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HomeMy WebLinkAbout06092008 City Council PacketSeward City Council Agenda Packet Breaking Ground at the New Long germ Lace raciiiLy J1LC, June 9, 2005 May 19, 2008 City Council Chambers Beginning at 7:00 p.m. 1963 1965 2005 The City of Seward, Alaska !mod CITY COUNCIL MEETING AGENDA -America cit; im- {Please silence all cellular phones and pagers during the meeting} Note NEW time! June 9, 2008 7:00 p.m. Council Chambers 1. CALL TO ORDER Clark Corbridge 2. PLEDGE OF ALLEGIANCE Mayor 3. ROLL CALL Term Expires 2009 4. CITIZENS' COMMENTS ON ANY SUBJECT EXCEPT Willard E. Dunham THOSE ITEMS SCHEDULED FOR PUBLIC HEARING. Vice Mayor [Those who have signed in will be given the first opportunity to Term Expires 2008 speak. Time is limited to 2 minutes per speaker and 30 minutes total time for this agenda item.) Robert Valdatta 5. APPROVAL OF AGENDA AND CONSENT AGENDA Council Member [Approval of Consent Agenda passes all routine items indicated by Term Expires 2009 asterisk (*). Consent Agenda items are not considered separately unless a council member so requests. In the event of such a Tom Smith request, the item is returned to the Regular Agenda) Council Member Term Expires 2009 b. SPECIAL ORDERS, PRESENTATIONS AND REPORTS Betsy Kellar A. Proclamations and Awards Council Member Term Expires 2009 1. Recognition For AVTEC Chefs Elizabeth Fackler, Kevin Lane, and Robert Wilson ....................Pg 3 Jean Bardarson 2. Proclamation Recognizing Flag Day June 14....Pg 6 Council Member Term Expires 2008 B. Borough Assembly Report C. City Manager's Report Linda Amberg D. City Attorney Report Council Member E. Port and Commerce Advisory Board Report Term Expires 2008 F. Seward Bear Creek Flood Service Board Report G. Other Reports, Special Presentations Phillip Oates 7. PUBLIC HEARINGS City Manager A. Ordinances Requiring A Public Hearing Jean Lewis City Clerk 1. Non-Code Ordinance 2008-015, .Appropriating Funds To Make Expenditures Which Could Influence The Outcome Of An Election Cheryl Brooking Concerning A Ballot Proposition Addressing A Biennial Budget In City Attorney An Amount Not To Exceed $1,SOO ..........................Pg 7 City of Seward, Alaska Council Agenda June 9, 2008 Page 1 8. UNFINISHED BUSINESS A. Items Postponed from Previous Agenda 1. Set A Work Session To Discuss PACAB Priorities. (Before June 23 or on July 14) 9. NEW BUSINESS A. Resolutions 1. Resolution 2008-049, Authorizing The City Manager To Purchase A Macerator/Grinder Device From JWC Enterprises For An Amount Not-To-Exceed $14,335 ......................................................................................Pg 10 2. Resolution 2008-050, Providing For The Issuance Of Electric Revenue Bonds Of The City In The Aggregate Principal Amount Of Not To Exceed $6,000,000 For The Purpose Of Providing Amounts To Acquire, Construct And Install Necessary Additions And Improvements To The City's Diesel Electric Generating System And To Do All Things Necessarily Incidental Thereto, And To Pay The Costs Of Bond Issuance; Fixing Certain Covenants And Protective Provisions Safeguarding The Payment Of The Principal And Interest On Said Bonds; And Providing For The Date, Form, Terms, Maturities And Manner Of Sale Of The Bonds ......................Pg 12 3. Resolution 2008-051, Approving A Management And Operating Agreement Between The City Of Seward And Providence Health & Services -Washington, D/B/A Providence Health System Alaska, And Appropriating Funds .....................Pg 41 B. Other New Business Items *l. Approval Of The May 27, 2008 Regular City Council Meeting Minutes.....Pg 76 *2. Approve Submittal Of Candidate Sue McClure To The Borough Mayor And Assembly For Appointment To The Kenai Borough Planning Commission For A Three-Year Term To Expire July 31, 2011 ........................................Pg 85 10. INFORMATIONAL ITEMS AND REPORTS (No action required) A. Providence Seward Medical Center Financials for April 2008 ......................Pg 90 11. COUNCIL COMMENTS 12. CITIZENS' COMMENTS ~S minutes per individual -Each individual has one opportunity to speak.] 13. COUNCIL AND ADMINISTRATION RESPONSE TO CITIZENS' COMMENTS 14. ADJOURNMENT City of Seward, Alaska Council Agenda June 9, 2008 Page z city of sews ~atulations Certificate Of Cong µ ~ A . Awarded To~ chnical Education Center's Alaska Vocational Te 1er abeth F ack Chef Eliz een certified as an American Culinary Federation roctor ed Practical Examiner,S hich allows her o p Chef Fackler has b Sional cooking levels from ~ACF) Approv exams that cerfifY a~~ profe practical cooking Cooks up to Executive Chefs. is Great Achievement From The Seward City Council! Congratulations On Th Dated June 9> 208 Clark Corbridge, MaY°r iii~~ . ~ City Of Seward Congratulations CertificatA ~arded To: ducation Center's _...~- .ona~ Te~hn~cal E vo~at~ yin Lane A~aSka f Ke Che Contest on Apr~~ 30, U~t~mate Chef Alaska on Food ted ~n the bane created clas6sas ~ r'cours Chef Lane compe chorage hour. Center in An ared in an Was Hanle Lane was ~~ctorious and 2008 at the Elan ~e that could be prep meal for three peop Creativity, Chef Alaska. Quality, Presentationt~ ~~timate and City Council! ent From The Sew ratulations On This Great Achievem Cong gated June g~ 2008 ark C°rbridge, May°C CI ~: City Of Seward ratu~ations Certificate larded To: Aw ',.-~-.' s ~ Education Center's ~-~ vocational Technic na Academy p,Iaska Cull ~Y Head °f Alaska ' ~SOCI bed ~V~ Chef R° ent Head, was named Academy ~e'Partm p,VTEC'S CuUnary Che f o f the Year at to on May Chef W--S°n' Association's tain Cook in Anchorag the Alaska Culinary tion's annual gala a the Hotel Cap associa 5, 2008. Cit Council on this great achievement! Congratulations from The Seward y 2008 Dated June 9, Clark corbridge, May°r ~oc1~~~7ro~ ~C~~2~S, may is celedrated on9une 14 in the 21nit~d States; and ry~}{~;~~~, this urmmemorates tfie adoption of flag of the united States which happened that day dy resolution of the second Continental Congress in 1777; aruf 7N"}{~~~~,5, in 1916, 'resident ryVoodrozv ~Nifson issued a proclamation that offt'eially esta6Gshed9une 14 as .flag may;:.:and : ~V"}f~;~~~[,S, inA.ugust 1949, rational }tag may was estadlished dy anklet of Congress; and ryt~'}{~f.~l,S, the weekof dune 14 is designated «J1~ational ~!ag ~INeel~;• and ~YV}{~~~cAS, many citizens hQVe died protecting it and ~f~S, our flag. is representative of our independence, our unity: as a nation and has a proud arufglorious history. ~o~W 2X~o, I ClarkCor6ridge, ~I~layor of tfie City of Seward, ~t.laska, cfo heredy encourage a!l citizens of Seward to fly tie American flag with pride in odservartee of ~ ~ay,~une 14, and show our respect to the flag, our culture, our nation, and its c~e~~ners and makers. _ mated tFiis 9~ day of ,dune, 2008. Sponsored by: Oates Introduction: May 27, 2008 Public Hearing: June 9, 2008 Enactment: June 9, 2008 CITY OF SEWARD, ALASKA NON-CODE ORDINANCE 2008-015 A NON-CODE ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, APPROPRIATING FUNDS TO MAKE EXPENDITURES WHICH COULD INFLUENCE THE OUTCOME OF AN ELECTION CONCERNING A BALLOT PROPOSITION ADDRESSING A BIENNIAL BUDGET IN AN AMOUNT NOT TO EXCEED $1,500 WHEREAS, the City of Seward currently operates under an annual budget cycle, and during 2006 and 2008 budget discussions, the City Council expressed an interest in moving to a biennial budget process in order to provide more opportunity to focus on longer-term strategic and financial planning projects, since the annual budget process leaves little time for addressing enterprise fund rates and charges, capital budgets, and General Fund fees, as required by the Seward City Code; and WHEREAS, migration from an annual to a biennial budget requires that the Charter be changed, thereby requiring a vote by the citizens of Seward, and at its meeting of March 24, 2008, the Seward City Council passed Resolution 2008-025, placing a proposition on the October 7, 2008 ballot, asking voters to vote on whether to accept a biennial rather than annual budget; and WHEREAS, the Seward city voters voted on this same issue at the October 3, 2006 election, opposing the move to a biennial budget by approximately two-to-one, and at that time, there was no effort to educate the public about the potential pros and cons of a biennial budget process; and WHEREAS, in order to educate the public in accordance with the provisions of 2AAC 50.360(b), the City Council must appropriate funds since the education process may influence the outcome of an election. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA that: Section 1. The City Council hereby appropriates and authorizes expenditures in the amount not to exceed $1,500 for the purposes of educating the public about the pros and cons of a biennial budget process, with the potential to influence the outcome of the election, with particular emphasis on the time and cost savings associated with a biennial, rather than annual budget. Section 2. The City Council further directs and authorizes the city manager and other City officers, officials, and employees, as may be appropriate, to register and to complete and file all necessary reports, forms, and notices relating to election-related expenditures under AS 15.13, or as may otherwise be required bylaw. ~_ _ CITY OF SEWARD, ALASKA NON-CODE ORDINANCE 2008-015 Section 3. This ordinance shall take effect ten (10) days following enactment. ENACTED by the City Council of the City of Seward, Alaska, this 9`'' day of June, 2008. THE CITY OF SEWARD, ALASKA Clark Corbridge, Mayor AYES NOES: ABSENT: ABSTAIN: ATTEST: Jean Lewis City Clerk (City Seal) ,_ COUNCIL AGENDA STATEMENT Meeting Date: May 27, 2008 From: Phillip Oates, City Manager.~~ RE: APOC Registration to Lobby in favor of Biennial Budget BACKGROUND & JUSTIFICATION: At its meeting of March 24, 2008, the Seward City Council passed Resolution 2008-025, which will place a proposition on the October 7, 2008 ballot, asking voters whether they support a biennial, rather than annual, budget. In anticipation of the election, the administration is preparing materials to identify the pros and cons of a biennial budget process, and expects to disseminate this information to the public, as well as to meet with various local groups to explain the reason that this issue is coming before the voters. The City is allowed to prepare and distribution election materials which reflect solely a neutral position on the issue, with regard to the voters approving or disapproving the proposition. Under AS 15.13.150, the City may engage in certain educational election-related communications and activities, to include: 1) publishing the date and location of the election; 2) educating students about voting and elections; 3) sponsoring open candidate debate forums; 4) participation in voter registration drives aimed at increasing voter participation in elections, so long as such information does not favor a particular candidate, political party, or political position; and 5) disseminating the views of all candidates running for a particular office. However, under AS 15.13.145, a municipality may not use money to influence the outcome of an election concerning a ballot proposition or question, unless the funds have been specifically appropriated for that purpose by the elected body. According to the Alaska Public Offices Commission ("APOC") regulations, "any communications which are paid for by a municipality and which are related to an election are considered to be intended to influence an election unless they are only notices of the election or unless they are required by statute, charter, or ordinance. 2AAC 50.360(b). Expenditures related to the outcome of an election must be reported on appropriate forms to the APOC. Consideration of a biennial budget process is one cost efficiency measure in our tool kit, and we would like the opportunity to educate and inform the public about the potential cost savings to be achieved by migrating to a biennial budget. While a biennial budget will likely save considerable staff and Council time, its broader goal is to free up time to focus on longer-term City priorities and financial planning. Any information distributed by mail will be mailed along with the utility bill, so we do not anticipate additional costs associated with postage. However, approval of an appropriation in the amount of $1,500 will provide us with some flexibility in the manner and type of information to be presented. Failure to appropriate funds for this purpose will limit the City's involvement in discussing a biennial budget, to the routine election preparation activities conducted by the City Clerk's office. 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 appropriation is available in the 2008 Budget. ~u`L~" N~"'~°~e RECOMMENDATION: City Council enact ~ Ordinance 2008-~15 appropriating funds for the purpose of making expenditures to influence the outcome of an election concerning a ballot proposition addressing a biennial budget. 9 Sponsored by: Oates CITY OF SEWARD, ALASKA RESOLUTION 2008-049 and A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, AUTHORIZING THE CITY MANAGER TO PURCHASE A MACERATOR/GRINDERbEVICE FROM JWC ENTERPRISES FOR AN AMOUNT NOT-TO-EXCEED $14,335 WHEREAS, the grinder/macerator treatment device at lift station #1 failed on May 16, 2008; WHEREAS, it was unable to be repaired due to age and damage sustained to the cutting teeth; and WHEREAS, options to replace the device were limited due to the necessity of getting an exact fit in the current schematic of lift station #l; and WHEREAS, it would have been economically unfeasible to retro fit the lift station to fit another manufactures brand; and WHEREAS, Seward City Code §6.10.120(2) and 6.10.120(3) exempt the City from the requirements of competitive procurement procedures where an emergency makes it unreasonable to delay the purchasing process in order to seek competitive bids, and the city manager found that the delay in replacing the macerator/grinder could lead to more extensive and expensive problems; and WHEREAS, the City Council finds that it is in public interest to waive the normal bid process per SCC 6.10.130 to pursue a sole source contract with JWC Enterprises to replace the existing equipment, based on: 1) the positive reputation of JWC Enterprises; 2) the necessity of finding a device compatible with the existing lift station schematic; 3) the difficulty of retrofitting the lift station to accommodate another manufacturer's equipment brand; and 4) the urgency of the repairs. The city manager notified the City Council of the pending emergency purchase during the work session of May 28, 2008. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA that: Section 1. The City Manager is authorized to purchase a new macerator/grinder from JWC Enterprises not-to-exceed $14,335. Section 2. The Seward City Council hereby determines that it is in the public interest to waive the normal bidding process per Seward City Code 6.10.130 for the reasons described in the recitals above, which recitals are incorporated herein by this reference. 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 9~' day of June, 2008. ~~ i Council Agenda Statement Meeting Date: June 9, 2008 To: Phillip Oates, City Manager `~~~~ From: W.C. Casey, Public Works Director Agenda Item: Purchase Macerator for Lift Station #1 BACKGROUND & JUSTIFICATION: The primary treatment device (grinder/macerator) at Lift Station #1(next to Napa) failed on May 16, 2008. The device was removed and personnel attempted to fix it. Repair was determined to not be a viable option, due to corrosion and damage to the cutting teeth as a result of age. Staff made phone calls to the manufacturer, JWC Environmental, and received a price quote of $14,335 to replace the device. With the approval of the City Manager, the device has been ordered and is scheduled to arrive the week of June 9`t'. Options were limited regarding the replacement of this device. Those limitations are based on the availability of a device that will "fit" into the exact framework built into the lift station where the device sits. Staff feltthat re-fitting the space to accommodate a device from a different manufacturer was not a viable option due to the costs associated with re-fitting the space and the time it would require to accomplish the re-fitting. INTENT: After the fact approval for the sole-source purchase of one macerator monster grinder from JWC Environmental. 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. Other: FISCAL NOTE: Funds are available in the 2008 Wastewater Budget in the maintenance and repair line item (703- 7900-5380}. Approved by Finance Department: RECOMMENDATION: Council approve anafter-the-fact sole-source purchase of a macerator monster grinder from JWC Environmental for an amount not to exceed $14,335.00. J~ ~ Sponsored by: Oates CITY OF SEWARD, ALASKA RESOLUTION 2008-050 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, PROVIDING FOR THE ISSUANCE OF ELECTRIC REVENUE BONDS OF THE CITY IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $6,000,000 FOR THE PURPOSE OF PROVIDING AMOUNTS TO ACQUIRE, CONSTRUCT AND INSTALL NECESSARY ADDITIONS AND IMPROVEMENTS TO THE CITY'S DIESEL ELECTRIC GENERATING SYSTEM AND TO DO ALL THINGS NECESSARILY INCIDENTAL THERETO, AND TO PAY THE COSTS OF BOND ISSUANCE; FIXING CERTAIN COVENANTS AND PROTECTIVE PROVISIONS SAFEGUARDING THE PAYMENT OF THE PRINCIPAL AND INTEREST ON SAID BONDS; AND PROVIDING FOR THE DATE, FORM, TERMS, MATURITIES AND MANNER OF SALE OF THE BONDS. WHEREAS, the City of Seward, Alaska (the "City") owns, operates and maintains an electric system (hereinafter defined as the "System") which is in need of certain additions, improvements and extensions; and WHEREAS, the Constitution and statutes of the State of Alaska and the Charter of the City permit the City to issue revenue bonds to finance any project which serves a public purpose which bonds are secured only by the revenues of the project and which do not constitute a debt or pledge of the faith and credit or taxing power of the City and which may be authorized by the Council and do not require ratification by the electors of the City; and WHEREAS, it is necessary to establish the form, conditions, covenants and method of sale of such bonds and to make provision for establishing the amount, maturities, interest rates and redemption rights and other terms thereof; NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF SEWARD, ALASKA: Section 1. Purpose. The purpose of this resolution is to authorize the issuance and sale of not to exceed $6,000,000 of electric revenue bonds, to fix the form, covenants and method of sale of said bonds to provide for establishing the amount, maturities, interest rates, redemption rights and other terms of the bonds, to be issued on a parity with bonds issued pursuant to Resolution 95-048. 1~ CITY OF SEWARD, ALASKA RESOLUTION 2008-050 Section 2. Definitions. As used in this resolution, unless a different meaning clearly appears from the context: "A.cQUired Gbli~ations" means and includes any of the following securities, if and to the extent the same are at the time legal for investment of funds of the City: any noncallable bonds or other noncallable obligations which as to principal and interest constitute direct obligations of, or are unconditionally guaranteed by, the United States of America, including obligations of any federal agency of corporation which has been or may hereafter be created pursuant to an act of Congress as an agency or instrumentality of the United States of America to the extent unconditionally guaranteed by the United States of America. "Annual Debt Service Requirement" means, with respect to any particular Fiscal Year and to any specified bonds, an amount equal to (i) interest accruing during such Fiscal Year on such bonds, except to the extent such interest is to be paid from deposits in the Debt Service Subaccount from bond proceeds, (ii) the principal amount of such bonds due during such Fiscal Year for which no sinking fund installments have been established, plus (iii) the unsatisfied balance of any sinking fund installment for such bonds due during such Fiscal Year. "Arbitrage and Tax Certificate" means the certificate executed and delivered by the City at the time of issuance and delivery of the Bonds setting forth the City's expectations as to the use of Bond proceeds. "Bond Account" means the Electric Revenue Bond Account created by Section 12 hereof. "Bond Register" means the registration books maintained by the Registrar containing the names and addresses of the owners of the Bonds. "Bonds" means the City of Seward, Alaska, Electric Revenue Bonds, 200$. "Bond Year" has the meaning given such term in the Arbitrage and Tax Certificate. "Charter" means the Home Rule Charter of the City, as the same may be amended from time to time. "City" means the City of Seward, Alaska, a municipal corporation organized and existing under the Charter and Constitution and laws of the State of Alaska. "Code" means the Internal Revenue Code of 1986, as amended, and all applicable regulations thereunder. "Consultin~En ig Weer" means an independent consulting engineer or engineering firm licensed to practice in the State of Alaska, retained and appointed pursuant to Section 15(G) and Section 16 hereof. "Council" means the general legislative authority of the City, as the same may be ~3 CITY OF SEWARD, ALASKA RESOLUTION 2008-050 constituted from time to time. "Debt Service Subaccount" means the Debt Service Subaccount created in the Bond Account by Section 12 hereof. "Electric Account" means the special fund heretofore established by the City for the deposit of Gross Revenues and other amounts received and held by the City in connection with the System. "Fiscal Year" means the 12-month period commencing on January 1 each year through and including December 31 of that year. "Future Parity Bonds" means any electric revenue bonds, notes or other obligations of the City, other than the Bonds, issued under a resolution wherein the City pledges that the payments to be made out of the Gross Revenues and moneys in the Electric Account into the Bond Account and Reserve Subaccount therein to pay and secure the payment of the principal of and interest on such revenue bonds, notes or other obligations will be on a parity with the payments required by this resolution to be made out of such into such Gross Revenues or Electric Account into such Bond Account and Reserve Subaccount to pay and secure the payment of the principal of and interest on the Bonds. "Government Obli ations" means any of the following: (i) any bonds or other obligations which, as to principal and interest, constitute direct obligations of, or are unconditionally guaranteed by, the United States of America; (ii) bonds, debentures, or other evidences of indebtedness issued or guaranteed by any agency or corporation which has been or may hereafter be created pursuant to an act of Congress as an agency or instrumentality of the United States of America; (iii) obligations of financial institutions insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation, to the extent insured; and (iv) bank certificates of deposit fully secured by obligations described in (i) and (ii) hereof. "Gross Revenues" means all rates and charges and other income (including income from Electric Account investments), in each case derived by or for the account of the City from the ownership, leasing or operation of the System, except proceeds from the sale of bonds or notes, any grants received for the City of Seward Electric Utility and interest received and profits derived from the investment of moneys obtained from such sources or from moneys held in any fund solely to pay or secure the payment of any bonds or notes issued in connection with the System. "Loan Agreement" means the Loan Agreement between the City and the Alaska Municipal Bond Bank, dated as of the first date of the month in which the Bonds are issued. "Net Revenues" means for any Fiscal Year or other period of time, the Gross Revenues and interest and profits derived from the investment of moneys held in the Bond Account during such period less Operating Expenses for such period. CITY OF SEWARD, ALASKA RESOLUTION 2008-050 "Operating Expenses" means the current expenses incurred for operation, maintenance or repair of the System of anon-capital nature, and shall include, without limiting the generality of the foregoing, payments required by any electric purchase agreements, source of supply expenses, fuel expenses, treatment, transmission and distribution expenses, customer accounts expenses, administrative and general expenses, insurance premiums, lease rentals, legal, regulatory, and engineering expenses, payments to pension, retirement, group life insurance, health and hospitalization funds or other employee benefit funds which are properly chargeable to current operations, interest on customers' deposits, payroll tax expenses and any other expenses required to be paid under the provisions of this resolution or by law or permitted by standard practices for public utility systems similar to the properties and business of the System (adjusted to reflect public ownership) and applicable in the circumstances. Operating Expenses shall not include depreciation, amortization or any principal, redemption price or purchase price of, or interest on, any obligations of the City incurred in connection with and payable from Gross Revenues or any fee or charge in lieu of City taxes. "Parity Bonds" means the Electric Revenue Refunding Bonds, 2005, the Bonds, any Future Parity Bonds, and related refunding bonds. "Proiect" means the improvements to the System as set forth in Section 3 hereof. "Proiect Subaccount" means the Project Subaccount created in the Bond Account by Section 12 hereof. "Registered Owner" means the person named as the registered owner of a Bond in the Bond Register. "Registrar" means the Finance Director of the City, or any successor. "Reserve Subaccount" means the Reserve Subaccount created in the Bond Account by Section 12 hereof. "Reserve Subaccount Requirement" means (a) an amount at least equal to the maximum Annual Debt Service Requirement on all outstanding Parity Bonds, or (b) if approved by the Bond Bank as the Registered Owner of all currently outstanding Parity Bonds, an amount equal to the lesser of (i) 10% of the proceeds of the sale of Parity Bonds, (ii) 125% of the average annual Debt Service Requirement for all Parity ~ Bonds, or (iii) the maximum Annual Debt Service Requirement on all outstanding Parity Bonds. "System„ means the existing electric system of the City as the same will be added to, improved and extended as authorized and provided in this resolution, and as the same may be added to, improved and extended for as long as any Parity Bonds are outstanding, but shall not include such electric supply, transmission and distribution facilities that hereafter may be purchased, constructed or otherwise acquired by the City as a separate electric system, the revenues of which may be pledged to the payment of bonds issued to purchase, construct or ,~ .- i CITY OF SEWARD, ALASKA RESOLUTION 2008-050 otherwise acquire and improve such separate system. Section 3. Authorization of Bonds and Purpose of Issuance. The City shall issue and sell an issue of revenue bonds designated "City of Seward, Alaska, Electric Revenue Bonds, 2008" (the "Bonds") in the aggregate principal amount of not to exceed $6,000,000. The proceeds of the Bonds shall be used to pay the costs of certain additions, betterments and extensions of the System consisting principally of replacing two diesel generators, constructing a facility to house the generators, installing automated controls for the generators and constructing facilities to house the electric shop and City offices (the "Project"), and installing and constructing all other items incidental to the Project. The Project serves a public purpose of the City. Section 4. Date, Maturities, Interest Rates and Other Details of the Bonds. The Bonds shall be dated and mature on such dates not later than 2038, and shall bear interest from their date payable on such dates, and at such rates, not exceeding 6.0% per annum, as the Council or the City Manager or Finance Director may fix and determine at or prior to the time of sale of the Bonds. The Bonds shall be fully registered as to both principal and interest, shall be in the denomination of $5,000 each, or any integral multiple thereof, and shall be numbered separately in such manner and with any additional designation as the Registrar deems necessary for purposes of identification. Section 5. Place and Medium of Payment. Both principal of and interest on the Bonds shall be payable in lawful money of the United States of America. For so long as all outstanding Bonds are registered in the name of the Alaska Municipal Sond Bank, payments of principal and interest thereon shall be made as provided in the Loan Agreement. In the event that the Bonds are no longer registered in the name of the Alaska Municipal Bond Bank, interest on the Bonds shall be paid by check mailed (or by wire transfer to Registered Owner of Bonds in an aggregate principal amount of $1,000,000 or more who so requests) to the Registered Owners of the Bonds at the addresses for such Registered Owners appearing on the Bond Register on the 15th day of the month preceding the interest payment date. Principal of the Bonds shall be payable upon presentation and surrender of the Bonds by the Registered Owners at the principal office of the Registrar. Section 6. Registration. A. Bond Register. The Bonds shall be issued only in registered form as to both principal and interest. The Registrar shall keep, or cause to be kept, a bond register. B. Registered Ownership. The City and the Registrar, each in its discretion, may deem and treat the Registered Owner of each Bond as the absolute owner thereof for all purposes, and neither the City nor the Registrar shall be affected by any notice to the contrary. Payment of any such Bond shall be made only as described in Section 5 hereof, but such registration may be transferred as herein provided. All such payments made as described in ~. J CITY OF SEWARD, ALASKA RESOLUTION 2008-050 Section 5 shall be valid and shall satisfy and discharge the liability of the City upon such Bond to the extent of the amount or amounts so paid. C. Transfer or Exchange. Bonds shall be transferred only upon the Bond Register kept by the Registrar. Upon surrender for transfer or exchange of any Bond at the office of the Registrar, with a written instrument of transfer or authorization for exchange in form and with guaranty of signature satisfactory to the Registrar, duly executed by the registered owner or its duly authorized attorney, the City shall execute and the Registrar shall deliver an equal aggregate principal amount of Bonds of the same maturity of any authorized denominations, subject to such reasonable regulations as the Registrar may prescribe and upon payment sufficient to reimburse it for any tax, fee or other governmental charge required to be paid in connection with such transfer or exchange. All Bonds surrendered for transfer or exchange shall be cancelled by the Registrar. The Registrar shall not be required to transfer or exchange Bonds subject to redemption during the 15 days preceding any principal or interest payment date or the date of mailing of notice of redemption of such Bonds, or any Bond after such Bond has been called for redemption. D. Registration Covenant. The City covenants that, until all Bonds have been surrendered and cancelled, it will maintain a system for recording the ownership of each Bond that complies with the provisions of Section 149 of the Code. Section 7. Redemption. The Bonds may be redeemed at the times and in the manner as set forth in the Loan Agreement and Bonds, as the Council or City Manager or Finance Director may fix and determine at or prior to the time of sale of the Bonds. Notice of any intended redemption of Bonds shall be given not less than 30 nor more than 60 days prior to the date fixed for redemption by United States mail to registered owners of the Bonds to be redeemed at their addresses as they appear on the Bond Register on the day the notice is mailed; provided, however, that for so long as the Bonds are registered in the name of the Alaska Municipal Bond Bank, all notices shall be given only as provided in the Loan Agreement. The requirements of this section shall be deemed to be complied with when notice is mailed as herein provided, whether or not it is actually received by the Registered owner. All official notices of redemption shall be dated and shall state: (a) the redemption date; (b) the redemption price; (c) if fewer than all outstanding Bonds are to be redeemed, the identification (and, in the case of partial redemption, the respective principal amounts) of the Bonds to be redeemed; (d) that on the redemption date the redemption price will become due and payable upon each such bond or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after said date; and (e) the place where such Bonds are to be surrendered for payment of the redemption price, which place of payment shall be the principal office of the Registrar. ~. CITY OF SEWARD, ALASKA RESOLUTION 2008-050 Notice of redemption having been given as described above, the Bonds or portions of Bonds to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified, and from and after such date (unless the City shall default in the payment of the redemption price) such Bonds or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds shall be paid by the Registrar at the redemption price. Installments of interest due on or prior to the redemption date shall be payable as herein provided for payment of interest. Upon surrender for any partial redemption of any Bond, there shall be prepared for the Registered Owner a new Bond or Bonds of the same maturity in the amount of the unpaid principal. All Bonds which have been redeemed shall be cancelled and destroyed by the Registrar and shall not be reissued. If any Bond shall be duly presented for payment and funds have not been duly provided by the City on such applicable date, then interest shall continue to accrue thereafter on the unpaid principal thereof at the rate stated on such Bond until it is paid. Section 8. Form of Bonds. The form of the Bonds shall be substantially as follows: No. UNITED STATES OF AMERICA CITY OF SEWARD, ALASKA ELECTRIC REVENUE BONDS, 2008 REGISTERED OWNER: PRINCIPAL AMOUNT: $. The City of Seward, Alaska (the "City"), a municipal corporation of the State of Alaska, hereby acknowledges itself to owe and for value received promises to pay to the Registered Owner identified above, or its registered assigns, but only from the sources stated herein, the Principal Amount indicated above in the following installments on of each of the following years, and to pay, from the sources stated herein, interest on such installments from the date hereof, payable on , 200_ and semiannually thereafter on the first days of each and of each year, at the rates per annum as follows: Maturity Principal Interest Date Amount Rate For so long as this Bond is owned by the Alaska Municipal Bond Bank (the "Bond ~~ CITY OF SEWARD, ALASKA RESOLUTION 2008-050 Bank"), payment of principal and interest shall be made as provided in the Loan Agreement between the Bond Bank and the City. In the event that this Bond is no longer owned by the Bond Bank, payment of principal of and interest on this Bond will be made by check or draft mailed by first class mail to the registered owner at the address appearing on the bond register of the City, provided that the final installment of principal and interest on this Bond will be payable at the office of the City Finance Director (the "Registrar") upon surrender of this Bond. Interest shall be computed on the basis of a 360-day year composed of twelve 30-day months. Both principal of and interest on this bond are payable in lawful money of the United States of America solely out of the special fund of the City known as the "Electric Revenue Bond Account" created by Section 12 of Resolution No. 95-048. This bond is one of an issue of bonds (the "Bonds") of like date and tenor except as to number, rate of interest, and date of maturity, aggregating the principal sum of $ and is issued pursuant to the Constitution and statutes of the State of Alaska and the Charter and duly adopted resolutions and ordinances of the City, including Resolution No. 2008- (the "Bond Resolution"). The definitions contained in the Bond Resolution shall apply to capitalized terms contained herein. The Bonds are being issued for the purpose of undertaking certain capital improvements to the City's electric system (the "System"). Bonds maturing on or after , 20 ,may be called for redemption at the option of the City on any date on and after in whole on any date, or in part in increments of $5,000 with maturities to be selected by the City and by lot within a maturity, at a price of par plus accrued interest to the date of redemption. Notice of any such intended redemption shall be given as provided in the Loan Agreement. From and after the date fixed for redemption, interest on any Bonds so called for redemption shall cease to accrue, provided funds for such redemption are on deposit in the Bond Account. The City does hereby pledge and bind itself to set aside out of Gross Revenues and the money in the Electric Account of the City and to pay into the Bond Account the various amounts required by the Bond Resolution to be paid into and maintained in said Account all within the times provided in the Bond Resolution. The City has further pledged and bound itself to pay into such Electric Account as collected all Gross Revenues. The pledge of Gross Revenues and moneys in the Electric Account contained herein and in the Bond Resolution may be discharged by making provision, at any time, for the payment of the principal of and interest on this Bond in the manner provided in the Bond Resolution. The pledge of amounts to be paid out of said Electric Account into the Bond Account is hereby declared to be a lien and charge upon the money in the Electric Account and Gross Revenues superior to all other charges of any kind or nature except Operating Expenses (other than payments in lieu of City taxes) and equal in rank to the lien and charge thereon for amounts pledged to the payment of any Parity Bonds. ~~ ~.:. ..~. CITY OF SEWARD, ALASKA RESOLUTION 2008-050 The City has further bound itself to maintain the System in good condition and repair, to operate the same in an efficient manner and at a reasonable cost, and to establish, maintain and collect rates and charges for electric service and all other services or facilities furnished or supplied by the System in each fiscal year for as long as any Parity Bonds are outstanding that will provide Net Revenues in an amount equal to at least 1.30 times the amount of the Annual Debt Service Requirement for such year on all outstanding Parity Bonds. It is hereby certified that all acts, conditions and things required by the Constitution and statutes of the State of Alaska and the Charter and resolutions of the City to be done precedent to and in the issuance of this bond have happened, been done and performed. IN WITNESS WHEREOF, the City of Seward, Alaska, has caused this bond to be executed with the manual or facsimile signature of its Mayor and to be countersigned with the manual or facsimile signature of its Clerk and the official seal of the City to be impressed or imprinted hereon, as of this day of , 2008. CITY OF SEWARD, ALASKA Mayor COUNTERSIGNED: City Clerk (Form of Assignment) ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto (Please insert Social Security or taxpayer identification number of transferee) (Please print or typewrite name and address, including zip code of Transferee) the within bond and does hereby irrevocably constitute and appoint of , or its successor, as Registrar, to transfer said bond on the books kept for registration thereof with full power of substitution in the premises. ~~ CITY OF SEWARD, ALASKA, RESOLUTION 2008-050 DATED: NOTE: The signature on this Assignment must correspond with the name of the registered owner as it appears upon the face of the within bond in every particular, without alteration or enlargement or any change whatever. SIGNATURE GUARANTEED: Section 9. Execution of Bonds. The Bonds shall be executed on behalf of the City with the manual or facsimile signature of the Mayor of the City, countersigned with the manual or facsimile signature of the Clerk. The official seal of the City shall be impressed or imprinted on each Bond. The execution of a Bond on behalf of the City by persons that at the time of the execution are duly authorized to hold the proper offices shall be valid and sufficient for all purposes, although any such person shall have ceased to hold office at the time of issuance and delivery of the Bond or shall not have held office on the date of the Bond. Section 10. Mutilated, Destroyed, Stolen or Lost Bonds. Upon surrender to the Registrar of a mutilated Bond, the City shall execute and deliver a new Bond of like maturity and principal amount. Upon filing with the Registrar of evidence satisfactory to the City that a Bond has been destroyed, stolen or lost and of the ownership thereof, and upon furnishing the City with indemnity satisfactory to it, the City shall execute and deliver a new Bond of like maturity and principal amount. The person requesting the authentication and delivery of a new Bond pursuant to this section shall comply with such other reasonable regulations as the City may prescribe and pay such expenses as the City may incur in connection therewith. Any Bonds issued pursuant to this section in substitution for Bonds alleged to be destroyed, stolen or lost shall constitute original additional contractual obligations on the part of the City, whether or not the Bonds alleged to be destroyed, stolen or lost be at any time enforceable by anyone, and shall be equally and proportionately secured with all other Bonds issued hereunder. Section 11. Electric Account and Priority of Use of Gross Revenues. There has been created by the City a special fund known as the "Electric Account." Gross Revenues and the moneys in the Electric Account are hereby pledged to and shall be used only for the following purposes and in the following order of priority: First, to pay Operating Expenses; Second, to make all payments, including sinking fund payments, required to be made into ~~ ~. CITY OF SEWARD, ALASKA RESOLUTION 2008-050 the Debt Service Subaccount for the payment of the principal of and interest on Parity Bonds; Third, to make all payments required to be made into the Reserve Subaccount; Fourth, to make all payments, including sinking fund payments, required to be made into a subordinate lien debt service account for the payment of the principal of and interest on any subordinate lien bonds; Fifth, to make all payments required to be made into a reserve account for subordinate lien bonds; Sixth, to make all required payments of charges or fees in lieu of City taxes; and Seventh, to pay the costs of additions, betterments, improvements and repairs to and extensions and replacements of the System, to make legally authorized payments into any other fund or account of the City, to purchase or redeem electric revenue bonds or notes of the City, or for any other proper purpose in connection with the operation of the System. Section 12. Electric Revenue Bond Account and Subaccounts Therein. In accordance with Section 12 of Resolution 95-048, there has been created a special fund of the City known as the "Electric Revenue Bond Account," (the "Bond Account"), which fund is a trust fund to be drawn upon for the sole purpose of paying the principal of and interest and premium, if any, on all Parity Bonds. The Bond Account consists of three accounts, the Project Subaccount, the Debt Service Subaccount and the Reserve Subaccount. Amounts pledged to be paid into the Bond Account are hereby declared to be a lien and charge upon Gross Revenues and the moneys in the Electric Account superior to all other charges of any kind or nature, except Operating Expenses, and equal in rank to the charge thereon to pay and secure the payment of the principal of and interest on all Parity Bonds. At the time of issuance of the Bonds, all proceeds, except those amounts paid into the Reserve Subaccount as described in Section 13 hereof, shall be paid into the Project Subaccount to be used for paying costs of issuance of the Bonds and costs of the Project. From and after the time of issuance and delivery of the Bonds and as long thereafter as any of the same remain outstanding, the City hereby irrevocably obligates and binds itself to set aside and pay into the Debt Service Subaccount out of Gross Revenues and moneys in the Electric Account or out of any other moneys legally available therefor on or before the 20th day of each month the following: A. Such amounts, in approximately equal monthly installments, as will be sufficient to accumulate the amount required to pay the interest scheduled to become due on Parity Bonds on the next interest payment date; and B. Such amounts, in approximately equal monthly installments, as will be sufficient to accumulate (i} the principal amount of all Parity Bonds due for which no sinking fund ~~ ~ CITY OF SEWARD, ALASKA RESOLUTION 2008-050 installments have been established, plus (ii) the unsatisfied balance of any sinking fund installment for Parity Bonds, in each case during the next 12 months. Moneys in the Debt Service Subaccount may be held in cash or invested in Government Obligations which investments mature prior to the time such money is required for the payment of the principal of or interest on the Parity Bonds. All interest earned on and profits derived from such investments shall remain in and become a part of the Debt Service Subaccount. Section 13. Reserve Subaccount. The City covenants and agrees that it will at the time of issuance of the Bonds cause amounts to be paid into the Reserve Subaccount such that the total amount in the Reserve Subaccount will be equal to the Reserve Subaccount Requirement. The City further covenants and agrees that it will at all times maintain therein an amount at least equal to the Reserve Subaccount Requirement until there is a sufficient amount in the Bond Account and Reserve Subaccount to pay the principal of, premium, if any, and interest on all outstanding Parity Bonds, at which time the money in the Reserve Subaccount may be used to pay such principal, premium, if any, and interest; provided, however, that moneys in the Reserve Subaccount may be withdrawn, or set aside in a special account in the Bond Account pursuant to Section 19 of this resolution, to pay (with or without other available funds) the principal, premium, if any, and interest on all of the outstanding Parity Bonds of any single issue or series payable out of the Bond Account, so long as the moneys remaining on deposit in the Reserve Subaccount are at least equal to the Reserve Subaccount Requirement on all of the remaining outstanding Parity Bonds. The City may, from time to time, transfer from the Reserve Subaccount to the Debt Service Subaccount amounts in excess of the Reserve Subaccount Requirement. In the event there shall be a deficiency in the Debt Service Subaccount for meeting maturing installments of either principal of or interest on Parity Bonds, such deficiency shall be made up from the Reserve Subaccount by the withdrawal of cash therefrom. Any deficiency created in the Reserve Subaccount by reason of any such withdrawal shall then be made up from the money in the Electric Account first available therefor after making necessary provision for the required payments into the Debt Service Subaccount. Investments in the Reserve Subaccount shall be valued at amortized cost except that in the event of a deficiency in the Reserve Subaccount caused by the withdrawal or transfer of moneys therefrom the amount of such deficiency shall be determined by valuing all investments in the Reserve Subaccount at the then market value. All money in the Reserve Subaccount may be kept in cash or invested in Government Obligations. Such investments shall mature not later than the last maturity of Parity Bonds outstanding at the time of their purchase. Interest on any such investments andlor any profits realized from the sale thereof shall be deposited in and become a part of the Debt Service Subaccount. r ~. CITY OF SEWARD, ALASKA RESOLUTION 2008-050 Section 14. Investment of Certain Accounts. Moneys held in the Electric Revenue Bond Account and in the Reserve Subaccount shall be invested and reinvested to the fullest extent practicable in Government Obligations which mature not later than at such times as shall be necessary to provide moneys when needed for payments to be made from such Accounts, and in the case of the Reserve Subaccount not later than fifteen years from the date of such investment. Nothing in the resolution shall prevent any Government Obligations acquired as investments of funds held under the resolution from being issued or held in bookentry form on the books of the Department of Treasury of the United States. Obligations purchased as an investment of moneys in any Account or Subaccount created under the resolution shall be deemed at all times to be a part of such Account or Subaccount and any profit realized from the liquidation of such investment shall be credited to such Account and Subaccount and any loss resulting from the liquidation of such investment shall be charged to the respective Account or Subaccount. In computing the amount in any Account or Subaccount created under the resolution for any purpose provided in the resolution, obligations purchased as an investment of moneys therein shall be valued at cost plus interest accrued and unpaid at the date of computation. Section 15. Specific Covenants. The City hereby covenants with the owners of each of the Parity Bonds for so long as any of the same remain outstanding as follows: A. The City will establish, maintain and collect rates and charges for electricity and all other services or facilities furnished or supplied by the System in each Fiscal Year that will provide Net Revenues in an amount equal to at least 1.30 times the amount of the Annual Debt Service Requirement for such year on all outstanding Parity Bonds. B. The City will at all times maintain, preserve and keep the System and every part and parcel thereof in good repair, working order and condition; will from time to time make or cause to be made all necessary and proper repairs, renewals and replacements thereto so that the business carried on in connection therewith may be properly and advantageously conducted; and will at all times operate the System in an efficient manner and at a reasonable cost . C. The City will at all times carry all-risk insurance and such other forms of insurance on such of the buildings, equipment, property and facilities of the System as are ordinarily insured in such amounts and with such deductibles as under good business practice are ordinarily carried on such buildings, equipment, property and facilities but such insurance shall in all events be in an amount at least equal to the lessor of (i) SO% of the estimated replacement cost of the insurable parts of System or (ii) the aggregate principal amount of the Parity Bonds then outstanding, in each cases such all-risk insurance shall include, but not be limited to, hazards such as fire, water, lightening, tornado, windstorm, hail, explosion, riot, civil commotion, vandalism and malicious mischief, aircraft and vehicles, excluding flood, tidal wave, wavewash, subsidence, or earthquake insurance. In addition to the above insurance, the City shall also carry ~~ CITY OF SEWARD, ALASKA RESOLUTION 2008-050 public liability insurance and such other types of insurance as are usually carried by municipal corporations operating like properties. All such insurance shall be carried with responsible insurers and the policies shall be payable to the City. D. The City will not expend any of the money in the Electric Account for any extensions or betterments which are not economically sound and which will not contribute to the operation of the System in an efficient and economical manner unless such extensions or betterments are required bylaw or by any regulatory body having valid jurisdiction. E. The City will keep and maintain proper books and accounts with respect to the operation of the System in such manner as prescribed by any authorities having jurisdiction over the System; will cause its books and accounts to be audited annually by a certified public accountant not later than 120 days following the end of each fiscal year, copies of which audits shall be disclosed in accordance with any continuing disclosure obligation and, upon request, be furnished to the owners of Parity Bonds. Said audit shall show whether or not the City has in all respects performed and complied with the covenants set forth in this resolution, including the payments into the Debt Service Subaccount and Reserve Subaccount provided for herein. F. A11 employees and agents of the City collecting or handling money of the City in connection with the management and operation of the System shall be bonded in an amount commensurate with the funds they handle and in an amount sufficient to protect the City from loss. G. The City will not sell or otherwise dispose of the System unless contemporaneously with such sale or disposal there shall be paid into the Bond Account a sum sufficient to pay the principal of and interest on all Parity Bonds then outstanding to the date or dates on which they first may be redeemed, nor will it sell or otherwise dispose of any part of the System which is material to the production of Gross Revenues unless, in the opinion of the Consulting Engineer, the remaining System will generate Gross Revenues sufficient to enable the City to comply with the requirements of this resolution and each resolution authorizing the issuance of Future Parity Bonds. H. The City will not at any time create or permit to accrue or to exist any lien or other encumbrance or indebtedness upon the System or the Gross Revenues, or any part thereof, or upon any Account or Subaccount created hereunder, prior or superior to the lien thereon for the payment of the Parity Bonds, and will pay and discharge, or cause to be paid and discharged, any and all lawful claims for labor, materials or supplies which, if unpaid, might become a lien or charge upon the Revenue, or any part thereof, or upon any Account or Subaccount in the hands of the City, prior or superior to the lien of the Parity Bonds, or which might impair the security of the Parity Bonds I. The City will not expend any of the Gross Revenues derived by it from the operation of the System or the proceeds of any indebtedness payable from Gross Revenues for any additions, betterments or improvements to the System which are not economically sound and which will not properly and advantageously contribute to the conduct of the business of the 9 V CITY OF SEWARD, ALASKA RESOLUTION 2008-050 System in an efficient and economical manner. J. At any and all times the City shall, as far as it may be authorized by law, make, do, execute, acknowledge, and deliver all further resolutions, acts, deeds, conveyances, assignments, transfers, and assurances as may be necessary or desirable for better assuring, conveying, granting, pledging, assigning, and confirming all and singular the rights, Gross Revenues, and other funds, moneys, and securities pledged or assigned under the resolution, or intended so to be, or which the City may become bound to pledge or assign. K. The City is authorized under all applicable laws to create and issue the Bonds and to adopt this resolution and to pledge the Gross Revenues and other funds, moneys, and securities purported to be pledged by this resolution in the manner and to the extent provided in the resolution. The Gross Revenues and other funds, moneys, and securities so pledged are and will be free and clear of any pledge, lien, charge, or encumbrance thereon or with respect thereto prior to, or of equal rank with, the pledge and assignment created by Resolution 95-048 and this resolution, and all corporate or other action on the part of the City to that end has been and will be duly and validly taken. The Bonds and the provisions of the resolution are and will be the valid and legally enforceable obligations of the City in accordance with their terms and the terms of the resolution. The City shall at all times, to the extent permitted by law, defend, preserve, and protect the pledge of the Gross Revenues and the other funds, moneys, and securities pledged under the resolution and all the rights of the Bondholders under the resolution against all claims and demands of all persons whomsoever. L. The City has, and will have so long as any Parity Bonds are outstanding, good right, and lawful power to operate, maintain, and repair the System and to fix and collect rates, fees, and other charges to the use and the sale of the capacity, output, or services of the System. M. The City shall do and perform or cause to be done and performed all acts and things required to be done or performed by or on behalf of the City under the laws of the State of Alaska and the resolution. Section 16. Parity Bonds. At the time of the issuance of the Bonds the City shall have on file a certificate executed by a Consulting Engineer experience in the construction and operation of municipal utilities (which certificate may not be dated more than 30 days prior to the date of delivery of the Bonds) showing that in his or her professional opinion the "annual income available for revenue bond debt service," as hereinafter set forth, shall be at least equal to 1.30 time the maximum Annual Debt Service Requirement on all outstanding Parity Bonds and the Bonds. Such "annual income available for revenue bond debt service" shall be determined by adding the following: (i) The historical Net Revenues for any 12 consecutive months out of the 24 months immediately preceding the month of delivery of the Bonds. Es n ~~ CITY OF SEWARD, ALASKA RESOLUTION 2008-050 (ii) The Net Revenues derived from those customers of the System that have become customers during such 12-consecutive-month period or thereafter and prior to the date of such certificate, adjusted to reflect an estimate of a full year's Net Revenues from each such customer to the extent such Net Revenues were not included in (i} above. (iii) The estimated annual Net Revenues to be derived from any person, firm, association, private or municipal corporation under any executed contract for electric service, which Net Revenues were not included in any of the sources of Net Revenues described in this section. (iv) The estimated annual Net Revenues to be derived from the operation of any additions or improvements to or extensions of the System under construction but not completed at the time of such certificate and not being paid for out of the proceeds of sale of the Bonds, and which Net Revenues are not otherwise included in any of the sources of Net Revenues described in this section. (v) The estimated Net Revenues to be derived from the operation of any additions and improvements to or extensions of the System being paid for out of the proceeds of sale of the Bonds. In the event the City will not derive any Gross Revenues as a result of the construction of the additions, improvements or extensions being or to be made to the System within the provisions of subparagraphs (iv) and (v) immediately above, the estimated Operating Expenses of such additions, improvements and extensions shall be deducted. from such "annual income available for revenue bond debt service." The computation of "annual income available for revenue bond debt service" shall be adjusted to reflect the electric rates and charges effective on the date of such certificate or approved by the regulatory authority with jurisdiction to become effective thereafter if there has been any change in such rates and charges put into effect or so approved during or after such 12- consecutive-month base period. Notwithstanding the preceding provisions of this section, the certificate of the Consulting Engineer referred to above shall not be required if one-half of Net Revenues, verified from certain financial statements of the City, for a period of any consecutive two out of the three Fiscal Years immediately preceding the issuance and delivery of the Bonds, was equal to at least 1.30 times the maximum Annual Debt Service required to be paid in any Fiscal Year succeeding the date of issuance of the Bonds on all outstanding Parity Bonds and the Bonds. Further, notwithstanding the preceding provisions of this Section 16, the Bonds may be issued if the City shall have on file a certificate of the Consulting Engineer stating his or her opinion that the Net Revenues for the next full Fiscal Year after the initial operation of any additions or improvements to or extensions of the System being paid for out of the proceeds of the Bonds will be at least equal to 1.30 times the maximum Annual Debt Service Requirement on all outstanding Parity Bonds and the Bonds and that at the time of the issuance of the Bonds F; ~-~ ~:. CITY OF SEWARD, ALASKA RESOLUTION 2008-050 there is no deficiency in the Debt Services Subaccount or Reserve Account. Proceeds of the Bonds to be used to fund interest or reserves shall be deposited in the Debt Service Subaccount or the Reserve Subaccount, as the case may be. Section 17. Subordinate Lien Bonds. Nothing contained herein shall prevent the City from issuing revenue bonds or notes which are a charge upon Gross Revenues and the moneys in the Electric Account subordinate or inferior to the payments required herein to be made therefrom into the Debt Service Subaccount and Reserve Subaccount, or from issuing electric revenue bonds to refund maturing bonds for the payment of which moneys are not otherwise available. Section 18. Covenants Regarding Arbitrage and Private Activity Bonds. The City hereby covenants that it will not make any use of the proceeds of sale of the Bonds or any other funds of the City which may be deemed to be proceeds of such Bonds pursuant to Section 148 of the Code which will cause the Bonds to be "arbitrage bonds" within the meaning of said section and the regulations applicable thereunder. The City will comply with the requirements of Section 148 of the Code (or any successor provision thereof applicable to the Bonds) and the applicable regulations thereunder throughout the term of the Bonds. The City further covenants that it will not take any action or permit any action to be taken that would cause the Bonds to constitute "private activity bonds" under Section 141 of the Code. The City will take any action determined by the City, after consultation with its bond counsel, to be legal and practicable and required to be taken by the City under future federal laws or regulations in order to maintain the exemption of the interest on the Bonds from federal income taxation. Section 19. Defeasance. In the event that money and/or Acquired Obligations maturing at such time or times and bearing interest to be earned thereon in amounts sufficient to redeem and retire any or all of the Bonds in accordance with their terms are set aside in a special trust account in the Bond Account to effect such redemption or retirement and such money and the principal of and interest on such obligations are irrevocably set aside and pledged for such purpose, then no further payments need to be made into the Bond Account for the payment of the principal of and interest on such Bonds, and such Bonds shall cease to be entitled to any lien, benefit or security of this resolution except the right to receive the funds so set aside and pledged, and such Bonds shall be deemed not to be outstanding hereunder or under any other resolution authorizing the issuance of Future Parity Bonds. For so long as the Bond Bank is the Registered Owner for any Parity Bonds, the City will give 30 days notice to the Bond Bank of any defeasance. Section 20. General Authorization to Municipal Officials. The Mayor, City Manager, Finance Director and City Clerk are hereby authorized to do everything necessary to complete such sale and to deliver the Bonds to the purchaser thereof upon payment of the purchase price thereof. ~, ~. CITY OF SEWARD, ALASKA RESOLUTION 2008-050 Section 21. Amendatory and Supplemental Resolutions. A. The Council from time to time and at any time may pass an resolution or resolutions supplemental hereof, which resolution or resolutions thereafter shall become a part of this resolution, for any one or more of the following purposes: (1) To add to the covenants and agreements of the City contained in this resolution, other covenants and agreements thereafter to be observed, or to surrender any right or power herein reserved to or conferred upon the City. (2) To make such provisions for the purpose of curing any ambiguities or of curing, correcting or supplementing any defective provision contained in this resolution or in regard to matters or questions arising under this resolution as the Council may deem necessary or desirable and not inconsistent with this resolution and which shall not adversely affect the interest of the owners of Parity Bonds. Any such supplemental resolution of the Council may be adopted without the consent of the owner of any Parity Bonds at any time outstanding, notwithstanding any of the provisions of subsection B of this section. B. With the consent of the owners of not less than 60% in aggregate principal amount of Parity Bonds at the time outstanding, the Council may pass a resolution or resolutions supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this resolution or of any supplemental resolution; provided, however, that no such supplemental resolution shall: (1) Extend the fixed maturity of any of the Parity Bonds, or reduce the rate of interest thereon, or reduce the amount or change the date of any sinking fund installment requirement, or extend the time of payments of interest from their due date, or reduce the amount of the principal thereof, or reduce any premium payable on the redemption thereof, without the consent of the owner of each Parity bond so affected; or (2) Reduce the aforesaid percentage of owners of Parity Bonds required to approve any such supplemental resolution without the consent of the owners of all of the Parity Bonds then outstanding; or (3) Remove the pledge and lien of this resolution on Gross Revenues or the moneys in the Electric Account. It shall not be necessary for the consent of the owners of Parity Bonds under this subsection B to approve the particular form of any proposed supplemental resolution, but it shall be sufficient if such consent shall approve the substance thereof. C. Upon the passage of any supplemental resolution pursuant to the provisions of this section, this resolution shall be deemed to be modified and amended in accordance ~~-; CITY OF SEWARD, ALASKA RESOLUTION 2008-050 therewith, and the respective rights, duties and obligations of the City under this resolutions and all owners of Parity Bonds outstanding hereunder shall thereafter be determined, exercised and enforced thereunder, subject in all respects to such modification and amendment, and all the terms and conditions of any such supplemental resolution shall be deemed to be part of the terms and conditions of this resolution for any and all purposes. D. Parity Bonds executed and delivered after the execution of any supplemental resolution adopted pursuant to the provisions of this section may bear a notation as to any matter provided for in such supplemental resolution, and if such supplemental resolution shall so provide, new Parity Bonds so modified as to conform, in the opinion of the Council, to any modification of this resolution contained in any such supplemental resolution, may be prepared by the City and delivered without cost to the owners of Parity Bonds then outstanding, upon surrender for cancellation of such Parity Bonds in equal aggregate principal amounts. Section 22. Disposition of the Proceeds of Sale of the Bonds. The proceeds received from the sale of the Bonds (exclusive of accrued interest which shall be paid into the Debt Service Subaccount and amounts paid into the Reserve Subaccount) shall be deposited into the Project Subaccount of the Electric Account of the City designated by the Finance Director and shall be used to pay all costs allocable to the issuance of the Bonds and to undertake improvements authorized by Section 3 of this resolution. Section 23. Documents. The Loan Agreement with the Alaska Municipal Bond Bank in substantially the form presented to and part of the records of this meeting is approved and the City Manager, Finance Director and City Clerk are each authorized to cause the Loan Agreement, a continuing disclosure agreement, and such other documents as needed for issuance of the Bonds to be executed and delivered on behalf of the City. Section 24. Severability. If any one or more of the covenants or agreements provided in this resolution to be performed on the part of the City shall be declared by any court of competent jurisdiction to be contrary to law, then such covenant or covenants, agreement or agreements shall be null and void and shall be deemed separable from the remaining covenants and agreements in this resolution and shall in no way affect the validity of the other provisions of this resolution or of the Bonds. Section 25. Effective Date. This resolution shall become effective immediately provided that no Bonds shall be issued under this resolution until 30 days from the date hereof. PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 9~' day of June, 2008. Council Agenda Statement Meeting Date: June 9, 2008 Through: Phillip Oates, City Manageri!~ From: Kristin Erchinger, Finance Director Agenda Item: $6 million Electric Revenue Bonds BACKGROUND & JUSTIFICATION: The Seward City Council passed Resolution 2007-99 on November 12, 2007, issuing a Notice of Intent to Issue Bonds for the purpose of replacing two 1940s era electric generators to provide emergency electric generation capability in Seward. These two generators have reached the end of their useful lives, and there are no remaining plants providing service parts, since the single remaining parts manufacturing plant was destroyed in Hurricane Katrina. " The purpose of the project is to replace the two electric generators, and to purchase all of the automated controls and associated components and systems necessary to operate the generators, in addition to constructing a building to house the generators, and a combined shop/ office building to house the electric department. The replacement of these generators is critical to the provision of reliable electric service to the residents of the Seward electrical service area, especially given that avalanches have resulted in significant damage to the transmission line twice in the past 15 years, leaving the community without power for weeks, except for the generation capability of the emergency generator system, and resulting in millions of dollars of damage. The City received a grant in the amount of $2 million in the State of Alaska 2009 budget, which will be added to local contributions of between $1.0 million and $1.5 million for the project, in addition to the $6.0 million revenue bonds, for a total amount available for the project not to exceed $9.5 million. 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. Other: FISCAL NOTE: The cost of the bond issuance will be paid either through the proceeds of the bonds, or through a separate funding request passed by the Seward City Council, with the determination to be based on the total project cost versus the amount of funding available for the project. The estimated annual debt service costs over 30 years are $468,000. Failure to issue these bonds and replace the generators could result in long-term disruption of power to local residents and businesses, and significant costs to the taxpayers and the City utility system. Approved by Finance: RECOMMENDATION: City Council authorize the Issuance of $6 million in revenue bonds of the Electric Enterprise Fund, for the purpose of replacing two generators, and constructing and installing all associated components, systems, automated controls, and facilities necessary to house the generators, and the office/shop facility. ~~ DRAFT: 6/5/08 LOAN AGREEMENT AGREEMENT, dated as of the 1st day of 2008, between the Alaska Municipal Bond Bank (the "Bank"), a body corporate and politic constituted as an instrumentality of the State of Alaska (the "State") exercising public and essential governmental functions, created pursuant to the provisions of Chapter 85, Title 44, Alaska Statutes, as amended (the "Act"), having its principal place of business at Juneau, Alaska, and the City of Seward, Alaska, a duly constituted home rule city of the State (the "City"): WITNESSETH: WHEREAS, pursuant to the Act, the Bank is authorized to make loans of money (the "Loan" or "Loans") to governmental units; and WHEREAS, the City is a Governmental Unit as defined in the General Bond Resolution of the Bank hereinafter mentioned and pursuant to the Act is authorized to accept a Loan from the Bank to be evidenced by its municipal bonds; and WHEREAS, the City desires to borrow money from the Bank in the amount of not to exceed $6,000,000 and has submitted an application to the Bank for a Loan in the amount of not to exceed $6,000,000, and the City has duly authorized the issuance of its fully registered bond in the aggregate principal amount of $ (the "Municipal Bond"), which bond is to be purchased by the Bank as evidence of the Loan in accordance with this Agreement; and WHEREAS, the application of the City contains the information requested by the Bank; and WHEREAS, to provide for the issuance of bonds of the Bank in order to obtain from time to time money with which to make Loans, the Bank has adopted the General Obligation Bond Resolution on July 13, 2005 (the "General Bond Resolution"), Series Resolution No. 2008-03, approved on April 24, 2008, as amended by Resolution No. 2008- 04 approved on June _, 2008 (together with the General Bond Resolution, the "Bond Resolution"), authorizing the making of such Loan to the City and Borough and the purchase of the Municipal Bond. NOW, THEREFORE, the parties agree: 1. The Bank hereby makes the Loan and the City accepts the Loan in the principal amount of $ . As evidence of the Loan made to the City and such money borrowed from the Bank by the City, the City hereby sells to the Bank the Municipal Bond in the principal amount, with the principal installment payments, and bearing interest from ~~ DRAFT: 615/08 its date at the rate or rates per annum, stated in Exhibit "A" appended hereto. For purposes of this Loan Agreement, the interest on the Municipal Bond will be computed without regard to the provision in Section 7 hereof for the City to make funds available to the Trustee acting under the General Bond Resolution for the payment of principal and interest at least seven business days prior to each respective principal and interest payment date. 2. The City represents that it has duly adopted or will adopt all necessary ordinances or resolutions, including Resolution No. 2008-_ passed by the City Council on June 9, 2008 (the "City Resolution"), and has taken or will take all proceedings required by law to enable it to enter into this Loan Agreement and issue its Municipal Bond to the Bank and that the Municipal Bond will constitute a .special revenue obligation duly authorized by the City's Resolution. 3. Subject to any applicable legal limitations, the amounts to be paid by the City pursuant to this Loan Agreement representing interest due on its Municipal Bond (the "Municipal Bond Interest Payments") shall be computed at the same rate or rates of interest borne by the corresponding maturities of the bonds sold by the Bank in order to obtain the money with which to make the Loan and to purchase the Municipal Bond (the "Loan Obligations") and, unless required under Section 7 hereof to be paid at least seven business days before the interest payment date, shall be paid by the City in such manner and at such times so as to provide funds sufficient to pay interest as the same becomes due on the Loan Obligation. 4. The amounts to be paid by the City pursuant to this Loan Agreement representing principal due on its Municipal Bond (the "Municipal Bond Principal Payments"), unless required under Section 7 hereof to be paid at least seven business days before the maturity date, shall be scheduled by the Bank in such manner and at such times (notwithstanding the dates of payment as stated in the Municipal Bond) so as to provide funds sufficient to pay the principal of the Loan Obligations as the same matures based upon the maturity schedule stated in Exhibit "A" appended hereto. 5. In the event the amounts referred to in Sections 3 and 4 hereof to be paid by the City pursuant to this Loan Agreement are not made available at any time specified herein, the City agrees that any money payable to it by any department or agency of the State may be withheld from it and paid over directly to the Trustee acting under the General Bond Resolution, and this Loan Agreement shall be full warrant, authority and direction to make such payment upon notice to such department or agency by the Bank, with a copy provided to the City, as provided in the Act. AMBB/General Obligation Bonds, 2008 Series Two Loan Agreement -Seward I:1Docs137421709~Loan Agreement- Seward.wpd DRAFT: 615108 6. In the event Loan Obligations have been refunded and the interest rates the Bank is required to pay on its refunding bonds in any year are less than the interest rates payable by the City on the Municipal Bond for the corresponding year pursuant to the terms of the Municipal Bond, then both the Municipal Bond Interest Payments and the Municipal Bond Principal Payments will be adjusted in such a manner that (l) the interest rate paid by the Municipality on any principal installment of the Municipal Bond is equal to the interest rate paid by the Bank on the corresponding principal installment of Bank's refunding bonds and (ii) on a present value basis the sum of the adjusted Municipal Bond interest Payments and Municipal Bond Principal Payments is equal to or less than the sum of the Municipal Bond Interest Payments and Municipal Bond Principal Payments due over the remaining term of the Municipal Bond as previously established under this Loan Agreement. In the event of such a refunding of Loan Obligations, the Bank shall present to the City for the City's approval, a revised schedule of principal installment amounts and interest rates for the Municipal Bond. If approved by the City the revised schedule shall be attached hereto as Exhibit "A" and incorporated herein in replacement of the previous Exhibit "A" detailing said principal installment amounts and interest rates. 7. The City is obligated to pay to the Bank Fees and Charges. Such Fees and Charges actually collected from the City shalt be in an amount sufficient, together with the City's Allocable Proportion (as defined below) ofi other money available therefor under the provisions of the Bond Resolution, and other money available therefor, including any specific grants made by the United States of America or any agency or instrumentality thereof or by the State or any agency or instrumentality thereof and amounts applied therefor from amounts transferred to the Operating Fund pursuant to Section 606 of the General Bond Resolution: (a) to pay, as the same become due, the City's Allocable Proportion of the Administrative Expenses of the Bank; and (b) to pay, as the same become due, the City's Allocable Proportion of the fees and expenses of the Trustee and paying agent for the Loan Obligations. The City's Allocable Proportion as used herein shall mean the proportionate amount of the total requirement in respect to which the term is used determined by the ratio that the principal amount of the Municipal Bond outstanding bears to the total of all Loans then outstanding to all Governmental Units under the General Bond Resolution, as certified by the Bank. The waiver by the Bank of any fees payable pursuant to this Section 7 shall not constitute a subsequent waiver thereof. During any period where the City's Allocable Proportion of the fees and expenses of the Trustee and paying agent for the Loan Obligations is reduced inconsideration of the AMBB/General Obligation Bonds, 2008 Series Two Loan /agreement -Seward 1:1Docs137421709\Loan Agreement- Seward.wpd ,~". R L} DRAFT: 615108 City so making funds available, the City shall make funds available to the Trustee for each Municipal Bond Interest Payment and Municipal Bond Principal Payment at least seven business days before the respective principal or interest payment date. 8. The City is obligated to make the Municipal Bond Principal Payments scheduled by the Bank. The first such Municipal Bond Principal Payment is due on the date indicated on Exhibit "A" appended hereto, and thereafter on the anniversary thereof each year. The City is obligated to make the Municipal Bond Interest Payments scheduled by the Bank on asemi-annual basis commencing on the date indicated on Exhibit "A" appended hereto, and to pay any Fees and Charges imposed by the Bank within 30 days of receiving the invoice of the Bank therefor. 9. The Bank shall not sell and the City shall not redeem prior to maturity any portion of the Municipal Bond in an amount greater than the Loan Obligations which are then outstanding and which are then redeemable, and in the event of any such sale or redemption, the same shall be in an amount not less than the aggregate of (I) the principal amount of the Municipal Bond (or portion thereof) to be redeemed, (ii) the interest to accrue on the Municipal Bond (or portion thereof) to be redeemed to the next redemption date thereof not previously paid, (iii) the applicable premium, if any, payable on the Municipal Bond (or portion thereof) to be redeemed, and (iv) the cost and expenses of the Bank in effecting the redemption of the Municipal Bond (or portion thereof) to be redeemed. The City shall give the Bank at least 50 days' notice of intention to redeem its Municipal Bond. In the event the Loan Obligations with respect to which the sale or redemption prior to maturity of such Municipal Bond is being made have been refunded and the refunding bonds of the Bank issued for the purpose of refunding such Loan Obligations were issued in a principal amount in excess of or less than the principal amount of the Municipal Bond remaining unpaid at the date of issuance of such refunding bonds, the amount which the City shall be obligated to pay or the Bank shall receive under item (I) above shall be the principal amount of such refunding bonds outstanding. In the event the Loan Obligations have been refunded and the interest the Bank is required to pay on the refunding bonds is less than the interest the Bank was required to pay on the Loan Obligations, the amount which the City shall be obligated to pay or the Bank shall receive under item (ii) above shall be the amount of interest to accrue on such refunding bonds outstanding. In the event the Loan Obligations have been refunded, the amount which the City shall be obligated to pay or the Bank shall receive under item (iii) above, when the AMBB/General Obligation Bonds, 2008 Series Two Loan agreement -Seward 1:1Docs137421708\Loan /agreement- Seward.wpd ~•, r v DRAFT: 615108 refunded Loan Obligations are to be redeemed, shall be the applicable premium, if any, on the Loan Obligations to be redeemed. Nothing in this Section shall be construed as preventing the City from refunding the Municipal Bond in exchange for a new Municipal Bond in conjunction with a refunding of the Loan Obligations. 10. Simultaneously with the delivery of the Municipal Bond to the Bank, the City shall furnish to the Bank evidence satisfactory to the Bank which shall set forth, among other things, that the Municipal Bond will constitute a valid special obligation of the City. 11. Invoices for payments under this Loan Agreement shall be addressed to the City of Seward, P.O. Box 167, Seward, Alaska 99664, Attention: Finance Director. The City shall give the Bank and the corporate trust office of the Trustee under the General Bond Resolution at least 30 days' written notice of any change in such address. 12. Prior to payment of the amount of the Loan or any portion thereof, and the delivery of the Municipal Bond to the Bank or its designee, the Bank shall have the right to cancel all or any part of its obligations hereunder if: (a) Any representation, warranty or other statement made by the City to the Bank in connection with its application to the Bank for a Loan shall be incorrect or incomplete in any material respect. (b) The City has violated commitments made by it in the terms of this Loan Agreement. (c) The financial position of the City has, in the opinion of the Bank, suffered a materially adverse change between the date of this Loan Agreement and the scheduled time of delivery of the Municipal Bond to the Bank. 13. The obligation of the Bank under this Loan Agreement is contingent upon delivery of its General Obligation Bonds, 2008 Series Two (the "2008 Series Two Bonds") and receipt of the proceeds thereof. 14. The City agrees that it will provide the Bank with written notice of any default in covenants under the City's Resolution within 30 days from the date thereof. 15. The City shall not take, or omit to take, any action lawful and within its power to take, which action or omission would cause interest on the Municipal Bond to become AMBBJGeneral Obligation Bonds, 2008 Series Two Loan Agreement -Seward 1:1Docs\37421709\Loan Agreement- Seward.wpd p-~ f'ti a-~ DRAFT: 6l5/Q8 subject to federal income taxes in addition to federal income taxes to which interest on such Municipal Bond is subject on the date of original issuance thereof. The City shall not permit any of the proceeds of the Municipal Bond, or any facilities financed with such proceeds, to be used in any manner that would cause the Municipa{ Bond to constitute a "private activity bond" within the meaning of Section 141 of the Code. The City shall make no use or investment of the proceeds of the Municipal Bond which will cause the Municipal Bond to be an "arbitrage bond" subject to taxation by reason of Section 148 of the Code. So long as the Municipal Bond is outstanding, the City, with respect to the proceeds of the Municipal Bond, shall comply with all requirements of said Section 148 and all regulations of the United States Department of Treasury issued thereunder, to the extent that such requirements are, at the time, applicable and in effect. The City shall indemnify and hold harmless the Bank from any obligation of the City to make rebate payments to the United States under said Section 148 arising from the City's use or investment of the proceeds of the Municipal Bond. 16. The City agrees that if it is one of the Governmental Units that has a ten percent or greater amount of outstanding bonds held by the Bank under its General Bond Resolution, it shall provide the Bank for inclusion in future official statements, upon request, financial information generally of the type included in Appendix D, under the heading "City of Seward Financial Summary," to the Official Statement and attached hereto as Exhibit B. 17. The City hereby agrees that it shall fully fund, at the time of Loan funding, its debt service reserve fund which secures payment of principal and interest on its Municipal Bond and that such fund shall be held in the name of the City with the same banking institution the Bank uses for Bond Resolution trustee services. 18. If any provision of this Loan Agreement shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such provision shall not affect any of the remaining provisions of this Loan Agreement and this Loan Agreement shall be construed and enforced as if such invalid or unenforceable provision had not been contained herein. 19. This Loan Agreement may be executed in one or more counterparts, any of which shall be regarded for all purposes as an original and all of which constitute but one and the same instrument. Each party agrees that it will execute any and all documents or other instruments, and take such other actions as are necessary, to give effect to the terms of this Loan Agreement. AMBBlGeneral Obligation Bonds, 2008 Series Two Loan Agreement -Seward I:\Docs\37421709\Loan Agreement- Seward.wpd F, V DRAFT: 6/5108 20. No waiver by either party of any term or condition of this Loan Agreement shall be deemed or construed as a waiver of any other term or condition hereof, nor shall a waiver of any breach of this Loan Agreement be deemed to constitute a waiver of any subsequent breach, whether of the same or of a different section, subsection, paragraph, clause, phrase or other provision of this Loan Agreement. 21. In this Loan Agreement, unless otherwise defined herein, all capitalized terms which are defined in Article I of the General Bond Resolution shall have the same meanings, respectively, as such terms are given in Article I of the General Bond Resolution. 22. This Loan Agreement merges and supersedes all prior negotiations, representations and agreements between the parties hereto relating to the subject matter hereof and constitutes the entire agreement between the parties hereto in respect thereof. IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first above written. ALASKA MUNICIPAL BOND BANK [SEAL] By: DEVEN J. MITCHELL Executive Director CITY OF SEWARD, ALASKA By: KRISTIN M. ERCHINGER Finance Director ATTEST: JEAN LEWIS, CMC City Clerk AMBB/General Obligation Bonds, 2008 Series Two Loan ~yreement -Seward I:1Docs1374217D9\Loan Agreement- Seward.wpd ~. DRAFT: 615/08 EXHIBIT "A" TO LOAN AGREEMENT BETWEEN THE CITY OF SEWARD, ALASKA, AND THE ALASKA MUNICIPAL BOND BANK City of Seward, Alaska Electric Revenue Bonds, 2008 Principal Date June 1 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Principal Interest Amount Rate Principal Date June 1 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 Principal Amount Interest Rate Principal installments shall be payable on June 1 in each of the years, and in the amounts set forth above. Interest on the Bond shall be payable on December 1, 2008, and thereafter on June1 and December 1 of each year. Prepayment Provisions: Principal installments due on or after June 1, 2019, are subject to prepayment by the City, in whole or in part, on any date, on or after June 1, 2018, at a price of 100% of the principal amount thereof to be prepaid plus accrued interest to the date of prepayment. AMBB/General Obligation Bonds, 2008 Series Two Loan Agreement Seward -Exhibit A I:1~ocs1374217091Loan Agreement- Seward.wpd `J EXHIBIT B AMBB/General Obligation Bonds, 2008 Series Two Loan Agreement Seward - F~chibit B I:\Doos1374217091Loan Agreement- Seward.wpd DRAFT: 615/08 Sponsored by: Oates CITY OF SEWARD, ALASKA RESOLUTION 2008-051 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, APPROVING A MANAGEMENT AND OPERATING AGREEMENT BETWEEN THE CITY OF SEWARD AND PROVIDENCE HEALTH & SERVICES - WASHINGTON, DB/A PROVIDENCE HEALTH SYSTEM ALASKA, AND APPROPRIATING FUNDS WHEREAS, the City owns real property consisting of land, a hospital building, and a long-term care facility in the process of being constructed, together with other improvements thereon (collectively, the "PSMC Property"); and WHEREAS, Providence Health and Services, Alaska ("Providence") leased the hospital property and operated a hospital thereon from June 28, 1996 to April 10, 2003 pursuant to a lease and operating agreement with the City; and WHEREAS, the City and Providence eliminated the lease agreement and entered into a management and operating agreement in April, 2003, when Providence began operating the collocated hospital and long-term care ("LTC") facilities on the City's behalf, with said agreement expiring on April 11, 2008, and extended by the Seward City Council until July 11, 2008, pending completion of a new contract; and WHEREAS, SCC 6.10.120 exempts contracts for professional services from competitive selection procedures; and WHEREAS, the City and Providence desire to enter into a new five-year contract whereby Providence will continue to operate Providence Seward Medical and Care Center ("PSMCC") on the PSMC Property, as a collocated hospital and long-term care facility; and WHEREAS, the parties desire to continue to provide safe, timely, efficient, effective, and quality healthcare services to the residents of Seward and the surrounding area, and to become the State's first Green House-certified long-term care facility, restoring the choices of daily living to the LTC residents through a transformational model of care; and WHEREAS, the City Council has previously designated $500,000 for the purpose of covering hospital operational shortfalls (Resolution 2002-042 and Resolution 2003-045), and under the new agreement, $500,000 is to be made available to cover potential shortfalls anticipated pending opening of the new long-term care facility. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, that: ~~ CITY OF SEWARD, ALASKA RESOLUTION 2008-051 Section 1. The City Council authorizes the city manager to execute and deliver, in substantially the form as attached hereto, the Management and Operating Agreement between the City of Seward, Alaska and Providence Health & Services -Washington, d.b.a. Providence Health System Alaska. Section 2. Based on Providence's solid reputation for providing quality healthcare services throughout Alaska, on the positive relationship which exists between Providence and the community of Seward, and on the continued positive performance Providence has demonstrated In managing and operating both the hospital and the long-term care facility in Seward, the Seward City Council finds and determines that the public interest would be best served by not requiring competitive bids or proposals before the City enters into the Agreement. Section 3. The amount of $500,000 is hereby appropriated from the Designated for Hospital Operations account no. 101-0000-3042, to pass-through account no. 101-1191- 5998, to be utilized for the purpose of covering operational shortfalls in the hospital/long-term care facility, per the attached Management and Operating Agreement between the City of Seward and Providence. Section 4. This Resolution shall take immediately following its adoption. PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 9th day of June, 2008. THE CITY OF SEWARD, ALASKA Clark Corbridge, Mayor ~~ Council Agenda Statement Meeting Date: June 9, 2008 Through: Phillip Oates, City Manager From: Kristin Erchinger, Finance ~irector Agenda Item: Contract for Hospital and Long-Term Care Services BACKGROUND & JUSTIFICATION Providence Health and Services, Alaska ("Providence") leased the Providence Seward Medical Center ("PSMC") property and operated a hospital thereon from June 28, 1996 to April 10, 2003 pursuant to a lease and operating agreement with the City. Under the lease arrangement, Providence was financially responsible for the operations ofthe hospital, meaning that any financial losses were covered by Providence. During the period Providence operated the facility under a lease arrangement, Providence lost approximately $1 million per year. Beginning in April, 2003, the nature of the City's agreement with Providence was changed from a lease and operating agreement, to a management and operating agreement. Under this new model, the City became financially responsible for the operations of the hospital. However, the City agreed to this model only after facilitating collocation between the hospital and the long-term care facility. Through collocation, the two facilities were able to merge under a single owner (the City), and a single operator (Providence), achieving significant cost efficiencies in the areas of administration, nursing, laundry, dietary, facilities maintenance, etc. Since collocating, the Providence Seward Medical & Care Center ("PSMCC") operated in a positive cash position for four years, until 2007. The short-term losses were predicted in the pro forma financial projections for the collocated facility, and were the result of a rebasing of rates which provides a lower reimbursement rate (and corresponding annual deficits) from January 1, 2007, until the facility opens. When the new facility opens, the new reimbursement rates will become effective, bringing the facility back into a positive cash position. The current management and operating agreement between the City and Providence is set tv expire July 11, 2008. At its meeting of October 8, 2007, the Seward City Council discussed whether to competitively bid out the operations of the hospital and long-term care facility, or whether to begin negotiations with Providence to enter a new contract. After considering a number of factors, including Providence's successful history of providing healthcare services in Seward, as well as the partnership between the City and Providence in facilitating the migration to a new model of caze under the Green House Model in the new long-term care facility, the Council directed the administration to negotiate a new contract with Providence. The new contract reflects a focus on providing fiscal certainty to the annual operating budget of the PSMCC. The previous contract provided for a management fee of up to $250,000, an incentive fee of up to $100,000, as well as the allocation of regional and systemwide indirect costs to the PSMCC. In an effort to mitigate the uncertain impact of allocated costs on the budget, the new contract moves away from the previous financial model of management fees, and supports a flat management fee based on 4.5% of net service revenues. This is expected to save the facility at least $250,000 per year, providing more fiscal stability and predictability. In addition, we are transferring the $500,000 previously designated by Council for hospital operational shortfalls, to the hospital account to cover potential shortfalls until the new facility is opened in approximately 16 months. A partnership between the City and Providence enables Providence to serve out its mission of providing healthcare services to residents of rural Alaska, especially the poor and the vulnerable. 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: This contract is expected to save PSMCC in excess of $250,000 per year. RECOMMENDATION: Seward City Council approve Resolution 2008-G'S,~ authorizing a foe-year contract with Providence Health & Services, to provide co-located hospital and long-term care services. ~3 MANAGEMENT AND OPERATING AGREEMENT THIS MANAGEMENT AND OPERATING AGREEMENT ("Agreement") is made and entered into by and between THE CITY OF SEWARD, a municipal corporation (the "City") and PROVIDENCE HEALTH SYSTEM -WASHINGTON d/b/a PROVIDENCE HEALTH AND SERVICES ALASKA, a Washington non-profit corporation authorized to do business in Alaska ("Providence"). RECITALS WHEREAS, the City owns certain real property consisting of land and a hospital (Providence Seward Medical and Care Center, "PSMCC"}, together with other improvements thereon, and is in the process of building along-term care facility on a separate parcel of land (collectively, the "PSMCC Property"); and WHEREAS, Providence has administered hospital operations in Seward since June 28, 1996 and long-term care operations since April 28, 2002; and WHEREAS, the City desires to continue affordable health care for its residents; and WHEREAS, the City desires a single delivery system for acute care and long term care services; and WHEREAS, the City desires cost effective health care services with emphasis on reducing duplication and inefficiencies in the delivery system; and WHEREAS, the City desires to engage a company with sufficient healthcare knowledge and expertise, and Providence has successfully operated the co-located hospital and long-term care facilities on behalf of the City since 2002; and WHEREAS, Providence owns and operates a number of health care facilities that are operated in keeping with its philosophy, mission and values. ~~ NOW, THEREFORE, the City and Providence agree as follows: 1. OQerations. (a) Agreement to Operate/Manage. The City hereby contracts with Providence to be the sole and exclusive operator and manager of PSMCC for the term of this Agreement. Providence hereby agrees to operate and manage PSMCC on behalf of the City consistent with the terms of this Agreement and all applicable laws, regulations and ordinances. Providence assumes all the rights, duties, liabilities and obligations which shall arise out of Providence's operation of the Providence Seward Medical and Care Center ("PSMCC"j, "Property" shall mean the hospital and long-term care facility Properties, collectively. Notwithstanding anything to the contrary, both parties understand and agree that any and all services provided by Providence during the term of #his Agreement shall be provided solely for the benefit of the City. During the term of this Agreement and subject to the other provisions of this Agreement, Providence shall operate PSMCC, and may perform or arrange for the provision of the following: 1. Ensure timely deposits into the Accounts (as defined in Section 5} of all receipts and moneys arising from the operation of PSMCC, and shall make disbursements from such accounts in such amounts and at such times as the same are required; 2. Establish all prices, price schedules, rates and rate schedules for PSMCC ; 3. Negotiate, prepare and execute any such other contracts reasonably necessary or desirable in connection with the operation of PSMCC in the usual course of business; ~~ 4. Hire or re#ain any consultants, accoun#ants, attorneys, or other professional personnel necessary and appropriate to assist Providence in carrying out 'rts duties and responsibilities in accordance with this Agreement; 5. Operate PSMCC in a manner thot is consistent with applicable federal, state and focal anti-discrimination laws, including the provision of services to persons at PSMCC without regard to race, creed, color, national origin or financial circumstances; 6. Operate PSMCC in a manner consisten# with their Medical Staff Bylaws, as applicable. The parties hereby specifically agree to allow Providence, while acting in the name of PSMCC to enter into certain exclusive contracts for the practice of primary care physicians, anesthesiologists, radiologists, pa#hologists, or other hospital-based specialists for the benefit of PSMCC; 7. Provide physician credentiaiing services and any and all other services as reasonably required to facilita#e and perform credentialing functions has applicable) at PSMCC; 8. Employ or otherwise retain and be responsible for selecting, hiring, training, supervising, and firing all management, professional, administrative, clerical, secretarial, bookkeeping, accounting, payroll, billing and collection and ~O other personnel that are reasonably necessary and appropriate for the operation of PSMCC; 9. Take all such actions reasonably necessary to cause PSMCC to continue as participating providers under the Medicare and Medicaid programs; 10. Prepare, execute and file any required documents with governmen#al or accrediting agencies, including without limitation any Medicare cost reports, provider agreements, and licensing documents; 11. Provide or arrange for the provision of all marketing and public relations services that are reasonably necessary and appropriate for the operation of PSMCC. The parties hereby agree that Providence may, during the term of this Agreement, identify PSMCC as an entity under the operational management of Providence; 12. Providence may, in its sole discretion defend, assert, settle, or otherwise dispose of any claims, litigation, judgments, or liabilities in connection with PSMCC, and will notify the City of same; 13. Provide to the City an annual operating and capital budget for PSMCC; 14. Negofiiate, contract for and generally supervise the disposal of all medical waste and/or garbage refuse; ~~ 15. Conduct medical educational training programs at PSMCC, including training of interns and residents and other medical/technical personnel, in a manner consistent with applicable governmental regulations and Providence's policies; 16. Unless otherwise specifically provided in this Agreement, Providence shall be responsible for the performance of all other acts reasonably necessary in connection with the operation of PSMCC in accordance with the approved annual budget and the #erms and conditions of this Agreement. Notwithstanding anything to the contrary in this Agreement, Providence shall not have authority to bind the City or PSMCC as to the following matters or to perform any of the following on behalf of the City or PSMCC without first obtaining approval from the City: (i) any sale, lease, exchange, mortgage, pledge, or other transfer or disposition of all or substantially all the assets of any of PSMCC other than in the ordinary course of business; (ii) any fundamental change in the nature of PSMCC's businesses; (iii) any merger, consolidation or affiliation of any of PSMCC with another en#ity; and (iv) any material change with respect to the insurance coverage obtained or provided through Providence, unless such change is beyond Providence's reasonable control. (b) General Control of PSMCC Although the City has contracted day-to-day operations and management of PSMCC to Providence during the term of this Agreement, the City shall continue to own and have financial responsibility for PSMCC. The City shall also have control over the facility other than day-to-day operations. The City represents that, as of the ~~ Effective Date, it has a license as owner of PSMCC ,and has listed Providence on the license as the manager to operate the PSMCC. Providence agrees that it will take all steps necessary to maintain and continue the PSMCC and licenses, permits and certifications for the term of this Agreement, and the parties agree to take all steps necessary to preserve the designer#ion of co- location at PSMCC, as such designation is ou#lined in the regulafions published by the State of Alaska Department of Health and Social Services. (c} Reavired Notifications: Providence shall notify the City in writing within twenty-four (24} hours of the occurrence of any one or more of the following events: (l } Any loss of licensure by PSMCC; (2) At such time as Providence becomes aware of any material governmental investigation or disciplinary proceeding relating #o PSMCC; (3) At such time as PSMCC becomes debarred, suspended or otherwise ineligible to participate in any federal or s#ate health care program, including the Medicare and Medicaid programs; (4} At such time as Providence becomes aware of any act of nature or any other event which has a material adverse effect on Providence's ability to operate PSMCC. 2. Effective Bate and Term. Subject to the referendum process described below, this Agreement shall become effective upon execution by both parties and 34 days following adoption of Resolution 2008- (the "Resolution") by the City Council (the "Effective Date"}. The term of this Agreement shalt be five years from the Effective Date unless sooner terminated as provided herein, provided that the parties may extend for one additional five-year term by providing wri#ten notice to the other party not less than 6 months prior to the end of the initial term provided that such extension is approved by Resolution of the Seward City Council Such extension shah be on the same terms and conditions of this Agreement. Providence understands tha# under the Charter and Code of Ordinances of the City, the Resolution may be voided by referendum. Providence agrees that if the Resolution is the subject of a referendum petition filed with the City Clerk, this Agreement, shall be ineffective unless and until the Resolution is approved by the voters of the City, and Providence shall not be entitled to any damages or other relief against the City in the event the Resolution is not so approved. On the Effective Date, the Prior Agreement shall terminate. 3. Operatinq Expenses. 1n accordance with the operating budget adopted annually, Providence will incur costs generally associated with the operation of a health care facility providing acute and long-term care services. Any and all direct and indirect costs actually incurred by Providence in connection with its operation of PSMCC pursuant to this Agreement shall be deemed operating expenses ("Operating Expenses") and accordingly will be subject to the reimbursement provisions of this Agreement. Indirect costs are defined herein to be those costs that can be directly attributable to costs incurred by Providence solely in connection with operations of PSMCC, and include: employee compensation and benefit costs directly related to PSMCC employees (workers' compensation insurance, employee retirement fund/pension contributions and matching funds, tuition assistance, PTO and sick accruals, compensation, and other benefi#s}; insurance costs directly related to PSMCC facilities (property, auto, general liability} and employees (health and malpractice); human resources costs which are directly related to PSMCC (employee relations support, recruitment efforts, contract negotiations); annual audit costs directly attributable to PSMCC; and information services costs that are directly at#ributable to the number of workstations, licensing agreements, and/or maintenance contracts utilized by PSMCC, but only to the extent that such cos#s exceed what Providence Alaska would be required to pay on its own behalf, if it did not manage PSMCC. To be eligible for reimbursement as indirect costs, such ~~ costs must not be alloca#ed on the basis of a percentage of overall Alaska Regional costs or Providence System costs, but must be directly attributable to time spent in connection wi#h business on behalf of PSMCC. It will be the responsibility of Providence to demonstrate that the allocation of costs as indirect costs, are reasonable and based on effort spent on behalf of PSMCC. General overhead costs of either the Alaska Regional office or the Providence System Office located in Renton, Washington are not to be considered indirect costs, and are not to be billed as indirect costs. Costs associated with the Providence Alaska Regional Office and Providence System Office are deemed to be recovered in the form of a management fee as described in Section 6. In the event the City and Providence discontinue their contractual relationship, the costs incurred by PSMCC in winding down and closing out its relationship with the City shall be deemed Operating Expenses. 4. Admission Policy. Providence agrees to accept any and a!I bona fide emergency patients PSMCC can accommodate. Providence shall treat patients in accordance with the services and capacity available at PSMCC. Providence agrees it shall not discriminate in the admission of patients or delivery of outpatient services on the basis of race, religion, national origin or color. Providence agrees that any patient seeking treatment at PSMCC, and requiring for medical reasons transport to a larger facility, has the right to select the health provider(s) dnd hospital of the patient's preference. Providence agrees to honor such determinations by patients and will relate such directives to emergency transportation services. ~~ ~~ Providence acknowledges the importance to the people of Seward of having a long- term care facility within the City boundaries and operating at its fullest capacity, and agrees that except to the extent necessary to meet patient choice, or the particular health or safety needs of a patient, and only for such time as is necessary to meet such needs, Providence will not move or cause patients to move to other facilities owned, operated or managed by Providence. The City has the right to retrospectively review reasons for all such transfers, so long as such review is in compliance with patient confidentiality laws. Providence shall use its best efforts to operate the long-term care facility at full capacity, and to operate the long-term care facility in accordance with the provisions of the Green House Project, to ensure the facility's continued qualifica#ion as an official "Green House". Providence further acknowledges the importance to the people of Seward of being able to receive care and treatment in a local hospital, rather than to be transported out of town, and agrees that except to the extent necessary to meet patient choice, or the particular health or safety needs of a patient, Providence will not move or cause patients to move to other facilities. The City has the right to retrospectively review reasons for all such transfers, so long as such review is in compliance with patient confidentiality laws. 5. Disaosition of Funds Reaortins~ cnd Administration. (a) Funds originating from the operation of PSMCC and collected by Providence pursuant to this Agreement shall be received, handled, managed and disposed of as follows: (i) Providence shall deposit ail funds received by it #rom the operation of PSMCC and all amounts advanced by the City in a jointly held bank account or accounts bearing the name of PSMCC hereinafter the "Accounts") in a bank or trust company approved by the City and Providence. Such funds shall in no event be ~~ commingted with other City or Providence funds. Providence shall have no liability or responsibility for any foss resulting from the insolvency, malfeasance or nonfeasance of the bank or banks in which such funds are deposited. (ii) Providence has the right to make withdrawals from and use the Accounts for the purposes of operating PSMCC and pertorming their obligations hereunder and paying Providence's compensation herein until the expiration or termination of this Agreement, at which time Providence shall resign as co-signatory for the Accounts. (iii) Signatories and approvals as to the amounts on all checks drawn from the Accounts shall be in accordance with the policies and procedures mutually agreed to by Providence and the City. (b) Providence will perform all billing and col{ection activities for PSMCC accounts receivables, will process accounts payable, and wilt provide such other administrative, accounting and clerical services as are necessary. All revenues and cash collections including those from patients, third-party payors and other sources billed and collected by Providence, and arising out of or related to services rendered during the term of this Agreement, and all grants or portions thereof attributed to PSMCC arising out of or related to PSMCC during the term of this Agreement, shall be used first to offiset Operating Expenses of PSMCC incurred on or after the Effective Date. Providence shat{ aggressively collect all amounts billed for services provided at PSMCC. The excess, if any, of such revenues over such expenses shall accrue to the City's account, and be applied in the City's sole discretion, to pay debt service on the City's existing general obligation and/or revenue bonds related to the PSMCC, the costs of repairs, renewals, improvements or additions to PSMCC, or to cover past, present or future losses. JJ (c) Providence shall provide the City with audited year-end financial statements for the PSMCC as a co-located entity within 120 days after the end of each year. Within b0 days after the end of the fiscal year, Providence shall prepare and deliver to the City an operational report that shall provide information on services provided, new programs and services that have been initiated, programs and services that have been terminated or relocated to other facilities, statistics on patients treated, and other information of interest to the City and the community. Providence shall provide the City with three copies of the report for distribution among the City officials and members of the community. Upon request by the City, Providence will make a representative available to make presentations to Seward City Council and community groups concerning the annual report. The information to be shared under this paragraph shalt not include protected health information covered by the Health Insurance Portability and Accountability Act of 1996 and regulations adopted thereunder ("HIPAA"). (d) Providence shalt maintain all financial, medical and hospital records, including admitting register books, schedules of room rentals, patients' insurance records, pertinent hospital personnel records and such other books and records as are necessary to the continued operation of PSMCC. Original copies of medical and hospital records shall be maintained and stored at PSMCC or at another facility acceptable to Providence. No Seward General records prior to July 1, 1996 may be destroyed without the consen# of the City, which consent shall not be unreasonably withheld. (e) Providence will use reasonable efforts to operate PSMCC consistent with the annual budget. The 200$ budget is attached hereto as Exhibit "B". Under the terms of this Agreement, the City shall have the right to review and approve Providence's budget. .1 '~~ Providence shall provide the City with monthly updates comparing PSMCC's actual financial performance to the approved budget during the course of each year to ensure that the City is fully aware of the financial performance of PSMCC on a monthly basis. The parties acknowledge that the budget is only a projection for the upcoming year, and changed circumstances may require budgetary modifications. Providence will notify the City of the following modifications to the budget: (i) any non-routine and non-budgeted expenditure (including capital expenditures) within Providence's control which exceeds $25,000, or contract in an amount greater than $25,000 annually; (ii) instigation of any litigation on behalf of PSMCC against a third party where the amount in controversy exceeds $25,000; and (iii) settlement of any litigation on behalf of PSMCC where the amount in controversy exceeds $25,000 or the proposed settlement involves payment by PSMCC of an amount in excess of $25A00. Providence will provide the City with monthly financial reports, including current revenues, expenses, and statements of cash flow, prepared in accordance with generally accepted accounting principles. The monthly reports shall include comparisons to budgeted amounts and prior year historical comparisons. The City shall have access to all financial information related to PSMCC. Providence will timely notify fhe City in the event there is a decrease in the number of resident physicians, or an increase in the use of contract medical services, such as traveling Registered Nurses. 6. Annual Management I~ee . (a) For each full calendar year of this Agreement, the City shall pay Providence an ~~ Annual Management Fee equal #0 4.5% of Net Service Revenue, payable by the City ,quarterly, in arrears. Partial years shall be pro-rated. Both parties understand and agree that the City has other financial obligations to Providence pursuant to the terms of this Agreement. (b) The purpose of the management fee is to compensate Providence for management and support services provided by Providence at its Alaska Regional C)ffice and Providence System Office. Such services include, but are not limited to, support services such as accounting, human resources, finance (budgeting, cost reports, etc.), purchasing, marketing and public relations, employee education, information services, strategic planning, patient billing, governmental affairs, accreditation support services, executive compensation and benefits, materials, travel, and other agreed-upon support services. (c} The parties agree that a management fee based on Net Service Revenue reduces the budge#ary uncertainty which accompanied the former methodology of billing region and system costs to PSMCC. Such management fee also reduces the adverse impacts to PSMCC in years following re-basing, where the allocation of region or system overhead costs could potentially exceed the CPI, which would result in unanticipated, unreimbursed cos#s to PSMCC. The parties also recognize that a management fee based on Net Service Revenue has the potential to result in higher overall costs to PSMCC in the event that charges for services are increased (which results in higher Net Service Revenues, thus higher management fee), with a corresponding increase in bad debts, so all reasonable of#orts will be made to maintain service charges at levels #hat wi11 not, in themselves, result in higher levels of bad debts. 7. Employment. (a} All personnel of PSMCC during the term of this Agreement sha11 be employees of Providence. Providence shall adopt its own employment policies and procedures. Providence . ~~ ~~ agrees to select and hire an individual to serve as the Administrator of PSMCC (the "Administrator"). The City shall have the right to participate in, and ask for a review process regarding the selection of an Administrator. The Administrator shall be Providence's primary representative with respect to communications to the City. Alf employee costs are deemed to be Operating Expenses. (b) Termination of Employees. Upon the earlier of termination or expiration of this Agreement, Providence shall terminate the employment of ati employees identified by Providence as primarily utilized at PSMCC under this Agreement. (c) The City shalt defend, indemnify, and hotd Providence harmless from, alt other claims or liability for employee benefits earned or employee claims made relating to employment with Wesley prior to April 28, 2002. 8. Medicare and Medicaid Reimbursement. From and after the Effective Date, Providence shall maintain Medicare and Medicaid certi#ication and shall prepare all Medicare/Medicaid cost reports in a timely manner and shall provide alt draft cost reports to the City for review and comment no less than 30 days prior to the date of submission, understanding that Providence may not be able to include the "Home Office" cost report at that time. Alternatively, the parties may agree to have the City hire an independent consultant to prepare the cost report. All expenses incurred within this Section are considered Operating Expenses and shalt be paid as direct or indirect costs from Providence. The City may, as Operating Expenses, have the cost reports prepared and/or analyzed by a financial consultant. 4. heal Proaertv Qwnershie. The PSMCC Property is owned by the City. .1~ 10. Reaiacemen# Facility. The City is in the process of constructing a new long-term care facility which will be operated by Providence as part of PSMCC, and in accordance with the guidelines established for of#icial Green House Projec#s. .Upon licensure of the new facility by the State of Alaska as a nursing home and certification from the federal government as a skilled nursing facility, use of the current long-term care facility property will cease and all long- term care services shall thereafter be provided at the newly constructed long term care facili#y on City property. 1 i . Eauiament. (a) Providence shall maintain all equipment at PSMCC and PWCC, regardless of ownership. (b) Providence will retain title to all PSMCC equipment owned by Providence. The City wi{I retain title to all PSMCC equipment owned by the City. Providence may purchase replacement or additional equipment to be used in the maintenance or improvement of Providence's operations of PSMCC and PWCC. Such additional equipment shall be the City's property, and shall be tagged and recorded in the financial records, as such. 12. Workin4 Caaitai and Cash Flow (a) Providence will pay Operating Expenses as they become due, using funds from the Accounts and provide the City with information satisfactory to the City supporting such transfer of funds from City to Providence. Providence will assure that al! Operating Expenses wilt be paid consistent with the various terms and conditions of vendors, as well as the ~~ operating budget and applicable regulations governing employee pay practices. in the event insufficient funds are available to pay Operating Expenses, Providence will notify the City verbally and in writing via fax and Email. Providence will then have the sole discretion to require payment as described in Subsection 12 (b) or Subsection 12 (c). In the event the City fails to transfer funds adequate to support Operating Expenses in accordance with Section 12(b) or 12(c), and such failure is not cured within 60 days of the original notice, Providence may terminate #his Agreement by providing the City with 30 days' advance wri#ten notice of such termination. (b) The City shall place a minimum of $500,000 of Emergency Funds into the Seward account. Such fiends may be used for capital or operating shortfalls only and require the prior written approval of the City Manager or designee. In the event that shortfalls are expected to be in excess of $500,000, Providence will notify the City and within sixty (60) days of receiving such notice, the City will transfer sufficient funds to Providence to cover the shortfall. (c) To the extent that the Accounts do not have sufficient cash available to reimburse Providence for direct and indirect costs as defined in Section 3, and the management fee as defined in Section 6, Providence Alaska Medical Center ("PAMC") may, at its sole discretion, charge interest to PSMCC for the cumulative unpaid portion of the monthly amount due to Providence Alaska Medical Center. Interest will be calculated monthly at the Prime Rate + 1 % on the average outstanding balance for the month, where the Prime Rate is defined in the Wall Street Journal Financial Section. Principal plus unpaid interest must be #ully paid by December 31, provided however, that this date may be extended by PAMC only upon its written consent. In the event that PSMCC fails to make such required payments, PSMCC agrees to pay on demand, a{I costs of collection, including reasonable legal expenses and attorneys fees, incurred in enforcing this repayment. PSMCC waives all actions on the part of PAMC ~~ required in fixing #his liability, including presentment, demand, notice of dishonor, protest, notice of protest, notice of non-payment, and any other notice. 13. Supplies. Providence shall, as part of its Operating Expenses, supply and maintain all expendable supplies as may be required in Providence's discretion for the proper operation of the PSMCC and PWCC. Upon termination of this Agreement, Providence will leave behind all of the supplies in inventory as wet{ as floor stock items maintained at the Property. 14. Condition on Surrender. Upon termination or expiration of this Agreement, Providence shall surrender the Property to the City in substantially the same condition as exists on the Effective Date, except for reasonable wear and tear, construction and demolition required or permitted under the terms of this Agreement and damage by fire and other risks covered by the insurance policy in Section 16. 15. Alterations. Providence shall have the right, to make alterations, additions, improvements and renovations to the Property, as Operating Expenses, provided: {a) Providence shat! notify the City with respect to any such work requiring any substantial expenditure; (b) such work shall not adversely affect the structural integrity of the Property or diminish the value thereof; (c} any such work steal! be performed in a good and workmanlike manner and in conformance wi#h all applicable building, fire and health regulations; and (d} the City shall have approved in writing such work in advance, in the City's sole discretion. 16. lnsurcnce. (a) Providence shah either obtain or continue, occurrence-based, professional (including medical malpractice} and general (lability insurance relating to PSMCC as Providence, in its sole opinion, deems necessary and sufficient, and maintain such liability insurance coverage for PSMCC during the term of this Agreement. Such insurance shall provide ~~ coverage for personal injuries, death or property damage to PSMCC in an amount of at least $5 million per occurrence and $10 million annual aggregate; provided, however that Providence's reasonable allocated cost for providing or continuing such insurance on the City's behalf shall be deemed an Operating Expense. In addition, Providence shall maintain insurance, in reasonable amounts, subject to reasonable terms, provisions and customary exclusions, for professional liability and workers' compensation for all Providence employees who provide services at PSMCC pursuant to this Agreement. Providence shall also maintain automobile, crime, directors and officers, property earthquake and fiduciary insurance coverage (as requested by the City} relating to PSMCC and maintain such insurance coverage for PSMCC during the term of this Agreement. Any insurance obtained or provided by Providence under this Section may be provided by insurance or alternative risk programs which may include self- insurance programs, provided such alternative risk or self-insurance programs are fully funded (confidence level of 8Q% or higher} for any reasonably projected liabilities, and contain customary and reasonable deductible and coinsurance amounts. The City hereby acknowledges that Providence has informed it of Providence's insurance's deductible/co- insurance amounts, as evidenced by Exhibit "G". The Operating Expenses will include the payment of such deductible/coinsurance amounts. All costs incurred by Providence under the terms of this Section 17(aj shall be deemed Operating Expenses and paid by City to Providence pursuant #o the terms of this Agreement. The Operating Costs shall include the payment of such deductibles/co-insurance in the event of any loss or casualty covered under the insurance provided by Providence hereunder. ~~ {b) The City hereby acknowledges and agrees that upon the earlier of termination or expiration of this Agreement, Providence shall no longer provide nor arrange for the provision of any insurance of any kind whatsoever to PSMCC. (c) the minimum amounts and types of insurance required under this section shall be subject to revision in accordance with standard insurance practices, in order to provide continuously throughout the Term, a level of protection consonant with good business practice and accepted standards in the industry. Such factors as increases in the cost of living shall be utilized in assessing whether the minimum insurance requirements should be increased. The City shall notify Providence of any required changes in insurance coverage. All insurance policies shall include a waiver of subrogation and shall provide for 30 days' notice to the City of cancellation and/or material change in policy terms. All such policies shall be written either by insurance companies legally authorized to do business in the State of Alaska and acceptable to the City, or by self-insurance under the same terms as the policies for healthcare centers or clinics owned or operated by Providence, and acceptable to the City. The City shall be named as an additional insured party on each such policy of insurance, and certificptes thereof shall be furnished to the City. Nothing herein shall be construed as a representation by the City as to the sufficiency of any insurance coverage for any purpose. i 7. No Assumption of Liability: Indemnt~cation. {a) During the term of this Agreement, Providence shall not assume or be liable for any claim, liability, or obligation of PSMCC, whether known or unknown, fixed or contingent, accrued or unaccrued, arising from Providence's operation of PSMCC pursuant to this ~z Agreement, except where such claim, liability or obligation arises from Providence's negligence or material breach of this Agreement, {b) During the term of this Agreement, the City shall not assume or be liable for any claim, liability or obligation arising from its responsibilities and duties under the terms of this Agreement, whether known or unknown, fixed or contingent, accrued or unaccrued pursuant to this Agreement, except where such claim, liability or obligation arises from the City's negligence or material breach of this Agreement. (c) The parties will defend, indemnify and hold each other harmless firom any loss, claim or damage arising from the negligent acts and omissions of their respective employees, officers and agents, including negligence connected with performing their obligations under this Agreement. In the event that foss or damage results from the conduct of more than one party, each party agrees to be responsible for its own proportionate share of the claimant's total damages under the laws of the state of Alaska. (d) The obligations under this Section 18 shall survive any termination or expiration of this Agreement and shall continue until the expiration of the applicable statute of limitations (with extensions) relating to the causes of action at issue. {e) Providence shall have no obligation #or, and the City shall indemnify and hold Providence harmless from and against, any and all liability with respect to any claims resulting from the negligence of the City or its agents or emp{ogees, or any claims arising ou# of acts or ~3 omissions which occurred prior to (a) April 28, 2002 with regard to PWCC or (b) 1996 with regard to PSMCC. 18. Assis~nment. This Agreement may not be assigned by Providence except in whole to an affiliate of Providence, as "affiliate" is defined in AS 10.06.990(2). Each and every provision of this Agreement shalt inure to the benefit of and shall be binding upon the successors in interest of Providence and the Cify. 19 Early Termination. Either party shall have the option in its sole discretion, to terminate this Agreement upon twelve (12) months written notice to the other party. 20. Relis~ious and Ethical Directives: Termination. Providence shall not be obligated to provide any services at PSMCC that are in conflict with the Providence Health System Mission and Core Values and the Roman Catholic moral tradition as articulated in such documents as The Ethical and Religious Directives for Catholic Health Care Facilities, as amended from time to time. Providence shall at all times have the right, power and duty to operate PSMCC in accordance with, and to make decisions that in Providence's reasonable discretion are necessary or desirable to comply with such Directives. If at any time during the term, as a result of changes to Alaska law or regulations, Providence shall be required to operate PSMCC in a manner that is not consistent with such Directives, then at its option, Providence may terminate this Agreement upon 60 days advance written notice. 21. Termination for Cause. (a) Either party may terminate this Agreement in the event of breach of this Agreement by the other party where such breach is not cured within thirty (30) calendar days after the non- breaching party gives written notice of the breach to the breaching party. (b} This Agreement shall automatically terminate in the event either party files a petition in voluntary bankruptcy, makes an assignment for the benefit of creditors, or takes any other action voluntarily or involuntarily under any state or federal statute for the protection of its debtors. (c) Either party may immediately terminate this Agreement in the event the other party attempts to limit or otherwise avoid its obligations set forth in Section 17 of this Agreement. (d) The dissolution or liquidation of Providence, other than as the result of merger or consolidation under conditions permitting continued full compliance with the terms of this Agreement, shall be cause for termination by the City. (e) The cessation by Providence of use of the Property for the purposes contemplated hereby for a period of thirty (30) consecutive days, except for periods when the same may be untenantable shall be cause for termination by the City, and no Management Fee shall be owed following such cessation of use; or ~~ 22. Winding Up. This Section 22 shall survive termination or expiration of this Agreemen#. Upon the termination or expiration of this Agreement, the following procedure shall be followed after the effective date of expiration or termination ("termination date"): (a) Providence shall work cooperatively with the City to facilitate a smooth transition of the operation/management of PSMCC. {b) The City shall retain as its property any equipment on the Property as of the expiration or termination of the Term to the extent that such equipment was acquired with the City funds. The City may purchase, free and clear of any encumbrances, any PSMCC equipment owned by Providence at its then net book value. Notice of the City's exercise of this option shall be effected by notice given at any time before the expiration date. Providence shall have the right to remove from the Property at its expense, any or all equipment that the City has not elected to retain under this paragraph. {c) Providence shall give the City, or such other person identified by the City, all records required for continued operations of PSMCC. (d) All licenses and permits incident to operation of the PSMCC will be transferred to an operator identified by the City, including, but not limited to transfer of permits for and inventories of alcohol, narcotics and dangerous drugs. Providence wi#! file a final cost report within 45 days after termination. J (e) Upon termination, ail accrued revenues and expenses related to the ordinary course of business shall be the City's. Such expenses shall include any fees owed to Providence under this Agreement and an amount equal to the final bi-weekly payroll costs. 23. Notices. Any notice permitted or required hereunder shah be in writing and shall be deemed given on the date delivered in person, sent by electronic mail or fax, or deposited in the United States certified or registered mail, postage prepaid, and addressed as follows: To the City: City of Seward P.O. Box 1 b7 410 Adams Street Seward, Alaska 99664-0167 ATTN: City Manager Phone: 907.224.4047 Fax No.: 907.224.4038 Email: citymgr@cit~rafseward.net To Providence: Providence Health and Services -Washington d.b.a. Providence Health and Services -Alaska 3200 Providence Drive P.O. Box 196604 Anchorage, Alaska 99519-6604 ATTN: Chief Executive, Alaska Service Area Fax No.: Email: Such addresses may be changed by either party by ten (10) days' prior written notice to the other party. 24. Authori Each individual executing this Agreement on behalf of Providence or the City represents and warran#s that he or she is duly authorized to execute and deliver this Agreement on behalf of such party, that all actions by such organization have been taken to authorize execution, delivery and performance of this Agreement, and that this Agreement is binding upon such party. The individuals signing on behalf of Providence further warrant and represent that they are authorized to act on behalf of Providence in all matters relating to this Agreement. ~~ 25. Representations and Warranties of Providence. As of the Effective Date, Providence hereby represents and warrants as follows: (a) Providence is a Washington non-profit corporation in good standing under the laws of the State of Washington and authorized to do business in Alaska. (b) Providence has full corporate power and authority to carry on its business as now conducted and to enter into this Agreement. The execution and delivery of this Agreement has been authorized by proper corporate action, and this Agreement constitutes a valid and legally binding obligation of Providence. (c) Except as may have already been obtained, no consent or approval of any trustee or holder of any indebtedness or obligation of Providence, and no consent, approval, permission, authorization, order, or license of any governmental authority, is required to be obtained by Providence for the execution and delivery of this Agreement or any other instrument or agreement required of Providence under this Agreement. (d) Providence is not subject to any charter, bylaw, or contractual limitation or provision of any nature whatsoever which in any way limits, restricts, or prevents Providence from entering into this Agreement or from performing any of its obligations hereunder. (e) Neither the execution and delivery of this Agreement, and the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the provisions hereto, materially conflicts with, violates, or breaches any charter, bylaw, or stock provision of Providence, any of the material terms, conditions, or provisions of any indenture, instrument, or ~~ agreement to which Providence is a party or by which Providence is bound, any statute, rule or regulation, or any judgment, decree, or order of any court or agency binding on Providence, or constitutes a default under any of the foregoing which has not been waived or consented to in writing by the appropriate party or parties, or results in the creation or imposition of any lien, charge, security interest, or encumbrance of any nature whatsoever upon any of the property or assets of Providence not permitted under the terms of any restriction, agreement, instrument, statute, governmental rule or regu{anon, court order, judgement, or decree. (fj Yo the knowledge of Providence, there is no action, suit, proceeding, inquiry, or investigation by or before any court, governmental agency, or public board or body pending or threatened against Providence which (ij affects or seeks to prohibit, restrain, or enjoin the execution and delivery of this Agreement, (iij affects or questions the validity or enforceability of this Agreement, or (iiij questions the power or authority of Providence to carry out the transactions contemplated by, or to perform its obligations under, this Agreement. (gj When duty executed, this Agreement will be enforceable against Providence according to its terms, except as may be {invited by bankruptcy, insolvency, reorganization, or other laws affecting creditors' rights generally as amended from time to time. (hj Any certificate signed by an officer of Providence duly authorized to execute such certificate and delivered pursuant to this Agreement shall be deemed to be a representation and warranty by Providence as to the statements made therein. ~~ (i) The execution, delivery, or performance of this Agreement or consummation of the transactions contemplated by this Agreement or compliance by Providence with any of the provisions of this Agreement will not violate any statute (including Alaska's Certificate of Need laws), rule, regulation, ordinance, code, order, judgment, ruling, writ, injunction, decree, or award. 2b. Representations and Warranties of the City. The City hereby represents and warrants that neither the execution, delivery or performance of this Agreement nor the consummation of the transactions contemplated by this Agreement, nor compliance by the City with any of the provisions of this Agreement, will: (a) violate or conflict with any provision of Seward's City Charter or any Seward City Council resolution; (b) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice andlor (apse of time, would constitute a default) under, terminate, accelerate the performance required by, or result in a right of termination or acceleration under any of the terms, conditions or provisions of any material contract, plan, indebtedness, note, bond, indenture, security or pledge agreement, commitment, license, lease, franchise, permit, agreement, or other instrument or obligation (i) to which the City is a party or (ii) by which the assets relating to PSMCC and PWCC are bound; or (c) violate any statute (including Alaska's Certificate of Need laws), rule, regulation, ordinance, code, order, judgment, ruling, writ, injunction, decree or award. 27. Parties in Interest. Nothing in this Agreement expressed or implied is intended or shall be construed to confer upon any person, other than the parties hereto, any right, remedy ~~ or claim, legal or equitable, under or by reason of this Agreement, this Agreement being intended to be and being for the sole and exclusive benefit of the parties hereto. 28. Confidential Information Providence shah comply with all {aws, regulations, directives or requirements in any form related to operating and managing hospitals and long- #erm care facilities, including, but not limited to the Health Insurance Portability and Accountability Act of 1996 ("HIPAA"), and regulations adopted under HIPAA. The City shall not have access to Protected Health Information as defined by HIPAA. City has read 45 C.F.R. 164.504(e), understands Providence's position is that 45 C.F.R. 164.504(e) applies to this Agreement, and that Providence therefore has the following obligations: Providence agrees to hold all individually identifiable patient health information ("Protected Health Information") that may be shared, transferred, transmitted, or otherwise obtained pursuant to this Agreement strictly confidential, and provide all reasonable protections to prevent the unauthorized use or disclosure of such information, including, but not limited to the protection afforded by applicable federal, state and local laws and/or regulations regarding the security and the confidentiality of patient health care information. Providence further agrees to make every reasonable effort to comply with any regulations, standards, or rules promulgated pursuant to the authority of the HIPAA, including those provisions listed below, as soon as possible. Providence may use and disclose Protected Health Information when necessary for Providence's proper management and administration (if such use or disclosure is necessary), or to carry out Providence's specific legal responsibilities pursuant to this Agreement. Specifically, Providence agrees as follows: (1) to maintain safeguards as necessary to ensure that the Protected Health Information is not used or disclosed except as provided herein; (2) to mitigate, if possible, any harmful effect known to Providence of a use or disclosure of Protected ~. Health Information by Providence; (3) to ensure that any subcontractors or agents to whom it provides Protected Health Information will agree to the same restrictions and conditions that apply with respect to such information; (4) to make available respective internal practices, books and records relating to the use and disclosure of Protected Health Information to the Department of Health and Human Services or its agents; (5) to incorporate any amendments or corrections to Protected Health Information when notified that the information is inaccurate or incomplete; (6) to return or destroy all Protected Health Information that Providence still maintains in any form and not to retain any such Protected Health Information in any form upon termination or expiration of this Agreement, if feasible or, if not feasible, Providence agrees to limit any uses of Protected Health Information after this Agreement's termination or expiration to those specific uses or disclosures that make it necessary for Providence to retain the information; (7) to ensure applicable policies are in place for providing access to Protected Health Information to the subject of that information; (8) if requested by the City, report to City any use or disclosure of Protected Health Information which is not provided for in the Agreement; and (9) to make Protected Health Information and an accounting of disclosures available to the individual who is the subject of the information or to City, to the extent required by HIPAA. Breach of this section shall be considered material. 29. Access to Books and Records Pursuant to 42 U.S.C. Section 13995x(v) (1), until the expiration of four (4) years after the furnishing of services under this Agreement, Providence shall make available, upon written request by the Comptroller of the United States Department of Health and Human Services, or upon request by the Comptroller General of the United States General Accounting Office, or any of their duly authorized representatives, including the City a copy of this Agreement and such books, documents and records as are (~ necessary to certify the nature and extent of the services furnished by Providence under this Agreement. If Providence carries out any of its duties under this Agreement through a subcontract, with a value or cost of ten thousand dollars ($10,000} or more over a twelve (12) month period, with a related organization of Providence, such subcontract shall contain a clause to the effect that until the expiration of four (4} years after the furnishing of such services pursuant to such subcontract, the related organiza#ion shalt make available, upon written request by the Secretary of the United States Department of Health and Human Services or upon request by the Comptroller General of the United States General Accounting Office, or any of their duly authorized representatives, including the City a copy of such subcontract and such books, documents and records as are necessary to verify the nature and extent of such costs. 30. Miscellaneous. (a) This Agreement constitutes the entire agreement between the parties with respect to the Property and operation of PSMCC. Any prior representations and agreements are of no effect except to the extent provisions of the Prior Agreement survive termination by its terms. No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the City or Providence unless reduced to writing and executed by the parties. (b) This Agreement shall be governed by and construed in accordance with the {aws of the State of Alaska, and venue for all disputes shalt be in Anchorage, Alaska. (c) If any term, covenant or condition of this Agreement, or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder _ nn ~~ of this Agreement, or the application of such term, covenant or condition to other persons and circumstances shall be valid and enforceable to the fullest extent permitted by law. (d) The terms, covenants and conditions hereof shall be binding upon and shall insure to the benefit of the parties hereto and their respective legal representatives, successors and assigns. (e) One City resident will be eligible to participate as a voting member on the Providence Alaska Region Community Ministry Board which will vote on the operations of PSMCC. (f) Nothing in this Agreement expressed or implied is intended or shall be construed to confer upon any person, firm, or corporation, other than the parties hereto, any right, remedy or claim, legal or equitable, under or by reason of this Agreement, this Agreement being intended to be and being for the sole and exclusive benefit of the parties hereto. (g) Nothing in this Agreement, and no performance of either party hereunder shall cause the relationship of the parties to be that of principal and agent, partners, or joint venturers, or cause the parties to be associated in any manner other than as independent contractors. (hJ The parties to this Agreement will perform their obligations hereunder consistent with applicable federal, sta#e and loco{ laws. -~ r~ IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized represen#atives as of the dates set forth below. SIGNATURES: PROVIDENCE HEALTH AND SERVICES -WASHINGTON d/b/a Providence Heat#h and Services Alaska By: Its: Date: CITY OF SEWARD By: City Manager Date: ATTEST: Jean Lewis City Clerk (City seal) t~ City of Seward, Alaska City Council Minutes May 27, 2008 Volume 37, Page CALL TO ORDER The May 27, 2008 regular meeting of the Seward City Council was called to order at 7:00 p.m. by Mayor Clark Corbridge. OPENING CEREMONY City Manager Phillip Oates led the pledge of allegiance to the flag ROLL CALL There were present: Clark Corbridge presiding and Linda Amberg Willard Dunham Bob Valdatta _. Tom Smith Betsy Kellar Jean Bardarson comprising a quorum of the Council; and Phillip Oates, City Manager Jean Lewis, City Clerk ABSENT -None CITIZENS' COMMENTS :ON ANY SUBJECT EXCEPT THOSE ITEMS SCHEDULED FOR PUBLIC HEARING Jolund Luther, requested to be re=appointed on the Historic Preservation Commission. He was happy to serve. and felt there was still unfinished business that he wished to resolve. John French also wished fcr reappointment to the Historic Preservation Commission and looked fa°w,ard to working with the -Commission again. APPROVAL OF AGENDA AND CONSENT AGENDA Motion (Bardarson/Dunham) Approval of Agenda and Consent Agenda Motion Passed Unanimous The following was removed from the consent agenda: Approval of The Apri128, 2008 and May 12, 2008 regular city council meeting minutes and the May 8, 2008 special city council meeting minutes. The clerk read the following approved consent agenda items: ~= r, Ciry of Seward, Alaska City Council Minutes May 27, 2008 Volume 37, Page John French and Jolund Luther were re-appointed to the Historic Preservation Commission with terms to expire in May, 2011. Non Code Ordinance 2008-015, Appropriating Funds To Make Expenditures Which Could Influence The Outcome Of An Election Concerning A Ballot Proposition Addressing A Biennial Budget In An Amount Not To Exceed $1,500. (Introduced and set for public hearing and enactment June 9, 2D08) Resolution 2008-044, Authorizing Payment To The Alaska Railroad- In The Amount Of $11,633.00 As Lease For A Portion Of The Transmission Line From ARRC Mile Post 23 To 23.75. Resolution 2008-047, Authorizing Change Order #7 To The Coil,- 4act With ;M. J. Nelson And ~, Associates For Engineering And Consulting Services On The ~Ja Lanese Creek Levee For An Amount Not To Exceed $35,241, And Appropriating Fuds. SPECIAL ORDERS, PRESENTATIONS AND RER(3RTS Proclamations and Awards A Certificate was read for Sergeant Bob Lockeby as the Spring Creek Correctional Center Employee of the Year. City Manager's Report. City Manager„Phillip dates stated the past weeks were busy ones, with attending the Chamber Luncheon, Alaska Railroad Board Meeting, meeting with the Alaska Workforce Investment Board; ribbon cutting. ceremony for the PARKS playground, and groundbreaking cereme-ny.fortheLong.-Term Care Facility. The status of state funding received and items vetoed by the Governor were as f~csllov~r : , Vetoe~d:~,.. .,~-`~ . CruT~e ship head tax money for dredging-------------------$4.5 million Utility infrastructure`for the Long-Term Care Facility----$400,000 $SOOK of the $1 mill~r~ for stabilization of the Jesse Lee Home Approved $2 million --------purchase of electric generator as part of the Railbelt Energy Funding. $500,000-----==----stabilization of the Jesse Lee Home $61,000-------------repairs to the fish ditch $195,000------------pavilion $1.7 million--------construction of the North Forest Acres Levee In addition, other agencies that received funding were: $8.9 million for the AVTEC Culinary Arts Building w City of Seward, Alaska City Council Minutes May 27, 2008 Volume 37, Page $3.2 million for DOT/PF Maintenance Station $68,000 for shellfish hatchery - Harbor. In-water dredging for the I&T dock construction project was completed on May 22, 2008. The few components that remained to be completed were the travelift refit and D-1 fill, electrical work and final placement of dredged material. The harbor staff discovered twenty four 55-gallon drums of material illegally dumped in the vicinity of mile 3 of Nash Road. An environmental cleanup was being facilitated and a $5,000 reward was being offered that would lead to the ar~e~t and conviction of the responsible individuals}. - Community Development. The re-write of Title 15 -was c~~itinuing with the first section being submitted to the Seward Planning & Zoning Cont~ssion for review. Building inspection and permitting had increased; ~and`an Amenc`~an. sub~~diary of a Chinese company had expressed interest m~leasing land at SMIC for staging scrap steel for export. - Jesse Lee Home. The RFP had been advertised''`and five potential proposers had expressed interest. As a result of requests for:extensions, the deadline had been extended to June 3, 2008. - Other. AVTEC Second Avenue ro _ ert ne oti~:tions were nearin com letion. P P yk. g g P This agreement would give the City guaran~eedfiaccess to the First Avenue parking lot at Two Lakes Park, and the city hall sidewalks were in the process of being repaired. Seward Planning, and Zoning. Commission Report. Chair Marianna Keil stated they had a meeting with the Historic Preservation Comnsson and were exploring the idea of a historic district in downtown. It would be nice to have>some facades on downtown buildings reinstalled. Tax incentives were di scussed':for business owners to buy into this district. Representative Seaton contacted Kevin Lyons .from the $oxough, and the Seward/Bear Creek Area Flood Board helped on some recent flooding issues. outside city'limits. Other Reports, Special Presentations An AuditPresentation was given by John Sost of Mikunda, Cottrell. A Joint Actin Agency Presentation was given by Jim Posey of ML&P. PUBLIC HEARINGS -None UNFINISHED BUSINESS Motion to Reconsider (Ke1larBardarson} Reconsider Ordinance 2008-011 Kellar thought it was in the best interest to pass the fire code. She originally had heartburn u=~ 4 ~~."+ City of Seward, Alaska City Council Minutes May 27, 2008 Volume 37, Page on some of the language. Motion to Reconsider Passed Unanimous Ordinance 2008-011, Amending Seward City Code, Chapter 9.15, Health And Safety, Adopting The 2006 Edition Of The International Fire Code (IFC), Including Revisions. Motion (Bardarson/Kellar) Enact Ordinance 2008-011 (Previous motion made at the May 12, 2008 meeting) Kellar again was not happy with the wording going from "will"; o `shall", even though she appreciated the need for house numbers. Oates said the city had discretion in this area. He defined `shad" as a requirement, "may" as discretionary, and "will" as somewhere in between. Fire Chief David Squires partly agreed with;,. Kellar because "shall" meant the fire department had to enforce. Motion Passed Yes: Bardarson, Smith, Valdatta, Dunham, Amberg, Corbridge No: Kellar NEW BUSINESS Resolutions Resolution 2008-045, 'Authorizing The City Manager To Pay A Deposit To Valley Power Systems, Inc. Toward The Purchase Of One (1) Rebuilt EMD Generator Set, Rated At 2865KWE, For An Ai~',ount Not To Exceed $112,500.00. Motion :(Bardarson/Amberg j Approve Resolution 2008-045 Electric Utility Manager Tim Barnum presented this resolution as a deposit instead of a purchase because lie was note sure whether the state would fund the generators. Barnum stated the proposals came back over $9 million. $7.5 million was budgeted for the generator and the warehouse. He was hoping to meet with the successful proposer and get the prices down enough to do the entire project. The City also needed automation and switch gears, and other items to improve the power quality of operating the generators. 42 weeks had been quoted for delivery on switch gear which affected the timeline for the project. Barnum thought the switch gear would also need a deposit. The deposit would hold the unit. This unit was in the price range the city needed. Barnum stated this generator matched the F~ City of Seward, Alaska City Council Minutes May 27, 2008 Volume 37, Pa e efficiency of the generators the city already had. Anew generator with no support systems went for $2 million dollars but would be more efficient. Motion Passed Unanimous Resolution 2008-046 Authorizing The City Manager To Pursue Environmental Permits For The North Forest Acres Levee/Road Project, In Accordance With The Alignment Contained On The Attached Map And To Negotiate The Acquisition Of Easements, Rights-Of-Way, And/Or Property Necessary For The Project. Motion (Bardarson/Smith) Approve Resolution 2008-046 Oates stated in 2004, the council pursued a supplemental ali=gnment of tflevee. He stressed the City needed the alignment revised again. Oates stated FEM~~ac~~VRCS wan~~as much of the floodplain saved as possible, and thought NRCS funding would be lost if they did,.`~get agency approval by this fall He noted with $1.7 million of state funding,,- e city had $4 2~ ullion for the project. This new alignment further south was supported by DOT~a~impacted the land to the east. t ;v The city would need property and right-of--way purchases from `the owners. Oates recommended approval, because without it, the project was over and there would not be a North Forest Acres Levee road. Dunham said this was a bitter pill to swall"ow and realized they had to have this, but thought this was petty blackmail by the bureaucrats. Smith concurred with~`Dunhatn. ,Y-: , Oates also agreed,: but it had come down to a levee or no levee. Motion Passed Yes: Amberg, Bardarson, Kellar, Valdatta, Corbridge No: Dunham, Smith Resolution X08-048, Autl~zing The City Manager To Make The Following Personnel Ad'ustments: ~ ~; eclassify The Planning Executive Assistant From A Range (12-14) To A Range (17-19) And Cha~iry. The~°Title To Associate Planner; Eliminate The Engineering Executive ~;.: , Assistant (Range (tclh5~. And Establish A New Position Titled Contract Administrator (Range 18-20); And Establish A New Position Titled Building And Community Development Administrative Assistant (Range 8-10). Motion (Bardarson/Smith) Approve Resolution 2008-048 Oates said this was not an increase in positions and would save money in salaries. The Planner and Staff engineer were the positions left unfilled. By not filling those positions, Oates was proposing an Associate Planner, Administrative Assistant and a Contract Admnustrator. This saved ~~ City of Seward, Alaska City Council Minutes May 27, 2008 Volume 37, Page over $3,000 a year and had the potential to save in legal staff on contract work. Oates could not afford to wait for the efficiency study by John Bird at the end of the summer. Some members of council voiced concerns with the $50 million dollars of projects moving forward, sustainability of these positions in the future, and lack of engineering ability on staff. Oates was aware the city needed a public works engineer, but noted most projects would come with their own project managers. Motion Passed Council Recessed at 8:40 p.m. Council Reconvened at 8:45 p.m. Other New Business Items Unanimous The Approval Of The Apri128, 2008 And May 12, 2008 RegularCity Council Meeting Minutes And The May 8, 2008 Special City Council Meeting 1Viinutes. Motion (Bardarson/Dunham) Approve The. Apr128, 2008 And May 12, 200f3 regular City Council Meeting Minutes And`~he May 8, 2008 Special City (,ouncil Meeting Minutes. Kellar wanted everyone to know that ethics and honesty were important to her, and she disagreed with the minutes because recess required a second and a vote and they were missing from the minutes. She thought accuracy was critical, but suggested the minutes be changed to reflect that Mayor Corbridge unilaterally recessed-the meeting to the following day, or table the approval until each council member provided ar affidavit on how they voted, so the voting record could become part of the city's' historical voting record. Amendments (Valdatta & Dunham) Clarify the types of ships on pages 58 & 68 - and add Vice-Mayor Durham's name to the reported material under the City Manager Report. Amendments Passed' General Consent Dunham understood that Ms. Kellar was upset, but city code required council to end at 11:00 p.m. The Mayor had to declare adjournment or recess to another time. You could not vote after the meeting was closed. Dunham felt this was handled correctly and he would have done the exact same thing as the Mayor, had he controlled the gavel. He believed the procedure followed was correct. Kellar felt that the situation that occurred that night, code dictated that the meeting end and any unfinished business went to the next regular scheduled meeting. City of Seward, Alaska City Council Minutes May 27, 2008 Volume 37, Page City Clerk Jean Lewis stated she saw no wrongdoing over the procedure used on Apri128, 2008 and no violation of the Open Meetings Act. Going past 11:00 p.m. would have violated city procedure. Time ran out and the motion to recess or adjourn took precedence over all other motions. She felt the minutes accurately reflected what was done that night. Kellar again suggested the minutes be changed to reflect the Mayor unilaterally recessed the meeting and continued it to the following day, or table approval of the minutes until each council member submit an affidavit on how they voted so this can become part of the city historical voting record. In response to suggestions by Ms. Kellar, Mayor Corbndge re=iterated he needed an amendment not suggestions. Motion to Amend (Kellar/Dunham) On tie last page of the A~iril 28, 2008 minutes, onh~,the second paragraph, last sentence, a~l't~e-~r Mayor Corbridge, add: "unilaxerally recessed the meeting and continued it the following day at 8:00 a.m. on Tuesday;.: April 29, 2008: ' Dunham thought Ms. Kellar had every right to bring this amendment to the floor for discussion, but he did not agree with it. The minutes should stand as they were because they were correct and accurately reflected what happened= Amberg agreed with Dunham: Bardarson disagreed with the word "unilaterally" being added, because she remembered the brief discussion on who could and- could not appear, and she had stated she could appear at 8:00 in the morning. Motion „to..~mend Failed 6=1 Yes: Kellar No: Smith, Amberg, Dunham, Valdatta, Bardarson, Corbridge Main Motion as Amended Passed Yes: Smith, Amberg, Dunham, Valdatta, Bardarson, Corbridge No: Kellar A Joint Work Session To Discuss PACAB Priorities Was Postponed And Put On The Agenda For June 9, 2008. INFORMATIONAL ITEMS AND REPORTS (No action required April City Financial Report. City of Seward, Alaska City Council Minutes May 27, 2008 Volume 37, Page COUNCIL COMMENTS Kellar thanked the Police department for their DARE program. It was important for the youth to have positive role models. She also thanked the PARKS project volunteers. Bardarson also thanked the PARKS project volunteers. Dunham thought this past week was one of the busiest for the City of Seward. Dunham saw the semi that rolled over with urea nitrates on the Kenai Peninsula this past weekend and he thought it was time the peninsula cities should band together to get the road re~,aed. He noted over 50 tankers a day ran over that road. He noticed that 5oldotna gave $20,00(~~ year in scholarships and thought the city should think about doing something similar and he commended Soldotna. Dunham wanted the crew to conduct pothole repair. Dunham attended the World. -Trade Banquet in Anchorage, and listened to the Governor speak and Senator Stevens' long speech on energy. Senator Stevens stated federal dollars would come in and protects needed to be put together. He complimented the Governor for paying utilities to reduce the cost of energy. Dunham thought the city was fortunate to receive $2 million from the railbelt ~nergv funding. Smith supported council member Dunham on his continents of the Sterling highway being deadly. Same frost heaves and dips for 20 years and he also thought~it was time something was done. Corbridge wanted names recommended to the Borough Mayor for appointment to the Kenai Peninsula Borough Planning Commission. He wanted an agenda item for the Joint Action agency. He supported Dunham on the scholarship goals. I-Ie also thought a letter of support for Governor Palin on her energy support program would be appropriate. Smith and Amberg. were both impressed by the amount of community support for scholarships and did not want to take away from that. CITIZEN COMMENTS iViair~ranna Keil, thought since the City was in such good financial shape she did not think the sales tax cap iicrease should`tie passed. She thought the petition had enough signatures to turn in, and she urged the council to rescind that. She thanked the council for their time and work. COUNCIL AND ADMINISTRATION RESPONSE TO CITIZENS' COMMENTS Kellar thanked Keil fox her comments and for staying for the entire meeting. Smith thought people should think about the fact Seward could be a disaster prone community, and the City only had two months of operating funds in reserves. This was an item that needed to be addressed. ~~ City of Seward, Alaska City Council Minutes May 27, 2008 Volume 37, Page ADJOURNMENT The meeting was adjourned at 9:30 p.m. ~~ Memorandum Date: June 9, 2008 To: Mayor Corbridge, City Council Members „~,... From: Jean Lewis, City Clerl~~ ~~~~ Subj: Submission of Sue McClure to represent the City on the Kenai Peninsula Borough Planning Commission Attached is a letter from Kenai Peninsula Borough Mayor John Williams, asking for a list of recommendations to fill the City of Seward's representative seat on the Kenai Peninsula Borough Planning Commission. Also attached is a draft letter for Mayor Corbridge to sign recommending the appointment of Sue McClure. Per an email by Mayor Clark Corbridge, Sue McClure has volunteered to serve on this Commission. Ms. McClure is a qualified voter of the Borough and resides within the City of Seward. Sue is also a member of the Seward Planning & Zoning Commission. By approving this recommendation on the consent agenda, the drafted letter will be sent to the Kenai Peninsula Borough Mayor's office for final appointment and confirmation by the Borough Assembly the first part of July. ~~ ?,..:.~ Jl~U1'91 RA m ~1\~~fJ~~A ~LJ 1'6~~v~ :`` 1~LA~T~II1~~ C~MMI~SI~l_~ .~.:~PLIC.~'~I®1~1 ~~ 3~ . Please print or type this form and attach a resume, or send a letter of application by mail, fax, or email to: Mayor John Williams Kenai Peninsula Borough 144 North Binkley Street Soldotna, A.Iaska 99669-7599 fax - 907-262-8616 hrinvP~n;~nrn»srh_kPnai ~k_t~s ~~ .~~~ ~ ~ 2008 ~~~ ~%~~ Name: ~ ~E ~1~~ C ~~ c-e Mailin Address: '~'~} ~ ~ k "~lv ~ ~ ~c~ ~~ ~ ~ ~ ~~ ~ ~ `~- Ph sical Address: o`~ ~ i e ~E ~' ~ lei bra ~ ~ ..~;-u. ~ ~~ Home Phone: (~ca~ -- ~ W$~ ~~,~ 2~Gt- E>7~~- ~ Phone: ~L~~ -`.~t7 -~+-C~~~ ~ Fax: I Email Address: ~ u~ "t1t~~;C,~ i ~~;, ~~rn Which Plannin Commission district are you a lyin for: }~ 6. East Feninsula ^ 10. Kalifornsk Beach ^ 7. Southwest Borou h ^ 11. Rid eway ^ $. Anchor Point/Ninilchik ^ 12. Sterlin O 9. Kasilof/Clam Gulch ^ 13. Northwest Borough I How lon have ou lived in the Borou h? ~ I ~1~~ Qecu ation or lace of em Ioyrnent: i ~'$~ r~.d What knowledge, ex erience, or ex er tise will you brin to the Commission? ;~ ~ +!~_LtivTw~ ~~Y~ CTTi~E e~ j '`~ l~s~~J{~ j ~ ~S~I i y~~ q "~ i ~.lJ il'~ ~` `~a ~"C~ . I I What are the land use and larLning issue s in the Kenai Peninsula Borou h? r ~~tL~1 ~~ ~ ~j ~i ~ ~ i L~~.-4 ~~ ~zz i ~" c~L vz- fr ~ ~. ~ V ~ ~ t i ` I What would ou like to see done with Borough owned lands? ~~ 1 I httn://www.borou~h.kenai. ak.us/planningdept/Pi annComm/pcapp.htm ~I 1,~8i200o' ~ Have you, or do ou currentl ,serve on other Kenai Peninsula 3orou h commissions, boards, or task forces? ~~ ' 1 I I rom.~nents: areas of interest, additional e~ erience, or ualifications) i ~ ~ Are you available for ni ht meetin s? ~? S~ Are you available for daytime meetin s? ~ ' ' 1 axrz a qualii~ed voter in the Kenai Peninsula borough, and I reside within the boundaries of the Kenai Peninsula. Borough. Signature: ~ ~ - ~ Date: ~,-~ ~ - ~'? ~; "~ t~1-rn-!iu,,x;w hc,rc~u~h_kenai.ak.uslplanninadeptiFlarinCoznm/pcapp.htm 1 l; 8/2006 ~~~ :~ '~~ ,.'~~ ~`~ a u t M fi ~ ~ k. ~ e4 • S' ~~1 `~ !!~ ' ~ ~t44 IV. BINKLEY • 50LD0~'NA, ALASKA, • 99669-?S2t} BUSINESS (907) 26~~4441 FAX (9D7) 262-169 Ja~11V J. WILUAtVI~ MA~fl~ May 19, 200$ The ~Io~aorablc Clark Corbxidge May®r, City ®f ~e~vard P~ Box 167 Ser~ard, Alaska 9964 Dear May®~ C®rbrielge° The Cif ®f 5e~ard. repxesex~tativ~. seat on the Kenai. Peninsula, Bnro~agh Plar.~ing ~ona.~ni~sion has been vacant for apprc~~rirnately eigl~t ~no~~,ths, and needs t® be filled. The current term expires on July 31, 200$. Txi accordance ~ifih A~ 29.40.C20, ~,ppointznents to the ~®r®ugh Plax~ing Co~nflssiao. are made by the ~arougt~ Mayor. Con~~~issiora. ~etnbers fr®m ~x hom.c rule city s1aa11 be seleeted by the l~oraugh Mayor from a lest ®f rec~~~runendations st~binitted by the pity Counci.I. ~ ~otild apprecaate a, list of canclit~.ates to fill the vacancy for this post. T'l~is appoint,~ent is for a 9;hree--year term that expzres on T~.d.y 3 1, 2011. Caa~..didates r~aust be qualified. ~roters of the l~arot~gh rho reside Within ~.e pity. rt ~~r®uId bo most hclpfi~l if I could receirre y®ur suggestio~as by Ju~.e 20, 200$. Assembly c®~firlnatTOr~ of app®h~.tgncnts fio fh.e Pl~.r~.ing Co~nmissi®n is tenta~tivel~r schedt~.ed ~®r ~'~zly $. Thank y®u fQr y®ur participatia~~ i,r~ this matter. Sincerely, ~- e ,To n ,T. ~If lli~ns Kenai Peni~.st~ta Borough Mayaa° 3~lllh cc: Phalip Bryson, Pla~i~.g Coznmis5io~n Chair T~'1~ ~'lanrging I~~partment Seward Cif Clerk ~ pia, fax 224-4(~ ~ ~~ ~~ ~tnn~ ~w+yh~SS~t~ K ~ r City of Seward, Alaska City of Seward 1963 1965 2005 P.O. Box 167 ~~ Seward, Alaska 99664-0167 AII~Ameriea City Main Office (907) 224-4050 t Facsimile (907) 224-4038. June 10, 2008 Kenai Peninsula Borough Office of the Borough Mayor 144 N. Binkley Soldotna, Alaska 99669 -~ Dear Mayor Williams: ~ g The City of Seward is pleased to recommen Su cClure c~ be the city's ~„ resentative on the Kenai Peninsula Borough Planning Commiss n. I~1s.1V~cClure is a qualified voter of the Borough who resides within= .he City of Sewa,, Ms. McClure also is on our Seward Planning & Zoning Commi ': ..and should bear-a_ excellent addition to this Commission. We understand that this a~pointrnent is for a three~~r_tei-m that expires on July 31, 2011. Please submit oar recc~z~~Tnendation 'to the Boroh Assembly for confirmation at your earliest conve~uence. S-ia~cze1~, Clark Corbridge Mayor of the City of Seward a C.~ 5121 /2008 Run Date - 5/21/08 Q 12:35 PM Providence Health 8~ Services 110 - MGD - PROV SEWARD MED CTR Detail Statement of Operations (in Thousands) Reported as of Apri12008 Variance Actual MTD Budget MTD MTD 48 91 (47.3%) 459 433 6.0% 122 121 0.8% 495 531 (6.8%) 20 18 11.1% 1,144 1,194 (4.2% 25 18 (38.9%) 133 179 25.7% 5 3 (66.7%) 47 41 (14.6%) 210 241 12.9% 934 953 (2.0%) 27 15 80.0% 961 968 (0.7%) 553 559 1.1 155 169 8.3°h 34 - - 63 49 (28.6%) 195 160 (21.9%) 2 28 92.9% 1 10 90.0% 50 56 10.7% 36 36 - 1,089 1,067 (2.1%) 1,089 1,067 (2.1°k) (128) {99J (29.3°k) (128) (99) (29.3°~) Gross Service Revenues: Acute Care-Inpatient Acute Care-Outpatient Primary Care Long-term Care Homecare & Hospice Housing & Assist. Living Total Gross Service Revenues Revenue Deductions: Charity Care Medicaid Charity Medicare ~ Medicaid Negotiated Contracts Other Total Deductions Net Service Revenue Premium Revenue Rental and Education Revenue Other Operating Revenue Total Net Operating Revenues Expenses from Operations: Purchased and Healthcare Expenses Other Expenses from Operations: Salaries & Wages Employee Benefits Professional Fees Supplies Purchased Service Depreciation Interest and Amortization Bad Debts Healthcare Taxes Other Expenses Total Other Exp from Operations Total Operating Expenses Excess of Rev Over Exp from OPS Non-Operating Gain (Loss) Excess of Revenues Over Expenses Other Activity-Unrestricted Increase (Decrease) in UR Net Assets °~ Variance Last Year °~ Variance Actual YTD Budget YTD YTD Actual YTD YTD 192 457 (58.0%) 468 (59.0%) 1,572 1,599 (1.7°k) 1,654 (5.0%) 444 489 (9.2%) 420 5.7% 1,948 2,122 (8.2%) 1,968 (1.0%) 60 72 (16.7%) 47 27.7% 4,216 4,739 (11.0%) 4,557 (7.5%) 101 94 (7.4%) 75 (34.7%) 545 686 20.6% 524 (4.0%) 15 14 (7.1%) 13 (15.4°~) 165 165 - 185 10.8°~ 826 959 13.9% 797 (3.6Ye) 3,390 3,780 (10.3%) 3,760 (9.8%) 68 61 11.5% 67 1.5% 3,458 3,841 (10.0%) 3,827 (9.6%) 2,114 2,243 5.8% 2,071 (2.1%) 652 677 3.7% 580 (12.4%) 34 - - - - 209 193 (8.3%) 202 (3.5%) 767 633 (21.2%) 689 (11.3%) 7 116 94.0% 135 94.8% 3 41 92.7% - - 241 228 (5.7%) 263 8.4% 176 145 (21.4%) 142 (23.9%) 4,203 4,276 1.7°~ 4,082 (3.0%) 4,203 4,276 1.7% 4,082 (3.0%) (745) (435) (71.3°~) (255) (192.2%) - 1 - 1 - (745) (434) (71.7%) (254) (793.3°/i) 1 5,340 (100.0%) 1744) 5,086 1114.6yi 12:35 PM DET OPS 12:35 PM BAL_SHT 5l21t2008 Run pate - 5121108 @ 12:35 PM PRELIM - providence Health & Services pROV SEWp-RD NiED C'TR 110 - MGD - ,n Thousands) Balance Sheet ( ril 2008 Reported as of Ap Apri12008 December 2007 last Year Actual __.~-------'" ASSETS sets: urrent As CashC ~ Squivalents System Pooled Cash Temporary investments Assets Held Under Securities Lending Accounts Receivable, Net Affiliate ReCeivablable Premiums abies Other Re at Cost Supplies inventory Other CurrentoAf Assets-Use is LTD Current Part• Total Current Assets Use i imit : As is Whose Board Des~9nated Cash a Pu poses en s Funds Held fond 7r~t ~ ^ds Gift Annuity b Trustees to Use Funds Held Y Non.Current Assets Limited as E w meat: Pro Plant & --~Pment Gross PropertY~ Plant & q cumulated Depreciatwn Less: Ac plant ~ Equipment Net Property. hpt e~ - Cost Unamor{1zed F-nancing ivable interaffiliate No~9 tern investments) Other (Inc1• Total Other Assets Total Assets December 2007 Apri12008 Last Year Actual 287 30 1,449 1,581- - 128 122 53 39 - - ~17 1__ 7-~- _~-'" 38 163 L1Ag-LITiES ~ NET ASSETS C rrent Liabiiitabie AccountsCompensation Accrued Affiliates PaYabte envies payable to Contractual A9 Deferred Revena d Medical C aims~ums Liability for Unp Liability for Risk-Sharing Liabilities Under Securities Lending Other Current L~ab-pties ShortTerm petit Current Portion of Long-Terra Debt Total Current Uabiiitles 38 163 107 107 11 18 gs 0 4 -_~` Term Debt: Lon - Master TrustA a ates Loans from Other Lang Term Debt Other Long-Term Liabilities Total Liabilities N t Asset Unrestricted Restricted Temporarily Permanently Restn~ed Total Net Assets Total Liabilities and Net Assets 213 97 g~ 847 289 256 - 826 1,361- ' ----_~-1,9 2,x+1 137 257 2,101 2,818 (50) (794? - 50 7s$ Nanci Richey 1 6/4/206. ~08 PM ~OO~ July 2008 August 2008 y S M T W T F ,S S M T VV T F S 1 2 '3 4 5 1 2 6 7 ''$ 9 10 11 12 3 4 5' 6 7...8..9 ', 13 14 15 16 17 18 19 10 11 12 13' 14 15 16 - 20212223242526 17181920212223 27 28 29 30 31 24 25 26 27 28 29 30 31 Monda Tuesda Wednesda Thursda Friday -- - July 1 ---- 2 ' 3 _ - 7:30pm P&Z Meeting 12:OOpm PACAB Meeting - ~~sc~~,,. _ 7 g -- -- g 1O - - 1 _ _ _ 141 15 ~~~ ~~ 1 " ~ 17 1.. - 7:00 m Ci Council ~ p ty Meeting 6; 3Qp~n ~ ~ `~ ~ 12:OOpm ~ 9:OOam Social Security Rep 6:30pm Historic Preservation Meeting 21 ---- -- 22 -- 23 - 24 -_- - -- 2 - 28 29 _- 3D; 31 __ _ ' - 7:OOpm City Council _ _ -- -- Meeting Nand Richey 2 6/4/2008~:~ PM