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cp09-11-2007 cAGENDA REGULAR MEETING — HUTCHINSON CITY COUNCIL TUESDAY, SEPTEMBER 11, 2007 1. CALL TO ORDER — 5:30 P.M. 2. INVOCATION — Father Bill Sprigler, St. Anastasia Catholic Church 3. PLEDGE OF ALLEGIANCE 4. PUBLIC COMMENTS 5. MINUTES (a) REGULAR MEETING OF AUGUST 28, 2007 (b) BID OPENING MINUTES OF SEPTEMBER 5, 2007 (CUSTOMER ELATION CALL CENTER) Action - Motion to approve as presented 6. CONSENT AGENDA (a) REPORTS OF OFFICERS, BOARDS AND COMMISSIONS 1. FIRE DEPARTMENT MONTHLY REPORT FOR AUGUST 2007 • (b) RESOLUTIONS AND ORDINANCES 1. RESOLUTION NO. 13262 — RESOLUTION FOR PURCHASE (COMPOST BAGS AND BIODIESEL) 2. CONSIDERATION OF VACATION OF DRAINAGE AND UTILITY EASEMENTS FOR CHARTER SCHOOL FACILITY IN THE I -1 (LIGHT INDUSTRIAL) DISTRICT LOCATED AT 1000 /1010 5T" AVENUE SOUTHEAST WITH FAVORABLE PLANNING COMMISSION RECOMMENDATION (SECOND READING AND ADOPTION OF ORDINANCE NO. 07 -0472) CONSIDERATION OF ZONING ORDINANCE AMENDMENT REGARDING NON- CONFORMING USES AND STRUCTURES WITH FAVORABLE PLANNING COMMISSION RECOMMENDATION (SECOND READING AND ADOPTION OF ORDINANCE NO. 07 -0468) (c) CONSIDERATION FOR APPROVAL OF IMPROVEMENT PROJECT CHANGE ORDERS - CHANGE ORDER NO. 2 — LETTING NO. 13, PROJECT NO. 06 -15 (WASTEWATER TREATMENT FACILITY SCADA SYSTEM) - CHANGE ORDER NO. 4 — LETTING NO. 12, PROJECT NO. 06 -14 (WASTEWATER TREATMENT FACILITY ADMINISTRATION BUILDING EXPANSION) (d) CONSIDERATION FOR APPROVAL OF GENERAL SERVICES AGREEMENT WITH BONESTROO (e) APPOINTMENT OF STEVE SHERMAN TO THE POLICE COMMISSION TO MAY 2010 • (UNEXPIRED TERM OF TOM SCHWARTZ) CITY CO UNCIL AGENDA —SEPTEMBER]], 2007 Action — Motion to approve consent agenda • PUBLIC HEARINGS — 6:00 P.M. (a) CONSIDERATION FOR APPROVAL OF RESOLUTION NO. 13263 — A RESOLUTION GRANTING HOST APPROVAL TO CERTAIN OUTSTANDING GENERAL OBLIGATION MEDICAL FACILITIES REVENUE BONDS OF THE CITY Action — Motion to reject — Motion to approve 8. COMMUNICATIONS, REQUESTS AND PETITIONS (a) WATER PLANT OPERATIONS UPDATE Action - (b) DISCUSSION OF CITY COMMERCIALANDUSTRiAL PROPERTY FIRE SAFETY INSPECTION FEE Action — (c) CONSIDERATION FOR APPROVAL OF SETTING DATE FOR CITY COUNCIL COMMUNITY VISIONING PROCESS WORKSHOP Action — Motion to reject — Motion to approve 0 (a) CONSIDERATION OF ORDINANCE NO. 07 -0471 — AN ORDINANCE AMENDING SECTION •73.15 OF THE HUTCHINSON CITY CODE RELATED TO REGULATIONS OF ALL- TERRAIN VEHICLES (WAIVE FIRST READING AND SET SECOND READING AND ADOPTION FOR SEPTEMBER 25, 2007) Action — Motion to reject — Motion to approve (b) CONSIDERATION FOR APPROVAL OF TAX INCREMENT ASSISTANCE AGREEMENT DISTRICT NUMBER 7 Action — Motion to reject — Motion to approve 10. NEW BUSINESS (a) CONSIDERATION FOR APPROVAL OF AN ORDINANCE APPROVING LEASING OF CERTAIN LAND, BUILDINGS AND OTHER PROPERTY TO HUTCHINSON HEALTH CARE (SECOND READING AND ADOPTION OF ORDINANCE NO. 07 -0473) Action — Motion to reject — Motion to approve (b) CONSIDERATION FOR APPROVAL OF AN ORDINANCE APPROVING THE ARTICLES OF INCORPORATION AND RESTATED BYLAWS OF HUTCHINSON HEALTH CARE (SECOND READING AND ADOPTION OF ORDINANCE NO. 07 -0470) Action — Motion to reject — Motion to approve (c) CONSIDERATION FOR APPROVAL OF AN ORDINANCE APPROVING THE DEBT SERVICE . RESERVE ESCROW AGREEMENT WITH HUTCHISON HEALTH CARE (SECOND READING AND CITY COUNCIL AGENDA —SEPTEMBER]], 2007 ADOPTION OF ORDINANCE NO. 07 -0474) • Action — Motion to reject — Motion to approve (d) CONSIDERATION FOR APPROVAL OF AN ORDINANCE OUTLINING ATTORNEY SERVICES BETWEEN THE CITY OF HUTCHINSON AND HUTCHINSON HEALTH CARE (SECOND READING AND ADOPTION OF ORDINANCE NO. 07 -0476) Action — Motion to reject — Motion to approve (e) CONSIDERATION FOR APPROVAL OF AN ORDINANCE APPROVING AN AGREEMENT BETWEEN THE CITY OF HUTCHINSON AND HUTCHINSON HEALTH CARE TO DETERMINE THE VALUE OF PROPERTY CURRENTLY USED BY THE HUTCHINSON AREA HEALTH CARE (SECOND READING AND ADOPTION OF ORDINANCE NO. 07 -0475) Action — Motion to reject — Motion to approve (f) CONSIDERATION FOR APPROVAL OF CALLING FOR SALE OF 2007 GENERAL OBLIGATION IMPROVEMENT BONDS (ADOPT RESOLUTION NO. 13269) Action — Motion to reject — Motion to approve (g) CONSIDERATION FOR APPROVAL OF SETTING 2008 PRELIMINARY TAX LEVY FOR SPECIAL TAXING DISTRICT HUTCHINSON REDEVELOPMENT AUTHORITY Action — Motion to reject — Motion to approve (h) CONSIDERATION FOR APPROVAL OF SETTING 2008 PRELIMINARY TAX LEVY FOR SPECIAL • TAXING DISTRICT HUTCHINSON ECONOMIC DEVELOPMENT AUTHORITY Action — Motion to reject — Motion to approve (i) CONSIDERATION FOR APPROVAL OF SETTING 2008 PRELIMINARY TAX LEVY FOR CITY OF HUTCHINSON Action — Motion to reject — Motion to approve (j) CONSIDERATION FOR APPROVAL OF SETTING TRUTH IN TAXATION HEARING DATE FOR DECEMBER 3, 2007, AT 5:00 P.M. AT THE HUTCHINSON EVENT CENTER Action — Motion to reject — Motion to approve (k) CONSIDERATION FOR APPROVAL OF PROJECT AWARD FOR THE EDA CUSTOMER ELATION CALL CENTER Action — Motion to reject — Motion to approve (1) CONSIDERATION OF SCHEDULING ANNUAL PERFORMANCE REVIEW OF CITY ADMINISTRATOR GARY PLOTZ Action — Motion to reject — Motion to approve 11. MISCELLANEOUS 12. CLAIMS, APPROPRIATIONS AND CONTRACT PAYMENTS 0 ADJOURN • MINUTES REGULAR MEETING — HUTCHINSON CITY COUNCIL TUESDAY, AUGUST 28, 2007 1. CALL TO ORDER — 5.30 P.M. Mayor Steve Coo ca e the meeting to order. Member present were Bill Arndt, Jim Haugen, Kay Peterson and Casey Stotts. Others present were Gary Plotz, City Administrator, Kent Exner, City Engineer, and Marc Sebora, City Attorney. 2. INVOCATION — Rev. Greg Nelson, Bethlehem United Methodist Church, delivered the invocation. 3. PLEDGE OF ALLEGIANCE 4. PUBLIC COMMENTS 5. MINUTES (a) REGULAR MEETING OF AUGUST 14, 2007 (b) BID OPENING MINUTES OF AUGUST 13, 2007 (SAW LOGS) Motion by Haugen, second by Stotts, to approve the minutes as presented. Motion carried unanimously. 6. CONSENT AGENDA •(a) REPORTS OF OFFICERS, BOARDS AND COMMISSIONS 1. AIRPORT COMMISSION MINUTES OF JUNE 21, 2007, AND JULY 19, 2007 2. PARKS, RECREATION, COMMUNITY EDUCATION BOARD MINUTES OF JUNE 4, 2007 3. HUTCHINSON HOUSING & REDEVELOPMENT AUTHORITY BOARD MINUTES OF JULY 17, 2007 4. HUTCHINSON HOUSING & REDEVELOPMENT AUTHORITY ANNUAL BOARD MEETING MINUTES OF AUGUST 15, 2006 5. PLANNING COMMISSION MINUTES OF JULY 17, 2007 6. CITY OF HUTCHINSON FINANCIAL REPORT JULY 2007 7. CITY OF HUTCHINSON INVESTMENT REPORT JULY 2007 (b) RESOLUTIONS AND ORDINANCES 1. ORDINANCE NO. 07 -0469 — AN ORDINANCE ADOPTING THE 2007 EDITION OF THE MINNESOTA STATE FIRE CODE (SECOND READING AND ADOPTION) 2. RESOLUTION NO. 13258 - RESOLUTION FOR PURCHASE OF ENGINEERING AGREEMENT FOR SERVICES FOR MERCURY AND WATER SYSTEM WITH DONOHUE & ASSOCIATES SCcl) CITY COUNCIL MINUTES — AUGUST 28, 2007 • 3. RESOLUTION NO. 13257 - RESOLUTION TO PARTICIPATE IN MCLEOD COUNTY HAZARD MITIGATION PLAN (c) PLANNING COMMISSION ITEMS CONSIDERATION OF CONDITIONAL USE PERMIT, SITE PLAN AND VACATION OF DRAINAGE AND UTILITY EASEMENTS TO ALLOW A CHARTER SCHOOL FACILITY IN THE I -1 (LIGHT INDUSTRIAL) DISTRICT LOCATED AT 1000 /1010 5TH AVENUE SOUTHEAST WITH FAVORABLE PLANNING COMMISSION RECOMMENDATION (ADOPTING RESOLUTION NO. 13255 AND WAIVING FIRST READING AND SETTING SECOND READING AND ADOPTION OF ORDINANCE NO. 07 -0472 FOR SEPTEMBER 11, 2007) 2. CONSIDERATION OF CONDITIONAL USE PERMIT TO MOVE A HOUSE TO 165 -5T" AVENUE NORTHWEST REQUESTED BY PAUL AND ROSE BOLDUC WITH FAVORABLE PLANNING COMMISSION RECOMMENDATION (ADOPT RESOLUTION NO. 13254) CONSIDERATION OF ZONING ORDINANCE AMENDMENT REGARDING NON- CONFORMING USES AND STRUCTURES WITH FAVORABLE PLANNING COMMISSION RECOMMENDATION (WAIVING FIRST READING AND SETTING SECOND READING AND ADOPTION OF ORDINANCE NO. 07 -0468 FOR SEPTEMBER 11, 2007) (d) APPOINTMENTS TO PUBLIC ARTS COMMISSION • TOM WIRT TO AUGUST 2008 BUZZ BURICH AUGUST 2009 TERRY KEMPFERT AUGUST 2010 JOANNE WILMERT AUGUST 2010 JIM HAUGEN TO JANUARY 2008 (COUNCIL REPRESENTATIVE) (e) CONSIDERATION FOR APPROVAL OF TRANSIENT MERCHANT LICENSE FOR CHARLES HOMIER JR. AT NATIONAL GUARD ARMORY Motion by Stotts, second by Peterson, to approve consent agenda with the exception of items 6(c)l, and 6(c)2. Motion carried unanimously. 6(c) l Mayor Cook wanted the minutes to show that if issues had such as traffic, odor and dust come up, they would be worked out by the parties, which should be expected, the school should not expect relief from the City, because it is the industrial district. Council Member Haugen mentioned that the issues were brought up and the Charter School handled them well, and the responses were thorough. Motion by Haugen, second Arndt, motion to approve item 6(c) 1. Motion carried unanimously. 6(c)2 Mayor Cook commented that there was discussion about the drainage at 165 -5`h Avenue Northwest. Council Member Haugen voiced the concern of a neighbor, that the house was being moved on and graded prior to the City storm pond being constructed, Council Member Haugen asked the City Engineering staff if there would be any negative flooding or adjacent properties adversely effected. Kent Exner, City Engineer, explained the drainage situation and plan. • Motion by Arndt, second by Peterson, to approve consent item 6(c)2. Motion carried unanimously. 2 5cc CITY COUNCIL MINUTES —AUGUST28,2007 • PUBLIC HEARINGS — 6:00 P.M. (a) 2008 BUDGET DISCUSSION Ken Merrill, Finance Director, discussed the purpose of the public hearing, and explained where the City is with the 2008 budget. At today's, August 28, 2007, budget meeting they came up with a list of possible options which include reduction of expenses, looking at a tax levy number, reserves in general funds and LGA, changing utility transfers, and also looking to the horizon for a special session to look at LGA problem and reinstate those dollars. Ken Merrill, Finance Director, would also like to set a workshop date for September 11, 2007, to set a preliminary levy for 2008. Motion by Arndt, second by Stotts, to close public hearing. Motion carried unanimously. (b) CONSIDERATION OF APPROVING THE GRANTING OF A BUSINESS SUBSIDY TO CUSTOMER ELATION CALL CENTER AND APPROVING THE FORMS OF A BUSINESS SUBSIDY AGREEMENT (ADOPT RESOLUTION NO. 13259) Shan Ghimire, in place of Miles Seppelt, EDA Executive Director, explained the business subsidy (call center). Mayor Cook expressed concern about the no time limit to purchase the land. Discussion was held on a time limit for the purchase of the land, and whether there should be a change in the agreement to include a time frame for purchasing the land and the expansion land. Mayor Cook inquired about the lot south of the expansion lot, and if the EDA owned the land, there would be more land for further expansion. Marc Sebora, City Attorney, commented that considering the circumstances it would be nice to communicate with the company so they know the parameters and are in a position to agree to them. • Rebecca Bowers, Director of Planning and Zoning, expressed that is was critical to have action passed tonight, the Planning Commission held a special meeting so the plans could move along. Motion by Peterson, second by Arndt, to close public hearing, Motion carried unanimously. Motion by Bill, second by Stotts, Motion to approve the granting of a business subsidy to customer elation call center and approving the forms of a business subsidy with the option to purchase both portions of property within seven years. Motion carried unanimously. 8. COMMUNICATIONS, REQUESTS AND PETITIONS (a) PARKING OF TRACTOR TRAILERS NEAR MAPLE STREET/NORTHWOODS AVENUE AS REQUESTED BY RUSS MERKINS Russ Merkins, Hutchinson citizen, was not present at the Council meeting, Mayor Cook moved to another item. 9. UNFINISHED BUSINESS 11 (a) CONSIDERATION OF AMENDING SECTION 73.15 OF THE HUTCHINSON CITY CODE RELATED TO REGULATIONS OF ALL - TERRAIN VEHICLES Mayor Cook touched on the difference between a Class 1 (standard) and Class 2 (utility) ATV, Mayor Cook would prefer to allow the Class 2 vehicles on City streets, because the City is already using these vehicles for the Parks Department and mowing lawns. Mayor Cook's concern is that there are no regulations or requirement for liability insurance, if there were to be an accident. CITY COUNCIL MINUTES — A UG UST 28, 2007 Council Member Stotts touched on the lawn and snow removal with a Class 1 ATV, and being able to use • the ATV's on your own property or sidewalks, the ordinance currently states ATV's are not allowed on sidewalks. Council Member Peterson inquired about changing the way the ordinance is written. Mayor Cook inquired about having the ATV's driven on City streets, if the City could then require that the ATV's have seatbelts put inside, or if it were possible to could get a license plate of sorts to put on the ATV so that the police officers could enforce the ordinance. Marc Sebora, City Attorney, explained that the seatbelt requirements may not be plausible because some ATV's are manufactured without seatbelts. Council Member Stotts explained that they will be reviewing County /City /State laws to see what they have in place and look at a later date to cover all bases on a Class 2 ATV. Mayor Cook explained that the Class 1 ATV would still be allowed to drive to the closest way out of town and on sidewalks for plowing and utility work. Further research will be done on class 2 ATV's. Bob Wiehr, 14594 State Hwy 7, touched on the difference between a Class 2 (side by side and no more than three people), and a Class 1 (single or behind one another). The Class 2 license is becoming more popular, and elderly people are using the Class 2 ATV's to get around. Motion by Peterson, second by Arndt, to table this item until the September 11, 2007 Council meeting. Motion carried unanimously. 10. NEW BUSINESS • (a) CONSIDERATION FOR APPROVAL OF AN ORDINANCE APPROVING THE DEBT SERVICE RESERVE ESCROW AGREEMENT WITH HUTCHISON HEALTH CARE (ADOPT ORDINANCE NO. 07 -0474) Paul Torgerson, special legal council, explained the Debt Service Reserve Escrow Agreement. The City has a years worth of bond payments in a reserve escrow incase the new non - profit organization can not make the payments. Paul Torgerson, special legal council, had some clarifications, adding "any future debt issues" at the end of the Existing Bonds Definition, and also Section 3.4 Reporting. "The agent shall provide monthly to the City a report detailing the amounts invested, detail of the investment, and current market value of the investments ". Motion by Arndt, second by Haugen, to approve Debt Service Reserve Escrow Agreement. Motion carried unanimously. (b) CONSIDERATION FOR APPROVAL OF AN ORDINANCE OUTLINGING ATTORNEY SERVICES BETWEEN THE CITY OF HUTCHINSON AND HUTCHINSON HEALTH CARE (ADOPT ORDINANCE NO. 07 -0476) Paul Torgerson, special legal council, explained the Attorney Service Agreement, up to a certain period of time is required of the City Attorney, and there is no reduction in payments if the services are not completely used. Mayor Cook noted that the City can also terminate the Attorney Services at any point without reduction to the payments. • Marc Sebora, City Attorney, explained to the Council that he would be available for one day a week, for general legal needs, and if the City wishes to terminate that attorney services, the payments will not stop. 50) CITY COUNCIL MINUTES — AUGUST 28, 2007 • Paul Torgerson, special legal council, had clarifications on the Attorney Services Agreement, by eliminating the language "As previously stated in the Lease Agreement between the parties ". Motion by Haugen, second by Arndt, to approve the Attorney Services Agreement. Motion carried unanimously. (c) CONSIDERATION FOR APPROVAL OF A ORDINANCE APPROVING AN AGREEMENTBETWEEN THE CITY OF HUTCHINSON AND HUTCHINSON HEALTH CARE TO DETERMINE THE VALUE OF PROPERTY CURRENTLY USED BY THE HUTCHINSON AREA HEALTH CARE (ADOPT ORDINANCE NO. 07 -0475) Paul Torgerson, special legal council, explained the Asset Valuation Agreement, the purpose of the agreement is to see what the City is putting into the arrangement and what is its value. It is a bench mark. It is not intended to be used now, but could provide a reference to the parties in the future if necessary. Motion by Stotts, second by Peterson, to approve the Asset Valuation Agreement. Motion carried unanimously. (d) CONSIDERATION FOR APPROVAL OF AN ORDINANCE APPROVING LEASING OF CERTAIN LAND. BUILDINGS AND OTHER PROPERTY TO HUTCHINSON HEALTH CARE (ADOPT ORDINANCE 07 -0473) Paul Tor�erson, special legal council, had some clarifications on the Lease Agreement, Section 6.1; seven clarifications were made in Section 15, and Section 26.4. Motion by Stotts, second by Haugen, to approve Lease Agreement between the City of Hutchinson and Hutchinson Health Care. Motion carried unanimously. • (e) CONSIDERATION FOR APPROVAL OF AN ORDINANCE APPROVING THE ARTICLES OF INCORPORATION AND RESTATED BYLAWS OF HUTCHINSON HEALTH CARE (ADOPT ORDINANCE NO. 07 -0470) Paul Torgerson, special legal council, discussed the transaction between the City of Hutchinson and Hutchinson Health Care. Paul Torgerson, special legal council, also explained Section A, Section B, Section C. Section D and the Amendments to the Hutchinson Health Care Bylaws. Monthly debt payments, expectation is going to be removed because it is not used in the documents. Mr. Torgerson also explained the City rights in Section B. Mayor Cook had a question about the definition future bonds, what happens when the City passes the documents and before the non - profit takes over. Paul Torgerson, special legal council, explained that when the Lease goes into effect the parties need to populate exhibit lists, if there are changes made, the agreements will also change. Paul Torgerson, special legal council, had some clarifications in the Bylaws about dividends in 2.7(n), 8.7. Council Member Peterson brought up the subject about why pass all the agreements tonight, when the documents are not finished. Discussion was held about the documents not having significant changes; the Council will see the complete documents before the second reading. Motion by Stotts, second by Peterson, to approve the Articles of Incorporation and the Restated Bylaws. Motion carried unanimously Wayne Fortune, Trustee for Hutchinson Area Health Care, wanted to thank the Council Members for working with the hospital, particularly Mayor Cook. He feels they are doing something that is changing • Hutchinson for many years. 5cc> CITY COUNCIL MINUTES — A UG UST 28, 2007 Discussion was held. • (f) HIGHWAY 7 CORRIDOR STUDY UPDATE AND REQUEST CITY COUNCIL WORKSHOP FOR OCTOBER 9, 2007, AT 4:00 P.M. REGARDING HIGHWAY 7 CORRIDOR STUDY Rebecca Bowers, Director of Planning and Zoning, requested a joint Council and Planning Commission workshop to review the progress of the Highway 7 Corridor Study and also obtain feedback. It is an additional service that the Planning Commission is requesting; the cost to bring people in would be under $2;000. Council Member Stotts asked if there were funds available to cover the costs. Rebecca Bowers, Director of Planning and Zoning, indicated that there is enough money left over in the Highway 7 Corridor Study fund to be able to cover the cost. Motion by Stotts, second by Arndt, to approve a workshop at 4:00 p.m. before the Council meeting. Motion carried unanimously. (g) CONSIDERATION OF LOT SPLIT AT 1316 DELAWARE STREET TO CREATE A NEW LOT WITHIN THE SHORELAND DISTRICT AND FLOOD PLAN WITH FAVORABLE PLANNING COMMISSION RECOMMENDATION (ADOPT RESOLUTION NO. 13256) Rebecca Bowers, Director of Planning and Zoning, explained that the applicant would like this item to be tabled to a later date. Motion by Arndt, second by Stotts, to table this item indefinitely. Motion carried unanimously. •(h) CONSIDERATION FOR APPROVAL OF TAX INCREMENT ASSISTANCE AGREEMENT DISTRICT NUMBER 7 Ken Merrill, Finance Director, clarified the Tax Increment Assistance of District Number 7. Discussion was held, Council Member Haugen was wondering if the documents are consistent. Council Member Haugen would like to table this item until Diane Gordon can review the documents. Motion by Haugen, second by Stotts, to table this item to September 11, 2007. Motion carried unanimously. (i) CONSIDERATION FOR APPROVAL OF PRELIMINARY AND FINAL PLAT FOR JENSEN ADDITION WITTHFFAVORABLE PLANNING COMMISSION RECOMMENDATION (ADOPT RESOLUTION NO. 13240) Rebecca Bowers, Director of Planning and Zoning, explained the Jensen plat. The strip along the western plat was a separate deed or separate ownership, non - conforming. The proposal includes the ten foot strip, if it were reassigned to the Jensen home it would revert back to ten years ago when it was non - conforming. The revised resolution does contain the recommendations to try and clean up legal descriptions and make it clearer and the preliminary and final plat subject allocating this ten foot strip, making sure that it is clear. The plat would be all one piece except a ten foot strip along the west. Neil Jensen (property owner) expressed thanks for resolving the issue, but will be talking to Marc Sebora, City Attorney, about the Shoreland Ordinance. Motion by Haugen, second by Peterson, to approve Preliminary and Final Plat for Jenson second addition. Motion carried unanimously. 11. MISCELLANEOUS • (a) COMMUNICATIONS 6 CITY COUNCIL MINUTES — AUGUST 28, 2007 •1. CONSIDERATION FOR APPROVAL OF A RESOLUTION FOR CREATING A PRIORITIZED BRIDGE REPLACEMENT LIST (ADOPT RESOLUTION NO. 13260) Kent Exner City Engineer, explained the Bridge Bonding list from MNDOT, and feels it is a good time to put the Yd Avenue Southeast bridge on the list. There is a typo on the resolution, the estimated cost from the Townships or State Bridge fund should be 5362,500 and the total estimated cost would be covered. Motion by Stotts, second by Arndt, to approve Resolution No. 13260, motion carried unanimously. 2. CONSIDERATION FOR APPROVAL OF A RESOLUTION PROVIDING FOR THE NEGOTIATED SALE OF $2,150,000 (APPROXIMATE) TAXABLE PUBLIC PROJECT REVENUE BONDS, SERIES 2007 A (ADOPT RESOLUTION NO. 1326 1) Ken Merrill, Finance Director, would like to authorize Ehlers firm to solicit quotations on the selling of bonds for the construction of the building customer elation will be occupying. There are several leasing options, which is why the City will be negotiated the sale, instead of collecting bids. Motion by Haugen, second by Stotts, to approve Resolution No. 13261, motion carried unanimously. 3. CONSIDERATION FOR APPROVAL TO SET PUBLIC HEARING FOR SEPTEMBER 11, 2007 AT 6:00 P.M. FOR PUBLIC COMMENTS Ken Merrill, Finance Director, explained there is a requirement to have a public hearing before the bond payments can be made. Motion by Stotts, second by Peterson, to approve public hearing for 6:00 p.m., carried unanimously. • Motion by Stotts, second by Peterson, to approve a workshop for 4:00 p.m. September 11, 2007, carried unanimously. Council Member Arndt would like the minutes from the Joint Planning meetings included in the council packet. Council Member Stotts noted that he had a meeting about the rental property inspection program; staff would like some direction about the program. Discussion was held on the various options of the program. Motion by Stotts, second by Peterson, for the City staff to continue with the program and come back to the Council with more specifics, motion carried unanimously. Kent Exner, City Engineer, had project updates, School Road will be open north and south by the end of the week, the stoplight will be working as a four way flash. Construction traffic will be able to travel east and west. Discussion was held about the Hwy 7, and the Hwy 12, MN DOT project. Kent Exner, City Engineer, hopes to have an open house for the Hwy 15 and North High layout. Tuesday September 4, 2007, they still have plans to draw down the dam. The west end of the highway has taken a few lumps with the rain, but is still expected to open mid to late September. 12. CLAIMS APPROPRIATIONS AND CONTRACT PAYMENTS Motion by Arndt, second by Cook, to approve claims, appropriations and contract payments. Motion carried unanimously. 13. ADJOURN • Motion by Arndt, second by Stotts, to adjourn at 8:30 p.m. Motion carried unanimously. Cad CJ • • BID OPENING LETTING NO. 111PROJECT NO. 07 -11 Customer Elation Call Center September 5, 2007, at 2:00 pm Present: Gary Plotz, City Administrator Kent Exner, City Engineer Sharon Anderson, Recorder The Bid Opening was called to order at 2:04 p.m. by Gary Plotz. Mr. Plotz noted that the City Council reserves the right to reject all bids and to waive any informalities and irregularities. The reading of the Advertisement for Bids was waived and the following bids were opened and read aloud: KUE Construction 130 Central Ave. S. P.O. Box 408 Watkins, MN 55336 Greystone Construction Company 500 Marshall Rd. S. Suite 300 Shakopee, MN 55379 Gen -Con Graus Construction Pat Rauch 12940 Harriet Ave. S. Suite 204 Burnsville, MN 55337 Dammon Construction Inc. 16042 Dairy Ave. Glencoe, MN 55336 Total Bid: $1,897,061.00 Bid Bond Enclosed Addendums 1, 2, and 3 Acknowledged Alt. A -1 - $175,000.00 Alt. M -1 - $30,000.00 Alt. E -1 - $35,000.00 Total Bid: $1,812,821.00 Bid Bond Enclosed Addendums 1, 2, and 3 Acknowledged Alt. A -1 - $149,426.00 Alt. M -1 - $14,000.00 Alt. E -1 - $34,175.00 Total Bid: $1,977,000.00 Bid Bond Enclosed Addendums 1 & 2 Acknowledged Alt. A -1 - $165,000.00 Alt M -1 - $50,500.00 Alt. E -1 - $41,000.00 Total Bid: $1,955,400.00 Bid Bond Enclosed Addendums 1, 2 and 3 Acknowledged Alt. A -1 - $160,200.00 Alt. M -1 - $29,800.00 Alt. E -1 - $41,600.00 Gopher State Contractors, Inc. Total Bid: $1,787,207.00 340 SE 1 "Ave. Bid Bond Enclosed P.O. Box 7 Addendum 1 & 2 Acknowledged Alt. A -1 - $178,892.00 Alt. M -1 - $30,305.00 Alt. E -1 - $35,713.00 w C,oau, 5 C b) t• 1 LJ L • Ebert Construction 23350 County Rd. 10 Corcoran /Loretto, MN 55357 Heymann Construction 2103 rd St. South P.O. Box 606 New Ulm, MN 56073 -0606 Ram Buildings, Inc. 529 Industrial Dr. P.O. Box 660 Winsted. MN 55395 Closed: 2:20 p.m. Steven W. Cook Mayor Total Bid: $1,738,200.00 Bid Bond Enclosed Addendum 1 & 2 Acknowledged Alt. A -1 - $157,177.00 Alt. M -1 - $31,400.00 Alt. E -1 - $34,175.00 Total Bid: $2,023,000.00 Bid Bond Enclosed Addendum 1, 2, and 3 Acknowledged Alt. A -1 - $173,000.00 Alt. M -1 - $34,300.00 Alt. E -1 - $34,175.00 Total Bid: $2,246,770.00 Bid Bond Enclosed Addendum 1, 2, and 3 Acknowledged Alt. A -1 - $261,335.00 Alt M -1 - $30,900.00 Alt. E -1 - $34,175.00 ATTEST: Gary D. Plotz City Administrator 0 Memo To: Mayor and City Council Members From: Brad Emans, Fire Chief Date: 09/04107 Re: Monthly Update on Activities of the Fire Department It is with great sadness that we must report the death of long time firefighter Gary Henke. Firefighter Henke retired 10 years ago after service the Hutchinson fire district for 20 years. Gary was very instrumental in reshaping our fire department pension fund to the successful venue it is today. We will miss his friendship. Fire Department Response: The fire department responded to 23 general alarms in the month of August. Fire Officer Only Response: A "fire officer only" responded to 12 calls in August, saving the fire district • the cost of a general alarm estimated at $2,025 and more importantly, kept our firefighters on their full time job or at home with their families! Response Time (First Emergency Vehicle Out of the Door): August — 3 minutes 37 seconds Example of a few of the calls: • We responded to a simple dumpster fire behind one of the shopping centers, it was alleged that the fire was deliberately set to do damage to the building (Arson). We investigated and determined the fire started from improperly discarded cigarettes. • We responded to a manufactured home fire in the northwest part of the city. The fire was contained to the rear bathroom, however heat and smoke damage did approximately $30,000 damage to the home. The cause of the fire was improperly discarded cigarettes in a garbage can. • Due to the dry conditions we responded to a few smoldering wood chip fires around commercial locations. All of them were due to discarded cigarettes. • We responded to smoke in the building at one of our high rise buildings, the smoke turned out to be just burnt toast. • We responded to a natural gas leak in a basement of a rental Vi -plex, we shut the gas off and vented the building. • We responded to one of our motels in the eastern part of the city where an individual placed a newspaper in the microwave and turned it on starting the paper on fire. This Arson calls is under • investigation by the FD and PD. We expect charges to be filed soon. ��a� t • This is the breakdown of the calls for the month: City: Residential CommerciaUlndustral7 Multi - family 3 School 3 Carbon Monoxide 1 Hazardous Material 2 Vehicle 0 Rescue 0 Medical 0 Grass 1 Sky -Wam 0 Good Will 0 Mutual Aid Structure Fires 1 Arson 1 Rural: Rescue 0 Grass Type 0 Medical 1 Residential 0 Farm Building 0 Hazardous Material 0 Carbon Monoxide 0 Vehicle 1 Commercial/Industrial 0 Good Will 0 Mutual Aid Structure Fires 0 Arson 0 Drills I Meetings I Other Information Training: 1. Lt's time to work on small tools, and pump operation 2. Decontamination trailer training • 3. Training site rehabilitation 4. New firefighter check -off on engines and the ladder Fire Prevention / Public Relations 1. We participated in the National Night Out by attending 13 block parties around the community 2. The McLeod County Fair Events that we provided fire/rescue /medical service for • Five nights of Fireworks • Auto cross • An 8 hour shift in the 1 n Aid building • Tractor Pull • Demolition Derby • • Page 2 (S (CA) l RESOLUTION NO. 13262 CITY OF HUTCHINSON • RESOLUTION FOR PURCHASE The Hutchinson City Council authorizes the purchase of the following: ITEM COST PURPOSE DEPT. BUDGET VENDOR EcoGuard Biodegradable Compost Bags $22,080 Compost liners Refuse Yes Poly- America &e following items were authorized due to an emergency need: ITEM COST PURPOSE DEPT. BUDGET VENDOR Bio —Diesel 7,500 $19,190.56 Use byMnDOT, Utilities & City vehicles HATS Yes CENEX Date Approved: *tion Made By: Seconded By: Resolution submitted for Council action by: (�, C�,) � �J • • PUBLICATION NO. ORDINANCE NO. 07 -0472 AN ORDINANCE OF THE CITY OF HLnPCHINSON, MINNESOTA VACATING UTILITY AND DRAINAGE EASEMENTS LOCATED BETWEEN LOTS 2 AND 3, BLOCK 2, GOEBEVS ADDITION THE CITY .COUNCIL OF THE CITY OF HITI'CHINSON, MINNESOTA ORDAINS: Section 1. Notice of heating was duly given and publication of said heating was duly made and was ttiade to appear to the satisfactidn of the City Council that it would be in the best interests of the City to vacate utility and drainage easements located between Lots 2 and 3, Block 2, Goebel's Addition. Section 2. That the utility and drainage easements to be vacated are described as follows: Vacate part of the 6.00 foot wide drainage and utility easement lying westerly of and adjoining the east line of Lot 2, Block 1, GOEBELS ADDITION, according to the recorded plat. thereof. The north line of said part of the easement to be vacated being the south line of the North 20.00 feet of said Lot 2 and the southerly line of said part of the easement to be vacated being the northerly line of the Southerly 10.00 feet of said Lot 2. Also, vacate part of the 6.00 foot wide drainage and utility easement lying easterly of and adjoining the west line of Lot 3, Block 1, GOEBELS ADDITION, according to the recorded plat thereof The north line of said part of the easement to be vacated being the south line of the North 20.00 feet of said lot 3 and the southerly line of said part of the easement to be vacated being the northerly line of the Southerly 10.00 feet of said Lot 3. Section 3. This ordinance shall take effect from and after passage and publication. Adopted by the City Council this 11 ei day of September, 2007. ATTEST: Gary D. Plotz City Administrator Steven W. Cook Mayor n u PUBLICATION NO. ORDINANCE NO. 07 -0468 AN ORDINANCE AMENDING THE HUTCHINSON CITY CODE SECTION 154.153. REGARDING NON - CONFORMING USES AND STRUCTURES THE CITY COUNCIL OF THE CITY OF HUTCHIlVSON, MINNESOTA ORDAINS: Notice of public hearing and publication of said hearing was duly made and determined to the satisfaction of the City Council that it would be in the best interests of the City to amend the City Code to update regulations of nonconforming uses to comply with State Statutes. §154.153 NONCONFORMING USES OFSTRUCTURES. (A) If a lawful use of a structure, or of a structure and premises in combination, exists at the effective date of adoption or amendment of this chapter that would not be allowed in the district under the terms of this chapter, the lawful use may be continued so long as it remains otherwise lawful. (B) The continued use is subject to the following provisions. (1) No structure thus described may be enlarged, extended, converted, • reconstructed or structurally altered unless the use of the structure is changed to one permitted within the district in which the building is located. The nonconforming use shall not thereafter be resumed. (2) Should the structure be destroyed by any means to an extent of more than 50% of its assessed market value at time of destruction, it may be constructed ifa building permit is applied for within 180 daps from the date of destruction and the nonconformity is not increased In this case. the City may impose reasonable conditions t{pon a building permit in order to mitigate any newly created impact on adjacent property. jqhall gh(3) Should he structure be moved for any reason for any distance whatsoever, it shall thereafter conform to the regulations for the district in which it is located after it is moved. (4) When a nonconforming use of a structure, or a structure and premises in combination, is discontinued or abandoned for more than one year, the structure, or structure and premises in combination, shall not thereafter be used except in conformance with the regulations of the district in which it is located. • U �,> 3 • Ordinance 07 -0468 Section 154.153 — Nan- conforming uses and structures City Council — 9111/07 Page 2 (5) , When a nonconforming use status applies to a structure and premises in combination, removal or destruction of the structure shall eliminate the nonconforming status of the land. (6) If any nonconforming structure in the floodway or flood fringe district is destroyed by any means, including floods, foods, to an extent of 50% or more of its market value at time of destruction, it shall not be reconstructed except in conformity with the provisions of this chapter. However, the City eky4 Fleaning Gemmimisn may issue a conditional use permit for reconstruction if the use is located outside the floodway and, upon reconstruction, is adequately flood proofed, elevated or otherwise protected in conformity with §§ 154.085 - 154.099 of this code, to the extent necessary to maintain eligibility in the National Flood Insurance Program and not increase flood damage potential or increase the decree of obstruction to flood Rows in the floodway. • (7) An alteration or addition to any nonconforming structure located only in the flood plain which would result in substantially increasing its damage potential shall be protected in accordance with §§ 154.085 - 154.099. ('89 Code, § 11. 4.04) (Ord. 464, passed 1 -96) Penalty, see § 10.99 EFFECTIVE DATE OF ORDINANCE. This ordinance shall take effect. upon is adoption and • publication. Adopted by the City Council this I Ith day of September, 2007. Attest: Gary D. Plotz City Administrator • Steven W. Cook Mayor l0 CbJ 3 F- -I L r� TO: Mayor & City Council FROM: Kent Exner, City Engineer Randy DeVries, Water /Wastewater Manager RE: Consideration of Improvement Project Change Orders DATE: September 11, 2007 As construction has proceeded on the below listed projects there have been additional work, project scope revisions, and construction staging revisions. All of these items have been identified and deemed necessary to satisfactorily complete the projects. The following Change Orders are proposed to address these items: • o Change Order No. 2 — Letting No, 13 /Project No. 06 -15 — W WTF - SCADA System Incorporating lift station SCADA connections into this project as previously bid. These improvements are accounted for within the Water /Wastewater Budget. The project cost increase for this Change Order is $124,045.75. o Change Order No. 4 — Letting No. 12/Project No. 06 -14 — W WTF - Administration Bldg Expansion Miscellaneous additional work and/or changes. The project cost increase for this Change Order is shown on the attached document prepared by WOLD Architects & Engineers. We recommend that the above Change Orders be approved in the amounts listed. cc: Gary Plotz, City Administrator r 1 LJ � CC1 • • • CHANGE ORDER NO. 2 CHANGE ORDER COMMENCEMENT OF DATE OF ISSUANCE August 22, 2007 CONTRACT TIME January 9, 2007 OWNER City of Hutchinson. Minnesota CONTRACTOR Electrical Installation & Maintenance PROJECT WWTP —SCADA System: L13/06 -15 CONTRACT NO. 11114 ENGINEER Donohue & Associates. Inc. YOU ARE DIRECTED TO MAKE THE FOLLOWING CHANGES IN THE CONTRACT DOCUMENTS: DESCRIPTION: 1. ADD THE WORK ASSOCIATED WITH BID ITEM 5 (MINUS ONE MINOR LIFT STATION, NEW QUANTITY 7) BACK INTO THE CONTRACT. SEE ITEM 1, ATTACHMENT A. 2. VARIOUS CHANGES TO CONTRACT WORK, SEE ITEMS 2, 3, 4, 5, AND 7, ATTACHMENT A. 3. CHANGE SUBSTANTIAL COMPLETION DATE FOR PHASE I WORK TO AUGUST 31ST, 2007, FINAL COMPLETION DATE TO SEPTEMBER 28TH, 2007. SEE ITEM 6, ATTACHMENT A. REASON FOR CHANGE ORDER: FUNDS NOW AVAILABLE TO INCORPORATE SEWAGE LIFT STATIONS BACK INTO THE PROJECT. ATTACHMENTS: ATTACHMENT A, B, C, D CHANGE IN CONTRACT PRICE Original Contract Price: $ 812.896.00 Net increase (decrease) from previous Change Orders: $ -177,987.00 Net increase (decrease) of this Change Order: $ +124.045.75 Revised Contract Price: $ 758.954.75 CHANGE IN CONTRACT TIMES Original Contract Times: (days or dares) Substantial Completion: Phase I — May 1, 2007 Ready for Final Payment: Phase I – June 1, 2007 Net increase (decrease) from previous Change Orders: (days) Substantial Completion: no change Ready for Final Payment: no change Net increase (decrease) of this Change Order: (daye) Substantial Completion: 122 Ready for Final Payment: 119 Revised Contract Times: (days ordares) Substantial Completion: Phase I – August 31, 2007 Ready for Final Payment: Phase I – September 28, 2007 CONTRACTOR agrees that this Change Order includes any and all costs associated with or resulting from the change ordered herein, including all impacts, delays, and accelerated costs. Other than the dollar amount and time allowance listed above, there shall be no other dollar or time compensation as a result of this Change Order. THIS DOCUMENT SHALL BECOME AN AMENDMENT TO THE CONTRACT AND ALL STIPULATIONS AND COVENANTS OF THE CONTRACT SHALL APPLY HERETO. RECOMMENDED: By ENGI ER (signar .. e) Date: A,.. 4A 2!2^" ZUO7 Donohue & Associates, Inc. Project No. 11114 APPROVED: By: OWNER (signawre) Date: ACCEPTED: M Date: CONTRACTOR (signnlure) CHANGE ORDER CO -1 (-Q Cf => • ATTACHMENT A TO CHANGE ORDER NUMBER 2 August 22, 2007 Change Ordered Herewith: Due to the availability of funds, the City has opted to add the work associated with Bid Item 5 within the Bid Form back to the City of Hutchinson W WTP SCADA Project, Letting Number 13, Contract Number 06 -15. This work had originally been deleted by Change Order Number 1. Per Change Order Number 1, the costs of adding the minor lift stations back to the contract has been held to the amount originally identified in the Contract Bid Form. The original quantity of minor lift stations deleted by Change Order Number 1 was 8, the quantity to be added back to the contract is 7 due to the fact the City has completed work associated with one of the 8 minor lift stations in the time between Change Order Number 1 and Change Order Number 2. This work is further defined in attachment B, Request for Proposal (RFP) Item 1. The work of adding the 7 minor lift stations back to the contract is hereinafter referred to as Change Order Number 2 — Item 1. Change Order Number 2 — Item 2 deducts the cost of Contract Work performed in the wastewater plant Administration Building by an outside contractor. This work is further described in attachment B, Request for Proposal (RFP) Item 2. • Change Order Number 2 — Item 3 relates to changes and additions to the input and output signal list as directed by the Engineer. This work is further described in attachment B, Request for Proposal (RFP) Item 3. Change Order Number 2 — Item 4 changes the type of radios used to communicate to the major and minor lift stations. Radio path studies conducted by the Contractor indicate the originally specified 900 MHz radio would have difficulty communicating with 1 or more of the lift stations. The type of radios to be used will be changed to accommodate the path study results. This work is further described in attachment B, Request for Proposal (RFP) Item 4. Change Order Number 2 — Item 5 reflects the deletion of an interim radio communication system within the wastewater treatment plant. This work is further described in attachment B, Request for Proposal (RFP) Item 5. Change Order Number 2 — Item 6 extends the substantial and final completion dates for the Contract. This change is further described in attachment B, Request for Proposal (RFP) Item 6. Change Order Number 2 — Item 7 reflects the substitution of a network media converter for a new control panel enclosure at the Main Lift Station. This change was requested in shop drawing no. 2, comment no. 1 -f, and is further described in attachment D. • Change Order Number 2 — Attachment A Page 1 of 2 (f) (0) • The contractor has submitted costs for the above change items in response to the proposed changes requested in the RFP. These costs are in line with previously identified unit prices, or have been negotiated and deemed reasonable by Donohue & Associates, Inc. These changes are summarized below: Change Order No. 2 Summary Item Change in Contract Price Change in Contract Time Item 1 +$123,663.75 No Change Item 2 -$2,037.00 No Change Item 3 +$7,244.00 No Change Item 4 - $3,600.00 No Change Item 5 - $1,225.00 No Change Item 6 No Change +122 days substantial completion +119 days final completion Item 7 No Change No Chan e • • Change Order Number 2 — Attachment A Page 2 of 2 LO(c), OrAef Na- • August 2, 2007 Ken Pysick Project Manager Electrical Installation and Maintenance Co., Inc. 1480 County Road 90 Maple Plain, MN 55359 Re: City of Hutchinson W WTP SCADA System City of Hutchinson Letting No. 13, Project No. 06 -15 RPP 01 — Phase B Minor Lift Stations Dear Ken: 'r® w .dmdlueasodatescom The City of Hutchinson has requested the minor lift stations that had been deleted from the project as part of Change Order No. 1 be included back into the Phase Il portion of the Project Change Order No. I deleted bid items No. 3 (all phase III work) and bid item No. 5 (minor lift station • control panels requiring new base controller, quantity 8) on the bid form, Section 00400, page 3. The inclusion of the minor lift stations back into the project will add the work included in bid item No. 5 back to the project with one exception; the quantity of stations will be reduced from 8 to 7. The City of Hutchinson has separately contracted the work for the Elementary Lift Station, no longer requiring this work to be included in the project. Phase It work will now include the following: Bid item 2, consisting primarily of the Master Radio Control Panel 90 -LCP -1 and associated electrical wiring and antenna installation. See paragraph 2.12 of Section 13402, and Drawing 100 -NE -1. Bid item 4, consisting of the major lift stations (RW W Pump Station 20 -PLC -1 and H.A.T.S. PLC Panel. See paragraphs 2.08 and 2.09 of Section 13402, and Drawing 20 -NE -1. Bid item 5, consisting of the minor lift stations requiring a new controllers, minus the Elementary Lift Station. The lift stations now included are: 1. Stoney Point (Not on drawing cover, located at intersection of School Road and Lewis Ave) 2. Shady Ridge 3. North High Drive 4. Campbell Lane 5. Delaware 6. 5h Ave SE 7. Harmony • Q 1y I � CL� YQ • Ken Pysick August 2nd, 2007 Page 2 • Bid item 6, consisting of the minor lift stations requiring modifications to existing controllers. The lift stations included are: 1. McDonald's 2. Otter Lake 3. Our Savior's The inclusion of bid item no. 5 minor lift station work back into the contract will be referred to as RFP Item 1 to this request for proposal. Several other issues need to be resolved by change order to the original contract. These remaining issues are: • A deduct to the contract for work performed in the Administration Building at the wastewater treatment plant. This work involved the removal of the existing Main Instrument Panel, Graphic Display Panel, and various instruments within the Main Instrument Panel. This work was completed by the contractor involved in the architectural rehabilitation of the Administration Building in order to prevent this project from falling behind schedule. Conditions in the building required the removal of conduit and re- termination of signals not included in the W WTP SCADA System project. Due to this additional work, it is agreed a fair deduct amount will be one ball of the amount shown in the other contractor's invoices, leading to a contract deduct of $2,037. The deduct for the Administration Building will be referred to • as RFP Item 2 to this request for proposal. The invoices from the other contractor's electrical subcontractor are attached to this request for proposal. Additions and changes were made to the input and output signals at the wastewater treatment plant. These changes and additions resulted in increased work to the WWTP SCADA System contract in the amount of $7,244, and will be referred to as RFP Item 3. The costs for these changes have been reviewed by Donohue and they appear fair for the work performed. The documentation for these changes is attached to this request for proposal. • A change to the type of radio system proposed for the communications to the major and minor lift stations has been proposed. The original contract required the use of 900 MHz spread spectrum licensed radios, the use of licensed frequency radios has been proposed. The change in radio type will result in a change to the original contract costs. This change will be referred to as RFP Item 4 of this request for proposal. • The original contract drawings for the W WTP SCADA System required the use of 900 MHz spread spectrum radios for communications between the various buildings in at the wastewater plant as an interim communications means between the buildings. This radio communication system was to be replaced by fiber optic cabling in a separate contract. Contract schedules have eliminated the need for the interim radio communication system, eliminating the need for the installation of the related antennas, cabling, and conduit. A cost for this elimination is required, and will be refereed to as RFP Item 5 to this request for proposal. This change eliminates the antennas identified by the wiring schedule hexagons on the contract drawings as follows: J. Hexagon 005 on drawing 010 -NE -1 2. Hexagon 024 on drawing 030 -NE -1 3. Hexagon 045 on drawing 060 -NE -1 r� U Lp (c) Q , �1f • Ken Pysick August 2nd, 2007 Page 3 4. Hexagon 053 on drawing 080 -NE -1 5. Hexagon 062 on drawing 090 -NE -1 Please note the antenna for communication to the remote lift stations will remain in the contract, this antenna is denoted by hexagon 071 on drawing 100 -NE -1. • The original contract required the phase I work to be substantially complete by May 13, 2007; and reach final completion by June 1° of 2007. Many of the delays in the wntract w beyond the control of the contractor, and substantial completion date of August' 2007 and final completion date of September 1" 2007 has initially been agreed to. T s change will be referred to as R" Item or t is quest for proposal. AA 64 ".i Z w. Please provide a cost addition or deduction for each of the six ) items identified in this request for proposal. For those REP items where costs or time extensions have been initially agreed to please indicate your acceptance of these RFP items. Your prompt attention to these matters will be appreciated. Once your proposal for costs and /or time is submitted, Donohue will review this information and, pending approval from the Owner, will issue a change order or work change directive authorizing you to proceed with alteration at the indicated costs. If you have any further questions or comments on this matter, please do not hesitate to call. Sincerely, Robert Neils Engineer Enclosures: As noted Copy: Randy DeVries, City of Hutchinson Pat Malay, Quality Flow Systems Jim Miller, Donohue & Associates, Inc. Axa 315' A4V_k,- l3 3/1 4-28-07; 7:26AM;HutCninSOn Y F JEFF'S ELECTRIC Buie% IDL 1467 Adams St SE Hutchinson, MN 55350 Phone 320-587-5047 Fax 320-234-6705 ;320 234 7486 0 31 3 NO -110751 Bill To hl&hai ,jo- ,AAPV1f I Job Location Phone No. Address I Address City, State, Zip S"S 330 1 CRY, State, Zip 1 Requested bv: IL4; ke /0 1 P.O. # I Terms I Date Job DescriPtib- n. //,7 7AAA- Ac*v-5' ZI�11 f�? fa 1.4 qpt�Cs Wei 0/005Y j gj --re-W 1 3 —z4 -3-7-1 1 1 0 t h e r C h h f 6 kPA �"Ri :k -R PA W -'� 'U'- �'� N' State Electrical Inspection Affidavit # "ONSWWWRE "W10'V"NrA unt I ob 1 3,00 1 .76 1 1 -W I I JDY I 13.00 1 3.00 I q EI I I I I I I I !!t �rP Z�erv, 2 Lo ( C') M-,�.....I- 3f 417 • 7c2SA ;Mutchln4o, W TF JEFF'S ELECTRIC Bute's, Inc. 1467 Adams St SE Hutchinson, MN 55350 Phone 320-587-5047 Fax 320-234-6705 1320 234 7486 0 2/ 9 N- C-10754 Bill To 0: iv e4-hWa,,A-ro,, Job Location 4_t2r�, 4". /,�A�Jhone No.aN-,VJ33 Address il� d"ya., si, sis Address Mu C-6L,,MM,, WN ss3so City, State, Zip P.O.# Terms Date 440 -67 Job Description X/1 W;�e tfp,� C�hikca,* -A Labor . . . . . . . . Z/- el 1 .73 SSA v Ile Z- .0 VAWbunt State Electrical Inspection Affidavit # Oty A" �A# Woo.$ CD jo 1.K OL) to a Ae. s r // 110 /5 1 r".k 1 1159 1• F. I Ie � I "iht, 7s,n 1 .19 3 V2- I I IJk' Ak/Y rH11V iJ ,� -t bb :1 ;J 2a V CFY— I c D-2 co cc,) M-, -�. 8, SY, CHANGE ORDER NO, MANGE ORDER COMMENCEMENT OF SATE OF ISSUANCE 60107 CONTRACTTIVE 0 W N B R CnY OF liUTCM NSON CONTRACTOR ELECMICAL 1NSTALLAION & MAINTENANCE PROJECT WXTT. SCADA SYSTEM CONTRACT NO. 06-15 ENGINEER DONOHUE& ASSOC YOU DIRECTED TO MAKE THE FOLLOWING CHANGES IN THE CONTRACT DOCUMENTS. DESCRIPTION. Co. 1/0 ADDITIONS & SCREEN NAME CHANORS AS FER ENGINEER 5/4/07 REASON FOR CHANGE ORDER: ATTACHMENTS: CHANGE IN CONTRACT PRICE CHANGE IN CONTRACT, TIM Es r! inat Coin mo Price: Original Contract Tiam: (days ni- daits) Substantial Completion: $812,896.00 Ready for Final Payment Net in-crease (d=easc) from previous Change Orderso Net increase Vecrme) &oim previous Change Viers: (dq)jj 0 77,987.00) Substantial Completion-. Ready for Final Flayilient.- Net increme (decrease) of this ge Order'. Net. incrme (deawn) of this Change Ordw (ftwi s7.2441.00 SubsmtW CompWicn: Ready for Final Payment: Revised Contrwt Pdre: RvAsed Contract Time s: MEN or 4bles) 3�42.153.00 Substantial Compiction: Ready for Final Payinent: V CONTRACTOR agrees that this Change Order iiicludes any and all costs mociated with or resijithig from the change ordered herein, including all impacts, delays, and acccicraled costs. Other than the dollar Rmount and time allowaince listed above, there shall be no ot her do I lar or t j ine c o m, pensVion as a Tuft of this Cha nge Order. THIS DOCUMENT SHALL, BECOME AN AMENDMENT TO THE XONTRACTAND ALI, -STIPULATIONS AND COVENANT'S OF THE COXTRAC T SHALL APPLY HERETO. RECOMMENDED. APPROVED: A C C E P T E, , 1)" Datv. ENGINEER tswww4 DonDhue & Assmiates. Inc.. By: By: 0 W IN E R (sig"Of tore) CONTRACTOR fsismiarc) Date-, Date: �a (0 �' q-7 T 1 • r-1 U To: Quality Flow Systems Attn: Pat Malay N0, 9488 P. Siemens WatorTechnologles 1230 WILLOW LAKE BLVO VADMAI6 HEHM. MN 06110 Phoo; W.795=0 Pao 861,7692701 Fop 1 ON Ddte: 05+17+2007 - Estimated by: Dale Holshn Phone Number; (001) 700 -2700 The following are requested changes to this contract per email from Bob Neils dated 05104/07. Changes are 110 additlons. The Spare 110 at each site will be utilized for the additional Inputs. item JUN. 8. 2007 2;33PM QUALITY FLOW SYS 952 758 9661. ds - 1 " W' _� This quote Is based upon list provided via amall from Bob Neils dated 0=4107. �31�) aro� -�xol • r-1 U To: Quality Flow Systems Attn: Pat Malay N0, 9488 P. Siemens WatorTechnologles 1230 WILLOW LAKE BLVO VADMAI6 HEHM. MN 06110 Phoo; W.795=0 Pao 861,7692701 Fop 1 ON Ddte: 05+17+2007 - Estimated by: Dale Holshn Phone Number; (001) 700 -2700 The following are requested changes to this contract per email from Bob Neils dated 05104/07. Changes are 110 additlons. The Spare 110 at each site will be utilized for the additional Inputs. item Qty. I Deacri tion A 1 Per the HMI submittal comments from the Owners, 1/0 additions have been requested. This quote Is based upon list provided via amall from Bob Neils dated 0=4107. I/O Addl9ons are as follows: - Ditch Washer/ Compactor Running -- 30 -PLC -1 ' . Ditch Washer/ Compactor Fail 30-PLC-1 . Cladfler 1 Sludge Depth 60 -PLC -1 . Clarifier 2 Sludge Depth 60 -PLC -1 . Thickener Press 1 Running Status 90 -PLC -1 . Thickener Press 2 Running Status 90 -PLC -t . Plant Engine Generator Run 10 -PLC -1 . Plant Engine Generator Fall 10 -PLC -1 Spare Uo at each RTU will be utillmd for the additional inputs unless requested otherwise. Changes Include_ . Documentation updates for panel drawings and functional description . LC3000 program tag database and programming . HMI program screens, data base, reports and SCADAlarm alarming - Re- download programs to each RTU and test new 1/0 points an screens, reports and SCADAlarm. Delivery Schedule: Upon receipt of approved change order; two -week extension to the shipping schedule for changes to be implemented. Panels will ship after the work Is complete. Price is based on completion of work while equipment is at factory. Terms per order 505013 with delivery schedule revisions based upon receipt of approved change order. Total sell price for Item A is S 3,075.00 net; excluding all taxes and commissions. RH I��� 3 Aw .,,L, -[ 131 7/1 LO �0 r--11 L -A JUN. U. 700/ 2: j4rm SIEMENS WUALIIY tLUW 5Y5 952 1h6 9btl Change Order #004 Nu.94bu F. 2 Siemens Waler7aehnol lea u ts7evauowwta�vo VADNA19 H O MN 56110 PAW. 661.769.xr00 FIM 03 F6r es 2701 Pge Pepe 2 0l7 The following are changes to this contract per Debbie Huddleston's 06101/07 email to your ofllce. Changes are VO Name changes only. Sea attached list. • • Total sell price for Item A is 3,307.00 (+ taX) souirrant Name .l Screen Collector i ba %en Collector 2 Semen -4A Valve Soreen 4 -2 Valve Screen 5 -1 Valve Screen 5.2 Valve West RWW Flow East RW W Flow Raw Wastewater Flow Sum Mixer 1 Blower 1 Mixer 2 Blower2 Mixer 3 Blower 3 Mixer 4 Blower4 Rotor 1 -10 (12) Rotor 1.20 (9) Rotor 1.30 (6) Now Name Auger Augec2 Norm Screen 1 Valve North Screen 2 Volvo South Screen 1 Valve South Screen 2 Valve Force Main 1 Flow Force Main 2 Flow Force Main Flow Sum Aire 021 Aire 021 Aire 02 2 Aire 02 2 Aire 02 3 Aire 02 3 Aire 02 4 Aire 02 4 Rotor 110 Rotor 120 Rotor 130 �1=P I�Cm3 8, 8/9 &), Description, A 1 Per the HMI submittal comments from the Owners, VO name changes have been requested. This quote is based upon list provided via email on 05/01107. . ' "Notes' - Scope only Includes name change references and does not Include I/O :I addGlons. Changes include: - Documentation updates for panel drawings and functional description - L03000 program tag database - HMI program screens, data base, alarming and reports - Retesting YO to verity changes have been Implemented correctly Delivery Schedule: Upon receipt of approved change order; One -week extension to the shipping schedule for changes to be Implemented. Panels will ship after the work Is complete. Price is based on completion of work while equipment Is at factory. Terms per order $05013 with delivery schedule revisions based upon receipt of approved change order. Total sell price for Item A is 3,307.00 (+ taX) souirrant Name .l Screen Collector i ba %en Collector 2 Semen -4A Valve Soreen 4 -2 Valve Screen 5 -1 Valve Screen 5.2 Valve West RWW Flow East RW W Flow Raw Wastewater Flow Sum Mixer 1 Blower 1 Mixer 2 Blower2 Mixer 3 Blower 3 Mixer 4 Blower4 Rotor 1 -10 (12) Rotor 1.20 (9) Rotor 1.30 (6) Now Name Auger Augec2 Norm Screen 1 Valve North Screen 2 Volvo South Screen 1 Valve South Screen 2 Valve Force Main 1 Flow Force Main 2 Flow Force Main Flow Sum Aire 021 Aire 021 Aire 02 2 Aire 02 2 Aire 02 3 Aire 02 3 Aire 02 4 Aire 02 4 Rotor 110 Rotor 120 Rotor 130 �1=P I�Cm3 8, 8/9 &), JUN. U. LUUI L:A M ' IN% Rotor 1 -40 (3) Rotor 2 -10 (11) Rotor 2 -20 (8) Rotor 230 (5) Rotor 2-40 (2) Rotor 3 -10 (10) Rotor 3 -20 (7) Rotor 3 -30 (4) Rotor 3.40 (1) D01 D02 Plant Recycle Flow 012 Gas 1 Vacuum Ott Gas 2 Vacuum S02 Gas 1 Vacuum S02 Gas 2 Vacuum Clarmar 1 Clarifier 2 3: ^ ^. '• 'rS oragel&cant Tink l P,SIfflagilDtidantTank2 N�r(h F)tgf Drlva M ' •' StaBon • . I 0 WUALIIY rLVW M Y9L J)d 901 Change Order #OOA Rotor 140 Rotor 210 Rotor 220 Rotor 230 Rotor 240 Rotor 310 Rotor 320 Rotor 330 Rotor 340 DO West DO Eaet Plant RAS Flow CL2 System A CL-2 System B $02 System A S02 System B Norge ClarlBer South Cladfier South Holding Tank North Holding Tank Highway 16 LUt Station Total Cost of Change Order Amount - $6382.00 (* tax) mu. Yqud r. J Siemens Water Technologies 1739 WILLOW LAKE BLVD VAONAI6 HEIGHTS. MM 55110 Deana: 661.166.2700 FM 6617682701 Page 3 of 8 Please confirm you received this change order and agree with the above additions and changes to the contract. Authori2ad Signature: Company: Date: t(I� . 141',9. W ,ht- 9, 9/1 �(0 1/13%2b0 35:30 7 7634793745 1 i i i��F': I'll Ifs '� 311j 'h Mob' #1Ntt ff90I� r MAPLE PLAX MN 55359 PHONE 763. 479.3744, FAX 479 -3745 AN EQUALOPPORTUNITY EMPLOYER iOENERALCONTRACTORS DONOHUE & ASSOCIATES A'PTN: BOB NEILS DESCRIPTION CITY OF HUTCHINSON W WTP $CADA SYSTEM CITY OF HUTCIi1NSON LRITINO NO, 13, PROJECT" NO. 06-1 :. 1 RPP01 - PHASE 11 MINOR LIFT STATION ii RFP ITEM I: -: • EIM �..^J, OrJ,, fro. Z PAGE 01/01 PROPOSAL DATE PROPOSAL 8/13/2007 5738 rT13M li ', EIM ]I INtr3N0INO TO HAVE THR PLANT RTU'S AND MAS FR OPIiItA'CIONAL BY SHVI%MBRR I. 2007. EIM IS IINABI.R TO COMMIT TO A COMPLI} TION DAT i FOR TIM 11RO1R(:T DUR TO'I'HE IlAC.I' WS CURRENTLY REMAIN IN THE SUBMITTAL STAVE FOR THE TWO MAJOR LIFI' STATIONS. UPON APPROVAL OF'TFIB MAJOR LIFT STATION EQUIPMENT. QF, WIIJ. NERD Eic idT WEEKS '1'0 BUILD. OELIVER AND STARTUPTHEMAJOR WORY IP S. I?IMWILANEEDAEOVI '30WORKIN(.IDAYS AFYI +It DFU V ERY Ol+ EQUIPMENT TO COMI1I.1; t-B OUR INS I'ALI.ATION OF QFS EQl11PM1 ',N7'. , I �p it TOTAL TOTAL 123,663.75 - 2.037.00 7.244.00 - 3.600,00 - 1.223.00 3124.045.75 - (y CG ) • • CLAiQ Dfjt, tie. Z A 1) ?�JC ,lz DATED: August 8, 2007 TO: Mr. AI Klein Electrical Installation and Maintenance 1480 County Road 90 Maple Plain, MN 55359 CONTRACT: City of Hutchinson, MN W WTP SCADA System Project No. 11114 With reference to Your Transmittal No. lopQ-S-N--91!Vf 0 3311 WEEDEN CREEK ROAD SHEBOYGAN, W1 53081 PHONE 920 - 208-0298 Disposition FAX 920 -20B -0402 Submittal No. 2 Ref. Specification Section No. 13400 Dated 6!25/07 a we are taking the following action: a CL a d v c c CL Z c.m a W c= d o '" a1 5 m �x v > Z a a a w c 'a 'o 9 d ¢m Copies Descri tion COMMENTS: 1. Comments related to Submittal tab "Important" a. Ranging information for RWW Influent pH meter: 0 to 14. b. Hutchinson has the files for both systems on their laptop computer. Quality Flow Systems has used the software to make modifications to both systems. No modifications have been made to these files since QFS has made changes. Contact OFS for latest version of files, or they may be removed from the owner's laptop computer. I believe there is a OFS or Siemens programmer currently on site. c. Please see the attached system architecture for the intended means of connection of the various components. No additional remote radio should be required. Coordinate installation of equipment for interface of control system with single mode fiber cable with the Owner's IT group. Provide single mode fiber to copper Ethernet media converter, and single mode patch cord for interface between media converter and OWNER'S patch panel. Cost of media By: Ale Robert Neils Copy: Randy Devries, City of Hutchinson Donohue Sheboygan Office See Submittal for Additional Comments Page 1 of 2 LQ (C�) • City of Hutchinson WWTP SCADA System Review Comments for Transmittal No. 1 Submittal No. 1 converter and patch cord should offset NEMA 4X enclosure addressed in comment 1 -e below. d. Wet well Yz selector switch (HS- 1- 7 -1 -4) shown on existing P &ID still exists, and is used to determine which of the two wet wells (East or West) is used for control actions (start standby pump and alarm, stop all pumps and alarm) triggered by high and low float switches located in each of the two wet wells. Selector switch also determines which of the two wet well level transmitters is used to control start/stop and speed control for pumps. Note selector switch is now a function of the Panelview software application. e. Electrically actuated pump discharge valves have been replaced by mechanical swing check valves. No control interaction for these valves is required. ` l Back panel replacement in lieu of NEMA 4X enclosure for Main Lift Station controller is acceptable. Please note the cost of the NEMA 4X enclosure should offset the media V r' converter and patch cord described in item 1 -c above. 2. Comments related to Submittal tabs "System Information ", 'Bill of Materials ", "Product", and "System" for the H.A.T.S. lift station. a. Section 13402, paragraph 2.09 -A required equipment for the H.A.T.S. station to be located within the existing enclosure for H.A.T.S. lift station control. Note the existing enclosure is located outdoors and already includes provisions for panel heating. Submittal shows separate enclosure for new equipment, but includes only a 50 watt heater for condensation control. Verify 50 watt heater will be adequate for maintaining suitable panel temperature. Separate is enclosure is acceptable, but heater size must be verified. CONTRACTOR to verify no additional costs for mounting or wiring of panel. b. Note pending radio path work may require change to licensed frequency radio for all remote (major and minor) lift stations. O1rk, No. Z Page 2 of 2 IQLG) • August 22, 2007 Mr. Ken Pysick Electrical Installation and Maintenance Co., Inc. 1480 County Road 90 Maple Plain, MN 55359 Re: City of Hutchinson WWTP SCADA System Change Order No. 2 City of Hutchinson Project No, 06 -15 Donohue Project No. 11114 Dear Ken, WP-Q_1-Y9iVf 0 131 VVEST 0HI0 STREET. SUITE 820 INDIANAPOLIS, NI 46204 PHONE 317 - 267 -820C FAA 317 267 -82C: • Per our conversation this afternoon, please review the attached change order No. 2 for the above referenced project. If you are in agreement, please sign all three copies of Change order No. 2 and forward it to the following address via overnight delivery: Mr. Randy DeVries City Center 111 Hassan Street SE Hutchinson, MN, 55350 Once the City has approved the change order, you will receive one copy back for your records. Please contact me if you have any questions in regard to the information and guidance provided in this letter. Sincerely, Robes /Ne --/ Control System Engineer Enclosures: As noted • U cc. IIAIA Document G701"' - 2001 Change Order PROJECT (Name and address): City of Hutchinson Wastewater Treatment Facility Administration Building Expansion 1300 Adams Street Hutchinson, Minnesota 55350 TO CONTRACTOR (Name and address): Ebert Construction 23350 County Road 10 Loretto, Minnesota 55357 CHANGE ORDER NUMBER: Four (4) DATE: August 7, 2007 LIVd6 ARCHITECT'S PROJECT NUMBER: 062030 CONTRACT DATE: October 17, 2006 CONTRACT FOR: General Construction OWNER: ❑ ARCHITECT: ❑ CONTRACTOR: ❑ THE CONTRACT IS CHANGED AS FOLLOWS: (Include, where applicable, any undisputed amount attributable to previously executed Construction Change Directives) FIELD: ❑ OTHER: ❑ PR #15 Relocate wall cabinet; provide base cabinet in Lab. Add $1,036.17 PR #I8 Provide standard roof drain in lieu of through -wall roof drain. Add $1,393.74 PR #19 Relocate thermostat to coordinate with revised layout in lab. Add $ 542.31 PR #20 Provide engineered solution (option B) for solids oven venting. Add $6,476.16 PR #23 Provide (2) stiffener plates above window and grout 3 CMU cores. Add $1,016.24 PR #26 Provide credit for sod watering. Credit ($1,000.00) CP #25 Provide additional electrical in Lab. Add $ 363.77 TOTAL CHANGE ORDER NO. 4 ADD $9,828.39 The original Contract Sum was $ 1,106,200.00 Thenet change by previously authorized Change Orders $ 15,188.27 The Contract Sum prior to this Change Order was $ 1,121,388.27 The Contract Sum will be increased by this Change Order in the amount of • $ 9,828.39 The new Contract Sum including this Change Order will be $ 1,131,216.66 The Contract Time will be increased by Zero ( 0 ) days. The date of Substantial Completion as of the date of this Change Order therefore is June 15, 2007 NOTE: This Change Order does not include changes in the Contract Sum, Contract Time or Guaranteed Maximum Price which have been authorized by Construction Change Directive until the cost and time have been agreed upon by both the Owner and Contractor, in which case a Change Order is executed to supersede the Construction Change Directive. NOT VALID UNTIL SIGNED BY THE ARCHITECT, CONTRACTOR AND OWNER. Weld Architects and Engineers Ebert Construction City of Hutchinson ARCHITECT (Finn name) CONT TOR (Finn name) OWNER (Firm name) 305 Saint Peter Street 23350 C my Road 10 111 Hassan Street Southeast, Saint Paul, Minnesota 55102 Loretto, innesota 55337 Hutchinson, Minnesota 55350 ADDi ADDRESS ADDRESS L t r L f J4�_' B ignatuie) Tt BY (Sig tune) BY (Signature) ,'0[4u Wl(l�i?lltik►� JA �ism�s ;� (Types( name) (Type n e) (Typed name) e7 of iSllt`.�07 DATE I DATE DATE AIA Document G701 T° -2001. Copyright © 1979, 1987, 2000 and 2001 by The American Institute of Architects. All rights reserved. WARNING: This AIA` • Document is protected by LLe. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this At A' Document, or any portion of it, may result in severe civil and criminal pen allies, and will be prosecuted to the maximum extent possible under the law. This document was proauced by AIA sotlware at 08:35:53 on 08 %0712007 under Order No. 1000282438_3 which expires on 113 012 0 0 8. and is not for resale. User Notes: (1017734990) OC6-3� n u rd TO: Mayor & City Council FROM: Kent Exner, City Engineer Randy DeVries, Water/Wastewater Manager RE: Consideration of General Services Agreement with Bonestroo DATE: September 11, 2007 This agreement allows Jim Miller, formerly with SEH Consulting, to complete /review the Wasterwater Treatment Facility apprenticeship program and follow -up on the previously administered staff /operations review. City staff believes that maintaining continuity with the individual involved in these services, and • not necessarily the specific consulting firm, is crucial to addressing these items in the most timely and cost effective manner. Previously budgeted funds for the SEH agreement remain to complete these services through Bonestroo. We recommend approving the General Services Agreement with Bonestroo. cc: Gary Plotz — City Administrator • U CA) r1 u L� • July 13, 2007 City of Hutchinson 111 Hassan St SE Hutchinson MN 55350 -2522 Attn: Kent Exner. PE Director of Public Works Dear Kent, ojo nignway 3o vv St. Paul, MN 55113 Tel 651- 636 -4600 Fax 651- 636 -1311 www.bonestroo.com * Bonestroo We appreciate the work we've been able to do for the City of Hutchinson recently and your interest in our consulting services. We understand that, from time to time, the City has need for various professional technical services in such disciplines as engineering, land surveying, planning, urban design, architecture, landscape architecture, and the environmental sciences. Both the City and our firm desire to set up a process by which our firm may easily be engaged to provide services on an as- needed basis. We therefore offer to enter into a master agreement with general terms and conditions applying to all projects for which we may be engaged the City. This letter, when signed by both parties, will become an Agreement between the City of Hutchinson ( "Client ") and Bonestroo, Inc. ( "Consultant "). Activation of Consultant's Services Client may contact Consultant by phone, fax, email or letter, requesting Consultant's assistance. Consultant will promptly respond with a "Proposal" in writing by letter, fax or email, outlining: • Consultant's understanding of the "Project," • The Basic Services to be provided, • Optional or Supplemental Services which the Client may choose to authorize, and • Consultant's proposed compensation. Consultant will not proceed with such services unless and until Client confirms its acceptance of Consultant's Proposal in writing by email, fax or signature of Consultant's Proposal. Unless stated otherwise in Client's written acceptance, this Agreement will be incorporated by reference into each Proposal accepted by Client. Standard Terms and Conditions The Standard Terms and Conditions attached as Appendix A are incorporated in this Agreement. Cdr St. Paul St. Cloud Rochester Milwaukee • • • Kent Exner, PE luiy 131007 Hutchinson, MN Page 1 x atxtttxxtxtxxtetetttxxxrtttxxtt Please return a signed copy of this document to Jim Miller to activate this Agreement. Thank you again for the opportunity to continue working with you and the City of Hutchinson. If you have any questions, please feel welcome to contact Jim at 651 - 967 -4678 (office), 612 - 961 -2505 (cell), or Jim.Miller@Bonestroo.com. Sincerely, BONESTR00, INC. By "6, 5 r� David 0. Loskota, PE Principal /Contracts Officer Date Hutchinson Master Agreement ACCEPTED BY CLIENT: CITY OF HUTCHINSON, MN By (Signature) (Printed name and tit /e) Date And by (Signature) (Printed name and tit /e) Date L9 CA Appendix A Standard Terms and Conditions stion 1. Consultant's Services 11) Furnish approvals and permits from all governmental authorities having jurisdiction over the Project and such approvals and consents Consultant shall act as the Client's agent only as provided for within this from others as may be necessary for completion of the work. Agreement. 12) Provide legal review of the contract documents and provide any Section 2. The Client's Responsibilities required accounting and insurance counseling services for the Project The Client shall: 1) Provide full information as to its requirements for the Project. 2) Furnish to the Consultant, prior to any performance by the Consultant under this Agreement, a copy of any planning standards which the Client shall require the Consultant to follow in the conduct of its services for the Project. 3) Place at Consultant's disposal all available written data in the possession of or readily available to the Client and pertinent to the Project, including existing reports, plats, surveys, contour mapping, utility mapping, record plans, wetlands, land -use, and zoning maps, borings and other data useful to the Consultant in the performance of its services. 4) Acquire all land, easements, and rights -of -way and provide for land surveys and the preparation of legal descriptions and exhibits, certificates or plats, as may be necessary for the Project. 5) Provide access to the Project site and make all provisions for the .Consultant to enter upon public and private lands as required by the Consultant to perform its services. 6) Examine all studies, reports, sketches, Opinions of Probable Construction Costs, specifications, drawings, proposals and other documents presented by the Consultant and promptly render the Client's decisions pertaining to each of such documents. 7) Designate a single person to act as the Client's Representative with respect to the Consultant's services. Such person shall have complete authority to transmit instructions, receive information, and interpret and define the Client's policies and decisions with respect to services covered by this Agreement, subject to Client's governing body approval when required by law. 8) Give prompt written notice to the Consultant whenever the Client observes or otherwise becomes aware of any defect in the Project or any development that affects the scope or timing of the Consultant's services. 9) Furnish, or instruct the Consultant to provide at the Client's expense, necessary "Supplemental Services" as may be provided for in this Agreement, or other services as they may be required. 10) Furnish to the Consultant, as required by the Consultant for performance of its services, information or consultations not covered in The Consultant's Basic Services, such as core borings, probings and subsurface explorations; hydrographic surveys, laboratory tests and inspections of samples, materials and equipment; appropriate professional interpretations of all of the •foregoing; property, boundary, easement, and right -of -way surveys and property descriptions; zoning and deed restrictions. Hutchinson Master Agreement 13) Act promptly on all construction Change Orders and provide authorization before Change Orders are issued to the Contractor on a Project. 14) If Client desires, furnish inspection or monitoring services to verify that Contractor is complying with all laws or regulations and to verify that Contractor is taking all necessary safety precautions to protect persons and property, as the Consultant in this Agreement does not undertake to perform these services. In performing its services, the Consultant may rely upon the accuracy and completeness of all Client- provided information. Section 3. Compensation 3.1 Payment For Reimbursable Expenses Unless otherwise provided, in addition to consulting fees, the Client will pay the Consultant for Reimbursable Expenses on the basis of the Consultant's cost plus 10 %. Although not a complete list, examples of Reimbursable Expenses include: project- specific pdnting, duplicating, tabs and indexes; testing; mileage; travel and per -diem expenses of the Consultant for out -of -town trips required for the Project; long distance telephone calls and faxes as required to expedite the work; postage and delivery charges; any new taxes, fees or costs imposed on the Consultant's services (such as sales taxes) after the date of this Agreement; and out -of- pocket expenses incurred directly for the Project. 3.2 Objections to Invoices /No Deductions It is important for the Consultant to be promptly informed of problems. If the Client objects to any portion of an invoice, the Client shall notify the Consultant in writing within twenty days of the invoice's receipt. The Client agrees to pay any undisputed portions of an invoice. No deductions shall be made from the Consultant's compensation except as may be determined by mediation, arbitration, litigation or other dispute resolution mechanism to which the Consultant is a party. 3.3 Suspension of Work If the Client fails to make payments when due or otherwise breaches this Agreement, the Consultant may suspend work after providing five days notice to the Client. The Consultant will not be liable for any costs or damages resulting from such a suspension of work. 3.4 Progress Payments The Client will make progress payments to the Consultant in proportion to services performed, as reasonably estimated by the Consultant. The Consultant will invoice the Client monthly during the progress of the work. The Client shall pay each properly documented invoice of the Consultant within 30 days after the Client's receipt of such invoice. Client may not reserve as retainage any portion of a payment due under this Agreement 3.5 Interest/Collection Costs lalient agrees to pay the Consultant 1.5% per month interest on all invoices of the Consultant, with interest beginning to accrue 30 days after the date of the invoice. If the Minnesota Prompt Payment Act (Minn. Stat. Sect. 471.425) requires a higher rate of interest, that rate shall apply. If the Client fails to pay Consultant all amounts owing pursuant to the terms of this Agreement the Client agrees to pay all costs of collection, including reasonable attorney's fees, in addition to all other amounts due under this Agreement. Section & General Considerations 4.1 Standard of Care The Consultant shall exercise the same degree of care, skill and diligence in the performance of its services as is ordinarily exercised by members of the profession under like circumstances. Nothing in this Agreement, or otherwise prepared as a result of the Project, shall modify the foregoing standard of care. The Consultant shall not be required to sign any documents that would result in it having to certify, guarantee or warrant the existence of conditions whose existence the Consultant cannot ascertain. 4.2 Delays Both the Consultant and the Client will put forth reasonable efforts to complete their respective duties in a timely manner. Because the Consultant's performance must be governed by sound professional practices, the Consultant is not responsible for delays occasioned by � rs beyond its control or that could not reasonably have been een at the time of preparation of this Agreement. 4.3 Opinions of Costs and Schedules Since the Consultant has no control over the cost of labor and material or over competitive bidding and market conditions, the Consultant's Opinion of Probable Construction Cost and of Project schedules can only be made on the basis of experience or qualifications as a professional Consultant. The Consultant does not guarantee that proposals, bids, actual Project costs or construction schedules will not vary from Consultant's opinions or estimates. 4.4 Insurance 4.4.1 The Consultant agrees to maintain a professional liability insurance policy for negligent acts, errors or omissions in an amount of at least $4,000,000 per claim and $4,000,000 annual aggregate, on a claims -made basis, as long as such insurance is reasonably available under standard policies at rates comparable to those currently in effect. The Consultant will not cancel the insurance until thirty days after providing the Client written notice. 4.4.2 The Consultant shall maintain: 1) Statutory workers compensation and employers' liability insurance coverage. 2) Comprehensive general liability insurance coverage of not less than $1,000,000 and automobile liability insurance coverage of not less • than $1,000,000 combined single limit. Hutchinson Master Agreement 4.5 tkP of IrKtmments of Service Documents (including Digital Data) prepared by the Consultant, such as drawings, specifications and reports ( "Consultant Documents ") are instruments of the Consultant's professional services, and not products. The Consultant Documents are prepared for a specific Project and may not be used by the Client for other Projects. For health and safety reasons, the Client agrees it will not use the Consultant Documents (except for computer hydraulic or hydrologic modeling data) for other purposes or provide them to other persons. If the Client violates this provision, it waives any resulting claims against the Consultant, and agrees to defend and indemnify the Consultant from any resulting claim or liability (including reasonable attomeys' fees). 4.6 Diaial Data 4.6.1 If included in Basic Services or Supplemental Services and as a convenience to the Client the Consultant will furnish the Client with electronic data versions of certain written documents ('Digital Data") provided in hard copy form. In the event of any conflict between a hard copy document and the Digital Data, the hard copy document governs. The Digital Data shall be prepared in the current software in use by the Consultant and is not warranted to be compatible with other systems or software. 4.6.2 Any Digital Data submitted by the Consultant to the Client is submitted for an acceptance period of 60 days ( "Acceptance Period "). Any defects that the Client discovers during this period and reports to the Consultant will be corrected by the Consultant at no extra charge. For correction of defects reported to the Consultant after the Acceptance Period, the Client shall compensate Consultant on an hourly basis at Consultant's normal billing rates. The Client understands that the Digital Data is perishable and the Client is responsible for maintaining it. 4.7 Termination. Suspension or Abandonment 4.7.1 The Client or the Consultant may terminate or suspend this Agreement for substantial non - performance by the other parry, including without limitation the failure to make payments in accordance with this Agreement. The party terminating or suspending this Agreement shall give seven days written notice to the other party. 4.7.2 If the Project or the Consultant's services are suspended for more than 90 days, the Consultant may terminate this Agreement upon seven days written notice to the Client. The Consultant shall have no liability on account of a suspension by the Client If a suspended Project is reinstated, an equitable adjustment to the Consultant's compensation may be necessary. - 4.7.3 In the event of termination or suspension permitted by this Agreement the Client shall compensate the Consultant for services performed prior to termination, suspension or abandonment and for services directly attributable to the termination, suspension or abandonment itself, together with Reimbursable Expenses. If the Client properly terminates Consultant for cause, Client may withhold from Consultant's compensation those damages directly attributable to the cause of the termination. 4.8 Dispute Resolution 4.8.1 In an effort to resolve any conflicts that arise out of the services under this Agreement, all disputes between the Client and the Consultant arising out of or relating to this Agreement shall be submitted to nonbinding mediation prior to commencing arbitration or litigation. The Mediator's fee shall be shared equally and mediation shall proceed only at a place where arbitration or litigation is proper. Mediation shall not be Lo CA) a condition precedent to arbitration or litigation if a party refuses to make reasonable arrangements for a mediation within 20 days of demand by the other party. If a dispute relates to or is the subject of a lien arising out of the Consultant's services, the Consultant may proceed igftrdance with applicable law to comply with the lien notice or filing dRWes prior to resolution of the matter by mediation or arbitration. 4.8.2 Unless the Client and the Consultant mutually agree otherwise, all claims, disputes, and other matters in question arising out of or relating to this Agreement which are not resolved by mediation and where the amount in controversy is less than $1,000,000, shall be decided by binding arbitration in accordance with the then -most current Construction Industry Rules of the American Arbitration Association. The arbitrators will not have jurisdiction, power or authority to consider any claim or dispute: (a) where the amount in controversy is more than S1,D00,000 (exclusive of interest and costs); (b) when the demand for arbitration is made after the date when a court action would be barred by any applicable statute or period of repose or limitations; or (c) when the claim or dispute is a claim for contribution or indemnity arising out of a claim by a third party who does not consent to joinder in arbitration. 4.8.3 In the event of litigation or arbitration arising from or related to the services provided under this Agreement, the prevailing party is entitled to recovery of all reasonable costs incurred, including staff time, court costs, attomey's fees and other related expenses. 4.8.4 If the Consultant or the Client intends to assert a claim against the other as a result of a dispute with a third parry, the claiming parry shall notify the other parry as soon as possible, and in any event prior to resolving the dispute with the third parry. 4.8.5 So that any claims of the Client may be intelligently addressed by the Consultant, the Client agrees to make no claim for professional ence against the Consultant unless the Client has first provided the W seRant a written certification signed by an independent professional d in the state in which the Project is located and currently practicing in the same discipline. The certification shall specify every act or omission of the Consultant that is a violation of the applicable standard of care and the basis for the certifier's opinion(s). This certificate shall be provided no fewer than 30 days prior to instituting arbitration or suit. 4.8.6 Causes of action between the Consultant and the Client relating to acts or failures to act shall be deemed to have accrued and the applicable statute of limitations shall commence to run not later than the date of substantial completion of a Project. 4.9 Hazardous Substances The Consultant's scope of services does not include any services related to hazardous or toxic materials, including asbestos and PCBs. If it becomes known that such materials may be present at or near a Project that may affect the Consultant's services, the Consultant may suspend performance of its services, without liability, and will assist the Client to retain appropriate consultants to adequately identify and abate such materials so that Consultant's services may resume. Nothing in this Agreement shall be construed to require the Consultant to: (a) assume the status of a generator, storer, transporter, treater, or disposal facility as those terms appear within the Resource Conservation and Recovery Act, 42 USC 6901 et seq, as amended, or within any state statute governing the generation, treatment, storage and disposal of waste; or (b) arrange for the transportation, treatment, or disposal of hazardous substances, as described in the Comprehensive Environmental Response, It and Liability Act, 42 USC 9601, et seq, as amended. The t agrees to defend, indemnify and hold harmless the Consultant, its employees, subcontractors and agents from all claims, losses, damages Hutchinson Master Agreement liability and costs, including attorney's fees, relating to or arising out of hazardous or toxic materials at or near a Project. 4.10 Governing Law This Agreement shall be governed by the laws of the state in which the Project is located. 4.11 Integration This is an integrated Agreement and it supersedes all prior negotiations or agreements between the parties. It shall be modified only by a written document signed by the party sought to be bound. The provisions of this Agreement are severable, and if any provision is found to be unenforceable, the remaining provisions continue to be valid, and the unenforceable provision shall be reformed with a valid provision that comes as near as possible to expressing the intention of the unenforceable provision. 4.12 Assionment and Waiver Except for the Consultant's use of necessary consultants, the Consultant and the Client shall not assign or delegate their respective obligations under this Agreement without the written consent of the other parry, which consent shall not be unreasonably withheld. The waiver of any term or condition or breach thereof by either party shall not constitute a waiver of any other term or condition or breach thereof. 4.13 Consultant's Services In performing professional engineering and related services, the Consultant is nut engaged in rendering legal, insurance, or accounting services or advice. The Client agrees that documents prepared by the Consultant, including reports, bidding materials, and Torn contracts will be reviewed by the appropriate representative of the Client, such as the Client's attomey, insurance counselor or other consultants, to the extent that Client deems necessary to protect its interests. 4.14 Government Agencies The Consultant shall not be liable for damages resulting from the actions or inactions of government agencies, including without limitation permit processing, environmental impact reports, dedications, zoning matters, annexations or consolidations, use or conditional use permits, and building permits. 4.15 Monitoring Work If required by the scope of services, the Consultant will make visits to the Project site at intervals appropriate to the various stages of construction as the Consultant deems necessary in order to observe the progress and quality of construction. The Consultant will not be required to make exhaustive or continuous inspections on the Project site. Based on such visits, the Consultant will determine in general if the construction work is proceeding in accordance with the contract requirements, keep the Client informed of the progress of the construction work, and will endeavor to guard the Client against defective work. The Consultant will not supervise, direct, control, or have authority over or be responsible for the Contractor's means, methods, techniques, sequences, or procedures of construction, or the safety precautions and programs incident thereto, or for any failure of the Contractor to comply with laws and regulations applicable to the work 4.16 Americans with Disabilities Act The Consultant shall use reasonable professional effort and judgment in interpreting and advising the Client as to the necessary requirements for Lp CA� the Project to comply with the Americans with Disabilities Act (ADA). The Consultant shall rely on the local building department for interpretations of the ADA at the time the service is rendered. The Consultant does not warrant or guarantee that the Project will fully comply with 0retations of ADA requirements by regulatory or judicial bodies. Section 5. Liability Having considered the potential liabilities that exist during the performance of the Consultant's services, the benefits of the Project, the Consultant's fee for its services, and the promises contained in this Agreement, the Client and the Consultant agree that risks should be allocated in accordance with this section, to the fullest extent permitted by law. 5.1 Indemnification The Consultant and the Client each agree to defend and indemnify each other from liability for claims, losses, damages or expenses (including reasonable attorney's fees) to the extent they are caused by their negligent acts, errors or omissions relating to this Agreement. In the event the claims, losses, damages or expenses are caused by the joint or concurrent negligence of the Consultant and the Client, they shall be bome by each parry in proportion to its own negligence. 5.2 Limitation of Liability The aggregate liability to the Client of Consultant its employees, and anyone else for whom they may be legally liable, for any and all claims, losses or damages arising out of any Project or this Agreement for any cause shall not exceed the insurance proceeds available at the time of settlement or judgment. This limitation shall apply regardless of the cause of action or legal theory pled or asserted. • Conseguential Damages Neither the Client nor the Consultant shall be liable to the other for any consequential damages incurred due to the fault of the other or their agents. Consequential damages include, but are not limited to, loss of use and loss of profit. 5.4 Desion without Construction -phase Services If the Consultant's Basic Services under this Agreement do not include Project observation, or review of the Contractor's performance, or any other construction phase services, and such services will be provided by the Client, then the Client assumes all responsibility for interpretation of the plans and specifications and for construction observation or review and waives any claims against the Consultant that may be in any way connected thereto. L Hutchinson Master Agreement CA CITY OF HUTCHINSON MEMO Finance Department September 6, 2007 TO: MAYOR 6 CITY COUNCIL FROM: KEN MERRILL, FINANCE DIRECTOR SUBJECT: PUBLIC HEARING FOR HAHC ISSUED BONDS The Hutchinson City Council has called for a public hearing on the bonds issued for hospital improvements. This hearing is part of the requirements as the hospital transitions to a non profit corporation with the new cooperation paying principal and interest when due to the City of Hutchinson. • Following the public hearing the attached resolution is to be approved by the City Council. H: \HOC \City council memo 3.doc • -3(-0,) • RESOLUTION NO. 13263 RESOLUTION GRANTING HOST APPROVAL TO CERTAIN OUTSTANDING GENERAL OBLIGATION MEDICAL FACILITIES REVENUE BONDS OF THE CITY BE IT RESOLVED by the City Council of the City of Hutchinson, Minnesota (the "City "), as follows: SECTION 1 Recitals and Findings I.I. The City has previously issued its (i) General Obligation Medical Facilities Revenue Refunding Bonds, Series 1997B, (ii) General Obligation Medical Facilities Revenue Refunding Bonds, Series 1998A, (iii) General Obligation Medical Facilities Bonds, Series 2002D, and (ii) General Obligation Medical Facilities Bonds, Series 2003A (the " Bonds "). The Bonds were issued by the City under Minnesota Statutes, Sections 447.45 to 447.50 and Chapter 475, in order to finance or refinance improvements to Hutchinson Community Hospital, a 66 -bed acute care hospital and related medical facilities located at 1095 Highway 15 South in the City of Hutchinson and the acquisition and installation of items of equipment therein, and to finance or refinance improvements to Burns Manor Nursing Home a 123 -bed skilled nursing facility located at 135 North High Drive NE in the City of Hutchinson and the acquisition and • installation of items of equipment therein. Hutchinson Community Hospital and Burns Manor Nursing Home are owned by the City, and it has been proposed that the City lease Hutchinson Community Hospital and Bums Manor Nursing Home to Hutchinson Area Health Care, a Minnesota nonprofit corporation. Such proposed lease of Hutchinson Community Hospital and Burns Manor Nursing Home will result in the Bonds becoming "private activity bonds" under Section 141(a) of the Internal Revenue Code of 1986, as amended, and in order that interest on the Bonds remain exempt from federal income taxation following the lease of Hutchinson Community Hospital and Burns Manor Nursing Home to Hutchinson Area Health Care, the City must give "host approval" to the Bonds within the meaning of Treasury Regulations, Section 5£103- 2(c)(3), prior to the effective date of such lease. 1.2. At a public hearing held on September 11, 2007, all parties who appeared at the hearing were given an opportunity to express their views with respect to the proposal that the City give host approval to the Bonds within the meaning of Treasury Regulations, Section 5f.103- 2(c)(3), and interested persons were given the opportunity to submit written comments to the City Administrator before the time of the hearing. SECTION 2 Approval 2.1. The Bonds are hereby approved by the City. Such approval is given by the City in • accordance with the requirements of Section 147(f) of the Internal Revenue Code of 1986, as amended. -1 (0) • Adopted by the City Council this 11th day of September 2007 ATTEST: Gary D. Plotz City Administrator • • Steve W. Cook Mayor CCA> 0 • • C TO: Mayor & City Council FROM: Kent Exner, City Engineer Randy DeVries, Water /Wastewater Manager Dick Nagy, Water Systems Supervisor RE: Discussion of New Water Treatment Plant Operations DATE: September 11, 2007 City staff will provide an update regarding the new Water Treatment Plant operations and resulting water quality. Also, a future plant open house for the public may be scheduled with the Council's approval. cc: Gary Plotz — City Administrator 1 M Community Visioning Workshop South Central Minnesota Catherine Rasmussen U of NfN Extension Office Regional Center, Hutchinson 980 2nd Ave SE Hutchinson, MN 55350 Email: rasmu035@uurnn.edu Phone: 320-234-0437 Fax: 320-234-04,44 Counties. Served: Blue Earth, Brown, Special Projects: Faribault, Kandi-yohi, Catherine is the lead educator for the Bridging Brown Mactin, ,McLeod, Meeker, County U-Lead program. Nicollet, Renville, Sibley, Waseca Education-, 0 Work pr-ince. B.S., English and Speech Catherine has over 25 years of teaching experience in M.S., Continuing Studies secondary education and currently work in the area of with an emphasis in leadership and civic engagement. She has worked with curriculum and instruction appointed and elected officials, state and federal agencies, Minnesota State University, non-profit organizations, and conununity groups. Catherine Mankato specializes in facilitation,, community team building.. strategic planning, and leadership development. Her development of a customized countywide leadership program in Brown County has received statewide recognition. Open Datese Affiliations, Honors and Community Service: Award: Minnesota Association of Extension Oct. 15, 16,X or 29 Educators Early Career Award Member: National Association of Commumty November 13 Development Extension Professionals; Community Development Society; Inte mats onal Association of Facilitators-. Association of Leadership Educators Extension Representative: Council of Academic Professionals and Administrators Certified Consultant: Myers-Briggs Type Indicator Trainer: The Pew Foundation's Leadership PLENTY ,curriculum ORDINANCE NO. 07 -0471 • § 73.15 ALL - TERRAIN VEHICLE TRAFFIC CONTROL AND REGULATIONS (A) DEFINITIONS (1) All- terrain vehicle or vehicle. "All- terrain vehicle" or "vehicle" means a motorized flotation -tired vehicle of not less than three low pressure tires, but not more than six tires, that is limited in engine displacement of less than 800 cubic centimeters and includes a class 1 all- terrain vehicle and class 2 all- terrain vehicle. (2) Class 1 all- terrain vehicle. "Class 1 all- terrain vehicle" means an all- terrain vehicle that has a total dry weight of less than 900 pounds. (3) Class 2 all- terrain vehicle. "Class 2 all- terrain vehicle" means an all- terrain vehicle that has a total dry weight of 900 to 1,500 pounds. (B) OPERATING RESTRICTIONS. It is unlawful to operate a Class 1 erg ATV as follows: (1) On a public sidewalk or walkway used for pedestrian travel, or upon any boulevard; (2) On private property of another without lawful authority or permission of the occupant or owner; (3) On school grounds, park property, playgrounds, recreational areas and golf courses, without express permission to do so by the property authority; (4) Upon any county road or state highway within the city, or within the designated downtown area as set forth in Chapter 74 Schedule I of this code; (5) Upon any street, other than the most direct route from the owner's or operator's residence to the nearest departure point from the city or appropriate trail. When no such • route exists without using a county road or state highway, then, in that event, the owner q C�� .. (A) DEFINITIONS (1) All- terrain vehicle or vehicle. "All- terrain vehicle" or "vehicle" means a motorized flotation -tired vehicle of not less than three low pressure tires, but not more than six tires, that is limited in engine displacement of less than 800 cubic centimeters and includes a class 1 all- terrain vehicle and class 2 all- terrain vehicle. (2) Class 1 all- terrain vehicle. "Class 1 all- terrain vehicle" means an all- terrain vehicle that has a total dry weight of less than 900 pounds. (3) Class 2 all- terrain vehicle. "Class 2 all- terrain vehicle" means an all- terrain vehicle that has a total dry weight of 900 to 1,500 pounds. (B) OPERATING RESTRICTIONS. It is unlawful to operate a Class 1 erg ATV as follows: (1) On a public sidewalk or walkway used for pedestrian travel, or upon any boulevard; (2) On private property of another without lawful authority or permission of the occupant or owner; (3) On school grounds, park property, playgrounds, recreational areas and golf courses, without express permission to do so by the property authority; (4) Upon any county road or state highway within the city, or within the designated downtown area as set forth in Chapter 74 Schedule I of this code; (5) Upon any street, other than the most direct route from the owner's or operator's residence to the nearest departure point from the city or appropriate trail. When no such • route exists without using a county road or state highway, then, in that event, the owner q C�� or operator may operate an ATV on the county road or state highway only to the • intersection with a street, taking thereafter the most direct route to the nearest departure point from the city or appropriate trail; (6) During the hours between 10:00 p.m. and 7:00 a.m. of the day next following, Sunday through Thursday, and the hours between 12:00 midnight and 7:00 a.m. of the day next following, Friday and Saturday; (7) At a rate of speed greater than reasonable or proper under all of the surrounding circumstances or in any instance in excess of 20 mph upon a public street; (8) At a speed greater than 10 mph when within 100 feet of any lake shore except in channels or when within 100 feet of a fisherman, ice house, skating rink or sliding area, or where the operation would conflict with the lawful use of property or would endanger other persons or property; (9) In a careless, reckless or negligent manner, so as to endanger the person or property of another or cause injury or damage thereto; (10) To tow any person or thing other than a disabled ATV upon a public street except through the use of a rigid towbar; or (11) To chase or run over any animal, wild or domestic. • (B) SPECIAL USE. An ATV of any classification may be used for the pumose of moving or removing snow from the residence of the owner or operator of the all- terrain vehicle. (C) EQUIPMENT REQUIREMENTS. A person shall not operate an all- terrain vehicle unless the vehicle is equipped with at least one headlight and one taillight, each of minimum candlepower as prescribed by rules of the Commissioner of Public Safety, and with brakes conforming to standards prescribed by rule of the commissioner, and all of which are subject to the approval of the commissioner of public safety. (D) EMERGENCY OPERATION. Notwithstanding any prohibition in this section, an ATV may be operated upon a public street in an emergency during the period of time when, and at locations where, snow upon the roadway renders travel by automobile impossible. (E) OWNER RESPONSIBILITY. • gcco ) • It is unlawful for the owner of any ATV to permit its operation in violation of this subchapter. The party holding title to the ATV shall be conclusively presumed to be the owner unless the ATV shall have been stolen and so reported to a law enforcement agency. Adopted by the Hutchinson City Council this day of Steven W. Cook Mayor • F-1 L Gary D. Plotz City Administrator 2007. q(CZl CITY OF HUTCHINSON MEMO Finance Department September 6, 2007 TO: MAYOR 6 CITY COUNCIL FROM: KEN MERRILL, FINANCE DIRECTOR SUBJECT: TAX INCREMENT DISTRICT NUMBER 7 The attached tax increment assistance agreement with Prince of Peace Senior Apartments, Inc. provides reimbursement of captured increments to the corporation for eligible expenses. The City has been paying to the corporation captured increments totaling $190,212.70 through 2006. This agreement formalizes the continuation of the reimbursement for costs incurred by the corporation for the duration of the district which will end in 2019. Prince of Peace officials are reviewing the documents and we would ask City Council approval of the agreement attached. H: \DOC \City counci2 memo 1.doc qCe) 0 Draft 2 September 11, 2007 TAX INCREMENT ASSISTANCE AGREEMENT DEVELOPMENT DISTRICT NO.4 - TAX INCREMENT FINANCING DISTRICT NO. 7 CITY OF HUTCHINSON, MINNESOTA Mall] • PRINCE OF PEACE SENIOR APARTMENTS, INC. September 11, 2007 0 ( M • TAX INCREMENT ASSISTANCE AGREEMENT This Agreement is made as of September 11, 2007, by and between the CITY OF HUTCHINSON, MINNESOTA, a municipal corporation of the State of Minnesota (the "City "), and PRINCE OF PEACE SENIOR APARTMENTS, INC., a Minnesota nonprofit corporation ( "Developer "). WITNESSETH: WHEREAS, the City has designated a development district in the City denominated Development District No. 4 (the "Development District ") and has approved a development program for the Development District (the "Development Program ") pursuant to and in accordance with Minnesota Statutes, Sections 469.124 to 469.134 (the "Act "); WHEREAS, pursuant to a Development Agreement dated June 22, 1994, between the City and the Developer, the Developer purchased certain property from the City in the Development District legally described in Schedule A hereto (the "Development Property ") and the Developer has constructed on the Development Property a 40 -unit senior residential rental housing development (the "Development'); WHEREAS, to assist the Developer in financing costs incurred by the Developer in acquiring and constructing the Development pursuant to the Development Agreement the City loaned to the Developer $397,000 (the "1994 Loan "); WHEREAS, on behalf of the Developer the City has issued its Housing Facilities Refunding Revenue Bonds (Prince of Peace Senior Apartments, Inc. Project), Series 2003A and B, under Minnesota Statutes, Chapter 462C (the "2003 Revenue Bonds "), on behalf of the Developer and loaned the proceeds to the Developer to refund revenue bonds previously issued on behalf of the Developer by the City to finance the acquisition and construction of the Development, and to prepay the 1994 Loan in full; WHEREAS, to provide financial assistance to the Developer with respect to the Development, the City has included the Development Property in a tax increment financing district designated as Tax Increment Financing District No. 7 (the "Tax Increment District') within the Development District, and authorized the financing of the Development Program pursuant to a Tax Increment Financing Plan For Tax Increment Financing District No. 7 (the "Financing Plan ") pursuant to and in accordance with Minnesota Statutes, Sections 469.174 through 469.179 (the "Tax Increment Financing Act'), and the City has been providing to the Developer a portion of the tax increment from the Tax Increment District to reimburse it for a portion of the debt service paid on the 1994 Loan and, following the prepayment of the 1994 Loan, the debt service of the 2003 Revenue Bonds issued to prepay the 1994 loan; WHEREAS, the City and the Developer desire to enter into this agreement to set forth the application of tax increment from the Tax Increment District by the City to reimburse the Developer for the payment of a portion of the debt service on the 2003 Revenue Bonds and any • indebtedness incurred by the Developer to refund such 2004 Revenue Bonds; a(e) • NOW, THEREFORE, in consideration of the foregoing premises and the mutual obligations set forth in this Agreement, the parties hereto hereby agree as follows: ARTICLE I DEFINITIONS Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears from the context: "Act" means Minnesota Statutes, Sections 469.124 through 469.134. "Agreement" means this Agreement, as the same may be from time to time modified, amended or supplemented. "Available Tax Increment" means 90% of the Tax Increment received by the City. "City" means the City of Hutchinson, Minnesota, a Minnesota municipal corporation. "City Council" means the City Council of the City. "Development Area" means the area included in the Development District. "Development District" means Development District No. 4 designated by the City under • the Act. "Developer" means Prince of Peace Senior Apartments, Inc., a Minnesota nonprofit corporation. "Development Agreement" means the Development Agreement dated June 22, 1994, between the City and the Development. "Development Property" means the portion of the Development Area described on Schedule A attached hereto. "1994 Loan" means the loan in the principal amount of $397,000 made by the City to the Developer pursuant to the Development Agreement. "Section" means a Section of this Agreement, unless used in reference to Minnesota Statutes. "Series 2003 Bonds" means the City's Housing Facilities Refunding Revenue Bonds (Prince of Peace Senior Apartments, Inc. Project), Series 2003A and B, and any bonds or other indebtedness which refunds the Series 2003 Bonds. "State" means the State of Minnesota. • q (b) L J "Tax Increment" means tax increment received by the City from the Tax Increment District. "Tax Increment Act" means Minnesota Statutes, Sections 469.174 through 469.179. "Tax Increment District" means Tax Increment Financing District No. 7 created by the City pursuant to the Tax Increment Financing Plan. "Tax Increment Financing Plan" means Tax Increment Financing Plan for Redevelopment Tax Increment Financing District No. 7, as amended. ARTICLE II REIMBURSEMENT TO DEVELOPER FROM TAX INCREMENT Section 2.1. Reimbursement to Developer of Certain Costs. In order to reimburse the Developer for a portion of the debt service on the Series 2003 Bonds issued to prepay the 1994 Loan, the City agrees to pay to the Developer all Available Tax Increment up to an aggregate maximum amount of $375, 939. On each February 1 and August 1 the City shall pay to the Developer all Available Tax Increment received to such date by the City and not previously paid by the City to the Developer, until such time as the aggregate amount of such payments equals $375.939; provided that if on such date there exists any delinquencies in the payment of real estate taxes or special assessments with respect to the Development Property, the City shall apply amounts otherwise to be paid to the Developer hereunder to pay delinquent real estate taxes and special assessments, and any amount remaining after such payment shall be paid to the Developer. The Developer acknowledges (i) that the payments to be made by the City under this Section 2.1 (including any amount applied to pay delinquent real estate taxes and special assessments) are limited to an aggregate amount of $375,939 and shall be made solely from Available Tax Increment, (ii) that Available Tax Increment is determined solely from Tax Increment received by the City with respect to the Tax Increment District, and that tax increment received by the City with respect to any other tax increment financing districts of the City does not constitute Available Tax Increment, and the City shall not be obligated to make this payment from any other funds of the City, (iii) no interest is payable on the amounts to be paid under this Section 2.1, and (iv) that neither the full faith and credit nor taxing power of the City is pledged to such payment. The Tax Increment District will terminate on December 31, 2019, and the obligation of the City to make payments under this Section 2.1 shall terminate once the Tax Increment District is terminated and the City has paid all Available Tax Increment on hand with the City to the Developer. The City makes no representation or warranty that the Available Tax Increment will aggregate $375.939 over the remaining term of the Tax Increment District. ARTICLE III ADDITIONAL PROVISIONS Section 3.1. Conflict of Interests City Representatives Not Individually Liable. No member, official, employee, or consultant or employees of the consultants of the City shall have NCO any personal interest, direct or indirect, in this Agreement, nor shall any such member, official, • consultant or the consultant's employees or employee participate in any decision relating to this Agreement which affects his or her personal financial interests or the financial interests of any corporation, partnership, or association in which he or she is directly or indirectly interested. No member, official, consultant or the consultant's employees, or employee of the City shall be personally liable to Developer, or any successor in interest, in the event of any default or breach by the City or for any amount which may become due to Developer or successor or on any obligations under the terms of this Agreement. Section 3.2. Titles of Articles and Sections. Any titles of the several parts, Articles, and Sections of this Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 3.3. Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand, or other communication under this Agreement by either party to the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally as follows: (a) in the case of Developer, addressed to or delivered personally to Developer at 301 Glen Street, Hutchinson, Minnesota 55350, Attention: Executive Director; (b) in the case of the City addressed or delivered personally to the City Administrator at City Center, 111 Hassan Street SE, Hutchinson, Minnesota 55350; • or at such other address with respect to any such party as that party may, from time to time, designate in writing and forward to the other party as provided in this Section. Section 3.4. Term of Agreement. This Agreement shall terminate upon the payment in full of the payments to be made by the City pursuant to Section 2.1 hereof. Section 3.5. Complete Agreement. This Agreement constitutes the entire agreement and understanding between the City and the Developer and supersedes any offers, negotiations, previous agreement or understanding, written or oral, between the City and Developer with respect to payment of any Tax Increment to the Developer by the City. Section 3.6. Counterparts. This Agreement is executed in any number of counterparts, each of which shall constitute one and the same instrument. • 4 qM IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as • of the date first above written. CITY OF HUTCHINSON, MINNESOTA By Its Mayor By Its City Administrator PRINCE OF PEACE SENIOR APARTMENTS, INC. :1 u of (6� 11 0 • SCHEDULE A DEVELOPMENT PROPERTY Lot One (1), Block One (1), Prince of Peace Addition to the City of Hutchinson, according to the Plat on file in the office of the County Recorder, McLeod County, Minnesota. q00) Ordinance No. 07 -0473 AN ORDINANCE APPROVING LEASING OF CERTAIN LAND, BUILDINGS AND OTHER PROPERTY TO HUTCHINSON HEALTH CARE WHEREAS, in conjunction with its operation of a health care system in the City of Hutchinson, City owns Hospital Property, Nursing Home Property, Medical Office Building Property, Shopping Center Property, Dassel Medical Center Property, Regional Eye Property, and Auxiliary Property, and other real property in the Hutchinson area, each as hereinafter defined; and, WHEREAS, also in conjunction with its operation of a health care system in the City of Hutchinson, the City owns equipment, fixtures and other tangible property; and, WHEREAS, City has concluded, following many months of analysis, public input and consultation with health care experts, that the lease of this property is likely to: (i) enhance operating efficiencies and effectiveness, (ii) enhance the Hutchinson health care system's ability to form linkages with other health care institutions and providers to form an integrated delivery system offering an increased continuum of care to the residents of City, (iii) improve the environment for physician and allied health professional recruitment and retention, and (iv) promote the Hutchinson health care system's ability to maintain financial viability and adaptability to future changes and challenges in the health care environment, especially those posed by state and national health care reform; and, WHEREAS, City has determined that it is in the best interest of the delivery of health care to residents of the City of Hutchinson and the community served by the health care system to lease and transfer the operation and assets of the health care system to a private, nonprofit, non - governmental corporation; and, WHEREAS, HHC is a nonprofit corporation organized under the laws of the State of Minnesota for the purpose of acquiring and operating the health care system; and, 0 WHEREAS, City has the statutory power and authority, pursuant to Minnesota Statutes §§ 144.581 and 447.47, to lease and transfer the health care system to HHC; and, WHEREAS, HHC has the power and authority to accept the lease and transfer of such assets and operations from City under the terms and conditions set forth herein; and, WHEREAS, City has concluded that the community served by the health care system will be best served by undertaking transactions described in this Agreement; and, WHEREAS, City and HHC intend for HHC to operate the health care system in a private, non- governmental capacity, not subject to any of the laws of the State of Minnesota or of the federal government that apply exclusively to governmental bodies or instrumentalities thereof; and, WHEREAS, HHC intends to operate the health care system in a manner consistent with its charitable purposes, including, but not limited to enhancing the health of people in the communities it serves without expectation of financial gain, NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF HUTCHINSON, THAT THE CITY HEREBY AUTHORIZES THE LEASING OF CERTAIN LAND, BUILDINGS AND OTHER PROPERTY TO HUTCHINSON HEALTH CARE AS OUTLINED AND DEFINED IN SAID LEASE AGREEMENT HEREBY ATTACHED AS EXHIBIT A TO THIS ORDINANCE. Signed this day of 12007. Attest: • Gary D. Plotz, City Administrator Steven W. Cook, Mayor Kok • LEASE AND AGREEMENT between CITY OF HUTCHINSON and HUTCHINSON HEALTH CARE 0 Dated: December 31. 2007 El 1 1 , 1 oW • TABLE OF CONTENTS Article Page Article1. Definitions ................................................................................... ..............................2 1.1 Agreement ............................................................................ ..............................2 1.2 Alteration .............................................................................. ..............................2 1.3 Annual Rent .......................................................................... ..............................2 1.4 Assigned Contracts ............................................................... ..............................2 1.5 Assumed Liabilities .............................................................. ..............................2 1.6 Auxiliary Improvements ....................................................... ..............................3 1.7 Auxiliary Land ...................................................................... ..............................3 1.8 Auxiliary Property ................................................................ ..............................3 1.12 Dassel Medical Center Property ........................................... ..............................4 1.13 Effective Date ....................................................................... ..............................4 1.14 Event of Default .................................................................... ..............................4 1.15 Excluded Assets .................................................................... ..............................4 1.16 Excluded Liabilities .............................................................. ..............................4 1.17 Existing Bond Documents .................................................... ..............................4 1.18 1.9 Birchwood Property .............................................................. ..............................3 • 1.10 Dassel Medical Center Improvements .................................. ..............................3 1.11 Dassel Medical Center Land ................................................ ..............................3 1.12 Dassel Medical Center Property ........................................... ..............................4 1.13 Effective Date ....................................................................... ..............................4 1.14 Event of Default .................................................................... ..............................4 1.15 Excluded Assets .................................................................... ..............................4 1.16 Excluded Liabilities .............................................................. ..............................4 1.17 Existing Bond Documents .................................................... ..............................4 1.18 Existing Bonds ...................................................................... ..............................4 1.19 Hazardous Material ............................................................... ..............................4 1.20 Hazardous Materials Laws ................................................... ..............................5 • 1.21 Health Care System .............................................................. ..............................5 -i- )b(a) _ii_ I bC�� 1.22 Health Care System Employees ........................................... ..............................5 • 1.23 Health Care System Funds ................................................... ..............................5 1.24 Health Care Systems Operations .......................................... ..............................5 1.25 Health Care System Personal Property ................................. ..............................5 1.26 Health Care System Real Property ....................................... ..............................7 1.27 Hospital Improvements ........................................................ ..............................7 1.28 Hospital Land ....................................................................... ..............................7 1.29 Hospital Leases ..................................................................... ..............................7 1.30 Hospital Property .................................................................. ..............................7 1.31 Improvements ....................................................................... ..............................7 1.32 Internal Revenue Code ......................................................... ..............................7 1.33 Inventories and Supplies ....................................................... ..............................7 1.34 Land ...................................................................................... ..............................7 1.35 Medical Office Building Improvements ............................... ..............................7 1.36 Medical Office Building Land .............................................. ..............................8 1.37 Medical Office Building Leases ........................................... ..............................8 1.38 Medical Office Building Property ........................................ ..............................8 1.39 Nursing Home Improvements .............................................. ..............................8 1.40 Nursing Home Land ............................................................. ..............................8 1.41 Nursing Home Property ........................................................ ..............................8 1.42 Operating Parameters ........................................................... ..............................8 1.43 Purchase Option .................................................................... ..............................8 1.44 Regional Eye Improvements ................................................ ..............................8 1.45 Regional Eye Land ............................................................... ..............................8 1.46 Regional Eye Property .......................................................... ..............................8 _ii_ I bC�� 1.47 Restore or Restoration .......................................................... ..............................8 • 1.48 Shopping Center Improvements ........................................... ..............................9 1.49 Shopping Center Land .......................................................... ..............................9 1.50 Shopping Center Leases ....................................................... ..............................9 1.51 Shopping Center Property .................................................... ..............................9 1.52 Taking ................................................................................... ..............................9 1.53 Tax Exempt Bonds ............................................................... ..............................9 1.54 Term ...................................................................................... ..............................9 1.55 Unavoidable Del ays .............................................................. ..............................9 Article 2. Lease, Transfer of Health Care System ....................................... ..............................9 2.1 Lease of Health Care Center Real Property ......................... ..............................9 2.2 Transfer of Health Care System Personal Property ............. .............................10 Article 3. Rent; Consideration .................................................................... .............................10 3.1 Annual Rent ......................................................................... .............................10 3.2 Assumed Obligations ........................................................... .............................11 3.3 Additional Costs .................................................................. .............................12 Article4. Payment of Taxes ....................................................................... .............................12 Article 5. Repairs and Maintenance ........................................................... .............................12 Article6. Insurance ..................................................................................... .............................12 6.1 Property Insurance ............................................................... .............................12 6.2 Liability Insurance ............................................................... .............................13 6.3 Director /Officer Insurance ................................................... .............................13 6.4 Worker's Compensation ...................................................... .............................13 6.5 Automobile Insurance ......................................................... .............................13 • 6.6 Crime Fidelity ........................................................................ ............................... 13 -iii- IC)(C;) 6.7 Policy Requirements ............................................................ .............................13 • 6.8 HHC's Insurance ................................................................. .............................14 6.9 Certificate of Insurance ....................................................... .............................14 Article 7. Damage To or Destruction of the Improvements ....................... .............................14 7.1 Notice; Rest oration .............................................................. .............................14 7.2 Payment of Costs; Application of Proceeds ........................ .............................14 7.3 No Abatement ...................................................................... .............................14 7.4 Mutual Rel ease .................................................................... .............................14 Article8. Condemnation ............................................................................. .............................15 8.1 Total Taking ........................................................................ .............................15 8.2 Partial Taking ...................................................................... .............................15 8.3 Determination of Partial Taking .......................................... .............................15 Article9. Alterations .................................................................................. .............................16 • 9.1 General ................................................................................. .............................16 • 9.2 Permitted Al terations ........................................................... .............................16 9.3 Permits ................................................................................. .............................16 Article 10. Discharge of Liens .................................................................... .............................16 Article 11. Use of Health Care System Real Property ............................... .............................16 Article 12. Entry on Property by City ......................................................... .............................17 Article13. Utilities ..................................................................................... .............................17 Article14. Indemnification ......................................................................... .............................17 Article15. Transfers ................................................................................... .............................17 15.1 By City ................................................................................. .............................17 15.2 ByHHC ............................................................................... .............................18 -1v- } oC�� Article 16. Estoppel Certificates ............... ............................... ................. ............................... • Article 17. Representations and Covenants of City .................................... .............................20 17.1 Power and Authority ............................................................ .............................20 17.2 Agreement Valid and Binding ............................................. .............................20 17.3 Tax - Exempt Bonds .............................................................. .............................20 17.4 Existing Bonds ..................................................................... .............................20 17.5 Assigned Contracts; Consents ............................................. .............................20 17.6 Cooperation ......................................................................... .............................20 17.7 Trade Secrets ....................................................................... .............................20 17.8 Environmental Condition .................................................... .............................20 17.9 Employees ........................................................................... .............................21 17.10 Future Financings ................................................................ .............................21 Article 18. Representations and Covenants of HHC .................................. .............................21 • 18.1 Formation of HHC ............................................................... .............................21 18.2 Power and Authority ............................................................ .............................21 18.3 Agreement Valid and Binding ............................................. .............................22 18.4 Nonprofit Status; Principal Office; Primary Service Area .. .............................22 18.5 Tax - Exempt Bonds .............................................................. .............................22 18.6 Existing Bonds ..................................................................... .............................23 18.7 Health Care Licenses ........................................................... .............................23 18.8 Medicare Certification ......................................................... .............................24 18.9 Accreditation ....................................................................... .............................24 18.10 Medical Staff ....................................................................... .............................24 18.11 Employment Offers to Existing Employees; Certain Liabi lities ......................24 . 18.12 Operating Expenses and Taxes ............................................ .............................25 -v- tieC 18.13 Reporting Requirements ...................................................... .............................25 • 18.14 Indigent Care ....................................................................... .............................25 18.15 Operating Parameters .......................................................... .............................25 18.16 Investments .......................................................................... .............................26 Article 19. Condition of Property ............................................................... .............................26 Article 20. Events of Default; Termination ................................................ .............................26 -vi- I aCC�) 20.1 Events of Default ................................................................. .............................26 20.2 Repossession ........................................................................ .............................27 20.3 Continued Liability .............................................................. .............................27 20.4 Re- letting ............................................................................. .............................27 20.5 No Waiver ............................................................................ .............................27 20.6 Exercise of Rights While in Defaul t .................................... .............................28 Article 21. Surrender of the Property ......................................................... .............................28 • 21.1 Surrender of Health Care System Real Property ................. .............................28 21.2 Disposition of Health Care System ..................................... .............................28 Article 22. No Merger of Title .................................................................... .............................28 Article 23. Quiet Enjoyment ....................................................................... .............................29 Article24. Notices ...................................................................................... .............................29 Article25. Contests .................................................................................... .............................30 25.1 Contest ................................................................................. .............................30 25.2 Suspension of Obligation .................................................... .............................30 25.3 Procedure ............................................................................. .............................30 Article 26. Purchase Option ........................................................................ .............................30 26.1 Grant .................................................................................... .............................30 • 26.2 Title ...................................................................................... .............................31 -vi- I aCC�) 26.3 Closing ................................................................................. .............................31 • 26.4 Effect of Non - Exercise ........................................................ .............................31 Article27. Miscellaneous ........................................................................... .............................31 27.1 Consent ................................................................................ .............................31 27.2 Relationship of Parties ......................................................... .............................32 27.3 Miscellaneous ...................................................................... .............................32 27.4 Recording ............................................................................. .............................32 27.5 Non - Delegation and Lack of Control .................................. .............................32 Exhibit A — Legal Description of the Land Exhibit B — Excluded Assets Exhibit C — Motor Vehicles r1 U • -vii- 1 eCO) 0 LEASE AND AGREEMENT This Lease and Agreement is made and entered into as of the oaf Effective Date, by and between the City of Hutchinson, a Minnesota municipal corporation ( "City "), and Hutchinson Health Care, a Minnesota nonprofit corporation ( "HHC "). RECITALS WHEREAS, City owns the Hospital Property, the Nursing Home Property, the Medical Office Building Property, the Shopping Center Property, the Dassel Medical Center Property, the Regional Eye Property, and the Auxiliary Property, each as hereinafter defined. WHEREAS, the Hospital Property, the Nursing Home Property, the Medical Office Building Property, the Shopping Center Property, the Dassel Medical Center Property, the Regional Eye Property, and the Auxiliary Property (collectively, the "Health Care System Real Property ") are operated by City as elements of a coordinated Health Care System, as hereinafter defined. WHEREAS, City has determined that it is in the best interest of the delivery of health care to residents of the City of Hutchinson and the community served by the Health Care • System to lease and transfer the operation and assets of the Health Care System to a private, nonprofit, non - governmental corporation. 1 WHEREAS, HHC is a nonprofit corporation organized under the laws of the State of Minnesota for the purpose of acquiring and operating the Health Care System. WHEREAS, City has the statutory power and authority, pursuant to Minnesota Statutes §§ 144.581 and 447.47, to lease and transfer the Health Care System to HHC. WHEREAS, HHC has the power and authority to accept the lease and transfer of such assets and operations from City under the terms and conditions set forth herein. WHEREAS, City has concluded, following many months of analysis, public input and consultation with health care experts, that the lease of the Health Care System is likely to: (i) enhance operating efficiencies and effectiveness, (ii) enhance the Health Care System's ability to form linkages with other health care institutions and providers to form an integrated delivery system offering an increased continuum of care to the residents of City, (iii) improve the environment for physician and allied health professional recruitment and retention, and (iv) promote the Health Care System's ability to maintain financial viability and adaptability to future changes and challenges in the health care environment, especially those posed by state and national health care reform. -1- I oCc\) WHEREAS, City has concluded that the community served by the Health Care • System will be best served by undertaking transactions described in this Agreement. WHEREAS, City and HHC intend for HHC to operate the Health Care System in a private, non - governmental capacity, not subject to any of the laws of the State of Minnesota or of the federal government that apply exclusively to governmental bodies or instrumentalities thereof. WHEREAS, HHC intends to operate the Health Care System in a manner consistent with its charitable purposes, including, but not limited to enhancing the health of people in the communities it serves without expectation of financial gain. NOW, THEREFORE, in consideration of the premises, covenants and agreements set forth herein, the parties hereto agree as follows: Article 1. Definitions The following terms shall have the meanings set forth in this Article: 1.1 Agreement. This Lease and Agreement, including the following exhibits attached hereto and made a part hereof: • Exhibit A — Legal Description of the Land Exhibit B — Excluded Assets Exhibit C — Motor Vehicles 1.2 Alteration. Construction, reconstruction, replacement, repairs, renewals, alterations, changes, additions, improvements and demolitions of or to the Improvements and all excavations at any time made or to be made in, or on about the Land, or any part thereof. 1.3 Annual Rent. The Annual Rent at the per annum rate provided for in Section 3.1 of this Agreement. 1.4 Assigned Contracts. All service and maintenance contracts, commitments, guarantees, indentures, insurance policies and contracts, leases and other contracts regarding the Health Care System Real Property and the Health Care System Operations, but excluding any contracts that are part of the Excluded Assets. 1.5 Assumed Liabilities. All of the following debts, obligations, accounts payable, claims and other liabilities of City (excluding, in each cast, any Excluded Liabilities): (a) All payment obligations, other obligations and liabilities arising under • the Assigned Contracts; -2- lOC ^) • (b) Any materialmen, mechanics or other liens against the Health Care System Real Property; (c) All employee liabilities arising from Health Care System Operations, including but not limited to any costs, settlement amounts, insurance deductibles and. other expenses associated with any employment - related legal claims brought by City employees arising from the termination of their employment for Health Care System Operations; (d) Any fines, penalties or other payments, or repayments, required to be made to any governmental entity in connection with Health Care System Operations prior to the Effective Date; (e) Claims relating to generation, manufacture, storage or release of Hazardous Materials on or about the Health Care System Real Property or with respect to the Health Care System Operations; and (f) All other liabilities and obligations of City, whether known or unknown, contingent or otherwise, incurred or arising in connection with Health Care System Operations prior to the Effective Date. 1.6 Auxiliary Improvements. The building, fixtures and other improvements now • or hereafter located on the Auxiliary Land and all alterations and additions thereto and replacements thereof, including by reason of Restoration. 10 1.7 Auxiliary Land. The land, but not any Improvements, situated in McLeod County, Minnesota, and legally described on Exhibit A attached hereto, together with all easements, appurtenances and hereditaments pertaining thereto. 1.8 Auxiliary Property. The Auxiliary Land and the Auxiliary Improvements, collectively. 1.9 Birchwood Property. The land and improvements at 710 Park Island Drive SW, Hutchinson, Minnesota. 1.10 Dassel Medical Center Improvements. The building, fixtures and other improvements now or hereafter located on the Dassel Medical Center Land and all alterations and additions thereto and replacements thereof, including by reason of Restoration. 1.11 Dassel Medical Center Land. The land, but not any Improvements, situated in Meeker County, Minnesota, and legally described on Exhibit A attached hereto, together with all easements, appurtenances and hereditaments pertaining thereto. 3- 1. 12 Dassel Medical Center Property. The Dassel Medical Center Land the Dassel • Medical Center Improvements, collectively. 1.13 Effective Date. December 31,2007 at 11:59:59 P.M.. 1.14 Event of Default. As defined in Section 20.1 of this Agreement. 1.15 Excluded Assets. Those assets owned by City as of the Effective Date which shall be and remain the assets of City and not leased or transferred to HHC pursuant to this Agreement, as such assets are more specifically identified on the attached Exhibit B. 1.16 Excluded Liabilities. Any and all debts, obligations, claims, and other liabilities of City: (a) to the extent such debts, obligations, claims or other liabilities of City are covered by an existing insurance policy maintained by City; (b) to the extent that the assumption of which by HHC would eliminate or limit the governmental immunity which would otherwise be available in regard to such debt, obligation, claim or other liability (and nothing herein shall grant to any person not a party hereto any right to payment or indemnification for any event occurring prior to the Effective Date which would not have existed had City not • entered into the transactions contemplated hereby); (c) which results from any act or omission of City (or any of its elected officials, employees, contractors, or agents) acting in, or in furtherance of, City's governmental function, and not in connection with, or in furtherance of, the Health Care System or Health Care System Operations; or (d) which results from a breach of this Agreement by City or the existence of which constitutes a misrepresentation by City under this Agreement. 1.17 Existing Bond Documents. All documents, instruments and agreements executed and delivered in connection with the issuance of the Existing Bonds. 1.18 Existine Bonds. The following bonds issued by City: General Obligation Medical Facilities Revenue Refunding Bonds, Series 199713; General Obligation Medical Facilities Revenue Refunding Bonds, Series 1998A; General Obligation Taxable Medical Facilities Revenue Refunding Bonds, Series 1998B; Taxable Medical Facilities Gross Revenue Bonds, Series 1998; General Obligation Medical Facilities Revenue Bonds, Series 2002D; and General Obligation Medical Facilities Revenue Bonds, Series 2003A. 1.19 Hazardous Material,. Any substance, chemical, waste or material that is or becomes regulated under applicable law because of its toxicity, infectiousness, radioactivity, • explosiveness, ignitability, corrosiveness or reactivity, including asbestos, urea -4- 1 oC�� formaldehyde, polychlorinated biphenyls, nuclear fuel or materials, radioactive materials, • explosives, known carcinogens, petroleum products and by- products and any substance, chemical, waste or material regulated by any Hazardous Material Law. 1J • 1.20 Hazardous Materials Laws. Each federal, state, county, municipal, local or other law, statute, code, ordinance, rule or regulation which relates to or deals with human health or the environment in the jurisdiction in which the Health Care System, or any part thereof, is located. 1.21 Health Care System. The Health Care System Real Property, the Health Care System Personal Property, and all other real or personal property purchased, leased or otherwise acquired by HHC (or by City, with respect to any real property acquired by City for the use of HHC and inclusion with the Health Care System Real Property) on or after the Effective Date, together with the operations, infrastructure, systems, processes, assembled work force and other intangibles necessary for the conduct of a healthcare delivery system of the scope and nature as that operated by City prior to the Effective Date. 1.22 Health Care System Employees. All full and part time employees of the Health Care System as of the Effective Date. 1.23 Health Care System Funds. All of City's right, title and interest in or to all cash, bank accounts, savings and loan accounts, certificates of deposit, money market accounts, treasury bills, investments (whether debt or equity, liquid or illiquid), reserves or other cash items held in the name of, or on behalf of, City in connection with Health Care System Operations. 1.24 Health Care Systems OMerations. The operation of the Health Care System, including operation of its various components as an acute care hospital, a surgical center, a skilled nursing facility, a medical office building, an outpatient clinic, and administrative facilities. 1.25 Health Care System Personal Property. All right, title and interest of City in and to the following property (excluding,-in each case, the Excluded Property): (a) All machinery, furniture and equipment, including hospital, medical and office equipment, and other fixed assets owned by City and used in connection with the operation of the Health Care System Real Property, or any part thereof; (b) All motor vehicles owned by City and used in connection with the operation of the Health Care System Real Property, including without limitation the motor vehicles listed on the attached Exhibit C; (c) All trademarks, servicemarks and names owned by City and used in connection with the operation of the Health Care System Real Property, Health Care System Operations, or any part or combination thereof; -5- ocq� • (d) All accounts receivable and other amounts owed to City or its health care operating units and arising out of the use, operation or ownership of the Health Care System Real Property or arising from Health Care System Operations; • (e) The benefit, but not outright ownership, of the gifts, bequests, donations or other endowments specifically given for the benefit of or restricted to the use of the Health Care System Real Property, Health Care System Operations, or any part or combination thereof; (f) All rights under the Assigned Contracts, including all rights to receive goods or services, to use and occupy personal and leased real property or to receive payment for goods or services rendered, or other benefits arising under such contracts; (g) All Inventories and Supplies; (h) All trade secrets and other confidential information concerning Health Care System Operations not in the public domain and in existence on the Effective Date; (i) All medical records of Health Care System patients in existence on the Effective Date; (j) All business records arising from the use of the Health Care System Real Property or Health Care System Operations in existence on the Effective Date; (k) All Health Care System Funds; (1) Any prepaid expenses arising from the operation or use of the Health Care System Real Property or from Health Care System Operations in existence on the Effective Date; (m) any and all shares, member interests, partnership interests, member control agreements or other interests held by City in any joint venture, partnership, limited liability company, corporation, or other entity or organization formed in relation to, in support of, or otherwise in connection with the Health Care System Real Property or Health Care System Operations, including, without limitation, City's interests in the joint ventures known as ConnectCare operating from the Birchwood Property and Hutchinson Diagnostic Center; (n) The right to any and all recovery from all collection cases in progress on the Effective Date for goods furnished or services rendered in connection with Health Care System Operations; IRS 1 aCG� and all of such other assets owned by City in connection with the operation of the Health Care System Real Property, other than the Excluded Assets, as of the Effective Date. Further, for purposes of this Agreement, the term "Health Care System Personal Property" shall (i) include all additions, alterations, changes, and substitutions in and to all or any part of the Health Care System Personal Property made after the Effective Date, and (ii) exclude all Health Care System Personal Property transferred or sold in accordance with Article 15 hereof on or after the Effective Date. 1.26 Health Care System Real Property. As defined in the Recitals hereof. 1.27 Hospital Improvements. The building, fixtures and other improvements now or hereafter located on the Hospital Land and all alterations and additions thereto and replacements thereof, including by reason of Restoration. 1.28 Hospital Land. The land, but not any Improvements, situated in McLeod County, Minnesota and legally described on Exhibit A attached hereto, together with all easements, appurtenances and hereditaments pertaining thereto. 1.29 Hospital Leases. Any and all tenant leases with respect to the Hospital Land or Hospital Improvements in effect on the Effective Date. 1.30 Hospital Provert v. The Hospital Land, the Hospital Improvements, and the Hospital Leases, collectively. • 1.31 Improvements. The Hospital Improvements, the Medical Office Building Improvements, the Nursing Home Improvements, the Shopping Center Improvements, the Dassel Medical Center Improvements, the Regional Eye Improvements, and the Auxiliary Improvements, collectively. • 1.32 Internal Revenue Code. The Internal Revenue Code of 1986, as amended, and any replacement or successor code. 1.33 Inventories and Supplies. All items of consumable personal property owned by City or held by City in connection with the Health Care System Operations. 1.34 Land. The Hospital Land, the Nursing Home Land, the Medical Office Building Land, the Shopping Center Land, the Dassel Medical Center Land, the Regional Eye Land, and the Auxiliary Land, collectively. 1.35 Medical Office Building Improvements. The building, fixtures and other improvements now or hereafter located on the Medical Office Building Land and all alterations and additions thereto and replacements thereof, including by reason of Restoration. -7- 1oCC 1.36 Medical Office Building Land. The land, but not any Improvements, situated • in McLeod County, Minnesota and legally described on Exhibit A attached hereto, together with all easements, appurtenances and hereditaments pertaining thereto. 1.37 Medical Office Building Leases. Any and all tenant leases with respect to the Medical Office Building Land or Medical Office Building Improvements in effect as of the Effective Date. 1.38 Medical Office Building Property. The Medical Office Building Land, the Medical Office Building Improvements, and the Medical Office Building Leases, collectively. 1.39 Nursing Home Improvements. The building, fixtures and other improvements now or hereafter located on the Nursing Home Land and all alterations and additions thereto and replacements thereof, including by reason of Restoration. 1.40 Nursing Home Land. The land, but not any Improvements, situated in McLeod County, Minnesota and legally described on Exhibit A attached hereto, together with all easements, appurtenances and hereditaments pertaining thereto. 1.41 Nursing Home Property. The Nursing Home Land and the Nursing Home Improvements, collectively. • 1.42 Operating Parameters. The financial, quality and operating parameters set forth in Exhibit A to the Bylaws of HHC, as amended from time to time. 1.43 Purchase Option. HHC's right to purchase City's interest in the Health Care System Real Property in accordance with Article 26. 1.44 Regional Eye Improvements. The building, fixtures and other improvements now or hereafter located on the Regional Eye Land and all alterations and additions thereto and replacements thereof, including by reason of Restoration. 1.45 Regional Eye Land. The land, but not any Improvements, situated in McLeod County, Minnesota, and legally described on Exhibit A attached hereto, together with all easements, appurtenances and hereditaments pertaining thereto. 1.46 Regional Eve Propert y. The Regional Eye Land and the Regional Eye Improvements, collectively. 1.47 Restore or Restoration. The repair, restoration or rebuilding of the Health Care System or any part thereof following any Taking, damage to or destruction of the same by fire or other casualty, in accordance with applicable legal requirements, with such Alterations as may be determined by HHC, together with any temporary repairs and property • protection pending completion of the work. I bCa) • 1.48 Shopping Center Improvements. The building, fixtures and other improvements now or hereafter located on the Shopping Center Land and all alterations and additions thereto and replacements thereof, including by reason of Restoration. 1.49 Shopping Center Land. The land, but not any Improvements, situated in McLeod County, Minnesota and legally described on Exhibit A attached hereto, together with all easements, appurtenances and hereditaments pertaining thereto. 1.50 Shopping Center Leases. Any and all tenant leases with respect to the Shopping Center Land or Shopping Center Improvements in effect as of the Effective Date. 1.51 Shopping Center Propert v. The Shopping Center Land, the Shopping Center Improvements, and the Shopping Center Leases, collectively. 1.52 Taking. A taking of all or any part of the Health Care System Real Property, or any interest therein or right accruing thereto, including, without limitation, any right of access thereto existing on the date of this Agreement, as the result of or in lieu or in anticipation of the exercise of the right of condemnation or eminent domain. The Taking shall be deemed to occur on the date on which the condemning authority takes possession. 1.53 Tax Exempt Bonds. The following bonds issues by City: General Obligation Medical Facilities Revenue Refunding Bonds, Series 199713; General Obligation Medical • Facilities Revenue Refunding Bonds, Series 1998A; General Obligation Medical Facilities Revenue Bonds, Series 2002D; and General Obligation Medical Facilities Revenue Bonds, Series 2003A • 1.54 Term. The term of this Agreement as provided in Article 2. 1.55 Unavoidable Delays. Acts of God, casualties, war, civil commotion, embargo, riots, strikes, unavailability of materials (but not unavailability of funds), contractor defaults and any other events which are not within the reasonable control of the party in question to prevent, control or correct. Article 2. Lease, Transfer of Health Care System 2.1 Lease of Health Care System Real Property. City does hereby demise and lease to HHC, and HHC does hereby take and hire, upon and subject to the terms and conditions of this Agreement, the Health Care System Real Property for a term commencing on the Effective Date and ending thirty (30) years after the Effective Date. As long as HHC is not in default of this Agreement and at any time prior to the commencement of the 291h year of this Agreement HHC may notify City of its intention to renew this Agreement upon the same terms and conditions as contained herein for one additional thirty (30) year term or 9- \ 0 CC-\� exercise the Purchase Option described in Section 26.1 of this Agreement as of the expiration • of the initial term. 2.2 Transfer of Health Care System Personal Property. In consideration of the amounts paid and to be paid by HHC pursuant to Article 3 of this Agreement, City hereby grants, bargains, sells and conveys unto HHC all of City's right, title and interest in and to the Health Care System Personal Property, effective as of the Effective Date. Article 3. Rent: Consideration 3.1 Annual Rent. (a) For the Health Care System Real Property, the Annual Rent during the Term shall be the following: (1) One Hundred Sixty Thousand and no /100ths Dollars ($160,000.00) per annum for the calendar year ending on December 31, 2008, which per annum amount shall be adjusted for calendar year 2009, and each calendar year thereafter during the Term, to equal, in each calendar year, 105% of the amount payable for the immediately, preceding calendar year; PI • f� • (2) an amount equal to all principal, interest, paying agent fees, registrar fees, bond trustee fees and expenses incurred under the terms of the applicable bonds, and bond reserve fund payments due on, or with respect to, the Existing Bonds and any additional Tax - Exempt Bonds or other bonds issued pursuant to Section 17.10 of this Agreement; (3) an amount equal to all reasonable sums, fees and expenses, including reasonable legal fees, of City incurred in connection with the issuance, payment, redemption and exchange of the Existing Bonds; (4) an amount equal to all expenses, including reasonable legal fees, incurred by City in order to enforce any obligation materially breached by HHC under this Agreement; and (5) an amount equal to any reasonable, direct, out -of- pocket transaction expenses, including reasonable legal fees and consulting fees, incurred by City in connection with any transfer, sublet, sale, assignment, release or other transaction involving any Health Care System Real Property under Article 15. (b) Commencing as of the Effective Date and continuing thereafter for the • Term, HHC covenants and agrees to pay to City the Annual Rent: (1) in the case of that part of Annual Rent specified in Section 3.1(a)(1), at the per annum rate set forth in Section 3.1(a)(1), payable in two equal installments in advance on or before the 15th day of May and October during the Term, and at that rate prorated and payable in advance for any portion of a calendar year at the commencement or the end of the Term; and (2) in the case of that part of Annual Rent specified in Section 3.1(a)(2), the amounts required from time to time due on, or on account of, the Existing Bonds, payable at least fifteen (15) business days prior to the date each such payment is due on, or on account of, the Existing Bonds; (3) in the case of any other component of Annual Rent specified in Section 3.1, payable in the ordinary course of business following receipt of an invoice from City or copies of applicable vendor invoices, but in any event not more than sixty (60) days following receipt by HHC of such invoices, and (4) on the Effective Date of the Lease, deposit by HHC of funds into an escrow account in accordance with the Escrow Agreement attached as Exhibit D, which City may draw upon in the event monthly rent payments made to City on the payment due dates for the Existing Bonds are insufficient • to make the full payment required. In the event of an early termination of this Agreement for any cause other than HHC's default, any Annual Rent paid in advance shall be prorated as of the date of such termination with the portion properly allocated to the period following termination refunded to HHC upon such termination. (c) All Annual Rent shall be paid by HHC to City at the address of City set forth in Section 24, or to such other address as City may direct by written notice to HHC. (d) It is the purpose and intent of City and HHC that the Annual Rent shall be net to City and that HHC shall pay Annual Rent and other amounts payable by HHC under this Agreement without notice or demand and without abatement, deduction or setoff, except as otherwise provided in this Agreement. 3.2 Assumed Oblieations. In consideration of the leases and transfers made by City to HHC pursuant to Article 2 hereof, HHC hereby agrees (a) to assume, pay, and perform the Assumed Liabilities, effective as of the Effective Date, and (b) to operate the Health Care System in accordance with the covenants set forth in this Agreement, including, without limitation, the covenants set forth in Article 18 hereof. HHC shall pay, or otherwise • cause to be satisfied or discharged, all Assumed Liabilities when due under their terms. loco) HHC may, at its expense and in its own name and behalf, or, to the extent lawful, in the • name and behalf of City, in good faith, contest the payment of any such Assumed Liabilities and, in the event of any such contest, permit any such Assumed Liabilities to remain unpaid during the period of such contest and any appeal therefrom. City will cooperate fully with HHC, at HHC's expense, in any such contest. City shall continue to be responsible for the Excluded Liabilities, except as specifically provided herein. 3.3 Additional Costs. On or before the Effective Date, HHC shall pay City's reasonable, direct, out -of- pocket transaction expenses, including reasonable legal fees and consulting fees incurred by City in connection with the transactions contemplated by this Agreement. Article 4. Payment of Taxes City and HHC anticipate that some or all of the Health Care System Real Property is or will be exempt from real estate taxation. However, if and to the extent that real estate taxes or installments of special assessments became due and payable with respect to the Health Care System Real Property during the Term, HHC agrees to pay all such amounts, prorated for any period before or after the Term. City and HHC agree that HHC's agreement to pay all applicable real estate taxes and special assessments does not constitute a waiver of any exemption from said taxes or assessments to which the Health Care System Real Property or HHC may be entitled. • Article 5. Repairs and Maintenance Throughout the Term, HHC, at its sole cost and expense, shall take good care of the Health Care System Real Property, and shall at all times keep the same in good order and condition, ordinary wear and tear excepted, and make all necessary repairs thereto, interior and exterior, structural and non - structural. All repairs by HHC shall be effected with due diligence and in a workmanlike manner in compliance with all legal requirements and shall be fully paid for by HHC. Article 6. Insurance 6.1 Property Insurance. HHC, at its cost, shall procure and maintain or cause to be procured and maintained during the Term a so called "all- risk" property insurance policy including the perils associated with mechanical breakdown (boiler and machinery) insuring the full replacement cost of the Improvements ° •e' i- ° of exeavatiefts Pgatings ^' f^••- •-titian bola ° the lowest fieeF 1 ° ° °'. The property policy shall also provide "all risk" coverage insuring at full replacement cost values for the improvements & betterments and personal property. Such insurance shall name City and HHC as insureds as their interest may • appear. -12- 1oco) • 6.2 Liability Insurance. HHC, at its cost, shall procure and maintain or cause to be procured and maintained during the Term commercial general public liability and professional liability insurance against claims of bodily injury, death, personal injury or property damage occurring on, in or about the Property, with a combined single limit of not less than $2,000,000 each claim/occurrence and an aggregate limit of not less than $4,000,000, naming City as an additional insured. 6.3 Director /Officer Insurance. HHC, at its cost, shall procure and maintain or cause to be procured and maintained during the Term, insurance or self - insurance with a minimum limit of $2,000,000 each claim/aggregate against all such liabilities and in such amounts as are required and procurable to reasonably protect the directors, officers and employees of HHC from claim of liability in connection with the management, operation, administration and maintenance of the Health Care System and the selection and supervision of its employees, volunteers and medical staff. 6.4 Worker's Compensation. HHC, at its cost, shall procure and maintain or cause to be procured and maintained during the Term, workers compensation insurance or self - insurance in accordance with applicable Minnesota Statutes. 6.5 Automobile Insurance. HHC, at its cost, shall procure and maintain or cause to be procured and maintained during the Term, automobile insurance with a minimum liability limit of $2,000,000 naming the City as an additional insured. Such coverage shall • extend to all owned, hired and non -owned automobiles. 6.6 Crime Fidelity. HHC, at its cost, shall procure and maintain or cause to be procured and maintained during the Term, Employee Dishonesty and Depositors Forgery coverage with minimum limits of $500,000. 6.7 Policy Requirements. Employer's Liability, Commercial General Liability, Professional Liability and Automobile Liability may be arranged under single policies for the full minimum limits required, or by a combination of underlying policies with the balance provided by an Excess or Umbrella Liability policy. All insurance provided for in this Article 6 shall: (a) be issued by insurance companies carrying an A M Best policyholder rating of at least A- and a financial size rating of at least VIII or subject to acceptance by the City, or be provided under a plan of self- insurance; (b) provide that policies of insurance may not be changed or canceled without at least 30 days (or 10 days, in the case of non - payment of premium) written notice of cancellation to the City and HHC; and (c) provide that, in the case of the property insurance required by Section • 6.1, losses shall be adjusted with the insurers and/or underwriters by City and HHC, -13- bCa) unless HHC Restores the Improvement, in which event HHC shall be authorized • exclusively to adjust the loss and receive the proceeds to pay for Restoration as Restoration progresses in accordance with this Agreement. 6.8 HHC's Insurance. Proceeds of any insurance carried by HHC on the Health Care System Personal Property shall be payable directly to HHC and HHC shall have the exclusive right to adjust and settle losses with respect thereto. 6.9 Certificate of Insurance. On or before the Effective Date and thereafter prior to expiration of the term of any expiring policy, HHC shall provide to City original certificates from the issuing insurance companies evidencing that the policies required to be carried by HHC are in full force and effect. Article 7. Damage To or Destruction of the Improvements 7.1 Notice; Restoration. In case of any material damage to or destruction of any part of the Improvements, HHC shall give notice thereof to City and HHC shall promptly and with all diligence at HHC's expense, commence and complete Restoration of such portion of the Improvements so damaged or destroyed. Unless City otherwise consents, any replacement building(s) to be constructed shall be of a quality not less than the quality of the Improvement, as the same existed immediately prior to such damage or destruction. • 7.2 Payment of Costs; Application of Proceeds. The costs of any Restoration performed by HHC in accordance with Section 7.1 shall be paid by HHC, and any insurance proceeds that are received by it in accordance with subsection 6.6(c) on account of any damage to or destruction of the Improvements or any part thereof shall be used for that purpose. Any insurance proceeds remaining following the payment of all costs of Restoration shall be retained by HHC, for its use in the operation of the Health Care System, and otherwise for its use in a manner consistent with its mission and purpose. LJ 7.3 No Abatement. There shall be no abatement of Annual Rent in the event of any damage or destruction to all or any part of the Health Care System. 7.4 Mutual Release. Notwithstanding any other provision of this Agreement, each party hereby releases the other (and each party for which such other may be responsible) of liability for any damage to the Improvements and the Health Care System Personal Property which is covetable by the insurance described in Section 6.1 above (or which could be covered by such insurance if HHC were to carry insurance on the Health Care System Personal Property), whether or not such damage is caused by the negligence or other fault of the party so released or any party for which it may be responsible. -14- I�Cc> Article 8. • Condemnation 8.1 Total Taking. In the event of a Taking of the whole or substantially all of the Health Care System Real Property, this Agreement shall terminate on the date of such Taking, and the Annual Rent and all other sums and charges required to be paid by HHC hereunder shall be apportioned and paid to the date of such Taking. In the event of any such Taking and notwithstanding the termination of this Agreement, and provided City is not the party which commenced the Taking, City and HHC shall together make one claim for an award for their combined interests and the net award received shall be allocated between City and HHC on the basis of their respective interests therein, including in the case of City the value of its reversion interest in the Health Care System Real Property and, in the case of HHC, the bargain value, if any, of its leasehold estate computed as though the Agreement had not been terminated, and damages sustained as a result of termination of the Agreement prior to the end of the Term. In addition, HHC shall be entitled to any award made in respect of or allocable to the Health Care System Personal Property and for moving, relocation and other statutory benefits. 8.2 Partial Taking. In the event of a Taking of less than substantially all of the Health Care System Real Property, this Agreement shall continue in full force and effect, and HHC shall at HHC's expense with reasonable diligence (subject to Unavoidable Delays) commence and complete Restoration, except to the extent made unfeasible by any reduction in area of the Land or Improvement caused by such Taking. All awards made in respect of • or allocable to the Health Care System Real Property shall be distributed as follows and in the following order: LJ (a) For the purpose of Restoration, in accordance Section 7.2, including the last sentence thereof, as if the same were insurance proceeds; and (b) HHC shall receive the balance of the award, for its use in the operation of the Health Care System, and otherwise for its use in a manner consistent with its mission and purpose. (c) In the event of a Partial Taking, City shall, to the extent there are available condemnation proceeds therefor, make a good faith effort to acquire such adjacent land in lieu of that taken as may be needed for restoration of the Property and requested in writing by HHC. 8.3 Determination of Partial Taking. As used herein, a Taking of substantially all of the Health Care System Real Property shall mean a Taking of such portion as renders it in HHC's good faith business judgment uneconomical or unfeasible to operate the Health Care System Real Property for the purpose for which the Health Care System Real Property was operated prior to such Taking. -15- C) • Article 9. Alterations Alhk low 9.1 General. HHC shall have the right from time to time during the Term to make, at its expense, Alterations in or to the Improvements, subject in all cases to the further provisions of this Article 9 and to all other applicable provisions of this Agreement. 9.2 Permitted Alterations. Subject to any applicable provisions of this Agreement, HHC shall have the right at any time during the Term to make such reasonable changes in and additions and alterations, structural or otherwise, to the Health Care System Real Property as HHC shall deem necessary or desirable for its operation of the Health Care System, provided that: (a) the work is performed in a good and workmanlike manner and in accordance with all applicable laws, ordinances, rules and regulations; and (b) no change, alteration, modification, or addition shall at any time be made that shall impair the structural soundness or diminish the value of any improvement. 9.3 Permits. Before any Alterations are begun, HHC shall procure, at its expense, all necessary licenses, permits, approvals and authorizations from all governmental authorities and shall, on demand, deliver photocopies thereof to City. Upon HHC's request, City shall join in the application for such licenses, permits, approvals and authorizations whenever such action is necessary. All Alterations shall be made and completed in accordance with all legal requirements. Article 10. Discharge of Liens Each of City and HHC agrees not to create, and shall discharge, liens or notices of claims of liens of mechanics and materialmen for work or materials contracted to be supplied to the Health Care System Real Property by City or HHC, respectively, subject to contest by HHC in accordance with Article 25. Article 11. Use of Health Care System Real Property HHC may use and occupy the Health Care System Real Property for Health Care System Operations, and any other lawful purposes, subject to the requirements of HHC's Articles of Incorporation and Bylaws and the Existing Bond Documents. 16- Article 12. Entry on Property by City HHC shall permit City and its authorized representatives to enter the Health Care System Real Property at all reasonable times for the purpose of inspecting the same, and showing the same to prospective purchasers and (during the last six (6) months of the Term only) tenants. Article 13. Utilities HHC shall pay all charges for the use at the Health Care System Real Property of water, sewer, electricity, heating, air conditioning and all other utilities consumed during the Term. Article 14. Indemnification Subject to Section 7.4, HHC shall defend, indemnify and save City harmless from and against all liabilities, claims, judgments, costs and expenses, including, but not limited to, reasonable attorneys' fees, to the extent arising by reason of or relating to the Health Care System, Health Care System Operations, or Health Care System Employees, whether known • or unknown, whether arising before or after the Effective Date, excluding, in each case, all liabilities, claims, judgments, costs and expenses that constitute Excluded Liabilities. Article 15. Transfers 15.1 By City. The City agrees as follows with respect to its interest in the Health Care System Real Property: (a) City agrees not to transfer, mortgage, pledge, lease, or encumber all or any part of its interest in the Health Care Center Real Property or its rights under this Agreement, except with the prior written consent of HHC. (b) If, in the ordinary course of business and in a fair market value transaction, HHC proposes to sell or transfer a portion or portions constituting less than all or substantially all of the Health Care System Real Property in aecardaneecgMalianqe with Section 15.2(eg), City agrees, following sixty (60) days prior notice by HHC, to cooperate with such sale or transfer, including by executing and delivering such reasonable and customary agreements and instruments as may be necessary or desirable (i) to release from this Agreement that part of the Health Care System Real Property proposed to be sold or transferred by HHC; (ii) to transfer and • convey the interest of City in that portion of the Health Care System Real Property -17- 1 oC°�� proposed to be sold or transferred by HHC, and (iii) to permit application of any net proceeds of sale or transfer in accordance with Section 15.2(eg). Notwithstanding the foregoing, if during the sixty day notice period, the City notifies HHC that the City wishes that the subject property be released from the Lease and returned to City control, City and HHC will cooperate to accomplish that result provided that HHC shall receive from the City at the time of the release an amount equal to the net proceeds anticipated by HHC from the transaction referenced in the initial notice to the City, such that HHC continues to have resources equivalent to the released property available for the mission and purposes of the Health Care System. 15.2 By HHC. HHC and City agree as follows with respect to HHC's interest in the Health Care System Real Property: (a) HHC's interest in the Health Care System Real Property may, in the ordinary course of its business, be sublet, in whole or in part, provided that: (1) no such sublease shall extend beyond the Term; and (2) no such sublease shall be inconsistent with HHC's mission; and (3) any such sublease shall not involve in excess of thirty percent of the square footage of the Hospital Property, without the written consent of City. (The parties intend that HHC be the primary accountable party for . delivery of healthcare services in and around the City of Hutchinson and have chosen the thirty percent limit as a measure aimed at insuring the continuing primary role of HHC.) • City agrees to execute a reasonable non - disturbance agreement (which includes provisions by which the subtenant agrees to recognize City as its direct landlord, and City agrees to recognize the subtenant as its direct tenant, following any early termination of this Agreement) as may be requested by the subtenant under any such sublease. (b) HHC's interest in the Health Care System Real Property, in the ordinary course of its business, he assigned, provided that: (1) no such assignment shall extend beyond the Term; and (2) no such assignment shall be inconsistent with HHC's mission; and (3) any such assignments in the aggregate shall not involve in excess of thirty percent of the square footage of the Hospital Property, without the written consent of City. M W Co� (c) If from time to time HHC determines that any portion of the Health Care System Real Property is no longer essential to Health Care System or its mission, HHC may, with the City's approval. release such portion of the Health Care System Real Property from this Agreement (returning control of such Real Property to City). A.,. not . eeds F ..1t:.,,, f..,,•„ & ; ..1e OF t.•.,.,..feF allO .,ea , .,,le.. c 15.1 .., . be used ta fai4her the Hiission and purpE)ses ,.f the He.,ltb Care System, bu Existing Bond Documents. Ut3 the 618 ....f . ale OF traiisfer of any poi4ian of eease to be a part of the Health Ga Sysieiii Real U. ea. ,der - ihi A . ,r (d) HHC's interest in the Health Care System Personal Property may, in the ordinary course of its business, be transferred or sold. (e) HHC shall have the right to mortgage, pledge, or otherwise encumber as collateral or security for debt held by an institutional lender or bond trustee all or any part of its interest in the Health Care System in the ordinary course of business financing transactions, provided that the proceeds of such transactions are used to support Health Care Systems Operations, and provided further that no right, title or interest of City shall be encumbered thereby. City agrees to cooperate reasonably with HHC in connection with any such financing, including the signing of such additional documents as may be required to obtain such financing. . (f) HHC shall not assign, sublet or otherwise transfer its rights and obligations under this Agreement, except as permitted under Section 15.1 and 15.2, without the consent of City. (g) With respect to a transaction described in Section 15 1(b) any net proceeds resulting from a sale or transfer allowed under Sections 15.1 shall be used to further the mission and purposes of the Health Care System, but only after any net proceeds are applied in accordance with the provisions of the Existing Bond Documents. Upon the closing of any sale or transfer of any portion of the He_ alth Care System Real Pro_pel1v pursuant to this Section such portion shall cease to be a part of the Health Care System Real Property. under this Ag =reement. Article 16. Estoppel Certificates Each party hereto agrees from time to time, upon not less than twenty (20) days' prior notice from the other, to execute, acknowledge and deliver, without charge, to the other or its designee, a statement in writing, certifying that this Agreement is unmodified and in full force and effect (or if there have been modifications, identifying the same by the date thereof and specifying the nature thereof), the dates to which the Annual Rent and other sums and charges payable hereunder have been paid, the amount of the Annual Rent, that to its actual . knowledge there are no claims against the other hereunder (or if there are any such claims, -19- I oCcl� specifying the same) and that to its actual knowledge the other party is not in default and there exists no circumstance which with the giving of notice or lapse of time, or both, would constitute a default (or if such party is aware of any such default or circumstance specifying the same). Article 17. Representations and Covenants of City 17.1 Power and Authority. City has the power and authority to execute and deliver this Agreement, and to carry out the transactions contemplated herein. The Hutchinson City Council, acting on behalf of City in connection with this Agreement, is the properly appointed, acting and duly authorized governing body of City, and is acting in accordance with the provisions of all applicable laws and regulations. 17.2 Agreement Valid and Binding. The Agreement is duly executed and delivered and is a valid and legally binding obligation of City enforceable in accordance with its terms. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, result in the creation of any lien, charge or encumbrance or the acceleration of any indebtedness or other obligation of City, and are not prohibited by, in violation of or in conflict with any provisions of, and will not result in a default under or a breach of (i) any constitutional provision affecting City; (ii) any ordinance, law or regulation; or (iii) any order, decree or judgment or any court of governmental agency to which City or the Health Care System is a party or is bound. 17.3 Tax - Exempt Bonds. City has not, by act or omission, caused any of the Tax - Exempt Bonds to lose their exemption from federal income taxation. 17.4 Existing Bonds. The Existing Bonds are the only bonds authorized and issued by City which are outstanding as of the Effective Date and applicable to the Health Care System. City will make such reports and disclosures from time to time as are required under the Existing Bond Documents. 17.5 Assigned Contracts; Consents. City shall make a good faith effort to obtain such consents and give such notices as may be required in connection with the assignment to HHC of Assigned Contracts. 17.6 Cooperation. City, at HHC's expense, shall cooperate reasonably with HHC in any manner necessary to enable HHC to fulfill HHC's obligations and exercise HHC's rights under this Agreement. 17.7 Trade Secrets. City understands that certain records that are defined as "trade secret information" pursuant to Minnesota law are of substantial value of HHC, and, except as otherwise required by law, are and have been maintained in the strictest confidence as trade secrets, and agrees, except as otherwise required by law, not to divulge, furnish, or . make accessible to anyone (other than HHC and its designees) any trade secrets at any time. -20- lbcc\> 17.8 Environmental Condition. Except for Hazardous Materials used by City in the ordinary course of operating the Health Care System and in accordance with Hazardous Substance Laws: (a) City has not generated, manufactured, stored or released any Hazardous Materials on or about the Health Care System Real Property, and has permitted no other party to do any of the same; and (b) City has received no notice of and has no knowledge (i). that any Hazardous Material are or have ever been generated, manufactured, stored or released about the Health Care System Real Property, (ii) of any, requests, notices, investigations, demands, administrative proceedings, hearings, litigation or other action proposed, threatened or pending relating to any of the Health Care System Real Property alleging non - compliance with or liability under any Hazardous Material Law, or (iii) that any above - ground or underground storage tanks or other containment facilities of any kind containing any Hazardous Materials are or have ever been located about the Health Care System Real Property. 17.9 Employees. City will take such actions with respect to Health Care System Employees as and when required under Section 18.11. 17.10 Future Financings. HHC may during the term of this Agreement undertake capital improvements to all or part of the Health Care System or replacements thereof, and during the term of this Agreement may further improve or expand the Health Care System for the purpose of serving community health care needs ( "Future Improvements "). In order to undertake and complete any such Future Improvements, HHC must secure adequate and . affordable long -term financing. City has, pursuant to the authority vested in it under applicable law, the ability to issue revenue bonds or general obligation bonds for this purpose. Upon the request of HHC, City agrees to consider use of its authority to issue such bonds, provided: 0 (a) City determines that issuance of revenue bonds or general obligation bonds (i) would advance HHC's purpose of serving community health care needs, (ii) is authorized by law, and furthers City's interests, (b) such bonds may be issued only for the construction of Future Improvements, or for the refunding, refinancing or otherwise defeasing the Existing Bonds or other bonds issued to finance Future Improvements, and (c) HHC executes and delivers all documents and instruments, and otherwise delivers or causes to be delivered to City all certificates and opinions, as may be reasonably requested by City and are customarily provided in connection with bonds financings. -21- 7oCO� Article 18. 49 Representations and Covenants of HHC 18.1 Formation of HHC. HHC is a nonprofit corporation duly organized and in good standing under the laws of the State of Minnesota. HHC has the power to lease and to own assets and to carry on its business as contemplated under this Agreement. 18.2 Power and Authority. HHC has the power to execute and deliver this Agreement and to carry out the transactions contemplated herein. All corporate actions required to be taken by HHC to authorize the execution, delivery and performance of this Agreement and all transactions contemplated hereby have been duly and properly taken. 18.3 Agreement Valid and Binding. The Agreement is duly executed and delivered and is a valid and legally binding obligation of HHC enforceable in accordance with its terms. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, result in the creation of any lien, charge or encumbrance or the acceleration of any indebtedness or other obligation of HHC, and are not prohibited by, in violation of or in conflict with any provisions of, and will not result in a default under or a breach of (i) any contract, agreement or other instrument to which HHC is a party or is bound; (ii) any ordinance, law or regulation; or (iii) any order, decree or judgment or any court of governmental agency to which HHC is a party or is bound. 18.4 Nonprofit Status: Principal Office; Primary Service Area. HHC shall remain . throughout the Term qualified to do business as a Minnesota nonprofit corporation with its principal office in the City of Hutchinson, Minnesota. HHC will operate the Health Care System such that the City of Hutchinson will always be in the HHC Geographic Service Area as that term is defined at the date hereof in the Bylaws of HHC. 18.5 Tax - Exempt Bonds. The parties intend that the interest paid on the Tax - Exempt Bonds will not be included in the gross income of the holders thereof for federal income tax purposes within the meaning of Section 103 of the Code. In furtherance thereof, the parties agree that each will take any and all necessary actions in order for the interest on the Tax - Exempt Bonds to remain exempt from federal income taxation. Without limiting the foregoing: (a) HHC represents that it is an organization described in Section 501(c)(3) of the Code (a "501(c)(3) Organization ") and agrees that it shall maintain its status as an organization described in Section 501(c)(3) of the Code, and exempt from federal income tax under Section 501(a) of the Code, and it will not receive or realize any unrelated trade or business income to the extent such income would adversely affect the tax- exempt status of the Tax - Exempt Bonds. (b) So long as any Tax - Exempt Bonds are unpaid, no more than five percent (5 %) of the facilities financed by the net proceeds of the Tax - Exempt Bonds will be used by any person other than: -22- �b co, 49 (1) a Governmental Unit; (2) a 501(c)(3) Organization in a trade or business, the conduct of which is substantially related to the exercise or performance by the nonprofit corporation of its charitable, educational, or other purpose or function which constitutes the basis for its exemption under Section 501 of the Code; or (3) a limited liability company, the sole member of which is a 501(c)(3) Organization, that operates as described in subparagraph (2) above; unless the Tax- Exempt Bonds which financed such facilities are redeemed within ninety (90) days from date on which there is a change from such an ownership. (c) So long as any Tax - Exempt Bonds are unpaid, HHC shall not take or omit to take, and shall not permit others to take or omit to take, any action that would adversely affect its qualification as a 501(c)(3) Organization. (d) HHC shall not take any action or omit to take any action with respect to the gross proceeds of the Tax - Exempt Bonds or with respect to any amounts expected to be used to pay the interest thereon or the principal thereof, which if taken or omitted, would cause any of the Tax - Exempt Bonds to be determined to be an "arbitrage bond," within the meaning of Section 148 of the Code. . (e) HHC shall not enter into any "management agreement," as defined in Revenue Procedure 97 -13, 1997 -1 COB. 632 (February 3, 1997) ( "Rev. Proc. 97- 13"), that does not satisfy the "safe harbor" provisions of Rev. Proc. 97 -13, except to the extent City receives an opinion of Bond Counsel to the effect that nonobservance of this representation will not cause interest on any Tax Exempt Bonds to be included in gross income for federal income tax purposes. n (f) HHC shall not take or omit to take, nor permit others to take or omit to take, any action, which, if taken or omitted, would adversely affect the exclusion of interest on the Tax - Exempt Bonds from gross income for federal income tax purposes. (g) HHC shall immediately remit to City any amount required to be rebated to the Internal Revenue Service pursuant to the provisions of Section 148 of the Code. 18.6 Existing Bonds. HHC shall cooperate with City and shall provide such instructions and requests to City from time to time as may reasonably be necessary to enable City to timely make such reports and disclosures as are required under the Existing Bond Documents. HHC shall not, by any act or omission, cause City to fail to comply with the financial and other covenants set forth in the resolution of City Council approving the Taxable Medical Facilities Gross Revenue Bonds, Series 1998, nor with any financial or -23- � oC�� other covenants set forth in documents governing any Future Financing issued pursuant to Section 17.10. 18.7 Health Care Licenses. HHC shall obtain on or before the Effective Date such licenses to operate the Health Care System from the Minnesota Department of Health, including a hospital license, and shall maintain such licenses in good standing throughout the Term. 18.8 Medicare Certification. HHC shall comply with all Medicare conditions of participation or submit timely corrective action plans satisfying same throughout the Term. 18.9 Accreditation. HHC shall maintain the Health Care System accreditation by the relevant state survey agency or The Joint Commission throughout the Term. 18.10 Medical Staff. On or before the Effective Date, HHC shall adopt the Medical Staff Bylaws of Hutchinson Health Care, including the Policy on Appointment, Reappointment & Clinical Privileges, Organization and Functions Manual, and Rules and Regulations in effect as of the Effective Date and shall extend privileges to all members of the Health Care System medical staff and its independent allied health professional staff on the same terms that were in effect as of the Effective Date. 18.11 Employment Offers to Existing Employees; Certain Liabilities. . (a) Effective as of the Effective Date, City shall terminate the employment of all Health Care System Employees and HHC shall offer employment to all such Health Care System Employees under the same job title, responsibilities, salary and substantially similar employee benefits in effect as of the Effective Date. This covenant, however, shall not be construed to create any right for any individual to be employed by HHC, it being understood that HHC shall have the right to make personnel changes consistent with its operating needs; and no Health Care System Employee shall be offered employment by HHC unless such employee agrees to the transfer by City to HHC of the employment records with respect to such employee. HHC shall assume and shall pay and satisfy when due, all of City's obligations to pay accrued, but not paid, wages, paid time off, to Health Care System Employees. City shall make all scheduled payroll disbursements until the Effective Date. Except as provided in Section 18.11(b) below, HHC does not hereby assume any other obligations with respect to City's employees. HHC will adopt, at its sole election, either a Section 401(a) or a Section 403(b) defined contribution retirement plan. The initial contribution rate by HHC shall be the percentage of employee covered salary utilized by City immediately prior to the Effective Date. (b) Any unemployment benefits costs associated with the termination of the employment of an employee with City or with any other subsequent employer where City would be an employer for the previous four (4) quarters will be the sole • responsibility of HHC, and HHC shall reimburse City for any such costs billed to it. -24- ) b (0 J HHC shall remain obligated under this subparagraph until such time as City is no longer an employer of record for the previous four (4) quarters for the benefit year indicated by the unemployment statement of benefits. (c) City maintains the Hutchinson Health Care Deferred Compensation Plan, an eligible governmental plan described in Section 457(b) of the Code, (the "457(b) Plan") for the benefit of certain Health Care System Employees. Those Health Care System Employees shall no longer be eligible to participate in said plan following severance of employment with City. HHC agrees to act as City's delegate and accept appointment as the Administrator of the 457(b) Plan in order to carry out the terms of the 457(b) Plan until distribution of all accounts held under the plan are made following severance of employment with City by the participants in the plan. HHC shall be responsible for the costs and expenses incurred in the administration of the 457(b) Plan. 18.12 Operating Expenses and Taxes. In addition to HHC's agreement to pay certain taxes, maintenance expenses and insurance associated with the Health Care System Real Property pursuant to Articles 4, 5 and 6 hereof, HHC shall pay, or otherwise cause to be paid, all Operating Expenses, whenever incurred. For purposes of this Agreement, the term "Operating Expenses" means all costs associated with operation of the Health Care System including, but not limited to, the costs of maintenance and repair, utilities, equipment rental, professional fees, salaries, wages, employee benefits, permit fees, license fees, and, as the same respectively become due, all taxes, assessments and governmental charges that may be . lawfully assessed or levied against or otherwise attributable to the Health Care System during the Term; provided, however, that with respect to taxes, assessments or governmental charges that may lawfully be paid in installments over a period of years, HHC shall be obligated to pay only such installments as are required to be paid during the Term. HHC may, at its expense and in its own name and behalf, or, to the extent lawful, in the name and behalf of City, in good faith, contest any such taxes, assessments and governmental charges in accordance with Article 25 hereof. 18.13 Reporting Requirements. HHC shall deliver to City copies of HHC's audited annual financial statements prepared in accordance with GAAP within one hundred fifty (150) days after the end of each fiscal year during the Term and HHC shall provide proof to City annually that all applicable health care accreditations have been maintained. In addition, HHC shall provide both (i) an annual letter from HHC's Board of Directors and Chief Executive Officer to the effect that nothing has come to their attention to indicate that an Event of Default has occurred that has not been cured pursuant to Section 20. 1, or if such an uncured Event of Default exists, such letter shall set forth the details thereof; and (ii) any and all documentation provided to and from Moody's, Standard & Poor's and like agencies evaluating the financial and operating performance of the Hospital or the Health Care System. 18.14 Indigent Care. HHC shall operate the Hospital Property as a hospital open to • the general public providing emergency and acute care services, from time to time at no -25- \ charge or at reduced charges in accordance with charity care, discount and community o benefit policies consistent with HHC's charitable purposes approved by HHC's board of directors and in compliance with any applicable federal, state and City statute or ordinance and regulations with respect thereto. 18.15 Operating Parameters. City has entered into this Agreement in the belief that HHC can effectively and efficiently operate the Health Care System. Accordingly, in addition to the qualitative performance covenants set forth above herein, HHC agrees to operate the Health Care System such that, at all times during the Term, the Health Care System is in compliance with the Operating Parameters (including the cure provisions applicable thereto), all covenants and obligations set forth in Section 18.5 with respect to the Existing Bonds, and any such covenants and obligations undertaken by HHC in connection with financing referenced in Section 17.11 of this Agreement. The parties acknowledge that the Operating Parameters have been designed as indicators of financial and quality jeopardy under current market conditions. HHC and City shall, from time to time, amend the Operating Parameters as necessitated by changes in market conditions in order to maintain their status as indicators of financial and quality jeopardy, taking into consideration the performance of similarly situated nonprofit corporations having operations comparable to HHC's Health Care System Operations. 18.16 Investments. HHC, acting through its board of directors, agrees to invest all Hospital Funds in accordance with the standard of care set forth in Minnesota Statutes Section 309.62 et seq. and consistent with the standard of care set forth in Minnesota Statutes . Section 11.A.09. Article 19. Condition of Property 19.1 Except as expressly stated herein, City does not make any representations or warranties regarding the Health Care System. HHC agrees that it is leasing and acquiring the Health Care System on an "AS IS ", "WHERE IS" and "WITH ALL FAULTS" basis, based upon its own judgment. CITY MAKES NO WARRANTY WITH RESPECT TO THE HEALTH CARE SYSTEM OR ANY PART THEREOF, EXPRESS OR IMPLIED, AND CITY SPECIFICALLY DISCLAIMS ANY WARRANTY OF MERCHANTABILITY AND OF FITNESS FOR A PARTICULAR PURPOSE AND ANY LIABILITY FOR CONSEQUENTIAL DAMAGES ARISING OUT OF THE USE OF OR THE INABILITY TO USE THE HEALTH CARE SYSTEM OR ANY PART THEREOF. Article 20. Events of Default; Termination 20.1 Events of Default. If any one or more of the following events ( "Events of Default ") shall happen, then and in any such event, City may give notice to HHC specifying such Event or Events of Default and stating that this Agreement and the Term shall expire • and terminate on the date specified in such notice, and on such date, unless such specified -26- 1 0 (0` Event or Events of Default shall have been cured, this Agreement shall terminate and HHC shall remain liable as hereinafter provided: (a) HHC defaults in the payment of any Annual Rent payable under this Agreement and HHC does not cure such default within fifteen (15) days after actual receipt of notice thereof; (b) HHC fails to satisfy an Operating Parameter giving rise to the City's voting member amendment rights set forth in Section 73(d) of HHC's bylaws, and the City provides written notice to HHC within the time period specified in the Operating Parameter that such amendment rights shall take effect. (c) HHC fails to pay any other monetary obligation when due or observe or perform any of the other terms, conditions, covenants or agreements required to be observed or performed by it under this Agreement and such failure shall continue for a period of, in the case of a monetary obligation, thirty (30) days or, in the case of a non - monetary obligation, sixty (60) days, following actual receipt of written notice of such failure by HHC, or, in the case of a non - monetary default which cannot with due diligence be cured within such period of sixty (60) days, HHC fails to proceed with due diligence within such period of sixty (60) days to commence to cure the same and thereafter to prosecute the curing of such default with due diligence. 20.2 Repossession. If this Agreement is terminated pursuant to Section 20.1, City • may enter upon and repossess the Health Care System Real Property (said repossession being hereinafter referred to as "Repossession ") by legal process, and may remove HHC and all other persons therefrom. 20.3 Continued Liability. No termination of this Agreement pursuant to Section 20.1 and no Repossession of the Health Care System Real Property pursuant to Section 20.2 or otherwise shall relieve HHC of its obligation to pay Annual Rent or any of its other obligations under this Agreement, all of which shall survive any such termination or Repossession. 20.4 Re- letting. In the event that the Term shall terminate as provided in this Article 20 before its scheduled expiration, City, at its option, may elect from time to time following Repossession to rent the Health Care System Real Property or any part thereof in its own name, or for the account of HHC, for the residue of the then Term or for a longer period of which said residue is a part, or for a shorter period or periods, at such rentals and upon such terms as City deems best, and may receive rents therefor, applying any monies collected for the residue of such term, first, to the payment of such reasonable expense, including reasonable attorneys' fees, to which City may have been put to obtain possession, accomplish such reletting and care for the Health Care System Real Property while vacant; and, second, the balance of the net amount of the rents to the performance of HHC's obligations under this Agreement. Any surplus shall belong to City but HHC shall remain . liable for any deficiency. City shall act reasonably to mitigate damages. -27- W 20.5 No Waiver. No failure by any party to insist upon the strict performance of Goany term hereof or to exercise any right or remedy consequent upon a breach thereof, and no acceptance of full or partial rent during the continuance of any such breach, shall constitute a waiver of any such breach or of any such tern. 20.6 Exercise of Rights While in Default. HHC may exercise and continue to exercise all of its rights under this Agreement upon the occurrence and during the continuance of any default and Event of Default under this Agreement up to the point of termination of this Agreement and actual Repossession, including but not limited to the Purchase Option. Article 21. Surrender of the Propert v 21.1 Surrender of Health Care System Real Property. In the event HHC does not exercise and fulfill the requirements of the Purchase Option, upon the expiration or sooner termination of this Agreement, HHC shall quit and surrender the Health Care System Real Property leased to it pursuant to this Agreement, in the condition required to be maintained in accordance with this Agreement (subject to ordinary wear and tear and damage by fire or other casualty excepted), to City, without any payment therefor by City, without delay, free and clear of all lettings and occupancies (other than assignments and subleases entered into as permitted under this Agreement). . 21.2 Disposition of Health Care System. The parties acknowledge that in certain situations, including in the event HHC does not exercise and fulfill the requirements of the Purchase Option, the bylaws of HHC provide City certain corporate membership rights which could affect the disposition of the assets of the Health Care System upon termination of this Agreement. In such situations, in addition to the specific rights set forth in Section 21.1, City may assert such membership rights and take such other actions as it deems advisable to cause the return or distribution to City, and the manner thereof, of such Health Care System assets as the City may determine at that time and as allowed by law. It is understood that, depending on the manner of such actions, City may be required to assume certain liabilities as required by law. Article 22. No Merger of Title There shall be no merger of HHC's interest in this Agreement nor of the leasehold estate created by this Agreement with the fee estate in the Health Care System Real Property or any part thereof by reason of the fact that the same person may acquire or own or hold, directly or indirectly, (a) HHC's interest in this Agreement or the leasehold estate created by this Agreement or any interest therein and (b) the fee estate in the Health Care System Real Property or any part thereof or any interest therein, and no such merger shall occur unless • and until all persons then having an interest in, which interest shall have been voluntarily -28- 1 0 Co�� CJ created by the holders of, the ownership interests described in (a) and (b) above, shall join in a written instrument effecting such merger and shall duly record the same. Article 23. Quiet Enjoyment City covenants that HHC shall quietly have, hold and enjoy the Property during the Term without hindrance or molestation, subject only to Article 20. City represents, warrants and covenants to HHC that the Health Care System is free and clear of all prior liens and encumbrances except for the Medical Office Building Leases, the Shopping Center Leases, and except to the extent that the Existing Bond Documents create any liens or encumbrances. Article 24. Notices All notices, requests, demands, consents, approvals, and other communications that may or are required to be served or given hereunder (for the purposes of this Article collectively called "Notices ") shall be in writing and shall be delivered personally or sent by registered or certified mail, return receipt requested, postage prepaid, or by nationally recognized overnight courier, addressed to the party to receive such Notice at the following addresses: If to City: City of Hutchinson 111 Hassan St. SE Hutchinson, Minnesota 55350 Attention: City Attorney If to HHC: Hutchinson Health Care 1095 Highway 15 S. Hutchinson, Minnesota 55350 -5000 Attention: Chief Executive Officer -29- \bA Either party may, by Notice given as aforesaid, change its address for all subsequent Notices, • except that neither party may require Notices to it to be sent to more than two addresses. Mailed Notices shall be deemed given when mailed in the manner aforesaid, provided that in the case of a notice of default to HHC the same shall be deemed given only upon actual receipt by HHC. Article 25. Contests 25.1 Contest. After written notice to City, HHC may at its expense contest, by appropriate proceedings conducted in good faith and with due diligence (all such proceedings together with appeals therefrom being hereinafter referred to as "Contests ") the amount, validity or application, in whole or in part, of any tax, assessment, mechanics' lien, encumbrance, charge or any other adverse claim for which HHC is responsible under this Agreement (hereinafter collectively "claims ") provided that: (a) In the case of an unpaid claim, such Contest shall operate to suspend the collection of the same from City and HHC therein; (b) HHC shall have furnished such security, if any, as may be required in the proceedings or reasonably required by City; and (c) No part of the Health Care System or any interest therein shall be, in is the reasonable opinion of City, in imminent danger of being forfeited or lost. 25.2 Suspension of Obligation. During the period HHC carries forward any such Contest in good faith, HHC shall be relieved from its obligations herein contained to pay the claims, or to clear the liens with respect to which such contest is conducted. If and to the extent HHC shall not prevail in any such Contest, HHC shall immediately pay and discharge the claim in question to such extent. 25.3 Procedure. All such Contests may be brought by HHC in the name of HHC or, if reasonably necessary, in the name of City or HHC and City, as may be appropriate. Each party agrees to cooperate with the other in such Contests, short of the payment of money with respect thereto, except where this Agreement otherwise requires payment. Each party will endorse such pleadings, checks and other documents as will be appropriate to carry out the purposes of this Article 25. Article 26. Purchase Option 26.1 Grant. Notwithstanding any other provision in this Agreement to the contrary, HHC shall have the option to purchase the Health Care System Real Property from City at the expiration of either Term for a purchase price equal to the greater of (i) the then- existing • balance of the Existing Bonds and interest accrued thereon, and (ii) one dollar ($1.00). HHC -30- I U (c� must give City written notice of its intent to exercise its Purchase Option at least ninety (90) • days prior to expiration of the Term. The Parties acknowledge that the purchase price represents a bargain sale and has no relation to the value of City's membership rights set forth in the Bylaws of HHC. 26.2 Title. Upon proper exercise of the Purchase Option by HHC, City agrees to convey the Health Care System Real Property to HHC free and clear of all liens and encumbrances, except for the Medical Office Building Leases, the Shopping Center Leases, and any other lien or lease created, suffered or granted by HHC (or those claiming by, through or under HHC). In connection with exercising the Purchase Option, HHC may, at its expense, obtain a title insurance commitment. If such commitment reflects any matter affecting title to the Health Care System Real Property that is objectionable to HHC (other than this Agreement and any encumbrances created on or after the date hereof by HHC or those claiming by, through or under HHC), then HHC may give written notice to City of such matter. If HHC gives City such notice prior to closing, City shall at its expense within sixty (60) days cause all encumbrances not permitted as provided above to be removed and corrected of record. If City fails to do so within sixty (60) days, time being of the essence, HHC may at its option: (a) attempt to cause such encumbrances to be removed, (b) proceed to close without waiving any rights to damages hereunder, or (c) terminate the agreement formed by exercise of the Purchase Option, this Agreement, or both, by giving written notice thereof to City. If HHC elects alternative (a) above, closing shall be postponed until the encumbrances in question are removed and, if HHC is unable within a further period of sixty (60) days to cause such encumbrances to be removed, HHC may then elect either alternative • (b) or (c) above. No such postponement shall alter the purchase price. All costs and expenses incurred by HHC in causing or attempting to cause such encumbrances to be removed, including reasonable attorneys fees, shall be payable by City if attributable to any fault or action by City. 26.3 Closine. Except as postponed pursuant to Section 26.2, the closing shall take place at the time and place agreed to by City and HHC within the last sixty (60) days of the Term. At the Closing, City and HHC shall execute and deliver such reasonable and customary documents and instruments as may be necessary or desirable to convey City's interest in the Health Care System Real Property to HHC, as herein provided. This Agreement and all of the terms and provisions hereof shall remain in full force and effect until the purchase has closed, except as otherwise provided in this Agreement. 26.4 Effect of Non - Exercise. If HHC does not exercise its Purchase Option, upon termination of the Agreement HHC shall surrender the Health Care System Real Property to City in the condition specified herein: as provided in Article 2] Article 27 Miscellaneous 27.1 Consent. In any case under this Agreement which requires consent or . approval such consent or approval shall not be unreasonably withheld, conditioned or 31- 1�C�� delayed unless otherwise specified; provided that any consent relating to Section 17.10 as to • which a vote of City Council or City Electorate is required, the decision of such body shall not be deemed unreasonable, conditioned or delayed. 27.2 Relationship of Parties. It is agreed that nothing herein contained is intended or should be construed in any manner as creating or establishing the relationship of joint venturers or as constituting HHC or any of its employees or agents as the employees or agents of City, except as otherwise provided herein. 27.3 Miscellaneous. This Agreement shall be governed by the laws of the State of Minnesota. If any term of this Agreement or any application thereof shall be invalid or unenforceable, the remainder of this Agreement and any other application of such term shall not be affected thereby. This Agreement may be changed, waived, discharged or terminated only by an instrument in writing signed by the then owners of City and HHC interests herein. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto. The headings of this Agreement are for purposes of reference only and shall not limit or define the meaning hereof. This Agreement may be executed in any number of counterparts, each of which is an original, but all of which shall constitute one and the same instrument. The parties have finalized the terms of the Lease prior to the Effective Date and understand that additional Real Property that should be Health System Real Property could be acquired, or Health System Real Property could be disposed of. between the date of this Agreement and the Effective Date and some additional bonds could be issued through the cooneration of the parties. which • bonds then should constitute Existing Bonds. Consequently. the parties are authorized and instructed to update and conform the Health System Real Property definition to the actual property list and the Existing Bonds definition to the actual list of Existing Bonds as of the Effective Date. Further, in the same context, the parties are authorized and instructed to complete the Lease Exhibits as of the Effective Date. which Exhibits shall be initialed by an authorized representative of both parties. 0 27.4 Recording. This Agreement, or a short form of this Agreement, may be recorded in the real estate records of the Counties in which the Health Care system Real Property is situated. HHC and City agree to cooperate with each other in the preparation and recordation of any such short form of this Agreement. 27.5 Non - Delegation and Lack of Control. No provision of this Agreement shall be construed as a delegation by City to HHC of any governmental function of City. Further, HHC and City have determined that the rights of City under this Agreement and the rights granted to City by HHC under its Articles of Incorporation and Bylaws do not, and are not intended to, give City direct or indirect control over the conduct of the Health Care System or its operations. -32- 1 Q 0 • tb.us.1682982.05 (Signature pages follow] r 1 LJ • -33- 1oC6�) • IN WITNESS WHEREOF, the parties hereto have executed this instrument under seal as of the day and year first above written. CITY OF HUTCHINSON By: Its: And by: STATE OF ) ss. is COUNTY OF The foregoing instrument was acknowledged before me this day of , 2007, by and , the and , respectively, of the City of Hutchinson, a Minnesota municipal corporation, on behalf of the municipal corporation. Notary Public ri U 10(00 • • • HUTCHINSON HEALTH CARE By: Its: And by: STATE OF Its: ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this _ day of 2007, by and the and , respectively, of Hutchinson Health Care, a Minnesota nonprofit corporation, on behalf of the nonprofit corporation. Notary Public THIS INSTRUMENT WAS DRAFTED BY: Faegre & Benson LLP 2200 Wells Fargo Center 90 South Seventh Street Minneapolis, MN 55402 Phone: (612) 766 -7000 �DC0> EXHIBIT A • Legal Description of the Land Hospital Land: Medical Office Building Land: Nursing Home Land: Shopping Center Land: • Dassel Medical Center Land: Regional Eye Land: Auxiliary Land: • 10(6 EXHIBIT B • Excluded Assets • • 1) co- EXHIBIT C • Motor Vehicles • 11 �bCc-) C, J n U • EXHIBIT D Escrow Agreement wcca • • 11 Document comparison done by DeltaView on Wednesday, September 05, 2007 1:40:44 PM Inca r Count Insertions 19 Deletions 25 Moved from 2 Moved to 2 Style change 0 Format chan ed 0 Total changes 48 Inca • Ordinance No. 07 -0470 AN ORDINANCE APPROVING ARTICLES OF INCORPORATION AND RESTATED BYLAWS OF HUTCHINSON HEALTH CARE WHEREAS, as a result of 3 years of analysis, public input and consultation with health care experts, the City and Hospital agree that at the current time it is in the best interest of the residents of Hutchinson and the surrounding area that the Hospital be governed by a not- for - profit organization under Internal Revenue Code Section 501(c)3; and, WHEREAS, a non - profit corporation, Hutchinson Health Care, has been created to serve as the governing entity to serve the health care needs of the Hutchinson area and, WHEREAS, the City of Hutchinson will continue to be a part of Hutchinson Health Care through membership rights and the Board of Directors of Hutchinson Health Care the Articles of Incorporation and the bylaws of Hutchinson Health Care, the City Council of the City of Hutchinson must approve said Articles and Bylaws, NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF HUTCHINSON, THAT THE ARTICLES OF INCORPORATION AND RESTATED BYLAWS OF HUTCHINSON HEALTH CARE AS ATTACHED AS EXHIBIT A AND B TO THIS ORDINANCE 1S HEREBY ADOPTED BY THE CITY COUNCIL AND THAT THIS ORDINANCE SHALL BE EFFECTIVE UPON PUBLICATION. Signed this day of 12007. Attest: • Gary D. Plotz, City Administrator J Steven W. Cook, Mayor IoCb� HHC 8 -22 -07 DRAFT • RESTATED BYLAWS OF HUTCHINSON HEALTH CARE W. I: Hutchinson Health Care (the "corporation ") is a nonprofit health care corporation, including a hospital, nursing home, and clinic, organized under the laws of the State of Minnesota. The mission ( "Mission ") of Hutchinson Health Care is "to promote health and provide care alternatives to our community." The Board of Directors of Hutchinson Health Care is responsible for the quality of care rendered by the corporation and must accept and discharge this responsibility to do all that is necessary to fulfill the corporation's obligation to its patients, clients, and residents. The corporation is formed as the result of the conclusions of a community task force which has recommended that assets and activities of the City of Hutchinson, Minnesota ( "City") with respect to delivery of health care services be transferred to a private nonprofit entity not controlled by the City as a way to more effectively and efficiently provide for the health care needs of residents in the primary service area of Hutchinson Community Hospital ( "Hospital "). The corporation was formed under the auspices of community representatives serving on the task force and not by the City under Section 144.581 of the Minnesota • Statutes. Acknowledging that the corporation needs the cooperation of the City of Hutchinson to deliver on certain aspects of its mission, the corporation has provided for certain rights to be exercised by the City as provided in these Bylaws. At the time of adoption of these Restated Bylaws, the corporation offers a wide variety of services including, in addition to hospital inpatient and outpatient services and clinical services, emergency room, and nursing home services. The corporation defines its fundamental nature ( "Fundamental Nature ") as an independent private health care provider, providing a reasonable range of acute care and outpatient hospital services and clinic services. SECTION 1.1 Number and method of election. The Board of Directors of this corporation shall consist of an odd number of no fewer than seven (7) and no more than eleven (11) persons, and, subject to such limitation, the number of members of the Board of Directors shall be such as may be designated from time to time by the Board of Directors. Members of the Board of Directors shall be elected or appointed as set forth below in accordance with the nominations process described in Section 4.5 of these Bylaws. (a) Appointed Directors. Within the Board size parameters established from time • to time by the Board, the largest number of directors which constitute a minority of the total \OM number of authorized directors shall be appointed by the City Council of the City (the "City • Council "). No more than two (2) of such appointees may concurrently serve as members of the City Council. (b) Ex Officio Director. There shall be one (1) Ex Officio Director, who shall be the physician serving from time to time as the Chief of the Medical Staff of the Hospital. The Ex Officio Director shall have voting rights. (c) Community Directors. The remainder of the directors shall be elected by the Board of Directors of this corporation at the annual meeting of this corporation and shall be known as Community Directors. At least two (2) of the Community Directors shall be residents of the Hospital's Geographic Service Area at the time of election; and of those, at least one director shall be a resident of the City. The Geographic Service Area shall mean the area composed of the lowest number of contiguous zip codes from which the Hospital draws at least 75 percent of its inpatients. SECTION 1.2 Board Composition. The composition of the Board of Directors is subject to the following limitations: (a) Credentialed practitioners. At any given time, no more than one -third of the directors may be health care professionals credentialed to provide services at the Hospital or any other health care facility owned by this corporation. (b) Directors of other systems. At any given time, a majority of the directors of • this corporation shall be persons who are neither: (i) directors of any other health care providers or health care systems residing outside the Hospital's Geographic Service Area; nor (ii) directors of any single health care provider or health care system. n (c) Employees. No employee of this corporation shall be a member of the Board of Directors; provided, however, that this requirement shall not apply to health care professionals credentialed to provide services at the Hospital or any other health care facility owned by this corporation. SECTION 1.3 Terms. Except as otherwise provided in Section 1. 1, each director of this corporation other than the Ex Officio Director shall be elected or appointed to serve for a term of three years, and, unless the Board of Directors has determined that a successor will not be elected or appointed, until his or her successor has assumed office; or until the director's prior death, resignation or removal. Each Community Director and Appointed Director is limited to serving four consecutive terms. The term of office of the Ex Officio Director shall be coterminous with his or her term as Chief of the Hospital's Medical Staff. The Community Directors and Appointed Directors shall each be divided into three classes as nearly equal in number as possible, so that the terms of office of approximately one -third of the Community Directors and approximately one -third of the Appointed Directors shall expire each year. -2- �aC�� SECTION 1.4 Compensation. Directors shall not receive compensation for • their service as directors; provided, however, that this corporation may reimburse directors for reasonable and necessary expenses incurred while performing the duties of a director. n U SECTION 1.5 Removal; resignation; vacancies. Any director may at any time be removed with or without cause by the Board of Directors; provided, however, that an Appointed Director may be removed by the Board of Directors only for cause by the affirmative vote of two- thirds of the directors of this corporation. For purposes of the foregoing sentence, "cause" shall mean breach of fiduciary duty. An Appointed Director may also be removed with or without cause by the City Council. Any director may resign at any time by giving written notice to the Chair or the Secretary. The resignation shall be effective without acceptance when the notice is received by the Chair or the Secretary, unless a later effective date is specified in the notice. Any vacancy occurring because of the death, resignation or removal of a Community Director may be filled by a person elected by the Board of Directors for the unexpired term of such director provided; however, that the Board complies with the requirements of Section 1.1(c) and Section 1.2 of these Bylaws. Any vacancy occurring because of the death, resignation or removal of an Appointed Director shall be filled by a person appointed by the City Council; which shall fill the vacancy within 60 days following the date the vacancy occurs. Any vacancy resulting from an increase in the number of Community Directors may be filled by a person elected by the Board of Directors for a full term of office unless the Board of Directors designates a shorter term of office. MEETINGS OF THE BOARD OF DIRECTORS SECTION 2.1 Annual meeting. The annual meeting of the Board of Directors for the purpose of electing Community Directors and officers and transacting such other business as may properly come before the meeting shall be held in the City at the time and place designated from time to time by the Board of Directors, provided that, by unanimous action of the Board of Directors, another place of meeting within the State of Minnesota may be designated. SECTION 2.2 Other meetings. Other meetings of the Board of Directors may be held at such time and place as are announced at a previous meeting of the Board of Directors, however the Board of Directors shall meet at least quarterly. The annual meeting serves as a quarterly meeting. Meetings of the Board of Directors may also be called at any time (a) by the Chair, (b) by the Board of Directors, or (c) upon the request of three or more members of the Board of Directors. Anyone entitled to call a meeting of the Board of Directors may make a written request to the Secretary to call the meeting, and the Secretary shall give notice of the meeting, setting forth the time and place thereof, to be held between two and thirty days after receiving the request. If the Secretary fails to give notice of the meeting within seven days from the day on which the request was made, the person or persons who requested the meeting may fix the time and place of the meeting and give notice • in the manner hereinafter provided. -3- 1 o C►O) • SECTION 2.3 Notice of meetings. Notice of each meeting of the Board of Directors for which notice is required, and of each annual meeting, stating the time and place thereof, shall be given to all directors by electronic communication or in person at least two days before the meeting, or shall be mailed to each director at least five days before the meeting. A director may be given notice by electronic communication only if the director has previously consented to receive notice in such form of electronic communication. All such notices not given in person shall be sent to the director at his or her postal or electronic address according to the latest available records of this corporation. Any director may waive notice of a meeting before, at or after the meeting, orally, in writing, by electronic communication, or by attendance. Attendance at a meeting is deemed a waiver unless the director objects at the beginning of the meeting to the transaction of business because the meeting is not lawfully called or convened and the director does not participate in the meeting. SECTION 2.4 Ouorum and voting. The presence of at least a majority of the members of the Board of Directors shall constitute a quorum at any meeting thereof, provided that at least one Appointed Director is present. The directors present at any meeting, although less than a quorum, may adjourn the meeting from time to time. If a quorum is present when a duly called meeting is convened, the directors present may continue to transact business until adjournment, even though the withdrawal of one or more directors leaves less than the number otherwise required for a quorum. At all meetings of the • Board of Directors, each director shall be entitled to cast one vote on any question coming before the meeting. A majority vote of the directors present at any meeting, if there be a quorum, shall be sufficient to transact any business, unless a greater number of votes is required by law or these Bylaws. A director shall not appoint a proxy for himself or herself or vote by proxy at a meeting of the Board of Directors. For purposes of determining whether a director has met his or her fiduciary duties as a director, but for no other purpose, a director who is present at a meeting of the Board of Directors when an action is approved by the Board of Directors is presumed to have assented to the action unless the director votes against the action or is prohibited from voting on the action. I� SECTION 2.5 Action without a meeting. Any action that could be taken at a meeting of the Board of Directors may be taken by written action signed by all of the directors. SECTION 2.6 Meetings held using remote communication. A director may participate in a meeting of the Board of Directors by means of conference telephone or, if authorized by the Board of Directors, by such other means of remote communication, in each case through which that director, other directors so participating, and all directors physically present at the meeting may communicate with each other on a substantially simultaneous basis. Participation in a meeting by remote communication constitutes presence at the meeting. -4- 1 u Cad SECTION 2.7 Actions Subject to Supermajority Approval. The following • actions shall require the approval of at least two -thirds of the total number of authorized directors; provided, however, that the actions listed in subsections (a) through (i) shall not be effective unless the voting member has approved the action or waived its rights as described in Article VIII of these Bylaws: (a) Amendments to the Articles of Incorporation of this corporation. (b) Amendments to the Preamble and Sections 1. 1, 1.2, 1.4, 1.5, 2.4, 2.5, 2.7, 4. 1, 4.2, 4.3, 4.5, 8.1, 8.2, 8.3, 8.4, sr8.5 or 8.7 of these Bylaws, including Exhibit A, in accordance with Section 7.3 of these Bylaws. (c) Merger, consolidation, liquidation, dissolution, or sale or lease, or other transfer, or mortgage or other grant of a security interest, of or in, all or substantially all of the assets of this corporation, provided that nothing herein is intended to restrict the ability of the corporation to mortgage, grant a security interest or otherwise encumber as collateral or security for debt held by an institutional lender or bond trustee all or any part of the corporation's assets in the ordinary course of business financing transactions where the proceeds of such transactions are used to support the corporation's health care operations. • (d) Any subleases or assignments which if executed would bring the aggregate of subleased or assigned space to a percentage of 30% or more of the space identified with or referenced in the corporation's hospital license (provided, however, that space associated with leases or assignments in which the services provided in such space or spaces are "provider -based services" billed by and in the name of this corporation under applicable Medicare statutes and regulations as in effect from time to time shall not be deemed a lease or assignment for purposes of this limitation). (e) Closure of the Hospital. (f) Contributions of cash or cash - equivalents that in the aggregate exceed 1.5 percent of the net income of the corporation during any fiscal year to any person(s) or entit(ies) without receipt of fair market value consideration in return; provided, however, that such contributions shall be made for the charitable purposes described in Section 501(c)(3) of the Internal Revenue Code ( "IRC ") and shall be in furtherance of the corporation's health care mission; and provided further that this provision shall not prohibit: (1) the provision of free or reduced price medical care in accordance with the Hospital's charity care /community benefit policies or payor agreements; (2) payment of recruitment incentives to physicians and other health care • practitioners provided in accordance with the applicable policies of this corporation; or (3) donations of used equipment or supplies to a governmental -5 entity or nonprofit organization exempt from income tax under IRC Section • 501(c)(3). (g) Add additional members or create additional member rights. (h) Any action(s) the result of which would cause this corporation to fall outside the definition of the Fundamental Nature of the corporation, or a transfer of assets to a joint venture in which this corporation is a participant (whether or not controlled), the result of which would be that this corporation would no longer directly meet the Fundamental Nature definition. (i) Transfer of assets to an entity wholly owned or wholly controlled by this corporation (unless such wholly owned or controlled entity gives to the City the same director appointment, membership, and other rights as the City possesses with respect to this corporation, in which case, such transfer will require in any event a supermajority approval). (j) Transfer of assets to an entity wholly owned or wholly controlled by this corporation, in which the City has the same director appointment, membership, and other rights as the City possesses with respect to this corporation. (k) Transfer of assets to a joint venture in which this corporation is a participant • (whether or not controlled). (1) Closure of Emergency Room or transfer of nursing home. (m) Entering into a management agreement with a third party, other than the manager as of the date of approval of these Bylaws, covering the day -to -day operations of all or substantially all of the Hospital and/or nursing home owned by this corporation. (n) Declaration of a dividend to the member. (Dividends are not contemplated, however, the tool is available if extraordinary/windfall circumstances arise, should the Board of Directors choose to use it.) (o) Delegation of authority to the Executive Committee to approve specific transactions identified in Section 4.3(e). OFFICERS SECTION 3.1 Designation and term. The officers of this corporation shall include a Chair, a Vice Chair, a Secretary, a Treasurer, and a President. Officers other than • the President shall be elected by the Board of Directors to serve for terms of one year and until their respective successors are elected and have qualified. The President shall serve at -6- ADDO) the pleasure of the Board of Directors. Any officer may at any time be removed by the • Board of Directors with or without cause. Any officer may resign at any time by giving written notice to the Chair or the Secretary. The resignation shall be effective without acceptance when the notice is received by the Chair or the Secretary, unless a later effective date is specified in the notice. The same person may hold more than one office at the same time, except the offices of (a) Chair and Vice Chair and (b) Chair and Secretary. The officers, except the Chair and Vice Chair, need not be directors of this corporation. SECTION 3.2 Chair. The Chair shall, when present, preside at meetings of the Board of Directors, and shall perform such other duties as are prescribed by the Board of Directors. The Chair shall not also be the President. SECTION 3.3 Vice Chair. During the absence or disability of the Chair, it shall be the duty of the Vice Chair to perform the duties of the Chair. SECTION 3.4 Secretary. The Secretary shall perform or properly delegate and oversee the performance of the following duties: (a) keep accurate minutes of all meetings of the Board of Directors and of the members; (b) be responsible for the custody of the records, documents and papers of this corporation; and (c) keep proper records of all transactions of this corporation. The Secretary shall have and may exercise any and all other powers and duties pertaining by law, regulation or practice to the office of Secretary, or imposed by these Bylaws. • SECTION 3.5 Treasurer. The Treasurer shall perform or properly delegate and oversee the performance of the following duties: (a) keep accurate financial records of this corporation; (b) deposit money, drafts, and checks in the name of and to the credit of this corporation in the banks and depositories designated by the Board of Directors; (c) endorse for deposit notes, checks, and drafts received by this corporation as ordered by the Board of Directors, making proper vouchers for the deposit; (d) disburse corporate funds and issue checks and drafts in the name of the corporation, as ordered by the Board of Directors; and (e) upon request, provide the Chair and the Board of Directors an account of transactions of this corporation and of the financial condition of this corporation. The Treasurer shall have and may exercise any and all other powers and duties pertaining by law, regulation or practice to the office of Treasurer, or imposed by these Bylaws. • SECTION 3.6 President. The President shall be the chief executive officer of this corporation. He or she shall: (a) have general active management of the business of this corporation; (b) see that orders and resolutions of the Board of Directors are carried into effect; and (c) have the authority to sign and deliver in the name of this corporation deeds, mortgages, bonds, contracts, or other instruments pertaining to the business of this corporation, except in cases in which the authority to sign and deliver is required by law to be exercised by another person or is expressly delegated by the Articles of Incorporation, the Bylaws or the Board of Directors exclusively to one or more other persons. \0o! ) SECTION 3.7 Additional powers. Any officer of this corporation, in addition • to the powers conferred upon him or her by these Bylaws, shall have such powers and perform such additional duties as may be prescribed from time to time by the Board of Directors. COMMITTEES SECTION 4.1 Committees. Except as provided in Section 4.2 of these Bylaws, regarding the Executive Committee, this corporation shall not have committees with the authority of the Board of Directors. The Board of Directors may establish advisory committees, the members of which shall be appointed by the Board of Directors or, if expressly authorized by the Board of Directors, by the Chair. Each such committee shall at all times be subject to the control and direction of the Board of Directors. Except as otherwise provided in these Bylaws, committee members need not be directors. SECTION 4.2 Executive Committee. There shall be an Executive Committee consisting of the Chair, Vice Chair, Secretary, Treasurer, and at least one Appointed Director of this corporation, elected by the Board, who shall be voting members of the Executive Committee, and the President, who shall serve as an ex officio non - voting member. The Chair of this corporation shall be the chair of the Executive Committee. The Executive Committee shall have the authority of the Board of Directors in the management of the business of this corporation in the interval between meetings of the Board of Directors, • provided, however, that the Executive Committee shall not have authority to act on any matter described in Section 2.7 of these Bylaws or matters listed in Section 4.3 below, except as specifically provided in Section 4.3(e) and Section 2.7(o). The presence of all the members of the Executive Committee shall constitute a quorum at any meeting thereof, but the committee members present at any meeting, although less than a quorum, may adjourn the meeting from time to'time. SECTION 4.3 Prohibited Actions. Notwithstanding any provision of these Bylaws apparently to the contrary, the Executive Committee shall not have the authority to take any of the following actions: (a) Amend or repeal the Articles of Incorporation or Bylaws of this corporation; (b) Elect, appoint, or remove any member of the Board of Directors or the Executive Committee, or any officer of this corporation; (c) Adopt or approve a plan of merger or consolidation with another corporation; (d) Authorize the sale, lease, exchange, mortgage or other disposition of all or substantially all the assets of this corporation; (e) Authorize the sale, lease, exchange, mortgage or other disposition of the assets • of this corporation in the ordinary course of business, unless the Board of -8- 1b uo� Directors has by resolution approved such delegation as provided in Section • 2.7(o) and such resolution references both the specific transaction and the specific assets for which authority is delegated; (f) Authorize the voluntary dissolution of the corporation or revoke proceedings therefor; or (g) Amend or repeal any resolution of the Board of Directors. SECTION 4.4 Audit/Compliance Committee. There shall be an Audit/Compliance Committee consisting of the Treasurer, one Community Director, an Appointed Director and one other individual, who need not be a director of this corporation, with expertise in the areas of finance or consumer advocacy. The Treasurer of this corporation shall be the chair of the Audit Committee. The Audit/Compliance Committee shall (a) review this corporation's financial matters and report on them to the Board of Directors, (b) recommend independent auditors for approval by the Board of Directors, and (c) review this corporation's compliance program, including matters relating to charity care, discounts and collections and report on the program to the Board of Directors. SECTION 4.5 Governance Committee. There shall be a Governance Committee consisting of one Appointed Director and two Community Directors. The Governance Committee shall nominate individuals to serve as Community Directors and • officers of this corporation, shall supply criteria and desired competencies, may suggest candidates to the City for Appointed Director positions and shall have such other duties as the Board of Directors shall determine from time to time. The corporation is committed to maintaining a Board having diverse competencies, aimed at effective oversight of the health care enterprise. The Governance Committee shall periodically review and recommend to the Board the general and special competencies that should be reflected in Board membership and create, manage and regularly review a list of potential board members from which a slate of candidates for Board of Director vacancies can be developed (the "Candidate List "). For vacancies in Appointed Director positions, the Governance Committee will forward to the City the Board's most recently adopted competency based board criteria, identify the special competencies with respect to which the Governance Committee believes the current Board has gaps, and list those candidates from the Committee's Candidate List who would comply, in the Committee's judgment, with the criteria, given the competencies of the other current Board members. In making its appointments, the City will review the corporation's board criteria, the special competency gaps and consider names forwarded, if any, by the Governance Committee, but shall be free to appoint whomever the City determines. For vacancies in Community Director positions, the Governance Committee will identify and forward to the Board the special competencies with respect to which the Governance Committee believes the current Board has gaps, and list those candidates from the • Committee's Candidate List who would comply, in the Committee's judgment, with the Board's most recent competency based board criteria, taking into account the competencies 1 bC.'O • of the other current Board members. In filing vacancies for Community Board positions, the Board will review the corporation's board criteria, the special competency gaps and consider names forwarded by the Governance Committee, but shall be free to elect such individuals as it determines. SECTION 4.6 Meetings and voting. Meetings of each advisory committee shall be called and held in accordance with the provisions of Sections 2.2 to 2.6 of these Bylaws as they apply to meetings of the Board of Directors. INDEMNIFICATION SECTION 5.1 Indemnification. This corporation shall indemnify its directors, officers, committee members, and employees against such expenses and liabilities, in such manner, under such circumstances, and to such extent, as required or permitted by Minnesota Statutes, Section 317A.521, subd. 2, as amended from time to time, or as required by other provisions of law; provided, however, that no indemnification shall be made with respect to any claim, issue or matter as to which the person shall be adjudged to be liable to this corporation. SECTION 5.2 Advances. This corporation shall advance expenses in such manner, under such circumstances, and to such extent, as required or permitted by Minnesota Statutes, Section 317A.521, subd. 3, as amended from time to time; provided, however, that • this corporation shall not advance expenses incurred in defense of a claim brought by or in the right of this corporation or expenses incurred in pursuing a claim against this corporation. The provisions of this Section are not intended to limit the ability of a person to receive advances as an insured under an insurance policy maintained by this corporation. n U SECTION 5.3 Insurance. This corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, committee member, or employee against any liability asserted against and incurred by such person in or arising from such capacity, whether or not this corporation would otherwise be required to indemnify the person against the liability. MEDICAL STAFF SECTION 6.1 Authority. In accordance with applicable law, the Board of Directors shall have the ultimate authority to determine the categories of practitioners eligible and criteria for appointment to the medical staffs of facilities operated by the corporation. The Board of Directors shall have final authority on all matters involving medical staff membership, clinical privileges and corrective action after consideration of the medical staff s recommendations; provided, however, that the Board of Directors may act in any event in which the medical staff fails to adopt and submit such recommendations within the time frame set forth in the medical staff bylaws and any supporting documents. • SECTION 6.2 Dele ag tion. Subject to the ultimate authority of the Board as set forth in Section 6.1 of these Bylaws and in accordance with legal and accreditation requirements, the Board of Directors has authority to delegate to the medical staffs of the facilities operated by the corporation the responsibility for monitoring and ensuring the quality of care provided in such facilities, making recommendations concerning applications for appointment and reappointment to the medical staff and clinical privileges, and such other matters as the Board of Directors in its discretion deems appropriate. MISCELLANEOUS SECTION 7.1 Fiscal year. Unless otherwise fixed by the Board of Directors, the fiscal year of this corporation shall begin on January I and end on the succeeding December 31. SECTION 7.2 Corporate seal. This corporation shall have no seal. SECTION 7.3 Amendments. The Bylaws of this corporation may be amended only as provided in this Section 7.3. (a) The Board of Directors may amend the Sections of the Bylaws listed in Section 2.7(b) of these Bylaws by the approval of at least two - thirds of all • directors of this corporation as provided in Section 2.7, provided, however, that no such amendment shall be effective without the approval of the voting member. (b) The voting member may propose amendments to the Sections of the Bylaws listed in Section 2.7(b) above, provided, however, that no such amendment shall be effective without the approval of at least two- thirds of all directors of this corporation as provided in Section 2.7 of these Bylaws. (c) Sections of the Bylaws other than those listed in Section 2.7(b) above may be amended by the affirmative vote of a majority of the directors present at a meeting of the Board of Directors at which a quorum is present. Such amendments shall be effective without approval by the voting member. The voting member shall have no power to propose amendments to Sections other than those listed in Section 2.7(b) above. (d) Notwithstanding the foregoing, the voting member may unilaterally amend any Section of the Bylaws of this corporation upon any of the following events: (i) the Lease between this corporation and the City effective December 31, 2007 terminates for any reason other than as a result of the exercise of the purchase option set forth in such lease, (ii) continued noncompliance by this • corporation with the Operating Parameters set forth in Sections B, C or D of Exhibit A attached to these Bylaws at the expiration of the cure period as provided for such Operating Parameters, Provided that the Citv furnishes • written notice within the Periods stated in such Sections of its intent to exercise its amendment rights or (iii) the Board of Directors votes to undertake any action described in Section 2.7(c) or 2.7 (d) of these Bylaws or to cease all or substantially all the operations of this corporation. The voting member shall have no power to amend these Bylaws unilaterally in any other circumstance. SECTION 7.4 Authority to borrow, encumber assets. No director, officer, agent or employee of this corporation shall have any power or authority to borrow money on its behalf, to pledge its credit or to mortgage or pledge its real or personal property except within the scope and to the extent of the authority delegated by resolutions adopted from time to time by the Board of Directors. Authority may be given by the Board of Directors for any of the above purposes and may be general or limited to specific instances. SECTION 7.5 Execution of instruments. Deeds, mortgages, bonds, checks, contracts and other instruments pertaining to the business and affairs of this corporation may be signed on behalf of this corporation by the President, the Chair, the Vice Chair, or such other person or persons as may be designated from time to time by the Board of Directors. SECTION 7.6 Deposit of funds. All funds of this corporation shall be deposited from time to time to the credit of this corporation in such banks, trust companies or • other depositories as the Board of Directors may approve or designate, and all such funds shall be withdrawn only in the manner or manners authorized by the Board of Directors from time to time. LIMITED MEMBER RIGHTS SECTION 8.1 Context for Creation of Member Rights. As described in the Preamble to these Bylaws, this corporation was formed by a community task force, which believed that this corporation should provide certain limited rights to the City concerning the commitment of this corporation to continue its mission. This corporation agrees that the City should receive the benefit of all residual assets should all or substantially all of the assets of the corporation be sold, merged with, or leased or transferred to others, or should this corporation cease operations as a health care provider of the type contemplated under these Bylaws. Although this corporation had no voting members when it was incorporated, the Board of Directors has determined that it is in the best interests of this corporation to permit the City to become a voting member solely for the purpose of ensuring that the City receives the benefit of any residual assets or resources and has the opportunity to approve the final disposition of the corporation's assets or the proceeds from disposition thereof. Accordingly, these Bylaws confer on the City certain limited member rights which become exercisable only upon the occurrence of events or Board of Director actions described herein. If or when those events occur, the City may exercise the membership rights described in these Bylaws. The City shall have no membership rights other than those described in these Bylaws. The • -12- `br�) rights set forth herein require acceptance of such membership rights by action of the City • Council at any time following adoption of these Bylaws. SECTION 8.2 Limited Membership Rights. The City shall have the following membership rights, and only these membership rights: (a) In the event that the Board of Directors approves an action described in Section 2.7(a) -(i) of these Bylaws, the City has the power to approve or veto the action. The action shall not be effective without the approval of the City. (b) As described in Section 7.3 of these Bylaws, the City has the power to approve and propose amendments to these Bylaws. (c) The City may sell or transfer its membership rights to this corporation or to a third party, but only if such sale or transfer is approved in advance by at least two- thirds of the directors of this corporation. The consideration given in exchange for such membership rights will be determined by the parties to the transaction, but in any event, is wholly unrelated to any purchase option or payment obligations set forth in the Lease. SECTION 8.3 Resi ng ation. The City may resign one or more of its enumerated membership rights at any time, but shall not have the right thereafter to reinstate • such rights. SECTION 8.4 Dues. This corporation shall not have the right to impose dues, assessments or fees on the City without the consent of the City. SECTION 8.5 Dividends. The City shall have the right to receive dividends as a member. (Dividends are not contemplated, however, the tool is available if extraordinary /windfall circumstances arise, should the board ever choose to use it.) SECTION 8.6 Member Meetings. This corporation shall not be required to hold annual meetings of the member as a result of the limited membership rights set forth in Section 8.2 of these Bylaws. SECTION 8.7 No Prospective Waiver. No consent given, or waiver bv. the member with respect to any right under these bylaws shall be deemed or construed to be consent or waiver with respect to any other application of such right or other rights. and the failure to act with respect to a right, or failure to declare that a right has been triggered shall not constitute a waiver of such rights hereunder except as specifically provided in Exhibit A or Section 7.3. [b.us.T_194�5- 24128495526 • -13- 1 D "�) • BYLAWS EXHIBIT A Operating Parameters, and Effects of Default The corporation and the City (as a limited member) have agreed that the corporation will exceed certain performance parameters and fundamental standards set forth in Sections A, B, C and D, below (collectively, the "Operating Parameters "). On or before the 150th day after the end of this corporation's Fiscal Year, this corporation will submit to the City its computations and certification of compliance with each of the Operating Parameters set forth in Sections A and B, based on financial results audited by a firm of qualified Certified Public Accountants. Section A If this corporation is not in compliance with any of the Operating Parameters set forth in this Section A when such computations are due, this corporation shall provide a written plan detailing how it will satisfy the Operating Parameters in this Section A within a reasonable time period specified by the City (the "Workplan"). The City may also require this corporation to engage, within forty -five (45) days of the City's written notice, a management • consultant mutually selected by the City and this corporation (the "Consultant ") for the purpose of reviewing the deficiency and making recommendations regarding the operation and administration of the health care system. This corporation shall give full and prompt consideration to the Consultant's recommendations and, to the fullest extent feasible and consistent with this corporation's charitable mission, its obligations under this Agreement, and the interests of the community it serves, this corporation shall undertake its best efforts to implement such recommendations. Notwithstanding the foregoing, this corporation shall take no action pursuant to its Workplan or in response to the Consultant's recommendations that would jeopardize this corporation's 501(c)(3) status, compliance with bond covenants under any Existing Bonds or Future Bonds, or its adherence to legal, regulatory or accreditation standards and requirements. So long as this corporation fails to comply with any of the Operating Parameters set forth in Section A, the corporation will provide to the City, not later than on the last day of each fiscal quarter, or at such other interval as the corporation and the City may agree, a letter from the Consultant (if engaged) to the effect that in his or her judgment, this corporation is implementing such recommendations in orderly fashion. (1) Maximum Annual Debt Coverage Ratio of at least 1.3 times. (2) Cash to Debt Ratio of at least 50 percent. • (3) Days Cash on Hand of 60 days. -14- lbCb� • (4) Operating Margin of at least 1.5 percent in at least 1 of the last 2 Fiscal Years. Section B If the corporation is not in compliance with the Operating Parameters set forth in this Section B, or fails to submit its required computations and certification of compliance with the Operating Parameters, then no later than one hundred twenty (120) days from its receipt of such computations and certification, or in the event of a failure to submit such computations and certifications, no later than one hundred twenty (120) days from their due date, the City may provide written notice to the corporation that its voting member's amendment rights set forth in Section 7.3(d) shall be effective as of such 120th day. The failure to provide such notice in any one Fiscal Year shall not constitute a waiver of the City's notice and member amendment rights in any subsequent Fiscal Year in which the corporation is not in compliance with the Operating Parameters set forth in this Section B, or fails to submit its required computations and certification of compliance. (1) Maximum Annual Debt Coverage Ratio of at least 1.15 times in at least 1 of the last 3 Fiscal Years. (2) Cash to Debt Ratio of at least 30 percent. • (3) Days Cash on Hand of 45 days. (4) Operating Margin of at least 1.5 percent in at least 1 of the last 3 Fiscal Years. Section C If at any time, this corporation is not in compliance with any of the Operating Parameters set forth in this Section C, following either (i) a period equal to the cure period stated in the notice from the applicable agency threatening revocation of authority or applicable statute or regulation with respect thereto, or (ii) if no specific cure period is provided by any such notice, statute, or regulation, a period of thirty (30) days from the date of the notice or actual knowledge of the event which resulted in the noncompliance, then no later than one hundred twenty (120) days from the close of such cure period or the date of such notice or knowledge of the event, as applicable, the City may provide written notice to the corporation that its voting member's amendment rights set forth in Section 7.3(d) shall be effective as of such 120th day; provided, however, that the aforementioned cure periods will be tolled during any period in which both (i) the corporation complies with the applicable administrative and/or legal process necessary to challenge or appeal the noncompliance or noncompliance determination, and (ii) during the pendency of such challenge or appeal, and before final determination of the matter, the corporation continues to have authority to provide care and • to bill and collect payment for the services rendered to all its patients for whom, otherwise, the noncompliance would prohibit the corporation from billing and collecting for services -15- \ O0 � provided to such patients. The failure to provide such notice in any one Fiscal Year shall not • constitute a waiver of the City's notice and member amendment rights in any subsequent Fiscal Year in which the corporation is not in compliance with the Operating Parameters set forth in this Section C. (a) The corporation shall obtain such licenses from the Minnesota Department of Health as are necessary to operate in accordance with its Fundamental Nature, including a hospital license, and maintain such licenses in good standing. (b) The corporation shall comply with all applicable Medicare conditions of participation or submit and implement corrective action plans satisfying same (or the federal government's primary health insurance program from time to time if the existing Medicare program is supplanted at any time). (c) The corporation shall obtain and maintain the health care system accreditation by the relevant state survey agency or the Joint Commission. (d) The corporation shall maintain tax- exempt status as an organization described in Section 501(c)(3) of the Internal Revenue Code, as amended. (e) At all times, the corporation shall be authorized and permitted to bill and collect for • the provision of hospital and clinic services to patients under such government programs by which they are covered and services to members of the general public. Section D If the corporation is not in compliance with the Operating Parameters set forth in this Section D, then no later than one hundred twenty (120) days from its receipt of notice with regard to a default under paragraph 1 or deficiency under paragraph 2, the City may provide written notice to the corporation that its voting member's amendment rights set forth in Section 7.3(d) shall be effective as of such 120th day. The failure to provide such notice in any one Fiscal Year shall not constitute a waiver of the City's notice and member amendment rights in any subsequent Fiscal Year in which the corporation is not in compliance with the Operating Parameters set forth in this Section D. (1) Compliance with any financial covenants made by this corporation in connection with any future outstanding debt of the corporation issued as described in Section 17.10 of the Lease, which, if not complied with, would constitute an event of default; provided that this corporation shall be considered compliant during any period with respect to which the lender, or trustee acting on its behalf, has waived all defaults. • (2) This corporation shall always operate such that the City is within the Hospital's Geographic Service Area as defined in Section 1.1 (c) of these Bylaws. -16- \b(b) • Amendments The parties acknowledge that the Operating Parameters have been designed as indicators of financial or quality jeopardy under current market conditions. It is also acknowledged that the Operating Parameters are also based on Generally Accepted Accounting Principles ( "GAAP ") that currently exists. This corporation and the City shall, from time to time, amend the Operating Parameters as necessitated by changes in GAAP and market conditions in order to maintain their status as indicators of financial or quality jeopardy, taking into consideration the performance of similarly situated nonprofit corporations having comparable operations to this corporation's. Certain Definitions: Cash To Debt Ratio: For any Fiscal Year, shall mean the ratio of (1) Unrestricted Liquid Funds of the corporation to(2) the Long -Term Debt less cash or investments restricted under any Indenture (that has been excluded from Unrestricted Liquid Funds) of the corporation, all as shown in the audited financial statements of the corporation for any Fiscal Year. Days Cash on Hand: means the result of dividing the Unrestricted Liquid Funds of the corporation by daily operating expenses. Daily operating expenses is computed by dividing • Total Operating Expenses less depreciation and amortization expense for such Fiscal Year by the number of days in that Fiscal Year. • Existing Bonds: The following bonds issued by City: General Obligation Medical Facilities Revenue Refunding Bonds, Series 199713; General Obligation Medical Facilities Revenue Refunding Bonds, Series 1998A; General Obligation Taxable Medical Facilities Revenue Refunding Bonds, Series 199813; Taxable Medical Facilities Gross Revenue Bonds, Series 1998; General Obligation Medical Facilities Revenue Bonds, Series 2002D; and General Obligation Medical Facilities Revenue Bonds, Series 2003A. Future Bonds: Any indebtedness of the corporation that is entered into on or after the December 31, 2007 effective date of the Lease between the City and the corporation. Fiscal Year: Each 12 month period ending on the date specified in the Bylaws of this corporation. Currently, the fiscal year ends on December 31. Generally Accepted Accounting Principles (GAAP): GAAP is the standard framework of guidelines for financial accounting, as established in the United States of America. It includes the standards, conventions, and rules accountants follow in recording and summarizing transactions, and in the preparation of financial statements. GAAP for this purpose means those guidelines and rules applicable to this corporation. 17 )oM Long -Term Debt: All obligations which appear as a long -term liability on this corporation's • financial statement in accordance with GAAP, including but not limited to revenue bonds, capital leases, bank or installment debt, and eentrcontracts for deel plus or minus any amounts for imamortized discounts /premiums or deferred losses on refunding. However, Long -Term Debt excludes the debt to the City related to the payment required in Section 3.1 of the Lease Agreement. Maximum Annual Debt Coverage Ratio: Net Revenues for a Fiscal Year divided by the Maximum Annual Principal and Interest Requirement due in future fiscal years. The ratio is to be computed based on this corporation's audited financial statements. For any computation that requires reference to one or more Fiscal Years prior to the effective date of the Lease Agreement, the ratio is to be computed using the Net Revenues and Maximum Principal and Interest Requirement from the applicable Fiscal Year audited financial statements of the City enterprise Hutchinson Area Health Care. Maximum Annual Principal and Interest Requirement: The sum of the maximum principal and interest payments required to be paid in any future Fiscal Year on Long -Term Debt. If a Long -Term Debt issue has a balloon payment, for the purposes of this computation that balloon payment is to be amortized over a period of years equal to the lesser of 30 years the f l life of the asset being "naiie less the total number of years that the issue has been outstanding (from inception) prior to the date of the balloon payment or the remaining useful life of the asset beintinanced. For purooses of the preceding sentence the "remaining useful life" shall be defined as the number of years remaining until the asset is fully depreciated per the depreciation schedule maintained by the corporation in accordance with GAAP. The interest rate to be applied during this period is equal to the rate required to be paid on the issue in the fiscal year preceding the balloon payment. The principal and interest amortization for the Fiscal Years including and subsequent to the balloon payment is to be computed assuming an equal annual amortization. If Long -term Debt includes a debt issue that has a variable interest rate, for purposes of computing future year interest requirements, the interest rate to be used is the rate in effect at the end of the Fiscal Year for which this computation is being made. Net Revenues: The aggregate of all operating and nonoperating revenues less Total Operating Expenses, except excluding (1) depreciation (2) amortization and (3) interest expense of this corporation, all determined in accordance with GAAP, for a Fiscal Year. However, Net Revenues are to exclude any (1) contribution or investment income that has been restricted by its donor for endowment (permanently restricted) purposes (2) unrealized • gains and losses on investments (3) extraordinary or non - recurring items including gains or -18- Lb CO losses on refinancing, extinguishment of indebtedness, gains or losses of sales or other dispositions of property not in the ordinary course of business. Operating Margin: The sum of Total Operating Revenues less Total Operating Expenses divided by Total Operating Revenues for a Fiscal Year. The ratio is to be computed based on this corporation's audited financial statements. For the two Fiscal Years immediately after the effective date of the Lease Agreement, the prior year(s) ratio is to be computed using the Total Operating Revenues and Total Operating Expenses from the applicable Fiscal Year audited financial statements of Hutchinson Area Health Care. Total Operating Expenses: All expenses reported as operating expenses, in accordance with GAAP, that this corporation reports for a Fiscal Year, including (1) depreciation (2) amortization and (3) interest expense. Total Operating Revenues: All revenues reported as operating revenues, in accordance with GAAP, that this corporation reports for a Fiscal Year excluding any (1) contribution or investment income that has been restricted by its donor for endowment (permanently restricted) purposes (2) unrealized gains and losses on investments (3) extraordinary or non- recurring items including gains or losses on refinancing, extinguishment of indebtedness, gains or losses of sales or other dispositions of property not in the ordinary course of business. Unrestricted Liquid Funds: means (i) unrestricted cash, (ii) cash equivalents, (iii) escrow funds, if any, under that certain Escrow Agreement effective December 31, 2007 by and between this corporation and the City of Hutchinson, and (iv) board designated marketable debt and equity securities, but excluding and exclusive of: (1) all trustee -held funds; and (2) borrowed funds that are entrusted with a lender. fb.as.."O "m�' 1184955 .2 I* -19- � dGo� n V LJ Document comparison done by DeltaView on Wednesday, September 05, 2007 1:42:22 PM iDCO� Insertion Count sf'�'+iw- 9 file: / /C: /Documents and Document 1 Settings /kressel.chris /Desktop /Hutchinson /HAHC - Bylaws for 1 Newco.doc 1 file:/ /C: /Documents and Document 2 Settings /kressel.chris /Desktop /Hutchinson /HAHC - Bylaws for 0 Newco (Final).doc lRenclering set IStandard iDCO� Insertion Count Delelw ft 9 T Q....„a % -..., 5 Moved to 1 Style change 1 Format change 0 Move 0 Inserted cell 16 Deleted cell Moved cell rR Split/Merged cell Padding cell' iDCO� Count Insertions 9 Deletions 5 Moved from 1 Moved to 1 ,Style change 0 Format changed 0 Total chan es 16 iDCO� • Ordinance No. 07 -0474 AN ORDINANCE APPROVING A DEBT SERVICE ESCROW AGREEMENT WITH HUTCHINSON HEALTH CARE WHEREAS, the City of Hutchinson has enacted ordinance number 07 -0474 which authorizes the City to enter into a lease agreement with Hutchison Health Care concerning the lease of certain property currently owned by the City, and, WHEREAS, said lease requires Hutchinson Health Care to undertake certain financial obligations and make rent payments to the City, and, WHEREAS, to facilitate the exercise of those obligations, the City and Hutchinson Health Care desire to enter into a debt service agreement to ensure that there is adequate security to make said payments in a timely manner, NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF HUTCHINSON, THAT THE DEBT SERVICE ESCROW AGREEMENT ATTACHED AS EXHIBIT A TO THIS ORDINANCE IS HEREBY ADOPTED BY THE CITY COUNCIL AND THAT THIS ORDINANCE SHALL BE EFFECTIVE UPON PUBLICATION. Signed this day of 2007. Attest: • Gary D. Plotz, City Administrator Steven W. Cook, Mayor 0 w (C-) DEBT SERVICE RESERVE ESCROW AGREEMENT THIS DEBT SERVICE RESERVE ESCROW AGREEMENT, dated as of , 2007, by and between the CITY OF HUTCHINSON, MINNESOTA, a Minnesota municipal corporation (the "City "), HUTCHINSON HEALTH CARE, a Minnesota nonprofit corporation ( "HHC ") and a as Escrow Agent (the "Agent "). RECITALS: WHEREAS, the City and HHC are simultaneously herewith entering into a Lease and Agreement dated as of , 2007 (the "Lease "), pursuant to which the City leases and transfers the operation and assets of the Health Care System (as defined therein) to HHC. WHEREAS, pursuant to the Lease, HHC is required to pay Annual Rent to the City on the dates and in the amounts set forth therein (or otherwise incorporated therein by reference), including an amount equal to all principal and interest due,on, or with respect to, the Existing Bonds (defined herein). WHEREAS, the Lease contemplates that the parties will enter into this Debt Service Reserve Escrow Agreement providing for, among other things, the creation and operation of a debt service reserve account upon the terms and conditions hereof. WHEREAS, the Agent is willing to enter into this Debt Service Reserve Escrow Agreement and to undertake the duties set forth herein upon the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the mutual agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows: 1. The following terms when used herein shall have the following meanings: Additional Bonds: Any future bonds issued by the City for the benefit of the HHC as to which the City is the obligor (i.e. excluding conduit revenue bonds issued by the City) for which there is no bond - funded debt service reserve maintained by the City or the trustee or paying agent for such bonds. Agent: in , Minnesota, or any successor bank or trust company acceptable to the City and HHC, acting as escrow agent hereunder. Existing Bonds: The following bonds issued by the City: General Obligation Medical Facilities Revenue Refunding Bonds, Series 1997B; General Obligation Medical Facilities Revenue Refunding Bonds, Series 1998A; General Obligation Taxable Medical Facilities . Revenue Refunding Bonds, Series 199813; Taxable Medical Facilities Gross Revenue Bonds, fb.us.2146671.03 1 (l\} C J v Series 1998; General Obligation Medical Facilities Revenue Bonds, Series 200213; and General Obligation Medical Facilities Revenue Bonds, Series 2003A. Maximum Annual Debt Service: As of any date, the greatest amount of principal of and interest due in the then current or any future twelve -month period ending Permitted Investments: Any of the following or any combination of one or more thereof: (a) Direct obligations of the United States of America or obligations the principal and interest of which are unconditionally guaranteed by the United States of America. (b) Bonds, debentures, certificates of participation or notes issued by the Bank of Cooperatives, Federal Financing Bank, Federal Land Banks, Federal Home Loan Mortgage Corporation, Federal Home Loan Banks, Federal Intermediate Credit Banks, Federal National Mortgage Association, Export-Import Bank of the United States, Farmers Home Administration, Government National Mortgage Association or any other agency or corporation which has been or may hereafter be created by or pursuant to an Act of the Congress of the United States or an agency or instrumentality thereof. (c) Shares of an Investment Company registered under the Federal aInvestment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, which has as an investment objective maintenance of a net asset value of $1.00 per share by investment in "money market" instruments. (d) Commercial paper of United States corporations rated P -1 by Moody's Investors Service or rated A -1 by Standard & Poor's Ratings Group. (e) Repurchase agreements entered into with dealers in U.S. government securities collateralized at least 102% by bonds or other obligations described in clauses (a) and (b) above if: (i) such obligations are delivered to the Depository or are supported by a safekeeping receipt issued by a depository satisfactory to the Depository, (ii) the value of the underlying obligations shall be maintained at a current market value, calculated no less frequently than monthly, of not less than the current balance of the deposit; (iii) a prior perfected security interest in the obligations which are securing such agreement has been granted to the Depository and (iv) such obligations are free and clear of any adverse third party claims. (f) Interest - bearing time or demand deposits, certificates of deposit, . bankers acceptances or other similar banking arrangements with any fb.us.2146671.03 2 \bu, bank or savings institution (including the Depository), provided that • such deposits, certificates and other arrangements are fully insured by the Federal Deposit Insurance Corporation, or secured by obligations described in clauses (a) and (b) above, or a combination thereof. (g) Written investment contracts with a bank, bank holding company, trust company, domestic branch of a foreign bank, domestic corporation or insurance company whose similar obligations are rated "A2" or better by Moody's Investors Service or "AA" or better by Standard & Poor's Ratings Group. Person: Any individual, corporation, partnership, limited liability company, joint venture, association, joint stock company, trust, unincorporated organization, government or Indian tribe, or any agency, instrumentality or political subdivision thereof. 2. DEBT SERVICE RESERVE ACCOUNT Section 2.1. Debt Service Reserve Account. There is hereby created with the Agent a separate account in the name of the Agent on behalf of HHC under this Debt Service Reserve Escrow Agreement designated as the "Debt Service Reserve Account." HHC shall make an initial deposit to the Debt Service Reserve Account on the date hereof in the amount of $ , which is equal to Maximum Annual Debt Service on the Existing Bonds. HHC shall make a future deposit to the Debt Service Reserve Account on the date of issuance of • any Additional Bonds in the amount of Maximum Annual Debt Service on the Additional Bonds. In the event that amounts paid by HHC pursuant to Section 3.1(a)(2) of the Lease are not sufficient to pay principal of and interest on the Existing Bonds and Additional Bonds when due, and the City shall give written notice thereof to the Agent, with a copy to HHC, the Agent shall transfer the amount of the deficiency as specified in such written notice from the Debt Service Reserve Account to the City to be applied to the payment of principal of and interest on the Existing Bonds and any Additional Bonds then due. HHC shall promptly restore the amount of any such transfer by deposit with the Agent of moneys in the amount transferred. Section 2.2. Release from Debt Service Reserve Account. The Debt Service Reserve Account shall be maintained by HHC for the benefit of the City for so long as any Existing Bonds and Additional Bonds remain outstanding. In the event that the amount in the Debt Service Reserve Account exceeds the Maximum Annual Debt Service on the Existing Bonds and any Additional Bonds at any time, HHC shall be entitled to withdraw such excess amount from the Debt Service Reserve Account, by notice in writing to the Agent, with a copy to the City. All investment earnings on amounts on deposit in the Debt Service Reserve Account shall be transferred to HHC upon receipt. Upon written notice from the City that all Existing Bonds and any Additional Bonds have been paid in full, any and all amounts remaining in the Debt Service Reserve Account shall be transferred to HHC. Section 2.3. Investment of Funds. The Agent shall invest and reinvest all money held • in the Debt Service Reserve Account in such Permitted Investments as HHC shall from time rs.us 2146,71.03 3 �0ct> to time direct pursuant to written instructions. Such Permitted Investments shall be • registered in the name of the Agent and held by the Agent. The Agent may purchase or sell to itself or any affiliate, as principal or agent, investments authorized by this Section, as directed in writing by HHC. The Agent shall, without further direction from HHC sell such investments as and when required to make any payment required to be made from the Debt Service Reserve Account. The Agent shall not be responsible or liable for any loss resulting from the making or disposition of any investment pursuant to this Section. Section 2.4. Statements, The Agent shall provide monthly statements to HHC and the City which monthly statements shall include the market value of the investments on deposit therein, and the amount of any investment earnings on deposit therein. 3. THE AGENT Section 3.1. Agent's Rights and Duties. (a) The Agent undertakes to perform such duties as are specifically set forth in this Debt Service Reserve Escrow Agreement, and no implied covenants or obligations shall be read into this Debt Service Reserve Escrow Agreement against the Agent. (b) In the absence of its own negligent acts or omissions, the Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Agent and conforming to the requirements of this Debt Service Reserve Escrow Agreement; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Agent, the Agent shall be under a duty to examine the same to determine whether or not they conform to the requirements hereof. (c) The Agent shall exercise such of the rights and powers vested in it by this Debt Service Reserve Escrow Agreement, and use the same degree of care and skill in its exercise, as a fiduciary would exercise or use in connection with the care and control of another Person's funds. (d) No provision of this Debt Service Reserve Escrow Agreement shall be construed to relieve the Agent from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct. Section 3.2. No Set -Off. The Agent shall not set -off from amounts on deposit in the Debt Service Reserve Account, any obligations or other amounts which may be payable to the Agent by HHC or by any other Person. Section 3.3. Fees and Expenses. HHC agree to pay the Agent its fees and charges for serving as Agent hereunder and to pay and reimburse the Agent on demand for all out -of- pocket expenses (including in each case all filing and recording fees and taxes and all reasonable fees and expenses of counsel) incurred or expended by the Agent in connection . with the creation, perfection, satisfaction, foreclosure or enforcement of the security interests fb.0 2146671.03 4 to�G� Ll 0 0 granted hereby and the preparation, administration and enforcement of this Debt Service Reserve Escrow Agreement. 4. MISCELLANEOUS Section 4.1. Governing Law. This Debt Service Reserve Escrow Agreement shall be construed in accordance with and governed by the internal law of the State of Minnesota. Section 4.2. Severability. If any provision of this Debt Service Reserve Escrow Agreement is prohibited by, or is unlawful or unenforceable under, any applicable law of any jurisdiction, such provision shall, as to such jurisdiction, be ineffective to the extent of such prohibition without invalidation the remaining provisions hereof. Section 4.3. Limited Indemnity. HHC agree to indemnify and hold the Agent harmless against any loss, cost, expense, damage or liability arising out of or resulting from any misrepresentation by HHC under this Debt Service Reserve Escrow Agreement or from the failure by HHC to observe or perform any agreement or undertaking made by it in this Debt Service Reserve Escrow Agreement or pursuant hereto. Section 4.4. Notices. Any notice to any party to this Debt Service Reserve Escrow Agreement shall be in writing and shall be sent by manual delivery, telegram, telex, facsimile transmission, overnight courier or United States mail (postage prepaid), addressed to such party at the address specified on the signature page hereof, or at such other address as such party shall have specified to the other parties hereto in writing. Section 4.5. Captions. Captions herein are for convenience only and shall not be deemed part of this Debt Service Reserve Escrow Agreement. Section 4.6. Binding Effect. This Debt Service Reserve Escrow Agreement shall be binding upon and inure to the benefit of HHC, the Agent, the City and their respective successors and assigns. Section 4.7. Entire Agreement. This Debt Service Reserve Escrow Agreement constitutes the entire understanding of HHC and the City with respect to the subject matter addressed and supersedes any prior representations or agreements, whether written or oral, with respect to the subject matter hereof. tb.us.2146671.03 tb.us. ^_ 14667 L03 5 1b C/�� IN WITNESS WHEREOF, the parties hereto have executed this instrument under . seal as of the day and year first above written. CITY OF HUTCHINSON i • By: Its: And by: Address: fb.us.ziaeen.os 6 • • • Address: Ib.us.2166671.03 HUTCHINSON HEALTH CARE By: Its: And 1 Cv> E i • Address: m.us.2146671.03 By: Its: [AGENT] k p cc-) • • Ordinance No. 07 -0476 AN ORDINANCE APPROVING AN ATTORNEY SERVICE AGREEMENT WITH HUTCHINSON HEALTH CARE WHEREAS, the Hutchinson City Attorney office has acted as general legal counsel for Hutchinson Area Health Care for the past several years; and, WHEREAS, the Hutchinson City Attorney office is familiar with the operations and staff of Hutchinson Area Health Care; and, WHEREAS, as the successor to Hutchinson Area Health Care, Hutchinson Health Care will employ substantially the same operations and staff; and WHEREAS, Hutchinson Health Care desires to employ, and is willing to pay for, the services of the Hutchinson City Attorney, NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF HUTCHINSON, THAT THE ATTORNEY SERVICE AGREEMENT ATTACHED AS EXHIBIT A TO THIS ORDINANCE IS HEREBY ADOPTED BY THE CITY COUNCIL AND THAT THIS ORDINANCE SHALL BE EFFECTIVE UPON PUBLICATION. Signed this day of Attest: Gary D. Plotz, City Administrator Steven W. Cook, Mayor 2007. �bcz� City of Hutchinson — Hutchinson Health Care • Summary of Expectations for Attorney Services Background Hutchinson Area Health Care (HAHC) is the City -owned organization that will transfer its operations to Hutchinson Health Care (HHC), a private, nonprofit, 501(c)(3) organization, on December 31, 2007. Over the years, HAHC has paid the City for and used up to 25 % of the city Attorney's time. As part of the lease arrangement between the City and HHC, HHC will be paying the City a set amount ($160,000 initially, escalating annually by 5% for use of the property assets and the services of the City Attorney. Following are mutually agreeable expectations that define how HHC can continue to access and use the City Attorney's services on a non - exclusive basis. General Provisions The parties recognize that the City Attorney will be working as General Legal Counsel for both HHC and the City and as such both parties agree to this dual representation as required under Rule 1.7 of Minnesota Rule of Professional Conduct. The use of the City Attorney services by HAHC/HHC may be terminated by either rparty at any time with no reduction in the amount of the payment and its escalator by HAHC/HHC. Responsibilities of the City Attorne • Be available to HHC during normal business hours to respond to requests of HHC for legal services, and be available for urgent issues during evenings and weekends when not on vacation or away from the area; • Provide legal assistance to HHC, including but not limited to contract review and legal advice on a wide range of issues; • Be present on the HHC campus at least one day per week, with the understanding that the Attorney may perform non -HHC work during this time if HHC does not require legal services and Attorney documents the time spent on non -HHC matters; • Recognize that HHC, not the City, is the client, maintain the attomey- client privilege and confidentiality of all HHC information obtained in representing HHC (both with respect to the City and all other parties) when working on HHC matters, and address conflicts of interest with the City and other persons in accordance with the rules of professional conduct. • ia(A� Responsibilities of HHC: • Provide a locked office area with a telephone and computer access that is secure and used only by the Attorney and Attorney's staff; • Limit requests and usage of the Attorney and staff to 25% of their time, unless mutually agreed to by both parties; • Provide adequate lead time for the Attorney to respond. If there is a time - sensitive need, work will be prioritized; • Provide at the sole expense of HHC Legal Malpractice, errors and omissions and all other appropriate insurance coverage in an amount of not less than four million dollars. Gary Plotz, City Manager • • Mary Ellen Wells, HHC President and CEO 2 �\ 0 • • Ordinance No. 07 -0475 AN ORDINANCE APPROVING AN ASSET VALUATION AGREEMENT WITH HUTCHINSON HEALTH CARE WHEREAS, THE City of Hutchinson has enacted ordinance number 07 -0475 approving a lease with Hutchinson Health Care for certain assets in Hutchinson used for health care purposes; and, WHEREAS, the parties to the lease agree that the value of those assets be determined in the event, if at sometime in the future, that those assets are transferred to a third party or are returned to the City; and, WHEREAS, the parameters of that valuation are set forth in the attached exhibit A, NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF HUTCHINSON, THAT THE ASSET VALUATION AGREEMENT ATTACHED AS EXHIBIT A TO THIS ORDINANCE IS HEREBY ADOPTED BY THE CITY COUNCIL AND THAT THIS ORDINANCE SHALL BE EFFECTIVE UPON PUBLICATION. Signed this day of Attest: Gary D. Plotz, City Administrator Steven W. Cook, Mayor 2007. oc(�) �J n U • ASSET VALUATION AGREEMENT The parties to this agreement, the City of Hutchinson ( "City ") and Hutchinson Health Care ( "HHC "), agree that a business valuation study should be undertaken to determine the fair market value, as of December 31, 2007, of the enterprise comprising the Health Care System as that term is defined in Section 1.21 of that certain Lease and Agreement between the City and HHC effective as of December 31, 2007 (the "Lease "). Appraiser. The parties agree that the City, as the present owner of the assets, shall select the person or firm that will conduct the valuation of the Health Care System. Method. The City shall select the method after consultation from HHC. Cooperation. The parties shall provide any and all information, financial and otherwise, to the appraiser and will timely respond for inquiries and requests for information from the appraiser and will direct those under its control (e.g. auditors, accountants, etc.) to provide information in this same fashion. Prior to the reports final issuance, the City shall share a draft with HHC. The City shall afford HHC a reasonable opportunity (not less than 30 days) to submit any written comments to the report, which shall be appended to the report as finally issued. The City would have their response to any comments by HHC appended to the report as well. Completion Date. The valuation report shall be completed no later than May 31, 2008. Cost. The parties shall split the cost of the valuation equally. HUTCHINSON HEALTH CARE Signature: By: Its: CITY OF HUTCHINSON Signature: By: Its: �D(e� City of Hutchinson, Minnesota • Pre -Sale Report September 11, 2007 Proposed Issue: Purpose: Schedule: • • C $425,000 General Obligation Improvement Bonds, Series 2007A To fund the City's 2007 pavement management program pursuant to Minnesota Statutes, Chapter 429. Council Authorizes Bond Sale: Conference with Rating Agency: Bond Sale: Estimated Closing Date: September 11, 2007 Week of October 1, 2007 October 9. 2007 Week of October 22, 2007 Term: The total term of the Bonds will be 10 years, with the first interest payment due on August 1, 2008, and principal due on February 1, 2009, and each year thereafter with the final principal payment on February 1, 2017. Call Feature: Due to the potential for prepayments of assessments over time, a shorter call date is recommended, with the Bonds maturing in 2016 and later can be called on February 1, 2015. Rating: The Bonds are expected to be rated by Moody's Investors Service at an "A2" level. Funding Sources: The Bonds will be repaid with special assessments and a property tax levy. Special assessments are to be levied in the amount of $143,665 (representing approximately 33% of the project costs). The assessments are assumed to be filed in 2007 for collection over ten years at a rate 1% over the average rate on the Bonds. The balance of the debt service will be payable from a property tax levy. D C -0 • Bank Qualification: The City will designate the Bonds as "bank qualified" obligations, which will allow banks to buy the Bonds at slightly lower interest rates. Discussion Issues: The City Council has given the general direction to issue 15 -year debt in order to achieve overall level debt service on all future bonds by 2010. Nevertheless, this issue is structured to mature over 10 years due to the very small size of the project being financed. A 15 -year term will be required for future debt, as planned, to meet the City's goals. Arbitrage Rebate: With increasing short -term investment rates, IRS rules regarding the amount of interest that the City may earn on bond proceeds is more of a concern. Because the City is issuing less than $5,000,000 of its own debt for the calendar year, the City has three years to spend the proceeds of the Bonds without needing to rebate or repay interest income that is earned at a higher rate that than the interest rate on the Bonds. The excess earnings are known as "arbitrage." The City will also need to keep its debt service fund balances within IRS parameters to avoid penalties on carrying too high of a balance during the life of the issue. Attachments: Sources and Uses of Funds Proposed Debt Service Schedule Ehlers Contacts: • Financial Advisors: Bond Analysts: Bond Sale Coordinator: • Steve Apfelbacher (651) 697 -8510 Jessica Cook (651) 697 -8546 Kathy Kardell (651) 697 -8548 Diana Lockard (651) 697 -8534 Debbie Holmes (651) 697 -8536 Connie Kuck (651) 697 -8527 The Official Statement for this financing will be mailed to the Council Members at their home address for review prior to the sale date. 1) C�--) Resolution No. 13269 Council Member introduced the following resolution and moved its adoption: Resolution Providing for the Sale of $425,000 General Obligation Improvement Bonds, Series 2007A A. WHEREAS, the City Council of the City of Hutchinson, Minnesota, has heretofore determined that it is necessary and expedient to issue the City's 5425,000 General Obligation Improvement Bonds, Series 2007A (the "Bonds "), to fund certain public improvements; and; B. WHEREAS, the City has retained Ehlers & Associates, Inc., in Roseville, Minnesota ( "Ehlers "), as its independent financial advisor for the Bonds and is therefore authorized to solicit proposals in accordance with Minnesota Statutes, Section 475.60, Subdivision 2(9); NOW, THEREFORE, BE IT RESOLVED by the City Council of Hutchinson, Minnesota, as follows: 1. Authorization; Findings. The City Council hereby authorizes Ehlers to solicit proposals for the sale of the Bonds. 2. Meeting; Proposal O en nine. The City Council shall meet at City Hall on October 9, 2007, for the purpose of considering a resolution awarding the sale of the Bonds. 3. Official Statement. In connection with said sale, the officers or employees of the City are hereby authorized to cooperate with Ehlers and participate in the preparation of an official statement for the Bonds and to execute and deliver it on behalf of the City upon its completion. The motion for the adoption of the foregoing resolution was duly seconded by Council Member and, after full discussion thereof and upon a vote being taken thereon, the following Council Members voted in favor thereof: and the following voted against the same: Whereupon said resolution was declared duly passed and adopted. Dated this day of , . City Clerk • 0 • \J City of Hutchinson, MN $425,000 G.O. Improvement Bonds, Series 2007 $431,628 Project Costs -10 Year Term Sources & Uses Dated 11/012007 i Dellvered 11/01/2007 Sources Of Funds Par Amount of Bonds $425,000.00 Water Fund 23,680.00 Total Sources $448,680.00 Uses Of Funds Total Underwriters Discount (1.250 %) 5,312.50 Costs of Issuance 11,500.00 Deposit to Project Construction Fund 431.628.00 Rounding Amount 239.50 Total Uses $448,680.00 i � oC�> 0 • City of Hutchinson, MN $425,000 G.O. Improvement Bonds, Series 2007 $431,628 Project Costs -10 Year Term Debt Service Schedule Date Principal Coupon Interest Total P +I Fiscal Total 11/01/2007 - - - - - 08101/2008 - - 14,019 -38 14,019,38 - 02/01/2009 45,000.00 4.250% 9,346.25 54,346,25 68,365.63 08/01/2009 - - 8,390.00 8,390.00 - 02101/2010 45,000.00 4.300% 8,390.00 53,390.00 61,780.00 08/01/2010 - - 7,422.50 7,422.50 - 02101/2011 45,000.00 4.350% 7,422.50 52,422.50 59,845.00 08/01/2011 - - 6,44335 6,443.75 - 02/01/2012 45,000.00 4.350% 6,443.75 51,443.75 57,887.50 08/01/2012 - - 5,465.00 5,465.00 - 02/01/2013 45,000.00 4.400% 5,465.00 50,465.00 55,930.00 08/01/2013 - - 4,475.00 4,475.00 - _ _ 02/01/2014 50,000.00 4.400% _ 4,475.00 54,475.00 58,950.00 08/0112014 - - 3,375.00 3,375.00 - 02/01/2015 50,000.00 4 -500% 3,375.00 53,375.00 56,750.00 08/01/2015 - - 2,250.00 2,250.00 - 02/01/2016 50,000.00 4.500°/ 2,250.00 52,250.00 54,500.00 08101/2016 - 1,125.00 1,125.00 - 02/01/2017 50,000.00 4500% 1,125.00 51,125 -00 52,250 -00 Total $425,000.00 - $101,258.17 $526,258.13 - Yield Statistics Bond Year Dollars $2,281.25 Average Life 5.368 Years Average Coupon 4.4387125°/ Net Interest Cost (NIC) 4.6715893% True Interest Cost (TIC) 4.7044112% Bond Yield for Arbitrage Purposes 4.4316297% All Inclusive Cost (AIC) 5.3119731% IRS Form 8038 Net Interest Cost 4.4387125% Weighted Average Maturity 5.368 Years Ser 07 GO Imp, Bas I SINGLE PII RPOSE 1 9/4/2007 1 1W PM Ehlers &Associates, Inc.' a- ioC�� 0 �J • City of Hutchinson, MN $425,000 G.O. Improvement Bonds, Series 2007 $431,628 Project Costs - 10 Year Term Debt Service Schedule -- Accrual Basis Calendar Year Principal Coupon Interest Total P +I 2007 - 2008 - - 14,019.38 14,019.38 2009 45,000.00 4.250% 17,736.25 62,736.25 2010 45,000.00 4.300% 15,812.50 60,812.50 2011 45,000.00 4.350% 13,866.25 58,866.25 2012 45,000.00 4.350% 11,908.75 56,908.75 2013 45,000.00 4.400°/ 9,940.00 54,940.00 2014 50,000.00 4.400% 7,850.00 57,850.00 2015 50,000.00 4.500% 5,625.00 55,625.00 2016 50,000.00 4.500% 3,375.00 53,375.00 2017 50,000.00 4.500% 1,125.00 51,125.00 - $425,000.00 $101,258.13 $526,258.13 Yield Statistics Bond Year Dollars $2,281.25 Average Life 5.368 Years Average Coupon 4.4387125% Net Interest Cost (NIC) 4.6715893% True Interest Cost (TIC) 4.7044112% Bond Yield for Arbitrage Purposes 4.4316297% All Inclusive Cost (AIC) 5.3119731 % IRS Form 8038 Net Interest Cost 4.4387125% Weighted Average Maturity 5.368 Years I Ser 07 GO l mp,v Bds S NGLE PUR POSE 1 W412007 3:00 PM 'Ehlers & Associates;, Inc. ,,,LeadersJPPub1i Fin d • City of Hutchinson, MIN Financial Management Debt Plan Proposed Bonds Preliminary - Foussion Purposes Only Bond Information Proposed G.O. Bonds, Series 2007, ' Dated Date 10/112007 ": Par Amount of Bonds . -- 425,000 1, 1st Interest Pymt 2/1/2008 'Water Contribution` 27,680 -' 1st Principal Pyml 2/1/2009 - .Total Sources Term Average Coupon 4.3944% Total Underwriters Discount (1.250/) - 5,313 TIC 4.6281% Costs of Issuance -- 11,500 Deposit to Capitalized Interest (CIF) Fund ! - 2008_ 12131/2008 - Deposit to Project Construction Fund 431,628'" 14 019 ,,�x" "14',19 Rounding Amount _ 240 - (8,117) Total Uses 448,680 __ _2007 2008 2009 3: _. 45,000' , 4.25 %. _ -_ 17,736 ;;:i 62,736' 6S,873`,µ _(14,367) _ (14,367) .,_ _ _ (7,305) _ _(22,48 - (21,672) _ ____(7,763). (21,672) Levy Collect Period 211 cap" '': Net P & (- Year Year Endino Principal Rate - Interest;' interest +- : -'P &1- +5.00% Assessment Revenue Project 1 Assessment Amount 143,665 Prepaids year 1 Total Assessment Amt 143,665 Prepaids year 2 - Prepaids year 3 - Rate 5.65% Start Year (Collection) 2008 Term 10 Calculation Method Equal Prin • Asmnl as % of Par 33.80% Asmnt as % of Project 33.28% Total Total city Principal Interest Assessmt Revenue Lew Prepared by Ehlers & Associates, Inc. © EHLERS 12/31/2006 - - - 2006 2007 12/31/2007 - 2008_ 12131/2008 '_ 14 019 ,,�x" "14',19 j 14 MO,, (8,117) (22,484) __ _2007 2008 2009 12/31/2009 _. 45,000' , 4.25 %. _ -_ 17,736 ;;:i 62,736' 6S,873`,µ _(14,367) _ (14,367) .,_ _ _ (7,305) _ _(22,48 - (21,672) _ ____(7,763). (21,672) 44,201 2009 2010 12/31/2010 .`' 45,000 4.30% 15,813 . .60,813. - = °- 63,8531 (14,367) (6,494) (20,860) (20,860) 42,993 2010 2011_ 12/31/2011 .45,000_' 435 % -` 13666 .,';.- ..58866 __` 61'r610 (14,367) (20,048)(20,048L x1,761 _ 2011 _ 2012 - 12/31/2012 - 45,000 4.35% 11,909. - .'" 56,909 -� 59,754' _ (14,367) ,__...(5,662) (4,870) (19,237) _ (19,237) _ 40,517 2012 2013 12/31/2013 45,000 4.40% 9,940 .54,940" ";57,687 (14,367) (4.059) (18,425) (18,425) 39,262 2013 2014_ 12131/2014 4.40% .__ 7850_ _- _. 60743, (14,367)____ (117-,-613)____ _ _ 2014 2015 _ _'.50,000 12/31/2015. 50,000 450 %�µ 5,625 _ _' ,57850 __' 55,625 -. µS8,406 (14,367) „(3,247) (2,435) (16.802) _(17,613!_ (16,602) -_43,129 41,605 2015 2016 12/31/2016 50,000 4.50% 3,375 53,375 56,044 (14,367) (1,623) (15,990) (15,990) 40,054 2016 2017 12/31/2017 50,000 4.50% 1,125 51,125 53,681 _ (14,367) (812) (15.178) (15,178) _ 38,503 2017 2018 12/31/2018 - - - - - - - - 2018 2019 12131/2019 - - - - - - - - 2019 2020 12/31/2020 _- .......... _ ...._...__._ __. _.. - ..- _ -._.. - - 2020 _ 2621 1213112021 2021 2021 2022 12/31/2022 - - - - - - - 2022 2023 12/31/2023 2023 2024 12/31/2024 - 2024 2025 12/31/2025 - - - - - - - - 2025 2026 12/3112026 - - - - _ 2026 2027 12/31/2027 2027 2028 12131/2028. - 2028 2029 12131/2029.' _. 2029 2030 12/31/2030 -� - -� -- - _- __ - -.- Prepared by Ehlers & Associates, Inc. © EHLERS CITY OF HUTCHINSON MEMO Finance Department September 6, 2007 TO: MAYOR 6 CITY COUNCIL FROM: KEN MERRILL, FINANCE DIRECTOR SUBJECT: 2008 PRELIMINARY TAX LEVY Resolutions to set the preliminary tax levies for 2008 are attached. The EDA and HRA resolutions follow the requests by the respective boards. The resolution setting the City's preliminary levy has the • General Fund set at $3,981,000 and is the amount included the budget document you have in hand, which has a current short fall of $270,000. We will be discussing the budget prior to the meeting beginning at 4 p.m. on Tuesday. The preliminary levy once set by the council can be reduced but cannot be increased; this number will be used to create the truth in taxation hearing notices. Preliminary levies are required by state law to be set by September 15. The final levy is scheduled to be adopted at the first meeting in December. H: \DCC\City council memo l.doc • 1o(g) CITY OF HUTCHINSON RESOLUTION NO. 13265 • CITY OF HUTCHINSON, MINNESOTA SETTING 2008 PRELIMINARY TAX LEVY FOR SPECIAL TAXING DISTRICT HUTCHINSON REDEVELOPMENT AUTHORITY BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF HUTCHINSON, MINNESOTA THAT the City of Hutchinson hereby establishes a special taxing district for the purpose of Hutchinson Housing Redevelopment Authority (Hutchinson HRA) and the financing of such district as authorized under Minn. Stat. 469.033 WHEREAS the Minn Stat 469.033 authorizes a levy to be set for an HRA special tax of .000144 times taxable market value of the city. AND for 2008 the authorization yields: 000144 x $897,004,800 = $129,169; the HRA Board requests for 2008 a levy of $116,252 THAT the City of Hutchinson hereby establishes a preliminary tax levy for the above named special taxing district of : • Adopted by the City Council this 11th day of September 2007 ATTESTED: Gary D. Plotz City Administrator • $116,252 Steve W. Cook Mayor lo C�) CITY OF HUTCHINSON RESOLUTION NO. 13266 • CITY OF HUTCHINSON, MINNESOTA SETTING PRELIMINARY 2008 TAX LEVY FOR SPECIAL TAXING DISTRICT HUTCHINSON ECONOMIC DEVELOPMENT AUTHORITY BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF HUTCHINSON, MINNESOTA WHEREAS the City of Hutchinson hereby establishes a special taxing district for the purpose of Hutchinson Economic Development Authority (Hutchinson EDA) and the financing of such district as authorized under Minn. Stat. 469.107 WHEREAS the Minn Stat 469.107 authorizes a levy to be set for an EDA special tax of .0001813 times taxable market value of the city. AND for 2008 the authorization yields: 0001813 x $897,004,800 = $162,627; the EDA Board requests for 2008 a levy of $146,000 THAT the City of Hutchinson hereby establishes a preliminary tax levy for the above named special taxing district of : • Adopted by the City Council this 11 h day of September 2007 ATTESTED: Gary D. Plotz City Administrator \J $146,000 Steve W. Cook Mayor ) (DC r)) CITY OF HUTCHINSON RESOLUTION NO. 13267 2008 PRELIMINARY TAX LEVY FOR CITY OF HUTCHINSON, MINNESOTA • BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF HUTCHINSON, MINNESOTA THAT A PRELIMINARY NET tax levy for the City of Hutchinson for 2008 is hereby set in the amount of $5,605,900 The detail for this levy is as follows: Total General Fund General Obligation Bond H.A,T.S. Facility Total Gen. Obligation Bond Improvement Bonds 1996 1997 • 1998 1999 2000 2001 2002 2002 Refunding 2003 2004 2005 2006 Total Improvement Bond TOTAL TAX LEVY Adopted by the City Council this 11th day of September 2007 ATTESTED: • Gary D. Plotz City Administrator LEVY Amt. 3,981,000 160,600 160,600 665,300 135,000 301,000 92,500 25,500 0 148,800 96,200 1,464,300 5,605,900 Steve W. Cook Mayor 1ac,l) CITY OF HUTCHINSON • RESOLUTION NO. 13264 RESOLUTION SETTING TRUTH IN TAXATION HEARING DATE FOR TAXES PAYABLE 2008 BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF HUTCHINSON, MINNESOTA: THAT a hearing a prescribed by State Law entitled Truth In Taxation is hereby established as follows: Monday, December 3, 2007; 5:00 p.m. And Monday, December 10, 2007; 5:00 p.m. For continuation of the hearing if necessary • Said meetings shall be convened at the Hutchinson Events Center; 1005 Hwy 15 So ; Hutchinson, Minnesota. Adopted by the City Council this 11 th day of September 2007 ATTEST: Gary D. Plotz City Administrator is Steve W. Cook Mayor wc)) 0 C TO: Mayor & City Council FROM: Miles Seppelt, Director of Economic Development Kent Exner, City Engineer RE: Consideration of Project Award for the EDA Customer Elation Call Center (Letting No. 11/Project No. 07 -11) DATE: September 11, 2007 Bids for the Hutchinson Dam Replacement project will be received on Wednesday, September 5". City staff will then provide a summary of the bids and an award recommendation at the Council meeting. Several bid alternates will also be • reviewed and considered accordingly. Acting on the timely award of this project at the upcoming Council meeting is necessary to meet a very aggressive fall construction schedule. cc: Gary Plotz, City Administrator • I ©c K' RESOLUTION NO. 13268 RESOLUTION ACCEPTING BID AND AWARDING CONTRACT • LETTING NO. 11 /PROJECT NO. 07 -11 Whereas, pursuant to an advertisement for bids for the furnishing of all labor and material forthe construction of the Economic Development Authority Customer Elation Call Center and appurtenances; and bids were received, opened and tabulated according to law, and the fallowing bids were received complying with the advertisement: Base Bid Alt A -1 Alt M -1 Alt E -1 Total Base /Alt Add'I Fill Add'1 Exc Ebert Construction $1,738,200 - $157,177 - $31,400 - $34,175 $1,515,448 $15.00 $11.00 Greystone Construction Co. $1,812,821 - $149,426 - $14,000 - $34,175 $1,615,220 $17.25 $12.65 Gopher State Contractors Inc $1,787,207 - $178,892 - $30,305 - $35,713 $1,542,297 $16.25 $12.25 KUE Contractors Inc $1,897,061 - $175,000 - $30,000 - $35,000 $1,657,061 $16.00 $12.00 Dammann Construction Inc $1,955,400 - $160,200 - $29,800 - $41,600 $1,723,800 $16.35 $12.25 Gen -Con Construction $1,977,000 - $165,000 - $50,500 - $41,000 $1,720,500 $20.00 $18.00 Heymann Construction Co. $2,023,000 - $173,000 - $34,300 - $34,175 $1,781,525 $16.00 $12.00 RAM Buildings Inc $2,246,770 - $261,335 - $30,900 - $34,175 $1,920,360 $10.00 $ 7.00 and whereas, it appears that Ebert Construction is the lowest responsible bidder. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF HUTCHINSON, MINNESOTA: 1. The mayor and city administrator are hereby authorized and directed to enter into a contract with Ebert Construction forthe base bid amount of $1,738,200.00, in the name of the City of Hutchinson, forthe improvement contained herein, according to the plans and specifications therefor approved by the City Council and on file in the office of the Director of Engineering. 2. The Director of Engineering is hereby authorized and directed to return forthwith to all bidders the deposits made with their bids, except that the deposits of the successful bidder and the next lowest bidder shall be retained until a contract has been signed, and the deposit of the successful bidder shall be retained until satisfactory completion of the contract. • Adopted by the Hutchinson City Council this 11th day of September 2007. Mayor City Administrator • P' IGa R 00:f-) 0 0 BID TABULATION CITY OF HUTCHINSON, 111 HASSAN ST SE, HUTCHINSON MN 55350 P:320- 2344209 LETTING NO. 11 1PROJECT NO. 07 -11 -ECONOMIC DEVELOPMENT AUTHORITY CUSTOMER ELATIONS CALL CENTER BID OPENING: 09/05/2007 AT 2:00 PM - HUTCHINSON CITY COUNCIL CHAMBERS 0 ITEM RE TEM BASE BID Lv nlvlc.v .,an YN DO61 HONE: IoXN.IwX PEAL(: TOLIMI051 snayapanMNN6sa)e]oa B:E6X518BVlntl oew •MX 60ae]IX ,NI oOW a6nauN 66anaw O6mma.. cwANAEd.. m. m aMN 66608• gp.E 60e-6BZM67 06% I.. aoo HWma 3 `'N. :.11P.N. X•w VIm MN /6601] PHONE. 10)3613115 )15/11]6 ITEM DESCRIPTION UNR OUAN TITT USE, 6%Bitl So. Tl':E6%BiC BeM BYRETV; B,[EaM eUPE}V.06 YBIJ B.M FARE, E%XI FIX BIO PNICE BID iaTA BIO FAKE BID TOTAL BIO PM6E BIO TOTAL TOTAL 1 EASE RE DIVISIONS I THROUGH I6 3521 o0 8 E11B1 ]0]OD $1,]B]]OY DO 0 89108100 1955/0000 1955,40000 $19]700000 $19]700000 $2 023 000 00 0000 $32de,Y7O80 52116]]000 TOTAL BASE BID: $1,738200.00 $1.012,82100 $f ]5120]00 51097,061.00 $1,955400.00 $1.97700000 $2,023,000,00 S2]4B ]]000 ITEM NO ALTERNATE NO. A -1 BM pRI[E BID TOTAL PLO PRICE BUD TOTAL BIO PRIDE BID TOTAL BID PRICE BID TOTAL BID PRICE BID TOTAL BID PRICE BID TOTAL BID PRICE BID TOTAL 910 PRIDE pipTAL ITEM DESCRIPTION UNIT OUPX 2 DEDUCT FOR DELETING THE NORTH HALF OF THE OFFICE 9 70 PARKING STALLS INCLUSIVE. PER PLANS (EX LURING ALTERNATES M -1 & E -1 WHICH ARE TO 6E PRIDED SEPARATELY} LUMP 6U 11$]1]]00 (STS]1]]00) y1i9,4]800 (5149128NE) 11111 88200 ISIYBtl9200) - 31]500000 Rl]5000001 5180120000 IE180i200ED) �51o5i00000 ($16E 000 - 51]9100000 R1]900D001f26133500 (5761.335 00) TOTAL ALTERNATE NO. A -1 BID 1$157T77QS 15159,426.00) 13f76.S92D0) 1a 759DO.om (EISD 0o.o0) (3165000.00) (S173.00000) ($261,5$5.001 ITEM NO ALTERNATE NO. M -1 BID PRICE BIO TOTAL BIS PRICE BIO TOTAL BIO PRICE BID TO TAL BIO PRICE BIO TOTAL II PRICE BIO TOTPL I BIp PRI[E BID PRICE MIO TOTAL 910 PRICE BID TO TAL ITEM pES[RIPTpH UNIT AJAX TITY 3 NORTH HAL 1 HULLOING PER SPEC SEC TION 15001 011A LUMP SU 1 $3140000 153140000) 31400000 (514,00000) ;]0]0500 (j30 ]0500) i3000n 00 (530000001 32P60000 §2P80000) l -f5D50000 (55050000) 5]130000 1531ISE F.1 f3DB0000 (53060000) TOTAL ALTERNATE NO. M -1 BID ($]1400.01) (514,000.00) (S30.305.00) (IGO 000.no) ($2860000) I As. 'E0 SID (s34xu.) (s30,9oo.a1) ITEM NO ALTERNATE NO. E -1 .1. PRICE .1. TOTAL BID PRICE BID TOTAL BID PRICE BID TOTAL BID PRICE BID TOTAL BID PRICE BID TOTAL 810 PRICE BID TOTAL BID PRICE BID TOTAL SO PRICE BID TOTAL ITEM DESCRIPTOR UNIT GLEE TTY 4 NORTH HALF BUILDING PER SPEC SECT ION 16001 01 IA LUMPSU 1 33417500 (",I... G) 335,17500 (53417500) 335113 D0 (535,71300) 53500000 (§3500000) S4150000 154160000) 34100000 (.4100000) 134, 111W E34,175001 /3417500 ($35,175DO) TOTAL ALTERNATE NO. E -1 BID 111175 00) (1134,17500) (595.]13.00) 1 ($95.OD00) ($41,600.00) (Sn,000.00) ($04.73500) ($34175,00) rtESxo 1i OUgN 851500E R$1]25E 651625E 8$1600 ADDITIONAL FILL CY E1635 0000 §1800 I §1000 6 ADDITIONAL E %CAVATION GY $1100 $1265 $1225 $1200 51225 §1600 51200 5700 BASE BID WITH ALTERNATES ECeJ COneBDC... Gmystone Con6N9cbon Co, DopNe... COnrcamve In. NEE Contract —MC Oamnann CoNa9u68on Inc on Cnnelmmn. H.ym.nn LPn.wPBen C., RAM BmMBBa Inc TOTAL BASE BID Low Did - EbeR §1]30,20000 §181262100 $1,794,0700 E1B6706100 $1955400.00 5187700000 $202300000 f2 )481]O 00 TOTAL BASE BID WITH ALTERNATE F' Low Bid Ebert $160102300 5166336500 SO 4,..,315 D0 E1i2206100 51).5.20000 5111200000 $1650,00000 5198541500 TOTAL BABE BID WITH ALTERNATE A Low BIB - EbeX $1]03800.00 $179682100 1 §1)53902.00 SIRO06100 §1925,600.00 31 926 5 00 00 E19BB]000D S2215 87000 TOTAL BASE BID WIH ALTERNATE E-1 Low-.Id - Eb.it $1,70402500 §111664fi 00 1 6175149400 51962 HU 00 41 ELSE. SO §193600000 5196.,62500 $2.21259500 TOTAL BASE BID WTH ALTERNATES A -1, M3, E -1 Low Bid - EbeH %1 515 418 00 $161522000 1 315422000 $1.657 061 00 $1]23600.00 51]2050000 $1 781 525 ED 31920.]6100 P c-� ✓ cumrvnvrnunRl­ly @w „L „CL „IW,O.AHiu Tawl.uvn lvviLmva, -Ll, n, -,1 0 C TO: Mayor & City Council FROM: John Olson, Public Works RE: Sale of Surplus Vehicles DATE: September 7, 2007 The following vehicles are slated for auction through Fahey Sales Agency. At this time, Fahey's is in possession of the three vehicles and the titles are required for the municipal auction. • Staff recommends approval to forward the titles of the vehicles listed below to Fahey. The vehicles will be at auction on Friday, September 14, 2007 in New Prague, MN. 1989 Ford 1 ton 4x2 truck — VIN # 1FDKE37M9KHB59331 1994 Ford Crown Victoria — VIN # 2FALP71 W4RX183010 2001 Ford Crown Victoria — VIN # 2FALP71 W 1RX169419 cc: Gary Plotz, City Administrator Melissa Starke, Administration/Council Secretary 40 11(cL) A SEH September 11, 2007 Mr. Kont Exncr, PE City of Hutchinson 111 Hassan St. SE Hutchsinson, MN 55350 -2522 Dear Kent: RE: City of Hutchinson, Minnesota Water Emergency & Conservation Plan SEH No. P- HUTCH0801.00 Short Elliott Hendrickson, Inc. (SEH is pleased to provide this proposal for assisting the City of Hutchinson in completing its second generation Water Emergency and Conservation Plan (WECP). The City's existing WECP was completed in October 1995. The Minnesota Department of Natural Resources (DNR) is requiring communities with populations greater than 1,000 to develop an updated WECP in accordance with Minnesota Statutes 103G.291. The updated WECP is due by October 15, 2007, so it is essential that work commence as soon as possible to meet that deadline. SEH will complete the following tasks as they relate to completing Hutchinson's WECP: Task 1 — Information Gathering and Data Gap Analysis • SEH has already compiled much of the information necessary for the WECP. SEH staff will gather all the information and data available in -house and will identify any missing elements required for the Plan. With the information at hand, SEH will complete as much as the WECP as possible before meeting with city staff to finalize data collection. Task 2 — Meeting and Interviews with City Staff SEH staff will hold a meeting with city staff to thoroughly review the information necessary for the WECP, and to obtain any policies related to conservation or emergencies required for the Plan through interviews with key city staff or formal requests for additional information. Task 3 — Plan Completion and Submittal The DNR has developed a detailed report template for the second generation of WECPs. To save the City costs and remain consistent with DNR expectations, SEH will utilize this template in completing the WECP. The recent changes and template format for the second generation of the Plans include the following sections: ■ Part I — Water Supply System Description and Evaluation • Analysis of Water Demand • Treatment and Storage Capacity • Water Sources • Demand Projections • • Resource Sustainability • Capital Improvement Plan Short Elliott Hendrickson Inc., 10901 Red Circle Drive, Suite 200, Minnetonka, MN 55343 -9301 JJJ \ SEH is an equal opportunity employer I w .sehinc.com 1 952.912.2600 1 800.734.6757 1 952.912.2601 fax Kent Exner, PE September 11, 2007 Page 2 ■ Part II — Emergency Response Procedures • Federal Emergency Response Plan • Emergency Response Procedures a Part III — Water Conservation Plan Conservation Goals Water Conservation Programs ■ Part IV — Items for Metropolitan Area Public Suppliers Part N of the WECP is only required for communities within the Twin Cities seven - county metropolitan area as part of their Water Supply Plan and Comprehensive Plan, as required by the Metropolitan Council and is not included as part of this proposal. Once all the necessary and applicable information is compiled and a draft of the WECP is complete, SEH will submit three (3) paper copies of the draft plan to city staff for their review, comment, and approval. Upon the City's approval, SEH will submit the finalized WECP to the DNR in both electronic (CD) and paper copy. Task 4 — DNR Comment Review SEH staff will be available to review any comments from the DNR regarding the WECP. If necessary, SEH will assist city staff in addressing any comments or concerns from DNR staff regarding the Plan. • Project Schedule The DNR has designated October 15'", 2007 as the City's deadline for submitting their WECP. SEH will work with city staff ensure that the WECP is completed and submitted to the DNR to meet this tight deadline. Our staff is available to begin work on the WECP upon notice - to-proceed. Cost Estimate Our estimated cost to complete a second generation WECP for the City is $6,000. The work discussed above will be completed on an hourly, not -to- exceed basis. If the city is available to assist in data input into the template, this will further reduce the amount of effort required by SEH. Thank you for this opportunity to provide engineering services to the City of Hutchinson. If you have any questions, or need additional information, please do not hesitate to contact me at 587 -7341 or Doug Klamerus, the Project Manager, at 651.765.2973. Sincerely, HENDRICKSON INC. Client Service sll • cc: Doug Klamerus, PE - SEH Greg Johnson, PE — SEH s:tFrvnr�wau:ommoo�tvrcxoaa� oo.a« i(a) PAYROLL DATE: August 31, 2007 Period Ending Date: August 25, 2007 FOR COUNCIL LIST ONLY - ELECTRONIC TRANSFER • TO STATE AND IRS DO NOT ISSUE CHECKS FOR THIS PAGE AMOUNT ACCT# $26,855.71 9995.2034 $13,969.16 9995.2240 $4,018.92 9995.2242 NAME DESCRIPTION WITH, TAX Employee Contribution - Federal Tax ACCOUNT Employee Contribution - Soc. Security Employee Contribution - Medicare $44,843.79 Sub -Total - Employee Contribution $13,969.16 9995.2240 Employer Contribution - Social Security $4,018.92 9995.2242 Employer Contribution - Medicare Per Journal Entries Difference Fica $ 27,938.32 $17,988.08 Sub -Total - Employer Contribution Medicare $ 8,037.84 Withholding $ 26,855.71 $62,831.87 Grand Total - Withholding Tax Account Total $ 62,831.87 $0.00 ,561.33 9995.2035 MN DEPT OF REVENUE State Tax $ 11,561.33 $0.00 $15,870.69 9995.2241 PERA Employee Contribution - Pension Plan $19,145.04 9995.2241 Employer Contribution - Pension Plan $35,015.73 Sub -Total - PERA $15.86 9995.2243 PERA -DCP Employee Contribution - Pension Plan $15.86 9995.2241 Employer Contribution - Pension Plan Pere $ 35,108.34 $31.72 Sub - Total - DCP DCP $ 15.86 $35,047.45 GRAND TOTAL - PERA Total $ 35,124.20 ($76.75) OK City will be issued to City. Finance Director Approval • R55APPYRV CITY OF HUTCHINSON By Check Number AP Payment Register with Voids Check Dates 08/31/2007 - Ck Date Type Check # Vendor Name Amount 08/3112007 PK 144591 122919 BRYAN STREICH TRUCKING 555.35 08/31/2007 PK 144592 102038 HUTCHINSON, CITY OF 210,000.00 08/31/2007 PK 144593 102449 MINNESOTA CHILD SUPPORT PAYMEN 223.93 08131/2007 PK 144594 105141 SCOTT COUNTY COURT ADMIN 420.00 211,199.28 Account Num # 211.199.28 i Void Amou C J • I \ L J • R55APPYR CSV20000VO CITY OF HUTCHINSON By Check Number AP Payment Register with Voids Check Date 09/05/2007 - Ck Date GL Date Type Check # Vendor Name Amount 09/05/2007 09/05/2007 PK 144595 ' 101919 AMERICAN FAMILY INS CO. 152.31 09/05/2007 09/05/2007 PK 144596 119212 BLOCK FARMS & TRUCKING INC. 1,094.04 09/05/2007 09/05/2007 PK 144597 122919 BRYAN STREICH TRUCKING 2,199.97 09/05/2007 09/05/2007 PK 1445981 1 102227 COLLINS BROTHERS 408.33 09/05/2007 09105/2007 PK 144599 104277 DRIVER & VEHICLE SERVICES 1,847.02 09/05/2007 09/05/2007 PK 144600 101872 H.A.R.T. 427.88 09/05/2007 09/05/2007 PK 144601 102635 HUTCHINSON, CITY OF 770.19 09/05/2007 09/05/2007 PK 144602 101873 ICMA RETIREMENT TRUST 4,316.92 09/05/2007 09/05/2007 PK 144603 101876 ING LIFE & ANN CO. 1,445.00 09/05/2007 09/05/2007 PK 144604 122894 METEORLOGIX 149.00 09/05/2007 09105/2007 PK 144605 102449 MINNESOTA CHILD SUPPORT PAYMEN 903.10 09/05/2007 09/05/2007 PK 1446061 101992 MINNESOTA DEPT OF HEALTH 32.00 09/05/2007 09/05/2007 PK 144607 104280 MINNESOTA LIBRARY ASSN 220.00 09/05/2007 09/05/2007 PK 144608 103504 MINNESOTA RURAL WATER ASSC. 75.00 09/05/2007 09/05/2007 PK 144609 124060 MPCA- FISCAL SERVICES 180.00 09/05/2007 09/05/2007 PK 144610 101875 ORCHARD TRUST COMPANY, LLC 300.00 09/05/2007 09/05/2007 PK 144611 102096 PRUDENTIAL MUTUAL FUNDS 30.00 09/05/2007 09/05/2007 PK 144612 121176 REINER ENTERPRISES, INC - 943.97 09105/2007 09/05/2007 PK 144613 109801 SCOTT'S WINDOW CLEANING SERVIC 63.90 15,558.63 Account Nu # 15,558.63 R55APPYRV CITY OF HUTCHINSON By Check Number AP Payment Register with Voids Check Payi Check Pay Check Dates 09/11/2007 - Ck Date Type Check # Vendor Name Amount 09/11/2007 PK 144614 102126 ACE HARDWARE 1,501.32 09111/2007 PK 144615 102217 AEM MECHANICAL SERVICES, INC 39.87 09/11/2007 PK 144616 122030 ALPHA WIRELESS 53.25 09/11/2007 PK 144617 124704 ALTIRIS INC. 875.00 09/1112007 PK 144618 116423 AMENT, ADAM 15.00 09111/2007 PK 144619 114880 AMERICAN LEGION POST #428 105.00 09/11/2007 PK 144620 102430 AMERIPRIDE LINEN & APPAREL 311.56 09/11/2007 PK 144621 124686 ANDERSON, JENNIFER 50.00 09/11/2007 PK 144622 105204 ARCTIC GLACIER PREMIUM ICE INC 414.38 09/11/2007 PK 144623 122083 ASHWILL INDUSTRIES 1,360.00 09/11/2007 PK 144624 105021 AUTO VALUE 229.85 09111/2007 PK 144625 101990 BAASEN, EUGENE 99.99 09/11/2007 PK 144626 102207 BACHMAN'S 440.11 09/11/2007 PK 144627 124695 BAHE, MICHAEL 187.80 09/11/2007 PK 144628 102969 BARKEIM, ELDEN 44.97 09/11/2007 PK 144629 121462 BARN YARD, THE 754.00 09/11/2007 PK 144630 102367 BELLBOY CORP 504.00 09/11/2007 PK 144631 101916 BERNICK COMPANIES 15270 09/1112007 PK 144632 119212 BLOCK FARMS & TRUCKING INC. 3,225.00 09/11/2007 PK 144633 101987 BRANDON TIRE CO 331.99 09/11/2007 PK 144634 124139 BRAU BROTHERS BREWING COMPANY 547.50 09/11!2007 PK 144635 102856 BREEZY POINT RESORT 642.68 09/1112007 PK 144636 103542 BROCK WHITE CO 189.44 09/11/2007 PK 144637 124696 BROOD, BILL 54.00 09/11!2007 PK 144638 122919 BRYAN STREICH TRUCKING 2,485.35 09111/2007 PK 144639 102470 BUFFALO CREEK ENTERPRISES 29.76 09/11/2007 PK 144640 113662 BURICH, CHARLES 22.00 09/11/2007 PK 144641 104418 BURMEISTER, JEROME 74.60 09/11/2007 PK 144642 121089 BUSHMAN, RAQUEL 529.43 09/11/2007 PK 144643 102136 BUSINESSWARE SOLUTIONS 5,494.32 0911112007 PK 144644 102456 C & L DISTRIBUTING 53,957.70 09/11/2007 PK 144645 102117 CARQUEST AUTO PARTS 2.30 09111/2007 PK 144646 102092 CARR FLOWERS 25.00 09/11/2007 PK 144647 102143 CENTRAL LANDSCAPE SUPPLY 814.52 09/11/2007 PK 144648 102253 CENTRAL MCGOWAN 8.65 09/11/2007 PK 144649 110865 CHOICEPOINT SERVICES INC 83.00 09111/2007 PK 144650 105423 CINDY'S HOUSE OF FLORAL DESIGN 92.13 09/11/20D7 PK 144651 102741 COBORN'S INCORPORATED 764.82 09/1112007 PK 144652 121750 CORNERSTONE CONTRACTING 21,861.00 09/11/2007 PK 144653 121750 CORNERSTONE CONTRACTING 6,400.00 09/11/2007 PK 144654 117879 CORNWELL TOOLS 85.15 09/1112007 PK 144655 102484 CORPORATE EXPRESS 1,501.87 09/11/2007 PK 144656 121640 CREEKSIDE SOILS 856.21 09/11/2007 PK 144657 102050 CROW RIVERAUTO & TRUCK REPAIR 1,677.26 09111/2007 PK 144658 102220 CROW RIVER PRESS INC 124.87 09/11/2007 PK 144659 102186 CULLIGAN WATER COND 37.28 09/11/2007 PK 144660 103403 CURRIMBHOY, FARID 30.00 09/11/2007 PK 144661 1 1D2488 DAY DISTRIBUTING 3,897.75 9 /oid Amou Payment T, Check Payi Check Pay Check Pay Check Payi Check Pay Check Payi Check Pap Check Pap Check Payi Check Pay Check Pay Check Pay Check Pay Check Pay Check Pap Check Pap Check Payi Check Pay Check Pay Check Pay Check Pay Check Pay l Check Payl • Check Pap Check Payt Check Pay Check Pap Check Payi Check Pay Check Payi Check Payi Check Pay Check Pay Check Payi Check Pap Check Pap Check Pap Check Pay Check Payi Check Pay; Check Pay Check Pay Check Pay Check Payi Check Pay Check Payi Check Pay Check Pay • • 09/11/2007 PK 144662 102698 DEVRIES, RANDY 34.73 09/11/2007 PK 144663 124687 DIEPOLD, JACQUELINE 10.00 09111/2007 PK 144664 123819 DIGITAL ALLY, INC 77.50 09/11/2007 PK 144665 121697 DIMLER, KYLE 18.60 09/11/2007 PK 144666 102710 DOMINO'S PIZZA 40.88 09/11/2007 PK 144667 102275 DPC INDUSTRIES INC 1,456.36 09/11/2007 PK 144668 113181 DROP -N -GO SHIPPING, INC 151.87 09/11/20071 PK 144669 102236 DUININCK BROS INC. 199.00 09/11/2007 PK 144670 102647 DYNA SYSTEMS 241.21 09/11/2007 PK 144671 105467 EAGLE LEGAL SERVICE 35.00 09/11/2007 PK 144672 123714 EBERT CONSTRUCTION 55,897.80 09/11/2007 PK 144673 102495 EBERT, PAT 5.96 09/11/2007 PK 144674 102726 ECOLAB PEST ELIM 118.22 09/11/2007 PK 144675 102354 ECONO FOODS 93.87 09/11/2007 PK 144676 121762 EDUCATION & ORGANIZATION DEVEL 35.00 09111/2007 PK 144677 102356 ELECTRO WATCHMAN 709.29 09111/2007 PK 144678 117233 ENVIRONMENTAL TOXICITY CONTROL 3,000.00 09/11/2007 PK 144679 102360 ERLANDSON, BEN 40.00 09/11/2007 PK 144680 102689 ERLANDSON, DAVID 1250 09111/2007 PK 144681 110034 EXTREME BEVERAGE LLC 192.00 09/11/2007 PK 144682 102223 FARM -RITE EQUIPMENT 15.36 09/1112007 PK 144683 1 104137 FASTENAL COMPANY 208.04 09/11/2007 PK 144684 122555 FIRE SAFETY USA, INC 119.00 09/11/2007 PK 144685 104529 FLAATA, MIKE 30.00 09/11/2007 PK 144686 124688 G & J AWNING & CANVAS INC 1,088.00 09/11/2007 PK 144687 102526 G & K SERVICES 430.20 09/11/2007 PK 144688 122611 GARTNER REFRIGERATION & MFG, 1 18,485.10 09/11/2007 PK 144689 123435 GCI SYSTEMS 1,620.00 09/11/2007 PK 144690 123363 GMS INDUSTRIAL SUPPLIES INC 21.08 09/11/2007 PK 144691 122907 GRIDOR CONSTRUCTION 69,162.00 09/11/2007 PK 144692 101874 GRIGGS & COOPER & CO 13,626.55 09/11/2007 PK 144693 102730 HALI -BRITE INC 1,097.91 09/11/2007 PK 144694 102451 HANSEN DIST OF SLEEPY EYE 859.20 09/11/2007 PK 144695 124705 HANSEN, ANGIE 22.00 09/11/2007 PK 144696 104363 HAUGEN, JIM 30.00 0911112007 PK 144697 105493 HEARTLAND TIRE & SERVICE 514.68 09/11/2007 PK 144698 116866 HEWLETT - PACKARD CO 9,073.81 09/11/2007 PK 144699 102518 HILLYARD I HUTCHINSON 190.65 09/11/2007 PK 144700 105080 HIRSHFIELD'S INC 44.77 09/11/2007 PK 144701 102119 HOLT MOTORS INC 212.44 09/11/2007 PK 144702 102534 HUTCH AUTO BODY 3,578.86 09/11/2007 PK 144703 102319 HUTCHINSON AREA HEALTH CARE 39,856.50 09/11/2007 PK 144704 102319 HUTCHINSON AREA HEALTH CARE 70.00 09/11/2007 PK 144705 121375 HUTCHINSON CITY DEPTS 41,850.00 09111/2007 PK 144706 102530 HUTCHINSON CO -OP 6,181.74 09/11/2007 PK 1447D7 102537 HUTCHINSON LEADER 2,73956 09/1112007 PK 144708 102541 HUTCHINSON TELEPHONE CO 7,349.32 09/11/2007 PK 144709 105161 HUTCHINSON UTILITIES 91,718.41 09/1112007 PK 144710 105515 HUTCHINSON UTILITIES 7,099.00 09/11/2007 PK 144711 102543 HUTCHINSON WHOLESALE 1,454.13 09/11/2007 PK 144712 102038 HUTCHINSON, CITY OF 198,000.00 09/11/2007 PK 144713 102635 HUTCHINSON, CITY OF 6,824.77 Check Payi Check Payi Check Payi Check Payi Check Payi Check Pap Check Pap Check Payi Check Payi Check Pap Check Pay Check Payi Check Payi Check Payi Check Pap Check Payi Check Payi Check Pap Check Pap Check Payi Check Pay Check Pay Check Payi Check Payi Check Payi Check Payi Check Payi Check Payi Check Payi Check Payi Check Payi Check Pay Check Payi Check Pap Check Pap Check Payi Check Payi Check Pap Check Payi Check Payi Check Payi Check Payi Check Payi Check Pap Check Payi Check Payi Check Pay Check Payi Check Payi Check Pay Check Payi Check Payi D9/11/2007 PK 144714 103246 HUTCHINSON, CITY OF 13,668,70 09/11/2007 PK 144715 105160 HUTCHINSON, CITY OF 24,099.92 D9/1112007 PK 144716 124299 J & R RADIATOR AC & EXHAUST 1,827.51 D9/1112007 PK 144717 121990 JAY MALONE MOTORS 4322 09/11/2007 PK 144718 102208 JEFF'S ELECTRIC 3,02574 D9/1112D07 PK 144719 124656 JJ TAYLOR DIST OF MN 1,560.00 D911112007 PK 144720 101938 JOHNSON BROTHERS LIQUOR CO. 11,93377 09/11/2007 PK 144721 1 124689 JOHNSON, BRAD 15.00 09111/2007 PK 144722 102124 JOHNSON, DOUG L. 13.71 09/11/2007 PK 144723 118112 JORDAHL, MICHELLE 20.00 09/11/2007 PK 144724 102555 JUUL CONTRACTING CO 998.50 09/11/2007 PK 144725 105697 KQIC -Q1O2 539.55 09/11/2007 PK 144726 102561 L & P SUPPLY CO 456.56 09/11/2007 PK 144727 113892 LANDSCAPE CONCEPTS, INC 299.97 09111/2007 PK 144728 114701 LAWYER REGISTRATION STATEMENT 218.00 09/11/2007 PK 1 1447291 124690 LINDELL, KRISTINA 22.97 09/11/2007 PK 144730 104499 LOCATORS & SUPPLIES 221.60 09/11/2007 PK 144731 101984 LOCHER BROTHERS INC 38,859.75 09/1112007 PK 144732 104081 LOFDAHL, JOHN 30.00 09/11/2007 PK 144733 103541 LOUIS DAMMANN & SONS CONST 1,64379 09/11/2007 PK 144734 124703 LOWELL M CAMPBELL III PSYD LP 1,200.00 09/11/2007 PK 144735 102145 M -R SIGN - 518.07 09/1112007 PK 144736 124706 MAPLEWOOD INN 85.15 09/11/2007 PK 1 1447371 102565 MARCO BUSINESS PRODUCTS 1,985.49 09/11/2007 PK 144738 101986 MCKAY, KAREN 59.88 09/11/2007 PK 144739 102158 MCLEOD COUNTY ABSTRACT & TITL 125.00 09/11/2007 PK 144740 102489 MCLEOD COUNTY COURT ADMINISTRA 1,750.D0 09/11/2007 PK 144741 102574 MEEKER WASHED SAND & GRAVEL 112.92 09/11/2007 PK 144742 102024 MEMINDEX 110.81 09/1112007 PK 144743 112400 "VOID VOID VOID VOID VOID ". 0 911 112 00 7 PK 144744 112400 MENARDS - HUTCHINSON 934.20 09/11/2007 PK 1447451 102131 METRO ATHLETIC SUPPLY 2,273.45 09/11/2007 PK 144746 101840 MEYER LABORATORY, INC 566.65 09/11/2007 PK 144747 102575 MINI BIFF 146.64 09/11/2007 PK 144748 108403 MINNCOR INDUSTRIES 1,513.37 09/11/2007 PK 144749 119858 MINNEAPOLIS FINANCE DEPARTMENT 234.00 09/11/2007 PK 144750 102449 MINNESOTA CHILD SUPPORT PAYMEN 223.93 09/11/2007 PK 144751 114439 MINNESOTA COUNTY ATTORNEY ASS 60.00 09/11/2007 PK 144752 101992 MINNESOTA DEPT OF HEALTH 7,409.00 09/11/2007 PK 1 1447531 1019471 MINNESOTA DEPT OF LABOR & INDU 30.00 09/11/2007 PK 144754 101947 MINNESOTA DEPT OF LABOR & INDU 10.00 09/11/2007 PK 144755 101947 MINNESOTA DEPT OF LABOR & INDU 10.00 09/11/2007 PK 144756 101947 MINNESOTA DEPT OF LABOR 8 INDU 20.00 09111/2007 PK 144757 101947 MINNESOTA DEPT OF LABOR & INDU 20.00 09/11/2007 PK 144758 101947 MINNESOTA DEPT OF LABOR & INDU 10.00 09/11/2007 PK 144759 101947 MINNESOTA DEPT OF LABOR & INDU 20.00 09/11/2007 PK 144760 101947 MINNESOTA DEPT OF LABOR & INDU 50.00 09/11/2007 PK 1 1447611 1 101947 MINNESOTA DEPT OF LABOR & INDU 10,00 09/11/2007 PK 144762 102653 MINNESOTA DEPT OF MOTOR VEHICL 26.75 09/11/2007 PK 144763 102705 MINNESOTA ICE ARENA MANAGERS A 10.00 09/11/2007 PK 144764 105157 MINNESOTA SHREDDING 57.95 09/11/2007 PK 1447651 1 102583 MINNESOTA VALLEY TESTING LAB 548.30 Check Pap Check Pay l Check Payl Check Payi Check Payi Check Payi Check Payi Check Pap Check Pap Check Payi Check Payi Check Payi Check Payi Check Payi Check Pap Check Payi Check Pap Check Payi Check Payi Check Payi Check Pap Check Payi Check Payi Check Payi Check Payi Check Pay l • Check Payl Check Payi Check Payi Check Payi Check Payi Check Payi Check Payi Check Payi Check Payi Check Payi Check Pap Check Pap Check Pap Check Pap Check Pap Check Payi Check Payi Check Payi Check Payi Check Payi Check Payi Check Payi Check Payi Check Payi Check Payi Check Payi • • • 09/11/2007 PK 144766 124133 MODERN TOWING 149.10 09/11/2007 PK 144767 118643 NAPA AUTO PARTS - 429.08 09/11/2007 PK 144768 114919 NORTH SHORE ANALYTICAL INC 125.00 09/11/2007 PK 144769 118653 NORTHERN BALANCE & SCALE 227.00 09/11/2007 PK 144770 103014 NORTHERN BUSINESS PRODUCTS 369.78 09/11/2007 PK 144771 102591 NORTHERN STATES SUPPLY INC 12321 09/11/2007 PK 144772 122214 O'REILLY AUTO PARTS 190.67 09/1112007 PK 144773 122948 OFFICE DEPOT 664.95 09/11/2007 PK 144774 102592 OLSON'S LOCKSMITH 60.00 0911112007 PK 144775 123756 PAULSON, JOHN 15.00 0911112007 PK 144776 120797 PEDERSON, JASON 13.71 09/11/2007 PK 144777 101853 PHILLIPS WINE & SPIRITS 8,395.49 09/11/2007 PK 144778 121993 PLUNKETT'S 264.16 09/11/2007 PK 144779 102445 POSTMASTER 1,350,00 09/1112007 PK 1447801 112254 PREMIER LIFT PRODUCTS LLC 237.50 09111/2007 PK 144781 103221 PROGRESSIVE BUSINESS PUBLICATI 230.00 09/11/2007 PK 144782 103221 PROGRESSIVE BUSINESS PUBLICATI 299.00 0911112007 PK 144783 102598 QUADE ELECTRIC 218.85 09/1112007 PK 144784 102212 QUALITY FLOW SYSTEMS 13,502.07 09111/2007 PK 144785 102052 QUALITY WINE & SPIRITS CO. 13,605.49 09/11/2007 PK 144786 102398 R & R EXCAVATING 11,631.11 09/11/2007 PK 144787 102398 R & R EXCAVATING - 36,022.43 09/11/2007 PK 144788 104421 RDJ SPECIALTIES 1,095.00 09/1112007 PK 1 144789 1 121176 REINER ENTERPRISES, INC 439.02 09111/2007 PK 144790 102395 REINER IRRIGATION & SEPTIC INC 184.98 09/11/2007 PK 144791 124209 RIES FARMS 7,650.00 09/11/2007 PK 144792 104149 RIVER VALLEY TRUCK CENTERS 264.89 0911112007 PK 144793 123287 ROECKER, DONALD 1,200.00 09/11/2007 PK 144794 121677 RUCKS, CAMERON D. 974.10 09/11/2007 PK 144795 102225 RUNNING'S SUPPLY 488.28 09/11/2007 PK 144796 124691 SALON MONTAGE 544.00 09111/2007 PK 144797 102436 SARA LEE FOOD SERVICES 131.92 09/11/2007 PK 144798 102606 SCHMELING OIL CO 24,522.92 09/1112007 PK 144799 115821 SEPPELT, MILES 169.76 09/11/2007 PK 144800 120908 SEVEN COUNTY PROCESS SERVERS L 45.00 0911112007 PK 144801 102637 SEVEN WEST WASH & DRY 311.51 09111/2007 PK 144802 102719 SHAW, KAREN 125.00 09111/2007 PK 144803 102609 SHOPKO 93.86 09111/2007 PK 144804 104058 SHUFELT, JEFF 49.81 09111/2007 PK 144805 102610 SIMONSON LUMBER CO 29.49 09111!2007 PK 144806 102106 SIMPLEXGRINNELL LP 368.00 09/11/2007 PK 144807 102611 SORENSEN'S SALES & RENTALS 57.99 09/1112007 PK 144808 102612 STANDARD PRINTING 133.13 09/11/2007 PK 144809 124707 STATE OF MINNESOTA 100.00 09111/2007 PK 144810 124692 STIBAL, LINDSAY 86.00 09/11/2007 PK 144811 118862 STRATEGIC EQUIPMENT 590.54 09/11/2007 PK 144812 102617 STREICHERS 256.63 09/11/2007 PK 144813 1 103094 SUBWAY 23.86 09/11/2007 PK 144814 1 121020 TAPS -LYLE SCHROEDER 20.00 0911112007 PK 1 144815 102659 TEK MECHANICAL 6.12 0 911 112 0 07 PK 144816 102258 TESSMAN SEED CO 882.89 09/11/2007 PK 1 14017 1 122895 TEWS TRUCKING INC. 3,428.80 Check Pap Check Payi Check Payi Check Pap Check Payi Check Payi Check Payi Check Payi Check Payi Check Payi Check Pap Check Payi Check Payi Check Payi Check Pap Check Pap Check Pap Check Pap Check Pap Check Payi Check Payi Check Payi Check Pap Check Pap Check Pay Check Payi Check Pap Check Pay Check Payi Check Payi Check Payi Check Payi Check Payi Check Payi Check Payi Check Payi Check Payi Check Pap Check Payi Check Payi Check Payi Check Pap Check Payi Check Payi Check Payi Check Payi Check Payi Check Payi Check Payi Check Payi Check Payi Check Payi 09/11/2007 PK 144818 103870 THOMSEN WEST 2,063.45 09111/2007 PK 144819 119472 TRAILBLAZER TRANSIT 150.00 09/1112007 PK 144820 101971 TRAVELERS DIRECTORY SERVICE 416.00 09111/2007 PK 144821 102620 TRI COUNTY WATER 250.12 09/11/2007 PK 144822 124708 TRUCK BODIES & EQUIPMENT INTL 271.55 09/11/2007 PK 144823 102201 UHL CO. 1,976.67 09/1112007 PK 144824 102624 UNITED BUILDING CENTERS 152.15 09/11/2007 PK 1448251 102625 UNITED LABORATORIES 317.47 09/11/2007 PK 144826 118655 UNITED PACKAGING & DESIGN 12,544.00 09/11/2007 PK 144827 119701 UNUM LIFE INS COMPANY OF AMERI 3,257.99 09/11/2007 PK 144828 101974 VIKING BEER 6,362.36 09/11/2007 PK 144829 102132 VIKING COCA COLA 133.95 09/11/2007 PK 144830 102630 VIKING SIGNS 30.00 09/11/2007 PK 144831 121147 VSS- VERTECH SOLUTIONS & SERVIC 74.50 09/11/2007 PK 144832 122357 WASTE MANAGEMENT - SAVAGE 10,851.97 09/11/2007 PK 144833 120852 WASTE MANAGEMENT -TC WEST 1,119.46 09/11/2007 PK 144834 105122 WASTE MANAGEMENT - WINSTED 35,585.23 09/11/2007 PK 144835 122164 WEGNER, SUE 11.00 09/11/2007 PK 144836 124697 WEST HENNEPIN PUBLIC SAFETY 15.00 0911112007 PK 144837 110738 WESTMOR INDUSTRIES 161.09 09/11/2007 PK 144838 103452 WINE COMPANY, THE 3,623.98 09/11/2007 PK 144839 - 102452 WINE MERCHANTS INC 659.50 09/11/2007 PK 144840 102640 WM MUELLER & SONS 1,019.72 09/11/2007 PK 144841 102640 WM MUELLER & SONS 84,894.13 09111/2007 PK 144842 105208 WOLD ARCHITECTS & ENGINEERS 806.05 09/1112007 PK 144843 102632 XEROX CORP 1,420.73 09/11/2007 PK 144844 124698 ZENK READ TRYGSTAD & ASSOCIATE 24,420.00 1,143,542 24 Account Num 1,143,542.24 Check Pay Check Pap • Check Pay. Check Pay, Check Pay Check Pay Check Pay Check Pap Check Pap Check Pap Check Pap Check Pap Check Payl Check Payl Check Pap Check Pay Check Pay Check Pay Check Payl Check Payl Check Pay Check Pay Check Pay Check Pay Check Pay Check Check Payi Pap 1143542 0 Retirement Sick Leave Policy Survey i /August 2007 IJurisdiction lHutchinson IMcLood Cou lei Lj L_ 0011CV I Maximum Put 1/3 of sick hours over 240 160 -192 hours i Non - Union: P out of % of up to 800 hour max. 440 hou r p _ �. _ ur max, hours p 'Teamsters �rial/ �i 'a /�'E _ gut o � u - tl- r 3 U n i 6 n s (law efforceme p .Pa rout of 5 5 % of a p to 900 Dour rn ax if 1495 hours, fired d r to 1997` ,1/2 of accumulated sick leave hours. For retirement involu me r _ .�_ 1360 hou . term in then than 1 i pim 160% a o at of 512 hour max. � V 1266 hour _ a to t of u t 960 hours. % based n � in. 288 to Payout i's for separab on of e m rat, rat r� retirement. 1576 ou 75% of a u M U sated hours not t d 720 ou r, 1 year r 720 u, Also payout 50% to 70% of hours if _ termin:afing prior to retirement with 10 or more years f service. � p t o 20% of sick hours based on average number sick r used drp m to e' tenure, Granted upon retirement or• ILesignation. -16 hrs iised 2 0 0/0—P a yo ut 116.1-32 hrs used 16% payout .1 hr used �_ ID 9 ..� r �t - - _ A8+ hrs used % 2ayout