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2020-03-10 City Council - Full Agenda-2567o Agenda Edmonds City Council InC i8y0 COUNCIL CHAMBERS 250 5TH AVE NORTH, EDMONDS, WA 98020 MARCH 10, 2020, 6:00 PM CALL TO ORDER/ROLL CALL ACTION ITEM 1. Senior Center Loan Request (60 min) ADJOURN Edmonds City Council Agenda March 10, 2020 Page 1 2.1 City Council Agenda Item Meeting Date: 03/10/2020 Senior Center Loan Request Staff Lead: Scott James Department: Administrative Services Preparer: Scott James Background On March 3, 2020, staff presented City Council a potential funding plan to help the Edmonds Senior Center obtain a $2 million Line of Credit/Loan. The funding plan includes the City depositing up to $2 million into a certificate of deposit that would be used by the bank as collateral for the Line of Credit/Loan. During the March 3rd Council meeting, Edmonds' City Attorney walked Councilmembers through the proposed amendments to the City of Edmonds / Edmonds Senior Center Ground Lease and solicited Councilmember feedback on the amendments. Since the March 3rd meeting, City Administration and Senior Center Administration continued negotiations on the amendments and have reach agreement to the attached "Amendment to Ground Lease." The are two versions to the "Amendment to Ground Lease," 1) 2020-03-06 amendment to ground lease ESC v2, which is a redline version with comments regarding updates and changes to the March 3rd version. 2) 2020-03-06 amendment to ground lease ESC - clean version - does not include redlines or comments. During the March 10, 2020 Council meeting, both City Administration and Senior Center Administration look forward to hearing Council comments and addressing Council questions regarding Senior Center Loan request. Additional Background On October 26, 2017, the Edmonds Senior Center hosted the Waterfront Center Gala, kicking off the $16.35 million community fundraiser campaign to replace the 58 year old building. To date, the Edmonds Senior Center (ESC) has raised $14,050,000, leaving a $2,300,000 funding gap. The ESC's plan to close this gap includes: 1) Secure the option to borrow up to $2 million from a bank that will be collateralized by the City of Edmonds (explained in detail below under the heading "Loan") 2) Continue reaching out to donors, and 3) Continue applying for grants. History The South County Senior Center (SCSC) was founded in 1967 and began offering programs on their present waterfront location and obtained 501c3 status a year later. It was the first non-profit senior center in Snohomish County. In 1971 SCSC was featured at the Second White House Conference as the model for the multipurpose senior center concept which led to the formation of thousands of senior centers throughout the country. The present waterfront property was purchased in 1972 with a $300,000 HUD grant obtained Packet Pg. 2 2.1 by SCSC and a $100,000 local match from the City of Edmonds. As a result the City came to own the property and declared it would be the permanent home of the senior center. The early years saw a number of innovative programs including performing musical and drama groups, the Job Bureau, a robust long distance travel program, the creation of the Thrift Store and Country Boutique for senior crafts, partnering with Edmonds Community College to offer seniors education classes, a mentoring program at the Edmonds School District, and the creation of many health & wellness activities/services. From 1975 through 1985 a number of State grants enabled the connection of the two original buildings and the creation of the present senior center. Much of the work was performed by community volunteers. In 1996 SCSC was contracted by the City of Lynnwood to help it create the Lynnwood Senior Center. In 2008 SCSC underwent a significant governance change and became a membership driven organization with 18 of 21 Board positions elected by the membership. After a year of political and legal action and debate within the Center and the community, the November 2008 election, monitored by the League of Women Voters and over 600 voters, decisively established this form of organizational structure. In 2011 the legal name was changed to the Edmonds Senior Center (ESC). 2012 saw the establishment of three key programs which continue to this day: the Bastyr University Natural Medicine Clinic - the first (and still only) of its kind in Snohomish County, the Emergency Cold Weather Shelter for the Homeless in partnership five local churches, and Enhance Wellness and later PEARLS in partnership with and the financial support of the Verdant Health Commission. In 2013, with the passage of the City's Strategic Action Plan, ESC began work to replace the existing aging structure with the new Edmonds Waterfront Center serving all ages. In 2019, the City and the ESC finalized a lease agreement, where the City will lease the land under the new Edmonds Waterfront Center to the Edmonds Senior Center for 40 years. At the end of the 40 year lease, the lease agreement calls for the ESC to either turn over ownership of the Center to Edmonds or the ESC has the option to renew the lease for an additional 15 years. The New Waterfront Center Creating social connections and addressing holistic health and wellness for today's modern seniors wanting to live active and fulfilling lives is at the heart of our work at the Edmonds Senior Center (ESC). The new Edmonds Waterfront Center, is now under construction, and once complete it will arguably be the most significant regional social infrastructure project in decades. The new Waterfront Center will provide a unique gathering place and support services for all ages. The new Edmonds Waterfront Center will be a modern 26,000 sf regional community center, offering programs for all generations at its rare waterfront site just south of the Edmonds / Kingston ferry. ESC is in the final phase of a $16.35M capital campaign ($14,050,000 has been raised to date) to replace its original failing structure. The ESC currently serves approximately 3,000 seniors annually with a broad range of programs and activities. The new Center is being built on the same site of the original building but will operate as a multi -generational activity Center serving a larger demographic in an expanded timeframe. From 8:00am-4:00pm most of the programs will be aimed at seniors and organized by ESC. From 4:00- 10:00pm programs for all ages will be offered by the City's Parks, Recreation and Cultural Services department. Unique aspects of the Edmonds Waterfront Center Public / Private Partnership between ESC and the City of Edmonds allowing maximum program impact throughout the day and evening Intergenerational programs designed to bring young & old together Expanded services to include behavioral health support for veterans & their families Packet Pg. 3 2.1 Food service partnership with leading restaurateur offering Senior Center members and the general public to dine together Sustainable LEED Gold, all -electric building with full rooftop solar array and commitment to long- term environmental stewardship programming Staff Recommendation Staff is recommending that the City Council: Study and discuss the key deal terms that would establish the City as the guarantor of the Senior Center's loan. During the Council discussion, staff will talk about the Pros and Cons of the bank Term Sheets and answer Council questions. Narrative Loan The Edmonds Senior Center (ESC) is requesting the City of Edmonds to assist them in securing a loan of up to $2 million for two reasons: 1) Washington State awarded $4 million in funding for the new Waterfront Center project. However, the State funding is contingent on the ESC being able to show that the ESC has received funding commitments to finish constructing the project. In other words, if the ESC is unable to show the State that the ESC has sufficient funding commitments to finish constructing the project, the State will not release any of the $4 million to pay for the Waterfront Center project. Currently, the ESC has a $2.3 million gap in their funding commitments. 2) The Edmonds Senior Center (ESC) has received $1,037,278 in pledges that come due between now and by the end of 2025. Since the construction is scheduled to be completed in late September to early October 2020, the ESC will have to borrow funds until the pledges are paid to the ESC. The City contacted several banks to solicit proposals for how they would accommodate the following three requests: 1) Provide the ESC with a Line of Credit up to $2 million. 2) The Line of Credit would be guaranteed by a $2 million certificate of deposit from the City. 3) Convert the Line of Credit to a seven year term loan. Three banks submitted Term Sheets, and each are summarized below. Bank 1: First Financial Northwest Bank will provide a $2 million Line of Credit to the Edmonds Senior Center (ESC) to assist with the construction of the Edmonds Waterfront Center. ESC can draw down on the Line of Credit to pay construction costs. The total amount of construction draws against the Line of Credit at the close of business on October 31, 2020 will convert to a seven year term loan on November 1, 2020. First Financial Northwest Bank is only willing to provide these funding options to the ESC pending that the City open a $2 million Certificate of Deposit at The Bank. In other words, the City will have to open a $2 million Certificate of Deposit, prior to the ESC's first draws down on the Line of Credit. The Bank will use the CD as collateral for the loan. First Financial Northwest Bank's loan rate will maintain a 2% margin over the pledged CD rate, initially set at 1.68%. The CD interest earnings rate will be adjusted each November 1st to match the Bank's Packet Pg. 4 2.1 current Market Rate CD. The Bank will release 1/7th of the value of the CD each November 1", beginning on November 1, 2021. First Financial Northwest Bank's loan fees total $11,500. Bank 2: Cashmere Valley Bank will provide a $2 million Loan to the Edmonds Senior Center (ESC) to assist with the construction of the Edmonds Waterfront Center. ESC can draw down on the Loan as needed to pay construction costs. ESC be allowed to make construction draws against the Loan through the close of business on October 30, 2020. The loan would mature on December 31, 2027. Cashmere Valley Bank is only willing to provide these funding options to the ESC pending that the City deposit matching funds at The Bank. The Bank will use the City's deposit as collateral for the loan. Details of Cashmere Valley Bank's loan terms and conditions are listed on the attached Term Sheet. Cashmere Valley Bank's loan rate will be a floating rate equal to the Wall Street Journal Prime Rate currently at 4.75%. The Banks' deposit interest earnings rate will be adjusted monthly to match the Washington State Local Investment Pool rate plus 0.05%. As the ESC makes loan principal, The Bank will release a corresponding amount of the City's deposit. Cashmere Valley Bank requires a "Call Option" in the event the spread between the Loan's interest rate and the deposit interest rate fall below 1.00%. Cashmere Valley Bank's loan fees total $1,000. Bank 3: WaFd Bank will provide a $2 million Loan to the Edmonds Senior Center (ESC) to assist with the construction of the Edmonds Waterfront Center. ESC can draw down on the Loan as needed to pay construction costs. ESC be allowed to make construction draws against the Loan through the close of business on December 1, 2021. WAFd Bank's loan period is for seven years. WaFd Bank is only willing to provide these funding options to the ESC pending that the City deposit matching funds at The Bank. The Bank will use the City's deposit as collateral for the loan. WaFd Bank Bank offer three loan options. All options have the same loan rate of 3.12%. Loan fees and the City's CD investment rates vary as follows: Optionl: CD investment rate is 2.00% and the loan fee totals $50,000. Option2: CD investment rate is 1.00% and the loan fee totals $25,000. Option3: CD investment rate is 0.00% and the loan fee totals $5,000. All three bank's Term Sheet are attached and an overview of the Term Sheets are listed in the attached Senior Center Bank Loan Comparison. Edmonds Senior Center Financial Pro Forma The Edmonds Senior Center staff assembled the attached Pro Forma and includes revenue/expense projections, cash flow projections, rental rates and a donor pledge aging report. The Finance Director and the Assistant Finance Director conducted an extensive review of the ESC's financial projections, financial history, and interviewed the Senior Center Management team regarding their projections, and we concluded that the projections appear to be reasonable. The Management team we talked to included; Senior Center Executive Director, Farrell Fleming, Campaign Director and Project Manager, Packet Pg. 5 2.1 Daniel Johnson and Senior Center Accounting Manager, Chris Wolfe. During the Pro Forma review, there are three items that stand out: 1) Projected revenues increase significantly over prior actual revenues 2) Projected expenses increase significantly over prior year actuals. 3) A significant amount of donor pledges come in between now and the end of 2025 During our interview with the Senior Center Management team (Team), we asked the team about these three items to learn more. First, regarding the increased revenues, the Team provided us of several explanations: 1) The most noteworthy reason is simply that they are moving into a big new beautiful building that will significantly increase rental and catering revenues. 2) With anew building, the Team believes they also will attract new members which will increase membership dues. 3) With an expanded building size, the Team believes they will also be able to expand services. As an example, they intend to add new services for veterans, which also will aid in the recruitment of more new members and open new grant opportunities. 4) With anew building, the Team believes that many of the capital donors will also become new operating donors, and also with all the attention that the capital brought to the surrounding communities, a greater/wider awareness will bring new members and increasing donor pools Second, regarding the increased expenses, the Team stated that: 1) With the increased building footprint, staffing will increase to make the most use of the new facility. ESC intends to add four new positions to include a receptionist, fundraiser, rental manager and a building superintendent. 2) With ESC assuming ownership of the building, they have to increase their insurance and maintenance budgets. Third, regarding the sizable donor receivable, the Team said that they fully believe all the donors will make good on their respective pledges, stating that not one donor has reneged on a donation to date. Rental Rates/ Rental Rate Comparison To the reviewer of the information in tonight's packet, one can easily misjudge the new Waterfront Center rates as being too high. When one looks closer at the rental rates for comparable venues to the new Edmonds Waterfront Center they may come up with the idea that perhaps the Edmonds Waterfront Center rates may be low and that the corresponding rental income may be too conservative. However, when one looks at all the amenities the new tenants will have available, and add in the waterfront location the projected rental income seems very reasonable. City of Edmonds and Edmonds Senior Center Agreement The attached City of Edmonds and Edmonds Senior Center Amendment to Ground Lease (Agreement) is attached. The Agreement contains strong incentives designed to increase the likelihood of the Senior Center's full repayment of all funds borrowed from Bank. The Agreement also captures other terms that settle certain issues or questions that have arisen since the time the ground lease was approved. Some of these terms may be viewed as mere clarifications, while others might be viewed as consideration for the City's willingness to act as guarantor. The following material terms are included in the Amendment: 1) For every $100,000 of City guarantee money paid, the City would take one year off the Senior Center's lease term. The maximum reduction of the lease term would still leave ten years within which the Senior Center would be able to operate its programs. 2) Use of facility and catering: City will have the use of the building free of charge Monday - Thursday (as per lease agreement) and not be subjected to catering requirements for events like the annual holiday breakfast or luncheon and annual employee recognition. Additionally, City will have access to second floor rooms without being subjected to a Packet Pg. 6 2.1 catering requirement. 3) City will have exclusive use of a space for office and/or storage. 4) City will have some guaranteed weekday use during summer time and other times when school is not in session. 5) City will be able to reserve one Saturday evening per year for a City special event like the Daddy Daughter Dance. 6) One City staff member will be appointed to ESC Board and ESC Finance Committee with full voting authority. Attachments: 2020-03-06 amendment to ground lease ESC v2 2020-03-06 amendment to ground lease ESC - clean version Pro Forma 12 2019 Financials ESC Financial History Bank Loan Comparison FFNW Bank term sheet Cashmere Valley Bank Term Sheet WaFdBank Term Sheet Packet Pg. 7 2.1.a AMENDMENT TO GROUND LEASE THIS AMENDMENT TO GROUND LEASE (this "Amendment"), effective the day of , 2020 ("Effective Date") is between THE CITY OF N EDMONDS, a municipal corporation of the State of Washington (the "City") and THE EDMONDS SENIOR CENTER, a nonprofit corporation under the laws of the State of Washington (the "Senior Center"). WHEREAS, the City and the Senior Center entered into a Ground Lease dated April 15, c M o 2019 (the "2019 Lease"), the Term of which is scheduled to expire on April 14, 2059 unless extended by the fifteen -year option to extend in the 2019 Lease; and c m WHEREAS, the 2oi9 Lease was recorded in Snohomish County's real property records U under auditor's file number 201911130021; and p WHEREAS, subsequent to the execution and recording of the 2oi9 Lease, the Senior Cn U Center determined that it would need to obtain a bank loan to complete the construction of the Edmonds Waterfront Center on the property subject to the 2oi9 Lease; and N WHEREAS, the Senior Center's new bank loan is expected to take the form of a letter of U co credit in the amount of Two Million Dollars ($2,000,000) (the "Letter of Credit") due to W the fact that the Senior Center's fundraising is ongoing, making it unclear exactly how 0 much money the Senior Center will need to borrow; and d WHEREAS, the Letter of Credit will have a Maturity Date of October 31, 2027, by which date, the Senior Center shall be required to fully repay any outstanding balance on the p Letter of Credit, including all interest and any other amounts owing to the bank under a) the terms of the Promissory Note between the bank and the Senior Center; and o WHEREAS, the Senior Center has asked the City to guarantee the Letter of Credit; and y E WHEREAS, the nature of the City's guarantee would be such that the City would be = required to keep $2,000,000 on deposit with the bank while the Senior Center's Letter of Credit is outstanding; and M WHEREAS, under the contemplated lending agreements, if the Senior Center fails to W M make timely payments during the term of its Letter of Credit or fails to completely repay o any amounts owing under the Letter of Credit by the Maturity Date, the bank would be N entitled to deduct from the City's funds on deposit any amount that the Senior Center fails to pay the bank, including, but not limited to, any balance still owing the bank as of N the Maturity Date; and c d WHEREAS, any amount so deducted from the City's funds on deposit, whether during z the term of the Letter of Credit or at the Maturity Date, shall be referred to herein as a Guarantee Payment; Q Packet Pg. 8 2.1.a WHEREAS, the City, while willing to assist the Senior Center, does not intend to make a permanent loan or gift to the Senior Center in the form of the Guarantee Payment(s) referenced above, and wants to ensure that the Senior Center's leaders and donors are sufficiently motivated to facilitate the successful completion of the Senior Center's capital campaign so that no such payment is necessary; and WHEREAS, the City intends the terms of this Amendment to provide that motivation; NOW THEREFORE, The parties, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound by the terms and conditions of this Amendment, agree as follows: 1. Amendment of Ground Lease. The City and Senior Center hereby amend the following provisions of the 2019 Lease (new text is shown in double underline; deleted text is shown in stAkethrough): a. SECTION 2, entitled "TERM," shall be amended to read as follows: 2.1 Initial Term. The term of this Lease ("Lease Term") shall extend for a period of Forty (40) years commencing on April 15, 2019, and terminating on April 14, 2059, subject to the right of the Senior Center to extend the Lease Term as provided in 2.2 belowl3erei, and subject to the provisions of 2.R below. which shorten the Lease Term proportionally to the extent of anv Guarantee Payments made by the Citv. 2.2 Extension of Lease Term. The Lease Term may be extended by the Senior Center for an additional period of Fifteen (15) years. 2.2.1 Conditions of Extension. In order for the Senior Center to extend the Lease Term, it shall (i) it shall not be in material default at the time of providing Notice of its Lease Extension and thereafter; (ii) it shall provide written Notice of its Lease Extension at least one hundred eighty (18o) days prior to the Termination of the Lease Term: and (iiil the Letter of Credit shall have been fully mid off by the Letter of Credit Maturity Date of October 31, 2027 without any Guarantee Payment needing to have been made by the City at any time during the term of the Letter of Credit. 2.2.2 Process for Extension. No sooner than three hundred sixty-five (365) days and no later than one hundred eighty (18o) days prior to the expiration of the Lease Term, Senior Center shall provide written notice of its intention to exercise the Extension Term. The City and Senior Center shall meet no later than one hundred twenty (120) days prior to the expiration of the Lease Term to confirm the Extension Term, W m c M 0 J L d c m U L 0 d U N U CO) W d 0 d c 0 L a) 0 c d E c m E 0 0 0 M 0 0 N 0 N r c d E z M a Packet Pg. 9 2.1.a discuss any matters pertaining thereto and sign a Lease Addendum incorporating the Extension Term and any mutually acceptable matters pertaining to the Extension Term. 2.3 Shortening of Lease Term. For every One Hundred Thousand Dollars ($1oo.000) of Guarantee Payment made by the City, the Lease Term shall be shortened by one year. Any fraction of a One Hundred Thousand Dollar Guarantee Payment shall result in an additional one year shortening of the Lease Term, including any Guarantee Payment made resulting from the Senior Center's failure to make a timely payment during the term of the Letter of Credit. If multiple Guarantee Payments of less than One Hundred Thousand Dollars are made during the term of the Letter of Credit, the sum of the Guarantee Payments shall be tallied for the purpose -of determining the extent of the shortened Lease Term. 12.3.1 Example #1: if the City's Guarantee Payment equals exactly One Million Two Hundred Thousand Dollars $1.200.000), on the Maturity Date, and no Guarantee Payments are made before the Maturity Date. then the Lease Term shall be shortened by twelve . e Example #2: if the Citv's Guarantee Payment eouals exactly One Million Two Hundred Thousand and One Dollars ($1.200.001), on the Maturity Date, and no Guarantee Pavments are made before the Maturity Date. then the Lease Term shall be shortened by thirteen ev ars. 2.-q.-q ExamDle #-q: if the Citv's Guarantee Pavment eauals exactly One Million Two Hundred Thousand Dollars ($1.200.000), on the Maturity Date, and the City also had to make three Ten Thousand Dollar payments during the term of the Letter of Credit, then the Lease Term shall be shorted by thirteen years (twelve years for the Guarantee Payment made at the Maturity Date and one year for Thirty Thousand Dollars paid during the term of the Letter of Credit). 2.q.a ExamDle #a: if the Citv's Guarantee Pavment eauals exactly One Million Two Hundred Thousand Dollars $1.200.000), on the Maturity Date, and the City also had to make eleven Ten Thousand Dollar payments during the term of the Letter of Credit, then the Lease Term shall be shorted by fourteen (twelve years for the Guarantee Payment made at _years the Maturity Date and two years for One Hundred Ten Thousand Dollars Daid during the term of the Letter of W 7 c M 0 J L d m U `0 d U N U CO W d N M d _ M 0 L 0 0 _ d E m E 0 0 0 M 0 0 N 0 N _ d E z v M a Packet Pg. 10 2.1.a 2.3.5 Example #5: if the City's Guarantee Payment equals exactly One Million Two Hundred Thousand and One Dollars ($1.2oo.00i), on the Maturity Date, and the City also had to make three Ten Thousand Dollar payments during the term of the Letter of Credit, then the Lease Term shall be shorted by thirteen years (in this case the three Ten Thousand Dollar payments shall be combined in the same fraction of $1oo.000 as the One Dollar over the $1.200.000�.� 2.4 Regardless of the amount or number of the Guarantee Payments made, the provisions of subsection 2.3, above, shall not overate to shorten the Lease Term to such an extent as to rp event the Senior Center from satisfying its duty to the State of Washington Department of Commerce under its Leasehold Promissory Note and Leasehold Deed of Trust, which require the Senior Center to use its $a.000.000 state grant award as required by the grant contract for a period of ten flog years. b. SECTION 1.2, entitled "Use of the Property," shall be amended to read as follows: 1.2.1 Allowed Uses of the Property by the Senior Center. Except as otherwise provided herein, the Senior Center shall use the Property for the purpose of constructing, maintaining, and operating a non-profit community resource center to be known as the "Edmonds Waterfront Center" serving the needs of the local population, in particular, poor, infirm and otherwise vulnerable seniors and other members of the community. 1.2.1.1 Notwithstanding the foregoing, the Senior Center may from time to time utilize portions of the Property for revenue -generating activities including, but not limited to, rentals, catered events and the operation of a thrift stere and e6ecoffee kios provided that -all revenues generated therefrom shall be utilized by the Senior Center exclusively for the purposes set forth in Section 1.2.1, above. For the Purpose of generating such revenue. the Senior Center shall be authorized to enter into an agreement with a caterer commercially reasonable payment from the caterer to the Senior Center, SUBJECT TO THE FOLLOWING PROVISIONS: Commented [jtlj: It has been suggested that some or a these examples, while accurately reflecting the council's intent, are unnecessary. For the purposes of interpreting this document years from now, any council action to remove one or more of these examples should be understood merely as an attempt to simplify the docum not to change its meaning. Alternatively, if the council d intend its removal of examples (if any) to signify a chan@ the meaning of the document, such other meaning shoe be clearly stated through council action. ESC does not object to the inclusion of these examples. Commented jjt2j: This change just makes clear the to distinction between the coffee kiosk and the lunch cafe. G does not object to this change. M 0 0 N 0 N r C Commented DO]: This change just makes clear that, wl d the primary purpose of the lunch cafe is to provide a E nutritious meal for low-income seniors. Meals will also t V available to the public at market rates. ESC does not obj r0+ to this change. Q Packet Pg. 11 2.1.a L2.1.1.a. the City shall be given the opportu lLI to provide input on the catering agreement before the terms are finalized: 1.2.1.1.b. the term of the catering agreement shall be limited to five years, and any extension thereof beyond the initial five-year term shall be subject to the approval of the Cit , which approval shall not be unreasonably withheld:) 1.2.1.1.c. regardless of the day, time, or number of attendees, the caterer's exclusivity rights on the second floor of the Edmonds Waterfront Center shall be limited to precluding on -site catering served by another professional caterer: attendees (exelusi'vera• for -Ci yam[ omrams and uetivtes) the caterer's exclush& rights on the second floor of the Edmonds Waterfront Center shall not preclude the following: individual meals (e.g., "sack lunches") �te�re Fedprepared food that is delivered to the second floor of the Edmonds Waterfront Center, as long-m the food is not served by the ^vendor or any other food service professional: 1.2.1.1.e. for the purposes of subsections 1.2.1.1.c. and 1.2.i.i.d., above, the phrase "served by" shall include any kind of professionally staffed food service. including, but not limited to, table service for a sit- down meal, staffed service of or refilling of a buffet, staffed beverage pouring. etc. 1.2.1.1.f. extent as described in subsection 1.2.1.1.g. and 1.2.1.1.h., below. the catering agreement for the first floor of the Edmonds Waterfront Center shall allow the caterer to be the onlv_nrovider of food or beverage that is consumed on the first floor, and may specifically preclude provision of food on the first floor as would be allowed on the second floor under subsection 1.2.1.1.d. 1.2.1.1.g. notwithstanding subsection 1.2.1.1.f., above, the catering agreement shall not require the .r W c M Commented Ut4]: City staff and ESC are OK with this 0 change. L y c tv V L. 0 c d Commented Ut5]: ESC has indicated they can accept th language in this paragraph. The gist is that, if someone F M the means to cater an event, FEEDME will be the design caterer. Individuals who do not have the means to cater V even will not be precluded from bringing outside food it CO tha --nd flnnr fnr thair avant Commented ]jt6]: These changes were made to use a r general term ("meal") than "lunch" ESC does not object this change. ty Yn M _ 0 0 0 _ d E tv E 0 0 0 M 0 r 0 N 0 N c d E z v c� a Packet Pg. 12 2.1.a purchase of food or beverage from the on-3it-e caterer where a first -floor event during City Hours is of a twe that food and beverage are not needed. 1.2.i.i.h. notwithstanding subsection 1.2.1.i.f., above, the catering agreement shall: 1) allow cu cp akes and juice purchased from a source other than the caterer to be served on the first floor during the Daddy Daughter Dance or other event allowed pursuant to subsection 1.2.2.1.c., below;12) allow the consumption of coffee and cookies from off -site vendors and re uire the caterer to prepare and Commented t As I mentioned on March 3M, Esc ha serve a pancake breakfast for all the City's employees indicated that consumption of coffee and cookies could during the Ci 's Annual Holiday Breakfast referenced excluded from the first -floor on -site catering exclusive. in subsection 1.2.2.1.d, below. 1.2.2 Allowed Uses of the Property by the CitX. The City of Edmonds shall be given access to and -use -of the Building so it may offer recreational and other programs to the public. Except for the first -floor kitchen hand offee kioskeafe areas, the City will be use through Thursday, 4:oopm — elese io:oo p.m. (hereinafter the "City Hours"). The Senior Center shall have first -priority use of the Building at all other times (hereinafter the "Senior Center Hours"). except as provided in subsection 1.2.2.1. The City and Senior Center agree to meet on a regular on -going basis (at least quarterly) to review their respective program schedules and determine whether there is any unprogrammed (surplus) time after accounting for each W c M 0 J L tv c tv V L0 tv Cn N U Commented Ut8]: This language just makes express oui CO current understanding. ESC does not object to this langi LU Commented DO]: Because the word cafe is now used above in reference to the lunch cafe, the parties agree t we need a different term to refer to the coffee kiosk. ES does not object to this language. parry's program needs during that parry's first -priority time periods. At these meetings each party shall offer its remaining unprogrammed first -priority time slots to the other party for use by the other party or by rental to a third -party. PROVIDED THAT fall rental revenue defived c..,.m ..+,.t,, a....:..,. City u,.uFs shall aeefu ^e�hall accrue to the Senior Center. Senior Center Commented ptio]: City staff supports this language as acknowledges that the grounds surrounding the Property are a proposed by ESC. public park and shall remain open to the public subject to the City's reasonable regulations related to uses, hours, etc. 1.2.2.1 Exceptions to the Senior Center's first -priority use of the Building. The following are exceptions to the Senior Center's first -priority use rights described in subsection 1.2.2, above. 1.2.2.1.a. Office Storage Space, Senior Center shall construct a lockable space within the Building. which is suitable for the City's office and/or storage uses. d N M d c 0 0 a) 0 c d E c tv E M W 0 M 0 r 0 N O N c d E z v M a Packet Pg. 13 2.1.a Senior Center shall finish that =ce to the same decree as other similar spaces within the Building. Oe Qi4:;X shall have the exelusiye:right4e use that 1.2.2.1.b. Summer Time And Other Weekdays When Edmonds School District Is Not In Session. The City shall have first -priority use of lone mutually agreed upon space for programming of the rear ,.,.een n pe f n weekda s when ........................................... ..... the Edmonds School District is not scheduled to be in session, including weekday holidays, school breaks. and summer vacations. for one Saturday evening each February, to allow for the scheduling of one City special event, such as the Daddy Daughter Dance. City special event, such as the City's Annual Holiday Breakfast. Commented [jtlI]: City staff and ESC have agreed upoi this amendment. Commented Ut121: City staff and ESC have agreed to tF language. Commented [jt13]: The first edit to 1.2.3 makes this language unnecessary. Commented Ut14]: The first edit to 1.2.3 makes this language unnecessary. 1.2.3 The City is not responsible for repair and/or maintenance of the Building; provided, however, as part of the City's allowed use of the Building, the City may be charged for mutually agreed upon costs directly associated with its use of the Building (i.e. utilities, site monitor, cleaning, etc.),f PROVIDED THAT the City shall not be subject to any rental charges for its use of the Building at any time. Commented Ut151: This language makes express that tl In allocating such operating costs between the parties, the parties City would never pay rent. it allows for the removal of n shall estimate: 1 the number of people -square feet that-useof the free references elsewhere, as noted above. The City's re free use has always been understood. ESC does not objE Building that are used pursuant to a City program and lengtYi to this change. duration of that use, including any square footage _that unused during City Hours; 21 the number of maple square feet t useof the Building that are used pursuant to a Senior Center program and l tl -duration of that use: and 3) the number of square feet generating event or activity and lent€ rduration of that use. The commented are baUtl6lsed Then the realization that estimatin City shall only be responsible to pay the operating costs that are numbers of people that use the building could pose estimated to be associated with the first of these three categories. significant operational challenges when compared to ju° counting square footage and hours. ESC does not object this change. .r W O 7 O' O _ M O J L d m U O d CO) N U CO) W d rn M m c 7 O L O _ d E c m E M W 0 M 0 O N 0 N c d E z v O a Packet Pg. 14 2.1.a 2. City Board Seat. For as long as the Letter of Credit is outstanding, the City shall be entitled to appoint a City representative to sit as a voting member of the Senior Center's board and executive committee. IN WITNESS HEREOF, the parties have subscribed their names hereto effective as of the day, month and year first written above. LESSEE: EDMONDS SENIOR CENTER By: Its: APPROVED AS TO FORM: By: Jeff Taraday City Attorney LESSOR: THE CITY OF EDMONDS By: Mike Nelson As its Mayor APPROVED BY CITY COUNCIL ON: ATTEST: City Clerk Packet Pg. 15 2.1.a STATE OF WASHINGTON ) ) ss. COUNTY OF SNOHOMISH ) I certify that I have evidence that Mike Nelson is the person who appeared before me, and said person acknowledged that he signed this instrument, on oath stated that he was authorized to executed the instrument and acknowledged it as the Mayor of the City of Edmonds, to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. DATED: PRINTED NAME: NOTARY PUBLIC In and for the State of Washington My commission expires: STATE OF WASHINGTON ) ) ss. COUNTY OF SNOHOMISH ) I certify that I have evidence that is the person who appeared before me, and said person acknowledged that he signed this instrument, on oath stated that he was authorized to executed the instrument and acknowledged it as the President of the Edmonds Senior Center, to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. DATED: PRINTED NAME: NOTARY PUBLIC In and for the State of Washington My commission expires: Packet Pg. 16 AMENDMENT TO GROUND LEASE THIS AMENDMENT TO GROUND LEASE (this "Amendment"), effective the day of , 2020 ("Effective Date") is between THE CITY OF EDMONDS, a municipal corporation of the State of Washington (the "City") and THE EDMONDS SENIOR CENTER, a nonprofit corporation under the laws of the State of Washington (the "Senior Center"). WHEREAS, the City and the Senior Center entered into a Ground Lease dated April 15, 2019 (the "2019 Lease"), the Term of which is scheduled to expire on April 14, 2059 unless extended by the fifteen -year option to extend in the 2019 Lease; and WHEREAS, the 2019 Lease was recorded in Snohomish County's real property records under auditor's file number 201911130021; and WHEREAS, subsequent to the execution and recording of the 2o19 Lease, the Senior Center determined that it would need to obtain a bank loan to complete the construction of the Edmonds Waterfront Center on the property subject to the 2019 Lease; and WHEREAS, the Senior Center's new bank loan is expected to take the form of a letter of credit in the amount of Two Million Dollars ($2,000,000) (the "Letter of Credit") due to the fact that the Senior Center's fundraising is ongoing, making it unclear exactly how much money the Senior Center will need to borrow; and WHEREAS, the Letter of Credit will have a Maturity Date of October 31, 2027, by which date, the Senior Center shall be required to fully repay any outstanding balance on the Letter of Credit, including all interest and any other amounts owing to the bank under the terms of the Promissory Note between the bank and the Senior Center; and WHEREAS, the Senior Center has asked the City to guarantee the Letter of Credit; and WHEREAS, the nature of the City's guarantee would be such that the City would be required to keep $2,000,000 on deposit with the bank while the Senior Center's Letter of Credit is outstanding; and WHEREAS, under the contemplated lending agreements, if the Senior Center fails to make timely payments during the term of its Letter of Credit or fails to completely repay any amounts owing under the Letter of Credit by the Maturity Date, the bank would be entitled to deduct from the City's funds on deposit any amount that the Senior Center fails to pay the bank, including, but not limited to, any balance still owing the bank as of the Maturity Date; and WHEREAS, any amount so deducted from the City's funds on deposit, whether during the term of the Letter of Credit or at the Maturity Date, shall be referred to herein as a Guarantee Payment; Packet Pg. 17 2.1.b WHEREAS, the City, while willing to assist the Senior Center, does not intend to make a permanent loan or gift to the Senior Center in the form of the Guarantee Payment(s) referenced above, and wants to ensure that the Senior Center's leaders and donors are sufficiently motivated to facilitate the successful completion of the Senior Center's capital campaign so that no such payment is necessary; and WHEREAS, the City intends the terms of this Amendment to provide that motivation; NOW THEREFORE, The parties, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound by the terms and conditions of this Amendment, agree as follows: 1. Amendment of Ground Lease. The City and Senior Center hereby amend the following provisions of the 2019 Lease (new text is shown in double underline, deleted text is shown in ): a. SECTION 2, entitled "TERM," shall be amended to read as follows: 2.1 Initial Term. The term of this Lease ("Lease Term") shall extend for a period of Forty (40) years commencing on April 15, 2019, and terminating on April 14, 2059, subject to the right of the Senior Center to extend the Lease Term as provided in 2.2 belo vherein, and subiect to the provisions of 2.3 below, which shorten the Lease Term proportionally to the extent of anv Guarantee Payments made by the City. 2.2 Extension of Lease Term. The Lease Term may be extended by the Senior Center for an additional period of Fifteen (15) years. 2.2.1 Conditions of Extension. In order for the Senior Center to extend the Lease Term, it shall (i) it shall not be in material default at the time of providing Notice of its Lease Extension and thereafter; (ii) it shall provide written Notice of its Lease Extension at least one hundred eighty (180) days prior to the Termination of the Lease TermLau (iiil the Letter of Credit shall have been fully paid off by by the Letter of Credit Maturity Date of October 31, 2027 without any Guarantee Payment needing to have been made by the City at any time during the term of the Letter of Credit. 2.2.2 Process for Extension. No sooner than three hundred sixty-five (365) days and no later than one hundred eighty (180) days prior to the expiration of the Lease Term, Senior Center shall provide written notice of its intention to exercise the Extension Term. The City and Senior Center shall meet no later than one hundred twenty (120) days prior to the expiration of the Lease Term to confirm the Extension Term, Packet Pg. 18 discuss any matters pertaining thereto and sign a Lease Addendum incorporating the Extension Term and any mutually acceptable matters pertaining to the Extension Term. 2.3 Shortening of Lease Term. For every One Hundred Thousand Dollars ($1oo.000l of Guarantee Payment made by the City, the Lease Term shall be shortened by one year. Any fraction of a One Hundred Thousand Dollar Guarantee Payment shall result in an additional one year shortening of the Lease Term, including any Guarantee Payment made resulting from the Senior Center's failure to make a timely payment during the term of the Letter of Credit. If multiple Guarantee Payments of less than One Hundred Thousand Dollars are made during the term of the Letter of Credit, the sum of the Guarantee Payments shall be tallied for the 1)uU2ose of determining the extent of the shortened Lease Term. 2.3.1 Example #1: if the CiW's Guarantee Payment ea_uals exactly One Million Two Hundred Thousand Dollars L$1.200.0001. on the Maturity Date, and no Guarantee Payments are made before the Maturity Date, then the Lease Term shall be shortened by twelve years. 2.3.2 Example #2: if the MW's Guarantee Payment equals exactly One Million Two Hundred Thousand and One Dollars ($1.200.001), on the Maturity Date, and no Guarantee Payments are made before the Maturity Date, then the Lease Term shall be shortened by thirteen ygwr 2.3.3 Examnle #3: if the City's Guarantee Payment equals exactly One Million Two Hundred Thousand Dollars L$1.200.0001, on the Maturity Date, and the City also had to make three Ten Thousand Dollar payments during the term of the Letter of Credit, then the Lease Term shall be shorted by thirteen years (twelve years for the Guarantee Payment made at the Maturity Date and one year for Thirty Thousand Dollars paid during the term of the Letter of Creditl. 2.3.4 Example #a: if the City's Guarantee Payment eo_uals exactly One Million Two Hundred Thousand Dollars L$1.200.0001, on the Maturity Date, and the City also had to make eleven Ten Thousand Dollar payments during the term of the Letter of Credit, then the Lease Term shall be shorted by fourteen years (twelve years for the Guarantee Payment made at the Maturity Date and two years for One Hundred Ten Thousand Dollars paid during the term of the Letter of N a C cc 0 J C a� L Cn C 0 .y a� V Cn w 0 a� 0 E E M to 0 M 0 0 N O N r+ c a) E M U M Q Packet Pg. 19 2.1.b Dollars ($1.200.001), on the Maturity Date, and the Ci also had to make three Ten Thousand Dollar payments during the term of the Letter of Credit, then the Lease Term shall be fraction of $1oo.00o as the One Dollar over the $1,200,0001. 2.4 Regardless of the amount or number of the Guarantee Payments made, the provisions of subsection 2.3, above. shall not operate to shorten the Lease Term to such an extent as to rp event the Senior Center from satisfying its duty to the State of Washington Department of Commerce under its Leasehold Promissory Note and Leasehold Deed of Trust, which require the Senior Center to use its $a.000.000 state grant award as required by the grant contract for a period of ten (1o) e b. SECTION 1.2, entitled "Use of the Property," shall be amended to read as follows: 1.2.1 Allowed Uses of the PropeM by the Senior Center. Except as otherwise provided herein, the Senior Center shall use the Property for the purpose of constructing, maintaining, and operating a non-profit community resource center to be known as the "Edmonds Waterfront Center" serving the needs of the local population, in particular, poor, infirm and otherwise vulnerable seniors and other members of the community. 1.2.1.1 Notwithstanding the foregoing, the Senior Center may from time to time utilize portions of the Property for revenue -generating activities including, but not limited to, rentals, catered events and the operation of a +hfift steFe eafecoffee kiosk, provided that all revenues generated therefrom shall be utilized by the Senior Center exclusively for the purposes set forth in Section 1.2.1, above. For the purpose of generating such revenue. the Senior Center shall be authorized to enter into an agreement with a caterer which would give the caterer exclusive rights to o erp ate a coffee kiosk. z lunch cafe for low-income seniors (which would also be open to the public), and a catered event space at the Edmonds Waterfront Center in exchange for a commercially reasonable payment from the caterer to the Senior Center. SUBJECT TO THE FOLLOWING I U Kew o)ilk1 Packet Pg. 20 1.2.1.1.a. the City shall be given the opportunity to provide input on the catering agreement before the terms are finalized: 1.2.1.1.b. the term of the catering agreement shall be limited to five years, and any extension thereof beyond the initial five-year term shall be subject to the y approval of the City: which approval shall not be a unreasonably withheld: 1.2.1.1.c. regardless of the dad time, or number of C 0 attendees, the caterer's exclusivity rights on the second floor of the Edmonds Waterfront Center shall be limited to precluding on -site catering served by 0 another professional caterer: 1.2.1.1.d. regardless of the day: time, or number of Cn attendees the caterer's exclusivity rights on the second floor of the Edmonds Waterfront Center shall not preclude the following: individual meals (e.g.. "sack > lunches") that are brought by attendees of classes and events; food events: boxed meals that are delivered to the site: and other professionally N spared food that is delivered to the second floor of w the Edmonds Waterfront Center, as long as the food is not served by the vendor or anv other food service professional: 0 L 1.2.1.1.e. for the purposes of subsections 1.2.1.1.c. c and 1.2.1.1.d., above, the phrase "served by" shall include any kind of professionally staffed food service, 0 including; but not limited to, table service fora E own meal, staffed service of or refilling of a buffet. E staffed beverage op uring. etc. 0 1.2.1.1except as described in subsection .f. o 1.2.1.1.g. and 1.2.1.1.h.. below. the catering agreement c for the first floor of the Edmonds Waterfront Center N shall allow the caterer to be the onlprovider of food C or beverage that is consumed on the first floor. and E may specifically preclude provision of food on the first floor as would be allowed on the second floor under Q subsection 1.2.1.1.d. 1.2.1.1.g. notwithstanding subsection 1.2.1.1.f. above, the catering agreement shall not require the purchase of food or beverage from the on -site caterer Packet Pg. 21 where a first -floor event during City Hours is of a type that food and beverage are not needed. 1.2.1.1.h. notwithstanding subsection 1.2.1.11 above, the catering agreement shall: 11 allow cu cp akes and juice ice purchased from a source other than the caterer to be served on the first floor during the Daddy Daughter Dance or other event allowed pursuant to subsection 1.2.2.1.c.. below: 2) allow the consum_ntion of coffee and cookies from off -site vendors and 3) reouire the caterer to spare and serve a pancake breakfast for all the Ci 's employees during the Citv's Annual Holiday W Breakfast referenced in subsection 1.2.2.1.d, below. 1.2.2 Allowed Uses of the PropeM by the City. The City of Edmonds shall be given access to and use of the Building so it may offer recreational and other programs to the public. Except for the first -floor kitchen and coffee kioskeafe areas, the City will be allowed first -priority use of the Building Monday through Thursday, 4:001?m — elese 10:00 p.m. (hereinafter the "City Hours"l. The Senior Center shall have first -priority use of the Building at all other times (hereinafter the "Senior Center Hours"l. except as provided in subsection 1.2.2.1. The City and Senior Center agree to meet on a regular on -going basis (at least quarterly) to review their respective program schedules and determine whether there is any unprogrammed (surplus) time after accounting for each party's program needs during that party's first -priority time periods. At these meetings each party shall offer its remaining unprogrammed first -priority time slots to the other party for use by the other party or by rental to a third -party, PROVIDED THAT all rental revenue shall accrue to the Senior Center. Senior Center acknowledges that the grounds surrounding the Property are a public park and shall remain open to the public subject to the City's reasonable regulations related to uses, hours, etc. 1.2.2.1 Exceptions to the Senior Center's first -priority use of the Building. The following are exceptions to the Senior Center's first -priority use rights described in subsection 1.2.2, above. 1.2.2.1.a. Office Storage Space. Senior Center shall construct a lockable space within the Building, which is suitable for the City's office and/or storage uses. Senior Center shall finish that space to the same degree as other similar spaces within the Building. Packet Pg. 22 1.2.2.1.b. Summer Time And Other Weekdays When Edmonds School District Is Not In Session. The City shall have first -priority use of one mutually a rg eed upon space for programming on weekdays when the Edmonds School District is not scheduled to be in session. includine weekdav holidays. school breaks. nd summer vacations. 1.2.2.1.c. The Senior Center shall make the banauet space available to the City for one Saturday evening each February, to allow for the scheduling of one Citv special event, such as the Daddy Daughter Dance. 1.2.2.1.d. The Senior Center shall make the banquet space available to the City for one weekday morning each December, to host one City special event, such as the City's Annual Holiday Breakfast. 1.2.3 The City is not responsible for repair and/or maintenance of the Building; provided, however, as part of the City's allowed use of the Building, the City may be charged for mutually agreed upon costs directly associated with its use of the Building (i.e. utilities, site monitor, cleaning, etc.). PROVIDED THAT the City shall not be subiect to any rental charges for its use of the Building at any time. In allocating such operating costs between the parties, the parties hall estimate: 11 the number of sauare feet of the Building that are used pursuant to a Ci-V pro ram and duration of that use, including any square footage that goes unused during City Hours; 2) the number of square feet of the Building that are used pursuant to a Senior Center program and duration of that use; and 3) the number of square feet of the Building that are used pursuant to a revenue - generating event or activity and duration of that use. The City shall only be responsible to pay the operating- costs that are estimated to be associated with the first of these three categories. 2. City Board Seat. For as long as the Letter of Credit is outstanding, the City shall be entitled to appoint a City representative to sit as a voting member of the Senior Center's board and executive committee. IN WITNESS HEREOF, the parties have subscribed their names hereto effective as of the day, month and year first written above. LESSEE: LESSOR: EDMONDS SENIOR CENTER THE CITY OF EDMONDS Packet Pg. 23 By: By: Mike Nelson As its Mayor Its: APPROVED AS TO FORM: APPROVED BY CITY COUNCIL ON: By: Jeff Taraday City Attorney ATTEST: City Clerk Packet Pg. 24 STATE OF WASHINGTON ) ss. COUNTY OF SNOHOMISH I certify that I have evidence that Mike Nelson is the person who appeared before me, and said person acknowledged that he signed this instrument, on oath stated that he was authorized to executed the instrument and acknowledged it as the Mayor of the City of Edmonds, to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. DATED: STATE OF WASHINGTON ) ss. COUNTY OF SNOHOMISH ra 4111-MrWONVEN&I NOTARY PUBLIC In and for the State of Washington My commission expires: I certify that I have evidence that is the person who appeared before me, and said person acknowledged that he signed this instrument, on oath stated that he was authorized to executed the instrument and acknowledged it as the President of the Edmonds Senior Center, to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. DATED: PRINTED NAME: NOTARY PUBLIC In and for the State of Washington My commission expires: Packet Pg. 25 2.1.c Edmonds Senior Center Pro Forma for Edmonds Waterfront Center Updated January 8, 2020 Descri tion I Ln 1 2021 2022 2023 2024 2025 2026 2027 # I Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Revenue Membership Dues & Prgm Service Fees 1 $ 180,000 $ 185,400 $ 190,963 $ 196,692 $ 202,593 $ 208,670 $ 214,929 Rental Income 2 350,100 360,603 371,421 382,564 394,041 405,862 418,038 Food Services Income 3 175,000 180,250 185,658 191,228 196,965 202,874 208,960 Building Usage Fee (City of Edmonds) 4 60,000 61,800 63,654 65,564 67,531 69,557 71,644 Thrift Store 5 225,000 231,750 238,703 245,864 253,240 260,837 268,662 Public Support Government Fees & Grants 6 160,000 164,800 169,744 174,836 180,081 185,483 191,047 Contributions, Gifts & Grants 7 180,000 185,400 190,962 196,691 202,592 208,670 214,930 Fundraising 8 1 180,000 1 185,400 1 190,962 1 196,691 1 202,592 1 208,670 214,930 Total Revenue 9 1 $1 510,100 1 $1,555,403 1 $1,602,067 1 $7 650130 1 $1,699,635 1 $1 750623 $1,803,140 Expenses Wages & Benefits Wages & Salaries 10 $ 572,528 $ 589,704 $ 607,395 $ 625,617 $ 644,386 $ 663,718 $ 683,630 Payroll Taxes 11 52,229 53,796 55,410 57,072 58,784 60,548 62,364 Medical Benefits 12 65,760 67,733 69,765 71,858 74,014 76,234 78,521 Total Wages & Benefits 13 $ 690,517 $ 711,233 $ 732,570 $ 754,547 $ 777,184 $ 800,500 $ 824,515 Supplies & Equipment Office & Operating Supplies 14 $ 54,000 $ 55,620 $ 57,289 $ 59,008 $ 60,778 $ 62,601 $ 64,479 Small Tools & Minor Equipment 15 6,000 6,180 6,365 6,556 6,753 6,956 7,165 Total Supplies & Equipment 16 $ 60,000 $ 61,800 $ 63,654 $ 65,564 $ 67,531 $ 69,557 $ 71,644 Services & Other Costs Professional Services 17 $ 45,000 $ 46,350 $ 47,741 $ 49,173 $ 50,648 $ 52,167 $ 53,732 Communications 18 18,000 18,540 19,096 19,669 20,259 20,867 21,493 Travel 19 3,000 3,090 3,183 3,278 3,376 3,477 3,581 Advertising 20 12,000 12,360 12,731 13,113 13,506 13,911 14,328 Operating Rentals & Leases 21 90,000 6,000 6,180 6,365 6,556 6,753 6,956 Insurance 22 75,000 77,250 79,568 81,955 84,414 86,946 89,554 Utility Services 23 54,000 55,620 57,289 59,008 60,778 62,601 64,479 Repairs & Maintenance 24 45,000 46,350 47,741 49,173 50,648 52,167 63,732 Miscellaneous Program Activity- trips, recognition 25 30,000 30,900 31,827 32,782 33,765 34,778 35,821 Printing/Public Information 26 30,000 30,900 31,827 32,782 33,765 34,778 35,821 Taxes & Other Misc Expenses 1 271 60,000 1 61,800 1 63,654 1 65,5641 67,531 1 69,557 1 71,644 Total Services & Other Costs 1281 $ 462,000 1 $ 389,160 $ 400,837 1 $ 412,8621 $ 425,246 1 $ 438,002 1 $ 451,141 Total Expenses 1291 $1,212,517 1 $1162,193 $1,197,061 1 $1,232973 1 $1,269,961 1 $1308.059 1 S1,347,309 Net Return from Operations 30 $ 297,583 $ 393,210 $ 405,006 $ 417,157 $ 429,674 $ 442,564 $ 455,840 Pledges Receivable 31 178,371 147,971 146,971 103,571 100,000 Fundraising (Capital Retirement) 32 120,000 120,000 120,000 120,000 120,000 120,000 120,000 Debt Service (Bank) 33 (345,714) (337,143) (328,571) (320,000) (311,428) (302,857) (294,287) Debt Service (Other) 34 (53,904) (53,904) (53,904) (53,904) (53,904) Capital Reserves 1 35 60,000 60,000 60,000 60,000 60,000 60,000 Net Return 36 $ 196,336 $ 210,134 $ 229 502 $ 206,824 $ 224,342 $ 199,707 $ 221 553 Q Packet Pg. 26 Edmonds Senior Center Edmonds Waterfront Center - Cash Flow Projection Cash Balances 2.1.c 12/31 /2019 Description Ln Activity thru 1213112917 1st qtr 2018 2nd qtr 2018 3rd qtr 2018 4th qtr 2018 1st qtr 2019 2nd qtr 2019 3rd qtr 2019 4th qtr 2019 1st qtr 2020 2nd qtr 2020 Jul - Oct 2020 Actuals Actuals AcWals Actuals Actuals Actuals Actuals Actuals Actuals Projected Projected Projected Beginning Cash Balance a S - S 709.150.48 S 666.523.56 S S84.805.33 S 530,890.37 $1.483.576.54 S1.311.743.58 $2.437.097.14 S4.659.990,97 S 4,200,230.94 S 1.492.863.96 S 1,263,8511.21 Cash Received b 'From Line 60 $1.150,921.75 S 54.719.70 S 76.093.43 S 50.084.84 $1,158,979.23 S 58,996,96 $1,320,729.39 S3,195 763.11 S1,222 419.07 S 1,131,000.00 S 4 302,000.00 S 2,630,290.52 Cash Expended c from Line 29 S 441 771.27 S 97,346.62 S 157,813.68 S 103 999.80 S 206,293.06 S 228,829.92 S 195,375.83 S 972,869.28 $1.682.179.10 S 3.838 366.98 S 4,531,007.75 S 3,B94,146.73 [Ending Cash Balance d S 709,150.48 1 $ 668.523.56 1 $ 584,805.33 1 S 530.1190.37 S1,483.576.54 S1.311.743.58 $2.437.097.14 1 $4,659,990.97 S4,200,230.94 I S 1,492,863.96 S 1,263,856.21 $ - Expenditures Description Ln vendor Budget Adjustments Revised Budget Spent 1st qtr 2018 2nd qtr 2018 3rd qtr 2018 4th qtr 2018 1st qtr 2019 2nd qtr 2019 3rd qtr 2019 4th qtr 2019 1st qtr 2020 2nd qtr 2020 Jul - Oct 2020 A 17 117 0 Construction Cost - Building Construction Contract 1 W.G. Clark $11,922,943-00 $ 414,583.54 $12,337,526.54 $ - $ - $ - $ - $ $ $ $ 678,793.62 $1,344,539.36 $ 3,413,998.00 $ 3,723,424.00 $ 3,176,771.56 WEST 2 Na $ 1,239,986,00 $ 43,116.69 $ 1,283,102.69 $ $ $ $ $ $ $ $ 70,594.53 $ 150,907.18 $ 351,390.00 $ 383,238,00 $ 326,972.98 Construction Contingency 3 1 Na $ 37.071-00 $ (37.071.00) $ - $ $ $ $ $ $ $ $ - $ - $ - $ - $ - Subtotal - Construction Cost - Building 4 $13.200.000.00 S 420.629.23 $13.620,629,23 S $ S $ - S S S $ 749,388.15 S1,495,446.54 S 3,765,388.00 S 4,106,692.00 S 3,503,744.54 Other Development Costs Architectural Contract 5 Environmental Works $ 860,000.00 $ 65,000.00 $ 925,000.00 S 105,875.30 $ 55,639.78 $ 116,732.78 5 68,675.90 $ 129.916 40 $ 168,324.91 $ 120,443.68 $ 48,230.38 S 74,181.89 $ 12,978,98 S 12,000,00 $ 12,000.00 Architectural Other 6 -'"multiplevendort— $ 17,000.00 $ (0.43) $ 16,999.57 S 7,999.57 $ 5,500.00 $ 3,500.00 S - S - $ $ - $ S $ - S - $ - Boundary 3 Topographic Survey 7 Reid Middleton $ 11,295.00 $ (0.25) $ 11,294.75 S 7,281.00 $ - $ - S $ $ 2,500.00 $ 1,513.75 $ - S $ S - $ Geotechnical Study 8 Landau Associates $ 29,681.00 $ 345.29 $ 30,026.29 S - $ - $ - 5 $ 27,951.29 $ $ 1,730.00 $ 345.00 5 $ $ $ - Legal 9 Anderson Hunter Law Firm $ 15,000.00 $ - $ 15,000.00 $ 5,570.00 $ $ 1,325.00 $ 2,625.00 $ 1,462.50 $ $ 1,23750 $ - 50.00 $ S - $ 2,730,00 Project Management 10 $ $ $ - S - $ $ - S - $ - $ $ - $ $ - $ 5 $ - Other: Cost Study(s) 11 *-multiple vendors— $ 3,350.00 $ $ 3,350.00 $ 3,350.00 $ $ S - $ $ $ $ S $ S $ Other: Hazmat Surrey 12 Eco Compliance Corporation $ 5,355.00 $ $ 5,355.00 $ - $ 5,355.00 $ S - $ $ $ - $ - $ $ 5 $ Other: Traffic Study 13 Gibson Traffic Consultants $ 2,950.00 $ $ 2,950.00 $ 2,950.00 $ - $ 5 - $ $ $ $ $ $ S $ Insurance 14 Liberty Mutual Insurance $ 35,000.00 $ (4,501.00) $ 30,499.00 S - $ $ 5 - $ $ $ $ 30,499.00 $ $ $ $ Permits, Mitigation & Hookups Fees 15 City of Edmonds, etc $ 125,000.00 $ $ 125,000.00 $ $ $ 5,452.50 5 - $ 13,497.00 $ $ $ 76,375.94 5 24,749A4 $ 5 $ 4,925,12 Other: Engineering Review 16 Glumac $ 17,000.00 $ $ 17,000.00 S $ $ 5 - $ - $ $ $ - $ 750.00 $ S $ 16,250.00 Other- Financing Expenses 17 *-multiple vendors*-- $ 300,000.00 $ (150,000.00) $ 150,000.00 $ $ $ S S 2,500.00 $ 12,250.00 $ $ 7,500.00 $ 5,000,00 $ 5,000.00 5 112,500,00 $ 5,250.00 Other: Furniture & Equipment 18 —multiple vendors— $ 500,000.00 $ $ 500,000.00 S $ $ 5 - $ - $ - $ 15,154.25 $ - $ - $ 5 234,845,75 $ 250,000.00 Other: LEED Certification 19 O'Brian i Company $ 25,000.00 $ $ 25,000.00 S $ $ S - $ $ - $ - $ - $ - $ S $ 25,000,00 Other: Market Study 20 JGL Food Services Consultants $ 25,000.00 $ 14,008.12 $ 39,008.12 $ $ $ 5 - $ $ 5,000.00 $ 15,341.45 $ 9,333.33 $ 9,333.34 $ 3 $ - Other: Special Inspections IL Testing 21 "multiple vendors"-* $ 100,000.00 $ - $ 100,000.00 S $ $ S - $ $ - $ 1.091.78 $ 9,068.29 $ 29,088.04 $ 20,000.00 $ 20,000 00 $ 207751.89 Other: Tax Study OBIT i Property Tax 22 Mark Hugh $ 10,000.00 $ - $ 10,000.00 $ $ $ 5 $ $ $ - $ - $ - $ S 10,000.00 $ - Contingency 231,Na $ 18.369.00 $ 4,519.04 $ 22,888.04 5 $ $ 5 S $ $ - $ - S $ 5 $ 22.888.04 Subtotal - Other Development Costs 24 S 2,100,000.00 ; 70,629.23 S 2,029,370.77 S 133,025.87 S 66,494.78 $ 127.010.28 $ 71,300.90 $ 175,327.19 $ 188 074.91 $ 156 512.41 $ 181,351.94 $ 143,152.71 $ 37,978.98 S 389,345,75 S 359,795.05 Total - Capital Costs 25 $15.300,000.00 $ 350,000.00 $15,650.000.00 $ 133,025.87 S 66.494.78 $ 127,010.29 S 71.300.90 S 175.327.19 S 188,074.91 S 156,512.41 S 930.740,09 S1.638.599.25 S 3,803,366.98 S 4.496.007.75 S 3,863,639.59 Operating Costs Capital Campaign 26 Na $ 700,000.00 $ - $ 700.000.00 $ 308,745.40 $ 30,851.84 $ 30.803.38 $ 32.698.90 $ 30.965.87 $ 40.755.01 $ 38.863.42 $ 42.129.19 $ 43.579.85 S 35,000.00 $ 35-000.00 $ 3060714 Total Operating Costs 27 S 700 000.00 $ S 700,000.00 S 308,745.40 S 30.851.84 S 30,803.38 S 32,698.91 S 30,965,17 $ 40,751,01 $ 38,863.42 $ 42,129.19 $ 43,579,85 $ 35.000.00 S 35,000.00 S 30,607.14 Total Project Costs 28 $16,000,000.00 1 S 350 000.00 $16 350,000.00 $ 441.771.27 S 97.346.62 S 157.813.66 S 103,999.80 S 206 293.06 $ 228,829.92 $ 195,375.83 $ 972,869.28 1 $1.682,179.10 S 1838,366.98 S 4,531,007.75 rS37L, 146.73 Accumulative S 441.771.27 1 S 539.117.89 1 S 696.931.55 1 S 1.35 i $1.007.224A1 1 S1.236.054.33 1 $1.431,430.16 1 $2.404,299.44 54 1 S 7.924.845,521 S12.455.853.27 1 31 Page 1 of 2 Packet Pg. 27 2.1.c Edmonds Senior Center Edmonds Waterfront Center - Cash Flow Projection Cash Recei is 12/31 /2019 Description Ln • Secured funding Pledges Not Available In 2020 Balance to Raise Available Funding Received as of 1213112017 1st qtr 2018 2nd qtr 2018 3rd qtr 2018 4th r 2016 qtr 1st 2019 qtr 2nd qtr 2019 3rd qtr 2019 4th qtr 2019 1st qtr 2020 2nd qtr 2020 Jul -Oct 2020 Community Leadership Rick Slaves 30 $ 4,200,000.00 $ S $ 4,200,000.00 $ - $ - $ - $ - S $ - $1,000,000.00 $3,000,000.00 $ $ 200,000.00 $ $ otlter 31 $ 2,670,824.40 $ (627,000.00) S $ 2,043,824.40 $ 253,165.00 $ 35,249.00 $ 11,249.00 $ 41,734.84 S1,092,832.16 $ 6,249.00 $ 43,249.00 $ 78,341.00 $ 348,985 06 $ 45,000,00 $ 45.000.00 $ 42,770,34 Board 32 $ 405,322.01 $ (40,400.00) S $ 364,922.01 $ 211,528.97 $ 4,975.70 $ 4,700.00 $ 7,500.00 $ 26,567.34 $ 900.00 $ 2,950.00 $ 62,700.00 $ 19,450.00 $ 5,000,00 $ 5,00000 $ 13,650.00 CommunityCtunpalpn 33 $ 391,894.92 $ (9,485.74) S $ 382,409.18 $ 171,227.78 $ 14,495.00 $ 10,146A3 $ 850.00 S 72,175.00 S 20,769.00 $ 3,950.00 $ 15,400.00 $ 67,524.54 $ 2,000,00 $ 2,000.00 $ 1,871.43 Government 300 Appropriation 34 $ 1,250,000.00 $ $ $ 1,250,000.00 S - $ $ $ S $ S - $ - $ - $ - $ 1,250,000.00 $ - state Gudltsng Comnuinitles Grata 35 $ 2,250,000.00 $ $ $ 2,250,000.00 S $ $ $ $ S S - $ $ $ - $ 2,250,000.00 $ State Appropriation 36 $ 500,000.00 $ $ $ 500,000.00 $ $ $ $ $ $ $ - $ - $ $ - $ 500,000.00 $ Verdant 37 $ 154,000.00 $ $ $ 154,000.00 $ $ $ $ $ 5 S - $ 25,000.00 $ $ 129,000.00 $ - $ Foundations Anduin Foundation 39 $ 100,000.00 $ $ $ 100,000.00 S $ - $ 5 $ S 100,000.00 S $ - $ $ - $ $ C Keith BirkenfaId CharitableTrwt 39 S 350,000.00 $ $ $ 350,000.00 S 350,000.00 $ - S `w S S - 3 - $ $ $ $ S 0 & 0 Charitable Fund $ 250,000.00 $ $ $ 250,000.00 $ $ S S S $ S 250,000 00 $ $ $ - $ S Edmonds Arts Festival d! $ 50;000.00 $ $ $ 50.000.00 S $ 5 50.000.00 S S $ $ $ - $ $ - $ S - Hazel Milles Foundation i1 S 500,000.00 $ $ - $ 500,000.00 S $ - $ 5 $ $ $ $ $ $ 500,000.00 $ S - Norcllffe Foundation 1Z $ 750,000.00 $ $ $ 750,000.00 $ $ $ $ $ $ S $ $ 750,000.00 $ - $ S - Yam" Foundation $ 77,000.00 $ $ $ 77,000.00 $ 40,000.00 $ S S $ 17,000.00 S S $ 5,000.00 $ 15,000.00 $ - $ S Other M S 11,000.00 $ $ $ 11,000.00 $ - $ S S S - $ $ 10,000.00 $ - $ 1,000.00 $ - $ S Interest & Investments $ 44,845.66 $ $ $ 44,845.66 S $ $ 5 5 404.73 S 4,078.96 S 10,580.39 $ 9,322.11 $ 20,459.47 $ $ $ - Bank Loan 46 $ - $ $ 2,000,000.00 $ 2,000,000.00 S $ $ $ S $ - S - $ - $ - $ - $ S 2,000,UM-01 I= WaterfrontLOaiisZ der. LLC R S 250,000.00 $ $ - $ 250,000.00 S $ S - S S $ $ $ $ $ $ 5 250.000.00 Funding Gap 48 $ $ 821,998.75 $ 821,998.75 S $ $ 5 S o $ - $ - $ - $ 250,000,00 $ 250,000.00 S 321,993-75 IntarfundLena from Reserves 4RI IS $ I $ - 5 125.000.00 S S c S (50.000.00) S (75.000.00) $ s S - $ - I $ S Tatat Cash Receipts !0 1 21a 204,886.99 1 t 676,tIBS.7 s $16,350,09t1.90 $1,150,921.75 s U,719.79 ; 76,095.0 $ 60,111M.84 ;1 15l,lT933 s 56,91111111.1116 1 s1.340 72l.39 fS wis3.N I s1.2ZZ-419A7 i s 1 131,900A0 s atselr ft= I 3 L630 29D 32 Funding Gap - Line 48 (Potential sources of funding currently being pursued to eliminate the funding gap and reduce or eliminate borrowing) Feed Me Hospitality $ 50,000.00 Tulalip Tribe $ 250,000.00 Premera $ 750,000.00 Major Donors $ 11000,000.00 Total $ 2,050,000.00 O E O LL O L. 1L C O E t t� O Q Packet Pg. 28 Page 2 of 2 2.1.c as L O 4;; o E $ s c — oo 0 ~ a - N L- ate' _ d tko O m U = 0o CO � IA 4-0 L . I N {.i �� E a, M VN c 3 �7 C O L IA O M N dl �y W ;;, = L 7"1 CiA V41 ++ CCD c •� a-+ CL N NLU 7 O V f- E„?°�'. cba (n ai M � 0 a SaEi N LLL O N Packet Pg. 29 2.1.c Notes: Edmonds Waterfront Center Pro Forma updated January 8, 2020 The pro forma is based on the following assumption. Edmonds Senior Center (ESC) began construction of the Edmonds Waterfront Center (EWC) building June 2019. ESC will operate offsite for a fifteen months period at various locations around town and will reopen in the new EWC October 1, 2020. Revenues • Membership Dues & Program Service Fees (line 1) —This revenue source has been in the $150,000 range the past few years (the four year average was $149,830). Once the new building is placed in service this figure is expected to rise based on higher attendance figures and increases in the cost of an annual membership. • Rental Income (line 2) — Once the new EWC opens ESC anticipates high demand for the Edmonds Waterfront Center as a rental venue. The estimate is based on a study by JGL Food Service Consultants and meetings with Feedme Hospitality and Restaurant Group, the caterer selected for the new Edmonds Waterfront Center building. a • Food Services Income (line 3) —This is a new revenue source. The estimate is based on ongoing negotiations with Feedme Hospitality and Restaurant Group, the caterer selected for the new Edmonds o Waterfront Center building. _J L • BuildingUsage Fee - City of Edmonds line 4 — This figure represents roughly 25% of the insurance utility g Y ( ) g p g Y Y c and maintenance costs (short and long-term) of the new building. The actual share will be negotiated v with the city sometime after the start of construction. This figure does not included any labor costs. o • Thrift Store (line 5) —This revenue source has been in the $155,000 range the past few years (the four year average is $155,599). Better foot traffic and extended hours have increase sales substantially at the Centers interim location at the Westgate Shopping Center. E L • Government Fees & Grants (line 6) — ESC currently receives $75,000 a year from Snohomish County and L° $75,000 from the City of Edmonds. The pro forma assumes a $10,000 increases in 2021 and a 3% per year ° a - increase thereafter. w • Contributions, Gifts & Grants (line 7) —This revenue source has been in the $155,000 range the past few years (the four year average is $154,463). The primary source of funding from this revenue source is a three year grant from the Verdant Health Commission for $116,000 per year that funds the center's social r worker and a part-time registered nurse. Q • Fundraising (line 8) — The past few years ESC has split its fund raising efforts between operations and the Edmonds Waterfront Center capital campaign. In 2015 and 2016 operations received $31,938 and $33,219 respectively; this figure jumped to $52,624 in 2017 followed by $65,376 in 2018 and $112,787 in 2019. Once the capital campaign is complete fundraising will focus on operations. Through stewardship, efforts will be made to transition capital donors to annual operating donors. The Centers fundraising program will be expanded to include an annual campaign, major gifts, and planned giving. ESC also anticipate significant savings on the expense side by holding all fundraising events at the Edmonds Waterfront Center instead of renting other venues. Packet Pg. 30 2.1.c Expenses • Wages & Benefits (line 13 thru 15) — ESC will add four new position bringing the total number of employees to thirteen including six full-time and seven part-time employees; this increases the number of FTE's to 10.2. The key additions are a receptionist, fundraiser, rental manager and building superintendent with the goal of insuring the new center is staffed appropriately. • Supplies & Equipment (line 16) — Adjustment made for increased activity and operating hours. • Professional Services (line 17) — Adjustment made for increased IT support. • Communications (line 18) — Adjustment made for increased activity. • Travel (line 19) —Adjustment made for increased activity. • Advertising (line 20) — Adjustment made for increased activity related to building rentals and the thrift store. • Operating Rentals & Leases (line 21) — The thrift store has a three-year lease at the Westgate Shopping Center, it expires December 31, 2021. There is also an offsite rental allowance for other ESC activities that begins April 1, 2019 and runs for a 18 month period through September 30, 2020. In 2022 with the expiration of the Westgate lease the leasing cost should drop to historic levels. • Insurance (line 22) — The estimated cost of insurance is based on a quote by the centers insurance carrier, NPIP. • Utility Services (line 23) — Adjustment made for increased building size, activity and operating hours. • Repairs & Maintenance (line 24) —The City of Edmonds has been responsible for the vast majority of repair and maintenance costs on the existing building. ESC will assume full responsibility for repairs and maintenance on the new building. Maintenance costs should be reasonable with most major systems in the building under warranty during the first five -years of operation at the new EWC. • Miscellaneous (lines 25-27) — Adjustment made for increased activity. A provision has also been made for Unrelated Business Income Tax and state taxes related to taxable activities at the EWC. Other • Pledges Receivable (line 31) — See attached schedule. • Fundraising - Capital Retirement (line 32) —The Center will continue its capital fundraising efforts to insure repayment of any construction related debt. Excluding Leadership gifts from the public (gifts in excess of $25,000) the Center received $197,799 from 188 individuals and businesses in 2017, $145,359 from 146 individuals and businesses in 2018 and $193,644 from 202 individuals and businesses in 2019. • Debt Service — Bank (line 33) - The pro forma assumes ESC will borrow $2,000,000 at 3% from a commercial bank secured by a City of Edmonds CD; this will be repaid over a 7-year period ending 12/31/2027. • Debt Service — Other (line 34) — Debt service on the EWC Loan Fund, LLC. This assumes $250,000 borrowed at 3% payable over a 5-year period. • Capital Reserves (line 35) —These funds will be set aside to insure the Edmonds Waterfront Center has sufficient long-term funding to cover major repair and maintenance of the building. Payments would be deferred during the center's first fifteen months of operation. • Net Return (after payments on debt and capital reserves) (line 36) —The net return provides a reasonable cushion should revenues fall below or expenses exceed expectations. Depending on the size of the surplus and the wishes of the ESC's Board of Directors some of these funds could be directed towards operating reserves, capital reserves, debt retirement, program enhancements and/or additional staffing. Packet Pg. 31 2.1.c Edmonds Waterfront Center Rentals Updated January 8, 2020 Description total total rental % rental gross gross dates rentals rate potential estimate Peak Season Saturday Base Rate 20 20 100.0% $ 4,500 $ 90,000 $ 90,000 Sunday Base Rate 20 12 75.0% $ 2,500 $ 50,000 $ 30,000 Sunday Non -Profit Rate 3 $ 2,000 $ 6,000 Friday Base Rate 20 10 60.0% $ 1,500 $ 30,000 $ 15,000 Friday Non -Profit Rate 2 $ 1200 $ 2,400 Off Season Saturday Base Rate 30 24 80.0% $ 3,500 $ 105,000 $ 84,000 Sunday Base Rate 30 12 60.0% $ 2,500 $ 75,000 $ 30,000 Sunday Non -Profit Rate 6 $ 2,000 $ 12,000 Friday Base Rate 30 9 50.0% $ 1,500 $ 45,000 $ 13,500 Friday Non -Profit Rate 6 $ 1,200 $ 7,200 Peak Season Total 60 47 78.3% $ 170,000 $ 143,400 Off Season Total 90 57 63.3% $ 225,000 $ 146,700 Other Rentals * I unknown $ 60,000 Grand Total 150 104 69.3% $ 395,000 $ 350,100 * 2nd Floor Multi -Purpose Rooms & Banquet Room (Mon-Thur) r a Packet Pg. 32 2.1.c Edmonds Senior Center Edmonds Waterfront Pledge Aging Updated January 8, 2020 Description Total Current Yr 2021 2022 2023 2024 2025 Donor 1 5,520.34 5,520.34 0.00 0.00 0.00 0.00 0.00 Donor 2 48,000.00 18,000.00 10,000.00 10,000.00 10,000.00 0.00 0.00 Donor 3 11,250.00 11,250.00 0.00 0.00 0.00 0.00 0.00 Donor 4 800.00 400.00 400.00 0.00 0.00 0.00 0.00 Donors 1,250.00 1,250.00 0.00 0.00 0.00 0.00 0.00 Donor 6 4,000.00 1,000.00 1,000.00 1,000.00 1,000.00 0.00 0.00 Donor 7 12,000.00 7,000.00 5,000.00 0.00 0.00 0.00 0.00 Donor 8 40,000.00 10,000.00 10,000.00 10,000.00 10,000.00 0.00 0.00 Donor 9 40,000.00 10,000.00 10,000.00 10,000.00 10,000.00 0.00 0.00 Donor 10 3,000.00 1,000.00 1,000.00 1,000.00 0.00 0.00 0.00 Donor 11 500,000.00 0.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 Donor 12 9,600.00 2,400.00 2,400.00 2,400.00 2,400.00 0.00 0.00 Donor 13 15,000.00 3,000.00 3,000.00 3,000.00 3,000.00 3,000.00 0.00 Donor 14 2,000.00 2,000.00 0.00 0.00 0.00 0.00 0.00 Donor 15 200,000.00 200,000.00 0.00 0.00 0.00 0.00 0.00 Donor 16 40,000.00 10,000.00 10,000.00 10,000.00 10,000.00 0.00 0.00 Donor 17 25,000.00 25,000.00 0.00 0.00 0.00 0.00 0.00 Donor 18 75,000.00 50,000.00 25,000.00 0.00 0.00 0.00 0.00 Donor 19 2,000.00 2,000.00 0.00 0.00 0.00 0.00 0.00'. Donor 20 2,857.17 571.43 571.43 571.43 571.43 571.45 0.00 Total 1,037,277.51 360,391.77 178,371.43 1 147 971.43 146,971.43 103,571.45 100 000.00 Packet Pg. 33 2.1.d Edmonds Senior Center Statement of Financial Position December 31, 2019 and December 31, 2018 li?escription Line Unrestricted � TRestrlempocted 1 12I31/2019 I 12131l2098 rily Total Total+Change ,Assets Current assets Cash (Note 1) 1 263,598.79 15,725.91 279,324.70 205,005.74 74,318.9 Accounts receivable {Note 2) 2 19,272.00 0.00 19,272.00 19,411.36 (139.3 Inventory 3 26,560.00 0.00 26,560.00 26,560.00 0.0 Other assets (Note 3) 4 30,983.73 0.00 30,983.73 35,361.86 (4,378.1 Total current assets 5 340,414.52 16,725.91 356,140.43 286,338.96 69,801.4 Capital campaign assets Cash (Note 1) 6 0.00 4,200,230.94 4,200,230.94 1,483,576.54 2,716,654.4 Pledges receivable 7 0.00 1,039,177.51 1,039,177.51 434,617.57 604,559.9 Total capital campaign assets 8 0.00 5,239,408.45 5,239,408.45 1,918,194.11 3,321,214.3 Property and equipment Equipment & building improvements 9 107,821.50 0.00 107,821.50 341,365.01 (233,543.5 Construction in progress (pre -development) 10 3,487,085.68 0.00 3,487,085.68 631,055.34 2,856,030.3. Accumulated depreciation 11 (55,820.49) 0.00 (55,820.49) (182,828.48) 127,007.9! Total property and equipment 12 1 3,539,086.69 0.00 3,539,086.69 789,691.87 2,749,494.8; Total Assets 13 1 3,879,601,.21 6,256,134.36 9,134,636.67 2,994,124.94 0,140,610.6; Liabilities and Net Assets Current liabU ttos Accounts payable & accrued expenses (Note 4) 14 8,615.24 0.00 8,615.24 69,772.27 (61,157,0, Short term note 15 0.00 0.00 0.00 0.00 0.0( Prepaid memberships 16 13,452.50 0.00 13,452.50 17,005.00 (3,552.5( Accrued vacations 17 12,174.83 0.00 12,174.83 12,174.83 0.0( Total current liabilities 18 34,242.57 0.00 34,242.57 98,962.10 (64,709.5; Longterm liabilities None 19 0.00 0.00 0.00 0.00 0.0( Net assets (Note 5) Beginning balance 20 960,856.82 1,934,316.02 2,895,172.84 1,566,570,09 1,328,602.7° Net gain (loss) from operations 21 (29,524.84) (75,000.00) (104,524.84) 1,986.01 (106,510.8E Net gain (loss from non -operating activities) 22 2,913,926.66 3,395,818.34 6,309,745.00 1,326,616.74 4,983,128.2E Total net assets 23 3,845,258.64 5,255,134.36 9,100,393.00 2,895,172.84 6,205,220.1E Total Liabilities & Net Assets 24 3,879,501.21 6,266,134.36 9,134,635.67 2 994,124.94 1 6,140 610,63 a Page 1 of 6 Packet Pg. 34 2.1.d Edmonds Senior Center Notes to the Financial Statements December 31, 2019 and December 31, 2018 Total j Total [ Change Note 1 Cash Checking/savings 1 296,952.66 15,725.91 312,678.57 75,505.75 237,172.8 RBC Wealth Management 2 (37,861.61) 4,200,230.94 4,162,369.33 1,610,141.53 2,552,227.8 Undeposited funds 3 4,052,74 0.00 4,052.74 2,520,00 1,532.7 Petty cash/advances 4 410.00 0.00 410.00 370.00 40.0 PayFal 5 45.00 0.00 45.00 45.00 0.0 Ameri nse Financial 6 0.00 1 0.00 0.00 0.00 0.0 Total 7 263,698.79 1 4,21 956.86 4 479 555.64 1,688,502.28 2,790,073.3 15,725.91 Cafe 4,200,230.94 Capital Campaign Note 2 Accounts receivable City of Edmonds 8 6,250.00 0.00 6,250.00 6,250.00 0.01 Snohomish County 9 12,500.00 0.00 12,500.00 12,500.00 0.01 Other receivables 10 522.00 0.00 522.00 661.36 139.31 Total 11 19,272.00 0.00 19,272.00 19,411.36 139.3i Note 3 Other assets Prepaid insurance 12 6,965.65 0.00 6,965.65 10,489.25 (3,523.61 Prepaid postage 13 217.01 0.00 217.01 62.70 154.3 Other prepaid Muses 14 23,801.07 0.00 23,801.07 24,809.91 (1,008.8, 1.Total 15 30 903.73 0.0Q 30 983.73 35 361.86 4 378.1 Note 4 Other liabilities Payroll faxes 16 6,177.19 0.00 6,177.19 6,229.27 (52.OE Payables 17 0.00 0.00 0.00 57,896.32 (57,896.3, Prepaid rental deposits 18 0.00 0.00 0.00 2,230.00 (2,230.0( Rental damage deposits 19 0.00 0.00 0.00 2,450.00 (2,450.0( Sales tax payable 20 2,001.55 0.00 2,001.55 966.68 11034.81 Other federal taxes 1 21 436.50 1 0.00 1 436.50 1 0.00 436.5( Total 1 22 8,615.241 0.00 8,616.241 00,772.27 61,157.0w Note 6 Balance Board Net Change Net Assets Balance Descri tion 12/31/2018 Transfers Released 12/3112019 TemporarFly eee#rieted net assets Reserves 23 0.00 0.00 0.00 0.00 0.0( Subtotal - Oerating 24 U11 0.00 0.00 0.00 O.Qc Capital campaign Cash 25 1,483,576.54 0.00 5,870,908.53 (3,154,254,13) 4,200,230.94 Pledges 26 434,617.57 0.00 604,559.94 0.00 1,039,177.51 Cafe events 27 1 16,121.91 0.00 0.00 396.00 15,725.91 Subtotal - Non -operating 28 1,034,316.02 0.00 8,475 468.47 (3164 660.13) 6,266,134.3� Subtotal - Temporarily orari restricted net assets 29 1,934,316A2 0.00 6,476,468.47 3,164,650.13, 6,255134.36 Unrestricted net assets Unrestricted 30 960,856.82 0.00 (270,248.31) 3,164,660.13 3,845,258.64 Subtotal - Unrestricted net assets 31 960 856.82 1 0,00 270,240.31 3154,660.13 1 3,845,258.64 Total 1 32 1 2,896,172.84 1 0.00 1 6,206,220.16 1 0.001 0,100,393.00 a Page 2 of 6 Packet Pg. 35 2.1.d Edmonds Senior Center Statement of Activities For the Period Ending December 31, 2019 Line) Unrestricted I Temporarily I Grand Public Support and Revenue from Operations Contributions, Gifts & Grants Membership dues 1 33,949.00 0.00 33,949.00 Government grants 2 150,000.00 0.00 150:000 DO Other contributions, gifts & grants 3 215,861.55 0.00 215,861.55 Net assets released from restrictions 4 75,000.00 (75,000.00) 0.00 Total Contributions, Gifts & Grants 5 474 810.55 75,000.00 399,810.56 Program Service Revenue Recreational 6 43,383.04 0.00 43,383.04 Health & Wellness 7 35,437.48 0.00 35,437 48 Total: Pr ram Service Revenue 8 78,820.52 0100 78,820.52 Other Revenue Investment income 9 (243.98) 0.00 (243 98) Rental income 10 4,712.49 0.00 4,71249 Fundraising events 11 112,787.03 0.00 112,787,03 Sale of inventory 12 174,207.88 0.00 174,207.88 Miscellaneous revenue 13 9,727.37 0.00 9,727,37 Total Other Revenue 94 301 190.79 0.00 301,190,79 Total Public Support and Revenue from Operations 15 054,821.86 (76,000.00)1 779,821.86 Expenses Wages & Benefits Wages & salaries 16 385,040.36 0.00 385,040.36 Payroll taxes 17 32,636.59 0.00 32,636.59 Medical benefits 18 19,039.79 0.00 19,039 79 Total Wages & Benefits 19 436 716.74 0.00 438 718.74 Supplies & Equipment Office & operating supplies 20 28,665.93 0.00 28,665.93 Small tools & minor 2quipment 21 8,053.25 0.00 8,053.26 Total Su ties & Equipment 22 36,719.18 0.00 36 719.18 Services & Other Costs Professional services 23 54,177.74 0.00 54,177.74 Communications 24 14,695.64 0.00 14,695.64 Travel 25 5,029.76 0.00 5,029.76 Advertising 26 887.33 0.00 887.33 Operating rentals & leases 27 109,912.94 0.00 109,912.94 Insurance 26 20,241.18 0.00 20,241.18 Utility services 29 23,189.76 0.00 23,189.76 Repairs & maintenance 30 11,298.81 0.00 11,298.81 Miscellaneous 31 154,503.69 0.00 154,503.69 Total Services & Other Costs 32 $93,936.06 0.00 393,936.85 Cost of Sales 33 0.00 0.00 0.00 De reciation 34 16,973,93 0.00 10,973.03 Total Expenses 35 884 346.70 0.00 884 346.70 10hange in net assets from operations 1 361 1 .. (29-524-8411 175,000.001_004,0f14 Non -Operational Gains (Losses): Other non -operating gains (losses) $7 0.00 (396.00) (396.00) Contributions restricted for capital campaign 38 0.00 6,475,468.47 6,475,468.47 Net assets released from restrictions 39 3,079,254.13 (3,079,254.13) 0.00 Ca ltal campaign ennnses 40 165,327.47 0.00 j 165,327.47 Chan a In net assets from non -a retie activities 41 2,913 926.66 3,3%,818.34 6,309,746.00 Total change in net assets Net assets, beginning of year 1.-.44,1,3,846.2158.64 42 43 2,884,401, 2 960,856.82 3,320,818.34 1,934,316.02 6,205,220.16 2,896,172.84 Net assets end of period 5,256134.36 9100,393.00 a Page 3 of 6 Packet Pg. 36 2.1.d o! r O N M N 7 t r+ V w 10 CL n O r N CD 0 CO to 0 0 O CA CD 0 f0 Cl 0 G! d N't O O 0 to O 0 N N 0 0 0't CO O O M CO M O O O O CO C CO N O CA LO CO "gr uuj O CD qr M r 0 I N N CO et N M s} 6Fi 69 69 Efl V3 69 as 69 urs O O CO O O = O O O O O O O Cl O O N ti C N O COf3 r O to N CO � v m 69 69 69 69 69 69 4& 69 Y! U M o in V)N m O O M CO 0 WLO 0 CO — M M FL 0) o � O r 69 69. 69 69 69 69 V► 69 *w O � O O O f00 �f d N 1- O O LD m 0 It C N L 0 0 n n '= CO - (0 u) oD v m' tC V N CO CA m00 Cq L N N 0 r CO CD E9 d9 69 69 69 69 VP 69 4* U J J a C CL to O O Q -j o to Ca E U u W a' 5 c s ., w 3 c m o c72 U _E E c- E m E m= c o O O J CO U yCO E o > 0 0 0 C� U. c N N SD 7 w U CU N a .� C 7 C y � pC U_ U ' C N C � O OD 'V � C V1 > d N Ca pC U f6 0 C C O U L Vi a c CL CCC o E c E C Vl U O O Y CU U d a w l0 U rn 0 Y C � W Y f6CO E W +. E C7 > L Cl c m W N C7 Fu o t r m E . z w O Ch Q M. C N 0 to � to COO' U7 � m O O x xy r� to m Cl) t- r r r N C N N � 69 64 41! E9 f/i Vi COO O O COD COO Ifi r Cn 1n N N CO O N CO OItOD N � CD VT t, o OQ !D N lqm Co LO CO LO N O N CD M d' N M d' 69 69 69 6N 64 410- i9 0 0 0 C 0 0 0 N C CD aA CO C Cq O O NNto�tiM(O m N r u! m _O E9 69 69 6A 69 {f3 fh tC m V) m C W O U m tw° CD C W 0 0 0 x w e c C)U a. 'a E m c 6 0 u U O 0 2 G. u! c r CD yo v U a o m o rn to H d' O O M N 61k Page 4 of 6 Packet Pg. 37 2.1.d Edmonds Senior Center Statement of Activity for Budgeted Operations For the Period Ending December 31, 2019 Description Lionel Dec Actuals I YTD Actuals l % of Trot 1 I YTD Budget) Variance 1 Public Support and Revenue from Operations Contributions, Gifts & Grants Membership dues 1 0.00 33,949.00 4.35% 36,000.00 (2,051.00) Government grants 2 12,500.00 150,000.00 19.22% 150,000.00 0.00 Other contributions, gifts & grants 3 10,372.64 215,861.55 27.67% 144,500.00 71,361.55 Net assets released from restrictions 4 0.00 0.00 0.00% 0.00 0.00 Total Contributions, Gifts & Grants 5 22,872.64 399,810.55 51.24% 330,500.00 69,310.55 Program Service Revenue Recreational 6 2,567.48 43,383.04 5.56% 54,000.00 (10,616.96) Health & wellness 7 1,409.25 35,437.48 4.54% 39,000.00 3,562.52 Total Program Service Revenue 8 3,976.73 78,820.52 10.10°% 93,000.00 14,179.48 Other Revenue Investment income 9 10.70 174.09 0.02% 600.00 (425.91) Rental income 10 0.00 4,712.49 0.60% 9,000.00 (4,287.51) Fundraising events 11 6,100.00 112,787.03 14.46% 80,500.00 32,287.03 Thrift store 12 17,985.22 174,207.88 22.33% 195,000.00 (20,792.12) Miscellaneous revenue 13 1 210.60 1 9.727.37 1 1.25% 3,900.00 5,827.37 Total Other Revenue 14 24,306.52 301,608.86 38.66% 289,000.00 12,608.86 Total Public Support and Revenue from Operations 15 51,155.89 780,239.93 100.00% 712,500.00 67,739.93 Expenses Wages & Benefits Wages & salaries 16 30,019.04 385,040.36 49.35% 358,574.00 (26,466.36) Payroll taxes 17 2,507.69 32,636.59 4.18% 29,738.00 (2,898.59) Medical benefits 18 1,279.97 19,039.79 2.44% 22,868.00 3,828.21 Total Wages & Benefits 19 33,806.70 436,716.74 55.97% 411,180.00 25,536.74 Supplies & Equipment Office & operating supplies 20 1,210.64 28,665.93 3.67% 36,000.00 7,334.07 Small tools & minor 2guipment 21 1,042.60 8,053.25 1.03% 1,500.00 6,553.25 Total Supplies & Equipment 22 2,253.24 36,719.18 4.71% 37,500.00 780.82 Services & Other Costs Professional services 23 2,503.64 54,177.74 6.94% 42,000.00 (12,177.74) Communications 24 1,210.62 14,695.64 1.88% 15,000.00 304.36 Travel 25 377.02 5,029.76 0.64% 1,500.00 (3,529.76) Advertising 26 0.00 887.33 0.11 % 300.00 (587.33) Operating rentals & leases 27 10,753.75 109,912.94 14.09% 103,881.00 (6,031.94) Insurance 28 1,393.13 20,241.18 2.59% 24,900.00 4,658.82 Utility services 29 455.82 23,189.76 2.97% 14,700.00 (8,489.76) Repairs & maintenance 30 126.96 11,298.81 1.45% 11,400.00 101.19 Miscellaneous Program activity - trips, recognition, etc 31 325.71 8,662.35 1.11 % 15,600.00 6,937.65 Printing/public information 32 513.83 14,782.00 1.89% 18,000.00 3,218.00 Bank & merchant fees 33 783.51 10,019.16 1.28% 10,500.00 480.84 Taxes & licenses 34 463.39 4,111.23 0.53% 4,500.00 388.77 Other 135 1 815.55 1 15.532.77 1 1.99%1 13.950.00 1,582.77 Total Services & Other Costs 36 19,722.93 292,540.67 37.49% 276,231.00 16,309. 77 Total Expenses 37 55,782.87 765,976.59 98.17% 724,911.00 41,065.59 Chan a in Net Assets, Budgeted Operations 38 4,626.98 14,263.34 1 1.83% 12,411.00 26,674.34 a Page 5 of 6 Packet Pg. 38 2.1.d * m I V I O I r Q. N � �r � I I Q 1 i f I f 1 I � w t L 1 I ``% y U. � f I I I I I 1 i 0 0 0 0 o 0 0 0 C o W co mr N N 40 iR d). '? E1 � Page 6 of 6 Packet Pg. 39 2.1.e N N (O In O O O b y N O h h O %n h N to W C O V YJ A Y O N O h N CO (O O N W W N h O M M h h h N W h 0) O N h (D CO '(F - N M (, N r 0) 0) CO N Y) Y7 N CO 0) 0) O) 16 CO r O N WA 7 O ('7 r a Y N O r N r h h D1 N CO m N r r I+) 7 0) 0 N N r N r r V' M M1% CO O V N ((pp CO h CO O 00 O N 'q r O h 0 W M O In Y) M O O W v CO C N 0 O) a N M A W (0 N N OAf_ OD N � v Cl) h S OC Cl) N O r N M M m W N A N cc G r CWC (O O) M O w r r CW7 O r N N N N r M r r a y N In CO 0) (p O r N V N Y) Cn N r N M O O CO r O O O e- CS Cl) N (O - CO CO t0 r N N W r Cb (O M m'r ? n (O P% h M N n OD (O O M N O r O V u') 0) (O h a p (O O r N N r Co41 hCn d' W (WO (Mn Or 7 N h r r V) (V r C C(V N N M Z. N M v O) Y) R Co Y) 0) N 'Q Y) It W W O O O (D O Cl O N 0) .. 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O I°- 0) H Q Packet Pg. 45 Financial Institution Senior Center Bank Loan Comparison Other Investment Rate Loan Rate Loan Fees Fees Other I First Financial NW Bank I $ 2,000,000 Start at 1.68% CD Rate + 2% $ 10,000 $1,500 Move all banking activity to FFNW Cashmere Bank $ 2,000,000 5 bps above LGIP Floating, start at 4.75% $1,000 Federally Taxable, no prepayment penalty WaFd Bank option A $ 2,000,000 2% 3.12% $50K annually $ 5,000 Prepayment fee that will cover the bank's loss incurred from prepayment WaFd Bank option B $ 2,000,000 1% 3.12% $25K annually $ 5,000 Prepayment fee that will cover the bank's loss incurred from prepayment WaFd Bank option B $ 2,000,000 0% 3.12% M annually $ 5,000 Prepayment fee that will cover the bank's loss incurred from prepayment r Q Packet Pg. 46 2.1.g AL TERM SHEET February 28, 2020 Farrell Fleming Executive Director Edmonds Senior Center dba Edmonds Waterfront Center 220 Railroad Ave Edmonds, WA 98020 Dear Farrell: First Financial Northwest Bank First Financial Northwest Bank (FFNWB) is pleased to provide you with this Term Sheet to assist with the construction of the Edmonds Waterfront Center. The following terms and conditions are for proposal purposes only and do not constitute any form of loan approval. TYPE OF CREDIT: (a) Line of Credit (b) Term Loan BORROWER: Edmonds Senior Center LOAN AMOUNT: Not to exceed $2,000,000 PURPOSE OF LOAN: To assist with the construction of the Edmonds Waterfront Center COLLATERAL: Assignment of a Certificate of Deposit (CD) from the City of Edmonds n-p-en.ed-at-FFN-W- -B for-the-loa-n-amo-u-nt INTEREST RATE: The loan rate will be a 2.0% margin over the pledged CD rate from the City of Edmonds. Any adjustment made to the term and rate of the pledged CD, our Bank loan rate will continue to maintain a 2% margin. TERM and AMORTIZATION: (a) Draws allowed on the line of credit until October 31, 2020. (b) The loan balance at November 1, 2020 will be fully amortize over 7 years. REPAYMENT: (a) Monthly Interest payable on the line of credit. (b) Monthly principal and interest when the loan is termed out. To coincide with the principal balance during the term out, the pledged CD will step down proportionately to the loan principal balance beginning with November 1, 2020 and annually thereafter. LOAN FEE: 0.5% of loan amount 207 wells Avenue S. Renton, WA 98057 I PO Box 1.1.30 Renton, VIA 98067 j Tel 425.687.4600 Member FDIC I Toil -tree 866.372.1200 ; www.ffnwbxorn 12 i°r"r�'oeiz r a Revised 8/24/15-hy/ss Packet Pg. 47 2.1.g Tta First Financial Northwest Bank OTHER FEES: Other fees will include documentation and process of no more than $1,500 and if our loan documents require outside counsel, these attorney fees will be borne by the borrower. COMPENSATING BALANCE REQUIREMENT: It is customary for FFNWB to provide loan services to our depository customers. City of Edmonds to bring in an additional $2MM in funds to secure the loan. In addition, Edmonds Senior Center to move all their operating bank accounts to FFNWB. FINANCIAL REPORTING: Borrower to provide audited financial statements on an annual basis when completed. OFFER EXPIRATION: March 31, 2020 This letter is not a commitment to lend funds, and shall not be construed as such. It is an initial outline of rates, term and structure. First Financial Northwest Bank retains sole discretion to underwrite said application in accordance with our guidelines and standards. We appreciate the opportunity to make this proposal to you and hope it lays the foundation for a long �2 and mutually satisfactory relationship. m Sincerely, E E L d r.+ Y m Z Michael C. Lum U- U- FVP-Commercial Banking Sales Manager r First Financial Northwest Bank m E cc. Dalen Harrison, Chief Banking Officer ..x Daniel Hatch, Commercial Relationship Manager Q 207 Wells Avenue S. Renton, WA 98057 1 PO Box 1.1.30 Renton, WA 98067 I Tel 4MeiS37,4600 FDIC Revised 8/24/15-hy/ss Toil•I'me866.372A200 I vnvw.ffnwbtonn EOwixounxo LENDER Packet Pg. 48 2.1.g ., First Financial Northwest Bank The Equal Credit Opportunity Act (ECOA) prohibits from discrimination against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age (provided the applicant has the capacity to enter into a binding contract); because all or part of the applicant's income derives from any public assistance program; or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act. The federal agency that administers compliance with this law concerning this creditor is: FDIC Consumer Response Center 2345 Grand Boulevard, Suite 100 Kansas City, MI 64108. NOTICE: ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW. I/WE HEREBY ACCEPT THIS TERM SHEET AS OUTLINED. Signature Farrell Fleming Signature Date Executive Director — Edmonds Senior Center Date Scott James Finance Director —City of Edmonds 207 Wells Avenue S- Renton. WA 98057 1 PO Box 1.1.30 Renton, WA 98057 i Tel 42 z.687,460 i I Toll -Free 866.372.1200 i wwwJfnwb,corra Member FDIC 101MLNMIBDERIMU LEN Revised 8/24/15-hy/ss Packet Pg. 49 2.1.h Cashmere Valley Bank Term Sheet (For Discussion Purposes Only) February 27, 2020 Re: Edmonds Senior Center (the "Borrower") Thank you for the opportunity to propose the following structure for the Edmonds Senior Center loan. Cashmere Valley Bank (the "Bank") has outlined general terms below for discussion purposes only. The following terms represent a cash -secured transaction between the Bank and the Edmonds Senior Center with the security pledged by the City of Edmonds, Washington (the "City"). The terms assume and depend on the scenario that the City is legally permitted under the statutes of the Revised Code of Washington to provide collateral in support of the Edmonds Senior Center loan. Material changes to the security of the loan would void the following terms. All terms are subject to credit approval and do not constitute a commitment to lend money. 1. Borrower: Edmonds Senior Center 2. Amount: up to $2,000,000 3. Tax Status: Federally Taxable 4. Purpose: The proceeds of the Loan will be used to provide construction financing for the Borrower's capital project. 5. Maturity: December 1, 2027 6. Loan Description: a. Interest Rate: The Loan would have a fully floating variable rate of interest equal to the Wall Street Journal Prime Rate. Currently, that rate would equal 4.75%. If the Wall Street Journal were to cease publishing the Prime Rate, a supplanting publisher or alternative rate index would be assigned. Interest would accrue on the outstanding principal balance of the Loan. Interest would accrue on the basis of actual days elapsed in a 365 day year. b. Terms: The Loan would mature on December 1, 2027. Interest on the Loan would be payable quarterly on each March 1, June 1, September 1 and December 1, beginning September 1, 2020 through and including the Maturity Date or date of prior prepayment of the Loan. Principal on the Loan would be payable quarterly on each March 1, June 1, September 1 and December 1, beginning March 1, 2021 through and including the Maturity Date or date of prior prepayment of the Loan. Packet Pg. 50 2.1.h Edmonds Senior Center TERM SHEET c. Security: The Loan would be secured with time deposits provided by the City in support of the Borrower's Loan. The Bank would require that the City maintains deposits with the Bank in an amount greater than or equal to the then outstanding principal balance of the Loan. d. Draws: The Loan would either be funded upfront or by draws made on the Loan facility. Draws could be made from the closing date of the Loan to October 30, 2020. At the close of the draw period, the Bank would provide the Borrower an amortization schedule reflecting all outstanding principal at that time. Draws could be made on any business day in an amount greater than or equal to $25,000. Draw proceeds would be wire transferred for the Borrower's benefit. For same day funding, draw requests would need to be received and confirmed by 11:OOAM. 7. Transferability: The Bank would hold the Loan with no intent to sell or transfer 8. Call Option: Should the spread between the Loan's interest rate and the underlying security be less than 1.00%, the Loan would be called and all principal and accrued interest would be due and payable immediately. 9. Prepayment: The Borrower may choose to prepay the Loan in whole or in part at any time without penalty. The Bank would prefer ten (10) days advance notice of any prepayment. Partial prepayment would be first applied to outstanding accrued interest with the balance applied to reduce principal. After a partial prepayment, the debt service schedule would be recalculated as mutually agreed upon, in writing, by the Borrower and the Bank to reflect either a reduction in the semiannual payment amount, or the earlier maturity date of the Loan. Within seven (7) business days of prepayment, the Bank shall provide to the Borrower and City a recalculated debt schedule. 10. Fees: A Loan Draw administration fee of $1,000 would be taken as a discount to the first draw. No other fees would be charged by the Bank. The Borrower would be responsible for all other costs of issuing the Loan. 11. Additional Terms: The City would be required to provide satisfactory documentation showing their ability to pledge funds as collateral for the Loan. The City would be responsible for all costs of obtaining the documentation. The Loan documents would be in the standard forms customarily required by the Bank for commercial funding and would include additional terms and conditions not discussed above. The Borrower would provide is annual financial report to the Bank during the period the Loan is outstanding and held by the Bank. At the date of closing of the Loan, the financial condition and credit of the Borrower and all other features of this transaction would be as represented to the Bank without material adverse change. In the event of adverse material changes in the credit worthiness of the Borrower, including litigation involving or claims filed against the Borrower, any Packet Pg. 51 2.1.h Edmonds Senior Center TERM SHEET future commitment would terminate upon notice by the Bank. Any future commitment would be non -assignable by the Borrower. 12. Approval: If selected to provide the financing, the Bank would review the Borrower's most recent 5-years of financial information as part of the credit approval process. The estimated time between being selected and credit approval is 3 weeks. Prior to closing, the Bank would require documentation from the City and its attorney satisfying the legal requirements to provide collateral accounts in support of the Borrower's project and to open and maintain the collateral accounts with the Bank. ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW. Respectfully, CASHMERE VALLEY BANK Authorized Representative: Tom Brown Vice President, Municipal Finance Manager 1400 112th Ave. SE, STE 100 Bellevue, WA 98004 (p) 425.688.3936 (f) 425.455.2494 tbrown@cvb.bank Packet Pg. 52 2.1.i ,S WaFd Bank Pete Sullivan Vice President 425 Pike Street Seattle, WA 98101 206-626-8111 pete.sulllvan@wafd.com February 27, 2020 Scott James Finance Director City of Edmonds 121 Sth Ave North Edmonds, WA 98020 scott.iames@edmondswa.gov Regarding: $2,000,000 Draw to Term Loan Dear Mr. James: We enclose a summary of terms and conditions outlining the proposed terms under which Washington Federal Bank (WA Fed Bank) may extend credit to the Edmonds Senior Center & City of Edmonds. Please note that this is not a commitment to lend. WA Fed Bank appreciates the opportunity to provide our financing proposal. Please call Pete Sullivan at 206-626-8111 to discuss any questions or comments you may have regarding our proposal. We look forward to working with you. Sincerely, A Pete Sullivan Vice President Packet Pg. 53 2.1.i Edmonds Senior Center & City of Edmonds LS_ �Financing Proposal WaFd Bank Parties to the Transaction: BORROWER: Edmonds Senior Center & City of Edmonds (the "Borrower") LENDER: Washington Federal Bank N.A. (the "Bank") The Facility: FACILITY: Draw to Term Loan (the "Credit Facility') FACILITY AMOUNT: $2,000,000 (not to exceed) CLOSING DATE: March 31, 2020 (estimated) ADVANCES Advances under the Credit Facility during the Draw Period may be requested on any banking day. REPAYMENT/MATURITY: The Borrower must pay the Credit Facility in semi-annual payments of accrued interest on June 1 and December 1, beginning 12/1/2020. Draw Period • The draw period is from Loan Closing to 12/1/2021. • Principal payments are not required during the draw period Term Loan Period • The Term Loan Period is from 12/2/2021 to 12/1/2028. • Principal payments on the Credit Facility shall be repaid annually each year on December 1, beginning 12/1/2022. The Credit Facility will mature, and all unpaid principal and interest will be due and payable at maturity on December 1, 2028. PREPAYMENT: The Borrower may prepay the Credit Facility at any time prior to maturity with a prepayment fee. The prepayment fee shall be in an amount sufficient to compensate the Bank for any loss incurred by it as a result of the prepayment, including any loss arising from the liquidation or reemployment of funds obtained by it to maintain the funds used to purchase the Credit Facility. INTEREST CALCULATION: All calculations of interest shall be made on a 30-day month and a 360- day year. 1 Packet Pg. 54 2.1.i SECURITY: The Credit Facility will be cash secured equal to the Credit Facility commitment level ($2 million), to be held at a Bank controlled account. CONVERSION TO TERM LOAN: On 12/2/2021, the balance of the Credit Facility will automatically convert to a 7 year fully amortizing term loan, provided the Borrower is not in default. Fees and Expenses: BANK ORIGINATION FEE: $50,000 LEGAL COUNSEL FEE: $5,000 — Hillis, Clark, Martin & Peterson Rates: INTEREST RATE: This rate is set and locked till closing. • This fixed interest rate will be from closing till 12/1/2028. Option A • Line of Credit Interest Rate: 3.12% (taxable) • Annual Fee: $50,000 due annually on April 15t, starting 4/1/2021. • CD Rate: 2.00% (reset annually at 100bps over the base rate) Option B • Line of Credit Interest Rate: 3.12% (taxable) • Annual Fee: $25,000 due annually on April 15t, starting 4/1/2021. • CD Rate: 1.00% (reset annually — this is the base rate) Option C • Line of Credit Interest Rate: 3.12% (taxable) • Annual Fee: $5,000 due annually on April 1", starting 4/1/2021 • CD Rate: 0% EXPIRATION: This proposal letter shall automatically expire on March 31, 2020. Covenants and Financial Reporting Requirements: COVENANTS: Usual and customary for transactions of this type. REPORTING REQUIREMENTS: The Borrower shall provide the following information and statements in form and content acceptable to the Bank: (a) Within 270 days after the close of each financial year of the Borrower, the complete audited financial statements of the Borrower. 2 JA EDMONDS W�kerfronk Center US WaFd Bank Packet Pg. 55 2.1.i Description of Basic Terms and Conditions DOCUMENTATION: Documentation will be usual and customary for transactions of this type, including: (a) A copy of the Resolution passed by the Council/Board authorizing the issuance of the Credit Facility; (b) A receipt of the original signed Note or Bond at closing; (c) The resolution or financing/bond purchase agreement ("Agreement"), prepared by bond counsel and subject to approval by Bank Counsel. i. The Agreement will include, but is not limited to, the terms and conditions outlined herein, as well as provisions that are customary and standard with respect to conditions precedent, representations and warranties, covenants, events of default and remedies; (d) An unqualified legal opinion of nationally recognized bond counsel, in form and substance acceptable to Bank and its legal counsel that: i. The resolution and all documents related to the Credit Facility have been properly adopted, authorized and executed; and ii. The resolution and all documents related to the Credit Facility constitute a legally binding obligation of the Borrower and enforceable according to their terms (subject to standard exceptions). W. Opinion of counsel that the term portion of the loan under the revolving line of credit option will be treated in parity with all other senior lien holders at the time of conversion. EVENTS OF DEFAULT: Usual and customary in transactions of this type including, without limitation the following: (a) Nonpayment of principal, interest, fees or other amounts; or a (b) Failure to perform or observe covenants/reporting requirements set forth in the loan documentation; (c) The Borrower must maintain a debt rating of Al or comparable. Description of the Process: THE PROPOSAL: This summary of terms is not a commitment. It represents a willingness on the part of the Bank to seek approval to provide the commitment indicated herein and consummate a transaction based on the terms and conditions outlined in the proposal and is subject to: (a) Final credit approval (see "Credit Process" below), (b) Such any due diligence as Bank may require, and (c) Agreement as to all final terms and conditions and satisfactory documentation thereof (including satisfactory legal opinions). 3 JA EDMONDS W�kerfronk Center US WaFd Bank Packet Pg. 56 2.1.i CREDIT PROCESS: The credit process will take approximately 4-weeks from the point at which the Bank is officially awarded the transaction and has in its possession all materials necessary to undertake a full credit analysis. Washington Federal is a Seattle based, FDIC insured financial institution with total assets in excess of $16 billion. Washington Federal and assigned contacts have specific experience in lending to governmental issuers. Contacts: BANK: Washington Federal Bank N.A. Pete Sullivan 425 Pike Street Seattle, WA 98101 206-626-8111 pete.sullivan@wafd.com BANK COUNSEL: Hillis Clark Martin & Peterson P.S. Brandon Pond 999 Third Avenue, Suite 4600 Seattle, Washington 98104 206.470-7623 brandon.pond@hcmp.com ement by the Borrower: By signing below, the Borrower agrees to engage the Bank to provide the Credit Facility pursuant to the terms and conditions stated in this proposal, including the Borrower's responsibility for the Bank's legal fees even if closing & funding does not occur. Please evidence your agreement with the foregoing by signing and returning a copy of this document to the Bank. Accepted and Agreed to: Edmonds Senior Center & City of Edmonds Signature: Printed Name: EDMONDS W�kerfronk Center 4 Date: US WaFd Bank Packet Pg. 57 2.1.i Disclosure: The transaction contemplated by this term sheet is an arm's length, commercial transaction between you and the Bank, in which the Bank (i) is acting solely as a principal and for its own interest; (ii) is not acting as a municipal advisor or financial advisor to you; (iii) has no fiduciary duty pursuant to Section 15B of the Securities Exchange Act of 1934 to you with respect to the transaction contemplated hereby and the discussions, undertakings and procedures leading thereto; and (iv) is not recommending that you take any action with respect to the transaction contemplated by this term sheet, and before taking any action with respect to the contemplated transaction, you should discuss the information contained herein with your own legal, accounting, tax, financial and other advisors, as it deems appropriate. The only obligations the Bank has to you with respect to the transaction contemplated hereby are set forth in this term sheet. If you would like a municipal advisor in this transaction that has legal fiduciary duties to you, you are free to engage a municipal advisor to serve in that capacity. This term sheet is provided to you pursuant to and in reliance upon the "bank exemption" provided under the municipal advisor rule of the Securities and Exchange Commission, Rule 15Ba1-1 etseq. This Term Sheet is not a commitment to lend, either expressed or implied, and does not impose any obligation on WA Fed. This Letter is merely a non -binding indication of interest in the referenced loan transaction. No oral agreement, past or future action, or course of conduct in relation to the referenced loan transaction, except by the mutual execution and delivery of the final loan agreement, will give rise to any obligation on the part of the parties. ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW. 5 EDMONDS 'Neterkont Center US WaFd Bank Packet Pg. 58