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HomeMy WebLinkAbout5651 RESOLUTION NO. 5651 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AUBURN, WASHINGTON, AUTHORIZING THE MAYOR TO SIGN AN INTERLOCAL AGREEMENT ADMITTING THE CITY AS A MEMBER OF THE WASHINGTON MULTI-CITY BUSINESS LICENSE AND TAX PORTAL AGENCY WHEREAS, the City established its business and occupation (B&O) tax and corresponding administrative provisions in Ordinance No. 6814; WHEREAS, in a 2014 interlocal agreement, Seattle, Bellevue, Everett and Tacoma created the Washington Multi-City Business License and Tax Portal Agency (the Agency) to assist cities and B&O taxpayers by establishing a uniform municipal B&O tax reporting and payment system (known as "FileLocal"). The FileLocal system is an efficient and simplified way for taxpayers to report and pay municipal B&O taxes. Under the interlocal agreement, participating cities share the cost of operating the FileLocal system in accordance with their respective shares of total system tax filings. The 2014 interlocal agreement is attached as Exhibit A to this Resolution; WHEREAS, section 8 of the interlocal agreement allows the Agency to admit additional city members through agreement addendums signed by appropriate city officials. Since 2014, Renton, Des Moines, Lake Forest Park and Kent have also joined the Agency; WHEREAS, in December 2021, the Agency adopted Resolution FL2021- 04 approving the City's Agency admission, conditioned upon the City executing Resolution No. 5651 March 4, 2022 Page 1 of 3 an interlocal agreement addendum. The Agency's resolution of approval and the required agreement addendum are respectively attached to this Resolution as Exhibits B and C; WHEREAS, the City desires to join the Agency so that its B&O taxpayers may use the Agency's FileLocal system to report and pay City B&O taxes required by Ordinance No. 6814. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AUBURN, WASHINGTON, HEREBY RESOLVES as follows: Section 1. The Mayor is authorized to sign the addendum to the Washington Multi-City Business License and Tax Portal Agency Interlocal Agreement attached as Exhibit C to this Resolution, so that the City can be added as a member of the Washington Multi-City Business License and Tax Portal Agency. Section 2. The Mayor is hereby authorized to implement such administrative procedures as may be necessary to carry out the directions of this legislation, to include signing additional documents necessary to effectuate the City's admission as an Agency member. Resolution No. 5651 March 7, 2022 Page 2 of 3 Section 3. That this Resolution shall take effect and be in full force upon passage and signatures. Dated and Signed this 7th day of March, 2022. CITY OF AUBURN ANCY :+ice KUS MAYOR `. ATTEST: APPROVED AS TO FORM: Shawn Campbe , MMC, City Clerk Kendra Comeau, City Attorney Resolution No. 5651 March 4, 2022 Page 3 of 3 Attachment 1 WASHINGTON MULTI-CITY BUSINESS LICENSE AND TAX PORTAL AGENCY INTERLOCAL AGREEMENT BY AND BETWEEN THE CITIES OF BELLEVUE EVERETT SEATTLE and TACOMA DATED AS OF MARCH 1,2014 8-19 TABLE OF CONTENTS Section Caption Page Recitals 1 1 Creation of Washington Multi-City Business License and Tax Portal Agency2 2 Term of Agreement 2 3 Definitions .. 3 4 Guiding Principles and Goals 6 5 Portal Agency Services .. 8 6 Portal Agency Powers 10 7 Executive Board: Composition and Operation . 11 8 Conversion of Status of Participating Cites;Addition of New Principals or Subscribers 15 9 Tax and Finance Operations Committee 16 10 Portal Agency Staffing 17 11 Portal Agency Manager . 18 12 Assignment of Portal Services Contract From Seattle to Portal Agency 19 13 Budget; Cost Allocation; Capital Cost Recovery Charges;Payment of Charges; Delinquencies;Reserve Funds 19 14 Retained Authority and Responsibility of Participating Agencies 23 15 Ownership of Property 23 16 Merger or Consolidation, or Sale of All or Substantially All Assets . 24 17 Withdrawal by,or Termination of,a Principal .. 24 18 Amendment of Agreement 25 19 Termination of Agreement;Dissolution of Agency 25 20 Dispute Resolution 26 21 Insurance 27 22 Indemnification and Hold Harmless . 27 23 Intergovernmental Cooperation . 28 24 Notice 29 24 Venue 29 26 Filing 29 27 No Third Party Beneficiaries 29 28 Severability 30 29 Ratification . 30 30 Execution,Counterparts and Effective Date 30 List of Exhibits .. 32 A Proposed 2014 Portal Agency Budget Summary .. 33 B 2015-2020 Estimated Portal Agency Operating Budget Summary 35 C Capital Cost Recovery Charges 37 D Calculation of New Participant Capped Cost Increment and New Participant Labor Cost Increment 38 8-20 WASHINGTON MULTI-CITY BUSINESS LICENSE AND TAX PORTAL AGENCY INTERLOCAL AGREEMENT THIS AGREEMENT,incorporating all exhibits hereto,is entered into by and between the Cities of Bellevue, Everett, Seattle and Tacoma(collectively, the "Principals")pursuant to the Interlocal Cooperation Act Ch. 39.34 RCW and has been authorized by the legislative body of each Principal. RECITALS WHEREAS, each of the Principals is a city, a general purpose municipal corporation authorized by state law to issue local business licenses and collect a variety of local taxes; and WHEREAS,the Principals seek to make it easier and more efficient for businesses to apply for local business licenses and file local taxes, while retaining local control over local licensing and tax collection functions and policies; and WHEREAS, the Principals seek to accomplish these goals by jointly facilitating the creation of an interne web application gateway(the"Portal")where tax collection and business licensing functions can be collectively administered, and where businesses operating in multiple cities can use a"one-stop" system for tax payment or business license application filing; and WHEREAS, the Principals have engaged in extensive outreach with other cities, state legislators, taxpayers and the business community to understand the interests of these stakeholders in relation to development of the Portal; and WHEREAS, the creation of an intergovernmental entity, in the form of a governmental nonprofit corporation whose members are Principals to oversee the operation of the Portal will enable each Principal to participate in management of the Portal,provide economies of scale to participating cities, and ensure continued control by each Principal of its tax and licensing policy and local tax collections; and WHEREAS, the collection of local taxes is an exclusively governmental activity of each of the cities party to this Agreement; and WHEREAS, the creation of an intergovernmental entity as described in this Agreement will enable the Principals to carry out this exclusively governmental activity as a joint instrumentality; and v. 11.5.13 8-21 WHEREAS, it is anticipated that additional cities will elect to use the Portal over time, and that some may wish to do so as subscribers of the Portal's services rather than as principals; and WHEREAS,The City of Seattle has provided start-up funding for the development of the Portal and has conducted a competitive procurement process in which staff from each of the Principals participated with Seattle staff in selecting a preferred vendor to provide portal development, hosting and maintenance services; and WHEREAS, The City of Seattle has entered into a contract with the preferred vendor, and the vendor has begun work to develop the Portal with continued input from staff from each of the Principals; NOW THEREFORE, in consideration of the promises and agreements contained in this Agreement and subject to the terms and conditions set forth, it is mutually understood and agreed by the Parties as follows: SECTION 1. CREATION OF WASHINGTON MULTI-CITY BUSINESS LICENSE AND TAX PORTAL AGENCY. The Washington Multi-City Business License and Tax Portal Agency, ("PORTAL AGENCY") is hereby created as authorized by the Interlocal Cooperation Act(Ch. 39.34 RCW), and shall be a municipal instrumentality of the Principals,jointly organized by the Principals as a nonprofit corporation under Chapter 24.06 RCW as expressly authorized by RCW 39.34.030(3)(b). The Principals each assign to PORTAL AGENCY the responsibility for overseeing the development, operation and maintenance of an interne web application gateway to administer city business licensing and tax collection functions as exclusively governmental activities, all as described herein. SECTION 2. TERM OF AGREEMENT. This Agreement shall have an initial term of approximately five years, ending on December 31, 2019, (the"Initial Term"), and shall thereafter be perpetual, subject to the termination provisions in Section 19 of this Agreement. During the Initial Term no Principal may withdraw from the Agreement,provided that a Principal may convert or be converted to Subscriber status as provided in Sections 8.a, 13.d and 13.k, and may upon action of the Executive Board be terminated from participation in the Agreement as provided in Section 13.k. v. 11.5.13 2 8-22 SECTION 3. DEFINITIONS. a. Agreement. The"Agreement" is this interlocal agreement, as it may hereafter be amended or modified, together with all exhibits and appendices hereto,as they may hereafter be amended or modified. b. Articles of Incorporation. The"Articles of Incorporation"or"Articles" are terms defining aspects of the PORTAL AGENCY corporate formation under 39.34.030(3)(b)and consistent with RCW 24.06.025, as they may hereafter be amended by the Executive Board. c. Board Member. A"Board Member"or"Executive Board Member"is the individual representing a Principal on the Executive Board,whether the Chief Financial Officer of such Principal or his/her designated alternate. d. Business and Occupation Taxes. "Business and Occupation Taxes" are Gross Receipt Taxes imposed by a Participating City as an exclusively governmental activity authorized by state law and as defined in RCW 35.102.030. e. Business Licenses. `Business Licenses" are licenses required to be obtained by businesses in order to operate within a Participating City, consistent with state law. f. Bylaws. "Bylaws"as adopted and amended from time to time by the Executive Board shall govern the operations of the PORTAL AGENCY Executive Board, Operations Committee, and the officers thereof. g. Capital Cost Recovery Charge. The"Capital Cost Recovery Charge" is an annual fee charged to all Participating Cities other than the City of Seattle, for the purposes of reimbursing Seattle for a portion of the funding it provided to pay for start-up of the PORTAL AGENCY, as further described in Section 13.j. h. Capped Costs. "Capped Costs"means all items in the PORTAL AGENCY budget excluding:. i. Labor Costs unrelated to increases in full or partial staff positions; ii. Costs payable pursuant to the Portal Services Contract with the Vendor; iii. State Auditor's Office Audit costs; iv. Accounting services; v. Insurance; vi. Bank fees; vii.Any unanticipated expenses outside the normal course of business, for example, costs of litigation or damages, uninsured losses,tax or other liabilities resulting from a change in law, and events of force majeure(e.g. fire, explosion, accident, volcanic eruption, flood, epidemic,civil disturbance). i. CPI-U Limit. "CPI-U Limit"means the percentage increase(or decrease)equal to the percentage increase(or decrease) year to year in the Consumer Price Index—Urban for the Seattle/Tacoma/Bremerton metropolitan area, April—April, calculated by the Federal Bureau of Labor Statistics, or its successor index. v. 11.5.13 3 8-23 j. Executive Board. The"Executive Board" is the body described in Section 7 and shall be the governing body of the PORTAL AGENCY. k. Gross Receipts Taxes. "Gross Receipts Taxes" are taxes imposed by Participating Cities which are based on the gross receipts of certain businesses, specifically to include Business and Occupation Taxes as defined by RCW 35.102.030 as well as other taxes imposed by Participating Cities on utilities or businesses that are collected on basis of such gross receipts in accordance with applicable law. For purposes of this Agreement, Gross Receipts Taxes also includes square footage taxes imposed by a Participating City for the act or privilege of doing business in that city and calculated based on the amount of space occupied and used for those business activities within that city. 1. Initial Term. The"Initial Term" is the period from the effective date of this Agreement through December 31, 2019. m. Labor Costs. "Labor Costs"include salary, benefits and other compensation provided to Portal Agency employees (if any) and/or loaned staff. n. Licensees. "Licensees" are businesses or individuals that apply for a Business License from a Participating City or Cities using the Portal. o. Manager. The"Manager"is the chief operating officer for PORTAL AGENCY appointed by and serving at the pleasure of the Executive Board. p. New Participant Capped Cost Increment. The"New Participant Capped Cost Increment"is an amount calculated each budget period to identify the maximum amount by which Capped Costs may increase in the Executive Board approved draft or final budget for such period without unanimous approval of the Executive Board Members representing all Original Principals, as further described in Section 13.b.iv.1 and Exhibit D. q. New Participant Labor Cost Increment. The"New Participant Labor Cost Increment" is an amount calculated each budget period to identify the maximum amount by which Labor Costs may increase to provide for additional full or partial staff positions in the Executive Board approved draft or final budget for such period without requiring unanimous approval of the Executive Board Members representing all Original Principals, as further described in Section 13.b.iv.2 and Exhibit D. r. Operations Committee. The"Operations Committee" or"Tax and Finance Operations Committee"is the committee described in Section 9. s. Original Principals. The Original Principals are those four cities initially signing this Agreement: the cities of Bellevue,Everett, Seattle and Tacoma. t. Participating Cities. All Principals, and all Subscribers, as they may be so constituted from time to time, are collectively referred to as the"Participating Cities"or "Participants,"and individually referred to as a"Participating City"or"Participant." u. Population. "Population"is the residential population of a City, according to the most recent annual report issued by the State Office of Financial Management each year determining the population of each city for purposes of taxation and allocation of certain state shared revenues in the following calendar year. v. 11.5.13 4 8-24 v. Portal. The"Portal"is an internet web application gateway owned, operated and maintained by the Vendor under contract with the PORTAL AGENCY that affords Taxpayers and businesses a single access point through which they may apply for business licenses from, and pay taxes and fees to, Participating Cities, and receive information related to these functions. w. PORTAL AGENCY. "PORTAL AGENCY"means the Washington Multi-City Business License and Tax Portal Agency. x. Portal Operations Policy. The"Portal Operations Policy"is a separate document adopted by Supermajority Vote of the Executive Board, as it may be amended from time to time, which describes how data will be shared between the Participating Cities and the PORTAL AGENCY, and sets forth operating procedures and rules for the Portal. y. Portal Services Contract. The `Portal Services Contract" is that certain contract dated as of September 6,2013 between The City of Seattle and eGov Systems, a Louisiana corporation,to develop software for, and host the Portal operations. The Portal Services Contract is to be assigned to the PORTAL AGENCY by The City of Seattle pursuant to Section 12 of this Agreement. z. Principal. A"Principal"is a general purpose municipal corporation formed as a city under the laws of the state of Washington which imposes a Business and Occupations Tax and which has accepted the terms of and is a party to this Agreement and has paid its share of initial costs as may be required by the Executive Board as a condition to becoming a Principal. Principals shall receive services offered by the PORTAL AGENCY according to such terms and conditions as may be established by the Executive Board. aa. Representative. The term "Representative"refers to the individual representing a Principal or a Subscriber on the Operations Committee, or his/her designated alternate. bb. Simple Majority Vote. A "Simple Majority Vote"of the Executive Board means a majority(more than 50%) of the votes of the Board Members present constituting a quorum, with each Board Member that is present and voting having one vote. cc. Subscriber. A"Subscriber" is a general purpose municipal corporation, formed as a city under the laws of Washington which has agreed to pay the PORTAL AGENCY for services according to such terms and conditions as may be established by the Executive Board and evidenced by separate contract between the PORTAL AGENCY and such entity. A Principal may convert or be converted to Subscriber status as provided in Sections 8, 13.d and 13.k and a Subscriber may convert to a Principal as described in Section 8. dd. Supermajority Vote. A"Supermajority Vote"means Executive Board approval of an item accomplished by securing affirmative votes of not less than sixty-six percent(66%)of all voting Board Members of the Executive Board in number, and not less than sixty-six percent (66%) in number of the Original Principals. ee. Taxpayers. "Taxpayers" are businesses subject to local city taxes imposed by a Principal or Subscriber,payment of which is or can be administered by the Portal. v. 11.5.13 5 8-25 ff. Transaction. A"Transaction"is a payment or filing for a Business License,or a payment or filing of an online tax form(where multiple taxes filed on the same online tax form are counted as a single Transaction), made on the Portal by a business to a Participating City; provided, however, that where historical actual Transactions counts are to be used(rather than payments and transactions made on the Portal),then Transactions includes the total actual Business License filings and Gross Receipts Tax filings(where multiple taxes filed on the same tax form are counted as a single Transaction) for the Participating City over the applicable period. The Executive Board may refine this definition from time to time by amending the Portal Operations Policy in order to accommodate expansion of services offered by the Portal or to address other issues. gg. User Fees. "User Fees" are fees and charges imposed on businesses,Licensees or Taxpayers per Executive Board approval as part of PORTAL AGENCY's budget approval process. hh. Vendor. The Vendor is eGov Systems, a Louisiana corporation, which through the Portal Services Contract is providing services to develop, establish,host, own and maintain the Portal, associated online data storage and services. The Vendor has ownership of the Portal. The term Vendor shall also include any successor in interest to eGov Systems or any successor firm(s) or agency(s)with which the PORTAL AGENCY may contract to provide Portal development,hosting,maintenance, and associated online data storage and services. SECTION 4. GUIDING PRINCIPLES AND GOALS. a. Guiding Principles of PORTAL AGENCY. The Principals intend that the PORTAL AGENCY actions be guided by the following guiding principles: i. Local Control—The PORTAL AGENCY will seek to respect and preserve each Participating Cities' authority to set local tax policies. ii. Integrity—The PORTAL AGENCY will be honest, truthful and straightforward. iii. Accountability—The PORTAL AGENCY will be responsible for its actions and decisions, a good steward of public funds and transparent in its operations. iv. Flexibility/Adaptability—The PORTAL AGENCY will strive to nimbly respond to a changing business, technology and policy environment. v. Security—The PORTAL AGENCY will at all times seek to safeguard Taxpayer, Licensee and Participating City data. vi. Accessibility—The PORTAL AGENCY will seek to be accessible and responsive to Taxpayers, Licensees and Participating Cities. vii. Affordability—The PORTAL AGENCY will seek to be affordable to both Participating Cities and businesses and taxpayers using the Portal. Also, fees v. 11.5.13 6 8-26 and charges will be structured so that the addition of new Cities using the Portal does not impose additional costs on prior Participating Cities. b. Goals of the PORTAL AGENCY. The Principals acknowledge and support the following goals which they seek to accomplish by this Agreement and creation of the PORTAL AGENCY: i. Taxpayers and Licensees utilizing the Portal will have a seamless, transparent, user-friendly and efficient experience. ii. It will be easy and timely for Taxpayers and Licensees to access knowledgeable staff at each Participating City to respond to tax or licensing questions. iii. The Portal will have error-free data collection,transmittal and tax payment allocation as between Participating Cities. iv. There will be local control and oversight of tax collections and tax policy. v. Participating Cities will be accountable for the accuracy and timeliness of information they provide to the PORTAL AGENCY and for their customer service response. vi. Decision-making will be jointly exercised by the Principals through the Executive Board. vii. The PORTAL AGENCY will seek to balance the interests of information technology, treasury, finance and tax staff within Participating Cities in the development of the Portal's capabilities and operating rules. viii. The PORTAL AGENCY will comply with all legal requirements, including but not limited to public record-keeping,public meetings, public records, security, and audit requirements. ix. The PORTAL AGENCY will be able to accommodate additional city partners as Principals or Subscribers over time, and be able to process additional types of local taxes and licenses over time. x. The PORTAL AGENCY will support the ability to maximize use of the Portal by Taxpayers and Licensees so that Participating Cities do not need to replicate the Portal's services. xi. The PORTAL AGENCY will maximize compatibility with Participating City's systems of record for data storage and processing. xii. The PORTAL AGENCY will coordinate with the state Department of Revenue. xiii. The PORTAL AGENCY will be a cost effective solution for Participating Cities. v. 11.5.13 7 8-27 SECTION 5. PORTAL AGENCY SERVICES. a. Generally. The PORTAL AGENCY has the responsibility and authority for overseeing the Vendor's contractual responsibilities to develop, own,operate, maintain and manage the Portal and for managing the operations of the PORTAL AGENCY. It is expressly contemplated that this scope of services includes: i. The implementation, operation and maintenance of replacement or upgrades of the Portal as necessary or appropriate. ii. The development and adoption of rules for access,use and maintenance of the Portal by City Participants, Taxpayers and Licensees. iii. Expansion of the scope of services offered through the Portal if approved per Subsection 5.c below. iv. Other responsibilities reasonably necessary for the development, operation and maintenance of the Portal. v. Other related or ancillary services. b. Limitation on Authority. The PORTAL AGENCY shall have no authority to set tax rates or tax classifications for Participating Cities, to set local tax policy, tax rules,deductions or exemptions; or take enforcement action on behalf of any Participating City. The PORTAL AGENCY is created by the Principals to manage the Participating Cities'joint participation in the facilitation of an exclusively governmental activity, specifically,the collection of certain local taxes. c. Expansion of Scope of Services. The Portal will be initially established with the capability to handle payment of Gross Receipts Taxes and filing of applications for Business Licenses. PORTAL AGENCY may provide additional capability to pay additional types of city taxes or application for additional types of city licenses through the Portal only upon approval of a Supermajority Vote of the Executive Board;provided, however, that the cost of service expansions will be allocated only to those Participating Cities electing to participate in such services. d. Requirement of Participating Cities to Utilize Services of Portal. i. Gross Receipts Tax Collection Services: Participating Cities shall be required to offer their Taxpayers the option of paying Gross Receipts Taxes through the Portal, if and to the extent such taxes are imposed by a Participating City. ii. Other Services: Except as required by Subsection 5.d.i above,no Participating City shall be required to utilize any other service of the Portal without the prior written approval of such City. iii. Provision of Alternate Collection Options by Participating Cities. Nothing in this Agreement shall be interpreted to preclude a Participating City from v. 11.5.13 8 8-28 offering its Taxpayers or businesses additional means (other than through the Portal) for acquiring Business Licenses or paying any local taxes, including but not limited to payment of Gross Receipts Taxes. iv. Operating Policies and Rules for Use of Portal. In order to protect sensitive Taxpayer data, and ensure the relationship between the Portal and Participating Cities remains fully functional and secure, the Executive Board shall adopt a Portal Operations Policy. It is understood and agreed that the access and use of the Portal by any Principal or Subscriber is conditioned on that party consenting in writing to comply with the Portal Operations Policy. Such consent shall be signified by signature of the chief executive officer of each Participating City, or his/her designee, and shall not require further legislative action of the Participating City. The Portal Operations Policy will be regularly reviewed and updated by the Executive Board as necessary or appropriate. e. Additional Activities of the PORTAL AGENCY. At the discretion of the Executive Board, the PORTAL AGENCY may, in addition to the services described in Section 5.a above: i. Participate in forums for Participating Cities to discuss tax policy issues (including but not limited to the Association of Washington Cities Tax Policy Advisory Group or its successor in interest); ii. Provide education to Taxpayers and Businesses regarding the Portal and the PORTAL AGENCY, and work to increase transparency about Participating City tax policies and activities; iii. Provide a forum for businesses and others to provide feedback and suggestions on the use and functionality of the Portal and the taxes and licenses administered through the Portal; and iv. Provide a forum for discussion, coordination and execution of coordinated enforcement activities,provided that the PORTAL AGENCY itself is not authorized to take any tax collection or license fee enforcement actions on behalf of a Participating City. The PORTAL AGENCY shall not use or authorize the use of the Portal or such forum for the purpose of assisting a campaign for election of any person to any office or for the promotion of or opposition to any ballot proposition. v. The PORTAL AGENCY shall coordinate with the Washington State Department of Revenue with regard to the Portal's operations and functionality to minimize the need for Taxpayers and Licensees to enter data on the Portal and any separate state tax payment and licensing systems. v. 11.5.13 9 8-29 SECTION 6. PORTAL AGENCY POWERS. Through its Executive Board,the PORTAL AGENCY shall have all powers allowed by law for interlocal agencies created under RCW 39.34.030 and Chapter 24.06 RCW, as authorized, amended, or removed by the Executive Board, as provided for in this Agreement and including but not limited to the following: a. Recommend action to the legislative bodies of the Participating Cities; b. Review and approve budget expenditures for the PORTAL AGENCY; c. Establish policies for expenditures of budget items for the PORTAL AGENCY; d. Review and adopt a personnel policy for the PORTAL AGENCY(if applicable); e. Review and approve operating, Portal use, and financial policies for the PORTAL AGENCY; f. Establish a fund or special fund or funds as authorized by RCW 39.34.030 for the operation of the PORTAL AGENCY; g. Conduct regular and special meetings as may be designated by the Executive Board consistent with the state Open Public Meetings Act (Ch. 42.30 RCW) as now or hereafter amended; h. Maintain and manage records in accordance with the state Public Records Act (Ch. 42.56 RCW) as now or hereafter amended, and other applicable state and federal laws and regulations; i. Determine what services shall be offered and under what terms they shall be offered, consistent with Section 5. • j. Retain and terminate a Manager; k. Create committees to review and make recommendations and carry out such functions and responsibilities as the Board may expressly provide; 1. Approve strategic plans; m. Approve the addition of new Principals and new Subscribers and the terms of their participating in PORTAL AGENCY and receipt of PORTAL AGENCY services; n. Enter into agreements with third parties for goods and services necessary to fully implement the purposes of this Agreement; o. Establish fees and charges for services provided to Participating Cities or other parties, including but not limited to Taxpayers and Licensees using the services of the Portal; p. Direct and supervise the activities of any committee established and/or any advisory boards, and the Manager; q. Accept grants of funds from any federal, state, local or private agencies and receive and distribute such funds; r. Receive all funds allocated to PORTAL AGENCY by Participating Cities; v. 11.5.13 10 8-30 s. Purchase, take,receive, lease, take by gift, or otherwise acquire, own,hold, improve,use and otherwise deal in and with real or personal property; or any interest therein,in the name of PORTAL AGENCY; t. Sell, convey, lease, exchange, transfer, and otherwise dispose of all of its property and assets; u. Sue and be sued, complain and defend, in all courts of competent jurisdiction in PORTAL AGENCY's name; v. Make and alter bylaws for the administration and regulation of its affairs; and w. Any and all other lawful acts necessary to further PORTAL AGENCY's goals and purposes. x. Notwithstanding the foregoing, the PORTAL AGENCY shall not have the authority to issue debt in its own name. The Portal Agency, as a joint instrumentality of its municipal corporation members under Chapter 39.34 RCW, shall have no powers or authority that are not held by Washington cities. SECTION 7. EXECUTIVE BOARD: COMPOSITION AND OPERATION. a. Composition. The Executive Board shall be composed of one(1)Board Member from each Principal,plus at least one(1) non-voting Board Member representing PORTAL AGENCY Subscribers. Such representatives are referred to as a Board Member or Board Members of the Executive Board. b. Powers. The Executive Board shall have final decision making authority upon all policy issues and shall exercise the powers described in Section 6. The Executive Board may delegate responsibility for execution of Executive Board policies and directives and for day-to- day operational decision-making to the Manager,including the hiring and supervision of additional staff positions authorized by the Executive Board, subject to the terms of Section 11. c. Limitation on Total Number of Voting Board Members on Executive Board; Allocation of Executive Board Positions Among Multiple Principals. Notwithstanding the terms of Subsection 7.a, at no time shall the number of Executive Board Members exceed fifteen (15) voting members, and for so long as it remains a Principal,no Original Principal shall be required to share representation of its Board seat with another Principal. If the addition of a new Principal would cause the number of Executive Board voting Board Members to exceed fifteen(15), then the Principals with the smallest Population shall share a single Board Member position in order to reduce the number of Executive Board voting Board Members to fifteen (15);provided that,if over five(5)Principals would be represented by a single Board Member,then an additional v. 11.5.13 11 8-31 Board seat shall be converted for shared representation, to be shared by the Principals with the smallest Population. In the event that the number of Principals sharing representation is not evenly divisible by the number of shared seats, then the Principals with the larger Population shall be given the benefit of the allocation (e.g., if 7 Principals are to share 2 seats, then the 3 Principals with the largest Population(within the group sharing representation) shall share one (1)seat, and the four(4)Principals with the smallest populations shall share the second seat). If the number of Principals exceeds 59, then the same process as described above shall be repeated, that is,moving to a maximum of six(6)Principals sharing a seat, and so on (seven (7)Principals sharing a seat, etc.) as necessary to accommodate additional Principals. d. Method of Determining Selection of Subscriber Representative(s)or Shared Voting Board Member(s). Subscribers shall initially share one(1)non-voting seat on the Executive Board. The Executive Board may by Supermajority Vote increase the number of non- voting seats for Subscribers, and may define how such additional seats are allocated among Subscribers. Unless otherwise described in the Bylaws, Subscribers sharing representation of the non-voting Board Member shall determine the means by which to select their Executive Board representative and shall inform the Board of their choice at the time of the biennial Executive Board Officer elections (or at such other times as may be required in the event of a vacancy). Similarly, those Principals sharing representation on a single Executive Board seat shall determine the means by which to select the position, and shall make the determination at the same time as the biennial Executive Board Officer elections(or at such other times as may be required in the event of a vacancy). i. Unless otherwise described in the Bylaws, in the event that Subscribers or Principals are unable to agree on a shared representative or Board Member on a timely basis,the remaining Executive Board Members may make the selection for them by a vote of the Executive Board. ii. Individuals representing multiple Subscribers or Principals are expected to confer with the Cities they represent. e. Qualifications to Serve on Executive Board. To serve on the Executive Board, as either a voting or non-voting Board Member, a person must be the appointing city's Chief Financial Officer(e.g., finance director or city treasurer, or equivalent), or their deputy or equivalent. An individual representing multiple cities on a single Executive Board seat, or serving as the non-voting Subscriber representative shall similarly hold such a position within one of the Subscriber cities sharing such representation. f. No Compensation for Serving on Executive Board. All Executive Board Members and their alternates shall serve without compensation from the PORTAL AGENCY. However, the PORTAL AGENCY may pay for or reimburse Executive Board Members and alternates for out-of-pocket costs related to service on the Executive Board. v. 11.5.13 12 8-32 g. Term of Office; Vacancies. Executive Board Members shall serve on the Executive Board for so long as they hold a position that qualifies them for the seat,unless the city they represent elects to appoint another individual. Executive Board Members representing multiple Cities(either as a Principal or Subscriber) shall serve until the next Board Officer elections. Any vacancies shall be promptly filled by the appointing Principal, group of Principals, Subscribers,or the Executive Board (per Section 7.d.i), as appropriate. h. Alternates. Each Executive Board Member shall have a single alternate designated in writing. Alternates must meet the same qualification as the designated Board Member or have similar financial expertise and be in a management position within their city. i. Quorum. A simple majority of the Board Members (or their alternates)in number (excluding any Board Member which per Section 17 has given notice of withdrawal or which has been terminated by vote of the Executive Board) shall constitute a quorum of the Executive Board for purposes of taking action. j. Voting. The Executive Board shall strive to operate by consensus. All Executive Board decision on items not listed in Section 7.k shall require a Simple Majority Vote for approval. A Board Member may not split his or her vote on an issue. No voting by proxies or mail-in ballots will be allowed. Voting by a designated Alternate is not considered a vote by proxy. A Board Member representing a Principal that has given notice of withdrawal or which has been terminated by vote of the Executive Board shall be authorized to cast votes at the Executive Board only on budget items to be implemented prior to the withdrawal or termination date. k. Items Requiring a Supermajority Vote for Approval: i. Approval or amendment of the budget or draft budget. (Per Section 13.b.iv, approval of the draft and final budget or amendments thereto also requires unanimous approval of the Original Principals in certain instances). ii. Approval or amendment of user fees and charges. iii. Approval of the Portal Operations Policy or amendments thereto. iv. Adoption or amendment of the Bylaws or amendment of the Articles of Incorporation. v. A decision to acquire assets, equipment,real or personal property, or bind the PORTAL AGENCY to pay total or cumulative any contract amounts over $50,000,provided that, this threshold amount will be indexed on the fifth anniversary of the formation of the PORTAL AGENCY and every five (5) years thereafter by the CPI-U Seattle-Tacoma-Bremerton. vi. Admission of a new Principal. v. 11.5.13 13 8-33 vii. Admission of a new Subscriber. viii. The decision to create an additional non-voting seat for Subscribers on the Executive Board. ix. Addition of any staff positions, or partial staff positions,to support PORTAL AGENCY operations. (Per Section 13.b.iv, approval of funding for increases in the number of staff positions also requires unanimous approval of the Original Principals in certain instances). x. Appointing or removing the Manager. xi. Merger, consolidation, sale of all or substantially all assets of the PORTAL AGENCY(See Section 16). xii. Amendment of the Agreement(except for those amendments requiring approval of all legislative bodies of the Principals per Section 18). xiii. Termination or dissolution of the PORTAL AGENCY(See Section 19). xiv. Any other action actions requiring a sixty six-percent(66%) Supermajority vote under Chapter 24.06 RCW. 1. Officers. The Executive Board shall have four officers, a Chair, Vice-Chair, Secretary and Treasurer. It will be the function of the Chair to preside at the meetings of the Executive Board.The Vice-Chair shall assume this role in absence of the Chair. At the first meeting of the Executive Board following the effective date of this Agreement, the officers shall be elected, and shall serve in this capacity through April 1, 2016, whereupon a new Chair and Vice-Chair shall be elected by the Executive Board. Biennially thereafter, the Executive Board shall elect a new Chair and Vice-Chair for two(2)year terms commencing each April 1. In the event of a vacancy in the Chair position,the Vice-Chair shall assume the Chair for the balance of the term of the departed Chair. In the event of a vacancy in the Vice-Chair position, the Executive Board shall elect a new Vice-Chair to serve the balance of the term of the departed Vice-Chair. An officer elected to fill the unexpired term of his or her predecessor shall not be precluded from serving one or more full annual terms of office following the end of such unexpired term. Any officer appointed by the Executive Board may be removed by vote of the Executive Board,with or without cause, in which event the Executive Board shall promptly elect a new officer who shall serve until the next regular officers' board term begins. The Executive Board may appoint persons other than Board Members of the Executive Board to serve as Secretary and Treasurer of the PORTAL AGENCY. The duties of all officers shall be further described in the PORTAL AGENCY Bylaws. m. Staffing. The Manager shall assign agency staff to support the Executive Board as he or she deems appropriate. n. Meetings. The Executive Board shall meet as often as it deems necessary and not less than once a year, at a time and place designated by the Chair of the Executive Board or by a majority of its Board Members. Not less than fourteen (14)days advance notice of regular v. 11.5.13 14 8-34 meetings shall be given. Special meetings may be called by the Chair or any two (2)Board Members upon giving all other Board Members not less than ten (10) days prior notice. In an emergency, the Executive Board may dispense with written notice requirements for special meetings, but must, in good faith, implement best efforts to provide fair and reasonable notice to all Executive Board Members. Board Members(or alternates)may participate in meetings by telephone conference or equivalent means of voice communication. At all times the Executive Board shall comply with Ch. 42.30 RCW(Open Public Meetings Act). o. Articles of Incorporation and Bylaws. Unless otherwise provided in the Articles and Bylaws or by vote of the Executive Board, upon the request of any Board Member of the Executive Board, Robert's Revised Rules of Order shall govern any proceeding of the Executive Board. p. Consultation with Operations Committee. It is the intent of this Agreement to seek the active participation and advice of Participating Cities in the determination of PORTAL AGENCY policies and management. To the extent practicable, all items to come before the Executive Board shall have been previously subject to the review, comment and recommendation of the Operations Committee and the Executive Board shall consider input from the Operations Committee in its deliberations. q. Consultation with Businesses,Taxpayers and Participating Cities. Not less than once each year the Executive Board shall seek input from Taxpayers and Participating Cities for the purpose of securing feedback and information on the efficiency and effectiveness of the Portal and PORTAL AGENCY programs. SECTION 8. CONVERSION OF STATUS OF PARTICIPATING CITIES; ADDITION OF NEW PRINCIPALS OR SUBSCRIBERS. a. Loss of Principal Status. As described in Sections 13.d and 13.k hereof, a Principal shall be converted to Subscriber for failure to approve its share of the budget or for nonpayment or delinquency in payment of charges and fees. On the date of such conversion, said former Principal shall: i. lose its representation on the Executive Board; ii. lose its right to receive a share of the PORTAL AGENCY assets upon dissolution of the PORTAL AGENCY; iii. become subject to payment of charges and fees in accordance with the then applicable payment formula for Subscribers; and iv. be bound by the terms of the then current Subscriber service contract. The conversion of a Principal to Subscriber shall not discharge or relieve any Principal of its obligations to the PORTAL AGENCY or any other Participating City. v. 11.5.13 15 8-35 b. Election to Convert to Subscriber. A Principal may elect to convert to Subscriber status effective the first day of the next budget period by giving notice of its intent to the Governing Board not less than eight(8)months in advance of such effective date;provided that, a Principal may not exercise such election to take effect within the Initial Term. Such conversion shall be effective as proposed without further action of the Executive Board,barring any basis for terminating the Principal and action thereon by the Executive Board. c. New Principals. A city or town otherwise meeting the qualifications of a Principal in Section 3.z hereof may be admitted to the PORTAL AGENCY as a Principal upon Supermajority Vote of the Executive Board as required under Section 7.k and its approval and execution of a document confirm. Similarly, a Subscriber may apply to the Executive Board to be converted to Principal status. As a condition of becoming a Principal, whether by conversion or new admission, the Executive Board may require payment or other contributions or actions by the new Principal as the Executive Board may deem appropriate consistent with the Bylaws and Portal Operations Policy, and may set such start date for service as it deems appropriate, it being the intention that the addition of new Principals shall not cause then-existing Principals to incur additional costs. d. New Subscribers. The determination of whether to accept Subscribers shall be made by the Executive Board in a manner similar, and subject to such terms and conditions, as that for accepting new Principals, it being the intention that the addition of new Subscribers shall not cause then-existing Principals or Subscribers to incur additional costs. SECTION 9. TAX AND FINANCE OPERATIONS COMMITTEE. a. Role and Responsibilities. A Tax and Finance Operations Committee ("Operations Committee")shall be established to provide advice and recommendations to the Executive Board. The Executive Board may determine to direct the Operations Committee to perform specific responsibilities within Board-defined parameters. The Operations Committee shall endeavor to promote interagency collaboration, cooperation and information sharing between PORTAL AGENCY Principals and Subscribers. The Operations Committee shall: i. Assist in the review and development of Portal Operations Policy and amendments thereto,Portal development options,proposed new service options, and such other matters as the Executive Board may direct; ii. Make reports and recommendations to the Executive Board from time to time on matters the Operations Committee deems appropriate; iii. Assist in the review and development of proposed PORTAL AGENCY budgets; v. 11.5.13 16 8-36 iv. Provide written recommendations with respect to the proposed budget to the Executive Board at the time the proposed budget is submitted to the Executive Board; v. Provide advice, information and recommendations to the PORTAL AGENCY Manager and staff; vi. Assist in communications to City Councils, legislators,business community on PORTAL AGENCY issues; vii. Reach out to technology staff within their respective Cities for input and ideas, and to keep them apprised of PORTAL AGENCY issues; viii. Brief their respective Executive Board Members in advance of Executive Board meetings. b. Membership. Membership of the Operations Committee shall include one(1) Representative from each Principal, appointed by that Principal,plus at least one(1) representative, appointed by the Executive Board, to represent Subscribers. Each Principal shall also appoint in writing a designated alternate to serve on the Operations Committee in case of absence of the primary Representative. c. Qualification to serve on Operations Committee. Representatives and their alternates shall be staff from the Principal they represent, with expertise in city tax policy and administration and/or city financial policy and administration. Persons serving on the Operations Committee are referred to as Representatives(or alternates)and shall serve without compensation from the PORTAL AGENCY. d. Officers, Voting, Meeting Rules. The Operations Committee shall select a Chair and Vice-Chair from among the membership of the Operations Committee. Each Representative on the Committee shall have one vote. The meeting rules for the Operations Committee shall be further defined in the PORTAL AGENCY Bylaws. e. Staffing. The Operations Committee shall be staffed by the Manager and such additional agency staffing as the Manager may deem appropriate. SECTION 10. PORTAL AGENCY STAFFING. a. The PORTAL AGENCY shall be staffed in such manner as the Executive Board determines, including but not limited to the use of loaned employees from Principals, consultants or other service providers, purchase of services from Principals or others, or hiring staff, or any combination of the foregoing. v. 11.5.13 17 8-37 b. As described in Section 13.b.iv.2 and Exhibit D, any increase in Labor Costs in excess of the New Participant Labor Cost Increment requires approval of a Supermajority Vote of the Executive Board as well as the approval of all Board Members representing all Original Principals. SECTION 11. PORTAL AGENCY MANAGER. a. Portal Agency Manager Appointment, Responsibilities and Authority.The Executive Board shall be responsible for the appointment and termination of a Manager of the PORTAL AGENCY, and shall request input from the Operations Committee, or any other standing committees created by the Executive Board,regarding any proposed appointment. The Manager shall: i. Be responsible to the Executive Board and shall advise it from time to time on a proposed budget and other appropriate matters in order to fully implement the purposes of this Agreement; ii. Administer the PORTAL AGENCY in its day-to-day operations consistent with the policies adopted by the Executive Board; iii. Appoint persons to fill other staff positions, subject to confirmation by the Executive Board as the Board may require; iv. Submit quarterly budget and operation performance reports to the Executive Board in a form acceptable to the Executive Board; v. Undertake outreach to Taxpayers, Licensees and businesses, as well as to Participating Cities on the effectiveness of the PORTAL AGENCY operations and programs. vi. Manage and oversee performance of the Vendor and other vendors or contractors providing services to the PORTAL AGENCY. vii. Consult in advance with the Operations Committee on issues to come before the Executive Board, including but not limited to working with the Operations Committee in the development of the PORTAL AGENCY's budget and policies. b. Qualifications, Retention and Termination. The Manager shall have experience in technical, financial and administrative fields and his or her appointment shall be on the basis of merit only. The Manager is an"at will"position and may be terminated from his or her position as Manager upon the Supermajority Vote of the Executive Board, without cause. c. Legal Counsel, Accountants and Auditors. Only the Executive Board shall be authorized to hire or retain legal counsel and independent accountants and auditors. Other consultants may be designated in such manner as the Executive Board may determine subject to Sections 6 and 7. v. 11.5.13 18 8-38 d. Contracts and Support Services. Subject to the terms of the Bylaws, the Executive Board or the Manager with advice of the Operations Committee shall as necessary contract with appropriate local governments or other third parties for the use of space for its operations, and for staff and auxiliary services including,but not limited to,records,payroll, accounting,purchasing and data processing. Notwithstanding the foregoing, only the Executive Board may approve changes to the Portal Vendor(s)or Portal Vendor Services Contract. SECTION 12. ASSIGNMENT OF PORTAL SERVICES CONTRACT FROM SEATTLE TO PORTAL AGENCY. Promptly following the execution of this Agreement and the filing of such forms with the Washington Secretary of State as are necessary to incorporate the PORTAL AGENCY as a nonprofit corporation, The City of Seattle agrees to assign the Portal Services Contract to the PORTAL AGENCY, together with all rights and responsibilities appurtenant thereto and the PORTAL AGENCY shall agree to accept such assignment,rights and responsibilities, it being the intent of the parties to this Agreement that the PORTAL AGENCY shall assume all responsibility for overseeing and funding the work of the Vendor pursuant to such Portal Services Contract as soon as practicable following formation of the PORTAL AGENCY. SECTION 13. BUDGET; COST ALLOCATION; CAPITAL COST RECOVERY CHARGES; PAYMENT OF CHARGES; DELINQUENCIES; RESERVE FUNDS. a. Budget Fiscal Year. The budget fiscal year shall be either the calendar year, or two calendar years as the Executive Board may determine. The"budget period" corresponds to the fiscal year or years so determined by the Board. b. Budget Approval. The Manager shall develop the proposed operating budget in consultation with the Operations Committee. The Manager and Executive Board shall use their best efforts to meet the budget schedule set forth below, but failure to meet a specified budget deadline shall not constitute a breach of this Agreement. i. The Manager shall present a proposed budget to the Executive Board by no later than May 1 prior to the commencement of the budget period, together with the Operation Committee's recommendations with respect to the proposed budget. ii. By no later than June 15, the Executive Board shall (1)review and revise the draft budget as it deems appropriate; (2) approve the draft budget (including proposed charges to Participating Cities and any user fees to v. 11.5.13 19 8-39 Taxpayers and Licensees)by Supermajority Vote; and (3) forward same to Principals. The approved draft budget, and all proposed fees and charges shall be forwarded to Subscribers no later than July 1. iii. The final budget shall be adopted by vote of the Executive Board effective no later than December 31 prior to commencement of the budget period, after receiving information as to: 1. which Subscribers will be continuing to contract with the PORTAL AGENCY; and 2. which Principals have or will approve their shares of the PORTAL AGENCY budget, based on action or information from such Principals received by the PORTAL AGENCY no later than December 1. iv. Vote Required to Approve Budget. Per Section 7.k.i, a Supermajority Vote of the Executive Board is required to approve the draft and final budget,provided that unanimous approval of the Executive Board Members representing all Original Principals shall also be required to approve any budget or budget amendment that includes: 1. An increase in Capped Costs greater than the maximum amount allowed per calculation of the New Participant Capped Cost Increment, as further described in Exhibit D. 2. An increase in Labor Costs to increase the number of full or partial staff positions greater than the maximum amount allowed per calculation of the New Participant Labor Cost Increment, as further described in Exhibit D. v. 2014 Budget. Notwithstanding the foregoing, the PORTAL AGENCY budget for the year 2014 will be formally adopted by action of the Executive Board promptly following incorporation of the PORTAL AGENCY and need not be submitted for approval by the Original Principals. The proposed 2014 budget is set forth at Exhibit A. By approving this Agreement each Original Principal also approves their contribution to the 2014 budget in an amount not to exceed that shown in Exhibit A,promptly following the date the PORTAL AGENCY is incorporated. v. 11.5.13 20 8-40 c. Payment of Charges. The Board shall determine the timing of payments by Participating Cities, which shall be set forth in the Portal Operations Policy. d. Failure of a Principal to Approve Budget Share. Failure of a Principal to approve its share of the budget before the commencement of the budget period shall result in the Principal being converted to Subscriber status effective as of the first day of the budget period for which the budget was not approved. e. Notification of Final Adopted Budget. Promptly following final adoption of the budget by the Executive Board, the Manager shall provide notice to all Principals and Subscribers as to the terms of the final adopted budget,including their share of PORTAL AGENCY costs, charges and fees, and the payment schedule. f. Budget Modifications. Modifications to the budget shall be approved by a Supermajority Vote of the Executive Board(and also unanimous consent of the Original Principals if required by Section 13.b.iv above) as necessary from time to time to account for changes in expenditures and revenues. g. Cost Allocation and Cost Recovery Principles. The PORTAL AGENCY budget shall be generally allocated between all Participating Cities based on the number of Transactions processed for each City on the Portal. In years 2014 through 2018,the number of Transactions for the Original Principals shall be based on 2012 historical actual pre-Portal use Transaction Counts (set forth in Exhibit A) and the City Transaction Count for any other Participating City shall be based on the most recent historical data for that City prior to it joining the Portal. From and after 2019, the number of Transactions allocated to Original Principals shall be based on the most recent actual annual number of Transactions processed on the Portal for each such City (thus for 2019, the 2017 actual Transaction count will be used); for other Participating Cities, the allocation will be determined considering the actual number of Transactions (if the City had joined before 2019), historical tax and license information, and the experience of Original Principals as to how quickly businesses have adopted use of the Portal since its launch. The details of the cost allocation calculation shall be set forth in the Portal Operations Policy. Nothing in this Agreement shall be construed to prohibit the Executive Board from including factors in addition to the number of City Transactions in the cost allocation formulas as between Participating Cities, so long as the primary basis for allocation remains the City Transaction count. h. User Fees. The PORTAL AGENCY shall impose such reasonable user fees as the Executive Board may determine on Taxpayers and Licensees utilizing the Portal to file tax returns or file business license applications in order to recoup costs of PORTAL AGENCY v. 11.5.13 21 8-41 operations, the Portal operation and maintenance, reserves and any other PORTAL AGENCY costs. i. Estimated Six Year Operating Costs. Exhibit B sets forth a general estimate of the annual costs to establish and operate the PORTAL AGENCY between 2014 and 2020, assuming the Original Principals are the only Participating Cities, and includes estimated payment of Vendor's charges pursuant to the Portal Services Contract and other estimated operating costs. This Exhibit is an estimate and is not binding on any of the parties to this Agreement,nor is it binding on the PORTAL AGENCY. j. Capital Cost Recovery Charge. In order to reimburse the City of Seattle for approximately one third of the costs Seattle paid to fund start-up of the Portal Agency, each Participating City other than the City of Seattle will be charged an annual Capital Cost Recovery Charge,in an amount described in Exhibit C. Such Charges shall be imposed each year from and after 2015 until such time as the total Capital Cost Recovery Charges paid reaches $1,400,000. The Capital Cost Recovery Charges will be paid by Participating Cities to the Portal Agency and the Portal Agency shall thereafter remit the total annual amount to Seattle. The Capital Cost Recovery Charge is not considered part of the Portal Agency budget for purposes of calculating Capped Costs or CPI-U limitations on the growth of such costs. k. Payment and Delinquencies. Principals shall promptly pay fees and charges allocable to them. Interest on fees and charges allocable to any Principal not paid when due shall begin accruing interest immediately at the Federal Reserve Prime Rate as of the date the payment was originally due,plus 3%per year. The PORTAL AGENCY shall, within seven (7) days of the due date, send notice to any delinquent Principal and provide a 60-day cure period from the original due date of the payment. If such fees and interest penalties are not paid in full within 60 days of the original due date, then the Principal delinquent in payment of fees shall upon such 60`h day be deemed immediately converted to the status of a Subscriber and subject to penalty as described in Section 8. In the event a Principal converted to Subscriber status by non-payment of fees shall not have paid in full all fees and interest owing by six(6)months after the original due date, then the Executive Board may terminate provision of the PORTAL AGENCY'S services to that former Principal. After one(1) year, the nonpaying former Principal shall be deemed to have withdrawn from this Agreement,but the termination of services shall not absolve the former Principal of its obligation to pay all fees and charges past due, together with interest. 1. Terms of Subscriber Contracts. Subscriber contracts shall include terms consistent with these delinquency provisions, that is, interest shall accrue on delinquent payments at the same rate as provided herein, and service may be terminated if fees and interest are not paid in full within six months. v. 11.5.13 22 8-42 m. Reserve Funds. The Executive Board may establish and fund reserve funds to support operations or capital investments for the PORTAL AGENCY, at levels the Executive Board determines to be appropriate;provided that general reserve funds may only be used to support general PORTAL AGENCY operations, maintenance and capital costs and may not be used in support of developing projects or services that will not be utilized by all Principals; and provided further,that no Principal shall be required to contribute to special reserves established exclusively in support of projects or services that the Principal has certified it does not intend to utilize or make available to its Taxpayers and Licensees. n. Use of Funds. Consistent with any use imposed on particular funds by statute, ordinance, contract,this Interlocal Agreement or any bylaws adopted by PORTAL AGENCY, the PORTAL AGENCY may use any available funds for any purpose authorized by this Agreement in connection with an authorized project. SECTION 14. RETAINED AUTHORITY AND RESPONSIBILITY OF PARTICIPATING AGENCIES. Each Participating City shall retain the responsibility and authority for its operational departments and for such equipment and services as are required at its place of operation to connect to PORTAL AGENCY operations, including but not limited to each Participating City's computer and data systems managing processes that provide services the Portal delivers(the City's system of record). Each Participating City shall also retain the responsibility and authority for managing and maintaining the security and privacy of all data that the Participating City links to the Portal. Inter-connecting equipment and services will not be included in PORTAL AGENCY'S budget and operational program, except as the Executive Board may determine. SECTION 15. OWNERSHIP OF PROPERTY. a. Ownership of Property. Excepting the Portal which is owned by the Vendor, all property both real and personal, as well as intellectual property rights or licenses purchased or otherwise acquired pursuant to or in connection with this Agreement shall be owned or held in the name of the PORTAL AGENCY; provided, however, that the Executive Board may convey ownership of specific property, property or use rights. b. Loaned Property. If any Participating City provides equipment or furnishings for PORTAL AGENCY'S use, title to the same shall rest with the respective local entity unless that equipment or furnishing is acquired by the PORTAL AGENCY. v. 11.5.13 23 8-43 c. Data. Each Participating City shall retain ownership of its own data and property that may be used in connection with Portal or PORTAL AGENCY operations. SECTION 16. MERGER OR CONSOLIDATION,OR SALE OF ALL OR SUBSTANTIALLY ALL ASSETS. Approval of the merger or consolidation of PORTAL AGENCY with another entity, or the sale of all or substantially all assets of PORTAL AGENCY, shall require a Supermajority Vote. SECTION 17. WITHDRAWAL BY,OR TERMINATION OF,A PRINCIPAL. a. Notice and Timing. Any Principal may withdraw its membership and terminate its participation in this Agreement by providing written notice to the Executive Board on or before December 31 in any year, and the Executive Board shall promptly inform all other Principals of such notice. That withdrawal shall become effective on the last day of the next calendar year. Notwithstanding the foregoing, no Principal may terminate its participation in this Agreement effective prior to the end of the Initial Term. b. Obligations of departing Principal. A Principal who withdraws, is terminated, changes or is changed to Subscriber status("departing Principal") shall hold the remaining Principals and Subscribers harmless against any resultant increased capital and/or operating costs allocated to them for the following two (2) budget years(plus the remainder of the current , budget year, if applicable), with respect to any Executive Board approved project(excluding the initial launch of the Portal) in which the departing Principal is participating or has agreed to participate prior to notice of withdrawal or notice of change to Subscriber status,but such obligation shall exclude the cost of any Capital Cost Recovery Charges. Such obligation shall be reduced to the extent new Principals or Subscribers are allocated these costs that would otherwise have been chargeable to the departing Principal. After recouping such costs, the Executive Board may authorize reimbursement to the remaining Principals and Subscribers based on a depreciated value of the withdrawing or converting Principal's contribution. c. Rights of departing Principal. Departing Principals shall have rights to copies of all data held by the PORTAL AGENCY relating to that Principal's Taxpayers and Licensee and other data relating specifically to the Principal. d. The termination and/or withdrawal of a Principal shall not discharge or relieve any Principal of its obligations to the PORTAL AGENCY or other Participating Cities. v. 11.5.13 24 8-44 SECTION 18. AMENDMENT OF AGREEMENT. This Agreement may be amended upon approval of a Supermajority Vote of the Executive Board except that any amendment affecting the following shall require consent of the legislative authorities of all Principals: a. Expansion of the scope of services provided by the PORTAL AGENCY beyond the scope of expansion authorized in Section 5.c. b. The terms and conditions of membership on the Executive Board. c. Voting rights of Executive Board Members. d. Powers of the Executive Board. e. Principal contribution responsibilities. f. Hold harmless and indemnification requirements. g. Provisions regarding duration, termination or withdrawal. h. The conditions of this Section. This section shall not be construed to require legislative authority consent for the addition of a new Principal or agreement to serve an additional Subscriber, or to expand or contract the services purchased by any Principal or Subscriber or offered by the PORTAL AGENCY. SECTION 19. TERMINATION OF AGREEMENT; DISSOLUTION OF AGENCY. a. Generally. This Agreement may be terminated upon the approval of a Supermajority Vote of the Executive Board. The termination shall be by direction of the Executive Board to wind up business by a date specified by the Executive Board,which date shall be at least one(1) year following the date of the vote to terminate. Upon the final termination date,this Agreement shall be fully terminated. b. Distribution of Property on Termination of Agreement. Upon termination of this Agreement, all property acquired during the life of the Agreement remaining in ownership of PORTAL AGENCY shall be disposed of in the following manner: i. Real or Personal Property. All real or personal property purchased pursuant to this Agreement and all unexpended funds or reserve funds, net of all outstanding PORTAL AGENCY liabilities, shall be distributed to those Principals still participating in the PORTAL AGENCY on the day prior to the termination date and shall be apportioned between Principals based on the ratio that the average of each Principals' contributions to the operating budget over the preceding five(5) years bears to the total of all then remaining Principals' user fees paid during such five-year period. The Executive Board shall have the discretion to allocate the real or personal v. 11.5.13 25 8-45 property and funds as it deems appropriate, and the apportionment, determined consistent with the preceding sentence, need not be exact. ii. Intellectual Property Rights. The Vendor will own, or have rights to, all its intellectual property per the terms of the Portal Services Contract, including the right to license the Portal operating system exclusively to the PORTAL AGENCY, its Principals and Subscribers. The Portal license rights, and all rights granted relating thereto,terminate with the termination of the Portal Services Contract. Notwithstanding this termination, the Principals and Subscribers shall retain the right after termination of the Portal license rights to acquire any and all information and data,including but not limited to Taxpayer, Licensee and their respective City data, then currently held by the Vendor or the PORTAL AGENCY.Upon termination of the Portal Development and Services Contract or the dissolution of the PORTAL AGENCY, any and all intellectual property owned by the PORTAL AGENCY (which excludes the Portal and any other intellectual property owned by the Vendor) will be transferred in its entirety to Principal with the largest Population. If said Principal does not agree to accept the intellectual property owned by the PORTAL AGENCY, it shall then be transferred in its entirety to the Principal with the next largest population, and so on should that Principal not agree to accept the intellectual property. If no Principal agrees to accept the intellectual property, then the Executive Board will attempt to sell the intellectual property at fair market value and distribute the proceeds in proper proportion to the current Principals in accordance with Subsection 19.b.i. iii. Loaned Property. In the event of dissolution or termination of the PORTAL AGENCY, assigned or loaned assets shall be returned to the lending entity. iv. Allocation of Liabilities. In the event outstanding liabilities of the PORTAL AGENCY exceed the value of personal and real property and funds on hand, all Principals shall contribute to retirement of those liabilities in the same manner as which they would share in the distribution of properties and funds. c. Notwithstanding the foregoing, the Agreement may not be terminated if to do so would abrogate or otherwise impair any outstanding obligations of the PORTAL AGENCY, unless provision is made for those obligations. SECTION 20. DISPUTE RESOLUTION. a. Whenever any dispute arises between a Principal or the Principals or between the . Principals and the PORTAL AGENCY (referred to collectively in this section as the"parties") v. 11.5.13 26 8-46 under this Agreement which is not resolved by routine meetings or communications,the parties agree to seek resolution of such dispute by the process described in this section, which shall also be binding on Subscribers. b. The parties shall seek in good faith to resolve any such dispute or concern by meeting, as soon as feasible. The meeting shall include the Chair of the Executive Board, the Manager, and a representative(s)of the Principal(s), if a Principal(s) is involved in the dispute, and/or a person designated by the Subscriber(s), if a Subscriber(s) is involved in the dispute. c. If the parties do not come to an agreement on the dispute or concern, any party may request mediation through a process to be mutually agreed to in good faith between the parties within 30 days, which may include binding or nonbinding decisions or recommendations (whichever is mutually agreed to). The mediator(s) shall be mutually agreed upon and shall be skilled in the legal and business aspects of the subject matter of this Agreement. The parties shall share equally the costs of mediation and assume their own costs. SECTION 21. INSURANCE. The Executive Board, Manager, and Operations Board shall take such steps as are reasonably practicable to minimize the liability of the Participating Cities, including but not limited to the utilization of sound business practice. The Executive Board shall determine which, if any, insurance policies may be reasonably practicably acquired to cover the operations of the Portal Agency and the activities of the Parties pursuant to this Agreement(which may include Directors and Officers, Commercial General Liability, Auto, Workers' Compensation, Stop Gap/Employer's Liability, errors and omissions, crime/fidelity insurance, CyberRisk), and shall direct the acquisition of same. SECTION 22. INDEMNIFICATION AND HOLD HARMLESS. Each Principal shall indemnify and hold other Principals, their officers, officials, employees, agents and volunteers harmless from any and all claims, injuries, damages,losses or suits including attorney fees, arising out of that Principal's negligent acts or omissions in connection with the performance of its obligations under this Agreement, except to the extent the injuries or damages arecaused by another Principal. a. Each Principal shall indemnify and hold the PORTAL AGENCY and its officers, officials, employees and volunteers harmless from any and all claims, injuries,damages, losses or suits including attorney fees, arising out of that Principal's negligent acts or omissions in connection with the performance of its obligations under this Agreement, except to the extent the injuries and damages are caused by the PORTAL AGENCY. v. 11.5.13 27 8-47 b. As provided in its Articles of Incorporation, the PORTAL AGENCY shall indemnify and hold each Principal its officers, officials, employees and volunteers harmlessfrom any and all claims, injuries,damages, losses or suits including attorney fees, arising out of the PORTAL AGENCY'S acts or omissions in connection with the performance of its obligations under this Agreement, except to the extent the injuries and damages are caused by any Principal. c. Subscribers shall be required to agree to indemnify and hold harmless each Principal and the Portal Agency, their officers, officials, employees and volunteers from any and all claims,injuries, damages,losses or suits including attorney fees, arising out of Subscribers negligent acts or omissions in connection with its use of the Portal. To such degree as the Executive Board determines to be reasonable, appropriate, and consistent with applicable law and to be in the best interests of the Portal Agency, the Portal Agency may also indemnify and hold harmless Subscribers. d. Should a court of competent jurisdiction determine that this Agreement is subject to RCW 4.24.115, then,in the event of liability for damages arising out of bodily injury to persons or damages to property caused by or resulting from the concurrent negligence of a party hereto and the PORTAL AGENCY, its officers, officials, employees, and volunteers,the party's liability hereunder shall be only to the extent of the party's negligence. It is further specifically and expressly understood that the indemnification provided in this Section constitutes the party's waiver of immunity under Industrial Insurance Title 51 RCW, solely for the purpose of this indemnification. This waiver has been mutually negotiated by the parties. The provisions of this section shall survive the expiration or termination of this Agreement. e. Each party shall give the other parties proper notice as provided in Section 24, of any claim or suit coming within the purview of these indemnities. Termination of this Agreement, a Principal's withdrawal from the PORTAL AGENCY, or a Principal's conversion to Subscriber status (collectively for purposes of this subparagraph"Termination"), shall not affect the continuing obligations of each of the parties as indemnitors hereunder with respect to those indemnities and which shall have occurred prior to such Termination. SECTION 23. INTERGOVERNMENTAL COOPERATION. The PORTAL AGENCY shall cooperate with local, state and federal governmental agencies in order to maximize the utilization of any grant funds for equipment and operations and to enhance the effectiveness of the PORTAL AGENCY's operations and minimize costs of service delivery. v. 11.5.13 28 8-48 SECTION 24. NOTICE. Notices required to be given to the PORTAL AGENCY under the terms of this Agreement shall be directed to the following unless all Principals are otherwise notified in writing: • Chair, PORTAL AGENCY Executive Board do his/her Principal agency's address Notices to Principals or Subscribers, Board Members or Representatives required hereunder may be given by mail,overnight delivery, facsimile or email (with confirmation of transmission), telegram, or personal delivery. Each Principal shall provide the Chair of the PORTAL AGENCY Executive Board written notice of the address for providing notice to said Principal. Any Principal wishing to change its mail or email address shall promptly notify the Chair of the Executive Board. Notice or other written communication shall be deemed to be delivered at the time when the same is postmarked in the mail or overnight delivery services, sent by facsimile or email (with confirmation of transmission), sent by telegram, or received by personal delivery. SECTION 25. VENUE. The venue for any action related to this Agreement shall be in the Superior Court in and for King County, Washington at Seattle, or if applicable, in Federal District Court,Western District of Washington. SECTION 26. FILING. As provided by RCW 39.34.040, this Agreement shall be filed prior to its entry in force with the King County Department of Executive Services Division of Records and Licensing Services, or its successor, Records and Elections,or, alternatively, listed by subject on a Principal's web site or other electronically retrievable public source. SECTION 27. NO THIRD PARTY BENEFICIARIES. There are no third-party beneficiaries to this Agreement. No person or entity other than a party to this Agreement shall have any rights hereunder or any authority to enforce its provisions, and any such rights or enforcement must be consistent with and subject to the terms of this Agreement. v. 11.5.13 29 8-49 SECTION 28. SEVERABILITY. The invalidity or any clause, sentence,paragraph, subdivision, section or portion of this agreement shall not affect the validity of the remainder of the Agreement. SECTION 29. RATIFICATION. All prior acts taken by the Principals and the PORTAL AGENCY consistent with this Agreement are hereby ratified and confirmed. SECTION 30. EXECUTION, COUNTERPARTS AND EFFECTIVE DATE. This Agreement and any amendments thereto, shall be executed on behalf of each Principal by its duly authorized representative and pursuant to an appropriate motion,resolution or ordinance. This Agreement may be executed in any number of counterparts, each of which shall be an original,but those counterparts will constitute one and the same instrument. This Agreement shall be deemed adopted and effective as of March 1, 2014, subject to prior approval by the legislative bodies of all four Original Principals, execution by each Original Principal, and prior filing of same as required by Section 26. // // (Remainder of page left blank intentionally) // // // v. 11.5.13 30 8-50 IN WITNESS WHEREOF, this Agreement has been executed by each party on the dates set forth below. City of Bellevue City of Everett City Manager Mayor Date Date Approved as to Form: Approved as to Form: City Attorney City Attorney Date Date The City of Seattle City of Tacoma Mayor City Manager Date Date Approved as to Form: Approved as to Form: City Attorney City Attorney Date Date v. 11.5.13 31 8-51 FL2022-04 Attachment A FIFTH ADDENDUM TO PAGE 31 OF THE WASHINGTON MULTI-CITY BUSINESS LICENSE AND TAX PORTAL AGENCY INTERLOCAL AGREEMENT DATED MARCH 1, 2014 TO ADD CITY OF AUBURN AS A PRINCIPAL. Pursuant to FileLocal Resolution 2021-04 and Section 8 of the foregoing, this Agreement has been executed by the City of Auburn to become a Principal city on the date set forth below: City of Auburn Itc .� •- :.7? !�,.�r title] _ dy®v° v\ C, \ " ) 2D2Z Date List of Exhibits A. Proposed 2014 PORTAL AGENCY BUDGET SUMMARY (including number of Transactions used for cost allocation as between Original Principals) B. 2015-2020 Estimated PORTAL AGENCY Operating Budget Summary C. Capital Cost Recovery Charges D. Calculation of New Participant Capped Cost Increment and New Participant Labor Cost Increment v. 11.5.13 32 8-52 Exhibit A • Proposed 2014 PORTAL AGENCY OPERATING BUDGET SUMMARY (including number of Transactions used for cost allocation as between Original Principals) (June to December 2014) Labor Total' 152,649 Contracts Total2 27,000 Overhead Total3 12,500 Vendor Costs4 180,208 Operating Reserves 55,854 Total Budgeted Costs 428,210 Total Budgeted Revenues 428,210 Estimated User fee Revenuess 72,566 Estimated Revenue from City Cost Allocations6 355,644 --�z�- --- v>•s;rms:ru,ar.�:v - xar„x� �r;r.;r,.��,rgrs::ra�-''�4.ny re. �•;r";c�tlir='x-" i-:'x'=-:w`i."^�=:::' -_ - ;:,i:,.>n...v�:.;�,..,�>,G'§ ;;�i.""__ _ x:x.. .irr;�7�'='�:-'—?�r.:.•r,..7-r...:1�:: �r .r;:n,t+s..y .>�`��::?:::a:._....s,-_`•xte;=,...��;.a�,;: is.;�-,;,:.::>,a:�. : .•.. _Ci.y o.Seat'tle Cost° llova.tions rM K i ,:.3.. � =r,. .x �,; :;:•: ::;_,r,»,R :,_ 5.-. 245 394 EEi�r.�::"r,•.._,,...,,..xe.�%a.,.�';��?,�:�,:ya,u«,..:ieu':? fcfh�:r-:?.:,:ifn3?ur w�_r�i�-�e..:;.T.'z�c._.. -°ra"i1;•r::ai,��:,mi�»�� ,:.ii=:hr fir;! .. .._3,w�"�-."s•�.��>. .x."�'��s•:,.a - K-" a F r zk?�c.#i-v'z?:cs.'"'..:?'•fin.-:`C''ci:t`''?Yi-'i r`;fit'v*•.a'... -'�_.-r.:,•c�.w.J_;Wy_ =r-' sc: vue Cost A.,I„location -� � -_`=��•>:.Qr35�654,r; Pi,.'_.�._'._:.a�._»'u= .Y-...s:•-, 1%C>-: ao ffT avtecore, GCoss,_•tt,'-ztA-rl._oloc caSttioo-n. :r ..,�:r•.H.31erss:" us1_., s.:�;.=w`t..+•..�•`2--'•_Cer=�,:.i::,^-'F:.n:,;{_S.;.r-t•:W-L�a+.;�?-'i.�fz•a^.-_;.=�-.;+.C.�y.s ,-..,.k Yv --•:i.�. 9:�..$M r:i^ ok .: : ,- , M� A:�;: '- ..r a.. • .1:.,.,_. :., _,...f._.._.:S..e ..t. - ...UCivaL.u:de:a+.•.-:::4�:vsk,.r..L3;5.:.sha.r..•a�'r,.:6,�,.-rre.,.w xf-w:.e.-ur.e.�.:.e.:..-xr....."'.3"':a.r. .� .> .,......:_...-. ... ;rt:•>^4-...r, res This budget estimates a six month budget beginning after the Multi-City Business License and Tax Portal is up and running in mid-2014, the first six months are covered by the Portal This budget includes 2.5 FTE: the Portal Manager,a half-time administrative assistant and a full-time IT Project Manager/Business Analyst. The personnel for these positions will be provided by the City of Seattle and the costs in this budget include the fully-funded(salary,benefits,etc.)labor costs for all 2.5 positions. A separate loaned staffing agreement will be entered into between the Portal Agency and the City of Seattle in 2014 for these staff. 2 Includes contracts for outside services such as Accounting,Insurance,Bank and the State Auditor. 3 Funding for miscellaneous overhead items such as legal fees,office and operating supplies,printing and licenses/memberships. 4 Includes costs estimated payable to-Gov Systems under the Portal Services Contract in 2014, from and after the Portal goes"live.” For the first five years of Portal operation,.e-Gov Systems will charge the Portal Agency$1.25 every time a business or taxpayer makes an online Portal filing,whether or not tax is owing. 5 Assumes the Executive Board approves a proposed user fee of$4 per online session per City(the proposed fee would be payable only when tax is owed;multiple tax and/or license filings on the same session would incur only one fee). This user fee is based on an estimated Portal use adoption rate by business and taxpayers of 15%.This adoption rate is expected to grow considerably each year. 6 Cost Allocations are based on the 2012 Transaction count for each Original Principal,shown in the table at the End of this Exhibit A. 'Excludes Seattle's contributions to start-up costs in 2014. Also excludes labor and operating costs for which • Seattle will be reimbursed from the Total Budget shown above,per the loaned staffing agreement. v. 11.5.13 33 8-53 Implementation Project costs funded by Seattle. This budget estimates also assumes only four cities participate in 2014. Transaction Counts Calculations used for Cost Allocation as between Original Principals a- ^. .e `:.�''4u :" ,"�}".cSti�n`�i'�;'=i'r�" ;h"ns�.+,r^..�Lr,;a#st':�i': d'.`7.',3:f}�r:$ �Ei _, :3?icY`7x.�5`.:, "','kY3'f.`as"�.='d"tv',sfdii?r ,:Rit'. :a- .et ,..}..tr ;•(n• or wa -ctioon�'^w 7 -. t3ase om' ',i 1�2- u byr s C ce self t gs b.us , ,n o pa ►off:.�; t .' 4.ri andigrghss�r�,eceipts a 3fiLi g , r .. lr�a orf:„erpa ` ?4.`4 i ” Seattle Bellevue Tacoma Everett Total Transactions 212,457 30,927 50,000 14,392 307,776 %Allocation 69% 10% 16% 5% 100% v. 11.5.13 34 8-54 • Exhibit B: Multi-City Business License and Tax Portal Agency 2015-2020 Estimated Operating Budget Summary This budget is an estimated six year budget and assumes only four cities participating. 2015 2016 2017 2018 2019 2020 •Labor Totals 314,740 324,182 333,908 343,925 354,243 364,870 Contracts Totals 55,188 56,402 57,643 58,911 60,207 61,532 Overhead Total10 15,330 15,667 16,012 16,364 16,724 17,092 Vendor Totalll 344,888 383,360 421,832 460,304 479,540 498,776 Operating Reserve-15% 53,668 7,420 7,467 7,516 4,681 4,733 Total Estimated Budget 783,814 787,031 836,862 887,021 915,396 947,003 Estimated User Fee Revenue12 193,510 241,888 290,266 338,643 362,832 • 387,021 Estimated City Cost Allocation 602,057 555,622 557,306 559,322 563,749 571,414 Revenues13 co ., .t}e:r,}eag-_�ca+s^ra, ;r-x�, i� "1. °nr•'�t r.«.n �.;-:w- �,�M z .nt. a'+cwv. cn •hz3 r m..--w : .�'<'' r,"�Q„..�.tt�- .§��: 'f*- ,d:e�-.»,�,r sxdY St:'��i;:}.�+'� L3asnr w-r�-ss.:rn-;m�;�nagtrr �: ..,n.�,h� _ ,..,.Ssw�'1,s•t�.t+sxa, �•aCt ja Seattle,- e. ��' , ; ; 5'4Y :, a7gf W 7: 4 s 6V _tY�.r.. x_.. :rr r €:€ 1_• g 3 83;x. _:; 384, 41 .. :3$5 932 V9 7 ti 399, Nt to Ag' 'aa ,}^ =3 r: " a :.Y ".s°.', •�`" L.,,U,e� ig arx N. 4=.-*,34"'... as; ,o5[ '7" c.ta'.:. r�. � 0,41,..40)11.#4104-i� �.� �r' f'Yz+,����=tf'=fE,�}:.-,'S'$�FaFN`�s�,j'�^.a °: ..!f;'i�4ir7� �, ues� z as ��{i!i..l"r'3 � ei:+aa �c. ;a ✓K °Clt` 6f� ...- t.,ry, .,.. ttr. �� tl' ? 0,2 6 '^ S 5 j sgt �, F c€ t6 J y a ii ,` ,,.. .yr. .l30epe ,� ,. ; ; ': i �fi 00 ' J5511• 62 S.73 . E Sz , 5.9 . :S X25 .14' & }�°u ,�R:.�i::�a -.a-=.+3+.iw,ynN?.a�-,K.;.f �.ai nfl �.�zi^�. =•°uc+k,�s;a P...,.! i Cr,. a.3�'' y°'e l Wrii G�.s�, i 4i�'gi�t i r „� u�. i 'S n�fi. � '��- !�. _"+.�'tr ai�k•- !. n..s .�.�K'riv;iii :1 a'.?� -itma„ i a m� :r'{r;v, ?. �n"e.hku f0 s 1 ._,i ,:; WO*r M. -,. lea 9..0.+a. ;.a y,'.£ !4 tt, s .Jifi•.i, t fq `�" [�. Ktun;'i�;:�F � tf * '1 rl i . y.. r € " •, ;�: a ._ .. .,,Ctty4o 7 co apa„=.,�;.1-a-fl�y : a,oki- 9,6 32 .: € ' 8 9.0010 0,. "r'=t ll� _ur,.�.. i?? �. .,•���-�z3k. . n �� k =�,:.,,z'_ t,. ,.�_���.�•, �� �, -a�a� �$'9..369.�`� �a .� ", 2.y_ :� r�4,. Q0; � 9' 26.,1 � ...:4,,, :�• e, .Ksgw� +�•',,1 �`isY e�sC` �'�� i .S:i.,g . ">1 ..v.. y'.„... e' .4�i ..e.C...•. °s•''^.,`y fit, :, ;..,. S '.�. i Mgr 9 zf•,d•3;. a;;;.:"' µµS. ••r-la C ' SG. G n # r , : c: z .�'. 't :3rF.5��.C''a 7" :,444:,...,441,,. 9. Y"c8 ..y ,�^. H r ux.�u, 5t�r'sa'�C d _ ��..a= S�f i!;f.' r s 7.h'RI j,et:L ,4,:�'•3ltio Vii;3,C us,: q. �. r .. K . : F F`RR -::Ci yaf uuerett �b tl : 'ii , z,Af•''•.d_.::_;,..:1ala;a. :46r13Q;1Q3 �- ,, , 2 .;781�,ly as 7;86--• . :,F2 6.� $} -: 187 r, a jg„: - , �•8tS3fr �n:u ..=att#r:?Essor+.?r:.cii..i:?S.:a..,.....:r.�.+�.f�a<t�,:xik:v.<wC.s.'Y":.c"+.4n'a....a?.€•ssPr.3..,�.:.�7:°%a'...:sC4A1£:�a4e����L`�'+i4�.'�ist3cT«u4i,+`Sii7a7 :,:.s�P,i�.:aai+sS�.+,':�� .yY:diti`sSu�`+�.•al`st�r�c�a#��� -. �'. ���.4�i:zi���• 8 This budget includes 2.5 FTE: the Portal Manager,a half-time administrative assistant and a full-time IT Project Manager/Business Analyst. The personnel for these positions will be provided by the City of Seattle and the costs in this budget include the fully-funded(salary,benefits,etc.)labor costs for all 2.5 positions. A separate loaned staffing agreement will be entered into between the Portal Agency and the City of Seattle in 2014 for these staff. 9 Includes contracts for outside services such as Accounting,Insurance,Bank and the State Auditor. 10 Funding for miscellaneous overhead items such as legal fees,office and operating supplies,printing and licenses/memberships. 11 Includes costs estimated payable to-Gov Systems under the Portal Services Contract in 2014,from and after the Portal goes"live." e-Gov Systems will charge the Portal Agency$1.25 every time a business or taxpayer makes an online Portal filing,whether or not tax is owing. This per-filing cost is fixed for the first five years of Portal operation. 2 Assumes the Executive Board approves a proposed user fee of$4 per online session per City(the proposed fee would be payable only when tax is owed; multiple tax and/or license filings on the same session would incur only one fee). This user fee is based on an estimated Portal use adoption rate by business and taxpayers of 15%.This adoption rate is expected to grow considerably each year. 13 Cost Allocations are based on the 2012 Transaction count for each Original Principal,shown in Table 2. 14 Excludes Seattle's contributions to start-up costs in 2014. Also excludes labor and operating costs for which Seattle will be reimbursed from the Total Budget shown above,per the loaned staffing agreement. v. 1 .5.13 35 Transaction Counts Calculations used for Cost Allocation as between Original Principals _ ,.y, ,, re=� iaFs,t?.;.,-ar•.$;:,ro=q zxa i'i::'?o:o� ilmm,. g x., - a ..:. •o:ir<�. •u�rr .ron .r '^1�::::�,c.r,^sem'^ ..i x..'iY';f's:#...w,:s:a3 Y}: ^F '�'i;.P _n ;i '>`=r.t_r"�4•.:,".`+•�a.t=:"�i''s:•-�,d''S``a i�4�}.�s.s.J a••'4'F,<d•.{}.<S`t� �.., Transacfiprio if-4 =z--1,,Basecl°©n'r20�12f°actu`aIib'usiriesslicense,niings=,business,an. Focc-riation (�3 't:.m< ,....o>s..,,-y i =. �. �.}i_ 30..... .,.. .�.;:i ,_j .Y ° f%;`":E3' i: C'-��; z F%' Sian.?�?,.�..ib. »ti>;`r.i i •rr.,� .X �� 77il anr.;.� ,3.::.::,sstr. ;ti:: t ili s r`<g: ii;. PN4iriiia i, A• c .P, , :-v: .7...atri::ti'+'` t : %iis ;��e �:i;"• .,s.! "r;y£�a;�,x"1,��"'`�i„;g�x 7Y�:.,.^« ..y#u:t'�I'.r�.,-4F'�1+,t4�.'i."�"�.'��.7�_�l!�s•y4F .,%,:t{.�i..r'1.•�t:t%4�.r"L�.,,yx.''a:'1�:.•r.:..ti:.xF.i..iri.akbi�Ss ..Xr�ii.�',`4 •k°�.1'� `•<�4• Couintsrt., ,. , , .ands(Jross!receiptsYrtaxfilm s'forrletchliOri 1 a loPtincipyalti:�: 't ,t�. 1,4 4,,r„:0„,<,..,,,..�r.e�-.9.__4."s.; ..-..: t?,—;,aa.•• .,4,c,e:,s. :._:_.-,.a.,...r,,1,,,,„...:•z.v , :,,:,,m,'....21,......,,..i.,::,..4 ..:�..:.,n ,44,,,e .•,•. vi<:a.4,74 er ..-;... h4'l...4w Seattle Bellevue Tacoma Everett Total Transactions 212,457 30,927 50,000 14,392 307,776 %Allocation 69% 10% 16% 5% 100% Estimated Adoption Rates s`�31�,^,°,£ii`•bi'.='.="k:•ayr�:C'^�y�-.h:..YS,�".»is^S qi'&4:. s y"p Ki+ r 6-a'�'8 si::...u:-, e u y�171.a. ..•;:: 4' ...may sµ =`°. l's �.n , 1 -:.;.•x`t'Fio A-•. r 4 'a-. - F`-F.ii. e-Gova$6yste�my�� s '.� _ tee« _>N� � .. 7 4� � ... h e ���L s •YFxiJ.a �1 F f'f'dt e. .0, ` �yyY•,.'17•�3's.Tt 1.Es p ,`S ,: `'• , .5.. �1. `•ir.� 9.S'. Ait .iii 1 - R5�'1 'S� �� �� `�'i'� PAi.. .,:.��` sya--"�-��1=%'°ek,` , s§�� ����L�� 3 h� � ^ �ilt1 `s tor �kV� r �,�.7.�x5 '. Ree�rnnlendeo-, options �9�T�};.his;£isAthe,reco:mmendedtrate'Fbl adop,ion from =Gov ',4e ,-bas-4-d!;n . ;-.vio.,s , p�lernezntat onss:: .14'004-4r, - #n Ad .ry. •a iz2.„q 1.• F'.� , •. .0 ,uFaii ,a". ,:0,4% 0 t ,{nx. �.,04.;,,.,,:w.,„ y. w ”' s ; • 3" - 5.i.. r.^ ?{ :"t � h1sfJ.�' 4' uy �� • '� •xg � ! ' 3f.+ 'r'� amu k°'� �3-� J'.�y e^ yt,.;;T.0,44.1,..,40‘..,-µ .# •� !�"� ,�S �a� '�:� �,�'' Ratg :AAA: ;�JuN te:x. y, I FAig,#•` _ k. lt' µ lj{ tg y{ ' us> F�i3 ' t. .n&N�.t � ._ mv�'?a,�+tj�..�°„S''ii':. • �. :��:�.•"`;r''�x�.is ff5� t:�r:.� r"`,s'� '.�.a���a �"?2rF .'}s.",�s ��•..�5.�...fr..:i.�,k.��'�sx-� �#rt+,.w>�y, TG..'7'.,-. ,t� � E��2�"da+.. ,aai4�i�.-.rn._�=tF?!� t. .3..;s.a...�� c.. ni". 2015 2016 2017 2018 2019 2020 03 Adoption Rate 40% 50% 60% 70% 75% 80% 6, rn CPI-U Rates Forecast 2014 2015 2016 2017 2018 2019 2020 CPI-U Forecast 2.20% 2.20% 2.20% 2.30% 2.30% 2.30% 2.30% (Bellevue) v. 11.5.13 36 Exhibit C Capital Cost Recovery Charges Beginning in 2015, every Participating City other than the City of Seattle will pay a yearly Capital Cost Recovery Charge to the Portal Agency which in turn will remit the annual total of such Charges paid to the City of Seattle. The Charges will remain in place until the total amount of$1,400,000 has been remitted to Seattle. The Executive Board shall determine the timing for payment of the Capital Cost Recovery Charges. Each Participating City's Capital Cost Recovery Charge will be determined based on the number of Transactions allocated to such City in the budget year in which the Charge will be collected, and in accordance with the following table: Category: Smallest Smaller Small City Medium City Large City City City Transaction Count < 1000 1001 - 4000 4,001 to 14,401 to >31,001 allocated to the 14,400 31,000 City in the budget year Capital Cost $500 $1000 $2000 $4000 $6000 Recovery Charge payable annually v. 11.5.13 37 8-57 Exhibit D Calculation of New Participant Capped Cost Increment and New Participant Labor Cost Increment New Participant Capped Cost Increment. The New Participant Capped Cost Increment is an amount calculated in the development of each budget(or budget amendment)to identify the maximum amount by which Capped Costs may increase in the budget period without requiring unanimous consent of the Executive Board Members representing all four Original Principals. The Increment is determined by identifying the"CPI-U Limit for Capped Costs per Transaction"for the applicable budget period, assuming the Portal Agency has the same number of Participating Cities as the prior budget period and the Capped Costs from the previous period are inflated by the CPI-U Limit. The Capped Cost per Transaction is then multiplied by the number of Transactions attributable to new Participating Cities joining the Portal Agency in the budget period, and the resulting total is the maximum amount by which the Capped Costs in the new budget period may be increased over and above the Status Quo Capped Cost without requiring unanimous consent. Illustration: Calculation of New Member Capped Cost Increment for Year X Assuming: 1 year budget period; addition of 2 member cities proposed in Year X Part 1: Calculating CPI-U Limit for Capped Costs Per Transaction CPI-U Limit for Capped Cost for Year X, $16,000 • Inflate Capped Costs for the previous year by the CPI-U Limit. Estimated Transaction Count for Year X from currently 125,000 Participating Cities • Includes all Cities participating as Principals or Subscribers in the previous year. • Transaction count is that used for purposes of estimating the cost allocations of these Participating Cities in Year X. Capped Cost Per Transaction ($16,000± 125,000) $0.128 Part 2: Calculating New Member Capped Cost Increment New Member Transaction Count 10,000 • Total Transactions assigned to the 2 new Participating Cities for purposes of budget allocation in Year X New Member Capped Cost Increment for Year X ($0.128 x 10,000) $1,280 Capped Costs in Year X may be increased by Supermajority Vote to a level of$17,280. Capped Costs in excess of that amount would require Supermajority Vote and unanimous approval by Board Members representing the Original Principals. v. 11.5.13 38 8-58 New Member Participant Labor Cost Increment. The New Participant Labor Cost Increment is an amount calculated in the development of each budget(or budget amendment) to identify the maximum amount by which Labor Costs may increase in the budget period without requiring unanimous consent of the Executive Board Members representing all four Original Principals. The Increment is determined by identifying the"Status Quo Labor Cost per Transaction"for the applicable budget period, assuming the Portal Agency has the same number of Participating Cities and staff as the prior budget period. The Labor Cost per Transaction is then multiplied by the number of Transactions attributable to new Participating Cities joining the Portal Agency in the budget period, and the resulting total is the maximum amount by which the Labor Costs in the new budget period may be increased over and above the Status Quo Labor Cost without requiring unanimous consent. Illustration: Calculation of New Participant Labor Cost Increment for Year X Assuming: 1 year budget period; addition of 2 member cities proposed in Year X Part 1: Labor Cost Per Transaction Status Quo Labor Costs for Year X $350,000 • Assuming same number of staff(including employees, if any, and loaned staff) as were engaged by the Portal Agency in the previous year, and adding any estimated increases in costs of salary, benefits, etc. for those same personnel over and above the previous year's costs. Estimated Transaction Count for Year X from Currently 125,000 Participating Cities • Includes all Cities participating as Principals or Subscribers in the previous year. • Transaction count is that used for purposes of estimating the cost allocations of these Participating Cities in Year X. Labor Cost Per Transaction ($350,000- 125,000) $2.80 Part 2: New Participant Labor Cost Increment New Participant Transaction Count 10,000 • Total Transactions assigned to the 2 new Participating Cities for purposes of budget allocation in Year X New Participant Labor Cost Increment for Year X ($2.80 x 10,000) $28,000 Labor Costs in Year X may be increased by Supermajority Vote to a level of$378,000. Labor Costs in excess of that amount would require Supermajority Vote and unanimous approval by Board Members representing the Original Principals. v. 11.5.13 39 8-59 Attachment 2 Draft Draft dated 9.20.13 Draft ARTICLES OF INCORPORATION OF WASHINGTON MULTI-CITY BUSINESS LICENSE AND TAX PORTAL AGENCY The undersigned, in order to form a not for profit corporation under Chapter 24.06 of the Revised Code of Washington ("RCW"), and pursuant to Chapter 39.34 RCW, hereby sign and deliver the following Articles of Incorporation: ARTICLE I — NAME The name of this corporation is: WASHINGTON MULTI-CITY BUSINESS LICENSE AND TAX PORTAL AGENCY ARTICLE II — DURATION The period of duration of Washington Multi-City Business License and Tax Portal Agency (the "PORTAL AGENCY") is perpetual. ARTICLE III — PURPOSES PORTAL AGENCY is organized on behalf of and as an instrumentality of its governmental members to carry out certain exclusively governmental activities and the purposes of the Washington Multi-City Business License and Tax Portal Agency Interlocal Agreement (the "Interlocal Agreement") pursuant to the Interlocal Cooperation Act, Chapter 39.34 RCW. These purposes include developing, owning, operating and managing and maintaining an internet web application gateway to administer City business licensing and tax collection functions (the "Portal"), as further described in the Interlocal Agreement. ARTICLE IV — PROHIBITED ACTIVITY Notwithstanding any of the provisions of these Articles of Incorporation, the PORTAL AGENCY shall not conduct or carry on activities not permitted to be conducted or carried on by an organization exempt from federal income tax under Sections 115 of the Internal Revenue Code or by an organization, contributions to which are deductible under Section 170(c)(2). No part of the net earnings of the PORTAL AGENCY shall inure to the benefit of any director, officer or private individual. No substantial part of the activities of the PORTAL AGENCY shall be devoted to the carrying on of propaganda, or otherwise attempting to influence legislation except as may be permitted by the Internal Revenue Code, and the PORTAL AGENCY shall not participate in, or intervene in (including the publication or distribution of statements regarding) any political campaign on behalf of or in opposition to any candidate for public office. The PORTAL AGENCY shall not have or issue shares of stock, shall not make any disbursement of income to its directors or officers, and shall not make loans to its officers or directors. 8-61 ARTICLE V — POWERS In general, and subject to such limitations and conditions as are or may be prescribed by law, or in these Articles of Incorporation or in the PORTAL AGENCY'S Bylaws or in the Interlocal Agreement, the PORTAL AGENCY shall have all powers which now or hereafter are conferred under Chapters 24.06 and 39.34 RCW and other applicable law upon a corporation organized for the purposes set forth above, or are necessary or incidental to the powers so conferred, or are conducive to the attainment of the PORTAL AGENCY's purposes. ARTICLE VI — MEMBERS Each Member of PORTAL AGENCY must be a general purpose municipal corporation formed and existing as a city or town under the laws of the state of Washington and meeting the other requirements described in the Interlocal Agreement. As used in these Articles, the term "Members" means "Principals" as defined in the Interlocal Agreement. The rights and responsibilities of the Members/Principals and the manner of their election, appointment, or admission to membership and termination of membership shall be as provided for in the Interlocal Agreement. The PORTAL AGENCY shall have one class of Members/Principals, except that each Member/Principal may be treated as a separate class for calculating votes as provided for in the Interlocal Agreement. ARTICLE VII — DISTRIBUTIONS UPON DISSOLUTION No director, trustee or officer of the PORTAL AGENCY, nor any private individual, shall be entitled to share in the distribution of any of the corporate assets upon dissolution of the PORTAL AGENCY or the winding up of its affairs. Upon dissolution of the PORTAL AGENCY, after paying, satisfying, and discharging, or making adequate provision therefor, of all liabilities and obligations of the PORTAL AGENCY, and after returning, transferring, or conveying assets held by the PORTAL AGENCY requiring return, transfer, or conveyance on condition of the dissolution, all remaining assets of the PORTAL AGENCY shall be distributed by the Executive Board as provided for in the Interlocal Agreement. ARTICLE VIII — DISSENTING MEMBERS "Dissenting members," as that term is used in RCW 24.06.245 through 255, will be entitled to the rights and allocation of assets set forth in the Interlocal Agreement, but may be limited to "a return of less than the fair value" of their membership as that term is used in RCW 24.06.255. ARTICLE IX — BYLAWS Provisions for the regulation of the internal affairs of the PORTAL AGENCY shall be set forth in the Bylaws of the PORTAL AGENCY. Draft dated 9.20.13 8-62 ARTICLE X — REGISTERED AGENT The address of the initial registered office of the PORTAL AGENCY is . The name and address of its initial registered agent is Glen Lee, Finance Director, City of Seattle, 700 Fifth Avenue, Suite 4350, Seattle, WA 98104. ARTICLE XI — DIRECTORS The initial board of directors (referred to in the Interlocal Agreement as the "Executive Board") shall consist of four (4) directors. The names and addresses of the persons who are to serve as initial directors are: Ms. Jan Hawn, Finance Director City of Bellevue 450 110th Avenue N.E. Bellevue, WA 98004 Ms. Debra Bryant, Chief Finance Director City of Everett 2930 Wetmore Avenue Everett, WA 98201 Mr. Glen Lee, Finance Director The City of Seattle 700 Fifth Avenue, Suite 4350 Seattle, WA 98104 Mr. Andy Cherullo, Finance Director City of Tacoma 747 Market Street Tacoma, WA 98402 Directors may be removed as provided for in the Bylaws. ARTICLE XII-- OFFICERS The PORTAL AGENCY shall have four officers, a President, Vice-President, Secretary and Treasurer. The President and Vice-President are referred to as the "Chair" and Vice-Chair" respectively, in the Interlocal Agreement. The responsibilities of the officers shall be described in the PORTAL AGENCY Bylaws. ARTICLE XIII — INCORPORATORS The names and addresses of the incorporators are: 1. City of Bellevue 450 110th Avenue N.E. Bellevue, WA 98004 Draft dated 9.20.13 8-63 2. City of Everett 2930 Wetmore Avenue Everett, WA 98201 3. The City of Seattle 600 4th Avenue Seattle, WA 98104 4. City of Tacoma 747 Market Street Tacoma, WA 98402 ARTICLE XIV — LIMITATION OF DIRECTOR LIABILITY Except to the extent otherwise required by applicable law (as it exists on the date of the adoption of this Article or may be amended from time to time), a director of the PORTAL AGENCY (a director is referred to as a "Member of the Executive Board" in the Interlocal Agreement) shall not be personally liable to the PORTAL AGENCY for monetary damages for conduct as a director, except for liability of the director (i) for acts or omissions which involve intentional misconduct by the director or a knowing violation of law by the director, (ii) for any transaction from which the director will personally receive a benefit in money, property or services to which the director is not legally entitled, or (iii) for any act or omission occurring before the date when this provision becomes effective. If the Washington Nonprofit Miscellaneous and Mutual Corporation Act (the "Act") is hereafter amended to expand or increase the power of the PORTAL AGENCY to eliminate or limit the personal liability of directors, then, without any further requirement of action by the directors of the PORTAL AGENCY, the liability of a director shall be eliminated or limited to the full extent permitted by the Act. No amendment to or repeal of this Article shall adversely affect any right of protection of any director of the PORTAL AGENCY occurring after the date of the adoption of this Article and prior to such amendment or repeal. ARTICLE XV — INDEMNIFICATION Except as provided in Article XIV, the PORTAL AGENCY shall indemnify any director and officer of the PORTAL AGENCY who is involved in any capacity in a proceeding (as defined in RCW 23B.08.500, as presently in effect and as hereafter amended) by reason of the position held by such person or entity in the PORTAL AGENCY to the full extent allowed by law, as presently in effect and as hereafter amended. By means of a resolution or of a contract specifically approved by the Board of Directors (referred to as the "Executive Board" in the Interlocal Agreement), the PORTAL AGENCY may also indemnify an employee, or agent to such degree as the Board of Directors determines to be reasonable, appropriate, and consistent with applicable law and to be in the best interests of the PORTAL AGENCY. Reasonable expenses incurred by a director or officer who is involved in any capacity in a proceeding by reason of the position held in the PORTAL AGENCY, shall be advanced by the PORTAL Draft dated 9.20.13 8-64 AGENCY to the full extent allowed by and on the conditions required by applicable law, as presently in effect and as hereafter amended. The Board of Directors of the PORTAL AGENCY shall have the right to designate the counsel who shall defend any person or entity who may be entitled to indemnification, to approve any settlement, and to approve in advance any expense. The rights conferred by or pursuant to this Article shall not be exclusive of any other rights that any person may have or acquire under any applicable law (as presently in effect and as hereafter amended), these Articles of Incorporation, the bylaws of the PORTAL AGENCY, a vote of the Board of Directors of the PORTAL AGENCY, or otherwise. No amendment to or repeal of this Article shall adversely affect any right of any director, officer, employee, or agent for events occurring after the date of the adoption of this Article and prior to such amendment or repeal. The PORTAL AGENCY shall also indemnify and hold harmless every Member/Principal, including, but not limited to that Member's/Principal's officers, directors, employees and agents from all claims, injuries, damages, losses or suits, including reasonable attorney fees which arise out of acts and/or omissions of the PORTAL AGENCY. To such degree as the board of directors/Executive Board determines to be reasonable, appropriate, and consistent with applicable law and to be in the best interests of the PORTAL AGENCY, the PORTAL AGENCY may also indemnify and hold harmless Subscribers, including, but not limited to that Subscriber's officers, directors, employees and agents from all claims, injuries damages, losses or suits, including reasonable attorney fees which arise out of acts and/or omissions of the PORTAL AGENCY. Nothing in these Articles of Incorporation may be interpreted as a waiver of sovereign immunity by any member. Indemnification of directors and officers by the PORTAL AGENCY shall be consistent with the terms of the Interlocal Agreement, the Act, the Interlocal Cooperation Act and other applicable law. In the event of any inconsistency between this Article and the Interlocal Agreement, the terms of the Interlocal Agreement shall control to the extent consistent with applicable law. Notwithstanding any other provision of this Article, no indemnification shall be provided to any person if in the reasonable opinion of competent counsel, payment of such indemnification would cause the PORTAL AGENCY to lose its exemption from federal income taxation. DATED as of this 1st day of March, 2014. INCORPORATORS: INCORPORATOR: City of Bellevue INCORPORATOR: The City of Seattle Draft dated 9.20.13 8-65 By: Interim City Manager Brad Miyake By: Mayor Mike McGinn INCORPORATOR: City of Everett INCORPORATOR: City of Tacoma By: Mayor Ray Stephanson By: City Manager T.C. Broadnax Draft dated 9.20.13 8-66 Attachment 3 Summary of Washington Multi-City License and Tax Portal Agency Interlocal Agreement and Articles of Incorporation Interlocal Agreement 1 Creation of Portal The Washington Mulit-City License and Tax Portal Agency("Portal Agency Agency") is a joint effort by 4 cities(Bellevue, Everett,Seattle and Tacoma)to carry out a governmental function: business licensing and payment of certain local taxes. The Portal Agency is being formed under authorization of the Interlocal Cooperation Act(Ch. 39.34 RCW) as a nonprofit corporation pursuant to Ch. 24.06 RCW. Once established,the Portal Agency will be a separate legal entity that is a municipal instrumentality,subject to all the same limitations to which cities are subject under state law. 2 Term of Agreement The Interlocal Agreement(ILA) has an initial term of 5 years, during which no party may voluntarily terminate its participation. Thereafter,the agreement is of perpetual duration,and parties may terminate upon prior notice(See sectionl7). 3. Definitions Among the key terms: "Gross Receipts Tax"–includes both Business&Occupations (B&O)Taxes and taxes on gross receipts of utilities or other businesses as well as square footage taxes. "Initial Term"–the first approximately 5 years of the ILA(through 12/31/019) "Original Principa|s"–thosecities initially signing the ILA: Bellevue, Everett,Seattle and Tacoma. "Participating Cities"--all Principals and all Subscribers. "Principals" --Cities that impose a B&0 Tax and agree to become a party to the ILA. Principals have a vote on the Board (it may be a shared vote). "Portal"—a shared Internet web application gateway owned, operated and maintained by the Vendor under contract to the Portal Agency. The Portal will provide a single online access point through which taxpayers and businesses may apply for business licenses from,and pay taxes and fees to, Participating Cities. "Portal Services Contract"–the contract with the Vendor to develop,operate and maintain the Portal. "Subscribers"–Cities that contract for service from the Portal Agency. "Supermajority Vote"–Requires vote of not less than 66%of all voting members of the Executive Board in number AND not less than 66%in number of the Original Principals. No individual city will have a veto power. "Vendor"-eGov Systems, a Louisiana Corporation,or its successor. • 4. Guiding Principles and The principles and goals adopted in 2012 by the 4-city working Goals group are incorporated in the ILA as guidance as to what the parties seek to accomplish. 5. Portal Agency Services Portal Agency will oversee the Vendor's contractual responsibilities to develop,own, operate,maintain and manage the Portal. The Portal Agency will own the domain name for the Portal,and will perform other responsibilities reasonably necessary for the development,operation and maintenance of the Portal and other related or ancillary services. The Portal will have capacity to process Gross Receipts Taxes (including B&0 Taxes and square footage taxes)and business license applications. Service may expand to other areas upon a Supermajority Vote of Executive Board. Portal Agency has NO authority to set tax rates,classifications, policy, rules or deductions. Portal will have NO authority to take enforcement action on behalf of a Participating City. If a Participating City imposes a Gross Receipts Tax(including B&O tax,or square footage tax or other gross receipts tax) it must offer taxpayers use of the Portal to pay those taxes. It may also offer other mechanisms for payment. Beyond that, Participating Cities can choose what Portal services to use. A Portal Operating Policy will be adopted and amended from time to time by a Supermajority Vote of the Board. Here is where the data sharing and service level commitments will be included. Each City will be required to agree to comply with this policy as a condition of using the Portal,as signified by signature of its CEO or designee. Portal Agency will also engage in outreach and education on Portal services and tax policy issues. 6. Portal Agency Powers As a separate legal entity,the Portal Agency will have a full range of corporate powers(enter into contracts, sue and be sued, establish funds, buy and sell property,etc.) permissible under the Interlocal Cooperation Act and Ch.49.06 RCW, but will not have the power to issue debt. 7. Executive Board The Executive Board is the governance board for the Portal Agency. It has final decision making authority on all issues, and exercises all powers of the Portal Agency. The Executive Board may delegate day to day responsibilities to the Portal Agency director,and can assign specific tasks to committees within defined parameters. The Executive Board will be composed of one (1) Board Member per Principal,with a maximum of 15 voting members, plus at least one (1)non-voting Board Member representing Subscribers. 2 8-68 If there are more than 15 Principal Cities,the smallest Principals (by population)share seats(up to 5 cities per seat), provided that no Original Principal is required to share a seat. Each Board Member has 1 vote. Board Members must be the CFO of a City,or their deputy. Each Board Member may have one designated alternate,with qualifications as similar to the Board Member. Principals sharing representation on a single Board Member seat shall devise their own method to determine who represents them. 7.k Supermajority Vote Routine items require a simple majority of a quorum to pass. Items The following will require a Supermajority Vote: i. Approval or amendment of the budget or draft budget.* ii. Approval or amendment of fees and charges. iii. Approval of the Portal Operating Policy or amendments thereto. iv. Adoption or amendment of the Bylaws or amendment of the Articles of Incorporation. v. A decision to acquire assets,equipment, real or personal property,or bind the PORTAL AGENCY to pay total or cumulative any contract amounts over$50,000,provided that, this threshold amount will be indexed on the fifth (5th) anniversary of the formation of the PORTAL AGENCY and every five (5)years thereafter by the CPI-U Seattle-Tacoma- Bremerton. vi. Admission of a new Principal. vii. Admission of a new Subscriber. viii. Creating an additional non-voting Subscriber seat on the Executive Board. ix. Adding any staff positions,or partial staff positions.* x. Appointing or removing the Manager. xi. Merger,consolidation,sale of all or substantially all assets of PORTAL AGENCY. xii. Amendment of the Agreement(except for those amendments requiring approval of all legislative bodies). xiii. Termination or dissolution of the PORTAL AGENCY. xiv. Any other action actions requiring a sixty six percent(66%) majority vote under Chapter 24.06 RCW. *These actions may also require unanimous consent of the 3 8-69 Original Principals if defined inflationary caps are exceeded. 7.1 Board Officers The Board will have 4 officers: President,Vice-President, Secretary and Treasurer. The Secretary and Treasurer functions may be performed by staff. 7.n Meetings The Executive Board will meet not less than once a year,and as often as it deems necessary. Open Public Meetings Act requirements apply to all meetings. 8 Conversion of Status of Principals will be converted to Subscriber status if they fail to Participating Cities; approve their share of the budget or do not pay their share of the Addition of New budget or are delinquent for 60 days. Conversion means the Principals or Subscribers Principal loses its vote on the Executive Board, and its right to receive Portal Agency assets upon dissolution. A converted Principal will be subject to the then applicable fee formula for Subscribers. Principals may also elect to convert to Subscriber status on not less than 8 months' notice before the start of the next budget term(this option can only be exercised after the Initial Term.) The Executive Board at its discretion can determine to add new Principals or Subscribers(Supermajority Vote required). Subscribers may request to be converted to Principals. 9 Tax and Finance The"Operations Committee"will provide advice and Operations Committee recommendations to the Executive Board and may be tasked with specific responsibilities by the Board,within defined parameters. The Operations Committee will assist in policy and budget development. The Operations Committee will have 1 member from each Principal,plus at least 1 voting representative appointed by the Executive Board to represent Subscribers. Persons serving on the Operations Committee must be staff from the Principal they represent,with expertise in city tax policy and administration and/or city financial policy and administration. Details about the operation of the Operations Committee will be set forth in the Portal Agency Bylaws. 10 Portal Agency Staffing The Executive Board shall determine the means of staffing the Portal Agency—using loaned staff from Principal(s), hiring consultants or other service providers, hiring employees or any combination of means. At least initially,the Portal will operate with use of loaned staff and contract service providers. 11 Portal Agency Manager The Executive Board shall appoint a Manager who will be 4 8-70 responsible for the day to day operation of the Portal Agency. The Manager will be an "at will"employee. Only the Executive Board may approve selection of legal counsel, independent accountants and auditors. 12 Assignment of Portal The City of Seattle agrees to assign the Portal Services Contract to Services Contract from the Portal Agency promptly after the Portal Agency is legally Seattle to Portal Agency established (end of 01 2014),and the Portal Agency will accept the assignment. 13 Budget– The budget may be adopted on an annual or biennial calendar Approval Process year basis. The Manager will present a proposed budget by May 1 to the Executive Board;the Executive Board will forward an approved draft budget to all Principals for their review by June 15. The final budget will be adopted by the Executive Board effective no later than December 31 after receiving information as to which Principals have approved their share of the budget in their individual city budgets, as well as information regarding continuing Subscriber interest. Budget approval requires a Supermajority Vote, provided that an increase in certain capped costs or labor costs above defined growth factor increments will also require unanimous consent of the Original Principals. 13.b.v 2014 Portal Budget The Portal Agency 2014 budget is set forth at Exhibit A,and will be approved by adoption of the ILA. By approving the ILA, each Original Principal agrees to pay the amount shown in Exhibit A. 13.g Budget—Cost Allocation Generally, costs shall be allocated between all Participating Cities and Cost Recovery based on the number of online transactions processed for each such City on the Portal. 13.h Budget—User Fees Executive Board may impose reasonable user fees on taxpayers and licensees using the services of the Portal. 13.i Six-year estimated An estimated budget for years 2014-2020 is attached as Exhibit B. budget 13.j Capital Cost Recovery Each Participating.City other than Seattle will pay an annual fee, Charges beginning in 2015, to reimburse Seattle for approximately one- third of its contribution to start-up costs for the Portal Agency. The Charges are set on a sliding scale using the number of Transactions processed for a City. Charges will be imposed until such time as Seattle has been reimbursed$1.4 million. 13.1 Delinquencies If a Principal does not pay its charges when due, notice of delinquency is sent;if not cured within 60 days,the Principal is converted to a Subscriber. After 6 months nonpayment,service to the Principal may be halted. After 1 year,the nonpaying party is deemed to have withdrawn from the Agreement. 5 8-71 13.m Subscriber contracts Subscriber contracts will generally have the same payment and delinquency terms as for Principals. 13.n Reserve Funds Reserves may be established. Executive Board will determine the levels. No Principal is required to contribute to a reserve established for a project that a Principal will not use. 14. Retained Authority All Participating Cities retain authority for their operational departments and services and equipment connecting to the Portal,and for management of security for all data that may be linked to the Portal. 15. Ownership of Property The Vendor owns the Portal and the software that operates it. The Portal Agency has contract rights to use the Portal. Any other property purchased per the Agreement is owned and held in the name of the Portal Agency. Each Participating City retains ownership of its data. 16. Merger or Consolidation Requires approval by Supermajority Vote of Board. of Agency;Sale of all or substantially all assets 17. Withdrawal by,or After the Initial Term (5 years), a Principal can withdraw from the Termination of,a Agreement effective December 31 of a year, having given not less Principal than 1 year's advance notice. A departing or terminated Principal holds other Principals and Subscribers harmless from cost increases incurred with respect to previously approved projects in which departing Principal has agreed to Participate (excluding the initial Portal launch), but only for a period of two years(plus the balance, if any of the current year if a Principal departs mid-year),and only to the extent such costs are not recouped by new Participating Cities. 18. Amendment of The Agreement can be amended by a Supermajority Vote of the Agreement Board,except for certain key items which can only be approved by the legislative bodies of all Principals—key items include: a. Expansion of services beyond that contemplated in Section 5.c. b. Membership on Executive Board c. Powers of Executive Board d. Contribution Obligations e. Changes to voting rights f. Hold Harmless/Indemnification g. Duration,termination,withdrawal from Agreement h. Conditions to Amend the Agreement. Addition of Principals or Subscribers does not require approval of Principals' legislative bodies. 19. Termination of Termination of Agreement and Dissolution of Agency requires a Agreement, Dissolution Supermajority Vote. Termination date will be at least 1 year of Agency following the date of the vote to terminate to allow for a wind-up of business. 6 8-72 Agency property and liabilities(if any)will be allocated to Principals participating as of dissolution, based on ratio of their contributions to the preceding 5 years' budgets. Intellectual property(IP), if any,will be transferred to the Principal with the largest population; if that City does not want to accept ownership,the IP is transferred to the next largest Principal; if no Principal wants the IP,the Executive Board will attempt to sell it and share the proceeds per the terms of the preceding paragraph. 20. Dispute Resolution In event of disputes (between Principals or between Principal(s) and the Agency), parties will first try to resolve issues by meeting together; if there is no agreement,a party may request • mediation. Parties could agree that the mediation is binding or nonbinding. Mediator must be mutually agreed and costs would be shared equally between the parties. If the issues are not resolved in mediation,the parties could proceed to court. 21. Insurance The Portal Agency will carry such insurance as the Executive Board determines is reasonably practicable to minimize liability of the Participating Cities. 22. Indemnification and Principal indemnify and hold harmless other Principals and the Hold Harmless Portal Agency for their negligent acts or omissions. The Portal Agency will indemnify and hold harmless Principals for its acts or omissions(negligent or otherwise). Subscribers will indemnify and hold harmless Principals and the Portal Agency for their negligent acts or omissions. 22.- "Boilerplate"sections Intergovernmental Cooperation; Notice;Venue; Filing; No Third 30. Party Beneficiaries;Severability; Ratification; Execution, Counterparts and Effective Date(March 1, 2014). 7 8-73 Articles of Incorporation The Articles of Incorporation include provisions required by Ch.24.06 RCW Article Subject ;. .Summary... .. Name of Agency Washington Multi-City Business License and Tax Portal Agency II Duration Perpetual Ill Purposes A governmental instrumentality to carry out exclusively governmental activities per the ILA. IV Prohibited Activities No actions that would violate requirements of Internal Revenue Code for nonprofit corporations. V Powers As described in ILA,Chapters 24.06 and 30.34 RCW VI Members The Principal Cities are "members"of the corporation VII Distributions upon No director or officers will receive corporate assets upon Dissolution dissolution. Assets will be distributed per ILA to member cities. VIII Dissenting Members Ensures that Portal Agency assets will be distributed per ILA. IX Bylaws Will provide for additional detail on operations of the Portal Agency;these will be adopted by the Executive Board once the Agency is established. X Registered Agent For purposes of receiving legal notice;will initially be Glen Lee, Finance Director of Seattle XI Directors Initial Board of directors identified:the finance directors of the four original principals. XII Officers There will be 4 officers: President,Vice-President, (referred to as Chair and Vice-Chair in ILA),Secretary and Treasurer. XIII Incorporators The Cities of Bellevue, Everett,Seattle and Tacoma are the original incorporators. XIV Limitation of Director Directors(Executive Board members) not personally liable for Liability their actions unless intentional misconduct,taking personal benefit to which they are not entitled XI Indemnification Consistent with the ILA and Interlocal Cooperation Act,the Agency indemnifies officers and directors and Principals. May also elect to indemnify subscribers. 8 8-74 Attachment 4 • Item No.SS 2(b) November 18,2013 �. CITY COUNCIL STUDY SESSION ITEM SUBJECT { Bellevue business tax simplification update on the Multi-City Business License and Tax Portal agency interlocal agreement and related articles of incorporation. STAFF CONTACT Jan Hawn,Finance Director 425.452.6846 Sara Lane,Assistant Finance Director 425.452.7247 Chris Bothwell,Tax Division Manager 425.452.4358 Finance Department Darcie Durr,Senior Assistant City Attorney 425A522033 City Attorney's Office FISCAL IMPACT The City's share of the Portal Agency 2014 budget is anticipated to be under$40,000(See Exhibit A to ILA) which is less than the amount included in the 2013-2014 Budget. Each year,the Citywill be asked to approve its share of the budget as part of the City's regular budget process. The estimated Portal Agency budgets for years 2014-2020 are presented on Exhibit B to the ILA;these assume no additional cities join the Portal Agency.It is expected that additional cities will join the portal during that time,which will lower costs.These costs were anticipated in the operating budget for 2014 and Financial Forecast for future years. POLICY ISSUES Shall the Council further the goals of local B&O tax simplification and retained local control,with its approval of an interlocal agreement(ILA)and related Articles of Incorporation to establish an intergovernmental entity responsible for the operation of an online"portal"that will enable Bellevue businesses to apply for and renew business licenses and pay business&occupations taxes in"one-stop"even if the business operates in multiple participating cities? DIRECTION NEEDED FROM COUNCIL ' Action X_Discussion _X_Information Staff will return with an ordinance authorizing execution of the final ILA for Council approval on December 2. ANALYSIS �. Summary Bellevue continuously looks for opportunities to simplify tax compliance for its business community. In September,Council received a Management Brief on efforts currently underway to simplify Bellevue Tax reporting for Bellevue businesses including the Multi-City Business License and Tax Portal(MCBLTP)project. 8-75 The online portal is anticipated to provide efficiencies and cost savings for businesses using it,reduce current administrative costs,and improve information quality for cities. Tonight,staff will provide additional information and seek direction on a major milestone in the MCBLTP project. The Multi-City Tax and License Portal Project Background For nearly three years,the cities of Bellevue,Everett,Seattle and Tacoma(the`.`Portal Cities")have been collaborating to simplify local tax reporting for the business community through creation of a single online location where taxpayers can license their business and file local taxes in multiple jurisdictions at the same time. This effort addresses stakeholder interests in streamlining B&O tax collection and business licensing and preempts proposals to move local tax control and administration to the Department of Revenue. The effort gained momentum in 2011,when a study was performed to determine the feasibility of a one-stop reporting solution. In 2012,following the successful completion of the feasibility study,the Portal Cities developed the technological • requirements for the Portal. Later that year Seattle issued a Request for Proposals(RFP)for a vendor to develop the portal technology. As a result,earlier this year,Seattle contracted with a vendor who is currently developing the software for the portal. The portal is on track for the scheduled go-live in mid-2014. Project progress has been closely tracked by the business community,cities from around the state,the Association of Washington Cities,the State Department of Revenue,State Legislature,and the Governor's office. Staff has been diligent about involving stakeholders in the project at every opportunity. Stakeholders appear excited about the recent progress on the project and the opportunity to report via the portal. The next major milestone is the creation of the"Portal Agency"entity that will operate and maintain the portal technology after it goes live. To establish the Portal Agency,each of the Portal Cities must adopt the ILA and approve the associated Articles of Incorporation. • The Portal Agency will manage the day to day operations of the electronic portal that will be used by taxpayers to license their business and report local taxes to Bellevue,Seattle,Tacoma,and Everett initially,and other B&O cities in the future.Adoption of the proposed ILA and Articles of Incorporation in December will clearly demonstrate the City's ongoing efforts to simplify reporting for local B&O taxes for Bellevue businesses. The Interlocal Agreement Governance Representatives from the Portal cities determined that a separate legal entity in the form of a nonprofit corporation,as authorized by the Interlocal Cooperation Act(Ch.39.34 RCW),is the preferred governance structure for the Portal. It affords legal protection to the member cities and allows true joint oversight and decision making,while maintaining operational flexibility. The nonprofit corporation structure has been used multiple times in Washington by groups of cities or other local governments seeking to jointly undertake a project. The Portal Agency will be governed jointly by the four cities that are party to the WA:Bellevue,Everett,Seattle, and Tacoma. The governing body of each of these cities must,by ordinance or resolution,authorize adoption of the ILA.The enabling Ordinance will also: • Authorize the City's funding of its share of the 2014 budget for the Portal Agency. • Provide for the signing and filing of the Articles of Incorporation necessary as part of the statutory requirements to create the Portal Agency as a nonprofit corporation.(This will take place in Ql 2014.) • • • Facilitate assignment of the Portal development vendor contract from Seattle to the Portal Agency. 8-76 Over the last ten months,the cities have worked through all the terms in the ILA,with the assistance of city attorneys from each city and outside legal counsel. Below are key points of the ILA.A section-by-section summary of the ILA is provided at Exhibit C. Kev Agreement Elements 1. Original Principals,Governance and Voting. Each of the four original parties to the ILA—Bellevue, Everett,Seattle and Tacoma(the"Original Principals")—will have a member on the Executive Board which governs the Portal Agency. Executive Board members must hold the position of Finance Director or Deputy Finance Director or the equivalent at their city. Each Original Principal will have one vote. It is contemplated that other cities may join the Portal Agency over time. As this happens,the size of the Executive Board will increase,to a maximum of 15 seats(with potential expansion thereafter),each seat having one vote.If membership grows beyond 15 cities,seats will be shared--but each of the Original Principals will always have its own seat. 2. Supermajority Vote Requirement. Significant operating or budget decisions will require a two-pronged "supermajority vote"to approve:both 66%in number of votes on the Executive Board,and 66%in number of the Original Principals. 3. Qualifications to be a PrincipaUParty to ILA. Only cities that impose B&O taxes may join the ILA as Principals,upon a supermajority vote of the Board. 4. Principals Must Offer Portal to their Taxpayers. All Principals must offer the Portal as a payment processing option for their taxpayers-but may also offer other options. 5. Expansion of Portal Agency Services. The Portal will be able to process business license applications and fees,as well as the payment of business and occupation(B&O)taxes(including Bellevue's square footage tax)and other gross receipts taxes. The Executive Board can,by supermajority vote,expand the scope to include processing of other city licenses and other city taxes,but the costs of that expansion cannot be charged to Principals who elect not to utilize the service. 6. No Auditing or Enforcement by Portal Agency. The Portal Agency will not audit tax collections by local taxpayers or perform any audit or enforcement activities against taxpayers. 7. Subscriber Cities. Cities that would like to use the services of the Portal only for processing of business licenses may do so by entering into a separate contract with the Portal Agency. Such cities are referred to as"Subscribers." Cities may also be Subscribers for processing of B&O and gross receipts taxes(they do not need to be a"Principal"to receive these services). Subscribers have a non-voting Board representative and share in the costs of operating and maintaining the Portal. 8. Five-Year Initial Term. To enable a steady launch of the new organization,the Original Principals agree to remain party to the ILA at least through the end of 2019. 9. User Fees and Cost Allocation between Cities. Costs of the Portal Agency will be covered in part by minimal user fees on businesses using the Portal,and the balance(the majority of costs,for the foreseeable future)will come from participating cities. Cities will be charged the same whether they are Principals or Subscribers and will pay based on the number of transactions(a transaction is a taxpayer's payment or filing for a Business License or a payment or filing of an online tax form)processed for them on the Portal. 10. Budgets. Each year,the City Council will be asked to approve its share of the Portal Agency budget. Budgets require approval by supermajority vote of the Executive Board. 8-77 11. Limitations on Growth of Budget. Budgets are anticipated to be relatively stable,but as other cities join the Portal Agency,the workload and costs will increase. Factors allowing for such growth will be calculated for each budget year,and if the proposed budget exceeds those limits,a unanimous vote of the Original Principals is required to approve the budget. 12. Effective Date. The effective date of the ILA is March 1,2014. It is anticipated that after the ILA is approved,the Articles of Incorporation can be filed early next year and the Portal Agency will be established as of March 1,2014. Staffing support for the Portal Agency will be provided through loaned staff from the City of Seattle,paid for by the Portal Agency per terms of a separate contract between Seattle and the Portal Agency. Portal Naming and Marketing After reviewing many options and soliciting input from the Cities the team selected"FileLocal"as the portal name. The team has been working on logos and other branding activities that will be shared with Council at the meeting on November 18. ALTERNATIVES 1. Provide direction to staff to move forward with drafting the Ordinance to authorize the ILA and the related Articles of Incorporation for adoption on the consent agenda December 2,2013. 2. Provide alternate direction to staff. RECOMMENDATION Recommend directing staff to move forward with drafting the Ordinance to authorize the ILA and the related Articles of Incorporation for adoption on the consent agenda December 2,2013. ATTACHMENT(S) 1. Draft Interlocal Agreement 2. Draft Articles of Incorporation 3. Section by Section Summary of TLA,Articles of Incorporation • AVAILABLE IN COUNCIL OFFICE FOR REVIEW NA 8-78 1364-ORD 11/25/13 CITY OF BELLEVUE, WASHINGTON ORDINANCE NO. C013$ AN ORDINANCE authorizing the City Manager or his designee to execute any and all documents necessary to establish the Washington Multi-City Business License and Tax Portal Agency, including an Interlocal Agreement, Articles of Incorporation, and Operating Policies. WHEREAS, the City is authorized by state law to issue city business licenses and collect business and occupations and other city taxes; and WHEREAS, the Cities of Seattle, Tacoma, Bellevue and Everett(collectively, the "Original Principals") have worked for over two years to investigate and develop a mechanism by which to make it easier and more efficient for businesses to apply for local business licenses and file local taxes, while retaining local control over local licensing and tax collection functions and policies; and WHEREAS the Original Principals seek to accomplish these goals by jointly facilitating the creation of an Internet web application gateway(the "Portal")where tax collection and businesslicensing functions can be collectively administered, and where businesses operating in multiple cities can use a "one-stop" system for tax payment or business license application filing; and WHEREAS the Original Principals have engaged in extensive outreach with other cities, state legislators, taxpayers and the business community to understand the interests of these stakeholders in relation to development of the Portal; and WHEREAS, the Original Principals have negotiated the terms of an interlocal agreement that will, if approved, establish an intergovernmental entity in the form of a governmental nonprofit corporation as authorized by the Interlocal Cooperation Act, RCW 39.34, to be known as the "Washington Multi-City Business License and Tax Portal Agency" ("Portal Agency"); and WHEREAS, the Portal Agency will oversee the development and operation of the Portal, promote economies of scale in the provision of an exclusively governmental function, and ensure continued control by each participating city of its tax and licensing policy and local tax collection activities; and WHEREAS, the initial signatories to the Agreement and the initial members of the Portal Agency will be the four Original Principals which will serve on the Executive Board of the Portal Agency and oversee its operations and finances; and WHEREAS, it is contemplated that overtime, additional cities may seek to join the Portal Agency as principals and signatories to the Agreement, or may seek 8-79 1364-ORD 11/25/13 services of the Portal Agency as subscribers through contracting with the Portal Agency; and WHEREAS, pursuant to a competitive procurement process in which staff from all the Original Principals participated, the City of Seattle has entered into a contract with eGov Systems, a Louisiana Corporation, for the development, operation and maintenance of the Portal software program, related data storage and other matters; and WHEREAS, the City of Seattle intends to assign the contract with eGov Systems to the Portal Agency once the Portal Agency is established; and WHEREAS, the project schedule calls for the Portal Agency nonprofit corporation to be legally established in the first quarter of 2014, and for the Portal to begin online operations in the second quarter of 2014; and WHEREAS; the Agreement is authorized by the Interlocal Cooperation Act and the Nonprofit Miscellaneous and Mutual Corporations Act set forth in chapters 39.34 and 24.06, respectively, of the Revised Code of Washington; now, therefore, THE CITY COUNCIL OF THE CITY OF BELLEVUE, WASHINGTON, DOES ORDAIN AS FOLLOWS: Section 1. The City Manager is hereby authorized to execute on behalf of the City of Bellevue both the Agreement, in form substantially similar to that attached as "Attachment 1,"and the Articles of Incorporation, in form substantially similar to that attached as "Attachment 2," a copy of which Interlocal Agreement has been given Clerk's Receiving No. . Section 2. The City agrees to pay its share of the 2014 Portal Agency budget as described in Exhibit A to the Agreement. Section 3. The City Manager or his designee is authorized to approve, on behalf of the City, the Portal Operations Policy as the same may be adopted from time to time by the Executive Board of the Portal Agency. Section 4. This ordinance shall take effect and be in force five (5) days after passage and legal publication. • 8-80 1364-ORD 11/25/13 Passed by the City Council this day of , 2013 • and signed in authentication of its passage this day of 2013. (SEAL) Conrad Lee, Mayor Approved as to form: Lori M. Riordan, City Attorney Darcie Durr, Assistant City Attorney Attest: Myma L. Basich, City Clerk Published 8-81