HomeMy WebLinkAboutCity Council Meeting - Council - Agenda - 05/05/2009 oWi
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Ulty of Kent
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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.
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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
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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
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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
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B) FROM THE PUBLIC
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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.
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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).
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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
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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
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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.
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• 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.
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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
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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
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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.
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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
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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
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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.
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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.
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• 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,
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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.
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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.
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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.
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• 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.
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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.
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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.
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• 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
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• 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?
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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
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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
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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.
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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.
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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.
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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
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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
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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.
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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,
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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.
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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
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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."
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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.
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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.
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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.
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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."
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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.
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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.
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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)
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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.
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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
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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.
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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
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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.
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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
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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.
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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
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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
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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
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57 H5050 09ANOCE000010908
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2009 Evidence of Coverage(EOC)
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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 '
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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
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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.
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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.
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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
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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.
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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,
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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;
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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.
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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.
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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
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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.
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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
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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
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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
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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.
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% 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
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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
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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,
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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
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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
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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.
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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.
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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
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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)
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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.
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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-
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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,
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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.
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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.
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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
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_ 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
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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
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By: By:
Title: Title:
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Date: Date:
ATTEST:
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Exhibit G
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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
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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.
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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
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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.
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Print Name:
Notary Public in and for the State of Washington,
residing at
My Commission Expires
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Page 2 of 4
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N89°15'54"W
632.76' —
�' GLEN NELSON
QI
IN PARK
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0 I Io
O I 2 � Go
(N N �� N
N 100 O
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N,
c� 30' N
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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.
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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.
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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
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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
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N89,15'54"W
- 632.76' -
�' GLEN NELSON
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PARK
( Lo
300, DETAIL
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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
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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.
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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
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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/ .
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Jeff Watling, Director
Kent Parks, Recreation & Community Services
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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.
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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
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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)
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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.
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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.
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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
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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
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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
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' 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
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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
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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
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1
1
1
1
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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
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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.
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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
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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.
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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.
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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.
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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.
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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
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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.
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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.
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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.
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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
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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.
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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�
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° - � 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.
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"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
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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. '
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' 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. ,
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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
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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
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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.
Very truly ours,
illiam M.Pascucci
President
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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
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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
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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
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EXHiB ff
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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
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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:
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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.
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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
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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
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' EXECUTIVE SESSION
ACTION AFTER EXECUTIVE SESSION