P:\Corporate\Comm\Commrec\mtgmemos\2009\April 14, 2009 SM\228th MOA 3-25-09.doc

DRAFT

INTERLOCAL AGREEMENT BETWEEN PORT OF SEATTLE AND CITY OF KENT

FOR S. 228

TH

GRADE SEPARATIONS

PURPOSE

This Agreement is entered into by and between the City of Kent (City), a

municipal corporation of the State of Washington and the Port of Seattle

(Port), a municipal corporation of the State of Washington, collectively known

as the Parties, to implement the Memorandum of Understanding among the

principle parties of the FAST Corridor by sharing funds to construct two grade

separations on S. 228

th

Street in Kent, Washington.

RECITALS

WHEREAS, the assurance of continued freight and passenger mobility

throughout Puget Sound is an issue of critical strategic importance to the City

and to the Port;

WHEREAS, projected growth in cargo volumes and the

implementation of commuter rail service by the Regional Transit Authority are

expected to generate more frequent mainline rail traffic, with a projected

increase in traffic congestion at many of the at-grade crossings along major

arterials;

WHEREAS, the Port, the State of Washington (State), King County

(County), the Port of Tacoma, the City , and other local jurisdictions have

developed and signed the Freight Action Strategy Memorandum of

Understanding (“FAST MOU”) which commits approximately Two Hundred and

Sixty Million Dollars ($260,000,000.00) for grade separation and other road

and rail improvements;

WHEREAS, the Freight Action Strategy Memorandum of

Understanding (“FAST MOU”) commits the Ports of Seattle and Tacoma to

jointly contribute seven percent (7%) of the estimated project costs;

WHEREAS, S. 228th Street is listed on Attachment B to the FAST

MOU as among FAST Corridor Phase II Projects for immediate

implementation;

WHEREAS, the S. 228TH Street Project (Project) calls for road

improvements along a three mile corridor, and for grade separations at the

Burlington Northern Santa Fe (BNSF) and Union Pacific (UP) rail lines;

WHEREAS, the first stage of the Project’s scheduled corridor

improvement (road improvements) is complete, open to traffic, and provides

access from the Kent valley up the west hill to I-5, the second stage of the

Project (grade separation at the BNSF) is currently under construction, and

the final stage of the Project, (grade separation at the Union Pacific) will

commence after completion of the grade separation at the BNSF;

Memorandum of Agreement - City of Kent and Port of Seattle

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WHEREAS, the grade separations of the Project, which will complete

the S. 228th Street corridor, are critical to address the impacts of increased

rail traffic resulting from the reopening of Stampede Pass to freight traffic,

and will specifically benefit the Port by providing a seamless connection

between the forty million square feet of warehouse and industrial space in the

Kent valley and the Port of Seattle and Sea-Tac Airport;

WHEREAS, the Project grade separations, while located on arterials

within the corporate limits of the City, will benefit all of the parties to the

FAST MOU by promoting the efficient movement of passengers and cargo

throughout the region;

WHEREAS, pursuant to the FAST MOU, the Port endorsed a 3.5%

funding participation toward the costs of the Project;

WHEREAS, the City and the Port agree on a proposed Port

contribution which will be 3.5% of the cost of the Project, based on the

estimated project cost at the time the FAST MOU was executed; and

WHEREAS, the Port’s 3.5% share of the Project cost is estimated to

be One Million One Hundred and Ninety Thousand Dollars ($1,190,000.00),

which shall be used for construction purposes only.

TERMS OF AGREEMENT

1. Scope of Work

1.1 Project Title: South 228th Street Union Pacific and BNSF

Railroad Grade Separations

1.2 Project Description: Construction of grade separations at both

the Union Pacific (UP) and Burlington Northern Santa Fe (BNSF) rail lines on

S. 228th Street to complete the S. 228th Street corridor between 84th

Avenue S. and Military Road/I-5. (See exhibits 1 through 3.)

1.3 Project Schedule: Construction of the BNSF grade separation

Project is currently ongoing and is scheduled for completion in October of

2009. Design work on the UP grade separation Project is scheduled to be

completed in 2009 with construction commencing in 2010 and completion in

2011.

1.4 Direct Costs of Construction - The direct costs of construction

include: mobilization, maintenance of traffic, temporary erosion and

sedimentation control, earthwork, pavement, drainage, structures, traffic

items (including signage, signalization, lighting, Intelligent Transportation

Systems, and pavement markings), retaining walls, landscaping,

environmental mitigation, and utilities as listed in the bid documents and

corresponding Schedule of Values.

Memorandum of Agreement - City of Kent and Port of Seattle

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2. TERMS AND CONDITIONS

2.1 At-Grade Railroad Crossings: Upon completion of the Project

grade separations at both the UP and BNSF railroad tracks, the existing at-

grade crossings will be permanently closed.

2.2 Lead Agency: The City shall be lead agency for the Project in

regard to State Environmental Policy Act and National Environmental Policy

Act compliance and responsible for obtaining all necessary permits. As lead

agency, the City shall be responsible for accomplishing all actions necessary

for the construction of the Project.

2.3 Consultants and Contractors: The City has already and shall in

the future retain consultants and contractors for Project purposes that

include, but are not limited to, design, right-of-way acquisition, and

construction of the grade separation Project. The City, at its sole discretion,

shall select, hire, or coordinate with other agencies to retain consultants or

contractors.

2.4 Value Engineering: A value engineering study was performed

on the BNSF grade separation portion of the Project. A value engineering

study will also be performed on the UP grade separation portion of the

Project.

2.5 Contact Persons: The parties to this Agreement shall designate

person(s) to act as liaison for the project. The contact persons shall meet

regularly as appropriate given the phase and status of the project.

2.6 Schedule: The City shall determine the schedule for the Project

based on funding, right of way acquisition and other items that dictate the

project schedule. The Port shall be notified of any schedule changes.

2.7 Progress Reports: The City shall forward progress reports to the

Port on a monthly basis. These reports shall review and update the status of

the Schedule of Values and expenditures of the Project. The progress reports

shall also identify any issues that can impact the scope, Project cost and

schedule and describe the action plan to resolve any issues.

2.8 Extra Work: If the City decides to make any change from the

design approved by the Port, the City will collaborate with the Port for any

new element of design that affects the Port’s anticipated benefit.

Memorandum of Agreement - City of Kent and Port of Seattle

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3. PAYMENT

3.1 Reimbursement: The City shall, in connection with any request

for reimbursement under this Section, provide the Port with the WSDOT

inspection-verified and approved Schedule of Values showing percentage of

completion on the items listed above. The Port agrees to reimburse the City

for 3.5% of the direct costs of construction for the Project, up to a maximum

amount of One Million, One Hundred and Ninety Thousand Dollars

($1,190,000.00), which includes any applicable taxes under the conditions

described below:

• All environmental review under SEPA and NEPA has been

successfully completed;

• All necessary permits have been obtained from regulatory

agencies;

• Approved Schedule of Values of the direct construction costs,

including:

- Monthly construction cash flow projections through the life

of the contract

- Monthly payment requests, including a detailed break down

of the direct construction costs

• The Project, or its component, has been completed in a manner

that is consistent to the with the plans and technical specifications

reviewed and approved by the Port

3.2 Progress Payments: The Port will make progress payments,

upon request of the City. These payments will be made in accordance with

the terms of this Agreement. The Parties agree that by making such

progress payments, the Port shall not waive its right to object to the

appropriateness of any Project expenditure. At the time of final audit for the

Project, the Parties shall make all required adjustments and these

adjustments shall be made and reflected in determining the amount of the

Port’s contribution to the funding for the Project.

3.3 Payment Schedule: The Port agrees to make payments for the

work by the City on the Project within thirty (30) days from the date of the

Port’s receipt of a billing for the Project from the City.

4. AMENDMENT

Either Party may request changes to the provisions contained in this

Agreement. Such changes to this Agreement shall be agreed upon and

incorporated by written amendment to this Agreement executed with the

same formalities as the Agreement.

Memorandum of Agreement - City of Kent and Port of Seattle

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5. NOTIFICATION

Any notice required or permitted to be given pursuant to this

Agreement shall be in writing, and shall be sent postage prepaid by U.S.

Mail, return receipt requested, to the following addresses unless otherwise

indicated by the Parties to this Agreement:

To the CITY: Project Engineer, S. 228

th

Street Grade Separations

City of Kent

400 W. Gowe Street

Kent, WA. 98032-5895

To the PORT: Project Manager

Port of Seattle

2711 Alaskan Way

Seattle, WA 98121

6. RECORDS RETENTION AND AUDIT

During the progress of the work and for a period not less than three

(3) years from the date of final payment to the City, the records and

accounts pertaining to the Project and accounting thereof are to be kept

available for inspection and audit by the Port and copies of all records,

accounts, documents, or other data pertaining to the Project will be furnished

upon request. If any litigation, claim, or audit is commenced, the records

and accounts along with supporting documentation shall be retained until all

litigation, claim, or audit finding has been resolved even though such

litigation, claim, or audit continues past the three year retention period. This

provision is not intended to alter or amend records retention requirements

established by applicable state and federal laws.

7. DISPUTES

The designated representatives herein under section 5.0, NOTIFICATION,

shall use their best efforts to resolve disputes between the Parties. If the

designated representatives are unable to resolve a dispute, then the

responsible project directors for each Party shall review the matter and

attempt to resolve it. If the project directors are unable to resolve the

dispute, the matter shall be reviewed by the department director or chief

executive officer of each Party or his or her designee. The Parties agree to

exhaust each of these procedural steps before seeking to resolve disputes in

a court of law or any other forum.

Memorandum of Agreement - City of Kent and Port of Seattle

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8. EFFECTIVENESS AND DURATION

This Agreement is effective upon the date of recording and will remain in

effect until October 31, 2013, unless otherwise amended or terminated.

9. TERMINATION

10.1 Either party may terminate this Agreement at any time upon

thirty (30) days written notice. If either Party decides to terminate this

Agreement, the Port shall reimburse the City for all costs payable under this

Agreement and all non-cancelable obligations that the City incurred prior to

termination. For the purposes of this Agreement, “non-cancelable

obligations” are defined as those costs that the City is obligated to pay as of

the day that either Party provides notice that it is terminating this

Agreement.

11. INDEMNIFICATION AND HOLD HARMLESS

11.1 Each of the Parties, shall protect, defend, indemnify, and save

harmless the other Party, its officers, officials, employees, and agents, while

acting within the scope of their employment as such, from any and all costs,

claims, judgment, and/or awards of damages, arising out of, or in any way

resulting from, each of the Party’s own negligent acts or omissions. No Party

will be required to indemnify, defend, or save harmless the other Party if the

claim, suit, or action for injuries, death, or damages is caused by the sole

negligence of the other Party. Where such claims, suits, or actions result

from the concurrent negligence of the Parties, the indemnity provisions

provided herein shall be valid and enforceable only to the extent of each

Party’s own negligence.

11.2 Each of the Parties agrees that its obligations under this section

extend to any claim, demand and/or cause of action brought by, or on behalf

of, any of its employees or agents. For this purpose, each of the Parties, by

mutual negotiation, hereby waives, with respect to the other Party only, any

immunity that would otherwise be available against such claims under the

Industrial Insurance provision of Title 51 RCW.

11.3 The indemnification, hold harmless, and/or waiver obligation

described in this section shall survive the termination of this Agreement. In

any action to enforce the provisions of the Section each party shall be

responsible for its own costs and attorneys’ fees.

Memorandum of Agreement - City of Kent and Port of Seattle

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12. VENUE

12.1 This Agreement shall be deemed to be made in the County of

King, State of Washington, and the legal rights and obligations of the CITY

and PORT shall be determined in accordance with the laws of the State of

Washington. All legal actions in connection with this Agreement shall be

brought in the County of King, State of Washington.

IN WITNESS WHEREOF, the Parties hereto have executed this

Agreement which shall be effective upon the date of recording.

PORT OF SEATTLE CITY OF KENT

___________________________ ____________________________

Tay Yoshitani, Chief Executive Officer Suzette Cooke, Mayor

Date: ________________ Date: ___________________

APPROVED AS TO FORM: APPROVED AS TO FORM:

__________________________ ________________________

Kent City Attorney Port of Seattle Legal Department

Date: ___________________ Date: _____________________

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Union Pacific Grade Separation—Phase 3