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06/25/2007 - Packet I - REVISED -- TIGARD WATER DISTRICT BOARD OF COMMISSIONERS MEETING Serving the Unincorporated Area Monday June 25, 2007 6:45 PM Tigard Public Library ry Second Floor Conference Room 13500 SW Hall Blvd. Tigard, Oregon AGENDA TIGARD WATER DISTRICT BOARD of COMMISSIONERS MEETING Serving the Unincorporated Area Tigard Public Library, Second Floor Conference Room 13500 SW Hall Blvd., Tigard, Oregon Monday, June 25, 2007, 6:45 p.m. Reception for Commissioners Delphine, Froude, Rhine and Zeider 6:45—7:00 a.m. 1. Call to Order, Roll Call and Introductions 2. Recognition of Commissioners Delphine, Froude, Rhine, and Zeider 3. Approval of Minutes—May 14, 2007 4. Visitor Comments 5. Budget Adoption Process for Fiscal Year 2007-2008 • Public Hearing • Adopt Budget • Resolution 07-01 6. Resolution 07-02— Consider a resolution authorizing an amendment to the 1993 Intergovernmental Agreement, and the execution of Tenants in Common Agreements and Bargain and Sale Deeds for the Water Building and Canterbury properties 7. Oregon law ORS 198.320 8. Water Supply Update—Dennis Koellermeier 9. IWB Update— George Rhine/Janet Zeider 10. Non-Agenda Items 11. Set next meeting date—July 2, 2007, at 7:00 p.m. at Tigard Public - Works - ANNEX, 9020 S.W. Burnham Street, Tigard Continued 12. Adjournment Executive Session: The Tigard Water District Board may go into Executive Session under the provisions of ORS 192.660(2)(d), (e),&(h)to discuss labor relations,real property transactions,and current and pending litigation issues.If an Executive Session is called to order, the appropriate ORS citation will be announced identifying the applicable statute.All discussions within this session are confidential; therefore nothing from this session may be disclosed by those present.Representatives of the news media are allowed to attend this Session, as provided by ORS 192.660(4), but must not disclose any information discussed.No Executive Session may be held for the purpose of taking any final action or making any final decision.Executive Sessions are closed to the public. r TIGARD WATER DISTRICT BOARD OF COMMISSIONERS Serving the Unincorporated Area Tigard Public Works—Annex 9020 SW Burnham Road,Tigard€. . Monday,May 14,2007 7:00 p.m. Members Present: Beverly Froude, George Rhine - ` Members Absent: None 4 `; 44. Staff Present: Brian Rager, Roger Dawes, Gr * . < Visitors: Virginia Babcock, Clark Balfo6aj4 � � and Wynne Wakkila 1. Call to Order,Roll Call and Introductions ` The Tigard Water District(TWD)meeting was called to order by Chair Froude at 7:25 p.m. All board members were in attendance. 2. Approval of Minutes—April 23,2007 The minutes of the April 23,2007 meeting were unanimously approved by the board. 3. Visitors Comments-None 4. Discussion of Responses to Questions with Attorney Balfour Mr. Balfour began with some history. About one year ago similar questions came up regarding the Canterbury property and the Intergovernmental Agreement("IGA"or"Agreement")that was signed back in 1993. In his letter of April 21, 2006, Mr. Balfour stated the Agreement was not clear and should be rewritten. The Agreement covers a 25 year period and there are 10-11 years left. Mr. Balfour thought the District and the cities need to anticipate these kinds of questions and update the Agreement. With regard to the Canterbury issue and the question as to the validity of the IWB representatives' vote at the April 11, 2007, IWB meeting,the TWD board is in a position of doing one of three things: • Make a motion to ratify the vote of the IWB representative to remove all doubt. • Indicate to the other members of the IWB that the TWD may be interested in,going forward with a property transaction as discussed, but only if the Agreement is amended or if there is a separate agreement that deals with this specific transaction as far as how the proceeds will be distributed and, in general, how the transaction will be handled. • Indicate to the IWB that the TWD wishes to decline the transaction. Tigard Water District 1 May 15, 2007 Draft Copy If the TWD board takes the third option, other IWB members will need to decide whether they want to oppose the TWD's decision. Mr. Balfour looked at the third alternative and what a court would do in his letter of April 26, 2006, and his letter of May 11, 2007. Mr. Balfour concluded it is probable a court would affirm the actions of the IWB. Mr. Balfour gave a brief history of the TWD and the process the cities of Tigard, Durham and King City went through in 1993 to withdraw from the TWD. The group at that time had a choice as to whether or not to segregate the water system assets by the boundary of each city, or to keep an integrated system. The cities and the remnant district(current TWD)voted to keep an integrated system. A report by Economic and Engineering Services, Inc. (EES)was produced that defined the types of assets in the integrated system. The report refers to both "system"assets and "other" assets. Mr. Balfour referred to his April 21, 2006, summary conclusions. He said if a court was looking at this, it would likely find the Intergovernmental Water Board could determine if a system asset continues to be necessary for the delivery of water. If not, it could classify it as an "other"asset by unanimous vote of the board. If the vote is not unanimous, then it would remain a"system" asset. The question is: Is the Canterbury site a system asset or not? Mr. Balfour also concluded a unanimous vote on that kind of reclassification appears to give veto power to any of the IWB members. However, a veto would have to be based on some reasonable analysis that the asset is necessary for system operations. If a member did not have such an analysis to establish the reasonable basis of the veto, a judge could say the party is unreasonably withholding their consent. Murray, Smith and Associates, an engineering firm, concluded a portion of the Canterbury property was necessary for water system improvements,but another portion was not. Mr. Balfour said it was his opinion a judge would be persuaded that consensus was reached at the January 22, 2007, TWD meeting concerning the disposition of the surplus Canterbury property, and the TWD's representative to the IWB was justified in his vote. With reference to tracking proceeds from a transaction, it is not entirely clear in the Agreement. Mr. Balfour commented that it is his opinion the intent of the Agreement is for the money to remain within the water system and not be distributed to the entities. Mr. Balfour then summarized portions of his May 11, 2007, letter to the TWD regarding the questions submitted from Julie Russell, Commissioner Radley, Lisa Hamilton-Treick, and Bert Cornick. Some of the questions discussed included: • Russell, Question 4, regarding the Water Building. Mr. Balfour commented the 1993 EES report, adopted by the Board, placed the headquarters building in the"other", or"non hydraulic" asset category. • Radley, Question 1, regarding changes to ORS-279 and the effect on property transactions. Mr. Balfour remarked ORS-279 does not apply to local governments with regard to surplus properties. Mr. Balfour summed up his comments by once again suggesting the three options listed above with regard to the Canterbury transaction. He also suggested again that the TWD recommend to the other IWB members that the Agreement be revised to better clarify how property and asset transactions should take place. Tigard Water District 2 May 15, 2007 Draft Copy Mr. Balfour proceeded to address specific questions presented to him. • Commissioner Radley asked for further clarification with regard to the"surplus"property issue and how ORS-279 may apply. Mr. Balfour suggested all TWD members obtain a copy of the 1993 EES report, as it provides a basis for how assets were defined. The Commissioner offered a copy of the Special Districts Association letter on this issue to Mr. Balfour and asked for his quick review. Mr. Balfour noted that ideally the board should become its own contract review board,but the statute is really only intended for personal property transactions. • Commissioner Rhine commented,with regard to the IWB discussion to make part of the Canterbury site"surplus property,"that since this property is not necessary for system operation, it would be deemed an"other" asset. As such,it could be argued the property should transfer directly to Tigard. Mr. Balfour replied the Agreement language is not completely clear on this issue, and this is another reason why the Agreement should be amended. He did conclude that ultimately the asset would become an asset of Tigard's. • Wynne Wykkila, citizen, asked if a special fund should be set up to allow Tigard to lease part of the Water Building for non-water purposes. Commissioner Rhine indicated the IWB is currently reviewing a proposed lease structure that would accomplish this, and proceeds from the lease would go into the Water Fund to be used throughout the entire water service area. Commissioner Rhine motioned to have the TWD board ratify the actions taken by the TWD's representative at the April 11, 2007, IWB meeting. Chair Froude seconded the motion. Commissioner Radley voiced opposition and advocated for the second option presented by Mr. Balfour. The board voted 3:1 in favor of the motion; Commissioner Radley opposed. 5. Water Supply Update—Brian Rager Drilling of the ASR well on the Price property(across from Alberta Ryder School)continues and the depth is now approximately 400 feet. The contractor has been setting the first piece of casing that will cover a depth of the first 300-400 feet. Once the casing is set,the driller will continue the drilling operation. It is estimated the finished depth of the well will be 1,000 feet, similar to ASR 2. In response to Chair Froude's inquiry about the site and future improvements,Mr.Rager responded the property is approximately 2.7 acres with a 2,000 square-foot building, a buried three million gallon reservoir, and an above-ground park. 6. IWB Update—George Rhine/Janet Zeider Commissioner Rhine,TWD representative on the IWB, stated the April 11,2007,IWB meeting minutes were changed. The change reflected there was a consensus reached among members, but no vote taken at the January 22,2007,TWD meeting with regard to the Canterbury proposal. Commissioner Rhine commented that Tigard attorney,Tim Ramis,provided the IWB with a draft of the First Amendment to the IGA for the rental/lease agreement of the Water Building. This topic will be discussed again at the June 13,2007,IWB meeting. Tigard Water District 3 May 15, 2007 Draft Copy 7. Non-Agenda Items Next Meeting—Monday,June 25,2007,7:00 p.m. Public Works Annex,9020 SW Burnham Street,Tigard,Oregon Commission Radley asked if other board members had an opportunity to look at Oregon law ORS 198.320. Chair Froude indicated that would be an agenda item for the June 25,2007, meeting. 8. Adjournment Commissioner Rhine motioned to adjourn,Commissioner Zeider seconded the motion, and the board voted unanimously to adjourn the meeting at 8:47 p.m. Joy Koss, TWD Recording Secretary Date: Tigard Water District 4 May 15, 2007 Draft Copy • MEMORANDUM T I GARD TO: Tigard Water District Board of Commissioners FROM: Roger Dawes - Financial Operations Manager RE: Audit of District Funds DATE: June 6,2007 During the budget hearing on April 30,2007, the question was asked regarding the last time the District had gone through an audit. After responding, because of the size of the District and the total amount of revenue and expenses, an audit was not required, one of the citizen budget committee members requested that money be budgeted for fiscal year 2007-08 to pay for having an audit completed on the District's financials. The attachments I have included will hopefully provide you with a understanding of the State requirements with regards to auditing and who can perform audits. All accounting for the District is recorded in a fund, separate of the City's funds. CC: Dennis Koellermeier Attachments: ORS 297— definitions for audits of public funds, copy of annual report in lieu of audit for TWD for FY 2005-06. Chapter 297—Audits of Public Funds and Financial Records Page 1 of 2 MUNICIPAL AUDIT LAW 297.405 Definitions for ORS 297.020, 297.230,297.405 to 297.740 and 297.990. As used in ORS 297.020, 297.230, 297.405 to 297.740 and 297.990: (1) "Accountants"means all accountants whose names are included in the roster prepared and maintained by the Oregon Board of Accountancy as required by ORS 297.670. (2) "Accounts"means all books,papers, files, letters and records of any nature or in any form used in conducting the affairs of the municipal corporation or in recording the transactions thereof. (3) "Board"means the Oregon Board of Accountancy. (4) "Fiscal affairs"means and includes all activities of any nature giving rise to or resulting from financial transactions, including compliance with legal requirements applicable to the operation of a municipal corporation. (5) "Municipal corporation"means a: (a) City; (b) County; (c) Special district; (d) Corporation, except a municipal corporation established pursuant to ORS 441.525 to 441.595, upon which is conferred powers of the state for the purpose of local government; or (e) Public corporation, including a cooperative body formed between municipal corporations. (6) "Public corporation"means a corporation the operation of which is subject to control by local government or its officers and which, at least in part, is organized to serve a public purpose of, and receives public funds or other support having monetary value from, such government. [1977 c.774 §2; 1979 c.286 §7; 1987 c.423 §1; 2005 c.443 §15] 297.410 [Repealed by 1977 c.774 §27] 297.415 Periodic financial reports required. The Secretary of State shall require that periodic reports of financial condition and financial operations be prepared and submitted to the Secretary of State by municipal corporations in such form and at such times as the Secretary of State considers necessary. The periodic reports may be required of all municipal corporations. [1977 c.774 §3] 297.420 [Repealed by 1977 c.774 §27] 297.425 Annual audits required; contracts related to audits and accounting systems; compensation; expenses; subjects of audit. (1) Except as provided in ORS 297.435, the accounts and fiscal affairs of every municipal corporation shall be audited and reviewed at least once each calendar or fiscal year, and more often if considered advisable by the governing body or managing or executive officer of the municipal corporation. The audits and reviews shall be made by accountants pursuant to contracts entered into by the governing body, or managing or executive officer, and accountants, or by the Secretary of State pursuant to a duly adopted ordinance or resolution, a copy of which shall be furnished to the Secretary of State. (2)Municipal corporations may enter into contracts, or by ordinance or resolution request the Secretary of State, to develop or revise and install accounting systems. (3) All contracts for conducting audits and reviews or for developing or revising and installing accounting systems shall be in a form prescribed or approved by the Secretary of State. A copy of each completed contract shall be furnished the Secretary of State. (4)(a) The compensation for audits and reviews performed by accountants shall be as agreed upon between the governing body, or managing or executive officer of the municipal corporation, and the accountant, and shall be paid in the same manner as other claims against the municipal corporation are paid. (b) The compensation for installation of accounting systems performed by parties under subsection(2) of this section, other than the Secretary of State, shall be as agreed upon between the governing body, or managing or executive officer of the municipal corporation, and the other party, and shall be paid in the same manner as other claims against the municipal corporation are paid. (5) All expenses and costs incurred by the Secretary of State in conducting audits and reviews, and installing accounting systems for municipal corporations shall be borne by the municipal corporation for which a particular audit, review or installation is made. The expenses and costs shall be paid to the Secretary of State in the same manner as other claims against the municipal corporation are paid. http://landru.leg.state.or.us/ors/297.html 5/21/2007 Chapter 297 Audits of Public Funds and Financial Records Page 2 of 2 (6) Audits and reviews required by this section shall inquire into: (a) The principles of accounting and methods followed by the municipal corporation in recording, summarizing and reporting its financial transactions and financial condition; (b) The accuracy and legality of the transactions, accounts,records, files and financial reports of the officers and employees of the municipal corporation as they relate to its fiscal affairs; and (c) Compliance with requirements, orders and regulations of other public officials which pertain to the financial condition or financial operations of the municipal corporation. [1977 c.774 §4; 1987 c.143 §5; 2001 c.26 §1] 297.430 [Repealed by 1977 c.774 §27] 297.435 Exemption from audit; financial statement and bonding required. (1) Subject to ORS 297.445, the provisions of ORS 297.425 shall not apply to any municipal corporation, except a county or a school district, if, with respect to any one calendar year or fiscal year,the municipal corporation meets all the conditions in either subsection (2) or(3)of this section. (2)(a) Total receipts from all sources and expenditures for all purposes,including money obtained from borrowing and money expended for debt retirement, did not exceed $150,000 for the year; (b).The municipal corporation has submitted financial statements for the year to the Secretary of State within 90 days following the end of the year; and (c)A certificate has been submitted with the financial statements stating that the principal responsible official of the municipal corporation was covered during the entire year by a fidelity or faithful performance bond in an amount at least equal to the total amount of money received by the municipal corporation during the year. (3)(a) Total receipts from all sources and expenditures for all purposes, including money obtained from borrowing and money expended for debt retirement, exceeded $150,000 but did not exceed$500,000 for the year; (b) The municipal corporation has submitted financial statements for the year to the Secretary of State within 180 days following the end of the year, and the financial statements have been reviewed by an accountant or the Secretary of State in accordance with standards prescribed by the Secretary of State; and (c)A certificate has been submitted with the financial statements stating that the official responsible for receiving and disbursing moneys on behalf of the municipal corporation was covered during the entire year by a fidelity or faithful performance bond in an amount at least equal to 10 percent of the total receipts for the year,but not less than $10,000. (4) The financial statements required by this section shall be in a form prescribed by the Secretary of State and shall be considered audit reports for the purpose of the filing fee required by ORS 297.485. (5) The provisions of ORS 297.466 apply to financial statements for cities reviewed under subsection (3) of this section. [1977 c.774 §5; 1981 c.245 §1; 1997 c.401 §1] 297.440 [Repealed by 1977 c.774 §27] 297.445 Petition to audit municipal corporation exempt under ORS 297.435; notice to corporation; audit. (1) ORS 297.435 does not apply to a municipal corporation for any calendar or fiscal year if a petition requesting an audit, signed by residents of the municipal corporation who are subject to taxes, fees, assessments or other charges levied by the municipal corporation, is filed with the Secretary of State within six months of the end of the fiscal year for which the audit is requested. In a municipal corporation with a population of 150 or less,the petition must be signed by at least 10 residents. In a municipal corporation with a population of more than 150,the petition must be signed by at least 30 residents. (2)The Secretary of State shall give notice of the petition to the governing body of the municipal corporation within 10 days of its receipt.Upon receipt of notice of the petition from the Secretary of State,the governing body or managing or executive officer of the municipal corporation shall immediately comply with the provisions of ORS 297.425. If a copy of a signed contract between the governing body or managing or executive officer and an accountant, or a duly authorized ordinance or resolution requesting an audit by the Secretary of State;is not received within 30 days of the dispatch of notice of petition, the Secretary of State shall cause an audit and review to be made of the accounts and fiscal affairs of the municipal corporation designated in the petition. (3) The costs incurred by the Secretary of State in making the audit and review shall be borne by the municipal corporation, and shall be paid to the Secretary of State in the same manner as other claims against the municipal corporation. [1977 c.774 §6; 1987 c.143 §6; 2003 c.326 §1] http://landru.leg.state.or.us/ors/297.html 5/21/2007 Chapter 297—Audits of Public Funds and Financial Records Page 1 of 2 297.465 Standards for audits; form; filing. (1)The Secretary of State, in cooperation with the Oregon Board of Accountancy, and in consultation with the Oregon Society of Certified Public Accountants, shall prescribe the minimum standards for conducting audits of municipal corporations, preparing the resulting audit reports and expressing opinions upon the financial condition and results of operation for the period under audit. The expression of opinion shall be signed by the accountant signing the contract, or in the case of a partnership or professional corporation,by a partner or stockholder who is an accountant as defined in ORS 297.405, who has personally conducted the audit to an extent satisfactory to the Secretary of State and to the municipal corporation. (2)The municipal corporation shall be furnished with a written audit report, containing a signed expression of opinion, in the form prescribed by the Secretary of State. A copy of the audit report shall be furnished to each person who was a member of the governing body at the end of the calendar or fiscal year and to each member of the current governing body. Other copies shall be furnished the municipal corporation as are requested by the chairperson of the governing body or the managing or executive officer. The accountant shall furnish the audit report to the municipal corporation within six months after the close of the calendar or fiscal year under audit, except that the Secretary of State, for good cause shown,may grant to the accountant a reasonable extension of time. (3)The municipal corporation shall file one copy of its audit report with the Secretary of State. The report shall be subject to review by the Secretary of State,who may also require submission of the working papers and audit programs of the accountant.If an audit, audit report or expression of opinion is found by the Secretary of State not to be in accordance with the prescribed standards,the Secretary of State shall request compliance. If the accountant fails to comply with the request,the Secretary of State shall so report to the Oregon Board of Accountancy,which thereupon may remove or suspend the name of the accountant from the roster required by ORS 297.670. (4)Audit reports or financial statements filed with the Secretary of State as required by ORS 297.405 to 297.555 shall include the names,mailing addresses and titles of the officers and members of the governing board of the municipal corporation. The report or statement of a special district shall include the name of its registered agent and the address of its registered office as provided by ORS 198.335 to 198.365. [1977 c.774 §8; 1979 c.646 §3] 297.466 Auditor statement required; procedure for determining and correcting deficiencies; withholding of state funds. (1) In performing an audit and review required under ORS 297.425,the accountant under contract with the municipal corporation or the Secretary of State,whoever performs the audit and review, shall determine if the municipal corporation has,or has not, followed generally accepted governmental accounting principles in reporting its financial condition and operations, established appropriate accounting systems and internal controls and substantially complied with legal requirements in conducting its financial affairs. The determination shall either be included in the signed expression of opinion or otherwise disclosed in the audit report required under ORS 297.465. (2)Upon receipt of an audit report under ORS 297.465 the governing body of a county or city shall determine the measures it considers necessary to correct any deficiencies disclosed in the report. The governing body shall adopt a resolution setting forth the corrective measures it proposes and the period of time estimated to complete them. (3) Within 30 days after a county or city files a copy of its audit report with the Secretary of State under ORS 297.465 a copy of the resolution prepared under subsection (2) of this section shall also be filed. Upon receipt of the audit report and the resolution, the Secretary of State shall either acknowledge the city or county's plans to correct deficiencies cited in the audit report or notify the county or city of those deficiencies which, if not corrected, could result in withholding of funds under this section. At the request of the governing body of the city or county the Secretary of State shall make suggestions for correcting those deficiencies. If the governing body of the county or city does not agree with the notification by the Secretary of State, it shall be granted an opportunity for a conference regarding the notification, audit determinations or corrective measures to be taken. (4)If the Secretary of State concurs with determinations made under subsection (1) of this section in two successive audits and reviews of the same county or city, and determines that the governing body of the county or city has not taken adequate action to correct the deficiencies cited in the notifications given under subsection (3) of this section, the Secretary of State may certify these facts to the State Treasurer,the Director of the Department of Revenue,the Director of Transportation and the Director of the Oregon Department of Administrative Services.'The certificate of the Secretary of State shall only be issued after notice, opportunity to be heard and hearing pursuant tolhe provisions of ORS chapter 183, governing contested cases.The hearing shall be held within the jurisdiction of the county or city. (5)Upon receipt of a certificate from the Secretary of State under subsection(4) of this section,the State Treasurer, the Director of the Department of Revenue,the Director of Transportation and the Director of the Oregon Department of Administrative Services shall withhold from distribution to the county or city 10 percent of the moneys otherwise to be distributed to it under ORS 221.770, 323.455, 366.762 to 366.768, 366.785 to 366.820, 471.805 and 471.810. The http://landru.leg.state.or.us/ors/297.html 5/21/2007 Chapter 297—Audits of Public Funds and Financial Records Page 2 of 2 moneys withheld shall be disbursed to the county or city only after the officer responsible for disbursement has received notice from the Secretary of State that the governing body of the county or city has taken action to follow generally accepted governmental accounting principles in reporting financial condition and operations and establish appropriate accounting systems and internal controls and will substantially comply with legal requirements in conducting its financial affairs. (6) The Secretary of State shall not issue a certificate under subsection (4) of this section for failure to follow generally accepted governmental accounting principles if a county or city has followed accounting practices authorized by state law. (7)As used in this section, "generally accepted governmental accounting principles"means those accounting principles sanctioned by recognized authoritative bodies such as the National Council on Governmental Accounting, the American Institute of Certified Public Accountants, the Financial Accounting Standards Board or their successors. [1979 c.646 §2; 1981 c.245 §3; 1987 c.143 §8] 297.470 [Repealed by 1977 c.774 §27] 297.475 Cancellation of request for Secretary of State assistance. Whenever any municipal corporation has made a request to the Secretary of State,pursuant to ORS 297.425, for the audit of its accounts and fiscal affairs, or for the installation of accounting systems, or both, the municipal corporation may cancel that request by ordinance or resolution adopted and furnished to the Secretary of State at least 90 days prior to the end of a calendar or fiscal year. [1977 c.774 §9] 297.480 [Repealed by 1977 c.774 §27] 297.485 Filing fees. (1)At the time an audit report,prepared by an accountant, is filed with the Secretary of State, as required by ORS 297.465,the municipal corporation shall pay to the Secretary of State a filing fee. The filing fee shall be determined by the total expenditures made by the municipal corporation for any and all purposes during the calendar or fiscal year audited, except that expenditures for principal of bonded debt,principal of short-term loans, principal of warrants redeemed which were issued during prior audit periods,transfers or loans between funds and turnovers of taxes or other trust moneys to other municipal corporations shall not be included in the total expenditures upon which the amount of the fee is based. (2) The filing fee to be paid shall be as indicated for those municipal corporations whose total expenditures fall within the classifications as follows: Over Not Over Fee $ 50,000 $ 20 $ 50,000 150,000 40 150,000 500,000 150 500,000 1,000,000 200 1,000,000 5,000,000 250 5,000,000 10,000,000 300 10,000,000 50,000,000 350 50,000,000 400 (3) Audit reports filed by the administrative office of the county, under ORS 328.465 (2), for school districts with less than 1,000 children according to the latest school census in the county, shall be considered one report for purposes of the filing fee required by this section. The filing fee shall be paid by the county administrative office and deducted pro rata from moneys due to the several school districts. [1977 c.774 §10; 1999 c.345 §1] http://landru.leg.state.or.us/ors/297.html 5/21/2007 Chapter 297 Audits of Public Funds and Financial Records Page I of 1 ROSTER OF AUTHORIZED ACCOUNTANTS 297.670 Board of Accountancy to prepare and maintain roster of authorized accountants. The Oregon Board of Accountancy shall prepare and maintain a roster of accountants authorized to conduct the municipal audits required by ORS 297.425. [Amended by 1981 c.83 §1] 297.680 Rules for establishing and maintaining roster of authorized accountants. The Oregon Board of Accountancy shall adopt by rule: (1) Procedures and qualifications for admitting applicants to the roster of authorized accountants referred to in ORS 297.670; (2) Procedures for reviewing the qualifications of accountants admitted to the roster for continuance on the roster; (3) Fees payable upon application for admission to the roster; and (4)Procedures for making the roster available to municipal corporations described in ORS 297.405 (5)which are subject to the Municipal Audit Law. [Amended by 1959 c.238 §2; 1965 c.332 §3; 1987 c.455 §1; 1999 c.309 §1; 1999 c.322 §34] 297.690 [Amended by 1965 c.332 §4; 1973 c.832 §2;repealed by 1987 c.455 §5] 297.700 [Repealed by 1959 c.238 §4] 297.701 Persons on roster on August 5, 1959; removal. Notwithstanding the repeal of ORS 297.700, any person who is on the roster referred to in ORS 297.670 on August 5, 1959, shall remain thereon subject only to removal under ORS 297.710. [1959 c.238 §5] 297.710 Removal of accountant from roster; reinstatement. (1) The Oregon Board of Accountancy, for cause, may remove from the roster the name of any person appearing thereon and may provide for the reinstatement thereof. (2)The board shall remove from the roster the name of any person appearing thereon if the person ceases to possess the qualifications described in ORS 297.680. If after such removal the board determines that such person later possesses such qualifications, the board may provide for the reinstatement of that person's name on the roster without an examination. [Amended by 1965 c.332 §5] 297.720 Biennial fee of accountants included on roster. Every auditor or accountant whose name is included on the roster of authorized accountants referred to in ORS 297.670 shall pay to the Oregon Board of Accountancy biennially a fee for continuance thereon. The fee shall be in an amount not to exceed $100 as determined by the board by rule. [Amended by 1971 c.217 §1; 1981 c.89 §13; 1987 c.455 §2] 297.730 Disposition of fees of board. The fees collected by the Oregon Board of Accountancy under ORS 297.670 to 297.740 shall be turned over to the State Treasurer who shall deposit the moneys in the General Fund to be credited to the Oregon Board of Accountancy for its use in carrying out the provisions of ORS 297.405 to 297.555 and 297.670 to 297.740. [Amended by 1981 c.83 §2] 297.740 Rules of board. The Oregon Board of Accountancy may adopt rules necessary to exercise its powers and duties provided in ORS 297.405 to 297.555 and 297.670 to 297.740. [Amended by 1981 c.83 §3; 1999 c.322 §35] http://landru.leg.state.or.us/ors/297.html 5/21/2007 J-C y , This 5 k Le/ L COMMERCIAL LEASE "'ICI u- -d ht-if BETWEEN THE INTERGOVERNMENTAL WATER BOARD AND /)dCkd a-S ars FYE- FOR THE WATER BUILDII �� a& I W B w. Date: ,2007 a.ch 0)1 Yh%s -( a1 Between: INTERGOVERNMENTAL WATER BOARD 7t�1)) b1 Ap..z LLI(L4 8777 SW BURNHAM STREET TIGARD, OR 97223 And: CITY OF TIGARD 13125 SW HALL BLVD. TIGARD, OR 97223 diseas.3. RECITALS 1. The City of Tigard is leasing the Water Building in the IWB and during the period of the lease wil responsibility for the maintenance of the propert3' 2. The Water Building has new Heating, Ventilatioi along with electrical, fire protection, and plumbic improvements were paid for by the City of Tigard,although such expenses are most often the responsibility of the property owner. 3. The City of Tigard's expense for the above mentioned systems necessitates and justifies a long term lease in order for the City to recover those expenditures. 4. In further consideration of the City of Tigard's contributions to the Intergovernmental Water Board,the Intergovernmental Agreement, and their investment in the entire cost of the abovementioned systems in the Water Building,the City of Tigard shall retain the First Right of Refusal if the Water Building property is designated as surplus and for sale by the IWB. AGREEMENT Landlord leases to Tenant and Tenant leases from Landlord the following described property(the"Premises")on the terms and conditions stated below: The leased Premises property includes the entire building and common areas including parking and all other improvements located at 8777 SW Burnham. Street,Tigard, Oregon, 97223. The Premises are as shown on Exhibit A. Page 1 of 13 IWB/City of Tigard Commercial Lease for the Water Building Section 1. Occupancy 1.1 Original Term. The term of this lease shall commence 2007, and continue through December 31,2018,unless sooner terminated or renewed as hereinafter provided. 1.2 Possession. Tenant's right to possession and obligations under the lease shall commence on .2 1.3 Renewal Option. If the lease is not in default at the time each option is exercised or at the time the renewal term is to commence,Tenant shall have the option to renew this lease for 2 successive terms of 5 years each, as follows: (1) Each of the renewal terms shall commence on the day following expiration of the preceding term. (2) The option may be exercised by written notice to Landlord given not less than 120 days prior to the last day of the expiring term. The giving of such notice shall be sufficient to make the lease binding for the renewal term without further act of the parties. Landlord and Tenant shall then be bound to take the steps required in connection with the determination of rent as specified below. (3) The terms and conditions of the lease for each renewal term shall be identical with the original term except for rent and except that Tenant will no longer have any option to renew this lease that has been exercised. Rent for a renewal term shall be the greater of (a)the rental during the preceding term or(b)a reasonable market rent. (4) If the parties do not agree on the rent within 90 days after notice of election to renew,the rent shall be determined by a qualified,independent real property appraiser familiar with comparable commercial rental values in the area. The appraiser shall be chosen by Tenant from a list of not fewer than five such individuals submitted by Landlord. If Tenant does not make the choice within five days after submission of the list, Landlord may do so. If Landlord does not submit such a list within 10 days after written request from Tenant to do so, Tenant may name as an arbitrator any individual with such qualifications. Within 30 days after his [her] appointment,the appraiser shall return his [her] decision,which shall be final and binding upon both parties. The cost of the appraisal shall be borne equally by both parties. 1.4 Premises Leased"As Is". Tenant agrees to accept the Premises in the current"as is" condition. Section 2. Rent 2.1 Base Rent. Rent will be calculated as set forth in attached Exhibit B describing rental costs and credits as agreed upon between Landlord and Tenant. As set forth in said Exhibit B, at the commencement of the Lease and through the duration of the initial term,Tenant shall pay Landlord$59,985.57 annually. Page 2 of 13 IWB/City of Tigard Commercial Lease for the Water Building 2.2 Rent Credits. Tenant has paid$177,000.00 for improvements to the building and shall receive an annual credit of$14,190.32 against the total annual rent of$74,175.89 for said expenses as shown in attached Exhibit B and in Section 2.1 above. If the Lease is terminated before the expense has been fully amortized, Landlord and Tenant shall agree to a method for allocating the remaining unamortized expenses. 2.3 Additional Rent. All taxes,insurance costs,utility charges that Tenant is required to pay by this lease, and any other sum that Tenant is required to pay to Landlord or third parties shall be additional rent. 2.4 Payment of Rent. Rent is due and payable annually in advance on July 15 of each year. Section 3. Use of the Premises 3.1 Permitted Use. The Premises shall be used for municipal government public works offices and related activities, and for no other purpose without the consent of Landlord, which consent shall not be withheld unreasonably. 3.2 Restrictions on Use. In connection with the use of the Premises, Tenant shall: (1) Conform to all applicable laws and regulations of any public authority affecting the premises and the use,and correct at Tenant's own expense any failure of compliance created through Tenant's fault or by reason of Tenant's use,but Tenant shall not be required to make any structural changes to effect such compliance. (2) Refrain from any activity that would make it impossible to insure the Premises against casualty,would increase the insurance rate,or would prevent Landlord from taking advantage of any ruling of the Oregon Insurance Rating Bureau, or its successor, allowing Landlord to obtain reduced premium rates for long-term fire insurance policies,unless Tenant pays the additional cost of the insurance. (3) Refrain from any use that would be reasonably offensive to other tenants or owners or users of neighboring premises or that would tend to create a nuisance or damage the reputation of the premises. (4) Refrain from loading the electrical system or floors beyond the point considered safe by a competent engineer or architect selected by Landlord. 3.3 Hazardous Substances. Tenant shall not cause or permit any Hazardous Substance to be spilled,leaked,disposed of, or otherwise released on or under the Premises. Tenant may use or otherwise handle on the Premises only those Hazardous Substances typically used or sold in the prudent and safe operation of the business specified in Section 4.1. Tenant may store such Hazardous Substances on the Premises only in quantities necessary to satisfy Tenant's reasonably anticipated needs. Tenant shall comply with all Environmental Laws and Page 3 of 13 IWB/City of Tigard Commercial Lease for the Water Building exercise the highest degree of care in the use,handling, and storage of Hazardous Substances and shall take all practicable measures to minimize the quality and toxicity of Hazardous Substances used,handled,or stored on the Premises. Upon the expiration or termination of this Lease, Tenant shall remove all Hazardous Substances from the Premises. The term Environmental Law shall mean any federal, state,or local statute,regulation, or ordinance or any judicial or other governmental order pertaining to the protection of health, safety or the environment. The term Hazardous Substance shall mean any hazardous,toxic, infectious or radioactive substance, waste, and material as defined or listed by any Environmental Law and shall include,without limitation,petroleum oil and its fractions. Section 4. Repairs and Maintenance 4.1 Landlord's Obligations. The following shall be the responsibility of Landlord: (1) Repairs and maintenance of the roof and gutters, exterior walls (including painting),bearing walls, structural members, floor slaps, and foundation. (2) Repair of sidewalks, driveways, curbs, parking areas, and areas used in common by Tenant and Landlord or tenants of other portions of the same building. (3) Repair and maintenance of exterior water, sewage, gas, and electrical services up to the point of entry to the leased Premises. (4) Repair of the heating and air conditioning system other than ordinary maintenance. 4.2 Tenant's Obligations. The following shall be the responsibility of Tenant: (1) Repair of interior walls, ceilings, doors, windows, and related hardware, light fixtures, switches,and wiring and plumbing from the point of entry to the Premises. (2) Any repairs necessitated by the negligence of Tenant, its agents, employees, and invitees, except as provided in Section 7.2 dealing with waiver of subrogation, but including repairs that would otherwise be the responsibility of Landlord under Section 5.1. (3) Ordinary maintenance of the heating and air conditioning system and any repairs necessary because of improper maintenance. (4) Any repairs or alterations required under Tenant's obligation to comply with laws and regulations as set forth in Section 4.2(1). (5) All other repairs to the premises which Landlord is not required to make under Section 5.1. 4.3 Landlord's Interference with Tenant. In performing any repairs, replacements, alterations, or other work performed on or around the Premises, Landlord shall not` Cause Page 4 of 13 IWB/City of Tigard Commercial Lease for the Water Building unreasonable interference with use of the Premises by Tenant. Tenant shall have not right to an abatement of rent nor any claim against Landlord for any inconvenience or disturbance resulting for Landlord's activities performed in conformance with the requirement of this provision. 4.4 Reimbursement for Repairs Assumed. If either party fails or refuses to make repairs that are required by this Section 5, the other party may make the repairs and charge the actual cost of repairs to the first party. Such expenditures by Landlord shall be reimbursed by Tenant on demand together with interest at the rate of TEN (10%) per annum from the date of expenditure by Landlord. Such expenditures by Tenant may be deducted from rent and other payments subsequently becoming due or, at Tenant's election, collected directly from Landlord. Except in an emergency creating an immediate risk of personal injury or property damage, neither party may perform repairs which are the obligation of the other party and charge the other party for the resulting expense unless at least 20 days before work is commenced, and the defaulting party is given notice in writing outlining with reasonable particularity the repairs required, and such party fails within that time to initiate such repairs in good faith. 4.5 Inspection of Premises. Landlord shall have the right to inspect the Premises at any reasonable time or times to determine the necessity of repair. Whether or not such inspection is made, the duty of Landlord to make repairs shall not mature until a reasonable time after Landlord has received from Tenant written notice of the repairs that as required. Section 5. Alterations 5.1 Alterations Prohibited. Tenant shall make no improvements or alterations on the Premises of any kind without first obtaining Landlord's written consent. All alterations shall be made in a good and workmanlike manner, and in compliance with applicable laws and building codes. Section 6. Insurance 6.1 Insurance Required. The Tenant as the managing partner of the Landlord will provide insurance as set forth in the December 1993 Intergovernmental Agreement. 6.2 Waiver of Subrogation. Neither party shall be liable to the other(or to the other's successors or assigns)for any loss or damage caused by fire or any of the risks enumerated in a standard fire insurance policy with an extended coverage endorsement, and in the event of insured loss,neither party's insurance company shall have a subrogated claim against the other. This waiver shall be valid only if the insurance policy in question expressly permits waiver of subrogation or if the insurance company agrees in writing that such a waiver will not affect coverage under the policies. Each party agrees to use best efforts to obtain such an agreement from its insurer if the policy does not expressly permit a waiver of subrogation. Section 8. Taxes; Utilities 8.1 Property Taxes. Tenant is a municipal government and statutorily exempt from property taxes,except as may be assessed by appropriate special districts and collected by the county Page 5 of 13 IWB/City of Tigard Commercial Lease for the Water Building assessor. Tenant shall pay as due all taxes on its personal property located on the Premises, if any. Tenant shall pay as due all real property taxes and special assessments if any,levied against the Premises. As used herein,real property taxes includes any fee or charge relating to the ownership,use,or rental of the Premises, other than taxes on the net income of Landlord or Tenant. 8.2 Special Assessments. If an assessment for a public improvement is made against the Premises,Landlord may elect to cause such assessment to be paid in installments, in which case all of the installments payable with respect to the lease term shall be treated the same as general real property taxes for purposes of Section 8.1. 8.3 Contest of Taxes. Tenant shall be permitted to contest the amount of any tax or assessment as long as such contest is conducted in a manner that does not cause any risk that Landlord's interest in the Premises will be foreclosed for nonpayment.Landlord shall cooperate in any reasonable manner with such contest by Tenant. 8.4 Proration of Taxes. If applicable,Tenant's share of real property taxes and assessments for the years in which this lease commences or terminates shall be prorated based on the portion of the tax year that this lease is in effect. 8.5 New Charges or Fees. If a new charge or fee relating to the ownership or use of the Premises or the receipt of rental therefrom or in lieu of property taxes is assessed or imposed, then,to the extent permitted by law, Tenant shall pay such charge or fee. Tenant,however, shall have no obligation to pay any income,profits, or franchise tax levied on the net income derived by Landlord from this lease. 8.6 Payment of Utilities Charges. Tenant shall pay when due all charges for services and utilities incurred in connection with the use, occupancy, operation, and maintenance of the Premises,including(but not limited to)charges for fuel,water, gas, electricity, sewage disposal, power,refrigeration,air conditioning,telephone, and janitorial services. If any utility services are provided by or through Landlord,charges to Tenant shall be comparable with prevailing rates for comparable services. If the charges are not separately metered or stated, Landlord shall apportion the charges on an equitable basis, and Tenant shall pay its apportioned share on demand. Section 9. Damage and Destruction 9.1 Partial Damage. If the Premises are partly damaged and Section 9.2 does not apply,the Premises shall be repaired by Landlord at Landlord's expense. Repairs shall be accomplished with all reasonable dispatch subject to interruptions and delays from labor disputes and matters beyond the control of Landlord and shall be performed in accordance with the provisions of Section 5.3. 9.2 Destruction. If the Premises are destroyed or damaged such that the cost of repair exceeds 50%of the value of the structure before the damage, either party may elect to terminate the lease as of the date of the damage or destruction by notice given to the other in writing ndt Page 6 of 13 IWB/City of Tigard Commercial Lease for the Water Building more than 20 days following the date of damage. In such event all rights and obligations of the parties shall cease as of the date of termination, and Tenant shall be entitled to the reimbursement of any prepaid amounts paid by Tenant and attributable to the anticipated term. If neither party elects to terminate, Landlord shall proceed to restore the Premises to substantially the same form as prior to the damage or destruction. Work shall be commenced as soon as reasonably possible and thereafter shall proceed without interruption except for work stoppages on account of labor disputes and matters beyond Landlord's reasonable control. 9.3 Rent Abatement. Rent shall be abated during the repair of any damage to the extent the premises are untenantable, except that there shall be no rent abatement where the damage occurred as the result of the fault of Tenant]. 9.4 Damage Late in Term. If damage or destruction to which Section 9.2 would apply occurs within one year before the end of the then-current term, Tenant may elect to terminate the lease by written notice to Landlord given within 30 days after the date of the damage. Such termination shall have the same effect as termination by Landlord under Section 9.2. Section 11. Liability and Indemnity 11.1 Liens. (1) Except with respect to activities for which Landlord is responsible,Tenant shall pay as due all claims for work done on and for services rendered or material furnished to the Premises, and shall keep the Premises free from any liens. If Tenant fails to pay any such claims or to discharge any lien,Landlord may do so and collect the cost as additional rent. Any amount so added shall bear interest at the rate of 10% per annum from the date expended by Landlord and shall be payable on demand. Such action by Landlord shall not constitute a waiver of any right or remedy which Landlord may have on account of Tenant's default. (2) Tenant may withhold payment of any claim in connection with a good- faith dispute over the obligation to pay, as long as Landlord's property interests are not jeopardized. If a lien is filed as a result of nonpayment, Tenant shall,within 10 days after knowledge of the filing,secure the discharge of the lien or deposit with Landlord cash or sufficient corporate surety bond or other surety satisfactory to Landlord in an amount sufficient to discharge the lien plus any costs, attorney fees, and other charges that could accrue as a result of a foreclosure or sale under the lien. 11.2 Indemnification. Tenant shall indemnify and defend Landlord, and Landlord shall indemnify Tenant,from any claim, loss,or liability arising out of or related to any [negligent] activity of Tenant on the Premises or any condition of the Premises in the possession or under the control of Tenant including any such claim, loss, or liability that may be caused or contributed to in whole or in part by Landlord's own negligence or failure to effect any repair or maintenance required by this lease.Landlord shall have no liability to Tenant for any injury, loss, or damage caused by third parties,or by any condition of the Premises. Page 7 of 13 IWB/City of Tigard Commercial Lease for the Water Building 11.3 Liability Insurance. The Tenant as the managing partner of the Landlord will provide insurance as set forth in the December 1993 Intergovernmental Agreement. Section 12. Quiet Enjoyment; Mortgage Priority 12.1. Landlord's Warranty. Landlord warrants that it is the owner of the Premises and has the right to lease them free of all encumbrances. Landlord will defend Tenant's right to quiet enjoyment of the Premises from the lawful claims of all persons during the lease term. 12.3 Estoppel Certificate. Either party will,within 30 days after notice from the other, execute and deliver to the other party a certificate stating whether or not this lease has been modified and is in full force and effect and specifying any modifications or alleged breaches by the other party. The certificate shall also state the amount of monthly base rent,the dates to which rent has been paid in advance,and the amount of any security deposit or prepaid rent. Failure to deliver the certificate within the specified time shall be conclusive upon the party from whom the certificate was required that the lease is in full force and effect and has not been modified except as represented in the notice requesting the certificate. Section 13. Assignment and Subletting No part of the Premises may be assigned,mortgaged,or subleased,nor may a right of use of any portion of the property be conferred on any third person by any other means, without the prior written consent of Landlord. This provision shall apply to all transfers by operation of law. Landlord may in its sole and arbitrary discretion not unreasonably withhold or condition such consent. Section 14. Default The following shall be events of default: 14.1 Default in Rent. Failure of Tenant to pay any rent or other charges within 10 days after written notice that it is due. 14.2 Default in Other Covenants. Failure of Tenant to comply with any term or condition or fulfill any obligation of the lease(other than the payment of rent or other charges)within 15 days after written notice by Landlord specifying the nature of the default with reasonable particularity. If the default is of such a nature that it cannot be completely remedied within the FIFTEEN (15) day period,this provision shall be complied with if Tenant begins correction of the default within the 15 day period and thereafter proceeds with reasonable diligence and in good faith to effect the remedy as soon as practicable. 14.3 Insolvency. Insolvency of Tenant; an assignment by Tenant for the benefit of creditors; the filing by Tenant of a voluntary petition in bankruptcy; an adjudication that Tenant is bankrupt or the appointment of a receiver of the properties of Tenant; the filing of any involuntary petition of bankruptcy and failure of Tenant to secure a dismissal of the petition within 30 days after filing; attachment of or the levying of execution on the leasehold interest Page 8 of 13 IWB/City of Tigard Commercial Lease for the Water Building and failure of Tenant to secure discharge of the attachment or release of the levy of execution within 10 days shall constitute a default. If Tenant consists of two or more individuals or business entities,the events of default specified in this Section 14.3 shall apply to each individual unless within 10 days after an event of default occurs, the remaining individuals produce evidence satisfactory to Landlord that they have unconditionally acquired the interest of the one causing the default. If the lease has been assigned,the events of default so specified shall apply only with respect to the one then exercising the rights of Tenant under the lease. 14.4 Abandonment. Failure of Tenant for 30 days or more to occupy the Premises for one or more of the purposes permitted under this lease,unless such failure is excused under other provisions of this lease. Section 15. Remedies for Default 15.1 Termination. In the event of a default the lease may be terminated at the option of Landlord by written notice to Tenant. Whether or not the lease is terminated by the election of Landlord or otherwise, Landlord shall be entitled to recover damages from Tenant of the default, and Landlord may reenter,take possession of the premises, and remove any persons or property by legal action or by self-help with the use of reasonable force and without liability for damages and without having accepted a surrender. 15.2 Reletting. Following reentry or abandonment,Landlord may relet the Premises and in that connection may make any suitable alterations or refurbish the Premises, or both, or change the character or use of the Premises,but Landlord shall not be required to relet for any use or purpose other than that specified in the lease or which Landlord may reasonably consider injurious to the Premises,or to any tenant that Landlord may reasonably consider objectionable. Landlord may relet all or part of the Premises, alone or in conjunction with other properties, for a term longer or shorter than the term of this lease,upon any reasonable terms and conditions, including the granting of some rent-free occupancy or other rent concession. 15.3 Damages. In the event of termination or retaking of possession following default, Landlord shall be entitled to recover immediately,without waiting until the due date of any future rent or until the date fixed for expiration of the lease term,the following amounts as damages: (1) The loss of rental from the date of default until a new tenant is,or with the exercise of reasonable efforts could have been, secured and paying out. (2) The reasonable costs of reentry and reletting including without limitation the cost of any cleanup,refurbishing,removal of Tenant's property and fixtures, costs incurred under Section 15.5,or any other expense occasioned by Tenant's default including but not limited to,any remodeling or repair costs, attorney fees, court costs,broker commissions, and advertising costs. (3) Any excess of the value of the rent and all of Tenant's other obligations under this lease over the reasonable expected return from the premises for the period Page 9 of 13 IWB/City of Tigard Commercial Lease for the Water Building commencing on the earlier of the date of trial or the date the premises are relet, and continuing through the end of the term. The present value of future amounts will be computed using a discount rate equal to the prime loan rate of major Oregon banks in effect on the date of trial. 15.4 Right to Sue More Than Once. Landlord may sue periodically to recover damages during the period corresponding to the remainder of the lease term, and no action for damages shall bar a later action for damages subsequently accruing. 15.5 Landlord's Right to Cure Defaults. If Tenant fails to perform any obligation under this lease,Landlord shall have the option to do so after 30 days written notice to Tenant. All of Landlord's expenditures to correct the default shall be reimbursed by Tenant on demand with interest at the rate of 10%per annum from the date of expenditure by Landlord. Such action by Landlord shall not waive any other remedies available to Landlord because of the default. 15.6 Remedies Cumulative. The foregoing remedies shall be in addition to and shall not exclude any other remedy available to Landlord under applicable law. Section 16. Surrender at Expiration 16.1 Condition of Premises. Upon expiration of the lease term or earlier termination on account of default,Tenant shall deliver all keys to Landlord and surrender the Premises in first- class condition and broom clean. Alterations constructed by Tenant with permission from Landlord shall not be removed or restored to the original condition unless the terms of permission for the alteration so require. Depreciation and wear from ordinary use for the purpose for which the Premises are leased shall be excepted but repairs for which Tenant is responsible shall be completed to the latest practical date prior to such surrender. Tenant's obligations under this section shall be subordinate to the provisions of Section 9 relating to destruction. 16.2 Fixtures (1) All fixtures placed upon the Premises during the term, other than Tenant's trade fixtures,shall,at Landlord's option,become the property of Landlord. If Landlord so elects,Tenant shall remove any or all fixtures that would otherwise remain the property of Landlord,and shall repair any physical damage resulting from the removal. If Tenant fails to remove such fixtures,Landlord may do so and charge the cost to Tenant with interest at the legal rate from the date of expenditure. (2) Prior to expiration or other termination of the lease term Tenant shall remove all furnishings,furniture, and trade fixtures that remain its property. If Tenant fails to do so,this shall be an abandonment of the property, and Landlord may retain the property and all rights of Tenant with respect to it shall cease or,by notice in writing given to Tenant within 30 days after removal was required,Landlord may elect to hold Tenant to its obligation of removal. If Landlord elects to require Tenant to remove,Landlord may effect a removal and place the property in pubic storage for Tenant's account. Tenant shall be liable to Landlord for the cost of Page 10 of 13 IWB/City of Tigard Commercial Lease for the Water Building removal,transportation to storage, and storage,with interest at the legal rate on all such expenses from the date of expenditure by Landlord. 16.3 Holdover (1) If Tenant does not vacate the Premises at the time required, Landlord shall have the option to treat Tenant as a tenant from month to month, subject to all of the provisions of this lease except the provisions for term and renewal,to eject Tenant from the Premises and recover damages caused by wrongful holdover. Failure of Tenant to remove fixtures, furniture, furnishings, or trade fixtures that Tenant is required to remove under this lease shall constitute a failure to vacate to which this section shall apply if the property not removed will substantially interfere with occupancy of the Premises by another tenant or with occupancy by Landlord for any purpose including preparation for a new tenant. (2) If a month-to-month tenancy results from a holdover by Tenant under this Section 16.3,the tenancy shall be terminable at the end of any monthly rental period on written notice from Landlord given not less than? days prior to the termination date which shall be specified in the notice. Tenant waives any notice that would otherwise be provided by law with respect to a month-to-month tenancy. Section 17. Miscellaneous 17.1 Nonwaiver. Waiver by either party of strict performance of any provision of this lease shall not be a waiver of or prejudice the party's right to require strict performance of the same provision in the future or of any other provision. 17.2 Attorney Fees. If suit or action is instituted in connection with any controversy arising out of this lease,the prevailing party shall be entitled to recover in addition to costs such sum as the court may adjudge reasonable as attorney fees at trial, on petition for review, and on appeal. 17.3 Notices. Any notice required or permitted under this lease shall be given when actually delivered or 48 hours after deposited in United States mail as certified mail addressed to the address first given in this lease or to such other address as may be specified from time to time by either of the parties in writing. 17.4 Succession Subject to the above-stated limitations on transfer of Tenant's interest, this lease shall be binding on and inure to the benefit of the parties and their respective successors and assigns. 17.5 Recordation. This lease shall not be recorded without the written consent of Landlord. 17.6 Entry for Inspection. With at least 24 hours prior notice to Tenant,Landlord shall have the right to enter upon the Premises to determine Tenant's compliance with this lease,to make necessary repairs to the building or to the Premises,or to show the Premises to any prospective tenant or purchaser,and in addition shall have the right, at any time during the last two months of Page 11 of 13 1WB/City of Tigard Commercial Lease for the Water Building the term of this lease,to place and maintain upon the Premises notices for leasing or selling the Premises. 17.7 Interest on Rent and Other Charges. Any rent or other payment required of Tenant by this lease shall, if not paid within 20 days after it is due,bear interest at the rate of TEN (10 %) per annum(but not in any event at a rate grater than the maximum rate of interest permitted by law)from the due date until paid. In addition, if Tenant fails to make any rent or other payment required by this lease to be paid to Landlord within 20 days after it is due,Landlord may elect to impose a late charge of$25.00 payment to reimburse Landlord for the costs of collecting the overdue payment. Tenant shall pay the late charge upon demand by Landlord. Landlord may levy and collect a late charge in addition to all other remedies available for Tenant's default, and collection of a late charge shall not waive the breach caused by the late payment. 17.8 Proration of Rent. In the event of commencement or termination of this lease at a time other than the beginning or end of one of the specified rental periods,then the rent shall be prorated as of the date of commencement or termination and in the event of termination for reasons other than default,all prepaid rent shall be refunded to Tenant or paid on its account. 17.9 Time of Essence. Time is of the essence of the performance of each of Tenants obligations under this lease. 17.10 Oregon Tort Claims Act. Subject to the limitations of liability for public bodies set forth in the Oregon Tort Claims Act, (ORS 30.260 to 30.300)the Intergovernmental Water Board members shall hold harmless and indemnify each other and their Councilors,employees, agents and volunteers against all claims, damages,losses and expenses (including all attorney fees and costs) arising out of or resulting from the District's performance of this agreement when the loss or claim is attributable to the acts or omissions of the Districts,their Commissioners, employees, agents and volunteers. Section 18. Arbitration 18.1 Disputes to Be Arbitrated. If any dispute arises between the parties as to a matter which this lease says should be arbitrated,or as to any other question involving apportionment or valuation,either party may request arbitration and appointment as an arbitrator an independent real estate appraiser having knowledge of valuation of rental properties comparable to the premises. The other party shall also choose an arbitrator with such qualifications, and the two arbitrators shall choose a third. If the choice of the second or third arbitrator is not made within 10 days of choosing the prior arbitrator,then either party may apply to the presiding judge of the judicial district where the premises are located to appoint the required arbitrator. 18.2 Procedure for Arbitration. The arbitrator shall proceed according to the Oregon statutes governing arbitration, and the award of the arbitrators shall have the effect therein provided. The arbitration shall take place in the county where the leased premises are located. Costs of the arbitration shall be shared equally by the parties,but each party shall pay its own attorney fees incurred in connection with the arbitration. Page 12 of 13 IWB/City of Tigard Commercial Lease for the Water Building Section 19.Right of First Refusal No Owner/Landlord of the Property shall sell or transfer the Owner's/Landlords undivided interest in the Property except as set forth herein in this Water Building Lease. In the event that three (3)out of four(4)of the representative jurisdiction Owners vote to sell the Water Building Property,the City of Tigard shall have the Right of First Refusal. Within 30 days of notification to Tenant that the Property will be sold,Tenant shall notify Owner of the intent to exercise the right to purchase the Property. Within 30 days of Tenant's notification to Landlord,the City of Tigard shall determine the Water Building Property improvement value as set forth in the System Assets and Liabilities Final Report(Section II,Utility Plant in Service)prepared by Economic and Engineering Services,Inc. dated November 1994, and order an appraisal of the land to be performed by an appraisal company highly experienced in valuation of land similar to the Property and agreed upon by seller and purchaser. Within 30 days of receiving the determination of value of the Property,the sale shall be closed. LANDLORD: Intergovernmental Water Board Member Jurisdictions CITY OF TIGARD CITY OF DURHAM CITY OF KING CITY TIGARD WATER DISTRICT TENANT: CITY OF TIGARD Page 13 of 13 IWB/City of Tigard Commercial Lease for the Water Building . . • . . EXHIBIT A TO LEASE. LEASED BUILDING AND PARKING PREMISES , . . . . • .;•est-.3 ,11,PAlt W - • or, .ea.i I ram min I i•fai . I 1 I , ...j . ._ _il _A 21' MINE . 1 A.V4 ii 7' '6.1 tA i ,11..4fir L - I . 1 3,444 . *Mr - Ilq .-- mom lo L.... I 1 i . ; •i va3z. . 01--3"-- - •- • .4111 ,..„... • I ....4 . '7 ., .. . ... .. . . ... .. ''‘„,.s.... ..-‘,....., ...N. s•-•. 11......,/ • \,. N\ r,, ' , Ns\''•,, NNNN\\' 'N\ . ., . N. 1 . . • Ns.s. ... 1 `,..,\ N\•,:r , .,•,.9 N'',.. • '`‘. •.. • 1 : NN ..0 = Parking (not to scale) . . • EXHIBIT B TO LEASE CITY OF TIGARD WATER BUILDING LEASE: RENTAL STRUCTURE Estimated Annual Rent Revenues and Credits Total Rent From City of Tigard (COT) $178,891.20 Water Services Rent Portion $104,715.31 COT Rent Other Than Water Services $74,175.89 Total annual COT Credit for Owner improvements, annualized $14,190.32 � I � Total Annual Rent from COT after Credits $59,985.57 Rent data is from D. Koellermeier 3/12/07 Office Building Asset Evaluation:Future Use Allocation City of Tigard Cost and Rental Credits For Renovation of HVAC, Fire,Plumbing and Electrical Systems COT Cost to be Reimbursed by IWB for HVAC, Fire, Electrical and Plumbing Renovation/Upgrade $177,379.00 Annualized for term of lease, 12.5 years, $14,190.32 July 1, 2007, until Dec 31, 2018 FIRST AMENDMENT TO INTERGOVERNMENTAL AGREEMENT BETWEEN THE CITY OF TIGARD AND THE TIGARD WATER DISTRICT FOR DELIVERY OF WATER SERVICE TO TERRITORY WITHIN THE DISTRICT BOUNDARIES THIS FIRST AMENDMENT TO THIS INTERGOVERNMENTAL AGREEMENT (this "Amendment") is made and entered into as of 2007, by and between the CITY OF TIGARD, an Oregon municipal corporation, (hereinafter "Tigard") and the Tigard Water District, a domestic water supply district existing under ORS Ch. 264, (hereinafter "District"), referred to herein as "the Parties". RECITALS A. The Parties previously entered into that certain INTERGOVERNMENTAL AGREEMENT BETWEEN THE CITY OF TIGARD AND THE TIGARD WATER DISTRICT FOR DELIVERY OF WATER SERVICE TO TERRITORY WITHIN THE DISTRICT BOUNDARIES dated December 23, 1993 (the "IGA") relating to the Parties' creation of the Intergovernmental Water Board (hereinafter "IWB") and the cooperative effort to serve the long term water supply needs of the residents in the original District. B. The Parties hereto desire to amend the IGA: to further ensure consistency across the jurisdictions among rates and services, to clarify the IWB votes required to change ownership of original District assets, to memorialize a new lease between the IWB and the City of Tigard for the Water Building, to establish a process for calculating and recording prorated expenses and revenues, and to allow the IWB to use proceeds from sales of assets for expenses in addition to capital improvements. AGREEMENT NOW THEREFORE, in consideration of the terms and conditions contained herein, the receipt and adequacy of which are hereby acknowledged, the Parties hereby amend the IGA as follows: 1. Paragraph 5. Asset Ownership/Water Rates/Revenues , B., is replaced with the following: First Amendment to the Intergovernmental Agreement City of Tigard/Tigard Water District Page 1 of 4 B. The fees, rates and charges charged by Tigard for providing water services to properties, residences and businesses in the District shall be the same as those charged within Tigard, and rates shall be consistent among those receiving water services from Tigard under this IGA. Notwithstanding the foregoing, Tigard may impose higher fees, rates and charges for providing water service to properties, residences and businesses when the cost of providing such service is greater due to unusual circumstances, including, but not limited to additional cost to pump water up hill to reach customers. Any higher fees, rates and charges imposed for providing water service shall be reviewed by the Intergovernmental Water Board prior to taking effect and shall be limited to covering the actual additional costs of providing such service. When higher fees, rates and charges are imposed, they shall be consistently applied among all member jurisdictions, except that at the request of the District, Tigard will collect on behalf of the District additional charges imposed by the District on District customers. 2. Paragraph 5. Asset Ownership/Water Rates/Revenues C. (2) Moneys/Revenues, is replaced with the following: (2) Moneys transferred to Tigard as a result of the division of assets after withdrawal from the original District by Tigard which were previously dedicated by the original District to system capital improvements shall be used solely for system capital improvement by Tigard in accordance with subsection 5.D, except that the Intergovernmental Water Board may at its discretion, and consistent with voting requirements in Paragraph 3.D. of this Intergovernmental Agreement, determine that said moneys may be used for other purposes. 3. Paragraph 5, Asset Ownership/Water Rates/Revenues, G. Accounting, is added to as follows: (3) In fulfillment of the Intergovernmental Agreement's intent to reliably and methodically account for expenses and revenues, Exhibit A showing allocation of ownership interests is attached hereto and incorporated thereby as the model for documenting the use of assets by the City of Tigard. 4. Paragraph 3. Intergovernmental Water Board. D., is replaced as follows: D. A quorum of the Board shall be three (3) members. All actions of the board shall require at least three (3) votes, excluding abstentions. First Amendment to the Intergovernmental Agreement City of Tigard/Tigard Water District Page 2 of 4 E. Notwithstanding prior agreements, no more than three (3) jurisdictions'votes (from among Tigard, Durham, King City and the Tigard Water District) will be required to purchase, sell, or otherwise act with respect to the original District's real property assets. By: IWB Representative for the City of Tigard CERTIFICATE OF NOTARY PUBLIC STATE OF OREGON COUNTY OF Signed or attested before me on ,2007,by Signature of Notarial Officer First Amendment to the Intergovernmental Agreement City of Tigard/Tigard Water District Page 3 of 4 By: IWB Representative for the Tigard Water District CERTIFICATE OF NOTARY PUBLIC STATE OF OREGON COUNTY OF Signed or attested before me on ,2007,by Signature of Notarial Officer First Amendment to the Intergovernmental Agreement City of Tigard/Tigard Water District Page 4 of 4 EXHIBIT A AMENDMENT TO INTERGOVERNMENTAL AGREEMENT BETWEEN CITY OF TIGARD AND TIGARD WATER DISTRICT ECONOMIC AND ENGINEERING SERVICES, INC. •• \ ' 380 S W Macadam Avenue,Suile 365 Porland.OR 97201 (503)223.3033 FAX(503)274.6248 EXHIBIT A FIRST AMENDMENT TO INTERGOVERNMENTAL AGREEMENT BETWEEN THE CITY OF TIGARD AND THE TIGARD WATER DISTRICT Letter Verifying System Asset and Liability Allocations from EES Final Report • November 1, I994 Ms.Beverly Froude Tigard Water District 8777 S.W. Burnham Street Tigard, OR 97223 Dear Ms.Froude: Enclosed please find Economic and Engineering Services, Inc.'s (EES's) final report of cyst asset and liahility 11 cations prepared for the Tigard Water District(District). The total of assets equals the total of liabilities. This total amount is $25,620,938 and is • - allocated as follows: Tigard Water District $5,394,464 (21.05%) • City of Tigard 17,997,978 (70.25%) City of Durham 1,044,091 (4.08%) City of King City 1,184,406 (4.62%) This report and the allocations have been adopted by resolutions passed by each jurisdiction. Copies of the four resolutions are bound into this final report, immediately after this Ietter. Very truly yours, PR °y ECONOMIC AND ENGINEERING 42 `- SERVICES,INC. iff OREGON qJ J��-'�""^7 i"l.•� • /4 21�°\'S Gilbert R.Meigs! BERT R, t� Project Manager GRM:pp winlgn\tigard.rpl 301 • Olympia.WA Bellevue,WA Vancouver.B,C Pord)and,OR Washington,D.0 EXHIBIT A FIRST AMENDMENT TO INTERGOVERNMENTAL AGREEMENT BETWEEN THE CITY OF TIGARD AND THE TIGARD WATER DISTRICT City of Tigard Analysis of Proportionate Interest Allocations Updated from Tigard Water District System Assets and Liabilities Final Report- November 1994 Allocation Basis Real Market Consumption* Value** Meters*** (A) (B) (C) District 641,523 880,511,030 3,671 Tigard 2,093,982 2,822,340,560 12,196 King City 130,395 201,727,000 1,238 Durham 74,115 116,051,350 358 2,940,015 4,020,629,940 17,463 Proportionate Interests Proportionate Change From Interests Original District 21.82% 21.90% 21.02% 21.58% 3.99% Tigard 71.22% 70.20% 69.84% 70.42% -2.96% King City 4.44% 5.02% 7.09% 5.51% -1.20% Durham 2.52% 2.89% 2.05% 2.49% 0.18% 100.00% 100.00% 100.00% 100.00% 0.00% "Other Assets" Percentages For Allocations District Tigard King City Durham District, Tigard, King City 22.13% 72.22% 5.65% 0.00% 100.00% District, Tigard 23.46% 76.54% 0.00% 0.00% 100.00% Tigard, Durham 0.00% 96.59% 0.00% 3.41% 100.00% * Annual consumption from November 1, 2005 through October 31, 2006 **Real Market Value(RMV) Updated as of November 7, 2006 ***Meter count updated as of October 31, 2006 TWD Study Analysis.xls 6/5/20072:47 PM EXHIBIT A FIRST AMENDMENT TO INTERGOVERNMENTAL AGREEMENT BETWEEN THE CITY OF TIGARD AND THE TIGARD WATER DISTRICT CITY OF TIGARD, OREGON RESOLUTION NO. Lia A RESOLUTION OF THE CITY COUNCIL, CITY OF TIGARD, OREGON, TO ADOPT THE TIGARD WATER DISTRICT SYSTEM ASSETS AND LIABILITY REPORT AS REVISED BY THE INTERGOVERNMENTAL WATER BOARD (IWB) WHEREAS, the Tigard Water District, in accordance with Section 4 of the Intergovernmental Agreement (hereinafter "Agreement") between the City of Tigard and the Tigard Water District for Delivery of Water Service to Territories Within the District Boundaries has caused preparation of a System Assets and Liability Report; and WHEREAS, the Tigard Water District accepted the report with amendments on September 12, 1994; and WHEREAS, the Intergovernmental Water Board reviewed the Tigard - Water District's actions and further amendments as proposed by Tigard Water District and its consultants, Economic & Engineering Services, Inc. , and unanimously voted. to recommend that the cities of Durham, King City, and Tigard formally adopt the plan; and WHEREAS, the City of Tigard acknowledges that it has reviewed the report and amendments and finds its contents to be consistent with the direction given to the IWB participants within Section 4 of the Agreement; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF TIGARD THAT: SECTION 1: The conclusions contained within the Tigard Water District System Assets and Liability Report as revised by the Intergovernmental. Water Board (IWB) are accepted and adopted. PASSED: By W1 an lrY LTiLO vote of all Council members present after beingread by number and title only, this 077120 day of , 1994.• thy Wheatley,[ City corder APPROVED: This a7day of `.�{�� z;/ 11994. J' Schwartz, Mayor Approved as to form: City Attorn W Date: • `I/.27194 team\a ch\4 DD24V wa,erb_re J G 3 4 L11111Yf l A FIRST AMENDMENT TO INTERGOVERNMENTAL AGREEMENT BETWEEN THE CITY OF TIGARD AND THE TIGARD WATER DISTRICT 4. v. Division of=:Original- District '=Assets: . ti` :i: ;D�' t 'a ee - =Pu�s "ant- to .ORS�•�:Z=2 5��b`4 - `.tti°e� tre s that .�A` x„�.. :�, �i. ..�� 1.. _ _ �..- - - ,tt.gr_. the division'o :`:`a�ssets after':`-iilthc _rawa3 ;zroui:',thee:Qri` final, Distract b r the`'Cities`shall:=be-,consis_tent .:Na.:;:.:th-.;the :fol-lowin_g-,concepts:. ::(1:) As`se :-mac.rudYeas, personal: and--.intangible property. - i tangible-property” includes but .is not limited to: moneys, checks, drafts-, deposits, interest, dividends and income. (2) Assets will be divided into two groups: a. System Assets: Assets necessary for the operation of Tigard's water supply system throughout the original District, not including those "other assets" of Tigard. rn Personal and intangible property are system assets. >t -Water: ;mains, .:service - installations, structures, rn :fac:ilities, • improvements .or:,.other property necessary.for w b operation;:o' -:the 'City o'f;:Tigard's,,..,1 m,:-t,..e.„ water supply system n '-3 throughout,,%iie ..otx4.1 al _D; strict,.axe. system assets. ' 11 00- •E' - 2 I..i b:'-_ b.her ;Assets: 'As,s_ets not necessary for the . ,A operat oi -'.`of'-.;thie; City_ of Tigard's water supply system d z throug1!.W ± ie' 0.-. ;_ el' District: `biker- :assets 'shall < �y t become':;'Fie': -'Dp'erty df'::tlie. '-ursdct 'on- =in :.which._the. ,. ! . .. �a . 't,:!!--• e�1. <`� �;.'�iat ;�ma� n:'s., ':._�er`vice�-�insta`ll:ations, O _ • ` 'structf res f aclliti°es:, "'improvements ,.or. tiother property 0 ,.,not 'necessary--.for;:the'.operation..of. the:: City of Tigard's :. 77 water,supply.;system throughout.the original District are °Q otl er:.a ets. - a r w ...TB. All system assets and other assets shall be pledged by _ r the 'Cand the District to Tigard.. All system assets and other - a assets shall be managed by Tigard and shall be utilized by Tigard y n in order to provide water services to properties, residences and businesses in the original District. t., til 3 m C. Should one of the Cities or the District terminate its z water service agreement with Tigard, the Cities' and the District's proportionate interest in a system asset shall be determined based . upon the following formula: -� Jurisdiction':s :Proportionate Interest = '(A- + B + C)/3 A.;= .;Jur s-diction's:-percentage.of,Current.Consumption in (- -'o ih l_District :'f .L 'c I 0. `;:T�ir;i di rc1•i n. a e' sof � urrent ea Market :.D .. ��.�:.. is"r'c �:V j`�tie` ,.n.�o� ria t'`;' C = Jurisdiction's Percentage of .Current Meters in original District . ' - `The Cities' and-the District's proportionate interest in a systein :asset capital-improvement shall be based upon the capital improvementts. .cIepreciated :v..alue:. ..The depreciated value shall be based :upon_. the :: sefu.l! _?cif e..:'of. the capital improvement` under :: .•..generally .'aecepte .:---accouinting:•:-principles:_using a, straight line t method;of depreciation..,:` ,! _ - :gib:?: -'•' oiiF;�'teriininatz'oaf=�� '�s .. `ee�'e - ,.�.;�;�- P;. _ __ _ ki :Agr_. m Sit �.-ot3ier ;assets;shall. -bec ae:-''the` �-ro 1ert. _ of `tie urL°sdic ti"-n ':"in. )whi - 4m -`p:. .:R;.._ _Y�:°i :f�;7: .. - o. ch the: �ass.et. is 7 cat.e d TENANCY IN COMMON AGREEMENT THIS AGREEMENT is made and effective the day of , by CITY OF TIGARD ("Owner"), CITY OF DURHAM ("Owner"), CITY OF KING CITY, ("Owner"), and TIGARD WATER DISTRICT, ("Owner"), collectively known as the INTERGOVERNMENTAL WATER BOARD (IWB), and hereinafter referred to as the "Owners". WHEREAS, the ownership of the Canterbury Property was vested in the Tigard Water District (TWD) as a single entity; and is now owned by the City of Tigard, City of King City, City of Durham, and the Tigard Water District as Tenants In Common; and WHEREAS, the IWB and its member jurisdictions desires to provide for the management and control of the Property; and WHEREAS, on April 11, 2007, the IWB adopted Resolution 07-02, recommending to the Tigard City Council that a portion of the Canterbury property be declared surplus; and WHEREAS, the City of Tigard has expressed an interest in purchasing the surplus property for use as a public park; and WHEREAS, the Owners of the Canterbury Property have determined that the preferred disposition of the surplus Canterbury Property is that it should be sold under the conditions set forth in IWB Resolution 07-02. The Owners agree as follows: 1. Acquisition of Property. The Owners have acquired certain real and personal property commonly known as THE CANTERBURY PROPERTY, located at 10310 SW Canterbury Lane, Tigard, Oregon, and more particularly described as Exhibit A attached hereto and incorporated by this reference (the "Property"). 2. Co-Tenancy. The Property has been improved with two (2) reservoirs and a storage building. The intent of the Owners is to enter into a sale agreement with CITY OF TIGARD to purchase a portion of the Property ("Park Property") for use as a public park and to continue in ownership of the balance of the Property as Co-Tenants. 3. Business Name. The business of the co-tenancy shall be conducted under.the name "INTERGOVERNMENTAL WATER BOARD (IWB)". An application for registration of a fictitious business name shall be filed and published as provided by law. Page 1 of 10—Canterbury Property Tenancy In Common Agreement 4. Declaration of Ownership. The owners as described intend that their relationship with respect to the Property shall be a tenancy in common. The Owners intend that no provision of this Tenancy In Common Agreement shall be construed as establishing a partnership, joint venture, or any other form of business entity. 5. Ownership Interest. The names of the Owners and their percentage of undivided interests in the Property are currently as follows: Name Percentage Ownership City of Tigard 70% Tigard Water District 22% City of King City 5.5% City of Durham 2.5% The Property has been acquired by the co-tenancy. The Owners shall be responsible for payment of all financial obligations of the co-tenancy in the proportion of their ownership interests. Every twenty-four (24) months, and at the time of any sale of the Property, the ownership proportions shall be adjusted to reflect population changes as a result of annexation, and Owners will execute a new deed to reflect the changes. 6. Expenses. Until the sale of the surplus portion of the Property, the expenses incurred with respect to the Property shall be the obligation of the Owners. Anticipated expenses include, but are not limited to: cost of repairs, maintenance, debt service, taxes, assessments, insurance and property management, and as provided for in the Intergovernmental Agreements. In the event of a conflict between or among the agreements with respect to this Tenancy In Common Agreement, this Agreement will prevail. Periodically, the Owners shall determine the extent, if any, of additional funds necessary to provide for the payment of expenses. Each Owner shall pay a portion of the amount necessary to pay expenses equal to the Owner's undivided interests in the Property. Payment shall be made within thirty (30) days for receipt by the Owner of notice of the amount due. 7. Improvements. In the event the Owners shall further improve the Property, each Owner shall be obligated for the costs of such improvements in an amount proportionate to the Owner's undivided interest in the Property. The Owners shall determine whether to assess the.cotenants for the amount required for said improvements, or to finance said amount as a joint ,debt of the Page 2 of 10—Canterbury Property Tenancy In Common Agreement cotenants. In the event an assessment is made, payment shall be made within thirty (30) days of receipt by the Owner of notice of the amount due. 8. Default. In the event an Owner shall fail to pay his or her obligations within the time prescribed above in the amount due under the terms of this Agreement, the undivided interest of the nonpaying Owner shall be subject to a lien in the amount of the deficiency. The provisions of Section 18 of this Agreement relating to liens shall be applicable to an unpaid obligation of an Owner. 9. Revenue, Expenses and Deductions,. Subject to Section 12, the revenues, expenses and deductions from the operation and any sale of the Property shall be shared by the Owners in proportion to their respective undivided interest in the Property. 10. Disbursements. The Owner shall determine if funds are available for disbursement from the operations of the Property and shall direct the Manager hereinafter described to pay said amounts to the Owners in proportion to their respective undivided interests in the Property, subject to the provisions of the Lease and the Intergovernmental Agreement. 11. Proceeds from Sale or Refinance. Proceeds received from any sale or refinancing of the Property, or from the condemnation or destruction of the Property, to the extent that the proceeds are not needed for debt service, anticipated expenses, and reasonable reserves for contingencies as determined by the Owners, shall be retained by the IWB as reserves for capital projects. Notwithstanding the foregoing, the Owners may determine to use part or all of said proceeds to reduce or repay any mortgage indebtedness, contract, or other liability incurred in connection with the Property. 12. Management. The Owners have each engaged the CITY OF TIGARD ("Tigard") to manage the Property under terms and conditions contained in the Intergovernmental Agreement. The Owners agree that Tigard may enter into a separate off-site management agreement with a management company of Tigard's choice as it may approve, for management of the Property. 13. Duties of Property Manager. The City of Tigard shall be responsible for performance of all services and duties as set forth in the Intergovernmental Agreement. None of the Owners, their agents or representatives, shall be entitled to any compensation for management or other services rendered to or for the Property unless such compensation is expressly authorized by the Owners, and subject to the Lease, and Intergovernmental Agreement. 14. Allocation of Purchase Price on Sale or Other Distribution of Property. The allocation of the purchase price received for any sale of the Property as between real property, improvements and personal property, shall be determined by the IWB and the accountant for the co-tenancy, in consultation with the Owners,who shall be bound by said determination. Page 3 of 10—Canterbury Property Tenancy In Common Agreement 15. Liens and Encumbrances. Any lien or encumbrance on an Owner's undivided interest in the Property, including but not limited to, any judicial attachment, any judgment lien, any lien arising out of the order or judgment of any court, any lien in connection with taxes claim due any governmental unit, any lien arising under federal or state bankruptcy or insolvency laws, and any lien arising from non-payment by an Owner of amounts pursuant to the terms of this Agreement, shall be discharged by said Owner, and the undivided interest released, within ten (10) days after the lien is filed or otherwise becomes effective. Failure to discharge the lien and obtain release of the undivided interest within the stated time shall constitute a default of this Agreement. During the term of the default, interest shall accrue on any unpaid balance due the co-tenancy at the rate of ten percent (10%) per annum. All amounts due, plus interest thereon, shall be immediately due and payable without further demand and notice. In addition to the foregoing, the remaining Owners may agree to revoke the right of the defaulting Owner to vote and manage the affairs of the co-tenancy. Any cash distributions which may become payable to a defaulting Owner shall be reduced by the outstanding amounts due plus interest thereon. The remaining Owners shall have the right, but not the obligation, to pay the deficient amount and to obtain release of the lien and to receive reimbursement for the amount of the deficiency plus interest as provided above, from any cash distributions which may become payable to the defaulting Owner. 16. Bonding of Liens. An Owner whose interest in the Property is subject to a lien may, within thirty (30) days after the lien is filed or otherwise becomes effective, deposit with the remaining Owner's cash, a corporate surety bond, or other security satisfactory to the remaining Owners, in an amount sufficient to discharge the lien and all costs, attorney's fees and other charges which could accrue as a result of a foreclosure or sale under the lien. Upon making said deposit, the Owner shall not be considered in default of this Agreement. 17. Waiver of Right of Partition. Each Owner irrevocably waives the right to directly or indirectly maintain an action or petition in any court for a partition of the Property. 18. Restrictions on Sale of the Owner's Interest. An Owner may sell, convey or transfer the Owner's undivided interest in the Property only in compliance with the terms of Section 18 herein, and the Intergovernmental Agreement. Upon the withdrawal of an Owner from the IWB, the remaining Owners shall have authority to act on behalf of the withdrawn Owner with respect to the Property. Any sale of a portion of the interest of an IWB member jurisdiction must be to another member jurisdiction or to the IWB as a group. 18.1 Sale. An Owner may sell, convey or transfer its interest only to another Owner or Owners. 18.2 Price. The selling price of the Property shall be established through an appraisal performed by an appraisal company highly experienced in valuation of properties similar to the Canterbury Property and selected by the mutual agreement of Seller and Purchaser, except the Page 4 of 10—Canterbury Property Tenancy In Common Agreement value of the improvements on the Property, which shall be valued according to the System Assets and Liabilities Final Report (Section II, Utility Plant in Service) prepared by Economic and Engineering Services, Inc. dated November 1994. 19. Sale of the Park Property. The Owners may sell the Park Property upon an affirmative vote of three (3) out of four (4) of the representative Owner jurisdictions and the net proceeds distributed under the terms of Section 11 above. 20. Richt of First Refusal. No Owner/Landlord of the Property shall sell or transfer the Owner's/Landlords undivided interest in the Property except as set forth herein. In the event that three (3) out of four (4) of the representative jurisdiction Owners vote to sell the Canterbury Property, the City of Tigard shall have the Right of First Refusal. Within 30 days of notification to Tenant that the Property will be sold, Tenant shall notify Owner of the intent to exercise the right to purchase the Property. Within 30 days of Tenant's notification to Landlord, the City of Tigard shall determine the Canterbury Property improvement value as set forth in the System Assets and Liabilities Final Report (Section II, Utility Plant in Service) prepared by Economic and Engineering Services, Inc. dated November 1994, and order an appraisal of the land to be performed by an appraisal company highly experienced in valuation of land similar to the Property and agreed upon by seller and purchaser. Within 30 days of receiving the determination of value of the Property, the sale shall be closed. 21. Required Vote for Determinations. All determinations to be made by the Owners under the terms of this Agreement, other than sale of the Property, shall be by majority vote of the five (5) members of the IWB. Unless specifically provided otherwise, an affirmative vote of three or more of the IWB members shall be required for any action to be taken, any determinations to be made, or any authorizations to be given by the Owners under the terms of this Agreement. 22. Manner of Votine. All determinations to be made by the Owners shall be made at meetings or by telephone conferences. However, the Owners may make determinations without a meeting or telephone conference by obtaining the signed, written vote of each Owner. 23. Events of Termination. The co-tenancy Agreement shall continue until terminated by the occurrence of one of the following events: the sale of the Property, the majority agreement of the Owners to terminate this Agreement, or the majority Agreement of the Owners to divide and separate the Property among themselves. 24. Effect on Oblinations. Termination shall not affect the rights or obligations of the Owners which arise prior to the termination. 25. Notices. All notices will be in writing and delivered by mail or in person to each.Owner. Page 5 of 10—Canterbury Property Tenancy In Common Agreement 26. Attorney Fees. In the event of suit, action or arbitration to interpret or enforce any of the terms of this Agreement, including any action under the Bankruptcy laws of the United States, the prevailing party or parties shall be awarded such sum as the court or arbitrator may adjudge reasonable as attorney fees in such suit, action or arbitration and in any appeal or review therefrom. 27. Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of each of the Owners, their respective heirs, executors, administrators, legal representatives, successors and assigns. 28. Amendment. This Agreement may be amended at any time by the Owners in the same manner as they make any other determination under Sections 21 and 22 of this Agreement. 29. Integration. This Agreement contains the entire Agreement of the Owners and supercedes all prior and contemporaneous agreements between them with respect to the co- tenancy. Except as fully set forth herein, there are no presentations, agreements, or understandings, oral or written, among the Owners relating to the co-tenancy, except for the Intergovernmental Agreements, and the Lease. 30. Severability. If any term or provision of this Agreement shall to any extent be invalid or unenforceable, the remainder of this Agreement shall not be affected thereby, and each term or provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 31. Governing Law. This Agreement shall be subject to, and governed by, the laws of the State of Oregon. The parties have executed this agreement as of the date first written above. Page 6 of 10—Canterbury Property Tenancy In Common Agreement By: IWB Representative for the City of Tigard CERTIFICATE OF NOTARY PUBLIC STATE OF OREGON COUNTY OF Signed or attested before me on ,2007,by Signature of Notarial Officer Page 7 of 10—Canterbury Property Tenancy In Common Agreement By: IWB Representative for the Tigard Water District CERTIFICATE OF NOTARY PUBLIC STATE OF OREGON COUNTY OF Signed or attested before me on ,2007,by Signature of Notarial Officer Page 8 of 10—Canterbury Property Tenancy In Common Agreement By: IWB Representative for the City of Durham CERTIFICATE OF NOTARY PUBLIC STATE OF OREGON COUNTY OF Signed or attested before me on ,2007,by Signature of Notarial Officer Page 9 of 10—Canterbury Property Tenancy In Common Agreement By: IWB Representative for the City of King City CERTIFICATE OF NOTARY PUBLIC STATE OF OREGON COUNTY OF Signed or attested before me on ,2007,by Signature of Notarial Officer Page 10 of 10—Canterbury Property Tenancy In Common Agreement EXHIBIT A CANTERBURY PROPERTY TENANTS IN COMMON AGREEMENT LEGAL DESCRIPTION OF PROPERTY • • Begtni tag .$t._t}m.4011:vest gornar of Y.ot $0,�0•`, 4 Iville Heights a subdivision of record in. Section 11.Tcen hip�2 0004.' Range 1 'Pleat ofe`the W .aipotte Meridian, in Washington L ! oet to G 4 'bofh201.49:1theme,ga'A'V.y,--.ala g ha -4° of idose e1Pn 155: t to.:: e.•:Squ t R_ 264 feet; thence North asci parallal,lirith the'West lino of said lot 165 feet to the" North iiiize_thhoreof; 'thenca'TYest 261k feet to the place of beginning; Together with an easeeent over the follo}ring described tract of 1+ndt . Begi..og;i 4t-t a-No theast corner of the aboyy-i4oe ribeci. property; thence East'=;loxig thea-i F= . ,-0.0„4010:44.4..)::Ti ardvi7la Heiglk s'' to the center Murdock Avenge, thoi1co_ soi th.a'7.ong..aaidnosiitta,,1i ib.41vai'stance of a: z Ss'pty4 thence tat and parallel with:the' ' Northeline of'Lot 5,.to_the_.East. line off' t3 e'A0ve described tract of land, thence • North a.distance of 12 feet to the place of beginning:- • • TENANCY IN COMMON AGREEMENT THIS AGREEMENT is made and effective the day of , by CITY OF TIGARD ("Owner"), CITY OF DURHAM ("Owner"), CITY OF KING CITY, ("Owner"), and TIGARD WATER DISTRICT,("Owner"),collectively known as the INTERGOVERNMENTAL WATER BOARD(IWB),and hereinafter referred to as the"Owners".The Owners agree as follows: WHEREAS, the ownership of the Water Building and associated real property (Water Building Property) was vested in the Tigard Water District (TWD) as a single entity and is now owned by City of Tigard,City of King City,City of Durham and Tigard Water District as Tenants In Common; and WHEREAS,the IWB and its member jurisdictions desire to provide for the management and control of the Property; and WHEREAS,the Water Building Property is suitable and has been used for water operations,City of Tigard offices, and IWB and TWD meetings; and WHEREAS, the Owners of the Water Building Property have determined that the preferred disposition of the Water Building property is to lease it to the City of Tigard for use in water operations, as city offices and other related activities. The Owners agree as follows: 1. Acquisition of Property. The Owners have acquired certain real and personal property commonly known as THE WATER BUILDING, located at 8777 SW Burnham Street, Tigard, Oregon, and more particularly described as Exhibit A attached hereto and incorporated by this reference(the "Property"). 2. Co-Tenancy. The Property has been improved as the Water Building,a building suitable for water operations,city offices and related activities.The intent of the Owners is to enter into a Lease with the CITY OF TIGARD and to manage and control the Property as Co-Tenants through this Agreement., 3. Business Name. The business of the co-tenancy shall be conducted under the name "INTERGOVERNMENTAL WATER BOARD (IWB)". An application for registration of a fictitious business name shall be filed and published as provided by law. 4. Declaration of Ownership. The owners as described intend that their relationship with respect to the Property shall be a tenancy in common. The Owners intend that no provision of this Tenancy In Common Agreement shall be construed as establishing a partnership,joint venture,or any other form of business entity. - Page 1 of 10—Water Building Tenancy In Common Agreement 5. Ownership Interest. The names of the Owners and their percentage of undivided interests in the Property are currently as follows: Name Percentage Ownership City of Tigard 70% Tigard Water District 22% City of King City 5.5% City of Durham 2.5% The Property has been acquired by the co-tenancy. The Owners shall be responsible for payment of all financial obligations of the co-tenancy in the proportion of their ownership interests. Every twenty-four(24)months and at the time of the sale of the Property,the ownership proportions shall be adjusted to reflect population changes as a result of annexation, and Owners will execute a new deed to reflect the changes. 6. Expenses. The expenses incurred with respect to the Property shall be the obligation of the Owners. Anticipated expenses include, but are not limited to: cost of repairs, maintenance, debt service, taxes, assessments, insurance and property management, and as provided for in the Intergovernmental Agreements. In the event of a conflict between or among the agreements with respect to this Tenancy In Common, this Agreement will prevail. Periodically, the Owners shall determine the extent, if any, of additional funds necessary to provide for the payment of expenses. Each Owner shall pay a portion of the amount necessary to pay expenses equal to the Owner's undivided interests in the Property. Payment shall be made within thirty(30)days for receipt by the Owner of notice of the amount due. 7. Improvements. In the event the Owners shall further improve the Property,each Owner shall be obligated for the costs of such improvements in an amount proportionate to the Owner's undivided interest in the Property, except as may otherwise be provided for in the Lease. The Owners shall determine whether to assess the cotenants for the amount required for said improvements,or to finance said amount as a joint debt of the cotenants. In the event an assessment is made, payment shall be made within thirty (30) days of receipt by the Owner of notice of the amount due. 8. Default. In the event an Owner shall fail to pay his or her obligations within the time prescribed above in the amount due under the terms of this Agreement,the undivided interest of the nonpaying Owner shall be subject to a lien in the amount of the deficiency. The provisions of Section 18 of this Agreement relating to liens shall be applicable to an unpaid obligation of an Owner. 9. Revenue. Expenses and Deductions. Subject to Section 12, the revenues, expenses and Page 2 of 10—Water Building Tenancy In Common Agreement deductions from the operation and any sale of the Property shall be shared by the Owners in proportion to their respective undivided interest in the Property. 10. Disbursements: The Owner shall determine if funds are available for disbursement from the operations of the Property and shall direct the Manager hereinafter described to pay said amounts to the Owners in proportion to their respective undivided interests in the Property, subject to the provisions of the Lease and the Intergovernmental Agreement. 11. Proceeds from Sale or Refinance. Proceeds received from any sale or refinancing of the Property,or from the condemnation or destruction of the Property,to the extent that the proceeds are not needed for debt service, anticipated expenses, and reasonable reserves for contingencies as determined by the Owners, shall be retained by the IWB as reserves for capital projects. Notwithstanding the foregoing, the Owners may determine to use part or all of said proceeds to reduce or repay any mortgage indebtedness, contract,or other liability incurred in connection with the Property. 12. Management. The Owners have each engaged the CITY OF TIGARD("Tigard")to manage the property under terms and conditions contained in the Intergovernmental Agreement and the Water Building Lease. The Owners agree that Tigard may enter into a separate off-site management agreement with a management company of Tigard's choice as it may approve, for management of the Property. 13. Duties of Property Manager. The City of Tigard shall be responsible for performance of all services and duties as specified in the Water Building Lease. None of the Owners, their agents or representatives,shall be entitled to any compensation for management or other services rendered to or for the Property unless such compensation is expressly authorized by the Owners,and subject to the Lease, and Intergovernmental Agreement. 14. Allocation of Purchase Price on Sale or Other Distribution of Pronertv. The allocation of the purchase price received for any sale of the Property as between real property, improvements and personal property, shall be determined by the IWB and the accountant for the co-tenancy, in consultation with the Owners, who shall be bound by said determination. 15. Liens and Encumbrances. Any lien or encumbrance on an Owner's undivided interest in the Property, including but not limited to, any judicial attachment, any judgment lien, any lien arising out of the order or judgment of any court, any lien in connection with taxes claim due any governmental unit, any lien arising under federal or state bankruptcy or insolvency laws, and any lien arising from non-payment by an Owner of amounts pursuant to the terms of this Agreement, shall be discharged by said Owner,and the undivided interest released,within ten(10)days after the lien is filed or otherwise becomes effective. Failure to discharge the lien and obtain release of the undivided interest within the stated time shall constitute a default of this Agreement. During the term of the default, interest shall accrue on any unpaid balance due the co-tenancy at the rate of ten percent (10%) per annum. All amounts due, plus interest thereon, shall be immediately due and payable without further demand and notice. In addition to the foregoing,the remaining Owners may Page 3 of 10—Water Building Tenancy In Common Agreement agree to revoke the right of the defaulting Owner to vote and manage the affairs of the co-tenancy. Any cash distributions which may become payable to a defaulting Owner shall be reduced by the outstanding amounts due plus interest thereon. The remaining Owners shall have the right,but not the obligation, to pay the deficient amount and to obtain release of the lien and to receive reimbursement for the amount of the deficiency plus interest as provided above, from any cash distributions which may become payable to the defaulting Owner. 16. Bonding of Liens. An Owner whose interest in the Property is subject to a lien may,within thirty (30) days after the lien is filed or otherwise becomes effective, deposit with the remaining Owners cash,a corporate surety bond,or other security satisfactory to the remaining Owners,in an amount sufficient to discharge the lien and all costs, attorney's fees and other charges which could accrue as a result of a foreclosure or sale under the lien. Upon making said deposit,the Owner shall not be considered in default of this Agreement. 17. Waiver of Right of Partition. Each Owner irrevocably waives the right to directly or indirectly maintain an action or petition in any court for a partition of the Property. 18. Restrictions on Sale of the Owner's Interest. An Owner may sell, convey or transfer the Owner's undivided interest in the Property only in compliance with the terms of this Section 18,the Intergovernmental Agreement,and the Water Building Lease(granting Right of First Refusal to the City of Tigard). Upon the withdrawal of an Owner from the IWB,the remaining Owners shall have authority to act on behalf of the withdrawn Owner with respect to the Property. Any sale of a portion of the interest of an IWB member jurisdiction must be to another member jurisdiction or to the IWB as a group. 18.1 Sale. An Owner may sell, convey or transfer its interest only to another Owner. 18.2 Price. The selling price of the Water Building property shall be established through an appraisal performed by an appraisal company highly experienced in valuation of properties similar to the Water Building Property and selected by the mutual agreement of Seller and Purchaser,except the value of the improvements on the Property,which shall be valued according to the System Assets and Liabilities Final Report (Section II, Utility Plant in Service) prepared by Economic and Engineering Services, Inc. dated November 1994. 19. Right of First Refusal. No Owner/Landlord of the Property shall sell or transfer the Owner's/Landlords undivided interest in the Property except as set forth herein and in the Water Building Lease to the City of Tigard. In the event that three(3)out of four(4)of the representative jurisdiction Owners vote to sell the Water Building Property,the City of Tigard shall have the Right of First Refusal. Within 30 days of notification to Tenant that the Property will be sold,Tenant shall notify Owner of the intent to exercise the right to purchase the Property. Within 30 days of Tenant's notification to Landlord,the City of Tigard shall determine the Canterbury Property improvement value as set forth in the System Assets and Liabilities Final Report (Section II, Utility Plant in Service)prepared by Economic and Engineering Services,Inc. dated November 1994,and order an appraisal of the land to be performed by an appraisal company highly experienced in vaivation of Page 4 of 10—Water Building Tenancy In Common Agreement land similar to the Property and agreed upon by seller and purchaser. Within 30 days of receiving the determination of value of the Property, the sale shall be closed. 20. Vote on Sale of Water Building. Subject to the provisions of the Water Building Lease and of this Tenants in Common Agreement Section 18.1 Right of First Refusal,the Owners may sell the Water Building upon an affirmative vote of three (3) out of four(4) of the representative Owner jurisdictions and the net proceeds distributed to the Owners under the terms of Section 11 above. 21. Required Vote for Determinations. All determinations to be made by the Owners under the terms of this Agreement, other than sale of the Property, shall be by majority vote of the five (5) members of the IWB. Unless specifically provided otherwise,an affirmative vote of three or more of the IWB members shall be required for any action to be taken,any determinations to be made,or any authorizations to be given by the Owners under the terms of this Agreement. 22. Manner of Voting. All determinations to be made by the Owners shall be made at meetings or by telephone conferences. However,the Owners may make determinations without a meeting or telephone conference by obtaining the signed, written vote of each Owner. 23. Events of Termination. The co-tenancy Agreement shall continue until terminated by the occurrence of one of the following events: the sale of the Property, the majority agreement of the Owners to terminate this Agreement, or the majority Agreement of the Owners to divide and separate the Property among themselves. 24. Effect on Obligations. Termination shall not affect the rights or obligations of the Owners which arise prior to the termination. 25. Notices. All notices will be in writing and delivered by mail or in person to each Owner. 26. Attorney Fees. In the event of suit, action or arbitration to interpret or enforce any of the terms of this Agreement, including any action under the Bankruptcy laws of the United States,the prevailing party or parties shall be awarded such sum as the court or arbitrator may adjudge reasonable as attorney fees in such suit,action or arbitration and in any appeal or review therefrom. 27. Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of each of the Owners,their respective heirs,executors,administrators,legal representatives,successors and assigns. 28. Amendment. This Agreement may be amended at any time by the Owners in the same manner as they make any other determination under Sections 21 and 22 of this Agreement. 29. Integration. This Agreement contains the entire Agreement of the Owners and supercedes all prior and contemporaneous agreements between them with respect to the co-tenancy. Except as fully set forth herein, there are no presentations, agreements, or understandings, oral or written, among the Owners relating to the co-tenancy,except for the Intergovernmental Agreements;and the Page 5 of 10—Water Building Tenancy In Common Agreement Lease. 30. Severability. If any term or provision of this Agreement shall to any extent be invalid or unenforceable, the remainder of this Agreement shall not be affected thereby, and each term or provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 31. Governing Law. This Agreement shall be subject to,and governed by,the laws of the State of Oregon. The parties have executed this agreement as of the date first written above. Page 6 of 10—Water Building Tenancy In Common Agreement By: IWB Representative for the City of Tigard CERTIFICATE OF NOTARY PUBLIC STATE OF OREGON COUNTY OF Signed or attested before me on ,2007,by Signature of Notarial Officer Page 7 of 10—Water Building Tenancy In Common Agreement By: IWB Representative for the Tigard Water District CERTIFICATE OF NOTARY PUBLIC STATE OF OREGON COUNTY OF Signed or attested before me on ,2007,by Signature of Notarial Officer Page 8 of 10—Water Building Tenancy In Common Agreement By: IWB Representative for the City of Durham CERTIFICATE OF NOTARY PUBLIC STATE OF OREGON COUNTY OF Signed or attested before me on ,2007,by Signature of Notarial Officer Page 9 of 10—Water Building Tenancy In Common Agreement 1 By: IWB Representative for the City of King City CERTIFICATE OF NOTARY PUBLIC STATE OF OREGON COUNTY OF Signed or attested before me on ,2007,by Signature of Notarial Officer Page 10 of 10—Water Building Tenancy In Common Agreement EXHIBIT A WATER BUILDING TENANTS IN COMMON AGREEMENT LEGAL DESCRIPTION OF PROPERTY DESCRIPTION PARCEL I • A tract of land in Section 2, Township 2 So}th, Range 1 West of tba. Willamette Meridian, in the City of Tigard, County of Washington and State of Oregon, described as follows: Beginning at a point of intersection of the Southwesterly right of way line of that certain 50 foot strip of right of way conveyed to the Oregon Electric Railway Company by James R. O'Mara and Mary C. • O'Mara, his wife, by deed dated January 4, 1907 and recorded February 16, 1907, on Page 40 of Book 75, Deed Records of+Washington County, Oregon, and the vest line of the William Graham Donation Land Claim No. 39, said point being monumented by an iron pipe; thence South 43° 00' West along the vest Donation Land Claim line a distance of 354.3 feet, more or lees, to the center line of County Road No. 977; thence South 45' 04' East along the center line of said County Road; a distance of 95.75 feet; thence South 0' 21' West a distance of 132.33 feet to a point, said point being monumented by an iron pipe; thence South B9° 41' East, a distance of 366.55 feet to a point in the center line of County Road No. 227; thence North 0' 19' East along the center line of County Road No. 227 to a point on the Southwesterly right of way line of the Oregon Electric Railway Company, as aforesaid; thence North 41' 56' West along the South- westerly right of way line as aforesaid, a distance of 291.63 feet to the point of beginning. PARCEL II A tract of land in Section 2, Township 2 South, Range 1 West of the Willamette Meridian, is the City of Tigard, County of Washington and State of Oregon, described as follows: Beginning at the point of intersection of the Southwesterly right of way line of that certain 50 foot strip of right of way conveyed to Oregon Electric Railway Company by James R. O'Mara and Mary C. O'Mara, his wife, by deed dated January 4, 1907, and recorded February 16, 1907, on Page 40 of Book 75, Deed Records of Washington County, Oregon. and the vast line of the William Graham Donation Land Claim No. 39, said point_being monumented by an iron pipe; thonce South 43' 00' West along said west donation land claim line a distance of 354.3 feet, more or less, to the center of County Road No. 997; thence North 45' 04' 30" West along the center line of County Road No. 997, a distance of 241.44 feet; thence North 43' 00' East a distance of 367.75 feet, more or loos, to a point on the Page 2 EXHIBIT A WATER BUILDING TENANTS IN COMMON AGREEMENT LEGAL DESCRIPTION OF PROPERTY DESCRIPTION - Continued Southwesterly right of may line of that carton 50 foot strip of right of way conveyed to the Oregon Electric.Railway Company by Rudolph Runziker and S. C. Hunziker, his wife, by deed dated December 13, 19D6 and recorded February 16, 1907, on Page 39 of Book 75, Deed Records of Washington County, Oregon, thence South 41' 58' East a distance of 242.25 feet, more or less, along said South- westerly right of way line to the point of beginning. PARCEL III A tract of land in Section 2, Township 2 South, Range 1 West of the Willamette Meridian, in the City of Tigard, County of Washington and State of Oregon, described as follows: Beginning at a point in the center of County Road North 45' 46' West 241.44 feet of the most easterly corner of that certain tract of land conveyed to Charles Burnham by deed recorded in Book W, Page 162, Deed Records of Washington County, Oregon, said beginning point being also the most westerly corner of that certain tract of land conveyed to W. J. Karry by deed recorded in Book 146, Page 105, Deed Records; thence North 42° 19' East along the northwesterly line of said Kerry tract, 367.7 feet to the westerly right of way of Oregon Electric Railway Company; thence Northwesterly along said right of way line 60 feet to a point; thence South 42' 19' West 374.23 feet, more or less, to center line of County Road and the easterly line of said Burnham tract; thence South 45' 46' East 60 feet, more or less, to the place of begianning. AFTER RECORDING,RETURN TO: Attn: Timothy V. Ramis Ramis Crew Corrigan, LLP 1727 NW Hoyt Street Portland, OR 97209 BARGAIN AND SALE DEED TIGARD WATER DISTRICT, ("Grantor") conveys to the TIGARD WATER DISTRICT, CITY OF TIGARD, CITY OF DURHAM AND CITY OF KING CITY, as "Tenants In Common"with the following undivided interests: City of Tigard 70% Tigard Water District 22% City of Durham 2.5% City of King City 5.5% the following real property known as the Canterbury Property and legally described as, See Attached"Exhibit A: Property Description" Subject to any easements, rights of way, and reservations as the same may exist or appear of record. Subject also to the Tenancy In Common Agreement dated , 2007. The true consideration for this conveyance is Zero Dollars ($0.00). THIS INSTRUMENT WILL NOT ALLOW USE OF THE PROPERTY DESCRIBED IN THIS INSTRUMENT IN VIOLATION OF APPLICABLE LAND USE LAWS AND REGULATIONS. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO THE PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENT TO VERIFY APPROVED USES AND TO DETERMINE ANY LIMITS ON LAWSUITS AGAINST FARMING OR FOREST PRACTICES AS DEFINED IN ORS 30.930. Dated this day of GRANTOR: Signature, Tigard Water District Print Name and Title of Signing Official (Notarial Certificate on following page) Bargain and Sale Deed for the Canterbury Property Page 1 of 2 STATE OF OREGON ) ) ss COUNTY OF ) This instrument was signed before me on by Notary Public My Commission expires: Bargain and Sale Deed for the Canterbury Property Page 2 of 2 EXHIBIT A CANTERBURY PROPERTY DEED LEGAL DESCRIPTION OF PROPERTY Beginrjng 'at..the;.no• th est corner of"Lot 5, T.gardville I{eLghta a subdivision of record iii. Seatton U-•T nin hip .2 3out1} Range 1 West of he Y 1:aipotte lieridian, in 1Yashington G:of}nty-i.„orogo ve,. :: Gs ,g0-0•: g� 9:!.:lest a off.;. Went line of -said oot,a�,vie.Ipn � l ,3 ti � the X65: root to.:.the o 19Qatc::5o x r Lot.S,.thanes.;gnat.gong,the„South•.mete lqt 541' 26 feet; thence•Nor-thence-West th and parallollwith the''ieet lino of said lot 165 feet to the' North line:thoreof; thence Nest 264 feat to the place of beginning; Together with an easement over the follmring•described treat of lands Hagi.' x `_tea.=..}Jp7[ h@apt corner of the show, deeeribed. property; thence East .along �`� '``#��?�:-�.,��ss:`1`.igardville.Heiglk�s.�' to the ae�ittar:of ?.tiudock Ave�►ge, tl?otico_ South',aa.ong.-aaidr�aenta3�-'I±n?e 4►•-.distanoe of 12 :fsot, thence °V1e t and paralle 1. ith:•the' North-line of 'Lot 5,•to_the_.East l3.ne or t31a.10a7iO-deperibed tract of hind, thence North a.distanoe of 12 feet to the place of beginning.' AFTER RECORDING,RETURN TO: Attn: Timothy V. Ramis Ramis Crew Corrigan, LLP 1727 NW Hoyt Street Portland, OR 97209 BARGAIN AND SALE DEED TIGARD WATER DISTRICT, ("Grantor") conveys to the TIGARD WATER DISTRICT, CITY OF TIGARD, CITY OF DURHAM AND CITY OF KING CITY, as "Tenants In Common"with the following undivided interests: City of Tigard 70% Tigard Water District 22% City of Durham 2.5% City of King City 5.5% the following real property known as the Water Building and legally described as, See Attached"Exhibit A: Property Description" Subject to any easements,rights of way, and reservations as the same may exist or appear of record. Subject also to the Tenancy In Common Agreement dated , 2007. The true consideration for this conveyance is Zero Dollars ($0.00). THIS INSTRUMENT WILL NOT ALLOW USE OF THE PROPERTY DESCRIBED IN THIS INSTRUMENT IN VIOLATION OF APPLICABLE LAND USE LAWS AND REGULATIONS. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT,THE PERSON ACQUIRING FEE TITLE TO THE PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENT TO VERIFY APPROVED USES AND TO DETERMINE ANY LIMITS ON LAWSUITS AGAINST FARMING OR FOREST PRACTICES AS DEFINED IN ORS 30.930. Dated this day of GRANTOR: Signed, Tigard Water District Print Name and Title of Signing Official (Notarial Certificate on following page) Bargain and Sale Deed for the Water Building Property Page 1 of 2 STATE OF OREGON ) ) ss COUNTY OF ) This instrument was signed before me on by Notary Public My Commission expires: Bargain and Sale Deed for the Water Building Property Page 2 of 2 EXHIBIT A WATER BUILDING DEED LEGAL DESCRIPTION OF PROPERTY DESCRIPTION PARCEL ' A tract of land in Section 2, Township 2 SoJ'th, Range 1 West of the: Willamette Meridian, in the City of Tigard, County of Washington and State of Oregon, described as follows: Beginning at a point of intersection of the Southwesterly right of way line of that certain 50 foot strip of right of way conveyed to the Oregon Electric Railway Company by James R. O'Mara and Mary C. O'Mara, his wife, by deed dated January 4, 1907 and recorded February 16, 1907, on Page 40 of Book 75, Deed Records of Washington County, Oregon, and the test line of the William Graham Donation Land Clain No. 39, said point being monumented by an iron pipe; thence South 43' 00' West along the West Donation Land Claim line a distance of 354.3 feet, more or less, to the center line of County Road No. 977; thence South 45' 04' East along the center line of said County Road; a distance of 95.75 feet; thence South 0' 21' West a distance of 132.33 feet to a point, said point being monumented by an iron pipe; thence South 69' 41' East, a distance of 366.55 feet to a point in the center line of County Road No. 227; thence North 0' 19' East along the center line of County Road No. 227 to a point on the Southwesterly right of way line of the Oregon Electric Railway Company, as aforesaid; thence North 41' 58' West along the South— westerly right of way line as aforesaid, a distance of 291.63 feet to the point of beginning. PARCEL II A tract of land in Section 2, Township 2 South, Range 1 West of the Willamette Meridian, in the City of Tigard, County of Washington and State of Oregon, described as follows: Beginning at the point of intersection of the Southwesterly right of vay line of that certain 50 foot strip of right of way conveyed to Oregon Electric Railway Company by James R. O'Mara and Mary C. O'Mara, his wife, by deed dated January 4, 1907, and recorded February 16, 1907, on Page 40 of Book 75, Deed Records of Washington County, Oregon, and the vest line of the William Graham Donation Land Claim;lo. 39, said point being monumented by an iron pipe; thence South 43' 00' West along said west donation land claim line a distance of 354.3 feet, more or lees, to the center of County Road No. 997; thence North 45' 04' 30" West along the canter line of County Road No. 997, a distance of 241.44 feet; thence North 43' 00' East a distance of 367.75 feet, more or leas, to a point on the Page 2 EXHIBIT A WATER BUILDING DEED LEGAL DESCRIPTION OF PROPERTY DESCRIPTION — Continued Southwesterly right of uay line of that cnrt.in 50 foot strip of right of way conveyed to the Oregon Electric.Railway Company by Rudolph Bunziter and S. C. Bunziker, his wife, by deed dated December 13, l906 and recorded February 16, 1907, on Page 39 of Book 75, Deed Records of Washington County, Oregon, thence South 41° 5111 East a distance of 242.25 feet, more or Sens, along said South— westerly right of way line to the point of beginning. PARCEL III A tract of land in Section 2, Township 2 South, Range 1 West of the Willamette Meridian, in the City of Tigard, County of Washington and State of Oregon, described as follows: Beginning at a point in the center of County Road Borth 45° 46' West 241.44 feet of the Moet easterly corner of that certain tract of land conveyed to Charles Burnham by deed recorded in Book W, Page 162, Deed Records of Washington County, Oregon, said beginning point being also the most westerly corner of that certain tract of land conveyed to W. J. Kerry by deed recorded in Book 146, Page 105, Deed Records; thence North 42° 19' Past along the northwesterly line of said Kerry tract, 367.7 feet to the westerly right of way of Oregon Electric Railway Company; thence Northwesterly along said right of way line 60 feet to a point; thence South 42' 19' West 374.23 feet, more or less, to center line of County Road and the easterly line of said Burnham tract; thence South 45' 46' East 60 feet, more or less, to the place of beginning, , • ',Omitted at the TWD Meeting • By: u s Y kos r ou-k-/ Ilut10n1V0. 07-01 Date: 6/- /o-7 Agenda Item No.: ADOPTING THE BUDGET BE IT RESOLVED that the Board of Directors of the Tigard Water District hereby adopts the budget for fiscal year 2007-08 in the total of$ 105,768.00 *now on file at the Tiaard City Hall. 13125 SW Hall Blvd.Tiaard. OR 97223 • MAKING APPROPRIATIONS BE IT RESOLVED that the amounts for the fiscal year beginning July 1,2007,and for the purposes shown below are hereby appropriated: General Fund Reserve Fund Personal Services $ Personal Services $ Materials&Services $ Materials&Services Capital Outlay $ Capital Outlay $ Transfers $ Total $ 0 $ Tigard Water District Fund Contingency $ Personal Services $ Total $ 0 Materials&Services $ 54,768 Capital Outlay $ $ Debt Service Fund Contingency $ 8,000 Debt Service $ 0 Total $ 62,768 Total Appropriations,All Funds $ 62,768 Total Unappropriated and Reserve Amounts,All Funds $ 43,000 TOTAL ADOPTED BUDGET $ 105,768 (*amounts with asterisks must match) IMPOSING THE TAX BE IT RESOLVED that the Board of Directors of the N/A hereby imposes the taxes provided for in the adopted budget: (1)In the amount or at the rate per$1,000 of assessed value of$ for operations; (2)In the amount or at the rate per$1,000 of assessed value of$ for local option tax;and (3)In the amount of$ for bonds; and that these taxes are hereby imposed and categorized for tax year 2007-08 upon the assessed value of all taxable property within the district as follows: CATEGORIZING THE TAX General Government Limitation Excluded from Limitation General Fund $ N/A/$1,000 Local Option Tax $ N/A/$1,000 Debt Service Fund $ 0 The above resolution statements were approved and declared adopted on this 25 day of June 2007. X X Signature Signature X X Signature Signature 150-504.073-a(Rev.12-06) r Tigard Water District Adopted Budget Fiscal Year 2007-08 Actual Actual Actual Actual Adopted Account# Est Actual Proposed Approved Adopted FY 2002-03 FY 2003-04 FY 2004-05 FY 2005-06 FY 2006-07 Resources FY 2006-07 FY 2007-08 FY 2007-08 FY 2007-08 Revenues $13,125 $13,091 $13,310 $13,116 $14,500 One Percent Water Sates $15,475 $15,500 $15,500 $15,500 1,609 1,179 2,123 2,334 2,500 Interest Earnings 3,800 3,700 3,700 3,700 $14,734 $14,270 $15,433 $15,450 $17,000 Total Revenues $19,275 $19,200 $19,200 $19,200 57,794 67,851 79,217 89,815 94,836 Beginning Balance 90,076 86,568 86,568 86,568 $72,528 $82,121 $94,650 $105,265 $111,836 Total Resources $109,351 $105,768 $105,768 $105,768 Expenditures $0 $0 $0 $0 $0 Total Personal Services $0 $0 $0 $0 Materials and Services $780 $0 $0 $3,362 $20,000 Attorney $2,000 $20,000 $20,000 $20,000 O 0 0 0 10,000 Consultant Services 0 10,000 12,000 12,000 0 0 0 0 0 Financial Reveiw 0 0 5,000 5,000 O 0 0 0 0 Engineering Services 0 0 0 0 494 1,304 1.684 8.883 12,000 Meeting/Staff Support 14,573 12,000 10.000 10,000 1,274 1,304 1,684 12,245 42,000 601000 Professional/Contractual Svcs 16,573 42,000 47,000 47,000 1,152 0 1,442 0 0 Election Costs 3,500 0 0 0 O 0 0 0 63,316 Misc 0 56.998 998 998 1,152 0 1,442 0 63,316 613000 Special Department Expense 3,500 56,998 998 998 O 42 0 0 300 620000 Office Supplies&Expenses 50 300 300 300 777 100 150 155 150 Meeting Notice 200 200 200 200 O 0 0 500 2500 Public Relations 500 2,500 2,500 2.500 777 100 150 655 2,650 621000 Advertising&Publicity 700 2,700 2,700 2,700 O 0 0 20 20 622000 Fees&Licenses 20 20 20 20 120 120 120 120 150 Special District Assoc Dues 120 150 150 150 120 120 120 120 150 623000 Dues&Subscriptions 120 150 150 150 54 38 49 59 600 624000 Travel/Food&Lodging 75 600 600 600 0 0 0 0 500 625000 SDAO Annual Conference 0 500 500 500 1,300 1,300 1-390 2,090 2,300 632000 Insurance 1,745 2,500 2.500 2.500 $4,677 $2,904 $4,835 $15,189 $111,836 . Total Materials and Services $22,783 $105,768 $54,768 $54,768 O 0 0 0 Total Capital Outlay 0 0 0 0 $4,677 $2,904 $4,835 $15,189 $111,836 Total Expenditures $22,783 $105,768 $54,768 $54,768 O 0 0 0 0 Contingency 0 0 8,000 8,000 $4,677 $2,904 $4,835 $15,189 $111,836 Total Appropriations $22,783 $105,768 $62,768 $62,768 67.851 79,217 89.815 90.076 0 Ending Fund Balance 86,568 0 43 000 43,000 Total Appropriations and Ending $72,528 $82,121 $94,650 $105,265 $111,836 Fund Balance $109,351 $105,768 $105,768 $105,768 625/2007 3:49 PM qifi WASHINGTON COUNTY -' .a s'`'' '" -, '- Date: 15-JUN-07 SUITE 270 MS 25 155 N 1ST AVE HILLSBORO OR 97124-3072 Invoice #: 41203 Assessment and Taxation Depa Due Date: 15-JUL-07 Krevanko, Trade M 503-846-5824 Amount $: 1,882.13 Customer: Attn: Accounts Payable CITY OF TIGARD Customer P.O. #: WATER DISTRICT 13125 SW HALL BLVD TIGARD OR 97223 Unit Price = _Eittended Quantity escription''' 1 May 15, 2007 Election Costs 1,882.13 1.882.13 • Submitted at the TWD Meeting • By: .I0 y kc g -doe Date: / / 6 -7 Agenda Item No.: "'IA- ' • • • TOTAL: 1,882.13 . Customer #: 1758 invoice #: 41203 Customer: Attn: Accounts Payable Due Date: 15-JUL-07 CITY OF TIGARD WATER DISTRICT Amount Due: $ 1.882.13 13125 SW HALL BLVD TIGARD OR 97223 Amount Paid: $ Remit To: Washington County. Finance Division SUITE 270 MS 25 155 N 1ST AVE HILLSBORO OR 97124-3072 1100 I Tn insure mmner credit. nlease include this nortion of invoice with navment By: eting • �suemmea at the rwoe�eme; ..c Date: /�/' —7 Agendanem No.: 1A Background Information on Rental Calculations for the Water Building Lease Tigard Water Service Area (TWSA) Office Building Asset Evaluation : Future Use Allocation DKK, 3/12/07 Sq. Ft. Allocated Percentage of Rental by Sq. Ft. Sq. Ft. Reallocation Income and Division/ Without Without of Common Common Area Common Percentage of Rental Percentage of Common Common Areas to Allocation by Area Description Areas Total Sq.Ft. Income Sq. Ft. Areas Areas Divisions Division Common Areas Employee Shared Area 3,670 23.56% $ 66,060.00 Admin. Staff 986 6.33% $ 17,748.00 Fleet 2,469 15.85% $ 11,851.20 Public Auditorium 1,603 10.29% $ 28,854.00 $ 124,513.20 56.03% Water 905 5.81% $ 16,290.00 Water Equipment Bays 3,132 20.11% $ 15,033.60 $ 31,323.60 25.92% 4,037 58.94% $ 73,391.71 $ 104,715.31 Parks/Facilities 374 2.40% $ 6,732.00 $ 6,732.00 2.40% 374 5.46% $ 6,799.23 $ 13,531.23 Storm 175 1.12% $ 3,150.00 Storm Equipment Bay 1,044 6.70% $ 5,011.20 $ 8,161.20 7.83% 1,219 17.80% $ 22,161.13 $ 30,322.33 Sanitary 175 1.12% $ 3,150.00 Sanitary Equipment Bay 1,044 6.70% $ 5,011.20 $ 8,161.20 7.83% 1,219 17.80% $ 22,161.13 $ 30,322.33 Total: 15,577 100.00% $ 178,891.20 100.00% 6,849 100.00% $ 124,513.20 $ 178,891.20 Rental Rate*.(per sq.ft.): Commercial @ $18.00 annually Source: Pacific Security Capital Fourth Quarter Overview, 2006 Shop/Bays @ $ 0.40 monthly Source: Grubb & Ellis Industrial Market Trends, Fourth Quarter, 2006 z_rz 4a i/ALL I , zG ZE 74 (z! sz LZ - --- --- -------- - - e Z_ / J5 ) ___cs✓ (/ _psi E, ,, -.F.,,Kt/ • , iiy /-z. 2i z8yy (I ---------------- - ---- - - - -- -- - (7/ c,OZ f ------------ --- ----- - a'7_S acts ---- - - -- --- ------ --- ooQz . 0,.0.___,--, gcci i , (1,r,--,,,,..t) cz5765. 0070 _a/r7 "'s' ; l . • 7 ; ATTACHMENT D CITY OF TIGARD INVITATION TO BID FIRST TIER SUBCONTRACTOR DISCLOSURE FORM PROJECT NAME:`!I 442-Y, iP. i 4flr2 BZ-i RE,t'c7Vf1rD,j BID #: .BID CLOSING:Date: 3—g'a 7 Time: Z:P2 This form must be submitted at the location specified in the Invitation to Bid on the advertised bid closing date and within two working hours after the advertised bid closing time. List below the name of each subcontractor that will be famishing labor or will be furnishing labor and materials in connection with the public improvement and that is required to be disclosed,the category of work that the subcontractor will be performing and the dollar value of the subcontract. Enter "None" if there are no subcontractors that need to be disclosed. (Attach additional sheets ifthey are needed). NAME DOLLAR VALUE CATEGORY OF WORK 1) TiZJnJ 11y 0611-pEi 1LP& $ 37 5121 hili. ? FLp/.d4 2) 'FART `T- PLUrnbi. '4. $ Z3. SPD 1jy J )1.,1)6•6;;K 3) 62.12-Ey +n,, $ 93, S-21) 351.0 Z3 - V14-C._ 4) ATLAS EL . $ 53 - 13? 1.);0 2,4 ELEeZ Failure to submit this form by the disclosure deadline will result in a nonresponsive bid. A nonresponsive bid will not be considered for award. Form submitted by(Bidder's name): c_.:E,drizsic Contact Individual: K L) 5 Z-rblhErvo. Phone#:_5D 3 4 42/—Def f 3 ITB—Tigard Public Works,Water Building Renovation Page 16 Close—Tuesday,March 8,2007,2:00 PM Aroma FB002 • 3/5/2007 2 :24 : 54 PM PAGE 5/017 Fax bervGx , ATTACHMENT A CITY OF TIGARD TIGARD PUBLIC WORKS WATER BUILDING RENOVATION BID FORM The Bidder,whose legal signature binding the Bidder to the bid prices indicated on these pages,hereby bids as follows: *e Base Bid $ ' S t j Bid Alternate No.1 $ '?)L.7.fl©,' (Reuse existing entrance doors) Bid Alternate No.2 $.20$c'". .13/) (Delete Louver Blinds) Bid Alternate No.3 \S r()ice.V P) (Delete sprirdrlrs head replacement) \ i,/ Bidders Signature Print Corporate Name of Bidding Finn: Centrex Construction, Inc. Print Bidder Rep. NameandTitle: Jim Severson, President Bidder Representative Signature: The following schedule of bid prices is for owner's reference only.This pricing will not be used in determining bid award.Minor discrepancies between this pricing and bid noted above or Attachment`D' will not constitute a non-responsive bid. vxkh r« et ;' x 3 2ii ; s'42Na ,,, -vv. tk:1/4— e r u .. ` DIVISION 01 GENERAL REQUIREMENTS i$ jWO i' CtiliK_ 1 DIVISION 02 IFOUSTING CONDITIONS 1$ )l i V I DIVISION 05 METALS I$ 2, pDC7 • t DIVISION 06 WOOD,PLASTICS,AND COMPOSITES ,I$ ' t svo i DIVISION 07 !THERMAL AND MOISTURE PROTECTION J$ 5LV DIVISION 08 DOORS AND WINDOWS 1$ 1 2I `T�t` DIVISION 09 FINISHES `$ (;L. 7v12 1T1i-Tigard Public Works,Waxer Building Renovation Page 11 Close—Tuesday,March 8,2007,2:00 PM FBO.02 3/5/2007 2 : 24 :54 PM PAGE tsiuii rax nerver DIVISION 10 SPECIALTIES 15 i 2 3 2_ I DIVISION 11 EQUIPMENT 1$ 443V2- 1 Z1 I DIVISION 12 'FURNISHINGS I s 21Y V 1 DIVISION 21 'PIKE SUPPRESSION 1$ I ( g33 DIVISION 22 ,PLUMBING 1$ 24.3 2 ) I DIVISION 23BEATING,VENTILATING,AND AIR CONDITIONING(HVAC) is 1 0 5 L. DIVISION 26 !ELECTRICAL 'I 1$ 63, i3 j DIVISION 27 COMMUNICATIONS 1$ 17, 9-24. DIVISION 28 1ELECTRONIC SAPETY AND SECURITY 1$ r 2- 3 2- I DIVISION 32 (EXTERIOR IMPROVEMENTS 1$ 7 11'3 I I NOTE-Ifa bid reauires more table space to list pricing detail.Bidderis to submit information on additional Cont/of this form. ITB-Tigard Public Works,Water Building Renovation Page 12 Close-Tuesday,March 8,2007,2:00 PM • ATTACHMENT B ACKNOWLEDGMENT OF ADDENDA CITY OF TIGARD, OREGON INVITATION TO BID TIGARD PUBLIC WORKS WATER BUILDING RENOVATION CLOSE:TUESDAY,MARCH 8, 2007,2:00 PM I/WE HAVE RECEIVED THE FOLLOWING ADDENDA: If none received,write 'None Received" 1. Addendum 1 3. 2. d ndnm 2 4. is March 8, 2007 • Date Signat eProporer PrAci runt Title Centrex Construction-Inc. Corporate Name • ITB—Tigard Public Works,Water Building Renovation Page 14 Close-Tuesday,March 8,2007,2:00 PM •T BID BOND Travelers Casualty ark. ..iurety Company of America One Tower Square 3PB, Hartford, CT 06183 Bond No. NIA KNOW ALL MEN BY THESE PRESENTS, That we, Centrex Construction, Inc., as Principal, hereinafter called the Principal, and Travelers Casualty and Surety Company of America, of One Tower Square 3PB. Hartford, CT 06183, a corporation duly organized under the laws of the State of Connecticut, as Surety, hereinafter called the Surety, are held and firmly bound unto City of Tigard, as Obligee, hereinafter called the Obligee, In the sum of --Ten Percent of the Total Bid Amount-- Dollars ($--10%--), for the payment of which sum well and truly to be made, the said Principal and the said Surety, bind ourselves, our heirs, executors, administrators, successors and assigns, jointly and severally, firmly by these presents. WHEREAS, the Principal has submitted a bid for Tiaard Public Works Water Building Renovation. NOW, THEREFORE, if the Obligee shall accept the bid of the Principal and the Principal shall enter into a Contract with the Obligee in accordance with the terms of such bid, and give such bond or bonds as may be specified in the bidding or Contract Documents with good and sufficient surety for the faithful performance of such Contract and for the prompt payment of labor and material furnished in the prosecution thereof, or in the event of the failure of the Principal to enter such Contract and give such bond or bonds, if the Principal shall pay to the Obligee the difference not to exceed the penalty hereof between the amount specified in said bid and such larger amount for which the Obligee may in good faith contract with another party to perform the Work covered by said bid, then this obligation shall be null and void, otherwise to remain in full force and effect. - ._ - Signed and sealed this 2nd day of March, 2007. Centrex Construction, Inc. (Seal) Witness Principal Travelers Casualty and Surety Company of Amer By. kekt— (Seal) hleen M. Sadowski Witness T�}'rotoffett �� Attorney-in-Fact Printed in cooperation with the American Institute of Architects(AIA)by Travelers Casualty and Surety Company of America. The language in this document conforms exactly to the language used in AlA Document A310,February 1970 edition. S-1869-G(10-00) WARNING:THIS POWER OF ATTORNEY IS INVALID WITHOUT THE RED BORDER TRAVELERS POWER OF ATTORNEY Farmington Casualty Company St.Paul Guardian Insurance Company Fidelity and Guaranty Insurance Company St.Paul Mercury Insurance Company Fidelity and Guaranty Insurance Underwriters,Inc. Travelers Casualty and Surety Company Seaboard Surety Company Travelers Casualty and Surety Company of America St.Paul Fire and Marine Insurance Company United States Fidelity and Guaranty Company Attorney-In Fact No. 218303 Certificate No. 0 01450 3 39 KNOW ALL MEN BY THESE PRESENTS:That Seaboard Surety Company is a corporation duly organized under the laws of the State of New York,that St.Paul Fire and Marine Insurance Company,St.Paul Guardian Insurance Company and St.Paul Mercury Insurance Company are corporations duly organized under the laws of the State of Minnesota,that Farmington Casualty Company,Travelers Casualty and Surety Company,and Travelers Casualty and Surety Company of America are corporations duly organized under the laws of the State of Connecticut,that United States Fidelity and Guaranty Company is a corporation duly organized under the laws of the State of Maryland,that Fidelity and Guaranty Insurance Company is a corporation duly organized under the laws of the State of Iowa,and that Fidelity and Guaranty Insurance Underwriters,Inc.is a corporation duly organized under the laws of the State of Wisconsin(herein collectively called the"Companies"),and that the Companies do hereby make,constitute and appoint A.G.Sadowski, Derek A. Sadowski, Kathleen M. Sadowski,and Ty Moffett of the City of Saler .State of ., ,their true and lawful Attorney(s)-in-Fact, in thea separate capacity if more than one is named above,to sign,execute,seal and ac owledge any and all bonds,recognizances,conditional undertakings and other writings obligatory in the nature thereof on behalf of the Companies in theirkusjness of aranteeing the fidelity of persons,guaranteeing the performance of contracts and executing or guaranteeing bonds and undertakings required or pee in ar ons o ceedings allowed by law. Q 15th dayIN WITNESS WHEREOF,the Companies have caused this ins a tribe $tie vabd orate seals to be hereto affixed,this day of February , 2007 , ; � �1 Farmington Casualty Cp ' . VP ) St Paul Guardian Insurande Company • Fidelity and Guarantyteas ran i ipa,m O St.Paul Mercury Insurance Company Fidelity and Guaranty Insul lhe'Underwt'iCers,Inc. Travelers Casualty and Surety Company Seaboard Surety Company Travelers Casualty and Surety Company of America St.Paul Fire and Marine Insurance Company United States Fidelity and Guaranty Company pI.6 U,t, 574 Jy""6 �pN �yy.G pj 1Msuq u,,`TY 44° INS ry �ISYA p? w?< 1,-��-'�' fF Y .r Cor R;9 �f..........syn aG1 �'" 1962 o f o� z7 • - _•d>". ,� eves, ,e i9 • S4"'y 2 1ltt �9 -.AS6ALlo" tS81LL:; r�o' 4 "`b dna• �� _WI � � .G.. 4.0F wire' '�rwucE `�1�`S. 'j34 'vl AlltO`_ State of Connecticut By: City of Hartford ss. Georg Thompson, 'or rce President • On this the 15th day of February 2007 , before me personally appeared George W. Thompson,who acknowledged himself to be the Senior Vice President of Farmington Casualty Company, Fidelity and Guaranty Insurance Company,Fidelity and Guaranty Insurance Underwriters, Inc.,Seaboard Surety Company,St.Paul Fire and Marine Insurance Company,St.Paul Guardian Insurance Company,St.Paul Mercury Insurance Company,Travelers Casualty and Surety Company,Travelers Casualty and Surety Company of America,and United States Fidelity and Guaranty Company,and that he,as such,being authorized so to do,executed the foregoing instrument for the purposes therein contained by signing on behalf of the corporations by himself as a duly authorized officer. G•Ter C d.,/ kattand+ In Witness Whereof,I hereunto set my hand and official seal. TAR I 1 W w" My Commission expires the 30th day of June,2011. O,t Ria0 f* Marie C.Tetreault,Notary Public 58440-8-06 Printed in U.S.A. WARNING:THIS POWER OF ATTORNEY IS INVALID WITHOUT THE RED BORDER • ATTACHMENT C BID CERTIFICATIONS o;..;-1..;ca;o;..i o,4-1-1a:-1-1..;4.1-i..1..i..4-i-1a;..;a;_1.4-k Non-discrimination Clause The Contractor agrees not to discriminate against any client, employee or applicant for employment or for services, because of race,color,religion,sex, national origin,handicap or age with regard to,but not limited to, the following employment upgrading, demotion or transfer;recruitment or recruitment advertising;layoffs or termination; rates of ply or other forms of compensation; selection for training; rendition of services. It is further understood that any contractor who is in violation of this clause shall be barred from receiving awards of any purchase order or contract from the City, unless a satisfactory showing is made that discriminatory practices have terminated and that a recurrence of such acts is unlikely. Agreed by: Jim Severson II FirtnName: Centrex Construction, Inc. Address: 8250 SW Hunziker Rd. Tigard, OR 97223 1..i.;.dol.4-144-1-1-4.44-4a;..4..4..4.4-:,_4_4-4-1-k..44i. Resident Certificate Please Check One: © Resident Vendor:Vendor has paid unemployment taxes and income taxes in this state during the last twelve calendar months immediately preceding the submission of this proposal. Or ❑ Non-resident Vendor:Vendor does not qualify under requirement stated above. (Please specify your state of residence: ‘It.--...--..f2.-1"."...... , Officer's signature: Type or print officer's name: James Severson ITB-Tigard Public Works,Water Building Renovation Page 15 Close—Tuesday,March 8,2007,2:00 PM I u I I I I iiia II I I I I III uE • C.1 CENTREX CONSTRUCTION INCORPORATED a March 8,2007 To Whom It May Concern: Centrex Construction, Inc. is an Oregon Corporation registered since 1985, specializing in commercial and industrial in both new and remodel construction. Centrex Construction agrees to meet conditions set forth in ORS 279C.840 and ORS 279C.845 pertaining to prevailing wages on this project. Existing Centrex Construction drug testing program shall remain in place for the duration of this contract. J.L'es Severson,President Centrex Construction noun c u► L1111.1711(FR RR_ ■ TIGARD,OREGON 97223-5060 ■ TELEPHONE(503)684-0443 ■ FAX(503)620-6692 CENTREX CONSTRUCTION INCORPORATE D March 8,,2.007 Centrex Construction, Inc. References Columbia County Transitional Housing City of St. Helens $750,000 Completed Sept. 2006 Southend Airpark Hangar Juliet Westwood Development Corp. $1,700,000 Completed March 2005 City of Tigard City Hall and Permit Center Remodel City of Tigard $1,120,000 Completed Feb. 2005 8250 S.W.HUNZIKER RD. ■ TIGARD,OREGON 97223-5060 ■ TELEPHONE(503)684-0443 ■ FAX(503)620-6692 Office Market Trends Portland Grubb & Ellis Research First Quarter 2007 GrubbGEllise Market Takes a Breather Property Solutions Worldwide Executive Summary The overall Portland economy started slow, reflecting seasonal trends, but was back to modest growth by February. Unemployment has dropped to 5.1 percent and job growth registered a year-over-year increase of 2.1 percent in the metro area. The Portland office market also got off to a slow start in 2007, an indication of seasonal fluctuations in deal activity rather than a reversal of the market's improving trend. The market sustained a loss in net absorption of 152,000 square feet, pushing vacancy rates up to 12.5 percent. Despite this loss, rental Contents rates continue to climb in response to the tightening office market and increased competition for space. Just 148,000 square feet of new construction was added Executive Summary 1 to the market but there has been an increase in the construction pipeline with over Overview 2 1.1 million square feet currently under construction. Forecast 2 The CBD office market will become tighter as the year progresses, more due Opportunities&Challenges 3 to a lack of new supply than particularly robust demand. Nonetheless, expect rental rates in the CBD to spike this year, ending the year over$26.00,while the Market Snapshot 4 best Class A+space is already being marketed at rates between$28-$30.00 full service. The Washington Square/Kruse Way submarket has felt the repercussions of the sub-prime mortgage fallout with vacancy up again this quarter. Deals in the market and current leasing velocity suggest that this trend will not last long and the market is expected to be a strong performer in 2007. Portland Office Market Trends is a newsletter published quarterly by 20% — 13.9 13.3 12.7 12.5 12.4 11.9 11.9 11.7 12.5 Grubb&Eihs Company.To obtain additional copies or other Grubb&Ellis publications, please contact: 18% — Patricia K.Raicht Client Services Manager 16% E-mail:patricia.raicht@grubb-ellis.com Grubb&Ellis Company 14% — 1120 NW Couch Street,Suite 350 Portland,Oregon 97209 12% — • Phone:503.241.1155 Fax:503.241.0306 Internet:www.grubb-ellis.com 10% 10/05 20/05 3Q/05 4Q/05 10/06 2Q/06 30/06 4Q/06 10/07 ®2007 Grubb&Ellis Company Office Vacancy Rate* *All Classes of Space Office Market Trends First Quarter 2007 While net absorption took a Overview hit this quarter, deal velocity The Portland economy started the year out slowly, reflecting and current deals in the typical seasonal trends, but returned to job growth in February. market indicate that this is Unemployment stands at 5.1 percent, this is down from 5.4 percent a seasonal blip, and not an in February of 2006, and metro area employers added jobs reflecting indication of a trend for the an annualized growth rate of 2.1 percent. The State is faring office market. similarly with statewide unemployment now standing at 5.3 percent, down slightly from the previous year, and job growth has rebounded in February contributing to a 2.0 percent year over year growth rate. Much like the economy, the commercial real estate markets tend to CBD Class A Rental see a surge in activity at the end of the year, followed by a slower and Vacancy Rates period in the beginning of the year. Portland's office market took a 18% - $26 breather in the first quarter. The market registered a net absorption 16 $24.31 25 • 24 loss of 152,000 square feet, pushing overall vacancy rates up to 14 • 23 „ 12.5 percent. The losses were felt across many of the submarkets, a • c 12 • 22 ce with the largest submarkets seeing the greatest losses. While net 10 • 20 m absorption took a hit this quarter, deal velocity and current deals in 8 16 the market indicate that this is a seasonal blip, and not an indication 6.4% • 17 of a trend for the office market. 6 • 16 4 . 15 1Q/05 1Q/06 1Q/07 Rental rates have risen again this quarter, driven primarily by the Vacancy% Rental Rates$ CBD and Washington Square/Kruse Way submarkets, with overall Class A asking rates up 2 percent in the first quarter, going from $23.60 to $24.15. Construction activity has also increased with Washington Square/Kruse Way total office under construction jumping from 877,000 square feet Class A in the fourth quarter of last year to over 1.1 million square feet 18% ' - $27 currently underway. $25.50 - 26 16 25 14 . - 24 Forecast - 23 ce 12 • - 2zDespite the seasonal setback, Portland's Central Business District _ 10 10.5% 21 , continues to be the tightest major submarket. Class A vacancy • 20 tr stands at 6.4 percent and there are limited options for any tenant 8 • - 19 18 looking for more than 30,000 square feet. The CBD market will •6 • - 17 tighten as the year progresses, due more to a limited supply than 4 1Q105 1Q/06 1Q. 16 particularly robust demand. Companies are increasingly expecting more from their employees and are doing more with less. The hyper- ' Vacancy% Rental Rates$ expansions of the late 1990's and early 2000 are gone, having been replaced, after several years of stagnation, by stable, sustainable organic growth. With a conservative estimate of net absorption (based on an average of the previous 10 years)vacancy is expected ©2007 Grubb&Ellis Company 2 • Office Market Trends First Quarter 2007 to drop below 5 percent by the end of 2007 and be at an all time low Tenants throughout the of less than 4 percent in 2008. Rental rates have already begun to motto al ea will need to spike, jumping from $23.80 to $24.31, in the first quarter. This repre- prepare themselves fur :: sents an annualized increase of 8 percent and indicates that Class /imr.'I !Orket{ alit; A tenants will be facing average rental rates of over$26.00 by the end of 2007. The best space, Class A+, is already being marketed at rates from $28-$30 full service. Construction talk has increased significantly but no major CBD tower has yet to break ground. Rather, a number of smaller infill, redevel- opment or mixed-use projects have broken ground or are on the Area Sublease Space verge of breaking ground, helping to meet the needs of CBD tenants. in Square Feet These projects include:The Lovejoy, 12th & Washington, Block 90 1.6 MIL - and 809 NW Flanders. 1.4 1.2 - Opportunities and Challenges 1.0 - The Washington Square/Kruse Way submarket suffered additional 0.8 - 625,048 losses this quarter, much of it due to the continuing fallout from the o.s - 0.4 _ mortgage industry shakeup. These losses, coupled with the quiet 0.2 period resulting from the Shorenstein purchase of the Equity Office 0 Properties portfolio from Blackstone, led to a slowdown in activity in 1Q/05 1Q/06 1Q/07 the submarket. It remains to be seen what additional losses may be coming from the sub-prime mortgage industry meltdown, but deals in the pipeline indicate that the Kruse Way submarket will continue to be a strong performer in 2007. Deals already announced include: Oregon State Bar at 55,426 SF, Oregon Medical Association, at 34,905 SF, and American Family Insurance, at 42,801 SE Office Under Construction in Square Feet Tenants should brace themselves for sticker shock when they try to 1.4 - renew in the Kruse Way submarket. It has been reported that rents in 1.2 1,102,593 - the area are so fluid that lease rates on proposals for the same space 1.0 - can increase from one month to the next and concessions have been 0.8 0.6 - gone for some time. 0.4 - 0.2 - Tenants throughout the metro area will need to prepare themselves for a new market reality. The best spaces have multiple tenants 1Qi05 10/06 10i07 competing for them. Where in the past a tenant could take their time in reviewing their options and selecting a space, the current market environment requires tenants to act fast if they want to secure a particular space and be prepared to go outof pocket for a portion of the tenant improvement buildout. ©2007 Grubb&Ellis Company 3 Office Market Snapshot Portland First Quarter 2007 By Submarket Total(1) Vacant(2) Net Absorotion Under Const.(3) Askino Rent (4) (All Classes) SF SF Vacant% Current Year To Date SF Class A Class B x sx` :, , �.:a ,., x n [[ a� `� to rib ->:'z �� stt ....t °�:.:... .akj-. -..., '.c.? :7 :�''e; ar�> .��° � `40',,. CBD Total 17,144,421 1,631,072 9.5% (66,809) (66,809) 289,343 $24.31 $18.55 Portland Suburbs Columbia Corridor 538,455 111,163 20.6% 17,286 17,286 - $20.00 $16.77 Johns Landing/BarburBlvd 1,625,853 215,323 13.2% (23,062) (23,062) - $25.30 $19.60 Northwest v j 1,641,301 114,7y13 7.0% (2,9{23) (2,923)• }} 16,400 Y$ -- $18.58 .- �� t+,�.`. +., Tc" �i,1,e Z Aa aew.r..nM<.. •5i f 1.,�; 4 SW/Beaverton/Sylvan 2,788,321 497,237 17.8% (38,489) (38,489) 158,400 $23.79 $17.03 Washington Sq/Kruse Way 5,577,114 557,072 10.0% (89,025) (89,025) 248,186 $25.50 $19.06 Portland Suburban Total 22,509,569 3,225,710 14.3% (112,012) (112,012) 683,250 $24.16 $18.04 Clark County Suburbs Cascade Park 1,886,587 200,088 10.6% (53,837) (53,837) 10,000 $23.66 $19.92 Clark County Outlying 17,475 9,572 54.8% (2,755) (2,755) - - $24.00 Atkg,Megettffrett�,..'�x .ms's d;� Orchards 243,033 30,800 12.7% 21,300 21,300 - - $14.69 " -3ML'.- ,max.._-..: '' ,r, tr� "? s �. �.•j �., .'`� ;�, ;. ., �. Vancouver Mall 690,217 164,969 23.9% 60,028 60,028 - $21.66 $20.05 Clark County Suburban Total 5,829,220 823,737 14.1% 26,077 26,077 130,000 $22.92 $19.03 Suburban Total 28,338,789 4,049,447 14.3% (85,935) (85,935) 813,250 $23.99 $18.21 Totals 45,483,210 5,680,519 12.5% (152,744) (152,744) 1,102,593 $24.13 $18.30 By Class Available for Sublease (All Submarkets) CBD Suburban z+a Class B 15,181,910 2,034,998 13.4% 8,726 8,726 417,107 1,855 159,826 a Yn s 3 s z � x `.0�}1 ��.. Totals 45,483,210 5,680,519 12.5% (152,744) (152,744) 1,102,593 139,147 485,901 (1)Inventory includes multi-tenant and single tenant buildings with at least 10,000 sq.ft. (2)Vacant space includes both vacant direct and vacant sublease space. (3)Space under construction includes speculative and build-to-suit for lease projects. (4)Asking rates are per square foot per year full service.Rates for each building are weighted by the amount of available space in the building. *Grubb&Ellis statistics are audited annually and may result in revisions to previously reported quarterly and final year-end figures. For more information on the Portland Office Market, contact one of our specialists: David C.Squire,SIOR Thomas A.Remley,SIOR Irian Tahir Jake Lancaster Michelle Franceschl Managing Director Senior Vice President Investment Associate Office Specialist Office Specialist Executive Vice President 503-972-5512 503-972-5509 503-972-5511 503-972-5523 503-972-5505 Julie Bennett Eric Haskins Matt Adams Bradford H.Fletcher,SIOR Donn M.Sullivan,SIOR Office Specialist Senior Associate Office Specialist Managing Director Senior Vice President 503-972-5506 503-972-5503 503-972-5543 Executive Vice President 503-972-5522 Brandon Frank David Hili Jeff Snyder 503 X72-5500 Senior Associate Vice President Office Specialist 503-972-5504 503-972-5510 503-972-5502 e GrubbtlEllis® ®om007ftom gathered from third party sources and has not been independently verified Property Solutions Worldwide by Gnrbb&Ellis.Grubb&Ellis makes no warranties or representations as to the completeness or accuracy thereof. Industrial Market Trends Portland Grubb & Ellis Research First Quarter 2007 GrubberEllis® Market Pushes On Property Solutions Worldwide Executive Summary While the overall economy in Oregon got off to a slow start in 2007, growth predictions remain stable for the year. Job growth has exceeded population growth, pushing unemployment rates down. Issues to look out for include the slowing housing market, modest manufacturing job growth and the wild-cards of energy prices and interest rates. These issues could be just a bump in the road, or could portend an end to this long economic expansion. The Portland industrial market pushes on, despite cooling economic news. Contents Vacancy rates have dropped to ten-year lows, net absorption is strong and construction is picking up steam. Asking rental rates are rising for Executive Summary 1 both shell and flex space. Speculative construction is surging, with almost Overview 2 700,000 square feet of speculative space delivered to the market in the Forecast 2 first quarter and another 1 million square feet in the pipeline. Opportunities & Challenges 3 The Sunset Corridor had a solid quarter, spurred on by the SolarWorld Market Snapshot 4 deal, which took over 400,000 square feet off the market. That submarket has seen vacancy drop substantially, with overall vacancy now standing at 6.6 percent and R&D/Flex vacancy down 250 basis points. 12% — 8.8 8.0 7.1 6.6 7.4 7.4 6.9 63 6.1 11% — Portland Office Market Trends is a newsletter published quarterly by 10% — Grubb&Ellis Company.To obtain additional copies or other Grubb&Ellis publications, 9% — please contact: 8% — Patricia K.Raicht Client Services Manager 7% — E-mail patricia.raicht@grubb-eliis.com 6% — Grubb&Elks Company , 1120 NW Couch St.,Suite 350 5% — Portland,Oregon 97209 Phone:503.241.1155 4% Fax:503241.0306 1Q/05 2Q/05 3Q/05 4Q/05 10/06 2Q/06 3Q/06 4Q/06 10/07 Internet:www.grubb-ellis.com Industrial Vacancy Rate* ®2007 Grubb&Ellis Company *All Product Types Industrial Market Trends First Quarter 2007 Overview The Portland metro area economy got off to a slow start in 2007 but growth ThePortland industrialpredictions remain stable for the year. Unemployment levels remain near market continues to five-year lows, despite monthly fluctuations, and job growth has continued demonstrate strength on a modest but stable path. With 2006 metro area job growth revised up with vacancy dropping to 3.2 percent, and population growth for 2006 coming in at 1.9 percent,the to a ten-year low of 6.1 metro area's economy ended on solid footing. There are warning signs on 1)ercent the horizon however,which may signal a slight slowing in the rate of this economic expansion or may be a sign of the end of the cycle. Areas of concern remain the modest job growth in the manufacturing sector and the housing sector slowdown. Fuel prices are also an area of concern, as are interest rates. Current estimates call for a metro area job growth rate of 2 Industrial Vacancy percent for 2007,which will keep the economy on a steady path. 16.0% - 14.0% - The Portland industrial market continues to demonstrate strength with 12.0°i° vacancy dropping to a ten-year low of 6.1 percent. Net absorption,while not record-setting,was solid at just over 1 million square feet, and the market s.0% - saw over 750,000 square feet of new product delivered to the market. As 6.0% - - expected, rental rates are inching up across the board,with overall shell 4.0% 2.0% rates ending the quarter up$0.01 to$0.38 and flex rates up$0.05 to$0.79 0.0% per square foot triple net. Activity was brisk this quarter and there continues 10/05 10/06 10/07 to be a host of larger users circling the market. MNFAVHS/DIST R&D FLEX Construction season is moving into full gear and developers are responding with a slew of new speculative projects underway. Construction had been Industrial Supply and Demand dominated by owner/user and build-to-suit projects but there has been a shift in the market with speculative construction now dominating activity. Over 1.6 MIL _ 750,000 square feet of new product was delivered to the market in the first 1.4 . quarter,just 66,000 of which was not speculative. Construction is happening 1.2 . throughout the metro area with projects in almost all submarkets. A signif- 1.0 - icant amount of activity is occurring in the NE/Columbia Corridor submarket, 0.8 - along 1-5 South and in the Rivergate area. 0.6 . 0.4 - Forecast The Sunset Corridor posted a strong quarter driven by a newcomer to the 0.0 market. SolarWorid AG purchased the 400,000 square-foot former Komatsu 10/05 10/06 10/07 Silicon America facility and has begun retrofitting the property into the largest New Construction Net Absorption solar factory in North America. This transaction took this long-vacant facility off the market and led to a significant drop in overall vacancy in the Sunset Corridor. The market now stands at 6.6 percent vacant overall and R&D/ Flex vacancy is just 6.9 percent. Other Class A Flex transactions in ®2007 Grubb&Ellis Company 2 Industrial Market Trends First Quarter 2007 the Sunset Corridor helped to push Class A Flex vacancy in that submarket down from 21.6 percent last quarter to 19.1 percent. Landlords in this market have reason to be optimistic as it looks like the worst is well behind them and Tenants seeking state- the market is moving toward equilibrium. Some of the larger transactions in of-the-art facilities have not been put off h the Sunset Corridor included the following: higher rental rates and Planar—61,000 SF—Techpointe Commons owners have held firm Nike—43,000 SF—Woodside Corporate Park on these new projects. Nvidia—22,000 SF—AmberGlen McKenzie Books—21,000 SF—Beaverton Creek The Columbia Corridor remains one of the tightest submarkets in the metro area with overall vacancy at just 5 percent and average asking rates now Weighted Average Rental Rates over$0.40. Deals in the pipeline indicate that the submarket will post a strong year in 2007 and construction has begun on a number of new specu- $0.80- lative projects. Development in the NE/Columbia Corridor is pushing east to Fairview,Gresham and Troutdale, as all the closer-in prime sites get absorbed. gc,• 0.60 - The Reynolds Industrial site,a 700-acre parcel of land north of the TroutdaleCC Airport,will likely be the centerpiece to future development in the area. • 0.40- Opportunities and Challenges 020 As the market continues to tighten, land values have begun to rebound to 10/05 10/06 10/07 pre-recession levels. Well-located, entitled and serviced sites are becoming I Shell Rates Flex Rates I increasingly rare and developers are competing with users to secure the best sites. As rental rates increase,with the best space in the premier markets now asking over$0.42 per square foot on the shell and a$0.75 per square foot surcharge,speculative development now pencils. This is evident in the growing number of speculative projects currently underway and in the pipeline in the Columbia Corridor and along 1-5 South. Developers are paying$5.00- $7.00 per square foot for land but owner/users are still willing to pay more for sites if they have a need. It will remain a challenge for developers to find sites that work, either economically or locationally. The crop of new speculative industrial buildings currently under construction will offer tenants something they have not had in quite some time,a choice. Tenants seeking state-of-the-art facilities have not been put off by higher rental rates and owners have held firm on these new projects. Shell rates will start in the$0.40 range and surcharges begin at$0.70. Expect these rental rates to continue their climb, as construction and development costs remain high and competition for space remains stiff. C 2007 Grubb&Ellis Company 3 Industrial Market Snapshot Portland First Quarter 2007 By Submarket Total(1) Vacant(2) Net Absorption Under Const.(3) Askina Rent (4) (All Property Types) SF SF Vacant% Current Year To Date SF WH/Dist R&D/Flex 217 Corridor/Beaverton 8,576,062 940,419 11.0% 111,590 111,590 - $0.44 $0.88 ''.:'.,- 14r ,: .546'974 : :: $ =:$1,..03. Clark County -.:.:: :�'., . .., .:...,i3 �,130 . . -.. '�`- >9:Q94s' ;;;<<`43i9$7`4' 4:3;997':;';;.= ':=$ 5,27 '`•_';'::":� .. 0; Close-in SE 4,493,177 266,932 5.9% (91,211) (91,211) - $0.34 $0.92 Gresham/OuterSE ,'1,777,255 . ,:6000 ' 6.35G...., {38,070) (38,070)- - $0:34,. $0:75. 1-5 South Corridor 17,502,917 804,575 4.6% 52,490 52,490 287,005 $0.38 $0.72 Mitwaukie/Clackapras_ l`r ,z1 �a'g219� ' i,2 8,0 'h 9.3.2 °7' "-- "7650 , 27 ttia $0.53. NE/Columbia Corridor 25,102,285 1,256,157 5.0% 98,677 98,677 525,574 $0.40 $0.56 _- -.�::.-. '`,. ,r... ,.-��,.�-: - �.�`aw _:��;` zr_ ria r� - ..c.,s.vtr,M �!�::,�-'.:�o:... .,"fir'?�`V`4:'-'dv}s" � :�'=u'.' ',,-.i>r,�;. 7.Kt., 7` • Slk 1 0 Northwest :.:._-'.:Y� ..,•:-�, � .rte.. ._"_.x := -�:�.�' �� _�=� ..i..,~ :. .. . ��""�_:y. $ Rivergate 12,297,951 1,287,730 10.5% 139,994 139,994 40,000 $0.33 $0.64 • .. .., � : - .: ci .._. _ %0 ';:/. y t��i"''p;F'+ sunset Corridor s.231 1;6ij �*—', i' . s c ' -; 44 ts.„. 1t'100(1. . $9.so . ., $alis. �': .;<''-e• -.. . '•`.:� �A:. "'` 5:::': 1x+i-~_.. `. a ..-. rc!>.Ti.°'.,�i.F ..3,..:-:+; t.. .. Swan Island/Close-in NE 6,015,500 89,991 1.5% 82,220 82,220 - $0.74 - Totals 133,930,687 8,148,231 6.1% 1,030,954 1,030,954 1,244,850 $0.38 $0.80 By Property Type Askina Rent (All Submarkets) R&D/Flex 32,720,801 2,405,009 7.4% 710,033 710,033 95,929 $0.80 We selDistiibutiori .1`<_ =881 ;,,,5'-743,222 ,.;,,L:s 5i % .. 4,92' ,'„ V320,92Vev • - .11.46,921 $038 ar hot] . .,.. ...DT,248,. •,"_ ..:..-�,�_.�,_>� ..�k,_.....<,.,, - , Totals 133,930,687 8,148,231 6.1% 1,030,954 1,030,954 1,244,850 $0.49 i (1)Inventory includes multi-tenant and,tenant buildings and owner-occupied with at least 10,000 sq.ft. (2)Vacant space includes both vacant direct and vacant sublease space. (3)Space under construction includes speculative,owner and build-to-suit for lease projects. (4)Asking rates are per square foot per year triple net.Rates for each building are weighted by the amount of available space in the building. Grubb&Ellis statistics are audited annually and may result in revisions to previously reported quarterly and final year-end figures. For more information on the Portland Industrial Market, contact one of our specialists: Bradford H.Fletcher,SIOR Joe Sugura Irian Tahir Jeff Snyder Managing Director,Executive VP Vice President Investment Associate Associate 503-972-5500 503-972-5520 503-972-5509 503-972-5502 David C.Squire,SIOR David Hill Mike Newman Tyler Shells Managing Director,Executive VP Vice President Industrial Associate Associate 503-972-5505 503-972-5510 503-972-5517 503-972-5525 Tamara Garlett Associate 503-972-5545 • Ellis C 2007 Grubb&Ellis Company G rubb • Some of the data in this report has been gathered from third party sources and has not been independently verified Property Solutions Worldwide by Grubb&EIFs.Grubb&Ellis makes no warranties or representations as to the completeness or accuracy thereof. Commercial Real Estate Terminology Page 1 of 5 x;M Home Advertise Site Guide 'F34: off .corn lllhere Corporate fimarica finds Heal fstale Help ID Register Back Commercial Real Estate Terminology Real Estate FAQs o i 1Rinniannl rnm FFPrihark-Arte by rinru,la Absolute Net - Lease requiring tenant to pay in addition to base rent all costs associated with the operation, repair and maintenance of the building, all real estate taxes, and utilities including repair and maintenance of the building's structure and . roof. Often the tenant is directly responsible both for all such costs and for the active handling of the items themselves. Distinguished from Triple Net(see below)by tenant's responsibility for maintenance and repair of the building structure and roof. ADA -Americans With Disabilities Act passed by Congress in 1994 with intent to provide persons with disabilities accommodations and access equal to or similar to that of the general public. Additional Rent - Any amounts due under a lease that are in addition to base rent. Most common form is operating expense increases. Agency - Any relationship in which one party (agent) acts for or represents another(principal) under the authority of the latter. Agency involving real property should be in writing, such as listings,trusts, powers of attorney, etc. Allowance - A set dollar amount provided by the Landlord under a lease to be used by the Tenant for a specific purpose. Examples include allowances for tenant improvements, moving expenses design fees, etc. If the expense exceeds the allowance amount, such excess is the Tenant's responsibility. If the expense is less than the allowance, the savings are retained by the • Landlord unless their agreement specifies otherwise. Alternative Workspace - Term embodies numerous concepts related to utilization of space including telecommuting, hotelling, office sharing and open office plans. Amortization - Payment of debt in regular, periodic installments of principal and interest, as opposed to interest only payments. May also be used in a lease where the landlord incurs costs for additional tenant improvements which are effectively treated as a debt and repaid by tenant over the term of the lease. Assignment - A transfer to another of any property, real or personal, or any rights or estates in said property. Common assignments are of leases, mortgages, deeds of trust, but the general term encompasses all transfers of title. Base Building - The existing shell condition of a building prior to the installation of tenant improvements. This condition varies from building to building, landlord to landlord,and generally involves the level of finish above the ceiling grid. Base Rent-A specific amount used either as a minimum rent in a lease (retail) which uses a percentage of sales or overage for additional rent or sets a base onto which is added expenses and taxes in a net lease or increases in those items in a fully serviced lease. Base Year-The 12 month period upon which a direct expense escalation of rent is based.Typically the calendar year the lease commences. BOMA - Building Owners and Managers Association. BOMA publishes the definition of rentable and useable area, which is used to determine the square footage leased in most commercial office buildings. • CAM Charges - Common Area Maintenance charges. Those charges levied on or the expenses incurred in maintaining the common areas of a building. • Churn - Moving people from one workspace to another within the leased premises. Usually involves relocation of furniture, phones,and the like and can be very expensive and time consuming. A high churn rate is to be avoided. Circulation -Those areas (hallways, corridors, etc.) in an office space that are used to travel between offices, cubicles and the like. Commencement Date - The date on which a lease begins. This is typically but not always the day on which the tenant takes possession of the leased space, which usually occurs upon substantial completion of the tenant improvements. (See occupancy Date). Commercial Real Estate Terminology Page 2 of 5' Class - Class is usually used in conjuction with an office property and refers to the quality of property. Class definitions fall with the following guidelines. Class A+: Landmark quality, highrise building with prime central business district locatation (the best of the Class A buildings). Class A: Generally 100,000 sf or larger(five or more floors), concrete and steel construction, built since r' 1980, business/support amenities, strong identifiable location/access. Class B: Renovated and in good locations. Newer building are smaller in size. wood frame construction, and/or in non-prime location. Class C: Older, unrenovated or any size in average to fair condition. Common Area - Common area is the area used in common by the tenants of an office building. Common area includes building and elevator lobbies, restrooms and the corridor leading from an elevator lobby to a tenant space. Contingent Fees- Fees to be paid only in the event of a future occurrence. Examples include: Attorneys(especially in negligence cases) paid based on winning the suit and collecting damages; and a broker's commission paid only upon closing the sale of a piece of property. Certificate of Occupancy (COO) - A statement issued by a local government verifying that a newly constructed building is in compliance with all codes and may be occupied. Demised Area - The walled off and secured area of a leased space, separated from spaces leased to others (by a "demising" wall). Also measured as useable area. Discount Rate-The rate of interest used in a present value analysis representing the"time . value of money". • Effective Rent-The average per square foot rent paid by the tenant over the term of a lease.Takes into account only free rent • and stepped rents. Does not include allowances,space pockets,free parking and other similar landlord concessions. Effective Useable Area- Excludes those areas within the Useable Space (see below)that the tenant pays rent on but effectively • cannot use such as columns and sharply angled spaces. Equivalent Level Rate (ELR) -The ELR is the flat rate per square foot that, if paid each year in nominal dollars, will equal the same total present value as a proposed lease's variable cash flows. The ELR is calculated by discounting all cash flows to a net present value per square foot and then amortizing this lump sum amount evenly over the term of the lease on a cost per square foot basis. Escalation - A clause in a lease providing for an increased rental at a future time. May be accomplished by several types of clauses, such as: (1) fixed increases -- a clause which calls for a definite, periodic rental increase; (2) cost of living -- a clause which ties the rent to a government cost of living index,with periodic adjustments as the index changes; (3)direct expense--the rent adjusted according to changes in the expenses of the property paid by the lessor, such as tax increases, increased , maintenance costs, etc. Estoppel Certificate-An instrument which itself prevents individuals from later asserting facts different from those contained in the document. Often required by the buyer of an office building. The tenant and landlord both sign the estoppel certificate, confirming the lease and pertinent facts thereto.Thereafter, neither party may make claims to the contrary. Exclusive Listing - Any property where the owner has signed an agreement with a real estate broker to lease and/or sell their property.That broker has an"exclusive listing"on the owner's property. • Expansion Option - A right granted by the landlord to the tenant whereby the tenant has the option(s)to add more space to its premises pursuant to the terms of the option(s). Expense Stop - A fixed amount (typically per square foot) in a lease where the tenant is responsible for all building operating expenses and taxes in excess of said amount. Extension Option -An agreed continuation of occupancy under the same conditions, as opposed to a renewal, which implies view terms or conditions. In a lease, it is a right granted by the landlord to the tenant whereby the tenant has the option to extend the lease for an ad. Fair Market Rent - The rent which would be normally agreed upon by a willing landlord and tenant in an "arm's length transaction"for a specific property at a given time,even though the actual rent may be different.In a lease,the term "fair market , rent"is defined in a number of different ways and is subject to extensive negotiation and interpretation. Free Rent - A concession granted by a landlord to a tenant whereby the tenant is excused from paying rent for a stated period during the lease term. Fully Serviced Lease - A lease in which the stated rent Includes the operating expenses and taxes for the building. Same as Gross Lease.Opposite of Net Lease. Gross Lease - A lease in which the stated rent includes the operating expenses of the building. Same as Fully Serviced Lease. Opposite of Net Lease. Gross Up-An adjustment made to operating expenses to account for the occupancy level in a building. When operat)ng expenses are "grossed up", it means that the building's variable expenses have been adjusted upwards to the level that those expenses would be incurred if the building was fully occupied (typically 95%). Ground Lease -A lease of land only, (either vacant or exclusive of any buildings on it). Usually a net lease on a long term basis (30 years+).Ground rent should not be charged back to the tenant as an operating expense. Hotelling - An alternative workspace concept where rather than having an assigned exclusive workspace, an employee accesses one space, perhaps being one of many such spaces in common with others on an as needed basis, and otherwise works outside of - cr-------- ___ ,T ..r . ., 6/15/?0n7 Commercial Real Estate Terminology Page 3 of 5 the office. Hotelling - (Another usage is what those members of an office relocation committee are entitled to after going through a relocation or office redesign, making use of a commercial shelter offering food, lodging, etc.; preferably in some warm spot like Hawaii.) HVAC- Heating,Ventilation, Air Conditioning. A general term encompassing any system designed to heat and cool a building in its entirety, as opposed to a space heater. Landlord (Lessor)-The party(usually the owner)who gives the lease(right to possession)in return for a consideration (rent). Lease Term -The specific period of time in which the Landlord grants to the tenant the right to possession of real estate. Lessee(Tenant) -The party to whom a lease (the right to possession)is given in return for a consideration (rent). Lessor(Landlord)-The party(usually the owner)who gives the lease(right to possession)in return for a consideration (rent). Letter of Intent-There are potentially multiple uses of this term. Generally a written statement that two parties to a prospective transaction (buyer/seller or lessor/lessee) intend to proceed to a final agreement in good faith on stated principal business terms of the deal to be entered into. This meaning applies when executed by both parties. Alternatively such a document may be signed only by one party and is then an indication of a willingness to enter into agreement on the stated terms and conditions. To avoid legal issues regarding offer and acceptance and thus formation of a binding contract, care should be taken to include a clause stating that there is not a specific offer and no intent to be a legally binding obligation. However, an obligation to continue to negotiate in good faith to conclusion can be created. Listing Agent-The real estate agent hired by the property owner to lease a property on their behalf. The agent obtains a listing agreement,which calls for that agent to act on the owner's behalf as a fiduciary in leasing the property. Load Factor - In a lease, the load factor is the multiplier to a tenant's useable space that accounts for the tenant's proportionate share of the common area (restrooms, elevator lobby, mechanical rooms, etc.). The load factor is usually expressed as a percentage and ranges from a low of 5% for a full tenant to as high as 15% for a multi-tenant floor. Subtracting one (1) from the quotient of the rentable area divided by the useable area yields the Load Factor. At times confused with the "loss factor" which is the total rentable are of the full floor less the useable area divided by the rentable area. (If a full floor broken up into multiple tenancies has a useable area of 18,000 s.f. and a rentable area of 20,000 s.f.,the load factor is 11.1%and the loss factor is 10%. Master Lease - A lease controlling subsequent leases. May cover more property than subsequent leases. For example: "A" leases an office building, containing ten offices, to "B". "B"subsequently subleases the ten offices individually.The ten subleases from "B" as sublessor are controlled by the lease from "A"to"B"(master lease). Net Lease-(See also"Triple Net").Today this generally indicates a lease in which the stated rent excludes the insurance, utilities, operating expenses and real estate taxes for the building. The tenant is then responsible for the payment of these costs either directly or as additional rent. Opposite of Gross or Fully Serviced Lease. Net Present Value(NPV) -The calculation of NPV takes into account both the netting of cost and benefits and the time value of money.See Present Value. Net Rentable Area - (Same as Rentable Area).The area (square footage)for which rent can be charged. Generally it is the gross area of the full floor less the area of all vertical penetrations(elevator shafts, stairwells, mechanical shafts etc.) Rentable area can be measured in many ways, but the most common measurement for office buildings is according to BOMA standards. Net Rentable area includes the tenant's premises plus an allocation of the common area directly benefiting the tenant, such as restrooms, common corridors, mechanical and janitor's rooms and the elevator lobby on the tenant's floor. Nondisturbance -So long as lease is not in default, its rights to occupancy under the lease will not be disturbed by the lessor or it's successors or assigns. Occupancy Cost - Any cost or charge incurred by a tenant pursuant to its lease, such as rent, operating expense increases, parking charges, moving expenses, remodeling costs, etc. Occupancy Date - Unless specifically stated otherwise in the lease, it is the date on which the tenant takes possession of its leased premises. (See also"Commencement Date"). Open Listing - Any property that is leased directly by the owner. Sometimes, the owner will employ an in-house leasing agent. Typically, these are called open listings, where the owner will pay a full commission to any broker who brings a tenant to the property. Operating Expenses -The cost of operating an office building, such as janitorial, management fees, utilities, and similar day to day expenses, as well as taxes, insurance, and a reserve for replacement of items which periodically wear out. Should not include capital expenses such as roof replacement nor expenses associated with the production of income such as leasing commissions and legal fees. Owner's Representative-An agent who is an advocate for the owner and/or landlord. Pass Throughs-An increase in operating expenses over the base year amount that is billed to the tenant as additional rent. See escalation. Premises - Typically the entire rentable area leased by lessee. Sometimes used to designate solely the useable area leased by lessee,i.e. that for which the lessee has exclusive occupancy as opposed to the common areas. ,. !m r //,r/nnnrr Commercial Real Estate Terminology Page 4 of 5• Present Value - The present value is the amount that must be invested now to produce the known future value. For any sum . invested at a given interest rate, the amount one would receive at the end of the period can be determined by taking the investment times one (1) plus the interest rate of the period to the power of the period. For example, if $10 is invested in an interest rate of 10% for one year, the investment would grow to $11 at the end of the year. It follows, then, that$11 one year from now is worth$10 today; that is$10 is the present value of$11. Reasonable Consent - A standard applied in a lease (most often in a sublease clause) which limits the landlord's ability to withhold consent in its sole discretion. If a reasonable person would give consent to an action given the circumstances, so must the landlord. Renewal Option - The right of a tenant to renew (extend the term of) a lease for a stated period of time at a rent to be determined(i.e. 9.5°/o of"fair market rent"). Rent • Consideration paid for the occupancy and use of real property. Also a general term covering any consideration (not only money). Rentable Area -The(square footage)for which rent can be charged. Generally it is the gross area of the full floor less the area of all vertical penetrations(elevator shafts, stairwells, mechanical shafts etc.) Rentable area can be measured in many ways, but the most common measurement for office buildings is according to BOMA standards. Rental Rate - The amount of Rent paid for the occupancy and use of real property. Typically stated on a per square foot per - month or per year basis. Request For Proposal (RFP) - A document typically issued by a tenant's agent to an owner(s) of real property, inviting the owner(s) to submit a proposal to the tenant for the leasing of a vacant space. The RFP sets forth the specific areas of concern to the tenant, such as the space in question, the lease term, expansion and renewal options, rental rate, and tenant improvements and other allowances to be provided by the owner. Right of First Offer or First Opportunity -A right, usually given by an owner to a tenant, which gives the tenant a first chance ; to buy the property or lease a portion of the property if the owner decides to sell or lease. Unlike under a Right of First Refusal,the owner is not required to have a legitimate offer which the tenant can then match or refuse. If the tenant refuses to make an offer ' or if the parties cannot agree on terms,the property can then be sold or leased to a third party. Right of First Refusal -A right, usually given by an owner to a tenant, which gives the tenant a first chance to buy the property or lease a portion of the property if the owner decides to sell or lease. The owner must have a legitimate offer which the tenant can match or refuse.If the tenant refuses,the property can then be sold or leased to the offeror. Right of Offset-A specific clause in a lease where the tenant has the right to deduct from the rent certain costs which are due to the tenant from the landlord. Included may be the costs incurred by tenant to cure defaults of the landlord, after notice and failure by landlord to cure the defaults.These are called "self help". Space Planning -Term is often loosely used. Most often it is the planning of the layout of the interior space of a building to meet the needs of the user. Can also include detailed interior design and preparation of construction drawings. Space planning and interior design only need not be licensed architects. Preparation of construction drawings for permit have to be prepared by architects licensed in the jurisdiction. Space Pocket - A portion of a leased premises that is set aside to accommodate future growth on the part of the tenant. The ; space pocket is typically fully improved at the commencement of the lease and no rent is due on the pocketed area until the earlier . of"actual use"or a specified future date. Sublease-A lease, under which the lessor is the lessee of a prior lease of the same property.The sublease may be different In terms from the original lease,but cannot contain a greater property interest. Example: "A" leases to "B" for five years. "B" may sublease to"C"for three years, but not for six years. (Rent can be greater or less than that in the prior lease.) Subordination -To make subject or junior to. Substantial Completion-Generally used in reference to the construction of tenant improvements(TIs). The tenant's premises is typically deemed to be substantially completed when all of the TIs for the premises have been completed in accordance with plans and specifications previously approved by the tenant. Sometimes used to define the commencement date of a lease. Tenant (Lessee) - A holder of an interest in property for a specific term under a lease or other rental agreement (generally a right to occupancy and use). Tenant Improvements (TI's)- Improvements to land or buildings to meet the needs of tenants. May be new improvements or remodeling,and be paid for by the landlord,tenant or part by each. Tenant Representative - An agent who is an advocate for the tenant. The relationship is most often the product of a signed : representation agreement. Triple Net-A lease requiring the tenant to pay in addition to a fixed rental, the expenses of the property leases,'such as taxes, insurance,maintenance,utilities,cleaning etc.The terms"net net", "net net net", "triple net",and other such repetitions are used. Turnkey - Referring to an owner making a property ready for a tenant to begin business by having the tenant furnish only furniture,phone and inventory, if any.Turnkey tenant improvements are provided at the landlord's expense according to plans and specifications previously agreed upon by the parties. Unlike an allowance where the tenant pays for costs in excess of the , allowance amount,the landlord bears the risk of construction in a turnkey situation. 4n CPUnn� Commercial Real Estate Terminology Page 5 of 5 Value Engineering - Process by which costs can be decreased or benefits can be added to an undertaking or project through redesign, prioritization or other similar actions. Useable Area -The secured area (square footage)occupied exclusively by tenant within a tenant's leased space.The useable area times the load factor for common area results in rentable area on which rent is charged. Useable area can be measured in many ways, but the most common measurement for office buildings is according to BOMA standards. Virtual Office - An office that moves with the person. Typically used in a sales organization where the salespeople are given portable computers, modems, and cellular phones in return for having their offices taken away. Vertical Transportation-Elevators,stairs or escalators moving people or freight between floors in a building. Work Letter - Specifications for tenant improvements usually attached to a lease and/or letter of intent. The work letter provides the basis for working drawings and contractor pricing and may allocate costs between the parties. Also establishes critical dates for approval of drawings and processes. Working Drawings - Drawings prepared by a licensed architect and used by contractors in the construction of tenant improvements. Shows all architectural detail such as electric, plumbing, partitions, etc. Back to prior Page Gvogic" I Search Web o: OfficeSpace.com Dubai Commercial Property Fund Commercial Property Business Bay,first offices to open with 10% Business Loan Repaid Using Your Company's pa,3 year guaranteed rent Future Credit Card Sales. • x �q".«... ,,tea=.: :"•- Y ?; :s .-• .._. Showcase Properties Region: Select Region Advanced Search i Wells Fargo Plaza-Tacoma,WA 1±2: Space Type: Select Type Move Guide Hayden Island Plaza-Portland,OR Office Space Coupons S .Ft.: Select Sq Ft Real Estate FAQs - 'E, Denvr Ce expo t II-Denver,CO 4 Real Estate $t1 `. North Pacific Plaza-Portland,OR Terminology Reed Hartman Park-Blue Ash,OH Resource Guide '��,a.-^s�.".�::..Y%�,o;tt=''s;?.�ez.. :'_err.--'r:•.. , :.-� .. - .a•:1 C� 1 99 5-2007 Commercial Space Online,Inc.All rights reserved. Home Tenants Agents Vendors About Us Disclaimer Contact Us , ,iliell PAGIFIG ____ _ SECURITY CAPITAL r p INTEGRATED REAL ESTATE SOLUTIONS" Fourth Quarter 2006 RETAIL OVERVIEW .t. ., itrF.- „.:: ,v/ .g � fi ; � +," rsxk . . , xb .U � 3?v 0 The performance of Portland's retail market, from a statistical standpoint, is often determined by the amount of new space that comes onto the market. Retailers remain interested in new construction. This -� r 111111.1. bodes well for the coming year, as the amount of retail 'J" space under construction increased each quarter of -,- ,iro„I.1, . . ,..! 0 2006. At present, there is over two million square feet i `i . ..r *.:t of retail space in the pipeline, of which only 35 percent ` :,%, ' € Zis available. m 'LL r'si Rcites Absorption Portland's overall retail vacancy rote remained relatively stable Although net absorption in Portland's retail market declined in ii.J mum during 2006,closing the year at 5.6 percent. The average asking each of the four quarters of 2006,it remained positive. Total net 11411( rental rate was$16.23 per square foot,NNN,continuing the absorption for the year met our forecast,totalling 1.15 million general upward trend of the last two years. square feet. Submarket vacancy rates followed absorption,with the Sunset Washington County in Oregon and Clark County in Washington are W Corridor and Vancouver realizing significant declines in vacancy. the two fastest-growing counties in the Portland metropolitan area. gitig The Sunset Corridor vacancy rate declined from 4.5 percent to 3.7 Thus,it is not surprising that,of Portland's retail submarkets,the percent over the fourth quarter,with the majority of the activity Sunset Corridor and Vancouver saw the highest levels of absorption occurring in the Tanasbourne area. Vancouver saw its vacancy during the final three months of the year. This trend is likely to rate fall from 6.2 percent to 5.6 percent. continue,as much of the retail space currently under construction is in these areas. Portland,with its relatively low level of retail space per capita, continues to attract new tenants to the market as well as There are a number of risks facing the economy,including a hard additional locations from existing retailers. Although construction ' landing in the housing market,rising energy costs,and the usual possibilities of a stock market correction or a sharp decline in the completions slated for 2007 bring the potential for increased vacancy rates,it is more likely that continued retail interest will dollar. Although these could impact the local retail market,we expect net absorption for 2007 to greatly exceed that of 2006. lead to stable vacancy during the year. We expect the overall Absorption from construction completions at Cascade Station, retail vacancy rate to remain in the range of 5.5 percent for 2007. Nyberg Woods,and Eastgate Plaza alone will likely equal 75 percent of the 2006 total. Rental Rates vs.Vacancy Rates «, Absorption Trends 5 40 116.20 rP 1200 .w... ..._.......,.,, .«.«a....w..,,.-....W...«..................._....,.. •aa 114.00 ,r . 1000 4,11410 ].47[ I t4640 4 0. }1T�r- ti: > 51460 +tsa r , 14440 sY 700 ._.__«..,.�.Ti' ...,�......... 31430 • _ - ?.Ai Il rtiv�o rit �aast ..,. ,. ax . i .200 '�4, '' .,.6,44‘,L. ;; ' :dam' r;y' a,y',k "c 'i 11;t t` i V Y Y 1' `Y Y 49 Y 'Y ADVISORY SERVICES • ASSE7 MANAGEMENT• DEVELOPMENT SERVICES•CAPITAL MARKETS • LANDLORD/TENANT REPRESENTATION•INVESTMENT SALES www.PacificSecurityCapital.com .. , . .. ., N • SECURITY CAPITAL 0,3-670-9300 - CORPORATE HEADQUARTERS INTEGRATED REAL ESTATE SOLUTIONS`' 8905 SW Nimbus Avenue, Fourth Floor Beaverton,OR 97008 RETAIL OVERVIEW = Fourth Quarter 2006 Submarket Statistics SUBMARKET INVENTORY AVAILABLE VACANCY NET ABSORPTION AVERAGE (SF) (SF) RATE (SF) ASKING RATE(NNN) 6,676,339.... 270,5 CBD/Northwest 34 4.1% 20,030 $17.80 Eastside 12,721,454 921,912 7.2% (12,641) $15.38 Gresham 6,630,415 615,189 9.3% 18,525 $14.53 Southeast 7,632,457 323,703 4.2% 10,193 $15.02 Southwest 6,445,128 388,768 6.0% (22,769) $16.59 Sunset Corridor 13,421,357 501,276 3.7% 108,492 $18.07 Vancouver 11,120,506 619,952 5.6% 73,700 $17.40 Portland Metro Totals/Avgs. 64,64Z656 3,641,334 5.6% 195,530 $16.23 ACTIVITY Trends Save-A-Lot,a nationwide chain owned by SuperValu,opened two stores in September. In November,it announced plans to open a store • Portland has emerged as a viable market for many retailers; as population growth has continued and constraints in the Hazel Dell area of Vancouver. The retailer,which also opened a on commercial growth have left the market relatively distribution center in Portland,expects to eventually grow to 100 stores in underserved. Gymboree Outlet,BCBG Max Azria,and Yves the Northwest region. Delorme opened their first Oregon locations at the Woodburn Company Stores in the final months of 2006. Golfsmith will Wickes Furniture,based in Illinois,has agreed to occupy a new 42,500 open its first two Oregon stores in new projects at Nyberg square foot store at Cornell Sunset Center in Beaverton. In addition to a Woods and Cascade Station. Numerous other restaurants distribution center,the retailer operates stores in Tigard,Delta Park and and retailers have recently been attracted to Oregon. Clackamas. . Portland also continues to attract new concepts from retailers. In addition to Costco Home,which will open at Macy's has closed its downtown location as renovations continue on the Cascade Station,and Williams-Sonoma Home,currently open site,which has been renamed Meier&Frank Square. When completed, in Northwest Portland,Pottery Barn will be testing its new Portland Bed and Bath concept in Portland,also in the trendy the Macy's will occupy the basement level and five stories of retail space, Northwest area. The concept had previously been a catalog on top of which will sit a 332-room Starwood Luxury Collection Hotel,to and e-commerce play. be called The Nines,developed by Sage Hospitality Resources. Macy's is set to re-open in late 2007,while the hotel plans for a Summer 2008 grand opening. About Pacific Security Capital Nike announced that it is looking for a new space for Niketown, Pacific Security Capitol(PSC)is a vertically integrated real estate indicating that it will vacate the downtown location it hos occupied for 16 services company offering advisory services,asset and property years. However,in good news for downtown Portland,a Nike spokesman management,development services,capital markets solutions, indicated that the new location will likely be in the Central City. landlord/tenant representation and investment sales.Our mission is to add value to client initiatives at every level of the real estate Chipotle Mexican Grill opened a new location in Vancouver in November cycle.Corporate headquarters are located in Beaverton,Oregon with of 2006,bringing its Portland area total to seven restaurants. The offices in Washington and California. Denver-based chain entered the market in February 2004. Other Mexican restaurant chains expanding in the market include Bajio and For further information,please contact Corine Nuss n ief,Emily Matzo or Muchos Gracias. Rebecca Gardner at 503-670-9300. ADVISORY SERVICES • ASSET MANAGEMENT• DEVELOPMENT SERVICES • CAPITAL MARKETS • LANDLORD/TENANT REPRESENTATION • INVESTMENT SALES all rifemTnat o^p.ese.Ueo b;Paa6:basun'.Onoi al;PSC)hasHbeen obtained hornSO,rce5 believed to be reliaoie.P30 makes no guarartee,warrant>or representalior with regard to the aecarasy of the Information contained herein. • Submitted at the TWD Meeting By: De/v.a'/- 1tCa /%e e rn :€R `s 0.e/ Date: C#/�-�- / Agenda Item No.: N` COMMERCIAL LEASE BETWEEN THE INTERGOVERNMENTAL WATER BOARD AND THE CITY OF TIGARD FOR THE WATER BUILDING Date: ,2007 Between: INTERGOVERNMENTAL WATER BOARD ("Landlord") 8777 SW BURNHAM STREET TIGARD, OR 97223 And: CITY OF TIGARD ("Tenant") 13125 SW HALL BLVD. TIGARD, OR 97223 RECITALS 1. The City of Tigard is leasing the Water Building property from the other entities in the IWB and during the period of the lease will pay rents and also assume responsibility for the maintenance of the property. 2. The Water Building has new Heating, Ventilation and Air Conditioning (HVAC), along with electrical, fire protection, and plumbing improvements. These improvements were paid for by the City of Tigard, although such expenses are most often the responsibility of the property owner. 3. The City of Tigard's expense for the above mentioned systems necessitates and justifies a long term lease in order for the City to recover those expenditures. 4. In further consideration of the City of Tigard's contributions to the Intergovernmental Water Board,the Intergovernmental Agreement, and their investment in the entire cost of the abovementioned systems in the Water Building,the City of Tigard shall retain the First Right of Refusal if the Water Building property is designated as surplus and for sale by the IWB. AGREEMENT Landlord leases to Tenant and Tenant leases from Landlord the following described property(the "Premises") on the terms and conditions stated below: The leased Premises property includes the entire building and common areas including parking and all other improvements located at 8777 SW Burnham Street,Tigard, Oregon, 97223. The Premises are as shown on Exhibit A. Page 1 of 13 IWB/City of Tigard Commercial Lease for the Water Building I I I I II II I I I I I I I i m 4 4 l Section 1. Occupancy 1.1 Original Term. The term of this lease shall commence 2007, and continue through December 31, 2018,unless sooner terminated or renewed as hereinafter provided. 1.2 Possession. Tenant's right to possession and obligations under the lease shall commence on , 2 1.3 Renewal Option. If the lease is not in default at the time each option is exercised or at the time the renewal term is to commence, Tenant shall have the option to renew this lease for 2 successive terms of 5 years each, as follows: (1) Each of the renewal terms shall commence on the day following expiration of the preceding teen. (2) The option may be exercised by written notice to Landlord given not less than 120 days prior to the last day of the expiring term. The giving of such notice shall be sufficient to make the lease binding for the renewal term without further act of the parties. Landlord and Tenant shall then be bound to take the steps required in connection with the determination of rent as specified below. (3) The terms and conditions of the lease for each renewal term shall be identical with the original term except for rent and except that Tenant will no longer have any option to renew this lease that has been exercised. Rent for a renewal term shall be the greater of (a) the rental during the preceding term or(b) a reasonable market rent. (4) If the parties do not agree on the rent within 90 days after notice of election to renew, the rent shall be determined by a qualified, independent real property appraiser familiar with comparable commercial rental values in the area. The appraiser shall be chosen by Tenant from a list of not fewer than five such individuals submitted by Landlord. If Tenant does not make the choice within five days after submission of the list, Landlord may do so. If Landlord does not submit such a list within 10 days after written request from Tenant to do so, Tenant may name as an arbitrator any individual with such qualifications. Within 30 days after his [her] appointment,the appraiser shall return his [her] decision, which shall be final and binding upon both parties. The cost of the appraisal shall be borne equally by both parties. 1.4 Premises Leased"As Is". Tenant agrees to accept the Premises in the current "as is" condition. Section 2. Rent 2.1 Base Rent. Rent will be calculated as set forth in attached Exhibit B describing rental costs and credits as agreed upon between Landlord and Tenant. As set forth in said Exhibit B, at the commencement of the Lease and through the duration of the initial terns,Tenant shall pay Landlord $58,751.63 annually. Page 2 of 13 IWB/City of Tigard Commercial Lease for the Water Building 2.2 Rent Credits. Tenant has paid $177,379.00 for improvements to the building and shall receive an annual credit of$15,424.26 against the total annual rent of$74,175.89 for said expenses as shown in attached Exhibit B and in Section 2.1 above. If the Lease is terminated before the expense has been fully amortized,Landlord and Tenant shall agree to a method for allocating the remaining unamortized expenses. 2.3 Additional Rent. All taxes, insurance costs, utility charges that Tenant is required to pay by this lease, and any other sum that Tenant is required to pay to Landlord or third parties shall be additional rent. 2.4 Payment of Rent. Rent is due and payable annually in advance on July 15 of each year. Section 3. Use of the Premises 3.1 Permitted Use. The Premises shall be used for municipal government public works offices and related activities, and for no other purpose without the consent of Landlord, which consent shall not be withheld unreasonably. 3.2 Restrictions on Use. In connection with the use of the Premises, Tenant shall: (1) Conform to all applicable laws and regulations of any public authority affecting the premises and the use, and correct at Tenant's own expense any failure of compliance created through Tenant's fault or by reason of Tenant's use, but Tenant shall not be required to make any structural changes to effect such compliance. (2) Refrain from any activity that would make it impossible to insure the Premises against casualty,would increase the insurance rate, or would prevent Landlord from taking advantage of any ruling of the Oregon Insurance Rating Bureau, or its successor, allowing Landlord to obtain reduced premium rates for long-term fire insurance policies, unless Tenant pays the additional cost of the insurance. (3) Refrain from any use that would be reasonably offensive to other tenants or owners or users of neighboring premises or that would tend to create a nuisance or damage the reputation of the premises. (4) Refrain from loading the electrical system or floors beyond the point considered safe by a competent engineer or architect selected by Landlord. 3.3 Hazardous Substances. Tenant shall not cause or permit any Hazardous Substance to be spilled,leaked, disposed of,or otherwise released on or under the Premises. Tenant may use or otherwise handle on the Premises only those Hazardous Substances typically used or sold in the prudent and safe operation of the business specified in Section 4.1.'Tenant may store such Hazardous Substances on the Premises only in quantities necessary to satisfy Tenant's reasonably anticipated needs. Tenant shall comply with all Environmental Laws and Page 3 of 13 IWB/City of Tigard Commercial Lease for the Water Building exercise the highest degree of care in the use, handling, and storage of Hazardous Substances and shall take all practicable measures to minimize the quality and toxicity of Hazardous Substances used,handled, or stored on the Premises. Upon the expiration or termination of this Lease, Tenant shall remove all Hazardous Substances from the Premises. The term Environmental Law shall mean any federal, state, or local statute, regulation, or ordinance or any judicial or other governmental order pertaining to the protection of health, safety or the environment. The term Hazardous Substance shall mean any hazardous,toxic, infectious or radioactive substance, waste, and material as defined or listed by any Environmental Law and shall include, without limitation,petroleum oil and its fractions. Section 4. Repairs and Maintenance 4.1 Landlord's Obligations. The following shall be the responsibility of Landlord: (1) Repairs and maintenance of the roof and gutters, exterior walls (including painting),bearing walls, structural members, floor slaps, and foundation. (2) Repair of sidewalks, driveways, curbs, parking areas, and areas used in common by Tenant and Landlord or tenants of other portions of the same building. (3) Repair and maintenance of exterior water, sewage, gas, and electrical services up to the point of entry to the leased Premises. (4) Repair of the heating and air conditioning system other than ordinary maintenance. 4.2 Tenant's Obligations. The following shall be the responsibility of Tenant: (1) Repair of interior walls, ceilings, doors, windows, and related hardware, light fixtures, switches, and wiring and plumbing from the point of entry to the Premises. (2) Any repairs necessitated by the negligence of Tenant, its agents, employees, and invitees, except as provided in Section 7.2 dealing with waiver of subrogation, but including repairs that would otherwise be the responsibility of Landlord under Section 5.1. (3) Ordinary maintenance of the heating and air conditioning system and any repairs necessary because of improper maintenance. (4) Any repairs or alterations required under Tenant's obligation to comply with laws and regulations as set forth in Section 4.2(1). (5) All other repairs to the premises which Landlord is not required to make under Section 5.1. 4.3 Landlord's Interference with Tenant. In performing any repairs, replacements, alterations, or other work performed on or around the Premises, Landlord shall not cause Page 4 of 13 IWB/City of Tigard Commercial Lease for the Water Building unreasonable interference with use of the Premises by Tenant. Tenant shall have not right to an abatement of rent nor any claim against Landlord for any inconvenience or disturbance resulting for Landlord's activities performed in conformance with the requirement of this provision. 4.4 Reimbursement for Repairs Assumed. If either party fails or refuses to make repairs that are required by this Section 5, the other party may make the repairs and charge the actual cost of repairs to the first party. Such expenditures by Landlord shall be reimbursed by Tenant on demand together with interest at the rate of TEN (10%) per annum from the date of expenditure by Landlord. Such expenditures by Tenant may be deducted from rent and other payments subsequently becoming due or, at Tenant's election, collected directly from Landlord. Except in an emergency creating an immediate risk of personal injury or property damage, neither party may perform repairs which are the obligation of the other party and charge the other party for the resulting expense unless at least 20 days before work is commenced, and the defaulting party is given notice in writing outlining with reasonable particularity the repairs required, and such party fails within that time to initiate such repairs in good faith. 4.5 Inspection of Premises. Landlord shall have the right to inspect the Premises at any reasonable time or times to determine the necessity of repair. Whether or not such inspection is made, the duty of Landlord to make repairs shall not mature until a reasonable time after Landlord has received from Tenant written notice of the repairs that as required. Section 5. Alterations 5.1 Alterations Prohibited. Tenant shall make no improvements or alterations on the Premises of any kind without first obtaining Landlord's written consent. All alterations shall be made in a good and workmanlike manner, and in compliance with applicable laws and building codes. Section 6. Insurance 6.1 Insurance Required. The Tenant as the managing partner of the Landlord will provide insurance as set forth in the December 1993 Intergovernmental Agreement. 6.2 Waiver of Subrogation. Neither party shall be liable to the other(or to the other's successors or assigns) for any loss or damage caused by fire or any of the risks enumerated in a standard fire insurance policy with an extended coverage endorsement, and in the event of insured loss,neither party's insurance company shall have a subrogated claim against the other. This waiver shall be valid only if the insurance policy in question expressly permits waiver of subrogation or if the insurance company agrees in writing that such a waiver will not affect coverage under the policies. Each party agrees to use best efforts to obtain such an agreement from its insurer if the policy does not expressly permit a waiver of subrogation. Section 8. Taxes; Utilities 8.1 Property Taxes. Tenant is a municipal government and statutorily exempt from property taxes, except as may be assessed by appropriate special districts and collected by the county Page 5 of 13 IWB/City of Tigard Commercial Lease for the Water Building assessor. Tenant shall pay as due all taxes on its personal property located on the Premises, if any. Tenant shall pay as due all real property taxes and special assessments if any, levied against the Premises. As used herein,real property taxes includes any fee or charge relating to the ownership,use, or rental of the Premises, other than taxes on the net income of Landlord or Tenant. 8.2 Special Assessments. If an assessment for a public improvement is made against the Premises,Landlord may elect to cause such assessment to be paid in installments, in which case all of the installments payable with respect to the lease term shall be treated the same as general real property taxes for purposes of Section 8.1. 8.3 Contest of Taxes. Tenant shall be permitted to contest the amount of any tax or assessment as long as such contest is conducted in a manner that does not cause any risk that Landlord's interest in the Premises will be foreclosed for nonpayment. Landlord shall cooperate in any reasonable manner with such contest by Tenant. 8.4 Proration of Taxes. If applicable,Tenant's share of real property taxes and assessments for the years in which this lease commences or terminates shall be prorated based on the portion of the tax year that this lease is in effect. 8.5 New Charges or Fees. If a new charge or fee relating to the ownership or use of the Premises or the receipt of rental therefrom or in lieu of property taxes is assessed or imposed, then, to the extent permitted by law, Tenant shall pay such charge or fee. Tenant, however, shall have no obligation to pay any income, profits, or franchise tax levied on the net income derived by Landlord from this lease. 8.6 Payment of Utilities Charges. Tenant shall pay when due all charges for services and utilities incurred in connection with the use, occupancy, operation, and maintenance of the Premises, including (but not limited to) charges for fuel, water, gas, electricity, sewage disposal, power, refrigeration, air conditioning,telephone, and janitorial services. If any utility services are provided by or through Landlord,charges to Tenant shall be comparable with prevailing rates for comparable services. If the charges are not separately metered or stated, Landlord shall apportion the charges on an equitable basis, and Tenant shall pay its apportioned share on demand. Section 9. Damage and Destruction 9.1 Partial Damage. If the Premises are partly damaged and Section 9.2 does not apply,the Premises shall be repaired by Landlord at Landlord's expense. Repairs shall be accomplished with all reasonable dispatch subject to interruptions and delays from labor disputes and matters beyond the control of Landlord and shall be performed in accordance with the provisions of Section 5.3. 9.2 Destruction. If the Premises are destroyed or damaged such that the cost of repair exceeds 50% of the value of the structure before the damage, either party may elect to terminate the lease as of the date of the damage or destruction by notice given to the other in writing not Page 6 of 13 IWB/City of Tigard Commercial Lease for the Water Building more than 20 days following the date of damage. In such event all rights and obligations of the parties shall cease as of the date of termination, and Tenant shall be entitled to the reimbursement of any prepaid amounts paid by Tenant and attributable to the anticipated term. If neither party elects to terminate, Landlord shall proceed to restore the Premises to substantially the same form as prior to the damage or destruction. Work shall be commenced as soon as reasonably possible and thereafter shall proceed without interruption except for work stoppages on account of labor disputes and matters beyond Landlord's reasonable control. 9.3 Rent Abatement. Rent shall be abated during the repair of any damage to the extent the premises are untenantable, except that there shall be no rent abatement where the damage occurred as the result of the fault of Tenant]. 9.4 Damage Late in Term. If damage or destruction to which Section 9.2 would apply occurs within one year before the end of the then-current term, Tenant may elect to terminate the lease by written notice to Landlord given within 30 days after the date of the damage. Such termination shall have the same effect as termination by Landlord under Section 9.2. Section 11. Liability and Indemnity 11.1 Liens. (1) Except with respect to activities for which Landlord is responsible, Tenant shall pay as due all claims for work done on and for services rendered or material furnished to the Premises, and shall keep the Premises free from any liens. If Tenant fails to pay any such claims or to discharge any lien, Landlord may do so and collect the cost as additional rent. Any amount so added shall bear interest at the rate of 10 % per annum from the date expended by Landlord and shall be payable on demand. Such action by Landlord shall not constitute a waiver of any right or remedy which Landlord may have on account of Tenant's default. (2) Tenant may withhold payment of any claim in connection with a good- faith dispute over the obligation to pay, as long as Landlord's property interests are not jeopardized. If a lien is filed as a result of nonpayment, Tenant shall, within 10 days after knowledge of the filing, secure the discharge of the lien or deposit with Landlord cash or sufficient corporate surety bond or other surety satisfactory to Landlord in an amount sufficient to discharge the lien plus any costs, attorney fees, and other charges that could accrue as a result of a foreclosure or sale under the lien. 11.2 Indemnification. Tenant shall indemnify and defend Landlord, and Landlord shall indemnify Tenant,from any claim, loss, or liability arising out of or related to any[negligent] activity of Tenant on the Premises or any condition of the Premises in the possession or under the control of Tenant including any such claim, loss, or liability that may be caused or contributed to in whole or in part by Landlord's own negligence or failure to effect any repair or maintenance required by this lease. Landlord shall have no liability to Tenant for any injury, loss, or damage caused by third parties, or by any condition of the Premises. ' ' - Page 7 of 13 IWB/City of Tigard Commercial Lease for the Water Building 11.3 Liability Insurance. The Tenant as the managing partner of the Landlord will provide insurance as set forth in the December 1993 Intergovernmental Agreement. Section 12. Quiet Enjoyment;Mortgage Priority 12.1. Landlord's Warranty. Landlord warrants that it is the owner of the Premises and has the right to lease them free of all encumbrances. Landlord will defend Tenant's right to quiet enjoyment of the Premises from the lawful claims of all persons during the lease term. 12.3 Estoppel Certificate. Either party will, within 30 days after notice from the other, execute and deliver to the other party a certificate stating whether or not this lease has been modified and is in full force and effect and specifying any modifications or alleged breaches by the other party. The certificate shall also state the amount of monthly base rent, the dates to which rent has been paid in advance, and the amount of any security deposit or prepaid rent. Failure to deliver the certificate within the specified time shall be conclusive upon the party from whom the certificate was required that the lease is in full force and effect and has not been modified except as represented in the notice requesting the certificate. Section 13. Assignment and Subletting No part of the Premises may be assigned,mortgaged, or subleased,nor may a right of use of any portion of the property be conferred on any third person by any other means,without the prior written consent of Landlord. This provision shall apply to all transfers by operation of law. Landlord may in its sole and arbitrary discretion not unreasonably withhold or condition such consent. Section 14. Default The following shall be events of default: 14.1 Default in Rent. Failure of Tenant to pay any rent or other charges within 10 days after written notice that it is due. 14.2 Default in Other Covenants. Failure of Tenant to comply with any term or condition or fulfill any obligation of the lease (other than the payment of rent or other charges)within 15 days after written notice by Landlord specifying the nature of the default with reasonable particularity. If the default is of such a nature that it cannot be completely remedied within the FIFTEEN (15) day period,this provision shall be complied with if Tenant begins correction of the default within the 15 day period and thereafter proceeds with reasonable diligence and in good faith to effect the remedy as soon as practicable. 14.3 Insolvency. Insolvency of Tenant; an assignment by Tenant for the benefit of creditors; the filing by Tenant of a voluntary petition in bankruptcy; an adjudication that Tenant is • bankrupt or the appointment of a receiver of the properties of Tenant; the filing of any - involuntary petition of bankruptcy and failure of Tenant to secure a dismissal of the petition within 30 days after filing; attachment of or the levying of execution on the leasehold interest Page 8 of 13 IWB/City of Tigard Commercial Lease for the Water Building and failure of Tenant to secure discharge of the attachment or release of the levy of execution within 10 days shall constitute a default. If Tenant consists of two or more individuals or business entities, the events of default specified in this Section 14.3 shall apply to each individual unless within 10 days after an event of default occurs, the remaining individuals produce evidence satisfactory to Landlord that they have unconditionally acquired the interest of the one causing the default. If the lease has been assigned, the events of default so specified shall apply only with respect to the one then exercising the rights of Tenant under the lease. 14.4 Abandonment. Failure of Tenant for 30 days or more to occupy the Premises for one or more of the purposes permitted under this lease, unless such failure is excused under other provisions of this lease. Section 15. Remedies for Default 15.1 Termination. In the event of a default the lease may be terminated at the option of Landlord by written notice to Tenant. Whether or not the lease is terminated by the election of Landlord or otherwise, Landlord shall be entitled to recover damages from Tenant of the default, and Landlord may reenter, take possession of the premises, and remove any persons or property by legal action or by self-help with the use of reasonable force and without liability for damages and without having accepted a surrender. 15.2 Reletting. Following reentry or abandonment, Landlord may relet the Premises and in that connection may make any suitable alterations or refurbish the Premises, or both, or change the character or use of the Premises, but Landlord shall not be required to relet for any use or purpose other than that specified in the lease or which Landlord may reasonably consider injurious to the Premises, or to any tenant that Landlord may reasonably consider objectionable. Landlord may relet all or part of the Premises, alone or in conjunction with other properties, for a term longer or shorter than the term of this lease, upon any reasonable terms and conditions, including the granting of some rent-free occupancy or other rent concession. 15.3 Damages. In the event of termination or retaking of possession following default, Landlord shall be entitled to recover immediately,without waiting until the due date of any future rent or until the date fixed for expiration of the lease term, the following amounts as damages: (1) The loss of rental from the date of default until a new tenant is, or with the exercise of reasonable efforts could have been, secured and paying out. (2) The reasonable costs of reentry and reletting including without limitation the cost of any cleanup,refurbishing, removal of Tenant's property and fixtures, costs incurred under Section 15.5, or any other expense occasioned by Tenant's default including but not limited to, any remodeling or repair costs, attorney fees, court costs, broker commissions, and advertising costs. (3) Any excess of the value of the rent and all of Tenant's other obligations under this lease over the reasonable expected return from the premises for the period Page 9 of 13 IWB/City of Tigard Commercial Lease for the Water Building commencing on the earlier of the date of trial or the date the premises are relet, and continuing through the end of the term. The present value of future amounts will be computed using a discount rate equal to the prime loan rate of major Oregon banks in effect on the date of trial. 15.4 Right to Sue More Than Once. Landlord may sue periodically to recover damages during the period corresponding to the remainder of the lease term, and no action for damages shall bar a later action for damages subsequently accruing. 15.5 Landlord's Right to Cure Defaults. If Tenant fails to perform any obligation under this lease, Landlord shall have the option to do so after 30 days written notice to Tenant. All of Landlord's expenditures to correct the default shall be reimbursed by Tenant on demand with interest at the rate of 10 %per annum from the date of expenditure by Landlord. Such action by Landlord shall not waive any other remedies available to Landlord because of the default. 15.6 Remedies Cumulative. The foregoing remedies shall be in addition to and shall not exclude any other remedy available to Landlord under applicable law. Section 16. Surrender at Expiration 16.1 Condition of Premises. Upon expiration of the lease term or earlier termination on account of default, Tenant shall deliver all keys to Landlord and surrender the Premises in first- class condition and broom clean. Alterations constructed by Tenant with permission from Landlord shall not be removed or restored to the original condition unless the terms of permission for the alteration so require. Depreciation and wear from ordinary use for the purpose for which the Premises are leased shall be excepted but repairs for which Tenant is responsible shall be completed to the latest practical date prior to such surrender. Tenant's obligations under this section shall be subordinate to the provisions of Section 9 relating to destruction. 16.2 Fixtures (1) All fixtures placed upon the Premises during the term, other than Tenant's trade fixtures, shall, at Landlord's option,become the property of Landlord. If Landlord so elects, Tenant shall remove any or all fixtures that would otherwise remain the property of Landlord, and shall repair any physical damage resulting from the removal. If Tenant fails to remove such fixtures, Landlord may do so and charge the cost to Tenant with interest at the legal rate from the date of expenditure. (2) Prior to expiration or other termination of the lease term Tenant shall remove all furnishings, furniture, and trade fixtures that remain its property. If Tenant fails to do so, this shall be an abandonment of the property, and Landlord may retain the property and all rights of Tenant with respect to it shall cease or,by notice in writing given to Tenant within 30 days after removal was required,Landlord may elect to hold Tenant to its obligation of removal. If Landlord elects to require Tenant to remove, Landlord may effect a removal and plaee,the property in pubic storage for Tenant's account. Tenant shall be liable to Landlord for the cost of Page 10 of 13 IWB/City of Tigard Commercial Lease for the Water Building removal, transportation to storage, and storage, with interest at the legal rate on all such expenses from the date of expenditure by Landlord. 16.3 Holdover (1) If Tenant does not vacate the Premises at the time required, Landlord shall have the option to treat Tenant as a tenant from month to month, subject to all of the provisions of this lease except the provisions for term and renewal, to eject Tenant from the Premises and recover damages caused by wrongful holdover. Failure of Tenant to remove fixtures, furniture, furnishings, or trade fixtures that Tenant is required to remove under this lease shall constitute a failure to vacate to which this section shall apply if the property not removed will substantially interfere with occupancy of the Premises by another tenant or with occupancy by Landlord for any purpose including preparation for a new tenant. (2) If a month-to-month tenancy results from a holdover by Tenant under this Section 16.3,the tenancy shall be terminable at the end of any monthly rental period on written notice from Landlord given not less than `.' days prior to the termination date which shall be specified in the notice. Tenant waives any notice that would otherwise be provided by law with respect to a month-to-month tenancy. Section 17. Miscellaneous 17.1 Nonwaiver. Waiver by either party of strict performance of any provision of this lease shall not be a waiver of or prejudice the party's right to require strict performance of the same provision in the future,or of any other provision. 17.2 Attorney Fees. If suit or action is instituted in connection with any controversy arising out of this lease,the prevailing party shall be entitled to recover in addition to costs such sum as the court may adjudge reasonable as attorney fees at trial, on petition for review, and on appeal. 17.3 Notices. Any notice required or permitted under this lease shall be given when actually delivered or 48 hours after deposited in United States mail as certified mail addressed to the address first given in this lease or to such other address as may be specified from time to time by either of the parties in writing. 17.4 Succession Subject to the above-stated limitations on transfer of Tenant's interest, this lease shall be binding on and inure to the benefit of the parties and their respective successors and assigns. 17.5 Recordation. This lease shall not be recorded without the written consent of Landlord. 17.6 Entry for Inspection. With at least 24 hours prior notice to Tenant, Landlord shall have the right to enter upon the Premises to determine Tenant's compliance with this lease, to make necessary repairs to the building or to the Premises, or to show the Premises to any prospective tenant or purchaser, and in addition shall have the right, at any time during the last two months of Page 11 of 13 IWB/City of Tigard Commercial Lease for the Water Building the term of this lease, to place and maintain upon the Premises notices for leasing or selling the Premises. 17.7 Interest on Rent and Other Charges. Any rent or other payment required of Tenant by this lease shall, if not paid within 20 days after it is due,bear interest at the rate of TEN (10%) per annum (but not in any event at a rate grater than the maximum rate of interest permitted by law)from the due date until paid. In addition, if Tenant fails to make any rent or other payment required by this lease to be paid to Landlord within 20 days after it is due, Landlord may elect to impose a late charge of$25.00 payment to reimburse Landlord for the costs of collecting the overdue payment. Tenant shall pay the late charge upon demand by Landlord. Landlord may levy and collect a late charge in addition to all other remedies available for Tenant's default, and collection of a late charge shall not waive the breach caused by the late payment. 17.8 Proration of Rent. In the event of commencement or termination of this lease at a time other than the beginning or end of one of the specified rental periods, then the rent shall be prorated as of the date of commencement or termination and in the event of termination for reasons other than default, all prepaid rent shall be refunded to Tenant or paid on its account. 17.9 Time of Essence. Time is of the essence of the performance of each of Tenants obligations under this lease. 17.10 Oregon Tort Claims Act. Subject to the limitations of liability for public bodies set forth in the Oregon Tort Claims Act, (ORS 30.260 to 30.300) the Intergovernmental Water Board members shall hold harmless and indemnify each other and their Councilors, employees, agents and volunteers against all claims, damages, losses and expenses (including all attorney fees and costs) arising out of or resulting from the District's performance of this agreement when the loss or claim is attributable to the acts or omissions of the Districts,their Commissioners, employees, agents and volunteers. Section 18. Arbitration 18.1 Disputes to Be Arbitrated. If any dispute arises between the parties as to a matter which this lease says should be arbitrated,or as to any other question involving apportionment or valuation, either party may request arbitration and appointment as an arbitrator an independent real estate appraiser having knowledge of valuation of rental properties comparable to the premises. The other party shall also choose an arbitrator with such qualifications, and the two arbitrators shall choose a third. If the choice of the second or third arbitrator is not made within 10 days of choosing the prior arbitrator,then either party may apply to the presiding judge of the judicial district where the premises are located to appoint the required arbitrator. 18.2 Procedure for Arbitration. The arbitrator shall proceed according to the Oregon statutes governing arbitration, and the award of the arbitrators shall have the effect therein provided. The arbitration shall take place in the county where the leased premises are located. Costs of the arbitration shall be shared equally by the parties,but each party shall pay its own attorney fees incurred in connection with the arbitration. Page 12 of 13 IWB/City of Tigard Commercial Lease for the Water Building Section 19. Right of First Refusal No Owner/Landlord of the Property shall sell or transfer the Owner's/Landlords undivided interest in the Property except as set forth herein in this Water Building Lease. In the event that three(3) out of four(4)of the representative jurisdiction Owners vote to sell the Water Building Property,the City of Tigard shall have the Right of First Refusal. Within 30 days of notification to Tenant that the Property will be sold,Tenant shall notify Owner of the intent to exercise the right to purchase the Property. Within 30 days of Tenant's notification to Landlord, the City of Tigard shall determine the Water Building Property improvement value as set forth in the System Assets and Liabilities Final Report (Section II,Utility Plant in Service)prepared by Economic and Engineering Services, Inc. dated November 1994, and order an appraisal of the land to be performed by an appraisal company highly experienced in valuation of land similar to the Property and agreed upon by seller and purchaser. Within 30 days of receiving the determination of value of the Property,the sale shall be closed. LANDLORD: Intergovernmental Water Board Member Jurisdictions CITY OF TIGARD CITY OF DURHAM CITY OF KING CITY TIGARD WATER DISTRICT TENANT: CITY OF TIGARD Page 13 of 13 IWB/City of Tigard Commercial Lease for the Water Building 1 EXHIBIT A TO LEASE. LEASED BUILDING AND PARKING PREMISES , 1 r rem Invw .q 1I y ' Fl (Il y LXIRmoi r' � 3e115 , '7'41 w, 1 1 7A/, T1{ 10, 1 ..„4: ...,i•".., l• l alg - y,R:. = YAT • • r CI N\f 4.....t.nJ� 1'�JI- 7 - \ .H. \N ,\\ \N. \\ /IA n:11i ~� �, � `� \. = parking (not to scale) EXHIBIT BTO LEASE CITY OF TIGARD WATER BUILDING LEASE: RENTAL STRUCTURE Estimated Annual Rent Revenues and Credits Total Rent From City of Tigard (COT) $178,891.20 Water Services Rent Portion $104,715.31 COT Rent Other Than Water Services $74,175.89 Total annual COT Credit for Owner improvements, annualized $15,424.26 I I � Total Annual Rent from COT after Credits $58,751.63 I I � Rent data is from D. Koellermeier 3/12/07 Office Building Asset Evaluation:Future Use Allocation City of Tigard Cost and Rental Credits For Renovation of HVAC, Fire,Plumbing and Electrical Systems COT Cost to be Reimbursed by IWB for HVAC, Fire, Electrical and Plumbing Renovation/Upgrade $177,379.00 I I Annualized for term of lease, 11.5 years, $15,424.26 July 1, 2007, until Dec 31, 2018 I C py Tigard Water District 8777 S.W.Burnham St. Tigard,OR 97223 June 27, 2007 Property Tax Division Oregon Department of Revenue P.O. Box 14380 Salem,OR 97309-5075 To Whom It May Concern: Please find attached the resolution statement adopting the budget and making appropriations for the Tigard Water District for the Fiscal Year 2007-08. The District does not impose a property tax. If you have any questions regarding this matter,please feel free to call me at (503)639-4171 x2493. Sincerely, Roger Dawes Financial Operations Manager City of Tigard ' Resolution No. 07-01 ADOPTING THE BUDGET BE IT RESOLVED that the Board of Directors of the Tigard Water District hereby adopts the budget for fiscal year 2007-08 in the total of$ 105,768.00 *now on file at the Tiaard City Hall. 13125 SW Hall Blvd. Tigard. OR 97223 . MAKING APPROPRIATIONS BE IT RESOLVED that the amounts for the fiscal year beginning July 1,2007,and for the purposes shown below are hereby appropriated: General Fund Reserve Fund Personal Services $ Personal Services $ Materials&Services $ Materials&Services $ Capital Outlay T Capital Outlay $ Transfers $ Total 4., 0 $ Tigard Water District Fund Contingency $ Personal Services $ Total $ 0 Materials&Services $ 54,768 Capital Outlay $ $ Debt Service Fund Contingency $ 8,000 Debt Service ct, 0 Total $ 62.768 Total Appropriations,All Funds $ 62,768 Total Unappropriated and Reserve Amounts,All Funds $ 43,000 TOTAL ADOPTED BUDGET $ 105,768- (*amounts with asterisks must match) IMPOSING THE TAX BE IT RESOLVED that the Board of Directors of the N/A hereby imposes the taxes provided for in the adopted budget: (1)In the amount or at the rate per$1,000 of assessed value of$ for operations; (2)In the amount or at the rate per$1,000 of assessed value of$ for local option tax;and (3)In the amount of$ for bonds; and that these taxes are hereby imposed and categorized for tax year 2007-08 upon the assessed value of all taxable property within the district as follows: CATEGORIZING THE TAX General Government Limitation Excluded from Limitation General Fund $ N/A/$1,000 Local Option Tax $ N/A/$1,000 _ Debt Service Fund $ 0 The above resolution statements were approved and declared adopted on this 25 day of June 2007. COACVC141 6._ / ' fX . ,,/,7tY.)) /7 2 Signature _ S'• a e `- ).yc <rp,;at/1 #.1 , Signature i/ Signature 150-504.073-6(neN12-06) 1 • • Tigard Water District Adopted Budget Fiscal Year 2007-08 Actual Actual Actual Actual Adopted Account# Est Actual Proposed Approved Adopted FY 2002-03 FY 2003-04 FY 2004-05 FY 2005-06 FY 2006-07 Resources FY 2006-07 FY 2007-08 FY 2007-08 FY 2007-08 Revenues $13,125 $13,091 $13,310 $13,116 $14,500 One Percent Water Sales $15,475 $15,500 $15,500 $15,500 1,609 1,179 2,123 2,334 2,500 Interest Earnings 3,800 3,700 3,700 3,700 $14,734 $14,270 $15,433 $15,450 $17,000 Total Revenues $19,275 $19,200 $19200 $19200 57,794 67,851 79,217 89,815 94,836 Beginning Balance 90,076 86,568 86,568 86,568 $72,528 $82,121 $94,650 $105,265 $111,836 Total Resources $109,351 $105,768_ $105,768 $105,768 Expenditures $0 $0 $0 $0 $0 Total Personal Services $0 $0 $0 $0 Materials and Services $780 $0 $0 $3,362 $20,000 Attorney $2,000 $20,000 $20,000 $20,000 O 0 0 0 10,000 Consultant Services 0 10,000 12,000 12,000 O 0 0 0 0 Financial Reveiw 0 0 5,000 5,000 O 0 0 0 0 Engineering Services 0 0 0 0 494 1.304 1,684 8-883 12,000 Meeting/Staff Support 14,573 12,000 10,000 10,000 1,274 1,304 1,684 12,245 42,000 601000 Professional/Contractual Svcs 16,573 42,000 47,000 47,000 1,152 0 1,442 0 0 Election Costs 3,500 0 0 0 O 0 0 0 63.316 Miss 0 56,998 998 998 1,152 0 1,442 0 63,316 613000 Special Department Expense 3,500 56,998 998 998 O 42 0 0 300 620000 Office Supplies&Expenses 50 300 300 300 777 100 150 155 150 Meeting Notice 200 200 200 200 O 0 0 500 2.500 Public Relations 500 2,500 2,500 2,500 777 100 150 655 2,650 621000 Advertising&Publicity 700 2,700 2,700 2,700 O 0 0 20 20 622000 Fees&Licenses 20 20 20 20 120 120 120 120 150 Special District Assoc Dues 120 150 150 150 120 120 120 120 150 623000 Dues&Subscriptions 120 150 150 150 54 38 49 59 600 624000 Travel/Food&Lodging 75 600 600 600 O 0 0 0 500 625000 SDAO Annual Conference 0 500 500 500 1,300 1,300 1,390 2,090 2,300 632000 Insurance 1,745 2,500 2,500 2,500 $4,677 $2,904 $4,835 $15,189 $111,836 Total Materials and Services $22,783 $105,768 $54,768 $54,768 O 0 0 0 Total Capital Outlay 0 0 0 0 $4,677 $2,904 $4,835 $15,189 $111,836 Total Expenditures $22,783 $105,768 $54,768 $54,768 O 0 0 0 0 Contingency 0 0 8,000 8,000 $4,677 $2,904 $4,835 $15,189 $111,836 Total Appropriations + $22,783 $105,768 $62,768 $62,768 67.851 79,217 89,815 90,076 0 Ending Fund Balance 86,568 0 43,000 43,000 Total Appropriations and Ending $72,528 $82,121 $94,650 $105,265 $111,836 Fund Balance $109,351 $105,768 5105,768 5105,768 6/25/2007 1:23 PM Sign-in Sheet for Tigard Water District Meeting June 25, 2007 Name and Address Would you like to (Please Print) ' speak to the Board? Eispj0_1___(.> )7c ' � S //' . -cis .14eF ke -s- l�af' Boakcl rn m s_e._ a_ Liin.e_ lit eni t u.b1emnn1&7 �.