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11/07/2006 - Minutes (2) PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH WORK SESSION TUESDAY, NOVEMBER 7 , 2006 The City Council of Salt Lake City, Utah, met in a Work Session on Tuesday, November 7, 2006, at 5 : 30 p.m. in Room 326, City Council Office, City County Building, 451 South State Street. In Attendance : Council Members Carlton Christensen, Van Turner, Eric Jergensen, Nancy Saxton, Jill Remington Love, Dave Buhler and Soren Simonsen. Also in Attendance : Cindy Gust-Jenson, Executive Council Director; Mayor Ross C. "Rocky" Anderson; Kay Christensen, Budget Analyst; Steve Fawcett, Management Services Deputy Director; LuAnn Clark, Housing and Neighborhood Development Director; Sherrie Collins, HAND Special Project Grants Monitoring Specialist; Gordon Hoskins, Chief Financial Officer; Sam Guevara, Mayor' s Chief of Staff; Rick Graham, Public Services Director; Russell Weeks, Council Policy Analyst; Sylvia Richards, Council Research and Policy Analyst/Constituent Liaison; Vicki Pacheco, Council Staff Assistant; Louis Zunguze, Community Development Director; Edwin Rutan, City Attorney; Jennifer Bruno, Council Policy Analyst; Tim Harpst, Transportation Director; Boyd Ferguson, Senior City Attorney; Janice Jardine, Council Land Use Policy Analyst; Greg Davis, Finance Director; D. J. Baxter, Mayor' s Senior Advisor; Dan Mule' , City Treasurer; Tom Berggren, Legal Counsel of Jones, Waldo, Holbrook and McDonough; Ralph Jackson, Mike Allegra and Steve Meyer, Utah Transit Authority; Carla Wiese and Andrew Wallace, Downtown Alliance; and Beverly Jones, Deputy City Recorder. Councilmember Buhler presided at and conducted the meeting. The meeting was called to order at 5 : 36 p.m. AGENDA ITEMS #1 . 5 : 36 : 08 PM INTERVIEW JERRY STANGER PRIOR TO CONSIDERATION OF HIS APPOINTMENT TO HOUSING ADVISORY AND APPEALS BOARD . Councilmember Buhler said Mr. Stanger' s name would be forwarded to the Consent Agenda for approval . #2 . 5:37 : 30 PM INTERVIEW J. SHAWN FOSTER PRIOR TO CONSIDERATION OF HIS APPOINTMENT TO THE COMMUNITY DEVELOPMENT ADVISORY COMMITTEE. (Note : THIS BOARD IS PROPOSED TO BE RENAMED THE COMMUNITY DEVELOPMENT AND CAPITAL IMPROVEMENT PROGRAMS ADVISORY BOARD) Councilmember Buhler said Mr. Foster' s name would be forwarded to the Consent Agenda for approval . #3 . 5: 46:27 PM RECEIVE A BRIEFING REGARDING AN ORDINANCE TO WAIVE PARKING METER FEES FOR UP TO TWO-HOURS FROM THANKSGIVING DAY, NOVEMBER 23 , 2006 THROUGH MONDAY, JANUARY 1 , 2007 . View Attachments 06 - 1 PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH WORK SESSION TUESDAY, NOVEMBER 7 , 2006 Tim Harpst, Russell Weeks, Carla Wiese and Andrew Wallace briefed the Council from the attached handouts . #4 . 5 : 51 : 33 PM RECEIVE A BRIEFING REGARDING AN ORDINANCE CREATING THE COMMUNITY DEVELOPMENT AND CAPITAL IMPROVEMENT PROGRAMS ADVISORY BOARD (CDCIPAB) WHICH WILL PERFORM THE DUTIES OF BOTH THE CAPITAL IMPROVEMENT PROGRAM CITIZEN BOARD AND COMMUNITY DEVELOPMENT ADVISORY COMMITTEE . View Attachments Jennifer Bruno and LuAnn Clark briefed the Council from the attached handouts . #5 . 6 : 12 : 58 PM RECEIVE A FOLLOW-UP BRIEFING REGARDING THE SORENSON UNITY CENTER CONSTRUCTION COSTS . View Attachments Rick Graham, Tom Berggren, Sylvia Richards, Jennifer Bruno and Gordon Hoskins briefed the Council from the attached handouts . Council Members were in favor of forwarding this item. #6 . RECEIVE A BRIEFING REGARDING THE SORENSON UNITY CENTER NEW MARKET TAX CREDITS . View Attachments Item Nos . 5 and 6 were briefed together . #7 . 6: 39: 17 PM RECEIVE A BRIEFING REGARDING A RESOLUTION TO AUTHORIZE THE MAYOR TO SIGN AND AMEND AN INTERLOCAL AGREEMENT RELATING TO THE UTAH TRANSIT AUTHORITY (UTA) TRAX EXTENSION TO THE INTERMODAL HUB. View Attachments D . J. Baxter, Russell Weeks, Ralph Jackson, Steve Meyer and Mike Allegra briefed the Council from the attached handouts . #8 . RECEIVE A BRIEFING REGARDING A PUBLIC BENEFIT STUDY RELATING TO THE UTA TRAX EXTENSION TO THE INTERMODAL HUB. View Attachments Item Nos . 7 and 8 were briefed together . 9 . 7 : 49 : 40 PM THE COUNCIL WILL CONSIDER A MOTION TO ENTER INTO EXECUTIVE SESSION FOR THE PURPOSE OF STRATEGY SESSION TO DISCUSS THE PURCHASE, EXCHANGE, OR LEASE OF REAL PROPERTY WHEN PUBLIC DISCUSSION OF THE TRANSACTION WOULD DISCLOSE THE APPRAISAL OR ESTIMATED VALUE OF THE PROPERTY UNDER CONSIDERATION OR PREVENT THE PUBLIC BODY FROM COMPLETING THE TRANSACTION ON THE BEST POSSIBLE TERMS, AND TO DISCUSS PENDING OR REASONABLY IMMINENT LITIGATION PURSUANT TO UTAH CODE ANNOTATED § § 52- 4-204 , 52-4-205 (1) (c) (d) AND ATTORNEY-CLIENT MATTERS THAT ARE PRIVILEGED PURSUANT TO UTAH CODE ANNOTATED § 78-24-8 . 06 - 2 PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH WORK SESSION TUESDAY, NOVEMBER 7, 2006 Councilmember Jergensen moved and Councilmember Saxton seconded to enter into Executive Session, which motion carried, all members voted aye . 10 . REPORT OF THE EXECUTIVE DIRECTOR INCLUDING A REVIEW OF COUNCIL INFORMATION ITEMS AND 7 :28 : 36 PM ANNOUNCEMENTS . No report was held. See File M 06-5 for announcements . The meeting adjourned at 7 : 50 p .m. Council Chair Chief Deputy City Recorder This document along with the digital recording constitute the official minutes for the City Council Work Session held November 7, 2006 . bj 06 - 3 Housing Advisory & Appeals Board - Appointment - Jerry Stanger INTRODUCTION: Mayor Anderson is recommending Jerry Stanger, a resident of District 5, to be appointed to the Housing Advisory 86 Appeals Board. If appointed he would serve a term through December 31, 2008 and will replace David Williams who has resigned. APPLICANT INFORMATION: Mr. Stanger is a small business owner of Ward 86 Child/The Garden Store and believes he would bring an objective and thoughtful voice to this board. Mr. Stanger is a Vest Pocket, Salt Lake Convention and Visitor Bureau, Red Butte Gardens and Lotusland member. He has served on the Salt Lake City Arts Council and the Arthritis Foundation Chairman Public Relations Committee. RESPONSE DEADLINE: If you have any objection to this appointment, please let Vicki know by 5:00 p.m. on Thursday September 21, 1006. CURRENT COMPOSITION OF HOUSING ADVISORY & APPEALS BOARD: Housing Advisory and Appeals Board is comprised of 10 members who, according to the Salt Lake City Code, are required to be City residents and selected "in a manner providing balanced geographical, professional, neighborhood and community representation." Housing Advisory and Appeals Board members include: Bryan R. Case, District 7; Billy Cruz, District 1; Samantha Francis, District 2; James Guilkey, District 6; Shirley McLaughlan, District 3; Bill Nighswonger, District 4; Robert Rendon, District 3; and Thomas Thorum, District 4. BOARD STRUCTURE: Housing Advisory and Appeals Board's mission is to interpret provisions of the Existing Residential Housing Code (ERHC); hear and decide ERHC appeals; modify the impact of specific provisions of ERHC where strict compliance with the provisions is economically or structurally impractical and any approved alternative substantially accomplishes the purpose and intent of the requirement deviated from; conduct housing impact and landscape hearings; recommend new procedures to the building official and new ordinances regarding housing to the Council; and conduct abatement hearings. Board Appointment: Community Development Advisory Committee J. Shawn Foster INTRODUCTION: Mayor Anderson is recommending that J. Shawn Foster, resident of District 5 be appointed to the Community Development Advisory Committee. If elected, Mr. Foster would serve a term extending through July 6, 2009 and will be replacing Jim Fisher whose term has expired. Mr. Fisher who is now the Liberty Wells Community Chair has recommended Mr. Foster for his replacement along with Council Member Jill Love. APPLICANT INFORMATION: J. Shawn Foster works as an attorney for the Law Offices of J. Shawn Foster and he believes that Community Development Block Grant's are a benefit to communities and enhances the quality of life. RESPONSE DEADLINE: If you have any objections to this appointment, please let Vicki know by 5:00 p.m. on Thursday, October 5, 2006. CURRENT COMPOSITION: The Salt Lake City Code requires at least one member to be appointed from each Council district. The Code states that "although members of the committee serve only in an advisory role, their involvement is necessary in order to obtain the opinions of those people who live and work in various neighborhoods to aid the city in identifying the needs within those areas, and projects to be completed with the city's community development funds." Current members are: Robert "Toby" Alires, District 2; Ronald Lee Bartee, District 7; Joana "Joey" Behrens, District l; Michael Bettin, District 4; Elmer Bullock, District 2; Arturo Gamonal, District 6; Ellie Muth, District 3, Samuel Straight, District 7; Gregory J. Valdez, District 7. BOARD STRUCTURE: CDAC, which can have a maximum of fifteen members, provides citizens an opportunity to participate in the City's planning and assessment of its community development program. CDAC makes recommendations to the Mayor regarding projects that should be completed with Community Development Block Grant funds, evaluates the effectiveness of CDBG program activities, and assures that CDBG goals are consistent with the housing assistance goals of the City. MEMORANDUM DATE: November 1, 2006 TO: City Council Members FROM: Russell Weeks RE: Request to Waive Parking Meter Fees During Holiday Season CC: Cindy Gust-Jenson,Rocky Fluhart, Louis Zunguze,Tim Harpst, Steve Fawcett, Gary Mumford, Larry Spendlove,Jennifer Bruno, Sylvia Richards,Robert Farrington This memorandum pertains to a proposed ordinance to waive parking meter fees in the City from November 23 (Thanksgiving Day)to January 1, 2007.The City Council is scheduled to consider the proposed ordinance on November 7. OPTIONS • Adopt the proposed ordinance. • Do not adopt the proposed ordinance. MOTIONS • I move that the City Council adopt the ordinance amending City Code Section 12.56.170 to waive parking meter fees during the winter holiday season. • I move that the City Council consider the next item on the agenda. KEY POINTS • The proposed ordinance would continue a City practice begun in 2003. • The Administration estimates that the City would lose about$100,000 in revenue from putting coins in meters and$50,000 in revenue from fines for parking-meter violations. • According to the Administration,the revenue loss was anticipated in preparing the current fiscal year's budget. It is considered a reduction of budgeted revenue. • The Administration estimates that the City operates about 2,150 parking meters. One-half or more of the meters are located in the Central Business District. Other areas with meters include 200 East Street, 1300 East Street near 100 South Street and Trolley Square. ISSUES/QUESTIONS FOR CONSIDERATION • Is waiving parking meter fees during the winter holiday season in the best interests of the City? 1 BACKGROUND/DISCUSSION The proposed ordinance would replace one exactly like it that the City Council adopted last year about this time to address parking during the winter holiday season. The City Council has waived parking meter fees during the winter holiday season since 2003. Generally, it has been seen as a way to publicize shopping in Salt Lake City by giving shoppers the opportunity to park free at meters for two hours. The practice has gone on long enough that City officials now are budgeting for the revenue loss as the annual budget is prepared. According to Downtown Alliance Executive Director Robert Farrington, this might be the last year that the business community the Alliance represents will seek a waiver. The Alliance supports waiving parking meter fees for the 2006 holiday season but plans to wait until recommendations that pertain to downtown parking issues are published in the Downtown Transportation Study that currently is under way. If the Transportation Study recommends different approaches to subsidizing or promoting parking downtown, the Alliance would like to compare the recommended approaches— and their cost—to the parking-meter fee waiver and,possibly, the downtown token program—and their costs, according to Mr. Farrington. 2 l 1. LJJ�J!� SL �� �� a' ITN CORM�,e II,GNI R O S S C. /'14 Y" A N D E R S O N A. LOUIS ZUNGUZE --�.+-�+ `�+��~'µ /i JSY DIRECTOR DEPT. OF COMMUNITY DEVELOPMENT MAM M� OFFICE OF THE DIRECTOR j£p o BRENT B. WILDE ]. CC.� DEPUTY DIRECTOR /O / 6 2006, y CJJ1N CITY COUNCIL TRANSMITT TO: Rocky Fluhart, Chief Administrative Officer E• October 5, 2006 FROM: Louis Zunguze, Community Development Direct r J RE: Request to waive parking meter fees from Thanksgivi , vember 23, 2006,to Monday, January 1, 2007, inclusive,to allow two- our free parking as a means of encouraging additional visitors in the Downtown area during the holiday season STAFF CONTACT: Tim Harpst, Transportation Director, at 535-6630 or tim.harpst@slcgov.com DOCUMENT TYPE: Ordinance BUDGET IMPACT: None DISCUSSION: Issue Origin: City Council approved waiving meter fees and bagging all parking meters during the majority of the holiday season in 2003 and all of the traditional holiday shopping season (Thanksgiving through New Year's) in 2004 and 2005. Consistent with that previous action, this request is for a similar waiver to be granted by City Council from Thanksgiving Day, November 23, 2006,to Monday, January 1, 2007, inclusive. Analysis: This incentive to shop and enjoy Downtown during the holiday season has been well received by retailers,the Downtown Alliance, and the public. The current fiscal year budget anticipated that this incentive would be approved this year. The parking meter and parking citation revenue estimate in the City's budget takes into account the reduction that will occur while the meters are bagged. The current fiscal year budget reflects a reduction in meter coin revenue and citation revenue based on the past three years' experience of providing this free parking during the holidays. The reduction in revenue,although highly dependent on weather and shopping conditions, is anticipated to be approximately$100,000 in meter coin revenue and $50,000 in fine revenue. There are sufficient green bags previously purchased by the Downtown Alliance from last year to use again this year. The Downtown Alliance will also be selecting the color and covering the cost of bows. The bags will display a 2-hour free parking time limit on the street side and a gold-colored"Lights On" logo on the sidewalk side. Free Holiday Meter Parkilig 209,5-H STATE STREET, ROOM 404, SALT LAKE CITY, UTAH 841 1 1 Page2 of2 TELEPHONE: S01-535-7105 FAX: 801-535-6005 WWW.SLCGOV.COM ;� vccvc co PAPER The recommended dates for free parking include the traditional holiday shopping season beginning Thanksgiving Day, Thursday,November 23, 2006, through and including New Year's Day, Monday, January 1, 2007. Thanksgiving Day, New Years Day, and weekends are normally free parking days. To implement this proposal, City Council will need to adopt an ordinance waiving the meter fees for the designated period. This action is requested now in order to provide sufficient time to acquire the bows and ribbon, as well as provide merchants and the Downtown Alliance sufficient time to prepare advertisements of the program. PUBLIC PROCESS: The Downtown Alliance Parking and Transportation Committee endorsed this proposal at their September 12, 2006, meeting. Their letter of support is attached. Similarly, the Downtown Retail Merchants Association is supportive and appreciative of this proposal. RELEVANT ORDINANCE: Ordinance 12.56.170 Parking Meters—Rates will need to be modified to waive the meter fees during the specified period. The appropriate wording is shown in Paragraph B of the accompanying draft ordinance. The proposed ordinance is attached to the transmittal for Council's review. Free Holiday Meter Parking 2006 Page 2 of 2 Attachment A: Letter from Downtown Alliance QvjZo 417 SALT LAKE CITY ORDINANCE S 1 v FOALI No. of 2006 (Waiving parking meter fees for holidays) AN ORDINANCE AMENDING SECTION 12.56.170, SALT LAKE CITY CODE, RELATING TO PARKING METER RATES. Be it ordained by the City Council of Salt Lake City, Utah: SECTION 1. That Section 12.56.170,Salt Lake City Code,pertaining to parking meter rates be, and the same hereby is, amended to read as follows: 12.56.170 Parking Meters-Rates: A. Parking meter rates shall not exceed twenty five cents ($0.25)per fifteen (15) minutes of parking within any parking meter zone. A parking meter token may be used in parking meters installed by the city at a rate not to exceed one hour of parking per token. Parking meter tokens shall not be used as legal tender to satisfy any debt to the city and shall only be used in connection with a downtown parking and transit token program. B. The foregoing notwithstanding, all parking meter charges shall be waived during the period of November 23, 2006, through January 1, 2007. However, during said period, no person shall park or peimit any vehicle to remain parked in any parking meter space adjacent to a meter for a continuous period longer than two (2) hours. SECTION 2. This ordinance shall take effect on the date of its first publication. 1 Passed by the City Council of Salt Lake City, Utah this day of 2006. CHAIRPERSON ATTEST: CHIEF DEPUTY CITY RECORDER Transmitted to Mayor on Mayor's Action: Approved. Vetoed. MAYOR ATTEST: CHIEF DEPUTY CITY RECORDER APPROVED AS TO FORM Salt Lake try Attarney's Office (SEAL) Date. /OPZ 'D-°°G By Bill No. of 2006. Published: I-.\Ordinance 06\Amending 12.56.170 re waiving parking meter fees for holidays 10-2-06 final 2 SALT LAKE CITY ORDINANCE IS-4/4 Ve No. of 2006 (Waiving parking meter fees for holidays) AN ORDINANCE AMENDING SECTION 12.56.170, SALT LAKE CITY CODE, RELATING TO PARKING METER RATES. Be it ordained by the City Council of Salt Lake City, Utah: SECTION 1. That Section 12.56.170, Salt Lake City Code, pertaining to parking meter rates be, and the same hereby is, amended to read as follows: 12.56.170 Parking Meters-Rates: A. Parking meter rates shall not exceed twenty five cents ($0.25) per fifteen (15) minutes of parking within any parking meter zone. A parking meter token may be used in parking meters installed by the city at a rate not to exceed one hour of parking per token. Parking meter tokens shall not be used as legal tender to satisfy any debt to the city and shall only be used in connection with a downtown parking and transit token program. B. The foregoing notwithstanding, all parking meter charges shall be waived during the period of November 23, 2006, through January 1, 2007. However, during said period, no person shall park or permit any vehicle to remain parked in any parking meter space adjacent to a meter for a continuous period longer than two (2) hours. SECTION 2. This ordinance shall take effect on the date of its first publication. 1 Passed by the City Council of Salt Lake City, Utah this day of 2006. CHAIRPERSON ATTEST: CHIEF DEPUTY CITY RECORDER Transmitted to Mayor on Mayor's Action: Approved. Vetoed. MAYOR ATTEST: CHIEF DEPUTY CITY RECORDER (SEAL) Bill No. of 2006. Published: I'\Ordinance 061Amcnding 12 56.170 re waiving parking meter fees for holidays 9-29-06 legislative 2 i SALT LAKE CITY COUNCIL STAFF REPORT DATE: November 7, 2006 SUBJECT: Adoption of a proposed ordinance combining the functions of the Capital Improvement Program (CIP)and Community Development Advisory Committee(CDAC)boards, into one citizen advisory board,to be named the Capital Improvement Programs Advisory Board(CDCIPAB). STAFF REPORT BY: Jennifer Bruno,Policy Analyst AFFECTED COUNCIL DISTRICTS: City-wide ADMINISTRATIVE DEPT: Housing and Neighborhood Development AND CONTACT PERSON: LuAnn Clark,Director KEY ELEMENTS: A. During the FY 2005 budget process the Council adopted the following legislative intent statement regarding Boards and Commissions: "It is the intent of the City Council that the Administration would continue to review all City boards and commissions that are not mandated by State Statute to determine where Administrative staff efficiencies can be obtained by combining boards that perform similar tasks,by identifying more effective means for public input where that potential exists,or by eliminating boards that may no longer serve their original purpose." B. The Administration has studied the issue and has drafted an ordinance for Council consideration that combines the duties of the CIP and CDAC boards. The ordinance amends the section of the Salt Lake City code that creates the CIP board, and repeals the section of the Salt Lake City code that creates the CDAC board. The ordinance contains the following amendments: 1. The new board will be called the"Community Development and Capital Improvement Programs Advisory Board" (CDCIPAB). 2. The purpose statement and responsibilities statements are expanded to include references to allocation of community development grants (to cover the function of the former CDAC board). 3. Members are given a 10 day deadline with which to sign the"oath of office" and file it with the City Recorder's office. Note:This deadline is included in the CDAC ordinance (which is proposed to be repealed) and is included in the amended ordinance to make all functions consistent. 4. The CIP Board ordinance and the proposed amended ordinance require 9-11 members. The CDAC Board ordinance,proposed to be repealed requires 15 members. 5. Of the 9-11 members of the board,in addition to the existing requirement that each council district be represented,"the Mayor should include representatives of low .... and moderate income,ethnic minorities,persons with disabilities,elderly persons, female-headed households..." Note: This statement is included in the CDAC 1 ordinance (which is proposed to be repealed) and is included in the amended ordinance to make all functions consistent. 6. The final proceedings will be available for public inspection in the City Recorder's office. 7. A sentence referencing the recording of each members' yea or nay votes was eliminated. Instead, the final vote on the overall budget recommendations will be recorded, and not the yea or nay votes on each specific project. 8. A sunset section is added,stating that if the CDBG funds are no longer being appropriated by the US Department of Housing and Urban Development, the board shall cease to function in an advisory role for the community development program, but will continue to function with regard to the role of advisory board to the Capital Improvement Program. C. The Administration states in the transmittal,that the key impetus for combining these two boards was a desire to evaluate projects based on the overall picture of the capital improvement 10 year plan,which includes both CDBG and CIP as funding sources. With two different boards evaluating projects,continuity is not easily guaranteed,and it is more difficult for both boards to see the overall"capital projects" picture. D. Currently,CDAC has 7 members with 8 vacancies (total of 15 members per the ordinance). The CIP Board currently has 8 members with 3 vacancies (total of 11 members per ordinance). The proposed "Community Development and Capital Improvement Programs Advisory Board" (CDCIPAB) would have 9-11 members. 1. HAND staff polled existing members from both boards regarding their interest in serving on a combined board. 11 of the 15 existing members expressed an interest in =� serving,with one non-response. Of these 11 who expressed an interest, the following would be the breakdown by Council District: 2. Should the Council forward the interviewee from November 7th to the consent agenda, there would be 12 individuals interested in serving on the combined board. See item J for a further explanation of how HAND staff would handle who would be recommended to the Mayor and ultimately to the Council. District 1 1 District 2 2 District 3 4 District 4 1 District 5 0* District 6 1 District 7 2 * Council interviewee on November 7th is from District 5 E. CDAC usually begins its review of applications in October and makes final recommendations to the Mayor by the end of January. The CIP Board usually begins its review of applications in January and makes final recommendations to the Mayor by March. 1. Thus the functions of the proposed board would have an overlap of duties in January. 2. HAND staff will discuss options and solutions with the board should the Council adopt the proposed ordinance. 2 f F. The Administration has experienced some difficulty in obtaining a quorum at all CIP Board meetings,due to the unusual schedule and short time period for meetings. The Administration communicates in the transmittal that combining boards will create a more regular meeting schedule from October through March,and that will likely alleviate some of these problems. G. The idea of combining boards was discussed'with all current members of both the CIP Board and CDAC, and positive responses were received. The board members voiced the opinion that having a broader understanding of the general capital projects needs of the entire City would be most beneficial to their decision-making,particularly with the recent adoption of the 10 Year Capital Plan. Little concern was raised over the increase in number of meetings for whoever is on the consolidated board,should the Council adopt the proposed ordinance. H. While the efficiency and effectiveness of the boards will be improved by combining the boards,staff time will not be substantially reduced. Because of the guidelines and time- consuming procedures required by HUD for the federal grant process,a full time position is required. The CIP coordinator facilitates the CIP process (which is much simpler than the federal process)half of the time,and spends the other half of the time on non-federal grants that the City receives for programs and projects. Therefore,staffing demands will stay the same,regardless of the combination of the boards. I. Should the Council adopt the proposed ordinance,HAND staff would meet with the current chairs of CDAC and the CIP Board to determine criteria that would be used to determine who would be asked to continue on the consolidated board. The Chairs will then make their recommendations to the Mayor based on these criteria for his review. The Mayor will then submit his recommendations to the City Council for review and consideration. C: Rocky Fluhart,Sam Guevara,DJ Baxter,LuAnn Clark,Sherrie Collins,Rick Graham,LeRoy Hooton,Tim Harpst,Kevin Young,Max Peterson,Louis Zunguze,Chris Shoop,Barry Esham,Marge Harvey,Jan Aramaki,Veronica Wilson,Sylvia Richards,Janice Jardine 3 OCT 0 2 2006 A. LOUTS ZUNGUZE `....�\ 'I, ^\��.I� �S.i. �rl� r►�c���©val! ROSS C. "ROCKY" ANDERSON DIRECTOR DEPT. OF COMMUNITY DEVELOPMENT MAYOR BRENT B. WILDE OFFICE OF THE DIRECTOR DEPUTY DIRECTOR SM\I I ED 1RaN pC1 2 2p06 jj , �uN 1. CITY COUNCIL TRANSMIT T(l:� Rocky J. Fluhart, Chief Administrative Offic E: September 27, 2006 FROM: Louis Zunguze, Community Development Direc i r � SUBJECT: Community Development and Capital Improvement Pro:' ; s Advisory Board Ordinance STAFF CONTACTS: LuAnn Clark, Housing&Neighborhood Development Director, at 535-6136 or luann.clark@slc.gov ACTION REQUIRED: Adoption of Proposed Ordinance Amending Chapter 2.33, Salt Lake City Code and repealing Chapter 2.41, Salt Lake City Code by City Council DOCUMENT TYPE: Ordinance BUDGET IMPACT: None DISCUSSION: Issue Origin: During the 2004-2005 budget process the City Council adopted the following Legislative Intent Statement regarding Boards and Commissions: It is the intent of the City Council that the Administration would continue to review all City boards and commissions that are not mandated by State Statute to determine where Administrative staff efficiencies can be obtained by combining boards that perform similar tasks,by identifying more effective means for public input where that potential exists, or by eliminating boards that may no longer serve their original purpose. Two of the Boards that have been reviewed by the Community Development Department(CD) are the Capital Improvement Program(CIP) and the Community Development Advisory Committee (CDAC) Boards. Analysis: The CIP and CDAC Boards are advisory boards that provide the Mayor and the City Council with funding recommendations pertaining to the City's Community Development Block Grant Program (CDBG) and the Capital Improvement Program. Each Board reviews the capital improvement applications submitted by City Departments, organizations and private citizens. 451 SOUTH STATE STREET, ROOM 404, SALT LAKE CITY, UTAH B41 1 1 TELEPHONE: 801.535-7105 FAX: B01-535-6005 WWW.SLCGOV.COM The CIP Board,consisting of 11 members,reviews applications requesting general fund, impact fee and Class"C"funds and the CDAC Board, consisting of 15 members, reviews the CDBG applications. A combined board would allow one Board to review and evaluate all of the capital improvement applications regardless of the funding source. With the adoption of the fiscally constrained capital improvement ten-year plan, which both boards will use during the evaluation of projects, it seemed an appropriate time to request that the boards be combined. This new board would have 11 members,the same number as required in the CIP ordinance. The proposed board would have representation from each Council District,and the rest of the members would include representatives from low and moderate income groups, ethnic minorities,persons with disabilities, elderly persons, female-headed households and persons who represent business or commercial interests in the City. To accomplish this a new ordinance is required. The proposed ordinance combines the requirements in the current ordinances pertaining to the representatives for both existing boards. Both boards are currently facilitated by staff from the Housing and Neighborhood Development Division(HAND)of the CD Department. These boards are fairly unique because they do not meet on a regular monthly schedule throughout the year like most of the other boards in the City. Typically, CDAC begins its review of applications in October and makes final recommendations to the Mayor by the end of January. The CIP Board usually starts their review in January with final recommendations to the Mayor in March. These schedules do overlap in January and the HAND staff will discuss options and possible solutions with the board, if the City Council adopts the proposed ordinance. Due to the unusual schedule and the short period of time for meetings it has become more difficult to maintain CIP board members from year to year or to have a quorum at all meetings. The combination of the boards may alleviate some of the difficulties because board members will meet on a more regular basis from October to March. Although each board has staff assigned to facilitate the application process, eligibility review, public process and, reporting requirements, combining the boards will not eliminate or reduce the staff time needed to perform the work associated with each board. The guidelines and procedures required by the Department of Housing and Urban Development(HUD) for the federal grant process are very time consuming, specific and more restrictive than what is required of the CIP process. A full time position,the Community Development Planner, is assigned to perform these duties for CDAC. The CIP Coordinator facilitates the CIP process half time and spends the rest of her time on the other non-HUD grants the City receives for programs and/or projects. The Director of HAND also attends all board meetings,as well as other staff members when needed. Therefore, while combining the boards will improve efficiency of the processes and enable Board members to have a comprehensive view of project proposals, staff time will not be substantially reduced. As part of analyzing this change,the HAND Director discussed the idea with the boards and received positive input from all members regarding the possibility of combining the boards. The board members thought that combining the boards would give them a broader understanding of the general CIP needs of the entire City. They also thought that reviewing all CIP applications would be helpful to them in making recommendations for funding, especially with the adoption CDAC&CIP Board Consolidation Page 2 of 3 of the ten year plan. The number of meetings would increase substantially for CIP Board members,while the CDAC Board would see a slight increase. Recommendations: The CD Department is recommending that the CDAC and CIP Boards be combined into a new board called the Community Development and Capital Improvement Programs Advisory Board(CDCIPAB). If the Council adopts the proposed ordinance, HAND is recommending that we contact each board member and see if he/she is interested in serving on the new combined board. The HAND staff will then meet with the current Chairs of CDAC and CIP to discuss the criteria that will be used to determine who will be asked to continue on the Board. The Chairs will need to make sure that the City has representation from each City Council District, board diversity as outlined in the ordinance, and that the members are available to attend and participate from October through March. After the Chairs have made their recommendations,potential board members will be submitted to the Mayor for his review. The Mayor will then submit his recommendations to the City Council for review and consideration. PUBLIC PROCESS: The amendment to the Ordinance requires no public process other than Council adoption. RELEVANT ORDINANCES: New ordinance amending Chapter 2.33 and repealing Chapter 2.41 of the Salt Lake City Code. The attached ordinance has been reviewed and approved by the City Attorney's Office. The Attorney recommended that we amend Chapter 2.33,that establishes the CIP Board and then add in the pertinent information from Chapter 2.41 that establishes CDAC. The Ordinance also repeals Chapter 2.41. CDAC&CIP Board Consolidation Page 3 of 3 TABLE OF CONTENTS Attachment A: Proposed Salt Lake City Ordinance -No. of 2006 (Community Development and Capital Improvement Programs Advisory Board) Attachment B: Legislative Ordinance Attachment A Proposed Ordinance SALT LAKE CITY ORDINANCE No. of 2006 (Community Development and Capital Improvement Programs Advisory Board) AN ORDINANCE AMENDING CHAPTER 2.33, SALT LAKE CITY CODE, RELATING TO CAPITAL IMPROVEMENT PROGRAMS CITIZEN BOARD AND REPEALING CHAPTER 2.41, SALT LAKE CITY CODE, RELATING TO COMMUNITY DEVELOPMENT ADVISORY COMMITTEE. Be it ordained by the City Council of Salt Lake City, Utah: SECTION 1. That Chapter 2.33, Salt Lake City Code,pertaining to Capital Improvement Programs Advisory Board be, and the same hereby is, amended to read as follows: Chapter 2.33 COMMUNITY DEVELOPMENT AND CAPITAL IMPROVEMENT PROGRAMS ADVISORY BOARD 2.33.010 Definitions. For the purpose of this chapter the following words shall have the meaning as given in this section: A. "Board" means the Community Development and Capital Improvement Programs Advisory Board created under this chapter. B. "City" means and refers to Salt Lake City, a municipal corporation of the state of Utah. C. "Council" means the Salt Lake City council. D. "Mayor" means the duly elected or appointed and qualified mayor of the city. E. "Member" means a person appointed by the mayor who is duly qualified and acting as a member of the board. F. "Person" means an individual. 2.33.020 Board created. There is created the board, which body shall consist of not less than nine members nor more than eleven members who reside in the city. 2.33.030 Purpose. The purpose of the board is to provide citizens with an ample opportunity to participate, in an advisory role, in the city's planning, assessment and allocation of its community development grants and capital improvement programs. Although board members serve in an advisory role only, their involvement is necessary in obtaining the opinions of persons who live and/or work in various neighborhoods to aid the city in identifying the needs within those areas and the programs and projects to be completed as part of the city's community development and capital improvement programs. 2.33.040 Appointment—Oath of Office. A. All appointments of board members shall be made by the mayor, with the advice and consent of the city council. In making initial appointments, the mayor shall designate three members to serve one year, four members to serve two years, and four members to serve three years. Thereafter, all appointments shall be made for a three-year term. Each member's term of office shall expire on the applicable first Monday in June. Each member shall perform service on a voluntary basis without compensation and on such basis shall be immune from liability with respect to any decision or action taken during the course of these services, as provided by Utah Code Annotated, Section 63-30b-1, et seq. (1953) as amended, or successor sections. Members shall sign the oath of office required by law to be signed by City officials and file the same in the office of the City Recorder. Every member who shall fail within ten (10) days after notification of his or her appointment to file with the City Recorder his or her oath of office to perform faithfully, honestly and impartially the duties of the office, shall be deemed to have refused such appointment, and thereupon another person shall be appointed in the manner prescribed in this Chapter, or its successor. Vacancies occurring in the membership of the board shall be filled by appointment by the mayor with the advice and consent of the council for the unexpired term. B. Of the appointments to be made by the mayor, at least one member shall be appointed from each council district. In making such appointments and those of the remaining members of the board, the Mayor should include representatives of low and moderate income, ethnic minorities, persons with disabilities, elderly persons, female-headed households and persons who represent business or commercial interests of the city. 2.33.050 Removal from office. Any member may be removed from office by the mayor prior to the normal expiration of the term for which such member was appointed. 2 2.33.060 Members' ethics. Members shall be subject to and bound by the provisions of the city's conflict of interest ordinance, Chapter 2.44 of this code. Any violations of the provisions of said act shall be grounds for removal from office. 2.33.070 Eligibility for membership. A person, to be eligible to be appointed as a member of the board, shall meet the following prerequisites: A. Be at least eighteen years of age; B. Be a resident of the city. 2.33.080 Meetings. The board shall convene meetings as needed throughout the year. The board shall hold its meetings in compliance with the Utah Open and Public Meetings Act and shall be held in a public place. Six members of the board shall constitute a quorum for the transaction of business. The board shall cause a written record of its final proceedings to be available for public inspection in the office of the city recorder. The board shall adopt a system of rules and procedure under which its meetings are to be held. The board may suspend the rules of procedure by unanimous vote of the members of the board who are present at the meeting. The board shall not suspend the rules of procedure beyond the duration of the meeting at which the suspension of rules occurs. 2.33.090 Election of officers. Each year the board, at its first regular meeting, shall select one of its members as chairperson and another of its members as vice-chairperson, who shall assume the duties of the chairperson during the absence or disability of the chairperson 2.33.100 Subcommittees. The board may designate such subcommittees or committees as it desires to study, consider and make recommendations on matters which are presented to the board. 2.33.110 Responsibilities. The board shall have the following responsibilities: A. To serve solely in an advisory role on decisions relating to the city's community development grants and capital improvement programs; 3 B. To coordinate with the housing and neighborhood development division of the City on review and evaluation of current strategic plans, goals and policies of the community development and capital improvement programs; C. To review all eligible annual project proposals submitted by various individuals, neighborhood groups, community organizations and city departments, and make recommendations to the mayor on such request for funds; • D. To discuss program and project monitoring information prepared by the city to ensure that the projects are implemented as planned; E. To assure that the community development grants and capital improvement program goals are consistent with the strategic plans and goals of the city; F. To evaluate the overall effectiveness of the community development and capital improvement program activities; G. To be responsible for establishing and maintaining communications with the Salt Lake City community councils 2.33.120 Attorney. Any legal advice or assistance desired shall be obtained only from the office of the city attorney. 2.33.130 Board actions shall not bind the mayor or city council. The recommendations of the board shall not be deemed to bind the mayor and the city council in their determinations. Nothing in this chapter shall be construed to be a delegation of the mayor's and the city council's responsibility and authority regarding the community development grants or capital improvement programs. 2.33.140 Sunset: Should the Community Development Grants Program and funds being appropriated by the US Department of Housing and Urban Development terminate, the board shall cease to function in an advisory role for the community development program, but it shall continue to function as provided herein with regard to the role of the board under the capital improvement program. Section 2. That Chapter 2.41, Salt Lake City Code, pertaining to Community Development Advisory Committee be, and the same hereby is, repealed. 4 SECTION 3. This ordinance shall take effect immediately upon the date of its first publication. Passed by the City Council of Salt Lake City, Utah this day of 2006. CHAIRPERSON ATTEST: CHIEF DEPUTY CITY RECORDER Transmitted to Mayor on Mayor's Action: Approved. Vetoed. MAYOR ATTEST: APPROVED AS TO FORM CHIEF DEPUTY CITY RECORDER Salt take Apmers officeDate 8' 67 c BY f/ , 111 (SEAL) Bill No. of 2006. Published: I:\Ordinance 06\Amending Chapter 2.33 re Comm.Development&Capital Improvement Programs Advisory Board 8-16-06 clean 5 Attachment B Legislative Ordinance SALT LAKE CITY ORDINANCE No. of 2006 (Community Development and Capital Improvement Programs Advisory Board) AN ORDINANCE AMENDING CHAPTER 2.33, SALT LAKE CITY CODE, RELATING TO CAPITAL IMPROVEMENT PROGRAMS CITIZEN BOARD AND REPEALING CHAPTER 2.41, SALT LAKE CITY CODE, RELATING TO COMMUNITY DEVELOPMENT ADVISORY COMMITTEE. Be it ordained by the City Council of Salt Lake City,Utah: SECTION 1. That Chapter 2.33, Salt Lake City Code, pertaining to Capital Improvement Programs Advisory Board be, and the same hereby is, amended to read as follows: Chapter 2.33 COMMUNITY DEVELOPMENT AND CAPITAL IMPROVEMENT PROGRAMS CITIZEN ADVISORY BOARD 2.33.010 Definitions. For the purpose of this chapter the following words shall have the meaning as given in this section: A. "Board" means the Community Development and Capital Improvement Programs Chen Advisory Board created under this chapter. B. "City" means and refers to Salt Lake City, a municipal corporation of the state of Utah. C. "Council" means the Salt Lake City council. D. "Mayor" means the duly elected or appointed and qualified mayor of the city. E. "Member" means a person appointed by the mayor who is duly qualified and acting as a member of the board. F. "Person" means an individual. 2.33.020 Board created. There is created the board, which body shall consist of not less than nine members nor more than eleven members who reside in the city. 2.33.030 Purpose. The purpose of the board is to provide citizens with an ample opportunity to participate, in an advisory role, in the city's planning, assessment and allocation of its community development grants and capital improvement programs. Although board members serve in an advisory role only, their involvement is necessary in obtaining the opinions of persons who live and/or work in various neighborhoods to aid the city in identifying the needs within those areas and the programs and projects to be completed as part of the city's community development and capital improvement programs. 2.33.040 Appointment— Oath of Office. A. All appointments of board members shall be made by the mayor, with the advice and consent of the city council. In making initial appointments, the mayor shall designate three members to serve one year, four members to serve two years, and four members to serve three years. Thereafter, all appointments shall be made for a three-year term. Each member's term of office shall expire on the applicable first Monday in June. Each member shall perform service on a voluntary basis without compensation and on such basis shall be immune from liability with respect to any decision or action taken during the course of these services, as provided by Utah Code Annotated, Section 63-30b-1, et seq. (1953) as amended, or successor sections. Members shall sign the oath of office required by law to be signed by City officials and file the same in the office of the City Recorder. Every member who shall fail within ten (10) days after notification of his or her appointment to file with the City Recorder his or her oath of office to perform faithfully, honestly and impartially the duties of the office, shall be deemed to have refused such appointment, and thereupon another person shall be appointed in the manner prescribed in this Chapter., or its successor. Vacancies occurring in the membership of the board shall be filled by appointment by the mayor with the advice and consent of the council for the unexpired term. B. Of the appointments to be made by the mayor, at least one member shall be appointed from each council district. In making such appointments and those of nth the remaining members of the hoard, the Mayor should include representatives of low and moderate income, ethnic minorities,persons with disabilities, elderly persons, female-headed households and being persons who represent business or commercial interests of the city. 2.33.050 Removal from office. Any member may be removed from office by the mayor prior to the normal expiration of the term for which such member was appointed. 2.33.060 Members' ethics. 2 Members shall be subject to and bound by the provisions of the city's conflict of interest ordinance, Chapter 2.44 of this code. Any violations of the provisions of said act shall be grounds for removal from office. 2.33.070 Eligibility for membership. A person, to be eligible to be appointed as a member of the board, shall meet the following prerequisites: A. Be at least eighteen years of age; B. Be a resident of the city. 2.33.080 Meetings. The board shall convene regular meetings as needed throughout the year. The board shall hold its meetings in compliance with the Utah Open and Public Meetings Act_Special meetings may be urs'notice. • Meetings-shall-and shall be held in a public plae . Six members of the board shall constitute a quorum for the transaction of business. The board shall cause a written record of its final proceedings to be available for public inspection in the office of the city recorder. +' * ker by The board shall adopt a system of rules and procedure under which its meetings are to be held. The board may suspend the rules of procedure by unanimous vote of the members of the board who are present at the meeting. The board shall not suspend the rules of procedure beyond the duration of the meeting at which the suspension of rules occurs. 2.33.090 Election of officers. Each year the board, at its first regular meeting, shall select one of its members as chairperson and another of its members as vice-chairperson,who shall assume the duties of the chairperson during the absence or disability of the chairperson 2.33.100 Subcommittees. The board may designate such subcommittees or committees as it desires to study, consider and make recommendations on matters which are presented to the board. 2.33.110 Responsibilities. The board shall have the following responsibilities: 3 A. To serve solely in an advisory role on decisions relating to the city's community development grants and capital improvement programs; B. To coordinate with the capital planning and programming housing and neighborhood development division of the City on review and evaluation of current strategic plans, goals and policies of the community development and capital improvement programs; C. To review all eligible annual and slippage or contingency project proposals submitted by various individuals, neighborhood groups, community organizations and city departments, and make recommendations to the mayor on such request for funds; D. To discuss program and project monitoring information prepared by the city to ensure that the projects are implemented as planned; E. To assure that the community development rants and capital improvement program goals are consistent with the strategic plans and goals of the city; I F. To evaluate the overall effectiveness of the community development and capital improvement program activities; G. To be responsible for establishing and maintaining communications with the Salt Lake City community councils 2.33.120 Attorney. Any legal advice or assistance desired shall be obtained only from the office of the city attorney. 2.33.130 Board actions shall not bind the mayor or city council. The recommendations of the board shall not be deemed to bind the mayor and the city council in their determinations. Nothing in this chapter shall be construed to be a delegation of the mayor's and the city council's responsibility and authority regarding the community development grants or capital improvement programs. 2.33.140 Sunset: Should the Community development grants program and funds being appropriated by the US Department of Housing and Urban Development terminate, the board shall cease to function in an advisory role for the community development program, but it shall continue to function as provided herein with regard to the role of the board under the capital improvement program. Section 2. That Chapter 2.41, Salt Lake City Code,pertaining to Community Development Advisory Committee be, and the same hereby is, repealed. 4 Chapter 2.41 COMMUNITY DF, r OP T'� A"�'rcnny � nrtl fi_ 2.41.010 Definitions: • A. "Committee" means the Salt Lake City Community Development Advisory Committee B. "Council" means the Salt Lake City Council. C. "City" means and refers to Salt Lake City Corporation, a municipal corporation of the State of Utah. E. "Member"means a person appointed by the Mayor who is duly qualified and acting as a member of themi-ttee: . , • _ 2.41.020 Committee Created: (Ord. 6-1 87-§ 1, 1947: prier code § 25 30A 2) 2.41.030 Purpose: an advisory r • ' .. rd. 61 87 § 1, 1-9-87: prioreede§ 25 30A 3) L 010 ^pl ointment Oath Of Office: A. All appointments of members of the- Committee shall be made by the Mayor with the , , , amended, or successor sections. Members shall sign the oath of office required by law to be signed by City-officials and 5 �-ns nt f the cil for the expired term. • • , • . • , . 2 2.41.050 Removal From Office: ' ormal expiration of the term for which such member was appointed. (Ord. 61 87 § 1 -9-87: prior code § 25 30A 5) 2.41.060 Members' Ethics: Montt , Ordinance, Chapter 2.44 of this Title, or its successor. Any violations of the provisions of said t,. .. _ .. . 2.41.070 Eligibility For Membership: A person, to be eligible to be appoint , prerequisites: A. Be at least eighteen (18) years of age; B. Be a resident of the City. (Ord. 61 87 § 1, 1987: prior code § 25 30A 7) 2.41.080 Meetings: . '. s Act. Special meetings may member riot joining in the order ,r such special meeting must be given not less than three (3) hours' notice. Suc notice shal be s ,ea personally or left at the member's residence or business majority of-the-Committee-members-in attendance at a meeting shall constitute a quorum for the ^I adopt a system of rules and procedure under which its meetings arc to be held. The Committee arc present at the meeting. The Committee shall not suspend the rules of procedure beyond the 87 § 1, 1987: prior code § 25 30A 8) 2.41.090 Election Of Officers: 6 • . • • , § 1, 1987: prior code § 25 30A 9) 2.41.100 Subcommittees: • • • 1987: prior code § 25 30A 10) 2.41.1.1.0 Responsibilities: Tl, ! cee a h alt h th f it re onsibilities B. To coordinate with the housing and neighborhood development division of the City on C. To review all eligible annual project proposals submitted by various individuals, • . , Jt , l i D. To discuss program an b E. To assure that community development block grant goals arc consistent with the housing plan of the City; • activities; G. To be responsible for establishing and maintaining communications with the Salt Lake • , 2.41.120 Attorney: (Ord. 61. 87 § 1, 1987: prior code § 25 30A 1.2) 2.41.130 Sunset: The Cot . • - code § 25 30A 13) SECTION 3. This ordinance shall take effect immediately upon the date of its first publication. 7 Passed by the City Council of Salt Lake City,Utah this day of 2006. CHAIRPERSON ATTEST: CHIEF DEPUTY CITY RECORDER Transmitted to Mayor on Mayor's Action: Approved. Vetoed. MAYOR ATTEST: CHIEF DEPUTY CITY RECORDER (SEAL) Bill No. of 2006. Published: I:\Ordinance 06\Amending Chapter 2.33 re Comm.Development&Capital Improvement Programs Advisory Board B-16-06 draft 8 HOUSING & NEIGHBORHOOD DEVELOPMENT DIVISION TRANSMITTAL SUBMISSION FORM Transmittal Title: Community Development and Capital Improvement Advisory Board Ordinance 1 t 3 11lf03 A 113 O I i elV'ED 900Z t 9!1v 3 2iint Date Submitted to CD: August 31, 2006 � �� (Transmittals must be submitted by no later than 12:00 p.A.14 Scheduled for Council? ❑ Yes Date: �No • Director's Signature: CLtecAe__ Comments/Special Instructions: Robin will schedule with Council 8Ct&t, t-ictoci uyike?celed c\cw8e3 ghleit6 6ack , cn 6/A/0(p N©k0 2 O06 i, CITY CORPORATION" RICHARD GRAHAM �_� "�- �^ - ROSS C. "ROCKY" ANDERSON PUBLIC SERVICES DIRECTOR DEPARTMENT OF PUBLIC SERVICES MAYOR COUNCIL TRANSMITTAL TO: Rocky Fluhart, DATE: October 31, 2006 Chief Administration Officer FROM: Rick Graham,Director Public Services Department SUBJECT: Appropriation of Sorenson Unity Center Construction Funds Budget Amendment#1 STAFF CONTACT: Rick Graham 535-7774 Greg Davis 535-6397 DOCUMENT TYPE: Budget RECOMMENDATION: That the City Council appropriate $4,733,843 in prior year donations and interest earnings earmarked to construct the Sorenson Unity Center. BUDGET IMPACT: None DISCUSSION: The City Council was briefed on this issue during the September 19, 2006 Budget Amendment#1 briefing meeting. On Tuesday, October 3, 2006 the Council voted to continue this amendment item to a future Council meeting for consideration to allow time to receive project construction bids and to ensure that adequate funding is available to construct and house the computer clubhouse program within the Sorenson Unity Center. Project bids have been received and final contract negotiations are proceeding. Though the low bid exceeded the consultant/engineering estimate New Market Tax Credit funding is available to close the final construction cost gap and allow for the construction of two additional classroom spaces that will house the computer clubhouse program within the Center. No additional City funds are needed to construct the project. (A discussion on the New Market Tax Credit funding initiative is scheduled for November 7, 2006.) So that the project can move forward the Public Services Department requests that the Council appropriate the $4,733,843 and.authorize its use for the construction of the project. PUBLIC PROCESS: Hearing was held on October 3, 2006. 451 SOUTH STATE STREET, ROOM 148, SALT LAKE CITY, UTAH 841 1 1 TELEPHONE: 801-535-7775 FAX: SO1-535-7789 WWW.SLCGOV.COM n `r� nccvceo rnnca SALT LAKE CITY COUNCIL STAFF REPORT DATE: November 7,2006 SUBJECT: Briefing on the use of New Markets Tax Credits to aid in the construction of the Sorenson Unity Center Project—Resolution accepting the Public Benefit Study required by Utah Code Section 10.8.2 STAFF REPORT BY: Jennifer Bruno,Policy Analyst AFFECTED COUNCIL DISTRICTS: District 2 ADMINISTRATIVE DEPT: Public Services AND CONTACT PERSON: Rick Graham,Director KEY ELEMENTS: A. The Administration will brief the Council on an initiative to benefit from New Markets Tax Credit Financing(a financial tool authorized by Congress in 2000) in order to cover a funding shortfall in the construction of the Sorenson Unity Center. B. Construction bids came in at$700,000 over budget(bids included classroom space for the computer clubhouse). The Council could choose to appropriate an additional$700,000 from the general fund balance to cover this difference,or the Council could choose to pursue New Markets Tax Credits. C. The advantage to pursuing New Markets Tax Credit Financing,is that because the City already has approximately$4.7 million to contribute towards the project,the financial institution that would be the City's investor in the project("The Bank"),is willing to contribute approximately$1.99 million. Proceeds above and beyond construction costs could be used towards the first few years of operations and maintenance expenses at the Center,reducing the burden on the general fund during that time. The net benefit to the City is as follows: • Pays the$700,000 cost overrun • Reimburses the approximately$550,000 the City has already spent on design of the Center • Leaves approximately$399,000 for the City to use in operations and maintenance of the Center,above and beyond what the City receives in rent payments from tenants (the sum of the developer fee,interest payments made,and interest accrued). Given that the administration estimated it would cost approximately$150,000 above rental income to operate and maintain the Center,this money would operate the Center for just over 2.5 years. It is important to note that this sum could increase as contingencies of the development are or are not used. Any"extra" money not used in development will be paid to the City as a part of this"developer fee." See chart below for a detailed breakdown: C 1 • Net Benefit Analysis Financial Instituations Contribution $ 1,990,382 Associated Costs of Deal: Land rent($1 per year, 7 years) $ 7 "Reimbursment"of the City for expenses incurred (the City will fund rent out of this payment- In turn, rent will pay for the interest costs of the loan) $ 566,157 Reserves for closing the deal after 7 years ("Put" and "Call") - may be as low as $1,000 $ 100,000 Other Fees/Contingency $ 225,000 Total Associated Costs $ 891,164 Net Benefits: Payment of cost overrun $ 700,000 "Developer Fee" (for City to use for O&M) - less rent paid $ 179,968 Interest on City's$4.7 million $ 167,237 Interest on Funds remaining with the City $ 52,013 Total Net Benefit to the City $ 1,099,218 Note: The developer fee is a balancing number and may increase if all contingencies are not needed D. The Administration has indicated that in order for the New Markets Tax Credit approach to "'"'"q' move forward, the Council would need to express its support on or before the November 14th City Council meeting. E. The following outlines the proposed structure of the deal that the City would agree to in order to benefit from these New Markets Tax Credit Financing(for a brief explanation of the basics of New Markets Tax Credits,see the section on page 4). This deal can also be seen graphically in the attached flow chart: 1. In order for the investor to receive the benefits of these tax credits,the investor's money must be loaned to a non-governmental entity. Because the City already has a Foundation formed ("The Salt Lake City Foundation",formed in 1997),this Foundation will act as the conduit for the receipt of these tax credits. The Bank requires the creation of a separate entity from the Foundation to actually receive and have control of the money. As such,the Salt Lake City Foundation will create the "New Utah Entity," (a non-profit corporation) to receive all of the money to construct the project. (See Matters at Issue for issues relating to the Salt Lake City Foundation/Budgeting issues) 2. The total amount transferred to the"New Utah Entity"from the Bank is approximately$6.7 million. The "New Utah Entity"is only responsible for interest payments on this "loan." The cost of these interest payments is included in this$6.7 million. • Process-The City will loan approximately$4.7 million to the Bank's Investment Fund,a subsidiary of which is the arm that actually gives out the tax credit-based funding (a CDE). • The Investment Fund will pay interest on this loan, at.5%for a period of 8 years. The total amount paid to the City in the form of interest is$167,237. 2 The terms of this loan will stipulate that the Bank(through the CDE arm) will contribute$1.99 million into the Center,through the New Utah Entity. • Because of the tax benefits that the Bank receives as a result of their involvement in the federal New Markets Tax Credit program,during the "compliance period" (7 years),the New Utah Entity is only responsible for the interest on these loans,which has been included in the total$6.7 million. • Therefore,the City will be responsible for no additional funds in order to achieve this deal. While the documents make reference to payments beyond the 7 years,a separate agreement with the Bank will enable both the Bank and the City to terminate the deal after 7 years. It is important to note that the Bank will be required to give notice to the City if they decide to terminate or not to terminate. If they decide not to terminate,this would give the City notice,and would serve as an impetus for City action to terminate the agreement. 3. The City will enter into a ground lease with the New Utah Entity for a term of 60 years (Markets standard timeframe),for the entity to construct the building. During the period of their agreement,the New Utah Entity will own the building,and will secure the$4.7 million portion of the loan with the deed. At the end of the 60 year term,the City will become the sole owner of the project(the highly likely scenario is that the City will terminate the agreement with the New Utah Entity when they terminate the agreement with the Bank,after 7 years). 4. The City will also enter into a master lease whereby it will act as an agent and developer for the New Entity in order to construct the building. This lease would include a developer fee (see above),and will reimburse the City for design expenses already incurred($550,000). The lease would also specify that for a term of 20 years (Markets standard),the City will be responsible for sub-leasing,operations,and maintenance of the building,and will also retain all rent and fees paid by users. The rent that the City will pay will be$55,000 per year for the first year,with a 1% escalator in each of the following 9 years(the source of the City's payment for this rent is the reimbursed design money,the interest on the initial loan to the Bank,and the.Developer Fee. This money will be held by the City and then paid out to the New Entity). The total amount for 7 years of rent is approximately$397,000. 5. The rent that the New Entity receives from the City will be used to pay for the interest due on the loans from the CDE (approximately$385,000 total over the 7 years). 6. The New Entity,governed by the Board of Trustees of the Salt Lake City Foundation, will control,but will not be able to disperse any funds until the applicable confirmed documents relating to the specific part of the project have been demonstrated (confirmed construction documents,inspection certificates,etc). 7. After 7 years the City has the ability to terminate the agreement with the Bank(cost of termination is covered in reserves that are factored into the$6.7million loan). No additional funding is required at that time. At that time the SLC Foundation may choose to also terminate the"New Utah Entity" and have the City assume all ownership. F. The complexity of this arrangement is due to the fact that federal laws prohibit a qualified CDE(in this case,an arm of"the Bank")from entering into an agreement with a governmental agency. The structure the City is pursuing is very similar to a non-profit �✓ housing corporation forming an LLC for a specific project to take advantage of residential low-income housing tax credits. 3 • G. Contingency-the City will not release any funds to the Bank until there is a binding agreement between the CDE and the New Entity,stating that the CDE cannot use the funds for any other purpose other than loans to the New Entity for the purpose of constructing the Sorenson Unity Center. If for any reason the City's loan could not be used (for example, the block were accidentally contaminated with hazardous materials that could not be mitigated),the funds would be returned to the City. The Bank will pledge its Investment Fund's 99.9% ownership interest in the CDE as security for the performance of its loans to the New Entity. NEW MARKETS TAX CREDIT BASICS A. The New Markets Tax Credits Program was enacted by Congress in December 2000 as part of the bipartisan Community Renewal Tax Relief Act. B. The purpose is to spur private investment in target low-income,urban and rural communities by attracting investors with tax incentives. C. The federal program is similar to the CDBG program,in that there is a cap on the number of dollars that the federal government allows for tax credits. Each funding cycle,a number of Community Development Entities (CDEs)compete for and are allocated a specific amount of New Markets Tax Credit. Not all CDEs who apply are awarded tax credits. In this case, the Bank that the City is in negotiations with is the CDE. D. The CDE must then find a Qualified Equity Investment(QEI-In this case,the non-profit corporation created by the Salt Lake City Foundation) to partner with in order to expend the Tax Credits that it has been allocated. E. The project must be located in a qualified low-income community (the Sorenson Unity Center is in a qualified community). F. Tax credits can only be used in target areas,for a limited number of purposes. New Markets Tax Credits are not allowed for solely-residential projects. Mixed-use projects are allowed as long as more than 20 percent of the gross income comes from commercial rents. MATTERS AT ISSUE: A. The Salt Lake City Foundation is a 501(c)(3) corporation, and was created in 1997 for the purpose of accepting small grants and donations. The articles of incorporation state that the board of trustees consist of the Mayor of Salt Lake City, and two trustees appointed by the Mayor (currently the CAO and Director of Finance). As such,once the authority is given for the Foundation to pursue this process,the Council currently would have no oversight over the actions of the Foundation or the"New Utah Entity." However,because this project involves development of City property,which may directly or indirectly impact future City budgets and/or policy,the Administration is actively pursuing changing the articles of incorporation to include the Council Chair on the Board of Trustees. This will guarantee a certain amount of oversight and interest on the part of the Council. Altering the articles of formation is an administrative process. The current intent is to specify that the third member of the Board of Trustees would be appointed jointly by the Mayor and the Council Chair. B. The City Attorneys Office looked into the matter of the City's liability exposure at the facility. Because the "landlord" of the property is the Foundation,and is technically not a governmental entity, they would not have the City's situation of governmental immunity. After consulting with the City's Risk Manager,the Attorneys Office recommends that we purchase liability insurance. The City's Risk Manager has indicated that this is a good 4 solution in terms of protecting the City's interest in the property and would be fairly inexpensive (approximately$10,000-$20,000). C. The details of this deal can be somewhat confusing upon first review. Council Staff will continue to analyze the deal points in order to more fully explain the program. Tom Berggren,the City's consulting attorney for this matter,will be available at the Council Meeting to more completely answer any questions the Council may have. Staff can then work with Mr. Berggren and the Administration to follow-up on Council questions prior to the November 14th meeting. Please consider this staff memo a summary of key issues, rather than a completely comprehensive staff analysis. BUDGET RELATED FACTS: A. The net cash-in-hand gain to the City is approximately$399,000 in developer fees,interest paid to the City,and interest accrued. This money can be used to operate and maintain the Unity Center. Given that the administration estimated it would cost approximately$150,000 above rental income to operate and maintain the Center,this money would operate the Center for just over 2.5 years. It is important to note that this sum could increase as contingencies of the development are or are not used. Any"extra" money not used in development will be paid to the City as a part of this"developer fee." B. The$700,000 cost overrun will also be covered,with no additional responsibility to the City. C. The total net benefit is effectively$1.1 million. cc: Rocky Fluhart, Sam Guevara,DJ Baxter,Kay Christensen,Rick Graham,LeRoy Hooton,Tim Harpst,Kevin Young,Max Peterson,Boyd Ferguson,Louis Zunguze,Doug Wheelwright,Doug Dansie,Kurt Larson,Barry Esham,Marge Harvey,Janice Jardine,Valda Tarbet C 5 ‘, C n a O o 0O. C U T U U a> Y c0 J 4 rn ca p C_ fn C 'D as C J CD 0. O c) a) o cn a) O c6 u) N J a) 69 U J fn C i_ a) C O 0 2 al 0 2 ,r, o T 1r o o N c c (... 4 o c Tas as cm Z -o -a O I. m C c c .c co U L=L o u) � D Ym V- C CD 'C o N J u) a) U J6 to 7o . Z Up CD 0 J c N CO 14- U A to _J .«, 0 t- R 0 \ J `� cco {yN. s .'dl' J y c a. te� ) cS { _r^ -4- w T C W C a C o a) C O E p U O U Q -,— E ► Cn 0 c<1 C @ a) a` — m Q) E . v c iT > o {` U I `..4) ,_9 W o o U co N. oI U) C co E TONES WALDO HOLBROOK& MCDONOUGHPc 170 South Main Street Telephone: 801.534.7449 Suite 1500 Fax: 801328.0537 Salt Lake City,Utah 84101 tberggren@joneswaldo.com By: Email ME MOR ANDUM TO: Rick Graham CC: Kay Christensen Boyd Ferguson FROM: Tom Berggren DATE: October 31, 2006 RE: Sorenson Unity Center Executive Summary: The City currently has available approximately$5.3 million from grants to construct the Sorenson Unity Center(the "Project"). The Administration has learned that the Project is a type of development that is eligible for investment by an entity that wants federal tax credits under the New Markets Tax Credits Program (the "Tax Credits Program"). A financial institution (the "Bank")has expressed its interest in supporting the Project by contributing approximately$1.99 million in cash to the Project in accordance with the Tax Credits Program, which would result in a net benefit to the Project of in excess of$1.1 million. This additional funding is critical to making the Project a success. You have requested that I (1) explain how this contribution could be made, (2)highlight the key provisions of the agreements that would implement the financing of the construction costs and initial operational funding for the Project, and (3)review the benefits and the risks that may be involved. This memo responds to your request. In essence, because of the benefits the Bank would receive under the Tax Credits Program over the first seven years after construction of the Project, the Bank's contribution can remain with the Project with no repayment or any other remaining obligations on the part of the City. While there are certain potential problems with the proposal, they are probably quite unlikely to occur and in any event there are ways to mitigate any such problems. Proposed Structure: Attached is a chart that shows how the funds would flow. The following is a description of the main terms of the necessary agreements: (a) A new Utah nonprofit corporation (the "New Entity") will be formed by the existing Salt Lake City Foundation (the "SLC Foundation"), and an Operating Agreement will be signed by the trustees of the SLC Foundation containing, among other things, the following provisions: (i) The City will make a grant to the SLC Foundation in the amount of approximately$12,000. The SLC Foundation will use this amount of money to capitalize the New Entity, which in turn will use these funds for incidental costs incurred in connection with starting up the Project. (ii) The SLC Foundation will be the sole member/owner of the New Entity. (iii) The New Entity should apply for 501(c)(3) status. Given the nature of the Project and that the New Entity will be 100% owned by the SLC Foundation, which is already a 501(c)(3) entity, tax-exempt status should not be difficult to obtain. (iv) It should be noted that the current Articles of Incorporation of the SLC Foundation provide that the Mayor is one of the three trustees, and the Mayor appoints the other two trustees. As you have instructed, we will amend the Articles of Incorporation to provide that the Chair of the City Council will be one of the three trustees, the Mayor will be one of the trustees and those two will appoint the third trustee. (v) The Articles of Incorporation for the New Entity will provide that the three directors of the New Entity will be the same as the trustees for the SLC Foundation. The New Entity would need a President and a Secretary. As we have discussed, the imanslc_766181_4 2 directors could appoint Gordon Hoskins as President and Dan Mule' as Secretary. (b) At the closing, the New Entity will enter into a Ground Lease with the City, pursuant to which the parties agree as follows: (i) The City agrees to ground lease approximately 2.2 acres along 900 West to the New Entity. (ii) The Ground Lease is for a term that will expire 60 years following the date on which the Project is placed in service. (iii) The rent is $1 per year. (iv) The parties acknowledge they are simultaneously entering into the Master Lease Agreement(see below). (v) At the end of the term, the City becomes the owner of the Project. (c) At the closing, the City and the New Entity will enter into a Master Lease Agreement, pursuant to which the parties agree as follows: (i) The New Entity agrees to cause the construction of the Project at its expense. The City agrees to act as the agent of the New Entity for the purpose of constructing the Project. The New Entity will agree to pay the City a developer fee of at least $210,000. The City can use that money to fund reserves to pay for the costs of operation and maintenance. (ii) Following substantial completion of the Project, the City agrees to use its best efforts to lease the space to permitted users and lessees, such as educational institutions and non- profit organizations, and to use the facility as the site for public programming that is currently funded by the City or may be desired by the community to meet specific community needs. (iii) The Master Lease will be a"net lease" (under which the City is responsible for all costs of operation of the Project). (iv) The City will retain all rent and fees paid by sublessees and users. (v) The term of the Master Lease will be 20 years. imanslc 766181 4 3 (vi) The rent to be paid by the City will be $55,000 per year for the first year, with a 1% increase each of the next nine years. In year 11, the rent increases to $85,750 per year, with a 5% increase in the next nine years. TlTijs amount allows the New Entity to pay debt service owing on the CDE Loans (described below). Also, part of the proceeds of the CDE Loans (discussed below) that the New Entity receives can be used by the New Entity to reimburse the City for previously incurred costs, which money will then be used by the City to establish a reserve that will pay the full amount of this rent during the first seven years. In order to prevent the City's rent obligation from constituting unconstitutional debt, there will be a"subject to appropriation" clause, pursuant to which the New Entity acknowledges that the payment of rent each year is subject to an annual appropriation by the City Council. There would also be a clause that provides that the subleases and the rental payments thereunder will be assigned as security for the City's Master Lease obligations, so that if the City ever fails to pay rent(including but not limited to by reason of the City's failure to appropriate the necessary funds), the rent payable by sublessees will be paid to the New Entity(up to the amount owed by the City from time to time). (vii) The parties will acknowledge that the City will initially hold reserves in the amount of at least $210,000 to use for operational costs that are not covered by income from the Project during the term of the Master Lease. (This money will come from the developer fee earned by the City discussed above). (d) At the closing, the City will enter into a loan agreement with a newly formed subsidiary of the Bank (the "Investment Fund"), pursuant to which the parties agree as follows: (i) The City agrees to make a loan (the "City's Investment Loan") in the amount of$4,721,055 to the Investment Fund. The terms are as follows: 1. It will have a term of 8 years. 2. The City will agree to accept from the Investment Fund, in satisfaction of its obligation to repay the City's Investment Loan, an assignment to the City of the larger CDE Loan (discussed below), should the Investment Fund elect to cause the CDE (defined imanslc_766181_4 4 below) to distribute the same in kind to the Investment Fund. 3. The maturity date of the City's Investment Loan may be extended in the event there is an unexpected delay in the full funding of the Investment Fund's investment in the CDE to account for the resulting increase in the length of the compliance period under the New Markets Tax Credits Program (i.e. seven years after last investment is made (the "NMTC Compliance Period"), plus a reasonable time thereafter is allowed to enable the SLC Foundation to acquire the Bank's membership interests in the Investment Fund, pursuant to either the "Put" or"Call"rights described below). 4. It will bear interest at the rate of 0.50%per annum. 5. No principal payments are required, only monthly payments of accrued interest until maturity. 6. The City agrees that, notwithstanding any default under the loan by the Investment Fund to the CDE, the City will forebear from exercising any of its remedies prior to the maturity date of the City's Investment Loan. 7. The Investment Fund will pledge its partnership interest in the CDE as the sole security for the City's Investment Loan. (ii) The Bank agrees to make a capital contribution(the "Investor's Contribution")to the Investment Fund in the net amount of $1.99 million. (iii) The Investment Fund agrees to use the proceeds of the City's Investment Loan and the Investor's Contribution to make a capital contribution to a newly formed, special-purpose limited liability company (the "CDE") controlled by the Bank. (iv) The Investment Fund agrees to cause the CDE to make two loans to the New Entity on the following terms: 1. One loan will be in the amount of approximately $4,721,055 and one loan will be in the amount of $1,990,382 (the "CDE Loans"). Each loan will bear interest at the rate of 0.82% per annum and have a term of 36 years. Each will be interest only during the imanslc_766181_4 5 NMTC Compliance Period, and then it will begin paying principal with a balloon payment due in the last year. The larger loan will be secured by a deed of trust on the New Entity's ownership interest in the building and its leasehold interest in the land created by the Ground Lease. The smaller loan may or may not be secured. 2. The New Entity will agree to use the Project only for the specified purposes that are in compliance with the Tax Credits Program. (e) At the closing, the SLC Foundation will sign an indemnification agreement pursuant to which it agrees that it will indemnify the Bank for any losses incurred by the Bank as a result of the violation of the New Entity's representations and covenants that the New Entity will comply with the requirements of the Tax Credits Program. (f) At the closing, the Bank will enter into an Option Agreement with the SLC Foundation, pursuant to which the parties agree as follows: (i) The SLC Foundation grants the Bank the option to sell its membership interest in the Investment Fund to the SLC Foundation for a purchase price of$1,000 at the end of the NMTC Compliance Period(the "Put"). (ii) If the Put is not exercised by the Bank, the Bank grants the SLC Foundation the option to purchase its membership interest in the Investment Fund for a purchase price equal to the fair market value of the membership interest, which will be determined in accordance with an agreed upon formula(the "Call"). The actual amount of the fair market value of the membership interest at the time the Call is exercised will end up to be a number that is less than $100,000. This is because the Investment Fund will have a liability to pay the City's Investment Loan of$4,696,508, which will be satisfied by assigning the larger CDE Loan to the City, and then the only other asset of the Investment Fund will be the smaller CDE Loan. The fair market value of that approximately$2 million loan, given its long maturity and its low interest rate and principal repayment requirements, and given that it is subordinate to the larger CDE Loan (which will be secured by a deed of trust on the building), will be very modest; prior to the closing, financial projections will be made, using reasonable future market assumptions, that will demonstrate that the loan will be worth less than $100,000. The New Entity imanslc_766181_4 6 can establish/build up reserves to make sure this sum is available if the SLC Foundation needs to exercise the Call in the event the Put is not exercised. The Bank's Exit: If the Put is exercised, the SLC Foundation will control the CDE and can then exercise the rights of the Investment Fund under the operating agreement of the CDE, which will include(i) the right to require a distribution in kind of the CDE Loans to the Investment Fund, (ii) the right to remove and replace the managing member of the CDE, and (iii)the right to elect to dissolve the CDE. The SLC Foundation would then be able to determine the disposition of the CDE Loans (including the right to cause them to be assigned in satisfaction of the City's Investment Loan as described above). While this may be a taxable event, there are no tax consequences because the SLC Foundation is a 501(c)(3). There would be no remaining obligations of the City or the SLC Foundation(other than pursuant to the indemnification agreement discussed below). If the Project is subsequently transferred to the SLC Foundation or the City, there could possibly be tax consequences, but it is likely that the transfer could be structured to eliminate those issues, and assuming that the New Entity is a 501(c)(3), there will definitely be no liability at that point. If for any reason the Put is not exercised, then SLC will exercise its Call,which results in the same scenario as described in the previous paragraph. Risks: (1) Under the indemnification agreement by the SLC Foundation referred to above, if the New Entity were to use the Project for the purposes of operating(1) an apartment complex, (2) a bank, credit union or other financial institution, or(3) a country club, massage parlor, hot tub facility, suntan facility or racetrack, the Bank would have its tax credits recaptured and the SLC Foundation would be responsible for paying the Bank an amount equal to its anticipated federal tax credits. By managing the Project to avoid those prohibited uses, the City, as the master lessee under the Master Lease, can prevent the SLC Foundation from being liable for such amounts. I understand that the Department of Public Services has created pro formas for the revenues and costs in operating the Project over the next seven years. I also understand that, based on prior discussions with the Council (1) City appropriations for funds for the operation of the Project will be required in a few years, once the initial operational reserves have been depleted, and(2) to the extent that it turns out to be more difficult than projected to locate users of the Project willing to pay rent and/or a share of the operating costs of the Project, these operational subsidies may be more than the current pro formas provide. imanslc_766181_4 7 Please call me if you have any questions regarding the foregoing. Thank you. imanslc_766181_4 8 NOV 01 2006 SATIP e1 e r® L li CO RPO A�O l ROSS C. "ROCKY" ANDERSON RICHARD GRAHAM -» --� - ,� _ �„a PUBLIC SERVICES DIRECTOR DEPARTMENT OF PUBLIC SERVICES MAYOR COUNCIL TRANSMITTAL TO: RockyFluhart, DATE: October e 31, 2006 Chief Administration Officer FROM: Rick Graham, Director Public Services Department SUBJECT: New Market Tax Credit Initiative - Sorenson Unity Center Project STAFF CONTACT: Rick Graham 535-7774 Tom Berggren, Legal Counsel 534-7449 Jones, Waldo, Holbrook & McDonough, P.C. DOCUMENT TYPE: Briefing RECOMMENDATION: That the City Council support the Administration's effort to bring New Market Tax Credit investment funding into the Sorenson Unity Center funding program. BUDGET IMPACT: The New Market Tax Credit funding initiative will bring approximately$2,050,000 in cash to the project, to support the full build-out of the project including the construction of two (2) classroom spaces to house the computer club house program. DISCUSSION: The City currently has available approximately$5.3 million from grants and earned interest to construct the Sorenson Unity Center. The Sorenson Unity Center project is a type of public development that is eligible for investment by an entity that wants federal tax credits under the New Market Tax Credit Program. The City is close to finalizing an investment contribution of approximately$2,050,000 in cash with a financial institution. This additional funding is critical to making the project a success. It will allow the City to construct a 25,000 square foot building that includes space for the City's current computer clubhouse program and the other fitness, education, health and cultural arts programs desired by the community. Attached, is a Memorandum prepared by Torn Berggren, the City's outside legal counsel hired to provide legal support and technical expertise, and to represent the City's interest 451 SOUTH STATE STREET, ROOM 1 4B, SALT LAKE CITY, UTAH 641 1 1 TELEPHONE: B01-535-7775 FAX: B01-535-7769 WWW.SLCGOV.COM throughout the negotiation process. Tom's memorandum highlights the key provisions of the funding agreement; and reviews the benefits and risks involved. Construction bids have been received and contract negotiations are currently underway with the low bidder. Construction will begin in early December with completion anticipated in late summer 2007. PUBLIC PROCESS: Not Needed • ONE S k-INAT WALDO HOLBROOK& MCDONOUGHPC 170 South Main Street Telephone: 801.534.7449 Suite 1500 Fax: 801.328.0537 Salt Lake City,Utah 84101 terggren@joneswaldo.com By: Email MEMOR A ND UM TO: Rick Graham CC: Kay Christensen Boyd Ferguson FROM: Tom Berggren DATE: October 31, 2006 RE: Sorenson Unity Center Executive Summary: The City currently has available approximately $5.3 million from grants to construct the Sorenson Unity Center (the "Project"). The Administration has learned that the Project is a type of development that is eligible for investment by an entity that wants federal tax credits under the New Markets Tax Credits Program (the "Tax Credits Program"). A financial institution (the "Bank") has expressed its interest in supporting the Project by contributing approximately $2,050,000 in cash to the Project in accordance with the Tax Credits Program. This additional funding is critical to making the Project a success. You have requested that I (1) explain how this contribution could be made, (2) highlight the key provisions of the agreements that would implement the financing of the construction costs and initial operational funding for the Project, and (3) review the benefits and the risks that may be involved. This memo responds to your request. In essence, because of the benefits the Bank would receive under the Tax Credits Program over the first seven years after construction of the Project, the Bank's $2,050,000 contribution can remain with the Project with no repayment or any other remaining obligations on the part of the City. While there are certain potential problems with the proposal, they are probably quite unlikely to occur and in any event there are ways to mitigate any such problems. Proposed Structure: Attached is a chart that shows how the funds would flow. The following is a description of the main terms of the necessary agreements: (a) A new Utah nonprofit corporation (the "New Entity") will be formed by the existing Salt Lake City Foundation (the "SLC Foundation"), and an Operating Agreement will be signed by the trustees of the SLC Foundation containing, among other things, the following provisions: (i) The City will make a grant to the SLC Foundation in the amount of approximately $12,000. The SLC Foundation will use this amount of money to capitalize the New Entity, which in turn will use these funds for incidental costs incurred in connection with starting up the Project. (ii) The SLC Foundation will be the sole member/owner of the New Entity. (iii) The New Entity should apply for 501(c)(3) status. Given the nature of the Project and that the New Entity will be 100% owned by the SLC Foundation, which is already a 501(c)(3) entity, tax-exempt status should not be difficult to obtain. (b) At the closing,the New Entity will enter into a Ground Lease with the City, pursuant to which the parties agree as follows: (i) The City agrees to ground lease approximately 2.2 acres along 900 West to the New Entity. (ii) The Ground Lease is for a term that will expire 39 years following the date on which the Project is placed in service. (iii) The rent is $1 per year. (iv) The parties acknowledge they are simultaneously entering into the Master Lease Agreement (see below). imanslc_766181_3 2 (v) At the end of the term, the City becomes the owner of the Project. (c) At the closing, the City and the New Entity will enter into a Master Lease Agreement,pursuant to which the parties agree as follows: (i) The New Entity agrees to cause the construction of the Project at its expense. The City agrees to act as the agent of the New Entity for the purpose of constructing the Project. The New Entity will agree to pay the City a developer fee of about $210,000. The City can use that money to fund reserves to pay for the costs of operation and maintenance. (ii) Following substantial completion of the Project, the City agrees to use its best efforts to lease the space to permitted users and lessees, such as educational institutions and non- profit organizations, and to use the facility as the site for public programming that is currently funded by the City or may be desired by the community to meet specific community needs. (iii) The Master Lease will be a "net lease" (under which the City is responsible for all costs of operation of the Project). (iv) The City will retain all rent and fees paid by sublessees and users. (v) The term of the Master Lease will be 20 years. (vi) The rent to be paid by the City will be $55,000 per year for the first year, with a 1% increase each of the next nine years. In year 11, the rent increases to $85,750 per year, with a 5% increase in the next nine years. This amount allows the New Entity to pay debt service owing on the CDE Loans (described below). At the closing, reserves will be funded that will pay the full amount of this rent during the first seven years. In order to prevent the City's rent obligation from constituting unconstitutional debt, there will be a"subject to appropriation" clause,pursuant to which the New Entity acknowledges that the payment of rent each year is subject to an annual appropriation by the City Council. There would also be a clause that provides that the subleases and the rental payments thereunder will be assigned as security for the City's Master Lease obligations, so that if the City ever fails to pay rent (including but not limited to by reason of the City's failure to appropriate the necessary funds), the rent payable by imanslc 766181 3 3 sublessees will be paid to the New Entity (up to the amount owed by the City from time to time). (vii) The parties will acknowledge that the City will initially hold reserves in the amount of$210,000 to use for operational costs that are not covered by income from the Project during the term of the Master Lease. (This money will come from the developer fee earned by the City discussed above). (d) At the closing, the City will enter into a loan agreement with a newly formed subsidiary of the Bank (the "Investment Fund"), pursuant to which the parties agree as follows: (i) The City agrees to make a loan (the "City's Investment Loan") in the amount of$4,721,055 to the Investment Fund. The terms are as follows: 1. It will have a term of 8 years. 2. The City will agree to accept from the Investment Fund, in satisfaction of its obligation to repay the City's Investment Loan, an assignment to the City of the larger CDE Loan (discussed below), should the Investment Fund elect to cause the CDE (defined below) to distribute the same in kind to the Investment Fund. 3. The maturity date of the City's Investment Loan may be extended in the event there is an unexpected delay in the full funding of the Investment Fund's investment in the CDE to account for the resulting increase in the length of the compliance period under the New Markets Tax Credits Program (i.e. seven years after last investment is made (the "NMTC Compliance Period"), plus a reasonable time thereafter is allowed to enable the SLC Foundation to acquire the Bank's membership interests in the Investment Fund, pursuant to either the "Put" or"Call" rights described below). 4. It will bear interest at the rate of 0.50% per annum. 5. No principal payments are required, only monthly payments of accrued interest until maturity. 6. The City agrees that, notwithstanding any default under the loan by the Investment Fund to the CDE, the City manslc IS S 1 3 4 will forebear from exercising any of its remedies prior to the maturity date of the City's Investment Loan. 7. The Investment Fund will pledge its partnership interest in the CDE as the sole security for the City's Investment Loan. (ii) The Bank agrees to make a capital contribution (the "Investor's Contribution")to the Investment Fund in the amount of $2,058,174. (iii) The Investment Fund agrees to use the proceeds of the City's Investment Loan and the Investor's Contribution to make a capital contribution to a newly formed, special-purpose limited liability company(the "CDE") controlled by the Bank. (iv) The Investment Fund agrees to cause the CDE to make two loans to the New Entity on the following terms: 1. One loan will be in the amount of approximately $4,721,055 and one loan will be in the amount of $1,990,382 (the "CDE Loans"). Each loan will bear interest at the rate of 0.82%per annum and have a term of 36 years. Each will be interest only during the NMTC Compliance Period, and then it will begin. paying principal with a balloon payment due in the last year. The larger loan will be secured by a deed of trust on the New Entity's ownership interest in the building and its leasehold interest in the land created by the Ground Lease. The smaller loan may or may not be secured. 2. The New Entity will agree to use the Project only for the specified purposes that are in compliance with the Tax Credits Program. (e) At the closing, the SLC Foundation will sign an indemnification agreement pursuant to which it agrees that it will indemnify the Bank for any losses incurred by the Bank as a result of the violation of the New Entity's representations and covenants that the New Entity will comply with the requirements of the Tax Credits Program. (f) At the closing, the Bank will enter into an Option Agreement with the SLC Foundation, pursuant to which the parties agree as follows: imanslc_766181_3 5 (i) The SLC Foundation grants the Bank the option to sell its membership interest in the Investment Fund to the SLC Foundation for a purchase price of$1,000 at the end of the NMTC Compliance Period (the "Put"). (ii) If the Put is not exercised by the Bank, the Bank grants the SLC Foundation the option to purchase its membership interest in the Investment Fund for a purchase price equal to the fair market value of the membership interest, which will be determined in accordance with an agreed upon formula (the "Call"). The actual amount of the fair market value of the membership interest at the time the Call is exercised will end up to be a number that is less than $100,000. This is because the Investment Fund will have a liability to pay the City's Investment Loan of$4,696,508,which will be satisfied by assigning the larger CDE Loan to the City, and then the only other asset of the Investment Fund will be the smaller CDE Loan. The fair market value of that approximately $2 million loan, given its long maturity and its low interest rate and principal repayment requirements, and given that it is subordinate to the larger CDE Loan (which will be secured by a deed of trust on the building), will be very modest; prior to the closing, financial projections will be made, using reasonable future market assumptions, that will demonstrate that the loan will be worth less than $100,000. The New Entity can establish/build up reserves to make sure this sum is available if the SLC Foundation needs to exercise the Call in the event the Put is not exercised. The Bank's Exit: If the Put is exercised, the SLC Foundation will control the CDE and can then exercise the rights of the Investment Fund under the operating agreement of the CDE, which will include (i) the right to require a distribution in kind of the CDE Loans to the Investment Fund, (ii) the right to remove and replace the managing member of the CDE, and (iii) the right to elect to dissolve the CDE. The SLC Foundation would then be able to determine the disposition of the CDE Loans (including the right to cause them to be assigned in satisfaction of the City's Investment Loan as described above). While this may be a taxable event, there are no tax consequences because the SLC Foundation is a 501(c)(3). There would be no remaining obligations of the City or the SLC Foundation (other than pursuant to the indemnification agreement discussed below). If the Project is subsequently transferred to the SLC Foundation or the City, there could possibly be tax consequences, but it is likely that the transfer could be structured to eliminate those issues, and assuming that the New Entity is a 501(c)(3), there will definitely be no liability at that point. If for any reason the Put is not exercised, then SLC will exercise its Call, which results in the same scenario as described in the previous paragraph. imanslc 766181 3 6 Risks: (1) Under the indemnification agreement by the SLC Foundation referred to above, if the New Entity were to use the Project for the purposes of operating (1) an apartment complex, (2) a bank, credit union or other financial institution, or(3) a country club, massage parlor, hot tub facility, suntan facility or racetrack, the Bank would have its tax credits recaptured and the SLC Foundation would be responsible for paying the Bank an amount equal to its anticipated federal tax credits. By managing the Project to avoid those prohibited uses, the City, as the master lessee under the Master Lease, can prevent the SLC Foundation from being liable for such amounts. I understand that the Department of Public Services has created pro formas for the revenues and costs in operating the Project over the next seven years. I also understand that, based on prior discussions with the Council (1) City appropriations for funds for the operation of the Project will be required in a few years, once the initial operational reserves have been depleted, and (2) to the extent that it turns out to be more difficult than projected to locate users of the Project willing to pay rent and/or a share of the operating costs of the Project, these operational subsidies may be more than the current pro formas provide. Please call me if you have any questions regarding the foregoing. Thank you. imanslc_766181_3 7 U n a. 0 O 13 U I. C CO >, J 6 U _ 1 Y C) as J y 4 To o) to -o c C =o (C w CO b o O N a) O co (n N N co J a) <» -o J (n C N C 0 12 O in co CD O 2 'r o vW 0 C (0. (n CO O C cn >, CC O 3 0 N 1.) Z C -o 0 W c m D n ( 0 u) C.) 'a ILLu_ C �o Lo y'5 LL U c CO v � � z cu ' O@ ,.._) x 7oO .a. 0 co J : � 0 A _1 }` 1 co o (» LL coco U r N M C (6 _ 0 J N- 64 C W c co C E C (n a)s Y N .Q a -9 u) r > C N D C (6 > L —C m > CD m C— - C CO O V Ea CO 0 ,--I W ,-- co 0 o U C0 co N- U_I V7 C Co E Np� O1 ?00 6 COUNCIL TRANSMITTAL TO: Steve Fawcett Deputy Director, Management Services Department FROM: Kay Christensen SUBJECT: Approval of Transfer of Municipal Assets under Utah Code Annotated Section 10-8-2 STAFF CONTACT: Kay Christensen 535-7677 DOCUMENT TYPE: Study required by UCA Section 10-8-2 and request for Public Inspection and Public Hearing as required by UCA Section 10-8-2 BACKGROUND/DISCUSSION: This information is being provided in compliance with UCA Section 10-8-2, which states the purposes for which a municipal body may appropriate funds. The Statute sets forth a specified process which must be followed to determine if a charitable contribution can be made. The process has three steps: 1. A study must be performed that identifies the net equivalent value received by the City in exchange for any City asset contributed. The benefit may be intangible. The study must consider the following factors: a. The specific benefits to be received by the City; b. The City's purpose in making the appropriation, including an analysis of how the safety, health, prosperity, moral well-being, peace, order, comfort or convenience of the residents of Salt Lake City will be enhanced; and c. Whether the appropriation is "necessary and appropriate" to accomplish the City's goals. 2. Notice of a public hearing must be published in a newspaper of general circulation at least 14 days prior to the date of the hearing, and the notice must include the availability of the completed study for public inspection. 3. A public hearing must be held by the City Council and the Council must make a determination that the appropriation will provide for the safety, health, prosperity, moral well-being, peace, order, comfort or convenience of the residents of the City, and that the net value received by the City will constitute adequate consideration or equivalent value for the benefit being provided by the appropriation. Attached is a study regarding Salt Lake City Corporation's intention to enter into a financial arrangement in order to reap the benefits of the federal New Market Tax Credit program for the construction and operation of the Sorenson Unity Center. The arrangement requires the City to enter into a ground lease and a master lease. MEMORANDUM TO: Steve Fawcett FROM: Kay Christensen DATE: October 30, 2006 SUBJECT: New Market Tax Credit Financial Agreement Regarding the Sorenson Unity Center: Study to Comply with Utah Code Annotated Section 10-8-2 UCA 10-8-2 states the purposes for which a municipal body may appropriate public funds and the factors that must be considered in determining the propriety of such an appropriation. Salt Lake City Corporation intends to enter into a financial arrangement in order to reap the benefits of the federal New Market Tax Credits Program for the construction and operation of the Sorenson Unity Center. The arrangement requires the City to enter into a ground lease and a master lease. To ensure that the financial arrangement is in compliance with UCA 10-8-2, the following study has been performed. This study will consider the following factors: (1) The specific benefits to be received by the City; (2) The City's purpose in making the appropriation, including an analysis of how the safety, health, prosperity, moral well-being, peace, order, comfort or convenience of the residents of Salt Lake City will be enhanced; and (3) Whether the appropriation is "necessary and appropriate" to accomplish the City's goals. Benefits and Costs to Salt Lake City: The New Market Tax Credits Program was enacted by Congress in December 2000 as part of the bipartisan Community Renewal Tax Relief Act. The purpose of the NMTC is to spur private investment in low-income urban and rural communities. The program is based on the idea that there are viable business opportunities in low-income communities and that a federal tax credit would provide an attractive incentive to increase the flow of investment capital to such areas. Tax credits will make the cost of capital 2 or 3 percentage points below the cost it would have been without the credits. The program offers a credit against federal income taxes for qualified organizations, called "community development entities (CDE's)." CDE's qualify for the program and are allocated an amount of New Market Tax Credits. The CDE must then seek a "qualified equity investment (QEI)." When Salt Lake City learned of the New Market Tax Credits Program, the City began to seek a CDE that would be interested in helping to finance the Sorenson Unity Center. While the City owns the property on which the Center will be constructed and substantial donated funds for construction, recent increases in construction costs have raised the price of construction beyond the funds on hand. Low bid on the project came in at over $700,000 more than expected. Fortunately, the City had been in negotiation with a well-respected financial institution (the "Bank") with New Market Tax Credits that is willing to consider the Sorenson Unity Center a candidate for support as a qualified equity investment. Certain terms and conditions are necessary to achieve the status of qualified equity investment and it is those terms and conditions that require analysis under the provisions of UCA 10- 8-2. Because the New Market Tax Credits cannot go directly to a government entity, the following structure has been created to allow the City to reap the benefits of the program: The City has available approximately $4.7 million in donations and interest to construct the Sorenson Unity Center. The Bank has been allocated federal New Market Tax Credits, and is willing to contribute approximately $2,050,000 into the Center through the Tax Credits program. The City will make a loan of the $4.7 million to the Bank's Investment Fund (CDE) for a term of 8 years. The CDE will then make a capital contribution, generated from the Tax Credit program, to the Investment Fund of approximately $2,050,000. 2 In essence, because of the benefits the Bank would receive under the Tax Credits Program over the first seven years after construction of the Project, the Bank's $2,050,000 contribution can remain with the Project with no repayment or any other remaining obligations on the part of the City. The CDE will then lend approximately $6.7 to the entity that will facilitate the construction and operation of the Sorenson Unity Center. That entity is a new Utah nonprofit corporation (the "New Entity") foiiiied by the existing Salt Lake City Foundation (the "SLC Foundation"). This structure is necessary to meet the requirement of the federal NMTC program. The SLC Foundation will be the sole member/owner of the New Entity. The New Entity will build the Center, pay interest on the loans and keep reserves for closing out the investment after approximately 8 years. The City will ground lease (for a term of 39 years) the 2.2 acres of land for the Sorenson Unity Center to the New Entity. The New Entity will own the building. The City's approximately $4.7 million loan will be secured by a deed of trust on the leasehold interest in the building secured by the ground lease. Rent will be $1 a year and at the end of the term the City will become the sole owner of the project. At the same time the City and the New Entity will enter into a master lease agreement in which the New Corporation agrees to cause the construction of the Sorenson Unity Center at its expense and the City agrees to act as the agent of the New Entity for purposes of constructing the project. The New Entity will agree to pay the City a,developer fee of approximately $210,000. The City can use that money as a reserve to pay for the cost of operation and maintenance of the facility. The City will not make its loan until there is a binding loan agreement between the CDE and the New Entity stating that the CDE is obligated to make the loans to the New Entity for the purpose of financing the construction of the Sorenson Unity Center. The CDE could not use the funds for any other purpose. If for any reason the City's loan could not be used (for example, if the block were accidentally contaminated with hazardous materials that could not be cleaned up), the CDE would be obligated to immediately return the money to the City. 3 The Investment Fund will pledge its 99.99% partnership interest in the CDE as security for the performance of the Investment Fund's obligations to the City. When the building is completed, the City will lease the space to educational institutions, non-profit organizations and others as possible, and use the facility as the site for public programming that is currently funded by the City or may be desired by the community to meet specific community needs. Under the terms of the master lease, a "net lease," the City will be responsible for all costs of operation of the Center and will retain all rent and fees. The term of the master lease is 20 years. Meeting Salt Lake City's Purpose and Enhancing the Quality of Life for Residents: As a result of the New Market Tax Credits Program, Salt Lake City will gain approximately $2 million in additional funds to construct and operate the Sorenson Unity Center. Because the low bid on construction of the Center was $700,000 above expectations, it would not be possible to construct the Center as planned without an infusion of funds from the City or from the New Market Tax Credits Program. While the City will incur costs related to the New Market Tax Credits Project, and will loan funds to the CDE and enter into a lease agreement with the New Entity, the approximately $2 million in funds flowing into the project will be adequate to cover all costs of construction, legal and other fees associated with the project, and may even provide some residual funds for operation and maintenance. In order for the Bank to be eligible to receive new market tax credits, the Sorenson Unity Center must remain an eligible project. If the New Entity were to use the project for the purposes of operating (1) an apartment complex, (2) a bank, credit union or other financial institution, or (3) a country club, massage parlor, hot tub facility, suntan facility or racetrack, the Bank would have its tax credits recaptured and the SLC Foundation would be responsible for paying the Bank an amount equal to its anticipated tax credits. By managing the Sorenson Unity Center to avoid those prohibited uses, the City can prevent the SLC Foundation from being liable for such amounts. The new Sorenson Unity Center will serve the area from 1300 South to 2100 South and Redwood Road east to 700 East. While the proposed facility will be an asset for the whole City, the target area is this underserved 4 segment of the City. The Glendale, Poplar Grove area is one of the City's most diverse communities. To determine the demographics of this target area, the City examined census statistics in Census Tracts 1028.02, 1029 (which goes north to 9th South west of 1-15), 1031, and 1032; four Census Tracts. The Salt Lake City School District reports that there are at least 28 languages spoken in this geographic area, and that there are over 1,700 children who are not currently served by any early childhood education program. With regard to general population, race and ethnicity, age, household status (whether single head of household or married), income level, education level, rental or ownership of residence, and primary language, the following statistics apply: Population- 17,053 Race White- 12,093 African American- 486 American Indian- 471 Asian- 618 Pacific Islander- 711 Some other race- 1,801 Ethnicity Hispanic- 3,978 (23%) On the census form "Hispanic" is not listed as a race, so the majority of the category "some other race" are Hispanics also. Median Age The median age in the area is 30. Housing There are 6,773 housing units in the target area. 3,160 of those units are owner occupied (49.5%) and 3, 221 (50.5%) are renter occupied. Language There are 4,646 people who speak English as their primary language, 979 who speak Spanish, 357 who speak other Indo-European languages, 283 who speak Asian and Pacific Islander languages (mostly Tongan), and 137 who speak other languages. Those are very broad categories that encompass the 28 languages mentioned by the School District. Place of Birth 3,671 residents of the target area are foreign born. 72% of those people are not citizens and 28% are naturalized citizens. Family Type Female Head of household with children under 18. 543 Male head of household with no wife present and children under 18. 183 Income Median Family Income $36,000. The Sorenson Unity Center project is not an expansion of the existing recreation center. Its mission is to, "Provide a public space that appeals to, welcomes and values the culture of all people. The Center will offer multi- generational programs and services that are unique to the needs of the community, bridge cultural difference, and allow people to work, play and learn from each other. Programs and services will be designed to be broad in their appeal, sustainable, and cost effective so all participants experience equal and fair treatment. The Center will be a safe place for all to enjoy." It is expected that the Center will serve at least 325 people per day in the full range of services and programs offered. There is no facility offering the same services anywhere in the Glendale/Poplar Grove area. Accomplishing Salt Lake City's Goals: The mission of Salt Lake City Corporation is "to make Salt Lake City the best place to live, work, play, visit and to do business." The Sorenson Unity Center is an asset to the City in achieving each of those goals, and the New Market Tax Credits agreement will make construction of the Center as planned a reality. In conclusion, the City is fortunate to have found a financial institution willing to invest in the future of Salt Lake City's west side, and 6 the New Market Tax Credits project is necessary and appropriate to accomplish the City's goal. 7 RESOLUTION NO. OF 2006 (ACCEPTING THE STUDY PERFORMED IN COMPLIANCE WITH UTAH CODE SECTION 10-8-2 AND APPROVING A GROUND LEASE AND MASTER LEASE AND AN APPROPRIATION OF MONEY RELATING TO THE PROPOSED SORENSEN UNITY CENTER WHEREAS, the City Administration has recommended that the City construct the Sorensen Unity Center (the "Unity Center"); and WHEREAS, the City Administration has recommended that the City obtain approximately $2,000,000 through a financing involving new markets tax credits; and WHEREAS, such new markets tax credit financing requires the City to ground lease the land on which the Unity Center will be located to a Utah nonprofit corporation (the "New Entity"), the sole member/owner of which will be the existing Salt Lake City Foundation, and thereafter to enter into a master lease with the New Entity pursuant to which the City will lease from the New Entity the Unity Center and the land on which it is located; and WHEREAS, under the master lease the City will be obligated to perfoiin certain ongoing services with respect to the Unity Center that will benefit the New Entity; and WHEREAS, the City Council has received and reviewed a study(the "Study") regarding the proposed ground lease and master lease prepared by the City's Department of Management Services in compliance with the requirements of Utah Code Section 10-8-2, and public notice has been given at least 14 days prior hereto in a newspaper of general circulation within the City; and WHEREAS, the Council has reviewed the Study, and has fully considered the analysis and conclusions set forth therein, and all comments made during the public hearing; NOW, THEREFORE, BE IT RESOLVED by the City Council of Salt Lake City, Utah: 1. The City Council hereby adopts the conclusions set forth in the Study, and hereby finds and determines that, for all the reasons set forth in the Study, the net value to be received by the City from the new markets tax credits financing will constitute adequate consideration, or equivalent value, both tangible and intangible, for the benefit being provided by the proposed ground lease and master lease; 2. In the judgment of the City Council, the Unity Center, through the ground lease and the master lease, will provide for the safety, health,prosperity, moral well-being, peace, order, comfort, or convenience of the inhabitants of Salt Lake City; 3. $4,733,843 is hereby appropriated from the City's Special Revenue Account for (a) a loan to the made from the City to an investment fund that owns a community development entity and (b) a grant to the Salt Lake City Foundation, each in connection with the new markets tax credits financing. Passed by the City Council of Salt Lake City, Utah, this 14th day of November, 2006. SALT LAKE CITY COUNCIL By CHAIRPERSON ATTEST: CHIEF DEPUTY CITY RECORDER APPROVED AS TO FORM Salt Lake City Attorney's Oiiie Date tCi By " 1:ARESOLUTI\Doug Short matters\Accepting 10-S-2 study re Unity Center 11-2-06.doc 2 MEMORANDUM DATE: November 3, 2006 TO: City Council Members FROM: Russell Weeks RE: Proposed Amendments to TRAX Extension Interlocal Agreement CC: Cindy Gust-Jenson,Rocky Fluhart, DJ Baxter, Dan Mule, Steve Fawcett, Valda Tarbet, Ed Rutan, Gordon Hoskins, Gary Mumford, E. Russell Vetter,John Naser, Jennifer Bruno, Sylvia Richards This memorandum pertains to proposed amendments to an interlocal agreement between Salt Lake City and the Utah Transit Authority relating to a project to extend the Trax line from the Delta Center Station at 400 West South Temple to the Intermodal Hub at 300 South 600 West. An ordinance amending the agreement is scheduled for a briefmg during the City Council work session November 7. The City Council is scheduled to hold a public hearing November 14 on the proposed amendments. The amendments mainly involve increasing the amount of money each party to the agreement will contribute to the project. When the City Council originally authorized Mayor Ross C.Anderson in April to sign the agreement the estimated project cost was$32 million.However, bids to build the extension came in significantly higher than the original estimate. The lowest bid for the project was$46.5 million. City and UTA officials then met and pared $4.8 million from the bid so the estimated project cost now is$41.7 million. Salt Lake City originally agreed to fund 26.4 percent of the project. If the City Council adopts the proposed amendments, the City's share would be$11.01 million.Under the original agreement the City's share was$8.45 million. OPTIONS • Adopt the proposed amendments. • Do not adopt the proposed amendments. • Amend the proposed amendments. POTENTIAL MOTIONS City Council staff will prepare motions after the November 7 work session briefing. KEY POINTS • Adopting the proposed amendments would acknowledge that project construction costs to extend the Trax line from the Delta Center to the Intermodal Hub have risen from an estimated$32 million to an estimated$41.7 million. 1 • Again,the lowest bid for the project was$46.5 million.The City and UTA pared about $4.8 million from the bid through cutting or delaying aspects of the project including: 1. Planned improvements such as curb and gutter, sidewalk,trees and lighting on the east side of 600 West Street. „ 2. Reduction by half in planned set-aside funds to help mitigate business impacts during construction from$250,000 to $125,000. 3. Change to ballasted track on 600 West Street instead of imbedding the track in concrete. 4. Elimination of UTA's third tail track at the end of the light-rail line. 5. Deferral to a later date of public way improvements on the south side of 200 South Street between 600 West and 700 West streets. • Salt Lake City's share of construction costs would rise from$8.45 million to $11.01 million—a$2.56 million increase. • In April when the City Council authorized signing the original agreement, the Council and the Administration acknowledged that funds already in hand for the City's share of the project were $850,000 short of the project estimate. The City acknowledged that it would have to allocate$850,000 for the project by July 2007. The$850,000 plus the $2.56 million projected increase equals$3.41 million—the total amount of funds that have not been allocated for the project. • The Administration has proposed three funding options for the City Council's consideration: • Add to a sales tax revenue bond that would pay for a new City fleet facility, straightening the railroad line at Grant Tower, and controlling erosion on the 900 South and Folsom Street rail corridors. • Issue a motor fuel excise tax bond • Pay cash from fund balance • According to the Administration transmittal,the$600,000 designated in the original interlocal agreement as the City's share to build a second Trax station at 525 West 200 South is not eligible for municipal bonds.That means about$2.81 million would be eligible for bonding,and$600,000 would have to come from other sources. • There is some indication that among the Administration financial managers that adding to the sales tax revenue bond might be preferable to the other two options to retain a strong fund balance. ISSUES/QUESTIONS FOR CONSIDERATION • Before making a decision on financing methods,the City Council may wish to know how much fund balance above 10 percent of general fund revenues is available unencumbered. • The Salt Lake City Redevelopment Agency has committed$2.4 million to the Trax extension project. Does the Agency have other funds available for the project? 2 • The City Council may wish to seek an indication from the Administration on whether the Utah Legislature might act on changing laws pertaining to sales tax revenue bonds in the next legislative session. (It should be noted that during the last legislative session the City represented to the Legislature that it would issue no more than$37 million in sales tax bonds this year.) • Is$125,000, instead of$250,000, enough money to help mitigate business impacts during construction of the extension? • The original agreement's requirement that the City appropriate$600,000 to the Intermodal Hub enterprise fund to pay the City's share of building a Trax station at 525 West 200 South remains in place. The agreement requires that UTA build the station in 2010 or when the combined average weekday passenger boardings at the 400 West and Delta Center Trax stations reach 4,650 boardings. Is there any sentiment among the City Council to work with UTA to build the station sooner than the requirements? BACKGROUND/DISCUSSION As indicated above,the City Council in April authorized Mayor Ross C.Anderson to sign an interlocal agreement between Salt Lake City and the Utah Transit Authority. The agreement outlined financial and other responsibilities of each party for the construction of a light-rail extension between UTA's Delta Center Trax station at 400 West South Temple and the Intermodal Hub at 600 West 200 South. Under the agreement Salt Lake City agreed to pay 26.4 percent of project construction costs. Total construction costs were estimated at$32 million. Salt Lake City's share was$8.45 million. Of the$8.45 million, Salt Lake City had$7.6 million in available revenue to pay for its share. The sum included$2.4 million in Redevelopment Agency funds; $2 million in Utah Transit Authority funds; and$3.2 million in reimbursements from the Federal Transit Administration for the City's expenses in securing land and building the Intermodal Hub. That left about$850,000 the City would have to appropriate from a revenue source by July 2007. After the City Council's action the Transit Authority issued a request for proposals to build the extension. The bids the UTA received were significantly higher than the$32 million estimate. The low bid for the project was$46.5 million.UTA and City officials then met with the low bidder and cut$4.8 million from the project, leaving a construction budget of$41.7 million— roughly$9.71 million above the original$32 million budget. Items cut from the construction budget: • Planned improvements such as curb and gutter, sidewalk,trees and lighting on the east side of 600 West Street. • Reduction by half in planned set-aside funds to help mitigate business impacts during construction from$250,000 to $125,000. • Change to ballasted track on 600 West Street instead of imbedding the track in concrete. • Elimination of UTA's third tail track at the end of the light-rail line. 3 • Deferral to a later date of public way improvements on the south side of 200 South Street between 600 West and 700 West streets. Pursuant to the original agreement,the parties agreed that each would bear the same percentage(26.4 percent)of costs that they had agreed to in the original document.That meant that Salt Lake City's share of the$9.71 million in increased costs was $2.56 million.UTA also would pay$2.56 million, and the Federal Transit Administration would pay$4.58 million. (It should be noted that UTA will advance$4.58 million to the project and seek reimbursement from the Federal Transit Administration.) Again, Salt Lake City's share of the increased estimated cost is$2.56 million.Under the original agreement, City officials also understood that another$850,000 still was needed by July 2007 to meet the City's financial obligations under the original agreement.That means the City's total unfunded obligation under the proposed amendments to the interlocal agreement would be $3.41 million. The Administration has proposed three options to meet the obligation: • Add to the sales tax revenue bond that will be issued for building a new City fleet facility, straightening railroad track at Grant Tower, and controlling erosion on 900 South and Folsom Street rail corridors. • Issue a motor fuel excise tax bond. • Make a cash payment from fund balance. There is some indication from Administration fmancial officials that the preferable option would be to add to the sales tax bond. There would be some economies of scale achieved by adding to the sales tax bond. A rough estimated amount for the projects is$21.6 million for the new fleet facility; $5.7 million for straightening railroad track at Grant Tower; and$300,000 for controlling erosion on the 900 South and Folsom Street rail corridors.Again, it should be noted that City officials represented to the Legislature in the last session that the City would issue up to $37 million in sales tax revenue bonds this year. One potential downside is that the Utah Legislature earlier this year placed a moratorium on issuing sales tax bonds until it considers the issue further in the next Legislative session. Salt Lake City proceeded with its bond because it had indicated to the Legislature that it already had projects ready to bond before the Legislature met.The unknown is what the Legislature might do in its 2007 session about municipal sales tax bonding. The motor fuel excise tax bond nominally pledges Class C road funds as the revenue source to pay back bonds over a 10-year period. The Administration transmittal notes that bond payments would come from the General Fund's Capital Improvement Fund—not necessarily actual Class C road funds.However, the transmittal says, if the City issues"a bond with Class C funds as security,(it)must maintain adequate Class C revenue to cover debt service."The Council may wish to seek clarification of whether that means Class C revenue must be encumbered to cover debt service. The third option involves taking cash from the General Fund's fund balance to pay the entire $3.41 million. The unknown in that case is how much unencumbered money is available in fund balance above the 10 percent of general fund revenue that makes up fund balance. The City Council appears to be in general agreement that the 10 percent limit at least should be maintained 4 to keep the City's AAA bond rating. The issue is whether there is revenue available above the 10 percent limit for the project. It should be noted that City financial officials say they are concerned about pressure on the fund balance. If the amount in fund balance remains uncertain at the time the City Council votes on the proposed amendments to the interlocal agreement,the Council could approve the amendments but delay a decision on how much,if any, of the costs the Council might want to cover with bonding. Another issue involves the actual amount of bonding necessary. The Administration transmittal notes that even if the City Council pursues bonding, $600,000 of the project probably is not eligible for bonding.Under the original agreement,the City set aside$600,000 in the City's Intermodal Hub budget to pay its share of building a light-rail station in 2010. It should be noted that the agreement also requires that funds for public art at the station also would be placed in the Intermodal Hub budget. Given that, it appears that at least$600,000 from a source other than bonds must be allocated for the project. It also means that$2.81 million would be eligible for issuing bonds. One question the City Council may have is whether the Redevelopment Agency, which already has appropriated$2.4 million for the project,might be another revenue source to reduce the amount of the bond, or whether bonding might be more economical long-term than having the RDA share the expense. 5 OCT 31 2045 ROSS C. "ROCKY"ANDERSON SAL' ' �\ Q'Girtit es1p j• MINA MAYOR OFFICE OF THE MAYOR MEMORANDUM TO: Rocky J. Fluhart Chief Administrative Officer From: D.J. Baxter L )) Senior Advisox 2the Mayor Re: Amendment to TRAX Interlocal Agreement for Extension of TRAX to the Intermodal Hub Date: October 30, 2006 In April 2006, the Salt Lake City Council approved an Interlocal Agreement (ILA) with the Utah Transit Authority (UTA) to govern the construction of a new light rail segment that would extend the existing TRAX line from its current terminus at the Delta Center to the Salt Lake City Intermodal Hub (Hub). Bids for the project came in significantly higher than anticipated. Therefore, if the project is to proceed, the City and UTA must agree to changes in the scope and budget, and must amend the ILA to reflect those changes. The original ILA established a project budget, a scope of work for the project, and assigned costs to the parties. It also included Salt Lake City's agreement to transfer to UTA the Salt Lake City Intermodal Hub, to waive franchise fees for use of the City right- of-way, and to assign to UTA the City's current leases with Greyhound and Amtrak, in exchange for UTA's contributions to building the TRAX extension and its assumption of responsibility for all further improvements of and federal reimbursements for the Hub. This memo will address changes in scope and budget required to move the project forward. This includes the following: 1. Background 2. Recommended changes in scope and budget 3. Assignment of cost increases 4. Possible sources of City funds 5. Related items for consideration 451 SOUTH STATE STREET,ROOM 306,SALT LAKE CITY,UTAH 84111 TELEPHONE:801-535-7704 FAX:801-535-6331 www.slcgov.com 1. Background The original Interlocal Agreement between Salt Lake City and UTA established a budget of$32 million, of which the City and UTA would each contribute $8.45 million, and the Federal Transit Administration (FTA) would pay $15.1 million. The ILA specified that UTA would be responsible for paying the FTA share up front and seeking reimbursements for these expenses from FTA. Salt Lake City's contribution was comprised of$7.85 million that would go toward construction of the project, and $600,000 that would go into an escrow account to be used by UTA at a later date to build the station at 525 West 200 South, which would not be built with the project. The rationale for this arrangement was that Salt Lake City would fully finance the amount required to build this station if it were built with the project, but would not take financial responsibility for a decision on UTA's part to forego station construction until a later time. UTA was reluctant to build a second station with the project due to ridership concerns, and the ILA specified both ridership and date thresholds that would trigger construction of the station. Therefore, Salt Lake City's $600,000 would be placed in escrow until the station was built, at which time UTA would be responsible for all costs of constructing the station that exceeded the $600,000. Most of the City's commitment of$8.45 million in the original ILA can be covered with funds that are already on hand. Approximately $2 million will come from funds UTA transferred to Salt Lake City as a contribution to the Intermodal Hub several years ago. Another $2.4 million has already been appropriated(and spent on design) by the Redevelopment Agency. The City has also received approximately $3.2 million in federal reimbursements for the Hub, which can be applied to this project. That leaves approximately $850,000 in cash Salt Lake City will need to contribute under the original ILA. These funds will be needed by July 2007. 2. Recommended changes in scope and budget After the City and UTA approved the ILA in April 2006, UTA sought bids to construct the project. The lowest bid was $46.5 million, $12.5 million above the original budget established by the City and UTA. In the last few months, UTA and City staff members have worked to trim from the work scope items that were non-essential, or could be built at a later date. This effort initially considered several drastic changes to bring the project back within the original budget. These included ending the line at the 525 West 200 South station,building the entire length but only as a single-track configuration, and building the entire line as a double-track system, but eliminating non- essential budget items. The first two approaches were eliminated because eliminating the 600 West segment jeopardized the opportunity for federal matching funds under the Hub grant, and building only a single track too severely compromised the system. The third approach seemed the most reasonable way to reduce the budget substantially and yet retain a final project that both parties could accept. Amendment to TRAX Interlocal Agreement October 30, 2006 Page 2 of 5 UTA and City staff members met with the low-bid contractor to identify any and all possible eliminations, and to determine the amount by which removing each item would reduce the overall budget. After developing this list, City and UTA staff members agreed upon a list of items that could be reduced or eliminated from the scope. These items are listed in the table included with the Proposed Amendment to the ILA (Exhibit A). This effort resulted in cost reductions totaling $4.8 million, leaving a construction budget of$41.7 million. 3. Assignment of cost increases The original ILA's cost-sharing arrangement assigned costs to the City, UTA, and FTA at a rough percentage split of 26.4 / 26.4 /47.2, and stated future changes to the scope and budget that were mutually agreed-upon by the parties would be shared according to the same split. Therefore, UTA and Salt Lake City staff members recommend increasing the budget by $9.71 million, resulting in an additional contribution by each of the entities as follows: Salt Lake City $2.56 million UTA $2.56 million FTA $4.58 million Under the original ILA, the City's commitment of$8.45 million is covered largely by funds already in place. As noted previously, however, the City needed to appropriate new funds amounting to $850,000 to fund its share of the project under the original ILA. When added to the additional funds needed for the increased budget, the City's cash contribution comes to $3.41 million. The City's TOTAL contribution, including the amount committed under the original ILA and the amount recommended for the increased budget, comes to $11.01 million (26.4% of the total project budget of $41.71 million). 4. Possible sources of City Funds The Council could consider three potential options for funding the increased cost to complete the TRAX extension project. Note that under both bonding options, as described below, the City's $600,000 payment into escrow for the second station would have to come from fund balance. A. Add to the Grant Tower Sales Tax Revenue Bond This TRAX extension project should be eligible for bonding because, with one exception, all the funds the City will add to the project will be for facilities we will own and maintain, including utilities, streets, sidewalks and streetlights. The exception might be the $600,000 we have agreed to place into escrow for the future construction of a Amendment to TRAXInterlocal Agreement October 30, 2006 Page 3 of 5 TRAX station. This would leave $2.81 million of City contribution that would be eligible for bond financing. Our in-house calculations estimate the additional debt service on $2.81 million at an interest rate of approximately 4.11% would be $205,700 a year. B. Issue a Motor Fuel Excise Tax Bond Debt service for Motor Fuel Excise Tax Bonds (MFET) is not paid directly from Class C revenues. MFET debt service is covered by the General Fund through the CIP along with all other General Fund debt. The bond is merely secured by Class C funds. if we issue a bond with Class C funds as security, we must maintain adequate Class C revenue to cover the debt service. The same bonding eligibility requirements apply as with a sales tax bond, so approximately $600,000 of the approximately $3.41 million in cash needed could not be covered by an MFET bond. MFET bonds have a 10 year maximum payback period. Our in-house calculations suggest the debt service on $2.81 million at an interest rate of 3.9% would be approximately $336,600 per year for 10 years. Obviously, the yearly cost of debt service would reduce the funds available in the CIP. C. Cash Payment from Fund Balance If there is sufficient cash in fund balance to remain above the 10% level, the Council could consider taking the additional $3.41 million from fund balance. A major consideration for the Council could be the cost of bonding versus the interest earned on the fund balance. If we could invest our money at 100 basis points higher than the cost of borrowing, as is currently the case, there is a strong argument in favor of borrowing the needed funds and leaving the cash in fund balance to earn interest. The Council could also consider using a combination of bonding and fund balance to cover the $3.41 million, remembering that at least $600,000 MUST come from fund balance, as the second station would not eligible for municipal bonds. 5. Related Items for Consideration A. Public Way Use Agreement The original ILA included several exhibits that needed to be executed separately. These included lease assignments for Amtrak and Greyhound, the two current tenants at the Hub, and a Public Way Use Agreement, which allows UTA to use the street for TRAX and related facilities for an initial term 50 years, with two renewal terms, each for 25 years. Amendment to TRAX Interlocal Agreement October 30, 2006 Page 4 of 5 Since April of 2006, the City and UTA have found it necessary to make two important revisions to the Public Way Use Agreement. One revision reflects the fact that the canopy of the Intermodal Hub encroaches into the City's 600 West right-of-way. The revision grants UTA, who will soon be the owner of the Hub, an easement for the canopy for the same term as the right-of-way. The second revision grants UTA a temporary easement for the current Amtrak facility, which also encroaches into the 600 West right- of-way. The parties originally contemplated that Amtrak would move into the main Hub facility, allowing UTA to remove the current Amtrak building, and, thus, the encroachment. But UTA and Amtrak have since decided that Amtrak will remain in its current facility for a few more years while UTA and the City work on the build-out of the site. Therefore, UTA and City staff members have revised the Public Way Use Agreement to provide a temporary easement for the encroachment of the Amtrak facility. This easement will expire June 1, 2012. Because of these changes, the Administration will take the Public Way Use Agreement back to the Planning Commission for briefing in November, and we expect it to come to the City Council for approval in December. B. Public Benefits Analysis Utah Code Annotated §10-8-2 states the purposes for which a municipal body may appropriate public funds and the factors that must be considered in determining the propriety of such an appropriation. The original ILA spelled out the City's intention to transfer the Hub to UTA and to waive franchise fees that could ordinarily be collected for the use of City streets. To ensure that the transfer of the Hub and the franchise fee waiver are in compliance with Section 10-8-2, the City performed an analysis of the benefits that accrue to the City. This analysis has been updated to reflect the changes associated with amending the ILA as described in this transmittal. The revised analysis is attached as Exhibit D. Exhibits: A. Proposed Amendment to Interlocal Agreement between UTA and Salt Lake City B. Original Interlocal Agreement between UTA and Salt Lake City C. Proposed Salt Lake City Ordinance approving Proposed Amendment to the ILA D. Revised Public Benefits Analysis Amendment to TRAX Interlocal Agreement October 30, 2006 Page 5 of 5 SALT LAKE CITY ORDINANCE No. of 2006 (Relating to the amendment to the Interlocal Agreement for TRAX extension project, extending light rail service from the Delta Center Station to the Salt Lake City Intermodal Hub; the granting by Salt Lake City to Utah Transit Authority of certain City street surface rights for the operation of such light rail extension; the conveyance of the Salt Lake City Intermodal Hub to Utah Transit Authority; and related matters) * * * AN ORDINANCE (1) APPROVING AN AMENDED INTERLOCAL AGREEMENT BY AND BETWEEN SALT LAKE CITY CORPORATION AND UTAH TRANSIT AUTHORITY THAT (A) RELATES TO THE DESIGN, CONSTRUCTION, OWNERSHIP AND FUNDING OF AN EXTENSION OF THE TRAX LIGHT RAIL LINE FROM THE DELTA CENTER STATION TO THE SALT LAKE CITY INTERMODAL HUB, (B) PROVIDES FOR TWO LIGHT RAIL STATIONS BETWEEN THE DELTA CENTER STATION AND THE INTERMODAL HUB, (C) PROVIDES FOR THE CONVEYANCE BY SALT LAKE CITY OF THE INTERMODAL HUB SITE AND THE IMPROVEMENTS THEREON TO UTAH TRANSIT AUTHORITY, AND (D) PROVIDES FOR OTHER RELATED MATTERS; AND (2) AUTHORIZING AND APPROVING THE EXECUTION AND DELIVERY OF ALL DOCUMENTS NECESSARY TO CONSUMMATE THE FOREGOING TRANSACTIONS; AND RELATED MATTERS. * * * WHEREAS, Title 11, Chapter 13, Utah Code Annotated, allows public entities to enter into cooperative agreements to provide joint undertakings and services; and WHEREAS, Salt Lake City, Utah (the "City") and Utah Transit Authority ("UTA") have previously entered into an Interlocal Agreement dated April 11, 2006 that (a) provides for the design, construction, funding and ownership of facilities extending TRAX light rail line service from the Delta Center Station to the Salt Lake City Intermodal Hub (the "Hub"), (b) provides for the granting by the City to UTA of certain City street surface use rights, pursuant to a Public Way Use Agreement, for the operation of such TRAX light rail line, (c) provides for the conveyance by the City to UTA of the Hub, the Hub site and all related improvements, (d) provides for the assignment by the City to UTA of certain contracts relating to the Hub and the TRAX extension project, and (e) makes all other arrangements necessary or desirable in connection with the foregoing; and WHEREAS, the City and UTA desire to amend the Interlocal Agreement to increase the project budget and modify the project scope; and WHEREAS, a proposed amendment to the Interlocal Agreement (such amended interlocal cooperation agreement, including all exhibits attached thereto, being referred to herein as the "Amended Interlocal Agreement"), has been negotiated, and has been presented to and is now before the City Council for consideration; and WHEREAS, the City Council desires at this time to approve such Amended Interlocal Agreement and all transactions contemplated therein, NOW THEREFORE, BE IT ORDAINED by the City Council of Salt Lake City, Utah, as follows: 1. That the Amended Interlocal Agreement, in substantially the form presented to the City Council at the public meeting at which this Ordinance is adopted, is hereby approved, and Ross C. Anderson, Mayor of the City, or his designee, is hereby authorized to execute and deliver the Amended Interlocal Agreement on behalf of the City, subject to such minor changes as do not materially affect the rights and obligations of the City thereunder and as shall be approved by the Mayor, his execution thereof to constitute conclusive evidence of such approval. 2. The Mayor, or his designee, is hereby authorized to execute and deliver all documents, certificates and showings, and to otherwise take any and all actions, deemed by the Mayor to be reasonably necessary or desirable to consummate the transactions contemplated by the foregoing. 3. Each of the foregoing documents authorized and approved by this Ordinance shall take effect on the date last signed by all necessary signatories. 4. This Ordinance shall become effective immediately upon publication of notice thereof by the Salt Lake City Recorder. Passed by the City Council of Salt Lake City, Utah, this day of November, 2006. CHAIRPERSON ATTEST: CHIEF DEPUTY CITY RECORDER Transmitted to Mayor on Mayor's Action: Approved. Vetoed. MAYOR CHIEF DEPUTY CITY RECORDER (SEAL) Bill No. of 2006. Published: A 7Pf ovED As TO FORM Salt€ake City Attorney's Office Dcte Ocv`. 41-76 y r/---, 3 ^,Ordinance 06lTRAX Ordinance-Interlocal Antendntmn I0-25-06_doc AMENDMENT TO INTERLOCAL AGREEMENT REGARDING THE DESIGN AND CONSTRUCTION OF THE SALT LAKE CITY INTERMODAL TERMINAL CONNECTION TO TRAX LRT PROJECT BETWEEN SALT LAKE CITY CORPORATION AND UTAH TRANSIT AUTHORITY This Amendment to Interlocal Agreement Regarding the Design and Construction of the Salt Lake City Intermodal Terminal Connection to TRAX LRT Project ("Amendment") is entered this_day of 2006 by and between SALT LAKE CITY CORPORATION, a municipal corporation and political subdivision of the State of Utah (the "City"), and UTAH TRANSIT AUTHORITY, a public transit district and political subdivision of the State of Utah ("UTA"). The City and UTA are hereafter sometimes collectively referred to as "parties" and either may be referred to individually as "party," all as governed by the context in which such words are used. RECITALS WHEREAS, the City and UTA entered into an August 18, 2006 Interlocal Agreement Regarding the Design and Construction of the Salt Lake City Intermodal Terminal Connection to TRAX LRT Project(the "Agreement"); WHEREAS, the Agreement details the terms and conditions pursuant to which the parties would cooperate on the Project extending the TRAX System six (6) blocks from the Delta Center Station to the Intermodal Hub; WHEREAS, the Agreement incorporates (by reference) 65% Design Drawings which established the general scope for Project design and construction; WHEREAS, the Agreement establishes a $32 Million Project Budget, which the parties agreed to jointly fund as described in Article VI of the Agreement; WHEREAS, UTA received competitive proposals for Project construction that significantly exceeded the $32 Million Project Budget; WHEREAS, the parties selected a CM/GC to perform construction and related work with respect to the Project, and UTA in association with the City is negotiating with the CM/GC to establish a GMP; WHEREAS, as contemplated in Sections 6.7, 6.8, 8.7 and 9.8 of the Agreement, the parties have agreed upon certain modifications to the Agreement that will: (a) increase the Project Budget to $41,710,000; (b) increase each party's respective contribution to the overall Project Budget; (c) make certain changes to the Project scope of work (deviating from the 65% Design Drawings); and (d) modify other terms and conditions of the Agreement; and WHEREAS, the parties have entered this Amendment to identify and confirm their mutual agreements regarding the changes made to the Agreement. AGREEMENT NOW THEREFORE, on the stated Recitals, which are incorporated herein by reference, and for and in consideration of the mutual covenants and agreements hereafter set forth, it is hereby agreed as follows: A:' 415388 v 1 -UTA-Downtown Extension to Intermodal Hub-Interlocal Agreement Amendment.doc l. DEFINITIONS. Except to the extent the context clearly requires a different interpretation, all capitalized terms used in this Amendment shall have the meanings set forth in the Agreement. 2. AMENDMENTS TO PROJECT BUDGET. The parties hereby agree to increase the Project Budget from $32,000,000 to $41,710,000. The Project Budget identified in Exhibit "C" to the Agreement is hereby amended, replaced and superseded by the "Amended Exhibit C — Project Budget" (which is attached to this Amendment and hereby incorporated into the Agreement). As indicated in the amended Project Budget, each party has agreed to increase its respective contribution to the Project Budget. To reflect these changes, the parties have agreed to amend the dollar amounts indicated in Article VI of the Agreement as follows: A. Section 6.1 of the Agreement is amended to increase the Project Budget from $32,000,000 to $41,710,000. B. Section 6.2 of the Agreement is amended to increase UTA's local funding contribution to the Project from $8,450,000 to $11,010,000. C. Section 6.3 of the Agreement is amended to increase the City's local funding contribution to the Project from $8,450,000 to $11,010,000. D. Section 6.4 of the Agreement is amended to increase UTA's advancement of remaining portions of the Project Budget from $15,100,000 to $19,690,000. 3. AMENDMENTS TO PROJECT SCOPE. Article IV of the Agreement describes the general scope of work for the Project. This scope is more specifically detailed in the 65% Design Drawings, which have been incorporated into the Agreement by reference. In order to construct the Project pursuant to the amended Project Budget, the parties have agreed to certain changes to the scope of work. These changes are identified in the spreadsheet attached as Exhibit One to this Amendment (which is hereby incorporated into the Agreement). The City will cause the Consultant to incorporate these changes into the Final Design Drawings (as contemplated in Sections 8.6 and 9.8 of the Agreement). 4. AMENDMENTS TO PROJECT SCHEDULE. The Project Schedule identified in Exhibit "D" to the Agreement is hereby amended, replaced and superseded by the "Amended Exhibit D Project Schedule" (which is attached to this Amendment and hereby incorporated into the Agreement). 5. CHANGES TO OTHER AGREEMENT PROVISIONS. Any exhibit, general description or other provision set forth in the Agreement that appears to conflict with the modifications identified in Exhibit One to this Amendment shall be deemed to be modified as reasonably necessary to give effect to this Amendment, whether or not the modifications are specifically identified herein. 6. GMP. UTA will use reasonable efforts to finalize the GMP with the CM/GC in accordance with the amended Project Budget and revised Project scope (both as described in this Amendment). Once a GMP has been established based on the revised scope, any subsequent Changes to the Project will be borne by the parties as set forth in Section 6.9 of the Agreement. A:Afid 15388 v 1 -UTA-Downtown Extension to Intermodal I lob-Interlocal Agreiient Amendment.doc 7. EFFECT OF AMENDMENT. Except to the extent specifically modified by this Amendment, all terms and conditions of the Agreement shall continue in full force and effect. This Amendment shall be effective upon its full execution by both parties. 8. CITY ETHICS REQUIREMENTS. UTA represents that it has not: (a) provided an illegal gift or payoff to a City officer or employee or former City officer or employee, or his or her relative or business entity; (b) retained any person to solicit or secure this Amendment upon an agreement or understanding for a commission, percentage, brokerage or contingent fee, other than bona fide employees or bona fide commercial selling agencies for the purpose of securing business; (c) knowingly breached any of the ethical standards set forth in the City's conflict of interest ordinance, Chapter 2.44, Salt Lake City Code; or (d) knowingly influenced, and hereby promises that it will not knowingly influence, a City officer or employee or former City officer or employee to breach any of the ethical standards set forth in the City's conflict of interest ordinance, Chapter 2.44, Salt Lake City Code. IN WITNESS WHEREOF, the parties hereto have executed this Assignment in triplicate as of the date first herein written. UTAH TRANSIT AUTHORITY SALT LAKE CITY CORPORATION By: By: John Inglish, General Manager Ross C. Anderson, Mayor By: ATTEST AND COUNTERSIGN: Michael Allegra, Chief Capital Development Officer CHIEF DEPUTY CITY RECORDER APPROVED AS TO FORM AND LEGALITY APPROVED AS TO FORM AND LEGALITY UTA General Counsel's Office Senior City Attorney A:\441538S vl -UTA-Downtown Extension to Intermodal Hub-Interlocal Agrecgnent Amendment.doc AMENDED EXHIBIT C REVISED PROJECT BUDGET 10/31/2006 SLC UTA FTA Total Approved Budget 8.45 8.45 15.10 32.00 Percent participation 26.4% 26.4% 47.2% 100.0% Add Cost- Joint Agreement 2.56 2.56 4.59 9.71 Add Cost- Each Partner 0.00 0.00 0.00 0.00 Total Cost 11.01 11.01 19.69 41.71 A:'A4I5388 v I-UTA-Downtown Extension to Intermodal k lub-Interlocal Agreyloent Amendment.doc co v W M d 0 0 �1 < < .n. < �, al a7 c 0 A 3 S o 0 p' < 3 < C 73 d NO d CDLA 5 c 3 a> m 3 �. - v C) c m' c m' c ao r m rn O c m n m m o C * 0 f 2 D N, co 0 O go F C) 0 3 a m C) 0 o. oc o m m o 0 3 0 a -n c mom,0o cno o> m = S o 0 3 m (0 3 n Z m o \ a \ n m m m _: d d 0 0 z » too < 0 0 3 o ` A 5. m = O 0 171 -i c - m 3 m 3 m c w n o . 07, N _, 3 O• O 0:.. 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T V N W V O) en— --'• TI L L 7 03 '•" cu m aa> aa> o0 o c m e JD a> m c 3 3 3 00 3 c 3 y wa0o 00o 0 a0o oCi D CCo 0 D (DD aoi 0 rn rn rn 0 0 0 0 o0o 0 > D D D D y D D D D D X o. a CO A c�0 CD = A CA 411 A 1111 NI CD cn O o o CD o = A al m to X D o ,rA A rn r A 0 a m A * ' N N O O m AV g w 0 n o) a A o- o4 SIP- N p u o Acoo N W EXIBIT ONE TO AMENDMENT—AMENDMENTS TO PROJECT SCOPE OF WORK Interlocal Agreement—Baseline Proposed Amendment Item Description of Change Potential Savings 200 South Public Way Improvements— Postpone the project. UTA will $530,000 Sidewalk, park strip, curb and gutter, and incorporate this work into the roadway improvements to the south side of development of the north end of the 200 S. adjacent to the Intermodal Hub Hub site. When that development property. This work was put out to bid as a occurs, UTA will bear the cost for stand-alone project. Because no bids were completing this work. Before received, this project was incorporated into completion of the TRAX extension, the Hub Connector project. UTA will eliminate sidewalk trip hazards on north edge of Hub site. 600 W. Roadway—Overall improvements Eliminate new improvements on the $1,153,000 include new sidewalk, curb, gutter, east side such as curb, gutter, landscaping and lighting on the east side of sidewalk, trees and lighting. Do not 600 West. The public way improvements reconstruct roadway. Pavement cut on the west side of 600 West have already and trackway installed. Minor been completed. drainage and roadway paving required for functional purposes. Tail Track—Three tail tracks south of the Eliminate one of the three tail track $1,168,000 Intermodal Hub platform planned for and crossovers between them. staging, adding and cutting of trains for Eliminate train signaling associated operations. with the crossovers. OCS Spare Parts—spare parts are Eliminate the spare parts and $317,000 typically supplied with new capital projects purchase from UTA maintenance for expected repairs and maintenance of the budget when required. OCS and TPSS system. Embedded Track on 600 West—Plans Change to ballasted track on 600 $300,000 show track embedded in concrete on 600 West. Track curb would still separate West trackway from roadway. If future funds become available, the ballasted track could be covered with pavers. Brick Crosswalks—Plans show brick Eliminate the brick crosswalks and $140,000 crosswalks at the major intersections. replace with standard painted crosswalks. Indian Head Bases—All OCS poles are Change to a smooth or non- $360,000 planned to have the ornamental Indian ornamental base. If funds are Head base attached. available as project progresses, this item will be restored. Business Impact Mitigation —funds were Reduce the set aside funds by half; $125,000 set aside to help mitigate impacts to from $250,000 to $125,000 businesses during construction. The program or methods for allocation were not specified. A:Ar.415388 vI -ETA-Downtown Extension to Intermodal Hub-Interlocal Agre5nent Amcndment.doc Interlocal Agreement—Baseline Proposed Amendment Item Description of Change Potential Savings Crossover type—the crossover on 400 Embedded crossovers are expensive $120,000 West was planned to be embedded in due to the isolation "bathtub"that concrete. needs to be built around and underneath the crossover. Change to a relatively new method where crossover rails are"encapsulated" in a polymer to obtain electrical isolation. General Conditions and Fee Reduction of contracted construction $592,760 costs reduces the general conditions and fee by 8% and 6.5% accordingly. (Business Impact Mitigation is excluded) Potential Savings TOTAL $4,805,760 A:V4415388 vI-DTA-Downtown Extension to Intel-modal Hub-Interlocal Agre6nent Amendment.doc INTERLOCAL AGREEMENT REGARDING THE DESIGN AND CONSTRUCTION OF THE SALT LAKE CITY INTERMODAL TERMINAL CONNECTION TO TRAX LRT PROJECT BETWEEN SALT LAKE CITY CORPORATION AND UTAH TRANSIT AUTHORITY TABLE OF CONTENTS RECITALS 2 AGREEMENT 4 ARTICLE I. DEFINITIONS 4 ARTICLE II. STATUS OF PROJECT;PURPOSE OF AGREEMENT 8 ARTICLE III. TERM 9 ARTICLE IV. PROJECT DESCRIPTION 10 ARTICLE V. PERFORMANCE SPECIFICATIONS 12 ARTICLE VI. PROJECT BUDGET 13 ARTICLE VII. PROJECT MANAGEMENT AND DISPUTE RESOLUTION 16 ARTICLE VIII. PROJECT DESIGN 18 ARTICLE IX. PROJECT CONSTRUCTION 20 ARTICLE X. OWNERSHIP AND MAINTENANCE OF IMPROVEMENTS 24 ARTICLE XI. INSURANCE 25 ARTICLE XII. TRANSFER OF OWNERSHIP;INTERMODAL HUB 26 ARTICLE XIII. INDEMNITY 32 ARTICLE XIV. DEFAULT 32 ARTICLE XV. NOTICES 33 ARTICLE XVI. NON-WAIVER 33 ARTICLE XVII. SEVERABILITY 34 ARTICLE XVIII. GOVERNING LAW 34 ARTICLE XIX. NO THIRD PARTY BENEFICIARIES 34 ARTICLE XX. ENTIRE AGREEMENT;AMENDMENT 34 ARTICLE XXI. POLICE POWER 34 ARTICLE XXII. INTERLOCAL COOPERATION ACT REQUIREMENTS 35 ARTICLE XXIII. LIMITED OBLIGATIONS 35 ARTICLE XXIV. ETHICAL STANDARDS 36 ARTICLE XXV. INCORPORATION OF EXHIBITS 36 EXHIBIT A-PROJECT ALIGNMENT AND STATION LOCATIONS EXHIBIT B-SIXTY FIVE PERCENT(65%)DESIGN DRAWINGS EXHIBIT C-PROJECT BUDGET EXHIBIT D-PROJECT SCHEDULE EXHIBIT E-SITE PLAN FOR THE INTERMODAL HUBEXHIBIT F-PUBLIC WAY USE AGREEMENT EXHIBIT G-RESERVEDEXHIBIT H-SPECIAL WARRANTY DEED FOR INTERMODAL HUB EXHIBIT I-ASSIGNMENT AND ASSUMPTION AGREEMENT FOR GREYHOUND LEASE EXHIBIT J-ASSIGNMENT AND ASSUMPTION AGREEMENT FOR AMTRAK LEASE EXHIBIT K-MASTER DEVELOPMENT PLAN FOR INTERMODAL HUB i THIS 1NTERLOCAL AGREEMENT REGARDING THE DESIGN AND CONSTRUCTION OF THE SALT LAKE CITY INTERMODAL TERMINAL CONNECTION TO TRAX LRT PROJECT (this "Agreement"), is entered this day of 2006, by and between SALT LAKE CITY CORPORATION, a municipal corporation and political subdivision of the State of Utah (the "City"), and UTAH TRANSIT AUTHORITY, a public transit district and political subdivision of the State of Utah ("UTA"). The City and UTA are hereafter sometimes collectively referred to as"parties"and either may be referred to individually as"party,"all as governed by the context in which such words are used. RECITALS WHEREAS, UTA owns and operates a light rail public transportation system (the "TRAX System") within Salt Lake County, all segments of which currently extend to 350 West South Temple Street(the"Delta Center Station")in Downtown Salt Lake City; WHEREAS, UTA is constructing a high-speed commuter rail passenger system (the "Commuter Rail System"),the initial phase of which will extend from Weber County in the north to the Salt Lake City Intermodal Hub (the"Intermodal Hub") at approximately 600 West and 300 South in Downtown Salt Lake City; WHEREAS, the City has substantially completed construction of the initial phases of the Intermodal Hub utilizing City funding, with partial federal reimbursements provided through UTA; WHEREAS, in order to connect the Commuter Rail System with the City's Central Business District, to stimulate growth and development adjacent to the Intermodal Hub, to redevelop a "blighted" area that is part of the Depot District and Central Business District redevelopment project areas, to physically connect the Commuter Rail System to the TRAX System, and to increase the convenience and usage of public transportation within downtown Salt Lake City, the parties are cooperating to extend the TRAX System six (6) blocks from the Delta 2 Center Station to the Intermodal Hub (the rail, roadway and utilities, and all design, construction and other work related thereto,are hereafter referred to as the"Project"); WHEREAS, the City has retained a consultant to perform the design work for the Project; WHEREAS, UTA will retain a construction manager/general contractor to oversee and/or perform the construction work for the Project; WHEREAS, the parties will each bear a portion of the Project costs as outlined in this Agreement; WHEREAS,the Project will be constructed within public right-of-way owned by the City and will require the modification of City-owned roadways and roadway improvements; WHEREAS, the Project will require the protection, modification or relocation of public utilities owned by the City; WHEREAS, in connection with the development of Commuter Rail System and TRAX System improvements at the Intermodal Hub, the City will transfer ownership of the Intermodal Hub to UTA; WHEREAS, there is an existing August 25, 1999 Interlocal Agreement between the parties and the parties intend that,unless specifically identified in this Agreement, all existing and prospective obligations under that Interlocal Agreement shall be superseded by this Agreement; WHEREAS, this Agreement is entered into under and pursuant to the provisions of the Interlocal Cooperation Act, Title 11, Chapter 13, Utah Code Annotated 1953, as amended (the "Act"), and the parties desire to evidence compliance with the terms and provisions of the Act; and WHEREAS, the parties wish to enter this Agreement in order to identify and confirm their mutual agreements regarding the numerous issues related to the Project. 3 AGREEMENT NOW, THEREFORE, on the stated Recitals, which are incorporated herein by reference, and for and in consideration of the mutual covenants and agreements hereafter set forth, the mutual benefits to the parties to be derived herefrom, and for other valuable consideration, the receipt and sufficiency of which the parties acknowledge, it is hereby agreed as follows: ARTICLE I. DEFINITIONS In addition to other terms that may be defined throughout this Agreement, the following capitalized terms shall have the meanings indicated below: 1.1 "Amtrak" means the National Railroad Passenger Corporation, which operates a passenger station and train servicing facility at the Intermodal Hub. 1.2 "Amtrak lease" shall mean collectively, the Agreement between Salt Lake City Corporation and National Railroad Passenger Corporation, dated November 2, 1999, and the Lease Agreement entered into between Amtrak and the City pursuant thereto. 1.3 "Art in Transit"means the incorporation of artwork into public transit facilities in accordance with Federal Transit Administration Circular 9400.1A. 1.4 "Change"means any deletion, addition or other modification to the Project scope made after both the execution of the CM/GC Contract and the establishment of the GMP, which deletion, addition or modification results in a claim for a change order under the CM/GC Contract. 1.5 "City" means Salt Lake City Corporation, a municipal corporation and political subdivision of the State of Utah. 1.6 "City Representative"means the person so designated pursuant to Section 7.4 of this Agreement. 4 1.7 "City Right-of-Way" means those portions of 400 West Street, 200 South Street and 600 West Street that are owned by the City and will be occupied by TRAX System improvements as shown on Exhibit A to this Agreement. 1.8 "CM/GC" means the construction manager/general contractor with whom UTA will contract to: (a) coordinate with the Consultant during final design; (b) provide preconstruction value engineering and constructability reviews; (c) prepare Traffic and Staging Plans and Public Outreach Plans (as such terms are defined in Article IX of this Agreement) for review by the parties; (d) construct those portions of the Project to be self-performed by the CM/GC; (e) procure, manage and oversee those portions of the Project to be subcontracted; and (f)negotiate and establish a GMP for the Project as identified in the CM/GC Contract. 1.9 "CM/GC Contract"means the contract UTA will execute with the CM/GC. 1.10 "Commuter Rail System" means the 44-mile commuter rail passenger line currently under construction and extending from Pleasant View City to the Intermodal Hub, and includes any future extensions, additions or modifications to such commuter rail line. 1.11 "Construction Submittals"means all construction schedules, construction staging plans, utility shutdown plans, Traffic and Staging Plans and Public Outreach Plans (as such terms are defined in Article IX of this Agreement), QA/QC plans, fabrication drawings, approved equals requests, value engineering proposals, product and test data and other deliverables that are provided by the CM/GC from time to time for review, approval or comment pursuant to the CM/GC Contract. 1.12 "Consultant" means the design consultant with whom the City has contracted to provide preliminary engineering and final design services, construction engineering and administration services,cost estimating and similar work for the Project. 1.13 "Consultant Contract" means the contract the City has entered with the Consultant. 5 1.14 "Delta Center Station" means the existing light rail station located at approximately 350 West South Temple Street. 1.15 "Design Submittals" means all interim drawings, specifications, basis of design documents, design assumptions, "over-the-shoulder" review items or other matters that are submitted by the Consultant from time to time for review, comment or determination in the preparation of 90%Design Drawings and Final Design Drawings. 1.16 "Final Design Drawings"means the final set of drawings, specifications and cost estimates sealed by the design engineer of record for the Project and prepared to conform with the GMP for the Project. 1.17 "FTA" means the Federal Transit Administration, the public transportation modal administration for the United States Department of Transportation. 1.18 "GMP" means the "not to exceed price" to be paid to the CM/GC for the performance of construction and other work related to the Project. 1.19 "Greyhound" means Greyhound Lines Inc., which operates a passenger station and bus maintenance facility at the Intermodal Hub. 1.20 "Indemnified Party"has the meaning set forth in Article XIII of this Agreement. 1.21 "Indemnifying Party" has the meaning set forth in Article XIII of this Agreement. 1.22 "Intermodal Hub"means the Salt Lake City Intermodal Terminal constructed by the City with funding provided (or to be provided) in part by an FTA grant and including (or to include): (a) Greyhound facilities; (b) Amtrak facilities; (c) UTA bus facilities; (d) TRAX System facilities; (e) Commuter Rail System facilities; and (f) other improvements and facilities constructed from time to time. 1.23 "Ninety Percent (90%) Design Drawings" means the set of drawings, specifications and cost estimates for the Project at 90% completion. "Ninety Percent (90%) 6 Design Drawings" also means any additional deliverables that the Consultant is required to provide for the"Final Design Phase"pursuant to the Consultant Contract 1.24 "Performance Specifications" has the meaning set forth in Article V of this Agreement. 1.25 "Project" means the design, construction, systems integration, startup testing and other work necessary for the connection of the Intermodal Hub to the TRAX System. 1.26 "Project Budget" means the total amount allocated to the Project by the parties under this Agreement through local funds and anticipated federal grants, based on current cost estimates. The Project Budget is attached as Exhibit C to this Agreement. 1.27 "Project Integration Team" means the committee comprised of representatives from each party, which committee is responsible for reviewing relevant Project matters for the parties. The composition of the Project Integration Team is set forth in Section 7.1 of this Agreement. 1.28 "Project Policy Team"means the dispute resolution and policy setting committee created pursuant to Section 7.5 of this Agreement. 1.29 "Project Schedule" means the proposed completion dates for Project milestones attached as Exhibit D to this Agreement. 1.30 "RDA" means the Redevelopment Agency of Salt Lake City, a body corporate and politic of the State of Utah. 1.31 "RFP"has the meaning set forth in Section 9.1 of this Agreement. 1.32 "Sixty Five Percent (65%) Design Drawings" means the set of drawings, specifications and cost estimates for the Project at 65% completion, which were prepared by the Consultant prior to the execution of this Agreement and which constitute the baseline for the Project scope and the Project Budget. The Sixty Five Percent (65%) Design Drawings are attached as Exhibit B to this Agreement. 7 1.33 "TRAX System" means the current Sandy and University TRAX Lines operated by UTA and includes any future projects, extensions, additions or modifications to such light rail lines. Upon completion of the Project, the term TRAX System shall include the six-block extension to the Intermodal Hub. 1.34 "UTA" means the Utah Transit Authority, a public transit district and political subdivision of the State of Utah. 1.35 "UTA Representative"means the person so designated pursuant to Section 7.3 of this Agreement. ARTICLE II. STATUS OF PROJECT;PURPOSE OF AGREEMENT 2.1 Prior to the execution of this Agreement, the City retained the Consultant to prepare 65% Design Drawings, 90% Design Drawings and Final Design Drawings for the Project. The 65% Design Drawings have been accepted and approved by both parties and form the baseline for the Project scope and the Project Budget. The City has authorized the Consultant to proceed with final design of the Project. While the City will be the contracting party with respect to the Consultant Contract, the rail improvements constructed pursuant to the Project will ultimately be accepted, owned, operated and maintained by UTA as part of the TRAX System. Accordingly, it is important that the Project be designed in close coordination with UTA, and in accordance with UTA's Light Rail Criteria Manual and other design and operational requirements and subject to the City's needs, standards and requirements. 2.2 After consultation with the City, UTA will select and contract with the CM/GC responsible for Project construction. While UTA will be the contracting party with respect to the CM/GC Contract, the Project will be constructed in the City Right-of-Way and will affect traffic patterns and commercial and residential access within the City. Project construction will also impact public utilities, roadway improvements and other City-owned facilities. Hence, it is important that the Project be constructed in close coordination with the City and in accordance 8 with the City's engineering standards and requirements for public utility shutdowns, road closures,maintenance of commercial and residential access and similar matters. 2.3 As part of this Agreement, UTA will assume ownership and responsibility for and with respect to the Intermodal Hub and the operation thereof. 2.4 Therefore,the parties have entered into this Agreement for the following primary purposes: 2.4.1 To identify and document the interests and objectives of each party with respect to the Project and establish minimum Project requirements. This Agreement shall constitute the guiding document governing the Project and shall be referenced in the Consultant Contract and the CM/GC Contract. 2.4.2 To identify the allocation of Project costs between the parties. 2.4.3 To describe the respective responsibilities of the parties and establish cooperative procedures that will achieve the objectives identified herein. 2.4.4 To establish mechanisms for resolving any disputes between the parties arising in connection with the Project. 2.4.5 To establish the terms and conditions pursuant to which the City will convey to UTA (i) fee title to the Intermodal Hub, and (ii) rights to use certain City streets for operation of the extended TRAX System. ARTICLE III. TERM This Agreement shall be effective as of the date of execution by both parties and, unless otherwise agreed between the parties, shall continue thereafter in full force and effect until all obligations, commitments and requirements have been fully performed as set forth hereunder. Nothing provided herein shall be construed so as to exceed the term limitation provided in UCA §11-13-204 (as amended). The expiration or termination of this Agreement shall not relieve or excuse either party of any obligations accruing prior to the expiration or termination hereof 9 including, without limitation, the covenants and warranties made hereunder and any obligations accruing under the indemnification provisions set forth in Article XIII of this Agreement. ARTICLE IV. PROJECT DESCRIPTION 4.1 The Project shall be constructed in the City Right-of-Way. The Project shall be built with a center-of-street configuration, except for those portions constructed at the Intermodal Hub. The Project shall be integrated into the TRAX System and shall be generally consistent with the details and specifications of the TRAX System and standard reconstruction of City roadway pavement and utility improvements, storm drainage sidewalk improvements, street lights and traffic signals. The scope of the Project is detailed in the 65% Design Drawings attached as Exhibit B of this Agreement. 4.2 A terminal station shall be constructed at the Intermodal Hub. The details and specifications for the transit plaza, including the terminal station, shall be consistent with the City's site plan for the Intermodal Hub attached as Exhibit E. 4.3 One intermediate station shall be constructed at approximately 125 South 400 West (the "400 West Station") as part of the initial build-out of the Project. This station shall be opened for revenue service with the Project. The station details and specifications shall be similar to other Downtown stations within the TRAX System. 4.4 The infrastructure and track alignment for a second intermediate station shall be constructed at approximately 525 West 200 South (the "200 South Station") as part of the initial build-out of the Project. The scope of the 200 South Station infrastructure shall be determined by the Project Integration Team. The City shall fund an amount equal to the difference between the cost of building the 400 West Station and the cost of building the 200 South Station infrastructure. This amount is part of the City's local funding commitment under Section 6.3 and shall be held by the City, within its Intermodal Hub Enterprise Fund, until UTA commences final build-out of the 200 South Station. At such time as UTA commences completion of the 200 South Station, the City shall make such amount available to UTA, together with interest thereon 10 at the rate actually earned by the City from the date such amount is determined by the Project Integration Team, to the date such funds are made available to UTA. The future 200 South Station shall be completed upon the first to occur of the following events: (a) the date the total combined average weekday passenger boardings at the 400 West Station and the Delta Center Station reach 4,650; or (b) May 1, 2010. When the first of the aforementioned events occurs, UTA shall complete construction of the 200 South Station and place it into revenue service within one year of such event or, if completion within one year is not practicable, as quickly as reasonable diligence allows. Any costs for constructing the 200 South Station in excess of the amounts provided by the City(as set forth above) shall be the sole responsibility of UTA. 4.5 The City shall grant UTA the right to construct, operate and maintain the Project in the City Right-of-Way pursuant to an agreement in substantially the same form as the Public Way Use Agreement attached as Exhibit F to this Agreement. 4.6 The Project shall be constructed in general accordance with the Project Schedule attached as Exhibit D to this Agreement. The Project Schedule is coordinated with the anticipated opening of the Commuter Rail System and the parties acknowledge the importance of completing the Project prior to the opening of the Commuter Rail System. The parties agree to cooperate and coordinate in good faith to complete the Project in accordance with the Project Schedule. 4.7 The Project Budget includes an Art in Transit line item of one percent (1%) of the Project construction costs or$250,000, whichever is less. The Art in Transit budget includes amounts for all three stations and will fund all artwork, artist's fees and all costs necessary to integrate Art in Transit into the Project. The purpose of the Art in Transit program is to enhance the TRAX stations by integrating an aesthetic component to the Project reflecting the character, history and cultural context of the CBD and Depot Districts. The Salt Lake Art Design Board (the "Art Design Board"), with administrative support from the Salt Lake City Arts Council, shall: (a) issue a request for qualifications for the public art to be incorporated into the stations; 11 (b) review the materials submitted in response to the request for qualifications; (c) include City and UTA representatives at review meetings; and (d) provide a recommendation for the artist(s) to be selected for Art in Transit. Final approval for the artist(s) to be selected shall be made by the Salt Lake City Mayor and the General Manager of UTA. The Art Design Board shall not recommend any artwork that: (x)creates a potential safety hazard with respect to the operation of the TRAX System; or (y) materially increases the operation or maintenance costs of the TRAX System. UTA and the City shall contract with the approved artist(s). The City Arts Council shall serve as project manager for any Art in Transit project and UTA shall serve as budget manager. UTA shall cause the installation of supporting improvements for the approved artwork for the 400 West Station and the Intermodal Hub Station to be included within the scope of the CM/GC Contract with budget provided from the Art in Transit account. The amount of the Art in Transit budget allocable to the 200 South Station shall be deposited with the City in the Intermodal Hub Enterprise Fund, and used for artwork at the 200 South Station upon build-out of the 200 South Station. 4.8 The City agrees to fund all required City permit, connection and impact fees related to the Project. The cost of funding such fees shall be in addition to the City's funding obligation set forth in Section 6.3. 4.9 The Project represents a major cooperative effort between the parties. Each party agrees to cooperate with the other in a manner consistent with the respective commitments and obligations made and assumed under this Agreement. Such cooperation shall include the dedication of personnel and payment of committed funds as necessary to complete the Project according to this Agreement. ARTICLE V. PERFORMANCE SPECIFICATIONS The parties agree that the Project shall be designed and constructed, at a minimum, in accordance with the following standards and requirements, which are collectively referred to as the "Performance Specifications." Unless otherwise agreed by the parties: (a) the City shall 12 cause the Consultant to incorporate the Performance Specifications into Project design; and (b) UTA shall cause the CM/GC to perform all preconstruction and construction work in accordance with the Performance Specifications. The following standards shall constitute the Performance Specifications: 5.1 UTA's Light Rail Design Criteria Manual. 5.2 Manual of Standard Specifications, as published by the Utah Chapter of the American Public Works Association. 5.3 Manual of Standard Plans, as published by the Utah Chapter of the American Public Works Association. 5.4 The Salt Lake City Public Utilities Department Performance Specifications and Design Criteria for culinary water, sanitary sewer and storm drain facilities. 5.5 The FHWA Manual on Uniform Traffic Control Devices. 5.6 The Traffic Control Manual published by the Utah LTAP Center of Utah State University. 5.7 The City's as-built construction drawings for the Intermodal Hub. 5.8 The Americans With Disabilities Act, and all rules, regulations, interpretive guidance and other authority promulgated pursuant to the Americans With Disabilities Act. 5.9 Salt Lake City Intermodal Hub Site Management Plan for the Salt Lake City Intermodal Hub. 5.10 All applicable building codes, laws and regulations. ARTICLE VI. PROJECT BUDGET 6.1 The parties have established a total Project Budget of$32,000,000. The Project Budget is detailed in Exhibit C to this Agreement. 6.2 UTA shall fund the Project in the amount of$8,450,000, representing 26.4% of the total estimated Project Budget. This shall consist of local UTA funding. 13 6.3 The City shall fund the Project in the amount of$8,450,000, representing 26.4% of the total estimated Project Budget. This shall consist of local City funding. The City has expended or will expend approximately $2,462,000 toward the Consultant Contract. Actual City expenditures under the Consultant Contract shall be credited toward the City's share of the funding. The City has identified additional funding sources for the balance of its commitment in fiscal years 2007 and 2008. The City shall make these funds available to UTA on a monthly basis over the course of construction. UTA shall invoice the City on a monthly basis for the City's share of construction costs incurred by the CM/GC and paid to the CM/GC by UTA,based on the percentages set forth in this Article VI. The City will seek various sources for its share of the Project costs, including contributions from the RDA. RDA contributions will come from funds available associated with the Depot and Central Business Districts. 6.4 UTA shall advance the remaining portion of the estimated Project Budget ($15,100,000, or 47.2 % of the estimated Project) out of local funding. UTA shall seek to obtain reimbursement for some or all of this$15,100,000 through one or more federal grants to be issued under the November 2, 2005 Letter of No Prejudice obtained with respect to the Intermodal Hub construction project. UTA shall assume all risks related to obtaining the required federal grants, as well as the appropriation of federal monies pursuant to such grants. UTA will reimburse the City for any funds paid by the City under this Agreement for which UTA subsequently seeks and receives reimbursements from the FTA. 6.5 UTA shall maintain an accounting system and accounting records that thoroughly track the receipt and expenditure of all City and RDA contributions. The system shall be created and administered in a manner such that the City and RDA are able to affirmatively verify that all contributions are expended in compliance with limitations associated with funding sources from the Depot and Central Business Districts. UTA's accounting system and accounting records shall also satisfy all applicable FTA grant requirements. 14 6.6 Neither party has allocated or budgeted additional funds for the Project. Accordingly,the City has instructed the Consultant to design the Project to stay within the Project Budget. The Project Budget is based on the 65% Design Drawings, which establish the baseline for the Project scope. To the extent that either party requests a modification to the 65% Design Drawings, and such proposed modification will increase Project costs in a manner that increases the overall Project Budget, the requesting party shall agree to unilaterally fund the incremental cost. 6.7 In the event it becomes apparent from the cost estimates that the scope of design (as established by the 65% Design Drawings and refined during final design) shall cause the Project to exceed the Project Budget,the parties shall (i)reduce the scope of the Project, (ii)agree to provide additional funding for the Project, or(iii) agree to some combination of(i) and (ii), all as shall be mutually agreed by the parties. . Nothing provided in this Section shall be construed so as to require or allow the Project to be designed in material conflict with any applicable Performance Specification unless otherwise agreed in writing by the parties. 6.8 Upon approval of the 90% Design Drawings, including construction cost estimates, UTA shall negotiate with the CM/GC a GMP (guaranteed maximum price) for construction. The GMP shall be consistent with the Project Budget. If UTA is unable to negotiate a GMP that is consistent with the Project Budget, the parties shall meet and determine whether to: (a) jointly increase and fund the Project Budget by written amendment to this Agreement, and based upon the Project Budget percentages identified in Sections 6.2 and 6.3 of this Agreement or as otherwise agreed; (b)reduce Project costs through modification or reduction in the scope of the Project; (c) allow either party to unilaterally fund any item that would otherwise be deleted from the scope of the Project; or (d) reduce Project costs through implementation of value engineering proposals. Nothing provided in this Section shall be construed so as to require or allow the Project to be constructed in material conflict with any applicable Performance Specification unless otherwise agreed in writing by the parties. The 90% 15 Design Drawings shall be advanced to Final Design Drawings conforming to the established GMP. 6.9 After a GMP for construction is reached with the CM/GC, any incremental Project costs resulting from Changes shall be financed in accordance with this Section 6.9. Incremental costs that result from changed site conditions or other circumstances that were unknown to the parties at the time that the GMP was determined, shall be borne by the parties on the basis of 26.4% City, 73.6% UTA, or as otherwise agreed. Incremental costs resulting from a Change that is mutually agreed to by the Parties shall be borne by the parties on the basis of 26.4% City, 73.6% UTA, or as otherwise agreed. Incremental costs resulting from a Change requested by one party, but not accepted by the other party, shall be borne solely by the requesting party. 6.10 As part of the Project Budget, a sum of $100,000 shall be deposited into an escrow account to be used by UTA to fund future maintenance,restoration and replacement of the Art in Transit improvements installed at the stations. ARTICLE VII. PROJECT MANAGEMENT AND DISPUTE RESOLUTION 7.1 The parties hereby create a Project Integration Team consisting of the UTA Representative, the City Representative and additional representatives as agreed by the parties from time to time. The Project Integration Team shall: (a) review and approve relevant deliverables as set forth in this Agreement; (b)provide day-to-day input to the Consultant and the CM/GC as necessary for the Project design and construction; (c) implement modifications to the Project scope as may be necessary to conform to the Project Budget; (d) if necessary,recommend any amendments to this Agreement changing the Project Budget as contemplated herein; and (e) address and resolve issues, disputes or concerns arising during the course of the Project. The initial members of the Project Integration Team shall be: For the City: John Naser 801-535-6240 john.naser(o4slcgov.com Chuck Call 801-483-6840 chuck.call(aslcgov.com 16 For UTA: Greg Thorpe 801-287-2572 gthrope( uta.cog.ut.us Kevin Cox 801-287-2596 kcox4),uta.cog.ut.us Either party may change some or all of its representatives on the Project Integration Team by delivering written notice to the other party in accordance with the notice provisions set forth in Article XV of this Agreement. 7.2 The parties hereby commit to appoint to the Project Integration Team individuals who shall be dedicated to the Project as necessary to represent the respective interests of the parties, shall participate in the activities of the Project Integration Team as outlined in this Agreement, and shall attend applicable meetings held throughout the Project. Each member of the Project Integration Team shall consult with such technical experts, principals or other personnel of his or her respective party as may be appropriate in the performance of his or her duties on the Project, and shall obtain any authority or approval required on the part of his or her appointing party prior to authorizing, approving or taking any action on behalf of the Project. 7.3 UTA shall designate the UTA Representative who shall serve on the Project Integration Team and shall be the principal contact point with respect to the CM/GC Contract. Any formal communications, directions, modifications requests for Changes, or other correspondence with the CM/GC shall be delivered by the UTA Representative. The initial UTA Representative shall be Greg Thorpe, UTA Manager of Light Rail Engineering and Construction. UTA may change the UTA Representative from time to time by delivery of written notice to the City as provided in Article XV of this Agreement. 7.4 The City shall designate the City Representative who shall serve on the Project Integration Team and shall be the principal contact point with respect to the Consultant Contract. Any formal communications, directions, modifications, requests for changes, or other correspondence with the Consultant shall be delivered by the City Representative. The initial City Representative shall be John Naser, Senior Engineering Project Manager. The City may 17 change the City Representative from time to time by delivery of written notice to UTA as provided in Article XV of this Agreement. 7.5 The parties hereby create a Project Policy Team which shall be comprised of UTA's Chief Capital Development Officer and the City Engineer, Max Peterson. Any issues that cannot be resolved at the Project Integration Team level shall be elevated to the Project Policy Team for consideration and resolution. 7.6 Any dispute that cannot be resolved by the Project Policy Team shall be forwarded to UTA's General Manager and the City's Deputy Mayor, Rocky Fluhart. 7.7 The parties shall exhaust the dispute escalation and resolution process identified in this Article prior to the initiation of any formal legal action. If a dispute cannot be resolved by the parties after good faith negotiations as outlined in this Article, the dispute may then be brought before a court of competent jurisdiction as set forth in Article XVIII of this Agreement. ARTICLE VIII. PROJECT DESIGN 8.1 The Consultant has completed the 65% Design Drawings, and the City has given the Consultant authorization to proceed with final design. The 65% Design Drawings constitute the scope of the Project and form the basis for the final design work to be performed by the Consultant. 8.2 The City shall oversee and manage the efforts of the Consultant consistent with the Consultant Contract, the Performance Specifications and the provisions of this Agreement. The City Representative shall be the sole point of formal contact with the Consultant until completion of the 90% Design Drawings. The City recognizes that UTA will have considerable interaction with the Consultant, but the parties agree that UTA shall not provide formal direction to the Consultant under the Consultant Contract. 8.3 Throughout the final design process, the City shall cause the Consultant to provide UTA with the opportunity to review and comment upon all Design Submittals. Each Design Submittal shall state the latest permissible date for receipt of comments, which date must 18 be reasonable given the nature of the Design Submittal. Notwithstanding the identified review period, UTA shall use its best efforts to review and comment upon the Design Submittals in a shorter period of time, if such shorter review time is reasonable. The City shall cause the Consultant to address all comments and objections submitted by UTA with respect to the Design Submittals and to resolve such issues to UTA's reasonable satisfaction. 8.4 The City shall ensure that UTA participates in all formal and informal design meetings and reviews with the Consultant. 8.5 The City shall cause the Consultant to design the Project in a manner such that the cost estimates for construction, including contingency, are consistent with the overall Project Budget. The City shall monitor the design work against the overall Project Budget and shall address any potential overruns identified during the design process consistent with the provisions of Article VI of this Agreement. 8.6 The City shall cause the Consultant to provide UTA with a draft set of 90% Design Drawings. UTA shall have ten (10) days to review and comment upon the 90% Design Drawings. Notwithstanding the 10-day review period, UTA shall use its best efforts to review and comment upon the 90% Design Drawings in a shorter period of time. The City shall cause the Consultant to address all comments and objections submitted by UTA with respect to the 90% Design Drawings and to resolve such issues to UTA's reasonable satisfaction. The 90% Design Drawings shall be used by UTA to negotiate a GMP for the Project. Any changes to the 90% Design Drawings necessitated by the GMP negotiations shall be approved by both parties, and once so approved, shall be incorporated into the Final Design Drawings. The Final Design Drawings shall constitute the final work scope for Project construction. 8.7 Upon completion of the Final Design Drawings, the City shall assign and delegate to UTA, and UTA shall assume,all rights and obligations under the Consultant Contract. UTA shall oversee the construction-phase services to be performed by the Consultant including, without limitation, processing all Construction Submittals, invoices, change orders, requests for 19 clarification and quality control on behalf of the parties as set forth in the Consultant Contract. The City's obligation to assign and delegate the Consultant Contract shall be subject to the City obtaining the consent of the Consultant. Upon assignment of the Consultant Contract, the City shall be released from all obligations under the Consultant Contract, excepting those obligations previously accrued as of the date of assignment. 8.8 The City and UTA each agree to enforce (for such period as each respectively holds the Consultant Contract) all terms, conditions, performance requirements and warranties provided under the Consultant Contract on behalf of the other party, and to cause the Consultant to correct any defective or non-compliant work as required by the Consultant Contract, the Performance Specifications or as reasonably requested by the other party. ARTICLE IX. PROJECT CONSTRUCTION 9.1 Prior to completion of final design, UTA shall prepare, advertise and disseminate a request for proposals ("RFP") to be used in the selection of the CM/GC. The RFP shall be based on the 90% Design Drawings. Prior to public dissemination, UTA shall deliver a draft RFP to the City for review and comment. The City shall have fifteen (15) days to review and comment on the draft RFP. Notwithstanding the 15-day review period, the City shall use its best efforts to review and comment upon the draft RFP in a shorter period of time, if such shorter review time is reasonable. The parties shall cooperate and resolve all City comments or objections to the RFP prior to public dissemination. 9.2 UTA shall coordinate the evaluation of proposals received in response to the RFP and the process of selecting the CM/GC. The Project Integration Team shall appoint the selection team for this procurement, which selection team shall evaluate the proposals received in response to the RFP and select the CM/GC. The CM/GC shall be selected according to a "best value" selection process based on the criteria set forth in the approved RFP. 20 9.3 UTA shall negotiate, prepare, execute and deliver the CM/GC Contract, and shall authorize the CM/GC to proceed with the preconstruction phase of the CM/GC Contract. The CM/GC Contract shall incorporate the scope, terms and conditions of the approved RFP. 9.4 UTA shall ensure that the City participates in all formal and informal meetings and reviews with the CM/GC. 9.5 UTA shall cause the CM/GC to provide the City with the opportunity to review and comment upon all Construction Submittals materially affecting the City, including any Construction Submittals related to the City's roadway or utility facilities, the Project Budget, the management of traffic during construction or the distribution of construction information to the public. Each Construction Submittal shall state the latest permissible date for receipt of comments, which date must be reasonable given the nature of the Construction Submittal. Notwithstanding the identified review period, the City shall use its best efforts to review and comment upon the Construction Submittals in a shorter period of time, if such shorter review time is reasonable. UTA shall cause the CM/GC to address all comments and objections submitted by the City with respect to the Construction Submittals, and to resolve such issues to the City's reasonable satisfaction. 9.6 UTA shall oversee and manage the efforts of the CM/GC consistent with the CM/GC Contract, the Performance Specifications and the provisions of this Agreement. UTA shall be the sole point of formal contact with the CM/GC during the preconstruction and construction phases of the Project. UTA recognizes that the City will have considerable interaction with the CM/GC,but the parties agree that the City shall not provide formal direction to the CM/GC under the CM/GC Contract. 9.7 The parties agree and acknowledge that the CM/GC shall begin preconstruction services, construction materials procurement and advance utility work before the approval of the 90% Design Drawings and Final Design Drawings. The parties have selected the CM/GC project delivery method, in part, to allow for value engineering proposals and constructability reviews. 21 This delivery method also allows the CM/GC to provide input regarding Traffic and Staging Plans and Public Outreach Plans (as such terms are defined below) related to the Project. The involvement of the CM/GC during the preconstruction phase may result in changes to the design, or the redesign of certain elements of the Project. The parties agree to cooperate and closely coordinate the work of the Consultant and the CM/GC during the preconstruction phase of the Project in order to minimize duplicative work and to reduce the overall budget for the Project. The parties also agree to manage their respective contracts in a manner that allows for a cooperative and constructive process consistent with the Project Budget, the Project Schedule and the objectives identified in this Agreement. 9.8 UTA shall negotiate a GMP, and shall authorize the CM/GC to proceed with the construction phase of the CM/GC Contract. The GMP shall be consistent with the Project Budget described in Article VI of this Agreement. To the extent UTA is unable to negotiate a GMP for the work identified in the 90%Design Drawings within the scope of the Project Budget, UTA and the City shall address the potential overruns consistent with the provisions of Article VI of this Agreement. Any changes to the 90% Design Drawings shall be subject to the approval of both parties and, once so approved, shall be incorporated into the Final Design Drawings. The Final Design Drawings shall constitute the final work scope for Project construction. 9.9 UTA shall ensure that the City has access to the Project site as necessary to monitor all Project construction. If, as a result of the City's observation of construction, the City objects to the manner in which work is being performed, the City shall immediately notify the UTA Representative or his or her designee. UTA shall cause the CM/GC to comply with the Final Design Drawings (including any Changes approved by the Project Integration Team), the Performance Specifications and the terms and conditions of this Agreement. The City shall not directly order the CM/GC to stop or correct work except as necessary to prevent or mitigate an imminent threat of death, bodily injury, or other serious damage to persons or property as determined by the City in good faith. 22 9.10 Any proposed Changes to the CM/GC Contract shall be subject to review and approval of the Project Integration Team. Any incremental costs that result from a proposed Change shall be allocated between the parties as provided in Article VI of this Agreement. Unless otherwise agreed between the parties, no Change will be approved to the extent that the Change would adversely affect the Project Schedule. 9.11 UTA agrees to enforce all terms, conditions, performance requirements and warranties provided under the CM/GC Contract on behalf of the City and to cause the CM/GC to correct any defective or non-compliant work as required by the CM/GC Contract and as reasonably requested by the City. 9.12 To the extent that the Final Design Drawings require privately-owned utility facilities (including but not limited to electric power, gas, telephone, cable or telecommunications) to be relocated, the City will, consistent with applicable law and on a case- by-case basis, consider exercising any rights it may have under existing contracts, franchise agreements, ordinances or general law to cause such owners to relocate their utilities at the owner's expense. All direct and indirect costs incurred by the City in connection with the enforcement of such contracts, franchise agreements, ordinances or general law shall be borne by the Project. 9.13 In order to minimize the adverse impact of the Project on traffic and abutting property owners and patrons, UTA shall cause the CM/GC to prepare a Maintenance of Traffic and Access Plan, Traffic Control Plan and Construction Staging Plan (the "Traffic and Staging Plans") as part of the CM/GC's scope of work. The Traffic and Staging Plans shall be prepared by a Utah-licensed professional engineer with demonstrated expertise in traffic engineering and the development of maintenance of traffic and access plans in construction areas. The Traffic and Staging Plans shall include measures to minimize traffic disruption, provide traffic safety and assure abutting property access during construction. The Traffic and Staging Plans shall take into account other major construction projects which may affect traffic in and near the area affected 23 by the Project. The Traffic and Staging Plans shall include construction-related traffic mitigation strategies, a signage plan from the 600 South Interchange recommending directions to the Gateway development and other impacted businesses, and construction staging. Notwithstanding the foregoing, the Traffic and Staging Plans shall address: (a) internal and external parking and circulation strategies in and around the Gateway development and other businesses impacted by the Project that would help mitigate any potential impacts of the Project; and (b) prohibitions regarding work performed on the Project during the holiday shopping season. The Traffic and Staging Plans shall be reviewed and approved by the parties. 9.14 In order to minimize the adverse impact of the Project to the community, the parties will cause a public outreach, communication and coordination effort(the"Public Outreach Plan") to be implemented with respect to all construction. Proposals for a Public Outreach Plan will be considered in the selection of the CM/GC, and the Public Outreach Plan will be developed by CM/GC as part of the pre-construction services. The Public Outreach Plan will be reviewed and approved by the parties. ARTICLE X. OWNERSHIP AND MAINTENANCE OF IMPROVEMENTS 10.1 Upon satisfactory completion of the track and station improvements constructed pursuant to the Project, UTA shall accept such improvements as part of the TRAX System. UTA shall assume all maintenance and operation responsibility with respect to such improvements, and shall indemnify the City with respect to the operation and maintenance of such improvements, consistent with the terms and conditions of the Public Way Use Agreement attached as Exhibit F. 10.2 Upon satisfactory completion of the utility, roadway, sidewalk and related improvements constructed pursuant to the Project,the City shall accept such improvements as the City's public improvements. The City shall assume all maintenance and operation responsibility with respect to such improvements, and shall indemnify UTA with respect to the operation and maintenance of such improvements, subject to the terms and conditions of the Public Way Use Agreement attached as Exhibit F. Nothing provided in this Section 10.2 shall be construed to 24 limit UTA's obligation to enforce the terms of the CM/GC Contract as set forth in Section 9.11 of this Agreement. ARTICLE XI. INSURANCE 11.1 The City shall cause the Consultant to maintain the following insurance: (a) professional liability insurance that provides limits of not less than $5 Million per occurrence with a $10 Million annual aggregate limit, and that insures the Consultant's obligation to indemnify the City and UTA under the Consultant Contract; (b) commercial general liability insurance with limits of at least $1 Million per occurrence with a $2 Million annual aggregate; (c) commercial automobile insurance with limits of not less than $1 Million for any one accident or loss; and (d) worker's compensation and employer's liability insurance providing coverage for the statutory benefits required by Utah law. The commercial general liability and automobile liability policies shall each include an endorsement naming the City and UTA as additional insureds. All insurance policies shall include an endorsement prohibiting any modification or cancellation of insurance without 30 days prior notice to the City and UTA. The City shall cause the Consultant to deliver UTA,on an annual basis, insurance certificates evidencing the insurance coverage described above. The Consultant shall be required to maintain the professional liability and commercial general liability insurance for a period of two years following the close out of the Consultant Contract or must provide a comparable "extended discovery" clause or "tail endorsement"to such policies. 11.2 UTA shall cause the CM/GC to maintain the following insurance: (a) commercial general liability insurance with limits of at least$5 Million per occurrence with a$10 Million annual aggregate, and that insures the CM/GC's obligation to indemnify UTA and the City under the CM/GC Contract; (b)commercial automobile insurance with limits of not less than $1 Million for any one accident or loss; and (c) worker's compensation and employer's liability insurance providing coverage for the statutory benefits required by Utah law. The commercial general liability and automobile liability policies shall each include an endorsement naming UTA 25 and the City as additional insureds. All insurance policies shall include an endorsement prohibiting any modification or cancellation of insurance without 30 days prior notice to the UTA and the City. UTA shall cause the CM/GC to deliver the City, on an annual basis, insurance certificates evidencing the insurance coverage described above. The CM/GC shall be required to maintain the commercial general liability insurance for a period of two years following the close out of the CM/GC Contract or must provide a comparable "extended discovery" clause or "tail endorsement"to such policy. ARTICLE XII. TRANSFER OF OWNERSHIP; INTERMODAL HUB 12.1 The parties acknowledge that: 12.1.1 the land acquisition, development and construction related to the Intermodal Hub were all financed with the City's local money,part of which has been reimbursed from the proceeds of an FTA grant with a federal/local matching ratio equal to 80/20 percent,respectively; 12.1.2 UTA has been the primary recipient of the federal funding provided by the FTA and has transferred FTA funds to the City pursuant to an August 25, 1999 Interlocal Cooperation Agreement(Gateway Intermodal Terminal); 12.1.3 the City is eligible to receive reimbursement of additional federal funds for expenditures incurred relative to the development of the Intermodal Hub. Reimbursement for those funds will be received by the City prior to UTA receiving reimbursements for the Project; 12.1.4 pursuant to the August 25, 1999 Interlocal Cooperation Agreement, UTA has been responsible for monitoring and ensuring the City's compliance with respect to federal grant programs mandated by the FTA; 12.1.5 UTA is currently providing bus service to the Intermodal Hub; and 26 12.1.6 with the addition of TRAX System and Commuter Rail System improvements at the Intermodal Hub,UTA's presence at the Intermodal Hub will increase dramatically. 12.2 The City hereby agrees to convey fee title to the Intermodal Hub, and the approximately 16.5 acres of land constituting the Intermodal Hub site, to UTA (collectively the "Intermodal Hub Property"). Notwithstanding the foregoing, the City shall not convey to UTA such portion of the Intermodal Hub site as is situated in the historic area of 600 West Street, as reasonably determined by the City. Such portion of the Intermodal Hub site shall be retained by the City, and dedicated as part of the City's right-of-way. The Intermodal Hub Property shall be conveyed to UTA as consideration for UTA: (a) assuming the risk of future appropriations of federal monies for the Project; (b) advancing and committing local UTA funds pending receipt of future federal monies; (c) incurring finance costs attributable to the Project pending receipt of federal reimbursement; (d) assuming responsibility for the development of interim pedestrian and parking improvements (as depicted in Exhibit E) as part of the Project; (e) assuming the obligation to relocate the Amtrak station, parking and trackage, and to provide Amtrak with interim passenger facilities, as part of the Project; (f) assuming future responsibility for construction of permanent Amtrak facilities; (g) assuming other obligations under the Amtrak lease; (h) assuming obligations under the Greyhound lease; (i) assuming future responsibility for the mitigation of the north warehouse building; (j) assuming the City's obligations under the Salt Lake City Intermodal Hub Site Management Plan for the Salt Lake City Intermodal Hub; and(k) assuming operation and maintenance responsibility for the Intermodal Hub. In addition, UTA agrees that any income derived by UTA from the operation of the Intermodal Hub, including any future facilities situated on the Intermodal Hub Property, net of costs and expenses of operating the Intermodal Hub and such other facilities, shall be allocated to City mass transit needs or projects and, to the extent such projects require the City to contribute a "local match," shall be applied toward such local match obligation of the City, all as mutually agreed upon by the City, 27 UTA, and FTA. No other consideration beyond the covenants and requirements of this Agreement shall be conveyed. 12.3 Within 30 days following the execution of this Agreement (or such later date as the parties shall mutually agree), the City shall convey fee title to the Intermodal Hub Property (including any easements, access rights, covenants, restrictions or other interests appurtenant to and benefiting the Intermodal Hub Property)to UTA by special warranty deed in substantially the same form as that attached as Exhibit H. The conveyance shall be made subject to all matters of record including the existing leases between: (a) the City and Greyhound; and (b) the City and Amtrak. The special warranty deed shall provide that the interest conveyed by the City thereunder shall revert back to the City in the event that UTA (or a successor public transit provider) ceases to use the Intermodal Hub Property for public transportation purposes, or in the event that UTA attempts to convey the Intermodal Hub Property to a third party, excepting a successor public transit provider. 12.4 Upon delivery of the special warranty deed for the Intermodal Hub Property, the City shall execute and deliver an assignment and assumption agreement assigning and delegating the City's rights and obligations under the Greyhound lease. The assignment and assumption agreement shall be in substantially the same form as that attached as Exhibit I. 12.5 Upon delivery of the special warranty deed for the Intermodal Hub Property, the City shall execute and deliver an assignment and assumption agreement assigning and delegating the City's rights and obligations under the Amtrak lease. The assignment and assumption agreement shall be in substantially the same form as that attached as Exhibit J. The assignment and assumption shall be subject to obtaining the required consent to assignment from Amtrak. 12.6 Prior to the execution of this Agreement, UTA has performed the following due diligence with respect to the Intermodal Hub Property: (a) UTA has reviewed the environmental investigations conducted by the City in conjunction with the City's acquisition of the Intermodal Hub Property, and has conducted additional and/or updated environmental investigations as 28 deemed necessary by UTA; (b) UTA has reviewed the preliminary title commitment for the Intermodal Hub Property and approved all matters set forth on such commitment; (c) UTA has reviewed the Greyhound and Amtrak leases affecting the Intermodal Hub Property and satisfied itself as to the content of such leases; (d) UTA has reviewed the rent rolls and other documents related to the program income (as such term is defined by the FTA) generated from Intermodal Hub Property; (e) UTA has conducted any physical inspections deemed necessary with respect to the Intermodal Hub Property; (f)UTA has reviewed estoppel letters from Greyhound and Amtrak (dated as of the date of this Agreement) stating the basic terms of each lease and providing that the leases are in good standing, in full force and effect, and free of any default or event of default; and(g) UTA has performed any additional due diligence it deemed necessary. 12.7 The City makes the following covenants and warranties with respect to the Intermodal Hub Property, both as of the date of this Agreement, and as of the date the deed is actually delivered: (a) after the date of this Agreement, and prior to the delivery of the special warranty deed, the City shall not have entered into any new contract or agreement with respect to the Intermodal Hub Property that will survive the delivery of the deed or affect the use, operation or enjoyment of the Intermodal Hub Property after delivery of the deed; (b) the City has paid all bills and invoices for labor, goods, materials, utilities and services of any kind related to the Intermodal Hub Property up to the date of the deed is delivered to UTA (provided that the City shall have up to 30 additional days to make prorated payments of utilities for the month during which the deed is delivered); (c) the City has no actual or constructive knowledge of any pending or threatened action to enforce or seek damages with respect to any federal or state environmental law or to cause the cleanup of(or seek contributions to be used in the cleanup of) the Intermodal Hub Property, or any portion thereof; (d)the City has no actual or constructive knowledge of any other pending or threatened action involving the City's ownership of the Intermodal Hub Property, or contesting the City's title to the Intermodal Hub Property; (e) the City has no actual or constructive knowledge of any other pending or threatened action seeking to acquire the 29 Intermodal Hub Property, or any portion thereof, through the use of eminent domain authority; (f) the City has no actual or constructive knowledge of any claims regarding liens or other encumbrances, except to the extent that such liens or encumbrances are shown as matters of record; and (g) the Greyhound and Amtrak leases are the only leases that affect the Intermodal Hub Property and will survive the delivery of the deed, and both leases are in good standing, in full force and effect and free from any default or event of default on the part of the City or either lessee. All covenants and warranties made pursuant to this provision shall survive the delivery of the special warranty deed and the expiration and/or termination of this Agreement. The covenants and warranties provided by the City are limited to those set forth in this provision. All other representations regarding the Intermodal Hub Property are specifically disclaimed. Except as otherwise provided in this Section 12.7 or elsewhere in this Agreement, UTA is accepting the Intermodal Hub Property on an"AS-IS""WHERE-IS"basis and with all faults. 12.8 The City has developed a site development plan for the Intermodal Hub Property as depicted on the attached Exhibit K. After conveyance of the Intermodal Hub Property, UTA agrees to make all reasonable efforts, in good faith, to develop the Intermodal Hub Property consistent with the site development plan, as such plan is amended from time to time. It is the intent of the City to rezone the Intermodal Hub Property and other nearby properties from their current zoning to Gateway mixed-use zoning("GMU"), consistent with the Gateway Area Master Plan. UTA, as a property owner, shall support the rezoning of the Intermodal Hub Property and other nearby properties to GMU, or other consistent zoning. UTA shall comply with the zoning requirements of GMU zoning for the development of the site and shall, to the greatest extent possible, integrate development at the Intermodal Hub Property with development of the surrounding area. In addition, UTA shall assure that all buildings constructed at the Intermodal Hub Property meet, at a minimum, the requirements of the U.S. Green Building Council Leadership in Energy and Environment Design (LEED) for certification at the "Silver" level. UTA's commitment under this provision shall be subject to UTA securing acceptable funding for 30 the development of such improvements and receiving any necessary development approvals or other required approvals from third parties. 12.9 In connection with the development of the Intermodal Hub Property, there is hereby established a Joint Development Committee. The Joint Development Committee shall consist of three City employees, to be appointed by the Salt Lake City Mayor, three UTA employees, to be appointed by the UTA General Manager, and one employee of the Redevelopment Agency of Salt Lake City, to be appointed by the Redevelopment Agency Director. The purpose of the Joint Development Committee shall be to promote and support development of the Intermodal Hub Property, by initiating and proposing ideas, concepts and plans for consideration and action by UTA. The Joint Development Committee shall coordinate and integrate development of the Intermodal Hub Property with development of the surrounding area. The Joint Development Committee shall meet bi-monthly, and more frequently as determined by a majority of its members. UTA shall, in good faith, endeavor to implement the initiatives and proposals generated by the Joint Development Committee. 12.10 In addition to the general indemnity provisions provided in this Agreement, the City hereby agrees to assume, defend and hold UTA harmless with respect to, any third party claims relating to the ownership of the Intermodal Hub Property that accrued prior to the conveyance of the special warranty deed, unless such third party claims result from the actions or omissions of UTA. 12.11 In addition to the general indemnity provisions provided in this Agreement, UTA hereby agrees to assume, defend and hold the City harmless with respect to, any third party claims relating to the ownership of the Intermodal Hub Property that accrue after the conveyance of the special warranty deed, unless such third party claims result from the actions or omissions of the City. 12.12 Upon the execution of this Agreement, the August 25, 1999 Interlocal Cooperation Agreement shall be subsumed into, and replaced by,this Agreement. This provision 31 shall not be construed so as to: (a) relieve the City of any violation or breach of any "Grant Requirements" (as such term is defined in the August 25, 1999 Interlocal Cooperation Agreement)prior to the conveyance of the Intermodal Hub Property; (b)nullify the City's ability to seek and obtain reimbursement under federal grants for any costs properly incurred by the City prior to the date of this Agreement and otherwise reimbursable to the City under the terms of the August 25, 1999 Interlocal Cooperation Agreement; (c) nullify any debts, claims of liens, liabilities or other obligations incurred from, under or related to the City's construction contract related to the construction of Phase II of the Intermodal Hub project; or(d)nullify any third party claims against the City relating to the ownership of the Intermodal Hub Property that accrued prior to the conveyance of the Intermodal Hub Property by special warranty deed. ARTICLE XIII. INDEMNITY Each party (the "Indemnifying Party") hereby agrees to indemnify, defend and hold harmless the other party(the "Indemnified Party") from and against any and all claims, demands, liens, liabilities, costs, fees (including reasonable attorneys' fees), damages or other losses incurred by the Indemnified Party and arising out of or by reason of: (a) the negligent acts or omissions of the Indemnifying Party or its agents; or(b)the material breach of this Agreement by the Indemnifying Party or its agents. The indemnities provided hereunder are contractual obligations personal to the parties hereto. Nothing provided in this Agreement is intended to waive, modify, limit or otherwise affect any defense or provisions that the parties may assert with respect to any third party under the Utah Governmental Immunity Act or other applicable law. ARTICLE XIV. DEFAULT A party shall be deemed in default of this Agreement upon the failure of such party to observe or perform a covenant, condition or agreement on its part to be observed or performed, and the continuance of such failure for a period of thirty (30) days after the giving of written notice by the non-defaulting party, which notice shall specify such failure and request that it be remedied; provided, however, that if the failure stated in such notice cannot be corrected within 32 the applicable period, it shall not give rise to a default hereunder if corrective action is instituted within the 30-day period and diligently pursued until such failure is corrected. In the event of a default hereunder, the non-defaulting party shall have a breach of contract claim remedy against the defaulting party in addition to all other remedies provided or permitted by law, provided that no remedy which would have the effect of amending any provisions of this Agreement shall become effective without formal amendment of this Agreement. ARTICLE XV. NOTICES Any notice, demand, request, consent, submission, approval, designation or other communication which either party is required or desires to give under this Agreement shall be made in writing and mailed or faxed to the other party at the addresses set forth below or at such other addresses as the party may provide in writing from time to time. Such notices shall be hand delivered, mailed(by first-class mail,postage prepaid)or delivered by courier service as follows: If to the City: With a Copy to Salt Lake City Corporation Salt Lake City Attorney's Office Attn: City Mayor City&County Building City& County Building 451 South State Street,Room 505 451 South State Street, Room 306 Salt Lake City,Utah 84111 Salt Lake City, Utah 84111 If to UTA With a Copy to Utah Transit Authority Utah Transit Authority Attn: Deputy Chief,Major Capital Projects Attn: General Counsel's Office 3600 South 700 West 3600 South 700 West Salt Lake City,Utah 84119 Salt Lake City,Utah 84119 ARTICLE XVI. NON-WAIVER No covenant or condition of this Agreement may be waived by either party unless done so in writing by such party. Forbearance or indulgence by a party in any regard whatsoever shall not constitute a waiver of the covenants or conditions to be performed by the other party. 33 ARTICLE XVII. SEVERABILITY If any provision of this Agreement shall be held or deemed to be or shall, in fact, be illegal, inoperative or unenforceable, the same shall not affect any other provisions herein contained or render the same invalid,inoperative or unenforceable to any extent whatsoever. ARTICLE XVIII. GOVERNING LAW This Agreement shall be governed by the laws of the State of Utah, both as to interpretation and performance. It shall be enforced only a court of competent jurisdiction located in Salt Lake City, Utah. ARTICLE XIX. NO THIRD PARTY BENEFICIARIES There are no intended third party beneficiaries to this Agreement. It is expressly understood that enforcement of the terms and conditions of this Agreement, and all rights of action relating to such enforcement, shall be strictly reserved to the parties,and nothing contained in this Agreement shall give or allow any claim or right of action by any third person under this Agreement. It is the express intention of the parties that any third person who receives benefits under this Agreement shall be deemed an incidental beneficiary only. ARTICLE XX. ENTIRE AGREEMENT; AMENDMENT This Agreement contains the entire agreement between the parties with respect to the subject matter hereof, and no statements,promises or inducements made by any party or agents of any party that are not contained in this Agreement shall be binding or valid. This Agreement may not be amended, enlarged, modified or altered except through a written instrument signed by all parties. ARTICLE XXI. POLICE POWER The parties acknowledge the rights vested in the City pursuant to general law to exercise its police powers for the protection of health, safety and welfare of its constituents and their properties. Nothing in this Agreement shall be construed as precluding the City from exercising such powers in connection with the Project. 34 ARTICLE XXII. INTERLOCAL COOPERATION ACT REQUIREMENTS In satisfaction of the requirements of the Interlocal Cooperation Act,Title 11,Chapter 13, Utah Code Annotated 1953, as amended, and in connection with this Agreement,the parties agree as follows: 22.1 The Agreement shall be authorized by resolution or ordinance of the governing body of each party pursuant to §11-13-202.5 of the Act. 22.2This Agreement shall be approved as to form and legality by a duly authorized attorney on behalf of each party pursuant to §11-13-202.5 of the Act. 22.3 A duly executed original counterpart of this Agreement shall be filed with the keeper of records of each party pursuant to §11-13-209 of the Act. 22.4Prior to the expiration of the term of this Agreement pursuant to Article III of this Agreement, this Agreement may only be terminated by and upon the express written consent of the parties. 22.5Except as otherwise specifically provided in this Agreement or in any of the documents incorporated herein, any real or personal property acquired by a party, or by the parties jointly, pursuant to this Agreement or in conjunction with the Project shall be acquired and held, and disposed of by such party upon termination of this Agreement as agreed among the parties or as otherwise required by applicable local, state and federal law. ARTICLE XXIII. LIMITED OBLIGATIONS Any obligations of the parties to pay money or incur costs under this Agreement shall be subject to appropriation of sufficient funds for such purpose to the extent such payments or incurrence of costs fall outside of the present fiscal year or exceed amounts budgeted and available therefor in the budget for the present fiscal year. Except as otherwise provided herein, this Agreement shall not be construed to obligate either party to make financial contributions toward the Project. It is not the intention of the parties to create, and no obligations of the parties 35 hereunder shall be construed as creating or constituting, debt within the meaning of Article XIV, Section 3 of the Utah Constitution. ARTICLE XXIV. ETHICAL STANDARDS UTA represents that it has not: (a)provided an illegal gift or payoff to a City officer or employee or former City officer or employee, or his or her relative or business entity; (b)retained any person to solicit or secure this Agreement upon an agreement or understanding for a commission, percentage, brokerage or contingent fee, other than bona fide employees or bona fide commercial selling agencies for the purpose of securing business; (c) knowingly breached any of the ethical standards set forth in the City's conflict of interest ordinance, Chapter 2.44, Salt Lake City Code; or (d) knowingly influenced, and hereby promises that it will not knowingly influence, a City officer or employee or former City officer or employee to breach any of the ethical standards set forth in the City's conflict of interest ordinance, Chapter 2.44, Salt Lake City Code. ARTICLE XXV. INCORPORATION OF EXHIBITS This Agreement in its entirety includes Exhibits A through K, all of which are incorporated herein and made a part hereof by this reference. The Exhibits of this Agreement are as follows: 25.lExhibit A—Project Alignment and Station Locations. 25.2Exhibit B—Sixty Five Percent(65%)Design Drawings. 25.3Exhibit C—Project Budget. 25.4Exhibit D—Project Schedule. 25.5Exhibit E—Site Plan for the Intermodal Hub. 25.6Exhibit F—Public Way Use Agreement. 25.7Exhibit G—Reserved. 25.8Exhibit H—Special Warranty Deed for Intermodal Hub. 25.9Exhibit I—Assignment and Assumption Agreement for Greyhound Lease. 36 25.10Exhibit J—Assignment and Assumption Agreement for Amtrak Lease. 25.11Exhibit K—Master Development Plan for Intermodal Hub. IN WITNESS WHEREFORE, the parties have each executed this Interlocal Agreement Regarding the Design and Construction of the Salt Lake City Intermodal Hub Connection to TRAX LRT Project as of the date first set forth above. SALT LAKE CITY CORPORATION UTAH TRANSIT AUTHORITY By: By: Ross C. Anderson,Mayor John M. Inglish, General Manager ATTEST AND COUNTERSIGN: By: Michael Allegra,Chief Capital Development By: Officer Chief Deputy City Recorder APPROVED AS TO FORM AND LEGALITY: APPROVED AS TO FORM AND LEGALITY: Senior City Attorney UTA Legal Counsel 37 C SALT LAKE CITY CORPORATION UTAH TRANSIT AUTHORITY By: By: — Ross C.Anderson,Mayor John M.Inglish,General Manager ATTEST AND COUNTERSIGN: By: Michael Allegra,Chief Capital Development By: Officer Chief Deputy City Recorder APPR.OV • FORM AND LEGALITY: 0 % APPR . OVED AS TO FORM AND LBOA#:'TY: City Attorney P'1 N v+ f! 'xf U A Legal CoUnt .1 _..____— I ID 38 11111111111111.1111111111111117 Exhibit A — Project Alignment and Station Locations • ,Iit\ .ps DELTA t; ',.ss) � a CENTER 44 100 SOT-TII f1 h 1 ' i -I • f. i t , S 1 • l ' e. 1. ii 1,i'fGt+'Ni) 1, SI f.'I R 4\I.'VI I'N IO1� PkfiJF:f"I L 3{i0 St It i'11 F; I.SI17tif7, II., ; i'Rf)1'O,S1+,1)S IA I Ifii' s 1'ItfiPDS11)J.(i'I't,'It1 .3?'VI'I(IN 4 A-1 Exhibit B—Sixty Five Percent(65%) Design Drawings The March 2006 65% Engineering Plans for SLC Intermodal Hub Connection to TRAX Project, prepared by Parsons Transportation Group, are hereby incorporated by reference and are made a part of this Agreement as if fully included herein. 1111 11111 B4 Exhibit C - Project Budget Funding Budget Future Total Percent Source ($millions) 200 So Budget (%) Station City $7.85 $0.60 $8.45 26.4% UTA $8.45 $0.00 $8.45 26.4% FTA $15.10 $0.00 $15.10 47.2% Total $31.40 $0.60 $32.00 100.0% L C-1 FIIILiZEftIIfIiiiiJi '4 j. U • ± o a _..4._.i T. 1 11-1- 1 1 i 1 1-._t_-_ - _i_ , , i _ _' _ ' I t 4 '_ t ' 1i '1114 ,I} --� IA-- 4 + - - -- ------- 1 -1Ir111ttfit _ _ t- -0 18.....iiIrtii.±..i_.t_tri_.._.i1__.' 1-_1 1--1 1 , i li{ f • •--, 1 -- i - , -t I- 4- t- t II - •-' 8 8 8 8 8 8 g 8 8 8 8 8 g ! 9 8 g o n m 8 o ry N S ;, M ' o o 2 • f Z 0 K ^a < a a a a a a a a a a +' W g g g 8 8,yy g 8 8 8 �4 g 8 8 g 8 g e g S o n C 0 gg - N N m Fl N N N ,, -- - a T. a A� R 0 o �i o o 2 o o $ s < 2 Q f < 2 5 3 # z z z +'a V 3 E 53 o G ', m m n - r A R - ry G '< r o 0 41 C 0 C.) - g e _ r, 2 € z" o Y = 51 U - .a $ r 8 t r EO O € B, v t a 8 i b• A u 8 3 ,8 m z a s t o a u 4 6 5 I y a Z • ba• e - ? aaaE y $ $ � - g a C Eqiiill �xl � iEl 'ti52l2 � „• ! o4o o otga18 ' !, 2 J$ rc ; , a 0aa a8aa0y aa i U _1380 - § g § A u2o - F07 EREAN, 1 - 1 _.. _ c _J _J _ J -1 -J -1 -1 -I 2 J -1 _. . a LT u S. rc L 7 Exhibit E — Site Plan for the Intermodal Hub ‘.17r..:. ` i i iii' ,i. 1 , . f I 1 �` - ii --.c.::`.'4 'lop:, "-. "\-. i _ ! .q r )i ri \\ lb 'V\ 11 z.:.-7.-:.k ifr• - 13 ,a ,rat.) , t 1 ,t;Ii.j 6'' '/I. 1 1 '..4*#,;;.c 1 T 1� �.. U rL SALT LAKE CITY INTERMODAL HUB CONCEPTUAL TRANSIT PLAZA PLAN (3/30/06) E-1 Exhibit F— Public Way Use Agreement THIS PUBLIC WAY USE AGREEMENT (INTERMODAL HUB CONNECTION) (the "Agreement")is hereby entered the_day of 2006 by and between UTAH TRANSIT AUTHORITY("UTA"), a public transit district and political subdivision of the State of Utah, and SALT LAKE CITY CORPORATION, a municipal corporation and political subdivision of the State of Utah (the "City"). UTA and the City are hereafter sometimes collectively referred to "parties" and either may be referred to individually as "party," all as governed by the context in which such words are used. RECITALS WHEREAS, the City is the owner of various property rights and interests in certain streets and public ways which lie within the City; and WHEREAS, UTA proposes to occupy and use a portion of such City streets and appurtenant property for the construction, operation and maintenance of a six-block extension to the UTA TRAX light rail system from the Delta Center Station to the Salt Lake City Intermodal Terminal; and WHEREAS, the City has agreed in that certain Interlocal Agreement Regarding the Design and Construction of the Salt Lake City Intermodal Hub Terminal to TRAX LRT Project ("LRT Agreement"), dated as of the date hereof and by and between the City and UTA, to enter into this Agreement for the purpose of authorizing UTA to use certain City streets in connection with the light rail system along the alignment described herein; and WHEREAS, the City desires to grant such rights and privileges to UTA, and to document the terms and conditions upon which such City streets and other property may be used by UTA. AGREEMENT NOW, THEREFORE, for and in consideration of the mutual covenants and promises contained herein and in the LRT Agreement, and other good and valuable consideration, the F-1 receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows: SECTION 1. Definitions. The following capitalized terms shall have the following meanings when used in this Agreement,unless a different meaning is clearly intended: "City Property" means all real property, including streets and other improvements thereto,which is owned or controlled by the City. "CM/GC Contract" means the contract to be entered between UTA and the contractor selected to oversee the construction of the System, all as set forth in the LRT Agreement. "Effective Date" means the date on which the UTA Use Rights granted hereunder become operative,as specified in Section 3 hereof. "Final Design Drawings" means the plans for the System as approved by the parties pursuant to the LRT Agreement. "Force Majeure" means any event which: (i) causes UTA to be unable to exercise the UTA Use Rights provided for hereunder; and (ii) is outside the reasonable control of UTA and could not be avoided by UTA through the exercise of due care. Force Majeure events include, without limitation: earthquakes, fires, floods, tornadoes, wars, labor strikes or similar accidents, disputes or similar events. "Interlocal Act" means the Interlocal Co-operation Act, Title 11, Chapter 13, Utah Code Annotated(1953), as amended. "LRT Agreement" means that certain Interlocal Agreement Regarding the Design and Construction of the Salt Lake City Intermodal Hub Terminal to TRAX LRT Project entered by and between the City and UTA, dated as of the date hereof, which document sets forth the terms and conditions pursuant to which the System will be designed and constructed. "Occupied City Property" means City property to be physically occupied by System facilties in accordance with this Agreement and pursuant to the Final Design Drawings. F-2 "Project" means the planning, design, financing, construction and installation of the System as set forth in the LRT Agreement. "Public Facilities" means all City-owned public improvements of any kind which are affected by construction or operation of the System including, without limitation, public utility facilities, curbs and gutters, sidewalks, street paving, trees, landscaping, planters, fountains, beautification facilities, traffic signals, street lights, wiring, controllers, poles and related facilities, signs, lighting facilities and fire protection facilities. "System" means the six-block extension of the existing UTA TRAX light rail system from the Delta Center Station to the Salt Lake City Intermodal Terminal, including all tracks, stations, cars, conduits, electrical lines, traction power poles, traction power substations, cross- span wires, LRT traffic equipment, stray-current protection equipment, and other functionally related and appurtenant equipment and facilities. "System Alignment"means the alignment for the System agreed to between the parties as identified in Exhibit A of the LRT Agreement. "System Corridor" means all land located generally in and adjacent to City streets along the System alignment. "UTA Use Rights" means the right to use the City Property, as granted to UTA by this Agreement. SECTION 2. UTA Use of City Property. (a) UTA is hereby authorized to use, on a non-exclusive basis, such portion of the City Property, including surface, subsurface and air space property, as shall be necessary to accommodate the construction, operation and maintenance of the System. UTA's use of such property shall be strictly limited to the terms, conditions, limitations and restrictions contained herein. F-3 (b) The location and extent of the City Property which may be utilized by UTA for System facilities, and the scope and nature of such use, shall be governed by the Final Design Drawings approved by the parties. (c) UTA acknowledges that: (i) the City has previously granted franchises affecting the City Property; and (ii) no right of action in favor of UTA and against the City relating in any way to the existence of utility lines or facilities pursuant to such franchises,or for damages of any kind against the City relating to such franchises or lines and facilities or the existence of said franchises or franchised lines or equipment, shall arise or be deemed to arise from this Agreement. UTA and the City agree that, as between them,matters of relocation of private utility lines under existing franchises will be governed and handled pursuant to the terms and provisions of 9.12 of the LRT Agreement dated . The City agrees that, except for renewals or extensions of existing franchises, and renewals or extensions of existing use rights, the City shall not hereafter grant franchises or use rights which materially interfere with UTA's construction, operation or maintenance of the System. (d) The City makes no warranties, either express or implied, regarding the nature, extent or status of its title to the Property or within the System Corridor or the existence or non- existence of rights in third parties which may be superior to the UTA Use Rights. If UTA finds it necessary to acquire additional rights from third parties, the City shall have no obligation whatsoever to pay, or to reimburse UTA for the payment of, any costs related to such acquisition, or in connection with any litigation challenging UTA's use of City Property. SECTION 3. Effective Date; Term. (a) The UTA Use Rights granted herein shall not become operative until the Effective Date, which shall be the date on which the contract with the CM/GC is executed by UTA in accordance with the terms of the LRT Agreement. (b) Beginning on the Effective Date,this Agreement and the UTA Use Rights herein granted shall be operative for an initial term of fifty (50) years. The initial term shall F-4 automatically (subject to the last sentence of this subsection (b)) be renewed by the City for two (2) additional, successive twenty-five (25) year terms; provided, however, that if, at least one hundred and eighty (180) days prior to the expiration of the initial term or the first renewal term, the City notifies UTA of one or more significant concerns regarding System facilities, or UTA's operation or maintenance of the System facilities, or UTA's operation or maintenance of the System (whether or not the matters of concern are addressed by or constitute a default under this Agreement), and such concerns are not corrected by UTA to the reasonable satisfaction of the City (or an appropriate amendment to this Agreement is not executed) within such 180 day period, the City shall not be obligated to renew the term of this Agreement, in which event the UTA Use Rights shall terminate at the end of the then-effective term. The parties do not intend that the term of this Agreement, or the UTA Use Rights granted hereunder, shall exceed any limitation imposed by law, including without limitation the Interlocal Act, and agree to comply with any applicable requirements of the Interlocal Act in connection with any renewal of the term of this Agreement. (c) This Agreement, and the UTA Use Rights granted hereby, shall be subject to termination at the option of the City and by written notice delivered to UTA prior to the end of the otherwise effective term hereof upon the occurrence of any of the following events: (i) UTA fails to commence construction of the System within twenty-four (24) months after approval of the Design Plans as provided in the Memorandum or to diligently proceed with construction; (ii) UTA intentionally abandons the Occupied City Property, or disavows the UTA Use rights; (iii) UTA shall discontinue use of the Occupied City Property for the provision of regular System service for a consecutive period of one year, provided any such discontinuation is not caused by Force Majeure; or F-5 (iv) UTA is in default in the performance of any material covenant, term or condition contained in this Agreement, including any time frames set forth in the Agreement. The City shall have no obligation to terminate this Agreement or the UTA Use Rights in the event of default, and may continue to perform hereunder without terminating and without waiving the right to terminate. (d) The UTA Use Rights, including the right to use portions of the Occupied City Property, shall be subject to partial termination by written notice delivered to UTA prior to the end of the otherwise effective term hereof, if and to the extent that such rights are intentionally abandoned, or use of such portions of the Occupied City Property is discontinued for a consecutive period of one year(other than for reasons of Force Majeure). SECTION 4. Consideration. In consideration for the UTA Use Rights granted by the City to UTA hereunder, UTA agrees as follows: (a) UTA agrees to construct, operate and maintain the System as set forth in the LRT Agreement and this Agreement. (b) UTA agrees to provide regular System service to the general public within the System Corridor. SECTION 5. Maintenance and Repair. After construction of the System is completed, UTA shall comply with the following provisions concerning ongoing maintenance and repair work within the System Corridor: (a) Except as otherwise provided in subsection (b) below, the System shall be maintained or replaced, and all Occupied City Property shall be maintained or replaced, by UTA at UTA's expense. The System and Occupied City Property shall be reasonably maintained in a manner consistent with the Final Design Drawings, and as required by this Agreement, by applicable State or Federal law and by City ordinance. The portion of the Occupied City Property to be utilized by vehicular or pedestrian traffic shall be maintained by UTA as a smooth, safe and F-6 consistent surface (except for rumble areas approved by the parties), free of depressions or obstructions and consistent with the grade of the public streets, all in a manner consistent with the Final Design Drawings. The System and the Occupied City Property shall, at all times, be maintained in a neat, clean and orderly condition. Without limiting the foregoing, UTA shall keep the Occupied City Property free of weeds, garbage, and unsightly or deleterious objects or structures,and shall keep the System and all Occupied City Property free from graffiti. (b) The City reserves the right to plant landscaping on any Occupied City Property, both within and outside of System stations. All landscaping planted by the City both within and outside of System stations shall be maintained by the City at its cost. All landscaping planted by UTA within stations shall be maintained by UTA at its cost. (c) Prior to the performance by UTA of any maintenance or repair work within the System Corridor (other than routine maintenance which does not require excavation or removal of any portion of the street, or emergency work such as derailment),UTA will obtain any permits, and pay all fees and charges, required by City ordinance in connection with such work, and shall abide by the reasonable requirements thereof which are not in conflict with State or Federal laws or regulations. (d) The City and UTA shall in good faith endeavor to avoid disruption of System service for maintenance and other work and may agree to perform work during off-peak traffic times to minimize disruptions to System operations,businesses and traffic. The City shall not be liable to UTA for interruption of System service for emergency work or for scheduled work or work for which proper notice is given. The parties agree that when interruption of the System is required for non-emergency work, the party performing the work shall provide at least ten (10) days prior written notice to the other and shall perform the work so as to minimize disruptions to the greatest extent possible. In cases of emergency or exigent circumstances, the party effecting the repair shall immediately notify and cooperate with the other party. F-7 (e) For repair or maintenance work in City streets,UTA shall abide by the provisions of the City's Traffic Barricade Manual, as amended from time to time, except as preempted by Federal or State law. UTA shall prepare traffic control plans relating to repair and maintenance work, which shall be subject to City approval, and which shall be followed by UTA. The City may require repair and maintenance work to be done during off-peak traffic times to minimize business and traffic disruptions. (0 If any maintenance is required to be performed by this Agreement or by any State or Federal legislative act, rule or regulation, and is not completed within ten (10) days after written notice is sent by the City to UTA, or within a longer reasonable time given the nature of the maintenance required (as approved by the City), the City may perform such maintenance or repairs as it reasonably deems necessary, not inconsistent with State or Federal law or regulation, pursuant to said notice. For such work, UTA shall entirely reimburse the City within thirty (30) days of receipt of the city's bill. UTA will pay any reasonable City costs or expenses incurred in collecting such maintenance costs and expenses,including attorney's fees. (g) If, in connection with the performance of any repair or maintenance work, UTA shall remove or damage any Public Facilities, UTA shall repair or replace such Public Facilities with the same or similar materials, if available, as reasonably required by the City, consistent with applicable Federal and State laws and regulations and to the satisfaction of the City. (h) Repair and maintenance of the tracks and related system facilities shall be done, to the extent practicable, in a manner which avoids unnecessary impediment to the common and ordinary use of City streets by pedestrians and vehicles. The duration during which repair and maintenance equipment and repair and maintenance operations may block pedestrian or vehicular passage on the street shall be controlled by City ordinance and State law. (i) UTA shall be responsible for all removed snow on Occupied City Property. UTA will be allowed to place and store snow removed from Occupied City Property in the same F-8 places and in the same manner as the City stores snow removed from other areas of the streets. Snow removal will be closely coordinated with the City snow removal operations to ensure that City snow removal operations are not unduly hindered. (j) The City may, by separate agreement with UTA, and for adequate consideration, agree to undertake certain of UTA's maintenance responsibilities hereunder. SECTION 6. Utilities. (a) UTA agrees to pay, as long as the System is in place, all costs incurred by the City in connection with maintaining,repairing,replacing or connecting to City Lines, in excess of the costs which would have been incurred absent the System. UTA also agrees to pay, as long as the System is in place, all costs of repairing damage to City Lines to the extent such damage is caused by the System. (b) In connection with the development of the Design Plans, the parties shall engage an independent corrosion consultant, approved by the City, and shall incorporate into the System, and maintain during the term of this Agreement at UTA's expense, such stray current protection measures and devices for all publicly-owned utilities, wherever located, as shall be reasonably required by the City, based upon the recommendations of such consultant. Prior to the start of System service, readings shall be taken by appropriate methods. Readings shall be taken after the commencement of service, and at regular intervals during the terms of this Agreement. Such readings shall be compared with the "before" readings. From these comparisons, the consultant shall develop a recommendation for further stray current mitigation measures, which shall be implemented as reasonably required by the City based upon such recommendation. SECTION 7. Traffic Regulations. System vehicles traveling on City streets shall be subject to all generally applicable speed limits and other traffic control ordinances and regulations, consistent with State and Federal law. Nothing in this Section 6 shall be construed as F-9 preventing the City from adopting traffic ordinances and regulations which apply solely to the System vehicles, other than speed limits. SECTION 8. Traffic Signal Priority. UTA shall construct, install and maintain a traffic signal priority system in favor of System vehicles, approved by the City, which system shall be operated and contolled by the City. SECTION 9. Advertising. Neither UTA nor any private party shall use any fixed System facilities for purposes of advertising, without first obtaining City approval, which approval may be granted or withheld by the City in its sole and absolute discretion. Nothing in this Section 8 shall prevent UTA from advertising its public transportation services, or providing information regarding such services, such as maps, schedules or information kiosks, at stations and stops. SECTION 10. No Public Forums. In recognition of the safety concerns associated with potentially crowded station platforms, substantial foot traffic, street traffic and System vehicle traffic, and the resulting need for crowd contol and attention to surroundings, UTA agrees not to take any action or authorize any activity which would result in any Occupied City Property (including such property as shall be occupied by stations) being designated or recognized as a public forum. Furthermore, the City may establish and enforce policies prohibiting public speaking or other free speech activities on any Occupied City Property, including without limitation Occupied City Property occupied by stations, and may take such other action as may be necessary to prevent the designation or recognition of such Occupied City Property as public forums. SECTION 11. Potential Extension of Free Fare Zone. The Parties acknowledge that UTA provides public transportation services free of charge in the downtown area circumscribed by, and including, 500 South, 400 West, North Temple and 200 East. As of the date this Agreement is executed, the parties are conducting a downtown transportation and transit study. The downtown transportation and transit study will address, among other items, certain F-10 recommendations regarding a potential extension of the free fare zone. To the extent that the downtown transportation and transit study makes a recommendation that free public transportation services be extended to the Salt Lake City Intermodal Terminal, UTA agrees that its staff will forward this recommendation to UTA's Board of Trustees(the"Board"). The parties agree and acknowledge that all decisions regarding any extension of the free fare zone may only be made by the Board by separate resolution or agreement. Neither the Board's approval of this Agreement, nor its approval of the LRT Agreement, shall be construed as approving any extension of the current free fare zone. SECTION 12. Special Events. The City agrees not to issue special event permits for public events which substantially interfere with the operation of the System within the System Corridor without the prior written consent of UTA. SECTION 13. Design Approval. (a) The City has design approval rights with respect to the Final Design Drawings, as set forth in the LRT Agreement. In addition to the design approval rights set forth in the LRT Agreement, UTA agrees that the City shall have the right to review and approve (such approval not to be withheld unreasonably), during the term of this Agreement, any design plans and specifications for future significant additions, changes and alterations to, and modifications and replacements of, any System facilities within the City. UTA agrees not to construct, install or otherwise make any such significant additions, changes, alterations, modifications or replacements without first obtaining design approval from the City. (b) The purpose of the City's design approval authority with respect to future significant additions, changes and alterations to, and modifications and replacements of, any System facilities is to ensure that the System remains a fully integrated element of the City, both functionally and aesthetically. The City agrees to negoiate any design changes with UTA in good faith, and not to impose unrealistic or overly burdensome design requirements on UTA. UTA recognizes, however, that design decisions shall not not be based soely or primarily on bedgetary F-11 constraints. SECTION 14. Agreement Non-Assignable. UTA may not assign or otherwise transfer any of its rights or obligations hereunder to a third party (other than to a successor public entity charged with providing public transportation), without the express prior written consent of the City,which may be granted or withheld by the City in its sole and absolute discretion. SECTION 15. City approval of Agreements With Third Parties. All agreements between UTA and private parties which may affect the Occupied City Property or the subject matter of this Agreement including, without limitation, any agreements with companies operating private utilities, shall be subject to City approval as to those provisions which affect the City. SECTION 16. UTA Indemnification of the City. UTA shall indemnify, defend and hold harmless the City, and its respective past, present and future employees (each an "Indemnified Party"), from and against all claims, demands, liens and all liability or damage of whatever kind, including attorneys' fees and expenses of dispute resolution (including expert witness fees and investigative expenses), arising out of or by reason of any acts, errors or omissions: (a) related to the exercise of the UTA Use Rights after Project design and construction; (b) related to UTA's breach of any material provision of this Agreement; or (c) related to UTA's failure to comply with any federal, state, or local environmental laws or regulations in the operation of the System. This provision shall not impact, reduce or modify any indemnification provision related to the design and construction of the System as set forth in the LRT Agreement. These indemnification provisions shall survive the termination of this Agreement. SECTION 17. Duty to Restore. Upon the expiration of this Agreement, or earlier termination or partial termination of the UTA Use Rights and/or this Agreement pursuant to Section 3 hereof, all System improvements located on Occupied City Property as to which UTA Use Rights have been terminated shall, at the option of the City, be removed, and the Occupied City Property shall be restored to a condition consistent with the then current condition of adjoining streets or other public facilities with respect to grade, appearance, quality, finish and F-12 type of construction, at the sole cost and expense of UTA. Restoration shall be performed within ninety (90) days of such expiration or termination, or such longer period as shall be required by the nature of the work and agreed to by the City. If UTA fails to restore the Occupied City Property, the City may perform such work after thirty(30) days prior written notice to UTA, and UTA hereby agrees to pay all costs of the City in connection with such work, including any collection costs and attorney's fees. SECTION 18. Notice. Any notice, demand, request, consent, submission, approval, designation or other communication which either party is required or desires to give under this Agreement shall be made in writing and mailed to the other parties at the addresses set forth below or at such other addresses as the parties may provide in writing from time to time. Such notices shall be hand delivered, mailed (by first-class mail, postage prepaid) or delivered by courier service as follows: If to the City: With a Copy to Salt Lake City Corporation Salt Lake City Attorney's Office Attn: Salt Lake City Mayor City&County Building City& County Building 451 South State Street,Room 505A 451 South State Street, Room 306 Salt Lake City, Utah 84111 Salt Lake City,Utah 84111 If to UTA With a Copy to Utah Transit Authority Utah Transit Authority Attn: General Manager Attn: General Counsel's Office 3600 South 700 West 3600 South 700 West Salt Lake City, Utah 84119 Salt Lake City, Utah 84119 SECTION 19. Amendment. This Agreement may be modified or amended only by a written instrument executed by the parties and/or all their successors, as applicable. SECTION 20. Police Powers. Each party acknowledges the right vested in the other pursuant to general law to exercise its police powers for the protection of the health, safety and welfare of its citizens/passengers and their properties. Nothing in this Agreement shall be construed as precluding either party from exercising such powers in connection with the System, F-13 except with respect to matters specifically addressed in this Agreement, and then only to the extent of the express terms of this Agreement. SECTION 21. Default. Either party shall be deemed in default under this Agreement upon the failure of such party to observe or perform any covenant, condition or agreement on its part to be observed or performed hereunder, and the continuance of such failure for a period of ninety (90) days after the giving of written notice by the other party, which notice shall specify such failure and request that it be remedied, unless the party giving such notice shall agree in writing to an extension of such time period prior to its expiration; provided, however, that if the failure stated in such notice cannot be corrected within the applicable period, it shall not give rise to a default hereunder if corrective action is instituted within the applicable period and diligently pursued until such failure is corrected. In the event of a default hereunder, the non-defaulting party shall have a breach of contract claim and remedy against the other in addition to any other remedy provided or permitted by law, provided that no remedy which would have the effect of amending any provisions of this Agreement shall become effective without the formal amendment of this Agreement. In the event of any dispute with respect to any of the covenants or agreements contained herein, the prevailing party shall be entitled to recover from the other party all costs and expenses, including reasonable attorneys' fees, which may arise or accrue from enforcing this Agreement or its provisions, and in pursuing any remedy provided by this Agreement or the laws of the State of Utah or the United States, whether such remedy is pursued by filing a suit or otherwise. SECTION 22. Dispute Resolution. Any dispute regarding the meaning of any provision of this Agreement or the determination of an issue of fact, and which is not resolved by staff, shall be referred to the General Manager of UTA and the City's Mayor. Prior to the initiation of any formal legal action, such individuals shall engage in good faith negotiations aimed at reaching an amicable solution of the dispute that is consistent with this Agreement and with the LRT Agreement. If, after good faith negotiations, a dispute cannot be resolved by such F-14 individuals, such dispute may then be brought before a court of competent jurisdiction in Salt Lake County. SECTION 23. Interlocal Co-operation Act Requirements. In satisfaction of the requirements of the Interlocal Act in connection with this Agreement, the parties agree as follows: (a) This Agreement shall be authorized by resolution of the governing body of each party,pursuant to Section 11-13-219 of the Interlocal Act; (b) This Agreement shall be approved as to form and legality by a duly authorized attorney on behalf of each party,pursuant to Section 11-13-202.5 of the Interlocal Act; and (c) A duly executed original counterpart of this Agreement shall be filed with the keeper of records of each party,pursuant to Section 11-13-209 of the Interlocal Act. (d) Except as provided in Section 3 hereof, this Agreement and the UTA Use Rights may be terminated only by and upon the express written consent of the parties. (e) Except as otherwise specifically provided in this Agreement, any real or personal property acquired by either party, or by the parties jointly, pursuant to this Agreement or in conjunction with the Project shall be acquired and held, and disposed of by such party upon termination of this Agreement as agreed among the parties or as otherwise required by applicable local, State and Federal law. SECTION 24. Governing Law. This Agreement shall be construed, interpreted and applied in accordance with the laws of the State of Utah. SECTION 25. Entire Agreement. This Agreement contains the entire agreement between the parties with respect to the subject matter hereof, and no statement, promises or inducements made by either party or agents or either party that are not contained in this Agreement shall be binding or valid, and this Agreement may not be enlarged, modified or altered except through a written instrument which is signed by all parties. To the extent of any F-15 conflict between the provisions of this Agreement and the provisions of any later agreements, the later agreements shal be controlling. SECTION 26. Non-Waiver. No covenant or condition of this Agreement may be waived by any party, unless done so in writing. Forbearance or indulgence by any party in any regard whatsoever shall not constitute a waiver of the covenants or conditions to be performed by the other. SECTION 27. Severability. If any provision of this Agreement shall be held or deemed to be or shall, in fact, be illegal, inoperative or unenforceable, the same shall not affect any other provision or provisions herein contained or render the same invalid, inoperative or unenforceable to any extent whatever. SECTION 28. Binding Agreement. This Agreement shall be binding upon all of the assigns, grantees and successors in interest to each of the parties, and shall remain in full force and effect until amended as provided herein. SECTION 29. Further Assurances. The parties hereto shall execute such other documents and take such other actions as may be reasonably necessary or proper to achieve the intent and purposes hereof. SECTION 30. Ethical Standards. UTA represents that it has not: (a)provided an illegal gift or payoff to a City officer or employee or former City officer or employee, or his or her relative or business entity; (b) retained any person to solicit or secure this Agreement upon an agreement or understanding for a commission,percentage,brokerage or contingent fee, other than bona fide employees or bona fide commercial selling agencies for the purpose of securing business; (c) knowingly breached any of the ethical standards set forth in the City's conflict of interest ordinance, Chapter 2.44, Salt Lake City Code; or (d) knowingly influenced, and hereby promises that it will not knowingly influence, a City officer or employee or former City officer or employee to breach any of the ethical standards set forth in the City's conflict of interest ordinance,Chapter 2.44, Salt Lake City Code. F-16 IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. SALT LAKE CITY CORPORATION UTAH TRANSIT AUTHORITY By: By: Ross C. Anderson, Mayor John M. Inglish, General Manager ATTEST AND COUNTERSIGN: By: By: Michael Allegra, Chief Capital Development Officer Chief Deputy City Recorder APPROVED AS TO FORM AND LEGALITY: APPROVED AS TO FORM AND LEGALITY: Senior City Attorney UTA Legal Counsel STATE OF UTAH ) : ss County of Salt Lake ) On the day of , 2006, personally appeared before me Ross C. Anderson and , who being by me duly sworn did say that they are the Mayor and Chief Deputy Recorder, respectively, of SALT LAKE CITY CORPORATION, a municipal corporation of the State of Utah; and that the foregoing instrument was signed on behalf of said corporation by authority of a resolution of its City Council; and said persons acknowledged to me that said corporation executed the same. NOTARY PUBLIC Residing at: My Commission Expires: STATE OF UTAH ) : ss County of Salt Lake ) On the _ day of , 2006, personally appeared before me John M. Inglish and Michael Allegra, who being by me duly sworn did say that they are the General Manager and Chief Capital Development Officer, respectively, of UTAH TRANSIT AUTHORITY, a public transit district and political subdivision of the State of Utah; and that the foregoing instrument was signed on behalf of said public transit district by authority of a resolution of its Board of Trustees and said persons acknowledged to me that said public transit district executed the same. NOTARY PUBLIC Residing at: My Commission Expires: F-17 -o a) a) a) 0 1E 1E x w Exhibit H —Special Warranty Deed for Intermodal Hub When Recorded Please Return to: SPECIAL WARRANTY DEED For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, SALT LAKE CITY CORPORATION (the "GRANTOR") conveys in fee and warrants (only as against those claiming by, through or under GRANTOR) to UTAH TRANSIT AUTHORITY (hereafter"GRANTOR") (hereafter"GRANTEE"), all of Grantor's interest in the following described real property situated in Salt Lake County, State of Utah: See Exhibit"A"to this Special Warranty Deed The fee interest granted hereunder is subject to existing rights-of-way and easements of record, including those of all public utilities or private third parties now located on, in, under or over the confines of the above described property, and the rights of entry thereon for the purposes of obtaining,altering,replacing,removing,repairing or rerouting said utilities. GRANTOR By SALT LAKE CITY CORPORATION Name: Title: STATE OF UTAH ) :ss COUNTY OF ) The foregoing Special Warranty Deed was acknowledged before me this day of 2006 by , who before me duly sworn, did say that he is the of Salt Lake City Corporation. My Commission expires: Notary Public Residing at ,Utah H-1 Exhibit I —Assignment and Assumption Agreement for Greyhound Lease ASSIGNMENT, ASSUMPTION AND CONSENT AGREEMENT This Assignment, Assumption and Consent Agreement ("Agreement") is hereby entered into this _ day of 2006 by and between Utah Transit Authority, a public transit district organized under the laws of the State of Utah ("UTA"), Salt Lake City Corporation, a municipal corporation and political subdivision of the State of Utah (the "City"), and Greyhound Lines, Inc., a corporation organized under the laws of the Delaware ("Greyhound"). UTA, the City and Greyhound are hereafter collectively referred to as the"parties"and any of the foregoing may be individually referred to as"party,"all as governed by the context in which such words are used. RECITALS WHEREAS, the City and Greyhound entered into a MONTH, DATE, 2005 Lease Agreement(hereafter collectively the"Lease"); WHEREAS, the Lease provided for Greyhound's lease of exclusive and common areas for a bus maintenance and passenger station facility at the Salt Lake City Intermodal Terminal, located at approximately 600 West 300 South in Downtown Salt Lake City (the "Intermodal Hub"); WHEREAS, effective the date of this Agreement, the City has conveyed the Intermodal Hub(including the real estate subject to the Lease)and the underlying real estate to UTA; WHEREAS, the City is willing to assign and delegate all rights and obligations under the Lease, and UTA is willing to accept and assume all such rights and obligations; and WHEREAS, although not required under the Lease, Greyhound consents to the assignment described herein. AGREEMENT NOW THEREFORE, on the stated Recitals, which are incorporated herein by reference, and for and in consideration of the mutual covenants and Lease hereafter set forth, the mutual benefits to the parties to be derived herefrom, and for other valuable consideration, the receipt and sufficiency of which the parties acknowledge, it is hereby agreed as follows: 1. Assignment and Assumption. The City hereby assigns and delegates and UTA hereby accepts and assumes all rights and obligations of the City under the Lease. The Assignment shall be effective as of the date set forth above. Hereafter, UTA shall be solely responsible for all obligations and requirements allocated to the City under the Lease, and UTA shall be the sole beneficiary of all rights and obligations allocated to Greyhound under the Lease. Greyhound hereby releases the City from all obligations and liability accruing under the Lease. 2. Consent to Assignment. Greyhound hereby consents to the assignment of the Lease as set forth in this Agreement. I-1 3. Payment of Rent and Other Obligations. Any rent payments or other obligations payable by Greyhound under the Lease shall be delivered in accordance with the Agreements and to the following address: Utah Transit Authority Attn: Property Administrator—Intermodal Hub 3600 South 700 West P.O. Box 30810 Salt Lake City,Utah 84130-0810 4. Notices. Any notices or other communications deliverable by Greyhound under the Lease shall be provided in accordance with the Agreements to the following addresses: Utah Transit Authority Attn: Deputy Chief—Asset Management and Business Development 3600 South 700 West P.O. Box 30810 Salt Lake City,Utah 84130-0810 With a Copy to: Utah Transit Authority Attn: General Counsel 3600 South 700 West P.O. Box 30810 Salt Lake City,Utah 84130-0810 5. Ethical Standards. UTA represents that it has not: (a) provided an illegal gift or payoff to a City officer or employee or former City officer or employee, or his or her relative or business entity; (b)retained any person to solicit or secure this Agreement upon an agreement or understanding for a commission, percentage, brokerage or contingent fee, other than bona fide employees or bona fide commercial selling agencies for the purpose of securing business; (c) knowingly breached any of the ethical standards set forth in the City's conflict of interest ordinance, Chapter 2.44, Salt Lake City Code; or (d) knowingly influenced, and hereby promises that it will not knowingly influence, a City officer or employee or former City officer or employee to breach any of the ethical standards set forth in the City's conflict of interest ordinance,Chapter 2.44, Salt Lake City Code. 6. Other Provisions. Except as specially amended by this Agreement, all terms, conditions and provisions of the Lease shall continue unmodified and in full force and effect. I-2 IN WITNESS WHEREOF,the parties hereto have executed this Agreement in duplicate as of the date first herein written. UTA THE CITY UTAH TRANSIT AUTHORITY SALT LAKE CITY CORPORATION By: By: John Inglish, General Manager Ross C. Anderson, Mayor ATTEST AND COUNTERSIGN: By: Michael Allegra, Chief Capital Development Officer By: Chief Deputy City Recorder APPROVED AS TO FORM AND LEGALITY APPROVED AS TO FORM AND LEGALITY: UTA General Counsel's Office Senior City Attorney GREYHOUND LINES, INC By: Stephen Gorman President and Chief Executive Officer I-3 Exhibit J —Assignment and Assumption Agreement for Amtrak Lease ASSIGNMENT, ASSUMPTION AND CONSENT AGREEMENT This Assignment, Assumption and Consent Agreement ("Agreement") is hereby entered into this _ day of 2006 by and between Utah Transit Authority, a public transit district organized under the laws of the State of Utah ("UTA"), Salt Lake City Corporation, a municipal corporation and political subdivision of the State of Utah (the "City"), and National Railroad Passenger Corporation, a corporation organized under the laws of the District of Columbia ("Amtrak"). UTA, the City and Amtrak are hereafter collectively referred to as the "parties" and any of the foregoing may be individually referred to as "party," all as governed by the context in which such words are used. RECITALS WHEREAS, the City and Amtrak entered into a November 2, 1999 development agreement and a November 2, 1999 lease agreement (hereafter collectively the "Intermodal Agreements"); WHEREAS, the Intermodal Agreements provided for the relocation of Amtrak's passenger rail station and rail improvements to the Salt Lake City Intermodal Terminal located at approximately 600 West 300 South in Downtown Salt Lake City(the"Intermodal Hub"); WHEREAS, the Intermodal Agreements provided for the lease of approximately acres of real property for the development passenger platforms, parking improvements and trackage; WHEREAS, the Intermodal Agreements provided for the installation of a temporary, modular building to be used by Amtrak until the completion of the permanent Amtrak improvements as contemplated by Exhibit A of the development agreement; WHEREAS, the Intermodal Agreements provided for the development of permanent Amtrak improvements in conjunction with the development of UTA's commuter rail and light rail facilities at the Intermodal Hub; WHEREAS, effective the date of this Agreement, the City has conveyed the Intermodal Hub (including the real estate subject to the Intermodal Agreements) and the underlying real estate to UTA; WHEREAS, the City is willing to assign and delegate all rights and obligations under the Intermodal Agreements, and UTA is willing to accept and assume all such rights and obligations; and WHEREAS,Amtrak consents to the assignment described herein. AGREEMENT NOW THEREFORE, on the stated Recitals, which are incorporated herein by reference, and for and in consideration of the mutual covenants and Intermodal Agreements hereafter set forth, the mutual benefits to the parties to be derived herefrom, and for other valuable J-1 consideration, the receipt and sufficiency of which the parties acknowledge, it is hereby agreed as follows: 1. Assignment and Assumption. The City hereby assigns and delegates, and UTA hereby accepts and assumes, all rights and obligations of the City under the Intermodal Agreements. The Assignment shall be effective as of the date set forth above. Hereafter, UTA shall be solely responsible for all obligations and requirements allocated to the City under the Intermodal Agreements, and UTA shall be the sole beneficiary of all rights and obligations allocated to Amtrak under the Intermodal Agreements. Amtrak hereby releases the City from all obligations and liability accruing under the Intermodal Agreements. 2. Consent to Assignment. Amtrak hereby consents to the assignment of the Intermodal Agreements as set forth in this Agreement. 3. Payment of Rent and Other Obligations. Any rent payments or other obligations payable by Amtrak under the Intermodal Agreements shall be delivered in accordance with the Agreements and to the following address: Utah Transit Authority Attn: Property Administrator—Intermodal Hub 3600 South 700 West P.O. Box 30810 Salt Lake City,Utah 84130-0810 4. Notices. Any notices or other communications deliverable by Amtrak under the Intermodal Agreements shall be provided in accordance with the Agreements to the following addresses: Utah Transit Authority Attn: Deputy Chief—Asset Management and Business Development 3600 South 700 West P.O. Box 30810 Salt Lake City, Utah 84130-0810 With a Copy to: Utah Transit Authority Attn: General Counsel 3600 South 700 West P.O. Box 30810 Salt Lake City,Utah 84130-0810 5. Ethical Standards. UTA represents that it has not: (a) provided an illegal gift or payoff to a City officer or employee or former City officer or employee, or his or her relative or business entity; (b) retained any person to solicit or secure this Agreement upon an agreement or understanding for a commission, percentage, brokerage or contingent fee, other than bona fide employees or bona fide commercial selling agencies for the purpose of securing business; (c) knowingly breached any of the ethical standards set forth in the City's conflict of interest ordinance, Chapter 2.44, Salt Lake City Code; or(d)knowingly influenced, and hereby promises that it will not knowingly influence, a City officer or J-2 ® employee or former City officer or employee to breach any of the ethical standards set forth in the City's conflict of interest ordinance,Chapter 2.44, Salt Lake City Code. 6. Other Provisions. Except as specially amended by this Agreement, all terms, conditions and provisions of the Intermodal Agreements shall continue unmodified and in full force and effect. IN WITNESS WHEREOF,the parties hereto have executed this Agreement in duplicate as of the date first herein written. UTA THE CITY UTAH TRANSIT AUTHORITY SALT LAKE CITY CORPORATION By: By: John Inglish,General Manager Ross C. Anderson,Mayor ATTEST AND COUNTERSIGN: By: Michael Allegra,Chief Capital Development Officer By: Chief Deputy City Recorder Q APPROVED AS TO FORM AND LEGALITY APPROVED AS TO FORM AND LEGALITY: UTA General Counsel's Office Senior City Attorney NATIONAL RAILROAD PASSENGER CORPORATION By: Lee W. Bullock President,Amtrak Intercity ® J-3 7 Exhibit K— Site Development Plan for Intermodal Hub 1 .7. t 44 , „.• ..4`it • . 1 \ oil ...u- ? . i 140 ';',--- . , lb.• ,..•ir I. 1st FT , . -• , . 1 - A 1 1 I in 6 iI \ • •e i i i., -- . !11 1, :--1 . f 'IP , 1 1111 -11110- r ' '11 . , t• -4..,.. , ....„ pp), I , FP, ' - . U 1 i •.. " . . • - A • _IL _ . L ill i 'WIA l _ iv -iiii A A i. 0—.. A.kai) v ,,- 'll!'": ,It :,------ - " -----1------ r. III K-I • - 1 , . •- IP' ? C., W Z 0 R" g Ce -1 ci_• 0 w ce . ' W- 10 + 0 ( -' . -J 11 . . 0 Z Z 03 -- 0 c:c I W I, I >- I— , D W in re • tlio 0 o cs4 0 0. - 1 ' • r . , , 4, • , , 1 ' Ce • _ . 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Fluhart Chief Administrative Officer FROM: Kay Christenserft,, SUBJECT: Approval of Transfer of Municipal Assets under Utah Code Annotated Section 10-8-2 STAFF CONTACT: Kay Christensen 535-7677 DOCUMENT TYPE: Study required by UCA Section 10-8-2 and request for Public Inspection and Public Hearing as required by UCA Section 10-8-2 BACKGROUND/DISCUSSION: This information is being provided in compliance with UCA Section 10-8-2, which states the purposes for which a municipal body may appropriate funds. The Statute sets forth a specified process which must be followed to determine if a charitable contribution can be made. The process has three steps: 1 . A study must be performed that identifies the net equivalent value received by the City in exchange for any City asset contributed. The benefit may be intangible. The study must consider the following factors: 451 SOUTH STATE STREET, ROOM 23B, SALT LAKE CITY, UTAH B41 1 1 TELEPHONE: B01-535-5426 FAX: 801-535-61 90 gEcvcco PnPca a. The specific benefits to be received by the City; b. The City's purpose in making the appropriation, including an analysis of how the safety, health, prosperity, moral well-being, peace, order, comfort or convenience of the residents of Salt Lake City will be enhanced; and c. Whether the appropriation is "necessary and appropriate" to accomplish the City's goals. 2. Notice of a public hearing must be published in a newspaper of general circulation at least 14 days prior to the date of the hearing, and the notice must include the availability of the completed study for public inspection. 3. A public hearing must be held by the City Council and the Council must make a determination that the appropriation will provide for the safety, health, prosperity, moral well-being, peace, order, comfort or convenience of the residents of the City, and that the net value received by the City will constitute adequate consideration or equivalent value for the benefit being provided by the appropriation. Attached is a study regarding the transfer of ownership of the Internodal Hub from Salt Lake City Corporation to the Utah Transit Authority and a Right-of-Way agreement to give UTA a franchise to use City streets. This is an amendment to the study done previously on this subject. The amended portion deals only with the increased cost to construct the light rail extension to the Intermodal Hub created by higher than expected construction bids. RESOLUTION NO. OF 2006 (ACCEPTING THE STUDY PERFORMED IN COMPLIANCE WITH UTAH CODE SECTION 10-8-2 AND AUTHORIZING THE APPROPRIATION OF FUNDS CONCERING AN AMENDED INTERLOCAL AGREEMENT RELATING TO THE TRAX EXTENSION PROJECT; AND RELATED MATTERS) WHEREAS, the City Administration has recommended an amendment to increase project budget and modify the project scope related to the Interlocal Agreement dated April 11, 2006, between the Salt Lake City and Utah Transit Authority (UTA) which concerns the (i) the conveyance by Salt Lake City to UTA of the Salt Lake City Intermodal Hub situated west of 600 West Street, and south of 200 South Street, consisting of approximately 16.5 acres, and all existing improvements, (ii) the assignment of all City leases and agreements related to the Salt Lake City Intermodal Hub, and (iii) the granting by Salt Lake City to UTA of rights to use City streets to construct and operate a light rail extension from the Delta Center station to the Salt Lake City Intermodal Hub (the "Amended Interlocal Agreement"); and WHEREAS, the City Council has received and reviewed a Study regarding said Amended Interlocal Agreement prepared by the City's Department of Management Services in compliance with the requirements of Utah Code Section 10-8-2, and public notice has been given at least 14 days prior hereto in a newspaper of general circulation within the City; and WHEREAS, the Council has reviewed the Study, and has fully considered the analysis and conclusions set forth therein, and all comments made during the public hearing; NOW, THEREFORE, BE IT RESOLVED by the City Council of Salt Lake City, Utah: 1. The City Council hereby adopts the conclusions set forth in the Study, and hereby finds and determines that, for all the reasons set forth in the Study, the net value to be received by the City by making this grant will constitute adequate consideration, or equivalent value,both tangible and intangible, for the benefit being provided by entering into the Amended Interlocal Agreement; and 2. In the judgment of the City Council, the appropriation to be made pursuant the Amended Interlocal Agreement will provide for the safety,health, prosperity,moral well-being, peace, order, comfort, or convenience of the inhabitants of Salt Lake City; and 3. That the appropriation of funds required under the Amended Interlocal Agreement is hereby approved. Passed by the City Council of Salt Lake City, Utah, this day of November, 2006. SALT LAKE CITY COUNCIL By CHAIRPERSON ATTEST: CHIEF DEPUTY CITY RECORDER Aram -'r 2 1:ARDSOLUT-IVDoug Short matters\Accepting 10-22-06 study authorizing contr_b toward TRAX line extension to HUE.DOC MEMORANDUM TO: Steve Fawcett FROM: Kay Christensen DATE: October 22, 2006 SUBJECT: Amended study regarding the transfer of ownership of the Inteiiiiodal Hub from Salt Lake City Corporation to the Utah Transit Authority and a Right-of-Way agreement to give UTA a franchise to use City streets: Study to comply with Utah Code Annotated Section 10-8-2 (3) (Amended portion in bold italics) Salt Lake City (City) is preparing to convey to the Utah Transit Authority (UTA), without direct monetary payment, the Salt Lake City Inteiinodal Hub Terminal (the Hub), located at 300 South 600 West, including all or a majority of the approximately 16.5 acres on which the Hub is located. The City is also preparing to grant to the UTA, without a franchise fee, a 100-year franchise to use City streets to construct and operate a light rail extension from the Delta Center station to the Hub, and to assign to UTA all of the agreements to which the City is a party relating to the Hub. These transactions require the study mandated by Utah Code Annotated Section 10-8-2 (3) when a City asset is transferred to another entity without the municipality receiving obvious fair market value for such transfer. UCA 10-8-2 states the purposes for which a municipal body may appropriate public funds and the factors that must be considered in determining the propriety of such an appropriation. To ensure that the transfer of the Hub and the franchise fee waiver are in compliance with UCA 10-8-2, the following study has been performed. This study will consider the following factors: (1) The specific benefits to be received by the City; (2) The City's purpose in making the appropriation, including an analysis of how the safety, health, prosperity, moral well-being, peace, order, comfort or convenience of the residents of Salt Lake City will be enhanced; and (3) Whether the appropriation is "necessary and appropriate" to accomplish the City's goals. Background: The Gateway Development Master Plan, adopted by the City Council on August 11, 1998, supported 300 South and 600 West as the location for an intermodal transportation hub. An Environmental Assessment of the location was approved by the Federal Transit Administration (FTA) on September 18, 1998 and that was the basis for a federal grant. In 1998, the project received authorization for an FTA Grant totaling $40 million, subject to appropriations over an unspecified number of years. UTA is the grantee, and the City is the sub-grantee. The FTA approved budget for the Hub is $39,956,060. This includes the extension of TRAX to the Hub. The Hub facility anticipates accommodating Amtrak, Greyhound, local bus, commuter rail, taxis, shuttles, pedestrians, bicyclists and connections to light rail. The 16.57 acre site is bordered by 600 West to the east, Union Pacific main lines to the west, 200 South to the north and 700 South to the south. The prime acreage for development is between 200 South and 400 South. The Intennodal Hub Enterprise Fund was established February 9, 1999. The City Council adopted a resolution allowing the fund to borrow up to $8.41 million from the General Fund. The RDA Board of Directors authorized a $2.25 million dollar loan to the Intenmdal Hub Enterprise Fund. The City and the UTA signed an Interlocal Cooperative Agreement for the Gateway Intennodal Terminal on August 25, 1999. The agreement outlines the joint effort by UTA and the City to conceptualize, plan, design, construct, operate, and maintain the Hub. The agreement identifies the scope, schedule and budget for each phase of the project. 2 Phase 1 of the project included land acquisition, trackage work, site utilities, passenger platforms and the temporary Amtrak passenger facility. Phase 2 included design and construction of the peiiiianent hub facility to accommodate Greyhound, local bus, taxis, pedestrian, bicycles, and future commuter rail systems. It also includes completion of environmental work on the Hub parcel. Phase 3 will bring TRAX to the Hub. The Hub facility costs have totaled $23,500,000 to date. A total of $18,800,000 (80%) of that amount has been or will be reimbursed by the FTA through the Hub grant. The grant is based on an 80/20 match, so the local match is $4,700,000 (20%). Greyhound paid $1,400,000 toward that requirement, leaving $3,300,000 to be funded locally. The City appropriated $2.94 million in FY 2002 to cover this cost, and the remainder is related staff costs. Benefits and Costs to Salt Lake City: In considering the cost of the Salt Lake City Intermodal Hub Terminal to Salt Lake City and its value, it is important to note two requirements tied to the acceptance of federal funds for the project: 1. The property and facilities built with the funds must continue to be used only for mass transit related purposes. Therefore, the City could not choose to use the Hub for any purpose other than mass transit. Even if the City were to sell the property, the City would have to reimburse to the FTA 80% of the then current net market value of the property. For example, the land was purchased for $4 a square foot and is now valued at $17 a square foot (not including the facilities). 2. There can be private development on the Hub property, but it must be related to mass transit, and any net revenues must be dedicated to mass transit purposes. As a result, the Hub could not become a profit center for the City. These two requirements limit the value of the Hub as an asset. If the City were to retain ownership of the Hub, the City would have to bear the cost of owning and managing a transit facility. Typically, transit facilities do not generate a profit, so a City subsidy might be necessary. The City is not in the transit business so it would also be necessary to contract with an outside entity to run the facility. 3 Salt Lake City receives the following tangible benefits from the transfer of the Hub to the Utah Transit Authority: 1. Salt Lake City assumed numerous obligations in the original Interlocal Agreement signed August 25, 1999. All of our obligations under that Agreement will be assumed by UTA when they take ownership. 2. The previous City Administration saw the reconstruction of I-15 as an opportunity to shorten the 4th, 5th and 6th South viaducts and consolidate the railroad corridor west of 600 West. It was necessary for Amtrak to relocate to make this possible. The City agreed to build a permanent facility for Amtrak in return for their agreement to move. In consideration of the transfer of ownership of the Hub, UTA has agreed to build the permanent Amtrak facility and related parking and transit plaza at an estimated cost of $2 million. UTA will be eligible for federal reimbursement of this cost over time, but there is no guarantee those funds will be received, and, if the City had retained responsibility to build the facility, it would have had to pay the 20% match, a total of$400,000 plus the upfront and ongoing financing costs. 3. UTA has argued that the City has a duty to extend TRAX from the Delta Center to the Hub. UTA has agreed to fund the extension on a roughly 75/25 basis in consideration of the Hub transfer, and in so doing, UTA argues it is more than compensating the City for transfer of the Hub. UTA will seek federal reimbursements for up to 50% of the TRAX costs. Of the City's $8.5 million (25%) funding share, $2 million has already been funded by UTA, resulting in an actual City share of$6.5 million, or 20%. October 22, 2006 Amendment: Bids on this portion of the project were $14.5 million above expectations, increasing the budget from $32 million to $46.5 million. As a result, by agreement with UTA, certain aspects of the project were scaled back or eliminated, reducing the budget to $41. 7 million and the increased cost to $9.7 million. This cost will be borne by the City and UTA on the same approximately 75/25 basis as described above. Therefore, UTA will contribute approximately $7.14 million and the City will contribute approximately $2.56 million in additional funds above the amounts committed in the original Interlocal Agreement. 4 The project changes include: Elimination of the planned improvements on the east side of 600 West, such as curb and gutter, sidewalk, trees and lighting. Change to ballasted track on 600 West instead of embedded track.. Reduction by half in the planned set-aside funds to help mitigate business impacts during construction (from $250,000 to $125,000). Elimination of UTA's 3rd tail track at the end of the line. Deferral to a later date of public way improvements on the south side of 200 South between 600 West and 700 West. The extension of TRAX to the Intermodal Hub is an integral part of the entire agreement described in this study, and the public benefit of the TRAX extension must be considered on that basis. Therefore, the broad project analysis is not changed by the increased cost. The public benefits as described in the study, both tangible and intangible, continue to outweigh the costs. 4. UTA will assume responsibility for remediation of the derelict north warehouse on the Hub site. It is a public nuisance and a liability and must either be torn down, at an estimated cost of$300,000, or rehabilitated. 5. UTA will assume responsibility for obtaining federal grants to complete the transit related projects. For several years, the City has had to concentrate our staff resources on obtaining such grants. UTA's assumption of this responsibility will free the City to pursue grants in other areas. 6. UTA will assume all obligations under existing agreements relating to the Hub, including the leases with Greyhound and Amtrak. Payments under these leases essentially cover the City's ongoing costs of operation, and the leases are not considered assets by the City. 7. UTA will assume all responsibility and liability for further development of the project and management of the Hub on a day-to-day basis. 5 Salt Lake City receives benefits from granting UTA a 100-year right- of-way franchise to use City streets to construct and operate a light rail extension from the Delta Center station to the Hub, without receiving a franchise fee in return. UTA is providing the City with an important addition to our transit system that will substantially improve the City's transportation options and increase development potential in the area. This agreement is an essential part of the entire Hub transfer package. With regard to the Hub transfer, there are also numerous intangible benefits to the City. Without further financial responsibility, Salt Lake City will continue to reap the benefits of transit development and related commercial development in the area with the inevitable increase in property values and taxes as well as sales tax. Meeting Salt Lake City's Purposes and Enhancing the Quality of Life for Residents: Salt Lake City Corporation has made enhanced mass transit a major focus in the effort to reduce air pollution and global warming. The City has adopted a performance measurement tool called the Balanced Scorecard to assist the City in articulating strategic goals, measures and targets for all departments and divisions within the City. The Balanced Scorecard is divided into eight focus areas, including Community Building/Diversity, and Revitalization of Downtown/Neighborhoods, Economic Development and Growth/Quality of Life. The accompanying goals include strengthening neighborhoods by investing in quality of life initiatives, revitalizing downtown by improving the City's economic base, increasing the number of people living and working downtown, and protecting and enhancing the environment. Therefore, at least four of the City's eight identified focus areas will be positively impacted by the Salt Lake City Intermodal Hub and the extension of TRAX to the Hub. It was necessary to reach the Hub transfer and right-of-way agreements with UTA to make these projects economically feasible for the City at the least possible cost to taxpayers. Accomplishing Salt Lake City's Goals: The proposed Hub transfer and right-of-way franchise agreements are necessary and appropriate to accomplish Salt Lake City's goal of revitalizing downtown. As travel downtown is made easier, it will almost certainly lead to many future visits, thus assisting in the accomplishment of a major City goal-bringing people downtown to live, work and play. 6 Enhanced mass transit opportunities will also protect our environment by offering alternatives to commuting in personal vehicles and driving in the downtown area. 7