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2015-07-30 Work Session Kodiak Island Borough Assembly Work Session Immediately Following the Special Meeting Thursday, July 30, 2015, 7:30 p.m., Borough Conference Room Work sessions are Informal meetings of the Assembly where Assembly members review the upcoming regular meeting agenda packet and seek or receive information from staff.Although additional items not listed on the work session agenda are discussed when Introduced by the Mayor,Assembly,or staff,no formal action Is taken at work sessions and Items that require formal Assembly action are placed on regular Assembly meeting agenda.Citizen's comments at work sessions are NOT considered part of the official record.Citizen's comments intended for the"official record"should be made at a regular Assembly meeting. Page 1. CITIZENS' COMMENTS (Limited to Three Minutes per Speaker) 2. AGENDA ITEMS 4 a. Non-Profit Funding Discussion o rofit Infer aion, 5 - 17 b. Discussion on the Proposed Ordinance No. FY2016-02 Amending Title 2 Administration and Personnel by Adding Chapter 2.160 Borough Lands Committee. Ordinance FY 2016-02 s Committee Chanues.Ddf Ordinance Y 1 - 2 Lands Committee ire c . f Ordinance FY21 s Committee Backup In f tics f 18 - 199 c� Hospital Lease Discussion JuIv 22 Letter ss f esc to i Las t 7® f 1997-07 r vi c a A_qrmt.pdf 1997-07A o Providence Lease r to f 1997-07B Resa as t f i c 200 -224 d, Fishery Analyst Reports of May 6, May 12, May 27, and July 1, 2015 KFWG eeting ufrlmarjtLp f 3. PACKET REVIEW PUBLIC HEARING Ordinance No. FY2016-03 Amending Title 17 Zoning, Chapter 17.50 C-Conservation District and Chapter 17.130 PL— Public Land Use Lands District To Allow the Temporary Storage of Mobile Homes ulr iir Visit our�w lebsite ww frorb rullr rre/K odiii �llrl lll� rrbi rig us @KodiakBorough .a _ Pagel of 224 Displaced Under AS 34.03.225 To Be Stored On Sites Zoned C- Conservation Or PL-Public Use Lands. Ordinance No. FY2016-04 Amending Title 17 Zoning, Chapter 17.140 Existing Nonconforming Uses And Structures To Allow Mobile Homes Displaced Under As 34.03.225 To Relocate Within Existing Nonconforming Mobile Home Parks. Ordinance No. FY2016-05 Submitting to the Qualified Voters on the October 6, 2015 Ballot in each area affected by the Ordinance the question of altering the boundary of Service Area No. 1. NEW BUSINESS CONTRACTS Contract No. FY2016-11 Borough Facilities No.1 Heating Fuel Oil Delivery. Contract No. FY2016-12 Borough Facilities No. 2 Heating Fuel Oil Delivery. Contract No. FY2016-13 Aerial Imagery Acquisition. OTHER ITEMS Confirmation of the Mayoral Appointment to the Solid Waste Advisory Board (Tia Leber). Declaring a Seat on the Personnel Advisory Board Vacant (Tom Lacey). EXECUTIVE SESSION Discuss Litigation, Trial Strategy, and Tactics Regarding the Markham Case and Litigation Update Regarding the Wren Case. Borough Clerk's Performance Evaluation. 4. MANAGER'S COMMENTS 5. CLERK'S COMMENTS 6. MAYOR'S COMMENTS 7. ASSEMBLY MEMBERS COMMENTS 8. FUTURE DISCUSSION ITEMS a. Budget Debriefing, Budget Meetings with the City/School District, Renewal and Replacement Projects Funding, SD Mental Health Services Provided by the Counseling Center, School District Rental Rates, K1B Vacant Positions, Public/Private Land Development Partnership, MHP Land Sale, Teleconferencing Ordinance, In-Kind Documents, Action Plans, Vessel Personal Property Taxes, Traffic Along Mill Bay Road, KFAC Structure and Visit our website at . �..IIY"�:� III � �iu n�Il � ii @ �lllpuiruill 'uuri� KodiakBorough ............................................................................ Page 2 of 224 Purpose, Affordable Housing in Kodiak, Village Presentations at Regular Meetings, Contracting and Procurement Process, KUBS Presentation s ��� at w � d III�o- a�lllwuu� �l � u � uwll .�illk� u�u ;,,�ulll° @KodiakBorough ��GSio ��Ilwebsite Page 3 of 224 AGENDA ITEM #2.a. Due to the size of the nonprofit minders,a separate folder/tab was created and the information Is available on the following links: Open: Final Open PDF:Ihtt s: Ikodia�ra�s;.c'iviicwpllt.lriet Docu irnent�i DocN.Nmfkntll..i,.t.ar$ x?iD lf.:t. 4 Final Open Splitscreen:Ihxit,!0./IAO—C ualk�ull(.cilvirw:,llj.nlPt Doci ii nilp.nts/Docunnel l..aso2)D:,::::l.m156 Below is a screenshot of theInformation that is available to the Assembly and the public: nalated Information • Hco.Profij Fundrnrrp Oullurwu%(ascuaaumura 210 141113 1 INararI 'riunlin g oautpuna r.Noax • IFY:W116 Appillwcallmns 114IIP!F"dn 16 AlualCmirp I pdf .I INIVaIF'u'a16 ftekTt&nualr IU^u':alnu::oS.:~mWmGVVmar,Ig:aallf i U r%IPfr Atta fFocid IlRmnlbs pdf INS%VmIF116 t.';uurf^»itm'ara.uW"A iVr*U%' irxlll I f'te'nlpe Cminmun0y II(e%ources pdf uu� 1'16 ftruaNzrr.o of N0.:N:uuNuau'ir.pdf Will I Huu7t.a nme'Sor.um:rlty MR N+NPf=', ,16 lfdwOM INIC»11 ladlf kr% N4NPNr',AA16 KAW' ,.Fm:ff jell!'11 I4flf'�iT''�AN7GG pumff VIP.illl I4l'F At'Nu lf: X p'pudf Ibrl NPFA,16 tV:orti:alk fAr;fuipelago Leadership Nadf Q N4NPIF'014,16 NC,rrdlirak Affts C::mnrxd pdf N+iPF01141 6 I.Vtuurfa:wmal ES6cI lrek'Na.N.: if t+ir"trAIJ6Ib( Io~a�fatarkaw ms Mueazue.ru'ru WIF NPPdu41I6 IlNrpkgtl:PnN Sod WI Nad ae rx f µ N4lfmf"wor'Moron I:marutmtr w f fNIFnV=AIS IPIIfVIMC K111 H::Nll4t11:::: 'S faruajmsrt W.Af NPF A"Itil PTUVIK,96aru e("o%,un'uneaqurug f::mantcwr pc.ff HIPf=:f 16 FRuae,AL CAP pmdf i ul NPFAIiE ml'w-.M n,WN,rrewa f pdt NIFIFA Ifa S atswn t"w'dizenn of I'lrrosbmk pwdf ra P-IFIFuwu'IIS""'p ecawaN CN,y'ewai:m is pad1V I NVIaN:::'rtl«16 I51 IPau I IlPae sLhaiCrt p dF UWV::IIf:,.az'TIG'6!owan f:`.ruulrt'pdV i� Ultr V=Pwtll "'Blaulwr.Jj0W Smmrvwes Ipndf u � OtiUi'"'IFA16 tivornmmr'utu Rauuxuura:a II G:,„',malrul'mum.Ilau:Vf INAPIFAVIS LATE APF"..!FSEID CROS:S p:umft • 2015 V+,%aan Profol Flundung Nt^IInNuVacarLUaru 2015 Ikon I1 Il f'appaiva abonpdIT FU.r.ntdnpf,9.wlhoot Irnm:If IIFGiiatramW FundmV!rS"Naeltumru^lsVmoell from FY2005 Ito FY2014 V°lostwCUrwral IFu,unlcrernt;N„I.aprreartM'ieel 20Q9uo.2014 V.)df • 2014 Vualand dkpplJorabon 2014 NIP Fund dgyvllutmcraliiraarn p'udf 2014 IMP Fund Ilu' ir'wid Apnp;o'nra:aV on.Igae:tf V=Y2015 F'undtrupN FtuaaolnuWn f11'r`"2014-.12 Apnproeonrunlp f''h°,2015 MINI p"VOIIJO F:wurndhng pdf ftmataolubon Flo IF"M" fi9t4 32.sand Fx1f f'Y,015 InVor rruafim iiwall wp iraarpallh rat IF`ilnaW pdr • FY2014;!.nn,upp'oVmumwr'uNW IV'ruaruden'app Rrcosoluutnon IFYN.314 1M Pro'lfirt F unrt vwg ConiftwItyuhains Pdr fZww9otuutron I ril 4-,12 A I Ihernn g:aa:ff N-Mu:'tu'Iloncall IrNo-wwoln.uk^.sons Vtom f='V'2008 to P"Y'2015 p"1,t'.21Ifl013lro IFY210'iS INNorw II Rasoh,doarws,Pdf t^ty of Vfodeallr Process RealpYon.:ws t,n'hy oN Kodak fUon Pr'oM Poccess pdf Page 4 of 224 Non-Profit Funding Discussion AGENDA ITEM #2.b. Nova Javier Subject FW:Lands Committee Ordinance Attachments: Ordinance FY2016-02 Lands Committee Ordinance v2.docx From: Nova Javier Sent:Friday,June 26,2015 10:40 AM To:'Assembly Member Austerman;'Assembly Member Griffin; 'Assembly Member LeDotV; 'Assembly Member Lynch'; 'Assembly Member Peterson'; 'Assembly Member Rohrer; 'Assembly Member Skinner; 'Chris Lynch Personal'; 'Mayor Friend' Cc:CASSIDY Subject: Lands Committee Ordinance Hello, Changes made based on the June 25'h discussion: • REPORTING—changed from the Commission to the Assembly • MEMBERSHIP—7 voting members c.P 2 Assembly members(yearly] c� 2 ANCSA members(3 year term) o 2 Commissioners(yearly)-Commission to make recommendation to Mayor?—Line 56 n„v 1 At Large(3 year term) • MAYOR �(: Ex-officio,non-voting member o appoints all members s„o serves as the chair(vice-chair selected by the committee annually) • RESOURCE MANAGEMENT OFFICER AND CDD DIRECTOR o ex-officio nonvoting members This is the second DRAFT and additional changes can be made on July 301h. Thank you, Nova Ms.Nova M.Javier,MMC Kodiak Island Borough Office of the Borough Clerk 710 MITI Bay Road Kodiak,AK 99615 1 Page 5 of 224 Discussion on the Proposed Ordinance No. FY2016-02 Amending ... AGENDA ITEM #2.b. 1 2 Introduced by: Borough Mayor Requested by: Borough Mayor 3 Drafted by- Borough Mayor 1 Borough Clerk 4 Introduced: 06/0412015 Public Hearing: 5 5 Adopted: 7 KODIAK ISLAND BOROUGH 8 ORDINANCE NO. FY2016-02 9 10 AN ORDINANCE OF THE ASSEMBLY OF THE KODIAK ISLAND 11 BOROUGH AMENDING TITLE 2 ADMINISTRATION AND PERSONNEL BY 12 ADDING CHAPTER 2.160 BOROUGH LANDS COMMITTEE 13 14 WHEREAS, Per KIBC 2.100.020, the Assembly, by ordinance, may provide for advisory, 15 regulatory, appellate or quasi-judicial boards or commissions. The ordinance adopted shall 16 prescribe the duties and qualifications of members; and 17 18 WHEREAS, the Borough Lands Committee will provide a forum for input and 19 recommendations to the Assembly; the committee is responsible for review of real property 20 acquisition and disposal of borough land; and 21 22 NOW, THEREFORE, BE IT ORDAINED BY THE ASSEMBLY OF THE KODIAK ISLAND 23 BOROUGH THAT: 24 25 Section 1: This ordinance is of a general and permanent nature and shall become a part 26 of the Kodiak Island Borough Code of Ordinances. 27 28 Section 2: Title 2 Administration and Personnel is hereby amended to add Chapter 2.160 29 Borough Lands Committee in the Kodiak Island Borough Code. 30 31 Chapter 2.160 32 BOROUGH LANDS COMMITTEE 33 Sections: 34 2.160.010 Created–Membership. 35 2.160.020 Organization. 36 2.160.030 Term-Compensation. 37 2.160.040 Powers and duties.` 38 2.160.050 Administrative assistance. 39 40 2.160.010 Created—Membership.There is created a borough lands committee consisting of 41 the following members:the mayor, two (2) assembly members, two (2) representatives from 42 the Alaska Native Claims Settlement Act(ANCSA)Corporations in the Kodiak region, one(1) 43 borough representative from the Planning and Zoning Commission, one (1) city 44 representative from the planning and zoning commission, and one (1) at large member from 45 the public. Members are appointed in accordance with section 2.100.030 and shall meet the 46 qualifications of section 2.100.040 of this title. The mayor, borough resource management 47 officer,and community development director shall serve as ex-officio, non-voting members. 48 49 2.160.020 Organization.The mayor will serve as the chair and the committee shall designate 50 a vice-chair at the first meeting of the calendar year and shall hold at least one(1) quarterly 51 meeting. 52 53 Kodiak Island Borough,Alaska Ordinance No.FY2016-02 Page 1 of 2 Page 6 of 224 Discussion on the Proposed Ordinance No. FY2016-02 Amending ... AGENDA ITEM #2.b. 54 2.160.030 Term—Compensation. 55 A. The mayor shall appoint two (2) assembly member, during the annual appointment of 56 assembly member representatives to boards and committees. The Commission shall make 57 recommendations to the mayor for appointment of their members on an annual basis. The 58 representatives from ANCSA Corporations and the at large member from the public will serve 59 for three year terms. 60 61 B. Members of the committee shall serve without compensation. The mayor, assembly 62 members, and commissioners will receive their existing compensation related to their duties 63 as provided for in this title. 64 65 2.160.040 Powers and duties.The borough lands committee will: 66 A. Assist in identifying creative and workable solutions to ongoing and emerging issues in 67 selection, acquisition, management, and disposal of borough real property and 68 resources. 69 B. Provide input for potential land sale plans. 70 C. Provide input for utilization of borough land that achieves multiple land and housing 71 options. 72 D. Collaborate and seek input with private land owners when considering whether 73 borough land should be developed. 74 E. Provide for balanced consideration and representation of the viewpoints, problems 75 and issues regarding borough real property and resources. 76 F. Provide a forum for discussing development of specific sites and projects. 77 78 2.160.050 Administrative assistance. 79 The resource management officer shall• 80 A. Refer to the committee, for its discussion, all non-emergency matters within the scope 81 of its powers and duties prior to presenting those matters to the assembly. 82 B. Transmit all recommendations and other communications from the committee to the 83 assembly. 84 The clerk's office staff shall: 85 A. Work with the resource management officer in furnishing the committee with copies of 86 all requested documents and other information necessary or reasonably related to 87 committee functions. 88 B. Provide the committee with such supplies, meeting space, and secretarial assistance. 89 90 ADOPTED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH 91 THIS DAY OF -2015 92 93 KODIAK ISLAND BOROUGH 94 95 96 97 Jerrol Friend, Borough Mayor 98 99 ATTEST: 100 101 102 103 Nova M.Javier, MMC, Borough Clerk Kodiak Island Borough,Alaska Ordinance No.FY2016-02 Page 2 of 2 Page 7 of 224 Discussion on the Proposed Ordinance No. FY2016-02 Amending ... AGENDA ITEM #2.b. KODIAK ISLAND BOROUGH CODE 10.10.040 Chapler18.10 18.10.040 Designation of availability. A. The assembly shall review all recommanda- REAL PROPERTY ACOUISITION lions made pursuant to Kl 10.10.030 and, by resolution,may concur In,modify,or deny the rec- Sections, o ded real property use. 18,10.010 Methods of land acquisition. B. The assembly may at any time on Its own 18A0.020 Procedure. molion,or upon recommendation of the manager, 18AM030 Review. review the status of any real property previously 18.10.040 Designation of availability. reviewed and change the designation of availability with conformance tote borough comprehensive 18.10.010 Methods off acquisition. land use plan. The borough may acquire real property or other C. Any resolution stating real property avallabil- Interests therein by the following methods, Ity may Include such[arms,conditions,an Entitlement properties from the slate of du res as may be required to protect the borough's Alaska In accordance with AS 29.65.010; Interest consistent with this title. [Ord. 98-25 §2, B. Properties acquired through tax foreclosure-, 1998; Ord. 84-61-0 §10. 1984; Ord. 78-7-0 §2. C. Negotiated purchase or lease for valuable 1978). consideration: D. Dedicallon,grants,or gills; E. Dead in full or partial satisfaction of debt owed to the borough; F. Exercise of the powers of eminent domain and declaration of taking In accordance with AS 29.35.030'. G. Land or Interests in land to be acquired through exchange;and H. The borough may acquire real property or .......... any Interest therein Ins a manner as the assembly may authorize.[Ord.87-36-0§2,1987,. Ord.78-7-0§2,1978). 18.10.020 Procedure. Real property acquired under KIBC 18A0.01D shall be acquired pursuant to a resolution at the assembly.Such resolution may set the terms,con- ditions,and manner of acquisition of the real prop- erty or interest therein.Pr d.78-7-0§2.1978]. 18.10.030 Review. on acquisition of any real property,including real property acquired by tax foreclosure, but excluding real property acquired for a specific pur- pose or project, the planning commission shall review the newly acquired land and make recom- mandallons as to whether all or any portion of the land should be devoted to public use,reserved for future use to meet projected borough require- ments,or made available for sale, lease or other disposition in conformance to the borough compre- hensive land use plan.The manager shall review the planning commission action and make recom- mandallons to the assembly.[Ord.90-25§2,1998: Ord.84-61-0§10,1 ;Ord.7B-7-0§2,1978). 18-3 (Rmdzed 4NO) Page 8 of 224 Discussion on the Proposed Ordinance No. FY2016-02 Amending ... AGENDA ITEM #2.b. 18.20.010 REAL PROPERTY DISPOSAL—I GENERAL Chapter 18.20 18.20.030 Review by planning commission— Assembly approval. REAL PROPERTY DISPOSAL—IN GENERAL Except for disposal required by law, A. Each disposal of borough land is subject to Sections* review by the planning commission bef Dro submis- 18.20.019 Application of chapter and title to real sion to the assembly.The commission by resolu- pro perty disposal. lion shall make a recommendation to the assembly 1 0 Disposal authority. regarding ft proposed land disposal. 1820.030 Review by planning commission— 8. Borough land disposals that are not subject Assembly approval. to approval by ordinance are subject to approval by 18.20M0 Disposition and sale at tax-foreclosiad assembly resolution. The resolution shall specify pro perties. the to and conditions on is the disposal 18.20.050 Election required, will be offered.[Ord.80-28-0§1,1 gBol. 18.20.060 Applications. 18.20.070 Qualifications of applicants and 10.20.040 Disposition and sale of tax- bi dders. foreclosed properties. 18.20A80 Deposit costs. The assembly, by ordinance, shall provide for 18.20,090 Development plans. the disposition or sale of tax-loreclosed land, 18.20.100 Disposal for fair market value. Including the retention of such property by the bor- 18.20.110 Rapeakid. o for a public purpose,in accordance with AS 18.20.120 Land disposal methods. 29.45.460.[Ord.80-28-0§1,1980). 18.20.130 Appraisal. 18.20.140 Public no0co. 18.20.050 Election required. 18.20.150 FlWaled. The sale.lease or other permanent disposal at 18.20.155 Award—Rejection of bids or borough land valued at$250,000 or more per par- proposals. cel to any single Individual,partnershIp or corpora- 18.20.160 Disposal by conveyance. tIon by means other than outcry auction shall, In 18.20.170 elf lions. addition to conforming to this Hilo, be subject to approval by ordinance ratified by a majority of the 18.20.010 Application of chapter and tide to qualified voters voting at a regular or special elec- real property disposal. lion at which the question of the ratification of the A. Except as this title provides otherwise, this ordinance is submitted.Notice of the election shall chapter governs all disposal of borough land, be given in accordance with KIBC Title 7.[Ord.86- B. No contract,lease or conveyance pertaining 40-0 fi2.1986,Ord.80-28-0§1,1 ]. to the disposal of real property by the borough may be enforced against the borough unless the con- 18.20.060 Applications. tract,lease or conveyance was awarded,approved A. Application for a disposal of borough land and executed In accordance with this title. under this title shall be Iliad with the community C This section shall not be construed to Inv all- development department. Only applications com- dale any contract,or any legal or equitable Interest plet ed In full and accompanied by a nonrefundable In real property, existing prior to Its enactment. filing too as set to In the current fiscal year [Ord.80-28-0§1,1980). schedule off and charges will be accepted. B. The filing of an application shall not In any 10.20.020 Disposal authority. way vast In the applicant any right to the borough Except where this title or another provision of land or to the use thereof applied for.(Ord.83-66- law establishes a specific mandatory procedure for 0§1.1983;Ord.80-28-0§1.1980). disposing of borough land, the borough may dis- pose of borough land In any manner not prohibited 16.20.070 Qualifications of applicants and by law.[Ord.M28-0§1,19801. bidders. An applicant or bidder for a disposal of borough land Is qualified If the applicant or bidder Is: A. A citizen of the United States or has filed a declaration of intention to become a citizen,and Is 10 years of age or over, (new1rad4ffig) 18-4 Page 9of224 Discussion on the Proposed Ordinance No. FY2016-02 Amending ... AGENDA ITEM #2.b. KODIAK ISLAND BOROUGH CODE M20,100 -1--11-1.................. B. A group,associalIon,or corporation which Is G. Development plans not meeting minirnurn authorized to conduct business under the laws of slandwds Will The returried to the applicant for revi.- Alaska air sW and resubonission vvilhin 10 days after return C. Acting as an agent for a person qualified W the applicant. Applicants submitting develop- under subsection A or B of this section and has moment plans failing to rneet iiiiii1murn standards filed with the manager or designee,prior to the lime shall not be qualified to hid.Each applicant submit- set for the disposal,a proper power of attorney or tang a development Man shall be nolified In writing a letter or authorization creallng such agency."rho of the decision to accept or o'ejeLl the Individual's agency shall represent only one principal, to the development plan. exclusion of hImsefL[Ord.,98-25§2,1998,Ord.84- 0. (Minimum standards of a development plan 61-0§10, 1904',Ord.,80-28-0§1,198QJ, are as follows: 1. A layout sketch to show reasonable use of 18.204888 Deposit costs. the area being offered and nature of pmprovernenls A.. The applicant may be required,, upon 30 to be canslirucJed; days'wriflen notice,to deposit with Me borough an 2. The estimated value of the capital amount equal to the estimated costs of processing improvements;to be placed on the land and type of an application for the disposal of borough land, construction-,, Including but not Iliamniled to costs of survey, 3. A development schedule showling the appralsall,and advertising of the area subject to the time-Frame In which the Improvements will be con- application. If We applicant fails to imake the strucledu deposit, the application shall be canceled., If Ilia 4. The proposed development shall conrorm applicant does net accept a disposal contract to the zoning and building codes arid all appHcable within 30 days niter recelving an offer thereof,all federal,state,and local laws-,and deposit money spent or encumbered for survey, 5. Other requirernenis as may be stated In appraisal.or advertising shall be rowelled,and the the request for bids or proposals for the disposal, balance,if any,shall be iretumed to the applicant.If E. 'nDe manager imay require proof or an appli- the real property that is the subject or a cost deposit cant's financial capaWlity to complWe the proposed is conveyed to anoMer,the railer shall be reciialied development. to pay the actual costs of applIcatbri processing, F. The development plain and schedule for survey,appraisal,arid adverilsing,and the original development may be Incorporated into the disposal deposit shall be returned to the depositor.Where contract for enforcement of its completion. 10rd. the applicant becomes the purchaser, the full 98-25§2,1998;Ord.84-61-0§10, 19134a Ord.SO- arriount of any deposit by the applicant shall The 28-0§1, 1980]. credited to payments due under the contract. All survey, appraisal, and advertising shall be per- 18.200 N IDisposal for fair market value., formed only under the authorization of the bor- A, Except as offienNise provided by this We or ough,and any such work performed without such another provision of low, all disposal of borough auffiorization will nor be accepled. land shall be for the fair market value of the interest B. The manager may establish an applicallion disposed or.Tire boirough may accept in exchange processing fee schedule for- applicalions having for borough land any consideration of sufficient similar circumstances,[Ord.98-25§2. '1998;,Ord. value not prohibited by law. 84-61-0§10, 1984,Ord.80-28-0§1,19BO]. B The borough may dispose of bomugh land to the United States,the state of Alaska,or any polit- 18.20.090 Development plans. ical subdivision thereof,or a nonprorit corporation X To qualify to bid for a disposal requiring a or association,for less than the fair innarket value of development plan,a prospective bidder shall sub.- Ilia Interest disposed of, upoin a finding by the mit to the manager plans for Ilia conlempliale d assembly that the disposal will allow the use of the development conforming to Ilia sgmeffi caiions 'Birl land for a public purpose beneficial to the borough. Ilia request for bids or proposals. It may do so by direct negotiation with the orgaink B. The time for submitting development plans tion acqulring Me land, without conforming to shall be stated In the request for bids or proposals KISC 18.20.120 through 18.,20.155,, unless other- for the disposal. wise directed by the assembly.[Ord-8640-0§2. 1986',Ord,80-28-0§I 1980]. Page 10 of 224 Discussion on the Proposed Ordinance No. FY2016-02 Amending ... AGENDA ITEM #2.b. 18.20.110 AREAL PROPERTY IMSPO AL—irk GENERAL 1So20.119 lurid disposal(procedure—Ira '16.20.150 Award..Dejection of bids or general. proposals. Repeated by Ord,. 86-40-0. 1 rd. 80-28-0 1, Repeated by Ord. 86-40-0. Ord. 80-28- 1, 19919,x, 198% 19,29.1211 Land disposal meth ds. 18..20.155 Award—Rejection of bids or The assembly may select any of the following proposals. disposal methods. A. (Borough land disposal by competitive bid- A. Where specifically permitted under this Ude, ding or proposals shall be awarded to the highest direct negobafions with Interested parties who seek (bidder at the firne the bids or proposals is are opened to acquire borough land; In acoordance with the criteria set forth in the reso- B. Invite sealed bids for(borough land„specify- Iluutiion required under KIIBC 18.20.0X ing the tlme and place for receiving bids and the B. if the assembly finds it to be in the best inler•• rddmurn acceptable bide est of the borough to do so,It may reject sill bids or C. Offer borough land for sale at puublic auction, proposals aria to the firrie set for the opening of the specifying a minimum acceptable bid,or bids or proposals.[Ord.0640-0 4,1 9061. 0.. Invite proposals to purchase borough (land, The Invitation shall specify the basis upon which 19„20.160 Disposallbyconveyance., proposals shall be evaluated, which may include Any Instrument pertaining to the conveyance or but stied not be limited to the proposed acquisillon borough land and regauidng execution by the bor•. price,the quality of proposed development of land oogh shall be executed by the mayor or his desig- and Its(benefit to the community,the quallifications nee,attested by the cterk,l and approved as to form and organization of the proposer, the value of the by the attorney.i rd.84-61-0§10,1984,Ord,SO- proposed Improvements to the land and the rents 28.0§1,19801, or resale prices to be charged by the proposer. 1 rd.80-28-0§1, 19801. 18.20.'170 Defirultiorns. Ass used in this chapter 19 29a11ft puhpraisal„ 'Borough land`”means any real properly or inter- ' Borough land shall be appraised within 90 days est therein owned by the Kodlallr island Borough, prior to the dale fixed for Its dlsposall..The appraisal 'Contract' weans a legally enforoeabte agree- shall be performed by the assessor or a qualified monk of any kind,Including an option,regardless of appraiser and rellect the fair market value of the what it may Ibe celled, land and borough improvements located thereon, 'Msposal means any transfer of real property J nrd.50-28-0 1,19801. authorized under this tided and "Real properly"means any interest in teal prop- 18.20.140 Public notice„ erty undar the lawny of the state of Maska,including Notice of disposal of borough land by compefl- but not limited to a fee, easement, or leasehold tine bidding or proposals,or at puubtio auction,shalt, Interest, and a revocable license or permit to use at a minimuum,be published in a newspaper of gen- real property,lord,9g-29- 1, 1980), eral circulation within the(borough once each week rot two successive weeks, not less than 20 drays prior to the date of the auction or opening of bids or proposals, and shall be posted in at least three public places within the borough,one or which shall be in the community nearest to the subiect borough land,for at least 30 days prior to the disposal.Addi- tional notice may be given by any means deter•• mined to be reasonable by the manager or the assernbry,The notice must contain a brief descripw Lion of the land, its,size and general location, the proposed use, term, minimum offer, tirnitafuons, if any,and time and place set for the auction or bid opening.O rd,99-25§2, 1998;Ord.84-61- 10, '1984.Ord,80-28-0 1,19801. ........... s Page 11 of 224 Discussion on the Proposed Ordinance No. FY2016-02 Amending ... AGENDA ITEM #2.b. KODIAIK IISLANID BOROUGH CODE 18.3&030 Chapter 18.30 Chapter 18.35 SALE DIF BOROUGH LAID TRESPASS Secilkxis, Secilons: 18.30.010 Sale of borough land valued at$5,000 is.35.oio "Trespass—Unlawful. or less. 18.W020 Trespass—Defined. 18.30.020 Tema of sale. 11&35.030 Posting, • 8.30.030 Payment '1 ,35,040 Enforcement. 1830.0413 Conveyance by quitclaim,deed. 18,35.050 Penalties and rernedies. 18.30.050 CoveinanW,condillonal conveyances. Prior ordinance history:Ord.79-5-0. 16.30.010 Sale of borough land valued at $5,000 or Iles& 18.3 .0,10 "Frespass..-Unlawtull. The sale of borough land acquired from the state It is unlawilul for any person,firm or rdDirporation and valued at$5,,000 or less shall be in the manner to commit a trespass upon p"jperty owned or=- and by terms eslablished by resolution of the trailed by the borough.[Ord.83-7-0(A)§1,19831. assembly..[Ord..80-28-0§1,1198QJ. 18.35.020 Trespass—Donned. 18.30.020 To of sale. Any of the following acts,by any person,firm or The assembly shall determine the forms upon corporation, are arnong those that minstilute kres- whidi b0n)Ugh Iland is to be sold at the time the dIs pass and are a violation of the provisions of this posal is approved,or,if the assembly directs that chapter: purchase proposals The invited,the assembly may A. An unauthorized entry or rernaining upon provide that proposals include the terms of the borough property in violation of a notice posted or sale.. Ord.80-2R-0§'t,190014 exhibited alt the malin entrance to the premises-, 13, The pursuit of any course of conduct or 18.30.030 Payment. action in violation of a rnotice posted or exhibited at At the fime of SOle or suclion, the pumhoser time nwain entrance to borough property or at any shall pay to the Wough not less than 10 percent or point or approach or entry,or given oirally or In writ- the minknurn appraised value established for the ing by am awAhadzed agent of Me twirough", sale parcel.The difference between Me 10 perrant C. A faltUre or refusal to depart from borough minimum appralsed value and 10 percent of the property upon request to do so orally or in writing total price bid for the parcel shall be paid to the born by an authorized agent of the borough,, ough at the firne the purchase contracll is executed, D. "The cutting down, linjuiry or reirrinval of Uses The balance of the Ipurchase price shall The paid, or Umber, frorn borough property without wriflein and its payment secured, in accordance with the pwm.i.ssion from an aullhorlzed againt of the bur tairms of the sale appa.wed by the assembly.�Onk oughl 60-28-0§t,19801., E., The digging,taking.quarrying or removal of minerals, earth, or stone from borough property '18.30.040 Conveyance by quitclalirn deed. vOlhout written permission from an authorized Unless the tenons of sale approved by the agent of the boroughs or assembly provide ollherwise,, all conveyances at IF. LlUefing In or on borough property.[Old.,d3- borough land shall be by quNdallm deed.1[0ird.80- 7 O(A)§11, 1983]• 28-0§1,119801. '18,354030 Posting. 16.30.050 Covenants,conditional 'The manager or designee is authorized to cause conveyances. the posting oll'sigirws an araround be,rough property, A conveyance at borough Land shall be subject buildings,air offier areas advising that such prop- to such covenants, conditions and restrictions, of erty,bullding or area is restricted as to public use powers of terrdination,as the assembly In the pub- or access.�Oird.98-25§2,J998,Ord.84-61-0§10,, lic interest may require.jprd 00-28 0§1,1 198% '1984;Ord•,83-7-0(A)§1� 19631., 19•7 Page 12 of 224 Discussion on the Proposed Ordinance No. FY2016-02 Amending ... AGENDA ITEM #2.6. 1835.040 I.EASING 0r:: F EAI•PROPERTY OR INTERES1"THEREIN 18.35.M Enforcement. Chapter 18,40 Appropriate action imay be talken by ffie man- ager or designee at any time,or from time to firne, t-k-EASING OF REAL PROPERTY OR to enforce lim proftons of this chapter or to pre- INTEREST'rHEREIIN vent violations li-wreof. Ord.98-25§2, 1i tt„Ord. 84-61-0§10, 19841 Ord.83.-?-O(A)§1,19831. Seclions- 18.40.010 t..easing procedures. 13.3 .0 Penalties and remedies. 18.40.020 Negotiated leases, A. Ipersoun who violates the provisions of lhis 18.40.030 'Term of lease, rMapter,is guilty or a niisderneanoir and upon con- 't 8.40.040 Terms and conditions of leases. viction Is punishable by as fine of nok rnore. than 18.40.050 Minimum acreplable annual venlal. $300.00,in addition to the surcharge required to be '18.40 060 Deposit and receipt, imimsed imcker AS 12,1'039. 1 1A0,070 (payment or annual renlals, B., NotwithManding the aysHablflty or any other M40.080 Adjustment of rental. irernedy,the lborough or any aggrieved person may 118.40A0 Use of malarial. bring a chell action to enjoin any ViDiati011 of this l&40.°00 Lease utiftalion, chapter, or to obtain damages for any Injury the 08A0,1110 Subleasing, plaWrff wiffered as a result of the vkWaflon. 18,40.120 Forfeiture of reni:BL C. Eadh act or amdllion violialing this chapter, 18,40A30 Expiration of lease. and each day duning wtfth the act or =Kfiflon 18,40A40 Removal or reversion of exists, cordinues or is repealed, shall be a sepa- improvements upon lanurnation of rate and distinct violation. lease. ID. The penailips provided for violation ii:A this 1BA0.150 Right-of-may. chapter are in addition to and not In lieu of any other Ipaanatty Ipr,reuwrid ed W In stake low or any chit 113.40.010 Leasing procedures. remedy available to doe boixK.ugh. Ord.W26§10, Unless otherwise provided by an assembly res- 1998, Or& 83-37-0 55, '19831 Ord.83-7-0(A)§1a olution,the land leasing procedures established by this We shelf be utilIzct in the feassing of any bor., otigh land.,[Ord.•78.1-0§2,1970]. 18.40.020 Negotiated leases. A. The assarnlWy n-my approve by 0050600in the issamance of a noqofialed lease far a perkid not to exceed five ypars If the annt.pal rental value of the property is $500= or less and no competitive interest for tie property Is apparenL IB; The assernbly may appmve lby resolullon the issuance of a negotiated tease for a period not to exceed 25 years to a nonprofit corporalIon on pub- 111c utility at as reasonable rental rate W(ing Into con.. sideration ft purpose for which the real property, Is to be used, C. A nonpfoffi corporafion HI471ying for a negoIll- ated lease in subsection 9 or this section rnay be required to provide the folrawing. 1. A copy of 0%articles of incoirponabon In the stale of Alaska; 2. Verification that it 1% exempt firorn paying federal and stale Incorne lax; 3. A use plan In verify the need or tine real property reqiimstedl and 4. A statement of public service holing pro- vided to tine community and Its availability fr.)r enjoyment by ali citi zens of the Thorough, 18-5 Page 13 of 224 Discussion on the Proposed Ordinance No. FY2016-02 Amending ... AGENDA ITEM #2.b. Chapter 2.60 RESOURCE MANAGEMENT OFFICER Page I of I Chapter 2.60 RESOURCE MANAGEMENT OFFICER Section& 260.010 Resource management officer, 2.60.020 Duties. 2.60.010 Resource management officer. The resource management officer shall be responsible for planning and supervising the selection, acquisition,management,and disposal of borough real property and resources.[Ord.85-26-0§2, 1985.Formerly§2.23.010]. 2.60.020 Duties. I............... The resource management officer shall administer the selection,acquisition,and exchange of land programs;the disposal of borough surplus lands and resources,including the assessment for the demand of land;coordinate land management activities for survey,appraisal,and zoning;acquire easements and rights-of-way for roads,sewer,water lines,and other municipal-operated utilities: participate in land planning,economic development,resource management programs,and coastal zone management decisions;hold public meetings;collect data relating to borough land and its resource values;assist in the preparation of the department budget and formulation of departmental policies and procedures;interface with other governmental agencies on land programs,supervise resource specialists or technicians;provide a full range of planning and management activities; provide a full range of land and resource disposal actions:and provide land acquisition actions.[Ord. 85-26-0§2,1985.Formerly§2.23-020]. .......... .................................... ....... ......... .................. The Kodiak Island Borough Code Is current through Ordinance FY201"9.passed January 22,2015. Disclaimer.The Borough Clerk's Office has the official version of the Kodiak Island Borough Code.Users should contact the Borough Clerk's Office for ordinances passed subsequent to the ordinance cited above. http://www.code]?ublishing.com/AK/KodiaklslandBorough/html/KodiakislandBorouEh02/... 2/25/2015 Page 14 of 224 Discussion on the Proposed Ordinance No. FY2016-02 Amending ... AGENDA ITEM #2.b. KODIAK ISLAND OFFICER)CLASS SPECIFICATION MANAGEMENT SPECIALIST (RESOURCE MANAGEMENT SERIES CLASS Managgment Support 21.5 ,Non-Exempt CLA9S SUMMARY: �Thi�.mn is a "1...,. ... .... ..­",_ _" he firs ve I .. In level Management Support series. Incumbents re responsible for preparing written and graphical land management and use re ports; maintainin records on titles, sales and easements, con ctin roe related research; disposing f foreclosed ro erti s; Identifying Borou h owned property to sell; acquiring r its for land use-, negolialing the purchase,acquisition or exchange of land resources. ESSENTIAL DuTiES. PERCENT OF This class specification represents only the core areas of responsibilities,specific position TIME assignments will vary depending on the needs of the department. .... . ...... . .... rt s code,researches info at n prepares an 1 nd ana management Ian Daily use reports. Researches, repods and oversees r transactions related to % land acquisition,disposal and exchanges. Reports an issues related to rezoning, leases or public projects. Ac ti ing and method of public land disposal. Provkles related ly reporting regarding u lic land offerings,sales and conveyances. o i tes % documentation required for sales and disposals. Researches and determines the location,value and use of public lands. ssis In the development of a land management program, Reviews entitlement I Monthly programs land use l s recommendations a evl ent uses 1 % and growth of community tax base. vi es s u__p'_p"o" n technic I s i ce io st ecie an a ate o l sector and en I public. Researches deeds,patents,plats,maps and a variety 5% of documents regarding ownership status and property rights. Initer ain ins r on titl ,a se e n o"t r r a I"a'I—ed 646h­ly" documents. Reviews,compiles pl t l documents for the sale, % transfer,an conveyance of property. Identifies property for public acquisition. Conducts negoUations with priviiiiiiiia"_ 0 u"artarly owners and native corporations regarding property Purchases. 15% mA 11es far and ac ulres ennits for,."ubilcfworks ro acts and ublic land use r. ... u, PP � .m G„ P p P 1 P ©uarterly °/® " e or mms other ,. l Required.--- Was of a similar nature n level assigned.. Resource Management Officer t Page 15 of Discussion n the Proposed Ordinance Y 'I - i .. AGENDA ITEM 92.b. KODIAK ISLAND CLASS SPECIFICATION MANAGEMENT SPECIALJST TRAINING (RESOURCE MANAGEMENT OFFICER) EXPERIENCE: Bachelors Degree In lannin and 3 years bf community elop t planning experience, including prior real estate experience; or, an iv lent combination of educaflon and experience sufficient to successfully perform the ssetil duties f the job such a those list above. t I • State of Alaska Drivers License required. Preferred Lici eriilic lions: • I to do al i t f- rtifi tion. KNOWLEDGE OF- • Applicable Federal,state and local laws,codes, regulations n or ordinances; • Planning and zoning principles and practices; • Land use concepts re! to to leases,easements,plats,patents and land titles; • Land records and title transfer practices; • Research methods; • Negotiation techniques: • Public administration processes; • Modern office equipment. SKILL • Interpreting an applying p'lica le laws,codes, regulations E:Ind standards', • Researching data analyzing Its a' solutions; • Reading,comprehending and Interpreting land use documents and technical drawings, • Negotiating land purchases-, • Administering and maintaining detailed records: • Utilizing computer and relevant software applications; • Communication, Interpersonal skills as applied to Interaction coworkers, supervisor, the general public,etc.sufficient t exchange or convey Information a to receive direction. Resource Management Officer Page 16 of Discussion n the Proposed r i nc o. - in ... AGENDA ITEM #2.b. KODIAK ISLAND 130ROUGH CLASS SPECIFICATION MANAGEMENT SPECIALIST (RESOURCE MANAGEMENT OFFICER) ,. w ��.Xk&bfi Positions in this class typically require: walking, fingering, talking, hearing, seeing and repetitive mod s. Light ark: Exerting up to 20 pounds of force occasionally,andfor up to 10 pounds of force frequently, and/or negligible amount of force constantly to move objects. If the use of or leg controls requires exertion of forces greater than that for Sedentary Work and the ork r sits most of the time , the job is rated for Light Work. ....................... ....... . ,..m The above job description is Intended to represent only the key areas of responsibilities; specific position assignments will vary depending on the business needs of the department. This job description does not constitute an employment agreement between the employer n the employee and is subject to change by e employer as the needs of the employer and requirements of the job change. HISTORY CLASS INFORMATION: • Draft prepared by Fox Lawson&Associates LLC(13S) ate: 0112013 • Adopted by KIB inane 2014-16, 1512014 • Finalized by KIB,Date: 2014 APPROV r BOROUGH MANAGER T Resource Management Off lcer Page 17 of Discussion on the r oposed Ordinance No. FY2016-02 in ... AGENDA ITEM #2.c. iii% ' Kodiak Island Borough OFFICE of the MANAGER Bud Cassidy,Borough Manager MEMORANDUM Date: July 21® 1 ® Mayor and Borough Assembly From: Bud Cassidy,Borough Manager u je Item for the July Sdh Work Session ® Hospital Lease Providence 1® INTRODUCTION KIB is errantly leasing the Borough owned hospital facility to Providence Health System in Alaska. Language in the lease extended he term to April 20.2017. It is net too early to be discussing any changes that the Assembly y want incorporated Into a new lease. Also of interest Is the presence of anther nonprofit hospital management entity®ANTHC,who has expressed an interest in the operation of the hospital facility. With this memo,staff is looking for direction on how to proceed. 11. Relationship with Providence Health Systems PJaska The I 's relationship with Providence has been a good on.All aspects of healthcare in the community have been furthered through the leadership vience.Providence is also a known quantity and Is respected in the community.Administration of the existing lease has not presented any significant problems. Kodiak Island and the region has benefited from the efforts of Providence. III. ANTHC Alaska Native Tribal Health Consortium C)Is another non-profit healthcare organization teased in Anchor-age.They operate the 150 bed Alaska Native Medical Center.More information about them such as their mission statement and strategic plan can be found on their wesile entc.ore.f was approached by their CEO,Mr.Roald Helgesen about their potential Interest in managing the facility. If there is Interest by the Assembly,there may be value in inviting i to Kodiak tom e a presentation to the Assembly. IV. Legal Aspects The Assembly has the ability to direct staff to negotiate with either Providence or ANTHC based on KIBC 1 .40.0 0( )that allows the issuance of a negotiated lease fora period not to exceed 25 years to nonprofit corporation or public utility at a reasonable rental rate taking into consideration the purpose for which the real property is t®be use . V. Conclusion There may be a need to discuss this again at a second Assembly meeting.Staff is looking at the Assembly for direction on o to proceed. Hospital Page 18 of 224 is si AGENDA ITEM #2.c. In Reque3ted by maragarGmw Drafted by, I 15, 7 Adopted: KODIAK ISLAND BOROUGH- RESOLUTION -23 A RESOLUTION OF THE ASSEMBLY I ISLAND AUTHORVJNG A RENEWAL OF THE LEASE WITH PROVIDENCE SYSTEM �; _ . m .., ry_ A ,j � � ,rn.. WHEREAS, by means of an Amended and Restated Lease Agreement("the Lease")executed In November 2005, the Kodiak Island u h leased e premises known as ft Kodiak Island Hospital and Care Center to Pro%idence Health System Alaska(" vid • the terms of the Lase Included en Id extend its term for[on years provided it gave notice of Its desire to do so 180 days prior to[he expiration of the current lease term,and WHEREAS, the current lease term expires April 20,2007,and on October 4, 2006 Providence gave notice of Its desire to the lease term; and the terms and conditions of any extended lease term are to be the same as those of the Lease unless the parties mutuallyagree to change them;and there Is a mutual agreement n the parties that any extended lease term shout Include an amendment reducing Kodiak Isla 's annual equipment contribution from $150,000 t o$108,000 effective In I I year beginning July 1,2007 and thereafter,and It Is in the best Interest of the Kodiak Island to extend the lease to continue with t existing terms conditions but amendment reducing I Island m. Borough's annual equipment contribution from$160,000 to 1 Oe,000 affective in the KIB fiscal year beginning July 1,2007 and thereafter, NOW, THEREFORE, BE IT RESOLVED BY THE ASSEMBLY F THE KODIAK ISLAND BOROUGH that Sedlon 1. execute an agreementwith Providence eat Alaska to extend for angl4er Vina° e,r o on the basic terms(but t with an amendment educi ng"R6 d acIs# n Baroug h's annual nent from „$150,000 to $108,00 efecive In the KIB fiscal year beg n contribution and thereafter),the Amended nd Restated Lease Agreement for the premises the Kodiak Island Hospital and Care Center. ADOPTEIJ Y THE ASSEMBLY OF THE KODIAK ISLAND THIS I I I S Ja a M.Selby, Borough r ATT 7&L� ` Nova M.Javier,CMC,Boro Clerk Kodiak Island Borough.Alaska Resolution Ho. T-23 Pap 1 of 1 Page 19 of Hospital L Discussion AGENDA ITEM #2.c. 3200 PROW)ENCE ORNE Tel 947 562.2211 PO.BOX 196604 ANCHORAGE.ALASKA 99519.6604 April 2, 1997 Mr. Jerome M. Selby e-^ ED Mayor Kodiak Island Borough APR 0 21997 710 Mill Bay Road Kodiak,AK 99615-6398 Mayor's Office Dear Jerome Thank you for all your efforts in bringing this lease agreement and accompanying partnership to this stage. We have enjoyed our working relationship and look forward to the collaborative management of the Providence Kodiak Island Medical Center. Enclosed you will find three original signed agreements for the Kodiak Island Medical Center,we have kept three within our system. Thank you again and we look forward to the official transition date of April 21, 1997 and the following celebration on May 12, 1997. Sincerely, A.Bruce f Executive d-.th:dcugd:odtran Page 20 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 1 JAMIN, EBELL, BOLGER & GENTRY A mcwtoomMAL cas-aftAT10H ATTORNEYS AT LAW �O�asar� 979 CAROLYN 6TRU&T ANGLONA41s.ALAA*A 00601 JOEL H. BOLGER KODIAK.AUWKA 00616 TaLIEPHOwac AND FAX ATTO(1l141Y AT LAW (41a7) 70-41100 A0MMILD To ALA/WA TUA"moN n(007)486-6024 — AM WAmmamm sms FAc81MILIu(007)466-6132 GUATnA CWIP ; 4100 tlHRM1.L"NUILD"60 1:•MA1u JOKLajEBOKOO.=M REPLY TO KOOIAK OFFICE 41041 nMff AYp1Ua F2ArrM WAsNLNQTON 98104 TaU11"OHC 91041 612.7s3A FACEOW& i(2041)4123.7021 June 24, 1997 P'=t"%yVF-D Jerome M. Selby, Mayor JUN 2 5 1997 Kodiak Island Borough 714 Mill Bay Road Mayorr.,Office Kodiak, AK 99615 Re: PROVIDENCE HOSPITAL LEASE Our File 4742-632 Dear Jerome: Please find enclosed a draft ordinance revising the duties of the hospital advisory board. I will let you know more on this issue after I have a chance to talk to Stephanie Phillips about Providence's concerns. Sincerely, JAMIN, EBELL, BOLGER R GENTRY �o�el H cc: Robin Heinrichs, Presiding Officer 470rW L W6 Page 21 of 224 Hospital Lease Discussion AGENDA I rEM #2.c. G y P JAmm, EBELL, BOLGER & GENTRY A r"Cromm"aL CDW10"Tw" AMMO""o"WM- ATi'ORNEYS AT LAW Imo 1•Tnsr.ams70A 3=CA16OLYN ZTRZWr ANCW A R.AM A""I JOEL H. BOLDER =01AX.AI,AKKA 510618 TL,O9IO11S AND SAs pa71 t7Faeoo ATTORNLT AT RAW 7'KI.KPFIONS:(007)4864102A AC t TTW To ARA91% AKo wAsHr wToN SAM I<ACsOM1uL:(007)48&6112 N=117'Iili Orman. Soo MUTUAL"M ausaws K-MMt-sO81Jl ONIKOD.COM R6PL.Y TO KOOM OFF= we sour Avaws RL TTLL WASMmm M W04 TSWU%was,Uoq 621-78" rAeseweRS+Imo)ozs-"Xl June 24, 1997 RECOM Jerome M. Selby, Mayor r� z h q, Kodiak Island Borough 710 Mill Bay Road t{Rh Kodiak, AK 99615 OFF �c JROUGH JGH CLEFS! Re: PROVIDENCE HOSPITAL LEASE Our Pile 4702-632 Dear Jerome: Please find enclosed a draft ordinance revising the duties of the hospital advisory board. I will let you know more on this issue after I have a chance to talk to Stephanie Phillips about Providence's concerns. Sincerely, JAMIN, EBELL, BOLGER&GENTRY oel H. Bolger JHB:isb cc: Robin Heinrichs, Presiding Officer 470M;i -M Page 22 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. LEASE AGREEMENT THIS AGREEMENT is made and entered into by and between the KODIAK ISLAND M BOROUGH, a municipal corporation of the State of Alaska (hereinafter referred to as"KIB"), and SISTERS OF PROVIDENCE IN WASHINGTON d/b/a PROVIDENCE HEALTH SYSTEM IN ALASKA, a Washington non-profit corporation (hereinafter referred to as "Providence"). WITNESSETH: WHEREAS, KIB is the owner of certain real property consisting of a Health Care Facility together with improvements located thereon, and certain Equipment located in and about the Premises known as Kodiak Island Hospital and Care Center, (hereinafter referred to as the'Hospital'); WHEREAS,the Borough, in the interests of sound fiscal management and to ensure the continued operation of the Hospital in a professional and efficient manner, has requested Providence to lease and operate the Hospital; WHEREAS, Providence owns and operates a number of health care facilities,that are operated In keeping with its philosophy,mission and values; and WHEREAS, Providence desires to lease the Premises and the Equipment from IdB, subject to the terms and conditions contained herein. NOW, THEREFORE, in consideration of the mutual covenants contained herein, and each of the parties intending to be legally bound hereby, it Is mutually agreed as follows: LEASE AGREBAENT-Pais 10129 Page 23 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 1.1 AGREEMENT IQ LEASE KIB agrees to lease to Providence and Providence agrees to take from KIB, the Premises and Equipment described herein,for the term and upon the terms and conditions set forth in this Agreement. 2.1 PREMISES:The real estate which is the subject matter of this Agreement is described as follows: Lot Two-A(2-A) Hospital Subdivision according to Plat 95-03, located In the Kodiak Recording District, Third Judicial District, State of Alaska. including all buildings, appurtenances, and improvements thereto, (herein referred to as 'Premises'). KIB is in the process of remodeling the current hospital facility, pursuant to architectural drawings which have been provided to Providence. In addition, KIB intends to relocate certain services to the new hospital facility. The parties'acknowledge that KIB, by a target date of June 30, 1997, Intends to complete the remodeling of the old facility In accordance with such architectural drawings and transfer certain services to the new facility which collectively shalt be referred to as the Premises herein. KIB shall be solely responsible for all financial costs associated with the remodel of the old facility and transitional costs to the new hospital facility. 3.1 EQUIPMENT: The Equipment which is the subject matter of this Agreement Is all of the Equipment presently located in or on the Premises, in an 'as is' condition, and all Equipment to be acquired during the tern of this Agreement. The 1991 Champion Coach 18 passenger bus presently used in connection with the extended care facility will be included with the Equipment, but it may be later withdrawn by KIB, without obligation, to be used for a public transit system. LEASE AGREEM047-PRg*2 of 2B Page 24 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 3.2 KIB agrees to provide a minimum of$150,000 per year for purchase of new and replacement Equipment for the Hospital. KIB will purchase a CT Scan when that purchase becomes necessary and other major items wilt be discussed. The funds for purchase may be provided by the Fern Fuller Estate and Charitable Remainder Unitrust, revenue sharing or legislative grant funds provided by the State of Alaska to KIB, or other capital funds provided by KIB. Any Equipment purchased with funds from KIB will remain the property of KIB at the termination of this Agreement. 3.3 Providence may purchase additional equipment to be used in the maintenance or improvement of the Hospital's operations. Such additional equipment shall be Providence's property,and shall be tagged as such. Upon termination or expiration of this Agreement, KIB may purchase any items of equipment used in the Hospital and paid for by Providence. The purchase price shall be the market value of the acquired equipment less an amount equal to an allowance for depreciation of the equipment between acquisition and termination calculated pursuant to generally accepted accounting principles. Any equipment or personal property which belongs to Providence and is not purchased by KIB may be removed by Providence after the termination or expiration of this Agreement. TERM OF AGFLEEMENT• The Premises sand Equipment shall be leased to Providence by KIB for a term of ten (10) years, commencing on April 21, 1997, through and including April 20, 2007, unless sooner terminated as hereinafter provided. 4.2 Provided that Providence is not in default under this Lease Agreement, Providence shall have the option to extend this Lease Agreement for one additional term of ten(10) years by providing KIB with ISO days prior written notice. The extended term LEASE AOREEMENT-Pa"3 d 25 Page 25 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. shall be on the same terms and conditions of this Lease Agreement with monthly lease payments to be established by negotiation. 4.3 At the expiration of the term of this agreement or upon the termination 6TIK-Ii- agreement as provided for herein,providence shall surrender possession of the Premises and"gqy!pTent to KIB as set forth under the terms of this Agreement. " -.................... ................. ...................111111--111........... 5.1 FIgST gIGMJ EUBQHM: KIB hereby gives and grants to Providence the first right to purchase all of KIB'S interest in the Hospital, premises, and Equipment at any time from the date of this Agreement until the termination of this Agreement as provided for herein. VJB shall make any sale of said interest In the Hospital, Premises and Equipment between KIB and a third party conditioned upon and subject to Providence's first right to purchase as set out herein. Providence shall have the right to accept the purchase price and the terms of the intended sale to the third party as the terms and conditions of the sale between KIB and Providence. 5.2 Providence may exercise its first right to purchase by executing within ninety (90) days of notice of MOIS intent to sell its interest In the Hospital, Premises and Equipment an agreement for the purchase of said Interest in the Hospital, Premises and Equipment on terms and conditions as agreed between the parties. It Providence does not t t I exercise its first right to purchase as provided for herein or enter into a purchase with KIB within ninety(90)days of the notice by KIB to Providence of its first right to purchase, then and In that event Providence's first right to purchase shall lapse and KIB may sell the Hospital, Promises and Equipment or any part thereof to said third party or any other parties. LEASE AGREEMENT-Pap 4 ol 20 Page 26 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. T MEDULE. The fixed minimum monthly 6.1 T lease payment during the term of this Agreement shall be SIXTY THOUSAND DOLLARS ($130,000) payable by Tenant in equal monthly installments, on or before the first day of each month in advance, at the office of KIB or at such other place designated by KIB, without any prior demand therefor, and without any deduction or setoff whatsoever. 7.1 = PAYM bIl. Providence shall contemporaneously with the execution of this agreement, deposit with KIB the sum of TWO MILLION DOLLARS ($2,000,000) representing a down payment in consideration for the right to lease the Premises as set forth herein. This down payment is non-refundable (except to the extent that it may be recovered from operations)and consequently may be used by KIB for the construction or remodel of a portion of the Premises without the risk of any remaining claim by Providence. Provided, however, that if KIB exercises.the power of termination without cause as KIB will refund the sum of$200,000 per year for each year provided in Section 37.1,then remaining, at the time of termination, in the original ten-year term of this agreement. Providence shall be responsible for the total 8.1 operation of the Hospital. Providence shall operate the Hospital under the name Providence Kodiak island Medical Center. Except as otherwise stated herein, Providence assumes all the rights, duties, liabilities and obligations which shall arse out of Its operation of the Hospital and other activities on the Premises during the term of this Agreement. Providence shall cause all expenses incurred in operation of the Hospital after the effective dated of this Agreement to be paid, including, but not limited to, utilities, insurance, salaries, supplies, fees, benefits and other costs normally incurred in the operation of the Hospital. LEASE AGREWENT-PaQ*6 d 26 Page 27 of 221 Hospital Lease Discussion AGENDA ITEM #2.c. 8,2 All revenues and cash collections from patients, third-party payers and other sources billets and collected by Providence, and arising out of or related to services rendered during the term of this Agreement, shall be used to offset operating expenses (which includes rent payments and a return of operations to Providence for the$2 million downpayment)and capital equipment purchases incurred (in excess of K113 contributions) on or after the effective date of this Agreement. The excess,if any,of such revenues over operating expenses and capital expenditures shall be divided on an equal basis between Providence return on operations and K1B funded depreciation until each fund reaches a maximum of $604,Qoo per year. The balance, if any, shall accrue to the sole financial benefit of Hospital. 8.3 Providence shall maintain separate accounting 'records and financial statements for the Hospital and shall provide K1B with the Hospital's year-end financial statements. K1B recognizes that Providence may, at its discretion, change the fiscal year of the Hospital to be aligned with Providence Health System. 8.4 Providence may conduct medical educational training programs at the Hospital,including training of intems and residents and other medicaUtechnical personnel, in a manner consistent with applicable governmental regulations. 8.5 Providence shall have access to all prior financial, business, medical and other Hospital books and records, including, but not limited to, admitting register books, pricing schedules of the Kodiak Island Hospital and room services, patients' insurance records, pertinent Hospital personnel records and such other books and records as are necessary to the continued operation of the Hospital. Original capies of all such books a records shall be maintained and stored in the Hospital at all times. No such books and LEASE AGREEMENy.Paps 6 of 28 Page 28 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. records may be destroyed without the consent of the KIB, and in no event will patient medical records be destroyed,except in accordance with federal and state laws, rules and regulations. KIB agrees to defend and hold Providence harmless against all claims, liability and expense resufting from acts or omissions of KIB in connection with such books and records and relating to the period prior to the effective date of this Agreement. KIB shall continue to be liable for the performance of all agreements related to such books and records not so assigned to Providence. 9.1 UTILEJE$7 Providence shall arrange and pay for all utilities and other services to be fumished to the Premises, including gas, fuel, oil, electricity, sewer,water, telephone,and garbage collection. All utilities shall be prorated between the parties as of the effective date of this Agreement. 9.2 KIB agrees to refund up to $200,000 of the down payment referenced in section 7.1 to the extent that the utility expenses for the first year of operation under this Lease Agreement exceed$520,000. 10.1 TAXES; Providence shall be responsible for and shall pay before delinquency all governmental taxes, assessments charges or liens assessed during the term of this agreement against any leasehold interest or property of any kind or income or sales of any kind related to the Premises. KIB acknowledges that Providence will be entitled to a property tax exemption for property used exclusively for non-profit hospital purposes pursuant to AS 29.45.030(a)(3),except to the extent that the leasehold Premises are used by non-exempt parties for their private business purposes as elaborated in h i 553 P.2d 487 (Alaska 1978). rage Mh y. NUMM Providence may contest,by appropriate proceedings, any tax assessment, charge or lien, LME AGRMM NT•Pa"T d 28 Page 29 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. but such contest shall not subject any part of the Premises or Equipment to forfeiture or loss. Providence and KIB agree to negotiate in good faith regarding any KIB property taxes levied or assessed on the Premises and Equipment owned by KIB and leased to Providence, or any property owned by Providence during the term of this Agreement. 11.1 SUPPLIES Providence shall take ownership of all the supplies maintained at the Hospital at the commencement of this Lease Agreement. Providence shall supply and maintain all expendable Hospital supplies as may be required in Providence's discretion for the proper operation of the Hospital. Upon termination of this Agreement, Providence will transfer ownership of all of the supplies maintained at the Hospital to KIB. The value of the supplies provided by Providence at the termination of this Agreement shall be equal to the value of the supplies transfered to Providence at1he commencement of this Agreement multiplied by a fraction the numerator of which is the Consumer Price Index for all items for the area geographically nearest to Kodiak Alaska published by the Bureau of Labor Statistics, United States Department of Labor, or if none, by any other instrumentality of the United States or the State of Alaska for the area geographically nearest to Kodiak,Alaska(ft'CPI')at the termination of the Lease, and the denominator which is the CPI for the first full calendar month of the Lease term. If Providence does not transfer sufficient supplies under the formula in the previous sentence, then Providence will pay the balance to KIB at the time of termination. 12.1 !!.SE: Providence shall use and operate the Premises for a general acute care hospital, extended care facility, home health care provider, retail pharmacy and for any additional health care related purposes as may be appropriate. Providence shall provide, equip and maintain adequate facilities for the continuation of full range general LEASE AGREEMENT.Pape a d za Page 30 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. medical and surgery services at not less than the level of the state of the art available presently at the Hospital on April 21, 1997, or such greater level as economically feasible and warranted by the local physicians' levels of ability and the reasonable needs of the community, as determined in Providence's sole discretion and in accordance with the terms and conditions as set forth in this Agreement. Providence may convert parts of the Premises into use for other related purposes consistent with KIB`s obligation to supply its Inhabitants with facilities for the care of sick and injured persons. Providence shall operate and maintain a duly licensed Hospital under the Alaska Statutes and in accordance with the standards prescribed by the Alaska Department of Health and Social Services. 13.1 QUIET ENJOYMENT: KIB warrants that Providence, upon paying the rent and any other charges as provided for in this Agreement and upon performing all other obligations herein, shall quietly have, hold and enjoy the Premises without hindrance. 14.1 WARRANTY OF TITLE: KIB hereby warrants that it has good and marketable title to the Premises, subject only to the encumbrances and security interests stated in Exhibit A, attached hereto and incorporated herein. 15.1 PRIOR AGREEMENTS: KIB warrants that entering into this agreement does not breach any commitments or responsibilities of KIB under prior agreements, Including but not limited to financing agreements, and that KIB shall defend and hold providence harmless from any claims, liabilities and expenses arising from or in any way related to any prior agreements of KIB except to the extent such agreements are assumed by Providence. 16.1 BUILDING 13 GULATIONS: KIB warrants that there are no existing violations of applicable building, fire and health code regulations of which it is aware. KIB LEASE AGREEMENT,Paps 9 of 28 Page 31 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. is responsible for all costs of correcting any existing violations of applicable building, fire and health code regulations. Providence shall otherwise keep and maintain the Premises in good condition. 17.1 1 t KIB shalt, at its expense, conduct an audit of the hospital's financial statement as of April 20, 1997. The audit shall be performed according to generally accepted accounting principles by an independent certified public accountant approved by Providence. 17.2 KIB shall, at its expense, prepare the Medicare cost report for the period ending April 20, 1997, and repay or set aside any Medicare over payments pertaining to such period or prior periods. Upon request, Providence will make a proposal to KIB for preparation of the cost report. 18.1 D : Providence will receive from KIB at Closing current assets defined as accounts receivable, prepaids, and such other current assets of the Hospital as identified in the audit provided under sections 17.1 of this agreement.. Providence will retain and pay all Hospital liabilities, Including, accounts payable and accrued liabilities identified In the audit. K1B will retain and pay non- current payables attributable to prior years cost reports related to governmental payers, including those resulting from the filing of the termination cost reports of the Hospital. The excess, if any, of current assets over current liabilities shall accrue to the sole financial benefit of Providence to offset the Hospital operating losses. 18.2 Subject to this Agreement except as otherwise provided during the term of this Agreement, K1B shall retain all liability for notes payable and other debts, however characterized. LEASE AGREEI M'-page 10 d 29 Page 32 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 19.1 ACCREDITATION: Providence will use its best efforts (so long as it is in the best interests of Providence and KIB) to cause the Hospital to become and remain accredited by the Joint Commission on the Accreditation of Health Care Organizations. Providence shall send to the K1B upon any loss of accreditation a written notice that the Hospital is no longer accredited and the reasons for non-accreditation. 20.1 QUALIFICATION-FOR MEDICARE AND MEDICAL : Providence will use its best efforts (so long as it is in the mutual interests of KIB and Providence)to cause the Hospital to remain fully qualified as a provider of services under the'Medicare`program, "Medicaid'program, any program successor of either of the above or any other program by Federal, State or local governments providing for the payment or reimbursement for services rendered 21.1 W GARBAGE Providence shall at it's expense, properly and timely dispose of all medical waste and/or garbage refuse according to any and all laws governing disposal of the same. 22.1 INSURANCE; Providence shall,at its expense, maintain throughout the term of this Agreement the following insurance. A. Insurance against loss or damage by fire and such other risks as may be Included In the current KIB hazard insurance policy with extended coverage in an amount not less than the replacement value of the Premises from time to time; B. Insurance against claims for personal injury and property damage occurring on the Premises under public liability and malpractice policies with limits of not less than $1,0D0,0D0 per person, $3,000,000 per occurrence and$500,000 for property damage arising out of any single occurrence. LEASE AGREEMENT Page 11 of 28 Page 33 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. Such insurance policies may provide for partial self-insurance under the same terms as the policies for hospitals owned and operated by Providence. KIB shall be named as an . additional insured party on each such policy of insurance, and certificates thereof shall be furnished to KIB. 22.2 Providence shall also provide tail coverage for hospital professional liability for the KIB and LHS Management System by purchasing coverage with the current carrier which provides coverage for all occurrences since 1987. 22.3 KIB shall, at its expense, maintain throughout the tern of this Agreement insurance to cover all conditions, events and liabilities arising out of its actions and activities relating to the Hospital. 23,1 MAINTENANCE AND REPAIRS: Providence shall cause the Hospital to be maintained and repaired in accordance with all state and local codes, and keep the Hospital in a condition at all times acceptable to KIB, Including but not limited to cleaning, painting,decorating,plumbing, carpentry, grounds care and such other maintenance and repair work as may be necessary. KIB shall provide and pay for any major maintenance and repairs in the amount of$10,000 or more. KIB will set up and annually fund a Hospital Fund which shall be used for major repairs and maintenance of the premises and debt requirements. All funds generated from this lease shall be allocated to the Hospital Fund. If Providence, after written notification by KIB refuses or neglects to perform maintenance and repairs within a reasonable period of time,and KIB is required to perform maintenance or make repairs by reason of Providence's negligent acts or omissions, KIB shall have the right, but shall not be obligated to perform such maintenance and repairs LEASE ACREBQXT•Pape 12 of 29 Page 34 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. on behalf of and for the account of Providence. In such event such work shall be paid for by Providence as additional rent within fifteen (15) days after receipt of a bill from KIB. 241 C R N : Upon termination or expiration of this Agreement. Providence shall surrender the Premises to KIB in substantially the same condition as exists on the date hereof, except for reasonable wear and tear. 25.1 IMPR:)VFMENTS ANO : Providence shall make no alterations in, or additions or Improvements to,the permanent structure of the Premises without first obtaining the written consent of KIB.Any additions and improvements made to the permanent structure of the Premises shall remain upon and be surrendered with such Premises as a part thereof at the expiration of the term of this Agreement, by lapse of time or as otherwise provided herein. 26.1 l 7 : In the event that contributions are made to Providence for the benefit of the Hospital andfor KIB,the Providence may accept such contributions, it being understood, however, that Providence shall comply with the wishes of the donor insofar as they are compatible with the operation of the Hospital and that all property purchased with such contributions shall be and remain a part of the Hospital and the property of KIB. Should the terms or conditions of the contribution indicate that it is intended for Providence and not for the Hospital or KIB, Providence shall accept the contribution on its own behalf and utilize the funds in its sole discretion. For purposes of this paragraph the term "contribution" shall include a gift, bequest, grant or donation of money or property. It is expressly understood that the term "contribution"does not include any money derived by, or from,taxes or other governmental funds or entities. LEASE AGREEMENT-Paps 13 0128 Page 35 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 26.2 Providence,will identify for KIB in advance of purchase or expenditure, the Equipment, project or repairs for which the contributions will be expended and provide to KIB a full accounting of all expenditures. 26.3 The following contributions will remain under the ownership and control of KIB or other local entities. The parties will cooperate to insure that these funds are expended for the health care purposes for which they are established or provided. A. The revenues of the Kodiak Island Health Care Foundation. B. The Fern Fuiler Estate and Charitable Remainder Unkrust. C. Any revenue sharing or legislative grant funds provided by the State of Alaska to KIB. 27.1 . Any medical physician or osteopathic physician holding an unlimited license or any appropriately licensed dentist, who is recommended for approval by the Medical Staff and approved by the governing board of Providence shall be permitted privileges to practice in the Hospital. This section does not prohibit Providence from entering into an exclusive contract for the practice of an anesthesiologist or another specialist for the benefit of the community. 28.1 HOSPITAL_5TMF: There is a full staff employed at the Hospital at the time of this Agr eement providence will use its best efforts to employ qualified members of the present staff following the commencement of the lease term, subject to Providence's general employment policies. Providence will use its best efforts to maintain the benefits enjoyed by the present staff including employee bargaining units, seniority, wage schedules and retirement benefits, subject to Providence's general employment policies. Providence agrees to use its best efforts to make no reductions In budgeted staff for the LEASE AGREEfAENT page 14 el 20 Page 36 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. first six months of the Lease Agreement. To the extent consistent with Providence's personnel policies and procedures, Providence will give its new employees credit for vacation and sick leave benefits earned while employed by KIB. 291 er,��iccinN TO HOSPITAL:All persons in need of hospitalization shall be admitted to the Hospital without regard to race, creed, color, national origin or financial circumstances. 30.1 UMMIEISAM : Providence hereby agrees to indemnify and hold KIB harmless from and against any and all claims and demands for injury or death to persons and damage to property occurring on the Premises during the term hereof, and will defend KIB from any claim of liability on account thereof. Providence shall have no obligation for, and KIB shall indemnity and hold Providence harmless from and against, any and all liability with respect to any claims resulting from the negligence of KIB or its agents or employees. or any claims arising out of acts or omissions which occurred prior to the effective date of this Agreement. 30.2 Providence shall indemnify,defend,and hold KIB harmless from and against any and all claims, demands, damages, losses, liens, costs and expenses (including attorneys fees and disbursements)which accrue to or are incurred by KIB arising directly or indirectly from or out of or in any way connected with (1) any activities within the Hospital or on the Premises during the term of this Agreement which directly or indirectly resulted in the Premises being contaminated with Hazardous Substances; (2) the discovery of Hazardous Substances on the Premises whose presence was caused during the term of this Agreement; and (3) the clean-up of Hazardous Substances on the Premises whose presence was caused during the term of this Agreement. LEASE Pape 150126 Page 37 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 30.3 ibB shall indemnify,defend, and hold Providence harmless from and against any and all claims, demands, damages, losses, liens, costs, and expenses (including attorney's fees and disbursements)which accrue to or are incurred by Providence arising directly or indirectly from or out of or in any way connected with (1)any activities within the Hospital or on the Premises prior to the term of this Agreement which directly or indirectly resulted in the Hospital and/or the Premises being contaminated with Hazardous Substances; (2)the discovery of Hazardous Substances on the Premises whose presence was caused prior to the term of this Agreement; and (3) the clean-up of Hazardous Substances on the Premises whose presence was caused prior to the term of this Agreement. 31.1 ACC SS TO RECORDS: MB and Providence further agree that Providence shall retain and make available upon request for a period of four (4) years after the furnishing of such services(operation of the Hospital) as described in this Agreement, the books,documents and records which are necessary to certify the nature and extent of the costs thereof when requested by the Secretary of Health and Human Services or the Comptroller General, or any of their duly authorized representatives. 31.2 If Providence carries out any duties of this Agreement through a subcontract with a related organization, valued at $10,000 or more over a 12-month period, the Subcontract shall also provide that the Secretary of Health and Human Services or the Comptroller General may have access to the subcontract and the subcontractor's books, documents and records necessary to verify the costs of the subcontract for a period of four (4)years after the services have been furnished. LEASE AGREEMiNT-PAP 16 d 28 Page 38 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 31.3 This provision relating to the above retention and production of documents is included because of possible application of Section 1861(v)(1)(1) of the Social Security Act to this Agreement; if this Section should be found to be inapplicable,then this clause shall be deemed to be inoperative and without force and effect. 31.4 Should this Agreement terminate for any reason, Providence agrees to provide to K1B all personnel records for those employees who are to be re-employed by KIB who consent to the release of such records to KIB. 31.5 Except as otherwise provided herein in subparagraph 25.4. Providence agrees to provide JOB with the books,documents and records, including medical records, in regard to the operation of the Hospital. 31.6 Providence shall provide at no cost to KIB sufficient storage space for KIB to store its existing books and records relating to the Hospital. 32.1 K1B TO PPRO 1 41STRATUR Providence agrees to select and hire, with KIB consultation, a competent chief executive officer for the Hospital to be known as the Administrator.Providence shall conduct annual evaluations regarding the Administrator in consultation with KIB. The Administrator shall attend meetings of the KIB Hospital Advisory Board and KIB, representing Providence and reporting on the condition and affairs of the Hospital. Providence agrees to provide reasonable support and assistance to the Administrator to enable the Administrator to administer the business and affairs of the Hospital In an efficient and business-like manner consistent with the needs of the community. 32.2 Notwithstanding any other terms and conditions of this Agreement to the contrary, in the event this Agreement is terminated prior to the expiration of its full term, LEASE AGRE13AENT-Page 17 d 26 Page 39 of 224 Hospital lease Discussion AGENDA ITEM #2.c. an Administrator for the Hospital on a contract basis for then Providence shall provide nested by KIB• Winery days following the termination if req FFI 33.1 Salt Island Health Care Foundation able office space to Kodiak Providence shad Provide reason and reasonable for purposes s of a foundation office. Providence agrees to pay the salary benefits for the Foundation director. . The over all management and control of the Hospital will 34.1 that two KlB residents rest with P rovidence Alaska Service Area Board. It Is anticipated Health System in Alaska ' e to participate as voting members on the Providence Hea Y Will be eligible from the Hospital Community Board VPHSACB'}. one member shall be alb C rson from the community• medical staff and one member shall be a layn ed by MB with he approval of Providence, 34.2 An AdvisoryBoard will be appointed een KIB, the hospital staff.the medical staff, and Providence, and function as liaison betty regarding the operation of the shall be responsive to the concerns of the community With respect to matters of and Board updated nce shall keep the Advisory Hospital. Provide and the surrounding 1 and the relationship of the Hospital to the community Board Hospital policy responsibilities of the Advisory areas which it serves. 5p�rfically the duties and respo include the following s in Hospital policy. Policies may be suggested A. Review any change Board of the wire review by the Advisory by Providence or the Advis req Board;but all ory administration- Hospital. A policy is defined as a definite course of action as pursued by B. Review any new patient care services- LEA pO flF AEMT-Paba 18 d 29 Page 40 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. C. Review appointments and clinical privileges to the Medical staff or members which have been recommended for approval by the Medical Staff in accordance • with its Medical Staff bylaws, and provide the recommendation of the Medical Staff to the Providence for review and final action. D. Review the operating and capital budgets prepared for the Hospital. E. Review the rate and charge structures In the Hospital. F. Review and comment concerning the quality of care rendered to the patients of the Hospital. G. Review any reports prepared by Providence. H. Cooperate with Providence in meeting the requirements of any Federal or State law or statutes in retaining the Hospital license; iii obtaining or retaining accreditation from Joint Commission on Accreditation of Health Care Organizations and in maintaining the requirement for participation under the Medicare/Medicaid, other government programs and Blue Cross/Blue Shield. I. To assist the Administrator in long range planning for the Hospital. J. To assist Providence in reviewing administrator applicants and recommend a candidate to Providence prior to the appointment of the Administrator by Providence. K. To assist Providence in determining and deciding all matters of policy relating to the public relations of the Hospital and the relationship of the Hospital to the community and the surrounding area which it serves. LEmE A=E&eiT d,Page 19 a!z8 Page 41 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 35.1 RIGHT IQ ENTER PBEMIS95 Upon reasonable notice. Providence shall permit KIB, its agents and employees to have access to and to enter the Premises at all reasonable and necessary times to inspect the Premises. 36.1 D F : 'Event of Default' means any one or more of the following events, whatever the reason for such Event of Default and whether It shalt be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body: A. Failure to pay rent required by Section 6.1 or 7.1 when such rent becomes due and payable, and continuance of such failure to pay for a period of ten (10)days; or B. Default in the performance, or breach of any other covenant or warranty by Providence under this Agreement,with the exception of any obligations imposed under Exhibit B, and continuance of such default or breach for a period of thirty(30) days after there has been given,by registered or certfied mail,to Providence by KIB a written notice specifying such default or breach and requiring it to be remedied stating that such notice is a notice of default hereunder, or C. The entry of a decree or order by a court having jurisdiction in the premises adjudging Providence as bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of Providence under the Federal Bankruptcy Act or any other applicable Federal or State law, or appointing a receiver, liquidator, assignee, trustee (or other similar official) of Providence or of any substantial part of its property, or ordering the winding up or liquidation of its affairs; or LEASE AGREEMMT-POP 20 d 28 Page 42 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. D. The institution by Providence of proceedings to be adjudicated as bankrupt or insolvent,or the consent by it to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under the Federal or State law,or the consent by it to the filing of any such assignee, trustee(or other similar official) of Providence or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors; or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by Providence in furtherance of any such action. 36.2 If an Event of Default by Providence occurs and is continuing, KIB may: A. At€ts option, declare all installments of rent payable to be immediately due and payable by Providence; B. Re-enter and lake possession of the Hospital without termination of this Agreement,and use its best efforts to sublease the Hospital for the account of Providence, holding Providence liable for the difference between the rent and other amounts payable by the sublessee and the rents and other amounts payable by Providence hereunder; C. Terminate this agreement, excluding Providence from possession of the Hospital and use its best efforts to lease the Hospital, or to another for the account of Providence, holding Providence liable for the difference between the rentals received and the rentals which would have been receivable hereunder; D. Terminate this Agreement, exclude Providence from possession of the Hospital and either operate the Hospital or contract with a responsible operator to operate the Hospital; LEME AGREMO T-Per 216120 Page 43 of 224 Hospital lease Discussion AGENDA ITEM #2.c. E. with respect to any personal property, exercise any remedies available to a secured parry under the Uniform Commercial Code; and/or F. Take whatever action at law or in equity may appear necessary or appropriate to collect the rent then due and thereafter to become due, or to enforce performance and observance of any obligation, agreement or covenant of Providence under this Agreement. 37,1 N : At any time either KIB or Providence may terminate this Agreement by one year's written notice to the other parry.This Agreement shall terminate one year from the date of such notice without further action by either party and shall be of no further force and effect other than to perform any obligation incurred but not paid prior to the termination. However, if Providence is required to perform dny duty or provide any service under the terms of this agreement that is in conflict with the philosophy, mission and values of Sisters of Providence, pursuant to Exhibit B, Providence may terminate this agreement upon 90 days prior written notice to K18. Upon such termination, Providence shall surrender possession of the Hospital to KIB. On the effective date of such termination K48 shall have the option to purchase any such accounts receivable, inventory, supplies or equipment at a fair market value agreed to by both parties. Providence agrees to co-operate in such a way as to allow KIB to show the Hospital to a prospective tenant or accommodate the active transition needs of KIB for the actual termination. KIB agrees to cooperate in such a way as to accommodate Providence transition needs and the removal of Providence's assets. 38.1 ±, i481+ERS OF L CE D PERMITS: The parties will cooperate and jointly prepare and file all applications for transfer of licenses and permits incident to LEASE AGREEMENT•Page 22 d 20 Page 44 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. operation of the Hospital,including but not limited to transfer of permits for and inventories of alcohol, narcotics and dangerous drugs. 39.1 M: All notices,demands,or other writings in this Agreement provided to be given,made or sent,or which may be given, made or sent, by either party hereto to the other, shall be deemed to have been given, made or sent when made in writing and deposited in the United States Mail, Registered or Certified Mail, postage prepaid, and addressed as follows: K1B: Mayor Kodiak Island Borough 710 Upper Mill Bay Road Kodiak, Alaska 99615 Providence: Chief Executive Providence Health System in Alaska 3200 Providence Drive P.O. Box 196604 Anchorage, Alaska 99519.96604 39.2 The address to which any notice, demand or other writing may be given or made or sent to any party as above provided may be changed by written notice given by such parry as above provided. A : Providence may assign this Agreement 40.1 and may sublease the Hospital, in whole or in part, only with the prior consent of the KIB, but subject to each of the following conditions: A. At the time of the making of any such assignment or sublease. there shall be no Event of Default under this Agreement; B. Any assignee will continue to operate the Hospital as a hospital, In accordance with this Agreement; LFASE NGREMENS.page 23 d 26 Page 45 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. C. Any assignee of this Agreement shall expressly assume and agree to perform and comply with all the covenants and provisions of this Agreement on the part of Providence and shall be jointly and severally liable with Providence for any default in respect to any such covenant or provision; D. No assignment or sublease shall relieve Providence from primary liability for all rents and other payments due and for the performance of all other obligations required under this Agreement; E. In the case of an assignment of the Agreement or a sublease of all or substantially all of the Hospital, the assignee or sublessee shall agree to pay all rent payable by it directly to KIB, less a pro-rata share of reasonable maintenance, repair,or administrative handling costs; F. KIB shall be provided promptly a duplicate original of the instrument or instruments containing such assignment or sublease. Providence may not mortgage or grant a security interest in this Agreement or leasehold interest. Approval of all subleases assigned by Providence shall be concurrent with the terms of this Agreement. Nothing herein will prevent Providence from leasing space to physicians or other health care providers. No assignment for the benefit of creditors or by operation of law shall be effective to transfer any rights to the Assignee. 41.1 PAMAGE Og 2E51BUgTION: When all or any part of the Hospital is destroyed or damaged, the Kll3 may: A. Proceed promptly to replace, repair, rebuild and restore the Hospital to substantially the same condition as existed before the taking or event causing the damage or destruction. LE SE AGREEMENT-Paps 24 d 2B Page 45 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. B. All buildings,improvements and equipment acquired in the repair, rebuilding, replacement or restoration of the Hospital, together with any interests in land conveyed to the iQB as necessary for such restoration, shall become a part of the Hospital and available for use and occupancy by Providence without the payment of any rents other than those provided in Section 6.1 and 7.1. C. Rent shall be abated in the event of any destruction of, damage to, or taking all or any part of the Hospital in proportion to the square footage which is unusable by Providence. D. . If fifty percent(5(r/*)or more of the Premises are rendered untenantable by the aforementioned causes, KIB shall have the right to be exercised by notice In writing, from and after said occurrence,to elect not to reconstruct the Premises, and in such event this Agreement and the tenancy hereby created shall cease as of the date of such occurrence,the rent to be adjusted as of such date. 42.1 if the Premises,or such part thereof as in the reasonable opinion of Providence renders the remainder unusable for its purpose, shall be acquired by eminent domain, then this Agreement shall cease and terminate as of the date that possession is taken in such proceeding. Such termination, however, shall not be deemed to deprive Providence of any of its rights to receive compensation by reason of such taking. 43.1 : MB and Providence,both on their own behalf and on behalf of all others claiming through or under either of them, hereby mutually waive and release all claims, liabilities and causes of action against the other and the agents, servants, employees and invitees of each other, for all loss, damage to or destruction of the Premises or any portion thereof, as well as the fixtures, equipment, supplies and other LEASE AGREWMT Pap 25 d 28 Page 47 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. Property of either party located in, upon or about the Premises resulting from fire or other perils covered by standard fire and extended coverage insurance, whether caused by the negligence of any of said persons or entities or otherwise,except to the extent such waiver . would violate or otherwise abrogate the terms of such insurance coverage. 44.1 MISCELLANEOUS: All covenants and agreements in this Agreement by KIB or Providence shall bind their successors and assigns, whether so expressed or not. In case any provision in this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or Impaired thereby. None of the terms, conditions, covenants or provisions of this Agreement can be waived by either party except by appropriate written instrument. The waiver by either party or any breach of any term, condition, covenant or provision herein contained shall not be deemed a waiver of the same of any term. condition, covenant, or provision herein contained or of any subsequent breach of the same or any other term, condition,covenant or provision herein. This Agreement shall be construed in accordance with the laws of the State of Alaska. Nothing in this Agreement, express or implied, shall give to any person, other than the parties hereto, and their successors and assigns, any benefit or other legal or equitable right, remedy or claim under this Agreement. IN WITNESS WHEREOF the parties have respectively executed this Agreement the day and year written below. SISTERS OF PROVIDENCE IN WASHINGTON d/b/a PROVIDENCE ALAS ME CAL CENTER KODIAK ISLAND BOROUGH By. By. r ome M. Selby, LEASE AGREEMENT-Page 20 of 2E Page 48 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. DATE: DATE: STATE OF ALASKA ) ss.: THIRD JUDICIAL DISTRICT ) THIS IS TO CERTIFY that on the &±_day of . 1997, before me, a Notary Public in and for the State of Alaska, duly commissioned and sworn as such, personally appeared Jerome M. Selby, to me known to be the Mayor of the KODIAK ISLAND BOROUGH,and known to me to be the person who executed the above and foregoing instrument on behalf of the municipality, and who acknowledged to me that he executed the same as a free act and deed of the said entity for the uses and purposes therein stated and pursuant to the authority granted to him by the Borough Assembly. WITNESS my hand and notarial seal the day and year first above in this Certificate written. NO Public in and r Alask My Commission Expires: �f ATTEST: V,&OTARY wwbo- Plu" LEASE AGREEMENT,pap 27 d 26 Page 49 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. STATE OF ALASKA ) THIRD JUDICIAL DISTRICT } THIS IS TO CERTIFY that on the day of . 1996, before me, a Notary Public In and for the State of Alaska, duly commissioned and sworn as such,personally appeared , to me known to be the of SISTERS OF PROVIDENCE IN WASHINGTON dlb/a PROVIDENCE ALASKA MEDICAL CENTER, and known to me to be the person who executed the above and foregoing instrument on behalf of the corporation, and who acknowledged to me that he executed the same as a free act and deed of the said entity for the uses and purposes therein stated and pursuant to the authority granted to him by the Board of Directors. WITNESS my hand and notarial seal the day and year first above in this Certificate written. Notary Public in and for Alaska My Commission Expires: 4702&=.001 LEASE AQREGAe1T-Page 20 d 20 Page 50 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. E UMUS Exhibit A.............................rifle Report Exhibit B.............................Letter from Archbishop Exlu'bit C.............................Equipment List Page 51 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. EXHMIT A TITLE REPORT Page 52 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. WESTERN ALASKA LAND TITLE CO. 503 Marine Way, Suite 3-8 P.O. Box 864 Kodiak; Alaska 99615 (907) 486-4433 Fax (907) 486-5109 LIMITED LIABILITY REPORT To: KODIAK ISLAND BOROUGH C/O JAMIN EBELL BOLDER A GENTRY PC ATTN:JOEL BOLDER.ESC. 323 CAROLYN ST. KODIAK,AK 99815 No.WA-10513 Data: February 18. 1997!8:00 a.m. Amount due $250.00 Tax exempt That title to the property described herein Is vested on the data shown above in KODIAK ISLAND BOROUGH, an estate in fee simple, subject only to the exceptions shown heroin. This report shall'hsv#no force or effect except as a basis for the coverage spedMd herein- Tlmothy J. Hurley v.sdsting Signet-v LOT TWO "A' 12A1, HOSPITAL SUBDIVISION, ACCORDING TO PLAT 95-3, LOCATED IN THE KODIAK RECORDING DISTRICT,THIRD JUDICIAL DISTRICT, STATE OF ALASKA. -continued- t NDTE iavewippon slwWA ba mods m detpsmoa Wdwm am mY xrviea.ianWtim.mahrwM m ar mwavedw charyea for sewer,aster or electricity. Page 53 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. WESTERN ALASKA LAND TnU COMPANY ORDER NUMBER WA•10613 PAGE TWO SUBJECT TO: 1. Reservations contained In United States Patent. 2. Reservations as set forth in State Patent recorded March 24, 1967 in Book 19D at Page 204. 3. Matters disclosed by Plat 95-3. 4. Right-of-way and Easement granted to Kodiak Electric Association, Inc. and its successors and assigns including the authority to construct, reconstruct, maintain, repair, Improve and update an electric transmission and/or distribution line or system, including but not limited to poles, towers, wires, guys such other structures as Kodiak Electric Association, Inc. may deem necessary, also including the right to remove such things shrubs, anything l Electric tools would be a mce or danger to the operation of said system, recorded October 23, 995in Book 139 at Page 6 O (Affects those portions described therein.) 5. This report is restricted to the use of the addresses, end is not to be used as a basis for closing any transaction affecting title to said premises. Liability of the company for the Information provided herein and any claim of negligence resulting therefrom shall be limited to the compensation received therefor. TJlilan 02128/97 we-10513.newfolio Page 54 of 224 Hospital tease Discussion AGENDA ITEM #2.c. EXHIBrr B LETTER FROM ARCHBISHOP r Page 55 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. &Rchaiocese of anchoRW sn ea.aeMa s�•anaeoeara.afaaia 949ot� votrll�7a9a•Grou 007H7tsaM September 4, 1946 otiict of the AMr*Uft P Mr. Duuglav Bryce Administrator Providence Ala-vita Medical Center ]Y00 ProvidgrKe Drive P.C. Sox 196604 Anchorage. AK 49519-5604 Dear Mr. !truce. Tree .rltiative of Providence Alaska Medical Center to enter iko an operating agrewnent with small Atasun rural communities for the purpu:e of providing better health care for more people if one that I applaud. It without question is fully consistent with the Ctma'l~t of the Catholk Church and tno Sisters of Providence to !meet the human as well as the spiritual needs of people. From my own observation of with the health care avallabie In the smaller communities of Southeentral Alaska, I know how much the people strongly desire that more medical services be More readily 11"118ble to them locally. Local commnitles tan not eject the escalating cotta of 'Medical equlpor4nt and care. The people fire often prevW%tad from "avepng to medical renteirs in Anchorage because of distance and weather. In addition to that. It is the desire of patltntt to be Ciose to their fanrlltca. friends and n+inisters at the time of ltlreess. The operating agreement being developed by the City of Kodiak and by providence Alaska Medk:ei Center Will alleviate these dlffg%litles. The plan is. if you will allow a play on words, providwomil. l;orpinp operating agrse cents presents same difficulties In communities *!care there are Many Varied and at tames eoretlkting attitudes and convictions about what medical practices are Morally permissible. The 9uldelines utilized for Catholic health care sgsteats are cont imd In Vie Ethical And Re 'ous Directives for Health 5grviaw of the Catholic ®lst+ops o? tQ ~]milled ttlrs: "die��lty k has standards for Kodiak Hospita4- Vou haw Irrrl*,, tad that the City of Kodiak deem* It necessary that their long standing prWkG of elective Iterillsat}on be continued. As you know this prretk:e is not within the Olrectiv_es. You ask it it mould be within the paraateters of the Catholic teething for Providence medical Center to tolerate the Continuance of that pracLlcs wlthln the rity of Kodiak as part of the agreement. Page 56 of 224 Hospital ~_ease Discussion AGENDA ITEM #2.c. September 9, t9lb Page i I take note of important factor. Kodiak Hospital remains a eoalmunity hospital. the operating 100" doss not change that. The mutually accepted terms or the 10450 Identify the principles and practices that will allow both Providence and the City of Kodiak to be faithful to their commitments, in this context I make an observation about moral decisions. Moral daclxlons are generally not made by the application of only one principle, Rather, several principles must be recognized and brought into Into In this instance the Principle of Cpoperatial may be brought Into play with our principles relative to life and respect for the human body. Within the principle of cooperation*and under certain conditions and circumstances it is pvrmisslble that one ir+ay cooperate MOW 1411y, In an action or another that is contrary to one's convictions. in my iudinent the principle of material cooperation does apply In the situation that prevails in Kodiak. Kodiak Hospital remains a community hospital. The operating agreement with Providence Alaska Medical Center does not traMbrm it Into a Catholic Hospital. Rather Kodiak Hospital rrimins a rrmmunity hospital of the City of Kodiak. The mutually axepted tarns of agroement define the practices that will be permitted. The material cooperation few rterilisarion In no Tray knplias approval of the procedure by Providence. I hope that the arrengwnent with the City of Kodiak comes bo coetpietion. I know the community wreii. I was personally involved in working out an agreement with the adtainistraters of the City for the establishment of drviher Francis Shatter - Kodiak. -ter Cod bless. Sincerely In Christ. oop� f;" aFranels T. hurley Archbishop of Anchorage TOTAL P.03 Page 57 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. ExlIMrr c EQUIPMENT LIST Page 58 of 224 Hospital Lease Discussion 0 r~ m CD CD R u` 140mm Idum , , , , 1432= ®440M MOM 14520M , u up moadw LAnd -6-19L- o , b o n 42 M43 MEN am I m ®: ao `. sl tl 7 .Y1 IMMOM O aPAMWT "MiMP4 w m co en ni n, w A n 0 r m m m 0 n ' I1 } 1 1 t 1 W } } + + MW LOWWW" Lw*W Rod 3 ® 1 12 Be as ® t A t!ttl I71 is M 1.79 147 AT 1 a. OID t IM In 9 am rn O N N A y h 0 m r 0 m N Ili O 2OF1►"04wC•494+1 DEPRE MMEC4ATION SCHEDuLu m FORYEARENDI (FORMULA) (FORMULA) (FORMULA) (FORMULA) (FORMULA) N 6lALO4O: (Ca4a.wv.l @.0O4w.a (sand mck (5.9 aw• 1ca4Ao 1072 YIO DW) ffAM dd@M awl ap t y. I Atem Domcb . Mow* DN-amkm Y1D Accam WW owhvmo o O amom Coy LAO 0.4. Erd OA). awt414k.1 Y7O YDY90 D1p.ci>dw� aP.rik.q R.m�kV CTDonedi6119 173.m6m 70 ]1391 711121 31400 Z3A7235.......,, 41Smm 26,51250 1005007.80 TOTAL BULLDWO tgq�pp�00 11375130 A 323At2.m $4,5mm 328.71250`= t100,00�3D au Lana IMPROVEMENT& Amd /IOq�1NYq YmU AWifm Dgnid400n YID Aoo.e.4.l.d book VYm 1116 a4vplal Cod LI4 am EM 0414 awmwsl ymer3mm DW-scom aw.mAm Rwe�Y9 �asiViApSwnrdsIBM 316.34 5 01501 61505 6507 3041? 31.02 33534 000 eulft k6015.u.u-2801 24694 2D 72391 mil 097 00.34 11.14 60.70 IW44 phi k0014r44AU I ion aftim 15 sm 169506 3.33 191m 3005 230 m 4m 01 OLddLV kr0 101124t 904m is 92162 91107 4A9 27450 WAD 761.10 30602 GkodhD1m0 I= 2.70696 10 WIN 124o7 1337 00091 104.44 01333 1502101 p0841p Y�e.mmi 1992 1.172.06 is 122192 122101 651 21600 711.12 351.00 81775 eiOigFWsNnrY 19934CM 70407 to 21193 22001 637 70600 76.94 344.93 44314 aa55n9�r�+t1¢3a. 324m 5 22293 22"1 545 216.16 05.76 26222 407a DUN"wo mmlNM 104 1A0e09 10 30194 3D7W 1320 37162 10.65 63S So 137129 pAliq k7pq.r,u5.7091 70660 5 3074 30719 u.m 34509 law 52060 mco �Y ryy *lm/ 3.do4.75 15 40494 40409 2t.d1 SM90 230.00 66196 3500079 3 40994 007 40 91Aa 2AW.16 919.52 3.27506 ow BuNals iy�p1 6,015.16 la 4114 41100 27.93 734.11 31&16 1A09.27 30m61 DA&V 01pa44a1a41am 2A41A5 7 41'=4 415" 73m 1.96125 010.39 2.641.05 000 etaroYlp..4wdN5.ION 2.9mm 3 410M 415117 02.47 2=00 74231 2,06900 000 41 pmgkNw*wwmdm1N . tAm6o 1s 5124 51200 1006 764500 126-72 ]00.72 130920 pi91p Mp4..wmr 104 2.47140 3 61904 S1m7 Well 1.717.00 M40 2.47340 000 6tiwmp Yt[.rmm61994 011 7.000.11 10 100]04 UKW4 2156 490.96 "o 94 771.4 2A3437 pv91161nwa.mmb 1916Oq 2.7mm is 9!195 91110 1511 143.96 1111-77 "407 IM727 pm1ip Yltaan.A44 1993♦.0 1.420507 30 110006 110616 504 4737 71]5 111180 7.70127 pimawp4-o--rpan IAISLW 20 1000 10016 sm 35.40 74m 10820 1,300aD mm"wp9~RMrk 25017500 to 71096 71000 16.01 900 am 72 20172 IA1S 76 TOTAL 8URDOM W1R0UEYENI7 942.14047 oS1736 $13507620.....t5.3"A2,. :19.00602�...1127.174501 ........�.. ..,......,.. ..:.......... ......,. .66...6..61 ....... LAW u4PROVEMIN76: oAmy Ao%ftAk n UsoU AsOr6m awm•hm 44u41Yy D"N*W m6. YTO AmumLk 4 6a.r vr. n 4p N0. awt5on Coy 404 am E110Dr. aPSitSon YTD0130196 OW-somn D.w4tio- Runny/ aA o N A*oh-4 Om Om 000 000 N 006 n _ TWAL IAIAu&PROVEA&EM Sam 1 .a....sow law tom 6.,1.6.1.$.0 y ........1..p .6...........94 0.00!.. ..wru1,...........a6.6..1 m 3 N x . 0 to r m w rn m . p AUTOMOBILE: f�1 And AopAM- IMakd Ao*i6Ym owed 6 Moro" 0apeaekdlon YM Amarka1a1q Book Vakr N �, p��p. Cod LAW DO* EM f>W Dap6r en Y790Ap60 DprwMwl O.pKrkm Ran�arp N 4 4101 41605 1.37651 $73Aes.00 $0.m $77A0600�- $0m F FuW Van 77.666.00 � FOS Tags 1096411IN16a a.mO-60 4 30M 30266 11667 $4.750.14 7BN 66 f3.6m.m $000 Fa lI F1BO PW W19060k+6 22Am90 4 117796 112710 46376 PA15M $6626 0 110.140.63 613,35077 Fa1dEa4srfJOr-0r4arW167F 6p6Q00 4 e7306 92300 126.01 0m $1,134.36 $1.134.35 64SI504 Ford BaeaWO4kwf4v iFA 0.6010 4 97]06 02= 126.0+1 0.00 $1.13430 $t.13430 $401564 TatY 41AMc66aa $113206.00 $220063 $6t.36077 $6.7{].66 $00.101.35 $27,19068 ..� .uusuaaaw uwaaaasaaa aaaa.aaau.aa auaaaaauu4 uuaas..0 F0IE0 E*LnPMEW AGW 11nful Aa6A61a1 Op"Idab- r7 Downdakon Y70 AaurnAMad Book Vaka Rn OaaaMYal �Oolt 411. 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LEASE AGREEMENT THIS AGREEMENT is made and entered into by and between the KODIAK ISLAND BOROUGH, a municipal corporation of the State of Alaska (hereinafter referred to as'KIB"), and SISTERS OF PROVIDENCE IN WASHINGTON dlbla PROVIDENCE HEALTH SYSTEM IN ALASKA, a Washington non-profit corporation (hereinafter referred to as'Providence'). WITNESSETH: WHEREAS, KiB is the owner of certain real property,and certain equipment located In and about the Premises known as Kodiak Island Mental Health Center('Mental Health Center'); WHEREAS,the Borough, in the interests of sound fiscal management and to ensure the continued availability of a Mental Health Program ("Mental Health Program') in the Kodiak Island Borough managed In a professional and efficient manner, has requested Providence to lease the Premises; WHEREAS,Providence owns and operates a number of health care facilities,that are operated in keeping with its philosophy, mission and values; and WHEREAS, Providence desires to lease the Premises and the Equipment from KIB, subject to the terms and conditions contained herein. NOW, THEREFORE, in consideration of the mutual covenants contained herein, and each of the parties Intending to be legally bound hereby, it is mutually agreed as follows* LEIM AGpfi-Papa t d 12 Page 97 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 1 ,►rQ�FnnFNT TOE• KIB agrees to lease to Providence and Providence agrees to take from KIB, the Premises and Equipment described herein,for the term and upon the terms and conditions set forth in this Agreement. 2 Pte:The real estate which is the subject matter of this Agreement is described as follows: That certain office space located in various buildings located on Lot 5A-1 A,Military Reserve,U.S.Surrey 2538 according to prat i the dparticularly District, Judic al Di trict, Stateof Kodiak ska and more described below. a. Building A, Kodiak Island Borough Mental Health Vices and Dorm Building Apartments C through G. b. Building B, Kodiak Island Borough Mental rough Health offices and Dorm Building Apartments c. Building A, Kodiak island Borough Mental Health Cottages. including ail buildings,appurtenances, and improvements thereto, as well as the existing parking areas as identified on Exhibit A.attached (herein referred to as"Premises'). 3. Mange. th The Equipment which is e subject matter of this Agreement is all of the Equipment presently located in or on the Premises, in an"as is"condition, and all Equipment to be acquired during the term of this Agreement. 41 NR A OF GREEMM- The Premises and Equipment shall be leased to Providence by 108 for a term of approximately ten (10)years,commencing on January 2. 1998, through and including April 20, 2007, unless sooner terminated as hereinafter provided. a•. Provided that Providence is not in default under this base Agreement, Providence shall have the option to extend this Lease Agreement for one additional term LEASE AGAEB*NT-Pap 2d 12 Page 98 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. of ten(10)years by providing KIB with 180 days prior written notice. The extended term shall be on the same terms and conditions of this Lease Agreement with monthly lease payments to be established by negotiation. the kern of this agreement or upon the termination of this 4.3 At the expiration of agreement as provided for herein,Providence shall surrender possession of the Premises and Equipment to KIB as set forth under the terms of this Agreement. . The fixed annual lease payment during the 5. LEMMYMM term of this Agr eement shag be Ten Dollars ($10•oo)payable by Tenant on or before the first day of each contract year in advance, at the office of KlB or at such other place designated by 10B.without any per'demand therefor, and without any deduction or set whatsoever. UjjUjjM Providence shall arrange and pay for all utilities and other 6.services to be famished to the Premises, including gas,fuel oil, electricity, sewer,water, . All utilities shad be prorated between the parties as of to ,and garbage collection the effective lake of this Agreement. y. Uaj: Providence shalt use and operate the Premises for a mental health program and for any additional health care related purposes as may be appropriate. Providence shall operate and maintain the premises under the Alaska Statutes and in accordance with the swards prescribed by the Alaska Department of Health and Social $eNICe5. �B warrants that Providence, upon paying the rent B. and any other charges as provided for in this Agreement and upon performing all other obligations herein,shall quietly have,hold and enjoy the Premises without hindrance. LEAM ABRE MBIT.Paps 3 x112 Page 99 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 9. WAggANTy OF TITLE: KIB hereby warrants that it has good and marketable title to the Premises. 10 T : KIB shall, at its expense, conduct an audit of the Mental Health Center's financial statement as of October 31, 1997. The audit shall be performed according to generally accepted accounting principles by an independent certified public accountant approved by Providence. 11. 11.1 Providence will receive from KIB at Closing current assets defined as prepaids,existing and future rights under the Alaska Community Mental Health Services Act(AS 47.30.520 to.620)and any other state or federal programs,and such other current assets of the Mental Health Center as identified in the audit provided under sections 10. of this agreement. K18 agrees to execute and deliver any and all documents necessary or proper and to cooperate with Providence to accomplish the transfer of these assets. KIB will retain and pay all Mental Health Center liabilities through October 31, 1997, Including, accounts payable and accrued liabilities identified in the audit. K113 will retain and pay noncurrent payables attributable to prior years cost reports related to governmental payers, including those resulting from the filing of the termination cost reports of the Mental Health Center. The excess, if any, of current assets over current liabilities shall accrue to the sole financial benefit of Providence to offset the Mental Health Center operating losses. 11.2 Subject to this Agreement except as otherwise provided during the term of this Agreement, Y48 shall retain all liability for notes payable and other debts, however characterized. LEASE AOREBMeIT.PaV 4 0112 Page 100 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 11.3 KIB agrees to pass onto Providence all revenue sharing or grant funds which it receives from the State of Alaska for the Community Support Program or other mental health related programs..Providence agrees that it will use all such funds for the mental health related purposes for which they are established or provided. 12. INSURANCE: Providence shall,at its expense, maintain throughout the term of this Agreement the following insurance. a. Insurance against loss or damage by fire and such other risks as may be included in the current KIB hazard insurance policy with extended coverage In an amount not less than the replacement value of the Premises from time to time; b. Insurance against claims for personal injury and property damage occurring on the Premises under public liability and malpractice policies with limits of not less than $1,000,000 per person, $3,000,000 per occurrence and$500,000 for property damage arising out of any single occurrence. Such insurance policies may provide for partial self-insurance under the same terms as the policies for mental health programs owned and operated by Providence. KIB shall be named as an additional Insured parry on each such policy of insurance,and certificates thereof shall be furnished to 1913. 13. MAINTENANCE AND REPAIRS: Providence shall cause the Premises to be maintained and repaired In accordance with all state and local codes, and keep the Premises in a condition at all times acceptable to KIB, including but not limited to cleaning, painting,decorating,plumbing, carpentry, grounds care and such other maintenance and repair work as may be necessary. KIB shall provide and pay for any major maintenance and repairs in the amount of$10,000 or more. LEAH AGRMWB4T-Pape 6 of 12 Pagel 01 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 14. CONDITION ON SURD_: Upon termination or expiration of this Agreement, Providence shall surrender the Premises to KIB in substantially the same condition as exists on the date hereof, except for reasonable wear and tear. 15. IMpgOVEMENTS AND ALTERATIQNS Providence shall matte no alterations In, or additions or improvements to,the permanent structure of the Premises without first obtaining the written consent of KIB. Any additions and improvements made to the permanent structure of the Premises shall remain upon and be surrendered with such Premises as a part thereof at the expiration of the term of this Agreement, by lapse of time or as otherwise provided herein. 16 T p : All persons in need of mental health services shall be admitted to the Mental Health Programs without regard to race, creed, color, national origin or financial circumstances. 17 : Providence hereby agrees to indemnify and hold KIB harmless from and against any and all claims and demands for injury or death to persons and damage to property occurring on the Premises during the term hereof, and will defend IQB from any claim of liability on account thereof. Providence shall have no obligation for, and KIB shall Indemnity and hold Providence harmless from and against, any and all liability with respect to any claims resulting from the negligence of KIB or its agents or employees, or any claims arising out of acts or omissions which occurred prior to the effective date of this Agreement. 16.1 GOVERNANCE: The over all management and control of the Mental Health Program will rest with Providence Alaska Service Area Board. It is anticipated that two KiB residents will be eligible to participate as voting members on the Providence Health System in Alaska Community Board VPHSACB'). LL%SE AGREMENT.Pap d d 12 Page 102 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 18.2 An Advisory Board will be appointed by laB with the approval of Providence, and function as liaison between KIB, the Mental Health Program staff, and Providence, and shall be responsive to the concerns of the community regarding the operation of the Mental Health Program. Providence shall keep the Advisory Board updated with respect to matters of Mental Health Program policy and the relationship of the Mental Health Program to the community and the surrounding areas which it serves. Specifically, the duties and responsibilities of the Advisory Board include the following: a. Review any changes In Mental Health Program policy. Policies may be suggested by providence of the Advisory Board; but all require review by the Advisory Board. A policy is defined as a definite course of action as pursued by administration. b. Review any new client care services. c. Review the operating and capital budgets prepared for the Mental Health Program. d Review the rate and charge structures In the Mental Health Program. e Review and comment concerning the quality of care rendered to the clients of the Mental Health Program. f. Review any reports prepared by Providence. g Assist the Administrator in long range planning for the Mental Health Program. h. Assist Providence in determining and deciding all matters of policy relating to the public relations of the Mental Health Program and the relationship of the Mental Health Program to the community and the surrounding area which it serves. LEASE A(3Fi MMT-pop 7 0112 Page 103 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 19. gIG 7 TO, P E : upon reasonable notice, Providence shalt permit KIB, its agents and employees to have access to and to enter the Premises at all reasonable and necessary times to inspect the Premises. 20 1 F ; : 'Event of Default' means any one or more of the following events,whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body. to pay rent required by Section 6.1 or 7.1 when such rent a. Failure becomes due and payable,and continuance of such failure to pay for a period of ten (10) days; or b. Default in the performance, or breach of any other covenant or warranty by Providence under this Agreement, and continuance of such default or breach for a period of thirty(30) days after there has been given, by registered or certified mail, to Providence by IQB a men notice specifying such default or breach and requiring it to be remedied stating that such notice is a notice of default hereunder, or 20.2 If an Event of Default by Providence occurs and is continuing. KIB may terminate this agreement,excluding Providence from possession of the Premises and use its best efforts to lease the Premises to another for the account of Providence, holding Providence liable for the difference between the rentals received and the rentals which would have been receivable hereunder, and take whatever action at law or In equity may appear necessary or appropriate to collect the rent then due and thereafter to become due, or to enforce performance and observance of any obligation, agreement or covenant of Providence under this Agreement. LEnEAQREBMW-PW a a'z Page 104 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 21 l : At any time either Kie or Providence may terminate this es written notice to the other party This Agreement shall terminate Agreement by one� and shall be of one year from the date of such notice without further action by either party not paid prior no further force and effect other than to perform any obligation incurred b to the termination• Agreement proms 22. NQM All notices'demands,or other writings in this be Ivan,made or sent, by either party hereto to to be gam,made or sent,or which may 9 er shall be deemed to have been given, made or sent when made in writing and the oth postage prepaid, and deposited in the United States Mail, Registered 0r Certified Mail, addressed as follows: KIB: Mayor Kodiak island Borough 710 Upper Mill Bay Road Kodiak, Alaska 99615 Providence Chief Executive Providence Health System In Alaska 3200 Providence Drive P.O. Box 198604 Anchorage, Alaska 99519-96604 The address to which any notice, demand or other writing may be given or made Party above provided may be changed by written notice given by such or sent to an Y party as above provided. : Providence may assign this Agreement 23. and may sublease the Premises,in whole or in pan.only with the prior consent of the K'B' Providence may not mortgage or grant a security interest in this Agreement or leasehold interest. Nothing herein will prevent Providence from leasing space 10 LEASE AGRESNUIT.pop 9 of 12 Page 105 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. psychologists or other mental health providers. No assignment for the benefit of creditors or by operation of law shall be effective to transfer any rights to the Assignee. 24 I : When all or any part of the Premises is destroyed or damaged, the KIB may proceed promptly to replace, repair, rebuild and restore the Premises to substantially the same condition as existed before the taking or event causing the damage or destruction. Rent shall be abated in the event of any destruction of, damage to, or taking all or any part of the Premises in proportion to the square footage which is unusable by Providence. If fifty percent (50%) or more of the Premises are rendered untenantable by the aforementioned causes,KIB shall have the right to be exercised by notice in writing,from and after said occurrence,to elect not to reconstruct the Premises, and in such event this Agreement and the tenancy hereby created shall cease as of the date of such occurrence, the rent to be adjusted as of such date. 25. : If the Premises,or such part thereof as in the reasonable opinion of Providence renders the remainder unusable for its purpose, shall be acquired by eminent domain, then this Agreement shall cease and terminate as of the date that possession is taken in such proceeding. Such termination, however,shall not be deemed to deprive Providence of any of its rights to receive compensation by reason of such taking. 26. WAIVER : IqB and Providence,both on their own behalf and on behalf of all others claiming through or under either of them,hereby mutually waive and release all claims, liabilities and causes of action against the other and the agents, servants, employees and invitees of each other,for all loss, damage to or destruction of the Premises or any portion thereof,as well as the fixtures, equipment, supplies and other property of either party located In, upon or about the Premises resulting from fire or other LEASE AOReSAMT•Pap 16 d 12 Page 106 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. rils covered by standard fire and extended coverage insurance,whether caused by the � t to the extent such wave negligence of any of said persons or entities or Otherwise,except of such i would violate or otherwise abrogate the terms insurance covers�ent by�B 27. .�1crrC1 t ANEOUE. Ali covenants and agreements in this Agreement or Providence shad bird their successors and assigns, whether so expressed or not. In ovision in this Agreement sou be invalid,i43egal or unenforceable,the validity, case any pr be affected or legality and enforceability of the remaining provisions shall not in any way impaired thereby. None of the terms, conditions, covenants or provisions of this Agreement can be waived by either party except by appropriate written instrument.The waiver by either party or any breach of any term, condition, covenant or provision herein covenant,or contained shall not be deemed a waiver of the same of any terra.condition. provision herein contained or of any subsequent breach of the same or any other term. ltion.covenant or provision herein. This Agreement shall be construed in accordance toad ress or Implied, shall with the taws of the State ofi Alaska. Nothing in this Agreement, � and assigns, any glue to any person,other than the parties hereto, and their successors benefit or other legal or equitable fight, remedy or claim under this Agreement. IN WITNESS WHEREOF the parties have respective'►executed this Agreement the day and year written below- SISTERS WASHI OF PROVIDENCE VIDENCE KODIAK ISLAND BOROUGH WA,acHINGTON NTER ALASKA ME t BY By 4rome M. Seiby, M Tit d DATE: DATE: �EAa T_pop11of12 Page 107 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. STATE OF ALASKA j ss THIRD JUDICIAL DISTRICT 1997, THIS IS TO CERTIFY that on the 24 day of before me, a Notary Public In a Jerome M State��y ° m known commissioned j� t Maya of the as such, personally apps to me to be the person who executed the above KODIAK ISLAND BOROUGH�m°'�"n to me that and foregoing instrument on behalf of the municipality, and who acknowledged he executed the same as a free act and deed°rfarmiled to him by for the I3°rou�Ass mbY es therain stated and pursuant to the authority g WITNESS my hand and notarial seal the day and year first above in this Certificate written. Notary ublic in a for A � My Commission Expires: 0 ATTEST: STATE OF ALASKA )ss.. THIRD JUDICIAL DISTRICT day of 1997, THIS IS TO CERTIFY that on the - and sworn before me,a Notary Public in and for the State of Alaska.duly commissioned 10 me known to as such.Personally appeared of SISTER5 OF PROVIDENCE IN WASHINGTON 6Wa be the 0 person PROVIDENCE ...ASKA MEDIC gCkENN R behalf of the to corpo�on, and who executed the above and arego the said entitY agm°�ged to me that he executed the same as a tree act and dead canted t him by for the uses and purposes therein stated and pursuant to the authority 9 the Board of Directors. and notarial seal the day and year first above in this Certificate WITNESS my hand written. Notary Public in and for Alaska My Commission Expires: 4702VlW-001 LEASE AORE9AW'Paw 12 d 12 Page 108 of 224 Hospital Lease Discussion 0 -o o�'i� EXHiCir � v ••e�'ti M Y Ml�I��W�w� OF 7A •� ~r F��w•rwr�v��T C N _ /«s` 0 1,. cCAN awn► p4�.:�� .9y►'«5 AIM ol CD I / � I N z ' 0 w r CD a! D C) cl.an9:g«SYl+lx � n e. w ry C ry Ty Dry .W 66�s 1�M.0�WI fflA 1494 l�.®r! 14N ® 1790 916 LS746n 1.Ow" »>t aerow.r. IAM144 lalAtl tOt3y4 4'74.7D'1 17$7W ss• 4 471 1 t741.7N x,47 m ar"I 4754•X9 _ _ Iq w19961d6 4nT,7N 'A.M.7N Wkm Rb.m 1 _ ;7349 47.4]7 T" ;Sim—,A, yp374 ]74.'104 19L. 10W.N7 1484AM wd Kb 1.44n! I.1s4T14 1 Ltd 1 T-NA.6Nsano t.mn4 47aA97 MW 7. . y�r®Pd41® 1W11C $ _ - Tdfrp7d460 290aA00 L11Aa01 t krsalHY�YIa� ly9 ;�n.�p T/9,5I4 Y6W 19F7Y6 7,°04.111 90L477 I.96t;1n 14758At1 (I V&ln) 74 td.dwgad 976 s1ft3Yt tun'" °340496 t1J�n51 1a130Ar1 1 n19p7 IO,x07]ba M 1�4� 1 n4=-•s- n141.9u 1— �.at►1 tY CriJ la.dlFgOd - a49H x191 111/1.179 a,75C9H X007 17.191.211 +mss 1 S t7,1713u 119.x111 Yrrfr lM7+dw+Pd�4W � y946 xj77,yjt 10./04.199 4749306 1.000.004 17A7.911 I9,a4i 971761 73T1+�4 pa9•pm Onim 47" 41m wvw 0 7bw41s7 Am a1m Ira gd.4.r 13pgµp 47m 7paa3fl 737$°x9 gra9d.w r d wY® .. 21mm 13n.Ra XVIUa1 0" 4.4" L7riW7 Pd 4aswakMMlq L�°B0 Ira a1a apw CyYbl Grd SQL" 1w+r7s 9aaitAO 1LOM W. 400,x00 340" it I a low xs<I.4sa 574396 n4.au SWAN r �a9m xan 414¢M „paru ZOO: n Trrordrls.l6�dd afro -+ 7lewTlrr 7M Sl�a+� r�°a�ym10+i6erw:rwd�wo.9�pL Sr'4.r9w1199 +'�f" R1 o n N m N n AGENDA ITEM #2.c. Pf4 AMENDNEn A e� TWS=w&um to the Lea's Agretmed by and bcbwm KODIAIC 1SUM BORWCU(KM)Md 010 SrSTRRS OF PTIOVRFWCE IN WASMOTON dWll PROVIDENCE WALTH SYSTEM IN ALASKA.a Washingwn nos-tit cogxw'don (herelnafDet rt fezred to as"Provide=)is MWk dw vu Aux%Aueut to the Lean Apfe®oeot bowel,the parties. 'lbis Ate is herby iiaootporated WD fast Ar—W t by rafare and supa ades NW provisions of that A&=1eat the ate Cast M to this Anr Wmeat. Eneffi as madifled by dt%and other Ameadpaenh,dw Loan AgaommA mull"in U1 f0mc and Offm. Community Mental Health Canter A.I. Provi&n"llalth Sysum in Alaska 048-4),at its solo dimetioo,*A establish a oon mttdty mental health proms tbat w111 provide me al houRb mul behmdoW MO&Ine=.vices to the communhy of Kodiak Island. A.2. PUM shall operabs ib Kodiak Com"mity mental Hahh progeams In gr,corda w with the PHSA to ut%anal valuaa. AX MSA dealt bane full aeMMIability fm the operations►bWimt,Ad6w ,etc.of the Kodiak Coe7tm dW MeaW Hedth peogmw . A4. No Ins thaw amuWly,PHSA shall prepare.a awtement of t!eveaue god rxpeuarn for the Kodiak C=mmhY MOW Health proSnnL Any deSeira WOW to op"n8 Smw pwr=s dull be the r, q msiH1ity of Ka payable within 45 days of the cad of the ,"al yaar. XM sionil have the right to use its portion of the od lVlb 80er80 by ZtMe hospital es&v,,THW in sncdon 8.2 of this agree moM to support ddi t:rebored to the Kodiak CoBtunity MenW Halttt • In the ettre:d tbnt tbare are inw fieia t iitnds by the hospitd boa t° mvpUt tha Kodiak Commtmity Mental Health programs is my pt�yw,KiR'r IWAlfty dAU accilttr 41IM4 rho PIMA06 i yem Wt r0fits$'om h"W" till 0 to m ort opetadone. fftttene are imat3leieg2 fiords from >?�� KTR's liabft rdwd to late Kodiak CommmdtY Mental Health ptoffWO for two 000seo d"yalm KIB&a be"quieed to reambione PHSA in fall far all dedwits wwawru,gwHb1a45 days of the and of to&x*nd 6aod ywc. A.S. La nCOlgtltt0a that KIB will be acWWARble for tioa"W WW(dWW zda"d to the oammmity�bWth pima,PHSA shall We$"die mwtd health VWV=opera*&budgat to XM aaswally for i b review and • At" mi»IMUM of aim per quKtrr,PHSA sirup report the acPIA fi aztcial Puftm°r`os of do MOW boa*proms to&W. Page 111 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. A6. PHSA dm fl maintoin stpataI accouati%tv=ds and Goo stwomente for the Krsft Community A+wW Health programs and shalt provide MB wish& Kodiak Comity MMW Health nrograas'year-end trnaacial stetaaeats. A.7. KCB wars by PHSA rw&Wshwg new Kodiak Community Mental Health programs sad by eataft into this ag me mem for KM to lawn f nanandal accountability for iho PHSA Kodiak Community Mental Health p mpcaas does M I coaoh Mw oommkowa cc responsimlitim of M undo pdor agresaw a, Includitrg bat nut HMIMI m flnaodog and employment agreMtaats,and tbas KIR altall defod and hold MA hamlest for may cidum Liabilities and exponsee arising from or in Mw way related to aq prim agiecmeM of KM. A.S. The lrruu of this Ametrdmont ahall continua to the extent PHSA opeaft Comnatmity Mental Haft prognnas iu Kodiak. At any time eMa KIB or PUSA may Iermiadtie this Ameaftmt by one year's%titan wdo to do other party. This AmeodnmW Sloth tarnlbM one yew froa the dme of mch Welke without Awam action by d6w patty and shall be of no firrtha force and effect otha Ibex to VMkrm wW obHptkm Imwied but not paid prior to die wa nirtedan. SIGNATUMS: SISTER§OF PROVID15 IN WASHINGTA We Providence Kodiak Island Medical C le BY.— leter Bigelow Chief Evmdbo Vice President - Health Care Operations PmvkMnw H*MM Z3MImn in Alaska Washington/Alaska Data: KODIAK ISLAND BOROUGH 811' Jerww iby Its: Borota6h Mayor Kodiak Mond Daough nxt11: l-- ATTEST: ' C Tina Seelinger, Acting Borough Clerk Page 112 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. MENTAL HEALTH SERVICES THIS AGREEMENT is entered into by and between the Kodiak Island Borough, Alaska ("Borough")and Sisters of providence of Washington,dba Providence Health Systems of Alaska eccontractoe) for the purpose of setting forth terms and conditions pursuant to which the Contractor shall be contracted to provide mental health services. WITNESSETH Section I. INTENT OF AGREEMENT. The Contractor is hereby contracted to provide a Mental Health in Schools Program as described in the attached collaborative plan and fulfill all of the mental health services required by the attached grants from the State of Alaska Department of Health and Social Services for community mental health support program services. Contractor agrees to be bound by the terms and conditions of the attached collaborative plan and grants. Section 2. SCOPE OF WORK. During Fiscal Year 1998, the Contractor will provide the staffing required to deliver the services specified in the mental health in the schools collaborative plan and the grants from the State of Alaska. The Contractor will complete all documentation, billing and reporting as specified. The Borough will submit the appropriate billings when completed by the Contractor and pass the receipts through to the Contractor- Contractor acknowledges that documentation which is untimely or incomplete may jeopardize or delay payments to the Contractor. Any disallowed expenses will accrue to the Contractor. During Fiscal Year 1999,the Contractor will provide the staffing required to deliver the services specified in the Mental Heath in the Schools collaborative plan. State grants will be managed directly between the Contractor and the State with no Borough involvement. A monthly activity report of all activities of the Contractor will be submitted to the Borough Mayor by the I&day following the end of each month. Section 3. TERM. Unless earlier terminated, this Agreement will remain in effect beginning January 2, 1998 and ending June 30, 1999. Section 4. COMPENSATION. As compensation for all services rendered under this Agreement, Contractor shall be paid $33,300 per month by the Kodiak Island Borough for the school program and all funds billed and received from the applicable state grants for the term of this Agreement. Said compensation shall be paid in equal installis of $33,300 on the first day of each month from January, 1998 through June, In addition,all state funds will be paid within five days of receipt from the State of Alaska. Page 113 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. Mental Health in Schools Agreement Page 2 of 2 IN VMMSSETH WHEREOF the parties have executed this Agreement on this day of--V-&UmLW-• 1997. SISTERS OF PR ENCE KODIAK IS BOROUGH OF WA N one M. Selby,Ma or rest five ATTEST. (4 10L. Borough C erk Page 114 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. C lg9y-o7 ADDENDUM TO LEASE AGREEMENT August 20,2003 This addendum is made and entered into by and between the KODIAK ISLAND BOROUGH,a municipal corporation of the State of Alaska(hereinafter referred to as "KIB")and PROVIDENCE HEALTH SYSTEM-WASHINGTON(formerly known as Sisters of Providence in Washington)d/b/a PROVIDENCE HEALTH SYSTEM IN ALASKA,a Washington non-profit corporation(hereinafter referred to as"Providence"). For the purposes of this addendum"Providence"includes Providence Alaska Medical Center and Providence Kodiak Island Medical Center. Purpose: This Addendum is entered into between"Providence"and"KIB"in support of continued assess to hospital services within the Kodiak Island Borough. Agreement: In consideration of the mutual covenants contained herein,and each of the parties intending to be legally bound hereby,it is mutually agreed as follows This is an Addendum to the Lease Agreement dated April 21, 1997: (a) "Providence"shall make rent payments to"KIB"during the term of the Lease as described in section 6.1 MONTHLY LEASE PAYMENT SCHEDULE. For the Lease Year commencing 2004,"Providence"shall pay an additional lease payment of IS 1,300,000 for use of the hospital facilities owned by"KIB". (b) Unless otherwise agreed by the parties,"Providence"will make the additional lease payment as a single payment,without demand and without setoff,prior notice or demand,at a location designated by the Borough. (c) Thirty(30)days prior to the commencement of each subsequent lease year, "Providence"and"KIB"will negotiate the additional lease payment for the following year. "Providence's"obligation to make any additional lease payments to"KIB"shall be null and void and"KIB"agrees to waive any and all of it's rights(if any)to receive any such additional lease payments from"Providence" upon the occurrence of any or all of the following: 1. Upon"Providence"dissolution,if no successor corporation is organized for at least thirty days thereafter; 2. Upon the loss by"Providence"of any license or certification required by State or Federal Law or Regulations to operate a hospital in Kodiak,Alaska; 3. Upon bankruptcy, insolvency or receivership of"Providence"; Page I of 2 Page 115 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 4. In the event"Providence",in its sole discretion, fails to obtain disproportionate share funding from the Department of Health and Social Services, State of Alaska sufficient to fund the foil-value of the lease payment described in section(a)of this addendum;or 5. In the event"Providence"Medicare revenue declines by more than 50 percent from one year to the next. 6. In the event that KB fails to make payments required to Providence Kodiak Island Medical Center or Providence Alaska Medical Center pursuant to the terms and conditions of the Intergovernmental Agreement dates as of the same date hereof. In Witness whereof the parties have respectively executed this Addendum the day and year written below. PROVIDENCE HEALTH SYSTEM- KODIAK ISLAND BOROUGH WA N dlbla PROVIDENCE HEATH YS M IN ALASKA By: By: �nn1+rXr J�� .► av� Title.Al Parrish VP/CEO Providence Title: A&m tJn a P 1— Health System—Alaska Date: August 20,2003 Date: Alftf .�orou�i t?IerK $' D 1P0 ac �• s SKA* %q Page 2 of 2 Page 116 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. C- (�7-07 RECEIVED 1 Providmice MAR 1 8 2003 Medical Centel KIB MANAGER Critical Access Hospital Community Education Plan 1. The principal effort to educate and involve the community of Kodiak in discussions and decisions regarding the role and responsibilities of the Kodiak Island Borough and the Providence Kodiak Island Medical Center in providing health care services shall include,but not limited to: a. Monthly meetings of the Providence Health System Kodiak Island Service Area Board. These meetings include both public and closed executive sessions. b. Joint meetings and work sessions of the Providence Health System Kodiak Service Area Board and the Kodiak Borough Assembly. These meetings occur as necessary... c. The utilization of media available to the general public,such as newspaper and radio. 2. The times of these meetings and public announcement are a matter of public record in both the governing bodies' minutes and in the Public Information files at PKIMC. `S%p►ND BO LMI a Carl on Date: dink sland Borough Manager 4�gskA��q Ui gel , Donald Rush/'D Providence Kodiak Island Medical Center CEO Page 117 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. Clg97-o04 ADDENDUM TO LEASE AGREEMENT August 20,2003 This addendum is made and entered into by and between the KODIAK ISLAND BOROUGH,a municipal corporation of the State of Alaska(hereinafter referred to as "KIB")and PROVIDENCE HEALTH SYSTEM-WASHINGTON(formerly known as Sisters of Providence in Washington)d/b/a PROVIDENCE HEALTH SYSTEM IN ALASKA,a Washington non-profit corporation(hereinafter referred to as"Providence"). For the purposes of this addendum"Providence"includes Providence Alaska Medical Center and Providence Kodiak Island Medical Center. Purpose: This Addendum is entered into between"Providence"and"KIB"in support of continued assess to hospital services within the Kodiak Island Borough. Agreement: In consideration of the mutual covenants contained herein,and each of the parties intending to be legally bound hereby,it is mutually agreed as follows This is an Addendum to the Lease Agreement dated April 21, 1997: (a) "Providence"shall make rent payments to"KIB"during the tern of the Lease as described in section 6.1 MONTHLY LEASE PAYMENT SCHEDULE. For the Lease Year commencing ►"providence"shall pay an additional lease payment of S 1,300,000 for use of the hospital facilities owned by"KIB". (b) Unless otherwise agreed by the parties,"Providence"will make the additional lease payment as a single payment,without demand and without setoff,prior notice or demand,at a location designated by the Borough. (c) Thirty(30)days prior to the commencement of each subsequent lease year, "Providence"and"KIB"will negotiate the additional lease payment for the following year. "Providence's"obligation to make any additional lease payments to"KIB"shall be null and void and"KIB"agrees to waive any and all of it's rights(if any)to receive any such additional lease payments from"Providence" upon the occurrence of any or all of the following: 1. Upon"Providence"dissolution,if no successor corporation is organized for at least thirty days thereafter; 2. Upon the loss by"Providence"of any license or certification required by State or Federal Law or Regulations to operate a hospital in Kodiak,Alaska; 3. Upon bankruptcy,insolvency or receivership of"Providence"; Page i of 2 �I Page 118 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 4. In the event"Providence",in its sole discretion, fails to obtain disproportionate share funding from the Department of Health and Social Services,State of Alaska sufficient to fund the full-value of the lease payment described in section(a)of this addendum;or 5. In the event"Providence"Medicare revenue declines by more than 50 percent from one year to the next. 6. In the event that KIB fails to make payments required to Providence Kodiak Island Medical Center or Providence Alaska Medical Center pursuant to the terns and conditions of the Intergovernmental Agreement dates as of the same date hereof. In Witness whereof the parties have respectively executed this Addendum the day and year written below. PROVIDENCE HEALTH SYSTEM- KODIAK ISLAND BOROUGH WA N d/b/a PROVIDENCE HEAL YS M IN ALASKA By: By: Title: Al Parrish VP/CEO Providence Title: A&ca rA Health System—Alaska Date: August 20,2003 Date: Allen' wud� s,J D 90 R OG Page 2 of 2 Page 119 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. C- W-07 RECEIVED Providence I Kodiak Island MAR 1 8 2003 Medical Centelp K18 MANAGER Critical Access Hospital Community Education Plan L The principal effort to educate and involve the community of Kodiak in discussions and decisions regarding the role and responsibilities of the Kodiak Island Borough and the Providence Kodiak Island Medical Center in providing health care services shall include,but not limited to: a. Monthly meetings of the Providence Health System Kodiak Island Service Area Board. These meetings include both public and closed executive sessions. b. Joint meetings and work sessions of the Providence Health System Kodiak Service Area Board and the Kodiak Borough Assembly. These meetings occur as necessary. c. The utilization of media available to the general public,such as newspaper and radio. 2. The times of these meetings and public announcement are a matter of public record in both the governing bodies' minutes and in the Public Information files at PKIMC. \SVAND 80 ) J a Carl on _ 03 Date: diak stand Borough Manager Am gskA 19 1 `Pa'k 3 Donald Rush D e: Providence Kodiak Island Medical Center CEO u Page 120 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. Amendmeraf ADDENDUM TO LEASE AGREEMENT This addendum is made and entered into by and between the KODIAK ISLAND BOROUGH,a municipal corporation of the State of Alaska(hereinafter referred to as "KIB'j and PROVIDENCE HEALTH SYSTEM-WASHINGTON(formerly known as Sisters of Providence in Washington)d/b/a PROVIDENCE HEALTH SYSTEM IN ALASKA,a Washington non-profit corporation(hereinafter referred to as"Providence"). For the purposes of this addendum"Providence"includes Providence Alaska Medical Center and Providence Kodiak Island Medical Center. Purpose: This Addendum is entered into between"Providence"and"KIB"in support of continued assess to hospital services within the Kodiak Island Borough. Agreement: In consideration of the mutual covenants contained herein,and each of the parties intending to be legally bound hereby,it is mutually agreed as follows This is an Addendum to the Lease Agreement dated April 21, 1997: (a) "Providence"shall make rent payments to"KIB"during the term of the Lease as described in section 6.1 MONTHLY LEASE PAYMENT CHEDULE. For the Lease Year commencing ZP "Providence"shall pay an additional lease payment of$1,300,000 for use of the hospital facilities owned by"KIB". (b) Unless otherwise agreed by the parties,"Providence"will make the additional lease payment as a single payment,without demand and without setoff,prior notice or demand, at a location designated by the Borough. (c) Thirty(30)days prior to the commencement of each subsequent lease year, "Providence"and"KIB"will negotiate the additional lease payment for the following year. "Providence's"obligation to make any additional lease payments to"KIB"shall be null and void and"KIB"agrees to waive any and all of it's rights(if any)to receive any such additional lease payments from"Providence" upon the occurrence of any or all of the following: 1. Upon"Providence"dissolution,if no successor corporation is organized for at least thirty days thereafter, 2. Upon the loss by"Providence"of any license or certification required by State or Federal Law or Regulations to operate a hospital in Kodiak,Alaska; 3. Upon bankruptcy,insolvency or receivership of"Providence"; Page 1 oft 6 Page 121 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 4. In the event"Providence",in its sole discretion, fails to obtain disproportionate share funding from the Department of Health and Social Services,State of Alaska sufficient to fund the full-value of the lease payment described in section(a)of this addendum;or 5. In the event"Providence"Medicare revenue declines by more than 50 percent from one year to the next. 6. In the event that KIB fails to make payments required to Providence Kodiak Island Medical Center or Providence Alaska Medical Center pursuant to the terms and conditions of the Intergovernmental Agreement dates as of the same date hereof. In Witness whereof the parties have respectively executed this Addendum the day and year written below. PROVIDENCE H TH S EM- KODIAK ISLAND BOROU H WASHINGTO d!h/a P ENCE HEALTH T ALASKA By: By; Z/ r � Title: ' ? sz t LL--rr� �rlOrUuf'� t'�e/% p `SAD eOsp 0. V q�gSxa*_%q b0J Page 2 of 2 flu Page 122 of 224 Hospital Lease Discussion AGENDA !TEN! #2.c. rrv.u 7A Amendment"A" Hospital Contract This amendment to the Lease Agreement by and between Kodiak Island Borough(KIB)and Providence Health System—Washington dlbla Providence Health System in Alaska, a Washington non-profit corporation(hereinafter referred to as"Providence")is made as an Amendment to the Lease Agreement between the parties.This amendment is hereby incorporated into that Agreement by reference and supercedes any provisions of that Agreement that are contrary to this Amendment.Except as modified by this and other Amendments,the Lease Agreement remains in full force and effect. Section 34 of the contract is deleted and replaced as follows: 34.1 Governance:The overall management and control of the Hospital will rest with Providence Alaska Region Board. It is anticipated that two KIB residents will be eligible to participate as voting members on this Board.One member shall be appointed from the hospital medical staff and one member shall be a lay person from the community. 34.2 An advisory Board meeting the requirements of 7AAC 13.030(a)will be appointed by Providence to provide input to the hospital staff,the medical staff,and Providence Alaska Region Board about the concerns of the community regarding the operation of the Hospital and to undertake the responsibilities set out at 7 AAC 13.030(b)and(c). One KIB Assembly member shall be appointed by Providence as a full voting member of the advisory board,and Providence shall give KIB the opportunity for review and comment before appointments to the advisory board are made. Providence shall keep the advisory updated with respect to matters of Hospital policy and the relationship of the Hospital to the community and surrounding areas which It serves. EFFECTIVE DATE of this Agreement is fttg 11 . 2002 PROVIDENCE H T SYSTEM- Kodiak Island Borough: WASHINGTO ba vidence (�� Health Syst in ka: Pat Carlson �- xm Its: "R&C-0 up �. M e.,1,o.<a�1'— Its- R.+, Borough McWager.Kodiak lslbhd Borough ChieF Executive,Pr idence Realth System-Alaska Date: (r arch u .zoo Date: 3 r?Z Address: Address: Kodiak Island Borough_ Providence Health Sy is em in Alaska 714_Mill Bay Road _ 3200 PEgvldence Drive Kodiak,Alaska 99615 _ Anchorage,Ala k 99519 �`�-\SAD 901P0 X00 C Gn'-L Attest: '•+ � Borough CIEWk L-D 9I 4A* 1 q b'� Page 123 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. V--n7.4 99-ad Amendment"B" Mental Health Center Contract This amendment to the Lease Agreement by and between Kodiak Island Borough (KIB) and Providence Health System—Washington dlbla Providence Health System In Alaska,a Washington non-profit corporation(hereinafter referred to as"Providence")is made as an Amendment to the Lease Agreement between the parties.This amendment Is hereby incorporated into that Agreement by reference and supercedes any provisions of that Agreement that are contrary to this Amendment.Except as modified by this and other Amendments,the Lease Agreement remains in full force and effect. 1. Section 18 of the contract is deleted and replaced as follows: 18.1 Governance:The over all management and control of the Mental Health Center will rest with Providence Alaska Region Board. 18.2 An Advisory Board meeting the requirements of 7 AAC 71.030(a)will be appointed by Providence to provide input to the Mental Health Center staff and Providence Alaska Region Board about the concerns of the community regarding the operation of the Mental Health Center and to undertake the responsibilities set out at 7 AAC 71.030(c)and(d). One KIB Assembly member shall be appointed by Providence as a full voting member of the advisory board,and Providence shalt give KIB the opportunity for review and comment before appointments to the advisory board are made. Providence shall keep the advisory board updated with respect to matters of mental health center policy and the relationship of the Mental Health center to the community and surrounding areas which it serves. 2. Sections AA and A.5 of Amendment A to the contract are deleted and replaced with a new section A4 as follows: ►.4 No less than annually,Providence shall prepare a statement of revenue and expenses for the Kodiak Community Mental Health programs.Any deficits related to operating these programs shall be deducted from the net income generated by the hospital before calculating the KIB/Providence split.In the event that there are insufficient funds generated by the hospital operations to support the Kodiak Community Mental Health programs in any given year,the liability shall accrue against the succeeding years net Income from hospital operations. P`fez. Page 124 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. �r EFFECTIVE DATE of this Agreement Is January.2002 PROVIDENCE HEALjkM5,kSTEM- Kodiak Island Borough: WASHINGTON ro dente Health Syste By: � �! �l Cd�iv� By: Pat Carlson Q g Bruc its: I , Borough Ma alter,Kodiak Isla Borough lef Executive.Pr idence Yealth System-Alaska Date: rc Date: t' 3&2 Address: Address: Kodiak Island Borough Providence Health System in Alaska 710 Mill Bay Ro@d 3200 ProvidengR Div Kodiak,Alask 9615 Anchorage.61aska 19 Attest: 15LMD @O DowiLN- 1PO p GO Borough Clew C``'"l� act .� .; t x� Ska*Agb'S Mej Page 125 of 224 Hospital Lease Discussion AGENDA DEAR #2.c. x96P 6 43 CY 7C7 R MENTAL HEALTH SERVICES THIS AGREEMENT is entered into by and between the Kodiak Island Borough, Alaska (`Borough")and Sisters of Providence of Washington, dba Providence Health Systems of Alaska ("Contractor") for the purpose of setting forth terms and conditions pursuant to which the Contractor shall be contracted to provide mental health services. WITNESSETY1 Section 1. INTENT OF AGREEMENT. The Contractor is hereby contracted to provide a Mental Health in Schools Program as described in the attached collaborative plan and fulfill all of the mental health services required by the attached grants from the State of Alaska Department of Health and Social Services for community mental health support program services. Contractor agrees to be bound by the terms and conditions of the attached collaborative plan and grants. Section 2. SCOPE OF WORK. During Fiscal Year 1998, the Contractor will provide the staffing required to deliver the services specified in the mental health in the schools collaborative plan and the grants from the State of Alaska. The Contractor will complete all documentation, billing and reporting as specified. The Borough will submit the appropriate billings when completed by the Contractor and pass the receipts through to the Contractor,, Contractor acknowledges that documentation which is untimely or incomplete may jeopardize or delay payments to the Contractor. Any disallowed expenses will accrue to the Contractor. During Fiscal Year 1999, the Contractor will provide the staffing required to deliver the services specified in the Mental Heath in the Schools collaborative plan. State grants will be managed directly between the Contractor and the State with no Borough involvement. A monthly activity report of all activities of the Contractor will be submitted to the Borough Mayor by the I&day following the end of each month. Section 3. TERM. Unless earlier terminated, this Agreement will remain in effect beginning January 2, 1998 and ending June 30, 1999. Section 4. COMPENSATION. As compensation for all services rendered under this Agreement, Contractor shall be paid $33,300 per month by the Kodiak Island Borough for the school program and all funds billed and received from the applicable state grants for the term of this Agreement. Said compensation shall be paid in equal installments of $33,300 on the first day of each month from January, 1998 through June, 1999. In addition,all state funds will be paid within five days of receipt from the State of Alaska. Page 126 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. Mental Health in Schools itgrcement Page 2 of 2 IN WITNESSETH WBEREOF the parties have executed this Agreement on this 2t, day of Vaa,..Gcz 1997. KODIAK ISLAND BOROUGH SISTERS OF PR ENCE OF WASHIN N kgome M. Selby,Mayor rese tive ATTEST �iVl6L• Borough C erk Page 127 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. r j rR AMMMMENM A 'Phis ameadmant to the ease Agreement by and Wthveen KODIAK ISLAND BORWC,H(KIB)and the SI(ITFR S OF PROVIDENCE 1N WASIM CGTON&WIL PROVIDENCE HEALTH SYSTEM IN ALASKA,a Washington non-profit corporation (hereinafter referred to as`Trovidettee)is mWe ds au Aulcudwcat to the Lcase Agreement between the parties. This Amendment is hereby Wcorporated into the Agmeme nt by reference and supersedes my provisions of that Aueement that are contrary to this Amendment. Except as modified by this and other AaienAWnts,the U-nac Agnmwcut ruuLWM iu ft,ll force and of ct. Community Mental Health Ceuta A.I. Providence IIealth Syytcm in Alaska(PHSA),at its solo discretion,shall establish a community mexttal health program that will provide mental hratlth oral behavioral medicine services to the community of Kodiak Island. A.2. pHSA shall operate its Kodiak Community Mental Health programs in accordance with the PHSA n"un aud values. AX PHSA shall have full accountability for the operations,billitig,staffing,etc,of the Kodiak Community Mental Health programs. A.4. No less than antnually,PHSA shall preparea statement of revenue and rat mms for the Kodiak CommtunO Mental Health propgms, Any sh deficits related to operating these programs all be mvnnsiNlity of KIB,payable within 45 days of the end of tho fiscal year. KID shall have the right to use its portion of the oU prol is gmWamd by ft bmpital as&-.oTiLvd iu soctian 8.2 of this agreement to support deficits rebated to the Kodiak Community Mental Health Programs. In the event that thm arc i nsuffte:ient funds ge witted by the hospital operations to suepport rho Kodiak Community Mental Health programs is any given yeff,KTR's liability shall accrue W*xa dw ptuceedbig years net profits from hospital opaadom. If there are insuftideat funds from bespital operations to support KTB,s liability related to The Kodiak Community Iviental Health programs for two oo86scutiva years,K1B shall be loquiresd to reimlxirse PNSA in fnll for all deficits uutataetdb&within 45 days of the and of the=ond fiscal year. A.S. in recognition that KM will be accountable for tinancmi shuor&ils related to the community mental health proVmv,PT4gA xhall presatt the mental health propm operating budget to?aB annually for its review and approval. At A mWmum of once per gwcW,PHSA bball report the actual financial performemce of the mental health program to&W. Page 128 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. A.b. PHSA sbaU maiataln separate accountiug icwrds and financial statements for the Kodiak Community Menial Health programs and 91mil provide KIB wish the Kodiak Community Memel Health programs'yearend financial stetzments. A.7. KlB walr=by PHSA establishing new Kodiak Community Merl Health proV=and by entering into tbia agreement for KIS w l,uvo fiaaruial accouutshility fnr the PHSA Kodiak Community Mental Health programs does not brca&my catnmitna m or responsibiliHes of KIB tinder prior ammmetrts, Including but rA*liutitad m financing and omployment agreemema,and that KiR JmU defend sad hold 1'i-ISA harmless for att<y cluing.Liabilities and expenses mixing from or in any wiy related to any prior a9mcmcnls of KW- A•8. The tcrws of this Amcadmont shall"continue to the extad PHS A operates Community Mental Heel4t progams iu Kodiak. At any time either KIB or PHSA may tamminate this Amendment by one year's written nodes to dX tribe'party This Ammo meat shall tarrminate one year from the date of such notice vdthottt futthcr action by either pmiy and shall be of no further force and effect other than to perform airy obllpdun iLwwred but not paid prior to the teminstion. SIGNATURES: SISTERS OF PROVIDENCE IN wASHiNe I-A d/b/a Providence Kodiak island MpAlcai Con By:_ eter Bigelow Its• hief F+,6011duft Vice President - Health Care Operations Frovidence Health Syatnrtt In Alaska Washington/Alaska Date: KODIAK ISLAND BOROUGH gy: CL' Jerome by Its: Borough Mayor Kodiak island Vorough Hare: l 7 ATTEST: - Loa 22 7 Y �I Tina Seelinger, Acting Borough Clerk Page 129 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. C #Ado, /2olo r AMENDED AND RESTATED LEASE AGREEMENT THIS AGREEMENT is made and entered into by and between the KODIAK ISLAND BOROUGH, a municipal corporation of the State of Alaska (hereinafter referred to as and Providence Health System - Washington d/b/a Providence Health System in Alaska, a Washington non-profit corporation(hereinafter referred to as"Providence"). WITNESSETH: WHEREAS, KIB is the owner of certain real property consisting of a Health Care Facility together with improvements located thereon,and certain Equipment located in and about the Premises known as Kodiak Island Hospital and Care Center, (hereinafter referred to as "Hospital"); WHEREAS, the KIB, in the interest of sound fiscal management and to ensure the continued operation of the Hospital in a professional and efficient manner, has requested Providence to lease and operate the Hospital; WHEREAS, Providence owns and operates a number of health care facilities, that are operated in keeping with its philosophy, mission and values;and WHEREAS, Providence desires to lease the Premises and the Equipment from KIB, subject to the terms and conditions contained herein. NOW, THEREFORE. in consideration of the mutual covenants contained herein, and each of the parties intending to be legally bound hereby,it is mutually agreed as follows: 1. AGREEMENT TO LEASE: KIB agrees to lease to Providence and Providence agrees to take from KIB, the Premises and Equipment described herein, for the term and upon the terms and conditions set forth in this Agreement. 2. PREMISES: The real estate which is the subject matter of this Agreement is described as follows: Lot Two-A (2-A) Hospital Subdivision according to Plat 95-03, located in the Kodiak Recording District,Third Judicial District,State of Alaska. Including all buildings appurtenances, and improvements thereto, (herein referred to as `Premises"). Notwithstanding anything to the contrary, Providence recognizes and acknowledges that KIB may lease space to other entities contingent upon available space and advance approval from Providence.. 3.1 EQUIPMENT: The Equipment which is the subject matter of this Agreement is all of the Equipment presently located in or on the Premises, in an "as is" condition, at the inception of this Lease Agreement and all Equipment subsequently acquired directly by the KIB. r Page 130 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 3.2 NEW AND REPLACEMENT EQUIPMENT: The KIB agrees to budget a minimum of$150,000 each year effective for the KIB fiscal year beginning July 1, 2005, for purchase or lease purchase of new and replacement Equipment for use in the Hospital for the depreciable life of the equipment unless otherwise approved by KIB. This contribution will be paid to Providence on or before January 31 of each calendar year of the Agreement. Providence -will place these funds in a Funded Depreciation account for the 'sole purpose of purchasing or lease purchasing new and replacement equipment for the Hospital. New and replacement equipment will remain on the balance sheet of Providence for the duration of the Lease Agreement. Providence, at the termination or expiration of this Agreement, including Agreement extensions, will transfer assets in an amount equal to the estimated book value of equipment(Exhibit D) purchased with KIB contributions based upon an average useful life of 5 years. 3.3 ADDITIONAL EQUIPMENT: Providence may purchase additional equipment to be used in the maintenance or improvement of the Hospital's operations. Such additional equipment shall be Providence's property, and shall be tagged as such. Upon termination or expiration of this Agreement, KIB may purchase any items of equipment used in the Hospital and paid for by Providence.The purchase price shall be Providence's book value of the acquired equipment. Minor equipment previously expensed by Providence and equipment and furnishings purchased by Providcnce with no book value shall be contributed to the KIB at the termination or expiration of this Agreement. Any equipment or personal property which belongs to Providence and is not purchased by KIB may be removed by Providence after the termination or expiration of this Agreement. 4.1 TERM OF AGREEMENT: The Premises and Equipment shall be Ieased to Providence by KIB for a term of ten (10) years, commencing on April 21, 1997, through and including April 20,2007,unless sooner terminated as hereinafter provided. 4.2 ADDITIONAL TERM: Provided that Providence is not in default under this Lease Agreement, Providence shall have the option to extend this Lease Agreement for one additional tern of ten (I0) years by providing KIB with 180 days prior written notice. The extended term shall be on the same terms and conditions of this Lease Agreement, or as such terms and conditions are modified upon mutual written agreement of both parties, with monthly lease payments to be established by negotiation. 4.3 SURRENDER OF PREMISES: At the expiration of the term of this agreement or upon the termination of this agreement as provided for herein, Providence shall surrender possession of the Premises and Equipment to KIB as set forth under the terns of this Agreement. 5.1 FIRST RIGHT TO PURCHASE: KIB hereby gives and grants to Providence the first right to purchase all of KIB's interest in the Hospital,Premises, and Equipment at any time from the date of this Agreement until the termination of this Agreement as provided for herein. Said right of first refusal shall include space leased from KIB by other entities. KIB shall make any sale of said interest in the Hospital, Premises and Equipment between KIB and a third party conditioned upon and subject to Providence's first right to purchase as set out herein, including but not limited to space under Lease between KIB and other entities. Providence shall have the right to accept the purchase price and the terns of the intended sale to the third party as the terms and conditions of the sale between KIB and Providence. 2 Page 131 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 5.2 NOTICE: Providence may exercise its first right to purchase by executing an agreement within ninety (90) days of notice of K1B'S intent to sell its interest in the Hospital, Premises and Equipment, on terms and conditions as agreed between the parties. If Providence does not exercise its first right to purchase as provided for herein or enter into a purchase with KIB within ninety(90)days of the notice by KIB to Providence of its first right to purchase,then and in that event Providence's'first right to purchase shall lapse and KIB may sell the Hospital, Premises and Equipment or any part thereof to said third party or any other parties on substantially the same terms stated in the notice. If KIB does not sell and convey the Hospital, Premises and Equipment within 90 days after expiration of the 90 day notice period, any further transaction shall be deemed a new determination by KIB to sell and convey the Hospital, Premises and Equipment and the provisions of Sections 5.1 and 5.2 shall be applicable. 6. MONTHLY LEASE PAYMENT SCHEDULE: The fixed minimum monthly lease payment during the term of this Agreement shall be SIXTY THOUSAND DOLLARS ($60,000)payable by Providence in equal monthly installments,on or before the first day of each month in advance, at the office of KIB or at such other place designated by KIB, without any prior demand therefore, and without any deduction or setoff whatsoever. Notwithstanding anything to the contrary,this amount shall be reduced by the equivalent of the square foot cost of the hospital,not to include services,($720,000 times percent of area used)of the premises KIB is leasing to other entities,regardless of the actual amount KIB charges other entities for the leased space. 7.1 HOSPITAL OPERATIONS: Providence shall be responsible for the total operations of the hospital. Providence shall operate the Hospital under the name Providence Kodiak Island Medical Center. Except as otherwise stated herein, Providence assumes all the rights, duties, liabilities and obligations which shall arise out of its operation of the Hospital and other activities on the Premises during the term of this Agreement. Providence shall cause all expenses incurred in operation of the Hospital after the effective date of this Agreement to be paid, including, but not limited to,utilities, insurance,salaries, supplies, fees, benefits and other costs normally incurred in the operation of the Hospital. Providence will spend an amount equal to or greater than 50% of the net operating income, up to a maximum of$200,000, per calendar year for equipment or capital assets to be used at Hospital. These funds will be kept in a Providence Funded Depreciation account, restricted for use at the Hospital. Unused portions of these funds will be carried forward to subsequent years. Funds can also be used to pay debt obligations of Providence Kodiak Island Medical Center_ At the termination or expiration of this Lease Agreement unused funds will revert to KIB. 7.2 SEPARATE ACCOUNTING: Providence shall maintain separate accounting records and financial statements for the operations of the Hospital and shall provide KIB with the Hospital's year-end financial statements. KIB recognizes that Providence may, at its discretion, change the fiscal year of the Hospital to be aligned with Providence Health System. 7.3 TRAINING: Providence may conduct medical educational training programs at the Hospital, including training of interns and residents and other medical/technical personnel, in a manner consistent with applicable governmental regulations. 3 Page 132 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 7.4 ACCESS TO BUSINESS RECORDS: Providence shall have access to all prior financial, business, medical and other Kodiak Island Hospital books and records, including, but not limited to, admitting register books, pricing schedules of the Kodiak Island Hospital and room services, patients' insurance records, pertinent Kodiak Island Hospital personnel records and such other books and records as are necessary to the continued operation of the Hospital. Original copies of all such books and records shall be maintained and stored in the Hospital at all times. No such books and records may be destroyed without the consent of the KIB, and in no event will patient medical records be destroyed,except in accordance with federal and state laws, rules and regulations. KIB agrees to defend and hold Providence harmless against all claims, liability and expense resulting from acts or omissions of KIB in connection with such books and records and relating to the period prior to the effective date of this Agreement. KB shall continue to be liable for the performance of all agreements related to such books and records not so assigned to Providence. 8. UTILITIES: Providence shall arrange and pay for all utilities and other services to be furnished to the Premises, including gas, fuel, oil, electricity, sewer, water, telephone, and garbage collection. 9. TAXES: Providence shall be responsible for and shall pay before delinquency all governmental taxes, assessments charges or liens assessed during the term of this Agreement against any leasehold interest or property of any kind or income or sales of any kind related to the Premises. KIB acknowledges that Providence will be entitled to a property tax exemption for property used exclusively for non-profit hospital purposes pursuant to AS 29.45.030(x)(3), except to the extent that the leasehold Premises are used by non-exempt parties for their private business purposes as elaborated in Greater Anchorage Area Borou v. Sisters of Charity, 553 P.2d 467 (AIaska 1976). Providence may contest, by appropriate proceedings, any tax assessment, charge or lien, but such contest shall not subject any part of the Premises or Equipment to forfeiture or loss. Providence and KIB agree to negotiate in good faith regarding any KIB property taxes levied or assessed on the Premises and Equipment owned by KIB and leased to Providence,or any property owned by Providence during the term of this Agreement. 10. SUPPLIES:Providence shall take ownership all of the supplies maintained at the Hospital at the commencement of this Lease Agreement. Providence shall supply and maintain all expendable Hospital supplies as may be required in Providence's discretion for the proper operation of the Hospital. Upon termination of this Agreement, Providence will transfer ownership of all of the supplies maintained at the Hospital to KIB. The value of the supplies provided by Providence at the termination of this Agreement shall be equal to the value of the supplies transferred to Providence at the commencement of this Agreement increased by three percent annually. The increase will be prorated based on the number of months for partial years. A partial month will be considered a full month for the calculation. if providence does not transfer sufficient supplies under the formula in the previous sentence, then Providence will pay the balance to KIB at the time of termination. Likewise,if the value of inventory is greater than the calculation KIB will pay the balance to Providence at time of termination. ll. USE: Providence shall use and operate the Premises for a general acute care hospital, extended care facility, home health care provider, retail pharmacy and for any additional health care related purposes as may be appropriate. Providence shall provide, equip and maintain adequate facilities for the continuation of full range general medical and surgery services as economically feasible and warranted by the local physicians' levels of ability and the 4 b Page 133 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. reasonable needs of the community, as determined in Providence's sole discretion and in accordance with the terms and conditions as set forth in this Agreement.Contingent on Borough approval Providence may convert parts of the Premises into use for other related purposes consistent with KIB's obligation to supply its inhabitants with facilities for the care of sick and injured persons. Providence shall operate and maintain a duly licensed Hospital under the Alaska Statutes and in accordance with the standards prescribed by the Alaska Department of Health and Social Services. 12. DIET ENJOYMENT: KIB warrants that Providence, upon paying the rent and any other charges as provided for in this Agreement and upon performing all other obligations herein,shall quietly have,hold and enjoy the Premises without hindrance. 13. WARRANTY OF TITLE: KIB hereby warrants that it has good and marketable title to the Premises, subject only to the encumbrances and security interests stated in Exhibit B. attached hereto and incorporated herein_ 14. PRIOR AGREEMENTS: KIB warrants that entering into this Agreement does not breach any commitments or responsibilities of KIB under prior agreements,including but not limited to financing agreements, and that KIB shall defend and hold Providence harmless from any claims, liabilities and expenses arising from or in any way related to any prior agreements of KIB except to the extent such agreements are assumed by Providence. 15. BUILDING REGULATIONS: As of April 21, 1997, KIB warrants that there are no existing violations of applicable building, fire and health code regulations of which it is aware. KIB is responsible for all costs of correcting any existing violations of applicable building, fire and health code regulations. Providence shall otherwise keep and maintain the Premises in good condition. 16. ACCREDITATION: Providence will use its best efforts (so long as it is in the best interests of Providence and KIB)to cause the Hospital to become and remain accredited by the Joint Commission on the Accreditation of Health Care Organizations. Providence shall send to the KIB upon any loss of accreditation a written notice that the Hospital is no longer accredited and(lie reasons for non-accreditation. 17. MEDICAREIMEDICAID PARTICIPATION: Both parties hereby represents and warrants that they are not and at no time have been excluded from participation in any federally funded health care program, including Medicare and Medicaid. Both parties hereby agree to immediately notify the other of any threatened, proposed, or actual exclusion from any federally funded health care program, including Medicare and Medicaid. In the event that either party is excluded from participation in any federally funded health care program during the term of this Agreement,or if at any time after the effective date of this Agreement it is determined that either party is in breach of this Section,this Agreement shall,as of the effective date of such exclusion or breach,automatically terminate. 18. DISPOSAL OF MEDICAL WASTE AND/OR GARBAGE: Providence shall at its expense,properly and timely dispose of all medical waste and/or garbage refuse according to any and all laws governing disposal of the same. 5 y 4 h Page 134 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 19.1 INSURANCE: Providence shall,at its expense, maintain throughout the term of this Agreement the following insurance: A. Insurance against loss or damage by fire and such other risks as may be included in the current KIB hazard insurance policy with extended coverage in an amount not less than the replacement value of the Premises from time to time; B. Insurance against claims for personal injury and property damage occurring on the Premises under public liability and malpractice policies with limits of not less than $1,000,000 per person, $3,000.000 per occurrence and$500,000 for property damage arising out of any single occurrence. Such insurance policies may provide for partial self-insurance under the same terms as the policies for hospitals owned and operated by Providence. KIB shall be named as an additional insured party on each such policy of insurance, and certificates thereof shall be furnished to KIB. 19.2 Providence shall also provide tail coverage for hospital professional liability for the KIB and Lutheran Health Services (LHS)Management System for the period in which LHS operated the Hospital by purchasing coverage with the current carrier which provides coverage for all occurrences since 1987. 19.3 KIB shall, at its expense, maintain throughout the term of this Agreement insurance to cover all conditions, events and liabilities arising out of its actions and activities relating to the Hospital. 20.1 MAINTENANCE AND REPAIRS: Providence shall cause the Hospital to be maintained and repaired in accordance with all state and local codes, and keep the Hospital in a condition at all times reasonably acceptable to KIB, including but not limited to cleaning, painting, decorating, plumbing, carpentry, grounds care and such other maintenance and repair work as may be necessary. KIB shall provide and pay for any major maintenance and repairs. Major maintenance and repairs are defined as repairs greater than$25,000. If a repair is greater than or equal to $25,000, the KIB shall be responsible for the full amount of the repair. Providence shall be responsible for all repairs less than$24,999. If repairs go over the $25,000 limit because maintenance or repairs were not accomplished by Providence in a timely manner. KIB reserves the right to perform repairs or maintenance. KIB will be reimbursed for all costs of such repairs and maintenance by Providence. 20.2 DEPRECIABLE CAPITAL ASSETS: KIB shall provide and pay for depreciable capital asscts, mutually agreed to by KIB and Providence, including the cost of building components, land improvements, fixed equipment and building services equipment with useful lives of 10 years or more as defined by the latest edition of the American Hospital Association's Estimated Useful Lives of Depreciable Hospital Assets(Exhibit C).Providence shall provide and pay for depreciable capital assets with useful lives of 9 years or less as defined by the American Hospital Association's Estimated Useful Lives of Depreciable Hospital Assets. The Section 3.2 $L50,000 equipment contribution will not be used to purchase these assets. 2I. CONDITION ON SURRENDER: Upon termination or expiration of this Agreement, Providence shall surrender the Premises to KIB in substantially the same condition as exists on the date hereof,except for reasonable wear and tear. 6 Page 135 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 22. IMPROVEMENTS AND ALTERATIONS: Providence shall make no alterations in, or additions or improvements to, the permanent structure of the Premises without first obtaining the written consent of KIB. Any additions and improvements made to the permanent structure of the Premises shall remain upon and be surrendered with such Premises as a part thereof at the expiration of the term of this Agreement,by lapse of time or as otherwise provided herein. 23. CONTRIBUTIONS: In the event that contributions are made to Providence for the benefit of the Hospital and/or KIB, Providence may accept such contributions, it being understood,however, that Providence shall comply with the wishes of the donor insofar as they are compatible with the operation of the Hospital and that all property purchased with such contributions shall be and remain a part of the Hospital and shall revert to KIB at the expiration or termination of Lease Agreement. Should the terms or conditions of the contribution indicate that it is intended for Providence and not for the Hospital or KIB, Providence shall accept the contribution on its own behalf and utilize the funds in its sole discretion_ For purposes of this paragraph the term 'contribution' shall include a gift, bequest, grant or donation of money or property. It is expressly understood that the term "contribution' does not include any money derived by,or from,taxes or other governmental funds or entities. 24. MEDICAL STAFF: Any medical physician or osteopathic physician holding an unlimited license or any appropriately licensed dentist,who is recommended for approval by the Medical Staff and approved by the governing board of Providence shall be permitted privileges to practice in the Hospital. This section does not prohibit Providence from entering into an exclusive contract for the practice of an anesthesiologist or another specialist for the benefit of the community. 25. ADMISSION TO HOSPITAL: All persons in need of hospitalization shall be admitted to the Hospital without regard to race, creed, color, national origin or financial circumstances. 26.1 INDEMNIFICATION: Providence hereby agrees to indemnify and hold KIB harmless from and against any and all claims and demands for injury or death to persons and damage to property occurring on the Premises during the term hereof,and will defend KIB from any claim of liability on account thereof. Providence shall have no obligation for, and KIB shall indemnify and hold Providence harmless from and against, any and all liability with respect to any claims resulting from the negligence of KIB or its agents or employees,or any claims arising out of acts or omissions which occurred prior to the effective date of this Agreement. 26.2 HAZARDOUS SUBSTANCE INDEMNIFICATIION BY PROVIDENCE: Providence shall indemnify,defend, and hold KIB harmless from and against any and all claims, demands, damages, losses, liens, costs and expenses (including attomey's fees and disbursements)which accrue to or are incurred by KIB arising directly or indirectly from or out of or in any way connected with: (A)any activities within the Hospital or on the Premises during the term of this Agreement which directly or indirectly resulted in the Premises being contaminated with Hazardous Substances, (B) the discovery of Hazardous Substances on the Premises whose presence was caused during the tern of this Agreement,and(C)the clean-up of Hazardous Substances on the Premises whose presence was caused during the term of this Agreement. 7 1 r I Page 136 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 26.3 HAZARDOUS SUBSTANCE INDEMNIFICATION BY KIB: KIB shall indemnify,defend,and hold Providence harmless from and against any and all claims,demands, damages, losses, liens, costs. and expenses (including attorney's fees and disbursements) which accrue to or are incurred by Providence arising directly or indirectly from or out of or in any way connected with: (A)any activities within the Hospital or on the Premises prior to the term of this Agreement which directly or indirectly resulted in the Hospital and/or the Premises being contaminated with Hazardous Substances, (B) the discovery of Hazardous Substances on the Premises whose presence was caused prior to the term of this Agreement,and(C)the clean-up of Hazardous Substances on the Premises whose presence was caused prior to the term of this Agreement. 27.1 ACCESS TO RECORDS: KIB and Providence further agree that Providence shall retain and make available upon request for a period of four(4)years after the furnishing of such services (operation of the Hospital) as described in this Agreement, the books, documents and records which are necessary to certify the nature and extent of the costs thereof when requested by the Secretary of Health and Human Services or the Comptroller General,or any of their duly authorized representatives. If Providence carries out any duties of this Agreement through a subcontract with a related organization, valued at $10,000 or more over a 12-month period, the Subcontract shall also provide that the Secretary of Health and Human Services or the Comptroller General may have access to the subcontract and the subcontractor's books, documents and records necessary to verify the costs of the subcontract for a period of four(4) years after the services have been furnished. This provision relating to the above retention and production of documents is included because of possible application of Section 1861 MOW) of the Social Security Act to this Agreement; if this Section should be found to be inapplicable,then this clause shall be deemed to be inoperative and without force and effect. 27.2 PERSONNEL RECORDS: Should this Agreement terminate for any reason. Providence agrees to provide to KIB all personnel records for those employees who are to be re- employed by KIB who consent to the release of such records to KIB. 27.3. OPERATIONAL RECORDS: Except as otherwise provided herein, Providence agrees to provide KIB with the books, documents and records, including medical records, in regard to the operation of the Hospital, in accordance with all federal, state and local laws,rules and regulations including,but not Iimited to,privacy Iaws. 27.4 CONFIDENTIAL INFORMATION: Providence shall comply with all laws, regulations, directives or requirements in any form related to operating and managing hospitals and long-term care facilities, including, but not limited to the Health Insurance Portability and Accountability Act of 1996 ("HIPAA"), and regulations adopted under H1PAA. The KIB shall not have access to Protected Health Information as defined by HIPAA. KIB has read 45 C.F.R. 164.504(e), understands Providence's position is that 45 C.F.R. 164.504(e) applies to this Agreement,and that Providence therefore has the following obligations: 8 �I Page 137 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. Providence agrees to hold all individually identifiable patient health information ("Protected Health Information") that may be shared, transferred, transmitted, or otherwise obtained pursuant to this Agreement strictly confidential, and provide all reasonable protections to prevent the unauthorized use or disclosure of such information, including, but not limited to the protection afforded by applicable federal, state and local laws and/or regulations regarding the security and the confidentiality of patient healthcare information. Providence further agrees to make every reasonable effort to comply with any regulations, standards,or rules promulgated pursuant to the authority of the HIPAA, including those provisions listed below, as soon as possible, but in no event later than April 14, 2003. Providence may use and disclose Protected. Health Information when necessary for Providence's proper management and administration (if such use or disclosure is necessary), or to carry out Providence's specific legal responsibilities pursuant to this Agreement. Specifically, Providence agrees as follows: (1) to maintain safeguards as necessary to ensure that the Protected Health Information is not used or disclosed except as provided herein;(2)to mitigate,if possible,any harmful effect known to Providence of a use or disclosure of Protected Health Information by Providence; (3) to ensure that any subcontractors or agents to whom it provides Protected Health Information will agree to the same restrictions and conditions that apply with respect to such information; (4) to make available respective internal practices, books and records relating to the use and disclosure of Protected Health Information to the Department of Health and Human Services or its agents; (5) to incorporate any amendments or corrections to Protected Health Information when notified that the information is inaccurate or incomplete; (6) to return or destroy all Protected Health Information that Providence still maintains in any form and not to retain any such Protected Health Information in any form upon termination or expiration of this Agreement, if feasible or, if not feasible, Providence agrees to limit any uses of Protected Health Information after this Agreement's termination or expiration to those specific uses or disclosures that make it necessary for Providence to retain the information; (7)to ensure applicable policies are in place for providing access to Protected Health Information to the subject of that information; (8) if requested by the KID, report to KID any use or disclosure of Protected Health Information which is not provided for in the Agreement;and(9)to make Protected Health Information and an accounting of disclosures available to the individual who is the subject of the information or to KID,to the extent required by HIPAA. Breach of this section shall be considered material. 27.5 STORAGE SPACE: Providence shall provide at no cost to KIB sufficient storage space for KIB to store its existing books and records relating to the Hospital. 28.1 HOSPITAL ADMINISTRATOR: All administrators for Hospital shall be selected and hired with KIB consultation. Providence shall conduct annual evaluations regarding the Administrator in consultation with KID. The Administrator shall attend meetings of the Kodiak Island Service Area Community Board and KIB, representing Providence and reporting on the condition and affairs of the Hospital. Providence agrees to provide reasonable support and assistance to the Administrator to enable the Administrator to administer the business and affairs of the Hospital in an efficient and business-like manner consistent with the needs of the community. 28.2 TERMINATION OF ADMINISTRATOR: Notwithstanding any other terms and conditions of this Agreement to the contrary, in the event this Agreement is terminated prior to the expiration of its full term,then Providence shall provide an Administrator for the Hospital on a contract basis for ninety days following the termination if requested by KIB. 9 Vr R' Page 138 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 29. KODIAK ISLAND HEALTH CARE FOUNDATION OFFICE SPACE: Providence will work cooperatively with Kodiak Island Health Care Foundation to provide financial assistance at mutually agreed upon levels, subject to Providence's annual budgetary limitations,for the committed development of community healthcare. 30. GOVERNANCE: The overall management and control of the Hospital will rest with the Providence Alaska Regional Board. It is anticipated that two KIB residents will be eligible to participate as voting members on this Board. One member shall be the Chief of Staff and one member shall be the Board Chair of the Kodiak Island Service Area Community Board. 31. KODIAK ISLAND SERVICE AREA COMMUNITY BOARD: An Advisory Board meeting the requirements of 7AAC 13.030(x) will be appointed by Providence to provide input to the hospital staff, the medical staff, and Providence Alaska Regional Board about the concerns of the community regarding the operation of the Hospital and to undertake the responsibilities set out at 7 AAC 13.030(b) and (c). One KIB Assembly member shall be appointed by Providence as a full voting member of the Kodiak Island Service Area Community Board, and Providence shall give KIB the opportunity for review and comment before appointments to the Board are made. Providence shall keep the Kodiak Island Service Area Community Board updated with respect to matters of Hospital policy and the relationship of the Hospital to the community and surrounding areas which it serves. 32. RIGHT TO ENTER PREMISES: Upon reasonable notice, Providence shall permit KIB, its agents and employees to have access to and to enter the Premises at all reasonable and necessary times to inspect the Premises. 33. DEFAULT REMEDIES: 'Event of Default' means any one or more of the following events,whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment,decree or order of any court or any order,rule or regulation of any administrative or governmental body: A. Failure to pay rent required by Section 6 or 7.1 when such rent becomes due and payable,and continuance of such failure to pay for a period of ten(10)days;or B. Default in the performance, or breach of any other covenant or warranty by Providence under this Agreement, with the exception of any obligations imposed under Exhibit B.and continuance of such default or breach for a period of thirty(30)days after there has been given, by registered or certified mail, to Providence by KIB a written notice specifying such default or breach and requiring it to be remedied stating that such notice is a notice of default hereunder;or C. The entry of a decree or order by a court having jurisdiction in the premises adjudging Providence as bankrupt or insolvent,or approving as properly filed a petition seeking reorganization, arrangement,adjustment or composition of or in respect of Providence under the Federal Bankruptcy Act or any other applicable Federal or State law, or appointing a receiver, liquidator, assignee, trustee (or other similar official)of Providence or of any substantial part to its property,or ordering the winding up or liquidation of its affairs; or 10 Rage 139 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. D. The institution by Providence of proceedings to be adjudicated as bankrupt or insolvent, or the consent by it to the institution of bankruptcy or insolvency proceedings against it,or the filing by it of a petition or answer or consent seeking reorganization or relief under the Federal or State law, or the consent by it to the filing of any such assignee, trustee (or other similar official)of Providence or of any substantial part of its property,or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debt% generally as they become due, or the taking of corporate action by Providence in furtherance of any such action. 34. CONTINUING DEFAULT: If an Event of Default by Providence occurs and is continuing,KIB may: A. At its option, declare all installments of rent payable to be immediately due and payable by Providence; B. Re-enter and take possession of the Hospital without termination of this Agreement, and use its best efforts to sublease the Hospital for the account of Providence, holding Providence liable for the difference between the rent and other amounts payable by the sublessee and the rents and other amounts payable by Providence hereunder, C. Terminate this agreement, excluding Providence from possession of the Hospital and use its best efforts to lease the Hospital, or to another for the account of Providence,holding Providence liable for the difference between the rentals received and the rentals which would have been receivable hereunder; D. Terminate this Agreement, exclude Providence from possession of the Hospital and either operate the Hospital or contract with a responsible operator to operate the Hospital; E. With respect to any personal property, exercise any remedies available to a secured party under the Uniform Commercial Code;and/or F. Take whatever action at law or in equity may appear necessary or appropriate to collect the rent then due and thereafter to become due,or to enforce performance and observance of any obligation,agreement ur covenant of Providence under this Agreement. 35. TERMINATION: At any time either KIB or Providence may terminate this Agreement by one year's written notice to the other party. This Agreement shall terminate one year from the date of such notice without further action by either party and shall be of no further force and effect other than to perform any obligation incurred but not paid prior to the termination. However, if Providence is required to perform any duty or provide any service under the terms of this agreement that is in conflict with the philosophy, mission and values of Providence Health System, pursuant to Exhibit A, Providence may terminate this Agreement upon 90 days prior written notice to KIB. Upon such termination, Providence shall surrender possession of the Hospital to KIB. On the effective date of such termination KIB shall have the option to purchase any such accounts receivable, inventory, or supplies at a value agreed to by both parties. KIB shall have option to purchase equipment pursuant to Section 3.3 of this Agreement. Providence agrees to co-operate in such a way as to allow KIB to show the Hospital to a prospective tenant or accommodate the active transition needs of KIB for the actual termination. KIB agrees to cooperate in such a way as to accommodate Providence transition needs and the removal of Providence's assets. 11 Page 140 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 36. TRANSFERS OF LICENSES AND PERMITS: The parties will cooperate and jointly prepare and file all applications for transfer of licenses and permits incident to operation of the Hospital, including but not limited to transfer of permits for and inventories of alcohol, narcotics and dangerous drugs. 37. NOTICES: All notices,demands,or other writings in this Agreement provided to be given, made or sent,or which may be given, made or sent,by either party hereto to the other, shall be deemed to have been given, made or sent when made in writing and deposited in the United States Mail,Registered or Certified Mail,postage prepaid,and addressed as follows: KIB: Manager Kodiak Island Borough 710 Mill Bay Road Kodiak,Alaska 99615 Providence: Regional Vice President and Chief Executive Providence Health System in Alaska 3200 Providence Drive P.O. Box 196604 Anchorage,Alaska 99519-96604 38. The address to which any notice,demand or other writing may be given or made or sent to any party as above provided may be changed by written notice given by such party as above provided. 39. ASSIGNMENT AND SUBLEASE: Providence may assign this Agreement and may sublease the Hospital, in whole or in part, only with the prior consent of the KIB, but subject to each of the following conditions: A. At the time of the making of any such assignment or sublease, there shall be no event of Default under this Agreement; B. Any assignee will continue to operate the Hospital as a hospital, in accordance with this Agreement; C. Any assignee of this Agreement shall expressly assume and agree to perform and comply with all the covenants and provisions of this Agreement on the pan of Providence and shall be jointly and severally liable with Providence for any default in respect to any such covenant or provision; D. No assignment or sublease shall relieve Providence from primary liability for all rents and other payments due and for the performance of all other obligations required under this Agreement; E. In the case of an assignment of the Agreement or a sublease of all or substantially all of the Hospital, the assignee or sublessee shall agree to pay all rent payable by it directly to KIB, less a pro-rata share of reasonable maintenance,repair,or administrative handling costs; 12 V Page 141 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. F. KIB shall be provided promptly a duplicate original of the instrument or instruments containing such assignment or sublease. Providence may not mortgage or grant a security interest in this Agreement or leasehold interest. Approval of all subleases Assigned by Providence shall be concurrent with the terms of this Agreement. Nothing herein will prevent Providence from leasing space to physicians or other health care providers. No assignment for the benefit of creditors or by operation of law shall be effective to transfer any rights to the Assignee. 40. DAMAGE OR DESTRUCTION: When all or any part of the Hospital is destroyed or damaged,the KIB may: A. Proceed promptly to replace, repair, rebuild and restore the Hospital to substantially the same condition as existed before the taking or event causing the damage or destruction. B. All buildings, improvements and equipment acquired in the repair, rebuilding, replacement or restoration of the Hospital, together with any interests in land conveyed to the KIB as necessary for such restoration, shall become a part of the Hospital and available for use and occupancy by Providence without the payment of any rents other than those provided in Section 6 and 7.1. C. Rent shall be abated in the event of any destruction of damage to,or taking all or any part of the Hospital in proportion to the square footage which is unusable by Providence. D. If fifty percent (50%) or more of the Premises are rendered untenantable by the aforementioned causes, KIB shall have the right to be exercised by notice in writing, from and after said occurrence,to elect not to reconstruct the Premises, and in such event this Agreement and the tenancy hereby created shall cease as of the date of such occurrence, the rent to be adjusted as of such date. 41. CONDEMNATION: If the Premises, or such part thereof as in the reasonable opinion of Providence renders the remainder unusable for its purpose shall be acquired by eminent domain, then this Agreement shall cease and terminate as of the date that possession is taken in such proceeding. Such termination,however,shall not be deemed to deprive Providence of any of its rights to receive compensation by reason of such taking. 42. WAIVER OF SUBROGATION: KIB and Providence, both on their own behalf and on behalf of all others claiming through or under either of them,hereby mutually waive and release all claims, liabilities and causes of action against the other and the agents. servants, employees and invitees of each other, for all loss, damage to or destruction of the Premises or any portion thereof,as well as the fixtures,equipment,supplies and other property of either party located in,upon or about the Premises resulting from fire or other perils covered by standard fire and extended coverage insurance, whether caused by the negligence of any of said persons or entities or otherwise, except to the extent such waiver would violate or otherwise abrogate the terms of such insurance coverage. 13 Page 142 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 43. MISCELLANEOUS:All covenants and agreements in this Agreement by KIB or Providence shall bind their successors and assigns, whether so expressed or not. In case any provision in this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. None of the terms, conditions, covenants or provisions of this Agreement can be waived by either party except by appropriate written instrument.The waiver by either party or any breach of any term,condition,covenant or provision herein contained shall not be deemed a waiver of the some of any term, condition, covenant, or provision herein contained or of any subsequent breach of the same or any other term, condition, covenant or provision herein. This Agreement shall be construed in accordance with the laws of the State of Alaska.Nothing in this Agreement, express or implied, shall give to any person, other than the parties hereto, and their successors and assigns, any benefit or other legal or equitable right,remedy or claim under this Agreement. The parties agree the effective date of this Amendment is January 1,2005. IN WITNESS WHEREOF the parties have respectively executed this Agreement the day and year written below. PROVIIDENCE HEALTH SYSTEM-WASHINGTON dPo/a Prov' Health System in Alaska By: .6h �.Q-trc,l r Its: eLce Date: ATTEST: STATE OF ALASKA ) )Ss.: THIRD JUDICIAL DISTRICT } THIS IS TO CERTIFY that on the $' day of AElYE'rnbC-,C_ before me, a Notary Public in and for the State of Alaska, duly commissioned and sworn as such, personally appeared Al Parrish, to me known to be the Regional Vice President and Chief Executive, Providence Health System Alaska, and known to me to be the person who executed the above and foregoing instrument on behalf of Providence Health System — Washington, and who acknowledged to me that he executed the same as a free act and deed of the said entity for the uses and purposes therein stated and pursuant to the authority granted to him by the Borough Assembly_ written. WITNESS my hand and notarial seal the day and year first above in this Certificate 04\1 -, Z) i tary Public in and � ska NOTARY V commission expires.[. l * PUBLIC rgrF Of "'�1111111��� 14 Page 943 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. KODIAK ISLAND BOROUGH By: lts: ..aL Date: fe t o5' ATTEST: STATE OF ALASKA } )ss.. THIRD JUDICIAL DISTRICT ) THIS IS TO CERTIFY that on the c-10V ` day of t ?ADS, before me, a Notary Public in and for the State of Alaska, duly commissioned and sworn as such, personally appeared Rick Gifford, to me known to be the Manager of the KODIAK ISLAND BOROUGH, and known to me to be the person who executed the above and foregoing instrument on behalf of the municipality, and who acknowledged to me that he executed the same as a free act and deed of the said entity for the uses and purposes therein stated and pursuant to the authority granted to him by the Borough Assembly. WITNESS my hand and notarial seal the day and year first above in this Certificate written. Notary Public in and f6r Alaska �OJ A JA V� My commission expires: !(p 47 i40TAR y a 15 a Page 144 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. EXHIBIT A PROVIDENCE HEALTH SYSTEM PHILOSOPHY MISSION AND VALUES Letter from Archbishop of Anchorage Francis T.Hurley =� aachaiocesc of anchoRaGE ?1S Coed wa-a m •aneeoeatea eta fiv1l0114W • 9otrlsafava• F++n�r�.+-s+wf Oifect 91 can Atelebithop September 9, 1996 Mr. Duugomet Bruce Administrator Providence Alaska Medical Venter 7200 Providence Orive P.O. box 146604 Anchorrge, AK 99519•-6604 Dear Mr. Bruce. The Mitistive of Providence Alaska Medical Center to enter Into an -operating agreement with Small AlasKan rural communities for the purpuae of providing better health care for more people is one that I applaud. it without que emn stion is fully consistent with the ctltment of the Catholic Church and the Sisters of Providence to meet the human as well as the spiritual needs of people. �.. From my own observation of with the health care available In the swatter ct memunities of Southeentral Alaska, I know how much the people strongly desire that more medical services be more readily available to them locally. Local Communities can not mutt the escalating costs of medical equipment and care. The people are often prevented from traveling tv medical centyrs in Anchorage because of distance and weather, In addition to that, it Is the desire of patients to be close to their famlllea. friends and ministers at the time of Illness. The operating agreement being developed by the City of Kodiak and by Providence Alaska Medical Center will alleviate these ditt,cuttles. The plan, 1s. if you will allow a play on words, providential. Forging operating agreements presents sme difficulties In communities whore there are many -varied and at times conflicting attimms area convictions about what medical practice! are morally permissible. The Iuldelinas utilized for Catholic health care Systems are contained M the thiral anti Reli sous Directives for Health Services of the Catholic Bishops Of that Uri tad "States. -T eF e`City of a "has standards for Kodiak Hospits�. You Piave Indicated that the City of Kodiak deems it necessary that their long standing practice of elective sterilization be continued. As you knew thl■ practice Is not within the 01reetives. you ask If It Would be wi thin the parameters of the Catholic teaching for Providence Medical Center to tolerat* the continuance of that practice within the Glry of Kodiak as part of the agreement. 16 Page 145 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. Sapttmber 9, 1936 Piga 's I take mote of an important factor. Kodiak Hospital remains a community hospital. The operating lease does not change that. The mutually accspted Terms of the lease Identify the principles and practices that will allow both Providence and the City of Kodiak to be faithful to their c+xsmltments. ;n this context 1 crake an observation about moral decisions. Moral decisions are generally not made by the application of only one principle, Rather. several principles must be recognized and brought into �rmOnY. In this instance the principle of cooperation may be bmWht Into plan with our principles relative to life and respect for the human bodV- In the and clrcuins principle of cooperation'and under certain conditions ut�stances it is Pw misslble that one may cooperate mater an action of another that is contrary to one's convictions. 'iatly, !r< i r1 my j. � : ;tmcnt the principle of material cooperation does apply in the situation that prevwls in Kodiak. Kodiak lies alai remains a community hospital. The operating agreement with Arovld♦nce Alaska Medkol Center does not transform It Into a Catholic Hospital. Rather Kodiak Hospital resrralns a rrnimunity he pital of. the City of Kodiak. The mutually +�� agreement practices permitted.cooperation for Inowa loolell pprwaiof the arocedura by Providence. 1 hope that the arrangsitni;nt with the City of Kodiak comes to caatpletkfn. 1 know the cor+►n+unity well. I was personally involved in working put on agreement with the administrators of the City for the establishment of 8rvther Francis Shelter - Kodiak. Cod bless. Sinearely In Christ. •Franels T. Hurley Archbishop of Anchorage r 17 Page 146 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. EXHIBIT B ENCUMBRANCES AND SECURITY INTERESTS There are no encumbrances and security interests. 18 Page 147 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. EXHIBIT C American Hospital Association's Estimated Useful Lives of Depreciable Hospital Assets Revised 2004 Edition (See Attached) 19 Page 148 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. EXHIBIT D Estimated Book Value o£KIB Contributions KIB Contributions to Providence Estimation of Book Value at Expiration/Termination of Leash Book Value at the End of Five Years Year 1 Year 2 Year 3 Year 4 Year 5 Total Yearly Contribution $150,000 $150,000 $150,000 $150,000 $150,000 $750,000 Esimated Depreciation Year 1 $30,000 $30,000 Year 2 $30,000 $30,000 $60,000 Year 3 $30,000 530,000 $30,000 $90,000 Year 4 $30,000 $30,000 $30,000 $30,000 $120,000 Year 5 $30,000 $30,000 $30,000 $30,000 $30,000 $150,000 Year 6 Year 7 Year 8 Year 9 Year 10 Book Value $0 $30,000 $60,000 $90,000 $120,000 $300,000 Assumptions: Useful Life of Equipment 5 20 Page 149 of 224 Hospital Lease Discussion t 1� Estimated ?�uz L ives of D Hospital Assets q, V ?, , �' r� I I I 1�ipl II iii , f ��� yr "r�,4 way✓z a "'r�''k��� rr L� W��� a �( ,wn .�`�. w4 H ih Nil?��> r����� ;� "" rs 1 � P �-l; ff a Y, i.4 r k aN m r v r w "' ^ r y >';�a"i,..��'E"� „��r9 ,.n ��„,M""�°a, k �.� ✓mp �r'k r � k” Fyn � AGENDA ITEM #2,c. Introducedhy. M erGrrord Requested b5' Manager Gifford Drafted by Borough Introduced: F 15, r Adopted: KODIAK ISLAND BOROUGH RESOLUTION NO. FY2007-23 a A RESOLUTION OF THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH AUTHORIZING A RENEWAL OF THE LEASE WITH PROVIDENCE HEALTH SYSTEM ALASKA FOR THE KODIAK ISLAND HOSPITAL AND CARE CENTER WHEREAS, by means of an Amended and Restated Lease Agreement("the Lease')executed In November 2005, the Kodiak Island Borough leased the premises known as the Kodiak Island Hospital and Care Center to Providence Health System Alaska("Providence');and WHEREAS, the terms of the Lease Included a provision by which Providence could extend its term for ten years provided It gave notice of its desire to do so 180 days prior to the expiration of the current lease term;and WHEREAS, the current lease term expires April 20, 2007, and on October 4, 2006 Providence gave notice of its desire to extend the lease term;and WHEREAS, the terms and conditions of any extended lease term are to be the same as those of the Lease unless the parties mutuallyagree to change them;and WHEREAS, there is a mutual agreement between the parties that any extended lease term should Include an amendment reducing Kodiak Island Borough's annual equipment contribution from $150,000 to$108,000 effective in the KIB fiscal year beginning July 1, 2007 and thereafter, and WHEREAS, It is in the best interest of the Kodiak Island Borough to extend the lease and to continua with the existing terms and conditions but with an amendment reducing Kodiak Island Borough's annual equipment contribution from$150,000 to$106,000 effective in the KIB fiscal year beginning July 1,2007 and thereafter, NOW, THEREFORE, BE IT RESOLVED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH that Section 1: The Manager Is authorized to execute an agreement with Providence Health System Alaska to extend for another ten-year term, on the same basic terms(but with an amendment reducing Kodiak Island Borough's annual equipment contribution from $150,000 to $1013,000 effective in the KIB fiscal year beginning July 1, 2007 and 'thereafter).the Amended and Restated Lease Agreement for the premises known as the Kodiak Island Hospital and Care Center. ADOPTED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH THIS FIFTEENTH DAY OF FEBRUARY 2007 KODIAK ISLAND BORO GH ATT ST 4re M.S elby, Borough r Nova M.Javier, CIVIC, Boro Clerk Kodiak Island Borough,Alaska Resolution No.FY2007-23 Page S of 1 Page 151 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. Ad4� 107 07 RENEWAL OF LEASE AGREEMENT THIS AGREEMENT is made and entered Into by and between the Kodiak Island Borough a municipal corporation of the State of Alaska("KIB")and Providence Health System-Washington d/b/a Providence Health System in Alaska,a Washington non- profit corporation('Providence"). The parties confirm: RECITALS a. They entered into an amended and restated lease agreement which commenced on April 21, 1997 and is to end on April 20,2007, by which Providence leased the premises described as: Lot Two-A(2-A)Hospital Subdivision according to Plat 95-03, located in the Kodiak Recording District,Third Judicial District,State of Alaska. b. They desire to renew the term of that lease agreement. C. They have agreed that there will be no increase in the monthly lease payments and that the lease agreement shall be modified to reduce Kodiak Island Borough's annual equipment contribution from$150,000 to $108,000 effective in the KIB fiscal year beginning July 1,2007 and thereafter,and In consideration of the mutual covenants contained in this agreement,the parties agree as follows: (1) The execution of this agreement shall constitute a renewal of the basic lease agreement between the parties(excluding, however,the right to renew in paragraph 4.2)with no increase In the monthly lease payments and shall extend the termination date to April 20,2017. (2) Paragraphs 3.2 and 20.2 of the lease agreement between the parties are amended as follows: 3.2 NEW AND REPLACEMENT EQUIPMENT: The KIB agrees to budget a minimum of$108,000 each year effective bor the KIB fiscal year beginning July 1,2007,for purchase or lease purchase of new and replacement Equipment for use in the Hospital for the depreciable life of the equipment unless otherwise approved by KIB.This contribution will be paid to Providence on or before January 31 of each calendar year of the Agreement. Providence will place these funds in a Funded Depreciation account for the sole purpose of purchasing or lease purchasing new and Renewal of Lease Agreement--p. i of 4 V! Page 152 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. replacement equipment for the Hospital. New and replacement equipment wAl remain on the balance sheet of Providence for the duration of the Lease Agreement.Providence,at the termination or expiration of this Agreement, including Agreement extensions,will transfer assets in an amount equal to the estimated book value of equipment(Exhibit D) purchased with KIB contributions based upon an average useful life of 5 years. 20.2 DEPRECIABLE CAPITAL ASSETS: KIB shall provide and pay for depreciable capital assets,mutually agreed to by KIB and Providence, including the cost of building components,land improvements,fixed equipment and building services equipment with useful lives of 10 years or more as defined by the latest edition of the American Hospital Association's Estimated Useful Lives of Depreciable Hospital Assets(Exhibit C).Providence shall provide and pay for depreciable capital assets with useful lives of 9 years or less as defined by the American Hospital Association's Estimated Useful Lives of Depreciable Hospital Assets.The Section 3.2$108,000 equipment contribution will not be used to purchase these assets. (3) Exhibit D to the lease agreement Is amended consistent with the aforementioned amendments to Paragraphs 3.2 and 20.2.A copy of the amended Exhibit D is attached hereto. (4) Nothing in this agreement shall operate to discharge or release Providence or its assigns from the duty and obligation to perform each of the terms and conditions of the original lease. In witness,each party has caused it to be executed on the date Indicated below. Kodiak Island Borough By: ick Gifford, I anager ATTEST: ��SLAND eo Nova Javier, Boro h Clerk Q G Y l7 Renewal or Lease Agreement—p.2 of 4 Page 153 of 224 Hospital Lease Discussion AGENDA ITEM #1.c. Providence Health System-Washington dlbla Providence Health System in Alaska By: Va - E.A. P rrish, Its Regional Vice President and Chief Executive STATE OF ALASKA ) )ss. THIRD JUDICIAL DISTRICT ) On this day personally appeared before me Rick Gifford,to me known to be the person who signed as the Manager of the Kodiak Island Borough,an Alaska municipal corporation and acknowledged that he was duly authorized to execute said instrument as the free and voluntary act and deed of said corporation,for the uses and purposes ��• Q• ..••'GI♦TC.A(ct �my hand and official seal this day of , 2007. r•t1OIArip D = ' �JK$ pV81-tG f �� NOTARrPCIBLIC for Pfe Stat of aska �'�i��7,i-�S"•••••'$������ My commission expi s: .t S aaia S� =MRSKA } )ss. THIRD JUDICIAL DISTRICT ) On this day personally appeared before me E.A.Parrish,to me known to be the Regional Vice President and Chief Executive of Providence Health System- Washington dlbla Providence Health System In Alaska the corporation that executed the within and foregoing instrument, and acknowledged said instrument to be the free and voluntary act and deed of said corporation,for the uses and purposes therein mentioned, and on oath stated that he is authorized to execute said instrument on behalf of said corporation. GIVEN u l ',•• „••' sand official s day of , 2007. NOTgyj,% •� f 'OuBLtG ARY L S �A 1C for the S of aska °3%9p �� t” '',?,;•FO �L*•� My sion expires: / Renewal of Leasb,�Qc eme p.3 of 4 Page 154 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. EXHISIT D to Renewal of Lease Agreement Estimated Book Value of KIB Contributions KIB Contributions to Providence Estimation of Book Value at ExpirationlTerminatlon of Lease Book Value at the End of Five Years Year 1 Year 2 Year 3 Year 4 Year 5 Total Yearly Contribution $108,000 $10B.000 $108,000 $108,000 $108,000 $540,000 Esimated Depreciation Year 1 $21,600 $21.60D Year $21,600 $21,600 $43,200 Year $21,600 $21,600 $21,600 $64,800 Year 4 $21,600 $21,600 $21.600 521,600 $86,400 Year 5 $21,600 $21,800 $21,600 $21,600 $21,600 $108,000 Year 6 Year T Year 8 Year 9 Year 10 Book Value $0 $21,600 $43,200 ;64.800 $86,400 $296,000 Assumptions: Useful Life of Equipment 5 Renewal of Lease Agreement—p.4 of 4 Page 155 of 224 Hospital Lease Discussion AGENDA ! . . Parrish,All From: Humphrey Barnett,Susan Sent: Thursday,February 15,2007 5:33 PM To: Parrish,Al Subject: FW:FW:Lease Renewal Resolution draft #greement 3(2).doc (2).dm FYI_ Susan -----Original Message----- From: Rush, Donald Sent: Thursday, February 15, 2007 2:39 PM To: Humphrey Harnett, Susan; Gilbertson, Joel Subject: FW: FW: Lease Legal approval obtained. Being voted on tonight at 730. Don -----Original Message----- From: Mays, Stephanie Sent: Thursday, February 15, 2007 12:28 PM To: Rush, Donald Subject: RE: FW: Lease Hi Don, It's been a while since I have touched this document. Having said that, the renewal of the Lease Agreement, looks fine, from a legal perspective, as does the Resolution. Please ensure that from a business perspective, it meets your expectations. As well, the Resolution looks great. But again, if you have specific business concerns, do let me know. If you have additional questions, please let me know. L. Stephanie Mays Office of Legal Affairs Providence Health & Services System Office 506 Second Avenue Suite 1200 Seattle, WA 98104-2329 206.464.3986 - phone 206.464.5034 - fax stephanie.mays8providence.org Assistant: Terry Shahrivar 206.464.4733 ---_Original Message----- From: Rush, Donald Sent: Thursday, February 15, 2007 12:46 PM To: Mays, Stephanie Subject: FW: FW: Lease Importance: High Hi Stephanie, 1 p s Page 156 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. Your review of the attached is urgent. I will call. The KIB votes tonight. Don -----Original Message----- From: Rick Gifford [mailto:rgifford@kib.co.kodiak.ak.usI Sent: Thursday, February 15, 2007 11:42 AM To: Rush, Donald Subject: FW: FW: Lease Importance: High Hi Don, Please review the attached revisions completed by the Borough Attorney this morning. I need to know fairly quickly if this will work, if we want the Assembly to act on it tonight. Please let me know as soon as possible. Thanks. Rick Rick Gifford Borough Manager Kodiak Island Borough 710 Mill Day Road Kodiak, AK 99615 Phone: 907-486-9301 Fax: 907-466-9374 Bmail: rgifford@kib.co.kodiak.ak.us -----Original Message----- From: Matthew St John [mailto:Matthew@JESMKOD.COMI Sent: Thursday, February 15, 2007 11:41 AM To: Linda Brown; Rick Gifford Cc: Alan Schmitt Subject: Re: FW: Lease Rick, Attached for your review are copies of a resolution and agreement incorporating a reduction in the equipment budget in lieu of an increase in lease payments, per your request. Please give us a call if you have any questions or concerns. Alan can be reached in Anchorage at 907-222-1691 after out 2:30. 1 will be in the office in Kodiak. Alan noted that you should anticipate any possible ramifications that a reduction in the equipment budget might have on spending for equipment under the Fern Fuller Fund, and that you might check in with Karl about the same. Thanks, Matt St. John This electronic message transmission contains information belonging to Jamin Schmitt St. John that is solely for the recipient named above and which may be confidential or privileged. Jamin Schmitt St. John EXPRESSLY PRESERVES AND ASSERTS ALL PRIVILEGES AND IMMUNITIES APPLICABLE TO THIS TRANSMISSION. If you are not the intended recipient, be aware that any disclosure, copying, distribution, or use of the contents of this communication is STRICTLY PROHIBITED. if you have received this electronic transmission in error, please notify me by telephone (907-486-6024) or by electronic it (matthew@jesmkod.com) immediately. Thank you. >>> 'Rick Gifford" <rgifford@kib.co.kodi&k.ak.us> 02/14/07 09:18AM >>> Hi Linda, 2 Page 157 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. Here are the changes that I would like to have reflected in the resolution and the agreement. If you have any questions, please contact me. Thanks. Rick Rick Gifford Borough Manager Kodiak Island Borough 710 mill Bay Road Kodiak, AK 99615 Phone: 907-486-9301 Fax: 907-486-9374 Email: rgifford@kib.co.kodiak.ak.us <mailto:rgifford@kib.co.kodiak.ak.us> .............— From- Rush, Donald [mailto:Donald.Rush@providence.org] Sent: Tuesday, February 13, 2007 4.40 PM To: Rick Gifford Subject: Lease Hi Rick, Well, Al Parrish is adamant about the need for us to reduce the contribution by 42K instead of increasing the lease payments by 42K. He just doesn't want to reflect a decreased net income of 420K over the life of the lease. He thinks any reduction is going to impact us because we our margins are so tight every year. I have attached a modified Exhibit D, reflecting the decrease. I am also attaching the amended Sections 3.2 and 20.2 that reflects the change. Your attorney could quickly check for other areas as well but I think this covers it. Don Rush PKIMC CEO 1915 East Rezanof Drive 3 Page 158 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. Zodiak, AK 99615 (P) 907-486-9596 (FI 907-486-2336 DISCLAIMER: This message is intended for the sole use of the addressee, and may contain information that is privileged, confidential and exempt from disclosure under applicable law. If you are not the addressee you are hereby notified that you may not use, copy, disclose, or distribute to anyone the message or any information contained in the message. If you have received this message in error, please immediately advise the sender by reply email and delete this message. 4 Page 159 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. tnboduced by. Manager GHoid Requested by. Manager Wad araRed by, Borough Attomey lOtroduced: 02!15!2007 Adopted: 02N512007 � KODIAK ISLAND BOROUGH RESOLUTION NO. FY2007-24 A RESOLUTION OF THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH AUTHORIZING A RENEWAL OF THE LEASE WITH PROVIDENCE HEALTH SYSTEM ALASKA FOR THE KODIAK ISLAND MENTAL HEALTH CENTER NOW KNOWN AS PROVIDENCE KODIAK ISLAND COUNSELING CENTER WHEREAS, by means of a Lease Agreement ("the Lease") executed in November 1997 the Kodiak Island Borough leased the premises known as the Kodiak Island Mental Health Center to Providence Health System Alaska("Providence");and WHEREAS, the terms of the tease included a provision bywhich Providence could extend its term for ten years provided It gave notice of its desire 10 do so 180 days prior to the expiration of the currant lease term;and WHEREAS, the current lease term expires April 20,2007 and on October 12,2006 Providence gave notice of its desire to extend the lease term; and WHEREAS, the terms and conditions of any extended lease term are to be the some as those of the Lease unless the parties mutuallyagree to change them;and WHEREAS, the monthly lease payments for any extended term are to be established by negotiation;and WHEREAS, it is in the best interest of the Kodiak Island Borough to extend the lease and to continue with the existing terms and conditions and the amount of monthly lease payments for the extended term(excluding,however,the right to renew in paragraph 4.2); NOW, THEREFORE, BE IT RESOLVED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH that Section 1: The Manager Is authorized to execute an agreement with Providence Health System Alaska to extend for another ten-year term,on the same terms(excluding,however, the right to renew in paragraph 4.2),the Lease Agreement for the premises known as the Kodiak Island Mental Health Center. ADOPTED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH THIS FIFTEENTH DAY OF FEBRUARY 2007 KODIAK ISLAND BOROLIGH 5erdthe M.Selby, Borough Nla ATTE c NoA M.Javier,CMC, Boro gh Clerk Kodiak island Borough,Alaska Resolutfon No.FY2007-24 ; Page 1 of t Page 160 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. Item No. 12.A Kodiak Island Borough AGENDA STATEMENT Regular Meeting of October 20,2005 Contract No. 97-07-B Amending Contract No. 97-07 Agreement Between the KIB&Sisters of Providence In Washington d/b/a Providence Health System in Alaska for !_ease of the Kodiak Island Hospital & Care Center. The attached lease is an amendment and restatement of the original Contract 1997-66 with Providence Health System In Alaska to lease and operate Kodiak Island Hospital. The term of the lease is from April 21, 1997 to April 20, 2007 with an option to extend for ten years. In 1997 Providence leased the Hospital with a$2,000,000 down payment and then lease payments of$720,000 per year for the next ten years. If Providence did not lease the Hospital for the full ten years then the proportional amount of the$2,000,000 down payment would be returned to Providence Health System in Alaska. The reason for the proposed amendments Is to clear up ambiguities in the original lease that have been realized from several year; of operating the hospital; clean up and eliminate unnecessary provisions that are no longer pertinent, can be integrated with the amendments and recognize new confidentiality requirements; maximize cost reimbursement from Medicare/Medicaid through depreciation of equipment;and recognize the relationship with Kodiak Community Health Center("KCHC")and its operations within the hospital campus. The amended lease recognizes the operation of KCHC. Currently KCHC leases its space from Providence. The amended Providence lease proposes that Kodiak Island Borough ("KIB")will negotiate a lease directly with KCHC and the lease payments with Providence will be adjusted accordingly to take into account the lease with KCHC. Currently, KIB purchases$150,000 of equipment for the hospital every year. Since KIB purchases the equipment,the equipment is on the Borough's books. The amended lease will provide that KIB give Providence $150,000 each year for Providence to purchase equipment. The equipment will then be on Providence's books and Providence will be able to recapture the depreciation In their Medicare/Medicaid rates.In a recent presentation at a KIB Work Session,Hospital officials estimated an Increase value to the community over 10 years of approximately$600,000 generated from Medicare and Medicaid reimbursement. The amended lease deletes the profit sharing language. The amended lease allows Providence to retain any profits for use by the hospital for equipment and operations. Providence will spend 50%of each year's profits,up to$200,000 for equipment and retain the profits for the benefit of the Kodiak Island Hospital. Under the current profit sharing provision, Hospital officials indicate the need to have operating income at twice the net operating margin In order to maintain sufficient working capital to operate and to fund cash �I Page 161 of 224 Hospital lease Discussion AGENDA ITEM #2.c. reserves to replace equipment and expand services to the community.In add€tion,Hospital officials Indicate that dividing the profits with the KIB actually is increasing costs to the community, as prices have to be significantly increased to operate at an acceptable margin. The following table summarizes the financial amendments to the contract: Current Contract Proposed Contract KIB purchased$150,000 in equipment each KIB will give Providence$150,000 to purchase ear and kept title, new equipment each year. KIB retained half of net income (including Providence will keep all income. depreciation on capital assets) less capital Providence will spend 50%,up to$200,000,of expenditures. If an asset is purchased and the previous year's Income on equipment to be then depreciated it is a capital exp2nditure. I used at the Kodiak Hospital. Providence had to leave a like amount of KIB will give all operating supplies to operating supplies when they left the Providence. Hospital. ($277,000) Lease payments of $720,000 per year. Lease payments of$720,000 per year. Providence provided an initial down payment of $2,000,000 for construction of new facili . FISCAL.NOTES: ACCOUNT NO.: ®NIA Expenditure Amount R ulred: Budgeted: APPROVAL FOR AGENDA: The motion before the Assembly is to approve Contract No. 97-078 with Providence Health System - Washington d/b/a Providence Heakh System In Alaska. Page 162 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 1:�V .2ee 7 RENEWAL OF LEASE AGREEMENT THIS AGREEMENT is made and entered into by and between the Kodiak Island Borough a municipal corporation of the State of Alaska("KIB")and Providence Health System-Washington d/b/a Providence Health System in Alaska, a Washington non- profit corporation ("Providence"). RECITALS The parties confirm: a. They entered into a lease agreement which commenced on January 2, 1998 and is to end on April 20,2007, by which Providence leased the premises described as: That certain office space located in various buildings located on Lot 5A-1A, Military Reserve, U.S. Survey 2538 according to plat 95-04 recorded in the Kodiak Recording District, Third Judicial District, State of Alaska, and more particularly described below. i. 714 Eagan Way, Kodiak Island Borough Mental Health Offices and Dorm Building Apartments A through G. II. Partial Use of 716 Eagan Way, Kodiak Island Borough Mental Health boiler room. iii. 718 Eagan Way, Kodiak Island Borough Mental Health Offices and Dorm Building Apartments H through M. b. They desire to renew the term of that lease agreement. In consideration of the mutual covenants contained in this agreement, the parties agree as follows: 1. The execution of this agreement shall constitute a renewal of the basic lease agreement between the parties(excluding, however, the right to renew in paragraph 4.2)and shall extend the termination date to April 20,2017. 2. Nothing in this agreement shall operate to discharge or release Providence or its assigns from the duty and obligation to perform each of the terms and conditions of the original lease. In witness, each party has caused it to be executed on the date indicated below. Page 163 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. Kodiak Island Borough By: ck Gi ard,-lits iager ATTEST: �lcj�-p`Nfl e Nova Javier, Borough Clerk d G 9�SKA fir 1°x°3 Providence Health System-Washington dlbla Providence Health System in Alaska By: E. ish, Its Regional Vice President and Chief Executive STATE OF ALASKA ) )ss. THIRD JUDICIAL DISTRICT ) On this day personally appeared before me Rick Gifford,to me known to be the person who signed as the Manager of the Kodiak Island Borough, an Alaska municipal corporation and acknowledged that he was duly authorized to execute said instrument as the free and voluntary act and deed of said corporation,for the uses and purposes therein mentioned. GIVEN under my hand and official seal this G d day ofGri.r , 2007. p11 MC/r NOTAW PUBLIC fort Stao of Olaska ��v��.,.....,,. My commission expi P ,'t S A0/o VL p G Q>� her> Qfi1� Agreement-Page 2 of 3 AND 111111111���� yr B Page 164 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. STATE OF ALASKA ) )ss. THIRD JUDICIAL DISTRICT ) On this day personally appeared before me E.A. Parrish,to me known to be the Regional Vice President and Chief Executive of Providence Health System- Washington dlb/a Providence Health System in Alaska the corporation that executed the within and foregoing instrument, and acknowledged said instrument to be the free and voluntary act and deed of said corporation,for the uses and purposes therein mentioned, and on oath stated that he is authorized to execute said instrument on behalf of said corporation. GIVEN under my hand and offlci seal this day o , 2007. ���aaaanaa, ^ as3NNa � TAR LIC for the Stat of laska �= •+ s prrauG : My c,QmMission expires: / D '. 4702/961 PKICC IeaselRenewal Agmemeni V .' Renewal of Lease Agreement-Page 3 of 3 Page 165 of 224 Hospital Lease Discussion A AGENDA ! #2.c. e�rers,Teresa From: Rush,Donald Sent: Monday,February 49,2007 9:20 AM To: Swanson,Amanda Subject; FW:FW:Lease ---original Message----- From: Mays, Stephanie Sent: Thursday, February 15, 2007 12:28 PM To: Rush, Donald Subject: RE: FW: Lease Hi Don, It's been a while since I have touched this document. Having said that, the renewal of the Lease Agreement, looks fine, from a legal perspective, as does the Resolution. Please ensure that from a business perspective, it meets your expectations. As well, the Resolution looks great. But again, if you have specific business concerns, do let me know. If you have additional questions, please let me know. L. Stephanie Mays Office of Legal Affairs Providence Health & Services System office 506 Second Avenue Suite 1200 Seattle, WA 98104-2329 206.464.3986 - phone 206.464.5034 - fax stephanie.mays@providence.org Assistant: Terry Shahrivar 206.464.4733 _____Original Message_____ From: Rush, Donald Sent: Thursday, February 15, 2007 12:46 PM To: Mays, Stephanie Subject: FW: FW: Lease Importance: High Hi Stephanie, Your review of the attached is urgent. I will call. The KIB votes tonight. Don -----Original message----- From: Rick Gifford [mailto:rgifford @kib.co.kodiak.ak.us] Sent: Thursday, February 15, 2007 11:42 AM To: Rush, Donald Subject: FW: FW: Lease Importance: High Hi Don, Please review the attached revisions completed by the Borough Attorney this morning. I need to know fairly quickly if this will work, if we want the Assembly to act on it tonight. 1 Page 166 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. Please let me know as soon as possible. Thanks. Rick Rick Gifford Borough Manager Kodiak island Borough 710 Mill Bay Road Kodiak, AK 99615 Phone: 907-486-9301 Fax: 907-406-9374 Email: rgifford@kib.co.kodiak.ak.us -----Original Message----- From: Matthew St John [mailto:Matthew@JESMKOD.COM] Sent: Thursday, February 15, 2007 11:41 AM To: Linda Brown; Rick Gifford Cc: Alan Schmitt Subject: Re: FW: Lease Rick, Attached for your review are copies of a resolution and agreement incorporating a reduction in the equipment budget in lieu of an increase in lease payments, per your request. Please give us a call if you have any questions or concerns. Alan can be reached in Anchorage at 907-222-1691 after about 2:30. 1 will be in the office in Kodiak. Alan noted that you should anticipate any possible ramifications that a reduction in the equipment budget might have on spending for equipment under the Fern Fuller Fund, and that you might check in with Karl about the same. Thanks, Matt St. John This electronic message transmission contains information belonging to Jamin Schmitt St. John that is solely for the recipient named above and which may be confidential or privileged. Jamin Schmitt St. John EXPRESSLY PRESERVES AND ASSERTS ALL PRIVILEGES AND IMMUNITIES APPLICABLE TO THIS TRANSMISSION. If you are not the intended recipient, be aware that any disclosure, copying, distribution, car use of the contents of this communication is STRICTLY PROHIBITED. If you have received this electronic transmission in error, please notify me by telephone (907-486-6024) or by electronic it (matthew@jesmkod.com) immediately. Thank you. >>> *Rick Gifford' <rgifford@kib.co.kodiak.ak.us> 02/14/07 09:18AM >>> Hi Linda, Here are the changes that I would like to have reflected in the resolution and the agreement. If you have any questions, please contact me. Thanks. 2 Page 167 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. R"c" Rick Gifford Borough Manager Kodiak island Borough 710 Mill Bay Road Kodiak, AK 99615 Phone: 907-466-9301 Fax: 907-496-9374 Email: rgifford@kib,co.kodiak,ak.us <mailto:rgifford@kib,co.kodiak.ak.us> From: Rush, Donald [mailto:Donald.Rushgprovidence.org] Sent: Tuesday, February 13, 2007 4.40 PM To: Rick Gifford Subject: Lease Hi Rick, Well, Al Parrish is adamant about the need for us to reduce the contribution by 42K instead of increasing the lease payments by 42K. He just doesn't want to reflect a decreased net income of 420K over the life of the lease. He thinks any reduction is going to impact us because we our margins are so tight every year. I have attached a modified Exhibit D, reflecting the decrease. I am also attaching the amended Sections 3.2 and 20.2 that reflects the change. Your attorney could quickly check for other areas as well but I think this covers it. Don Rush PKIMC CEO 1915 East Rezanof Drive Kodiak, AK 99615 JP) 907-486-9596 IF) 907-486-2336 DISCLAIMER: This message is intended for the sale use of the addressee, and may contain information that is privileged, confidential and exempt from disclosure under applicable law. if you are not the addressee you are hereby notified that you may not use, copy, disclose, or distribute to anyone the message or any information contained in the message. if you have received this message in error, please immediately advise the sender by reply it and delete this message. 3 Page 168 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. AMENDMENT B Section 2 of the lease between the Kodiak Island Borough and Sister of Providence in Washington d/b/a Providence Health System in Alaska for the Mental Health Center is hereby deleted and amended as follows: 2. PREMISES: The real estate which is the subject matter of this Agreement is described as follows: That certain office space located in various buildings located on Lot 5A-1 A, Military Reserve,US Survey 2538 according to plat 95-04 recorded in the Kodiak Recording District,Third Judicial District,State of Alaska and more particularly described below. a. 7I4 Eagan Way,Kodiak Island Borough Mental Health Offices and Donn Building Apartments A through G. b. Partial use of 716 Eagan Way,Kodiak Island Borough Mental Health boiler room. c. 718 Eagan Way,Kodiak Island Borough Mental Health Offices and Dorm Building Apartments H through M. Including all buildings,appurtenances,and improvements thereto,as well as the existing parking areas as identified on Exhibit A,attached(herein referred to as"Premises")�hc IN WITVESS W�IEREOF,the parties have hereunto set their hands and seals this day ofd,2006. TENANT: Sisters of Providence in Washington dba Providence Health System in Alaska B y song v e. - e Dns Advwrllhe"k v A r: By: burn W,lso,\ Name ,reckn � #�1SD Title Page 169 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. LANDLORD: THE KODIAK ISLAND BOROUGH Rick Gifford,Borough M=66 ' ' A T• Nova Javier,CMC,B9 ough Clerk 4 II Page 170 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. Q9` r I 1 J 41 A s fit 41��� i �1 % { �o r Page 171 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. Item No. 12.A Kodiak Island Borough AGENDA STATEMENT Regular Meeting of October 20, 2005 Contract No. 97-07-B Amending Contract No. 97-07 Agreement Between the KIB&Sisters of Providence in Washington d/b/a Providence Health System in Alaska for tease of the Kodiak Island Hospital & Care Center. The attached lease is an amendment and restatement of the original Contract 1997-66 with Providence Health System in Alaska to lease and operate Kodiak Island Hospital. The term of the lease Is from April 21, 1997 to April 20,2007 with an option to extend for ten years. In 1997 Providence leased the Hospital with a$2,000,000 down payment and then lease payments of$720,000 per year for the next ten years. If Providence did not lease the Hospital for the full ten years then the proportional amount of the $2,000,000 down payment would be returned to Providence Health System in Alaska. The reason for the proposed amendments Is to clear up ambiguities in the original lease that have been realized from several years of operating the hospital; clean up and eliminate unnecessary provisions that are no longer pertinent, can be integrated with the amendments and recognize new confidentiality requirements; maximize cost reimbursement from Medicare/Medicaid through depreciation of equipment;and recognize the relationship with Kodiak Community Health Center("KCHC")and Its operations within the hospital campus. The amended lease recognizes the operation of KCHC. Currently KCHC leases its space from Providence. The amended Providence lease proposes that Kodiak Island Borough ("KIB")will negotiate a lease directly with KCHC and the lease payments with Providence will be adjusted accordingly to take Into account the lease with KCHC. Currently, KIB purchases$150,000 of equipment for the hospital every year. Since KIB purchases the equipment,the equipment is on the Borough's books. The amended lease will provide that KIB give Providence $150,000 each year for Providence to purchase equipment. The equipment will then be on Providence's books and Providence will be able to recapture the depreciation in their Medicare/Medicaid rates.In a recent presentation at a KIB Work Session,Hospital officials estimated an increase value to the community over 10 years of approximately$600,000 generated from Medicare and Medicaid reimbursement. i The amended lease deletes the profit sharing language. The amended lease allows Providence to retain any profits for use by the hospital for equipment and operations. Providence will spend 50%of each year's profits,up to$200,000 for equipment and retain the profits for the benefit of the Kodiak Island Hospital. Under the current profit sharing provision, Hospital officials indicate the need to have operating income at twice the net operating margin in order to maintain sufficient working capital to operate and to fund cash Page 172 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. reserves to replace equipment and expand services to the community.In addition,Hospital officials indicate that dividing the profits with the KIB actually is increasing costs to the community, as prices have to be significantly Increased to operate at an acceptable margin. The following table summarizes the financial amendments to the contract: Current Contract Proposed Contract KIB purchased$150,000 In equipment each KIB will give Providence$150,000 to purchase year and kept title, new a ui ment each year. KIB retained half of net income (including Providence will keep all income. depreciation on capital assets) less capital Providence will spend 50%,up to$200,000,of expenditures. If an asset is purchased and the previous year's income on equipment to be then depreciated it is a capital expenditure. used at the Kodiak Hospital. Providence had to leave a like amount of KIB will give all operating supplies to operating supplies when they left the Providence. Hospital. $277,000 Lease payments of $720,000 per year. Lease payments of$720,000 per year. Providence provided an initial down payment of $2,000,000 for construction of new facility. I i I i FISCAL E—NOTES: ACCOUNT NO.: ® NIA Expenditure Amount R ulred: Budgeted: APPRO'tAL FOR AGENDA: r ?, The motion before the Assembly is to approve Contract No. 97-07B with Providence Health System - Washington d/b/a Providence Health System in Alaska. Page 173 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. C 1d�,+ /�olo� AMENDED AND RESTATED LEASE AGREEMENT THIS AGREEMENT is made and entered into by and between the KODIAK ISLAND BOROUGH, a municipal corporation of the State of Alaska (hereinafter referred to as "IQB'), and Providence Health System - Washington dlb/a Providence Health System in Alaska, a Washington non-profit corporation(hereinafter referred to as"Providence'). WITNE-SSET14: WHEREAS. KIB is the owner of certain real property consisting of a Health Care Facility together with improvements located thereon,and certain Equipment located in and about the Premises known as Kodiak Island Hospital and Care Center, (hereinafter referred to as "Hospital"); WHEREAS, the KIB, in the interest of sound fiscal management and to ensure the continued operation of the Hospital in a professional and efficient manner, has requested Providence to lease and operate the Hospital; WHEREAS, Providence owns and operates a number of health care facilities, that are operated in keeping with its philosophy,mission and values;and WHEREAS, Providence desires to lease the Premises and the Equipment from KIB, subject to the terms and conditions contained herein. NOW, THEREFORE, in consideration of the mutual covenants contained herein, and each of the parties intending to be legally bound hereby,it is mutually agreed as follows: 1. AGREEMENT TO LEASE: KIB agrees to lease to Providence and Providence agrees to take from KIB, the Premises and Equipment described herein, for the term and upon the terms and conditions set forth in this Agreement. 2. PREMISES: The real estate which is the subject matter of this Agreement is described as follows: Lot Two-A Q2 A) Hospital Subdivision according to Plat 95-03, located in the Kodiak Recording District,Third Judicial District,State of Alaska. Including all buildings appurtenances, and improvements thereto, (herein referred to as `Premises"). Notwithstanding anything to the contrary, Providence recognizes and acknowledges that KIB may lease space to other entities contingent upon available space and advance approval from Providence.. 3.1 EQUIPMENT: The Equipment which is the subject matter of this Agreement is i all of the Equipment presently located in or on the Premises, in an "as is" condition, at the inception of this Lease Agreement and all Equipment subsequently acquired directly by the KIB. Page 174 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 3.2 NEW AND REPLACEMENT EQUIPMENT: The KIB agrees to budget a minimum of$150,000 each year effective for the KIB fiscal year beginning July 1, 2005, for purchase or lease purchase of new and replacement Equipment for use in the Hospital for the depreciable life of the equipment unless otherwise approved by KIB. This contribution will be paid to Providence on or before January 31 of each calendar year of the Agreement. Providence will place these funds in a Funded Depreciation account for the sole purpose of purchasing or lease purchasing new and replacement equipment for the Hospital. New and replacement equipment will remain on the balance sheet of Providence for the duration of the Lease Agreement. Providence, at the termination or expiration of this Agreement, including Agreement extensions, will transfer assets in an amount equal to the estimated book value of equipment(Exhibit D) purchased with KIB contributions based upon an average useful life of 5 years. 3.3 ADDITIONAL EQUIPMENT: Providence may purchase additional equipment to be used in the maintenance or improvement of the Hospital's operations. Such additional equipment shall be Providence's property, and shall be tagged as such. Upon termination or expiration of this Agreement, KIB may purchase any items of equipment used in the Hospital and paid for by Providence.The purchase price shall be Providence's book value of the acquired equipment.Minor equipment previously expensed by Providence and equipment and furnishings purchased by Providence with no book value shall be contributed to the KIB at the termination or expiration of this Agreement. Any equipment or personal property which belongs to Providence and is not purchased by KIB may be removed by Providence after the termination or expiration of this Agreement. 4.1 TERM OF AGREEMENT: The Premises and Equipment shall be leased to Providence by KIB for a term of ten (10) years, commencing on April 21, 1997, through and including April 20,2007, unless sooner terminated as hereinafter provided. 4.2 ADDITIONAL TERM: Provided that Providence is not in default under this Lease Agreement, Providence shall have the option to extend this Lease Agreement for one additional term of ten (10) years by providing KIB with 180 days prior written notice. The extended term shall be on the same terms and conditions of this Lease Agreement, or as such terms and conditions are modified upon mutual written agreement of both parties, with monthly lease payments to be established by negotiation. 4.3 SURRENDER OF PREMISES: At the expiration of the term of this agreement or upon the termination of this agreement as provided for herein, Providence shall surrender possession of the Premises and Equipment to KIB as set forth under the terms of this Agreement. 5.1 FIRST RIGHT TO PURCHASE: KIB hereby gives and grants to Providence the first right to purchase all of KIB's interest in the Hospital,Premises, and Equipment at any time from the date of this Agreement until the termination of this Agreement as provided for herein. Said right of first refusal shall include space leased from K113 by other entities. KIB shall make any sale of said interest in the Hospital,Premises and Equipment between KIB and a third party conditioned upon and subject to Providence's first right to purchase as set out herein, including but not limited to space under Lease between KIB and other entities. Providence shall have the right to accept the purchase price and the tetras of the intended sale to the third party as the terms and conditions of the sale between KIB and Providence. 2 Page 175 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 5.2 NOTICE: Providence may exercise its first right to purchase by executing an agreement within ninety (90) days of notice of KIB'S intent to sell its interest in the Hospital, Premises and Equipment, on terms and conditions as agreed between the parties. If Providence does not exercise its first right to purchase as provided for herein or enter into a purchase with KIB within ninety(90)days of the notice by KIB to Providence of its first right to purchase,then I and in that event Providence's first right to purchase shall lapse and KIB may sell the Hospital, Premises and Equipment or any part thereof to said third party or any other parties on substantially the same terms stated in the notice. If KIB does not sell and convey the Hospital, Premises and Equipment within 90 days after expiration of the 90 day notice period,any further transaction shall be deemed a new determination by KIB to sell and convey the Hospital, Premises and Equipment and the provisions of Sections 5.1 and 5.2 shall be applicable. 6. MONTHLY LEASE PAYMENT SCHEDULE: The fixed minimum monthly lease payment during the term of this Agreement shall be SIXTY THOUSAND DOLLARS ($60,000)payable by Providence in equal monthly installments,on or before the first day of each month in advance, at the office of KIB or at such other place designated by KIB, without any prior demand therefore, and without any deduction or setoff whatsoever. Notwithstanding anything to the contrary,this amount shall be reduced by the equivalent of the square foot cost of the hospital,not to include services,($720,000 times percent of area used)of the premises KIB is leasing to other entities,regardless of the actual amount KIB charges other entities for the leased space. 7.1 HOSPITAL OPERATIONS: Providence shall be responsible for the total operations of the hospital. Providence shall operate the Hospital under the name Providence Kodiak Island Medical Center. Except as otherwise stated herein, Providence assumes all the rights,duties, liabilities and obligations which shall arise out of its operation of the Hospital and other activities on the Premises during the term of this Agreement. Providence shall cause all expenses incurred in operation of the Hospital after the effective date of this Agreement to be paid, including, but not limited to, utilities, insurance,salaries,supplies, fees,benefits and other costs normally incurred in the operation of the Hospital. Providence will spend an amount equal to or greater than 50% of the net operating income, up to a maximum of$200,000, per calendar year for equipment or capital assets to be used at Hospital. These funds will be kept in a Providence Funded Depreciation account, restricted for use at the Hospital. Unused portions of these funds will be carried forward to subsequent years. Funds can also be used to pay debt obligations of Providence Kodiak Island Medical Center. At the termination or expiration of this Lease Agreement unused funds will revert to KIB. 7.2 SEPARATE ACCOUNTING: Providence shall maintain separate accounting records and financial statements for the operations of the Hospital and shall provide KIB with the Hospital's year-end financial statements. KIB recognizes that Providence may, at its discretion, change the fiscal year of the Hospital to be aligned with Providence Health System. 7.3 TRAINING: Providence may conduct medical educational training programs at the Hospital.including training of interns and residents and other medical/technical personnel, in a manner consistent with applicable governmental regulations. 3 Page 176 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 7.4 ACCESS TO BUSINESS RECORDS: Providence shall have access to all prior financial, business, medical and other Kodiak Island Hospital books and records, including, but not limited to, admitting register books, pricing schedules of the Kodiak Island Hospital and room services, patients' insurance records, pertinent Kodiak Island Hospital personnel records and such other books and records as are necessary to the continued operation of the Hospital. Original copies of all such books and records shall be maintained and stored in the Hospital at all times. No such books and records may be destroyed without the consent of the KIB, and in no event will patient medical records be destroyed,except in accordance with federal and state laws, rules and regulations. KIB agrees to defend and hold Providence harmless against all claims, liability and expense resulting from acts or omissions of KIB in connection with such books and records and relating to the period prior to the effective date of this Agreement. KIB shall continue to be liable for the performance of all agreements related to such books and records not so assigned to Providence. s. UTILITIES: Providence shall arrange and pay for all utilities and other services to be furnished to the Premises, including gas, fuel, oil, electricity, sewer, water, telephone, and garbage collection. 9. TAXES: Providence shall be responsible for and shall pay before delinquency all governmental taxes, assessments charges or liens assessed during the term of this Agreement against any leasehold interest or property of any kind or income or sales of any kind related to the Premises.KIB acknowledges that Providence will be entitled to a property tax exemption for property used exclusively for non-profit hospital purposes pursuant to AS 29.45.030(a)(3), except to the extent that the Ieasehold Premises are used by non-exempt parties for their private business purposes as elaborated in Greater Anchorage Area Borough v. Sisters of Charity, 553 P.2d 467 (Alaska 1976). Providence may contest, by appropriate proceedings, any tax assessment, charge or lien, but such contest shall not subject any part of the Premises or Equipment to forfeiture or loss. Providence and KIB agree to negotiate in good faith regarding any KB property taxes levied or assessed on the Premises and Equipment owned by KIB and leased to Providence,or any property owned by Providence during the term of this Agreement. 10. SUPPLIES:Providence shall take ownership all of the supplies maintained at the Hospital at the commencement of this Lease Agreement. Providence shall supply and maintain all expendable Hospital supplies as may be required in Providence's discretion for the proper operation of the Hospital. Upon termination of this Agreement, Providence will transfer ownership of all of the supplies maintained at the Hospital to KIB. The value of the supplies provided by Providence at the termination of this Agreement shall he equal to the value of the supplies transferred to Providence at the commencement of this Agreement increased by three percent annually. The increase will be prorated based on the number of months for partial years. A partial month will be considered a full month for the calculation. If providence does not transfer sufficient supplies under the formula in the previous sentence,then Providence will pay the balance to KIB at the time of termination. Likewise, if the value of inventory is greater than the calculation KB will pay the balance to Providence at time of termination. 11. USE: Providence shall use and operate the Premises for a general acute care hospital, extended care facility, home health care provider, retail pharmacy and for any additional health care related purposes as may be appropriate. Providence shall provide, equip and maintain adequate facilities for the continuation of full range general medical and surgery services as economically feasible and warranted by the local physicians' Ievels of ability and the 4 Page 177 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. reasonable needs of the community, as determined in Providcnce's sole discretion and in accordance with the terms and conditions as set forth in this Agreement.Contingent on Borough approval Providence may convcrt parts of the Premises into use for other related purposes consistent with KIB's obligation to supply its inhabitants with facilities for the care of sick and injured persons.Providence shall operate and maintain a duly licensed Hospital under the Alaska Statutes and in accordance with the standards prescribed by the Alaska Department of Health and Social Services. 12. QUIET ENJOYMENT: KIB warrants that Providence, upon paying the rent and any other charges as provided for in this Agreement and upon performing all other obligations herein,shall quietly have,hold and enjoy the Premises without hindrance. 13. WARRANTY OF TITLE: KIB hereby warrants that it has good and marketable title to the Premises, subject only to the encumbrances and security interests stated in Exhibit B, attached hcrcto and incorporated herein. 14. PRIOR AGREEMENTS: KIB warrants that entering into this Agreement does not breach any commitments or responsibilities of KIB under prior agreements,including but not limited to financing agreements, and that KIB shall defend and hold Providence harmless from any claims,liabilities and expenses arising from or in any way related to any prior agreements of K113 except to the extent such agreements are assumed by Providence. 15. BUILDING REGULATIONS: As of April 21, 1997, KIB warrants that there are no existing violations of applicable building, fire and health code regulations of which it is aware. KIB is responsible for all costs of correcting any existing violations of applicable building, fire and health code regulations. Providence shall otherwise keep and maintain the Premises in good condition. 16. ACCREDITATION: Providence will use its best efforts (so long as it is in the best interests of Providence and KIB)to cause the Hospital to become and remain accredited by the Joint Commission on the Accreditation of Health Care Organizations. Providence shall send to the KIB upon any loss of accreditation a written notice that the Hospital is no longer accredited and the reasons for non-accreditation. 17. MEDICAREIMEDICAID PARTICIPATION: Both parties hereby represents and warrants that they are not and at no time have been excluded from participation in any federally funded health care program, including Medicare and Medicaid. Both parties hereby agree to immediately notify the other of any threatened,proposed,or actual exclusion from any federally funded health care program, including Medicare and Medicaid. In the event that either party is excluded from participation in any federally funded health care program during the term of this Agreement,or if at any time after the effective date of this Agreement it is determined that either party is in breach of this Section, this Agreement shall,as of the effective date of such exclusion or breach,automatically terminate. 18. DISPOSAL OF MEDICAL WASTE AND/OR GARBAGE: Providence shall at its expense,properly and timely dispose of all medical waste and/or garbage refuse according to any and all laws governing disposal of the same. 5 Page 178 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 19.1 INSURANCE: Providence shall, at its expense, maintain throughout the term of this Agreement the following insurance: A. Insurance against loss or damage by fire and such other risks as may be included in the current KIB hazard insurance policy with extended coverage in an amount not less than the replacement value of the Premises from time to time; B. Insurance against claims for personal injury and property damage occurring on the Premises under public liability and malpractice policies with limits of not less than $1,000,000 per person,$3,000.000 per occurrence and$500,000 for property damage arising out of any single occurrence. Such insurance policies may provide for partial self-insurance under the same terms as the policies for hospitals owned and operated by Providence. KIB shall be named as an additional insured party on each such policy of insurance, and certificates thereof shall be furnished to KIB. 192 Providence shall also provide tail coverage for hospital professional liability for the KIB and Lutheran Health Services (LHS)Management System for the period in which LHS operated the Hospital by purchasing coverage with the current carrier which provides coverage for all occurrences since 1987. 19.3 KIB shall, at its expense, maintain throughout the term of this Agreement insurance to cover all conditions, events and liabilities arising out of its actions and activities relating to the Hospital. 20.1 MAINTENANCE AND REPAIRS: Providence shall cause the Hospital to be maintained and repaired in accordance with all state and local codes, and keep the Hospital in a condition at all times reasonably acceptable to KIB, including but not limited to cleaning, painting, decorating, plumbing, carpentry, grounds care and such other maintenance and repair work as may be necessary. KIB shall provide and pay for any major maintenance and repairs. Major maintenance and repairs are defined as repairs greater than$25,000. If a repair is greater than or equal to $25,000, the KIB shall be responsible for the full amount of the repair. Providence shall be responsible for all repairs less than$24,999. If repairs go over the$25,000 limit because maintenance or repairs were not accomplished by Providence in a timely manner, KIB reserves the right to perform repairs or maintenance. KIB will be reimbursed for all costs of such repairs and maintenance by Providence. 20.2 DEPRECIABLE CAPITAL ASSETS: KIB shall provide and pay for depreciable capital assets, mutually agreed to by KIB and Providence, including the cost of building components, land improvements, fixed equipment and building services equipment with useful lives of 10 years or more as defined by the latest edition of the American Hospital Association's Estimated Useful Lives of Depreciable Hospital Assets(Exhibit C).Providence shall provide and pay for depreciable capital assets with useful lives of 9 years or less as defined by the American Hospital Association's Estimated Useful Lives of Depreciable Hospital Assets.The Section 3.2 $150,000 equipment contribution will not be used to purchase these assets. 2t. CONDITION ON SURRENDER: Upon termination or expiration of this Agreement, Providence shall surrender the Premises to KIB in substantially the same condition as exists on the date hereof,except for reasonable wear and tear. 6 Page 179 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 22. IMPROVEMENTS AND ALTERATIONS: Providence shall make no alterations in, or additions or improvements to, the permanent structure of the Premises without first obtaining the written consent of KIB. Any additions and improvements made to the permanent structure of the Premises shall remain upon and be surrendered with such Premises as a part thereof at the expiration of the term of this Agreement,by lapse of time or as otherwise provided herein. 23. CONTRIBUTIONS: In the event that contributions are made to Providence for the benefit of the Hospital and/or KIB, Providence may accept such contributions, it being understood,however, that Providence shall comply with the wishes of the donor insofar as they are compatible with the operation of the Hospital and that all property purchased with such contributions shall be and remain a part of the Hospital and shall revert to KIB at the expiration or termination of Lease Agreement. Should the terms or conditions of the contribution indicate that it is intended for Providence and not for the Hospital or KIB, Providence shall accept the contribution on its own behalf and utilize the funds in its sole discretion. For purposes of this paragraph the term `contribution' shall include a gift, bequest. grant or donation of money or property. It is expressly understood that the term "contribution' does not include any money derived by,or from,taxes or other governmental funds or entities. 24. MEDICAL STAFF: Any medical physician or osteopathic physician holding an unlimited license or any appropriately licensed dentist,who is recommended for approval by the Medical Staff and approved by the governing board of Providence shall be permitted privileges to practice in the Hospital. This section does not prohibit Providence from entering into an exclusive contract for the practice of an anesthesiologist or another specialist for the benefit of the community. 25. ADMISSION TO HOSPITAL: All persons in need of hospitalization shall be admitted to the Hospital without regard to race, creed, color, national origin or financial circumstances. 26.1 INDEMNIFICATION: Providence hereby agrees to indemnify and hold KIB harmless from and against any and all claims and demands for injury or death to persons and damage to property occurring on the Premises during the term hereof,and will defend KIB from any claim of liability on account thereof. Providence shall have no obligation for,and KB shall indemnify and hold Providence harmless from and against, any and all liability with respect to any claims resulting from the negligence of KIB or its agents or employees,or any claims arising out of acts or omissions which occurred prior to the effective date of this Agreement. 26.2 HAZARDOUS SUBSTANCE INDEMNIFICATIION BY PROVIDENCE: Providence shall indemnify,defend, and hold KB harmless from and against any and all claims, demands, damages, losses, liens, costs and expenses (including attorney's fees and disbursements)which accrue to or are incurred by KB arising directly or indirectly from or out of or in any way connected with: (A)any activities within the Hospital or on the Premises during the term of this Agreement which directly or indirectly resulted in the Premises being contaminated with Hazardous Substances, (B) the discovery of Hazardous Substances on the Premises whose presence was caused during the term of this Agreement,and(C)the clean-up of Hazardous Substances on the Premises whose presence was caused during the term of this Agreement. 7 Page 180 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 26.3 HAZARDOUS SUBSTANCE INDEMNIFICATION BY KIB: KIB shall indemnify,defend,and hold Providence harmless from and against any and all claims,demands, damages, losses, liens,costs, and expenses (including attorney's fees and disbursements) which accrue to or arc incurred by Providence arising directly or indirectly from or out of or in any way connected with: (A)any activities within the Hospital or on the Premises prior to the term of this Agreement which directly or indirectly resulted in the Hospital and/or the Premises being' contaminated with Hazardous Substances, (B) the discovery of Hazardous Substances on the Premises whose presence was caused prior to the term of this Agreement,and(C)the clean-up of Hazardous Substances on the Premises whose presence was caused prior to the terra of this Agreement. 27.1 ACCESS TO RECORDS: KIB and Providence further agree that Providence shall retain and make available upon request for a period of four(4)years after the furnishing of such services (operation of the Hospital) as described in this Agreement, the books, documents and records which are necessary to certify the nature and extent of the costs thereof when requested by the Secretary of Health and Human Services or the Comptroller General,or any of their duly authorized representatives. If Providence carries out any duties of this Agreement through a subcontract with a related organization, valued at $10,000 or more over a 12-month period, the Subcontract shall also provide that the Secretary of Health and Human Services or the Comptroller General may have access to the subcontract and the subcontractor's books, documents and records necessary to verify the costs of the subcontract for a period of four(4) years after the services have been furnished. This provision relating to the above retention and production of documents is included because of possible application of Section 1861 (v)(1)(1) of the Social Security Act to this Agreement;if this Section should be found to be inapplicable,then this clause shall be deemed to be inoperative and without force and effect. 27.2 PERSONNEL RECORDS: Should this Agreement terminate for any reason, Providence agrees to provide to KIB all personnel records for those employees who are to be re- employed by KIB who consent to the release of such records to KIB. 27.3. OPERATIONAL RECORDS: Except as otherwise provided herein, Providence agrees to provide KIB with the books, documents and records, including medical records, in regard to the operation of the Hospital, in accordance with all federal,state and local laws,rules and regulations including,but not limited to,privacy laws. 27.4 CONFIDENTIAL INFORMATION: Providence shall comply with all laws, regulations, directives or requirements in any form related to operating and managing hospitals and long-term care facilities, including, but not limited to the Health Insurance Portability and Accountability Act of 1996("HIPAA"), and regulations adopted under HIPAA. The KIB shall not have access to Protected Health Information as defined by HIPAA. KIB has read 45 C.F.R. 164.504(e), understands Providence's position is that 45 C.F.R. 164.504(e) applies to this Agreement,and that Providence therefore has the following obligations: 8 Page 181 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. Providence agrees to hold all individually identifiable patient health information ("Protected Health Information") that may be shared, transferred, transmitted, or otherwise obtained pursuant to this Agreement strictly confidential, and provide all reasonable protections to prevent the unauthorized use or disclosure of such information, including, but not limited to the protection afforded by applicable federal, state and local laws and/or regulations regarding the security and the confidentiality of patient health care information. Providence further agrees to make every reasonable effort to comply with any regulations,standards,or rules promulgated pursuant to the authority of the HIPAA, including those provisions listed below, as soon as possible, but in no event later than April 14, 2003. Providence may use and disclose Protected Health Information when necessary for Providence's proper management and administration(if such use or disclosure is necessary), or to carry out Providence's specific legal responsibilities pursuant to this Agreement. Specifically, Providence agrees as follows: (1) to maintain safeguards as necessary to ensure that the Protected Health Information is not used or disclosed except as provided herein;(2)to mitigate,if possible,any harmful effect known to Providence of a use or disclosure of Protected Health Information by Providence; (3) to ensure that any subcontractors or agents to whom it provides Protected Health Information will agree to the same restrictions and conditions that apply with respect to such information; (4) to make available respective internal practices, books and records relating to the use and disclosure of Protected Health Information to the Department of Health and Human Services or its agents; (5) to incorporate any amendments or corrections to Protected Health Information when notified that the information is inaccurate or incomplete; (6) to return or destroy all Protected Health Information that Providence still maintains in any form and not to retain any such Protected Health Information in any form upon termination or expiration of this Agreement, if feasible or, if not feasible, Providence agrees to limit any uses of Protected Health Information after this Agreement's termination or expiration to those specific uses or disclosures that make it necessary for Providence to retain the information; (7) to ensure applicable policies are in place for providing access to Protected Health Information to the subject of that information; (8) if requested by the KIB, report to KIB any use or disclosure of Protected Health Information which is not provided for in the Agreement;and(9)to make Protected Health Information and an accounting of disclosures available to the individual who is the subject of the information or to KW.to the extent required by HIPAA. Breach of this section shall be considered material. 27.5 STORAGE SPACE: Providence shall provide at no cost to KB sufficient storage space for KIB to store its existing books and records relating to the Hospital. 28.1 HOSPITAL ADMINISTRATOR: All administrators for Hospital shall be selected and hired with KIB consultation. Providence shall conduct annual evaluations regarding the Administrator in consultation with KIB. The Administrator shall attend meetings of the Kodiak Island Service Area Community Board and KIB, representing Providence and reporting on the condition and affairs of the Hospital. Providence agrees to provide reasonable support and assistance to the Administrator to enable the Administrator to administer the business and affairs of the Hospital in an efficient and business-like manner consistent with the needs of the community. 28.2 TERMINATION OF ADMINISTRATOR: Notwithstanding any other terms and conditions of this Agreement to the contrary, in the event this Agreement is terminated prior to j the expiration of its full term,then Providence shall provide an Administrator for the Hospital on a contract basis for ninety days following the termination if requested by KIB. 9 Page 182 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 29. KODIAK ISLAND HEALTH CARE FOUNDATION OFFICE SPACE: Providence will work cooperatively with Kodiak Island Health Care Foundation to provide financial assistance at mutually agreed upon levels, subject to Providence's annual budgetary limitations,for the committed development of community healthcare. 30. GOVERNANCE: The overall management and control of the Hospital will rest with the Providence Alaska Regional Board. It is anticipated that two KIB residents will be eligible to participate as voting members on this Board. One member shall be the Chief of Staff and one member shall be the Board Chair of the Kodiak Island Service Area Community Board. 31. KODIAK ISLAND SERVICE AREA COMMUNITY BOARD: An Advisory Board meeting the requirements of 7AAC 13.030(a)will be appointed by Providence to provide input to the hospital staff, the medical staff, and Providence Alaska Regional Board about the concerns of the community regarding the operation of the Hospital and to undertake the responsibilities set out at 7 AAC t3.030(b) and (c). One KIB Assembly member shall be appointed by Providence as a full voting member of the Kodiak Island Service Area Community Board, and Providence shall give KIB the opportunity for review and comment before appointments to the Board are made. Providence shall keep the Kodiak Island Service Area Community Board updated with respect to matters of Hospital policy and the relationship of the Hospital to the community and surrounding areas which it serves. 32. RIGHT TO ENTER PREMISES: Upon reasonable notice, Providence shall permit KIB, its agents and employees to have access to and to enter the Premises at all reasonable and necessary times to inspect the Premises. 33. DEFAULT REMEDIES: 'Event of Default' means any one or more of the following events,whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment,decree or order of any court or any order,rule or regulation of any administrative or governmental body: A. Failure to pay rent required by Section 6 or 7.1 when such rent becomes due and payable,and continuance of such failure to pay for a period of ten(10)days;or B. Default in the performance, or breach of any other covenant or warranty by Providence under this Agreement, with the exception of any obligations imposed under Exhibit B,and continuance of such default or breach for a period of thirty(30)days after there has been given, by registered or certified mail, to Providence by KIB a written notice specifying such default or breach and requiring it to be remedied stating that such notice is a notice of default hereunder,or C. The entry of a decree or order by a court having jurisdiction in the premises adjudging Providence as bankrupt or insolvent,or approving as properly filed a petition seeking reorganization, arrangement,adjustment or composition of or in respect of Providence under the Federal Bankruptcy Act or any other applicable Federal or State law, or appointing a receiver, I liquidator,assignee, trustee (or other similar official)of Providence or of any substantial part to its property,or ordering the winding up or liquidation of its affairs;or 10 Page 183 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. D. The institution by Providence of proceedings to be adjudicated as bankrupt or insolvent, or the consent by it to the institution of bankruptcy or insolvency proceedings against it,or the filing by it of a petition or answer or consent seeking reorganization or relief under the Federal or State law, or the consent by it to the filing of any such assignee, trustee (or other similar official)of Providence or of any substantial part of its property,or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by Providence in furtherance of any such action. 34. CONTINUING DEFAULT: If an Event of Default by Providence occurs and is continuing,KB may: A. At its option, declare all installments of rent payable to be immediately due and payable by Providence; B. Re-enter and take possession of the Hospital without termination of this Agreement, and use its best efforts to sublease the Hospital for the account of Providence, holding Providence liable for the difference between the rent and other amounts payable by the sublessee and the rents and other amounts payable by Providence hereunder, C. Terminate this agreement,excluding Providence from possession of the Hospital and use its best efforts to lease the Hospital,or to another for the account of Providence,holding Providence liable for the difference between the rentals received and the rentals which would have been receivable hereunder, D. Terminate this Agreement, exclude Providence from possession of the Hospital and either operate the Hospital or contract with a responsible operator to operate the Hospital; E. With respect to any personal property, exercise any remedies available to a secured party under the Uniform Commercial Code;and/or F. Take whatever action at law or in equity may appear necessary or appropriate to collect the rent then due and thereafter to become due,or to enforce performance and observance of any obligation,agreement or covenant of Providence under this Agreement. 35. TERMINATION: At any time either KB or Providence may terminate this Agreement by one year's written notice to the other party- This Agreement shall terminate one year from the date of such notice without further action by either party and shall be of no further force and effect other than to perform any obligation incurred but not paid prior to the termination. However, if Providence is required to perform any duty or provide any service under the terms of this agreement that is in conflict with the philosophy, mission and values of Providence Health System, pursuant to Exhibit A, Providence may terminate this Agreement upon 90 days prior written notice to KB. Upon such termination, Providence shall surrender possession of the Hospital to KIB. On the effective date of such termination KIB shall have the option to purchase any such accounts receivable, inventory, or supplies at a value agreed to by both parties. KB shall have option to purchase equipment pursuant to Section 3.3 of this Agreement. Providence agrees to co-operate in such a way as to allow KIB to show the Hospital to a prospective tenant or accommodate the active transition needs of KIB for the actual termination. KB agrees to cooperate in such a way as to accommodate Providence transition needs and the removal of Providence's assets. Il Page 184 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 36. TRANSFERS OF LICENSES AND PERMITS: The parties will cooperate and jointly prepare and file all applications for transfer of licenses and permits incident to operation of the Hospital, including but not limited to transfer of permits for and inventories of alcohol, narcotics and dangerous drugs. 37. NOTICES: All notices,demands,or other writings in this Agreement provided to be given, made or sent,or which may be given,made or sent,by either party hereto to the other. shall be deemed to have been given, made or sent when made in writing and deposited in the United States Mail,Registered or Certified Mail,postage prepaid,and addressed as follows: KIB: Manager Kodiak Island Borough 710 Mill Bay Road Kodiak,Alaska 99615 Providence: Regional Vice President and Chief Executive Providence Health System in Alaska 3200 Providence Drive P.O. Box 196604 Anchorage,Alaska 99519-96604 38. The address to which any notice,demand or other writing may be given or made or sent to any party as above provided may be changed by written notice given by such party as above provided. 39. ASSIGNMENT AND SUBLEASE: Providence may assign this Agreement and may sublease the Hospital, in whole or in part, only with the prior consent of the KIB, but subject to each of the following conditions: A. At the time of the making of any such assignment or sublease, there shall be no event of Default under this Agreement; B. Any assignee will continue to operate the Hospital as a hospital, in accordance with this Agreement; C. Any assignee of this Agreement shall expressly assume and agree to perform and comply with all the covenants and provisions of this Agreement on the part of Providence and shall be jointly and severally liable with Providence for any default in respect to any such covenant or provision; D. No assignment or sublease shall relieve Providence from primary liability for all rents and other payments due and for the performance of all other obligations required under this Agreement; E. In the case of an assignment of the Agreement or a sublease of all or substantially all of the Hospital, the assignee or sublessee shall agree to pay all rent payable by it directly to KIB,less a pro-rata share of reasonable maintenance,repair,or administrative handling costs; 12 Page 185 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. F. KIB shall be provided promptly a duplicate original of the instrument or instruments containing such assignment or sublease. Providence may not mortgage or grant a security interest in this Agreement or leasehold interest. Approval of all subleases assigned by Providence shall be concurrent with the terms of this Agreement. Nothing herein will prevent Providence from leasing space to physicians or other health care providers. No assignment for the benefit of creditors or by operation of law shall be effective to transfer any rights to the Assignee. 40. DAMAGE OR DESTRUCTION: When all or any part of the Hospital is destroyed or damaged,the KIB may: A. Proceed promptly to replace, repair, rebuild and restore the Hospital to substantially the same condition as existed before the taking or event causing the damage or destruction. B. All buildings, improvements and equipment acquired in the repair, rebuilding, replacement or restoration of the Hospital, together with any interests in land conveyed to the KIB as necessary for such restoration,shall become a part of the Hospital and available for use and occupancy by Providence without the payment of any rents other than those provided in Section 6 and 7.1, C. (tent shall be abated in the event of any destruction of damage to,or taking all or any part of the Hospital in proportion to the square footage which is unusable by Providence. D. If fifty percent (50%) or more of the Premises arc rendered untenantable by the aforementioned causes, KIB shall have the right to be exercised by notice in writing, from and after said occurrence,to elect not to reconstruct the Premises, and in such event this Agreement and the tenancy hereby created shall cease as of the date of such occurrence, the rent to be adjusted as of such date. 41. CONDEMNATION: If the Premises, or such part thereof as in the reasonable opinion of Providence renders the remainder unusable for its purpose shall be acquired by eminent domain, then this Agreement shall cease and terminate as of the date that possession is taken in such proceeding. Such termination,however,shall not be deemed to deprive Providence of any of its rights to receive compensation by reason of such taking. 42. WAIVER OF SUBROGATION: KIB and Providence, both on their own behalf and on behalf of all others claiming through or under either of them,hereby mutually waive and release all claims, liabilities and causes of action against the other and the agents, servants, employees and invitees of each other, for all loss, damage to or destruction of the Premises or any portion thereof,as well as the fixtures,equipment,supplies and other property of either party located in,upon or about the Premises resulting from fire or other perils covered by standard fire and extended coverage insurance, whether caused by the negligence of any of said persons or entities or otherwise, except to the extent such waiver would violate or otherwise abrogate the terms of such insurance coverage. 13 Page 186 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 43. MISCELLANEOUS: All covenants and agreements in this Agreement by KIB or Providence shall bind their successors and assigns, whether so expressed or not. In case any provision in this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. None of the terms, conditions, covenants or provisions of this Agreement can be waived by either party except by appropriate written instrument.The waiver by either party or any breach of any term,condition,covenant or provision herein contained shall not he deemed a waiver of the same of any term, condition, covenant, or provision herein contained or of any subsequent breach of the same or any other term, condition, covenant or provision herein_ This Agreement shall be construed in accordance with the laws of the State of Alaska.Nothing in this Agreement, express or implied, shall give to any person, other than the parties hereto, and their successors and assigns, any benefit or other legal or equitable right,remedy or claim under this Agreement. The parties agree the effective date of this Amendment is January 1,2005. IN WITNESS WHEREOF the parties have respectively executed this Agreement the day and year written below. PROVIIDENCE HEALTH SYSTEM-WASHINGTON d/b/a ProvAdeqecHca lth System in Alaska By: 1p~.r F Its: cE F .rs Date: ATTEST: STATE OF ALASKA ) )ss.. THIRD JUDICIAL DISTRICT ) THIS IS TO CERTIFY that on the a/ r sue day of AiR'Frn&Z-=�_before me, a Notary Public in and for the State of Alaska, duly commissioned and sworn as such, personally appeared Al Parrish, to me known to be the Regional Vice President and Chief Executive, Providence Health System Alaska, and known to me to be the person who executed the above and foregoing instrument on behalf of Providence Health System — Washington, and who acknowledged to me that he executed the same as a free act and deed of the said entity for the uses and purposes therein stated and pursuant to the authority granted to him by the Borough Assembly. WITNESS my hand and notarial seal the day and year first above in this Certificate written. A.J, ary Public in and a i NOTA y commission expires. PUBL i�!P1,4r OF 4. '�'1111111��� 14 Page 187 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. KODIAK ISLAND BOROUGH By: Its: .tom Date: ATTEST: STATE OF ALASKA ) )ss.: THIRD JUDICIAL DISTRICT ) THIS IS TO CERTIFY that on the c day of t 70DS, before me, a Notary Public in and for the State of Alaska.duly commissioned and sworn as such, personally appeared Rick Gifford, to me known to be the Manager of the KODIAK ISLAND BOROUGH, and known to me to be the person who executed the above and foregoing instrument on behalf of the municipality, and who acknowledged to me that he executed the same as a free act and deed of the said entity for the uses and purposes therein stated and pursuant to the authority granted to him by the Borough Assembly. WITNESS my hand and notarial seal the day and year first above in this Certificate written. Notary Public in and f6r Alaska 0JA JAV/� My commission expires: (v 07 ? 9 140TAR y 15 Page 188 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. EXHIBIT A PROVIDENCE HEALTH SYSTEM PHILOSOPHY MISSION AND VALUES ri Letter from Archbishop of Anchorage Francis T.Hurley �- auchaiocese of anchonge Ins CMAMa town. 907rlSWa9eai�an.Aft""t-s°' Oftt of Me Arcnbllhap September e, 199 f; Mr. Douyraw Bruce Administrator Providence Alaska Medical Center 3200 Providvxe Orive P.O. Box 19600 Anchorage. AK 99519-6600 Dear Mr. Bruce, Tne :nitiadve of Providence Alaska Medical Center to enter in to an .operating agreement with small Alasuan rural coftnunitles for the purpuae of providing better hearth care for amrs people is one that I applaud. It without question is fully consistent with the cca►afrtment of the Catholic- Church and the Slstors of Providence to meet the human as well as the spiritual needs of people. From my awn Oservation of with the helltn care available to trig smaller communities of Southcentral Alaska, I know how much the people strongly desire that more medical services be =re readily available to them locally. Local cornmunitles can not meet the escalating costs of medical equlponent and care. The people are often prevented from traveling to medical ctnteirs in Andwrage because of distance and weather. In addition to that, It Is the desire of patients to be Close to their famliica, friends and ministers at the time of Illness. The operating ogree/n*nt being developed by the City of Kodiak and by Providence AlasM 10101ael Center will alleviate these difficulties. The pan is. if you will allow a play on words, providential. Forging operating agreements presents soafe diffleulties M communities where there are many varied and at tithes conflicting attitudes and convictions about what medical practices are morally permissible. The Euldellnes utilized for Catholic health care systems are contained In the thical and Relia-sou-s Directives r Health Services of the Catholic Bishops P thf United States. —T ee City or 3 faK�h ii itandards for Kodiak Hotiplw. You haws Indicated than the City of Kodiak deems it necessary that their long standing practice of elective sterlli:etlon be continued. As you knew► this practice is not within the Directives. Yoe ask If It would be within the parameters of the Catholic teaching for Providence Med;csl Center to tolerate the continuance of that practics within tho rlry of Kodiak as part of the agreement. 16 Page 189 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 54pternber 9, tg36 Page I I take note Of an important factor. Kodiak Hospital remains a community hospital. The operating lease does not CAangt that, the mutually accepted terms of the Iei7b identify the principles and prsctkes that wall allow both providence and the City of Kodiak to be faithful to their commitments. .n this content l Make an observation about moral decisions. Moral decisions are generally not made by the 4001katlon of only one prinCiple. Rather, several principles must be recognized and brought Into harmony. in this instance the prindpia Ot cooperation may be brought Into play with our principlat, relative to life and respect for the iwn+an and Y• Within the principle of cooPeratlon'and under certain conditiom a action oftanother that PIsmcontraryt totOft's convictions.o cooperate materially. In In my iJd9nent the principle of material Cooperation does apply in the situation that provaUs in Kodiak, Kodiak Hospital remains a community hespltai. The operating agreement with Providence Alaska Medical Center does not tr8tlsform it Into a Catholic Hospital. Rather Kodiak Hospitlsl remains a erdhmunily hospital of. the City of Kodiak. The mutually .� materlai cooperation &apt teritiyallo=n Practices ntocwa k4pllelt apA�lof the procedure by Providence. L hope that the arrengernent with the City of Kodiak comes to completbn. i know the community well. I was personally involved in working out an agreement with the ad+ninistraters of the City for the establishment of Brvlher Francis Shelter - Kodiak. God bless. Sincerely in Christ. •Francis T, Hurley Archbishop of Anchorage 17 Page 190 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. EXHIBIT B ENCUMBRANCES AND SECURITY INTERESTS There are no encumbrances and security interests. 18 Page 191 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. EXHIBIT C American Hospital Association's Estimated Useful Lives of Depreciable Hospital Assets Revised 2004 Edition (See Attached) 19 Page 192 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. EXHIBIT D Estimated Book Value of KIB Contributions K[B Contributions to Providence Estimation of Book Value at Expiration/Termination of Lease Book Value at the End of Five Years Year i Year 2 Year 3 Year 4 Year 5 Total Yearly Contribution $150,000 $150,000 3150,000 $150,000 $150,000 $750,000 Esimated Depreciation Year 1 $30,000 $30,000 Year $30,000 $30,000 $60,000 Year 3 $30,000 $30,000 $30,000 $90,000 Year 4 $30,000 $30,000 $30,000 $30,000 $120,000 Year 5 $30,000 $30,000 $30,000 $30,000 530,000 $150,000 Year 6 Year 7 Year S Year 9 Year 10 Book Value $0 $30,000 $60,000 $90,000 $120,000 $300,000 Assumptions: Useful Life of Equlpment 5 20 Page 193 of 224 Hospital Lease Discussion I ' I !z "Iammµua" 4 , °p Pdeld tstimic Us Lives of DepoNwitc-, mbile 6�, !1 Hosplotal Assets _ na TMy is �Lr � Y n, �°` `tip. n �". � �.�,� ����Il i�.�®%I�'r•+�N���'�I ���� W r ;� "�i `�i�u " .r .y rut`� �wc��.•., �" .,� +!�, �� t § d 777777 a v f1 tr r w� r5p-�yt,Jw ;*� 77 �m zi, MM 1 1 � o AGENDA ITEM #2.c. Introduced by. Manager Glfkw Requested by Manager Ma DraRed bK eoiaugh Altvmey Introduud: February 15,2007 Adoplad: KODIAK ISLAND BOROUGH RESOLUTION NO. FY2007-23 A RESOLUTION OF THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH AUTHORIZING A RENEWAL OF THE LEASE WITH PROVIDENCE HEALTH SYSTEM ALASKA FOR THE KODIAK ISLAND HOSPITAL AND CARE CENTER WHEREAS, by means of an Amended and Restated Lease Agreement("the Lease")executed in November 2005, the Kodiak Island Borough leased the premises known as the Kodiak Island Hospital and Care Center to Providence Health System Alaska("Providence");and WHEREAS, the terms of the Lease Included a provision by which Providence could extend its term for ten years provided it gave notice of its desire to do so 180 days prior to the expiration of the current lease term;and WHEREAS, the current lease term expires April 20,2007,and on October 4, 2006 Providence gave notice of its desire to extend the lease term;and WHEREAS, the terms and conditions of any extended lease term are to be the same as those of the Lease unless the parties mutuallyagree to change them;and WHEREAS, there is a mutual agreement between the parties that any extended lease term should Include an amendment reducing Kodiak Island Borough's annual equipment contribution from $150,000 to$108,000 effective in the KIB fiscal year beginning July 1, 2007 and thereafter,and WHEREAS, it is In the best interest of the Kodiak Island Borough to extend the lease and to continue with the existing terms and conditlons but with an amendment reducing Kodiak Island "- Borough's annual equipment contribution from$150,000 to$108,000 effective In the KIB fiscal year beginning July 1,2007 and thereafter, NOW, THEREFORE, BE IT RESOLVED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH that Section 1: The Manager Is authorized to execute an agreement with Providence Health System Alaska to extend for another ten-year term,on the same basic terms(but with an amendment reducing Kodiak Island Borough's annual equipment contribution from $150,000 to $108,000 effective in the KIB fiscal year beginning July 1, 2007 and thereafter),the Amended and Restated Lease Agreement for the premises known as the Kodiak Island Hospital and Care Center. ADOPTE6 BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH THIS FIFTEENTH DAY OF FEBRUARY 2007 KODIAK ISLAND BORO GH ST Jer a M.Selby,Borough r ATT Nova M.Javier, CMC, Boro Clerk I Kodiak Island Borough,Alaska Resolullon No.t-Y2007-23 Page 1 of 1 Page 195 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. Item No. 12.A Kodiak Island Borough AGENDA STATEMENT Regular Meeting of October 20,•2005 Contract No. 97-07-B Amending Contract No. 97-07 Agreement Between the KIB&Sisters of Providence in Washington d/b/a Providence Health System in Alaska for Lease of the Kodiak Island Hospital & Care Center. The attached lease is an amendment and restatement of the original Contract 1997-66 with Providence Health System In Alaska to lease and operate Kodiak Island Hospital. The term of the lease Is from April 21, 1997 to April 20, 2007 with an option to extend for ten Years. In 1997 Providence leased the Hospital with a$2,000,000 down payment and then lease payments of$720,000 per year for the next ten years. If Providence did not lease the Hospital for the full ten years then the proportional amount of the $2,000,000 down payment would be returned to Providence Health System in Alaska. The reason for the proposed amendments Is to clear up ambiguities in the original lease that have been realized from several years of operating the hospital; clean up and eliminate unnecessary provisions that are no longer pertinent, can be integrated with the amendments and recognize new confidentiality requirements; maximize cost reimbursement from Medicare/Medicaid through depreciation of equipment;and recognize the relationship with Kodiak Community Health Center("KCHC")and its operations within the hospital campus. The amended lease recognizes the operation of KCHC. Currently KCHC leases its space from Providence. The amended Providence lease proposes that Kodiak Island Borough ('KIB")will negotiate a lease directly with KCHC and the lease payments with Providence will be adjusted accordingly to take into account the lease with KCHC. Currently, KIB purchases$150,000 of equipment for the hospital every year. Since KIB purchases the equipment,the equipment is on the Borough's books. The amended lease will provide that KIB give Providence $150,000 each year for Providence to purchase equipment. The equipment will then be on Providence's books and Providence will be able to recapture the depreciation in their Medicare/Medicaid rates.In a recent presentation at a KIB Work Session,Hospital officials estimated an increase value to the community over 10 years of approximately$600,000 generated from Medicare and Medicaid reimbursement. The amended lease deletes the profit sharing language. The amended lease allows Providence to retain any profits for use by the hospital for equipment and operations. Providence will spend 50%of each year's profits,up to$200,000 for equipment and retain the profits for the benefit of the Kodiak Island Hospital. Under the currant profit sharing provision, Hospital officials indicate the need to have operating Income at twice the net u operating margin in order to maintain sufficient working capital to operate and to fund cash Page 196 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. reserves to replace equipment and expand services to the community.In addition,Hospital officials indicate that dividing the profits with the KIB actually is increasing costs to the community, as prices have to be significantly increased to operate at an acceptable margin. The following table summarizes the financial amendments to the contract: Current Contract Proposed Contract KIB purchased$150,000 ire equipment each KIB will give Providence$150,000 to purchase year and kept title. new equipment each year. KIB retained half of net income {including Providence will keep all income. depreciation on capital assets}less capital Providence will spend 50%,up to$200,000,of expenditures. if an asset is purchased and the previous year's income on equipment to be then depreciated it is a capital expenditure. used at the Kodiak Hospital. Providence had to leave a like amount of KIB will give all operating supplies to operating supplies when they left the Providence. Hospital. ($277,000) Lease payments of $720,000 per year. Lease payments of$720,000 per year. Providence provided an initial down payment of $2,000,000 for construction of new faclli . FISCAL NOTES: ACCOUNT NO.: ® NIA Expenditure Amount R uired: Budgeted: APPROVAL FOR AGENDA: The motion before the Assemblyis to approve Contract No. 97-07B with Providence Health System - Washington d/b/a Providence Health System In Alaska. Page 197 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. C 1197-�+ �Ba/zolo� AMENDED AND RESTATED LEASE AGREEMENT THIS AGREEMENT is made and entered into by and between the KODIAK ISLAND BOROUGH, a municipal corporation of the State of Alaska (hereinafter referred to as "KIB"), and Providence Health System - Washington d/b/a Providence Health System in Alaska, a Washington non-profit corporation(hereinafter referred to as"Providence"). WITNESSETH: WHEREAS, KES is the owner of certain real property consisting of a Health Care Facility together with improvements located thereon,and certain Equipment located in and about the Premises known as Kodiak Island Hospital and Care Center, (hereinafter referred to as "Hospital"); WHEREAS, the KIB, in the interest of sound fiscal management and to ensure the continued operation of the Hospital in a professional and efficient manner, has requested Providence to lease and operate the Hospital; WHEREAS, Providence owns and operates a number of health care facilities, that are operated in keeping with its philosophy,mission and values;and WHEREAS, Providence desires to lease the Premises and the Equipment from KIB, subject to the terms and conditions contained herein. NOW, THEREFORE, in consideration of the mutual covenants contained herein, and each of the parties intending to be legally bound hereby,it is mutually agreed as follows: 1. AGREEMENT TO LEASE: KIB agrees to lease to Providence and Providence agrees to take from KIB, the Premises and Equipment described herein, for the term, and upon the terms and conditions set forth in this Agreement. 2. PREMISES: The real estate which is the subject matter of this Agreement is described as follows: Lot Two-A (2-A) Hospital Subdivision according to Plat 95-03, located in the Kodiak Recording District,Third Judicial District,State of Alaska. Including all buildings appurtenances, and improvements thereto, (herein referred to as 'Premises"). Notwithstanding anything to the contrary, Providence recognizes and acknowledges that KIB may lease space to other entities contingent upon available space and advance approval from Providence.. 3.1 EQUIPMENT: The Equipment which is the subject matter of this Agreement is all of the Equipment presently located in or on the Premises, in an "as is" condition, at the inception of this Lease Agreement and all Equipment subsequently acquired directly by the KIB. Page 198 of 224 Hospital Lease Discussion AGENDA ITEM #2.c. 3.2 NEW AND REPLACEMENT EQUIPMENT: The KIB agrees to budget a minimum of$150,000 each year effective for the KIB fiscal year beginning July 1, 2005, for purchase or lease purchase of new and replacement Equipment for use in the Hospital for the depreciable life of the equipment unless otherwise approved by KIB. This contribution will be paid to Providence on or before January 31 of each calendar year of the Agreement. Providence will place these funds in a Funded Depreciation account for the sole purpose of purchasing or lease purchasing new and replacement equipment for the Hospital. New and replacement equipment will remain on the balance sheet of Providence for the duration of the Lease Agreement. Providence, at the termination or expiration of this Agreement, including Agreement extensions, will transfer assets in an amount equal to the estimated book value of equipment(Exhibit D) purchased with KIB contributions based upon an average useful life of 5 years. 3.3 ADDITIONAL E UIPMENT: Providence may purchase additional equipment to be used in the maintenance or improvement of the Hospital's operations. Such additional equipment shall be Providence's property, and shall be tagged as such. Upon termination or expiration of this Agreement, KIB may purchase any items of equipment used in the Hospital and paid for by Providence.The purchase price shall be Providence's book value of the acquired equipment.Minor equipment previously expensed by Providence and equipment and furnishings purchased by Providence with no book value shall be contributed to the KIB at the termination or expiration of this Agreement. Any equipment or personal property which belongs to Providence and is not purchased by KIB may be removed by Providence after the termination or expiration of this Agreement. 4.1 TERM OF AGREEMENT: The Premises and Equipment shall be leased to Providence by KIB for a term of ten (10) years, commencing on April 21, 1997, through and including April 20,2007,unless sooner terminated as hereinafter provided. 4.2 ADDITIONAL TERM: Provided that Providence is not in default under this Lease Agreement, Providence shall have the option to extend this Lease Agreement for one additional term of ten (10) years by providing KIB with 180 days prior written notice. The extended term shall be on the same terms and conditions of this Lease Agreement, or as such terms and conditions are modified upon mutual written agreement of both parties, with monthly lease payments to be established by negotiation. 4.3 SURRENDER OF PREMISES: At the expiration of the term of this agreement or upon the termination of this agreement as provided for herein, Providence shall surrender possession of the Premises and Equipment to KIB as set forth under the terms of this Agreement. 5.1 FIRST RIGHT TO PURCHASE: KIB hereby gives and grants to Providence the first right to purchase all of KIB's interest in the Hospital.Premises, and Equipment at any time from the date of this Agreement until the termination of this Agreement as provided for herein. Said right of first refusal shall include spate leased from KCB by other entities. KIB shall make any sale of said interest in the Hospital, Premises and Equipment between KIB and a third party conditioned upon and subject to Providence's first right to purchase as set out herein, including but not limited to space under Lease between KIB and other entities. Providence shall have the right to accept the purchase price and the terms of the intended sale to the third party as the terms and conditions of the sale between KIB and Providence. 2 Page 199 of 224 Hospital Lease Discussion AGENDA ITEM #2.d. Kodiak Fisheries Work Group(KFWG) City of Kodiak and Kodiak Island Borough Meeting May 6,2015 Notes., 1.The written note provided by the Clerk at the beginning of each KFWG Agenda informs the public that the work group is an"informal meeting of representatives of the City of Kodiak and the Kodiak Island Borough to discuss issues with its Fisheries Analyst....Items that require formal action are placed on a regular City Council and/or Borough Assembly meeting agenda." 2.The following summary of the meeting is provided by the Fisheries Analyst to help inform the public about the main issues discussed,and is not intended to constitute formal minutes of the meeting.Administrative Notes after each meeting are also provided by the City or Borough staff,and included in the meeting packet for the following KFWG meeting,available on the City or Borough website prior to that meeting. Present were Ca-Chairs John Whiddon and Chris Lynch(by phone),members Larry LeDoux,Carol Austerman,Pat Branson (by phone),the Borough Managers, additional support staff and Fisheries Analyst Heather McCarty(by phone). Public-comment Fisherman Kurt Waters said that the recent closure of Flatfish fishing means a loss of 10 to 15%of his income.The closure could also cost the community over$20 million,affecting cannery workers and support businesses.He said this group has done more than any other group has done before to inform the community and stop some of the infighting between groups,and he offered thanks for that He said anything you can do to help our leaders understand the situation,he would very much appreciate it If there ever was a time when we can get together this is it This is not a good way to run the fishery.The way the fish are sampled is not right We did not catch anywhere near the cap but were shut down because of the process. Board of Fish member Sue Jeffrey(could not hear her well)reported that the Board of Fish has put out a call for proposals on the statewide pollock fishery,with a Sept 4 deadline for proposals for the March 2016 meeting. Julie Bonney said that the processing plant tour and vessel tour offered by industry to the City and Borough Assembly members could happen soon.She said the City and Borough should figure out what the best times might be between now and May 22-providing a couple of different times.Re the bottomfish closure:AGDB is having a fishery meeting this Friday to discuss what happened and what can be done,as the infrastructure was not designed for this situation;and also what we can do to perhaps have a fall fishery.She said--we may be coming to the FWG as a body for help in doing that,and we will reach out to you. Page 200 of 224 Fishery Analyst Reports of May 6, May 12, May 27, and July 1... AGENDA ITEM #2.d. She said that the EA(Council analysis for the original action)regarding the Chinook cap said a late April closure would result in 22 MT lost harvest,and an impact of$23 to$28 million loss in the wholesale revenue.That does not count the losses to the support industry and the community infrastructure.She named the industry members in the audience(could not catch them all),including Nick from Global,Curt Heligso,Burt Ashley,Jason Chandler,Kurt Waters,Robby?, Frank Brown,Paddy O'Donnell,Trident plant manager,people who have built business plans around the flatfish fishery. Burt Ashley said that the Western plant is quiet-unusual for this time of year.He also said some are scared to go rockfish fishing.We don't want this to be our future -a ghost cannery. Representative Louise Stutes report Stutes spoke about the closure of the fishery because of the Chinook cap being exceeded.She reported she had told Cotten and the LL Governor that this could happen.People now realize that the cap should not have been Gulf-wide.She said that the Kodiak representatives put things in motion two months ago in case this came to fruition.She said she would make appropriate phone calls today after the meeting. Stutes also reported that only one Commissioner was confirmed for CFEC.Ruffner was not confirmed for the BDF because of Valley opposition.She also reported on a letter to the Council originating in Rep.Edgmon's office asking for halibut bycatch cap reductions in Bering Sea.She said she and Senator Stevens did not sign it because nothing was provided to them in terms of information,and because they would not take such a step without talking to constituents.They had no emails from constituents,except for one from Homer to Stevens,asking for them to support this issue.They need input from user groups,she encouraged constituents to get in touch with them if anything is needed. She reported that the Maritime Workforce resolution passed the House but the session ended before it passed the Senate.The resolution should have no problem passing.It creates a Commission with two members from House and Senate,two members from industry and one from Gov.office-to promote hiring and training from within Alaska. Fisheries Analyst report McCarty asked that Julie Bonney from AGDB be invited to the table to discuss the recent fishery closure. Bonney said that the new 2700 fish cap on Chinook was put in place in January 2015,to apply to the trawl cod and flatfish target fisheries.The cap was structured such that the Western Gulf and the Central Gulf-two distinct fleets-fall under the Page 201 of 224 Fishery Analyst Reports of May 6, May 12, May 27, and July 1... AGENDA ITEM #2.d same cap.The Western Gulf fleet had problems with salmon bycatch in their cod fishery and caught 1200 by mid-March.Less than 100 salmon were taken in the Central Gulf cod fishery.When the fleet moved into arrowtooth and flatfish in mid- April,they were already in the hole.This fishery bycatch protocol uses basket- sampling procedures and extrapolates the salmon taken to the entire fleet.In sampling for rare species,such as Chinook,one or two fish in the sample expands into many.One report of salmon taken drove the entire closure.(in contrast,the Pollock fishery does a full census-every salmon is counted,and thus no expansion takes place.) In this case,one sample was extrapolated over the whole boat and the whole trip and the whole fleet without an observer on board.They tried to close the fishery but couldn't get it done in time. Bonney said she suggested during program development that census counts be used instead of basket samples.She will get that language to the clerk for sharing with the FWG. Vessels for observer coverage are chosen at random.At the beginning of the fishery, the pool was still too large and vessels were too few,so the result was too few vessels with observers.Bonney said that it may be possible to ask the observer program to move from basket sample to full census now. FWG members asked several questions of Bonney.It was asked why this problem just came to light-and the answer was that this is the first year of implementation of the lower Chinook cap.Why was this method chosen?The answer was that the protocol can be changed but there is sometimes resistance to change. LeDoux said that since this is not a controversial issue of what bycatch should be, but how they determine what the bycatch is,it could be dealt with quickly,as it is not complex. McCarty asked Julie to be specific about what kind of support could be helpful from the City and Borough.Julie outlined what support would be helpful in terms of communications to the Council. Lynch said the City and Borough needed to follow up after the Friday fishing industry meeting,to develop strategy and carry it out with letters and other support. Branson agreed that the City and Borough needed to follow through with the support that's necessary and requested. Bonney was asked to speak at the City and Borough work session and at their meetings,as scheduled. Nova Javier,Borough Clerk,said that the Borough Assembly would need a draft letter by Friday,which could then be approved May 21.They could also have a Page 202 of 224 Fishery Analyst Reports of May 6, May 12, May 27, and July 1... AGENDA ITEM #2.d. special meeting on May 14 to approve.Mayor Branson said the City could have a special meeting to approve.Bonney said we could use more time.Branson will speak with the City Clerk on meeting timing and special meetings to approve letters. Bonney said a draft of a letter asking for changes in infrastructure could be done by Friday,but the letter asking for an emergency rule is more complex. Whiddon said that the group understood that this is a community issue,not just an industry problem.He said we are all in to help solve a community problem. LeDoux said he was glad we are moving forward expeditiously.He said the community needs to know this,as they can be involved,and asked Bonney whether the industry was trying to inform the community. Bonney said that all in the industry are well aware,and the story is all over the state and is in the media already.He said she could talk to the Kodiak Mirror and ask them to do a story.She is getting calls from shippers and packing material people, and crews are asking about it. Branson said that McCarty could write a press release for the Mirror and the radio. LeDoux and Whiddon agreed that a comprehensive treatment of this issue is important. Rep.Stutes said she could bring together the Alaska House fisheries committee. CommuniMForum LeDoux and Austerman both said they were pleased with the community forum agenda. Lynch said that the rural community group was happy with the forum agenda,and about being included. Whiddon said that the current situation(trawl closure)serves as a focal point of the importance of the fisheries to the community.He said the community needs to start to form a community position on GTBM,with a focus on the issues,not on people. McCarty reported that she had a conversation with Dennis McMillian (forum facilitator)on the major issues and the format of the discussion.McCarty will come in early on the day before the forum for further discussion with McMillian and the Co-chairs. The FWG discussed the potential coverage and live streaming of the forum. Page 203 of 224 Fishery Analyst Reports of May 6, May 12, May 27, and July 1... AGENDA ITEM #2.d. Economic study RFP Cassidy said he was hoping to have a draft this weekend of the RFP to pass around refining the document for the review of the FWG. Branson asked whether the group has a deadline for this,when we want to get it out Cassidy the nuts and bolts are there-so he wants to get it out ASAP.Will pass it to FWG this weekend.If it is good,it can be ready to go. Marine research and MSA McCarty gave a brief update on marine research and MSA.The Policy Council for the Kodiak SFOS facility is meeting in Kodiak in May to discuss the mission and work at the facility. Public comment Paddy O'Donnell spoke against the planned use of the Gulf by the US Navy for sonar research,it covers much of rockfish grounds-a large area-and starts this summer. Ammo and light bombs could be on the sea floor.Get hold of Tom Macks(?)from the Eyak Corporation for more information. O'Donnell: Regarding the current trawl closure,records indicate that dependence on rockfish and flatfish can be up to 60 to 70%of income especially when pollock declines.Many hatchery salmon are in the mix but we are still held to 2700 Chinook cap.Increasing halibut and salmon bycatch are perhaps a result of warming waters. Reducing bycatch in BS without scientific data is not good.Genetic sampling is good. Should address that down the road. Kurt Waters,Mar Del Norte: He agreed with everything that O'Donnell just said. He emphasized the bad idea of dropping bombs on fishing grounds. He said the Navy used an island for bombing runs in CA and it very much affected the fishing grounds. Community should weigh in on Chinook salmon issue.And the war games should not be within 100 miles of the fishing grounds. McCarty was asked to contact Tom from Eyak and get the most current info. Branson asked that the info come to the FWG. Bonney reiterated the available dates for the tours of the canneries and the vessels. John said that he would make the City Council aware of the opportunity. Lynch said that she would provide the contact info to the Assembly group. Page 204 of 224 Fishery Analyst Reports of May 6, May 12, May 27, and July 1... AGENDA ITEM #2.d Lynch said that Cassidy has been following the Naval exercise issue,and they have changed the scope.Eyak has been following it as well. Next meeting will be the community forum May 12 at convention center. The May 27 meeting will be a followup from the May 12 meeting,including a summary of the forum. Page 205 of 224 Fishery Analyst Reports of May 6, May 12, May 27, and July 1... AGENDA ITEM #2.d Community Roundtable Forum Gulf Trawl Bycatch Management Kodiak Fishery Work Group May 12,2015 8:30 a.m.to 12:30 p.m. Kodiak,Alaska Draft Meeting Summary Facilitator Dennis McMillian opened the meeting with a brief review of the agenda for the meeting and the purpose for the meeting. He said that the purpose of the meeting was for members of the Kodiak Fishery Work Group (KFWG) to have interactive discussions on the Gulf Trawl Bycatch Management program with the members of the public who volunteered to participate with them on the panel,who can also discuss issues with each other.Through those discussions,the KFWG will gain further insight into the community's goals and concerns,and the public present will gain additional knowledge of the process and the main issues. Nicole Kimball. Federal Fisheries Coordinator,Alaska Department of Fish and Game,presented an overview of the Gulf Trawl Bycatch Management (GTBM) action at the North Pacific Fishery Management Council (NPFMC) thus far. Kimball noted that the action began at an NPFMC meeting in Kodiak in 2012.The Council is required to balance the requirements in the Magnuson Stevens Act (MSA) laid out in the National Standards for fishery management.The Council has depended on the input from harvesters,processors and the communities in building a solution,and the current proposal or motion is the result of that input from the public.She said that the Kodiak Fishery Work Group input helped shape the community protection provisions. Kimball said the main provisions in the current motion create voluntary cooperatives,with pollock,cod and PSC (bycatch species) assigned to Page 206 of 224 Fishery Analyst Reports of May 6, May 12, May 27, and July 1... AGENDA ITEM #2.d the participants based on history accessed and managed through those cooperatives. She said the motion also contains proposed protections such as limits on consolidation of use and ownership,regionalization and active participation requirements. Last December the State of Alaska asked the Council to delay further action until this coming October, 2015,to allow the new administration to review and develop their direction.The main objective of the State, Kimball said,continues to be bycatch reduction,and to act in the best interests of harvesters,processors and communities. Sam Cunningham. Economist for the NPFMC and the chief analyst for the action,also provided an overview. He reviewed the ten tasks that the Council asked him to work on for the October meeting. The panel participants were able to make comments on the overviews, and ask questions of Kimball and Cunningham. Kimball said in response to a comment about Community Fishing Associations that the proponents would need to discuss what communities would be eligible for a CFA -just Kodiak or other communities in the region.Also,she said that CFA's require community sustainability plans, including the goals and objectives for a CFA,and how fish would be allocated. Kimball and Cunningham continued to be resources throughout the discussion. John Whiddon and Chris Lynch.Co-Chairs of the KFWG,presented an overview of the community's participation in the ongoing GTBM action. Whiddon said the group was formed four years ago to recognize the importance of fisheries to Kodiak and to increase engagement with the fishing industry.The group is advisory to the City and the Borough and does not do policy setting. Lynch described the process that the KFWG had gone through to arrive at the roundtable community forum. McMillian asked the participants around the table to introduce themselves.They were: Julie Bonney,Alaska Groundfish Data Bank;Jason Chandler,Alaska Whitefish Trawlers Association; Darren Platt, fisherman; James Turner, Page 207 of 224 Fishery Analyst Reports of May 6, May 12, May 27, and July 1... AGENDA ITEM #2.d. Ocean Beauty Seafoods; Natasha Hayden, Native Village of Afognak; Denise May, Native Village of Port Lions;Alexus Kwatchka,fisherman; Dave Kubiak,fisherman;Joe Macinko, Mike Okoniewski, Pacific Seafood; Theresa Peterson,Alaska Marine Conservation Council; Kent Helligso, fisherman. KFWG members Whiddon,Lynch,Carol Austerman, Pat Branson and Larry LeDoux (by phone) were also present,along with Fisheries Analyst Heather McCarty. McMillian let the roundtable discussion of key issues,attached, provided by the public and organized into three general categories: 1. Reduction of bycatch,and accountability 2.Additional program design elements 3. Community impacts and community protection In the first category,there were differing points of view expressed regarding whether it was necessary to allocate quota shares of both target species and Prohibited Species Catch (PSC),or just PSC. It was suggested by Chandler that a voluntary cooperative program was needed in the trawl fisheries to help prevent one person from catching bycatch in numbers that shut down the whole fishery. Macinko pointed out that in Canada they have a system of individual bycatch quotas that have cut down on bycatch in the trawl fisheries: he said the Gulf trawlers would like to have a catch share program. Bonney said that the Canadian system also allocates target fisheries along with bycatch species,and that there would be a discussion paper on the system at the Council. She said the trawlers are really facing a bycatch cliff,and the community faces a$28 million loss from the current trawl closure caused by going over the Chinook bycatch limit recently imposed on the fleet.She said the key to bycatch avoidance is cooperative management. Hayden said that the impact of trawling on salmon and halibut was high and a system should allocate PSC only. Peterson said that she recognized the dependence of the trawl fleet on PSC,and that the main purpose of the action was to reduce bycatch. Chandler pointed out that recent genetics information shows that 97%of the Chinook in the Page 208 of 224 Fishery Analyst Reports of May fi, May 12, May 27, and July 1... AGENDA ITEM #2.d bycatch does not originate from the Kodiak streams. He also said that allocating just PSC through Individual Bycatch Quota (IBQ) still allowed the race for the target species- and that the most important element in avoiding bycatch was time. Okoniewski said that the Pacific Northwest trawl fisheries program is not working well because there are several"choke species"and no cooperative management; target species need to be allocated in some way,and managed cooperatively. Whiddon asked where there might be common ground in this category. Several members of the panel indicated that 100%observer coverage was widely accepted as necessary.Also,there was some support for the idea of cooperative management being the key to bycatch control. Kwatchka said he was not convinced that property rights to the fishery resource were necessary or advisable.The rights can leave a community,he said,and then we have to talk about how to prevent negative effects on the community. He said we need fish over the docks in Kodiak- can we have cooperative management without the granting of property rights? The discussion turned to the need to allow additional participation in the fishery,and how that might be accomplished in a quota share management system. Chandler said that new boats usually come from other areas,and there needs to be a way to protect the vessels that have been historically fishing in the area. Platt asked how crews come up through the ranks to become skippers and owners. Chandler suggested a skipper training program. Helligso said that new skippers often catch the most salmon bycatch out of lack of experience in the fishery. Platt asked if there would be opportunity for Kodiak residents in a quota share fishery. Bonney said there could be an apprenticeship program developed in the cooperative structure,with annual coop reports and Council review of how coops are meeting those goals. Whiddon asked if there was a mechanism in the Magnuson Stevens Act (MSA) that creates cooperative structure without private"ownership" of quota. Kimball said that if there were to be a cooperative,each Page 209 of 224 Fishery Analyst Reports of May 6, May 12, May 27, and July 1... AGENDA ITEM #2.d participant would need to bring something to that cooperative, quota,or a license. May said that the privatization of fisheries has hurt rural.communities where there used to be fisheries available for residents to participate in. She said halibut bycatch needs to be addressed,and that rural communities need a seat at the table when decisions for the future are being made.She said rural communities need new small boat fisheries, and that fishery habitat needs to be protected. Bonney said a rationalized fishery helps protect habitat. Kwatchka said that leasing of quota as in the crab management program is a problem, causing owners to seek who will fish for the least amount; also that in the crab program the processors dictate when harvesters fish and deliver. Chandler said that use and ownership caps will help with leasing problems. Hayden said there are other tools to manage the race for fish that have not been tried,and that the rush to privatize has had a negative effect on communities. Kimball said that such management tools as fixed area closures, rolling closures, etc.,had not been very effective at controlling bycatch. Hayden said that she owned halibut IFQ that was not worth anything because of the halibut decline. Okoniewski said that the common ground may be that bycatch reduction is a good thing,and that rights-based cooperative management has some success stories. He said proponents have to make a convincing argument for a better economic outcome in the communities. Whiddon agreed that reduction of bycatch and cooperative management might be common ground,but that support for the granting of quota shares was not common to the group. McMillian said he was hearing that protecting and sustaining the community was a concern. Peterson said that in the Bering Sea cooperatively managed trawl fleets are reluctant to change the bycatch limits for halibut,and halibut quotas Page 210 of 224 Fishery Analyst Reports of May 6, May 12, May 27, and July 1... AGENDA ITEM #2.d for the directed halibut fishery have been reduced by 60%. She said she thought that an important element of program design was to bring back small trawl vessels to the community.Young new participants would have even more of a hurdle to get into the trawl fishery if they had to pay for quota rights. Bonney said that without a cooperative management system in the Gulf, 200,000 pounds of flatfish are left in the water because of the current trawl closure. She said that halibut fishery management has allowed overharvest for 10 years. She said that the Council will need to balance National Standards,and deal with the issues-how do we get new people into the fishery,and how do we improve the economics of the trawl fishery. May asked whether there had ever been a GAO report on the Gulf Fisheries. Kimball said that there had been a GAO report on the Gulf observer program. Denise said there needed to be a report on the allocation of fishery resources,and that smaller communities needed opportunity,perhaps small boat pollock fisheries. Kimball said that the State was looking at other legal gear for pollock and at a state water pollock fishery. Bonney said the grounditsh fishery in the Gulf has been named as one fishery that needed to be rationalized. Bonney named the impacts and benefits to Kodiak of year-round processing,and that the processors need to use the whole calendar. When vessel crews are rotated,more people live in Kodiak,providing more stability. Whiddon asked how it could be ensured that most of the vessels in the fishery are based in Kodiak,and benefit Kodiak. Kwatchka said validate all 96 LLP's,give equal shares to each for pollock and cod,and PSC species,then manage the vessels cooperatively. He said this would mitigate all other problems. Require owner on board. Guaranteed amounts of target and PSC allows cooperative management. Macinko suggested the rights to fish be given to the community and fished by current fishermen. Hayden said that the rights to fish should Page 211 of 224 Fishery Analyst Reports of May 6, May 12, May 27, and July 1... AGENDA ITEM #2.d be given to Kodiak,where it would be managed locally. Peterson said we must keep quota tied to the community. Turner described the impact at his processing plant of the shutdown of the flatfish fishery. He said many of the 300 workers, 200 of whom are from Kodiak,are idle in May and most of June,with a loss to the community of$1.7 million in wages. He said this is a huge loss to the community because we haven't been able to come to consensus. He said the processing workers should have some say in the process. Bonney said that the allocation of pollock in the voluntary coops now used is the"hardest thing we do."The system disregards dependency on the fishery and is just based on vessel capacity.This method dilutes the business plans of those you care about,she said.A cooperative system should acknowledge the historical participation and link with a historical processor,as a processor is key to cooperative management. Chandler said equal shares rewards people who have not been in the fishery historically,and have not invested in it. Kubiak said it was troubling to see halibut being scooped up. He said we need to take the long view, the view of future generations. He said he agrees with much of what he is hearing-if we have to have ownership, let's hold the owners' feet to the fire. Wrapping up the meeting,Whiddon said he agreed the community needed to have a generational viewpoint. Lynch said the KFWG would try to develop a paper and would discuss at the May 27 meeting,and that the goal would be to have something ready for the October Council meeting. Public comment: Steve Taufen said it would be nice to have another meeting,and mentioned the ownership issue, money flowing from Kodiak to other countries,and value-added processing. The EDF representative said that the status quo is not working,and that EDF would like to be a resource for Kodiak. Page 212 of 224 Fishery Analyst Reports of May 6, May 12, May 27, and July 1... AGENDA ITEM #2.d. Ernie Weiss from the AIeutians East Borough said that Kodiak had been a model for their community,and that they would share their economic analysis when it is finished. He reported being funded by NFWF to put together a CFA,with Peterson the contact in Kodiak. He said that some at the State believe that the trawl fisheries can be managed without catch shares. Scott Hoekema said that the low Chinook cap and the closure has cost two crew on his vessel their jobs. Tom Lanz brought up the issue of the Navy ordinance training in the Gulf and provided contact information. Curt Waters, Kodiak trawl fisherman,said that the community needed to get the truth on the Canadian system. He said he was a new entrant and he had been fishing for 30 years-you get there by experience,skill and talent. He said the trawl fishery did not ruin the halibut fishery. He said the community needed to deal with the processors' problems as described by Turner. Cody Hoekema from the Pacific Storm said he was a new entrant,and after five years was just beginning to understand the fishery.The current closure is a disaster. He said they spent days looking for places with no bycatch,and better research is needed. Paddy O'Donnell said that the current shut down of the trawl fishery has shut down the economic engine of the town. He said we need to get back on the boats,we need ambition,and we need to work together. Page 213 of 224 Fishery Analyst Reports of May 6, May 12, May 27, and July 1... AGENDA ITEM 2. Kodiak Fisheries Work Group(KFWG) City of Kodiak and Kodiak Island Borough Meeting May 27,2015 Notes: 1.The written note provided by the Clerk at the beginning of each KFWG Agenda informs the public that the work group is an"informal meeting of representatives of the City of Kodiak and the Kodiak Island Borough to discuss issues with its Fisheries Analyst....Items that require formal action are placed on a regular City Council and/or Borough Assembly meeting agenda." 2.The following summary of the meeting is provided by the Fisheries Analyst to help inform the public about the main issues discussed,and is not intended to constitute formal minutes of the meeting.Administrative Notes after each meeting are also provided by the City or Borough staff,and included in the meeting packet for the following KFWG meeting,available an the City or Borough website prior to that meeting. Present were KFWG co-chairs John Whiddon and Chris Lynch,and members Pat Branson,Carol Austerman and Larry LeDoux,Borough Manager Bud Cassidy, Fisheries Analyst Heather McCarty and additional staff. Reed Harris,fisheries staff for Representative Stutes,gave a report by phone.He reported that Rep.Stutes had written a letter to the Council supporting the industry initiative to ask the Council to provide additional Chinook to re-open the trawl non- pollock,non-rockfish fishery.She sent copies to the Lt.Governor,to the Kodiak Mayors and to the Alaska Congressional delegation. McCarty reported on the Community Roundtable Discussion on Gulf Trawl Bycatch Management held May 12 in Kodiak.The draft written summary of that roundtable was provided at the meeting and is attached. The FWG discussed the main issues that were on the agenda and others that emerged from the roundtable discussion.Lynch said that perhaps the FWG could use the key issues on the agenda as the basis,then list the topics brought out at the roundtable. Lynch said that common ground was found in several areas,but not in the area of ownership of quota shares.Austerman said she agreed. Whiddon said that quota share ownership is the big issue,and that's where the State is focusing. Whiddon said that entry level was not a sticking point at the meeting-the discussion was good,that the fishing trade is one you learn,and you need experience. He said he was wondering if the fleet is looking at that and recognizing Page 214 of 224 Fishery Analyst Reports of May 6, May 12, May 27, and July 1... AGENDA ITEM #2.d generational change.It meets community needs and concerns--keeping the industry in the community.What does entry level really mean? Whiddon said that Denise May said at the roundtable that the improvement in PSC management of halibut and salmon could help the fisheries that the villages rely on. It was very helpful to see that come out. LeDoux identified the commonality of reducing bycatch,cooperative management, trained skippers and small community concerns.One additional area we need to make the Council understand is that it is not just the processor closures,it's people losing their homes,etc.Economic analysis will be very important Branson agreed that economic analysis will be very important Can we rind out when the State might put out their position on GTBM7 McCarty said that she would find out Whiddon said we should look at the fishery and policy with a multi-generational view.This is what came out in the roundtable discussion. McCarty added that the idea of community ownership of quota also came up in the roundtable discussion. Whiddon said-what are we asking the Fisheries Analyst to do?We cannot say what the community felt about the quota share issue(as there were differing views). Perhaps we could have another community forum in September,just on coop structure and quota share. Branson and LeDoux agreed with that as well.LeDoux said that the opportunity to talk about their points of view is important to the community.Elected officials may not be able to take positions on specific strategies but it is helpful to bring together the public.We should invite all the community officials so they can get educated. (Note:All were invited to the community roundtable.) Austerman said that timing of the meeting is key,not at the end of September.The content of the community letter to the Council,which is due September 29 for the October Council meeting,should include economic and social aspects.Both are important.Say that Kodiak is a fishing community.Weave the community story a little more through the communication to the Council. Whiddon said we should tie comments to the National Standard that requires fisheries management to protect communities. Lynch asked what folks were thinking re structure of the forum.Branson said we don't need a facilitator. Page 215 of 224 Fishery Analyst Reports of May 6, May 12, May 27, and July 1... AGENDA ITEM #2.d Lynch asked if we keep the same panel as the first roundtable,and Julie Bonney and Jason Chandler said it depends on the dates. Bonney:Sept 21-24 is the Groundfish Plan Team meeting that many attend.Maybe the forum could be the week after Labor Day.C season pollock is going on-in September so trawl sector will not be well represented. Whiddon said there is no good season-July and August are also busy-and asked if there would there be enough to represent the trawl fleet. LeDoux said community members could be asked to turn in written material ahead of time. LeDoux said we should make a try to send the agreed-upon issues to the State sooner. Branson agreed-the Fisheries Analyst would put together the material. Whiddon said we should schedule the forum in September.Participants should come with a different perspective.Everyone here has a vital role to play in the outcome.If we stay with age-old positions,we will not move ahead.Think multi- generational. Bonney said we will have the results of the Council analysis in September,but not necessarily the State position. Lynch said we could have the forum between Sept.8 and Sept. 11.McCarty will rough out the topics for the new forum. Trawl closure: We have letters in the packet from both the Borough and City to the Council asking for relief from the trawl closure.McCarty said she would be at the Council meeting and could introduce the letters under B reports.The item is not on the agenda but will be testified to under B reports and discussed during Staff Tasking. The City letter did not get approved soon enough to be in the Council packet. Linda Kozak said it would be good to have someone from the City or Borough at the meeting.Whiddon said he could attend. Economic analysis: Cassidy said that the RFP is pretty much fleshed out He will send it out for review and then put out the RFP. He will have the RFP before next week and will send it to the chairs for review.He might incorporate some ideas from the forum. eseambf cia 'lily: Page 216 of 224 Fishery Analyst Reports of May 6, May 12, May 27, and July 1... AGENDA ITEM #2.d. McCarty committed to having the document from the recent meeting at the local SPOS Facility to the group For the next meeting. MSA.: The House version is controversial.Nothing is moving currently in the Senate. Public testimony: Bonney said she wanted to listen to the tape from the forum.She worries no one knows how the coop functions.Nicole said it-you have to bring something to the coop.Bonney said that is history for allocation.This new Forum should focus on the longer view,not who gets the allocation now.Not try to break the coops,but focus on a vision of what the coops are gong to look like in 10 or 20 years.Going through the data will help you understand how the coop will form. Steve Taufen.Re the City and Borough letters and the economic values in them-it includes labor and value added,and multipliers don't apply to an island economy. Re the Canadian letter on halibut bycatch,it talks about collaborative management. Many recreational voices are in the record already on halibut bycatch.Dutch Harbor did not get into that We are not hearing enough from crew voices.How much did they used to share from this fishery? We have the time.People are worried about shutdown from bycatch,but these fish are other people's fish.Why is it not unfair when the halibut fishery is shut down? Paddy O'Donnell.Thanks for bringing up the Canadian letter.Vessels have been reduced in Canada.Need to look more closely at the Facts on the Canadian system- you can get the facts-it's available.The Gulf will see more displaced vessels From the Bering Sea because of the halibut bycatch issue. PSC quota share would still be a race for fish. He said he sees no windfalls in the GTBM action,only costs.He would rather not have a quota share-would like to compete and catch more fish. He said he will be protesting the Navy exercises. Theresa Peterson.She supports an additional roundtable,and if the previous participants cannot attend perhaps they can appoint a substitute who has the same perspective. Page 217 of 224 Fishery Analyst Reports of May 6, May 12, May 27, and July 1... AGENDA ITEM #2.d. The Council action in June to address halibut bycatch in the Bering Sea,is also an important issue for halibut fishermen in the Gulf.There is a trickle-down effect of halibut bycatch,according to tagging studies. Regarding finding common ground-she said she liked the common ground expressed at the forum.One sticking point is the catch share ownership rights.She said one should look at how to provide the management benefits without property rights. Matt Moyer.He said don't get wrapped around the axle on the entry-level concept All industries have a process to get in.There are young men and women who are getting into the fisheries.Bank is loaning money and people are taking the risk. Linda Kozak.Don't spend a lot of time going down the 1BQ path.Council has done it two times already. Regarding creating wealth-what is wrong with that?What is wrong with rewarding people for having put a lot of time in to developing the fishery?We made mistakes in the halibut and crab management program-look at them and figure out how to benefit communities.The idea that allocating on history is a bad thing is appalling.This is America.Fishermen have spent years developing fisheries-it is not wrong to give them credit for that Chandler: People have a bad taste in their mouth from the halibut IFQ program. FWG comments; Branson:There is nothing wrong with wealth,we just hope wealth stays in the community. Whiddon:We want to continue to watch Karluk Lake. Brad Gilman(DC representative for Kodiak) had concerns about community speaking against the naval training. We are watching it Whiddon:Wealth is not bad.Just in the wrong hands it can be difficult Next meeting:the FWG will meet in June,and take July off.The next meeting will actually be July 1,and not another one until August Austerman:re the press release on the City and Borough letters to the Council.Be careful because there was a lot of conversation regarding the words in the release. Page 218 of 224 Fishery Analyst Reports of May 6, May 12, May 27, and July 1... AGENDA ITEM #2.d. Kodiak Fisheries Work Group (KFWG) City of Kodiak and Kodiak Island Borough Meeting July 1, 2015 1.The written note provided by the Clerk at the beginning of each KFWG Agenda informs the public that the work group is an'informal meeting of representatives of the City of Kodiak and the Kodiak Island Borough to discuss issues with its Fisheries Analyst Items that require formal action are placed on a regular City Council and/or Borough Assembly meeting agenda." 2.The following summary of the meeting is provided by the Fisheries Analyst to help inform the public about the main issues discussed,and is not intended to constitute formal minutes of the meeting.Administrative Notes after each meeting are also provided by the City or Borough staff,and included in the meeting packet for the following KFWG meeting,available on the City or Borough website prior to that meeting. Present were Co-chair John Whiddon, and FWG members Pat Branson, Terry Haines and Rebecca Skinner.Also present were City staff,and Fisheries Analyst Heather McCarty (by phone). Chair Whiddon welcomed the new FWG member from the Borough Assembly, Rebecca Skinner. Public comment: Julie Bonney thanked the City and Borough for their help at the June Council meeting, [in regard to asking for emergency action to provide additional Chinook salmon to allow the non-Pollock, non-rockfish trawl fishery to reopen.] She said the fishery should be back in the water by August 15,which will help the community economic situation. Representative Stutes report: Rep.Stutes provided a letter on the emergency action from the Governor's office. She said that the Lt. Governor was also very helpful in supporting the action taken by the Council to help with the closure, including discussing the action with ADF&G. Page 219 of 224 Fishery Analyst Reports of May 6, May 12, May 27, and July 1... AGENDA ITEM #2.d. Fisheries Analyst report: McCarty reported on the two actions taken by the Council,a short-term emergency action,and a longer-term amendment package to allow rollovers of Chinook salmon within the overall bycatch cap,as described in the written report included in the meeting packet. She said that the news from the NMFS Regional office in Juneau that morning was that the emergency action package would be transmitted to NMFS headquarters next week. Bonney said that the amendment package is the middle ground until we get the proper tools for bycatch management.She said that the existing proposal in the "tools" action for bycatch management is proposing to further reduce the Chinook cap. She said that it would be good to have another option in that management package to increase the Chinook cap. Whiddon asked if the ability to roll over Chinook had been available this year,would it have been useful to solve the current problem. Bonney answered yes,but that managers would still need to know how to allocate the bycatch among the fisheries. Whiddon concluded that it was still a good idea to continue to push for a comprehensive bycatch management program,and Bonney agreed. Whiddon asked McCarty to continue to keep them updated on the progress of the emergency action. September Community Forum: The FWG intent at their last meeting was to have another forum to discuss the areas where there was no common consensus at the May forum- the need for cooperative management was common ground in those discussions,but the catch share ownership concept was not.The FWG also discussed having the same volunteer participants or substitutes if those were not available. Page 220 of 224 Fishery Analyst Reports of May 6, May 12, May 27, and July 1... AGENDA ITEM #2.d. Skinner said the need for bycatch management tools has been driven home with the recent closure,so conditions are different now. She said that we need broader participation by those folks who have experience with cooperative management.We need an informed discussion with people who can bring that experience.She said that the previous forum included such discussion as whether trawl was an acceptable gear type, and now the discussion needs to be more focused. She said we need an option for a wider range of participation from the trawl sector. Branson agreed that the discussion needs to be more focused this time. The last time it was more broad. Whiddon agreed that we have moved beyond the discussion of whether trawl is good or bad. He said it was the responsibility of industry to send the right people. Haines said that everyone who applied got to participate last time. He said we continue to need representation from everyone who has a stake in the bycatch issue. After more discussion about how participation in the forum should be determined,it was agreed to put out another call for volunteer participants,with the addition of specifically what the discussion topics will be. From the volunteers,another group will be chosen.The FWG also agreed on Wednesday September 9,at the convention hall, in the morning. Bonney said that cooperative management was the agreed upon element,but ownership of catch shares was the sticking point. She said that as Nicole said at the previous forum,you have to have something to bring into the cooperative. She said we need to talk about this,and to have the topic well defined. Whiddon said the key is how we word the invitation,as otherwise we will waste our time. Page 221 of 224 Fishery Analyst Reports of May 6, May 12, May 27, and July 1... AGENDA ITEM #2.d Haines said it was important to reserve plenty of time for a robust pubic comment period.We are in a position of trying to guess what the Council might do,as usual.We need to be more specific but not appear to endorse something they have not put forward yet. We have to talk. about how a cooperative management regime might work. McCarty said that she had begun the dialogue to try to determine when the State of Alaska might put forward their concepts for bycatch management,and would report on any information. Whiddon said the community is in a position where we can help the process.We have never been in a position where we can be more impactful. Branson agreed it is a timing issue. The call will go out to the public again,asking for volunteer participants for the forum on September 9, from 8:30 to noon.The topics will be carefully laid out in the invitation,and the participants will be asked to focus on those topics. McCarty agreed to again invite the Commissioner and Nicole Kimball from ADF&G,and Sam Cunningham from the Council staff. Economic study RFP: Bud sent out the new draft May 31 asking for input from the Co-chairs and analyst. Skinner has asked what is the process for reviewing the RFP responses? Whiddon said the FWG will make recommendations on the responses. The entire package of responses will then be forwarded to the respective bodies who will make the decision on awarding the RFP. The analyst said she would respond immediately on the RFP draft, working with the Co-chairs.Skinner said that she would review the draft as well. Page 222 of 224 Fishery Analyst Reports of May 6, May 12, May 27, and July 1... AGENDA ITEM #2.d. Research_facili_ties: McCarty provided in the meeting packet the updated vision statement from the May meeting at the SFOS facility,and said how important the community support was in preserving the facility. Karluk update: Tina Fairbanks reported on the progress on the EA-- it has not come out.They are continuing to monitor the nutrient level in the lake. Whiddon asked McCarty and Brad Gilman to continue to monitor the situation. McCarty agreed to communicate with Gilman. Fairbanks said we don't want to enter into a vacuum again.We want to keep things current,keep the familiarity going. Whiddon said he would ask from an update from ADF&G on the sockeye run at the next FWG meeting in August. MSA update: Whiddon had three main questions on the MSA update from Gilman,and it was agreed that it would be a good idea to have Brad on line to answer detailed questions in August. McCarty can also provide an update on the observer and EM issues at the NPFMC level.Whiddon's questions had to do with the funding issues on surveys and how it might affect the North Pacific,whether the use of fines to fund management could lead to increasing fines,and how the North Pacific can make advancements on the use of EM. Haines said that he would like to know more about the challenges to the Alaska management model that are in the Young bill. McCarty will ask Gilman to sit in on the August meeting and address these issue and others. [Note: following this meeting Gilman indicated he would be on vacation in August,and it was agreed to invite him to attend a subsequent meeting by phone to talk more about MSA issues.] Page 223 of 224 Fishery Analyst Reports of May 6, May 12, May 27, and July 1... AGENDA ITEM #2.d. Environmental Defense Fund (EDF], Whiddon said that EDF has asked to come to a meeting and make a presentation to the FWG. Shems Judd said he would be willing to come in August.The FWG agreed. Public comment: Bonney said that several things are in play on the MSA-some conflicting- and it will be interesting to see how they will come together. She said there were some aspects of the Senate bill that could be bad for Alaska.The key on the use of fines is that the region within which the fines are levied should get the money. EDF: she supports the idea they make a presentation.They were a good bridge in the Pacific Council,and were a mediator between the environmental community and others. Linda Kozak commented on the MSA,and the proposed ability to make use of scientific information coming from elsewhere.The Council legislative committee had some concerns about the information coming from elsewhere and said it could be problematic.The CCC meeting discussed it as well. Gilman will be helpful on this. Skinner thanked everyone who helped get the Borough letter to the Council at the meeting. Whiddon said that August 5 is the next meeting time,with the Borough chairing. Page 224 of 224 Fishery Analyst Reports of May 6, May 12, May 27, and July 1... KODIAK ISLAND BOROUGH WORK SESSION ork Session of: we"- -0-1-11-5- Please PRINT your name Please PRINT your name Ca � �J 0MATMAM - ----------- C r