July 30, 2013

1                      EXHIBIT A
2
3
4                       GCB 1140
5                        SR 99
6         ALASKAN WAY VIADUCT REPLACEMENT PROGRAM
7                    Funding Agreement
8
9
10  THIS AGREEMENT ("Agreement") for the Alaskan Way Viaduct Replacement
11  Program ("PROGRAM") is made and entered into between the State of Washington,
12  hereinafter the "STATE," and the Port of Seattle hereinafter the "PORT," collectively the
13  "Parties" and individually the "Party."
14
15  WHEREAS, in the 1950s, the City of Seattle ("City") and the Washington State
16  Department of Transportation jointly designed and built the Alaskan Way Viaduct to
17  accommodate passenger and freight mobility into the foreseeable future; and
18
19  WHEREAS, the central waterfront section of the Alaskan Way Viaduct passes through
20  and is adjacent to downtown Seattle's urban core and the Seattle waterfront; and
21
22  WHEREAS, the Duwamish and Ballard-Interbay industrial areas in Seattle are served
23  by the SR 99 corridor and constitute a significant portion of Seattle's maritime and
24  industrial sector jobs and annual city-wide revenue; and
25
26  WHEREAS, in 2001 the Nisqually earthquake damaged the Alaskan Way Viaduct; and
27
28  WHEREAS, the Alaskan Way Viaduct is at risk of sudden and catastrophic failure in an
29  earthquake and is nearing the end of its useful life; and
30
31  WHEREAS, a failure to maintain the Alaskan Way Viaduct capacity would result in
32  unacceptable congestion for freight and other traffic within and between Seattle's harbor
33  and industrial areas; and
34
35  WHEREAS, in March 2007, the Washington State Governor, the King County
36  Executive, and the Mayor of Seattle pledged to advance a series of key SR 99 projects
37  (Moving Forward Projects) that will facilitate the removal and/or repair of key portions
38  of SR 99, including the Yesler Way Vicinity Stabilization Project, the Electrical Line
39  Relocation project, Battery Street Tunnel Fire and Life Safety Upgrades, SR 99 Lenora to
40  Battery Street Tunnel Improvements, the SR 99 South Holgate Street to South King
41  Street Viaduct Replacement Project, Transit Enhancements and Other Improvements; and
42
43  WHEREAS, in January 2009, the Governor of Washington State, the Mayor of Seattle
44  and the King County Executive jointly recommended replacing the Alaskan Way Viaduct
45  with a bored tunnel beneath downtown Seattle in conjunction with improvements in

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1  surface streets and transit service, and Port of Seattle Chief Executive Officer, Tay
2  Yoshitani, endorsed the deep-bore tunnel concept; and
3
4  WHEREAS, the PROGRAM includes system-wide projects led by the Washington State
5  Department of Transportation (such as Holgate to King viaduct replacement, Atlantic
6  Street overcrossing, SR519 Phase 2, New Alaskan Way, Connection to Elliott
7  Avenue/Western Avenue, SR 99 Bored Tunnel, new connections at the north and south
8  portals), King County (such as South End Transit, North End Transit and other transit
9  investments), the City (such as Spokane Street Viaduct, Mercer Corridor, Central seawall
10  replacement and First Avenue Street car study) and the PORT (East Marginal Way Grade
11  Separation), anticipated to total $4.2 billion; and
12
13  WHEREAS, the Washington State Legislature passed ESSB 5768 and the Governor
14  signed the bill into law designating and funding the SR 99 Bored Tunnel Project as the
15  replacement for the Viaduct; and
16
17  WHEREAS, the STATE executed a design-build contract with Seattle Tunnel Partners in
18  January 2011 for the design and construction of the SR 99 Bored Tunnel Project as a
19  replacement for the Alaskan Way Viaduct as part of the PROGRAM; and
20
21  WHEREAS, the STATE issued a Supplemental Draft Environmental Impact Statement
22  meeting the requirements of the National Environmental Policy Act and State
23  Environmental Policy Act in 2010, issued a Final Supplemental Environmental Impact
24  Statement and Section 4(f) Evaluation in July 2011 and issued a Record of Decision in
25  August 2011 for the SR 99 Bored Tunnel Project; and
26
27  WHEREAS, as outlined in the Parties' prior Memorandum of Agreement No. GCA 6444;
28  the STATE and the PORT are committed to a replacement for the Viaduct that will
29  improve transportation access to and along the Seattle waterfront, including access for
30  over eight million annual ferry riders; ensure connectivity and capacity between the
31  Ballard-Interbay and Duwamish industrial areas and Seattle-Tacoma International
32  Airport, including a corridor for oversized vehicles; provide access to port cargo, fishing
33  and cruise facilities; minimize construction disruption; and increase opportunities for the
34  public and freight to access the shoreline and waterfront; and
35
36  WHEREAS, the PORT's international trade, aviation, economic development, tourism
37  and passenger terminal activities are vital to the economic growth of the region and the
38  state, supporting nearly 194,000 jobs in the region, and the STATE and the PORT
39  support infrastructure improvements necessary to achieve growth in trade and jobs and
40  increase the region's competitiveness in global markets; and
41
42  WHEREAS, the Viaduct corridor is crucial to the region's freight mobility because it
43  provides for 1.5 million freight trips annually by grade-separation of through traffic, rail
44  lines and industrial corridors near the Port's marine terminals, which support the
45  movement of $30 billion in international and domestic cargo through the Port each year;
46  and
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1
2  WHEREAS, the STATE has designed and is constructing improvements, also known as
3  AWV S Holgate to S King St Stage 3  Atlantic St Bypass Project, to the surface street
4  system in the vicinity of the corridor segment from S. Holgate Street to S. King Street
5  that are designed to increase access to Terminal 46 and other port waterfront facilities.
6  This project provides a new overcrossing at South Atlantic Street which will significantly
7  improve freight hauling efficiency between the Port and Interstate 5 and Interstate 90,
8  allowing trucks to bypass the frequent and lengthy railroad track blockages across South
9  Atlantic Street; and
10
11  WHEREAS, the STATE's contractor is designing and will construct the SR 99 Tunnel
12  Alternative, Tunnel Design Build (also known as, the SR 99 Bored Tunnel Project), and
13  the PORT has reviewed its design scope and determined that, when completed, it will
14  offer a direct benefit to the PORT by maintaining throughput capacity in the SR 99
15  corridor; keeping additional traffic off I-5; and minimizing construction disruption to
16  regional traffic, industrial and maritime businesses, and PORT facilities; and
17  WHEREAS, the STATE and the City are designing and will construct other projects
18  included in the PROGRAM that will maintain and improve traffic flow along the Seattle
19  waterfront and between the Seattle waterfront and STATE highways; and,
20
21  WHEREAS the STATE has developed a plan for delivering the PROGRAM that
22  includes: (i) the SR 99/Tunnel Alternative, South Access Connection Project that will
23  facilitate freight movement to and from PORT container terminals along East Frontage
24  Road, South Atlantic Street, South Royal Brougham Way, Alaskan Way South, East
25  Marginal Way South, and South Dearborn Street; and (ii) the SR 99/Tunnel Alternative,
26  North Access Connection Project that will ensure access to PORT cargo, fishing and
27  cruise facilities via the tunnel or north end arterials, including Sixth Avenue North, North
28  Republican Street, Dexter Avenue North, Aurora Avenue, and two-way North Mercer
29  Street; and,
30
31  WHEREAS, the STATE has proposed that the PORT assist with the funding of the SR 99
32  Tunnel Alternative, Tunnel Design Build; the SR 99/Tunnel Alternative, South Access
33  Connection Project; and the SR 99/Tunnel Alternative, North Access Connection Project
34  hereinafter identified individually as the "PROJECT" and collectively as the
35  "PROJECTS" and the PORT deems the PROJECTS to provide a direct benefit to the
36  PORT; and
37
38  WHEREAS, the STATE will construct the PROJECTS using the design-build and
39  design-bid-build methods of project delivery; and
40
41  WHEREAS, the Parties executed Memorandum of Agreement No. GCA 6444, Alaskan
42  Way Viaduct and Seawall Replacement Program Bored Tunnel Alternative on April 12,
43  2010 in which the PORT agreed, to the extent feasible and authorized by the Port
44  Commission, to fund or procure funding within the life of the PROGRAM not to exceed
45  Three Hundred Million Dollars ($300,000,000) toward the STATE's PROGRAM elements
46  with the majority of the PORT's contribution occurring between 2016 and 2018; and
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1
2  WHEREAS, the PORT allocated Twenty-Five Million Dollars ($25,000,000) of up to
3  Three Hundred Million Dollars ($300,000,000) for funding of transportation projects
4  serving the SR 99 system; and
5
6  WHEREAS, the Parties agree that the PORT has contributed Nineteen Million Dollars
7  ($19,000,000) of the Twenty-Five Million Dollars ($25,000,000) towards funding of the
8  East Marginal Way Overpass, Spokane Street widening, Duwamish Intelligent
9  Transportation System and the SR 519 South Seattle Intermodal Access Project Phase 2
10  projects that complement the PROGRAM and provide capacity for future growth and
11  improved safety; and
12
13  WHEREAS, the STATE has requested that the PORT's contribution toward funding of
14  the PROJECTS begin on May 1, 2015; and
15
16  WHEREAS, the PORT would incur additional costs associated with issuing bonds prior
17  to 2016; and
18
19  WHEREAS, the PORT has incurred additional costs associated with staffing
20  requirements for assisting the STATE in developing the design, coordinating construction
21  and other activities required to successfully complete the PROGRAM, including the
22  PROJECTS; and
23
24  WHEREAS, the Parties wish to provide the terms and conditions of the PORT's future
25  contribution towards funding the PROJECTS;
26
27
28  NOW, THEREFORE, by virtue of RCW 53.08.330, RCW 53.08.340 and RCW
29  47.28.140 and in consideration of the terms, conditions, covenants and performances
30  contained herein, or attached and incorporated and made a part hereof, the Parties agree
31  as follows:
32
33  1.0  STATE RESPONSIBILITIES
34
35  1.1  The STATE will ensure that the PROGRAM will be designed and constructed to
36  facilitate efficient movement of freight and other traffic on the west corridors of the
37  Seattle transportation system between the Duwamish and Ballard-Interbay neighborhoods,
38  including maintaining access to fishing, cruise and other PORT facilities. The STATE
39  further agrees that, at a minimum, the reconstruction of the surface streets on the central
40  waterfront segment of the PROGRAM will include two lanes in each direction with left
41  turn lanes at intersections between Pine Street and the Colman Dock, and three lanes in
42  each direction south of Colman Dock with left turn lanes where needed.
43
44  1.2  The STATE will ensure that: (i) all environmental review and documentation has
45  been successfully completed and approved prior to construction of the tunnel, north portal,
46  south portal and central waterfront surface street projects; (ii) designs of PROJECTS are
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1  consistent with the STATE's and PORT's needs and provide the PORT with the direct
2  benefit that has been committed to by the Parties; (iii) the PORT has the opportunity to
3  review and comment on channelization plans prior to construction of each project in the
4  PROGRAM; (iv)it coordinates with the PORT prior to making any changes to
5  channelization plans that have been reviewed and commented on by the PORT; (v) all
6  costs of the PROJECTS funded with proceeds from PORT issued bonds meet the
7  requirements of the Internal Revenue Service ("IRS") for the use of tax exempt bond
8  proceeds; and (vi) that the PORT continues as a member of Maintenance of Traffic Task
9  Forces associated with construction of the PROJECTS.
10
11
12  2.0  PORT RESPONSIBILITIES
13
14  2.1  The PORT agrees to contribute Two Hundred Seventy-five Million Dollars
15  ($275,000,000) solely towards the costs of constructing the PROJECTS, less Seven
16  Million Three Hundred Thousand Dollars ($7,300,000) representing PORT costs for work
17  performed by PORT staff that is related to the PROGRAM, including the PROJECTS,
18  plus additional PORT costs associated with issuing bonds earlier than 2016 to meet its
19  obligations under Section 3.0, for a total PORT contribution not to exceed Two Hundred
20  and Sixty-seven Million, Seven Hundred Thousand Dollars ($267,700,000).
21
22  2.2  Subject to this Section 2, the PORT agrees to fund construction for the
23  PROJECTS, including mobilization, temporary erosion and sedimentation control,
24  earthwork, pavement, drainage, structures, and utilities in the amounts and according to
25  the schedule as described in Section 3.0 - Payment.
26
27  2.3   In addition to the total PORT contribution set forth in Section 2.1, the STATE
28  may, by no later than 2018, request an additional PORT contribution of up to Six Million
29  Dollars ($6,000,000) to assist in funding transportation projects identified by the STATE
30  as serving the SR 99 system. The Parties acknowledge and agree that PORT shall
31  determine in its sole and absolute discretion whether and how much to contribute under
32  this Section and, if so, how it will allocate any such contribution among the projects
33  identified by the STATE. Any additional PORT contribution under this Section 2.3 shall
34  be documented by attaching the minutes of the Port Commission authorizing such
35  contribution as Supplement 1 to this Agreement, thereby incorporating it herein without
36  further amendment.
37
38  2.4  The Port shall follow all requirements, included but not limited to I.R.S.
39  regulations, associated with bond proceeds arbitrage.
40
41
42  3.0  PAYMENT
43
44  3.1  Subject to Section 2, the PORT agrees to make payments to the STATE in the
45  amounts and according to the schedule set forth below:

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1      a.   Upon receiving the STATE's request for payment no later than April 1, 2015,
2      the PORT shall make a lump sum payment of One Hundred Twenty Million Dollars
3      ($120,000,000) no later than May 1, 2015.
4      b.   Upon receiving the STATE's request for payment no later than
5      April 1, 2016, the PORT shall make a lump sum payment of One Hundred
6      and Forty-seven Million Dollars ($147,700,000) no later than May 1,
7      2016.
8
9  3.2   All requests for payment by the STATE under Section 3.1 shall include copies
10  of contractor progress payments that support reimbursement to the STATE for actual
11  construction costs incurred for the PROJECTS.
12
13  3.3   In the event the PORT commits to an additional contribution under Section 2.3,
14  all requests for payment by the STATE therefor shall include copies of contractor
15  progress payments that support reimbursement to the STATE for actual construction
16  costs incurred for the project(s) identified in Supplement 1 to this Agreement.
17
18
19  4.0  MODIFICATIONS TO FUNDING OR SCOPE OF THE PROJECTS AND
20  AMENDMENT
21
22  4.1  The Parties may adjust the PORT's contributions to the Projects under Section 2.0
23  by written amendment reflecting changes to the Port's timing and contribution, except as
24  otherwise set forth in Section 2.3. In fulfilling its obligations under this Agreement, the
25  Port will at all times retain its duty to act in the best interests of the Port.
26
27  4.2  Either Party may request changes to the provisions contained in this Agreement.
28  Such changes shall be mutually agreed upon and incorporated by written amendment to
29  this Agreement, except as otherwise set forth in Section 2.3. No variation or alteration of
30  the terms of this Agreement shall be valid unless made in writing and signed by
31  authorized representatives of the Parties hereto, except as otherwise set forth in Section
32  2.3.
33
34
35  5.0  NOTIFICATION
36
37  5.1  Any notice required or permitted to be given pursuant to this Agreement shall be
38  in writing, and shall be sent postage prepaid by U.S. Mail, return receipt requested, to the
39  following addresses unless otherwise indicated by the Parties to this Agreement:
40
41      To the STATE:    Linea Laird, P.E.
42                  Program Administrator
43                  Washington State Dept. of Transportation
44                  999 Third Avenue, Suite 2424
45                  Seattle, WA 98104
46
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1      To the PORT:    Tay Yoshitani
2                  Chief Executive Officer
3                  Port of Seattle
4                  P. O. Box 1209
5                  Seattle, WA 98111
6
7
8  6.0  RECORDS RETENTION AND AUDIT
9
10  6.1  The PORT or its designee shall have the right to inspect, audit and/or copy
11  records supporting or pertaining to the PORT's funding assistance to the PROGRAM and
12  accounting thereof for the purpose of determining anything that is of consequence to this
13  Agreement.
14
15  6.2  The STATE shall retain the records pertaining to or supporting the PORT's
16  funding assistance to the PROGRAM for the periods required below. The STATE shall
17  also ensure that relevant wage, payroll and cost records of all contractors, subcontractors
18  and suppliers at all tiers shall be retained and open to similar inspection or audit for the
19  periods required below:
20      a. During the progress of work related to the PROJECTS funded by the PORT;
21      b. For a period of not less than six (6) years after the PORT's final payment to
22      the STATE under this Agreement; provided that if tax exempt bonds are used to
23      provide funding assistance to the PROGRAM, the STATE shall retain records
24      necessary to address an IRS audit for the period required under applicable IRS
25      regulations; and
26      c. If any claim, audit, or litigation arising out of, in connection with, or related to
27      this Agreement is initiated, all documents and records shall be retained until such
28      claim, audit or litigation involving the records is resolved or completed,
29      whichever occurs later.
30
31  6.4  The STATE, its contractors, subcontractors and suppliers shall make a good faith
32  effort to cooperate with the PORT and its designees when the PORT gives notice of its
33  need to inspect or audit records referenced in this Section 6. Cooperation shall include
34  assistance as may be reasonably required in the course of inspection or audit, including
35  reasonable access to personnel with knowledge of the contents of the records being
36  inspected or audited so that the information in the records is properly understood by the
37  persons performing the inspection or audit. Cooperation shall also include establishing a
38  specific mutually agreeable timetable for making the records available for inspection by
39  the PORT and its designee. Unless otherwise agreed, if the STATE, its contractor,
40  subcontractors and suppliers cannot make at least some of the relevant records available
41  for inspection within twenty-eight (28) calendar days of the PORT's written request,
42  cooperation will necessarily entail providing the PORT with a reasonable explanation for
43  the delay in production of records.
44
45
46
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1  7.0  DISPUTE AVOIDANCE AND RESOLUTION
2
3  7.1  Designated Representatives:
4
5              PORT:    Anne Porter
6                      Capital Project Manager V
7                      Port of Seattle
8                      Capital Development Division
9                      P. O. Box 1209
10                      Seattle, WA 98104
11                      206-787-3133
12
13              STATE:   Todd V. Trepanier
14                      Deputy Administrator  Operation
15                      Alaskan Way Viaduct Replacement Program
16                      999 Third Avenue, Suite 2200
17                      Seattle, WA 98104
18                      206-805-2813
19
20  7.2  The designated representatives herein under section 7.1, shall use their best efforts
21  to resolve disputes between the Parties. If the designated representatives are unable to
22  resolve a dispute, then the responsible project managers or directors for each Party shall
23  review the matter and meet as soon as possible, but in no case later than ten (10) business
24  days after request by either Party, to attempt to resolve it. If the project managers or
25  directors are unable to resolve the dispute, the matter shall be reviewed by the department
26  director or Chief Executive Officer of each Party or his or her designee. The department
27  director or Chief Executive Officer of each Party shall meet within ten (10) business days
28  of request by either Party after exhaustion of the previous procedural steps. If after that
29  meeting, the Parties are still not able to resolve the dispute, the Parties shall submit the
30  dispute to mediation. Representatives of each party with authority to settle the claim, or
31  in the case of the PORT, if Commission approval is required, management authority to
32  recommend settlement of the claim directly to Commission, shall participate in the
33  mediation. The mediator's fee will be divided equally among the parties participating in
34  the mediation. The Parties agree to exhaust each of these procedural steps before seeking
35  to resolve disputes in a court of law or any other forum.
36
37
38  8.0  EFFECTIVENESS AND DURATION 
39
40  8.1  This Agreement is effective upon execution by both Parties and will remain in
41  effect until final completion of all Parties' obligations contained or referenced in this
42  Agreement, unless otherwise amended or terminated.
43
44
45
46
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1  9.0  INDEMNIFICATION AND HOLD HARMLESS 
2
3  9.1  Each of the Parties shall protect, defend, indemnify, and save harmless the other
4  Party, its officers, officials, employees, and agents, while acting within the scope of their
5  employment as such, from any and all costs, claims, judgment, and/or awards of
6  damages, arising out of, or in any way resulting from, each of the Party's own negligent
7  acts or omissions. The STATE shall also protect, defend, indemnify and save harmless
8  the PORT, its officers, officials, employees and agents ("PORT indemnified parties"),
9  from any and all costs, claims, judgment and/or awards of damages, arising out of, or in
10  any way resulting from the design, permitting, or construction of the PROJECTS or the
11  PROGRAM. In no event shall the PORT have any maintenance or repair obligation with
12  respect to Alaskan Way, or facilities lying in public right-of-way along Alaskan Way, or
13  arising out of or related to the PROGRAM or the PROJECTS. No Party will be required
14  to indemnify, defend, or save harmless the other Party, its officers, officials, employees
15  and agents if the claim, suit, or action for injuries, death, or damages is caused by the sole
16  negligence of the other Party. Where such claims, suits, or actions result from the
17  concurrent negligence of the Parties, the indemnity provisions provided herein shall be
18  valid and enforceable only to the extent of a Party's own negligence.
19      Each of the Parties agrees that its obligations under this Section extend to any
20  claim, demand and/or cause of action brought by, or on behalf of, any of its employees or
21  agents. For this purpose, each of the Parties, by mutual negotiation, hereby waives, with
22  respect to each of the other Party only, any immunity that would otherwise be available
23  against such claims under the Industrial Insurance provision of Title 51 RCW.
24  9.2.  In the event of legal action challenging the PORT's legal authority to provide
25  funding assistance to the PROGRAM or the PROJECTS, the PORT, in its sole discretion,
26  may defend such legal action or may tender the defense to the STATE within ten (10)
27  business days after the service of such legal action. Failure to tender the legal action to
28  the STATE as provided herein shall constitute a waiver of PORT's right, if any, to seek
29  indemnity for the claims asserted therein. In the event that the PORT chooses to tender
30  to the STATE the defense of such legal action, and, to the extent permitted by law, the
31  STATE shall defend, pay the cost of such defense, save harmless, and indemnify the
32  PORT indemnified parties from any and all costs, claims, judgment and/or awards of
33  damages, arising out of, or in any way resulting from, such legal action.
34
35  9.3  The indemnification, hold harmless, and/or waiver obligations described in this
36  section shall survive the termination of this Agreement. In any action to enforce the
37  provisions of the Section, the prevailing Party shall be entitled to recover its reasonable
38  attorney's fees and costs incurred from the other Party.
39
40
41  10.0  VENUE
42
43  10.1  This Agreement shall be deemed to be made in the County of King, State of
44  Washington, and the legal rights and obligations of the STATE and PORT shall be
45  determined in accordance with the laws of the State of Washington. All legal actions in
46  connection with this Agreement shall be brought in the County of King, State of
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1  Washington.
2
3
4  11.0  RELATIONSHIP OF PORT AND STATE
5
6  11.1  Nothing contained herein shall be deemed or construed as creating the
7  relationship of principal and agent, partnership, or joint venture partners between the
8  STATE and the PORT.
9
10
11  12.0 AUTHORIZED SIGNATURES
12
13  12.1  The undersigned acknowledge that they are authorized to execute this Agreement
14  and bind their respective agencies to the obligations set forth herein.
15
16  IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
17  latest date written below.
18
19  PORT OF SEATTLE            STATE OF WASHINGTON
20                          DEPARTMENT OF TRANSPORTATION
21
22
23
24 _____________________________ ______________________________
25  By: Tay Yoshitani              By: Linea Laird, P.E.
26  Chief Executive Officer           Program Administrator
27                          Alaskan Way Viaduct and Seawall
28                          Replacement Program
29
30  Date: ________________          Date: ___________________
31
32
33  APPROVED AS TO FORM:        APPROVED AS TO FORM:
34
35
36
37 __________________________ _____________________________
38  By: Isabel R. Safora             By: __________________________
39  Deputy General Counsel           Assistant Attorney General
40
41
42  Date: ___________________        Date: _____________________
43

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