about these 74 1-15050 09ANOCE000010908 2009 Evidence of Coverage (EOC) exclusions and limitations. The list describes services, items that aren't covered under any conditions, and some services that are covered only under specific conditions. (The Benefits Chart earlier also explains about some restrictions or limitations that apply to certain services). If you get services/items that are not covered, you must pay for them yourself We won't pay for the exclusions that are listed in this section (or elsewhere in this EOC), and neither will the Original Medicare Plan, unless they are found upon appeal to be services/items that we should have paid or covered (appeals are discussed in Section 5). What services are not covered or are limited by our Plan? In addition to any exclusions or limitations described in the Benefits Chart, or anywhere else in this EOC, the following items and services aren't covered under the Original Medicare Plan or by our plan: 1. Services that aren't reasonable and necessary, according to the standards of the Original Medicare Plan, unless these services are otherwise listed by our Plan as a covered service. 2. Experimental or investigational medical and surgical procedures, equipment and medications,unless covered by the Original Medicare Plan or unless, for certain services,the procedures are covered under an approved clinical trial. The Centers for Medicare and Medicaid Services (CMS) will continue to pay through Original Medicare for clinical trial items and services covered under the September 2000 National Coverage Determination that are provided to plan members. Experimental procedures and items are those items and procedures determined by our Plan and the Original Medicare Plan to not be generally accepted by the medical community. 3. Surgical treatment of morbid obesity unless medically necessary and covered under the Original Medicare plan. 4. Private room in a hospital, unless medically necessary. 5. Private duty nurses. 6. Personal convenience items, such as a telephone or television in your room at a hospital or skilled nursing facility. 7. Nursing care on a full-time basis in your home. 8. Custodial care unless it is provided in conjunction with covered skilled nursing care and/or skilled rehabilitation services. This includes care that helps people with activities of daily living like walking, getting in and out of bed, bathing, dressing, eating and using the bathroom,preparation of special diets, and supervision of medication that is usually self- administered. 9. Homemaker services. 10. Charges imposed by immediate relatives or members of your household. 11. Meals delivered to your home. 12. Elective or voluntary enhancement procedures, services, supplies and medications including but not limited to: Weight loss, hair growth, sexual performance, athletic performance, cosmetic purposes, anti-aging and mental performance unless medically necessary. 13. Cosmetic surgery or procedures, unless needed because of accidental injury or to improve the function of a malformed part of the body. All stages of reconstruction are covered for a breast after a mastectomy, as well as for the unaffected breast to Y produce a symmetrical P appearance, 75 H5050_09ANOCE000010908 2009 Evidence of Coverage (EOC) 14. Routine dental care (such as cleanings, fillings, or dentures) or other dental services. However,non-routine dental services received at a hospital may be covered. However,these items are available under the Optional Dental Supplemental Benefit 15. Chiropractic care is generally not covered under the Plan, (with the exception of manual manipulation of the spine,) and is limited according to Medicare guidelines. 16. Routine foot care is generally not covered under the Plan and is limited according to Medicare guidelines. 17. Orthopedic shoes unless they are part of a leg brace and are included in the cost of the brace. Exception: Therapeutic shoes are covered for people with diabetic foot disease. 18. Supportive devices for the feet. Exception: Orthopedic or therapeutic shoes are covered for people with diabetic foot disease. 19. Hearing aids. 20. Eyeglasses (except after cataract surgery), routine eye examinations, radial lceratotomy, LASIK surgery,vision therapy and other low vision aids and services. 21. Self-administered prescription medication for the treatment of sexual dysfunction, including erectile dysfunction, impotence, and anorgasmy or hyporgasmy. 22. Reversal of sterilization procedures, sex change operations, and non-prescription contraceptive supplies and devices. 23. Acupuncture. 24. Naturopath services. 25. Services provided to veterans in Veterans Affairs (VA) facilities. However, in the case of emergency services received at a VA hospital, if the VA cost-sharing is more than the cost- sharing required under our Plan, we will reimburse veterans for the difference. Members are still responsible for our Plan cost-sharing amount. 26. Any of the services listed above that aren't covered will remain not covered even if received at an emergency facility. For example, non-authorized, routine conditions that do not appear to a reasonable person to be based on a medical emergency are not covered if received at an emergency facility. I1 1 I I i 76 H5050_09ANOCE000010908 I 2009 Evidence of Coverage (EOQ Index Appeal,26,40,46,73 Hospital care, 54 Clinical trial, 14 Medically necessary,42,59,69 Coinsurance,52 Medicare,42,47 Creditable coverage, 6 Medigap,42 Dental services,67, 71 Organization determination,22,43,45 Durable medical equipment,41,61 Prior authorization,43 Emergency care, 12,41,60 Religious Non-medical Health Care Institution, 14 Grievance, 19,41,45 Service area,3,43 Home health aide,41 Skilled nursing facility,44, 55 Home health care,41, 57 Subrogation,49 Hospice care,41, 57 Urgently needed care, 12,44,60 77 H5050 09ANOCE000010908 1 Kent City Council Meeting Date May 2009 Category Consent Calendar - 6D 1. SUBJECT: ICMA RETIREMENT CORPORATION DEFERRED COMPENSATION CONTRACT - AUTHORIZE 2. SUMMARY STATEMENT: Authorize the Mayor to sign the ICMA Retirement Corporation Services Contract for the City's deferred compensation program, subject to final terms and conditions acceptable to the City Attorney. A sole provider services contract with ICMA Retirement Corporation (ICMA-RC) to provide administrative oversight of employee-owned deferred compensation investment accounts. In exercising its fiduciary responsibility to conduct a review of the current providers, the city negotiated significant reduced fee structures for its employees under this seven-year sole provider option. 3. EXHIBITS: Memo to Operations Committee dated 4/7/09 and ICMA-RC Administrative Services Agreement 4. RECOMMENDED BY: Operations Committee 4/21/09 (Committee, Staff, Examiner, Commission, etc.) S. FISCAL IMPACT Expenditure? N/A Revenue? N/A Currently in the Budget? Yes No 6. CITY COUNCIL ACTION: Councilmember moves, Councilmember seconds i DISCUSSION: ACTION: 85 .1 ../ KF14 WASHINGTON EMPLOYEE SERVICES BENEFITS DIVISION Ray Luevanos HR Analyst 400 West Gowe Kent, WA 98032 Fax: 253 856-6270 OFFICE: 253 856-5298 April 7, 2009 TO: Operations Committee FROM: Ray Luevanos, Senior Human Resources Analyst THRU: Sue Viseth, Employee Services Director SUBJECT: ICMA Retirement Corporation Deferred Compensation Contract Motion: I move to approve the ICMA Retirement Corporation Services Contract for the city's deferred compensation program subject to approval of terms by the City Attorney's Office and that the matter be placed on the City Council consent calendar for the May 5, 2009 meeting. SUMMARY: The city is recommending a sole provider services contract with ICMA- Retirement Corporation (ICMA-RC) to provide administrative oversight of employee- owned deferred compensation investment accounts. In exercising its fiduciary responsibility to conduct a review of the current providers, the city negotiated significant reduced fees structures for its employees under this seven-year sole provider option. The contract reflects no additional increase in administrative fees by Premera Blue Cross and is budgeted in the health and welfare fund. BUDGET IMPACT:$0. (Administrative Services Contract) BACKGROUND: Approximately 579 active employees are participating in the city's 457 deferred contribution plans with approximately $45 million in assets. Reduced administrative fees, best of class investment options, and improved service levels have been negotiated as part of this contract. City of Kent Employee Services Department Sue Viseth, Director 86 DRAFT ADMINISTRATIVE SERVICES AGREEMENT This Administrative Agreement ("Agreement') made as of the day of , 2009 by and between the International City/City Management Association Retirement Corporation (hereinafter"ICMA-RC'), a nonprofit corporation organized and existing under the laws of the State of Delaware, and City of Kent, Washington (hereinafter referred to as "EMPLOYER") a City organized and existing under the laws of the State of Washington. RECITALS WHEREAS, EMPLOYER, pursuant to and in compliance with Internal Revenue Code Section 457, has established a Deferred Compensation Plan (the "Plan"); WHEREAS, EMPLOYER acts as a public Plan sponsor for this retirement Plan with responsibility to obtain investment alternatives and services for employees participating in that Plan; WHEREAS, EMPLOYER desires to contract with ICMA-RC in connection with the administration of the Plan; WHEREAS, ICMA-RC desires to provide such services subject to the terms and conditions set forth herein; WHEREAS, The VantageTrust ("the Trust') is a common law trust governed by an elected Board of Trustees for the commingled investment of retirement funds held by various state and local governmental units for their employees; WHEREAS, ICMA-RC acts as investment adviser to the Trust; ICMA-RC has designed, and the Trust offers, a series of separate funds (the "Funds")for the investment of plan assets. The Trust is available only to public employers through ICMA-RC; and WHEREAS, in addition to serving as investment adviser to the Trust, ICMA-RC provides a complete offering of services to public employers for the operation of employee retirement plans including, but not limited to, communications concerning investment alternatives, communications concerning educational alternatives, account maintenance, account recordkeeping, investment and tax reporting, transaction processing, benefit disbursement, and asset management. NOW THEREFORE, in consideration of the mutual promises contained herein the parties agree as follows: 1. DESIGNATION EMPLOYER designates ICMA-RC as a recordkeeper for the Plan to perform all non- discretionary functions necessary for the administration of the Plan with respect to assets in the Plan deposited with the Trust. The general functions to be performed by ICMA-RC include but are not limited to: A. allocation in accordance with participant direction of individual accounts to investment options offered by the Trust; B. maintenance of individual accounts for participants reflecting amounts deferred, income, 1 DRAFT gain, or loss credited, and amounts disbursed as benefits; C. provision of periodic reports to the EMPLOYER and participants of the status of Plan investments and individual accounts; I D. Communication to participants of information regarding their rights and elections under the Plan; ICMA-RC shall provide educational and communication services to all participants in the Plan as outlined under State and Federal law; and ICMA-RC shall i present workshops to participants outlining programs and provide assistance in education and communication as outlined under State and Federal law. ICMA-RC shall report in writing, in a format approved by the Deferred Compensation Committee, an update on all funds and education and communicated materials related to participants, including attendance at on-site meetings, to the Deferred Compensation Committee. E. ICMA-RC agrees that EMPLOYER shall retain the ultimate right of approval or disapproval of communications customized specifically for the Plan but agrees it will only do so after communication with the ICMA-RC. As it relates to communication materials, EMPLOYER shall reserve the right to audit and verify all information supplied it by ICMA-RC; and disbursement of benefits as agent for the EMPLOYER in accordance with terms of the Plan. 2. ADOPTION OF TRUST EMPLOYER has adopted the Declaration of Trust of VantageTrust and agrees to the commingled investment of assets of the Plan within the Trust. EMPLOYER agrees that operation of the Plan and investment, management and disbursement of amounts deposited in the Trust shall be subject to the Declaration of Trust, as it may be amended from time to time and shall also be subject to terms and conditions set forth in any disclosure documents (such as the Retirement Investment Guide or Employer Bulletins) as those terms and conditions may be adjusted from time to time. It is understood that the term "Employer Trust' as it is used in the Declaration of Trust shall mean this Administrative Services Agreement. 3. EXCLUSIVITY AGREEMENT EMPLOYER agrees that for the initial or succeeding term of this Agreement specified in Section 10, so long as ICMA-RC continues to perform in all material respects the services to be performed by it under this Agreement, EMPLOYER shall not obtain plan administration from anyone other than ICMA-RC. EMPLOYER acknowledges that ICMA-RC has agreed to the compensation to be paid to ICMA-RC under this Agreement in the expectation that ICMA-RC will be able to offset costs allocable to performing this Agreement with revenues arising from total Plan assets at the rates provided herein throughout the initial or succeeding term. I 4. EMPLOYER DUTY TO FURNISH INFORMATION i EMPLOYER agrees to furnish to ICMA-RC on a timely basis such information as is necessary for ICMA-RC to carry out its responsibilities as Administrator of the Plan, including information needed to allocate individual participant accounts to Funds in the Trust, and information as to the employment status of participants, participant ages, addresses, and other identifying information (including tax identification numbers). ICMA-RC shall be entitled to rely upon the accuracy of any information that is furnished to it by a responsible official of the EMPLOYER or any information relating to an individual participant or beneficiary that is furnished by such participant or beneficiary, and ICMA-RC shall not be responsible for any error arising from its reliance on such information. ICMA-RC will provide account information in reports, statements or accountings. 2 I 88 DRAFT 5. CERTAIN REPRESENTATIONS WARRANTIES and COVENANTS ICMA-RC represents and warrants to EMPLOYER that: A. ICMA-RC is a non-profit corporation with full power and authority to enter into this Agreement and to perform its obligations under this Agreement. The ability of ICMA-RC to serve as an investment provider to the Trust is dependent upon the continued willingness of the Trust for ICMA-RC to serve in that capacity. B. ICMA-RC is an investment adviser registered as such with the U.S. Securities and Exchange Commission ("SEC") under the Investment Advisers Act of 1940, as amended. ICMA-RC Services, LLC (a wholly owned subsidiary of ICMA-RC) is registered as a broker-dealer with the SEC and is a member in good standing with the Financial Industry Regulatory Authority ("FINRA") and the Securities Investor Protection Corporation ("SIPC"). ICMA-RC covenants with EMPLOYER that: C. ICMA-RC shall maintain and recordkeep the Plan in compliance with the requirements for eligible deferred compensation plans under Section 457 of the Internal Revenue Code; provided, however, ICMA-RC shall not be responsible for the eligible status of the Plan in the event that the EMPLOYER directs ICMA-RC to administer the Plan or disburse assets in a manner inconsistent with the requirements of Section 457 or otherwise causes the Plan not to be carried out in accordance with its terms. Further, in the event that the EMPLOYER uses its own customized plan document, ICMA-RC shall not be responsible for the eligible status of the Plan to the extent affected by terms in the EMPLOYER's Plan document that differ from those in ICMA-RC's standard plan document. ICMA-RC shall not perform any service that ICMA-RC, in its sole judgment, might cause ICMA-RC to be treated as a "fiduciary" of the Plan under applicable law. Provided, however, that solely with respect to providing non-discretionary recordkeeping and plan administration services hereunder, ICMA-RC acknowledges that it is a fiduciary for those purposes and for no other purpose. EMPLOYER represents and warrants to ICMA-RC that: D. EMPLOYER is organized in the form and manner recited in the opening paragraph of this Agreement with full power and authority to enter into and perform its obligations under this Agreement and to act for the Plan and participants in the manner contemplated in this Agreement. Execution, delivery, and performance of this Agreement will not conflict with any law, rule, regulation or contract by which the EMPLOYER is bound or to which it is a party. E. EMPLOYER understands and agrees that ICMA-RC's sole function under this Agreement is to act as recordkeeper and to provide administrative, investment or other services at the direction of Plan participants, the EMPLOYER, its agents or designees in accordance with the terms of this Agreement. Under the terms of this Agreement, ICMA- RC does not render investment advice, is not the Plan Administrator or Plan Sponsor as those terms are defined under applicable federal, state, or local law, and does not provide legal, tax or accounting advice with respect to the creation, adoption or operation of the Plan and the Trust. F. EMPLOYER acknowledges that certain such services to be performed by ICMA-RC under this Agreement may be performed by an affiliate or agent of ICMA-RC pursuant to one or more other contractual arrangements or relationships, and that ICMA-RC 3 DRAFT reserves the right to change vendors with which it has contracted to provide services in connection with this Agreement without prior notice to EMPLOYER. ICMA-RC agrees to notify EMPLOYER in the event that ICMA-RC is replacing vendors that provide services only to the EMPLOYER and a change in such vendor will have a material impact on the services being provided to EMPLOYER by ICMA-RC. i 6. COMPLETE AGREEMENT This Agreement and its exhibits and attachments shall constitute the complete and full understanding and sole agreement between ICMA-RC and EMPLOYER relating to the object of this Agreement and correctly sets forth the complete rights, duties and obligations of each party to the other as of its date. In the event of an ambiguity or inconsistency in this Administrative Services Agreement or between the Administrative Services Agreement and any Exhibit, the inconsistency shall be resolved by giving preference to (1) applicable Federal and State of Washington statutes and regulations, (2) the Administrative Services Agreement, (3) and then to the below referenced Exhibits in the following order: EXHIBIT: TITLE A. ICMA-RC's response to the City of Kent RFI 7. TERM The term of this agreement will begin as soon as the Agreement has been signed and executed by the parties and extend seven (7) years. This Agreement will be renewed automatically for each succeeding year unless written notice of termination is provided by either party to the other no less than sixty (60) days before the end of such Agreement year. I The Employer may terminate this Agreement for cause prior to the end of the Initial Term in the event that the Employer determines that ICMA-RC has materially breached this Agreement by not providing the services or performing its obligations as agreed to in this Agreement. Employer agrees to provide ICMA-RC thirty (30) business days to cure such breach following written notice from Employer of such breach and the Employer's intention to terminate the Agreement. Following the Initial Term of the Agreement, the Agreement may be terminated by either party on sixty (60) days advance notice in writing to the other. i 8. INVESTMENT OPTIONS Blended Stable Value ICMA-RC proposes to create a blended stable value fund during the period, in which a monthly rate would be credited based on the allocation of assets between the VantageTrust PLUS Fund and the Nationwide Fixed Account. Nationwide would need to provide a monthly rate factor five business days prior to the start of each month. In order to ensure proper liquidity for this fund, ICMA-RC would expect that Nationwide assets would be benefit responsive. In addition, in the first year Nationwide would be expected to permit participant transfers out of the Fixed Account with no Market Value Adjustment at any time the PLUS Fund component of the blended fund falls to zero. Open Architecture ICMA-RC agrees to accept Plan funds for investment in the investment options or such other options as mutually agreeable to the parties. The program features an "open architecture," this investment flexibility allows the City to select the investment options we have offered, or if the 4 90 DRAFT City prefers, make its own investment option choices, assuming mutual agreement between the City and ICMA-RC is reached to offer the investment option within our platform, which shall not be unreasonably withheld. ICMA-RC agrees to conduct an ongoing review of the investment options available in the Plan and provide information and data regarding the investment options annually or sooner should some concern pursuant to the adopted investment policy statement occur. A. The following provisions will apply to the mutual funds/other products: I. The investment options made available to Plan participants may have additions, eliminations, and substitutions upon agreement by the parties during the term of the Agreement. Dividends will be reinvested in accordance with the terms of the Trust Agreement. 11. Investment Management or other underlying fund charges may be imposed by the underlying mutual fund. These charges will be disclosed in the underlying fund prospectus and along with any operating expenses of the underlying fund would be separate from any fees or charges described in this Agreement. III. Redemption Fees. Redemption fees imposed by outside mutual funds in which Plan assets are invested are collected and paid to the mutual fund by ICMA-RC. ICMA- RC remits 100% of redemption fees back to the specific mutual fund to which redemption fees apply. These redemption fees and the individual mutual fund's policy with respect to redemption fees are specified in the prospectus for the individual mutual fund and referenced in the Retirement Investment Guide. B. Participants will be permitted to change their investment options as often as they wish subject to the terms of the Trust Agreement and applicable state and federal laws; however, participants shall be subject to any applicable restriction (including frequent trading or market timing policies), penalty, fee, or charge imposed by the underlying fund for such change. C. EMPLOYER acknowledges the following: The underlying funds, available as investment options under the Plan, are not intended as vehicles for short-term trading. Excessive exchange activity may interfere with portfolio management and may have an adverse effect on all shareholders. The underlying funds expressly reserve the right to curtail such short-term trading activity. These policies can by found in the underlying fund prospectuses. EMPLOYER acknowledges that in the event that excessive or abusive exchange activity in an underlying fund is detected, ICMA-RC may take action, including restricting or suspending any or all Participants from internet, phone, facsimile or other electronic investment option transfer privileges. 9. SELF-DIRECTED BROKERAGE OPTION If the EMPLOYER desires to offer to Participants in its Deferred Compensation Plan a self- directed investment arrangement. ICMA-RC and the EMPLOYER agree to the following: A. General. ICMA-RC will make available to participants in EMPLOYER's Plan a self- directed brokerage account option ("SDBA") through ICMA-RC's partnership with UVEST, a broker-dealer registered with the Securities Exchange Commission ("SEC"). UVEST will hold in each SDBA all securities, cash and other property transferred to the 5 o� DRAFT account on behalf of a participant, and will disburse the same in accordance with directions of each participant electing the SDBA account option. B. Investment Options. Investments under the SDBA are limited to shares in registered mutual funds. I C. Account and Transfer Minimums, The SDBA option will be made available to participants with a minimum $35,000 participant account balance in ICMA-RC core Funds, A participant may not transfer additional amounts into a SDBA if his or her core Funds balance falls below$30,000 at any given time. A minimum $5,000 initial transfer from core Funds is required, with a $1,000 minimum applying to subsequent transfers. D. Account Information and Transactions. Participants may access SDBA information via Account Access and may effect SDBA investments and other transactions through i Account Access or through licensed representatives made available on-site at ICMA-RC by UVEST. E. Fees. For services provided in connection with the SDBA option, ICMA-RC will charge each participant an enrollment fee $25. There is no ongoing annual account maintenance fee. UVEST, our VantageBroker partner, structures mutual fund fees as follows: I. .A large number of no-load, no transaction fee funds are available, with a fee for short-term trading on the sale of funds held for 180 days or less. j 11. No-load mutual funds with transaction fees of$30 on each purchase and redemption. III. Front-end load funds, which charge an initial fee (amount determined by the fund family) for purchases. IV. A fee of$35 is charged in the calendar year following a year in which no trading activity has taken place. This fee is charged in February, based on trading activity from the prior calendar year. Note: Depending on the individual participant's VantageBroker account activity, other fees such as an exchange fee for transfers between mutual funds within the same load- fund family, and a legal transfer fee may apply. F. Liability for Participant Directions. Notwithstanding any other provision in the Agreement, ICMA-RC shall not be liable in connection with any claim, loss, damages, or injury resulting from any participant self-directed brokerage account investment direction, unless ICMA-RC, its officers, agents or employees have acted negligently in executing or failing to execute such direction. G. Delivery of Documents. UVEST shall forward to participants or to the EMPLOYER for distribution to participants, documents received by UVEST including, but not limited to, proxies, options, warrants, tenders, reports, and offering circulars, that relate to voting rights or other rights accruing from investments purchased through a participant's SDBA. H. Complaint, Correspondence, Participant Inquiries. ICMA-RC agrees to forward immediately to the EMPLOYER any complaint, correspondence, or inquiry, written or oral, from a participant, or any document, correspondence, complaint, or inquiry from any regulatory authority, including, but not limited to, the SEC, FINRA, state securities 6 92 DRAFT departments, state insurance departments, or state banking departments that names or refers directly or indirectly to the EMPLOYER or its employees. I. Confidential Information. All information provided to ICMA-RC by the EMPLOYER or Plan participants in connection with a SDBA shall be regarded by ICMA-RC as confidential and shall not be used by ICMA-RC in connection with any matter other than Plan or self-directed brokerage administration without prior written consent of the EMPLOYER, or participant, as appropriate. 7 o^ J. DRAFT % PLAN ADMINISTRATION A. ENROLLMENT AND COMMUNICATION/EDUCATION SERVICES ICMA-RC agrees to: I. Establish an account for each participant; j II. Post and credit the amounts sent by EMPLOYER to the accounts of Participants in accordance with the latest instructions on file with ICMA-RC; and f III. Provide participants written communication, detailing changes in the Plan. ICMA-RC agrees to conduct grou p presentations periodically for employees of i EMPLOYER, to explain the Plan. EMPLOYER agrees to facilitate the scheduling of such presentations and to provide facilities at which satisfactory attendance can be expected. ICMA-RC agrees that qualified personnel will be made available periodically to discuss the Plan with individual employees of EMPLOYER. ICMA-RC agrees to process, or arrange to have processed, the enrollment of eligible employees who elect to participate in the Plan. ICMA-RC agrees to provide personalized portions of informational and promotional material pursuant to the Plan for distribution to employees of EMPLOYER, subject to approval of such material by EMPLOYER, such approval shall not be unreasonably withheld, EMPLOYER agrees to allow and facilitate the periodic distribution of such material to employees in an electronic (web-based) format. Participant enrollment will be made available to the extent possible and agreed upon. For the City's on-site services, ICMA-RC will staff one local Retirement Plans Specialist and additional Retirement Plans Specialists, as needed, who will be supported by the Territory Manager. ICMA-RC will also provide the services of a salaried Financial Planning Manager. ICMA-RC agrees to offer annually: 8 education worksho s minimum 1 two-hour financial planning seminar minimum Up to 360 'Y2 hour individual counseling sessions Each local service representative assigned to the City's account will hold a minimum of their FINRA Series 6/63 designations. ICMA-RC will conduct the stated number of contractual onsite individual and group enrollment/education meetings for employees beginning on the effective date of this Agreement. The EMPLOYER may adjust these numbers as appropriate but any increase in minimum amounts required must be mutually agreed upon by the EMPLOYER and ICMA-RC. B. DEFERRALS ICMA-RC agrees to post.funds no later than the business day following the day on which the funds and the electronic receipt of the contribution detail are received in good order by 1:00 p.m. PST by ICMA-RC. The term in "good order" as used in this Agreement means authorized instruction to ICMA-RC that is given with such clarity and completeness that ICMA-RC is not required to exercise any discretion, utilizing 8 94 DRAFT electronic contribution processing as ICMA-RC may require. The contribution detail must agree with the related funding and social security numbers and funding must correspond to participants previously enrolled in the recordkeeping system. ICMA-RC will not be liable for any delay in posting if EMPLOYER fails to send either the funds representing deferral amounts or deferral information in accordance with ICMA-RC's instructions, to the central processing site designated by ICMA-RC. Additionally, the cash and allocation data must be submitted to ICMA-RC. The allocation data submitted by the EMPLOYER to ICMA-RC must reconcile with both the cash remitted to ICMA-RC and the participant accounts on record with ICMA-RC. This means that cash and allocation data are submitted electronically in a layout and format mutually agreed to by both ICMA-RC and the EMPLOYER. For transactions that are not submitted in a satisfactory manner, ICMA-RC shall return the cash to the EMPLOYER within five (5) business days, unless directed otherwise. ICMA-RC is not responsible for collecting any contributions that may be due to the Plan but are not deposited with ICMA-RC. Any amounts contributed in error by the EMPLOYER to the Plan shall be returned to the EMPLOYER within seven (7) business days of the receipt of a written notice from the EMPLOYER to ICMA-RC, or as soon as administratively feasible based on the complexity of the request, which establishes the error, the amount of such error and the intended disposition of such error. Unclear Investment Instructions: If ICMA-RC determines that no proper investment directions are in effect for a participant, ICMA-RC will credit the contributions to the default fund or funds that are selected by the EMPLOYER so that the fund or funds can be credited immediately. EMPLOYER agrees to: Reconcile its payroll information to wire transfers to ICMA-RC. Cause appropriate deductions to be made from such payroll(s) as may be applicable and send the funds representing the total participant deferrals to ICMA-RC; and Provide to ICMA-RC in such a mutually agreed upon electronic media, a deferral listing with respect to participant accounts to include not less than the following: I. Plan Number ll. Name of participant III. Social security number of participant IV. Amount to be credited to participant's account(s); and V. Contribution source Funds may be sent by wire transfer, or through an automated clearinghouse in accordance with written instructions provided by ICMA-RC. Failure to follow the written instructions provided by ICMA-RC may result in delay of posting to Participant accounts. EMPLOYER agrees to furnish to ICMA-RC on a timely basis such information as is necessary for ICMA-RC to carry out its responsibilities as Administrator of the Plan, including information needed to allocate individual participant accounts to Funds in the Trust, and information as to the employment status of participants, and participant ages, addresses and other identifying information (including tax identification numbers), subject further to the terms of the Trust Funding Agreement. ICMA-RC shall be entitled to rely upon the accuracy of any information that is furnished to it by a responsible official of the EMPLOYER (as determined by the EMPLOYER) or any information relating to an individual participant or beneficiary that is furnished by such participant or 9 DRAFT beneficiary, and ICMA-RC shall not be responsible for any error arising from its reasonable reliance on such information. ICMA-RC will provide account information in reports, statements or accountings. C. REPORTS ICMA-RC agrees to provide to EMPLOYER the following reports: L_ EMPLOYER Statement of Account Quarterly* Activity Reports Dail ** Summary by Investment Dail ** Web ActivityMonth) ** Automated Telephone Transactions Report Annual Comprehensive Plan and Fund Review Annual Revenue Accounting Report Quarterly *The quarterly EMPLOYER Statement of Account is to be provided within fifteen business days after quarter end. **These reports are available through EZLink, the EMPLOYER on-line tool. In addition, ICMA-RC will provide reports each year detailing all education and communication activity including the number of group and individual sessions conducted during the year, and the number of participants attending sessions on each educational topic. D. ADJUSTMENTS ICMA-RC shall not be responsible for any acts or omissions of any person other than ICMA-RC, its affiliates and each of their agents and employees in connection with the administration or operation of the Plan. If, as a direct result of an error made by ICMA-RC, a loss is incurred by a Plan participant (or a gain was not received), ICMA-RC will adjust the participant's account retroactively according to the following policy: I. For transactions that are confirmed in writing, if ICMA-RC is notified within thirty (30) days following the confirmation date, ICMA-RC will correct the transaction and the participant's account will be made whole at ICMA-RC 's expense; and II. For transactions that are reflected on quarterly statements only, if ICMA-RC is notified within ninety (90) days following the receipt of the quarterly statement, ICMA- RC will correct the transaction and the participant's account will be made whole at ICMA-RC's expense. E. Qualified Domestic Relations Orders - See Exhibit I 11. PARTICIPANT SERVICES A. ICMA-RC will provide a toll-free Voice Response System telephone number, which shall be operative 24 hours per day, 7 days per week (less normal maintenance time and time allotted for system upgrades). Customer Service Representatives will be available from 5:30 am to 6:00 pm Pacific Time each business day. Using the toll-free number, 10 96 DRAFT participants may obtain information and conduct transactions for participant accounts. EMPLOYER authorizes ICMA-RC to honor instructions, which may be submitted by participants pursuant to their personal identification number(PIN) using the toll-free number, either via the Voice Response System or through a live Customer Service Representative. B. Internet availability. ICMA-RC will provide participants with Internet access, available 24 hours a day, 7 days per week with the exception of the time necessary for the normal maintenance of the system and updating of information. C. ICMA-RC will provide Plan participants opportunities to increase (within limitations of I.R.C. 457(b) or decrease deferral amounts. ICMA-RC agrees to permit participants to increase or decrease deferral amounts electronically subject to the ability of the EMPLOYER to facilitate such a service with ICMA-RC. D. ICMA-RC will provide Plan participants opportunities to redirect future deferral amounts to any investment option offered by the Plan. All requests received in good order will be processed within twenty-four(24) hours of receipt and will be effective the following pay period deferral. E. ICMA-RC will provide participants the daily ability, without additional cost, to exchange existing account balances from one investment option offered by the Plan to another, subject to fund restrictions and redemption fees that may be charged by mutual fund companies, and further subject to the terms of the Trust Funding Agreement. F. ICMA-RC will provide participants, if they request, an underlying fund prospectus and an annual report for each underlying fund offered by the Plan. Specific fund prospectuses and other relevant information are to be provided by each respective mutual fund or other investment provider upon request by the EMPLOYER or by a participant. G. ICMA-RC will provide participants quarterly statements reflecting their 457 retirement . plan accounts detailing participant's year-to-date deferral amounts, account balance information that includes changes in account value since the previous report date, a personal rate of return calculation, and any fees or charges assessed against the Participant account. ICMA-RC will provide each participant a personal rate of return calculation quarterly within the participant statement and via Account Access, the on-line participant system. H. ICMA—RC agrees to mail statements to participants within twelve (12) business days after the end of each calendar quarter. ICMA-RC will have no responsibility to report, or account for the accuracy of information applicable to periods prior to the effective date such Plan was administered by ICMA-RC. I. ICMA-RC will provide reports daily and monthly on-line via EZLink, the on-line administrative tool to enable EMPLOYER to effectively monitor all accounting and recordkeeping processes. J. ICMA-RC has retained Morningstar, Inc., as the Morningstar®Advice Onlinesm* for the Plan participants. Based upon information provided by the participant, it gives independent advice based on all of the funds available through the Plan. Additionally, Morningstar®Advice Onlinesm* contains modules that allow the participant to enter information pertaining to their retirement investments and receive projections on how much they may need for retirement, as well as how much they may need to accumulate based on their present situation. Morningstar, Inc. will assume fiduciary responsibility for guidance services and investment advisory services, ICMA-RC's selection of and 11 o^ DRAFT agreements with Morningstar are decisions made by ICMA-RC and not by EMPLOYER. ICMA-RC agrees that the indemnification provisions of Section 22 shall apply to ICMA- RC's acts in the selection of and agreements with Morningstar, and to Morningstar's performance of the Morningstar®Advice Online9m described in this subsection and as arranged by ICMA-RC with Morningstar. Fiduciary duty is assumed by Morningstar, Inc. as part of this service. Employee participation in Morningstar®Advice Onlines is optional, and available at $0 per year for participants that utilize the service. I_ 12. DISTRIBUTIONS A. ICMA-RC will assist the participant in preparing the necessary forms to select his/her distribution option, This would also include those distributions covered in the Plan's de- minimus provisions and those distributions required by law. B. Participants electing a payment of a lump sum amount will have their payment processed within twenty-four(24) hours if documentation is received in good order and the EMPLOYER has provided termination data. C. With respect to the administrative services provided by ICMA-RC in connection with unforeseeable emergency withdrawal requests (hereinafter referred to as "hardship withdrawal requests") submitted by participants in the EMPLOYER's 457(b) Eligible Deferred Compensation Plan, the EMPLOYER and ICMA-RC agree as follows: I. EMPLOYER authorizes ICMA-RC to review and process participant hardship withdrawal requests determined to be in good order as set forth in this section of the Agreement; II. EMPLOYER shall retain the final authority as to the determination of good order with respect to all hardship withdrawal requests; III. ICMA-RC shall provide all necessary paperwork within a standardized hardship withdrawal request package to participants. Such materials shall also be made available to the EMPLOYER upon request; IV. Hardship withdrawal requests must be submitted to ICMA-RC on a prescribed request form provided by ICMA-RC as part of the standardized hardship withdrawal request package. Such form shall be forwarded directly to ICMA-RC 's corporate headquarters in Washington, D.C.; and l V. ICMA-RC shall review all hardship withdrawal requests made by participants to determine whether such requests are in good order as set forth in this section. ICMA-RC shall perform such review, reach a determination and advise the participant of its determination within five (5) business days of receipt of a completed hardship withdrawal request package. After reviewing each hardship withdrawal request, ICMA-RC shall; I. process payment where the participant's hardship withdrawal request is determined to be in good order; or II. not make payment where the participant's hardship withdrawal request is not in good order. Written notification shall be sent to the participant; AND III. ICMA-RC will provide EMPLOYER with a quarterly report outlining hardship related 12 98 DRAFT activity for the preceding quarter. EMPLOYER authorizes ICMA-RC to process hardship withdrawal requests found to be in good order. Good order shall be found where the unforeseeable emergency creates a severe financial hardship to the participant. D. The circumstances that will constitute an unforeseeable emergency will depend upon the facts of each case. EMPLOYER reserves the right to review all hardship withdrawal requests made by participants to determine whether such requests are in good order as set forth in this section. If the EMPLOYER, in its sole discretion, makes such determination, the EMPLOYER must provide written documentation indicating that it has reviewed and approved the participant request and provide direction to ICMA-RC to process the withdrawal. E. ICMA-RC shall offer to participants for distribution of their account a designated amount payment option. Payments shall be made on a monthly, quarterly, semi-annual, or annual basis as specified by the participant, in equal installments until the amount applied, adjusted each business day for investment results, is exhausted, The final installment will be the sum remaining at the time such payment is due. Distribution selections may be changed by Plan Participants as permitted by the Plan. F. ICMA-RC shall also offer to Plan Participants a designated period payment option with a variable payment. Payments shall be made monthly, quarterly, semi-annually, or annually for any specified number of years as permitted by the Plan, at the discretion of the Plan participant. The amount of each variable payment shall be determined by dividing the Participant's current portfolio balance by the number of remaining payments. G. All payment options are available for all investment options. Participants selecting the options in B, D, E, or F above shall be subject to the same fees and charges, and permitted the same exchange opportunities, as an active or inactive participant as defined by the Plan. Processing of these options will be completed by ICMA-RC upon receipt of properly completed forms, in a time frame necessary to effectuate the "payment begin date" requested by the participant. Monthly Installments can be paid on an optional weekly cycle that is offered by ICMA-RC and which is selected by the participant. All distributions will be made pro-rata from each of the Participant's investment options unless the participant selects a fund depletion order. H. With regards to distributions from the EMPLOYER's Plan, ICMA-RC will be responsible for preparing and filing all reports required by federal and state taxing authorities through the effective date of the termination of the Agreement. EMPLOYER shall be responsible for all reporting requirements for periods prior to the effective date of this Agreement, or after the termination date of this Agreement. ICMA-RC will be responsible for the annual filing of individual 1099R forms. ICMA-RC shall withhold income taxes from distributions as required, and remit said taxes to appropriate regulatory authorities. ICMA-RC shall also prepare and file periodic and annual tax returns for said amounts withheld. I. ICMA agrees to provide Plan participants anticipating retirement or other separation from service with illustrations indicating monthly benefit payments at an assumed interest rate for savings accounts or an assumed rate of earnings for mutual fund investments. Such assumed interest rate or rate of earnings shall be for illustration purposes only. The actual interest rate/yield paid on saving products during distribution may change quarterly. For variable investment options, earnings will be those actually earned. 13 Q^ DRAFT 13. TRANSITION MEETINGS During the initial period when the transition will be introduced to Plan participants, ICMA-RC will conduct individual and group meetings with all interested employees and Plan participants regarding changes to the Plan and the investment line-up. The number of meetings will be as follows: Number of group meetings Number of individual meetings Number of Da s These meetings will be in addition to the regular annual meetings described in Section 10 of this Agreement. EMPLOYER agrees to facilitate the scheduling of such presentations and to provide facilities at which satisfactory attendance can be expected. ICMA-RC agrees to provide sufficient communications with regard to the investment line-up change. I l f ` l i 14 j 100 DRAFT 14. COMPENSATION Revenue Requirement. ICMA-RC shall receive total plan annual aggregate revenue of 0.20% from funds offered by the Plan, excluding loans, SDBA assets, and no former provider surrender charges. ICMA-RC shall pay an administrative allowance quarterly to the EMPLOYER or to the Plan in an amount equal to any revenue in excess of the revenue requirement. In the event that revenue received by ICMA-RC from funds offered by the Plan falls below the revenue requirement, ICMA-RC and the EMPLOYER shall mutually agree upon a method to make up the shortfall necessary to meet the revenue requirement. ICMA-RC will calculate the revenue earned on all funds each calendar quarter. Should the total revenue for the preceding calendar quarter exceed the annualized revenue requirement based on the above chart, and no defaults are outstanding, ICMA-RC agrees to make payment to the Plan of any such amount in excess within twenty-five (25) business days of the end of the calendar quarter. ICMA-RC and the EMPLOYER agree that the pricing for this contract is contingent upon a sole provider relationship. The compensation and payment set forth in this Section 14 is contingent upon the EMPLOYER's use of ICMA-RC's EZLink system for contribution processing and submitting contribution funds by ACH or wire transfer on a consistent basis over the term of this Agreement 15. MATERIAL BREACH AND CURE PERIOD i Non-Compliance with the provisions of this Agreement can result in termination of this Agreement. In addition to any other remedies for termination set forth under this Agreement, either party may upon ninety (90) days written notice to the officials noted in Section 33, terminate this Agreement for non-compliance of the provisions of this agreement. Either Party may, given the opportunity, correct the non-compliance as directed in the notice, but must do so in a reasonable time as prescribed in the notice. The EMPLOYER may also extend the time of termination of this Agreement to a period of not more than six (6) months in order to find another provider or complete transition of the assets to another program. 16. TERMINATION Upon the effective date of termination of this Agreement, the following shall occur: A. ICMA-RC will no longer accept deferrals; B. ICMA-RC will provide EMPLOYER a copy of all records relating to participant sub- accounts, in electronic format, within forty-five (45) days after the effective date of termination; C. If termination is due to either party exercising the right of termination described in Section 7 of this Agreement, within forty-five 45 days of the effective date of termination, ICMA-RC will liquidate the funds and transfer to EMPLOYER or to such other entity as EMPLOYER may designate in writing, subject further to the terms and conditions of the Trust Agreement and the Retirement Investment Guide. ICMA-RC agrees to provide a final accounting of all Plan assets for which ICMA-RC provides record-keeping and agrees to cooperate with the requests of the EMPLOYER and the successor provider(s) 15 DRAFT to the extent we are able. Accounts in distribution will be transferred to EMPLOYER or its designee in accordance with the time frame described above; and D. This Agreement is contingent upon the existence of a Trust Agreement. If the Trust Agreement is discontinued, this Agreement automatically terminates as of the date the Trust Agreement is discontinued. 17. CONFIDENTIALITY ICMA-RC agrees that all information supplied to and all work processed or completed by ICMA- RC shall be kept confidential and will not be disclosed except as required or permitted by law. This Agreement governs the services pertaining to the Plan only. The provider agrees that it shall not solicit ancillary non-retirement products and/or IRA products, not required for the servicing of the Plan, to participants and/or employees (except as additional products and services are requested by the EMPLOYER). ICMA-RC may still offer IRA products when requested by the employee and/or participant. 18. PRIVITY OF CONTRACT ICMA-RC and Plan Participants shall have no privity of contract with each other. 19. TITLE AND OWNERSHIP In accordance with the provisions of Internal Revenue Code Section 457, all account(s) established under this Agreement shall be held in the name of EMPLOYER, or by a Trustee/Custodian with a multi-employer"omnibus account' for the benefit of participants, in accordance with the Plan. 20. CIRCUMSTANCES EXCUSING PERFORMANCE Neither party to the Agreement shall be in default by reason of failure to perform in accordance with its terms if such failure arises out of causes beyond reasonable control and without fault or negligence on their part. Such causes may include, but are not limited to, acts of God or public enemy, acts of the government in its sovereign or contractual capacity, fires, floods, epidemics, quarantine or restrictions, freight embargoes, and unusually severe weather. I 21, GENERAL PROVISIONS The responsibility of ICMA-RC is limited to the terms of this Agreement. Nothing in this Agreement shall be construed to make ICMA-RC responsible for the Plan or Plan Trust or to confer responsibilities upon ICMA-RC except for those expressly provided for in this Agreement. The EMPLOYER agrees and acknowledges that no discretionary responsibility is hereby conferred upon or assumed by ICMA-RC under this Agreement. The EMPLOYER hereby acknowledges that ICMA-RC does not agree, pursuant to this Agreement or otherwise, to provide tax, legal, or investment advice. ICMA-RC shall perform its obligations hereunder as agent for the EMPLOYER and only in accordance with instructions received from those persons authorized to act on behalf of the EMPLOYER as specified to EMPLOYER in writing. The EMPLOYER understands that all services performed and reports prepared pursuant to this Agreement will be based on information provided by the EMPLOYER and that ICMA-RC shall incur no liability and responsibility for the performance of such services and preparation of such reports until and unless such information as ICMA-RC reasonably requests is provided. ICMA- 16 l 102 DRAFT RC shall be entitled to reasonably rely on the information submitted as to accuracy and completeness and assume no obligation or duty to verify such information. The EMPLOYER understands that all services performed and reports prepared pursuant to this Agreement will be in satisfaction of this Agreement. Where the information provided to ICMA-RC by the EMPLOYER was incorrect, and where services previously provided, based on such incorrect information, must be performed again, ICMA-RC reserves the right to charge additional fees. ICMA-RC shall have no responsibility or liability for any error, inadequacy, or omission, which results from inaccurate information, data documents or other records provided to ICMA-RC. EMPLOYER hereby agrees that ICMA-RC, its officers, employees, brokers, registered representatives, vendors and professional advisors (such as attorneys, accountants and actuaries) may use and disclose Plan and participant information only to enable or assist it in the performance of its duties hereunder and with other Plan related activities and expressly authorizes ICMA-RC to disclose Plan and participant information to the Plan's agent and/or broker of record on file with ICMA-RC. Plan and participant information may also be used or disclosed by ICMA-RC to other third parties pursuant to a written authorization signed by the EMPLOYER. Notwithstanding anything to the contrary contained herein, it is expressly understood that ICMA-RC retains the right to use any and all information in its possession in connection with its defense and/or prosecution of any litigation, which may arise in connection with this Agreement, the Trust Agreement funding the Plan, or the Plan. Where information needed to perform services under this Agreement is not received in good order, the EMPLOYER authorizes ICMA-RC to contact any employee at his or her home or business address to obtain additional information. ICMA-RC may assign its rights and obligations under this Agreement to an affiliate or subsidiary company without the written consent of EMPLOYER. However, any other assignment of this Agreement, or any part of it, without the written consent of the other party shall be void. 22. INDEMNIFICATION Indemnification by EMPLOYER. EMPLOYER agrees to indemnify, defend and hold harmless ICMA-RC, its subsidiaries, affiliates, officers, directors, employees and agents from and against any and all loss, damage or liability assessed against ICMA-RC or incurred by ICMA-RC arising out of or in connection with any claim, action or suit brought or asserted against ICMA-RC alleging or involving EMPLOYER's negligence or willful misconduct in the performance (or non- performance) of its services, duties and obligations under this Agreement and/or the Plan; provided that (i) ICMA-RC has notified EMPLOYER promptly and in writing of the claim, action or suit; (ii)the EMPLOYER has the right to assume the defense of such claim, action or suit with counsel selected by EMPLOYER and to compromise or settle such action, suit or claim (provided however, that any such compromise or settlement shall not require action or non- action by ICMA-RC without its prior written consent, which shall not be unreasonably withheld); and (iii) EMPLOYER receives ICMA-RC 's cooperation, at EMPLOYER's sole cost, in such defense. The provisions of this Section shall survive any termination of this Agreement. Indemnification by ICMA-RC. ICMA-RC agrees to indemnify, defend and hold harmless the EMPLOYER, its officers, directors, employees and agents from and against loss, damage or liability assessed against EMPLOYER or incurred by EMPLOYER arising out of or in connection with any claim, action or suit brought or asserted against EMPLOYER alleging or involving ICMA-RC 's negligence or willful misconduct in the performance (or non-performance) of its services, duties and obligations under this Agreement; provided that (i) EMPLOYER has notified ICMA-RC promptly and in writing of the claim, action or suit; (ii) ICMA-RC has the right to assume the defense of such claim, action or suit with counsel selected by ICMA-RC and to compromise or settle such action, suit or claim (provided however, that any such compromise or settlement shall not require action or non-action by EMPLOYER without its prior written consent, 17 1 L�' DRAFT which shall not be unreasonably withheld); and (iii) ICMA-RC receives EMPLOYER's cooperation, at ICMA-RC 's sole cost, in such defense. The provisions of this Section shall survive any termination of this Agreement. Notwithstanding anything to the contrary contained herein, neither party nor their affiliates shall be liable for indirect, special or consequential damages. I f I 18 104 DRAFT 23. ATTORNEYS' FEES Each party agrees that in the event of a claim, arbitration, or lawsuit filed by a party to this Agreement, each party shall be responsible for its own attorneys'fees and/or any costs or expenses related to the bringing or defense of any such claim, arbitration, or lawsuit. 24. ASSIGNABILITY No party to this Agreement shall assign the same without the express written consent of the other party, which consent shall not to be unreasonably withheld, as further described in the Trust Agreement. This provision shall not restrict ICMA-RC 's right to delegate certain services to an agent, including any affiliate, with the approval of the EMPLOYER. Further, ICMA-RC agrees that participant information shall not be outsourced to any agency outside the U.S. without the consent of the EMPLOYER. EMPLOYER agrees that such approval will not be unreasonably withheld. Unless agreed to by the parties, no such assignment shall relieve any party to this Agreement of any duties or responsibilities herein. 25. PARTIES BOUND This Agreement and the provisions thereof shall be binding upon and shall inure to the benefit of the successors and assigns of the respective parties. The parties desire that this Agreement, with Exhibits, Addenda, and Amendments, as may be amended from time to time in writing upon agreement of the parties, shall be binding. In the event of conflict or inconsistency between the Agreement and Exhibits, language in this Agreement shall control. 26. APPLICABLE LAW ICMA-RC and EMPLOYER shall comply with any and all federal, state and local laws affecting the services covered by this Agreement. This Agreement will be construed and enforced in accordance with and governed by the laws of the State of Washington. 27. UNLAWFUL PROVISIONS In the event any provisions of this Agreement shall be held illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts of the Agreement, but the same shall be construed and enforced as if said illegal or invalid provisions had never been inserted herein. Notwithstanding anything contained herein to the contrary, no party to this Agreement will be required to perform or render any services hereunder, the performance or rendition of which would be in violation of any laws relating thereto. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall be ineffective to the extent such provision is prohibited or unenforceable without invalidating the remaining provisions, and any such prohibition or unenforceable provision in any jurisdiction shall not invalidate nor render unenforceable such provision in any other jurisdiction. 28. MODIFICATION This writing is intended both as the final expression of the Agreement between the parties and as a complete statement of the terms of the Agreement. No modification of this Agreement shall be effective unless and until such modification is evidenced by a writing signed by both parties. The Agreement may be amended by ICMA-RC or EMPLOYER upon written consent of the other party. ICMA-RC and/or EMPLOYER shall not unreasonably withhold consent. 19 DRAFT 29. NO WAIVER The failure of either party to enforce any provision of this Agreement shall not be construed as a waiver of that provision or of any other provision in the Agreement and neither party may, at any time, enforce the provision previously waived, unless a modification to this Agreement has been executed. 30, SEVERABILITY The provisions of this Agreement are severable, and, if for any reason a clause, sentence, paragraph, or other part of this Agreement shall be determined to be invalid by a court or federal, state or City, board, or commission having jurisdiction over the subject matter thereof, such invalidity shall not affect other provisions of this Agreement which can be given effect without the invalid provision. 31, INSURANCE ICMA-RC shall obtain and maintain in full force and effect throughout the term of this Agreement, the following insurance coverage: A. Workers' Compensation insurance. If and to the extent required by law during the term of this Agreement, ICMA-RC shall provide workers' compensation insurance for the performance of any of ICMA-RC 's duties under this Agreement; including EMPLOYER's liability and shall provide CITY with certification of all such coverages upon request by EMPLOYER's Risk Manager. B. Liability Insurance I. General Liability. Each party shall obtain and maintain in full force and effect during the term of this Agreement commercial or comprehensive general liability insurance overage (personal injury and property damage) of not less than ONE MILLION DOLLARS ($1,000,000) combined single limit per occurrence, issued by a company having an A.M. Best Rating of no less than A:VIII, covering liability for any personal injury, including death, to any person and/or damage to the property of any person arising from the acts or omissions of that party under this Agreement. If the coverage includes an aggregate limit, the aggregate limit shall be no less than twice the per occurrence limit. The general liability policy shall provide that the inclusion of more than one insured shall not operate to impair the rights of one insured against another insured, the coverage afforded applying as though separate policies had been issued to each insured, but the inclusion of more than one insured shall not operate to increase the limits of the company's liability. 11, Professional Liability. Each party shall obtain and maintain in full force and effect during the term of this Agreement professional liability/errors and omissions insurance in an amount of not less than ONE MILLION DOLLARS ($1,000,000) combined single limit for each occurrence and issued by a company duly and legally licensed to transact business in the State of Washington, covering all professional acts or omissions of that party arising out of or in connection with this Agreement. III. Comprehensive Automobile Liability Insurance. Each party shall obtain and maintain in full force and effect during the term of this Agreement a comprehensive automobile liability insurance policy (Bodily Injury and Property 20 106 DRAFT _ Damage) on owned, hired, leased and non-owned vehicles used in conjunction ` with that party's activities under this Agreement of not less than THREE I HUNDRED THOUSAND DOLLARS ($300,000) combined single limit per occurrence. IV. Certificates of Coverage. Where the foregoing coverages are provided by insurance rather than by self-insurance (written proof of which shall be provided to the other party), the coverages shall be evidenced by one or more certificates of coverage which shall be filed with the other party's Secretary or Clerk prior to reimbursement for performance of any of the party's duties under this Agreement; and shall reference this Agreement by its CITY number or title and department. For the insurance coverages referenced in 7(b)(1) and (3), ICMA-RC shall include the CITY, its officers, employees, agents and volunteers as additional insureds. 32. NONDISCRIMINATORY EMPLOYMENT ICMA-RC and/or any permitted subcontractor, shall not unlawfully discriminate against any individual based on race, color, religion, nationality, sex, sexual orientation, age or condition of disability. ICMA-RC and/or any permitted subcontractor understands and agrees that ICMA-RC and/or any permitted subcontractor is bound by and will comply with the nondiscrimination mandates of all applicable federal, state and local statutes, regulations and ordinances. 33. NOTICES All notices and demands to be given under this Agreement by one party to another shall be given by certified or United States mail, addressed to the party to be notified or upon whom a demand is being made, at the addresses set forth in this section of the Agreement or such other place as either party may, from time to time, designate in writing to the other party. Notice shall be deemed received on the earlier of, 3 days from the date of mailing, or the day the notice is actually received by the party to whom the notice was sent. If to ICMA-RC: ICMA Retirement Corporation Attention: Legal Department 777 North Capital Street, NE Washington, DC 20002-4240 If to EMPLOYER: City of Kent, Human Resources 220 Fourth Avenue South Kent, WA 98032 21 DRAFT IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective on the date first written above. APPROVED BY APPROVED BY ICMA-RC CITY OF KENT i By: By: Title: Title: I Ii Date: Date: ATTEST: I i r j s i i l Exhibit G 22 108 DRAFT QUALIFIED DOMESTIC RELATIONS ORDER PROCEDURES The EMPLOYER's Plan provides for the assignment of a Participant's benefit to another individual pursuant to a qualified domestic relations order (hereinafter"QQDRO"). ICMA-RC agrees to provide administrative services in connection with requests for an assignment pursuant to a domestic relations order (hereinafter"QDRO"). ICMA shall only provide such services to or on behalf of participants who have an account under the Plan. With respect to the administrative services provided by ICMA-RC in connection with QDRO Assignments submitted by participants in the EMPLOYER's Plan, the EMPLOYER and ICMA- RC agree as follows: EMPLOYER authorizes ICMA-RC to process Participant QDRO Assignment Requests determined to be in Good Order. EMPLOYER shall retain the final authority as to the determination of Good Order with respect to all QDRO Assignment Requests. ICMA-RC shall provide all necessary paperwork within a standardized QDRO Assignment Request package to participants. Such materials shall also be made available to the EMPLOYER upon request. QDRO Assignment Requests must be submitted to ICMA-RC on prescribed request forms provided by ICMA-RC as part of the standardized QDRO Assignment Request package. Such forms shall be forwarded directly to ICMA-RC Home Office in Washington DC. ICMA-RC shall review all QDRO Assignment Requests made by participants to determine whether such requests are in Good Order. After reviewing each QDRO Assignment Request, ICMA-RC shall; a) process payment to the alternate payee or segregate assets to an account established for the alternate payee, where the participant's QDRO Assignment Request is determined to be in Good Order; or b) not make payment or segregate assets, where the participant's QDRO Assignment request is not in Good Order. Written notification shall be sent to the participant with a copy to the EMPLOYER. EMPLOYER authorizes ICMA-RC to process a QDRO Assignment Request, if such QDRO Assignment Request is found by ICMA-RC to be in Good Order. EMPLOYER agrees that "Good Order" shall be found where the participant, the alternate payee and their respective legal counsels, use the QDRO Assignment Request to provide and certify to the following information and criteria: 1) A QDRO has been issued by any state agency or instrumentality with the authority to issue judgments, decrees, or orders, or to approve property settlement agreements, pursuant to state domestic relations law (including community property law); and 2) The QDRO clearly specifies the name and last known mailing address of the participant and the alternate payee; and 3) The QDRO provides that it is applicable to the EMPLOYER's Plan; and 23 DRAFT 4) The QDRO relates to the provision of child support, alimony payments, or marital property rights to a spouse, former spouse, child, or other dependent of a Participant; and 5) The QDRO is made under a state's community property or other domestic relations law; and 6) The QDRO creates, recognizes, or assigns the right to receive all or a portion of a participant's plan benefits to the spouse, former spouse, child, or other dependent of a Participant; and 7) The QDRO clearly delineates the dollar amount or percentage or the method of determining the dollar amount or percentage of the benefit to be assigned to the Alternate Payee. The QDRO and the QDRO Assignment Request must clearly specify the amount of such benefit to be awarded to the alternate payee; and 8) The Domestic Relations Order clearly indicates the number of payments to be made i to the alternate payee or time period to which the order applies; and 9) The Domestic Relations Order applies only to the participant's account balance; and 10)The Domestic Relations Order does not provide for any type or form of benefit, or any option, not otherwise provided under the Plan; and 11)The Domestic Relations Order does not assign benefits to the Alternate Payee that are payable to someone else under a prior qualified domestic relations order; and 12)The QDRO Assignment Request is signed by the participant, the alternate payee and their respective legal counsels. For purposes of this section, an alternate payee cannot be anyone other than a spouse, former spouse, child, or other dependent of a Participant. EMPLOYER reserves the right to amend this Exhibit A. EMPLOYER reserves the right to review all QDRO Assignment Requests made by participants to determine whether such requests are in Good Order as set forth in this Section. If the EMPLOYER, in its sole discretion, makes such determination, the EMPLOYER must provide written documentation indicating that it has reviewed and approved the participant request and provide direction to ICMA-RC to process the QDRO Assignment Request. The EMPLOYER acknowledges that: ICMA-RC will not utilize discretion in determining whether or not a QDRO is qualified within the meaning of Section 414(p) of the Internal Revenue Code; and ICMA-RC will follow the guidelines set forth in this section and will utilize the QDRO Assignment Request; and ICMA-RC will process a domestic relations order in accordance with clear and specific directions provided to it through a QDRO Assignment Request where a participant, alternate payee and their respective counsels have provided the requisite information and certifications. �f 24 t Kent City Council Meeting Date May 5, 2009 Category Consent Calendar - 6E 1. SUBJECT: SOUTH 268T" STREET RIGHT-OF-WAY DEDICATION DEED - AUTHORIZE 2. SUMMARY STATEMENT: Authorize the Mayor to sign the deed dedicating the right-of-way for South 2681h Street. In 1971, South 268th Street, located between Military Road and Princeton Avenue, was widened. The street widening required 30 feet of right-of-way along the south side of Glenn Nelson Park. It was recently discovered that the right-of-way was not dedicated making this action necessary. 3. EXHIBITS: Copy of Deed 4. RECOMMENDED BY: Parks and Human Services Committee (Committee, Staff, Examiner, Commission, etc.) 5. FISCAL IMPACT Expenditure? N/A Revenue? N/A Currently in the Budget? Yes No 6. CITY COUNCIL ACTION: Councilmember moves, Councilmember seconds DISCUSSION: ACTION: WHEN RECORDED RETURN TO: Development Review/Property Services City of Kent 220 Fourth Avenue South Kent, Washington 98032 Grantor: City of Kent Grantee: City of Kent Abbreviated Legal Description: Ptn. NW '/a, SW '/4 27-22-04 Additional Legal Description on page 3 of Document. Assessor's Tax Parcel ID No. 272204-9086 Project Name: Glenn Nelson Park/South 2681h St. MUNICIPAL QUIT CLAIM DEED (Corporate) THE GRANTOR, the CITY OF KENT, a municipal corporation, for and in consideration of dedication to the public for right of way and utility purposes conveys and quit claims to the CITY OF KENT the following described real estate, situated in the County of KING, State of Washington including any after acquired title: Refer to Exhibit A and B as hereto attached. Dated this day of 2009 Grantor: City of Kent Mayor Page 1 of 4 l I i STATE OF WASHINGTON ) )SS COUNTY OF KING ) On this day of 20 , before me I � the undersigned, a Notary Public in and for the State of Washington, duly commissioned and sworn, personally appeared to me known to be the Mayor of the corporation that executed the foregoing instrument, and acknowledged the said instrument to be the free i and voluntary act and deed of said corporation, and for the uses and purposes therein mentioned, and on oath stated that is authorized to execute the said instrument and that the seal affixed is the corporate seal of said municipality. WITNESS my hand and official seal hereto affixed the day and year first above written. i I Print Name: Notary Public in and for the State of Washington, residing at My Commission Expires I 1 I Page 2 of 4 i I Ii oI < N 0I _ N89°15'54"W 632.76' — �' GLEN NELSON QI IN PARK �i _ � ; 0 I Io O I 2 � Go (N N �� N N 100 O I ! O z N, c� 30' N w V) w z J I RIGHT OF WAY DEDICATION 0 IN O 616,10' S891726"E 792.98 —_S 2 6 8 S T LOCATED IN THE NW 1/4 GLEN NELSON PARK OF THE SW 1/4 OF SEC � ��► RIGHT OF WAY 27, TOWNSHIP 22 N, KENT RANGE 4 E, MM. W,,,,,„,To„ S 268TH ST CITY OF KENT SME m120 EHIW REP 0]^J01J A1111tarv-260TH ST ENGINEERING DEPARTMENT DATE J/10/2009 B Exhibit A South 268th Street Right of Way The south 30.06 feet of the southwest quarter of the northwest quarter of the southwest quarter of Section 27, Township 22 North, Range 4 East, W.M., in King County, Washington; Except the west 30.00 feet thereof. INU �lQ fs � i . I I i i I , I Kent City Council Meeting Date May 5, 2009 Category Consent Calendar - 6F 1. SUBJECT: MILITARY ROAD RIGHT-OF-WAY DEDICATION DEED - AUTHORIZE 2. SUMMARY STATEMENT: Authorize the Mayor to sign the deed dedicating the right-of-way for Military Road. A sidewalk is being added at the northeast corner of Military Road and S. 268tn Street as part of the pedestrian sidewalk improvements project. An additional 3 feet of right-of-way, plus a triangular section at the corner, is required for the sidewalk. This right-of-way is within Glenn Nelson Park, which is owned by the City. I 3. EXHIBITS: Copy of Deed 4. RECOMMENDED BY: Parks and Human Services Committee (Committee, Staff, Examiner, Commission, etc.) 5. FISCAL IMPACT Expenditure? N/A Revenue? N/A Currently in the Budget? Yes No 6. CITY COUNCIL ACTION: Councilmember moves, Councilmember seconds DISCUSSION: ACTION: WHEN RECORDED RETURN TO: Development Review/Property Services City of Kent 220 Fourth Avenue South Kent, Washington 98032 Grantor: City of Kent Grantee: City of Kent Abbreviated Legal, Description: Ptn. NW 1/4, SW 1/4 27-22-04 Additional Legal Description on page 3 of Document. Assessor's Tax Parcel ID No. 272204-9086 Project Name: Glenn Nelson Park/Military Road MUNICIPAL QUIT CLAIM DEED (Corporate) THE GRANTOR, the CITY OF KENT, a municipal corporation, for and in consideration of dedication to the public for right of way and utility purposes conveys and quit claims to the CITY OF KENT the following described real estate, situated in the County of KING, State of Washington including any after acquired title: Refer to Exhibit A and B as hereto attached. Dated this day of 2009 Grantor: City of Kent Mayor Page 1 of 4 f I STATE OF WASHINGTON ) )SS COUNTY OF KING ) On this day of , 20 , before me the undersigned, a Notary Public in and for the State of Washington, duly commissioned and sworn, personally appeared to me known to be the Mayor of the corporation that executed the foregoing instrument, and acknowledged the said instrument to be the free and voluntary act and deed of said corporation, and for the uses and purposes therein mentioned, and on oath stated that is authorized to execute the said instrument and that the seal affixed is the corporate seal of said municipality. WITNESS my hand and official seal hereto affixed the day and year first above written. Print Name: Notary Public in and for the State of Washington, residing at My Commission Expires 1 I ' I i Page 2 of 4 L i II ` I ( I I Q it OI N89,15'54"W - 632.76' - �' GLEN NELSON �iCD PARK ( Lo 300, DETAIL I I 1 = 40 W n 1 lI 0 0 {� o N I I o ' 30' ui ( ' to I w z __._.— r RIGHT OF WAY } o DEDICATION IN o 616.10' ---S8917'26"E� 792.98' 5 268 S T ----- I .------ LOCATED IN THE NW 1/4 '� GLEN NELSON PARK OF THE SW 1/4 OF SEC RIGHT OF WAY 27, TOWNSHIP 22 N. O T RANGE 4 E, W.M. MILITARY RD CITY OF KENT SUE 1"-120' ExR16R I. REF 07-3013 Mlllt- -266TM ST ENOINEERINO DEPARTMENT IDAIE 3/ID/2009 B I i Exhibit A Military Road Right of Way That portion of the southwest quarter of the northwest quarter of the southwest quarter of Section 27, Township 22 North, Range 4 East, W.M., in King County, Washington, described as follows: Commencing at the southwest corner of said subdivision; thence S89017'26"E, along the south line of said subdivision, 30.00 feet to the east line of the west 30.00 feet of said subdivision; thence N01 000'12"E, along said east line, 30.00 feet to the north line of the south 30.00 feet of said subdivision and the TRUE POINT OF BEGINNING; thence continuing N01°00'12"E, along said east line, 180.00 feet to the north line of the south 210.00 feet of said subdivision; thence S89°17'26"E, along said north line. 3.00 feet to the east line of the west 33.00 feet of said subdivision; thence S01°00'12"W, along said east line, 166.23 feet; thence S44008'37"E 19.43 feet to the north line of the south 30.00 feet of said subdivision; thence N89017'26"W, along said north line, 16.78 feet to the TRUE POINT OF BEGINNING. Kent City Council Meeting Date May 5, 2009 1� Category Consent Calendar - 6G 1. SUBJECT: 2008 COMMUNITY DEVELOPMENT BLOCK GRANT ACTION PLAN AMENDMENT - APPROVE 2. SUMMARY STATEMENT: Approve the 2008 CDBG One-Year Action Plan Amendment to re-allocate $211,080 to the KYFS Watson Manor Roof Replacement Project, and $70,145.00 to the Kiwanis Tot Lot #1 Project. The City originally allocated funding to a Housing Rehabilitation Project (the project was subsequently identified as Kent Youth and Family Services-Watson Manor Roof Replacement Project) through the City of Kent's 2008 Community Development Block Grant (CDBG) One Year Action Plan. KYFS was unable to secure additional funding needed to start the project so the CDBG funds were not spent. Recently, the City was awarded CDBG Stimulus funds through the American Recovery and Reinvestment Act of 2009, which are required to be spent quickly. These stimulus funds would fund the entire KYFS roof project, and it can be completed expeditiously. Therefore, it would be prudent to re-allocate stimulus funds to the roof project, and re-allocate the funds originally awarded to the roof project to the Kiwanis Tot Lot #1 Project. The City also wishes to recapture funds from the Green River Community College Micro-enterprise Project that Green River Community College decided not to accept and award them to the Kent Parks Kiwanis Tot Lot #1 Project as well. The Public Notice regarding the Amendment was published on April 8, 2009. In addition, the Amendment is posted in public buildings and available for public comment for 30 days. Council action is required to approve the amendment reallocating the funding 3. EXHIBITS: Amendment 4. RECOMMENDED BY: Parks and Human Services Committee (Committee, Staff, Examiner, Commission, etc.) 5. FISCAL IMPACT Expenditure? N/A Revenue? N/A Currently in the Budget? Yes No 6. CITY COUNCIL ACTION: Councilmember moves, Councilmember seconds DISCUSSION: ACTION: PUBLIC NOTICE CITY OF KENT NOTICE OF PUBLIC HEARING REGARDING FIRST AMENDMENT TO THE 2008 ONE-YEAR ACTION PLAN A. SUMMARY 1. The 2008-2012 Consolidated Plan for Housing and Community Development provides a framework for implementing housing, human services and community development activities from 2008-2012. 2. Each year the City of Kent executes specific actions to implement the objectives and strategies of the five-year Consolidated Plan, which are outlined in a One-Year Action Plan. 3. The 2008, the City of Kent received $777,146 in Community Development Block Grant (CDBG) funds, and the City's use of these funds was outlined in the 2008 One-Year Action Plan. 4. In addition to its 2008 CDBG allocation, the City was recently awarded $211,080 in CDBG funds through the American Recovery and Reinvestment Act of 2009 (Recovery Act). 5. The City wishes to amend its One-Year Action Plan to recapture and reallocate CDBG funds that were awarded in 2008 and to allocate additional funds that were received through the Recovery Act. B. AMENDMENT 1. Amend the 2008 One-Year Action Plan to allow for the allocation of 211,080 in Recovery Act funds and the reallocation of $70,145 in recaptured funds. 2. Funds shall be awarded as follows: a) Award $211,080 to KYFS Watson Manor Roof Replacement /Parking Lot Repair Project and Titus Building Disaster Preparedness Upgrade/Parking Lot Repair Project: funds will be used (1) to remove and replace the roof on Watson Manor, a transitional housing facility for homeless adolescent mothers and their children; and (2) to add an emergency auxiliary power supply back up and repair the parking lot at the Titus Building, the administrative building and counseling offices for youth and family counseling. b) Award $70,145 to City of Kent Parks Project-.Kiwanis #1: funds used to replace playground equipment to meet current safety standards, provide grills at picnic sites, install accessible walkways, resurface the basketball court and install backboards, and landscape trees by removing dead limbs. i C. PUBLIC REVIEW AND COMMENT PERIOD 1. In accordance with 24 CFR 91, the City of Kent solicits comments and I public review for its First Amendment to the 2008 One-Year Action Plan. 2. Public Hearing: A public hearing to consider the amendment and to solicit public comments prior to approval will be held on Thursday, April 16, 2009, at 2:00 p.m., in the Centennial Building, 400 W. Gowe St., Kent, WA 98032, Mountain View Conference Room, Suite 401. 3. The amendment is available at no charge, from the Kent Human Services Division (HSD), 220 4th Avenue South, 3rd Floor, Kent, WA 98032. A copy is also available for public review in the HSD, at the Kent Library, and the Clerk's Office. In addition, a draft copy of the CAPER and additional information about the public hearing can be found on the City's web site at the following address: http://www,ci.kent.wa.us/humanservices/ . Jeff Watling, Director Kent Parks, Recreation & Community Services i 1 i I f 1 Kent City Council Meeting Date May 5, 2009 Category Consent Calendar - 6H j 1. SUBJECT: 2009 COMMUNITY DEVELOPMENT BLOCK GRANT ACTION PLAN AMENDMENT - APPROVE 2. SUMMARY STATEMENT: Approve the 2009 CDBG One-Year Action Plan Amendment to re-allocate $60,000.00 to the Kiwanis Tot Lot #1 Project. Originally, funds through the 2009 CDBG One Year Action Plan were allocated to Kent Youth and Family Services for the Watson Manor Roof Replacement Project. Recently, the City was awarded CDBG Stimulus funds and determined that it would be prudent to dedicate the stimulus funds to Kent Youth and Family Services-Watson Manor, as it is a project that is underway and will be completed expeditiously. The $60,000 in funds that was originally allocated to KYFS in 2009 will be reallocated to the Parks Project, Kiwanis Tot Lot #1, an ideal project to receive the re-allocated funds. A Public Notice regarding the Amendment was published on April 7, 2009. In addition, the Amendment is posted in public buildings and available for public comment for 30 days. Council action is required to approve the amendment reallocating the funding. 3. EXHIBITS: Amendment 4. RECOMMENDED BY: Parks and Human Services Committee (Committee, Staff, Examiner, Commission, etc.) 5. FISCAL IMPACT Expenditure? N/A Revenue? N/A Currently in the Budget? Yes No 6. CITY COUNCIL ACTION: Councilmember moves, Councilmember seconds DISCUSSION: ACTION: PUBLIC NOTICE CITY OF KENT NOTICE OF PUBLIC HEARING REGARDING FIRST AMENDMENT TO THE 2009 ONE-YEAR ACTION PLAN A. SUMMARY 1. The 2008-2012 Consolidated Plan for Housing and Community Development provides a framework for implementing housing, human services and community development activities from 2008-2012. 2. Each year the City of Kent executes specific actions to implement the objectives and strategies of the five-year Consolidated Plan, which are outlined in a One-Year Action Plan. 3. The City allocated $60,000 of CDBG to Kent Youth & Family Services (KYFS) to remove and replace the roof on Watson Manor, a transitional housing facility for homeless adolescent mothers and their children. 4. The City recently was recently informed that it will receive $211,080 in funding through the American Recovery and Reinvestment Act of 2009. These funds were awarded to stimulate the economy and must be spent promptly and efficiently, - 5. The KYFS Watson Manor Roof Replacement Project is far along enough in the planning stage that it can be started and completed expeditiously; consequently it would be prudent to invest CDBG stimulus funds in this project and use the funds that were originally slated for KYFS for another CDBG project instead 6. The City wishes to amend its One-Year Action Plan and reallocate $60,000 in CDBG funds to the City of Kent Parks Project-Kiwanis #1. B. AMENDMENT 1. Amend the 2009 One-Year Action Plan to allow for the reallocation of $60,000 in CDBG funds. 2. Funds shall be awarded as follows: • Award $60,000 to the City of Kent Parks Project-Kiwanis #1: funds shall be used to replace playground equipment to meet current safety standards, provide grills at picnic sites, install accessible walkways, resurface the basketball court and install backboards, and landscape trees by removing dead limbs. C. PUBLIC REVIEW AND COMMENT PERIOD 1. In accordance with 24 CFR 91, the City of Kent solicits comments and public review for its First Amendment to the 2009 One-Year Action Plan. 2. Public Hearing: A public hearing to consider the amendment and to t- solicit public comments prior to approval will be held on Thursday, April 16, 2009, at 2:00 p.m., in the Centennial Building, 400 W. Gowe St., Kent, WA 98032, Mountain View Conference Room, Suite 401, 3. The amendment is available at no charge, from the Kent Human Services Division (HSD), 220 4th Avenue South, 3rd Floor, Kent, WA 98032. A copy is also available for public review in the HSD, at the Kent Library, and the Clerk's Office, In addition, a draft copy of the CAPER and additional information about the public hearing can be found on the City's web site at the following address: http://www,ci.kent.wa.us/humanservices/ . I f G Jeff Watling, Director Kent Parks, Recreation & Community Services I i I I j ' I Kent City Council Meeting Date May 5, 2009 Category Consent Calendar - 6I 1. SUBJECT: HABITAT CONSERVATION PLAN (HCP) CONTRACT AMENDMENT - AUTHORIZE 2. SUMMARY STATEMENT: Authorize the Mayor to sign an amendment with R2 Resource Consultants in the amount of $49,663.80, subject to final terms and conditions acceptable to the City Attorney and the Public Works Director. This contract amendment will provide the City of Kent technical assistance to complete the Final Habitat Conservation Plan (HCP) and the associated Final Environmental Impact Statement (EIS) required for the issuance of an Incidental Take Permit from the US Fish and Wildlife Service and the National Marine 1 Fisheries Service (Services) for the Clark Springs Water Source. r 3. EXHIBITS: Public Works Memorandum dated 4/9/09 and Amendment No. 2 4. RECOMMENDED BY: Public Works Committee (Committee, Staff, Examiner, Commission, etc.) S. FISCAL IMPACT Expenditure? X Revenue? Currently in the Budget? Yes X No 6. CITY COUNCIL ACTION: Councilmember moves, Councilmember seconds DISCUSSION: ACTION: 5 PUBLIC WORKS DEPARTMENT Larry R. Blanchard, Public Works Director Phone: 253-856-5500 T Fax: 253-856-6500 WASHINGTON Address: 220 Fourth Avenue S. Kent, WA 98032-5895 Date: April 9, 2008 To: Chair Debbie Ranniger and Public Works Committee Members PW Committee Meeting Date: April 20, 2008 From: Michael Mactutis, Environmental Engineering Manager and Kelly Peterson, Environmental Conservation Supervisor Through: Larry Blanchard, Public Works Director Subject: Clark Springs Water Supply System Habitat Conservation Plan Contract Amendment Motion: Move to recommend authorizing the Mayor to sign an amendment with R2 Resource Consultants for $49,663.80 to complete the Clark Springs Habitat Conservation Plan and Environmental Impact Statement upon concurrence of the language therein by the City Attorney and Public Works Director. Background: In January 2001, Kent City Council directed staff to complete an HCP for the Clark Springs Facility. From 2001 - 2003 technical studies were completed for use in the development of the draft HCP, Since December 2003, staff and the City's consultants have been negotiating the Draft HCP and writing the Draft EIS. An Administrative Draft HCP and Administrative Draft EIS have been submitted to the Services for review. Following review of the Administrative Draft by the Services, the City of Kent will address comments, and then the draft HCP and EIS will be released for public comment through the National Environmental Policy Act and State Environmental Policy Act public processes. Following the public comment period, the City and its consultants will work with the Services to address public comments received during the public comment period and incorporate them into Final HCP and EIS documents. The contract with R2 Resource Consultants was signed in February 2006 for $302,324.11 which included finishing the HCP and developing the EIS to finish the project. Efforts to develop the HCP and EIS have been greater than anticipated by the City and its consultants due to unforeseen technical issues and additional processes required by the Services. Additional funds to complete the HCP are needed as a result of these specific requests from the Services that were not anticipated and addressing technical issues to ensure certainty of the long term operation of the Clark Springs facility. In summary, this contract amendment will provide the City of Kent technical assistance to complete the Final Habitat Conservation Plan (HCP) and the associated Final Environmental Impact Statement (EIS) required for the issuance of an Incidental Take Permit from the US Fish and Wildlife Service and the National Marine Fisheries Service (Services) for the Clark Springs Water Source. The contract amendment is $49,663.80 for a total of $351,989.80. Budget Impact: There will be no unbudgeted fiscal impacts as a result of this contract. P:IPabIlMd inSupIPINCnumiiiierelAai PaKe.doa �✓ KE 0 T WASHINGTON AMENDMENT NO. 2 NAME OF CONSULTANT OR VENDOR: R2 Resource Consultants, Inc. CONTRACT NAME & PROJECT NUMBER: Clark Springs Habitat Conservation Plan & EIS ORIGINAL AGREEMENT DATE: February 24, 2006 This Amendment is made between the City and the above-referenced Consultant or Vendor and amends the original Agreement and all prior Amendments. All other provisions of the original Agreement or prior Amendments not inconsistent with this Amendment shall remain in full force and effect. For valuable consideration and by mutual consent of the parties, Consultant or Vendor's work is modified as follows: 1. Section I of the Agreement, entitled "Description of Work," is hereby modified to add additional work or revise existing work as follows: In addition to work required under the original Agreement and any prior Amendments, the Consultant or Vendor shall: Continue to assist the City in the preparation of a Habitat Conservation Plan and Environmental Impact Statement. For a description, see the Consultant's April 3, 2009, Scope of Work which is attached as Exhibit A and incorporated by this reference. 2. The contract amount and time for performance provisions of Section II "Time of Completion," and Section III, "Compensation," are modified as follows: Original Contract Sum, $302,324.11 including applicable WSST Net Change by Previous Amendments $0 including applicable WSST Current Contract Amount $302,324.11 including all previous amendments Current Amendment Sum $49,663.80 Applicable WSST Tax on this $0 Amendment Revised Contract Sum $351,987.91 AMENDMENT - 1 OF 2 8 �.. Original Time for Completion June 30, 2008 f (insert date) Revised Time for Completion under June 30,2009 prior Amendments (insert date) Add'I Days Required (f) for this 549 calendar days Amendment Revised Time for Completion December 31, 2010 (insert date) In accordance with Section VII of the Agreement, the Consultant or Vendor accepts all requirements of this Amendment by signing below, by its signature waives any protest or claim it may have regarding this Amendment, and acknowledges and accepts that this Amendment r constitutes full payment and final settlement of all claims of any kind or nature arising from or connected with any work either covered or affected by this Amendment, including, without limitation, claims related to contract time, contract acceleration, onsite or home office overhead, or lost profits. This Amendment, unless otherwise provided, does not relieve the Consultant or Vendor from strict compliance with the guarantee and warranty provisions of the original Agreement. All acts consistent with the authority of the Agreement, previous Amendments (if any), and this Amendment, prior to the effective date of this Amendment, are hereby ratified and affirmed, and the terms of the Agreement, previous Amendments (if any), and this Amendment shall be deemed to have applied. 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. IN WITNESS, the parties below have executed this Amendment, which will become effective on the last date written below. CONSULTANT/VENDOR: CITY OF KENT: By: By: (signature) (signature) Print Name: Print Name: Suzette Cooke Its Its Mayor I (title) (title) DATE: DATE: APPROVED AS TO FORM: (applicable if Mayor's signature required) �I Kent Law Department R2 Resource-HCP&EIS Amd 2/Peterson AMENDMENT - 2 OF 2 g SOW—R2 Resource Consultants April 3, 2009 - EXHIBIT A CLARK SPRINGS WATER FACILITIES CITY OF KENT HABITAT CONSERVATION PLAN REQUEST FOR SUPPLEMENTAL BUDGET- R2 Resource Consultants R2 Resource Consultants, Inc. (Contractor)has been assisting the City of Kent(City)in the preparation of a Habitat Conservation Plan(HCP)and Environmental Impact Statement(EIS)for their Clark Springs Water Facilities Project. The overall objective of this work is to obtain an Incidental Take Permit(ITP) from the Services (NOAA Fisheries, U.S. Fish and Wildlife Service)that will afford protection to the City for the continued operations of the Clark Springs Facilities under Section 10 of the federal Endangered Species Act(ESA). This work is being coordinated with the Thompson Smitch Consulting Group(TSCG)who is also under contract to the City. R2's original Statement of Work(SOW) was submitted in November 2003 and identified seven(7)tasks needed to support preparation of the HCP and EIS. The TSCG defined three phases involved in securing an ITP via an HCP, including a Negotiation Phase (Phase 1),an EIS Management and Preparation Phase (Phase 2), and a Signing Phase (Phase 3). The first four tasks of this SOW are considered part of Phase One Activities, and the last three tasks are part of Phase Two. R2's original budget focused on activities related to the first two phases.The tasks included: • Task 1 —Existing Information Analysis • Task 2—Agency Meetings/Field Reconnaissance • Task 3—Stakeholder Meetings • Task 4—Preparation of HCP • Task 5—Preparation of EIS • Task 6—Assist with Preparation of Implementing Agreement • Task 7—Ad Hoc Meetings and Respond to Technical Issues As of April 2, 2009, R2 had essentially completed Tasks 1 and major portions of Tasks 2, 3, 4, 6, and 7. An Administrative Draft HCP has been completed and an Administrative Draft EIS in near completion. However, a number of tasks have required a greater than anticipated effort to complete resulting in the need to request supplemental funds to support 112's continued assistance to the City of Kent in completing the HCP and EIS, A description of and justification for additional funds to support these tasks is presented below. SCOPE OF WORK -SUPPLEMENTAL This Supplemental SOW is to provide funds for R2 to continue to support the City of Kent in the preparation of an HCP and EIS for their Clark Springs Water Facilities Project. The original SOW was developed and budgeted around a stringent time schedule City of Kent-Clark Springs HCP 1 10 SOW—R2 Resource Consultants April 3, 2009 that targeted the preparation of an HCP and HIS by late 2004-early 2005, with acquisition of an ITP in early to mid-2005. A number of technical issues were identified as part of Task I analysis that needed to be addressed prior to proceeding with the initial drafting of the HCP. This required substantially more meetings with the City of Kent and other contractors, and increased(because of a prolonged schedule)the number of meetings 7 with the Services. In addition, the US Fish and Wildlife Service and National Marine Fisheries Service(collectively the Services) identified the need for a NEPA document coordinator and other specialists for completing the EIS. A supplemental SOW and budget and revised schedule was proposed on January 31, 2006 that anticipated completion of the NEPA process by the end of 2007, The following describes the actual timeline for the development of the HCP and HIS documents under the supplemental 2006 SOW. In May of 2006 a Preliminary Draft HCP was released to a number of key stakeholders. A NEPA public seeping meeting was held at the City of Kent's Council Chambers in June of 2006. Further revisions to the HCP occurred as a result of comments from stakeholders. Alternative development occurred in August of 2006. A seeping report was completed in December 2006. Draft NEPA Chapters 1-3 were developed from September 2006 through March 2007. During May 2007, the Services asked that a memo,which had not been anticipated in our January 2006 SOW, be prepared describing the issues and methods to be used in preparation of Chapter 4,Environmental Consequences. Development of the methods and reviews/revision cycles by the City and the Services led to their eventual approval by the Services in August of 2007. The Chapter 4 analyses began immediately with submission to the Services of a draft Chapter 4 during October 2007 and comments returned by the Services in November 2007. The Services raised a number of concerns to be addressed during revision of Chapter 4,but most importantly issues were raised about the activities to be covered under the ITP and the level of detail describing the activities in the HCP. Further discussions with the Services resulted in revisions(a reduction)to the list of Covered Activities, and unanticipated revisions to Future Operations, and Chapter 6 (impacts assessment)of the HCP. Revisions to Chapter 3 and Chapter 4 of the HIS as a result of the Services comments were eventually submitted to the Services in August 2008 and their 2"d round of comments received January 2009. In summary, additional work effort and revisions have been required to development of the HCP and to Chapters 3 and 4 of the EIS that were not anticipated in the supplemental 2006 SOW and that resulted in substantial delay for completion of the NEPA HIS. i Because of delay in project completion,increases in staff rates, and the need for I unanticipated effort, R2 requests supplemental funding for the following tasks: Task L Existing Information Analysis This task is complete. No additional budget requested. I Task 2. Monthly Technical Meetings and Task 3. Stakeholder Meetings Under our original scope of work,we anticipated monthly technical meetings would be required. However, at the current point in the process, we expect a lower level of effort City of Kent-Clark Springs HCP 2 SOW-R2 Resource Consultants April 3, 2009 will be needed. We anticipate that some revisions will be required for the HCP following release of the draft to the public and consequently, additional Technical Meetings will be required. At this time, we anticipate requiring a minimum of an additional 4 half-day meetings to be attended by the Project Manager(I meeting)and Deputy Project Manager (4 meetings)to support the HCP. These will include meetings with the City and the Services. We assume there will be no additional Stakeholder meetings other than those required for completion of the NEPA process (Task 5). Costs to complete these tasks are estimated to be $3,105.00 for Task 2 and$0.00 for Task 3 while$1,942.00 remained in the budget for Task 2 and$1,780.00 remained in the budget for Task 3 as of March 23,2009. Consequently,we anticipate a supplemental budget of$1,523 will be needed for Task 2 and a surplus of$1,789.00 will be available in Task 3. These amounts do not include meetings related to preparation of the EIS, which will be covered under Task 5. Task 4. HCP Preparation As originally scoped, scheduled and budgeted, this task was to provide for the preparation of both a Public Review Draft and the Final HCP for the Clark Springs Water Facilities. However,the unforeseen delays noted above have prolonged the preparation of the Public Review Draft,although it is now complete. Moreover,portions of the budget originally assigned for this task were needed to address unanticipated revisions to the document, as well as to allow preparation and attendance at the greater than anticipated number of technical meetings. As a result,we have expended the budget for this task and are currently running a deficit. We anticipate a Public Review Draft will be released in mid-summer 2009. A public review and comment period will occur in late-summer and early-fall 2009, and R2 will need to respond to comments and prepare a Final HCP in early-2010. We assume that few revisions (limited to 60 hours of technical staff time)will be necessary to finalize the HCP because a Preliminary Draft HCP was released to selected Stakeholders in May 2006 and their comments were addressed in the current version. The estimated cost to complete the Final HCP is $15,602.00 and the task balance is currently at a deficit of$603.00 as of March 23, 2009.. Task 5. Prepare EIS The Administrative Draft EIS is near completion and the Public Review Draft EIS is anticipated to be released in mid-summer 2009, Subcontractors to complete preparation of the EIS include the following consulting firms: • Jones and Stokes-Project management;National Environmental Policy Act (NEPA) coordination, soils, and socioeconomics Biota Pacific-Wildlife,botanical, and wetlands (the latter two resource areas to be subcontracted to Smayda Environmental Associates,Inc.) * Heritage Research Associates (HRA)-Cultural Resources City of Kent -Clark Springs HCP 3 12 SOW—R2 Resource Consultants April 3, 2009 • Karen Burns, Technical Editor i The following outlines the 7 subtasks to be completed by R2 as part of the overall EIS. Subtask 1. Meetings. This subtask assumes 5 meetings with the City of Kent, TSCG, and/or the Services (average of 6 hours per meeting)plus 10 (1-hour)to 20 (half-hour meetings to be conducted by telephone for a total of 10 teleconference hours. Subtask 2. Scoping/Alternatives.This task is complete. Subtask 3. Draft EIS Preparation. R2 anticipates that minor revisions to the Administrative Draft EIS will be required following review by the Services. Additional j effort will also be required by subcontractors, Subtask 4. Public Comments. This task still remains to be completed and will begin I after the comment period following release of the Draft EIS to the public. Jones and Stokes will be taking the lead in supporting the Services in the organization of public comments received following release of the DEIS. We assume approximately 100 comments in 30 to 40 comment letters will need to be addressed. R2 staff will support this effort by addressing comments related to Fish and Aquatic Resources and HydrologyAVater Quality,as well as supporting Jones and Stokes in coordinating comment responses among resource staff and the Services, Depending upon the nature of the comments, some outside technical support(e.g., Michael Kenricks)or support from the City of Kent may be needed to address comments concerning the hydrogeology in the basin,HSPF modeling, or the City's water supply operations. Subtask 5. Final EIS. R2 staff will implement revisions to the DEIS for sections they prepared (i.e., Fish and Aquatics and Hydrology) as part of the Final EIS, R2 will also lead the revisions needed for Chapter 5 (Lists)with some support from technical resource leads, as necessary. Similar to Subtask 3, R2 will participate in strategic decisions and i support Jones and Stokes in coordinating revisions to be completed. R2 will also have overall responsibility for document production. Subtask 6. Record Of Decision(ROD). Jones and Stokes will have primary responsibility for preparation of the ROD. R2 effort is limited to reviewing this document. Subtask 7. EIS Project Management. This task includes estimated effort for R2 staff representation during NEPA coordination(4 hours per month). R2 has also included under this subtask effort for project administration and clerical work. EIS Schedule and Deliverables Table 1 provides an overall proposed timeline for completing the EIS and ROD. The schedule assumes that the Draft EIS will be released to the public during August 2009. Table 2 provides a list of work items, deliverables, and anticipated completion dates. A City of Kent-Clark Springs HCP 4 i 1 13 SOW—R2 Resource Consultants Apri13, 2009 definitive schedule through public release of the DEIS was developed in collaboration with the Services at a meeting on April 2, 2009, The schedule for addressing public comments on the DEIS and completion of the FEIS is tentative. The overall anticipated completion date for the FEIS and draft ROD is June 2010. The Services may need an additional 45 to 60 days to publish the ROD. The project schedule assumes: • . The Services will need 6 weeks to revise and publish the Notice of Availability (NOA) • 3-week review periods by Kent and the Services for each draft section • 4-week revision periods by the consultant team • A 60-day public comment period for the draft EIS EIS Costs to Complete Table 2a provide an effort and cost breakdown for each of the Subtasks outlined above. R2's portion of the estimated cost to complete the Clark Springs Water Supply HCP EIS is $59,702.00, The total estimated cost to complete the EIS is$122,933.30. The task balance as of March 23,2009 was $88,032.00. Assumptions concerning the supplemental budget request are the same as in the January 31, 2006 SOW. Subcontractor costs and markup on subcontractor costs total$63,231.00 and are a significant portion of the estimated costs to complete the EIS. Subcontractor costs for Jones and Stokes are anticipated to exceed their January 2006 estimate by$32,805.00 because of unanticipated effort needed for the DEIS development, project delays, and increases in staff rates (Attachment A). Subcontractor cost for Karen Burns is also anticipated to exceed her January 2006 estimate because of an increase in her hourly rate; however, her estimated level of effort has not changed. Subcontractor rates for HRA have increased,but they believe their January 2006 budget estimate is adequate for completing the FEIS (i.e., higher rates will be compensated by a lower than expected level of effort). Subcontractor rates for Biota Pacific and their subcontractor, Kathy Smayda,have increased,but through March 23,2009,the level of effort required to complete the DEIS was less than their January 2006 estimate. R2's estimated costs to complete the EIS anticipates these savings will be realized and reduces our overall supplemental budget request. Table 2b includes line items for the estimated cost to complete for each subcontractor working on the HCP EIS. Task 6—Assist With Implementing Agreement R2 shall work closely with the TSCG in preparing an Implementing Agreement(IA)for the HCP. One meeting has occurred to develop the IA. We anticipate that less effort will be required for this task than originally anticipated, Consequently we anticipate a task surplus of$825.50. Task 7—Ad Hoe Meetings and Respond to Technical Questions City of Kent-Clark Springs HCP 5 14 SOW—R2 Resource Consultants April 3, 2009 This task has been expended. No supplemental budget requested at this time. Total Costs to Complete the Project i The total cost to complete each task of the project estimated as of March 23, 2009 are: i' COSTS -Total Cost to Complete Costs by Task are: • Task 2 —Monthly Agency Meetings: $3,105.50 • Task 3— Stakeholder Meetings: $0.00 • Task 4— MCP Preparation: $15,602.00 • Task 5— EIS Preparation: $122,933.30 • Task 6--Implementation Agreement: 2,036.50 Project Cost To Complete Total: $143,676.80 Project Balance as of March 30,2009: $94,013.00 Supplemental Budget Request: $49,663.80 See attached Tables I and 2 for a detailed cost breakdown. Table 1. Proposed EIS Schedule. Date of Work Item Deliverable Completion Subtask 3 Administrative DEIS ADEIS to Services(5 wk review) Aril 17,2009 Camera-ready DEIS and draft Notice Camara-ready and draft NOA to Services July 16,2009 of Availabilit Public Release Draft EIS Au st 28,2009 Public Comment Ends(60 days) October 2009 Subtask 4 Draft Comment Summary Draft Comment Summary to Kent and November 2009 Services(3 wk review Final Comment Saran Final Comment Summary to Kent and December 2009 Services Subtask 5 Preliminary Administrative FEIS Preliminary AFEIS to Kent 3 wk review January2olo AFEIS AFEIS to Services(5 wk review) March 2010 Camera-ready FEIS and NOA Camera-ready FEIS and draft NOA to April 2010 Services Final EIS Production and Public Release Ma 2010 ' Subtask 6 Draft ROD Draft ROD to Services June 2010 I City of Kent-Clark Springs HCP 6 15 0 M P N O N6 h g0g p o p o 0 0 0 0 0 0 0 0 0 o p o 0 0 0 0 •a I ?t&77 ppp777 Is �I ^.L � �K Oi 6' flo y s� N yy y p fix p p % Eyy yyV yy 6 q��[� O h N 40f H lOA VI � V O N1 F x a a` Fv v_ VI V1 VOi W VI Use.a� rn 5 `sA a y E.. 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G � � o .4 19 _ d w W �rc » w in E3 ro w p� 0gq00 � � � m wviw A� yy p : Qr I N p ~ o"9 !! III I, � h 44 I d ........: tR W c fr i 14 F e'n •t G ,...E.....f......... ..... T a � jlavt f i Kent City Council Meeting Date May 5, 2009 Category Consent Calendar - 63 j 1. SUBJECT: LIMITED STREET LICENSE BETWEEN THE CITY AND ELECTRIC LIGHTWAVE, LLC - AUTHORIZE 2. SUMMARY STATEMENT: Authorize the Mayor to sign a limited street license agreement between the City of Kent and Electric Lightwave, LLC. Electric Lightwave, Inc., operated under a franchise agreement previously entered into with the City on December 4, 1991, per City Ordinance No. 3040. Ordinance 1 No. 3040 expired on May 4, 2002. Electric Lightwave seeks to maintain its telecommunications system within the City and has requested that the City grant a license to use City right-of-way for this purpose. 3. EXHIBITS: Limited Street License Agreement 4. RECOMMENDED BY: Public Works Committee (Committee, Staff, Examiner, Commission, etc.) 5. FISCAL IMPACT Expenditure? No Revenue? Yes Currently in the Budget? Yes No X 6. CITY COUNCIL ACTION: Councilmember moves, Councilmember seconds DISCUSSION: ACTION: 1 21 - LAW DEPARTMENT Tom Brubaker, City Attorney • Phone: 253-856-5770 KEN T Fax: 253-856-6770 WASHINGTON Address: 220 Fourth Avenue S. Kent, WA. 98032-5895 Date: April 20, 2009 To: Chair Deborah Ranniger and Public Works Committee Members PW Committee Meeting Date: April 20, 2009 From: Tim LaPorte, P.E., Deputy Public Works Director Subject: Electric Lightwave, LLC., Limited Street License MOTION: Move to recommend Council authorize the mayor to sign a limited street license from the City of Kent to Electric Lightwave, LLC. for their telecommunications facilities in the right of way, in a form acceptable to the City Attorney and the Public Works Director.. Summary: Electric Lightwave, Inc. operated under a franchise agreement previously entered into with the City dated December 4, 1991, per City of Kent Ordinance No. 3040. Ordinance 3040 expired on May 4, 2002. Electric Lightwave seeks to maintain its telecommunications system in the City of Kent in the form and location shown on the exhibits to the license. Evolving state case law had resulted in a determination that the city will issue limited street licenses to telecommunications companies, in lieu of franchises. State law limits the city to an administrative fee as stipulated in RCW 35.99.030. Electric Lightwave has executed the license agreement and remitted the associated fee. Electric Lightwave will pay a one-time amount of $7,500.00. This amount includes a $5000 administrative fee for a five year license and captures the arrearage associated with the expiration of Electric Lightwave's franchise in January 2002 at the City's previous rate of $500 per year. Budget Impact: No negative impact anticipated. Administrative fees are not a revenue source. LIMITED STREET LICENSE BETWEEN THE CITY OF KENT AND ELECTRIC LIGHTWAVE, LLC. THIS LIMITED STREET LICENSE ("License") is entered into between the CITY OF KENT, a Washington Municipal Corporation ("City"), and ELECTRIC LIGHTWAVE, LLC, a Delaware corporation ("Licensee"). RECITALS WHEREAS, Licensee's predecessor, in interest, Electric Lightwave, Inc., operated under a franchise agreement previously entered into with the City on December 4, 1991, per City of Kent Ordinance No. 3040. Ordinance 3040 expired on May 4, 2002; and WHEREAS, Licensee seeks to maintain its predecessor's telecommunications system in the City of Kent; and WHEREAS, Licensee has requested that the City grant a permit to use City right-of-way to maintain its telecommunications system within the City; and WHEREAS, the City has agreed to issue this license, which constitutes a use permit under Chapter 35.99 Revised Code of Washington, for a telecommunications system, as described in Exhibit A; and WHEREAS, the City is willing to enter into this License under the terms and conditions set forth in this License so that Licensee can continue to operate, and maintain its existing facilities; NOW, THEREFORE, THE CITY AND LICENSEE AGREE AS FOLLOWS: LICENSE 1. License Granted. The City grants Licensee this Limited Street License for a period of five (5) years from the effective date of this License to install, construct, operate, maintain, remove, repair, reconstruct, replace, use and inspect a telecommunications system and all related equipment ("Telecommunications System") across, along, in, upon, and under the City's right- of-ways described in Exhibit A, which is attached and incorporated by this reference. A general description of the plans and specifications for this Telecommunications System is attached as Exhibit B, public disclosure of which is subject to applicable provisions of the Revised Code of Washington. This License is subject to all the terms and conditions established below. LIMITED STREET LICENSE--Page 1 of 9 (April 14, 2009) (between City and Electric Ughtwave, LLC) l 2. Consideration. In consideration of the City's issuance of this License, Licensee shall, at the time of execution of this License, pay to the City a one-time amount in the sum of SEVEN THOUSAND, FIVE HUNDRED AND NO/100 DOLLARS ($7500.00) prior to the commencement of this License. This amount captures the arrearage associated with the expiration of Electric Lightwave's franchise in January, 2002. 3. Revocation and Termination. The intent of this License is to authorize Licensee to operate its Telecommunications System on the designated City right-of-ways, which right-of-ways constitute a valuable property interest owned by the City. This License does not grant an estate in the land described in Exhibit A; it is not an easement; it is not a franchise; it is not exclusive; and, it does not exclude the City from full possession of the property described in Exhibit A. As a license upon real property, it is revocable in accordance with the terms herein. However, prior to termination or revocation by the City, the City shall provide Licensee with at least one hundred eighty (180) calendar days written notice of that termination or revocation. Upon the effective date of the City's termination or revocation, the City may require Licensee to remove the Telecommunications System within one hundred eighty (180) calendar days; if Licensee fails to remove the Telecommunications System within the allotted time, the City may remove all or part of the Telecommunications System and Licensee waives any right it may have to any claim for damages of any kind incurred as a result of the City's removal of all or part of the Telecommunications System. 4. Permits Required. The City's grant of this License does not release Licensee from any of its obligations to obtain applicable local, state, and federal permits necessary to install, construct, operate, maintain, remove, repair, reconstruct, replace, use and inspect the Telecommunications System. Licensee's failure to comply with this Section 4 shall constitute grounds for immediate revocation by the City. S. Relocation. The term "relocate" shall refer to protecting, supporting, temporarily disconnecting, moving to a new location, removing, or converting from aerial facilities to underground facilities. Licensee shall, at its sole cost and expense, relocate all or a part of its Telecommunications System when required by the City for reasons of traffic conditions or public safety, widening or improvement of existing right-of-ways, change or establishment of street grade, or the construction of any public improvement or structure by any governmental agency acting in a governmental capacity, provided that Licensee shall, upon receiving approval and obtaining the necessary permits from the City, have the right to bypass in the authorized portion of the same right-of-way, any section of cable required to be temporarily disconnected or removed. LIMITED STREET LICENSE--Page 2 of 9 (April 14, 2009) (between City and Electric Lightwave, LLQ 5.1. For the purposes of this Section 5, any condition or requirement imposed by the City upon itself or any person or entity acting on the City's behalf, (including without limitation, any condition or requirement imposed pursuant to any contract or in conjunction with approvals for permits for zoning, land use, construction, or development) that reasonably necessitates the relocation of Licensee's facilities within the right-of-ways described in Exhibit A shall be a required relocation for purposes of this section. 5.2. If the City, under its authority, causes a required relocation of all or part of the Telecommunications System, the City, at least sixty (60) calendar days prior to the commencement of the project requiring relocation, shall provide written notice to Licensee of the required relocation and shall provide Licensee with copies of pertinent portions of the plans and specifications for the project. After receipt of the City's notice, Licensee must complete the required relocation of its affected facilities at least ten (10) calendar days prior to the commencement of the project requiring relocation. Licensee will complete this required relocation at no charge or expense to the City. Further, Licensee's relocation shall be accomplished in a manner that accommodates and does not interfere with the project requiring relocation. When other utilities are present and involved in relocation, the City will attempt to coordinate the relocation of the utilities. 5.3. Licensee may, after receipt of the City's written notice requesting relocation, submit written alternatives to the City. The City will evaluate those alternatives to determine if any of the alternatives can accommodate the work that would otherwise necessitate the relocation of the Telecommunications System. If requested by the City, Licensee will submit additional information to assist the City in making its determination. The City will give each alternative proposed by Licensee full and fair consideration. In the event the City ultimately determines that no reasonable or feasible alternative exists, Licensee shall relocate its facilities as otherwise provided in this Section 5. 5.4. Notwithstanding the above provisions in this Section 5, the Licensee may seek reimbursement from the City for its actual relocation expenses under any one of the following conditions: 5.4.1. If the City has required the Licensee to relocate these facilities at Licensee's cost within five (5) years of the date of a request for relocation; 5.4.2. If the Licensee holds an ownership interest of the aerial supporting structures (defined as pole or pole-like structures) for its facilities, and if the City requires an aerial to underground LIMITED STREET LICENSE--Page 3 of 9 (April 14, 2009) (between Clty and Electric Ughtwave, LLC) I relocation to Licensee's facilities, the City will pay the additional incremental costs of undergrounding these facilities compared to an aerial relocation of the facilities, or will pay those costs required in any approved tariff, if less than the additional incremental costs; or 5.4.3. If the City requests relocation solely for aesthetic j purposes. 5.5. In the event that a relocation of any of the Telecommunications System is required by any person or entity other than the City, so long as that person or entity Is not acting on the City's behalf in conducting any of the activities described in this Section 5, Licensee shall make those arrangements, including compensation for Licensee's relocation cost, that it deems appropriate with that person or entity. 5.6. Notwithstanding all of the above, the City may require the relocation of the telecommunications system at Licensee's expense in the event of an unforeseen emergency that creates an immediate threat to the public safety, health or welfare, but still subject to reimbursement under 5.4. 5.7. The provisions of this Section 5 shall survive the expiration or termination of this License. 5.8. Licensee shall not be responsible for any costs associated with relocation of the City's four inch (4") conduit Facilities. 5.9. Licensee shall not erect poles, run or suspend wires, cables, or other facilities, in any area without prior written approval from the City. 6. Emergency. In the event of any emergency in which any portion of the Telecommunications System breaks, becomes damaged, or in any other way becomes an immediate danger to the property, life, health, or safety of any individual, Licensee shall immediately take the proper emergency measures to remedy the dangerous condition without first applying for and obtaining a permit as required by this License. However, this emergency work shall not relieve Licensee from its obligation to obtain all permits necessary for this purpose, and Licensee shall apply for those permits within the next two succeeding business days. i 7. Indemnification. Licensee shall comply with the following indemnification requirements: 7.1. Licensee shall defend, indemnify and hold the City, its officers, officials, employees, agents, assigns and volunteers harmless from any and all claims, actions, injuries, damages, losses or suits, including all legal costs, LIMITED STREET LICENSE--Page 4 of 9 (April 14, 2009) (between City and Electric Lightwave, LLC) L I witness fees and attorney fees, arising out of or in connection with the performance of any of Licensee's rights or obligations granted by this License, but only to the extent of the negligence or comparative fault of Licensee, its employees, agents, contractors, subcontractors, consultants, subconsultants or assigns. In the event that a third party claim arises in whole or in part due to delays in relocation of Licensee's facilities and such claim is subject to binding arbitration, Licensee shall submit to the jurisdiction of the arbitrator and the provisions of this section 7.1 shall otherwise apply. 7.2. The City's inspection or acceptance of any of Licensee's work when completed shall not be grounds to avoid any of these covenants of indemnification. 7.3. These indemnification obligations shall extend to any claim, action or suit that may be settled by compromise, provided that Licensee shall not be liable to indemnify the City for any settlement agreed upon without the consent of Licensee; however, if Licensee consents to the agreed upon settlement, then Licensee shall indemnify and hold the City harmless as provided for in this Section 7 by reason of that settlement. Moreover, if Licensee refuses to defend the City against claims by third parties, Licensee shall indemnify the City regardless of whether the settlement was made with or without Licensee's consent. 7.4. In the event that Licensee refuses to accept tender of defense in any claim, action or suit by a third party pursuant to this Section 7 and if Licensee's refusal is subsequently determined by a court having jurisdiction (or such other tribunal that the parties shall agree to decide the matter) to have been a wrongful refusal, then Licensee shall pay all the City's costs for defense of the action, including all legal costs, witness fees and attorneys' fees and also including the City's costs, including all legal costs, witness fees and attorneys' fees, for recovery under this indemnification clause (Section 7). 7.5. The provisions of this Section 7 shall survive the expiration or termination of this Agreement. S. Insurance. Licensee shall procure and maintain for the duration of this License, insurance of the types and in the amounts described below against claims for injuries to persons or damage to property which may arise from or in connection with the performance of the work by Licensee, its agents, representatives, employees, contractors, subcontractors, consultants, subconsultants or assigns. LIMITED STREET LICENSE--Page 5 of 9 (April 14, 2009) (between City and Electric Lightwave, LLQ i_ 8.1. Before beginning work on the project described in this License, Licensee shall provide a Certificate of Insurance evidencing: 8.1.1. Automobile Liability insurance with limits no less than $1,000,000 combined single limit per accident for bodily injury f ,, and property damage; and 8.1.2. Commercial General Liability insurance written on an occurrence basis with limits no less than $2,000,000 combined single limit per occurrence and general aggregate for personal injury, bodily injury and property damage. Coverage shall include but not be limited to: blanket contractual; products/completed operations/broad form property damage; explosion, collapse and underground (XCU); and employer's liability. 8.1.3. Excess Liability insurance with limits not less than $2,000,000 per occurrence and aggregate. 8.2. Any payment of deductible or self-insured retention shall be the sole responsibility of Licensee. 8.3. The City, its officers, officials, employees, agents, assigns and volunteers shall be named as an additional insured on the insurance policy, as respects work performed by or on behalf of the Licensee and a copy of the endorsement naming the City as additional insured shall be attached to the Certificate of Insurance. 8.4. Licensee's insurance shall contain a clause stating that coverage shall apply separately to each insured against whom claim is made or suit is brought, except with respects to the limits of the insurer's liability. B.S. Licensee's insurance shall be primary insurance as respects the City, and the City shall be given thirty (30) calendar days prior written notice by certified mail of any cancellation or material change in coverage. 9. Modification. This License may not be modified, altered, or amended unless first approved in writing by the City and the Licensee. 10. Assignment. Licensee may assign all or any portion of its rights, benefits, and privileges, in and under this License subject to and conditioned upon approval of the City, which approval will not be unreasonably withheld or delayed. Licensee shall, no later than thirty (30) days of the date of any proposed assignment, file written notice of intent to assign the License with the City together with the assignee's written acceptance of all terms and conditions of the License LIMITED STREET LICENSE--Page 6 of 9 (April 14, 2009) (between City and Electric Lightwave, LLC) and promise of compliance. Notwithstanding the foregoing, Licensee shall have the right, without such notice or such written acceptance, to mortgage its rights, benefits, and privileges in and under this License to the Trustee for its bondholders and assign to any subsidiary, parent, affiliate or company having common control with Licensee so long as notice of same is provided to the City and provided Licensee remains fully liable to the City for compliance with all terms and conditions hereof until such time as the City shall consent to such assignment as provided above. 11. Dispute Resolution; Venue; Jurisdiction. In the event of any alleged breach or threatened breach of this License by either party and if the City and Licensee are unable to cure the breach or otherwise resolve their dispute, then final resolution of this dispute or claim shall occur exclusively under the venue, jurisdiction and rules of the King County Superior Court located in Kent, Washington. Each party shall also be responsible for its own legal costs and attorney fees incurred in defending or bringing that claim or lawsuit. 12. Notice. All notices, requests, demands, or other communications provided for in this License shall be in writing and shall be deemed to have been given when received and having been sent by registered or certified mail, return receipt requested, addressed as the case may be, to the addresses listed below for each party, or to such other person or address as either party shall designate to the other from time to time in writing forwarded in like manner, CITY OF KENT LICENSEE: Attn: City Clerk ELECTRIC LIGHTWAVE, LLC, a 220 Fourth Avenue South subsidiary of INTEGRA TELECOM, INC Kent, WA 98403 Registered Agent: CT Corporation System 520 Pike Street Seattle, WA 98101 With a copy of Notices of Default to: The CT Trust Company 1209 Orange Street Wilmigton, Delaware 19801 13. This License contains the entire agreement between the parties and, in executing it, the City and Licensee do not rely upon any statement, promise, or representation, whether oral or written, not expressed herein. IN WITNESS, this Limited Street License is executed and shall become effective as of the last date signed below, LIMITED STREET LICENSE--Page 7 of 9 (April 14, 2009) (between Clty and Electric Lightwave, LLC) APPROVED AS TO FORM: By: Kent Law Department CITY OF KENT ' ELECTRIC LIGHTWAVE, LLC By: Print Name: SUZETTE COOKE Print Name: Its: Mayor Its: peen Date: Date. STATE OF WASHINGTON ) ' . ss. COUNTY OF KING ) ' I hereby certify that I know or have satisfactory evidence that Suzette Cooke is the person who appeared before me, and said person acknowledged that she signed this instrument, on oath stated that she is authorized to execute the instrument on behalf of the City of Kent as its Mayor, and such execution to be the free and voluntary act of such party for the uses and purposes mentioned in the foregoing instrument. Notary Seal MWAppear lain ThlsBox- IN WITNESS WHEREOF, I have hereunto set my hand and official seal the day and year first above written. NOTARY PUBLIC, in and for the State of Washington, residing at My appointment expires LIMITED STREET LICENSE--Page 8 of 9 (April 14, 2009) (between City and Electric Lightwave, LLC) ' STATE OF ) 'M..-j lAvirnah ) ss. COUNTY o� ) On this day of 2009, before me Notary Public in and for the State of , personally ap eared th���°� � of a*W Wfimited Liability Corporation, who executed the foregoing instr vent, an ' acknowledged it to be the free and voluntary act of said partnership, for the uses and purposes mentioned in this instrument, and on oath stated that was authorized to execute said instrument. ' Notary Seal Must Appear Within nis Box- IN WITNESS WHEREOF, I have hereunto set my hand and official seal the ' day and year first above wn ' residing atl=r-i�:li�.sEQQ OT Y PUBLIC in and for Ste JONNIFER,IipFi1V � r4QTAOY PU13UC-o , ' gOMMIS819N Np•4'11 a p tment expires � W Q �3 . Pik R G ' P.\Civil\Files\OpenFiles\0421-TeleomROWActiveLicenses\Imega\Elec4icLighlwnveLimitedStreetLicense.doa 1 LIMITED STREET LICENSE--Page 9 of 9 (April 14, 2009) (between City and Electric Lightwave, LLQ IE to ��j■�i,� G\ i' _ n � Olfl :��re�lhl �•�:.I 11 r_INGO �� 1 r IE ml WIN MISS B soil, �,�, ` r4- '�• Wit. POLICY CHANGE 5 Effective 0 4/0 9/2 0 0 9 ,this endorsement forms apart of Policy No. 711-0 0-91-4 9-0 0 0 2 (At the time stated in the policy) Issued to INTEGRA TELECOM, INC. (See ASC 00 11 01 98, Schedule 1) ATTENTION: RISK MANAGEMENT 1201 NE LLOYD BLVD STE 500 PORTLAND, OR 97232-1259 Producer: MCGRIFF, SEIBELS & WILLIAMS OF OREGON, INC. byOneBeacon America Insurance Company In Accordance with this Policy Change Your Premium is Revised as follows: No Change in Premium This Policy Change Amends the Following Policy Provisions: Liability Schedule, VCG 100 10 98 IAdd Coverage(s) : 49950 Addl Ins-PGL Owners, Lessees or Contrac. Subline(s) : 334 Premises/Operations Loc Bldg Subline(s) 45 1 334 Add Additional Insured Owners, Lessees or Contractors, CG 20 10 07 04: CITY OF KENT ATTN: CITY CLERK 220 4TH AVE S KENT, WA 98032-5838 Loc Bldg 45 1 3 3-46-0079 04/10/2009 L2W CPW PR 0. 685 ASC 0010 0198 ARCHIVE POLICY CHANGE Page 1 of 1 A_,J-Ca-� Z POLICY NUMBER: 711-00-91-49-0002 THIS ENDORSEMENT CHANGES THE POLICY.PLEASE READ IT CAREFULLY. ADDITIONAL INSURED - OWNERS, LESSEES OR CONTRACTORS - SCHEDULED PERSON OR ORGANIZATION This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART SCHEDULE Name Of Additional Insured Person(s)Or Organization(s): ANYONE WHERE REQUIRED BY SIGNED WRITTEN CONTRACT OR WHERE A CERTIFICATE OF INSURANCE HAS BEEN ISSUED INCLUDING THE CERTIFICATE HOLDER AS AN ADDITIONAL INSURED PRIOR TO A LOSS OCCURRING. Location(s)Of Covered Operations: "ALL LOCATIONS AND OPERATIONS OF THE NAMED INSUREDS" Information required to complete this Schedule,if not shown above,will be shown in the Declarations. A. Section II—Who Is An Insured Is amended to This insurance does not apply to"bodily injury"or include as an additional insured the person(s)or "property damage"occurring after organization(s)shown in the Schedule,but only 1. All work, including materials, parts or with respect to liability for "bodily injury', equipment furnished In connection with such properly damage or personal and advertising work, on the project (other than service, injury caused,in whole or in part,by: maintenance or repairs) to be performed by 1. Your acts or omissions;or or on behalf of the additional insured(s)at the 2. The acts or omissions of those acting on your location of the covered operations has been behalf; completed;or in the performance of your ongoing operations for 2. That portion of"your work" out of which the the additional insured(s) at the location(s) desfg- Injury or damage arises has been put to its nated above. intended use by any person or organization B. With respect to the insurance afforded to these other than another contractor sub- P contractor engaged in performing operations additional insureds,the following additional exclu- for a principal as a part of the same project. sions apply: CO 20 10 07 04 0180 Propedles,Inc.,2004 Page 1 of r CERTIFICATE OF INSURANCE ISSUE DATE A CORD,, 04/09/2009 PRODUCER This certificate is Issued as a matter of information only and confers no rigghts McGriff,Seibels&Williams of Oregon upon the Certificate Holder.This Certificate does not amend,extend or alter the 1800 SW First Avenue,Suite 400 coverage afforded by the policies below. Portland,OR 97201 Phone:(503)943-6621 COMPANIES AFFORDING COVERAGE Company One Beacon American Insurance Company INSURED Company } Electric Lightwave,LLC e f/k/a Electric Lightwave,Inc. 1201 NE Lloyd Boulevard Company Suite 500 C Portland,OR 97232 Company D ComEp pany This is to certify that the policies of insurance described herein have been issued to the Insured named herein for the policy period indicated. Notwithstanding any requirement,term or condition of contract or other document with respect to which this certificate may be Issued or may pertain,the insurance afforded by the policies described herein is subject to all the terms,conditions and exclusions of such policies. Limits shown may have been reduced by paid claims. CO TYPE OF INSURANCE POLICY NUMBER EFFECTIVE LIMITS OF LIABILITY LT EXPIRATION A GENERAL LIABILITY 711-00-91-49-OD02 12/15/2008 EACH OCCURRENCE $ 1,000,00D ®Commercial General Uablilly, 12/15/2009 FIRE DAMAGE $ 500,000 ❑Claims Made ®Occurrence MEDICAL EXPENSE $ 10,000 ❑Owners'and Contractors'Protection ❑ PERS.AND ADVERTISING INJURY $ ❑ GENERAL AGGREGATE $ 2.000,000 General Aggregate Umil applies per. PRODUCTS AND COMP.OPER.AGG. $ 2,000,000 In policy ❑Project ❑Location A AUTOMOBILE LIABILITY 711-00-9149-0002 12/15/2008 COMBINED SINGLE LIMIT $ 1,000,000 Any Automobile 12/15/2009 BODILY INJURY r $ ❑All Owned Automobiles ❑Scheduled Automobiles BODILY INJURY Per accident) $ ❑Hired Automobiles PROPERTY DAMAGE Peaccident) $ ❑Non-owned Automobiles COMPREHENSIVE ❑ COLLISION A WORKERS'COMPENSATION 406-01-5440-0002 1211S0008 WC Statutory Limit I X I Other AND EMPLOYERS'LIABILITY 12/15/2009 EL EACH ACCIDENT $ 1.000,000 EL DISEASE(Each emvlayeel $ 1,00%000 EL DISEASE(Policy it $ 1,000,000 A EXCESS LIABILITY 711-00-91-49-0002 12/15/2008 EACH OCCURRENCE $ 4,000,000 ®occurrence ❑Clalms Made 12/15/2009 AGGREGATE $ 4,000,000 $ CITY OF KENT IS INCLUDED AS ADDITIONAL INSURED UNDER GENERAL LIABILITY AS REQUIRED BY WRITTEN CONTRACT,SUBJECT TO POLICY TERMS,CONDITIONS&EXCLUSIONS, WITH THE NAMED INSURED.THIS INSURANCE IS PRIMARY AS RESPECTS THE CITY OF KENT ITS OFFICIALS, OFFICERS,EMPLOYEES AND VOLUNTEERS.RE:LIMITED STREET LICENSE. CERTIFICATE HOLDER SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF,THE ISSUING INSURER WILL ENDEAVOR TO MAIL 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT,BUT FAILURE TO DO SO SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE INSURER,ITS AGENTS OR REPRESENTATIVES. City of Kent Authorized Representative Attn:City Clerk 220 Fourth Avenue,S _ Kent,WA 98403 Bee 1 of 1 Certificate to 0 11 VWKC34 Limited Street License Between the City of Kent and Electric Lightwave,LLC Attachment: No 3. General description of plant placed in easement. Underground facilities constructed in the public right of way will be fiber optic cables typically installed in conduit with multiple sub-ducts typically placed between manholes and/or hand- holes. Underground facilities may be place using the techniques of trenching, plowing, backhoe, and boring, as appropriate for given conditions. Any vault placed for underground will be G appropriately load bearing, given the conditions and location. Vaults will typically be placed to provide cable storage, cable splice locations, or to facilitate construction. The aerial/overhead facilities constructed in the public right of way will consist of fiber optic cable lashed to a high strength messenger with storage loops, riser conduits, and/or splice cases at calculated intervals. Aerial facilities will be permitted with the appropriate pole owner(s), in accordance with the owner's then-applicable rules for attachments, and will conform to NESC requirements." i Kent City Council Meeting Date May 5, 2009 Category Consent Calendar - 6K 1. SUBJECT: WEST FENWICK PARK RESTROOM BUILDING/PARK IMPROVEMENTS PROJECT - ACCEPT AS COMPLETE 2. SUMMARY STATEMENT: Accept the West Fenwick Park Restroom/Park Improvements Project as complete. On February 5, 2008, Council awarded the Public Works Agreement to Rodarte Construction to complete the West Fenwick Park Restroom Building/Park Improvements. The project is complete and was approved by the Project Manager on April 8, 2009. 3. EXHIBITS: Letter of acceptance 4/8/09 i4. RECOMMENDED BY: Staff (Committee, Staff, Examiner, Commission, etc.) 5. FISCAL IMPACT Expenditure? N/A Revenue? N/A Currently in the Budget? Yes No 6. CITY COUNCIL ACTION: Councilmember moves, Councilmember seconds i DISCUSSION: ACTION: I PARKS AND OPEN SPACE Jeff Watling Parks, Recreation &community Services Director e 220 4`"Avenue South K E N T Kent,WA 98032 WASHINGTON Fax: 253-856-6050 PHONE: 253- 5 10 April 16, 2009 Brad Deakins Rodarte Construction PO Box 1875 Auburn, WA 98071 RE: West Fenwick Park Restroom Building Dear Mr. Deakins: I made a final inspection of the restroom building at West Fenwick Park, and found that the work has been completed to my satisfaction. This letter serves as a final acceptance of the public works project. The one-year warranty period on product and labor will remain in effect through April 8, 2010. If you have any questions, please call me at (253) 856-5116. Sincerely, Brian Levenhagen, Project Manager Parks Planning & Development C: Jeff Watling, Director, Parks, Recreation & Community Services Lori Flemm, Superintendent Chauntelie Kristek, Parks Accountant j j 3 ® MAYOR SUZETTE COOKE City of Kent Parks, Recreation&Community Services Kent City Council Meeting Date May 5, 2009 Category Other Business - 7A 1. SUBJECT: PROFESSIONAL CONSULTING SERVICES CONTRACT WITH AMTEC FOR TAX-EXEMPT BONDS AND NOTES 2. SUMMARY STATEMENT: Municipalities are required to monitor the use of bond proceeds, and related investment earnings, and prepare reports of compliance. The Internal Revenue Code requirements are very dynamic and complex. Therefore, the Finance Department recommends that this service continue to be performed by a firm that specializes in this field. The Agreement provides for an initial five (5) year term, and allows the City to elect to extend the Agreement for two (2) additional five (5) year terms. However, either party may terminate the Agreement at any time upon providing the other party thirty (30) days' advance written notice. 3. EXHIBITS: Memo dated 4/21/09 and Consultant Services Agreement 4. RECOMMENDED BY: Operations Committee (Committee, Staff, Examiner, Commission, etc.) 5. FISCAL IMPACT Expenditure? X Revenue? Currently in the Budget? Yes X No 6. CITY COUNCIL ACTION: Councilmember moves, Councilmember c� seconds to authorize the Mayor to sign an agreement with AMTEC for arbitrage services regarding IRS reporting of the City's tax exempt bonds and notes, with an initial five-year term and two optional five-year extensions, the cost of such services to be within available budgets and the Agreement, subject to final terms and conditions acceptable to the City Attorney. DISCUSSION: ACTION: 111 KEN T W A S H I N G T O N FINANCE R. J. Nachlinger, Director Phone: 253-856-5260 Fax: 253-856-6255 220 Fourth Avenue S. Kent, WA. 98032-5895 April 21, 2009 TO: Kent City Council Operations Committee FROM: R.J. Nachlinger, Finance Director THROUGH: Suzette Cooke, Mayor SUB7ECT: Professional Consulting Services for Tax-Exempt Bonds and Notes - Approve MOTION: Move to recommend Council authorize the Mayor to sign an agreement with AMTEC for arbitrage services regarding IRS reporting of the City's tax exempt bonds and notes, with an initial five-year term and two optional five-year extensions, the cost of such services to be within available budgets, and the Agreement subject to final terms and conditions acceptable to the City Attorney. SUMMARY Interest earnings on municipal bonds are exempt from federal income tax if the issuer complies with the requirements of the Internal Revenue Code. Municipalities are not allowed to use tax-exempt bonds for non-qualifying purposes. Arbitrage is a municipality's profit from borrowing funds in the tax-exempt market and investing them in the taxable market. Municipalities are required to monitor the use of bond proceeds, and related investment earnings, and prepare reports of compliance. The Internal Revenue Code requirements are very dynamic and complex. Therefore, the Finance Department recommends that this service continue to be performed by a firm that specializes in this field. These services were advertised through a formal request for proposals process. The Finance Department recommends award of this Agreement to American Municipal Tax- Exempt Compliance Corporation, dba AMTEC. The Agreement provides for an initial five (5) year term, and allows the City to elect to extend the Agreement for two (2) additional five (5) year terms. However, either party may terminate the Agreement at any time upon providing the other party thirty (30) days' advance written notice. 1 1� BUDGET IMPACT The estimated cost of the initial five-year term is $23,400. However, during this initial term, the City may add additional bonds and notes that will require arbitrage services. Because the work is difficult to predict, staff requests Council extend its contracting authorization to those amounts within established budgets. If by exercising its right to extend the Agreement beyond the initial term, or if by adding additional bonds and notes to AMTEC's work, the compensation due AMTEC will be beyond established budgets, staff will bring the issue back to Council for approval. DETAIL A Request for Proposal was published in the Seattle Daily Journal of Commerce on July 28, 2008. The City also provided the RFP documents to seven known firms in the industry, including our current consultant (Arbitrage Compliance Specialists, Inc). We received proposals from five firms on or before the August 22, 2008 deadline: • American Municipal Tax-Exempt Compliance Corporation, dba AMTEC • Arbitrage Compliance Specialists, Incorporated • Bond Logistix, LLC • BondResource Partners, LP • Pinnacle Arbitrage Compliance, LLC The evaluation of the proposals was based on the quality of services, benefits, ability of the Proposer to deliver and perform the services requested, and the Proposer's cost in performing these services. The Audit Manager (Robert Goehring, CPA, CFE) and Assistant Finance Director (Paula Barry) extensively reviewed the proposals, conducted reference checks and ranked the firms based on proposer's experience, reference checks, fees and IRS audit representation services. The Finance Director, Assistant Finance Director and Audit Manager reviewed the results of this evaluation. We are recommending award of this Agreement to AMTEC. EXHIBITS Consultant Services Agreement 2 113 KENT W A S H I N O T O N CONSULTANT SERVICES AGREEMENT between the City of Kent and American Municipal Tax-Exempt Compliance Corporation, d.b.a. AMTEC THIS AGREEMENT is made between the City of Kent, a Washington municipal corporation (hereinafter the "City"), and American Municipal Tax-Exempt Compliance Corporation, d.b.a. AMTEC organized under the laws of the State of Connecticut, located and doing business at 124 LaSalle Road, West Hartford, CT 06107 (860) 523-5112 (hereinafter the "Consultant") I. DESCRIPTION OF WORK. Consultant shall perform the following services for the City in accordance with the following described plans and/or specifications: Perform all tasks required of the City per Section 148(f) of the Internal Revenue Code regarding City's tax-exempt bonds and notes. Consultant shall perform this work in accordance with Consultant's August 21, 2008, Proposal, which is attached and incorporated as Exhibit A; Consultant's January 7, 2009, Response to the City of Kent's Questions, which is attached and incorporated as Exhibit B; and the City of Kent's List of Tax-Exempt Bonds and Expected Reporting Periods as of June 30, 2008, attached and incorporated as Exhibit C. Additional bonds may be added to Consultant's Work through the execution of an 1 engagement letter in a form similar to that attached and incorporated as Exhibit D. Should the "not to exceed" amount provided for in this Agreement prove insufficient to cover the costs associated with that additional Work, the parties shall properly negotiate and execute an amendment to this Agreement. The City will provide Consultant with all appropriate and relevant documentation and information requested by the Consultant and in a manner to ensure that the Consultant can reasonably accommodate Internal Revenue Service arbitrage calculation and reporting requirements. Consultant further represents that the services furnished under this Agreement will be performed in accordance with generally accepted professional practices within the Puget Sound region in effect at the time those services are performed. II. TIME OF COMPLETION. The parties agree that work will begin on the tasks described in Section I above immediately upon the effective date of this Agreement. Upon the effective date of this Agreement, Consultant shall complete the work described in Section I to accommodate Internal Revenue Service arbitrage calculation and reporting requirements for all reporting periods during the term of this Agreement. This Agreement shall begin on its effective CONSULTANT SERVICES AGREEMENT - 1 (Over$10,000) 11� date and remain in effect, subject to all terms and conditions in this Agreement, through December 31, 2013. At its option, the City may extend this Agreement up to two (2) additional five (5) year terms. In no event, however, shall the term of this Agreement extend beyond December 31, 2023. Although this Agreement provides for renewal five (5) year terms, either party may terminate this Agreement upon thirty (30) days' advance written notice in accordance with Section V of this Agreement. III. COMPENSATION. A. The City shall pay the Consultant, based on time and materials, an amount not to exceed $23,400, proportionately annualized over the initial five (5) year period ending December 31, 2013, for the services described in this Agreement. Unless otherwise agreed to in writing between the City and the Consultant, the maximum amount for each year of each subsequent five-year term shall be increased by an amount equal to the percentage increase in the Consumer Price Index for Seattle- Tacoma-Bremerton (All Urban Customers) from the previous calendar year (the CPI) for the services described in this Agreement. This is the maximum amount to be paid under this Agreement for the work described in Section I above, and shall not be exceeded without the prior written authorization of the City in the form of a negotiated and executed amendment to this agreement. The Consultant agrees that the hourly or flat rate charged by it for its services contracted for herein shall remain locked at the negotiated rate(s) for a period of one (1) year from the effective date of this Agreement. The Consultant's billing rates shall be as delineated in Exhibit A and Exhibit B. B. The Consultant shall submit monthly payment invoices to the City for work performed, and a final bill upon completion of all services described in this Agreement. The City shall provide payment within forty-five (45) days of receipt of an invoice. If the City objects to all or any portion of an invoice, it shall notify the Consultant and reserves the option to only pay that portion of the invoice not in dispute. In that event, the parties will immediately make every effort to settle the disputed portion. IV. INDEPENDENT CONTRACTOR. The parties intend that an Independent Contractor-Employer Relationship will be created by this Agreement. By their execution of this Agreement, and in accordance with Ch. 51.08 RCW, the parties make the following representations: A. The Consultant has the ability to control and direct the performance and details of its work, the City being interested only in the results obtained under this Agreement. B. The Consultant maintains and pays for its own place of business from which Consultant's services under this Agreement will be performed. C. The Consultant has an established and independent business that is eligible for a business deduction for federal income tax purposes that existed before the City retained Consultant's services, or the Consultant is engaged in an independently established trade, occupation, profession, or business of the same nature as that involved under this Agreement. CONSULTANT SERVICES AGREEMENT - 2 (Over$10,000) 115 D. The Consultant is responsible for filing as the become due all necessary tax p 9 Y Y documents with appropriate federal and state agencies, including the Internal Revenue Service and the state Department of Revenue. E. The Consultant has registered its business and established an account with the state Department of Revenue and other state agencies as may be required by Consultant's business, and has obtained a Unified Business Identifier (UBI) number from the State of Washington. F. The Consultant maintains a set of books dedicated to the expenses and earnings of its business. V. TERMINATION. Either art may terminate this Agreement, with or without party Y 9 cause, upon providing the other party thirty (30) days written notice at its address set forth on the signature block of this Agreement. After termination, the City may take possession of all records and data within the Consultant's possession pertaining to this project, which may be used by the City without restriction. If the City's use of Consultant's records or data is not related to this project, it shall be without liability or legal exposure to the Consultant. VI. DISCRIMINATION. In the hiring of employees for the performance of work under this Agreement or any subcontract, the Consultant, its subcontractors, or any person acting on behalf of the Consultant or subcontractor shall not, by reason of race, religion, color, sex, age, sexual orientation, national origin, or the presence of any sensory, mental, or physical disability, discriminate against any person who is qualified and available to perform the work to which the employment relates. Consultant shall execute the attached City of Kent Equal Employment Opportunity Policy Declaration, Comply with City Administrative Policy 1.2, and upon completion of the contract work, file the attached Compliance Statement. VII. INDEMNIFICATION. Consultant shall defend, indemnify and hold the City, its officers, officials, employees, agents and volunteers harmless from any and all claims, injuries, damages, losses or suits, including all legal costs and attorney fees, arising out of or in connection with the Consultant's performance of this Agreement, except for that portion of the injuries and damages caused by the City's negligence. The City's inspection or acceptance of any of Consultant's work when completed shall not be grounds to avoid any of these covenants of indemnification. Should a court of competent jurisdiction determine that this Agreement is subject to RCW 4.24.115, then, in the event of liability for damages arising out of bodily injury to persons or damages to property caused by or resulting from the concurrent negligence of the Consultant and the City, its officers, officials, employees, agents and volunteers, the Consultant's liability hereunder shall be only to the extent of the Consultant's negligence. IT IS FURTHER SPECIFICALLY AND EXPRESSLY UNDERSTOOD THAT THE INDEMNIFICATION PROVIDED HEREIN CONSTITUTES THE CONSULTANT'S WAIVER OF IMMUNITY UNDER INDUSTRIAL INSURANCE, TITLE 51 RCW, SOLELY FOR THE PURPOSES OF THIS INDEMNIFICATION. THE PARTIES FURTHER ACKNOWLEDGE THAT THEY HAVE MUTUALLY NEGOTIATED THIS WAIVER. The provisions of this section shall survive the expiration or termination of this Agreement. CONSULTANT SERVICES AGREEMENT - 3 (Over$10,000) VIII. INSURANCE. The Consultant shall procure and maintain for the duration of the1l Agreement, insurance of the types and in the amounts described in Exhibit E attached and incorporated by this reference. IX. EXCHANGE OF INFORMATION. The City will provide its best efforts to provide reasonable accuracy of any information supplied by it to Consultant for the purpose of completion of the work under this Agreement. X. OWNERSHIP AND USE OF RECORDS AND DOCUMENTS. Original documents, drawings, designs, reports, or any other records developed or created under this Agreement shall belong to and become the property of the City. All records submitted by the City to the Consultant will be safeguarded by the Consultant. Consultant shall make such data, documents, and files available to the City upon the City's request. The City's use or reuse of any of the documents, data and files created by Consultant for this project by anyone other than Consultant on any other project shall be without liability or legal exposure to Consultant. XI. CITY'S RIGHT OF INSPECTION. Even though Consultant is an independent contractor with the authority to control and direct the performance and details of the work authorized under this Agreement, the work must meet the approval of the City and shall be subject to the City's general right of inspection to secure satisfactory completion. XII. WORK PERFORMED AT CONSULTANT'S RISK. Consultant shall take all necessary precautions and shall be responsible for the safety of its employees, agents, and subcontractors in the performance of the contract work and shall utilize all protection necessary for that purpose. All work shall be done at Consultant's own risk, and Consultant shall be responsible for any loss of or damage to materials, tools, or other articles used or held for use in connection with the work. XIII. MISCELLANEOUS PROVISIONS. A. Recyclable Materials. Pursuant to Chapter 3.80 of the Kent City Code, the City requires its contractors and consultants to use recycled and recyclable products whenever practicable. A price preference may be available for any designated recycled product. B. Non-Waiver of Breach. The failure of the City to insist upon strict performance of any of the covenants and agreements contained in this Agreement, or to exercise any option conferred by this Agreement in one or more instances shall not be construed to be a waiver or relinquishment of those covenants, agreements or options, and the same shall be and remain in full force and effect. C. Resolution of Disputes and Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington. If the parties are unable to settle any dispute, difference or claim arising from the parties' performance of this Agreement, the exclusive means of resolving that dispute, difference or claim, shall only be by filing suit exclusively under the venue, rules and jurisdiction of the King County Superior Court, King County, Washington, unless the parties agree in writing to an alternative dispute resolution process. In any claim or lawsuit for damages arising from the parties' performance of this Agreement, each party shall pay all its legal costs and attorney's fees incurred in defending or bringing such claim or lawsuit, including all appeals, in addition to any other recovery or award provided by law; provided, however, nothing in this paragraph shall be construed to limit the City's right to indemnification under Section VII of this Agreement. CONSULTANT SERVICES AGREEMENT - 4 (Over$10,000) D. Written Notice. All communications regarding this Agreement shall be sent to the 117 parties at the addresses listed on the signature page of the Agreement, unless notified to the contrary. Any written notice hereunder shall become effective three (3) business days after the date of mailing by registered or certified mail, and shall be deemed sufficiently given if sent to the addressee at the address stated in this Agreement or such other address as may be hereafter specified in writing. E. Assignment. Any assignment of this Agreement by either party without the written consent of the non-assigning party shall be void. If the non-assigning party gives its consent to any assignment, the terms of this Agreement shall continue in full force and effect and no further assignment shall be made without additional written consent. F. Modification. No waiver, alteration or modification of any of the provisions of this Agreement shall be binding unless in writing and signed by a duly authorized representative of the City and Consultant. G. Entire Agreement. The written provisions and terms of this Agreement, together with any Exhibits attached hereto, shall supersede all prior verbal statements of any officer or other representative of the City, and such statements shall not be effective or be construed as entering into or forming a part of or altering in any manner this Agreement. All of the above documents are hereby made a part of this Agreement. However, should any language in any of the Exhibits to this Agreement conflict with any language contained in this Agreement, the terms of this Agreement shall prevail. H. Compliance with Laws. The Consultant agrees to comply with all federal, state, and municipal laws, rules, and regulations that are now effective or in the future become applicable to Consultant's business, equipment, and personnel engaged in operations covered by this Agreement or accruing out of the performance of those operations. I. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute an original, and all of which will together constitute this one Agreement. IN WITNESS, the parties below execute this Agreement, which shall become effective on the last date entered below. CONSULTANT: CITY: AMTEC CITY OF KENT By: By: (signature) (signature) Print Name: Print Name: Suzette Cooke Its Its Mayor (title) DATE: DATE: CONSULTANT SERVICES AGREEMENT - 5 (Over$10,000) 11� NOTICES TO BE SENT TO: NOTICES TO BE SENT TO: CONSULTANT: CITY OF KENT: William M. Pascucci, Chairman and President Robert 3. Nachlinger, Finance Director American Municipal Tax-Exempt Compliance City of Kent Corporation, d.b.a. AMTEC 220 Fourth Avenue South 124 LaSalle Road Kent, WA 98032 West Hartford, CT 06107 (253) 856-5260 (telephone) (860) 523-5112 (telephone) (253) 856-6255 (facsimile) 860 236-7135 facsimile APPROVED AS TO FORM: Kent Law Department P•\Civil\Files\OpenFil es\0024-2009FinanceGeneral\Arbitrage-CLEANContractAMTEC.docx CONSULTANT SERVICES AGREEMENT - 6 (Over$10,000) 119 DECLARATION CITY OF KENT EQUAL EMPLOYMENT OPPORTUNITY POLICY The Cityof Kent is committed to conform to Federal and State laws regarding equal opportunity. 9 9 q As such all contractors, subcontractors and suppliers who perform work with relation to this Agreement shall comply with the regulations of the City's equal employment opportunity policies. The following questions specifically identify the requirements the City deems necessary for any contractor, subcontractor or supplier on this specific Agreement to adhere to. An affirmative response is required on all of the following questions for this Agreement to be valid and binding. If any contractor, subcontractor or supplier willfully misrepresents themselves with regard to the directives outlines, it will be considered a breach of contract and it will be at the City's sole determination regarding suspension or termination for all or part of the Agreement; The questions are as follows: 1. I have read the attached City of Kent administrative policy number 1.2. 2. During the time of this Agreement I will not discriminate in employment on the basis of sex, race, color, national origin, age, or the presence of all sensory, mental or physical disability. 3. During the time of this Agreement the prime contractor will provide a written statement to all new employees and subcontractors indicating commitment as an equal opportunity employer. 4. During the time of the Agreement I, the prime contractor, will actively consider hiring and promotion of women and minorities. 5. Before acceptance of this Agreement, an adherence statement will be signed by me, the Prime Contractor, that the Prime Contractor complied with the requirements as set forth above. By signing below, I agree to fulfill the five requirements referenced above. Dated this day of , 200_. By: For; Title: Date: EEO COMPLIANCE DOCUMENTS - 1 1� CITY OF KENT ADMINISTRATIVE POLICY NUMBER: 1.2 EFFECTIVE DATE: January 1, 1998 SUBJECT: MINORITY AND WOMEN SUPERSEDES: April 1, 1996 CONTRACTORS APPROVED BY Jim White, Mayor POLICY: Equal employment o ortunit requirements for the City of Kent will conform to federal and qopportunity q Y state laws. All contractors, subcontractors, consultants and suppliers of the City must guarantee equal employment opportunity within their organization and, if holding Agreements with the City amounting to $10,000 or more within any given year, must take the following affirmative steps: 1. Provide a written statement to all new employees and subcontractors indicating commitment as an equal opportunity employer. 2. Actively consider for promotion and advancement available minorities and women. Any contractor, subcontractor, consultant or supplier who willfully disregards the City's nondiscrimination and equal opportunity requirements shall be considered in breach of contract and subject to suspension or termination for all or part of the Agreement. Contract Compliance Officers will be appointed by the Directors of Planning, Parks, and Public Works Departments to assume the following duties for their respective departments. 1. Ensuring that contractors, subcontractors, consultants, and suppliers subject to these regulations are familiar with the regulations and the City's equal employment opportunity policy. 2. Monitoring to assure adherence to federal, state and local laws, policies and guidelines. EEO COMPLIANCE DOCUMENTS - 2 121 CITY OF KENT EQUAL EMPLOYMENT OPPORTUNITY COMPLIANCE STATEMENT This form shall be filled out AFTER COMPLETION of this project by the Contractor awarded the Agreement. I, the undersigned, a duly represented agent of Company, hereby acknowledge and declare that the before-mentioned company was the prime contractor for the Agreement known as that was entered into on the^ (date) , between the firm I represent and the City of Kent. r I declare that I complied fully with all of the requirements and obligations as outlined in the City of Kent Administrative Policy 1.2 and the Declaration City of Kent Equal Employment Opportunity Policy that was part of the before-mentioned Agreement. Dated this day of , 200 By: For: Title: Date: EEO COMPLIANCE DOCUMENTS - 3 1 1 1 1 1 1 i 1 1 t 1 1 1 1 1 1 123 TAX-EXEMPT COMPLIANCE August 21,2008 1 Robert A. Goehring,CPA, CFE Audit Manager City of Kent Finance Department 400 West Gowe Street, Suite 122 Kent,WA 98032 Dear Mr.Goehring: Thank you for inviting Amtec to submit its Proposal for Arbitrage Consulting Services in response to the request of the City of Kent (the "City'). Pursuant to your request, we have enclosed three Proposals. Each is an original. Based upon the scope of services requested and the diligence required to deliver these services, Amtec developed a guaranteed fee Proposal for each of the City's bond issues. Our guaranteed fee structure is based upon the conversion from the existing five-year rebate computation cycle to an annual rebate computation cycle. We will update all reports as of December 31,2008 and begin the delivery of annual rebate reports following January 1,2009 and following each bond anniversary date thereafter for the duration of our engagement. By pricing our services in this manner, the City can predict with extreme accuracy its current and future rebate computation expenses for budgetary purposes. Amtec has a significant amount of experience computing rebate for municipalities throughout the United States. Our offices are staffed until 8:00 p.m. Eastern time to accommodate our national client base. We do not use voice mail during office hours so when you call, an Amtec staff member will be here to assist you. Thank you for including Amtec in this process and should you have any questions, please do not hesitate to contact us Very truly yours, William M. Pascucci President r124 LaSalle Road,West Hartford,CT 06107 (860)523-5112 Fax(860)236-7135 www.amteccorp.com 1 124 PROPOSAL Arbitrage Consulting Services Presented To T CITY OF KENT WASHINGTON Submitted By American Municipal Tax-Exempt Compliance Corp. AMTEC August 21,2008 Table of Contents 2.2 Letter of Submittal 1 Introductory Remarks and Executive Summary 2 2.3 Service Proposal 4 Scope of Services—Defined 4 Scope of Services—Summary 9 Plan For Compliance Time Frame 10 2.4 Amtec's Experience 11 A. Description of Amtec 11 B. Philosophy 11 C. Experience 13 1. Arbitrage Consulting Services 13 2. Contracts For The Last Five Years 14 3. Service and Experience Details 14 D. Subcontractors 17 E. References 17 F. Related Information 18 2.5 Cost Proposal 19 Fees for Future Issues 20 Fees for Existing Issues 21 Exhibit A to RFP—Certifications and Assurances 22 Appendix Professional Opinion for the City of Kent,WA A-2 Confirmation of Amtec's Regulatory and Mathematical Accuracy A-3 Sample Rebate Report $9,799,656.80 Water Works Board of the City of Auburn,Alabama City of Lubbock,Texas Annual Rebate Executive Summary i 126 2.2 Letter of Submittal A. Name of Firm American Municipal Tax-Exempt Compliance Corporation d.b.a.AMTEC Address 124 LaSalle Road Principal Place of Business West Hartford,Connecticut Telephone/Fax Number 860 523-5112/ 860 236-7135 Legal Entity Name Amtec Address 124 La Salle Road,West Hartford CT 06107 Employer Identification No. 06-1308917 Email Address info(&,amteccorp.com Website Address www.amtecco!p.com B. � 3 Corporate Officers Tile=.�� �:��_ William M.Pascucci Chairman and President Raymond H.Bentley Vice President and Treasurer Michael J.Scarfo Vice President and Secretary Heather E.Place Vice President Samuel C.Lerner Vice President Amtec operates from a single location at 124 LaSalle Road, West Hartford, CT 06107 and has a single telephone number for all staff. (860)523-5112. C. Amtec was incorporated in Connecticut in 1990 and was organized to do business as it currently exists since its inception, as a provider of tax-exempt compliance services. D. The Federal Tax Identification number of the American Municipal Tax- Exempt Compliance Corporation is 06-1308917. Amtec does not have a Washington Uniform Business Identification number. E. No employee or former employee of the City has ever been employed by Amtec or is on its governing board. i TAX-EXEMPT COMPLIANCE Introductory Remarks August 21,2008 Robert A. Goehring,CPA,CFE Audit Manager City of Kent Finance Department 400 West Gowe Street,Suite 122 Kent,WA 98032 Dear Mr. Goehring: Thank you for inviting Amtec to submit its Proposal for Arbitrage Consulting Services. The pages that follow are succinct and correspond to the RFP. Amtec appreciates this opportunity and welcomes additional dialogue with the City of Kent(the"City"). Executive Summary Amtec is prepared to provide arbitrage rebate computations for the bond issues specified by the City. We have read the entire RFP, many of the Official Statements, the 2007 CAFR and Budget, and the Capital Improvement Plan. This information provided us with significant insight into the types and scope of bonded projects, as well as the City's capital needs and spending patterns. Based upon our experience and understanding of the scope of services requested, Amtec is qualified for this engagement and is offering the City a guaranteed maximum fee quote of$23,400 for the issues listed in the RFP. Computations would begin on the date of the last rebate report through December 31, 2013. Significant fee reductions are possible and explained in the fee pages that begin on page 19. Our fee averages$300 per issue, per year. Our service includes rebate computations, arbitrage consultation services and support for the term of the engagement. Our service is comprehensive and includes all services required to provide our unqualified opinion. Service Recommendations Based On Our Understanding • A complete review and restatement of all prior calculations to the last report date; • Conversion to annual rebate computations through a comprehensive rebate catch- up program as of December 31,2008; • Formal annual rebate computations on bond anniversary dates in 2009 and each year of the engagement; • Formal Computation Date(fifth anniversary date)calculations as dates occur; • Written recommendations on accounting and other compliance matters; • Full support and recommendations on the selection of qualified investments and pro-forma.rebate and spending tests,if needed; and • Comprehensive support in the event of an IRS review or audit. 124 LaSalle Road,West Hartford,CT 06107 (860)523-5112 Fax(860)236-7135 www.amteccorp.com 128 Work Plan Summary,Comprehensive Reporting and Amtec's Philosophy It is our understanding that the City computes rebate on Computation Dates and does not prepare interim computations annually. We propose the following: A more active cycle of annual rebate computations,designed to save expense dollars; • Eliminate concerns over an unknown accumulating rebate liability; Establish reserves for any rebate liability from current investment income;and • Provide the City with the potential to increase investment income. In order to convert the City to annual rebate computations,our work plan includes: • A legal review of documentation for all issues,including prior rebate computations; A restatement of all prior rebate reports to ensure their accuracy. Each Amtec rebate computation contains the service requirements of the City,as enumerated in the RFP and includes an executive summary, detailed and concise computations, definition of applied terms,computation methodology,recommendations and Amtec's professional opinion. All computations are in accordance with Section 148 of the Code and the Regulations, as amended. Our opinion is included in the Appendix Section page A-2 along with a confirmation of the accuracy of Amtec's computation methodology on pages A-3 and A-4. Guaranteed Reporting Compliance. The City will receive the requisite number of computations resulting from the rebate rule or rebate exception criteria selected prior to the closing. Testing for exceptions is a part of Amtec's computational controls. Not all exceptions are selected prior to the closing. Exception qualification occurs when the spending minimums of an issue have been achieved. However, due to the depressed interest rate environment that exists, the value of an exception from rebate will be carefully measured against the potential negative arbitrage that can be generated and used as a shelter against any potential rebate liability incurred by another bond account in the future. Amtec provides this analysis for each qualified issue. Each rebate report delivered to the City will be accompanied by Amtec's professional opinion. Consultation, Audit Representation and Training. In addition to arbitrage calculations and the filing of necessary tax forms, our service includes audit support in the event of an IRS review,consultation services and training of staff for the term of the engagement. Amtec's Compliance and Service Philosophy. Our service enables issuers to become proactive rebate managers. We structure our services toward the early recognition of any rebate liability through timely annual computations (or semiannual, when necessary) and realignment of investments,enabling our clients to optimize their earnings from bond proceeds. We are not investment providers or brokers. Amtec's clients receive recommendations for investment realignment,but do not pay for these services. Our focus is on compliance. Thank you for the opportunity to provide our services to the City of Kent. Very truly yours, William M.Pascucci President 3 1� 2.3 Service Proposal Amtec is an expert in the computation of arbitrage rebate and has the ability to compute the correct rebate amount for any type of bond structure. The average actual time to complete a formal first five-year rebate report is generally less than 5 business days from the time we receive all of the required documentation. The required tasks necessary to comply with Section 148(f)of the Code and the Regulations are described below. Verify that the issue is subject to the Rebate Requirement. Initially, the Tax Agreements, r Official Statements and other relevant documents are reviewed. The Tax Agreement,prepared i by bond counsel, provides information about the bond proceeds and other funds that could be subject to rebate and information relating to rebate exceptions. These documents provide the information which enables us to complete an independent verification of the bond yield. Calculate the bond yield. Since the bond yield is the basis for arbitrage liability,ensuring that all amounts are identified and applied in accordance with the Code is extremely important. Amounts such as the original issue discounts,premiums and qualified guarantee payments are needed to complete this process. From the information gathered in the bond document and review process,Amtec independently computes the bond yield for each fixed yield issue. Occasionally, the fixed bond yield provided to bond counsel by the underwriter is not complete or may contain inaccuracies. Through Amtec's independent verification of the bond yield, the City will be assured that the bond yield has been recomputed in accordance with the Regulations and is correct. The bond yield for variable rate bonds, if any, will be computed on each rebate computation date. As an example, if the rebate was computed at the end of the first bond year, the yield on the bonds would also be computed. The Regulations allow the issuers of variable rate bonds to align periods of high interest rates on their bonds and investments in an effort to minimize rebate. Amtec uses its discretion as to which periods or variable bond years will produce the least amount of rebate. Yield computations for variable rate issues require the analysis of all cash flows which include: • The actual principal and interest payments made to the bondholders; • Swap payments; • Liquidity fees; • LOC or municipal bond insurance premiums;and • Qualified expenses. The results of the variable rate bond yield are documented and presented in each rebate report for variable rate bond issues regardless of whether the issue qualifies for a spending exception. We believe that the City needs to confirm its true borrowing costs. Identify, and separately account for, all "Gross Proceeds" (as that term is defined in the Rebate Requirement) of the bond issue, including those requiring allocation analyses due to "transferred proceeds"and/or"commingled funds"circumstances. 4 130 Reconciliation of Proceeds. The Tax Agreement is used to reconcile the sources and uses of funds which can be tracked into the various bond and capital accounts. This step is important because the correct amount of bond proceeds must be identified and measured in order to ensure that the final rebate results are accurate. Failure to perform these initial steps violates the integrity of the rebate computation work which must follow. An issue containing transferred proceeds is easily identified in the Tax Agreement. Steps to compute the transferred proceeds are evident and performed systematically with current and advance ref endings. Commingled funds are not evident until the rebate computation has commenced. Our analysis of the various asset accounts will provide evidence of a commingled fund. Once detected,we can utilize our internal process to uncommingle bond proceeds from non-bond proceeds and compute the rebate accurately. Occasionally, an issuer commingles general funds or other bond proceeds from multiple issues and may not be aware that the commingling has occurred. Amtec is experienced in detecting I these situations. Our internal controls have been designed to provide the rebate amount, investment income and rate of return for each bond fund or account. Our expertise, which has been derived from the completion of more than 2,800 rebate computations per year, provides special insight that only this experience can offer. Our analysts have historical experience with every type of qualified investment and our internal controls highlight unusual rates of return, either high or low, which are often the result of commingling. When this occurs, we use our expertise and provide a series of tests that will easily identify the transactions that cause most aberrations in rebate computations. Obtain the necessary information related to investments, including investment and expenditure detail and interest earnings. Amtec does not require any special format but prefers bank records,when possible. If the bond proceeds are held by the City,Amtec does not require the creation of a new layer of accounting strata to provide the records required to compute rebate. As long as we are provided with investment and disbursement information from any accounting source, we are confident we will be able to provide our services with a minimum amount of support from City personnel. Amtec has relationships with and receives statements from many banks. With the City's authorization, the bank generally provides duplicate statements or statement access over the internet. By receiving statements in this manner, the City will be relieved from having to use staff for the purposes of copying statements. Additionally,the rebate report issuance process is expedited and reports are delivered systematically,shortly after each rebate report due date. 5 1� Calculate the excess investment earnings (cumulative rebate liability), taking into account any investment proceeds during the Temporary Period and in the post Temporary Period that may be subject to yield restriction requirements and require yield reduction payments. Solving for Rebate—Future Value Computation Methodology. Amtec utilizes listings of disbursements, investment records and accounting ledgers to solve for the rebate amount. This process is repeated one account at a time, if more than one account has been established for an issue. Amtec utilizes the future value methodology, as required by the Regulations, to determine the rebate amount. Each rebate amount, either positive or negative, is determined along with the rate of return of the investment portfolio for each fund. The portfolio returns must be consistent with the computed investment yield. Investment Portfolio Evaluation. Along with the disbursement listings, we gather information on the unspent bond proceeds and investments. Each investment is valued for every calculation. Amtec follows the regulatory valuation requirements and selects the most advantageous valuation method. The most advantageous valuation is the one that produces the smallest amount of rebate. We use care in these determinations to ensure market value fluctuations do not give rise to erroneous rebate returns. As a final control, the total income from the portfolio is identified and compared to the actual sums received. Project disbursements and investment income amounts are also balanced, ensuring that all items have been identified and are recorded on the bank statements. Rebate Consolidation. We solve the rebate for each account within a specific issue. Once each separate account has been solved and reconciled, the entire report is consolidated and the rebate amount is identified. The consolidation produces a blended rate of return and rebate amount for all accounts within an issue. We also provide the individual computations for each fund so our clients can easily determine which funds are generating arbitrage profits and which are generating losses. Testing for Rebate Exceptions and Penalty in Lieu of Rebate Elections. Once we have determined the rebate amount, we continue to test for exceptions from rebate. If a rebate liability has accumulated and the issue qualifies for an exception from rebate, we will issue our opinion utilizing the rebate exception criteria and the rebate would not be payable. If a client has elected to pay a penalty in lieu of rebate,we would discover this election during our bond document review and apply the penalty test and remit any penalty on a timely basis in accordance with the Regulations. Provide an executive summary. Identify the methodology employed, major assumptions, conclusions, and any recommendations for changes in the City record keeping and investment policy. Comprehensive Reports and Opinions. The rebate report is a formal document issued together with an executive summary,all computation schedules and the professional opinion of Amtec. Our opinion cites the various computation methodologies used to arrive at the rebate amount. 6 132 Our professional opinion,which is legally enforceable, is located in the Appendix Section page A-2. Amtec's opinion is generally broader than most opinions and clearly provides the assurance that our computation methodology is in accordance with the Regulations and the Code and the City may rely on it. Amtec's professional opinion provides the City with a level of confidence that rebate computations are accurate and in accordance with the Code and the Regulations. Our opinion is backed by our full faith and credit and a multi-million dollar professional liability insurance policy. No claim has ever been filed against Amtec. Record Keeping Review and Recommendations. During the course of our engagement, a review of the City's record keeping process and investment policy is conducted. We survey whether the accounting is adequate and the process followed meets the requirements of the Code. We review the level of detail provided to ensure it is reasonable and consistent with generally accepted accounting practices for bond proceeds. Occasionally, we have discovered that issuers create a second tier of accounting strata to support the rebate function. In most cases, this is not required and the time and resources spent maintaining this system can be put to other uses. Should we detect any irregularities or duplication, we would provide recommendations for increased controls,more accurate record identification or simplification of the internal process. rRecommendations for changes in these, or any other policies that come to our attention, would be immediately documented for the City. Annual Executive Summary. Due to the size of this engagement,Amtec's Annual Report of all bond issues will be prepared for the City. The Report is an executive summary of each outstanding bond issue subject to the rebate requirements. It was developed to assist senior managers understand the most important issues concerning their arbitrage liability, Code compliance status and other key data, without having to read multiple rebate reports in their entirety. We have attached an Annual Report prepared for the City of Lubbock, Texas. This report, which will be similar to the Annual Report prepared for the City, is located in the Appendix Section for your review. Annually perform all arbitrage calculations through the term of the contract. Additionally, due to the methodology utilized by Amtec to obtain financial data from any trustee or the City, we can produce intra-year rebate computation updates as often as the City requests them. There is no additional charge to receive an intra-year rebate update. Perform all anniversary arbitrage calculations through the term of the contract. Amtec will provide the City with a formal rebate report as of each bond anniversary date and on Computation Dates as they occur. 7 1� Provide the City with formal rebate reports. Include appropriate documentation r required to support calculations. Amtec will provide as many sets of rebate reports as required by the City. Each report distributed will be an original. We can also provide an electronic file of rebate reports, should the City wish to maintain its rebate reports electronically,as well. Internal Revenue Service Reporting Requirements Prepare all filings required by the Internal Revenue Service necessary for the payments of arbitrage rebate or refunds. IRS Reporting. Should a rebate liability exist on a computation date, Amtec would prepare the required transmittal documents for IRS reporting. The completed documentation and letter of instructions would be provided in advance of the payment due date. Formal rebate reports, complete with Amtec's opinion are delivered annually and on bond � p p Y Computation Dates(five-year anniversary dates). Failure to a a rebate when due. If the City has failed to a a rebate when due Amtec will pay tY pay prepare all of the necessary documentation, request for a waiver of penalty and late interest ' amounts on behalf of the City. Provide assistance and consultation as necessary to retain records and documentation at least six years after the issue's final maturity. Electronic Off Site Back-Up. We will provide the City with electronic back-up of all data and reports generated by Amtec for a period that extends six years after the redemption date or last maturity date of an issue. This data is created daily and moved off-site to a secured storage facility. Should the City require additional support or assistance with records retention, documentation or retrieval of any items that are related to its rebate computations, they will be made available by Amtec,upon request. Development of an Arbitrage Database. We will develop an arbitrage database for all bond ' issues. The information in the database includes but is not limited to the following: Bond Yield Investment Yield Rebate Liability Closing Date Maturity Date Computation Date Temporary Period Yield Restrictions Refunding Data Prior Rebate Paid I Transferred Proceeds I Fees The database is updated regularly as computations are completed, new bonds are issued or , when bonds are retired. r r 8 r 134 Amtec's Scope of Services—Summary Verification that each issue is subject to the rebate requirements. • Calculation of the bond yield. • Calculate the gross proceeds through a reconciliation of the sources and uses of funds. • Calculation of the yield on all investments, subject to rebate, annually and upon the date that all bonds of an issue are retired. Determine the arbitrage rebate liability. Verification of whether a penalty in lieu of rebate has been elected. Testing for exceptions from rebate. Written explanation of the computation methodology and recommendations for rebate reserves. Each rebate report includes a written explanation of the methodology, assumptions and conclusions employed. Recommendations for rebate reserves or the elimination of negative arbitrage and recommendations for changes in record keeping and investment policy accompany each report. Delivery of updated calculations and formal rebate reports, rebate exception reports and penalty in lieu of rebate reports, each indicating the above stated information; the issuance r of the Amtec professional opinion stating that the computations are in accordance with the Code and Regulations. Delivery of appropriate documentation required to support all computations with each rebate report. • Unlimited consultation with City personnel, as necessary, regarding arbitrage related ' matters. Consultation on the results of our report with staff,bond counsel,auditors,trustees and the IRS,if requested. Monitoring of the City's ongoing compliance with all arbitrage requirements for its tax- exempt issues and the safeguarding of completed projects for a period of six years after the final redemption date of each issue. Assurance to the City that all current issues are in compliance with the Regulations. • Guarantee the completeness and accuracy of our work, computation methodology and positive compliance with the Tax Code and the Regulations. • Preparation of IRS Form 8038-T,accompanying documentation, payment instructions and report delivery, within 30 days of the final computation date and 30 days prior to the payment due date,should a rebate payment be required. Review of existing accounting and investment practices and recommendations for improvements,if required. Assistance in the planning stages of new bond issues to discuss possible rebate exceptions, the pro-forma testing of anticipated expenditures of proceeds for rebate exception purposes based on a variety of investment scenarios. r 9 13� Plan for Compliance Time Frame Task Procedure Time Frame These will be completed as soon as possible.The time line Review and re-computation 100% review of prior rebate depends on the size,detail and of prior rebate reports. computations and conversion to a accuracy of the prior report. single Amtec Report. Completion within 10 days of receipt of the requested documentation. Develop a table of Build database of information after These steps are completed within computation dates for each a review of bond documents, bond a 2-day period once we are issue upon review of all year elections, prior rebate reports engaged and all prior rebate prior rebate reports. and any rebate liability. reports have been received by Amtec. Computation of bond yield Gather documents. Develop These steps are completed within amortization schedule, identify for fixed and variable rate OID/OIP, guarantee payments and the first week after the bonds. call data. documents are received. Complete"Catch-up" Within three weeks of computations through This has the highest priority and appointment,these computations December 31,2008 for all computations will be completed as will be completed and rebate issues,if necessary. soon as statement activity arrives. reports will be delivered to the city. Amtec provides semi-annual computations during the first 24 months from the closing date if the bonds are a"Construction Issue." j Rebate Reports and spending test computations are processed from Formal Annual Reports will be Future rebate reports. listings of investment and produced shortly after each disbursement data that would be anniversary date and on five-year assembled regularly throughout the Bond Computation Dates and year. Bond Retirement Dates. Scheduled Rebate Reports are produced within 15 days of receiving the bond and investment activity statements. A summary of key computational Delivery of Annual mfoimation compiled for all rebate Executive Summary reports. Contains comments and Delivered at end of Fiscal Year. recommendations,when warranted. r 10 136 2.4 Amtec's Experience A. Description of Amtec Amtec is an independent tax-compliance specialty firm incorporated in 1990. We have no subsidiaries nor are we a subsidiary of a larger firm. Since Amtec's inception, it has been and remains one of the only original monoline tax-compliance firms in the United States. 100%of Amtec's resources are pledged to arbitrage rebate computations and refunding verification ' services. Our business plans are to continue to expand our client base and provide service excellence to each of our clients. The City has the pledge of our senior management that we will be here to service your account in the future,just as we continue to serve our other clients 1 who engaged Amtec 18 years ago. Amtec is one of the oldest arbitrage rebate consultation firms in the United States. Due to our focused expertise and technical awareness of tax-exempt debt structures, we are able to efficiently compute rebate on any size bond issue, regardless of its complexity and do so on a more cost-effective basis than our competition. The key to our success is unparalleled service ' and guaranteed fixed fee pricing. Our clients include state governments and agencies, counties, cities, school districts and specialty issuers such as higher education, healthcare, housing and student loans. They issue single and multi-purpose bonds and pooled financings using a variety of structures. We have substantial experience with fixed rate bonds, commercial paper issues and variable rate bonds. Depending on the use of the proceeds, our clients issue AMT and Non-AMT Bonds. Security structures utilized include General Obligation, Certificates of Participation, Revenue, Special Assessment,Limited Tax,Special Tax Obligation and Pooled Financings. Amtec's Unique Qualifications ' In all, Amtec provides arbitrage rebate consulting services for more than 2,800 bond issues throughout the United States. We have delivered more than 28,000 rebate reports since 1990 and we have forward commitments for rebate computations through the end of 2013. The IRS has never challenged our findings B. Philosophy Amtec has distinguished itself as one of the nation's leading rebate computation firms and computes rebate for many of the nation's largest, as well as smaller, bond issuers. Serving large and small bond issuers provides the City with the assurance that our services are professional,accurate and efficient. Our record and standing in the municipal bond community are exemplary. Amtec has operated for 18 consecutive years under our original name. We have attracted our diverse municipal client base by listening to the needs of our clients. We have responded with a level of service and associated fees that are necessary to deliver compliance with the Tax Code and the Regulations and,at the same time,fit into their budget. 1 11 13� The success of Amtec is based on our unique management style which distances us from our competition. No issue is too small or too complicated and every client receives a guaranteed fee before the work begins. We always strive to understand the needs of every client,large and small,and we know that"one size does not fit all"when it comes to our service. • We have never asked a client for a fee greater than quoted because the calculation ' took longer than was expected. • We do not bill by the hour, by the copy or fax, nor do we charge any expenses to , our client,regardless of what transpires during the rebate computation process. Our clients are generally surprised by the level of service we provide for the fee quoted. We , can also tell by the questions listed in various RFP documents that other firms charge a variety of excess fees once the rebate computation process begins. These unnecessary fees relate to commingled funds analysis, transferred proceeds and yield reduction payments. Amtec includes each of these services in its calculations,when necessary. There is never an extra fee. We have seen other firms charge a fee for filing an 8038-T(rebate or yield reduction payment) and for defending their own computations with the IRS. This is not the case at Amtec. Our clients ask how we can provide our services for a fraction of the fees they have been paying. There is no secret: we are very specialized and are not watching the clock as we work. ' While our competition attempts to sell a variety of bond-related audit, investment and legal services,we are focused on arbitrage computations only. We are not distracted by the quest for cross-selling services. Our focus on arbitrage rebate computations enables us to provide a competitively priced,efficient service to our clients. Amtec is qualified and prepared to make a seamless transition from the Ci 's current arbitrage r P tY e g rebate provider if appointed as your rebate consultant. We will perform the scope of work requested and other important services that have not been requested, but will be discussed in ' detail in this Response. All Amtec services will be performed within 30 days after each calculation date, as requested. Amtec generally delivers its calculations within 15 days of receiving the required bond and investment activity from its clients. , Benefits Derived By the City By engaging Amtec, the City will"lock in" its costs for arbitrage rebate computations for the duration of the engagement term. More importantly, the City will receive the full support and expertise of Amtec for these additional services that may have increased the costs of arbitrage ' calculations in the past. These services include,but are not limited to: • Unlimited consultation and support in the event of an IRS inquiry of a rebate computation. If the IRS places an issue under investigation or follows up to ensure calculations were completed, it could take hours of time by bond counsel, financial advisors and staff to respond to the questions raised by such a review. Amtec is the only consultant that provides this service to our clients for no additional fee. 12 138 Provide pre-issuance rebate forecasting from estimated bond proceeds spending schedules and basic investment information. From this data, we can prepare the potential investment earnings from an issue along with an estimate of the rebate amount,if any,or the qualification potential for a spending exception from rebate. Once this model has been prepared, it can be used to make additional or revised forecasts of this data as changes within a project occur. Changes can range from interest rate fluctuations to construction delays and other similar items. As your rebate consultant, Amtec will provide this service along with any necessary updates for no additional fee. 1 Important reasons for engaging Amtec: Our fees for service are less than most of the fee quotes the City will receive from potential consultants; • Our service record throughout the industry is exemplary;and • The City will save tax dollars. Our services are geared toward assisting the City: ' • Earn as much income allowed by the Regulations through the aggressive reporting of the rebate liability by our process of annual and semi-annual rebate calculations; and ' . Maintain compliance with the Code and the Regulations. From each Amtec report, the City will learn of its total rate of return from investments, as compared with the bond yield. If our reports determine that the City has not maximized its earnings from the investment of its bond proceeds, you will be provided with the exact amount of income and a target yield for future investments that can be attained to optimize the investment from bond proceeds. By utilizing this process, the City will be assured that it has maximized its income. The increase in additional income, accompanied by the reduced fees paid for rebate computations, will benefit the City and its taxpayers. C. Experience 1. Arbitrage Consulting Services Amtec has provided arbitrage rebate services and refunding verifications since inception in 1990. Over this time period we have delivered 28,000 rebate reports. We will deliver more than 2,800 rebate reports in 2008. In addition to computing rebate, Amtec has substantial experience when dealing with the IRS on behalf of issuers who have not properly computed rebate in a timely manner or for inaccurate submissions. We have obtained more than $3 million dollars of rebate refunds and or overpayments on behalf of municipalities. ' 13 131 1 2. Contracts For The Last Five Years Amtec has completed more than 10,000 rebate reports over the last five years and more than 5,600 reports between July 1, 2005 and July 1, 2008. Although the City has asked for this listing, we have omitted it because it is 94 pages long and contains 60 rebate reports per page that were delivered to Amtec clients. Alternatively, we have provided a short listing of clients who issue the most complex bond issues. This listing is followed by a brief description of some of these issues and why they are considered complex. 3. Service and Experience Details Complex bond issues utilized by states,agencies,counties and city governments are not foreign to Amtec. This is attributed to many years of performing rebate computations and refunding verification services to state level governments who usually devise the most complex debt structures. Amtec has completed rebate computations for complex issues, including revolving ' fund programs and commercial paper programs for the following high profile municipalities: State of Connecticut Comm.of Massachusetts State of New Jerse ' State of West Virginia State of Rhode Island New Jersey Economic Development Arizona WIFA Phoenix,AZ M land Water Quality Fin.Adm. County of Schenectady Capital City Econ.Dev.Auth CT Resources Recovery Authority MassHEFA MassDevelo ment MassPort State of Oklahoma Water Oklahoma State Capital Imp. State of Oklahoma DOT Orange County CA Dane Coun Connecticut Development Audiority San Diego County CA Tulsa,OK Regional Transportation Dist. CO Greenville Water SC Charleston County SC Clark County A RI Water Resources Placer County CA Washtenaw County , Corpus Christi,TX Port of Bellingham,WA Lubbock,TX Huntin on Beach,CA Ann Arbor,MI Providence Buildings Auth.(RI � F' �► �gE Sod) . a E tlltt New Jersey Building Authority Arbitrage Rebate Computations Yield Monitorin Amtec was selected through the RFP process in 2004. We have completed 46 rebate and yield monitoring computations for the Authority. Bond proceeds are used for a variety of capital and refunding purposes. We also provide yield monitoring computations for the 2003 Series A Issue as a result of its variable rate feature with a Swap Agreement. Amtec maintains an arbitrage management database for all computations, computation dates and schedules as part of its responsibility for the Authority. 14 14 F I suer jr PO L New Jersey Economic Development Authority Arbitrage Rebate Computations School FaSE! Construction Pro ram Amtec was selected through the RFP process in 2005. We have completed rebate computations for 17 issues that aggregate more than $10.6 billion in par value. The proceeds are used for a variety of capital projects for school construction and renovation. Amtec maintains an arbitrage management database for all computations, computation dates and schedules as part of its responsibility to the NJEDA. er "!:,i SO nt OWN State of New Jerse Arbitrage Rebate Computations Amtec was selected through the RFP process in 2007. We have completed 3 rebate computations for the State. We are working with staff to identify the most efficient means of retrieving the bond expenditure and investment data. Amtec also maintains an arbitrage management database for all computations, computation dates and schedules as part of its responsibility to the State. eat 7 7, 7- Oft yl, Issuer State of Connecticut Arbitrage Rebate Computations Amtec was selected through the RFP process by the State of Connecticut in November 2002. We have completed several computations for Connecticut G.O. Bonds, Certificates for specified government buildings, Special Tax Obligations for road and bridge infrastructure, Revenue Bonds for Bradley International Airport, Rate Reduction, Clean Water, Waste Water and the University of Connecticut. Amtec maintains an arbitrage management database for all computations,computation dates and schedules as part of its responsibility to the State. 77 77 g' 7-"-' jiMr. I -I- 0 - State of Connecticut Arbitrage Rebate Computations !k Development Autho ,__ t' IRS Resolution Amtec was retained by the Authority at the suggestion of Bond Counsel at the inception of an audit by the IRS. The IRS contacted the Authority and expressed concern over the methodology used by the Authority to arrive at the rebate liability. Upon our review, it became clear that the Authority did not utilize the methodology described in the Regulations. However, we were able to restate 15 years of arbitrage calculations, using the correct methodology, resulting in a refund of more than$200,000 in rebate overpayments. Amtec has restated each of the Authority's self-prepared rebate calculations and has submitted a request for the overpayment of prior rebate paid. 15 1� `,?, sst 'v`•`e," ,, a. ° - � r ��F ; �o ►� ei€n�nt Commonwealth of Massachusetts Arbitrage Rebate Com utations Amtec was selected through the RFP process by the Commonwealth of Massachusetts in , October 2003 for a single bond issue: The City of Chelsea, $95,750,000 Select Auction Variable Rate Bonds (SAVRS). We have completed our initial assignment and have been retained by the Commonwealth since 2003. The RFP was initiated because of escalating fees from the prior consultant, which were based on the complexity of the calculation, which is variable rate. Amtec was able to substantially lower the fee for this calculation. ------------ ZkNI Massachusetts Health and Educational Facilities Authori MassHEFA) Arbitrage Rebate Computations Amtec was retained by MassHEFA through the RFP process for three bond issues, the proceeds of which were used to fund its Capital Asset Program. The bond proceeds funded , three unallocated pools for healthcare capital and related equipment. Each of the Series contains a variable rate with liquidity features. Additionally, the Regulations require a shortened temporary period, which could result in yield restrictions and yield reduction ' payments,in addition to the rebate liability that may be generated by low yield bonds. Amtec computes rebate for more than 100 conduit bond issues for clients of MassHEFA that issue revenue bonds for healthcare and higher educational capital purposes. These bonds are issued with both fixed and variable rates and many have entered into swap agreements. ' u¢ �x�';. - f ( ! ,ty:, C 4 «,C `` �. µ{�.��r, pyy��p�y`s rJ:Wniak kA111A41v1`it E Massachusetts Port Authori MassPort Arbitrage Rebate Computations Amtec was retained by MassPort in 2001 to complete rebate computations for each of their bond issues. The Authority issues fixed rate bonds, variable rate bonds and commercial paper on a tax-exempt basis. In total, there is more than $5 billion in issuance under our consulting agreement. Prior to Amtec's appointment, MassPort performed rebate calculations in-house with the , assistance of bond counsel. Due to the growing expense of this method of calculation, MassPort conducted the RFP and selected Amtec. They have saved thousands of dollars by transferring this function from bond counsel to Amtec. Amtec maintains an arbitrage management database for all computations, computation dates and schedules as part of its responsibility for MassPort. 16 142 "M Massachusetts Development Arbitrage Rebate Computations Finance Agency ftMEAJ I I Like MassHEFA, MDFA is a conduit bond issuer for a variety of health, educational and industrial projects. Amtec computes rebate for more than 80 conduit issues of MDFA. MDFA issued its own bonds in 2000 and selected Amtec as rebate consultant for MDFA's Devens Electric Project Issue. 4 J ll"f"': 0 P0 9ma itrage Rebate C2Tp1!tatio7 State of West Vir Arb _ns Amtec was retained in 2007 by the State of West Virginia following the RFP process. The State issues fixed rate bonds and commercial paper on a tax-exempt basis. In total, there are 18 issues under our consulting agreement. is J i ssuer 't County of Orange,California 'ArbitraLe Rebate Computa- Amtec was retained by the County of Orange through the RFP process in 2003. The County has issued more than$6.5 billion through 82 issues. Amtec computes rebate for all of the County's Bonds. The County is structured similarly to many states and is divided into a variety of taxing districts. The County provides each taxing district with access to capital markets through the sale of tax-exempt bonds. Since the source of funds for each district can vary,the County commingles much of its revenue. It is the job of Amtec, when computing the rebate liability for each issue, to uncommingle the funds and ensure that only the correct amount of bond proceeds is included in each rebate calculation. As a result of falling interest rates between 2001 and 2005,Amtec was able to file for a refund for an overpayment of rebate. In 2004, the County received a refund of$659,000. Amtec maintains an arbitrage management database for all computations, computation dates and schedules as part of its responsibility for the County. D. Subcontractors Amtec does not use subcontractors for its engagements. E. References Name of Agency Contact Information Phone Service Dates Amtec Manager Number (from/through) Oklahoma Water Resources Board Mr.Joe Freeman—Chief (405)530.8800 2006—Current JSFREEMAN@owrb.ok.gov Ra and Ben!!a Oklahoma Capital Improvement Mr.Madison Blair—Administrator (405)522.0441 2006—Current Authority Madison_ Blair@dcs.state.ok-us I Samuel Lerner 17 1� 1 Name of Agency Contair:t ame/ Phone Service Dates Ainte " ina er Number (from/through) Oklahoma Department of Mr.J.Michael Patterson-Fin.Dir. (405)521.2011 2007- Current Transportation MPatterson@ODOT.org/ Raymond Bentley State of Connecticut Ms.Sheree Mailhot-Debt Mgt. (860)702.3035 2001-Current Sheree.Mailhot@ct.gov! William Pascucci State of New Jersey Mr.Guy Tassi-Asst.Treasurer (609)633.9082 2003-Current ' Guy.Tassi@treas.state.nj.us/ Samuel Lerner State of West Virginia Mr.Ross Taylor-Comptroller (304)558.6181 2007-Current RTaylor@wvadmin.gov/ William Pascucci Massachusetts Health and Mr.Jose Peralta- Pool Loan Mgr. (617)737.8377 1996-Current Educational Facilities Authority JPeralta@mhefa.org MassHEFA Raymond Bentley Massachusetts Development Ms.Jami Loh- Vice Pres. (617)330.2000 1996-Current Finance Agency JLoh@massdevelopment.com MDFA Raymond Bentley Massachusetts Port Authority Mr.Michael Ahearn-Fin.Mgr. (617)568.1049 2002-Current MassPort MAheam@nassport.com/ Raymond Bentley ' Orange County,CA Ms.Suzanne Luster- Acct.Mgr. (714)834.3362 2003-Current Suzanne.Luster@ocgov.com/ Michael Scarfo ' San Diego County,CA Ms.Christine Fay-Debt Fin.Mgr. (619)685.2577 2001-Current CMstine.Fay@sdcounty.ca.gov/ Michael Scarfo City of Phoenix,AZ Mr.Randy Piotrowski-Superv. (602)495.5466 2006-Current ' Randy.Piotrowski@phoenix.gov/ Michael Scarfo Huntington Beach,CA Mr.Arnie Ross-Acct. (714)536.5238 2006-Current ARoss@surfcity-hb.org/ Michael Scarfo Town of Hilton Head.Island,SC Mr.Steven Markiw-Deputy Dir. (843)341 A612 2007-Current StevenM@hiltonheadislandsc.gov/ Raymond Bentley Beaufort County School District Phyllis White,CPA,COO (843)322.2346 1995-Current Phyllis.White@Beaufort.kl2.sc.us/ Raymond Bentley Auburn,AL Penny L.Smith,CPA-Treasurer (334)501.7223 2007-Current PSmith@aubumalabama.org/ Raymond Bentley ' F. Related Information 1. No staff member was ever an employee or is a current employee of the City. ' tY. 2. Amtec has never had a contract terminated for default. 3. Amtec has never had a contract terminated for default. ' 18 ' 144 CITY OF KENT GUARANTEED MAXIMUM FEE SCHEDULE 2.5 Cost Proposal A Fee Preamble We are aware that the City may receive larger fee quotes for its rebate computations. Our clients ask how we can provide our services for a fraction of the fees that others charge. There is no secret:we are very specialized and extremely efficient. We assure you that we understand your bond issues and our business. This is evidenced by our multiple years of service to more than 2,800 engagements. Before these clients engaged Amtec as rebate computation consultant, many paid fees that were two to three times greater than those they pay Amtec ' today. Each of these clients is very pleased with Amtec's service. Executive Overview ' In order to provide comprehensive computation and consulting services for the City's issues, we have developed a guaranteed fee schedule. The fees are listed by issue and by year and represent 100%of the fees to be charged. Amtec's fees are comprehensive,include all services required to provide our unqualified opinion and are guaranteed not to increase over the engagement term. We would not be surprised if our pricing provides a 50% savings over current costs. The savings generated by our service is not unusual. The states of Connecticut and New Jersey, the counties of Orange and San Bernardino in California and the cities of Corpus Christi and Lubbock in Texas saved more than 50% on their cost for arbitrage services by switching to Amtec. Each of these clients is very pleased with our services. ' Each Amtec rebate computation is completed for a guaranteed fee. Fees are determined before the engagement begins and are based upon the size and the complexity of each issue. Based upon the listing of tax-exempt bond issues that require a calculation, our fee would range from $300 to$900 per bond year,per issue. A Guaranteed Maximum One-Time"Catch-Up"Fee for all issues has been included in the table on the following page because some of the issues listed may not be current. However, should the City have usable rebate reports that were completed in the past, Amtec will not assess a Catch-Up fee for the years included in these prior reports. The Catch-Up Fee would be ' prorated as follows: If the one-time Catch-Up Fee is $1,000 and covers a 10-year period, but the City had a five- year rebate report on hand, the One Time Catch-Up Fee would be reduced by 50% to $500 to cover the five years that must be computed. Rebate Computations Rebate computations and formal rebate reports will be provided annually for every issue having unspent bond proceeds during the bond year. Computations will be future valued to the ' Computation Date. Additionally, Computation Date reports will be provided on the fifth bond anniversary date. ' 19 Yield Reduction Payments Should bond proceeds remain unspent at the end of the Temporary Period, which is usually three years following the date of the closing, Yield Reduction Payments for the proceeds subject to yield restriction will be incorporated into Amtec rebate reports. IRS Audit or Other Representation Amtec will provide the City with the necessary support in the event of an IRS inquiry. Additionally, we will work with the City's staff and consultants regarding all arbitrage related matters. Amtec does not assess an additional hourly rate for this support. Unlimited support for the City is provided because we are your arbitrage rebate consultant. Amtec's Fee Schedule has also been developed to assist the City determine its costs for rebate ' computations for future bond issues that are not part of the fee table. Amtec will apply this schedule to any City financing over the term of the engagement. Fees would not increase over the life of the engagement. The following fee table can be applied to any future City bond issue: General Ulili ation * Fee Revenue Bonds Fee Up to$15 million $600 per year for four Up to$15 million $600 per year ears $15+to$25 million $700 per year for four $15+to$25 $700 per year ears : ` million $25+to$40 million $800 per year for four $25+to$40 $800 per year ears million Up to$55 million $900 per year for four Up to$55 million $900 per year ears ` Fees for General Obligation Bonds are Capped Following Four Years of Service. Revenue Bonds with funded Reserves pay the Revenue Bond Fee Annually. Fees for Issues over$55 million will increase proportionally. Potential Additional Services Required Amtec's Fee Yield Restriction Analyses $0 Commingled Funds Analyses $0 Transferred Proceeds Analyses $0 Variable Rate Issues $0 Amtec does not charge any additional fee for the following: • Follow-up consultation upon completion of the arbitrage calculation. • Amending calculations if new Regulations require a restatement of any previous computation. • Planned travel to the City. • IRS representation. , 20 14E GUARANTEED FEE SCHEDULE _ Fee For Size in One-Time 20ear Issue Delivered "Catch-Up" FW 200�. Millions 2011 Fee * �� . ; � �.. 2012 2013 $2.3 LID No.327, 1989 07/27/89 $ 500 $300 $ 0 1.7 LID 328 and 334, 1990 08/01/90 500 300 300 14.1 ULTGO Ref., 1993 06/08/93 500 0 0 2.8 ULGO Ref., 1993 06/08/93 0 0 0 21.2 LTGO, 1999 03/31/99 500 0 0 13.2 LID 340 and 349, 1999 08/05/99 500 300 1,200 20.1 LTGO and Ref.,2000 10/10/00 500 300 1,200 5.4 LID No. 351,2001 04/30/01 500 300 1,200 13.7 LTGO,2002 07/30/02 500 300 1,200 3.5 LTGO,2003 Series B 12/18/03 500 300 1,200 23.3 LTGO Ref.,2004 03/30/04 500 0 0 11.8 LID No. 353,2004 12/29/04 1,500 500 300 7.4 LTGO Ref.,2005 05/03/05 500 0 0 12.0 LTGO,2006 01/04/06 1,000 500 1,200 53.1 Special Event Center 02/29/08 0 9001 3 600 Guaranteed Fee $8,000 $4,0001 $11,400 * If rebate reports exist for any period,the Catch-Up fee would be reduced accordingly. ** Fees for years 2010 through 2013 The total fee in this column will be billed 25% in 2010, 2011, 2012 and 2013 with the !� exception of the 1990 and 2004 LID Issues,which will each be billed only$300 in 2010. �i Debt Service Fund Residual Certifications—Fee$300 The $300 fee listed in the Schedule will only be charged to a bond issue when the City or its Trustee requested an Arbitrage Certification. An Arbitrage Certification is issued following a review of the flow of funds through the debt service fund for the issue. Should it be determined that the debt service fund was used for the proper matching of periodic payments of principal and interest to the debt service requirements of the Issue, the debt service fund is deemed bona fide and excluded from the computation of rebate. i Amtec fees are guaranteed not to change during the term of this engagement. 21 JAM t Exhibit A to RFP for Arbitrage Consulting Services CERTIFICATIONS AND ASSURANCES I/we make the following certifications and assurances as a required element of the proposal to which it is attached, understanding that the truthfulness of the facts affirmed here and the continuing compliance with these requirements are conditions precedent to the award or continuation of the related contract(s): 1. I/we declare that all answers and statements made in the proposal are true and correct. 2. The prices and/or costs data have been determined independently, without consultation, communication, or agreement with others for the purpose of restricting competition. However, I/we may freely join with other persons or organizations for the purpose of presenting a single proposal. 3. The attached proposal is a firm offer for a period of 120 days following receipt, and it may be accepted by the City of Kent, Washington without further negotiation (except where obviously required by lack of certainty in key terms) at any time within the 120 day period. 4. In preparing this proposal, I/we have not been assisted by any current or former employee of the City of Kent whose duties relate (or did relate) to this proposal or prospective contract, and who was assisting in other than his or her official, public capacity. (Any exceptions to these assurances are described in full detail on a separate page and attached to this document.) 5. I/we understand that the City of Kent will not reimburse me/us for any costs incurred in the preparation of this proposal. All proposals become the property of the City of Kent, and I/we claim no proprietary right to the ideas, writings, items, or samples, unless so stated in this proposal. 6. Unless otherwise required by law, the prices and/or cost data which have been submitted have not been knowingly disclosed by the Proposer and will not knowingly be disclosed by him/her prior to opening, directly or indirectly, to any other Proposer or to any competitor. 7. I/we agree that submission of the attached proposal constitutes acceptance of the solicitation contents and the attached sample contract and general terms and conditions. If there are any exceptions to these terms, I/we have described those exceptions in detail on a page attached to this document. 8. No attempt has been made or will be made by the Proposer to induce any other person or firm to submit or not to submit a proposal for the purpose of restricting competition. 9. I/we grant the City of Kent the right to contact references and others, who may have pertinent information regarding the Proposer's prior experience and ability to perform the services contemplated in this procurement. Sig�ure of Proposer 1 JSl i Title Date 22 148 A P P E N D I X Amtec's Professional Opinion for the City of Kent A-2 Confirmation of Amtec's Regulatory and Mathematical Accuracy A-3 Sample Rebate Reports $9,799,656.80 Water Works Board of the City of Auburn, Alabama—This is an example of a Computation Date (Five-Year) Rebate Report for fixed yield Revenue Bond with a Construction Fund,funded Debt Service Reserve Fund and a rebate consolidation. City of Lubbock,Texas Annual Rebate Executive Summary Due to the size of this engagement,Amtec's Annual Report of all bond issues will be prepared for the County. The Report is an executive summary of each outstanding bond issue subject to the rebate requirements. It was developed to assist senior managers understand the most important issues concerning their arbitrage liability,Code compliance status and other key data, without having to read multiple rebate reports in their entirety. An example of the Annual Report is included for review. A-1 1� Amtec's Professional Opinion We have prepared certain computations relating to the above captioned bond issue (the "Bonds")at the request of the City of Kent. The scope of our engagement consisted of preparation of the computations shown in the attached schedules to determine the Rebatable Arbitrage as described in Section 103 of the Internal Revenue Code of 1954, Section 148(f) of the Internal Revenue Code of 1986, (the "Code"), as amended,and all applicable Regulations issued thereunder. The methodology used is consistent with current tax law and regulations and may be relied upon in determining the rebate liability. Certain computational methods used in the preparation of the schedules are described in the Summary of Computational Information and Definitions. Our engagement was limited to the computation of Rebatable Arbitrage based upon the ' information furnished to us. In accordance with the terms of our engagement,we did not audit the information provided to us, and we express no opinion as to the completeness, accuracy or suitability of such information for purposes of calculating the Rebatable Arbitrage. American Municipal Tax-Exempt Compliance Corporation By:William M.Pascucci,President A-2 150 Regulatory and Mathematical Accuracy Confirmation .f The regulatory and mathematical accuracy of our rebate computation methodology can be tested when the service provider prepares a computation that has been published in the rebate regulations. To demonstrate, Example 1, contained in the regulations, is compared to Example 2, prepared by Amtec on the page that follows. The results are identical with the exception of rounding. The following computation is from the Internal Revenue Code, Section 148 Rebate Regulations and has been extracted exactly as printed below. 1.148-3j - General arbitrage rebate rules and Examples. Example 1. Calculation and payment of rebate for a fixed yield issue.(I)Facts. On January 1, 1994, City A issues a fixed yield issue and invests all the sale proceeds of the issue ($49 million). There are no other gross proceeds. The issue has a yield of 7.000 percent per year compounded semiannually(computed on a 30 day month/360 day year basis). City A receives amounts from the investment and immediately expends them for governmental purpose of the issue as follows: Amount 2/1/94 $3,000,000 4/1/94 5,000,000 6/1/94 14,000,000 9/1/94 20,000,000 7/1/95 10,000,000 (ii)First computation date. (A)City A selects a bond year ending on January 1, and thus the first required computation date is January 1, 1999. The rebate amount as of this date is computed by determining the future value of the receipts and the payments for the investment. The computation interval is each 6-month (or shorter) period and the 30 day month/360 day year basis is used because these conversions were used to compute yield on the issue. The future value of these amounts,plus the computation credit,as of January 1, 1999,is: Receipts(Payments) FV(7.0000 percent) 1/1/94 ($49,000,000) ($69,119,339) 2/1/94 3,000,000 4,207,602 4/1/94 5,000,000 6,932,715 6/1/94 14,000,000 19,190,277 1/1/95 (1,000) (1,317) 9/1/94 20,000,000 26,947,162 7/1/95 10,000,000 12,722,793 1/1/96 (1,000) 1229 Rebate amount(1/01/1999) $878,664 (B) City A pays 90% of the rebate amount ($790,798) to the United States within 60 days of January 1, 1999. A-3 1� Am ' Example tec s xa ple Verification of the Regulatory and Mathematical Accuracy of Amtec Computations ARBITRAGE REBATE CALCULATION DETAIL REPORT FUTURE VALUE FUTURE VALUE RECEIPTS AT BOND YIELD AT BOND YIELD DATE DESCRIPTION (PAYMENTS) (OF 7.000000%) (OF 7.000000%) 01-01-94 STARTING BALANCE: 49,000,000.00 02-01-94 3,000,000.00 4,207,602.40 49,281,751.94 04-01-94 5,000,000.00 6,932,714.69 49,850,125.38 06-01-94 14,000,000.00 19,190,276.94 50,425,053.95 09-01-94 20,000,000.00 26,947,161.62 51,299,903.29 01-01-95 -1,000.00 -1,316.81 52,490,025.00 07-01-95 10,000,000.00 12,722,792.63 54,327,175.88 01-01-96 -1,000.00 -1,229.26 56,228,627.03 ------------------------------------------------------------------------------- 01-01-99 TOTAL: 51,998,000.00 69,998,002.21 69,119,339.27 ------------------------------------------------------------------------------- �. 01-01-99 REBATABLE ARBITRAGE (AT INVSTMT YIELD OF 8.956104%) 878,662.94 ------------------------------------------------------------------------------- A-4 l: REBATE REPORT $997999656.80 i The Water Works Board of the City of Auburn (Alabama) Water Revenue Bonds Series 2002 Dated: August 1, 2002 (Current Interest Bonds) Dated: August 27, 2002 (Capital Appreciation Bonds) Delivered: August 27, 2002 1 Prepared By p� Amtec �` October 26,2007 1� TABLE OF CONTENTS i Consultant's Report 3 Summary of Rebate Computations 4 Summary of Computational Information and Definitions 5 Methodology 7 Sources and Uses 8 Bond Yield Verification 9 Debt Service Requirements 10 Arbitrage Rebate Calculation Detail Report—Rebate Consolidation 11 Arbitrage Rebate Calculation Detail Report—Construction Fund 12 Arbitrage Rebate Calculation Detail Report—Debt Service Reserve Fund 13 2 154 ARBITRAGE REBATE REPORT $9,799,656.80 The Water Works Board of the City of Auburn (Alabama) Water Revenue Bonds Series 2002 Dated: August 1, 2002 (Current Interest Bonds) Dated: August 27, 2002 (Capital Appreciation Bonds) Delivered: August 27, 2002 Rebate Report to the Computation Date August 26, 2007 Reflecting Activity To August 26, 2007 We have prepared certain computations relating to the above captioned Bond Issue (the "Bonds")at the request of the City of Auburn,Alabama(the"City"). The scope of our engagement consisted of preparation of the computations shown in the attached schedules to detemune the Rebatable Arbitrage as described in Section 103 of the Internal Revenue Code of 1954, Section 148(f) of the Internal Revenue Code of 1986, (the "Code"),as amended,and all applicable Regulations issued thereunder. The methodology used is consistent with current tax law and regulations and may be relied upon in determining the rebate liability. Certain computational methods used in the preparation of the schedules are described in the Summary of Computational Information and Definitions. Our engagement was limited to the computation of Rebatable Arbitrage based upon the infortnation furnished to us. In accordance with the terms of our engagement,we did not audit the information provided to us, and we express no opinion as to the completeness, accuracy or suitability of such information for purposes of calculating the Rebatable Arbitrage. American Municipal Tax-Exempt Compliance Corporation By_ lee� William M.Pascucci,President 3 1� SUMMARY OF REBATE COMPUTATIONS Our computations,contained in the attached schedules,are summarized as follows: For the August 26,2007 Computation Date Reflecting Activity from August 27,2002 through August 26,2007 Bond Yield 4.785731% *Taxable Investment Yield 1.046876% Rebatable Arbitrage_ $ 320,912.19 * The yield is based upon the investment of unspent bond proceeds for the period commencing August 27, 2002, the date of the closing, to August 26,2007,the Computation Date. Based upon our computations,no rebate liability exists. 4 15E SUMMARY OF COMPUTATIONAL INFORMATION AND DEFINITIONS COMPUTATIONAL INFORMATION 1. For the purpose of computing Rebatable Arbitrage, investment activity is reflected from August 27, 2002, the date of the closing, to August 26, 2007, the Computation Date. All nonpurpose payments and receipts are future valued to the Computation Date of August 26, 2007. 2. Computations of yield are based on a 360-day year and semiannual compounding on the last day of each compounding interval. Compounding intervals end on a day in the calendar year corresponding to Bond maturity dates or six months prior. 3. For purposes of computing arbitrage, interest earnings and yield, the value of the investments,subject to rebate and outstanding at the end of the Computation Period,was as follows: Debt Service Reserve Fund Value Accrued Interest Total --Money Market $657,867.11 1931.85 $659,798.96 Totals $657,867.11 $1,931.85 $659,798.96 4. For investment cash flow, debt service and yield computation purposes, all payments and receipts are assumed to be paid or received respectively, as shown on the attached schedules. 5. Purchase prices on investments are assumed to be at fair market value, representing an arm's length transaction. 6. The Principal and Interest Account has been established and henceforth maintained to function as a bona fide debt service fund, as defined under the Code, and therefore, is not subject to yield restriction. 5 1� DEFINITIONS 7. Computation Date August 26,2007. 8. Computation Period The period beginning on August 27, 2002, the date of the closing, and ending on August 26, 2007,the Computation Date. 9. Bond Year Each one-year period(or shorter period from the date of issue)that ends at the close of business on the day in the calendar year that is selected by the Issuer. If no day is selected by the Issuer before the earlier of the final maturity date of the issue or the date that is five years after the date of issue,each bond year ends at the close of business on the anniversary date of the issuance. 10. Bond Yield The discount rate that, when used in computing the present value of all the unconditionally payable payments of principal and interest with respect to the Bonds,produces an amount equal to the present value of the issue price of the Bonds. Present value is computed as of the date of issue of the Bonds. 11. Taxable Investment Yield The discount rate that,when used in computing the present value of all receipts of principal and interest to be received on an investment during the Computation Period, produces an amount equal to the fair market value of the investment at the time it became a nonpurpose investment. 12. Issue Price The price determined on the basis of the initial offering price to the public at which price a substantial amount of the Bonds were sold. 13. Rebatable Arbitrage The Code defines the required rebate as the excess of the amount earned on all nonpurpose investments over the amount that would have been earned if such nonpurpose investments were invested at the Bond Yield, plus any income attributable to the excess. Accordingly, the Regulations require that this amount be computed as the excess of the future value of all the nonpurpose receipts over the future value of all the nonpurpose payments. The future value is computed as of the Computation Date using the Bond Yield. 6 15E 14. Funds and Accounts The Funds and Accounts activity used in the compilation of this Report was received from records provided by the City of Auburn,Alabama,JPMorgan Bank,the Trustee and The Bank of New York,Successor Trustee,as follows: Fund JPMor an BONY Construction 10202908.3 N/A Debt Service Reserve 10202908.2 431157 Principal and Interest Account 10202908.1 431156 R&R 10202908.4 431160 METHODOLOGY Bond Yield The methodology used to calculate the bond yield was to determine the discount rate that produces the present value of all payments of principal and interest through the maturity date of the Bonds. Investment Yield and Rebate Amount The methodology used to calculate the rebatable arbitrage, as of August 26, 2007, was to calculate the future value of the disbursements from all funds, subject to rebate, and the value of the remaining bond proceeds,at the yield on the Bonds,to August 26,2007. This figure was then compared to the future value of the deposit of bond proceeds into the various investment accounts at the same yield. The difference between the future values of the two cash flows,on August 26,2007,is the rebatable arbitrage. 7 1� $9,799,656.80 The Water Works Board of the City of Auburn(Alabama) Water Revenue Bonds,Series 2002 Delivered:August 27,2002 Sources of Funds Par Amount $9 799 656.80 Original Issue Discount -54,450.50 Underwriter's Discount -91814.53 Accrued Interest 22 085.38 Total $9,675,477.15 Uses of Funds Construction Fund $2 471452.16 Debt Service Reserve Fund 598,500.00 Payoff of 1993 Bonds 6,583,439.61 Accrued Interest 22 085.38 Total $9,675,477.15 8 16G $9,799,656.80 The Water Works Board of the City of Auburn (Alabama) Water Revenue Bonds, Series 2002 Bond Yield Verification Dated Date 08/01/2002 Delivery Date 08/27/2002 Last Maturity 09/01/2032 Arbitrage Yield 4,785731% True Interest Cost (TIC) 4.785731% All-In TIC 4.785731% Average Life (years) 14.759 Duration of Issue (years) 12.980 Par Amount 9,799,656.80 Bond Proceeds 9,767,291.68 Total Interest 4,008,120.63 Net Interest 4,062,571.13 Total Debt Service 19,943,120.63 Maximum Annual Debt Service 1,330,000.00 Average Annual Debt Service 663,788.66 Underwriter's Fees (per $1000) Average Takedown Other Fee Total Underwriter's Discount Bid Price 99.444363 Par Average Average Bond Component Value Price Coupon Life Serial Bond 7,955,000.00 99.316 4.261% 11,824 CAB Bond 1,844,656.80 100.000 27.415 9,799,656.80 14.759 All-In Arbitrage TIC TIC Yield Par Value 9,799,656 80 9,799,656.80 9,799,656.80 + Accrued Interest 22,085.38 22,085.38 22,085.38 + Premium (Discount) -54,450.50 -54,450.50 -54,450.50 - Underwriter's Discount - Cost of Issuance Expense - Other Amounts Target Value 9,767,291.68 9,767,291.68 9,767,291.68 Target Date 06/27/2002 08/27/2002 08/27/2002 Yield 4.785731% 4.785731% 4.785731% 9 1� $9,799,656.80 The Water Works Board of the City of Auburn (Alabama) Water Revenue Bonds, Series 2002 Debt Service Requirements Dated Date 08/01/2002 Delivery Date 08/27/2002 Period Ending Principal Coupon Interest Debt Service 03/01/2003 178,381.88 178,381.88 09/01/2003 270,000.00 1.50000000% 152,898.75 422,898.75 03/01/2004 150,873.75 150,873.75 09/01/2004 305,000.00 1.70000000% 150,873.75 455,873.75 03/01/2005 148,281.25 148,281.25 09/01/2005 300,000.00 2.30000000% 148,281.25 448,281.25 03/01/2006 144,831.25 144,831.25 09/01/2006 305,000 00 2.65000000% 144,831.25 449,831.25 03/01/2007 140,790.00 140,790 00 09/01/2007 315,000 00 2.80000000% 140,790.00 455,790.00 03/01/2008 136,380.00 136,380.00 09/01/2008 330,000.00 3.25000000% 136,380.00 466,380.00 03/01/2009 131,017.50 131,017.50 09/01/2009 335,000.00 3.50000000% 131,017.50 466,017.50 03/01/2010 125,155.00 125,155.00 09/01/2010 345,000.00 3.70000000% 125,155.00 470,155.00 03/01/2011 118,772 50 118,772.50 09/01/2011 365,000.00 3.80000000% 118,772.50 483,772.50 03/01/2012 111,837.50 111,837.50 09/01/2012 375,000.00 3.90000000% 111,837.50 486,837.50 03/01/2013 104,525.00 104,525.00 09/01/2013 390,000.00 4.00000000% 104,525.00 494,525.00 03/01/2014 96,725.00 96,725.00 09/01/2014 400,000.00 4.05000000% 96,725,00 496,725.00 03/01/2015 88,625.00 88,625.00 09/01/2015 415,000.00 4.20000000% 88,625.00 503,625.00 03/01/2016 79,910.00 79,910.00 09/01/2016 440,000.00 4.25000000% 79,910 00 519,910.00 03/01/2017 70,560.00 70,560.00 09/01/2017 455,000.00 4.35000000% 70,560.00 525,560.00 03/01/2018 60,663.75 60,663.75 09/01/2018 475,000.00 4.45000000% 60,663.75 535,663.75 03/01/2019 50,095.00 50,095.00 09/01/2019 495,000.00 4.55000000% 50,095.00 545,095.00 03/01/2020 38,833.75 38,833.75 09/01/2020 520,000 00 4.65000000% 38,833.75 558,833.75 03/01/2021 26,743.75 26,743.75 09/01/2021 545,000.00 4.75000000% 26,743.75 571,743.75 03/01/2022 13,800.00 13,800.00 09/01/2022 575,000.00 4.80000000% 13,800.00 586,800.00 09/01/2027 353,381.00 5.37002233% 976,619 00 1,330,000.00 09/01/2028 333,444.30 5.39007392% 996,555.70 1,330,000.00 09/01/2029 315,343.00 5,40006453% 1,014,657.00 1,330,000.00 09/01/2030 297,348.10 5.42013151% 1,032,651.90 1,330,000.00 09/01/2031 280,284.20 5.44002774% 1,049,715.80 1,330,000.00 09/01/2032 264,856.20 5.45010271% 1,065,143.80 1,330,000.00 9,799,656 80 10,143,463,83 19,943,120.63 10 162 M 79%65C 80 The Water Works Board of the City of Auburn (Alabama) Water Revenue Bonds, Series 2002 Rebate Consolidation ARBITRAGE REBATE CALCULATION DETAIL REPORT FUTURE VALUE FUTURE VALUE RECEIPTS AT BOND YIELD AT BOND YIELD DATE DESCRIPTION (PAYMENTS) (OF 4.785731%) (OF 4.785731%) 08-27-02 STARTING BALANCE: 3,069, 952.16 11-27-02 77,343.64 96,812.11 3,106,464.94 01-30-03 47,756.59 59,284.89 3,132,281.97 08-25-03 20f632.74 24,932.83 3,217,784.05 10-15-03 41,098.29 49,338.47 3,238,989.86 01-30-04 96,344.82 114,077.41 3,283,978.04 02-02-04 419,281.09 496,320.77 3,284,841.00 03-26-04 275,040.85 323,276.00 3,308,226.69 04-28-04 162,815.50 190,566.38 3,322,163.37 05-21-04 238,444.00 278,243.29 3,332,216.61 06-22-04 232,252.20 269,916.52 3,345,814.77 08-24-04 398,954.08 459,891.31 3,373,177.81 09-21-04 3,280.00 3,767.61 3,385,163.81 10-20-04 325,345.36 372,290.45 3,398,085.10 12-22-04 148,761.45 168,845.83 3,425,875.62 12-31-04 114.89 130.26 3,429,478.01 08-26-07 DSRF MMkt Bal 657,867.11 657,867.11 3,888,405.28 08-26-07 DSRF-MMkt-Acc-------------1,931_85---------1,931_85 3,888,405.28 -------------- ----------------- 08-26-07 TOTAL: 3,147,264.46 3,567,493.09 3,888,405.28 ------------------------------------------------------------------------------- 08-26-07 REBATABLE ARBITRAGE (AT INVSTMT YIELD OF 1.046876%) -320,912.19 ------------------------------------------------------------------------------- I1 1� $9,799,656.80 The Water Works Board of the City of Auburn (Alabama) Water Revenue Bonds, Series 2002 Construction Fund ARBITRAGE REBATE CALCULATION DETAIL REPORT FUTURE VALUE FUTURE VALUE RECEIPTS AT BOND YIELD AT BOND YIELD DATE DESCRIPTION (PAYMENTS) (OF 4.785731%) (OF 4.785731%) 08-27-02 STARTING BALANCE: 2,471,452.16 11-27-02 77,343.64 96,812.11 2,500,846.62 01-30-03 47,756.59 59,284.89 2,521,630.51 08-25-03 20,632.74 24,932.83 2,590,463.60 10-15-03 41,098.29 49,338.47 2,607,535.25 01-30-04 96,344.82 114,077.41 2,643,752.80 02-02-04 419,281.09 496,320.77 2,644,447.52 03-26-04 275,040.85 323,276.00 2,663,274.08 04-28-04 162,815.50 190,566.38 2,674,493.74 05-21-04 238,444.00 278,243.29 2,682,587.06 06-22-04 232,252.20 269,916.52 2,693,534.20 08-24-04 398,954.08 459,891.31 2,715,562.70 09-21-04 3,280.00 3,767.61 2,725,211.98 10-20-04 325,345.36 372,290.45 2,735,614.21 12-22-04 148,761.45 168,845.83 2,757,986.85 12-31-04 114.89 130.26 2,760,886.94 ------------------------------------------------------------------------------- 08-26-07 TOTAL: 2,487,465.50 2,907,694.13 3,130,344.43 ------------------------------------------------------------------------------- 08-26-07 REBATABLE ARBITRAGE (AT INVSTMT YIELD OF 0.380096%)------222,650_30 --------------------------------------------------------------- 12 164 $9,799,656.80 The Water Works Board of the City of Auburn (Alabama) Water Revenue Bonds, Series 2002 Debt Service Reserve Fund ARBITRAGE REBATE CALCULATION DETAIL REPORT FUTURE VALUE FUTURE VALUE RECEIPTS AT BOND YIELD AT BOND YIELD DATE DESCRIPTION (PAYMENTS) (OF 4.785731%) (OF 4.785731°%) 08-27-02 STARTING BALANCE: 598,500.00 08-26-07 DSRF MMkt Bal 657,867.11 657,867.11 758,060.86 08-26-07 DSRF MMkt Acc 1,931.85 1,931.85 758,060.86 ------------------------------------------------------------------------------- 08-26-07-----TOTAL: ----------------659,798�96-------659,798�96-------758,060.86 08-26-07 REBATABLE ARBITRAGE (AT INVSTMT YIELD OF 1.960807%) -98,261.90 ------------------------------------------------------------------------------- 13 1� Annual Report — 2007 Arbitrage Rebate Executive Summary Prepared For The City of Lubbock Submitted By AMTEC American Municipal Tax-Exempt Compliance Corp. October 19,2007 - s 166 TAX-EXEMPT COMPLIANCE October 19,2007 Mr.Andy Burcham Director of Fiscal Policy&Strategic Planning City of Lubbock 1625 13'' Street Lubbock,TX 79457 Re: Arbitrage Rebate Computations for the City of Lubbock,Texas Bond Issues Dear Mr. Burcham: Amtec was appointed to complete the rebate computations for the City of Lubbock,Texas (the "City")during October 2007. Since that time,we have worked with City personnel to bring all rebate computations current through September 30,2007. In addition to providing computations since October 1, 2006, we incorporated the results from the previous rebate reports, which reflected activity prior to October 1, 2006. Therefore, the data included in our Rebate Reports encompasses the bond and investment activity from the date of each closing through September 30,2007. We are pleased to enclose our Rebate Report for each of the City's Bond Issues. Reporting to the IRS or any other regulatory authority is not required at this time. A summary of our computations is below. Bond Issues with a Liability Par Amount Issue Liability Computation Date $ 7,265,000 GO Ref Bonds,Series 2005 $ 86,876.78 September 1,2010 46,525,000 Tax&WW Sys Surp Rev CO, Series 2005 441,857.04 September 29,2010 76,950,000 Tax&WW Sys Surp Rev CO's, Series 2,740,000 2006 614,096.41 June 6,2011 General Obligation Bonds, Series 2006 25,255,000 Tax&WW Sys Surp Rev CO, Series 2007 98,237.25 * January 19,2012 * This Issue currently qualifies for the Eighteen-Month Spending Exception from Rebate. 998 Farmington Ave.,West Hartford, CT 06107 (860)523-5112 Fax(860)236-7135 www.atnteccorp.com Final Rebate Computations We have completed final Rebate Reports for the following Bond Issues(all proceeds spent): Par Amount Issue $10,260,000 Tax&Waterworks(limited pledge)Revenue CO,Series 1998 1,330,000 Tax&Airport Surplus Revenue CO, Series 1998 7,000,000 GO Bonds,Series 2000 9,100,000 GO Bonds, Series 2001 9,400,000 General Obligation Bonds, Series 2002 13,270,000 Comb Tax&Electric Light and Power Sys Rev Ref Bonds, Series 2003 8,900,000 Comb Tax&Electric Light and Power Sys Rev CO, Series 2003 Computation Dates Prior to September 30,2008 Par Amount Issue Date $25,255,000 Tax&WW Sys Surp Rev CO,Series 2007 ** January 19,2008 9,170,000 Electric Light&Power Sys Rev Bonds, Series 1998 February 12,2008 10,260,000 Tax&WW Sys(Limited Pledge)Rev CO,Series 1998 February 12,2008 1,330,000 Tax and Airport Surp Rev CO, Series 1998 February 12,2008 13,560,000 Electric Light&Power Rev Ref Bonds, Series 1995 April 15,2008 69,820,000 GO Bonds and Certificates of Obligation, Series 2003 August 28,2008 ** Interim calculation to test for Eighteen-Month Spending Exception from Rebate. Summary We have prepared our Summary of Rebatable Arbitrage for the City. This table summarizes the results for all Bond Issues through September 30,2007. We would like to acknowledge your assistance and the assistance of Mr. Brandon Inman in the preparation of these Reports. The detail and organization of the City's records are in accordance with the Code and the Regulations and facilitated the rebate computation process immensely. Thank you very much for this engagement and should the City have any questions, please do not hesitate to contact us. Very truly yours, William M.Pascucci Raymond H. Bentley President Vice President City of Lubbock,Texas 168 Summary of Rebatable Arbitrage September 30,2007 Report Rebatable Rebatable Delivery Bond Arbitrage Arbitrage Date Size Issue Description Yield 9/3012006 9/30/2007 05/28/87 5,960,000 General Obligation Bonds,Series 1987 (1) (1) 05/28/87 7.000,000 Electric Light&Power Revenue Bonds,Series 1987 7 667331% (2) (2) 06/02/88 750,000 Golf Course Certificates of Obligation,Series 1988 (•) 7 270492% (2) (2) 6,560,000 General Obligation Bonds,Series 1988 MUM 17,000,000 Electric Light&Power Revenue Bonds,Series 1988 7 523635% (2) (2) 09/27/88 2,774,682 Subordinate Lien Revenue Refunding Bonds,Series 1988 7 337620% (1) (1) 09/27/88 5,000,000 Revenue Certificates of Obligation,Series 1988 7 3376200 (1) (1) 08/30/89 3,800,000 Certificates of Obligation,Series 1989 (') 6 814692% (2) (2) 7.445,000 General Obligation Bonds,Series 1989 05/23/91 1.145,000 Comb Tax and Solid Waste Disposal CO,Series 1991 (•) 6 585301% (2) (2) 16,120,000 Subordinate Lien Revenue CO,Series 1991 2,000,000 General Obligation Bonds,Series 1991 05/23/91 7,500,000 Electric Light&Power Revenue Bonds,Series 1991 6 595991% (2) (2) 05/23/91 4,030,000 Comb Tax and Exhibit Hall/Auditonum CO,Senes 1991 6 609777% (2) (2) 05/23/91 1,085,000 PPF Contractual Obligations,Series 1991 (3) (3) 08/15/91 9,424,965 Electric Light&Power Refunding Bonds,Series 1991 A&B 6 359950% (2) (2) 11/01/91 1,655,000 Tax&Sewer Certificates of Obligation,Series 1991 (4) (4) 05/06/92 24.035,000 General Obligation Refunding Bonds,Series 1992 (5) (5) 06/08/92 34,520,000 Comb Tax&SS Subordinate Lien Rev CO,Srs 1992(Pro/B,SRF) (6) (6) 09/09/92 7,565,000 Tax&Waterworks System Revenue CO,Series 1992 5 260856% (2) (2) 06/10/93 14,425,000 Comb Tax and SS Subordinate Lien Rev CO,Series 1993 6 246430% (7) (7) 11118/93 2,550,000 Airport and General Obligation Bonds,Series 1993 4 905005% (8) (8) 11/18/93 3,625,000 Tax and Airport Surplus Revenue CO,Series 1993 4 905005% (8) (8) 11/18/93 19,215,000 General Obligation Bonds,Series 1993 (') 4699865% (1) (1) 1,470,000 Comb Tax&WW Sys (Limited Pledge)Rev CO,Srs 1993 01/20/94 9,865,000 General Obligation Refunding Bonds,Series 1993 4 618640% (2) (2) 06/15/95 900,000 Airport Certificates of Obligation,Series 1995 4 652812% (2) (2) 06/15/95 4,690,000 General Obligation Bonds,Series 1995 (`) 5 290685% (1) (1) 2,000,000 Tax&Hotel Occupancy Tax Surplus Rev CO,Series 1995 07/27/95 13,560,000 Electric Light&Power Rev Refunding Bonds,Series 1995 (`•) 5 153568% (120,929 24) (130,833 38) 01/11/96 6,505,000 General Obligation Bonds,Series 1995A (') 4 987647% (2) (2) 10,000.000 Tax&WW System(Limited Pledge)Revenue CO,Series 1995 16,505,000 02/13/97 17,530,000 General Obligation Refunding Bonds,Series 1997 4 913916% (8) (8) 02/12/98 9,170,000 Electric Light&Power System Revenue Bonds,Series 1998 (") 4 695336% (39,028 29) (39,955 82) 02/12/98 10,260,000 Tax&WW System(Limited Pledge)Revenue CO,Series 1998 (") 4 658081% (151,120 22) (161,639 60) (7) 02/12/98 1,330,000 Tax and Airport Surplus Revenue CO,Series 1998 (") 4 434344% (62,206 87) (66,561 26) (7) 03/04/99 20,835,000 General Obligation Refunding Bonds,Series 1999 (`) 4462841% (172,48214) (7) (7) 15.355,000 Tax&WW System(Limited Pledge)Revenue CO,Series 1999 36,190,000 03/04/99 14,975,000 Electric Light&Power Sys Rev Rfdg And Impry Bds,Srs 1999 (") 4 468030% (19,971 78) (16,491.97) 05/12/99 6,100,000 Tax&Sewer System Surplus Revenue CO,Series 1999 4.652509"/6 (4) (4) 05/12/99 12,300,000 Tax&WW System Surplus Rev Refunding Bonds,Series 1999 4 66250990 (5) (5) 10/20/99 24,800,000 Tax&Waterworks System Surplus Revenue CO,Series 1999 5 486626% (414,051 07) (7) (7) 1�City of Lubbock,Texas Summary of Rebatable Arbitrage September 30,2007 Report Rebatable Rebatable Delivery Bond Arbitrage Arbitrage Date Size Issue Description Yield 9/30/2006 9/30/2007 04/26/00 7,000,000 General Obligation Bonds,Series 2000 5 462557% (472,270 49) (573.948 01) (7) 03/15/01 9,100,000 General Obligation Bonds,Series 2001 4 794234% (804,419 97) (995,597 52) (7) 03/15/01 2,770,000 Tax&Solid Waste Surplus Revenue CO,Series 2001 4 794234% (366,116 51) (438,002 46) 07/19/01 35,000,000 Tax&Municipal Drain Util Sys Surplus Rev CO,Srs 2001 5 219862% (7) (7) 08/16/01 9,200,000 Electric Light&Power System Revenue Bonds,Series 2001 4 916425% (355,141 86) (9) (450.201 19) 04/04/02 9,400,000 General Obligation Bonds,Series 2002 4 653856% (571,133 50) (9) (719,299 32) (7) 04/04/02 1,545.000 Tax&Sewer System Surplus Revenue CO,Series 2002 4 653856% (7) (7) 04/04/02 6,450,000 Tax&WW System Surplus Revenue CO,Series 2002 4 653856% (519,297 89) (7) (7) 08/15/02 10,810,000 General Obligation Refunding Bonds,Series 2002 (•) 3 752446% (7) (7) 2,605,000 Tax&Sewer System Surplus Revenue CO,Series 2002A 09/30/02 8,500,000 Electric Light&Power System Revenue Bonds,Series 2002 4 746748% (2) (2) 08/28/03 11,855,000 General Obligation Bonds,Series 2003 3,795,000 Tax&Tax Increment Revenue CO,Series 2003 40,135,000 Tax&Municipal Drain Util Sys Surplus Revenue CO,Srs 2003 3,590,000 Tax&Solid Waste System Surplus Revenue CO,Series 2003 9,765,000 Tax&WW System Surplus Revenue CO,Series 2003 680,000 Tax&Sewer System Surplus Revenue CO,Series 200, 69,820,000 Rebate Liability (*) 4 690495% (3,446,933 82) (3,783,439 71) Yield Restriction Lrabilrq 15,696 03 127,441 10 Net Liability 15,696 03 (3,655,998 61) 09/30/03 13,270,000 Tax&Electric Light&Power Sys Surplus Rev CO,Series 2003 4 565969% (404,268 44) (436,669 82) (7) 09/30/03 8,900,000 Tax&Electric Light&Power Sys Surplus Rev Rfdg Bds,Srs 2003 4 565969% (37,558 03) (44,419 22) (7) 11/02/04 2,025,000 General Obligation Bonds,Series 2004 3 537691% (3,652 13) (884 69) 11/02/04 3,100,000 Tax&WW System Surplus Revenue CO,Series 2004 3 537691% (17,998 50) (16,837 04) 11/18/04 22,620,000 General Obligation Refunding Bonds,Series 2004 3 537691% (201,216 16) (268,228 04) 03/30/05 23,055,000 Comb Tax&Elec Light&Power Sys Surplus Rev CO,Srs 2005 3 721978% (7,222 44) (9,376 28) 07/28/05 49,615,000 General Obligation Refunding Bonds,Series 2005 3 732928% (1,371 55) (763 03) 08/15/05 43,080,000 Tax&WW System Surplus Revenue Refunding Bonds,Series 2005 3 740982% N/A (5,420 74) (7) 09/01/05 7,265.000 General Obligation Bonds,Series 2005 4 228446% 25,341.26 86,876.78 09/29/05 46,525,000 Tax&WW System Surplus Revenue CO,Series 2005 4 043291% 197,572.56 441,857.04 06/06/06 76,950,000 Tax&WW System Surplus Revenue CO,Series 2006 (*j 4 418797% N/A 614,096.41 06/06/06 2,740,000 General Obligation Bonds,Series 200E 79,690,000 06/20/06 18,830,000 General Obligation Refunding Bonds,Series 2006 4 807982% N/A (166 03) 01/19/07 25,255,000 Tax&WW System Surplus Revenue CO,Series 2007 4 291508% N/A 98,237.25 (10) 02/07/07 54,020,000 General Obligation Refunding Bonds,Series 2006 4 344984% N/A (254 21) 09/20/07 61,975,000 Tax&WW System Surplus Revenue CO,Serles 2007A N/A N/A N/A Total Cumulative Liabilityl$ 238,609.85 $ 1,241,067.48 N/A Non applicable or immaterial for current year (1)Paid 100%of rebate liability Final calculations performed (2)All bonds redeemed Final calculations performed (3)Taxable issue,not subject to rebate (4)Reimbursement issue,spent immediately (5)Refunding issue with no transferred proceeds or reserve fund (6)Sold to TWDB Variable Rate issue City elected to pay penalty in lieu of rebate (7)Funds spent,negative arbitrage liability Final calculations performed (8)Paid 100%of Yield Restriction liability at five year anniversary date (9)Represents liability at five-year anniversary date (10)This Issue currently qualifies for the Eighteen-Month Spending Exception from Rebate (*}Represents combined issue(s)for rebate purposes (**)Includes rebate payment 1170 1EXHIBIT B 1 1 1 r t i 171 I V I ....� TAX-EXEMPT COMPLIANCE January 7 2009 Robert A. Goehring,CPA,CFE Audit Manager City of Kent Finance Department 400 West Gowe Street,Suite 122 Kent,WA 98032 Dear Mr.Goehring: Thank you for the follow-up questions. We have answered each one using the RFP format. Your questions are very technical in nature and we have tried our best to provide you with a succinct answer,without quoting the Tax Code and the ambiguities that often arise. 1. IRS Representation: Does your firm charge for services provided related to reports issued by your firm? Briefly describe the scope of such services and, if applicable,the related rates. Amtec does not charge its clients for representation in front of the IRS. It does not matter if the subject of the IRS inquiry is an Amtec produced report or a report produced by another consultant so long as we are your consultant at the time of the inquiry. We will respond and provide support to the City for any and all IRS inquiries. Should Amtec be replaced by another firm in the future, we will always stand behind our work and provide representation at no cost to the City regarding any report issued by Amtec whether or not we are your current rebate consultant. 2. Prior Arbitrage Reports: Describe your usage of these reports and supporting information in relation to reports issued for periods covered under the RFP. Under what circumstances would a fee apply and what are the rates for such services? We would like to reprocess these reports using Amtec software and methodology. There are two reasons for this non-fee service: a. Restating the prior activity ensures that rebate computations prepared up to the date that we become your consultant are correct, in accordance with the Regulations and would withstand the scrutiny of an IRS review. 124 LaSalle Road,West Hartford,CT 06107 (860) 523-5112 Fax (860) 236 7135 www.amteccorp.com 1� b. Additionally, the restatement of the prior computations, using Amtec software and methodology, provides the City with a single rebate report that encompasses the entire period that dates back to the closing date for each issue. By providing this service, the City will only need the most recent Amtec rebate report and it will contain all of the historic rebate computations dating back to the closing date,including the rebate calculations that were prepared by others. Amtec does not charge a fee for restating prior rebate computations. However, occasionally, we have encountered that the prior rebate computations do not contain the requisite records to complete a restatement. If the City has used a nationally recognized rebate computation firm, the chances of a 100%successful restatement are excellent. The City has asked if there would ever be a fee. We have had two recent instances where the prior consultant did not provide the municipality with any reasonable records or schedules for the prior rebate computation history. In each incidence,we were able to demonstrate this to our client and we agreed upon a discounted catch-up fee to include the period that was covered by the prior consultant,but unusable for the purposes of determining the rebate amount. In both cases, the prior consultant was a small accounting firm that believed they were computing the correct rebate, but in both instances, the methodology was flawed and the resultant rebate liability was computed incorrectly. The chances of this happening to the City are remote,but if it were to materialize,we will work out a fair solution. Amtec's annual catch-up fee are deeply discounted and would never be greater than the prospective annual fees for any issue. 3. Maximum Fee Proposal: Please provide if this information is not clearly provided in the proposal. For example, in certain instances a fee schedule is provided; however, it is not linked to a specific City bond issue (see Exhibit D to the RFP). This information is very important in developing a contract for these services. We apologize for any ambiguity. The fee table on page 21 of our response includes a Guaranteed Maximum Fee ("GMF") for each issue identified in Exhibit D. The GMF for all issues in Exhibit D is$23,400 for the period ending on December 31,2013. Since this is a GMF, fee reductions are possible because we are unsure how many catch-up years are necessary for the issues or if any debt service fund residual calculations will be required. Therefore, we have provided a GMF as though these computations are necessary. Should it turn out that certain computations are not necessary, no fee would be charged to the City. 173 The catch-upears that have been included in the fee table are the i y maximum that will be charged, presuming the computations referred to in No. 2 above are useable. If a catch-up fee exists in the fee table on page 21 and it is not required because the computations are usuable, the fee will be reduced accordingly. The prior calculation would be restated for no fee, as identified in No.2 above and the catch-up fee would be removed from the fee table. The only disclaimer to this has been discussed in number 2 above. This relates to the validity I of the computations provided by another consultant. If they are not in accordance with the Regulations and could not pass the scrutiny of an IRS review, we would suggest a catch up fee for the years that precede the last rebate report. This fee would be in accordance with our fee structure for catch up calculations. 4. Allocation of Commingled Funds: Describe in detail the process used by your firm and identify the specific information that you would require from the City. If already addressed in the RFP,then simply reference to the appropriate section. Amtec provides "uncommingling" services to many municipalities that commingle funds in their Project Account, Debt Service Reserve and Debt Service Funds. Commingling of funds is a common practice and Amtec has developed specialized software and procedures that uncommingle bond proceeds, grants and other sums for the purposes of computing arbitrage rebate. However, the most sophisticated system will not be very helpful if the system operator does not understand the concept of commingled funds. At Amtec,we have 14 trained professionals that are capable of determining the allocations for any commingled fund and the expertise to audit its accuracy once the process has been completed. It is extremely important that each time the commingled fund is increased or decreased through the issuance of bonds, receipt of non-bond proceeds, the payment of principal and interest or an expenditure from a Project Account occurs, that a reallocation of the affected fund must also occur. When doing so, a ratable portion of the commingled fund is proportionally shared among the outstanding sources of the proceeds, whether they be sourced from bond proceeds, grants or general funds. In the case of a commingled fund of bond proceeds, Amtec will create a spreadsheet of all of the bond issues that have contributed to the commingled fund and we track the percentage allocated to each issue. As investment income is received, it is allocated to each participant in the commingled fund on a prorated basis. When a disbursement occurs, it is deducted from a specific issue, when it is known, or may be allocated on a prorated basis among more than one account within the commingled fund. An allocation such as this would depend on if the commingled fund was sourced from funds that were authorized to split certain project expenses. An example of this may be a commingled fund that includes a state grant and bond proceeds and the expenditures are required to be split on a 50%basis. 1� Amtec has the expertise to uncommin lin an fund for the City and we do not assess an p g g Y h' Y additional fee for this service. The information generally necessary to develop a commingled fund allocation sheet is as follows: • The identification of the issues or entities that comprise the commingled fund; • The historical activity of the commingled fund until the date Amtec is appointed. This information will provide the current balance for each entity and enable us to determine ownership ratios;and • Following our appointment, a listing of investments and disbursements occurring within the commingled fund. 5. Review and Restatement: Page 2 of your Proposal states in part, "A complete review and restatement of all prior calculations to the last report date." What does"restatement"mean? What,if any,are the related fees for this service? This was discussed in No.2 above and there is no additional fee for this service. 6. Bank Statements: Page 5 of your Proposal states in part, "With the City's authorization, the bank generally provides duplicate statements. . . By receiving statements in this manner,the City will be relieved from having to use staff for the purposes of copying statements." Currently when the City purchases investments, the investment is shared amongst many City funds/projects in which the bank is not aware of. Would you accept a listing of the investments owned created from the City's financial software? If so, what information do you require on the investments? Yes, if the investment data is not included on the bank statement, City generated reports should suffice. We presume that these reports provide the following information: • Description of the investment(i.e.TNote,TBills or CDs,etc.); • Date of purchase; • Cost with accrued interest,if any; • Rate and/or Yield of investment;and • Maturity date. We are encouraged by your questions and are confident we can provide the City with quality rebate computations, support and savings, should we be selected as your consultant. Once you have reviewed our answers, please do not hesitate to contact us if there are any additional questions. 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N 0 O N U m C 0jo W U N W cM (� M o �' m O o } � O 0 M C N C O W m m ` W Lxp N m N 0 W N O O O H C 7 0 cr �- NC cN to � CCl) 0 m cn Nm N m c 'C N O CNLL o c '0O Ul m N -0M 'a Cl) m N Nm O O m C O to C C Cof 'rc+ CO Mz m 0z C yN mmz m CO V d N N O O -O C o J c j 0 '� C 7 p N N C C N U � N O 0 ' U 'O 7 c tl1� m f/1 fA -O G t C -p E N N (n O 0 ti r •p N w c r 'O w 'O N O Q ' O N G M W C w a) O ca C M O O a) W N O W G c 0Z� to -0 0 O 0 y Oz000 0 O O 52 0 � W _ c Q pc I- C� 0 c a C9 C9 C9 c (9 (5 N , ao - E N a� c > J F- F- O f•- f- F- f_ O F- H 7 o N N 3 O mJULL Q J JU JJJ JJU J J fn LL Nco to Xa JE — N c+M V Ln (O L-- 0000 -- N - V d1F- >W I- J O0 arNr; v Z 1 1 1 1 1 1 1 1 1 1 1 1 I i 1 1 t 1 178 r- TAX-EXEMPT COMPLIANCE April 8,2009 Robert A. Goehring,CPA,CFE Audit Manager City of Kent Finance Department 400 West Gowe Street,Suite 122 Kent,WA 98032 Re: Arbitrage Rebate Computation Proposal for the$30,000,000 City of Kent,Washington, Water,Sewer and Drainage Revenue Bonds,Series 2009 Dear Mr. Goehrin : g As you know, AMTEC is an independent consulting firm that specializes in arbitrage rebate calculations. We have the ability to complete rebate computations for the above referenced City of Kent, Washington (the "City") bond issue. We do not sell investments or seek an underwriting role. As a result of our specialization,we offer very competitive pricing for rebate computations. Our typical fee averages less than $1,000 per year, per issue and includes up to five years of annual rebate liability reporting. Since this issue was not included in the original RFP, we would like to propose our services. We have prepared the following fee and report delivery schedule for the City. Our fee for rebate computations is guaranteed not to exceed$4,000 and provides service through the end of the fifth Bond Year. This fee is consistent with our fees for other City issues and is in accordance with the fee table listed on p. 20 of AMTEC's Proposal, dated August 21, 2008. Our fee is payable upon your acceptance of our rebate reports,which will be delivered shortly after the report dates specified in the following table. f $30,000,000 Water,Sewer and Drainage Revenue Bonds,Series 2009 (Estimated delivery date:April 30,2009) Report Date Type of Report Period Covered Fee October 31,2009 Initial Review Closing—October 31,2009 N/C April 30,2010 Rebate&Opinion Closing—April 30,2010 $ 800 October 31,2010 Spending Test Closing—October 31,2010 N/C April 30,2011 Rebate&Opinion Closing—April 30,2011 800 April 30,2012 Rebate&Opinion Closing—April 30 2012 800 April 30,2013 Rebate&Opinion Closing—April 30,2013 800 April 30,2014 Rebate&Opinion Closing—April 30,2014 800 Total $4,000 124 LaSalle Road,West Hartford, CT 06107 (860)523-5112 Fax(860)236-7135 www.amteccorp.com 1� In order to continue,we are requesting the following documentation: 1. A final Official Statement. If one is not available, then the cover, debt retirement schedule, including interest rates and reoffering yields, and Optional Redemptions found inside of the Official Statement will suffice. 2. IRS Form 8038-G. 3, Federal Tax Agreement. This document may also be known as the Arbitrage or Non- Arbitrage Certificate and is usually filed adjacent to IRS Form 8038-G in the bound transcripts. 4. Closing Memorandum—details sources and uses of funds,in addition to distribution of funds on closing date. 5. Refunding Verification Report,if one exists. 6. A listing of disbursements, receipts and interest earned, by date and amount, from the date of the closing through each report date. Please also include an asset listing as of each report date, including par amount, maturity date,purchase price, interest rate, etc. Our calculations require tracking the cash flow of bond proceeds for the entire computation period. AMTEC represents that it is qualified to provide the services required and states in its Proposal that the City may rely upon these representations. The scope of services to be performed is identified in AMTEC's Proposal issued on August 21, 2008. The entire Agreement shall consist of AMTEC's Proposal,dated August 21,2008,and this Agreement. The City agrees to furnish AMTEC with the required documentation necessary to fulfill its obligation under the scope of services. The City will make available staff.knowledgeable about the bond transactions,investments and disbursements of bond proceeds. The City agrees to pay AMTEC its fee after it has been satisfied that the scope of services, as outlined under the Proposal,has been fulfilled. AMTEC agrees that its fee is all-inclusive and that it will not charge the City for any expenses connected with this engagement. Thank you for considering AMTEC for this engagement and should you have any questions, please do not hesitate to contact us or visit our website at www.amteccorp.com. Very truly yours, � . Raymond H. Bentley Vice President 1` Exhibit E - Insurance Reauirements Insurance The Contractor shall procure and maintain for the duration of the Agreement, insurance against claims for injuries to persons or damage to property which may arise from or in connection with the performance of the work hereunder by the Contractor, their agents, representatives, employees or subcontractors. A. Minimum Scope of Insurance Contractor shall obtain insurance of the types described below: 1. Commercial General Liability insurance shall be written on ISO occurrence form CG 00 01 and shall cover liability arising from premises, operations, independent contractors, products-completed operations, personal injury and advertising injury, and liability assumed under an insured contract. The Commercial General Liability insurance shall be endorsed to provide the Aggregate Per Project Endorsement ISO form CG 25 03 11 85. There shall be no endorsement or modification of the Commercial General Liability insurance for liability arising from explosion, collapse or underground property damage. The City shall be named as an insured under the Contractor's Commercial General Liability insurance policy with respect to the work performed for the City using ISO additional insured endorsement CG 20 10 11 85 or a substitute endorsement providing equivalent coverage. B. Minimum Amounts of Insurance Contractor shall maintain the following insurance limits: 1. Commercial General Liability insurance shall be written with limits no less than $1,000,000 each occurrence, $2,000,000 general aggregate and a $1,000,000 products-completed operations aggregate limit. C. Other Insurance Provisions The insurance policies are to contain, or be endorsed to contain, the following provisions for Automobile Liability and Commercial General Liability insurance: 1. The Contractor's insurance coverage shall be primary insurance as respect the City. Any Insurance, self-insurance, or insurance pool coverage maintained by the City shall be excess of the Contractor's insurance and shall not contribute with it. 2. The Contractor's insurance shall be endorsed to state that coverage shall not be cancelled by either party, except after thirty (30) days prior written notice by certified mail, return receipt requested, has been given to the City. Exhibit E - Insurance Requirements - 1 of 2 1� 3. The City of Kent shall be named as an additional insured on all policies (except Professional Liability) as respects work performed by or on behalf of the contractor and a copy of the endorsement naming the City as additional insured shall be attached to the Certificate of Insurance. The City reserves the right to receive a certified copy of all required insurance policies. The Contractor's Commercial General Liability insurance shall also contain a clause stating that coverage shall apply separately to each insured against whom claim is made or suit is brought, except with respects to the limits of the insurer's liability. D. Acceptability of Insurers Insurance is to be placed with insurers with a current A.M. Best rating of not less than ANII. E. Verification of Coverage Contractor shall furnish the City with original certificates and a copy of the amendatory endorsements, including but not necessarily limited to the additional insured endorsement, evidencing the insurance requirements of the Contractor before commencement of the work. F. Subcontractors Contractor shall include all subcontractors as insureds under its policies or shall furnish separate certificates and endorsements for each subcontractor. All coverages for subcontractors shall be subject to all of the same insurance requirements as stated herein for the Contractor. Exhibit E - Insurance Requirements - 2 of 2 Kent City Council Meeting Date May 5, 2009 Category Other Business - 7B 1. SUBJECT: LAKE MERIDIAN OUTLET PROJECT/CASCADE MOBILE VILLA ASSOCIATES CONDEMNATION ORDINANCE 2. SUMMARY STATEMENT: Adoption of this Ordinance provides for condemnation of an environmental easement from Cascade Mobile Villa Associates, located at 15232 S.E. 272"d Street. The condemnation area is approximately 3.9 acres of wetland on the western portion of the property. The City is not including any mobile home pads within the easement area. This 1 easement will be used for wetland enhancement and restoration for the Lake Meridian Outlet Project. The objective of the Lake Meridian Outlet Project includes flood protection, water quality improvements for the lake outlet, fish habitat, and wetland restoration. The City is also simultaneously negotiating with the owners a purchase agreement for this environmental easement. The construction deadlines for the Lake Meridian Outlet Project, however, necessitate the passage of this ordinance in the event the City is not able to close the purchase with the owners. 3. EXHIBITS: Map and Ordinance 4. RECOMMENDED BY: (Committee, Staff, Examiner, Commission, etc.) 5. FISCAL IMPACT Expenditure? Yes Revenue? Currently in the Budget? Yes X No 6. CITY COUNCIL ACTION: Councilmember moves, Councilmember seconds to adopt Ordinance No. providing for condemnation of an environmental easement from Cascade Mobile Villa Associates. DISCUSSION: ACTION: WAR NOnom GO N \ 880'o dad 327.73• 102.00• \ il \ I 52ND ,. cn enLn ` I V r �I - m 00 vo' ° KENT-KAN LEY 'RD_ S. 516) 272N ST.)_ EXHiB ff 1 ORDINANCE NO. AN ORDINANCE of the City Council of the City of Kent, Washington, providing for the acquisition of real property and improvements located at 15232 SE 272"d Street in Kent, Washington. This acquisition is necessary to complete a wetland restoration project as a requirement of the Lake Meridian Outlet Project. This Ordinance provides for the condemnation, appropriation, taking, and damaging of real property and rights as are necessary for that purpose and provides for the payment thereof out of the Drainage Utility Fund. This Ordinance directs the City Attorney to prosecute the appropriate legal proceedings, together with the authority to enter into settlements, stipulations, and other agreements. All of the real property affected by this Ordinance is located within the corporate limits of the City of Kent in King County, Washington. NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF KENT, WASHINGTON, DOES HEREBY ORDAIN AS FOLLOWS: ORDINANCE SECTION 1. - Findings. After hearing the report of City staff, and after reviewing the planned improvements to complete the stream enhancement with flood control and wetland mitigation requirements of the Lake Meridian Outlet Project(the "Project"), the City Council finds and 1 Lake Meridian Outlet Project- Condemnation Ordinance declares that the public convenience, use, health, safety, and necessity demand that the City of Kent condemn, appropriate, take, and/or damage portions of certain real properties located within the corporate limits of the City of Kent in King County, Washington, in order to acquire the necessary real property and/or property rights for the construction of the Project, including all necessary appurtenances. The properties and owners of , record affected by this ordinance are described in Exhibit A, attached and incorporated by this reference (collectively the "Property"). The purposes r for which this condemnation is authorized shall include, without limitation, all acts necessary to complete the construction, alteration, maintenance, r reconstruction, and restoration of the Project and all necessary appurtenances and any other municipal purpose lawfully permitted. SECTION 2. - Condemnation Authorized. The City authorizes the acquisition by condemnation of all or a portion of the Property and/or rights in the Property to accomplish, without limitation; all acts necessary to complete the construction, alteration, maintenance, reconstruction, and restoration of the Project and all necessary appurtenances and to accommodate other municipal purposes lawfully permitted. SECTION 3. - Condemnation Procedure. The City shall condemn the Property and/or rights in the Property only upon completion of all steps and procedures required by applicable federal, state, and/or local laws and regulations. The City's possession and use of the Property and/or rights shall commence only after a firm offer has been made and that amount has first been paid to the owner(s) and encumbrancers or paid into the registry of the court for the owner(s) and encumbrancers in the manner prescribed r by law. Title shall not pass to the City until the time just compensation has been either agreed upon or has been finally adjudged by a court of competent jurisdiction and that amount along with any interest accrued 2 Lake Meridian Outlet Project- Condemnation Ordinance has been either distributed to the owner(s) and encumbrancers or paid in full into the registry of the court. SECTION 4. - Cost of Condemnation. The City shall pay for the entire cost of the acquisition by condemnation provided for in this ordinance through the City's Drainage Utility Fund or from any of the City's general funds, if necessary, as may be permitted by law. SECTION S. - City Attorney Direction. The City authorizes and directs the City Attorney to commence those proceedings provided by law that are necessary to condemn the Property and/or interests therein. The City Council authorizes the City Attorney to enter into settlements, stipulations, or agreements in order to mitigate damages and/or to minimize costs. The bases for such settlements, stipulations, or agreements may include, but are not limited to, the amount of just compensation to be paid, the size and dimensions of the property condemned, the acquisition of temporary construction easements and other limited property interests, and costs and attorneys fees. r SECTION 6. - Ratification. Any acts consistent with the authority and prior to the effective date of this ordinance are ratified and confirmed. SECTION 7. - Severability. The provisions of this ordinance are declared to be 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 circumstances shall not affect the validity of the remainder of this ordinance, or the validity of its application to other persons or circumstances. SECTION 8. - Effective Date. This ordinance, being the exercise of a power specifically delegated to the City legislative body, is not subject to r 3 Lake Meridian Outlet Project- Condemnation Ordinance referendum, and shall take effect and be in force five (5) days after its publication as provided by law. SUZETTE COOKE, MAYOR ATTEST: BRENDA )ACOBER, CITY CLERK APPROVED AS TO FORM: , TOM BRUBAKER, CITY ATTORNEY PASSED: day of May, 2009. r APPROVED: day of May, 2009. PUBLISHED: day of May, 2009. I hereby certify that this is a true copy of Ordinance No. passed by the City Council of the City of Kent, Washington, and approved by the Mayor of the City of Kent as hereon indicated. (SEAL) BRENDA ]ACOBER, CITY CLERK j P\Clvtl\Ftles\OpenFdes\0981\CascadeVdla\Condemn-CascadeVdla-OrdmanceLMOlmprovments,docx 4 Lake Meridian Outlet Project- Condemnation Ordinance r rEXHIBIT A Cascade Mobile Villa Associates, a Joint Venture r 1 That portion of the southwest quarter of the southwest quarter and the southeast quarter of the southwest quarter of Section 26, Township 22 North, Range 5 Bast, W.M., in King County, Washington, described as follows: Commencing at the southeast corner of the southwest quarter of the southwest quarter of said Section 26, from which point the southwest corner of said section bears north 88044120" west; thence north 00055/330 east, along the east line thereof, 260.00 feet to the north line of the south 260.00 feet of the southwest quarter of said Section 26; thence north 21059118" west 154.95 feet to the TRUE POINT OF BEGINNING; thence south 830551140 west 65.59 feet to the northeasterly margin of Soos Creek Drive Southeast; thence north 17006140" west, along said northeasterly margin, 963.86 feet to the north line of the southwest quarter of the southwest quarter of said subdivision; thence south 89001158/, east, along said north line, 296.16 feet to a point 102.00 feet west of the northeast corner of said subdivision; thence south 00055133" west. 439.00 feet, thence south 07*30104" east 81.88 feet; thence south 04002153" west 110.16 feet; thence south 16049107" east 52.50 feet.- thence south 3303211211 east 83'.83 feet; ' thence south 01*40111" west 159.18 feet to the TRUE POINT OF BEGINNING; TOGETHER WITS the easterly one-half of that portion of Soos Creek ' Drive Southeast vacated by King County Ordinance Number 9597, recorded under Recording Number 20020311000226, and attached thereto by operation of law. r r 1 1 Kent City Council Meeting Date May 5, 2009 Category Other Business - 7C 1. SUBJECT: LAKE MERIDIAN OUTLET PROJECT/CASCADE MOBILE VILLA ASSOCIATES AGREEMENT FOR ACQUISITION OF ENVIRONMENTAL EASEMENT 2. SUMMARY STATEMENT: The easement area at 15232 SE 272"d Street is approximately 3.9 acres of wetland on the western portion of the property. The City is not including any mobile home pads within the easement area. This easement will be used for wetland enhancement and restoration for the Lake Meridian Outlet Project. The objective of the Lake Meridian Outlet Project includes flood protection, water quality improvements of the lake outlet, fish habitat, and wetland restoration. ' 3. EXHIBITS: Map and Agreement for Acquisition of Environmental Easement 4. RECOMMENDED BY: (Committee, Staff, Examiner, Commission, etc.) ' 5. FISCAL IMPACT Expenditure? Yes Revenue? Currently in the Budget? Yes X No ' 6. CITY COUNCIL ACTION: Councilmember_ moves, Councilmember ��'y seconds to approve the Agreement for Acquisition of Environmental Easement for the Lake Meridian Outlet Project, and authorize the Mayor the sign the Agreement, subject to final terms and conditions acceptable to the City Attorney and the Public Works Director. DISCUSSION: Y ACTION: otTn' E ESN uNE�\ ` \ sagvil a 327.731 902.00' \\T, .�, _ UPC \ o \ \ Ln O� IVD co Ilk C-- gi l 1 f en 51 m `4 a VEEC � � o SECMON LWE KENT—KANG_LEY `RD. 4SR 7516) � jf=272Nb ST.�_ EXHIBIT AGREEMENT FOR ACQUISITION OF ENVIRONMENTAL EASEMENT RE: 15232 SE 272"d St., Kent, WA ' Tax Parcel #262205-9020 Lake Meridian Outlet Project #527367-2 ' This Agreement memorializes the agreement to purchase an Environmental Easement on the above-referenced parcel (the "Property") under the following terms and conditions: ' � " i 1. The City of Kent {`City ), a municipal corporation, will pay the sum of $70,000.00 to Cascade Mobile Villa Associates, a joint venture (the "Owner', as the purchase price for an Environmental Easement, a copy of which is attached and Incorporated herein as Exhibit A. The terms of the easement were previously provided to the owner in an Offer to Purchase presented to the Owner, via mail, on June 1, 2008. ' 2. Within ten (10) business days of this Agreement being fully executed, the City will pay the purchase price into escrow at Pacific Northwest Escrow ("Escrow"), 116 Washington Avenue North, Kent, Washington 98032. The purchase price will be disbursed to Owner when a fully executed Environmental Easement has been received by Escrow and all conditions of this Agreement have been satisfied. The City will pay all costs of Escrow. 3. Escrow Is Instructed to disburse the uchase rice to Owner equally among p p Q Y 9 the joint venturers as follows: 19.9% to June E. Pittelko and David Jordan Pittelko, trustees of the Harvey and June Pittelko Living Trust; 19.9% to Christopher K. Kelly and Mark J. Kelly, Executors of the Last Will and Testament of Muryel Z.Kelly; 19.9% to Harry & Colleen Moening, Trustees of the Harold and Colleen Moening A.B. Living Trust; 19.9% to Hal & Dana Manning;t— " 19.9% to Bruce & Leah Purcell; .5% to Robert Krueger Agreement for acquisition of environmental easement (Cascade Mobile Villa'Assoc&City of Kent) Page 1 of 5 4. Below the City acknowledges the effect that current Kent City Code (KCC) provisions have when applied to the Property. The Owner seeks these acknowledgements both for continuation of current uses and uses that may be proposed in the future on the Property. These acknowledgments by the City apply to current code provisions and any development applications submitted by Owner that vest to those code provisions. a. The City agrees that all legally existing structures, parking lots, ' driveways, Impervious surfaces, and the like, which lie within the new buffer mandated by Chapter 11.06 KCC, will be recognized by the City as legal non- conforming uses. Exhibit 6, attached and incorporated herein, depicts the new buffer. b. The provisions for buffer averaging of wetland buffers 6.600. 'h p s g g wet an rs in 11 0 D KCC are attached and incorporated as Exhibit C. The City agrees that Owner would be allowed to use these provisions for a development permit filed with the City. C. The provisions for operation, maintenance, repair and reconstruction of existing utilities within a wetland or wetland buffer in 11.06.040.A(4) KCC are attached and incorporated as Exhibit D. The City acknowledges that Owner would ' be allowed to use these provisions for utilities currently existing In the wetland and buffer. S. The City has received a title commitment for the Property from Pacific , Northwest Title (PNW Title), Title Order No. 527367. A copy of which has been provided to Owner. Owner agrees to cooperate with the City and PNW Title to have special exceptions 9 (joint venture agreement), 10 (matters of record joint venturers), 12 (Krueger), 13 (Moening Quit Claim deed), and 14 (Moening trust) removed from the title commitment or otherwise satisfy the City as to these exceptions. 6. The City will provide the Owner with a construction schedule at least 21 days In advance so that Owner may have time to notify Its tenants and owners at least 14 days in advance of any construction or disruption. The schedule will include , days and hours of construction, -as well as a timeline for project start and completion. It will also include names of the contractor and City project managers, as well as phone numbers for both days and evenings, so that they may be easilly contacted during an emergency. Agreement for acquisition of environmental easement ' (Cascade Mobile Villa Assoc&City of Kent) Page 2 of 5 1 7. The City agrees that no construction equipment or vehicles will block access to the Property or will be parked on the Property. 8. The Owners may continue to use the wetland area for storm water runoff in the same capacity and manner It presently enjoys until such time that a redevelopment project Is proposed on the property. 9. This Agreement is subject to approval by the Kent City Council. City staff plans on presenting the Agreement to the Council on April 21, 2009, which will require Owner to deliver an execute Agreement to the City by April 6, 2009. 10. Counterparts. This Agreement may be executed In any number of counterparts, each of which shall constitute an original, and all of which will together constitute this one Agreement. 11. Facsimile/Email Signature. Either party may execute and deliver this Agreement by facsimile or by emailing a PDF version of the original signature page, and that signature shall have the same force and effect as if executed in original. The parties agree to the foregoing as all the terms for purchase of the 'Environmental Easement. ( nature) By: June E. Pittelko Trustee of-the Harvey and June Pittelko Living Trust Date: 5 f i n tur(S 9 a e) j By: David Jordan Pittelko Trustee of t e H rvey and June Pittelko Living Trust Date: Gl' 1zr��� Agreement for acquisition of environmental easement (Cascade Mobile Villa Assoc&City of Kent) Page 3 of 5 (Signature) By: Christo r K. Kelly Executor o e Last Will and Testament of Muryel Z. Kelly Date: (Signature) By: Mark I elly , Executor o he Last Will and Testament of Muryel Z. Kelly Date: C�AA p. Owl (Signature) By: Harry M ening Trustee of the Harold and Colleen Moening AB Living Trust , Date:-___�4_ 0 9 A I CAI I'd OCAOE%.L- 9- &w 112 a (Signature) By: Colle�e--n� oeni g Trustee of tih Ha r d and Colleen Moening AB Uving Trust Date: Q (Signature) By: Hal Manning Date: Agreement for acquisition of environmental easement (Cascade Mobile Villa Assoc&City of Kent) Page 4 of 5 1 (Signature) By: Christopher K. Kelly Executor of the Last Will and Testament of Muryel Z. Kelly Date: C, (Signature) By: Mark I Kelly Executor of the Last Will and Testament of Muryel Z. Kelly Date: (Signature) By: Harry ening L Trustee of a Harold and Colleen Moening AB Living Trust Date: S (Signature) By: Colleen oening Trustee of a Harold and Colleen Moening AB Living Trust Date: (Signature) By: Hal Manning Date: Agreement for acquisition of environmental easement (Cascade Mobile Villa Assoc&City of Kent) Page 4 of S (Signature) By: Dana Manning Date: Lk-k1- aC (Signature) By: u urc II Date: 4siature) By: Leah Purcell Date: (SignaZert By: rueger Date: _ CITY OF KENT By: Suze Cooke Its: M or Date: P:\Gvl Nes\openFlles\0881\�aseadaVllla\dsoadeMobfloVll�aAGreemeertpuchaseffasemeM.docx Agreement for acquisition of environmental easement (Cascade Mobile Viila Assoc&City of Kent) Page 5 of 5 (Signature) By: Dana Manning Date: (Signature) By: Br a Purcell Date: Si nature � 9 ) By: Le Purcell Date: (Signature) By: Robert Krueger Date: CITY OF KENT By: Suzette Cooke Its: Mayor Date: p.'�C�vN�FBeslQvenFga�0981WseadeVgte\farradaMoblleln9xAgreernemPensiwseEamamentdoa Agreement for acquisition of environmental easement (Cascade Mobile Villa Assoc&City of Kent) Page 5 of 5 WHEN RECORDED RETURN TO: Property Management City of Kent 220 Fourth Avenue South Kent, Washington 98032 Grantor: CASCADE MOBILE VILLA ASSOCIATES Grantee: CITY OF KENT Abbreviated Legal Description: Ptn of STR 26-22-05 Additional Legal Description on Exhibit A of Document Assessor's Tax Parcel ID No. 262205-9020 Project Name: Lake Meridian Outlet Project ENVIRONMENTAL EASEMENT THIS INSTRUMENT made this day of , 2009, by and between CASCADE MOBILE VILLA ASSOCIATES, a joint venture in the State of Washington ("Grantor"), and the CITY OF KENT, a Washington municipal corporation of King County, ("Grantee"): That Grantor for valuable consideration does hereby grant, bargain,sell,convey, and confirm unto Grantee, its successors and/or assigns, a perpetual and assignable right and easement in, on, over, and across the lands of the Grantors legally described In Exhibit A, attached hereto, and as depicted in Exhibit B, attached hereto, to construct, operate, maintain, repair, alter, rehabilitate, remove, replace, and monitor features of the Green-Duwamish Ecosystem Restoration Project Including: channel features,vegetative plantings, modifications and improvements within and adjacent to ENVIRONMENTAL EASEMENT SiPMEW - (Between Cascade Mobile Villa and City of Kent) (April, 6, 2009) EXHIBIT the channel or shore for grade control, or bank stabilization purposes; fish and wildlife habitat or other ecosystem restoration Improvements; placement of materials or structures in the bed, banks, or shorelines that Influence stream velocity or channel form; removal or placement of gravels, cobbles, boulders, woody debris, and other structures or conveyances to recharge or maintain flow to existing wetlands; together with the right to remove structures or obstructions including levees, reserving, however,to the owners,their heirs and assigns,all other rights and privileges that may be used without Interfering with or abridging the enumerated rights and easement hereby conveyed and acquired; all subject to existing easements for public roads and highways, public utilities, railroads and pipelines. GRANTOR: CASCADE MOBILE VILLA ASSOCIATES, a joint venture By: June E. Pittelko, Party to Joint Venture and Trustee of the Harvey and June Pittelko Living Trust Date: STATE OF WASHINGTON ) ss. COUNTY OF KING ) On this day of , 2009, before me a Notary Public in and for the State of Washington, personally appeared June E. Pittelko, personally known to me(or proved to me on the basis of satisfactory evidence) to be the person who executed this instrument and acknowledged It to be her free and voluntary act and deed for the uses and purposes mentioned In this instrument. -Notary Sea!Must Appear Within This Box- IN WITNESS WHEREOF, I have hereunto set my hand and official seal the day and year first above written. NOTARY PUBLIC, in and for the State of Washington, residing at My appointment expires ENVIRONMENTAL EASEMENT-� (Between Cascade Mobile Villa and City of Kent) (April, 6, 2009) � rall A •1: Cascade Villa Easement Title Report Number 527367 That portion of the southwest quarter of the southwest quarter and the southeast quarter of the southwest quarter of Section 26, Township 22 North, Range 5 East,W. M., in King County,Washington, described as follows: Commencing at the southeast corner of the southwest quarter of the southwest quarter of said Section 26, from which point the southwest comer of said section bears N88044'20"W; thence N00°55'33"E, along the east line thereof, 260.00 feet to the north line of the south 260.00 feet of the southwest quarter of said Section 26;thence N11°59'18"W 154.95 feet to the TRUE POINT OF BEGINNING; thence S83055'14"W 65.59 feet to the northeasterly margin of Soos Creek Drive 1 SE; thence N17006'40"W, along said northeasterly margin, 243.50 feet to the southwest line of vacated Soos Creek Drive SE and a point of tangency with a 420.00 foot radius circular curve to the left;thence northwesterly, along said curve, through a central angle of 21*47'12", an arc distance of 159.71 feet to the centerline of said vacated roadway;thence N17'06'40"W, along said centerline, 574.27 feet to the north line of the southwest quarter of the southwest quarter of said subdivision;thence S89°01'68"E, along said north line, 327.73 feet to a point 102.00 feet west of the northeast corner of said subdivision; thence S00°55'33"W 439.00 feet; thence S07030'04"E 81.88 feet; thence S04002'53"W 110.16 feet; thence S16°49'07"E 52.50 feet; thence S33032'12"E 833.83 feet; thence S01°40'1 M 159.18 feet to the TRUE POINT OF BEGINNING. j a g ®°asJAL LAN► r � EXHIIT UUARTER 5LCTIGNLINE N` , \ S89'09'58'E 327,73' 1 102,00' \ CA i CO BE ru -0 \ Nr cyl _ i_ c T. r! �: $t C r, o VIA YO w5-• 1 I � I 1 "p _ __ SEC7lON LINE • KEN7-KAN�LEY 'R.D� � _ SR T 1 6) _j fS:-�272N EXN1 [T 'r r ���■ �,►, �,��' j� ,;�� !. � it , �'.,� � � r `, 1Y j EXHIBIT C PROVISIONS FOR BUFFER AVERAGING KCC 11.06.600 D. D. Buffer averaging. 1. Wetland buffer width averaging shall be allowed where the applicant demonstrates the following: a. The ecological functions and values of the buffer after averaging are equivalent to or greater than the functions and values before averaging as determined by a qualified consultant and as approved by the city. Properly functioning buffers shall not be reduced through buffer averaging except in exceptional circumstances,-such.as a need to gain access to property or other similar circumstances, to be approved by the director. b. Averaging will not adversely Impact the wetland functions and values. c. The total area contained within the wetland buffer after averaging shall be no less than the total.area contained within the standard buffer prior to averaging. d. At no point shall the buffer width be reduced by more than fifty (50) percent of the standard buffer or be less than twenty-five (25) feet. e. The additional buffer shall be contiguous with the standard buffer and located In a manner to provide buffer functions to the wetland. , ` . f. If the buffers are degraded pursuant to KCC 11.06.227, they shall be restored pursuant to an approved restoration/enhancement plan. g. If restoration or enhaIncement of the buffer is required in order to establish a suitable,growth of native plants, maintenance and monitoring of-the buffer for a period of at least three (3) years shall be provided pursuant to an approved monitoring plan as required by KCC 11.06.570. i - Exhibit D Provisions for operation, maintenance, repair and reconstruction of existing utilities within a wetland or wetland buffer. KCC 11.06.040.A(4) 11.06.040 Exemptions. A. The followingactivities performed on sites containing critical areas as defined b p 9 Y this chapter shall be exempt from the provisions of these regulations: 1. Conservation or preservation of soil water, vegetation,ation fish and other wildlife that does not entail changing the structure or functions of the critical area. 2. Existing and ongoing agricultural activities, as defined in this chapter. 3. Activities involving artificially created wetlands or streams intentionally created from nonwetland sites, including, but not limited to,, grass-lined swales, Irrigation and drainage ditches, retention or detention facilities, and landscape features, except wetlands- or streams created as mitigation or that provide critical habitat for anadromous fish. 4. Operation, maintenance, repair, and reconstruction of existing structures, roads, trails, streets, utilities, and associated structures, dikes, levees, or drainage systems; provided, that reconstruction of any facilities or structures Is not "substantial reconstruction," may not further encroach on a critical area or Its buffer, and shall Incorporate best management practices. 5. Normal maintenance, repair, and reconstruction of residential or commercial structures, facilities, and landscaping; provided, that reconstruction of any structures may not increase the previous footprint; and further provided, that the provisions of this chapter are followed. 6. The addition of floor area within an existing building which does not Increase the building footprint. 7. Site investigative work and studies that are prerequisite to preparation of an application for development including soils Nests, wager quality studies, wildlife studies, and similar tests and investigations; provided, that any disturbance of the critical area shall be the minimum necessary to carry out the work or studies. 8. Educational activities, scientific research, and outdoor recreational activities, including but not limited to interpretive field trips, birdwatching, boating, swimming, fishing, and hiking, that will not have a significant effect on the critical area. 9. The harvesting of wild crops and seeds to propagate native plants In a manner that Is not injurious to natural reproduction of such crops, and provided the harvesting does not require tilling of soil, planting of crops, or alteration of the critical area by changing existing topography, water conditions, or water sources. 10. Emergency activities necessary to prevent an immediate threat to public health, safety, property, or the environment which requires immediate action within a time too short to allow full compliance with this chapter as determined by the department. 11. Development of lots vested and/or legally created through a subdivision, short subdivision, or other legal means and approved prior to the effective date of the ordinance codified in this chapter. 12. Removal of invasive plants and planting of native vegetation in wetland and stream buffers for the purpose of enhancing habitat values of these areas pursuant to an approved mitigation plan. 13. Stabilization of sites where erosion or landsliding threatens public or private structures, utilities, roadways, driveways, or publicly maintained trails or where erosion or landsliding threatens any lake, stream, wetland, or shoreline. Stabilization work shall be performed In a manner which causes the least possible disturbance to the slope and its vegetative cover. This activity shall be performed in accordance with approved site stabilization plans. 14. Minor activities not mentioned above and determined in advance and In writing by the director to have minimal Impacts to a critical area. B. Notwithstanding the exemptions provided by this section, any otherwise exempt activities occurring in or near a critical area or its buffer shall comply with the intent of these standards and shall consider onsite alternatives that avoid or minimize significant. adverse Impacts. Emergency activities shall mitigate for any impacts caused to critical areas upon abatement of the emergency. C. With the exception of emergency actions, and existing and ongoing agricultural activities, no property owner or other entity shall undertake exempt activities prior to providing fourteen (14) days' notice to the director and receiving confirmation in writing that the proposed activity is exempt. In case of any question as to whether a particular activity is exempt from the provisions of this section, the director's determination shall prevail and shall be confirmed in writing. D. Legally established uses, developments, or structures that are nonconforming solely due to Inconsistencies with the provisions of this chapter shall not be considered nonconforming pursuant to KCC 15.08,100. Reconstruction or additions to existing structures which Intrude into critical areas or their buffers shall not increase the amount of such Intrusion except as provided by KCC 1 .06.1 (A). Once a nonconforming use Is discontinued for a period of one (1) year, that use cannot be reestablished. E. The exemptions established by this section shall apply only to activities that are otherwise permitted by federal, state, and/or local laws. Kent City Council Meeting Date May 5, 2009 Category Bids - 8A 1. SUBJECT: NORTH PARK SANITARY SEWER REBUILD PHASE II 2. SUMMARY STATEMENT: The bid opening for this project was held on April 28, 2009 with eight (8) bids received. The low bid was submitted by Pivetta Brothers Construction in the amount of $403,004.36. The Engineers' estimate was $664,852.76. The Public Works Director recommends awarding this contract to Pivetta Brothers Construction. 3. EXHIBITS: Memorandum dated 4/28/2009 4. RECOMMENDED BY: Staff (Committee, Staff, Examiner, Commission, etc.) 5. FISCAL IMPACT Expenditure? X Revenue? Currently in the Budget? Yes X No 6. CITY COUNCIL ACTION: Councilmember moves, Councilmember ^- seconds to authorize the Mayor to enter into a contract to award the North Park Sanitary Sewer Rebuild Phase II (between 41h Avenue N. to 3rd Avenue N. north of Cloudy St.) project to Pivetta Brothers Construction in the amount of $403,004.36. DISCUSSION: ACTION: PUBLIC WORKS DEPARTMENT Larry R. Blanchard. Public Works Director KEN T Address: 220 Fourth Avenue S. Kent, WA. 98032-5895 W A S H I N O T O N Phone: 253-856-5500 Fax: 253-856-6500 DATE: April 28, 2009 TO: Mayor Cooke and Kent City Council FROM: Larry Blanchard, Public Works Director RE: North Park Sanitary Sewer Rebuild Phase II (between 4th Ave. N. to 3rd Ave. N. North of Cloudy St.) The bid opening for this project was held on April 28, 2009 with eight (8) bids received. The low bid was submitted by Pivetta Brothers in the amount of $ 403,004.36. The Engineer's estimate was $664,852.76. The Public Works Director recommends awarding this contract to Pivetta Brothers. Bid Summary 1, Pivetta Brothers Construction $403,004.36 2. Sanders General Construction $414,336.84 3. R.L. Alia Company $414,999.95 4. RP & Company $417,200.71 5. Hoffman Construction $429,531.77 6. Road Construction Northwest $489,534.29 7. Rodarte Construction, Inc. $517,268.09 8. Laser Underground & Earthworks $635,291.68 Engineer's Estimate $664,852.76 U:\PWCommittee\2009\ToCounciIO50509.doc REPORTS FROM STANDING COMMITTEES AND STAFF A. COUNCIL PRESIDENT B. MAYOR 1 C. OPERATIONS COMMITTEE D. PARKS AND HUMAN SERVICES COMMITTEE E. PLANNING AND ECONOMIC DEVELOPMENT COMMITTEE F. PUBLIC SAFETY COMMITTEE G. PUBLIC WORKS H. ADMINISTRATION REPORTS FROM SPECIAL COMMITTEES 1 irCENT WASHINOTON OPERATIONS COMMITTEE MINUTES APRIL 7, 2009 1 Committee Members Present: Debbie Raplee, Tim Clark, and Les Thomas The meeting was called to order by Tim Clark at 4:05 p.m. 1. APPROVAL OF MINUTES DATED,MAH5;H JZ, ZQ09 Thomas moved to approve the minutes of the March 17, 2009 Operations Committee meeting. Raplee seconded the motion, which passed 3-0. 2. APPROVAL OF VOUCHERS QATED MARCH_i5, 200 tFinance Director Bob Nachlinger presented the vouchers for March 15, 2009 for approval. Raplee moved to approve the vouchers dated March 15, 2009. Thomas seconded the motion, which passed 3-0. 3. MOVE TO RECOMMEND THAT THE PREMERA BLUE CROSS ADMINISTRATIVE SERVICES CONTRACT FOR THE CITY'S SELF-INSURED HEALTH PLAN BE PLACED ON THE CITY COUNCIL CONSENT CALENDAR FOR THE APRIL 21, 2009 MEETING. Employee Services Benefits Manager Becky Fowler noted that the city contracts with Premera Blue Cross as a third party administrator (TPA) to process claims and provide access to Premera Blue Cross's PPa network of doctors and hospitals. The city is self-insured for this program and wires the weekly claims cost to Premera Blue Cross for our medical and prescription expenses. The 2009 contract reflects no additional increase in administrative fees by Premera Blue Cross and is budgeted in the health and welfare fund. The budget impact is $658,821 (Administrative Services Contract). Fowler also noted that approximately 94% of the city's employee population is covered under the self-insured Premera Blue Cross program totaling 2,300 lives. Included in this coverage is our LEOFF I retirees and their dependents. The overall projected cost of our self-insured plan inclusive of administration fees is $9,276,610. for 2009 and is budgeted In the health and welfare fund. Questions were raised by the Committee which Fowler responded to. Thomas moved to recommend that the Premera Blue Cross Administrative Services contract for the city's self-insured health plan be placed on the City Council consent calendar for the April 21, 2009 meeting. Raplee seconded the motion, which passed 3-0 . Operations Committee Minutes April 7, 2009 Page: 2 4. MOVE TO RECOMMEND A RESOLUTION BE PREPARED NO. , WHICH APPROVES AND ADOPTS AN IDENTITY THEFT PREVENTION PROGRAM AS REQUIRED BY THE FAIR AND ACCURATE CREDIT TRANSACTIONS ACT OF 2003, AND THE FEDERAL TRADE COMMISSION'S IDENTITY THEFT RULES. Finance director Bob Nachlinger advised that the Fair and Accurate Credit Transactions Act of 2003 and the Federal Trade Commission's identity Theft Rules ("Red Flag Rules") seek to reduce identity theft by requiring certain financial institutions and creditors with certain accounts that extend credit or involve deferred payments to prepare, adopt, and implement an identity theft prevention program. The City of Kent is subject to these requirements, and must have an appropriate program in place by May 1, 2009. Nachlinger further advised that the budget Impact Is largely dependent the time and effort required to implement the Identity Theft Prevention Program, including staff training. Nachlinger further noted that as part of the Fair and Accurate Credit Transactions Act of 2003 (FACTA), the Federal Trade Commission (FTC), the federal bank regulatory agencies, and the National Credit Union Administration (NCUA) have issued regulations (the Red Flag Rules) which require financial institutions and creditors to develop and implement written identity theft prevention programs. A Red Flag, in this context, is a pattern, practice, or specific activity that indicates the possible existence of identity theft. The Identity Theft Prevention Program (ITPP) must be: • Approved by the City Council • Managed by the City Council, Mayor or senior management designee • Include appropriate staff training, and • Provide for oversight of any service providers Nachlinger referred to Exhibit A, page 38 for the list of red flag indicators. Questions were raised by the Committee which Nachlinger responded to. Raplee moved to recommend a Resolution No. _be prepared, which approves and adopts an Identity Theft Prevention Program as required by the Fair and Accurate Credit Transactions Act of 2003, and the Federal Trade Commission's Identity Theft Rules. Thomas seconded the motion, which passed 3-0. 5. MOVE TO RECOMMEND COUNCIL APPROVE THE CONSOLIDATING BUDGET ADJUSTMENT ORDINANCE FOR ADJUSTMENTS MADE BETWEEN JULY 1, 2008 AND DECEMBER 31, 2008 TOTALING $53,994,704. Finance Director Bob Nachlinger advised that authorization is requested to approve 9 q the technical gross budget adjustment ordinance totaling $53,994,704 for budget adjustments made between July 1, 2008 and December 31, 2008. The net amount, excluding transfers and internal service charges, is $26,626,721. Nachlinger pointed out that $53,470,282 was previously approved by Council. These were primarily for projects. The net amount of $524,422 not yet approved by Council is for the liability Insurance funds ultimate loss/claims per actuarial study. Also 3 Operations Committee Minutes April 7, 2009 Page: 3 1 reflects allocation of dedicated revenues and authorizing expenditures. Questions were raised by the Committee which Nachlinger responded to. Thomas moved to recommend Council approve the consolidating budget adjustment ordinance for adjustments made between July 1, 2008 and 1 December 31, 2008 totaling $53,994,704. Raplee seconded the motion, which passed 3-0. 6A. WALK ON ITEM FROM PARKS, RECREATION, AND COMMUNITY SERVICES DEPARTMENT. MOVE TO RECOMMEND AUTHORIZING THE MAYOR TO SIGN THE WASHINGTON STATE SLO-PICTH UMPIRES ASSOCIATION AGREEMENT FOR THE 2009 SEASON. Parks, Recreation and Community Services Director Jeff Watling advised that participating teams in the City of Kent Adult Softball Program annually select their preferred umpires association to provide umpire coverage for league play. Watling noted at this year, 82 of 114 teams have chosen Washington State Slo-pitch Umpires Association (WSSUA) to service their games. As a result, the 2009 contract will likely exceed $25,000.00. Participant fees cover all costs for this program. Questions were raised by the Committee with Nachlinger responded to. Raplee moved to recommend authorizing the Mayor to sign the Washington State Slo-pitch Umpires Association Agreement for the 2009 season and bring to the April 7, 2009 Council meeting. Thomas seconded the motion, which passed 3-0. 6. Monthly Budget Summary Report. Finance Director Bob Nachlinger gave a brief overview of the month) budget 9 9 Y 9 summary report. Nachlinger explained the revenues were down 13.72% the first two months of this year from the previous year. Most of that is in relation to sales tax revenue. On March 31 the city did receive the mitigation payment for the 4t" quarter 2008 In the amount of $950,000. Utility taxes are running ahead of budget at 2.1%. Nachlinger addressed Interest income and building revenues referring to the charts on pages 60 and 61 showing Building Permits are down for the first two months of this year. Clark questioned the budgeted amount for the 2009 General Fund referencing page 62, the status of the refunding of the 1999 bonds, and the 10% contingency money which Nachlinger responded to. Th te ing adjo ed at 4:30 p m. I Nancy Cla Operations ommittee Secretary 1 PUBLIC WORKS COMMITTEE MINUTES April 06, 2009 1 COMMITTEE MEMBERS PRESENT: Committee Chair Deborah Ranniger and Committee Members Debbie Rapiee and Ron Harmon were present. The meeting was called to order at 5:02 p.m. ITEM 1- Approval of Minutes Dated March 16, 2009: Committee Member Raplee moved to approve the minutes of March 16, 2009. The motion was seconded by Harmon and passed 3-0. ITEM 2 - Lower Green River Acauisition Proiect: Environmental Engineering Manager, Mike Mactutis summarized that the Lower Green River Property Acquisition Project involves purchasing three parcels totaling 19.44 acres located along the south bank of the Green River along Frager Road S. The property will be used for a restoration project that will include creation of floodplain storage and side channel refuge habitat parallel to the Green River. Funds from the grant would be used to supplement acquisition costs including demolition, clean up and administration. The City will be reimbursed $60,000 by the Salmon Recovery Funding Board after the City of Kent spends its funds for this project. Harmon moved to recommend authorization for the Mayor to sign the Project Agreement Amendment with the Salmon Recovery Funding Board in the amount of$60,000, direct staff to accept the grant and establish a budget for the funds to be spent within the Lower Green River Property Acquisition Project, upon concurrence of the City Attorney and the Public Works Director. The motion was seconded by Raplee and passed 3-0. ITEM 3 - S. 2281h Grade Separation Burlinaton Northern Santa Fe (BNSF) Railroad Easement: Engineering Supervisor, Mark Madfai explained that the S. 228th Street Grade Separation project required an agreement with the BNSF Railroad that included the grant of surface, aerial and construction easement rights to the city at a total cost of $22,337.00. Acquisition of these rights is a condition of the agreement and execution of the associated documents by the city is required to establish title in the city. The project is 65% complete and on schedule and is scheduled for completion in October 2009. Raplee moved to authorize the Mayor to sign the Easement Agreement and memorandum of Easement for real property rights acquired from the Burlington Northern Santa Fe Railway (BNSF) at S. 228"' Street at a cost of $22,337.00, in a form acceptable to the City Attorney and the Public Works Director. The motion was seconded by Harmon and passed 3-0. ITEM 4 - Proposed Ordinance to Fund Water System Plan through Rates: Public Works Director, Larry Blanchard, presented an informative PowerPoint presentation highlighting the main issues discussed with Council over the past ten months. Blanchard summarized that rate adjustments are required in order to meet Department of Health standards, to meet bonding minimums and to maintain our water system. If rates are not adjusted the water system will not be able to meet the required system improvements necessary to meet those standards set by the Department of Health as outlined in the Water System Plan. Harmon moved to recommend Council adopt an ordinance revising sections 7.02.300 and 7.02.310 of the Kent City Council to adjust water rates to those rates set forth in Option 2 presented to the Committee, and direct the City Attorney to draft the ordinance consistent with this motion. Raplee seconded, Ranniger stated her objection and said that she would prefer to go with Option 1. The motion passed 2-1 for Option 2. Page 1 of 2 U:\PWCommittee\Minutes\PWMinutes 04 06 09.doc 2 PUBLIC WORKS COMMITTEE MINUTES April 06, 2009 ITEM 5— 2009 Desian & Construction Standards &Adoption of Ordinance: Development Engineering Manager, Mike Gillespie noted that he was coming back to committee as requested by committee members on March 16. Committee members had questions regarding street lighting in new developments. Staff will research their questions and come back to committee on May 4, 2009. Walk on Item; 2009 Design & Construction Standards - Garrett Huffman, South King County Manager of the Master Builders Association agreed about the light standards portion of the Construction Standards. He stated that if the City is going to charge up-front, builders would like to know what that cost is. He said that overall the Standards are good. Staff will meet with the Master Builders Association and get back to the committee on May 4, 2009. Committee members decided not to take action at this time. ITEM 6 - Contract Renewal/Plemmons Industry — Signal & Lighting Maintenance Shop: Public Works Director, Larry Blanchard stated that the City of Kent entered into a three (3) year contract with Plemmons Industries, to house the Signal and Street Lighting Maintenance personnel and equipment at the time to await the construction of the East Hill Operations Center (EHOC). The construction of the EHOC has been delayed until such time as bonds can be sold for said construction. In the mean time the Transportation Engineering Section of Public Works Engineering must retain this space until such time as the EHOC is constructed and the Signal and Street Lighting Maintenance functions can be moved to this facility. Blanchard requested the contract be extended until the East Hill Operations Center is completed. Harmon asked that staff look at the possibility of using City owned property along West Valley Highway; he mentioned that it has been vacant for some time and may be a good option. No motion was made. Staff will come back to committee with a report of their findings in regards to the feasibility of using City owned property. ITEM 7 - Lease Agreement for 23825 98th Ave. S: Public Works Director, Larry Blanchard briefly went over the history of this request. Based on the feedback received a Lease Agreement has been prepared for the Public Works Committee's review and approval. Raplee moved to authorize the Mayor to sign the Lease Agreement between the City of Kent and Montessori Plus School for the lease of parking spaces for overflow parking from property owned by the Water Utility at 23825 98th Avenue South subject to the terms and conditions acceptable to the City Attorney and the Public Works Director. The motion was seconded by Harmon and passed 3-0. Added Items: South 256th Street LID - Deputy Public Works Director, Tim LaPorte updated the committee on the status of the South 256th Street LID. The Design Section has held two public meetings to provide information to the affected property owners. The meetings have been well attended with between 25 and 35 attendees. Another public meeting will be held on April 16 at Kent-Meridian High School. Adiourned: The meeting was adjourned at 6:55 p.m. Next Scheduled Meeting: Monday, April 20, 2009 at 5:00 p.m. Cheryl Viseth, Public Works Committee Secretary Page 2 of 2 U:\PWCommittee\Minutes\PWMinutes 04 06 09.doc CONTINUED COMMUNICATIONS A. i 1 i 1 ' EXECUTIVE SESSION ACTION AFTER EXECUTIVE SESSION