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HomeMy WebLinkAbout06112007 City Council Packet The City of Seward, Alaska June 11,2007 Vanta Shafer Mayor Tenn Expires 2007 Willard E. Dunham Vice Mayor Tenn Expires 2008 Robert Valdatta Council Member Tenn Expires 2007 Robert Thomas Council Member Term Expires 2007 Steve Schafer Council Member Tenn Expires 2007 Jean Bardarson Council Member Tenn Expires 2008 Linda Amberg Council Member Term Expires 2008 Phillip Oates City Manager Jean Lewis City Clerk Brad Meyen Cheryl Brooking City Attorney .. City Council Meeting 7:30 p.m. Council Chambers 1. 2. 3. 4. CALL TO ORDER PLEDGE OF ALLEGIANCE ROLL CALL CITIZENS' COMMENTS ON ANY SUBJECT EXCEPT THOSE ITEMS SCHEDULED FOR PUBLIC HEARING. [Those who have signed in will be given the first opportunity to speak. Time is limited to 2 minutes per speaker and 30 minutes total timefor this agenda item.] s. APPROVAL OF AGENDA AND CONSENT AGENDA [Approval of Consent Agenda passes all routine items indicated by asterisk (*). Consent Agenda items are not considered separately unless a council member so requests. In the event of such a request. the item is returned to the Regular Agenda] SPECIAL ORDERS, PRESENTATIONS AND REPORTS 6. A. Proclamations and Awards 1. Proclamation for Watchable Wildlife Month..... .Pg 4 B. Borough Assembly Report C. City Manager's Report D. Seward Port and Commerce Advisory Board Report E. Other Reports, Special Presentations 1. Introduction of the 2007 Seward Sister City Exchange Students. City of Seward. Alaska June 11. 2007 Council Agenda Page 1 7. PUBLIC HEARINGS A. Ordinance Requiring a Public Hearing 1. Ordinance 2007-02. Amending Seward City Code 8.30.025 (A), Which Extends The Deadline For Seasonal Business License Renewals From April 1 To May I Each Calendar Year. . . . . . . . .. . . . . . . . . . . . . . . . . .. .. . . .. . .. . .. . .. . .. . . . . .. . .. . .. . .. . .. . .. . .. . .. . . ..Pg 5 B. Resolutions Requiring a Public Hearing 1. Resolution 2007-055. A Resolution Of The City Council Of The City Of Seward, Alaska, Authorizing The City Manager To Enter Into A Lease Agreement With Dale & Carol Lindsey To Lease 1706 Square Feet Of Office Space In The Petro Plaza Building For A Period Of Three Years With Two One-Year Options To Extend At A Rate of$2.05/SF....................................................................... ...Pg 8 8. UNFINISHED BUSINESS - None 9. NEW BUSINESS A. Resolutions *1. Resolution 2007-056. Authorizing The City Council To Donate Twenty Five Hundred Dollars ($2,500.00) To The National Ocean Sciences BowL.... ......... ...... .. Pg 51 *2. Resolution 2007-057. Authorizing The Discharge Of Fireworks By The Chamber Of Commerce During The 2007 Independence Day Celebration.. " . .. ............ . .Pg 53 *3 Resolution 2007-058. Authorizing The City Manager To Enter Into A Purchase Agreement For A 225 KV A Transformer, For A Total Amount Not- To-Exceed $11,761.20............................................................................. ...Pg 59 *4. Resolution 2007-059. Authorizing Payment In The Amount Of $21,436.85 To Harris Computers For Utility Billing Software Contract................................ ...Pg 67 B. Other New Business Items *1. Approval or The May 24,2007 and June 5, 2007 Special City Council Meeting Minutes And The May 29,2007 Regular City Council Meeting Minutes.. .Pg 71 10. INFORMATIONAL ITEMS AND REPORTS (No action required) A. Providence Seward Medical Center 2006 Audited Financial Statements..... .. . .Pg 81 11. COUNCIL COMMENTS City of Seward, Alaska June 11, 2007 . Council Agenda Page 2 12. CITIZENS' COMMENTS [5 minutes per individual - Each individual has one opportunity to speak.] 13. COUNCIL AND ADMINISTRATION RESPONSE TO CITIZENS' COMMENTS 14. EXECUTIVE SESSION A. Go into executive session to discuss contract negotiations in regards to the possible purchase of property for inclusion in the Mary Lowell Center Project. 15. ADJOURNMENT City of Seward. Alaska June II, 2007 Council Agenda Page 3 PROCLAMA TION WHEREAS, the Alasb Department of Fish & Game unveiled the AlaslG Coastal Wildlife Viewing Trail to enhance wildlife viewing opportunities along Southeast AlaslG Marine Highway routes and coastal communities in 2006; and WHEREAS. the AlaslG Department of Fish & Game has designated that the first road/boat based wildlife viewing trail in the St8te of AlaslG is to be located on the Kenai Peninsula; and WHEREAS. wildlife viewing trails encourage travelers to stay in communities longer and has been proven to be a powerful revenue booster for local economies; and WHEREAS, surveys showed wildlife viewing was responsible for $790 million in spending in Alaska and created 13,000 jobs; and WHEREAS, over 30 st8tes have developed wildlife viewing trails, becoming increasingly popular tools for both experienced and novice wildlife viewers; and f WHEREAS, some communities of the Kenai Peninsula have scheduled events in June 2007 to celebrate the Kenai Peninsula Viewing Trail; and WHEREAS. the Kenai Peninsula Tourism and Marketing Council wiD continue to be a primary group involved with trail promotion and fUture development,' and WHEREAS, Borough Mayor John Williams proclaimed June 2007 at Watchable Wildlife Month on the Kenai Peninsula. NOW THEREFORE, l, Vanta Shafer; Mayor of the City of Seward, AlaslG, do hereby recognize the month of June as Watchable Wildlife Month and issue awareness of our very own Kenai Peninsula Wildlife Viewing Trail Dated this 11th day of June, 2007. 11IE CITY OF SEWARlJ. .A.LAS.KA Vanta Shafer. Mayor o 4 Sponsored by: Clerk Introduction Date: May 29, 2007 Public Hearing Date: June 11, 2007 Enactment Date: CITY OF SEWARD, ALASKA ORDINANCE 2007-002 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, ~NDlNG SEWARD CITY CODE 8.30.025 (a), WHICH EXTENDS THE DEADLINE FOR SEASONAL BUSINESS LICENSE RENEWALS FROM APRIL 1 TO MAY 1 EACH CALENDAR YEAR WHEREAS, members of the public have requested additional time to renew their seasonal business licenses; and WHEREAS, many seasonal business owners travel out of state for the winter and do not receive their renewal notices on time or return to Alaska after April 1 , therefore owners have to pay an additional $30 late fee; and WHEREAS, past research of our business license code does not reveal any intent or reason this date cannot be extefided; and WHEREAS, after discussing this item during the May 14, 2007 council meeting, council directed staff by unanimous consent to generate an ordinance implementing this change; and WHEREAS, it IS in the best interest of the city and public to extend the seasonal business license renewal due date to May 1. NOW, THEREPORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY .OF SEWARD, ALASKA that: The Seward City Code Title 8 is hereby amended to read as follows: (strilee aut - deletions; bold italics = additions) Section 1: read as follows: The Seward City Code Title 8, Section 8.30.025 (a) is hereby amended to (a) A person engaging in a business shall apply to the city clerk for a business license on a form prescribed by the city and shall not open for business until the business license is issued. Renewal license applications must be filled out no later than January 31 in each subsequent year, except that a seasonal business operating during the summer - - . o 5 CITY OF SEWARD, AtASKA ORDINANCE 2007-002 season, May 1 to September 30 only, shall file a renewal application no later than Aprill May 1 in each subsequent year. Section 2: This ordinance shall take effect ten (10) days following its enactment. ENACTED BY CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, this 11th day ofJune, 2007. THE CITY OF SEWARD, ALASKA Vanta Shafer, Mayor AYES: NOES: ABSENT: ABSTAIN: ATTEST: Jean Lewis City Clerk (City Seal) !:r "6 Agenda Statement To: Honorable Mayor and Council From: Nanci Richey, Administrative Assistant I -i\v(L.- Meeting Date: May 29, 2007 Agenda Item: Amending Tile 8.30.025(a), business licensing to change the due dll.te of a seasonal business license renewal from April I to May 1 of each subsequent year. BACKGROUND & JUS1'IFICA TION: Seward City Code, Section 8.30.025 (a), states that a seasonal business license operating during the summer season, May I to September 30 only, shall file a renewal application no later than April 1 in each subsequent year. Many seasonal businesses are gone in the winter months and do not receive their renewal notices or return to Alaska until April or May. This causes many owners to react unfavorably to the late $30 fee since they have not even opened their businesses yet. Business owners would be reassured to know they would have an extra month to renew their business license. The public goodwill would more than outweigh the monetary value to the city, which is by our calculatiOns not more than $600.00. INTENT: Past research of our business license code does not reveal any intent or reason this date cannot be extended. CONSISTENCY CHECkLIST: Where applicable, this agenda statement is consistent with the Seward City Code, Charter, Comprehensive Plans, Land Use Plans, Strategic Plan and City Council Rules of Procedures. Other: FISCAL NOTE: None ~ Approved by Finance Department: RECOMMENDATION: Introduce and enact Ordinance 2007-002, to extend the deadline for seasonal business liceriSe renewals from April I to May 1 for each calendar year. 7 Sponsored by: Oates CITY OF SEWARD, ALASKA RESOLUTION 2007-055 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, AUTHORIZING THE CITY MANAGER TO ENTER INTO A LEASE AGREEMENT WITH DALE & CAROL LINDSEY TO LEASE 1706 SQUARE FEET OF OFFICE SPACE IN THE PETRO PLAZA BUILDING FORA PERIOD OF THREE YEARS WITH TWO ONE-YEAR OPTIONS TO EXTEND AT A RATE OF $2.05/SF WHEREAS, the City of Seward currently leases 1,706 square feet of office space located at the Petro Plaza Building, and that lease agreement expires May 31, 2007 with no additional options to extend; and WHEREAS, the City issued a Request for Proposals to lease between 1100 and 3100 square feet of office space, and received two responses; and WHEREAS, the lowest cost response was received from Petro Plaza located at 234 Fourth A venue, with a proposal to lease the existing 1706 square feet of modem office space at a price of $2.05/sf including heat, electricity, water, sewer, and two off-street parking spaces; and WHEREAS, the City currently leases the same office space in Petro Plaza as is being proposed, at the cost of $1.85/sf and would incur no additional costs associated with moving, installation of telephone and communication lines, signage, etc; and WHEREAS, the City still requires additional office space and will be investigating alternative locations for electric department staff. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, that: Section 1. The City Council hereby fmds that, for the reasons stated in the above recitals, acquiring City office space by lease under the terms and conditions in the attached Lease Agreement is in the public interest. Section 2. The Lease Agreement between Dale & Carol Undsey and the City of Seward is hereby approved in substantial form as attached hereto and the city manager is authorized to sign the Lease Agreement in substantial form on behalf of the City. Any options to extend may be exercised by the city manager without further approval and provided that funds are annually appropriated. Section 3. The Lease Agreement is subject to annual appropriations of the Seward City Council per Seward City Code Section 5.01.015. 8 CITY OF SEWARD RESOLUTION 2007-055 Section 4. This resolution shall take effect immediately upon adoption. PASSED AND APPROVED by the City Council of the city of Seward, Alaska, this 11th day of June, 2007. THE CITY OF SEWARD, ALASKA Vanta Shafer, Mayor AYES: NOES: ABSENT: ABSTAIN: A TrEST: Jean Lewis, CMC City Clerk (City Seal) .~ " 9 Council Agenda Statement Meeting Date: June 11, 2007 Through: Philip Oates, City Manager ~ P'/as-/67 Kris Erchinger, Finance Director '(JMJ From: Agenda Item: Lease of Office Space for. Engineering Department, Project Manager! Building Department and Community Development BACKGROUND & JUSTIFICATION: The City of Seward issued an RFP to lease office space for the Engineering Department, Project Manager! Building Department and Community Development Department between 1100 and 3100 square feet, excluding restrooms. The RFP specified that at least 1700 square feet of office space to City HaIl is important and that cost was only one factor that would be considered. Two responses were received: (1) Petro Plaza (234 4th Avenue), with an initial lease price of $2.05 per square foot for a total of 1706 square feet, including utilities, heated sidewalks, two parking spaces, and back-up electrical power; (2) Resurrection Body Works (231 5th Avenue) with an initial lease price of $2. I 0 per square foot for a total of28oo square feet. The city has leased the Petro Plaza since June 1,2003. If the City remains in the Petro Pla?a, they will not incur additional costs associated with moving, installations of telephone and communication lines, signage, and other such expenses. The proposals were evaluated by a committee composed of Kris Erchinger, Tim Barnum, Tom Shepard and Kirsten Vesel The Petro Plaza was deemed to most closely meet the needs of the Departments at the lowest over-all cost, including utilities and is therefore the recommended space for occupancy. Administration recommends a three year lease term with two one-year options to extend. Petro Marine Services has granted a temporary extension until the lease is presented to the City Council CONSISTENCY CHECKLIST: Where applicable, this resolution is consistent with the Seward City Code, Charter, Comprehensive Plans, Land Use Plans, Strategic Plan and City Council Rules of Procedures. FISCAL NOTE: The previous rate for the city leasing the Petro Plaza was for $1.86 per square foot for a total of1706 square feet The new lease rate will increase by $.20 per square fool The annual lease would be $41,967.60 versus the current rate of$37,873.20 for an increase of$4094.40. Approved by Finance Department ~tkAJ"~ 10 RECOMMENDATION: Council approves Resolution 2007- ..55 authorizing the City Manager to enter into a lease agreement with Dale and Carol Lindsey and the City of Seward in substantial for as attached hereto and the city manager is authorized to sign the Lease Agreement in substantial form on behalf of the City. Any option to extend may be exercised by the city manager without further approval and provided that the funds are annually appropriated. 11 PETRO MARINE SERVICES Petroleum Marketing to the Marine Industry May 31, 2007 KirSten Vesel, Assistant City Manager City of Seward PO Box 167 Seward, AK 99664 RE: Lease Extension Agreement Dear Ms. Vesel, At your request, Dale & Carol Lindsey would be pleased to extend the office space lease for an additional two months, until July 31,2007, to facilitate the preparation and execution of a new lease. Please feel free to contact me directly if you have any questions. Sincerely. f),II':','~I"/' ."< ,v if! " ',/ ,.~i,4" .' , / .'_ . .._A/~"iof I '^-._- (I U CherylJ. Beckham Petro Plaza Representative p, O. Box 389 . Seward. Alaska 99664 Phone (907) 224.3190 . Fox (907) 224.3937 A HARBOR ENTERPRl4l COMPANY OFFICE LEASE BETWEEN DALE & CAROL LINDSEY LANDLORD AND CITY OF SEWARD TENANT PREMISES: 234 FOURTII AVENUE . 13 ~ SEWARD, ALASKA 99664 TABLE OF CONTENTS OFFICE LEASE SECTION 1 -- BASIC LEASE PROVISIONS 1. SECTION 2 -- RENT 2 SECTION 3 -- AFFIRMATIVE OBLIGATIONS 3 SECTION 4 -- NEGATIVE OBLIGATIONS 7 SECTION 5 -- INSURANCE 11 SECTION 6 -- LOSS OF PREMISES 15 SECTION 7 -- DEFAULT 19 SECTION 8 -- NONDISTURBANCE 23 SECTION 9 -- LANDLORD'S RIGHTS 25 SECTION 10 -- DISPUTES 29 SECTION 11 -- MISCELLANEOUS 31 SIGNATURE PAGE 33 .. 14 ~~ OFFICE LEASE SECTION 1- BASIC LEASE PROVISIONS 1.01. Date and Parties. This Lease (Lease) is made this 1st day of August, 2007, between Dale & Carol Lindsey (Landlord), and City of Seward, (Tenant). Landlord has its principal office at 234 Fourth Ave., Suite 100, Seward, Alaska 99664. Tenant has its office at 234 Fourth Avenue, Suite 101, Seward, Alaska 99664. 1.02. Premises. Landlord leases to Tenant 1706 sq.ft.on the 1st Floor (Premises) of the building at 234 Fourth Avenue, Seward, Alaska (Building). Landlord will arrange for 2 parking spaces in the Landlords parking lot (due east of Building) at Landlords sole cost. Further, tenant shall be prohibited from parking vehicles along the North side of the Premises Monday thru Friday between 8am and 5pm, other than for delivery/temporary purposes. Tenant and its agents, employees, and invitees have the non-exclusive right with others designated by Landlord to the free use of the common area (Front Entrance) in the building and of the land for the common areas' intended and normal purpose. Common areas include sidewalks, stairways, elevators, common entrances, and other similar public areas and access ways. Landlord may change the common areas if the changes do not materially and unreasonably interfere with Tenant's access to the Premises or use of them. 1.03. Use. Tenant shall use the Premises for City administrative offices (Building and Engineering, Electric, Community Development and Planning) for general business offices and limited to 10 personnel, unless Landlord gives its advance written consent to additional occupants or another use. Food sales and services shall be prohibited by Tenant Landlord warrants that applicable laws, ordinances, regulations, and restrictive covenants permit the Premises to be used for general office space. Tenant shall not create a nuisance or use the Premises for any illegal purpose. Office Lease Between Dale and Carol Lindsey and the city of Seward August 2007 -Page 1 of36- 15 1.04. Term. 1.04(a). Term. The Lease begins on Aue:ust lit, 2007 (Beginning Date). The Lease ends on July 31st. 2010 (Ending Date). Tenant shall have the option to renew lease for an additional two (1) year minimum periQds. at negotiated rates, by providing Landlord 90 days written notice. 1.05. Condition of the Premises. Tenant shall provide a written request to Landlord if and when altering conditioo of Premise. Landlord will provide written permission to Tenant if they consent to such alterations. SECTION 2 - RENT 2.01. Rent. Tenant shall pay to Landlord Rent as follows: Year 1- $3,497.30 monthly ($2.05 per usable square feet); Year 2- $3,497.30 monthly ($2.05 per usable square feet); Year 3 - $3.497.30 monthly ($2.05 per usable square feet); . Plus, applicable sales taxes. Renewal Rates: to be negotiated. The Rent shall be paid: (i) without advance notice, demand, offset, or deduction unless the offset or deduction is made by Tenant as permitted under the Lease or to recover any unpaid (nonappealable) court judgment Tenant has l\8fIinlrt Landlord; (ii) by the first day of each month during the Term; and (Hi) to Landlord at P.O. Box 389 or 234 41h Ave, Seward, Alaska 99664, or as Landlord may specifY in writing to Tenant. If Tenant fails to pay part or all of the Rent within ten (10) days after written notice from Landlord, the Tenant shall also pay: (i) . a late charge equal to five percent (5%) of the unpaid Rent and Additional Rent, plus Office Lease Between Dale and Carol Lindsey and the City of Seward August 2007 -Page 2 of 36- 16 (ii) interest at the legal rote provided by AS 45.45.010(a) at the time of the failure to pay on the remaining unpaid balance, retroactive to the date originally due until paid, but the interest accumulation shall stop after thirty (30) days unless Landlord gives Tenant notice within thirty (30) days of the date payment was due of Tenant's failure to pay Rent. 2.02. Security Denosit. As a courtesy to Tenant, no security deposit is required. 2.03. Taxes: (if applicable) (i) Taxes: The term "taxes" as used herein shall mean: all taxes and assessments and governmental charges whether federal, state, county or municipal, and whether they be by taxing districts or authorities presently taxing the Leased premises or by others, subsequently created or otherwise, and any other taxes or assessments attributable to the Building or its operation. (ll) Personal Prooerty Taxes: Tenant will be responsible for the direct payment of any and all ad valorem taxes on its personal property and for all assessments, impositions in taxes made, levied or assessed against or imposed upon any and all improvements in, on. or about the Leased premises which were made by or on behalf of Tenant or which in whole or in part belong to Tenant. (Hi) Gross Receiots or Sales Taxes: If any State or local governmental authority shall in any manner levy a tax on rentals payable under this Lease or rentals accruing from use of property, a sales tax or a tax in any form against Landlord measured by gross revenue or income derived from the leasing or rental of the Building, such tax shall be paid by Tenant directly through Landlord. Tenant shall not be liable to pay any Fedem1 or State net income tax imposed on Landlord. SECflON 3 - AFFIRMATIVE OBLIGATIONS 3.01. Comoliance with Laws. 3.01(a). Landlord's Comoliance. Landlord warmnts, that on the Begjnning Date, the Premises will comply with all applicable laws, ordinances, rules, and Office Lease Between Dale and Carol Lindsey and the City of Seward August 2007 -Page 3 of36- 17 3.01(b). regulations of governmental authorities (Applicable Laws). During the Term, Landlord shall comply with all Applicable Laws regarding the Premises, Land and Building, including without limitation The Americans with Disabilities Act, except to the extent Tenant must comply under paragraph 3.01(b). Tenant's Compliance. Tenant shall comply with all Applicable Laws: (i) regarding the physical condition of the Premises, but only to the extent the Applicable Laws pertain to the particular manner in which Tenant uses the Premises; or (ii) that do not relate to the physical condition of the Premises but relate to the conduct of Tenant's business in the Premises and with which only the occupant can comply, such as laws governing maximum occupancy and workplace smoking. 3.02. Services and Utilities. 3.02(a). Services. Landlord shall provide at its expense: (i) heating, ventilation, and air conditioning (HV AC) for the Premises during business hours to maintain comfortable use and occupancy of the Premises. (ii) hot and cold water sufficient for drinking, lavatory, toilet, and ordinary cleaning purposes; (Hi) electricity to the Premises that provides electric current in reasonable amounts necessary for normal office use (computers, copier, fax and light office machines such as calculators), lighting, and HV AC; (iv) maintenance of common areas in a manner comparable to other first class office buildings in the Seward area. The maintenance shall include cleaning, HV AC, illumillfltion, snow shoveling, deicing, repairs, and replacements. (v) all interior window coverings, in order to keep building uniform. (vi) semi-annual exterior window cleaning and annual carpet cleaning. 3.02(b) Business Hours. In paragraph 3.02 business hours means: Office Lease Between Dale and Carol Lindsey and the City of Seward August 2007 -Page 4 of36- 18 (i) Monday through Friday 6:00 a.m. through 8:00 p.m. with the exception of some late evening meetings, (ii) Saturdays, Sundays and holidays (same times as (i) on an irregular basis. 3.02(c) 24 Hour Access. Tenant, its employees, agents, and invitees shall have access to the Premises twenty-four (24) hours a day, seven (7) days a week. Landlord may temporarily close the Building if required because of a life~ threatening or Building-threatening situation. Otherwise, Landlord shall use its best efforts to close the Building during nonbusiness hours only. 3.02(d). 3.02(e). Tenant shall pay for installation and use of telephone and data cabling. Interruntion of Services. (i) Interruptions. Landlord does not warrant that any services Landlord supplies will not be interrupted. Services may be interrupted because of accidents, repairs, alterations, improvements, or any reason beyond the reasonable control of Landlord. Except as noted in (ii) below, an interruption shall not: (A) be considered an eviction or disturbance of Ten ant's use and possession of the Premises; (B) make Landlord liable to Tenant for damages; (C) abate Rent or Additional Rent; or (0) relieve Tenant from performing Tenant's Lease obligations. (ii) Remedy. If any essential services (such as HV AC, passenger elevator ifnecessary for reasonable access, electricity, water) supplied by Landlord are interrupted, and the interruption does not result from the negligence or willful misconduct of Tenant, its employees, invitees, or agents, Tenant shall be entitled to an abatement of Rent and/or Additional Rent. The abatement shall Office Lease Between Dale and Carol Lindsey and the City of Seward August 2007 -Page 5 of 36- 19 begin on the fourth consecutive business day of the interruption or when Tenant stops using the Premises because of the interruption, whichever is later. The abatement shall end when the services are restored. Tenant shall have th.e option to cancel the Lease if the interruption unreasonably and materially interferes with Tenant's use of or access to the Premises or the Building for at least thirty (30) consecutive days and Landlord is not exercising its best efforts to restore the services. To exercise this option Tenant must give Landlord notice of the cancellation within ten (10) days from the end of the thirty (30) day period. 3.03. Repairs and Maintenance. 3.03(a). Tenant's Care of Premises. Tenant shall: (i) keep the Premises and fixtures in good order; (ii) make repairs and replacements to the Premises or Building needed because of Tenant's misuse or primaly negligence, except to the extent that the repairs or replacem~ are covered by Landlord's insurance or the insurance Landlord is required to cany under Section 5, whichever is greater; (ill) repair and replace special equipment or decorative treatments above building standard installed by or at Tenant's request and that serve the Premises only, except (A) to the extent the repairs or replacements are needed because of Landlord's misuse or primaly negligenCe, and are not covered by Tenant's in&urai1ce or the insurance Tenant is required to carry under Section 5, whichever is greater; or (B) if the Lease is ended under paragraphs 6.01 (Damages), 6.02 (Condemnation) or 7.03 (Landlord's Default); and (iv) not commit waste. 3.03(b). Landlord's ~. Except for repairs and replacements that Tenant must make under paragraph 3.03(a), Landlord shall pay for and make all the Office Lease Between Dale and Carol Lindsey and the City of Seward August 2007 -Page 6 of36- 20 other repairs and replacements to the Premises, common areas and Building (including Building fixtures and equipment). Landlord shall make the repairs and replacements to maintain the Building in a condition comparable to other similar office buildings in the Seward area. This maintenance shall include the roof, foundation, exterior walls, interior structural walls, all structural components, and all systems, such as mechanical, electrical, HV AC, and plumbing. 3.03(c). Time for Reoairs. Repairs or replacements required under paragraphs 3.03(a) or 3.03(b) shall be made within a reasonable time (depending on the nature of the repair or replacement needed) after receiving notice or having actual knowledge of the need for a repair or replacement. 3 .03( d). Surrendering the Premises. Upon the Ending Date, Tenant shall surrender the Premises to Landlord in the same broom clean condition that the Premises were in on the Beginning Date except for: (i) ordinary wear and tear; (ii) damage by the elements, fire, and other casualty unless Tenant would be required to repair under paragraph 3.03(a); (Hi) condemnation; (iv) damage arising from any cause not required to be repaired or replaced by Tenant; and (v) alterations as required mid permitted by this Lease unless consent was conditioned on their removal. On surrender Tenant shall remove from the Premises its personal property, trade fixtures, and any Alterations required to be removed under paragraph 4.01 and repair any damage to the Premises caused by the removal. Any items not removed by Tenant as required above shall be considered . abandoned. Landlord may dispose of abandoned items as Landlord chooses and bill Tenant for the costs of their disposal, minus any revenues received by Landlord for their disposal. Office Lease Between Dale and Carol Lindsey and the City of Seward . August 2007 .page 7 of36- 21 3.04. Landlord's Compliance with Environmental Laws. 3.04(a). Landlord's Representation. Lp1dlord represents and warrants to the best of . its knowledge that the Building and Premises comply withalr federal, state, and local environmental laws. Office Lease Between Dale and Carol Lindsey and the City of Seward August 2007 -Page 8 of36- 22 SECfION 4 - NEGATIVE OBLIGATIONS 4.01. Alterations. 4.01(a). 4.01(b). 4.01(c). Defmition. "Alterations" means alterations, decorations, additions, substitutions, installations, changes, and improvements, but excludes minor decorations. Consent. Tenant shall not make Alterations without the Landlord's advance written consent. Landlord's consent shall not be unreasonably withheld or unduly delayed for nonstructural interior AlterationS to the Premises that do not adversely affect the Building's appearance, value, and structural strength. Pavment and Ownership of the Alterations. Alterations made under this paragraph shall be at Tenant's expense. The Alteration shall belong to Landlord when this Lease and the last extension Term, if any, ends except for those Alterations required to be removed by Tenant, if any. Nevertheless, Tenant may remove its trade fixtures, furniture, equipment, and other personal property if Tenant promptly repairs any damage caused by their removal. 4.02. Assignment and Subleasing 4.02(a). 4.02(b ). Consent Required. Tenant shall not transfer, mortgage, encumber, assign. or sublease all or part of the Premises without Landlord's advance written consent. Landlord's consent to any assignment or sublease shall not be unreasonably withheld or unduly delayed. Reasonableness. The Landlord's consent shall not be considered unreasonably withheld if: (i) the proposed subtenant's or assignee's financial responsibility does not meet the same criteria Landlord uses to select comparable Building tenants; Office Lease Between Dale and Carol Lindsey and the City of Seward August 2007 -Page 9 of 36- 23 (ii) the proposed subtenant's or assignee's business is not suitable for the Building considering the business of the other tenants and the Building's prestige; or (Hi) the proposed use is inconsistent with the use permitted by paragraph 1.03. 4.02(c). Procedure. (i) Tenant must provide Landlord in writing: (A) the name and address oftll(: proposed subtenant or assignee; (B) the nature of the proposed subtenant's or assignee's business it will operate in the Premises; , (C) the terms ofthe_PfOPosed sublease or assignment; and (D) reasonable financial information so that Landlord can evaluate the proposed subtenant or assignee under paragraph 4.02(b)(i). (ii) Landlord shall within ten (10) business days after receiving the information under paragraph 4.02(c)(i), give notice to Tenant to permit or deny the proposed sublease or assignment. If Landlord denies consent, it must explain the reasons for the denial. If Landlord does not give notice within ten (10) business-day period, then Tenant may sublease or assign part or all of the Premises upon the terms Tenant gave in the information under paragraph 4.02(c)(i). 4.02(d). Affiliates. Notwithstanding paragraphs 4.02(a),(b), 'and (c), Tenant may assign or sublease part or all of the Premises without L8ndlord's consent to: (i) any corporation or partnership that controls, is controlled by, or is under common control with, Tenant; or ' (ii) any corporation resulting from the merger or consolidation with Tenant or to any entity that acquires all of tenant's assets as a going concern of the business that is being conducted on the Premises, as Office Lease Between Dale and Carol Lindsey and the City of Seward August 2007 -Page 10 of36- 24 long as the assignee or sublessee is a bona fide entity and assumes the obligations of Ten ant. 4.02(e). Conditions. Subleases and Assigmnents by Tenant are also subject to: (i) the terms of this Lease; (ii) the Tenn shall not extend beyond the Lease Term; (iii) Tenant shall remain liable for all Lease obligations; (iv) consent to one (1) sublease or assigmnent does not waive the consent requirement for future assigmnents or subleases; and (v) fifty percent (50%) of the lease or sublease consideration (Excess Consideration) received by Tenant from an assigmnent or sublease that exceeds the amount Tenant must pay Landlord under the Lease, which amount is to be prorated where a part of the Premises is subleased or assigned, shall also be paid to Landlord. Excess Consideration shall exclude market-rate leasing commissions paid by Tenant, payments attributable to the amortization of the Cost of . Tenant improvements made to the Premises at Tenant's cost for the assignee or sublessee, and other reasonable, out-of~pOcket costs paid by Tenant, such as attorneys' fees directly related to Tenant's obtaining an assignee or sublessee. Tenant shall pay this Excess Consideration to Landlord at the end of each calendar year during which Tenant collects any Excess Consideration. Each payment shall be sent with a detailed statement showing. . (A) the total consideration paid by the sublessee or assignee; and (B) any exclusion .from the consideration permitted by this paragraph. Landlord shall have the right to audit Tenant's books and records to verifY the accuracy of the detailed statement. 4.03 Restrictions on Tenant: Hazardous Material: Office Lease Between Dale and Carol Lindsey and the City of Seward August 2007 -Page 11 of36- 25 4.03(a). 4.03(b). Tenant shall not cause or permit any Hazardous Material to be used, stored, generated or disposed of on or in the Premises by Tenant, Tenant's agents, employees or contractors, without first obtaining Landlord's written consent. If Hazardous Material is used, stored, generated or disposed of on or in the Premises except as permitted above, or if the Premises become contaminated in any manner for which Tenant is liable; or except as a result of Landlord's or its, agent's, employee's or contractOr's negligence or willful acts or omissions, Tenant shall indemnify and hold harmless the Landlord from any and all cbums, damages, fines, judgments, penalties, costs liabilities or losseS (including, without limitation, a decrease in value of the premises, damages due to loss or restriction of rentable or usable space, or any damages due to adverse impact on marketing of the space, and any and all sums paid for settlement of claims, attorneys' fees, consultant . and expert fees) arising during or after the temi of the Lease and arising as a result of such contamination by Tenant. This indemnification includes, without limitation, any and all costs inCUI'l'td due to any investigation otthe Premises or Building or any cleanup, removal or restoration mandated by a federal, state or local agency or political subdivision. In addition, if Tenant causes or permits the presences of any Hazardous Substance on the Premises or in the Building and this results in contamination, Tenant shall promptly, at its sole expense, take any and all necessary actions to retUrn the Premises or the Building to the condition existing prior to the presence of any such Hazardous Substance on t:J1e Premises or in the Building, Tenant shall first obtain Landlord's approval for any such remedial action. For purposes of this Lease, "Hazardous Material" means and includes any hazardous substance or any pollutant or contaminant defined as such in (or for purposes ot) the Comprehensive Environmental Response, Compensation, and Liability Act. as amended, any so-called "Superfund" or "Superlien" law, The Toxic Substances Control Act. 15 U.S.C. ~2601 et seq., or any other Federal, state, or local statute, law, ordinance, code, rule, regulation, order, or decree regulating, relating to, or imposing liability or standards of conduct concerning,. any hazardous, toxic or dangerous waste, substance or material, as may now or at any time in the futme be in effect. or any other hazardous, toxic or dangerous, waste, substance, or material. Office Lease Between Dale and Carol Lindsey and the City of Seward . August 2007 -Page 12 of36- 26 SECTION 5 - INSURANCE 5.01. Insurance. 5.01(a). 5.01(b). 5.01(c). 5.01(d). Landlord's BuildinlZ Insurance. Landlord shall keep the Building insured against damage and destruction by fIre, vandalism, and other perils in the amount of the full replacement value of the Building, as the value may exist from time to time. The insurance shall include an extended coverage endorsement of the kind required by an institutional lender to repair and restore the Building. Propertv Insurance. Each party shall keep its personal property and trade fixtures in the Premises and Building insured with "all risks" insurance in an amount to cover one hundred percent (100%) of the replacement cost of the property and fJXtures. Tenant shall also keep any Don-Building-standard improvements made to the premises at Tenant's request insured to the same degree as Tenant's personal property. Liability Insurance. Each party shall maintain contractual and comprehensive general liability insurance, including public liability and property damage, with a minimum combined single limit of liability of ONE MILLION DOLLARS ($1,000,000.00) for personal injuries or deaths of persons occurring in or about the Building and Premises. Waiver of SubrolZation. Each party waives claims arising in any manner in its (Injured PartYs) favor and against the other party for loss or damage to Injured PartYs property located within or constituting a part or all of the Building. This waiver applies to the extent permitted by applicable law and provided the loss or damage is covered by: (i) the Injured party's insurance; or (ii) the insurance the Injured party is required to carry under Section 5, whichever is greater. The waiver applies only to the extent the claims are covered by valid and collectible insurance. The waiver also applies to each party's directors, officers, employees, shareholders, partners, and agents. The waiver does not apply to claims caused by a PartYs willful misconduct. Office Lease Between Dale and Carol Lindsey and the City of Seward August 2007 -Page 13 of36- 21 5.01(e). 5.01(t). If despite a party's best efforts it cannot find an insurance company meeting the criteria in paragraph 5.01(t) that will give the waiver at reasonable commercial rates, then it shall give notice to the other party within thirty . (30) days after the Lease's Beginning Date. The other party shall then have thirty (30) days to find an insurance company that will issue the waiver. If the other party also cannot find such an insurance company, then both parties shall be released from their obligation to obtain the waiver. If an insurance company is found but it Will give the waiver only at rates greater than reasonable commercial rates, then the parties can agree to pay for the waiver under any agreement they can negotiate. If the parties cannot in good faith n~otiate an agreement, then both parties shall be released from their obligation to obtain the waiver. Increase in Insurance. The amounts of coverage required by this Lease are . subject to review at the end of each three-year period following the Beginning Date. At each review, if necessary to maintain the same level of coverage that existed on the Beginning Date, the amounts of coverage Shall be adjusted to the lesser of: " (i) the amounts of coverage cairied by similar prudent landlords and similar prudent commercial tenants of comparable first class office buildings in the Seward area; or (ii) twenty-five (25) percent higher than the previous insurance amounts. Either party may make the review and request appropriate increases based upon this review within sixty (60) days after each three-year period ends. If the parties do.not agree to the amount of the increase, then the party requesting the increase may submit the dispute to arbitration under paragraph 10.01 within thirty (30) days of the request for the increase. Landlord shall not request increased insurance unless it makes, at appropriate times, similar requests of all other tenants in the Complex whose insurance coverage is below the amount carried by similar prudent commercial tenants of similar buildings. Insurance Criteria. Insurance policies required by. this Lease shall: Office Lease Between Dale and Carol Lindsey and the City of Seward August 2007 -Page 14 of36- 28 (i) be issued by insurance companies licensed to do business in the State of Alaska with general policyholder's ratings of at least A and a financial rating of at least XI in the most current Best's Insurance Reports available on the date in paragraph 1.01. If the Best's ratings are changed or discontinued, the parties shall agree to an equivalent method of rating insurance companies. If the parties cannot agree they shall submit the dispute to arbitration under paragraph 10.01; (ii) name the nonprocuring party as an additional insured as its interest " may appear; other landlords or tenants may also be added as additional'insured in a blanket policy; (Hi) provide that the insurance not be canceled or materially changed in the scope or amount of coverage unless thirty (30) days advance written notice is given to the nOIlprocuring party; (iv) be primary policies - not as contributing,with, or in excess of, the coverage that the other party may carry; (v) be permitted to be carried through a "blanket policy" or "umbrella" coverage; (vi) have deductibles not greater than ~2S.000.00; and (vii) be maintained during the entire Term and any extension Terms. 5.0 1 (g). Evidence of Insurance. By the Beginning Date and upon each renewal of its inSurance policies, each party shall give certificates of insurance to the other party. The certificate shall specify amounts. types of coverage, the waiver of subrogation, and the insurance criteria listed in paragraph 5.01(f). The policies shall be renewed or replaced and maintained by the party responsible for that policy. If either party fails to give the required certificate within thirty (30) days after notice of demand for it, the other party may obtain and pay for that insurance and receive reimbursement from the party required to have the insurance. The Tenant agrees to provide proof of Workman's Compensation Insmance. Notwithstanding the terms of paragraphs 5.0t"Landlord and Tenant reserve the right to self-insure or to insure with a blanket policy of insurance the Office Lease' Between Dale and Carol Lindsey and the City of Seward August 2007 -Page lSof36- f"~ ..... , liabilities and casualties specified in this Lease. Therefore, if either party self-insures, the self- insuring party shall not be required to provide the other party with certificates or policies of insurance; however, each party shall provide the other with a letter confirming such insurance or its self- insurance if requested by the other party. (Note: Tenant has advised Landlord that theY are self-insured) 5.02. Indemnification. 5.02(a). Tenanfs Indemnitv. Tenant indemnifieS, defends, and holds Landlord harmless from claims: (i) for personal injury, death, property damage and incidents occurring in or about the Premises or Building; (ii) provided that the foregoing are caused by the negligence or wil1fu.1 misconduct of Ten ant, its agents, employees, or invitees. When the claim is caused by the joint negligence or willful misconduct of Tenant and Landlord or Tenant and a third party unrelated to Tenant, except Tenanfs agents, employees, or invitees, Tenant's duty to defend, indemnify, and hold Landlord harmless shall be in proportion to Tenanfs allocable share of the joint negligence or willful misconduct. 5.02(b). Landlord's Indemnitv. Landlord indemnifies, defends, and hold Tenant harmless from claims: (i) for personal injury, death, property damage and incidents occurring in or about the Premises or Building; (ii) provided that the foregoing are caused by the negligence or willful misconduct of Landlord, its agents, employees, or invitees. When the claim is caused by the joint negligence or willful misconduct of Landlord and Tenant or Landlord and a third party unrelated to Landlord, except Landlord's agents, employees, or invitees, Landlord's duty to defend, indemnify, and hold Tenant harmless shall be in proportion to Landlord's allocable share of the joint negligence or willful misconduct. Office Lease Between Dale and Carol Lindsey and the City of Seward August 2007 -Page 16 of36- 30 5.02(c). 6.01 6.0 1 (a). 6.01(b). Release of Claims. Notwithstanding paragraphs 5.02(a) and (b), the parties release each other from any claims either party (Injured Party) has against the other. This release is (i) limited to the extent permitted by applicable law and provided the claims are covered by the Injured Party's insurance or the insurance the Injured party is required to carry under Section 5, whichever is greater and (ii) does not adversely affect such coverage. SECI10N 6 - LOSS OF PREMISES Damages. Defmition. "Relevant Space" means: (i) the Premises as defined in paragraph 1.02, excluding Tenant's personal property and its non-Building- Standard trade fixtures; (ii) access to the Premises; and (Hi) any part of the Building that provides essential services to the Premises. Re,pair ofDaJ1Iafe. If the Relevant Space is clamaged in part or in whole from any cause and the Relevant Space can be substantially repaired and restored within one hundred twenty (120) days from the date of the damaee using standard working methods and procedures, Landlord shall at its expense promptly and diligently repair and restore the Relevant Space to substantially the same condition as existed before the damage. lIDs repair and restomtion shall be made within one hundred twenty (120) days from the date of the damage unless the delay is due to causes beyond Landlord's reasonable control. If the Relevant Space cannot be repaired and restored within the one hundred twenty (120) day period, then either party may, within ten (10) days after determining that the repairs and restomtion cannot be made within one hundred twenty (120) days (as prescribed in paragraph 6.0 1 (c)), cancel the Lease by giving notice to the other party. Nevertheless, if the Relevant Space is not repaired and restored within one hundred and twenty (120) days from the date of the damage, then Tenant may cancel the Lease Office Lease Between Dale and Carol Lindsey and the City of Seward August 2007 -Page 17 of 36- 31 , 6.01(c). 6.01(d). 6.01(e). 6.0 1 (f). at any time after the one hundred and twentieth (120) day and before the one hundred fiftieth (150) 'day following the date of damage. Tenant shall not be able to cancel this Lease if its willful misconduct causes the damage unless Landlord is not promptly and diligently repairing and restoring the Relevant Space. , Determining the Extent of Damage. If the parties caIinot agree in writing whether the repairs and'restoration described in paragraph 6.0 1 (b) will take more than one hundred twenty (120) days to make, then the determination will be submitted to arbitration un~er paragraph 10.01. Abatement. Unless the damage is caused by Tenant's negligence or willful acts or omissions, the Rent shall abate in proportion to that part of the . Premises that is unfit for use'in Tenant's business. The abatement shall consider the nature and extent of interference to Tenant's ability to conduct business in the Premises and the need for' access and essential services. The abatement shall continue from the date the damage occurred until ten (10) business days a.fter Landlord completes the repairs and restoration to the Relevant Space or the part rendered unusable and notice to Teiumt that the repairs and restoration are completed. or until Tenant again uses the Premises or the part rendered unusable, whichever is first. Tenant's Prooertv. Notwithstanding anything else in Section 6, Landlord is not obligated to repair or restore damage to Tenant's trade fixtures, furniture, equipment, or other ~~ property, or any Tenant improvements. Damage to Building. If: (i) more than forty pei'cent (4QO/o) of the Building is damaged and the Landlord d~des not to' repair and restore the Building; or (ii) any mortgage of the Building ~ not allow adequate insUrance proceeds for repair and restoration; or (ill) the damage is not covered by Landlord's insurance required by paragraphs 5.0 1 (a) and (b); or Office Lease Between Dale and Carol Lindsey and the City of Seward August 2007 -Page 18 of36- 32 6.0I(g), (iv) the Lease is in the last twelve (12) months of its Term or of any Extension Term, then Landlord may cancel this Lease. To cancel, Landlord must give notice to Tenant within thirty (30) days after the Landlord knows of the damage. The notice must specify the cancellation date, which shall be at least thirty (30) but not more than sixty (60) days after the date notice is given. Cancellation. If either party cancels this Lease as permitted by paragraph 6.01, then this Lease shall end on the day specified in the cancellation notice. The Rent and other charges shall by payable. up to the cancellation date and shall account for any abatement. Landlord shall promptly refund to Tenant any prepaid, unaccrued Rent, accounting for any abatement, plus security deposit, if any, less any sum then owing by Tenant to Landlord. 6.02 Condemnation. .6.02(a). 6.02(b). 6.02(c). Definitions. The terms "eminent domain, n ncondemnati~" "taken," and the like in paragraph 6.02 include takings for pQblic or quasi-public use and private purchases in place of condemnation by any authority authorized to exercise the power of eminent domain. Entire Takiml. If the entire Premises or the portions of the Building required for reasopable access to, or the reasonable use of, the Premises are taken by eminent domain, this Lease shall automatically end on the earlier of: (i) the date title vests; or (ii) the date Tenant is dispossessed by the condemning authority. Partial Taking. If the ta1cing of a part of the Premises materially interferes with Tenanfs ability to continue its business operations in substantially the same manner and space then Tenant may end this Lease on the earlier of: (i) the date when title vests; (ii) the date Tenant is dispossessed by the condemning authority; or Office Lease Between Dale and Carol Lindsey and the City of Seward August 2007 -Page 19 of36- 33 6.02(d). 6.02(e). 6.02(1): 6.02(g). (ill) sixty (60) days following notice to Tenant of~ date when. vesting or dispossession is to occur. If there is a partial taking and this Lease continues. then the Lease shall end as to the part taken and the Rent Sball.abate inpr~on to the part of the Premises taken and Tenant's pro rata shate shall be equitably reduced. Termination by Landlord. . If title toa part oftheBullding otherthan.the Premises is condemn~and in theLandlord'si~leOPiIrion,.the Building should be restored in a manner that~~t~any a1ters~Premises. Landlordmay.cancelthi~Lease by giviItsnot!l7to T~1IJJt- .Can~on notice sballbe given within sixty(@) ~ fQU()Wingthe~atetit1e vested. 'fhi$ Lease. shall end on dle date specified intite atneel~ationnotice, which dateshallhq.at leastthirty (30) days but not~thaI1tili1ety (9Q)dayBafter $e date notice is given. Rent Adjus1ment. If the Lease is cancelled as provided in para~ 6.02(b). (c), or (d), then the Rent, and other charges shall be payable up to. the cancellation date, and shall account for any abatement. Landlord,. . considering any abatement, shall promptly refund to Tenant any prepaid. unaccmed Rent plus Security Deposit, if any, less any sum then owing by Tenant to Landlord. Repair. If the Lease is not cancelled as provided for in paragraphs 6.02(b), (c), or (d), then Landlord at its expense sballprotnptly repair and restore the Premises to the condition that existed il1'l11'Jediately before the tRljng, except for the part taken, to render the Premi~ a complete arcbitectura1 unit, but only to the extent of the: (i) cortdeQmation award ~yed for the(bt)n~e; and (ii) Bwld,ing StandanfWork. Awards and ~ Landlord reserves all rig1.ltIi to dl!lmages paid because of any partial or entire taking of1he I\~hi~. Tenant assigns to Landlord any right Tenant may have to the dsw18p or awanL Further; Tenant shall not make claims RgI'inst ~ord or the ~i"g authority for~.~ . Office Lease Between Dale and Carol Lindsey and the City o~ Seward Auqust 2007 -Page 20 of~ 34 Notwithstanding anything else in Paragraph 6.02(g), Tenant may claim and recover from the condemning authority a separate award for Tenant's moving expenses, business dislocation illlmages, Tenant's personal property and fixtures, the unamortized costs of leasehold improvements paid for by . Tenant, and any other award thilt would not substantially reduce the award payable to Landlord. Each party shall seek its own award, as limited by paragraph 6.02(g), at its own expense, and neither shall have any right to the award made to the other. 6.02(h). Temporary Condemnation. If part or all of the 1>remises are condemned for a limited period of time (Temporary Condemnation), this Lease shall remain in effect. The Rent and Tenant's obligations for the part of the Premises taken shall abate during the Temporary Condemnation in proportion to the part of the Premises that Tenant is unable to use in its business operations as a result of the Temporary Condemnation. Landlord shall receive the entire award for any Temporary Condemnation. SECTION 7 - DEFAULT 7.01 Tenant's Default 7.01(a). Defaults. Each of the following constitutes a default (Default): (i) Tenant's failure to pay Rent or Additional Rent within seven (7) days after Tenant receives prior written notice from Landlord of Tenant's failure to pay Rent or Additional Rent; (ii) Tenant's failure to pay Rent Or Additional Rent by the due date, at any time during a calendar year in which Tenant on separate occasions has already received three notices of its failure to pay Rent or Additional Rent by the due date; (Hi) Tenant's failure to perform or observe any other Tenant obligation after a period of thirty (30) business days or the additional time, if any, that is reasonably necessary to promptly and diligently cure the failure, after it receives notice from Landlord setting forth in reasonable detail the nature and extent of the failure and identifying the applicable Lease provision(s); Office Lease Between Dale and Carol Lindsey and the City of Seward August 2007 -Page 21 of36- 35 (iv) Tenant's abandoning or vacating the Premises if Tenant fails to timely pay the Rent or Additional Rent by the due date; (v) Tenant's failure to vacate or stay any of the following within ninety (90) days after they occur: (A) a petition in b8.nkruptcy filed by or against Tenant; (B) Tenant is adjudicated as bankrupt or insolvent; (C) a receiver, trustee, or liquidator is appointed for all or a substantial part of Tenant's property; or (D) Tenant makes an assignment for the benefit of creditors. 7.02 Landlord's Remedies. 7.02(a). Remedies. Landlord in addition to the remedies given in this Lease or under the law, may do anyone or more of the following if Tenant commits a Default under paragraph 7.01: (i) end this Lease, and tenant shall then surrender the Premises to Landlord; (ii) enter and take possession of the Premises either with or without due process of law and remove Tenant, with or without having ended the Lease; and (iii) alter locks and other security devices at the Premises. Tenant waives claims for dHmages by reason of Landlord's reentry or repossession, alteration of locks, or other security devices and for damages by reason of any legal process. 7.02(b). No Surrender. Landlord's exercise of any of its remedies or its receipt of Tenant's keys shall not be considered an acceptance of surrender of the Premises by Tenant. A surrender must be agreed to in writing signed by both parties. Office Lease Between Dale and Carol Lindsey and the City of Seward August 2007 -Page 22 of 36- 36 7.02(c). 7 .02( d). 7.02(e). Rent. If Landlord ends this Lease or ends Tenant's right to possess the Premises because of a Default, Landlord may hold Tenant liable for Rent or Additional Rent, and other indebtedness accroed to the date the Lease ends. Tenant shall also be liable for the Rent, Additional Rent, and other indebtedness that otherwise would have been payable by Tenant during the remainder of the Term had there been no Default, reduced by any sums Landlord receives by reletting the Premises during the Term. Other Expenses. Tenant shall also be liable for that part of the following sums paid by Landlord and attributable to that part of the Term ended due to Tenant's Default: (i) reasonable broker's fees incurred by Landlord for reletting part or all of the Premises prorated for that part of the reletting Term ending concurrently with the then current Term .of this Lease; (ii) the cost of removing and storing Tenant's property; (Hi) the cost of minor repairs, alterations, tenant refItting, and leasehold improvements necessary to put the Premises in a condition reasonably acceptable to a new tenant; and (iv) other necessary and reasonable expenses incurred by Landlord in enforcing its remedies, including its reasonable actual attorneys' fees and legal costs. Payment. Tenant shall pay the sums due in paragraphs 7 .02( c) and (d) within thirty (30) days of receiving Landlord's proper and correct invoice for the amounts. Landlord is not entitled to accelerated Rent. During each action to collect Landlord shall be limited to the amount of any sums due under paragraph 7 .02( c) that would have accroed had the Lease not been ended and sums under paragraph 7.02( d) that have been incurred by Landlord and are now payable by Landlord. 7.02(f). Mitigation. Landlord shall mitigate its dAmage by making reasonable efforts to relet the Premises on reasonable terms. Landlord may relet for a shorter or longer period of time than the Lease term and make any necessary repairs or alterations. Landlord may relet on any reasonable terms including a reasonable amount of:free rent. If Landlord relets for a Office Lease. Between Dale and Carol Lindsey and the City of Seward August 2007 -Page 23 of36- 37 period of time longer than the current Lease Term, then any special concessions given to the new tenant shall be allocated throughout the entire reletting Term to not unduly reduce the amount of consideration received by Landlord during the remaining period of Tenant's Term. 7.03. Landlord's Default. Landlord's failure to perfonn or observe any ofits Lease obligations after a period of thirty (30) business days or the additional time, if any, that is reasonably necessary to promptly and diligently cure the failure after receiving notice from Tenant is a Default. The notice shall give in reasonable detail the nature and extent of the failure and identify the Lease provision(s) containing the obligation(s). After Tenant receives notice of a Mortgagee's name and address and request for notice upon Landlord's Default, Tenant shall provide the notice required by this paragraph to the Mortgagee at the same time Tenant gives notice to Landlord. If Landlord commits a Default, Tenant may pursue any remedies given in this Lease or under the law. The provisions of this paragraph 7.03 are not intended to supersede the remedies available to Tenant under paragraph 3.02. 7.04. Exception to Cure Periods. The cure periods in paragraphs 7.01(aXiii) and 7.03 do not apply to: (i) emergencies; and (ii) failure to maintain the insurance required by paragraph 5.01. 7.05. Self-Heln. If either party defaults (Defaulting Party), the other party (Nondefaulting Party) may, without being obligated and without waiving the Default, cure the Default. . The Nondefaulting Party may enter the Premises or Building to cure the Default. The Defaulting party shall pay the Nondefaulting Party, upon demand, all reasonable costs, expenses, and disbursements incurred by the Nondefaulting party to cure the Default. 7.06. Survival. The remedies permitted by Section 7, the parties' indemnities in paragraph 5.02, and Landlord's obligation to mitigate damages in paragraph 7.02(f) shall survive the ending of this Lease. Office Lease Between Dale and Carol Lindsey and the City of Seward August 2007 -Page 24 of36- 38 SECTION 8 - NONDISTURBANCE 8.01 Subordination. 8.0l(a). Mortg:a2es. Subject to paragraph 8.01(b), this Lease is subordinate to prior or subsequent mortgages covering the Building. 8.0l(b). Foreclosures. If any mortgage is foreclosed, then: (i) this Lease shall continue; (ii) Tenant's quiet possession shall not be disturbed if Tenant is not in Default; (Hi) Tenant will attorn to and recognize the mortgagee or purchaser at foreclosure sale (Successor Landlord) as Tenant's Landlord for the remaining Term; and (iv) the Successor Landlord shall not be hotrod by: (A) any Payment of Rent or Additional Rent for more than one month in advance, except the Security Deposit and free rent, if any, specified in the Lease, (B) any amendment, modification, or ending of this Lease without Successor Landlord's consent after the Successor Landlord's name is given to Tenant unless the amendment, modification, or ending is specifically authorized by the original Lease and does not require Landlord's prior agreement or consent, and (C) any liability for any negligent act or willful omission of a prior Landlord. 8.01(c). Self-Operating. Paragraph 8.01 is self-operating. However, Tenant shall promptly execute and deliver any documents needed to confirm this arrangement. . Office Lease Between Dale and Carol Lindsey and the City of Seward August 2007 -Page 2S of36- 39 8.02 Estop.pel Certificate. 8.02(a). Obligation. Either party (Answering party) shall from time to time, within ten (10) business days after receiving a written request by the other party (Asking party), execute and deliver to the Asking Party a written statement. This written statement, which may be relied upon by the Asking Party and any third party with whom the Asking Party is dealing shall certify: (i) the accuracy of the Lease document; (ii) the Beginning and Ending Dates of the Lease; (ill) that the Lease is unmodified and in full effect or in full effect as modified, stating the date and nature of the modification; (iv) whether to the Answering Party's knowledge the Asking Party is in material default or whether the Answering Party has any claims or demands against the Asking Party and, if so, specifying the Default, claim, or demand; and (v) to other correct and reasonably ascertainable facts that are covered by the Lease terms. 8.02(b ). Remedv. The Answering Party's failure to comply with its obligation in paragraph 8.02(a) shall be a Default. Notwithstanding paragraphs 7.0 1 (aXiii) and 7.03, the cure period for this Default shall be five (5) business days after the Answering Party receives notice of the Default. 8.03 Quiet Possession. If Tenant is not in default, and subject to the Lease terms, Landlord warrants that Tenant's peaceable and quiet enjoyment of the Premises, together with the right to use and enjoy the parking areas described in paragraph 1.02 and Common Area in common with others, shall not be disturbed by anyone. SECflON 9 - LANDLORD'S RIGHTS 9.01 Rules. 9.01(a) Rules. All rules are established by this lease. Tenant, its employees and invitees, s4all comply with: Office Lease Between Dale and Carol Lindsey and the City of Seward August 2007 -Page 26 of36- 40 (i) the Rules that may be adopted by Landlord, and (ii) reasonable modifications and additions to the Rules adopted by Landlord that: (A) Tenant is given thirty (30) days advance notice of; (B) are for the safety, care, order, or cleanliness of the common areas; (C) do not unreasonably and materially interfere with Tenant's conduct of its business or Tenant's use and enjoyment of the Premises; and (0) do not require payment of additional moneys. 9.01(b) Conflict with Lease. If a Rule issued under paragraph 9.01(a) conflicts with or is inconsistent with any Lease provision, the Lease provision controls. 9.01(c) Enforcement. Although LandlOrd is not responsible for another tenant's failure to observe the Rules, Landlord shall not unreasonably enforce the Rules against Tenant. 9.02 Mechanic's Liens. 9.02(a). Discharge Lien. Tenant shall, within twenty (20) days after receiving notice of any mechanic's lien for material work claimed to have been furnished to the Premises on Tenant's behalf and at Tenant's request, except for work contracted by Landlord: (i) discharge the lien; or (ii) post a bond equal to one hundred fifty percent (150%) of the amount of the disputed claim with a title company reasonably satisfactory to Landlord. If Tenant posts a bond, it shall have the right to contest the validity of the lien. Tenant shall indemnify, defend, and hold Landlord harmless from all fees, costs, liabilities, dAmages and losses incurred from these liens. Office Lease Between Dale and Carol Lindsey and the City of Seward August 2007 -Page 27 of36- 41 9.02(b). Landlord's Discharge. If Tenant does not discharge the lien or post the bond within the thirty (30) day period, Landlord may pay any amounts. including interest and legal fees. to discharge the lien. Tenant shall then be liable to Landlord for the amounts paid by Landlord. 9.02(c). Consent not Implied. Paragraph 9.02 is not a consent to subject Landlord's property to these liens. 9.03 Right to Enter. 9.03(a). Permitted Entries. Landlord and its agents. servants. and employees may enter the Premises at reasonable times. and at any time if an emergency. without charge, liability, or abatement of Rent, to: (i) examine the Premises; (ii) make repairs, alterations, improvements, and additions either required by the Lease or advisable to preserve the integrity, safety. and good order of part or all of the Premises or Building; (iii) provide services required by the Lease; (iv) comply with Applicable Laws under paragraph 3.01; (v) show the premises to prospective lenders or purchasers and during the ninety (90) days immediately before this Lease ends to prospective tenants, accompanied, if requested by Tenant, by a Tenant representative; (vi) post notices ofnonresponsibility; (vii) remove any Alterations made by Tenant in material violation of paragraph 4.01; and (viii) during the one hundred twenty (120) days immediately before this Lease ends, post "For Lease" signs. Office Lease Between Dale and Carol Lindsey and the City of Seward August 2007 -Page 28 of36- 42 9.03(b). Entry Conditions. Notwithstanding paragraph 9.03(a), entry is conditioned upon Landlord: (i) giving Tenant at least twenty-four (24) hours advance notice, except m an emergency; (ii) promptly finishing any work for which it entered; and (iii) causing the least practical interference to Tenant's business. 9.03(c). Interference with Tenant. Notwithstanding paragraphs 9.03(a) and (b): (i) if Landlord's entry materially and substantially interferes with the conduct of Tenant's business (and the entry is not needed because of Tenant's negligence or willful misconduct), the Rent shall abate in proportion to the extent of the interference; and (ii) if the Landlord causes damage to Tenant's property, Landlord shall be liable for any damage to the extent the damage is not covered by Tenant's insurance or the insurance Tenant is required to carry under Section 5, whichever is greater. 9.04. Holdover. 9.04(a). Holdover Status. If Tenant continues occupying the Premises after the Term ends (Holdover) then: (i) if the Holdover is with Landlord's written consent, it shall be a month-to-month tenancy, terminable on thirty (30) days advance written notice by either party. Tenant shall pay at the beginning of each month Rent that is five percent (5%) higher than the amount due in the last full month immediately prec.eiling the Holdover period unless Landlord specifies a lower or higher Rent in the written consent; (ii) if the Holdover is without Landlord's written consent, then Tenant shall be a tenant at-sufferance. Tenant shall pay by the first day of each month twice the amount of Rent due in the last full month immediately preceding the Holdover period and shall be liable for any damages suffered by Landlord because of Tenant's Holdover. Office Lease Between Dale and Carol Lindsey and the City of Seward August 2007 -Page 29 of 36- 43 Landlord shall retain its remedies against Tenant who holds over without written consent. 9.04(b). Holdover Terms. The Holdovers in paragraph 9.04(a) shall be on the same tenus and conditions of the Lease except for: Landlord is required to respond to the City's request for a holdover period within 7 working days and if no response is received then consent is deemed given. (i) the Tenu (paragraph 1.04); (ii) Rent (paragraphs 2.01 and 2.02); (Hi) consent to an assignment or sublease may be unreasonably withheld and delayed (paragraph 4.02). 9.05 Sijpls. 9.05(a). Permitted Si911!l During the Term, if Premises are occupied by Tenant, the Building shall be known as the "Petro Plaza Building." Landlord shall pre-approve of all signs installed on the west, north and south outside windows and at the entrance of the Building. There shall be no signs permitted on the outside of the Building. If Tenant sublets and no longer occupies the Premises, Tenant may, at its option, determine that the Building should not be named for the Tenant, or the Landlord can determine that the Building should not be named for the Tenant. Tenant shall submit all other signs to Landlord for written approval. 9.06 Pets. Tenant shall not be allowed any pets to access Premises under any conditions. SECTION 10 - DISPUTES Office Lease Between Dale and Carol Lindsey and the City of Seward August 2007 -Page 30 of36- 44 10.01 Arbitration. 1O.01(a). Procedure. For disputes subject to arbitration under paragraph 1O.01(c) that are not resolved by the parties within ten (10) days after either party gives notice to the other ofits desire to arbitrate the dispute, the dispute shall be settled by binding arbitration by the American Arbitration Association in accord with its then-prevailing rules. Judgment upon the arbitration award may be entered in any court having jurisdiction. The arbitrators shall have no power to change the Lease provisions. The. arbitration panel shall consist of three arbitrators, one of whom must be an attorney with a real estate specialty actively engaged in the practice of law for at least the last ten (10) years. Both parties shall continue performing their Lease obligations pending the award in the arbitration procee.ding; The arbitrators shall award the prevailing party reasonable expenses and costs including reasonable attorneys' fees pursuant to paragraph 11.02 plus interest on the amount due at the legal rate provided in AS 45.45.010(a) (now ten and one- halfpercent (10.5%) per annum) Or its successor. Arbitration shall be held in Seward, Alaska, unless the parties agree in writing that the arbitration will be held elsewhere. All arbritration shall be in accordance to the Alaska Uniform Arbitration Act and according to Alaska State Law. 10.01 (b). Payment The losing party shall pay to the prevailing party the amount of the final arbitration award. If payDient is not made within ten (10) business days after the date the arbitration award is no longer appealable, then in addition to any remedies under the law: (i) if Landlord is the prevailing party, it shall have the same remedies for failure to pay the arbitration award as it has for Tenanfs failure to pay the Rent and Additional Rent; and (ii) if Tenant is the prevailing party, it may deduct any remaining unpaid award from its monthly payment of Rent, Additional Rent or other charges. (Hi) it is understood that this is not the Tenant's only remedy; (iv) Tenant may recover a lump sum, at the Tenant's discretion; deduct unpaid amounts with interest for monthly rent Office Lease Between Dale and Carol Lindsey and the City of Seward August 2007 -Page 31 of36- 45 10.01(c). Arbitration. The following disputes are subject to arbitration: (i) any disputes that the parties agree to submit to arbitration; (ii) the date when the Premises are substantially completed; (iii) amount of any abatement of Rent and Additional Rent because of damage or condemnation; (iv) the amount billed as Additional Rent; (v) which party must comply with Applicable Laws under paragraph 3.01; (vi) whether the utilities are being provided in the quality and quantity required by paragraph 3.02; (vii) whether Tenant may abate Rent and Additional Rent or cancel the Lease under paragraph 3.02(e) (ii); (viii) whether Landlord's withholding of consent is unreasonable or unduly delayed under paragraphs 4.02(a) and (b); (ix) the amount of any insurance increase under paragraph 5.01(e); (x) the insurance criteria under paragraph 5.0I(t); and (xi) whether either party can cancel the Lease under Section 6. SECflON 11- MISCELLANEOUS 11.01. Broker's Warranty. The parties warrant that no real estate agent brought about the execution of the Lease or is owed a commission. The party who breaches this warranty shall defend, hold harmless, and indemnifY the nonbreaching party from any claims or liability arising from the breach. 11.02. Attorneys' Fees. In any litigation between the parties regarding this Lease, the losing party shall pay to the prevailing party all reasonable expenses and court Office Lease Between Dale and Carol Lindsey and the City of Seward August 2007 -Page 32 of36- 46 costs including reasonable attorneys' fees incurred by the prevailing party. A party shall be considered the prevailing party if: (i) it initiated the litigation and substantially obtains the relief it sought, either through a judgment or the losing party's voluntary action before arbitration (after it is scheduled), trial, or judgment; (ii) the other party withdraws its action without substantially obtaining the relief if sought; or (Hi) it did not initiate the litigation and judgment is entered for either party, but without substantially granting the relief sought 11.03. Notices. Unless a Lease provision expressly authorizes verbal notice, all notices under this Lease shall be in writing and sent by registered or certified mail, postage prepaid, as follows: To Tenant: City of Seward Attn: City Manager P.O. Box 167/410 Adams Street Seward, Alaska, 99664 and To Landlord: Dale & Carol Lindsey P.O. Box 389 Seward, Alaska 99664 Either party may change these persons or addresses by giving notice as provided above. Tenant shall also give required notices to Landlord's mortgagee after receiving notice from Landlord of the mortgagee's name and address. Notice shall be considered given and received on the latest original delivery or attempted delivery date as indicated on the postage receipt(s) of all persons and addresses to which notice is to be given. 11.04. Partial Invalidity. If any Lease provision is invalid or unenforceable to any extent, then that provision and the remainder of the Lease shall continue in effect and be enforceable to the fullest extent pennitted by law. Office Lease Between Dale and Carol Lindsey and the City of Seward August 2007 -Page 33 of36- 47 11.05. Waiver. The failure of either party to exercise any of its rights is not a waiver of those rights. A party waives only those rights specified in writing and signed by the party waiving its rights. 11.06. Construction. Each party has had an adequate opportunity to review the lease with its attorney and make changes to the Lease; the parties agree that both parties were equally responsible for drafting the provisions of the Lease. The rule of construction to the effect that any ambiguities are to be resolved against the drafter shall not apply to the interpretation of this Lease or any amendments or exhibits thereto. 11.07. Bindine: on Successors. This Lease shall bind the parties' heirs, successors, representatives, and permitted assigns. 11.08. Govemine: Law. This Lease shall be governed by the laws of the State of Alaska. 11.09. Insurance Increase. If due to Tenant's particular use of the Premises the Landlord's insurance rates are increased, Tenant shall pay the increase. 11.10. Recordine:. Recording of this Lease is prohibited except as allowed in this paragraph. At the request of either party, the parties shall promptly execute and record, at the cost of the requesting party, a short form memorandum describing the Premises and stating this Lease's Term, its Beginning and Ending Dates, and other information the parties agree to include. 11.11. Survival of Remedies. The parties' remedies shall survive the ending of this Lease when the ending is caused by the Default of the other party. 11.12. Authority of Parties. Each party warrants that it is authorized to enter into the Lease, that the person signing on its behalf is duly authorized to execute the Lease, and that no other signtltures are necessary. 11.13. Business Davs. Business days means Monday through Friday inclusive, excluding the following holidays: New Year's Day, Memorial Day, July Fourth, Labor Day, Thanksgiving Day, and Christmas Day. Throughout this Lease, wherever "days" are used the term shall refer to calendar days. Wherever the term "business days" is used the term shall refer to business days. Office Lease Between Dale and Carol Lindsey and the City of Seward August 2007 -Page 34 of 36- 48 11.14. Entire Agreement. This Lease contains the entire agreement between the parties about the Premises and Building. This Lease shall be modified only by a writing signed by both parties. 11.15. Defmition of Lease. This Lease consists of the following: (i) Title Page; (ii) Table of Contents; (Hi) Sections 1 through 11; and (v) Signature Page. Office Lease Between Dale and Carol Lindsey and the City of Seward August 2007 -Page 3S of36- 49 SIGNATURE PAGE LANDLORD: DATED: Carol A. Lindsey TENANT: DATED: City of Seward - City Manager A TIEST: (TENAN1) DATED: City of Seward - City Clerk Office Lease Between Dale and Carol Lindsey and the City of Seward August 2007 .Page 36 of36- 50 Sponsored by: Oates CITY OF SEWARD, ALASKA RESOLUTION 2007-056 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, AUTHORIZING THE CITY COUNCIL TO DONATE TWENTY FIVE HUNDRED DOLLARS (52,500.00) TO THE NATIONAL OCEAN SCIENCES BOWL WHEREAS, the Alaska National Regional Sciences Bowl is part of a national high school academic competition sponsored by the Consortium of Oceanographic Research and Education and the National Marine Educators Association; and WHEREAS, first conducted in the winter and spring of 1998 in honor of the International Year of the Ocean, the goal of the National Ocean Sciences Bowl is to recognize and reward excellence among students interested in ocean studies; and WHEREAS, this is the first time the NOSB will be hosted in Alaska and will bring over 250 volunteers, students and judges into Seward; and WHEREAS, the city manager will also be donating $2,500.00 from administrations budget bring a total donated by the City of Seward to $5,000.00; and WHEREAS, The University of Alaska Fairbanks will host the National Ocean Sciences Bowl (NOSB) Final Competition in Seward, Alaska on April 25-27, 2008. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, that: Section 1. The Seward City Council agrees to authorize $2,500.00 from their budget to the National Ocean Sciences Bowl. Section 2. An expenditure of Twenty Five Hundred Dollars ($2500.00) is hereby authorized from Mayor/Council Contingency fund account number 101-1110-5690 to the National Ocean Sciences Bowl. Section 3. This resolution shall take affect immediately upon its adoption. PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 11th day of June, 2007 51 Council Agenda Statement Meeting Date: June 11,2007 From: Thru Mayor Shafer, City Council Members Nanci Richey, Administrative Assismn0l, Jean Lewis, City Clerk --(:}!;/ To: Agenda Item: Resolution 2007-056, authorizing the City Council to donate Twenty Five Hundred Dollars (2,500.00) to the National Ocean Sciences Bowl. BACKGROUND & JUSTIFICATION: The city manager is donating $2,500.00 from administrations budget. Mayor Shafer is requesting city council match that donation from their contingency fund for a total of Five Thousand Dollars ($5,000.00) donated by the City of Seward. The University of Alaska Fairbanks will host the National Ocean Sciences Bowl final competition in Seward, Alaska on April 25 -27, 2008. The 2008 National Ocean Sciences Bowl will bring in over 250 judges, students and volunteers to the City of Seward. The national competition has been held in various locations across the contiguous United States, but never in Alaska. Your support for the NOSB finals in Alaska will allow talented high school students from around the nation compete for the national title in the state which has half of the U.S. coastline and the largest fishery in the world. CONSISTENCY CHECKLIST: Where applicable, this resolution/ordinance is consistent with the Seward City Code, Charter, Comprehensive Plans, Land Use Plans, Strategic Plan and City Council Rules of Procedures. Other: FISCAL NOTE: Authorizing expenditure of Twenty Five Hundred Dollars ($2,500.00) from Mayor/Council Contingency account number 101-1110-5690 to the National Ocean Sciences Bowl. Approved by Finance Department: ~ r RECOMMENDATION: Council approve Resolution 2007-056, donating twenty five hundred dollars ($2,500.00) to the National Ocean Sciences Bowl Fund. J - 52 Sponsored by: City Manager CITY OF SEWARD, ALASKA RESOLUTION 2007-057 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, AUTHORIZING THE DISCHARGE OF FIREWORKS BY THE CHAMBER OF COMMERCE DURING THE 2007 INDEPENDENCE DAY CELEBRATION WHEREAS, Seward City Code ~ 1 0.1 0.040 prohibits the discharge of fireworks in Seward unless specifically approved by the City Council; and WHEREAS, the Chamber of Commerce will be sponsoring a fireworks display on Wednesday the 4th of July, 2007, at 12:01 a.m. and has requested city council approval; and WHEREAS, the City has traditionally allowed the Chamber of Commerce to provide a fireworks display within the City in conjunction with its Fourth of July celebration. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, that: Section 1. As a part of its Fourth of July Celebration, the Seward Chamber of Commerce is authorized to discharge fireworks within the City at a time and place that has received the prior approval of the City Fire Chief. Section 2. This resolution shall take effect immediately upon its adoption. PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 11 th day of June, 2007. THE CITY OF SEWARD, ALASKA Vanta Shafer, Mayor AYES: NOES: ABSENT: ABSTAIN: ATTEST: Jean Lewis, CMC City Clerk (City Seal) 53 Council Agenda Statement From: David Squires, Fire Chief Meeting Date: June 11,2007 To: Mayor and Council Members Agenda Item: Phillip Oates, City Manager ~ D~/D'I'j'67 2007 Fireworks Permit Through: BACKGROUND & JUSTIFICATION: The Seward Chamber of Commerce bas requested permission from City Council to holdafueworks display on Wednesday July 4, 2007 at 12:01 am at the new breakwater area, in front of the Harbor View Condominiums. Seward City Code 10.10.040 prohibits the discharge offuewoIks in Seward unless specifically approved by the City Council. The City has traditionally allowed the Chamber of Commerce to provide an annual firewoIks display within the City in conjunction with its Fourth of July celebration. The firewoIks will be presented by "Fire Art by Griz". The Seward Chamber of Commerce stated that they will wmk. directly with the Seward Fire Department to insure that the tirewoIks show is presented in a safe manner. The location bas been reviewed and approved. The Chamber bas also stated that they will supply two guards to keep the public away from the set up and discharge area. CONSISTENCY CHECKLIST: Where applicable, this resolution statement is consistent with the Seward City Code, Charter, Comprehensive Plans, Land Use Plans, Strategic Plan and City Council Rules of Procedures. FISCAL NOTE: Approved by Finance Department: ~ RECOMMENDATION: City Council approve Resolution 2007-.57, authorizing the ~harge offirewoIks by the Chamber of Commerce during the 2007 Independence Day Celebration. 54 JUN-05-2007 TUE 04:36 PM SEWARD CHAMBER COMMERCE FAX NO, 19072245353 P. 01 Seward~com 'itaJ"~ c;n....:sl)ft,..t. -c J .. :\} ..~ ,t St"lvard Chllmbcr of Commerce cOllrenmcc: :md Visitors BureQu .,~.,,,....."... " ..-., .....~.......-.. .... ............. ... ....._--_.._..._----~ J UI1.~ 5, ZOO'! Chl.:.!rnnw Squires City orS;.:wnnl 1'0 1.k1x 167 S~wl!rd. AK 9966~l D,:lorD.w.::: Till: ~cwanl Cll;lmbcr of Commerce il' bu.sy planning this year's lndcpcndCllcc Day Celebration ~;,d Mt. M~mthon Rae\). As in pa.-;l }'l.:al'll, we are sponsoring a fireworks display as part oftbc fc~livitk~. I 8m writing tu rcqoost a special event!; permit fTOm the City Council. Ib., Iirewm'ks dil\p!ay will br.: held Wednesday, July 3rd beginning at 11:59 pm. We arc cllfTcnlly corrcs(Xlmliug with "Fire Art by Gn:!.", a liconsed pyrolcehnician in the State of Alaska, to put 011 jh~ 1ircworks clisphlY. . ^s ill 2006. the sltlgirig area will be on 1ho lalld above the small boat harbor's new br~akwalcr. We will ptOvid.:: ;:ccurily 10 keep ~<lcslrillns and vehicle traffic out cfthe staging area once lhc fireworks arc set-lIp. In t,(k1ilion, \Ve will work direcLly with the Seward Fire Department to en'.lIrll Lhe fireworks show is rrCscl1t~d in a safe manner. I:'k~l;o;C kt 111e know whUl additional information you require for approval of this permit rcquc!>1. WI: i'Pilrvci:ltc the City's continued support oflhis annual evenl. Sin~"i'cly. .-::) () /J tl {:-'~-:V~{-LV1 L...k!I7V?U.e- . I.mlla Clowtlrd Ex;,:cl1livc Director ~., .... ......~.' ......... ...n ............................................-.. .-.--.--. PO Bux 749. Sew,!rd, Alas!;a 99664 907-224-8051 ehamber@seward.nct .55 M RACE CHUTE NBWIWlAKWATIlJ. I'IIUlWOUS MONROE ~ ~ a:l F;; - ~ 56 ACORD,. CERTIFICATE OF LIABILITY INSURANCE I DATI! (MMII)D/YYY'IJ 5/19/07 PRODUceR ATIJ..ed specJ..al ty Insurance, Inc THIS CERTIFICATE IS ISSUED AS A MA ITER OF INFORMATION 10451 Gulf Blvd. ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE . Treasure Island, FL 33706 ~P}9~!}IoI1,H!S CERTI~LC~TE DOES ,NJtT AMEND, ~~~,O~I!-.. 800/237-3355 Fire A.:rt By Griz, JNSURERS AFFORDING COVEEtAGE N~.9...!_. lNlKIRED Inc. ""SURER A: T.H.E. Insurance Company. P.O. Box 520584 ! ""SURER 8: Big Lake AK 99652 , - IIoISURER"~ ,.!HllURERD: .----.. 1_"oR .' THE POLICIES OF INSURANCE USTEO BELOW HAVE BEEN IssueD TO lHE INSURED NAMED MJIJIIE FOR lHE POllCY PERIOD INDICATED. NOlW'!liSTANDING mv REQUIREMENT. TERM OR CONOll1ON OF ANY CONTRACT OR OTIiER OOCUMENTIMlH RESPECT TO WHICH '!liIS CERl1FlCATE MAY BE ISSUED OR MAY PERTAIN. '!liE INSURANCEAFFORDEO BY '!liE POLICIES oeSCRlBED HEREIN IS SUBJECT TO AI.l '!liE TERMS. EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. AGGREGATE UMITS SH()VI.N MAY HAVE BEEN REDUCED BY PAID CLAIMS. lNSR ,... I" PQUl:Y- ! I'OUCV IXPIRA 1n~~~N~~W! M6MF2136 09/26/06 09/26/0 J CLAIMS MAoE [!J OCCUR 1,000,000 50,000 CCMIlINl!D SINGlE UMIT (Eo oocldonl) 8CJDll.V IHJURY (POr_1 I IIOOILV IH.lURV (POr-onll I M6XF2138 s I I ~ ~LIAIllU'IY f-!J OCCUR 0 QMlS MAOI! R~ I WORKI!III__11ClNAND I!IIIl'LOYiRS' IJAIlILI1Y Nrr PIICiI'fllElClREMJCECUTlIIE OI'F1CERJMEllIlER exe:WDED'/ tl' .. dPCdbt UI)IItr M6XF2137 I 1,0.00,000 I 1,000,000 OTHIR i _P11ClN OF DPERA 110IlS / LOCA11OIlS J\ll!HIClE$/I!XCWSlON8 _BY ~ElfT J II'IlCIALPROVlIIOlIS DISPLAY DATE: 7/03/07 RAIN DATE: 7/04/07 DISPLAY LOCATION: ON THE OCEAN SHORE AT SEWARD, AK ADDITIONAL INSURED: CITY OF SEWARD, AI{ AS RESPECTS TO THE OPERATION OF THE NAMED INSURED ONLY. 99664 $<<lUU) ANY Of' 1HE _lll!ICllI8I!D POUCIEI BE CllNCl!WiD BEFORE '"" DPIRAllll/l .DATI!'IlIl!IIEOF, 'IlIIE ISIUINGINIIIRl!RWll.LEND1IA\IDI!.lOMA1L ..6..Q.. DAYSWRITTI!N N01lCE 10 mE CEllTlFlCAlE NOlDER NAllIID TO mE U!FT,1IlIT I'AnJJRl! 10 DO so tHALL M'OSE NO OBUBAllll/l OR UAIlIUlY Of ~ 1QND UPON 1M! 1NSlJIlI!R. ms A(IENl$ DR AU ACORD 25 (2001/08) 57 ACORn", CERTIFICATE OF LIABILITY INSURANCE T o"Tt! \MMIDll!YY'Nl 5/19/07 PIWOUCElIl Allied Spec~alty Insurance, Inc THIS CERTIFICATE IS ISSUED AS A MA TIER OF INFORMATION 10451 Gulf Blvd. ONLY AND CONFERS NO RIGHTS UPON TflE CERTIFICATE Treasure Island, FL 33706 ~P}~:'}H~IS CERTIFICATE DOES NJV' ...~~E!'E..,exTEND ~~ 800/237-3355 '______t'NSURERS AFFORDING COVERA,~E NAIC # . - Fire- Art'-13y Griz, Inc. CompanY -- IIlSUllllP INSURER '" T . H . E . Insura!.!ce P.O. Box 520584 INSUReR e. Big Lake AI< 99652 I__RC: . - INSURER 0: IH.....R... THE POL1ClESDF INSURANCE USTEO BELOW HAVE Ba:N ISSUED TO THE INSURED NAMED NJlJVE FOR THE POUCY PERIOD INDICATED. NOTWITHSTANDING N('f REQUIRENEHT. TERM OR CONDITION OF NlY CONTRACT OR OTHER DOCUMENT Y\olTH RESPECT TO WHICH THIS CERl1F1CATEMAY BE ISSUED OR MAY PERTAIN. THE INSURANCE AFFORDED BY THE POUCIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS. EXCLUSIONS AND CONOll1ONS OF SUCH ..,,~ES. AGG~_~TE UMITS SHOW\l MAY WIVE BEEN REDUCED BY PAID ClAIMS, ~ ~ ~ .....N"- POUCY I!FFECllI/I! ~.!!!tf'lRA lMI1 . ~EAAI. UA8IU1Y I 1,000.000 1l I I~ CQOIMeRCllOl.GeN~ M6MF2136 09/26/06 09/26/07 0N\IA\l& TO Il&NTEl) . 50.000 1-... :=l ClAIMS MACe X OCCUR I MEOEXI"--_- . i-- ------- , ~INJI.IRY I 1,000,000 ! ~~nUMIT . I ! GENel!AL ."""""......TE I 1.000,000 I I . I : . COMPIOP N3iO . 1,000,000 I : ""'''''' PR2; rii ,"" I ~UAIlUTT CCU!llNl!O SINGl.e UIlIT . -jANYAISTO (ElI-o -l ALl. OI'H!O IlUTQ$ IlOOII. Y INJURY . -1 SCHEtlULEI AlIT05 (I>or_l --1 tlIRI!DAUlllS IlODtI. Y INJUftY ~~D~ (I>or-..o . -- PROPeRTY _ I , (I>or occIdenll ~E UAIIlIJ'/Y I I I AlJfO OIlLy. fAACQ- . r-iAN'l'AIJTO I OTHER 'IllAN fAAllC I I i AlJfO 0IlL Y: .- i. OO-MBRELlA ~TY 1 M6XF2137 09/26/06 09/26/0 ~~ I 1.000,000 1\ X OCCUR D ClAlt.lSMAllE I I 1.000,000 I--j 0E1lUCl1IILE 09/26/06 I r-~ .RflENTIOI! M6XF2138 09/26/0 EACH OCCUR. I. 3,000,000 . AGGREGATE . 3,000,000 I~~- I I 'l'tC8TATUo I I~ IF, Fo.",_NT . ---;-- AIr( PROPRIETCRJPARTNEM!lCEClJTM I 0FffCE-- EllCUIDIiOP E.\. DI6SAIlE. EA ~"'''''''F . i w~.~- .~ I IF, DISl!A8!!. PCLIC'l' WIlT . 101llER I . I I I I I , I DEICAIP110N OF OPERATIONS ILOCAlION8lftHlCt.E$JEXClLUlIIClIlS _ BY EN~/IPl!CI"L- DISPLAY DATE: 7/03/07 RAIN DATE: 7/04/07 DISPLAY LOCATION: ON THE OCEAN SHORE AT SEWARD, AI< ADDITIONAL INSURED: SEWARD CHAMBER OF COMMERCE, SEWARD, AK AS RESPECTS TO THE OPERATION OF THE NAMED INSURED ONLY. 99664 INDUI..OAHY ClFTHE_~1IID PClUCIIlS B8CANCELLm IIERlR8THE_lION llATETHEREOf.__IlSURl!RWlLL-1IORTOllAL ~ 1lA'lSWlUT1'1!N N011C:l! TO tHE CEllTIFtCATE "OLDiR _TO THE LEFT. BUT FAIUlRE TO DO eo IIW-L .,POSE NO QllUGA110Il OIl LWIIUTY OF NI'f ICIlIO _THE --. 1ft -,.. OIl " 58 ACORD 25 (2001108) Sponsored by: Oates CITY OF SEWARD, ALASKA RESOLUTION 2007-058 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, AUTHORIZING THE CITY MANAGER TO ENTER INTO A PURCHASE AGREEMENT FOR A 225 KV A TRANSFORMER, FOR A TOTAL AMOUNT NOT-TO-EXCEED $11,761.20 WHEREAS, the Electric Department needs a large transformer to serve the anticipated additional load of the Breeze Inn's new addition; and WHEREAS, we have a very limited space to install the transformer, so it has to be ordered built to specific size specifications; and WHEREAS, the cost of the transformer will be paid for by the customer on Work Order #3906; and WHEREAS, the Electric Department requested quotes from our regular suppliers and received 2 quotes meeting the size specifications. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA that: Section 1. The City Manager is authorized to enter into an agreement with Wesco To purchase a 225KV A transformer for a price not-to-exceed $11,761.20 from Account 501-5300- 5440. Section 2. The expenditure is conditioned upon reaching a written agreement with Breeze Inn to reimburse the City within thirty (30) days of the expenditure. Section 3. This resolution shall take affect immediately upon its adoption. PASSED AND APPROVED by the City Council of the city of Seward. Alaska, this 11 th day of June 2007. 59 Council Agenda Statement From: Tim Barnum. Manager Electric Utility To: June 11, 2007 Phillip Oates, City Manager ~ ~ 't' cft4T Meeting Date: Agenda Item: Transformer Purchase BACKGROUND & JUSTIFICATION: The Electric Utility needs to order a 225KV transformer to serve the Breeze Inn. None of the transformers we have in stock, or already on order, are big enough to serve the anticipated additional load of their new addition. We have very limited space to install the transformer, so it bad to be ordered and built to specific size specifications. The transformer will be paid for by the BIeeze Inn on Work Order # 3906. The Electric Department requested quotes from our regular suppliers on April 18, 2007. All transformers quoted were too big to fit in the aWilable space. . We requoted again on May 4,2007 with size specifications and received 2 quotes. The responses are atur.hM. Wesco provided the low quote. CONSISTENCY CHECKLIST: Where applicable, this resolution statement is consistent with the Seward City Code, Charter, Comprehensive Plans, Land Use Plans. Strategic Plan and City Council Rules of Procedures. FISCAL NOTE: Charge the cost to pmchase 1 225KVA Transformer with specific dimensions from Wesco in the amount ofSll,761.20to "Electric Fund", Account 501-5300-5440wbicb will then becbm!;aJ to the customer on Wotk Order #3906 Approved by Finance Department: ~ RECOMMENQATION: Seward City Council approve Resolution 2001- 5.g authorizing 1he City ~ to purchase 1 225KVA Transformer from Wesco, FOBSewmd,forapricenottoexceedSll.761.20. FQlIlIingis available in account no. 501-5300-5440. 60 .I 1. 2. 3. 4. S. 6. 7. 8. 9. 10. 11. 12. May 04~ 2007 The City of Seward would ike prioes on the following items. I need to know price and availabilfty as aoon 8S possible, with all prices FOB Seward. If you have any q estions, please q1ve me a call.. My direct line ie (907) 224-~073. Than you for your prompt ~espon8e. our fax numb~~ is (907) 224-4085. SinC?!:;r- Kathy Shipe , Seward Electric Department Quantitv n= ~/(),r,'t".11- Se-Ci;'l 1'rr71'rt.#~a fJfs;cIl-lpnlle OAT'h , 225 KVA ~admount Transformer, 120/208, 7.2/12/5, :3 pbase, Loop Feed, Dead Front, Bu;sldng Wells w/inssrta Taps, Bayonet Fulling, Stud Secondary, Paddles 1 w. ~ req11ot::Lng tobJ,.. 1:onAat'D%IlII!I:' with tba :fpllowiug SizB ~cifiaatioQ.. Wiclt:b '2" maz Dep~ ..n/50" iDaludiD~ ~. B.ig'b.~ - a.p ap-= . Fin. 0Xl ~ aides inst.ea4 Ofbaak p:r:ef'eJ:'z:ecl. ! . X_a 'to :f~~ 0Jl 1:he a-ttachecl DonazoeU pad speos. ~. ao maah *or :roaJ: help. cO J~fJ 61 05/08/2007 15: 24. 907-563-3134 \lESCO ANCHJRA(:C: ....Al:iI:. 1:1::1 j~11 05-08-2007 WESCO N1CHORAGE AK Ancholilll8o AK 98503 (United Stat..) From: Wayne SMrp A8I!I 50G weet HJghWllY 14 15101-5032 Jefferson City (United states) To: Neg: AKRR041901 ReV: 1 CITY OF SEWARD. AJ( 99664/ wesco ANCHORAGE AI( Spedlication or d8ta changes may result In ~ to quaIed prIceS Md/or delivery da Quote CGlor HY Neutral LV Spec : 3 Phase,. 60 ~ 65 "C AWR, SO"C Avg Amb. Loop feed. M1nenII Oll-Filled MTR f8d1nguntT~II" Green (UUns&ll7GY 3.21J11li) 1Z47DGnIYI1200, 85 'IN SIL. lapa +2 -2 2.5% HOXO bushing with ground IIb1Ip 208YI120 3PH-MTR.V (Rev 1, 1.1/1811988) FeatureS . 18- deep cebInet . Penta-I1eatl tablMt"'" boll . !JOO tJI7IfJ HV bushing ..... "B . I.D8tIlwsklnsel1s (deadftanO 1C & . ANSI CST,12.26 F1t12 & 3 HV bushing paII.em (minImUm) . 71Ireaded stud LV bushirJQs l/dIJ 4-lloIe NEJ,fA."ad8 ...."tltklls x 4 . NISI C51.12.26 FIg 3&4a minimum SfTd LV bushing pBIl8tII . Fused bajlDlNll wlIh ISDIatlon IInIc JC 3 ...1 . ApfJIOXlmBte DlmenIllollS: G2H JC 46W JC 43D . Wicfh of csbIe opening 11<< iipc:.JIiad. 4tr wide cablnflt quated. . I nBI I Q1Y I WA NL .. I 11. z 11r1 1 1 225 447 2478 1M l TotlII m-, I 3500 CUOIIId IOSIS8S are t,ypIcal for rel'erence plA'pDSeB onIy- Paymentwms : might Code W....-ly. PaId In 30 days ; Point or Shipment PrepaId WA, (Un1Ied StateS) : 12 rnonIhs 8fIer ~ or 18 rnonIhS BfIer shipment, whichever occurs Irst DIsclaimer Nates. Nam8p1ate lIIIIl(sI8te:"Cont8Ins no deteetehIA level dPCB (less thM11 PPM) lit the time drnanlJl'8clQe.- G~ AB8 1 ftf2 85/88/2887 15:24 987-563-3134 ~ ANCH.:RAGE PAGE ~4' ADI Refer to desCl'lpthIe bullelin for all cnmenatonal dala. Negotiation and 18m numbenI mUllt be refererwed upon order entry. ShIpment subject to available. prgducUon IP8C8 1Il1Ime of order recelpt III dIvIsIan. All door fastening bolls are made of AlSI 300 series stain... steel or 8ilicon bronze for corrosion resistance In full compliance wllh ANSI C57.12.28-1B88. WeIghIs and dimenskln. .. ....eI8s. not Iluerunlees. Q~ Valfcllv: Quote valid fill' 30 days urHss slated otherWIse on quole. Price VaRdltv: On Ann Orders: AB8 Intends to honer price through q~ c1e1vety. But If after 60 day& of rec:&lpt of <<del' there" a 1Sig~ InCRlillltJe In transportaIIon Dr materI8Is cosIs. ABB reseMlS the Ifgtt to amend the prIc:8 8fter conllUltlltlon will ... prchIl.... On Approval Ord..: Prtces are valid for 30 days alter IniIiaI malng dale of approval dr8WIngL Orders not released for manufadure within 30 days ofblnltiat draWWla date are eubject to IIdjustment of pricing. 0rderI on hold pending dRIWk1g approval beyond 30Il day or initial dr8WIng dale are subject to price adjuslment every 30 days. . Due to the high cost of dlee8l fuel. the price Indudell 8 traneporlallon sun:ta'ge. Price Indudes B c:tIarge of $O.D1 per rNIe for every SO.D5 charge far dIaeI fuel O\W S1.50 per gIilllorl. The eurdllrge 1& calcul8t8d ~ the latest government ..-bs1JllllCS publl9hed 8. U.S. RetaIl On-Highwey D-.J Price (hIlp:lIwWW.8ia.doe.QOY). Best regards, ABS Wayne Sharp AdvanGlld Sales EngIneer 63 AIl8 ..-., 65/68/2667 15:24 907-563-3134 ENGINEERING WE5CO ANCKRAGE FAX No.. 907 224 4085 PAGE 1112 p. 003/003 MAY-04-2001 FRI 01:28 PM IT T 3a' Sf .,..~ . r---- I I I 6:lc6'-.~)( I Vir. Huh ' I (Top & 4 Sides) 56~A . - - -.- -~~Q~ - -- I I. Cabl. Opp~~. I ~ I L~____.....__-_-_..J WI' II : J Top View' I wt J 44' Ferrule Loop 4ell. Vlrl' Mesh , Section'.A-A 64 ..h"'''~~I\I~\l , , r ,,^ .1'",1' lIU' _"''' ,,, ...-.., "1I.r "'... L\iVI Il\~ VIIV" 1M :! 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. .'" . CITY OF SEWARD ~ P.O. BOX 167 SEWARD, ALASkA 99664:'0167 . UTILITIES" FINANCE . MAin Offioc (907) 224-40:50 . PolICe (907) 224-3338 . HaibQr(907) 224-3188 . lOire (907) 224-3445 . cay Clerk 1901} 2~ , En~ (D07) 224-4049 , UtD~. (lKI1) 22A-4D!1O , FIX (V07)~ '" ~ ...y 0', 2007 7t? : The C1ty of Seward would like prioes on t~ following items. I need to know price and availability as soon as posSible, with all prices FOB Seward, If you hiilve any ques'tions, pleaee 9"i ve me a calL My di.rect line is (907) 224-4073. Thank you for your prompt r.spons~. Our fax numb.r is (907) 224-4085. Sincere~y~ <<tItf " Kathy Shipe Seward Electric Dep~~tmen~ ....:;'1" . ," , O":Janti t Y li..Im 1 2'25 !(:VA Padmount: 'Iranstormer, 120/208, 7.2/1215, 3 ppaee, LOOP Feed, Csad Front, Bu=h1ng Kells w/inserta Taps, ~ayonQt Fusing, Stud ,seCOndary, Paddles w. ~ :ceqaoti.rlq this t.r1lD.:fCldlll~ .11:11 ~ ~.ol~O~ She speed.fica tioa.. Width 62" III&X D.p~b .S" 1$0" :1noluctin&J J'j,DB BaLgbt,- ~o -.peg Fiu OD 1;110 .:i.de. i.n..~ o~, baak p~d.S"~. .ClOd. t:.o :r1.1O on 'tb. .~'taClhed' c;onoz:e'te ;pad .pee.. !1'haalc. .0 lIluah ~O~ yow: help. Hrtf~,' GNe/) -#> II) 1.0 3:;;. QE. ..c:;, C3 ~ A- oe.'b J... (l r: ~ ~ 3~-q.o ~C.5 ~ 1.p,.,..o.M ~rrt')~ -} c 6 Tit ~e..t.AJ.~ D '-f.O -l(- do vueEJL;> 9t<A-W,,'J~ I~ aH-a.~i (~vJ _. .. __._ __..., I"" -""11'::1111' 65 ' : 'ON xtJ.:! : lorn.:! FRCI'1 : FAX NO. : Mar-14-2007 08:Z6aJ Frot-HEES EnterprIses " 50332524&7 Dec. 27 2003 08:52PM P2 'HID P.owou f-150 , ' z 01 1 I I. I I I I I I j .1 I I I I I II I I : :1111111111 IiI .1.1 I I : ~ ~I I 'I I I I I I ~ I ~ j'''1 I I I' I I ,I I I I I ~.I I I I I I I I I I , 'I' :I: 1;11 I I I I I I I I I o tlC!);1 I I I I I I I I I I i II. al I I I I I I I I I CI2 ~ If!: :1111 : : 1111 ~ I J ~ . 111 U fijl I 1 I I I I I I I I&. 1 J ~' ; ~ a i II) IIlI ,I I I I I I I I I ~ I f I ~ if · ! ~ 1, ~ 181 : ~ 'I I I I I I I I I I C.I -; J J I t 1 i t' G a: i5 ~ 1 J j"l I I' I I I I I I I g ~ ~ ! ; ~ ! ! ~ ~ .. fII=3 L III P@ =~O@' ~ :II: .~ II. ~ ~ J: j .c '66 " ". " '"I, , .. . . . I I I- t- ! , I , ~ I. I I I I I ! I I Sponsored by: Oates CITY OF SEWARD, ALASKA RESOLUTION 2007-059 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, AUTHORIZING PAYMENT IN THE AMOUNT OF $21,436.85 TO HARRIS COMPUTERS FOR UTILITY BILLING SOFTWARE CONTRACT WHEREAS, the Seward City Council authorized Resolution 2004-82 on July 26, 2004, approving the purchase of computer hardware and software for the City's utility billing system; and WHEREAS, in addition to the purchase of hardware and software, and as is standard practice in the software industry, the City committed to paying annual software maintenance costs associated with utilization and upgrades of the software; and WHEREAS, since 2004 the cost of annual maintenance has increased approximately $1,400, representing a cumulative increase of 7% over three years. Funding for this contract has been included in the Electric Enterprise Fund annual repair and maintenance budget, but is subject to Council approval because it exceeds $10,000: NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, that: Section 1. The City Council hereby authorizes payment in the amount of$21,436.85 to Harris Computer for annual software maintenance costs associated with the NorthStar Utility Billing System. Section 2. This resolution shall take effect immediately upon adoption. PASSED AND APPROVED by the City Council of the city of Seward, Alaska, this 11 th day of June, 2007. THE CITY OF SEWARD, ALASKA Vanta Shafer, Mayor AYES: NOES: ABSENT: ABSTAIN: ATTEST: Jean Lewis, CMC City Clerk (City Seal) 67 Council Agenda Statement Meeting Date: June 11,2007 Phillip Oates, City Manager ~ ~'p,S{o 7 Kristin Erchinger, Finance Director ~ Through: From: Agenda Item: Utility Billing Software Maintenance Contract BACKGROUND & JUSTIFICATION The City of Seward purchased a new utility billing system in 2004. The City's previous software vendor was discontinuing support for the software, and without their assistance with programming needs, the City was not in a position to operate without a fully supported and functional utility billing system. The NorthStar Utility Billing (Harris Computers) system installation and transition process was a success. The staff continue to receiving training to expand their understanding of the system, and to implement new feature functionality. We hope in the future to be able to accept utility payments online, and to allow customers access to their account history online. The annual software maintenance costs for this system are standard in the industry, and entitle us to all software upgrades, to technical support and assistance, and to participate in training opportunities. Since 2004, the annual costs for maintenance have increased $1,400, representing a cumulative increase of 7% over three years. CONSISTENCY CHECKLIST Where applicable, this agenda statement is consistent with the Seward City Code, Charter, Comprehensive Plans, Land Use Plans, Strategic Plan and City Council Rules of Procedures. Other: FISCAL NOTE Funding for this annual maintenance contract are included in the maintenance line item in the Electric Enterprise Fund, but require Council approval because the total cost exceeds $10,000. Approved by Finance: ~ i:-t,~ RECOMMENDATION City Council authorize Resolution 2007-81approving payment to Harris Computers for utility billing software annual maintenance and support. 68 .1 I I Sponsored by: Shealy CITY OF SEWARD, ALASKA RESOLUTION 2004-82 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, AUTHORIZING A CONTRACf WITH N. ~SCOMYUTERCORPORATIONFORTHEPURCHASEOF COMPUTER HARDWARE AND SOFTWARE FOR UTILITY BILLING AND APPROPRIATING FUNDS IN THE AMOUNT OF $183,950 WHEREAS, the City of Seward has been utilizing utility billing software that was developed in-house from Alaska Electric Light and Power (AEL&P) since the late 19805, has been receiving servicing of the software from AEL&P, and the vendor is no supporting the legacy software; and WHEREAS, the City has benefited tremendously from the professional knowledge and experience of representatives from AEL&P who have provided computer programming services to the City for more than 10 years, and the City has worked closely with AEL&P representatives to research alternative utility billing software packages that meet the needs of the City; and WHEREAS, after a two-year seaICh of alternative software packages, both the City and AEL&P have detennined that N. Hams Computer Corporation's North star software provides the most cost-effective software solution to meet the needs of the City for processing billing for electric, water, sewer, and garbage services of the City, with only minor software modifications, and our. concurrent pUl'Chase of this software will enable the City to continue to benefit from its decade-long affiliation with the professional computer knowledge and experience of Alaska-based AEL&P utility company; and WHEREAS, Seward City Code 6.10.120 (9) specifically exempts the purchase of electronic data processing software and hardware systemS from competitive procurement requirements, and while the City did not competitively bid this software purchase. staff did spend considerable time researching software packages and found that North Star software is reasonably priced relative to other packages reviewed, and does a better job of meeting the compatibility needs of our existing utility billing services, as well as providing additional services that take advantage of new technologies relative to the internet and electronic blJnlc1ng services; and WHEREAS. City statrhave participated in two hands-on demonstrations of the software by representatives ofN. Harris Computer Corporation and have identified a tremendous opportunity for savings in both staffing and efficiency, and find that this software will meet our needs well into the future, and support the purchase of North Star software. 69 CITY OF SEWARD, ALASKA RESOLUTION 1004-81 NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNcn.. OF THE CITY OF SEWARD, ALASKA, that: SeetioD 1. The City Manager is hereby authorized to execute a contract with N. Harris Computer Corporation for the provision of customer information system, software, and related professional services. Section 1. Tbe City Manager is hereby authorized to approve annual software maintenance support services for an amount not to exceed 520,000, on a year-to-year basis, subject to annual appropriation, as mutually agreed by both parties. Section 3. The amount of$183,950 is belebyappropriated from the electric enterprise fund retained earnings account no. 501-0000-5-3050 to the capital outlay expense account no. 501-5410- 5930. Section 4. This resolution shall take effect immediately upon adoption. PASSED AND APPROVED by the City Council oftbe City of Seward, Alaska, this 26th day ofIuly, 2004. AYES: NOES: ABSENT: ABSTAIN: ATIEST: THE CITY OF. SEWARD, ALASKA .J{Aj;~ JL"r- Vuta Sbafer, Mayo Dunham, Branson, Valdatta, Amberg. Clark, Anderson, Shafer None None None (City Seal) ~ I ~","I"'"" '- - rfo""; Of SE!t.""4l ~"'~ ......... ''4...:'' ! ~?~~~~<)\ ~o( SEAL )oi "\ --,- <:. ~.~ "v /I ~"""J-1~~.1..,""~~~~ .-:r~ ~. OF ".\1':,.... ""....",,' 70 City of Seward, Alaska May 24, 2007 City Council Minutes Volume 37, Page CALL TO ORDER The May 24,2007 special meeting of the Seward City Council was called to order at 7:00 p.m. by Mayor Vanta Shafer. OPENING CEREMONY Councilmember Schafer led the pledge of allegiance to the flag. There were present: Vanta Shafer presiding and Willard Dunham Bob Valdatta Jean Bardarson Linda Amberg Steve Schafer Robert Thomas . ROLL CALL comprising a quorum of the Council; and CITIZENS' COMMENTS ON ANY SUBJE FOR PUBLIC HEARING - None Phillip Oates, City Manag Johanna Dollerhide, Acting ABSENT - None EXCEPT THOSE ITEMS SCHEDULED Approval of Agenda and Consent Agenda Unanimous. Motion (Thomas/Bardarson) Go into executive session to evaluate and discuss strategy and contract negotiation in regards to the potential site locations of the Long Term Care Facility. Motion Passed Unanimous Councilmember Schafer recused himself from the executive session, as a conflict of interest 71 City afSeward, Alaska May 24, 2007 existed regarding the location of the Long Term Care Facility. City Council Minutes Volume 37, Page Council went into executive session at 7:03 p.m. Council came out of executive session at 8:16 p.m. Motion (fhomas/Amberg) Direct City Manager to pursue contract negotiations for the site selection of the Long Term Care Facility. Motion Passed Unanimous Absent! Abstain: Schafer Bardarson thanked staff for their presentaf t Tuesday night to the SMIC COUNCIL COMMENTS Valdatta was appreciative of the field trip that area. Staff had planned out the trip very well. Mayor Shafer thanked staff for their work done in prep CITIZENS' COMMENTS - None . ADJOURNMEN ION RESPONSE TO CITIZENS' COMMENTS - None Johanna Dollerhide Acting City Clerk Vanta Shafer Mayor (City Seal) 72 City of Seward, Alaska May 29. 2007 City Council Minutes Volume 37. Page CALL TO ORDER The May 29,2007 regular meeting of the Seward City Council was called to order at 7:30 p.m. by Mayor Vanta Shafer. OPENING CEREMONY Council member Steve Schafer led the pledge of allegiance to the flag. Motion Passed There were present: Vanta Shafer presiding and Willard Dunham Bob Valdatta Jean Bardarson ROLLCALL comprising a quorum of the Council; and CITIZENS' COMMENT FOR PUBLIC HEARl EXCEPT THOSE ITEMS SCHEDULED Approval of Agenda and Consent Agenda Unanimous The clerk read the following approved consent agenda items: The May 14, 2007 regular city council meeting minutes were approved. Ordinance 2007-002. amending Seward City Code 8.30.025 (a), which extends the deadline for. seasonal business license renewals from April 1 to May 1 each calendar year, was introduced and set for public hearing on June 11,2007. 73 City of Seward, Alaska May 29, 2007 City Council Minutes Volume 37, Page SPECIAL ORDERS, PRESENTATIONS AND REPORTS Proclamations and Awards Recipient Kerry Kline received the annual 2007 Historic Preservation Award. City Manager's Report. City Manager Phillip Oates was sorry to report that library employee Doris Welch had passed away today and noted she would be sorely . ssed. Temporary Planner John Bird, was hired begimring today and would be addressing s the city's more complicated projects such as SMIC. Oates stated the interview process executive Liaison was completed and he hoped to have the position filled soon. He als unced the city website was scheduled to go live June 1,2007. ~ A VTEC fire training lease. Still pending stat ~ Cruise ship head tax initiative. Staffha and was told legislation allocating state legislature. There was no application how funds would be allocated. There were e "funds" into which these taxes would be placed, of which Seward may be eligib a for two of. Oates would continue to monitor, and;"':t\~ letter shou coming soon. ~ Long Term Care Facilitv. The suit 0 "'4,2007 special meeting held for an executive session, directed the age~~ursue negotiation of site selection for the Long T ility. anded out a sheet that outlined the past project timelines. the pr and submitted that city staff had little control over th below: .... orized funding to proceed with an application for a Certificate of in ovember, 2005, noting no hea1thcare facilities in Alaska ed with out the State's approval. i nsultant gathered information, submitted it to the State, which onths. eState 5 months to review. plication was submitted to the State on September 21,2006. e City received approval of the CON on February 22,2007. e following day, staff submitted a request to the Alaska Municipal Bond Bank for revenue bonds. . The Bond Bank met on April 9, 2007 and apProved the City's application for bond financing. Oates stated the City's 2006 annual finance report by auditing firm Mikunda, Cotttrell & Co. was presented this evening with high marks. He also informed the city council of a new database he was developing to capture and track customer service comments and suggestions. 74 City of Seward, Alaska May 29. 2007 City Council Minutes Volume 37. PaKe ~ FEMA flood status. FEMA was in town conducting project reviews for damaged city infrastructure resulting from the 2006 flood. They reviewed the damaged Japanese Creek levee to reconsider providing funding. There were ten project worksheets or areas affected such as roads, bridges, electrical, debris removal, waterlines, campground and fence repairs and lift stations, including the levee. The project total for reimbursement for nine of those areas would be at least $500,000. Chamber of Commerce Report. Ron Hewitt personally thank Ransom for helping keep the blessing of the fleet, and Mayor Shafer and for serving food on Military Appreciation Day. Hewitt stated the com huge success, and noted that visits and information requests were . appreciated the City Manager for taking the time to appear meetings. PUBLIC HEARIN NEW thorizing The City Manager To Enter Into An Agreement With Timberline Excav n, Incorporated For An Amount Not-To-Exceed $77,850.00 To Remove Approximately 15,000 Cubic Yards Of Debris At The Lowell Creek Waterfall. City Manager Phillip Oates stated the need for this debris removal was a result of the October, 2006 flooding event to protect critical infrastructure before another event occurred. Four bids were received and local preference was not used in evaluation because FEMA funding prohibited it. Timberline Excavation Inc. was the lowest bidder. He suggested other approaches presented by council members had merit, but without further engineering advice from the Corps of Engineers, Oates recommended proceeding with gravel removal at this time. 75 City of Seward, Alaska May 29, 2007 City Council Minutes Volume 37, Page Motion (SchaferlBardarson) Approve Resolution 2007-053 Valdatta disagreed 100% on removing the gravel. He wanted the gravel spread out and kept in the area or used by the cannery. Oates stated this debris would be removed to the ARR dock area. Public Works Director W.C. Casey stated disposal of deb . res from floods. There was a permitting process and it was hard fin' . sposal s floodplain. He agreed options were available, but unfortunat ublic proc time was of the essence before fall. Casey cautioned that er lssue with sprea was all fine material washed into the ocean. This fine . al consistency, therefore limiting the uses. In addressi ilin was handled, the more money it would cost the city. che the permitting process would involve coastal managemen . Railroad would be crediting the city for th lease payment on ill wanted to see a Amberg wanted this gravel to be used to build up other city properti graph showing other bidders for the future. Schafer agreed with the Admi advantageous to stockpiling. Casey stated a geol material deposited. Oates expres was a complex problem and two project worksheets were devoted to the area and presented MA. The City needed to get the Corps of Engineers to evaluate the area and seek funding. Oates felt this removal was a high priority, and with no definitive solutions tonight, stressed the City may have a bigger problem if it were not removed by fall. Schafer stated the COE were being contacted through the flood board. Motion Passed Yes: Bardarson, Schafer, Amberg, Mayor Schafer No: Valdatta, Dunham 76 City of Seward, Alaska May 29, 2007 . City Council Minutes Volume 37, Page Resolution 2007-054. Approving Change Order #2 With Harmon Construction And Appropriating Additional Funding In . The Amount Of $393,000 To Make The Proper Modifications To The Seward Senior Center. (A laydown version presented, cited a different account code) Oates stated this funding would complete the project, including the elevator by August, 2007. This funding would come out of an insurance category instead of directly out fthe general fund. Motion (Dunham! Amberg) Motion Passed OTHER NEW BUSINESS A work session was requested on the generator rep' works and electric shops, and was scheduled for Much discussion ensued on the cruise ship head tax initi Congratulations letter National Register of Bardarson Schafer had the same sentiments and explained how it affected everyone. Dunham noted community member Gilbert Nelson had just completed his training at A VTEC. He also thanked the agencies involved with paving the streets and thought they had done a great job. Dunham attended the World Trade Center Awards today and was pleased that Usibelli was awarded "Exporter of the Year." He also congratulated the Fairbanks Business Bureau for their tourism award. He thanked the Shellfish Hatchery for tours last week and hoped the City could partner with the King Crab Program. Dunham informed that if tidelands were involved with the 77 City of Seward. Alaska May 29. 2007 . City CouncU Minutes Volume 37, Page Snowden land request across the bay, he was under the impression only the city could own any and all tidelands. " Mayor Shafer thanked the Parks & Recreation Department for purchasing and hanging the fishing tournament signs. She gave her condolences to the Welch, Nelson and Buffington families and noted, with great sadness, they would all be missed. CITIZENS' COMMENTS - None (City Seal) The meeting was adjourned at 9:00 p.m. COUNCIL AND ADMINISTRATION RESPONSE TO CITIZENS' ADJOURNMENT Jean Lewis City Clerk ~ ... 78 City of Seward. Alaska June 5, 2007 City Council Minutes Volume 37, Page CALL TO ORDER The June 5, 2007 special meeting of the Seward City Council was called to order at 5 :00 p.m. by Mayor Vanta Shafer. OPENING CEREMONY Councilmember Amberg led the pledge of allegiance to the flag ABSENT - None Jean Bardarson came in There were present: Vanta Shafer presiding and Willard Dunham Bob Valdatta Jean Bardarson ROLL CALL comprising a quorum of the Council; and Phillip Oates, City Manag Jean Lewis, City Clerk CITIZENS' CO FOR PUBLIC HE CEPT THOSE ITEMS SCHEDULED Mo Approval of Agenda Unanimous Councilmember existed regarding th used himself from the executive session, as a conflict of interest tion of the Long Term Care Facility. Upheld by Mayor Shafer. NEW BUSINESS EXECUTIVE SESSION Motion (Thomas/Amberg) Go Into Executive Session To Evaluate And Discuss Strategy And Contract Negotiation In Regards To The Potential Site Locations Of The Long Term Care Facility. 79 City of Seward. Alaska June 5. 2007 City Council Minutes Volume 37. Page Motion Passed Unanimous . Council went into executive session at 5:04 p.m. Council came out of executive session at 5:55 p.m. The City Council directed the Administration to continue with negotiations as directed. COUNCIL COMMENTS - None The. meeting was adjourned at 5 :56 p.m. . . CITIZENS' COMMENTS - None COUNCIL AND ADMINISTRATION RESPONSE ADJOURNMENT Jean Lewis City Clerk (City Seal) 80 11_ PROVIDENCE SEWARD MEDICAL CENTER (Managed by Providence Health System- Washington) Financial Statements December 31, 2006 and 2005 (With Independent Auditors' Report Thereon) 81 =u KPMG LLP Suite 900 801 Second Avenue Seattle. WA 97104 . . Independent Anditors' Report The Board of Directors Providence Health System - Washington: We have audited the accompanying balance sheets of Providence Seward Medical Center (the Medical Center). owned by the City of Seward and managed by Providence Health System - Washington (a Washington nonprofit corporation). as of December 31, 2006 and 2005, and the related statements of operations, changes in net assets, and cash flows for the years then ended. These financial statements are the responsibility of the Medical Center's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material. misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Medical Center's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Providence Seward Medical Center as of December 31,2006 and 2005, and the results of its operations and its cash flows for the years then ended in conformity with U.S. generally accepted accounting principles. K:PMG- LLt> April 20, 2007 82 KPMCI, LLP. KPMGi LLP. IImbd"" ~ II; I"""''' t<PMO........... . ..... aMOCiIItan. . PROVIDENCE SEWARD MEDICAL CENfER (Managed by Providence Health System - Washington) Balance Sheets December 31, 2006 and 2005 (In thousands of dollars) Assets Current assets: Cash and cash equivalents $ Accounts receivable, less allowance for bad debts of $627 and $414 in 2006 and 2005, respectively Other receivables Other current assets Total current assets Assets whose use is limited: Funds held for long-tenn purpose Total assets $ Liabilities and Net Assets Current liabilities: Accounts payable Accrued compensation Due to contractual agencies Payable to the Corporation Total current liabilities Other long-tenn liabilities Total liabilities Unrestricted net assets Total net assets Total liabilities and net assets $ $ See accompanying notes to fmancial statements. 2 83 2006 2005 1,358 1,772 1,406 1,535 255 80 36 45 3,055 3,432 251 169 3,306 3,601 133 683 242 1,080 2,138 251 2,389 917 917 3,306 156 634 372 1,810 2,972 55 3,027 574 574 3,601 PROVIDENCE SEWARD MEDICAL CENTER (Managed by Providence Health System - Washington) Statements of Operations Years ended December 31,2006 and 2005 (In thousands of dollars) . 2006 2005 Operating revenues: Net patient service revenues $ 11,730 10,633 Other revenues 247 146 Total operating revenues 11,977 10,779 Operating expenses: Salaries and wages 6,195 5,794 Employee benefits 1,680 1,539 Professional fees 2 Supplies 579 643 . Purchased services 2,021 2,014 Bad debts and other 1,162 1,195 Total operating expenses 11,639 11,185 Excess (deficiency) of revenues over expenses from operations 338 (406) Net nonoperating gains 5 4 Excess (deficiency) of revenues over expenses 343 (402) Increase (decrease) in unrestricted net assets $ 343 (402) See accompanying notes to financial statements. " 3 84 . PROVIDENCE SEWARD MEDICAL CENTER (Managed by Providence Health System - Washington) Statements of Changes in Net Assets Years ended December 31, 2006 and 2005 (In thousands of dollars) Unrestricted net assets Balance, January 1, 2005 Deficiency of revenues over expenses Decrease in net assets Balance, December 31, 2005 Excess of revenues over expenses Increase in net assets Balance, December 31, 2006 $ $ 976 (402) (402) 574 343 343 917 See accompanying notes to financial statements. 4 85 Total net assets 976 (402) (402) 574 343 343 917 PROVIDENCE SEWARD MEDICAL CENTER (Managed by Providence Health System - Washington) Statements of Cash Flows Years ended December 31, 2006 and 2005 (In thousands of dollars) Cash flows from operating activities: Change in net assets $ Adjustments to reconcile change in net assets to net cash used in operating activities: Provision for bad debts Changes in certain current assets and current liabilities Change in certain long-term assets and long-term liabilities Net cash used in operating activities Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year $ See accompanying notes to financial statements. 5 86 . 2006 2005 343 (402) 668 709 (1,539) (697) 114 114 (414) (276) 1,772 2,048 1,358 1,772 , . PROVIDENCE SEWARD MEDICAL CENTER (Managed by Providence Health System - Washington) Notes to Financial Statements December 31, 2006 and 2005 (1) OrganizadoD Providence Seward Medical Center (the Medical Center) is owned by the City of Seward (the City) and is managed by Providence Health System - Washington (a Washington nonprofit corporation) (the Corporation). The Corporation operates a number of health care institutions in Washington and Alaska. The accompanying financial statements are based upon separate records maintained by the Medical Center. Effective May 1, 2003, the Corporation and the City signed a management and operations agreement (the Agreement) whereby all financial risks and rewards from the operations of the Medical Center accrue to the City and the Corporation is the manager of the Medical Center. Effective with the signing of the Agreement, the City entered into a contract to lease the Wesley Care Center, located adjacent to the Medical Center, which is now operated by the Medical Center. As part of the Agreement, the Medical Center pays the cost of the Wesley Care Center lease. The Medical Center also rents certain equipment from the Corporation. All other property, including the facility, is owned by the City and is not recorded on the Medical Center's financial statements, and per the Agreement, no cost of such property is charged to the Medical Center. The Medical Center pays a management fee to the Corporation according to the terms of the Agreement. Management fees were $297,000 and $305,000 for the years ended December 31, 2006 and 2005, respectively, and are included in purchased services in the accompanying statements of operation. Transactions with the Corporalion (a) Payable to the Corporalion The accounting, management and human resource functions of the Medical Center are provided by the Corporation. All receipts and payments on behalf of the Medical Center are received or made by the Corporation and recorded in the accompanying balance sheets. The amounts payable to the Corporation at December 31, 2006 and 2005 were approximately $948,000 and $1,734,000, respectively. As discussed above the Medical Center also pays management fees to the Corporation. Amounts payable to the Corporation at December 31, 2006 and 2005 were approximately $132,000 and $76,000, respectively. (6) Self-insurance The Medical Center participates in the Providence Health System Self-Insurance Funds for the deductible portion of professional and general liability, unemployment and workers' compensation insurance coverage. These funds provide insurance coverage for health care institutions associated with the Health System and certain other related institutions. In addition, the Health System maintains excess coverage with independent insurance carriers. The Health System's funding for estimated self-insured professional and general liability, unemployment and workers' compensation insurance coverage is based on management's estimates of the ultimate costs for both reported claims and actuaria11y determined estimates of claims incurred 6 (Continued) 87 PROVIDENCE SEWARD MEDICAL CENTER (Managed by Providence Health System - Washington) Notes to Financial Statements December 31, 2006 and 2005 . but not reported. The Health System discounts the ultimate cost of claims at a discount rate 5.5% as of December 31, 2006 and 2005, respectively. (c) System Office Expenses The expenses of the System Office of the Health System are prorated to all divisions and managed facilities including the Medical Center and have been included in purchased services in the accompanying statements of operations. (2) Summary of Significant Accounting Policies (a) Use of Estimates The preparation of financial statements inconformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. (b) Cash and Cash Equivalents Cash and cash equivalents include investments in highly liquid debt instruments with an original maturity of three months or less. (c) Assets Whose Use is Limited The Medical Center maintains trust accounts for residents. The Medical Center acts as an agent and has fiduciary responsibilities associated with these accounts. The Medical Center also holds funds in trust for the City for capital acquisition. As such, these assets are reported as assets whose use is limited with a corresponding liability. (d) Equipment Equipment is not recorded on the balance sheets of the Medical Center as all equipment used at the Medical Center is either owned by the Corporation or the City. The City purchases and records all new equipment and other capital items that are needed at the Medical Center. Maintenance and repairs are expensed as incurred by the Medical Center. (e) Net Patient Service Revenues Net patient service revenues are reported at the estimated net realizable amounts from patients, third-party payers and others for services rendered, including estimated retroactive adjustments under reimbursement agreements with third-party payers. Retroactive adjustments are accrued on an estimated basis in the period the related services are rendered and adjusted in future periods as final settlements are determined. 7 (Continued) 88 . PROVIDENCE SEWARD MEDICAL CENTER (Managed by Providence Health System - Washington) NoresroFmmc~ISmtemenu December 31, 2006 and 2005 '- (f) Income Tuu The Medical Center is owned by the City of Seward and bas been recognized as exempt from federal mcome mxes under the Internal Revenue Code. (3) Retirement Plans The Medical Center participates m the Providence Health System Retirement Plan (the Plm), which covers subsmntially all of iu employees. The Plan is a noncontributory, cash balance plm treated as a multiemployer plan for financial reporting purposes. The vesting period is five years. The cash balance plm meeU the definition of a defined benefit plan under Smtement of Financial Accounting Smndards No. 87, Employers' Accounting for Pensions. Under the cash balance plan, each employee carries an mdividual account balance. The Health System makes a defined annual contribution and provides a defined interest credit ro each employee's account. The Medical Center also participates in the Providence Health System Matching Plan (the Matching Plan). The Matching Plan is a money purchase pension plm ro which the Medical Center makes matchmg contnbutions based on employee contributions to the Providence Health System Tax Deferred Annuity Plan. participmu are immediately vested m all the contributions and associated earnings of the Matching Plan. Toml Medical Center contributions funded for these pension plans for the years ended December 31, 2006 md 2005 were approximately $280,000 and $237,000, respectively. (4) Operating Leases The Medical Center leases various medical and office equipment under operating leases which expire m the next five years, generally with no renewal or purchase options. Renml expense, recorded m bad debu md other, for all operating leases was approximately $139,000 md $189,000, respectively, for the years ended December 31, 2006 and 2005. The followmg is a schedule by year of future minimum lease paymenu under noncancelable operating leases as of December 31, 2006, that have initial or remaining lease terms m excess of one year (m thousands of dollars): Total $ 61 56 56 36 18 227 2007 2008 2009 2010 2011 $ 8 (Continued) 89 PROVIDENCE SEWARD MEDICAL CENTER (Managed by Providence Health System - Washington) Notes to Financial Statements December 31, 2006 and 2005 . (5) Litigation and Contingencies The healthcare industry is subject to numerous laws and regulations from federal, state and local governments. Compliance with these laws and regulations can be subject to future government review and interpretation, as well as regulatory actions unknown or unasserted at this time. Government monitoring and enforcement activity continues with respect to investigations and allegations concerning possible violations by healthcare providers of regulations which could result in the imposition of significant fines and penalties, as well as significant repayments of patient services previously billed. Management is aware of certain asserted and unasserted legal claims and regulatory matters arising in the course of business. After consultation with legal counsel, management estimates that these matters will be resolved without material adverse effect on the MediCal Center's future financial position, results of operations, or cash flows. (6) FUDctional Expenses The Medical Center provides healthcare services to residents within its geographic locations. Expenses related to providing these services for the years ended December 31, 2006 and 2005 are as follows (in thousands of dollars): Healthcare direct expenses Hea1thcareindirect expenses General and administrative expenses Total operating expenses $ 2006 7,524 1,019 3,096 11,639 2005 7,090 1,079 3,016 11,185 $ . " 9 90