DESCHUTES ESTUARY RESTORATION PROJECT

INTERLOCAL AGREEMENT

THIS DESCHUTES ESTUARY RESTORATION PROJECT INTERLOCAL AGREEMENT

("Agreement") is entered into this Date of Last Signature by and among the Department
of Enterprise Services (DES) acting on behalf of the State of Washington (State), the
Squaxin Island Tribe (Tribe), the County of Thurston (County), the City of Olympia
(Olympia), the City of Tumwater (Tumwater), the Port of Olympia (Port), and the LOTT
Clean Water Alliance (LOTT) to address shared responsibilities for long-term Sediment
Management in a restored Deschutes Estuary. Each entity identified above is referred to
individually as a “Party,” collectively all Parties are referred to as the “Parties,” and the
Parties other than the State are referred to as the “Local Parties.”

INTRODUCTION

Background

What is now Capitol Lake was originally the southern portion of the Deschutes Estuary,
where freshwater from the Deschutes River and Percival Creek mixed with saltwater from
Budd Inlet over extensive tidal flats. Between 1949 and 1951, the State constructed a
dam at 5th Avenue in Olympia to impound the Deschutes River to create a reflecting pool
for the Washington State Capitol Campus. The 5th Avenue Dam blocked saltwater from
Budd Inlet and transformed the area upstream of the dam into Capitol Lake, a 260-acre
freshwater lake fed by the Deschutes River. Capitol campus planners intended Capitol
Lake to be part of the Washington State Capitol Campus, and it was designated a
resource of the Capitol Campus under RCW 43.34.090 and RCW 79.24.710. DES (to
include predecessor agencies) has had the responsibility to manage Capitol Lake
throughout the lake’s existence under a long-term lease agreement with the Washington
State Department of Natural Resources (DNR). The Deschutes River and Estuary and
Budd Inlet, together with the parks and trails that surround them, are an important visual,
economic, cultural, and recreational resource for the community.

Each year, the Deschutes River and Percival Creek transport an estimated 35,000 cubic
yards of sediment downstream. Before construction of the 5th Avenue Dam, this sediment
could move freely into Budd Inlet. With the dam in place, most of this sediment settles in
Capitol Lake. The sediment captured upstream of the 5th Avenue Dam has accumulated
up to 13 feet deep in some places—dramatically altering conditions.

The establishment of Capitol Lake created conditions that have resulted in chronic
violations of water quality standards. Water quality monitoring began in the 1970s, and
by 1985, the Thurston County Health Department permanently closed the historic
swimming beach in Capitol Lake due to water quality impairments. Capitol Lake is and
has been a focus of state and federal water quality improvement planning since the
1970s. The presence of the 5th Avenue Dam is the single largest contributor to dissolved
oxygen depletion in Budd Inlet.

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The presence and persistence of invasive species in Capitol Lake has complicated its
management. Since the 1980s, the State has employed a variety of strategies to address
aquatic invasive species, but today more than a dozen different plant and animal invasive
species are present. In response to finding the New Zealand mudsnail in Capitol Lake in
2009, the State officially closed Capitol Lake to all active public use.

For more than 50 years, public and private entities have attempted to address these and
other environmental concerns regarding Capitol Lake and the Deschutes Estuary. For a
wide variety of reasons, these efforts did not result in meaningful resolution or enduring
solutions.

Selection of the Estuary Alternative

In 2018, DES began a process to evaluate long-term management alternatives for the
waterbody. To evaluate the alternatives, DES used the Environmental Impact Statement
(EIS) process. Through this process, DES carefully considered comprehensive technical
analyses, evaluated benefits and costs of project alternatives, solicited feedback from key
stakeholders, and reviewed public comments. In 2022, DES issued a final EIS identifying
the Estuary Alternative as the preferred long-term plan. The Estuary Alternative involves
removal of the 5th Avenue Dam, restoration of tidal flats and marsh habitat in the 260-acre
basin, construction of physical assets such as a new 5th Avenue Bridge, and long-term
management of sediment naturally transported into navigational areas of Budd Inlet.

Removal of the 5th Avenue Dam will also restore natural sediment transport processes.
This will result in increased sediment accumulation in navigational areas of West Bay
compared to existing conditions, similar to sediment processes that existed prior to dam
construction. Sediment accumulation, if unaddressed, will affect commercial and
recreational uses in West Bay including the marinas 1 and, to a lesser extent, the Port
vessel berths.

At the direction of the Washington State Legislature, 2 DES convened a Funding and
Governance Work Group (FGWG) comprising the Parties to explore long-term funding
and governance options. The Parties considered several funding and governance options
for long-term management of the restored Deschutes Estuary and reached consensus as
set forth in this Agreement.

Shared Goals and Benefits of the Project

The Parties recognize that the Project will contribute to the health of Budd Inlet and the
Deschutes River watershed.

1
The term “marinas” includes the following private businesses and entities: Olympia Yacht Club,
Fiddlehead Marina, Martin Marina, and One Tree Island Marina, as well as their successor entities.
2
Washington State Legislature. “Second Engrossed H.B. 1115 – 64th Legislature (2015 3rd Special
Session): Concerning the capital budget.” June 30, 2015.
https://app.leg.wa.gov/billsummary?BillNumber=1115&Year=2015&Initiative=false.

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Estuary restoration will produce a range of ecological and economic benefits. Removing
the dam, restoring tidal flows, and reintroducing native habitats will benefit ESA-listed
salmon populations and the species that depend on them, including the Southern
Resident killer whales. Birds, shellfish, and other native species are likely to proliferate in
the estuary and become part of a more diverse ecosystem. Restoring the estuary will also
help Budd Inlet meet state water quality standards, which reduces the need for more
stringent regulation on other contributors.

The Project will restore public access to the water and enhance adjacent open space
through new boardwalks, fishing piers, and trails. A new 5th Avenue Bridge will provide
safer pedestrian and bicycle connectivity along the trail between Heritage Park and
Deschutes Parkway. These new and improved amenities will benefit residents’ quality of
life and the experience of visitors to the region.

The Squaxin Island Tribe supports the Project, noting that restoring native habitat for fish
and other culturally important species and reopening access to the water will renew
cultural use of traditional lands and resources that were lost when the State built the dam.

Estuary restoration will complement and enhance the value of other investments among
state, tribal, and local governments, public entities, and private organizations to restore
the Deschutes River watershed, improve the health of Budd Inlet, and help address
flooding risk to adjacent urban infrastructure resulting from sea level rise.

The Parties agree that to be most successful, the Project must also help support a
working, urban waterfront, with recreational and commercial boating. Maintaining a
working waterfront and supporting boating infrastructure contributes to a dynamic, vibrant
community and will produce and sustain public revenue streams from taxes and lease
payments, support employment opportunities, and create public amenities that benefit all
community members. The Sediment Management program set forth in this Agreement
will enable the restored estuary and built environment downstream to coexist.

Shared Guiding Principles of the Project

The Parties, working through the FGWG, agreed on the following guiding principles to
support the process of identifying issues and developing proposed solutions:

• The process should have dedicated and secure funding sources.

• Those who contribute to the problem should participate in funding or paying for
the solution.

• Those who benefit from the solution should participate in funding or paying for
the solution.

• The process should have a shared distribution of costs.

• The State should participate.

• Solutions should be watershed-wide in scale.

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 • The process should establish manageable long-term governance.

• The Parties should commit to a long-term collaborative process.

• Administration of the project should be adequately resourced.

• Solutions must support the goals and objectives of the long-term management
plan and the future of the overall watershed.

From these guiding principles, the Parties agreed upon a three-part structure for
governing and funding the Deschutes Estuary restoration:

1. The State will be responsible for funding the capital costs of design, permitting,
and construction of the estuary restoration, which recognizes that the State
constructed the 5th Avenue Dam and has had management responsibility for
Capitol Lake since that time.

2. After construction is complete, the State will transfer ownership and

management of specific physical assets to other Parties. This will be
accomplished through separate agreements between the State and the
individual receiving Parties, included in Attachments 1 through 4. This transfer
helps to achieve the goal of minimizing the responsibilities for long-term joint
governance; after the physical assets are conveyed, the only remaining item
for joint governance is Sediment Management in West Bay.

3. The Parties will share in administering, funding, and implementing Sediment

Management that will be needed in West Bay to maintain navigation and avoid
significant adverse impacts 3 to the marinas and Port, for the term of this
Agreement. This shared responsibility for Sediment Management reflects the
Parties’ recognition that the restored estuary will provide significant benefits to
the Parties and the broader community, and is the subject of this Agreement.

AGREEMENT

Based on the foregoing, which is incorporated into and considered part of this Agreement,
the Parties agree to enter into an Interlocal Agreement pursuant to Chapter 39.34 RCW,
the Interlocal Cooperation Act, as follows:

1. Purpose and Conceptual Overview

The overall Deschutes Estuary Restoration is referred to as “the Project” and is

generally described as the Estuary Alternative in Chapter 2 of the final EIS. 4 The

3
Refer to Section 10.1.1 for a description of significant adverse impacts as it has been defined for this
Interlocal Agreement.
4
Washington State Department of Enterprise Services (DES). 2022. Final Environmental Impact
Statement: Supporting Chapter 2.0 Project Alternatives & Construction Approach. October.
<https://deschutesestuaryproject.org/wp-content/uploads/2023/11/Capitol-Lake-Deschutes-Estuary-Final-
EIS-2-Chapter-2.pdf>. Last accessed May 8, 2024.

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 design of the Project will be significantly advanced from the Estuary Alternative in the
EIS, but the description contained in the EIS is a good representation of key
components of the Project.

Construction and management of the Project will include the following elements:

• The State will fund and administer planning, design, permitting, estuary
restoration, and construction of physical assets.

• The State will transfer specific physical assets and/or long-term management
responsibilities of these physical assets to individual Parties after construction as
described in Table 1 to this Agreement.

• All Parties will fund and govern long-term Sediment Management in navigational
areas of West Bay in accordance with this Agreement. The term “Sediment
Management” herein refers to maintenance dredging in navigational areas of
West Bay to prevent adverse impacts to recreational and commercial navigation.
Refer to Exhibit 1, which shows the dredging areas of West Bay subject to this
Agreement.

The purpose of this Agreement is to describe and formalize the role of each Party in
funding and governance for Sediment Management in navigational areas of West Bay.
Exhibit 2a provides a flowchart that depicts the representative annual coordination
process for all marina dredging. Exhibit 2b provides the representative coordination
process for Port-lead dredging within the Port’s vessel berths. Both exhibits are for
illustration purposes and the written terms of this Agreement control in case of conflict.

2. Deschutes Estuary Steering Committee (DESC)

2.1. Formation and Purpose of the DESC

Pursuant to RCW 39.34.030(3) and (4), the Parties establish the Deschutes
Estuary Steering Committee (the “DESC”) as a joint board for the purpose of
providing overall governance regarding Sediment Management and the use of
funds collected pursuant to this Agreement. The DESC is not a separate legal
entity. The DESC shall consist of one representative from each Party who shall
represent the Party for all purposes on the DESC and one alternate from each
Party to act in the absence of the primary Party representative.

2.2. Designation of Party Representatives

Each Party shall designate one person to represent the Party on the DESC and
to receive notice of all actions related to Sediment Management and one
alternate from each Party to act in the absence of the primary Party
representative. If no representative is or has been designated by a Party, notices
shall be delivered to any person or office authorized to receive service of process

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 on behalf of the Party. Each Party shall have one vote on the DESC, regardless
of the number of representatives for the Party.

2.3. Authority and Duties of the DESC

The DESC shall have the following authority and duties, to the extent consistent
with Chapter 39.34 RCW:

2.3.1. To adopt its own bylaws, rules and procedures. Unless the DESC adopts
specific rules or procedures that conflict with Robert’s Rules of Order, the
most current version of Robert’s Rules of Order shall govern.

2.3.2. To select a Chair and Vice-Chair.

2.3.3. To review and either approve or reject written dredge event proposals
submitted by the Project Manager.

2.3.4. To review, and either approve or reject requests to expend funds from the
State Account and from the Local Account for Sediment Management.

2.3.5. To set general investment strategies for the Local Account, provided that
only Local Parties are authorized to vote with respect to matters affecting
the Local Account.

2.3.6. To monitor and, if it determines appropriate, request audits of financial

matters related to Sediment Management.

2.3.7. To make decisions and implement matters related to and arising out of
the subject of this Agreement and Sediment Management not otherwise
specifically addressed in this Agreement.

2.4. Decision Making/Voting

The DESC shall decide matters brought before it by majority vote, defined as a
clear majority of the Parties who are members of the DESC at the time of a vote
and entitled to vote on the specific matter. By way of example, if the DESC
consists of 7 Parties at the time of the vote, an affirmative vote of 4 Parties is
required to pass a motion; if the DESC consists of 8 Parties at the time of a vote,
an affirmative vote of 5 Parties is required to pass a motion. Each Party shall
have one vote, regardless of the number of Party representatives.

2.5. Meetings

2.5.1. The DESC shall meet annually, as scheduled by the Project Manager. At
least fourteen (14) days prior to each annual meeting, the Project
Manager shall provide each member with a written report consisting of

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 bathymetric surveys, a recommendation of whether or not a dredge event
is needed, financial information to include current account balances,
records of receipts and expenditures from all accounts, and any other
information relevant to understanding costs.

2.5.2. In addition to the annual meeting, meetings of the DESC may be called
by the Project Manager, or by any Party by written request to the Project
Manager, which meeting shall be held not later than 45 days from delivery
of the written request, unless a later date is agreed to by a clear majority
vote of the Parties, as defined below. The Project Manager shall be
responsible for scheduling any such additional meeting and providing not
less than fourteen (14) days’ notice to each Party, which shall include the
purpose of the meeting and materials relevant to such purpose; provided,
however, that to address issues requiring an immediate response, notice
shall be the best practicable under the circumstances.

2.5.3. During dredging events, and beginning no later than 30 days prior to the
start of in-water construction, the DESC and Project Manager shall meet
weekly to keep the DESC apprised of progress, particularly related to
budget and schedule. Such weekly meetings shall be convened and
facilitated by either the Project Manager (for dredging at the marinas and
marina access areas) or Port (for dredging at the Port vessel berths, if
contracted separately from marina dredging). The weekly meetings can
be cancelled at the discretion of the convening entity, in coordination with
the DESC, based on construction workflow and progress.

2.5.4. Attendance at a meeting of the DESC may be in person or by any

virtual/videoconferencing means that allows all representatives to hear,
be heard, review materials being presented, and fully participate in the
proceedings. A meeting of the DESC may commence once a majority of
the representatives of the Parties subject to the Agreement are in
attendance (quorum).

2.6. DESC Chair and Vice-Chair

2.6.1. The first order of business of the DESC at its initial meeting, at each
annual meeting, and at any meeting where the DESC does not have a
currently serving Chair and/or Vice-Chair, shall be to elect one Party
representative to serve as DESC Chair and one Party representative to
serve as DESC Vice-Chair, each with a term beginning upon election and
lasting until the next annual meeting. A representative for DES shall act
as the DESC Chair until the initial meeting. If an elected Chair is no longer
able to serve the Vice-Chair shall assume the position of DESC Chair
until the next annual DESC meeting.

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 2.6.2. The DESC Chair shall convene and facilitate all DESC meetings and
communicate decisions of the DESC to the Project Manager, the State
Finance Manager, and the Local Party Treasurer.

3. Project Manager

DES shall appoint an individual to be the Project Manager for Sediment Management,
with the following authority and duties:

3.1. At least annually, and not later than 14 days prior to each annual meeting of the
DESC, the Project Manager shall send to all Parties a report as described in
Section 2.5.1.

3.2. As described in and limited by Section 10.6, the Project Manager shall monitor
and report to the DESC on bathymetric conditions at the marinas and access
areas through annual bathymetric surveys, consult with marinas, negotiate
adaptive management with the marinas as needed, recommend contract for and
manage dredge events at the marinas, report on completed dredge events, and
coordinate with the Port.

3.3. Upon approval of a dredge event proposal by the DESC as described in Section
10.7, manage the advertising, bidding, contracting, and contract management
processes in conformance with applicable law and this Agreement. The State
(acting by and through DES) shall be the contracting party for such contracts for
Sediment Management at the marinas.

3.4. Respond to reasonable requests from a Party or Parties for information regarding
the status of Sediment Management within 30 days of receipt. The Project
Manager shall have responsibility for maintaining all records concerning
Sediment Management and acting as the records custodian for the DESC.

3.5. Negotiate, enter into, and manage separate contract(s) with the marinas
regarding marina funding for Sediment Management.

3.6. The Project Manager’s office shall be the principal office for Sediment
Management, and the Project Manager is designated and authorized to receive
any notices required to be given regarding Sediment Management.

4. Port of Olympia

The Port shall maintain responsibility for Sediment Management within its vessel
berths. This includes oversight and management of all bathymetric surveys, design,
permitting and dredging. Upon approval of the dredge event proposal by the DESC as
described in Section 10.7, this includes managing the advertising, bidding,
contracting, and contract management processes in conformance with applicable law
and this Agreement. The responsibilities of the Project Manager do not extend into the
Port vessel berths.

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5. Financial Management – Overview

Funding will be received from three sources: funding through State appropriations,
funding from Local Parties through their individual funding mechanisms, and funding
from the marinas. Funding from the marinas will be addressed by separate agreement
among the marinas and the State, and is therefore not addressed in this Agreement
except to the extent that availability of funding provided by the marinas is a necessary
prerequisite to expending or obligating State and Local Party funds.

With respect to funding addressed by this Agreement, the Parties’ goals are to ensure
that all Parties participate in Sediment Management expenditures, that funds provided
by Local Parties over time can be invested in secure instruments not amenable to re-
appropriation or transfer (i.e., sweeping) by the State, and that funding provided by
the State, which by necessity will occur at or near the time of a planned expenditure,
is a necessary prerequisite to expending or obligating Local Party or marina-provided
funds.

To accomplish these goals, two accounts will be created. The first account, referred
to herein as the State Account, will hold funds appropriated by the State legislature
generally at or near the time of a planned expenditure and will be under the control of
the State, acting by and through DES.

The second account, referred to herein as the Local Account, will be established by
the Local Parties and will hold funds deposited over time by the Local Parties that will
be invested in instruments to ensure no loss of principal and that are consistent with
all applicable laws, regulations, and polices. The Local Account will hold no State
funds and is not subject to reappropriation or transfer (i.e., sweeping) by the State.

Expenditures by the DESC will be on a three-way “match” basis, with the authority to
expend funds from any one of the three funding sources (State, Local Parties,
marinas) contingent on funding being provided by all three funding sources; provided,
however, that the State may fulfill its entire financial obligation of the Agreement by
providing full funding (lump sum, as shown in Exhibit 3 adjusted for inflation) ahead of
schedule and receiving authorization from the DESC to use a larger portion of State
funds while those funds are available from the State so long as the total state
contribution is consistent with the percent allocation provided in Exhibit 3.

Specific processes for receipt, investment, and expenditure of Sediment Management

funds are set forth in Section 10.

5.1. State Finance Manager: DES shall function as the State Finance Manager for
the State Account. At its earliest opportunity, the State shall establish an account
to receive, hold, and invest funds appropriated by the legislature or obtained
through grants or other sources that require State control of funds (collectively,
State Funds). The State Finance Manager shall invest State Funds in

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 instruments that will ensure no loss of principal and are consistent with all
applicable laws, regulations, and accounting standards, and in a manner so that
State Funds are available when needed to pay Sediment Management costs.

5.2. Local Party Treasurer: The Thurston County Treasurer shall act as Treasurer for
the Local Parties unless changed by the Local Parties. The Local Party Treasurer
shall establish an account to receive, hold, and invest funds from the Local
Parties (Local Funds), which shall serve as the operating account of the Local
Parties in accordance with RCW 39.34.030(4)(b). The Local Party Treasurer
shall manage and invest Local Funds in accordance with general investment
guidance from the DESC, in accordance with all applicable laws, regulations, and
accounting standards, and in a manner so that funds are available when needed
to pay Sediment Management costs.

5.3. The State Finance Manager and Local Party Treasurer shall prepare such
financial information as requested by the Project Manager to provide to the DESC
in the annual report. At a minimum, such information shall include current
balances in the State and Local accounts and amounts appropriated by the State
legislature (but not yet in the State Account).

5.4. The State Finance Manager and Local Party Treasurer shall respond to
reasonable requests from a Party or Parties for information regarding the status
of Sediment Management within 30 days of receipt of the request.

6. Term

6.1. Effective Date

This Agreement is effective when (i) all Parties have duly executed, (ii) the
Agreement has been filed with the Thurston County Auditor pursuant to RCW
39.34.040, and (iii) the Agreement has been approved pursuant to RCW
39.34.050.

6.2. Expiration Date

This Agreement will expire on December 31, 2050, unless some or all Parties
agree in writing to renew for an additional term, or unless terminated in
accordance with its terms.

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 6.3. Extension

Prior to the end of 2045, the Project Manager will convene the DESC to
determine whether to extend the Agreement, and if so, on what terms and with
which Parties. In this meeting, the DESC must consider, among other things, the
then-current state of navigation in West Bay, to include the following, at a
minimum:

• Public and private navigational interests

• Condition of infrastructure

• Actual cost/operation of dredge activities over the previous period of

agreement

• Available alternatives to more dredging

• Desire of Parties to continue supporting objectives of the agreement

7. Non-Project Conditions/Port Clean-Up

Prior to and separate from construction of the Project, it is anticipated the Port will
implement a project to remediate sediment contamination in West Bay (as part of the
larger remediation of Budd Inlet) to conditions satisfactory to the Washington State
Department of Ecology and the U.S. Army Corps of Engineers (USACE). This Port-
led remediation is separate from the Project and Sediment Management and is not
part of the Agreement. However, it is anticipated that the 5th Avenue Dam will not be
removed until the Port-led remediation in West Bay is complete.

If the Port remediation is not conducted before removal of the 5th Avenue Dam, it
would significantly increase the cost of the maintenance dredging to be conducted
under the Agreement by likely requiring dredged material to be disposed of upland,
increasing the number of dredge events that would occur under the term of this
agreement and significantly complicating legal responsibility for the first maintenance
dredging event.

The Port is currently targeting the late 2020s for remedial action throughout lower
Budd Inlet. Based on the current Project schedule, the earliest the 5th Avenue Dam
could be removed is 2033. The Port and the State will partner on funding strategies to
support the Budd Inlet Remediation Project with the intent to expedite funding for
remediation in West Bay. The Port and the State will also (1) coordinate efforts to
consider prioritization of remediation in West Bay, (2) minimize potential conflicts and
redundant efforts, and (3) maximize the benefit to the Deschutes Estuary and Port
area. This coordination will help ensure that the Port-led remediation and DES-led
estuary construction do not interfere with each other and, to the extent feasible,
complement each other.

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8. Sediment Management Design, Permitting, and Construction

8.1. Planning and Design

The State, acting through DES, will fund, manage, and have authority over
design and permitting of the Project. The Legislature appropriated initial funding
for design and permitting during the 2023 legislative session and work is
underway. Assuming additional funding is secured, this phase will conclude in
approximately 3 to 5 years. During the design and permitting process, DES will
coordinate with Olympia on the design of the 5th Avenue Bridge, with Tumwater
on the South Basin boardwalks, and with LOTT and Olympia on existing utility
assets surrounding Capitol Lake that will be affected by the Project, to ensure
that these physical assets meet applicable design standards, satisfy applicable
procedural and process requirements, and are acceptable to the receiving Party.
The details of each design process and asset transfer will be governed by a
separate agreement (Attachments 1 through 4) between the State and the
receiving Party.

DES will coordinate with the Squaxin Island Tribe, which may oversee
management of the constructed habitat to develop the estuary restoration
design, incorporate tribal knowledge and lessons learned on other similar
projects, and ensure that design of the Project is acceptable to the Squaxin Island
Tribe.

8.2. Restoration and Construction

The State, acting through DES, will fund, manage, and have authority over
estuary restoration and construction or replacement of existing physical assets
(together “construction funding”). If construction funding is secured without delay,
construction of the Project could begin in the late 2020s and is estimated to occur
over a 6- to 8-year period.

8.3. Physical Assets

After the State completes construction of the physical assets, the State will
transfer governance and/or ownership of specific physical assets to individual
Parties in accordance with Table 1, below. Each transfer will be governed by a
separate agreement between the State and the receiving Party (Attachments 1
through 4). Upon transfer of ownership of a physical asset, the receiving Party
will have full ownership in perpetuity, to include all maintenance responsibility
and risk of loss.

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 Table 1. Governance Responsibilities of Physical Assets

Receiving
and/or
Responsible Time of
Entity Asset/Governance Responsibility Transfer
Infrastructure to support boating, fishing,
recreation in estuary, as needed
Staffing decontamination stations
Maintain Middle Basin boardwalk. Upon
State of
Bathymetric surveys, design, permitting, construction
Washington
contract management for maintenance completion
dredging outside of federal navigation
channel and turning basin and port
vessel berths
New 5th Avenue Bridge Upon
City of
Refer to Attachment 1 for the City of construction
Olympia
Olympia Subsidiary Agreement completion
South Basin Boardwalks Upon
City of
Refer to Attachment 2 for the City of construction
Tumwater
Tumwater Subsidiary Agreement completion

Bathymetric surveys, design, permitting, N/A; the Port

and contract management for currently serves
maintenance dredging in port vessel in this role and
berths nothing in this
Port of Agreement shall
Lead coordination with USACE on
Olympia affect the Port’s
maintenance dredging in federal
existing authority
navigation channel and turning basin.
over its assets
Refer to Attachment 3 for the Port and
Addendum responsibilities
Lead biological monitoring of the restored
estuary to include fish monitoring at a
minimum. If additional funding is Upon
Squaxin Island
obtained, participate in implementing construction
Tribe
Habitat Enhancement Plan for completion
constructed habitat in the 260-acre basin,
formerly Capitol Lake.
Thurston
None identified N/A
County

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 Receiving
and/or
Responsible Time of
Entity Asset/Governance Responsibility Transfer
N/A; LOTT owns
existing utility
lines within the
Replaced LOTT Utilities Project Area. The
LOTT-owned
LOTT Refer to Attachment 4 for LOTT’s utilities replaced
Subsidiary Agreement by DES during
construction will
remain under
LOTT ownership.

9. Estuary Administration and Management

The State will be responsible for management of the restored estuary and for
expenses related to such management except expenses related to Sediment
Management in navigational areas as described in Section 10, below, or expenses
related to assets governed by other entities.

10. Sediment Management

The Parties will collectively fund and govern Sediment Management in navigational
areas of West Bay during the term of this Agreement. Sediment Management under
this Agreement includes only sediment removal (dredging) and disposal of dredged
material (dredging and disposal of dredged material are also referred to as a “dredge
event”).
As part of its responsibilities, DES will, at its own cost, perform bathymetric surveys at
least annually at the marinas and marina access areas to evaluate sediment
accumulation and determine if dredging is required, will complete design and secure
programmatic permits for dredging within the marinas and marina access areas, and
will be responsible for contract management for marina dredging. Consistent with
Table 1 above, the Port will, at its own cost, provide these governance responsibilities
for the port vessel berths.
10.1. Maintenance Dredging and Cost Estimate Assumptions

10.1.1. Maintenance dredging will occur when required to prevent significant

adverse impacts from occurring in the navigational areas of West Bay.
“Significant adverse impacts” are when any one of the following criteria
(i.e., dredge triggers) are forecast to occur: (1) vessels accessing the
Federal Navigation Channel and Port of Olympia have to wait more

14
 than 4 hours for channel access due to water depth and low tide
conditions caused by sediment deposition on more than one
consecutive occasion; (2) more than 10% of anticipated small craft
vessels at any single marina are unable to access leased moorage
due to shallowed water depth caused by sediment deposition; or
(3) any applicable law or regulation requires dredging to be performed.

10.1.2. Numerical modeling conducted for the EIS suggests that maintenance
dredging to avoid significant impacts to navigation from sediment
accumulation will be needed in areas of the West Bay of Budd Inlet on
an average and approximated frequency of every 6 years. The actual
rate of sediment accumulation is highly dependent on river flow
conditions, which vary.

10.1.3. Estimates conservatively assume that the earliest the 5th Avenue Dam
could be removed is 2033. The total estimated Sediment Management
costs also assume three dredging events, based on the 18-year
duration between 2033 and 2050 and the estimated 6-year frequency
of maintenance dredging that is based on hydrodynamic and sediment
transport numerical modeling conducted for the EIS. If removal of the
5th Avenue Dam is delayed such that there is reasonable certainty that
fewer than three dredging events will be necessary during the term of
the Agreement, the Parties may adjust total estimated Sediment
Management costs and annual payments.

10.1.4. The Parties have negotiated this Agreement using planning-level cost
estimates. Civil, environmental, and coastal engineers developed
planning-level cost estimates using costs for other maintenance
dredging projects in the Puget Sound region and marine environments,
hydrodynamic and sediment transport numerical modeling in the EIS
that predicts sediment accumulation under the Estuary Alternative,
and triggers to initiate dredging events (see Footnote 3 and Section
10.1.1). Planning-level cost estimates also assume in-water disposal
of the dredged sediment; this is based on the assumption that the Port
will remediate sediment contamination in navigational areas of West
Bay, and it is based on sediment data from Capitol Lake as provided
in Attachment 15 of the EIS and a projection that invasive species will
not persist in the material to be dredged as described in Attachment 8
of the EIS.

10.1.5. The following measures have been implemented to increase certainty

that funding will remain available for Sediment Management for the
term of this Agreement:

• Cost estimates are based on planning-level costs developed for

the EIS, escalated using the assumptions detailed in
Section 10.1.6 below. They are consistent with Class 4 estimates

15
 prepared using standards established by the Association for the
Advancement of Cost Engineering and include a 15%
contingency. The planning-level cost estimates have an accuracy
variation of minus 25% to plus 35%. The higher end of the
planning-level cost estimate range (+35%) has been used.

• Annual payments will begin once the State has secured enough
construction funding to complete the Project through removal of
the 5th Avenue Dam. This will likely be more than a decade before
the first dredge event is triggered. Interest may accrue during this
time.

• The Parties cannot adjust downward the total dredge cost

estimate upon which annual payments are based during the initial
term of this Agreement, even if actual Sediment Management
costs are less than expected in the initial dredge event. Holding
the total contributions consistent with Exhibit 3 will increase
certainty that funds will be available while acknowledging that
dredging frequency, environmental conditions, and costs could
vary over the initial Agreement term.

10.1.6. Costs have been escalated from EIS planning-level costs. The
following escalation assumptions were used.

• Cost estimates were originally prepared and presented in the

Draft EIS in 2020 dollars and were escalated to 2022 dollars in
the Final EIS using an annual escalation rate of 8%. This rate
reflects the historically high levels of inflation in the economy
during this period and is informed by specific trends in
construction-related inflation.

• Costs were escalated forward from 2022 dollars through the

period of the Agreement using an initial escalation factor of 4.5%.
This escalation rate is based on a review of dredge-related cost
trends over the last 30 years (including non-residential building
construction costs, fuel costs, and CPI) and is at the high range
of these sources, which reflects two factors present at the time of
this ILA: 1) the relatively high level of economic uncertainty and
2) projections for continued strong demand for infrastructure-
related construction services.

10.1.7. The State Finance Manager and Local Party Treasurer will invest
funds in accordance with Sections 5.1 and 5.2, and the estimated
annual payments are calculated assuming an annual investment
growth at 2%.

16
10.2. Sediment Management Cost Allocation and Annual Payment Estimates

10.2.1. Percent Allocation

Costs for Sediment Management above those costs associated with
dredging of the No Action Alternative (baseline; i.e., the increase in
sediment accumulation in navigational areas of West Bay as a result
of dam removal, atop the baseline amount of sediment accumulation
that would already pass through the 5th Avenue Dam and settle in
these areas if the dam remained in place) are allocated among the
Parties on a percentage basis as set forth in Exhibit 3 below. This
percentage will be used to allocate dredge event contract costs only
(refer to Exhibit 4 for an estimated annual payment schedule
incorporating cost assumptions detailed in Sections 10.1 and 10.2).
Parties shall be responsible for their own overhead and “soft costs”
associated with their obligations under this Agreement, including
those governance responsibilities outlined in Table 1 and
participation on the DESC. These additional costs are not estimated
or included in any of the costs presented in this agreement.
10.2.2. Estimated Annual Payments
Exhibit 4 provides the estimated annual payment schedule for the term
of the Agreement. The estimated annual payment is calculated by
proportionally dividing the planning-level costs for dredge events,
(escalated through the agreement at an initial rate of 4.5% as
described in Section 10.1.6), by the number of payment years (X,
partial years count as a full year) and the percent allocation share as
shown in Exhibit 3. Each Party agrees to make annual payments
(determined as above) on or before December 31 of each year,
beginning the year the State secures sufficient construction funding for
estuary construction and removal of the Fifth Avenue Dam, through
the end of the Agreement term. Late payments shall accrue interest at
the rate of 18% per annum, compounded daily.
10.2.3. Initiation of Annual Payments
The State Finance Manager shall notify all Parties when the State has
formally secured construction funding for estuary construction and
removal of the Fifth Avenue Dam. Each Local Party will begin making
annual payments as set forth in Section 10.2.2 by December 31 of that
year.
10.2.4. Cost Assumption and Annual Payment Review
No later than 5 years following the first annual payment, the Project
Manager, the State Finance Manager, and the Local Party Treasurer

17
 will review the escalation and investment assumptions used to
calculate estimated payments (as shown in Exhibit 4) and recommend
to the DESC revisions as appropriate to reflect new information and
economic conditions.
Thereafter, following each dredge event (refer to Section 10.6), the
Project Manager, the State Finance Manager, and the Local Party
Treasurer shall prepare a report to the DESC regarding the costs of
the dredge event with respect to the overall Sediment Management
projections and shall recommend adjustments to the annual payments
as appropriate, including a review of escalation and investment growth
assumptions.
10.3. Notice of Failure to Pay

If a Party fails to make a payment required under this Agreement when due, to
include the State failing to appropriate funds when required, the State Finance
Manager or Local Party Treasurer shall notify the Party of the failure in writing,
with copies to the Project Manager and to all other Parties. A Party’s failure to
make a payment required under this Agreement within 2 years of receiving
notice of non-payment from the Project Manager shall be considered a
withdrawal for non-appropriation of funds under Section 11.2.2.
10.4. Refund of Excess Funds

If funds remain in the Local Account upon either the expiration or termination
of the Agreement, and unless otherwise agreed to, each Local Party that is a
member in good standing at the time of either expiration or termination of the
DESC will be entitled to receive a refund of such excess funds based on a pro-
rata calculation of the amounts paid into the Local Account; provided, however,
that the return of any amounts paid into the Local Account by an entity
withdrawing from this Agreement for convenience or due to non-appropriation
of funds shall be at the discretion of the remaining Local Party members of the
DESC.
10.5. Audit Rights

Upon reasonable notice, but not more frequently than annually, any Party may
call for an examination of the books and records of the State or Local Accounts
solely as related to this Agreement. The DESC may appoint an auditor,
accountant, or one or more of the Parties to perform such review. Any costs of
hiring outside auditors or accountants shall be borne by the Party or Parties
requesting the audit.

18
10.6. Sediment Monitoring and Adaptive Management

10.6.1. Monitoring/Reporting

The Project Manager will ensure that, at least annually, a bathymetric

survey is completed in the marinas and marina access area of West
Bay. Upon completion, the Project Manager shall review the
bathymetric survey and analyze whether the dredge triggers defined
in Section 10.1.1 have been met. The bathymetric data will be shared
with each Party along with a summary describing how it relates to
timing and scope of future dredge events as part of the annual report
provided to DESC.

10.6.2. Consultation/Adaptive Management

Throughout the Project, and particularly in response to bathymetric

surveys indicating a dredge event may or soon will be triggered, the
Project Manager will evaluate whether adaptive management
measures can be implemented that will reduce the scope and cost of
Sediment Management, or disruption to navigation and marina
operations of future dredge events. The Project Manager may
coordinate directly with the marinas in this process. The Project
Manager may implement adaptive management measures that result
in a reduction in overall Sediment Management costs. The Project
Manager will report on adaptive management measures considered
and rejected or authorized for implementation in the annual report.

10.6.3. Coordination with Port

The Port is responsible for bathymetric surveys, design, permitting and

contracting for Sediment Management in its vessel berths. The Port
shall work in good faith with the DESC and its members, the Project
Manager, the State Finance Manager, and the Local Party Treasurer
to coordinate dredging efforts within Port vessel berths as set forth in
Attachment 3 (Port Addendum). The Port shall report to the DESC and
Project Manager results of Port bathymetric studies taken in the Port’s
vessel berths and the Federal Navigation Channel. When Port
bathymetric surveys establish that dredging is necessary to prevent
significant adverse impacts at Port vessel berths, the Port shall provide
the DESC and the Project Manager written confirmation that dredge
triggers have been met and with a Port dredging plan.

19
 10.6.4. Dredge Event Proposals

When, after consideration or implementation of adaptive management

measures, the Project Manager determines that the criteria for a
dredge event at the marinas have been met and a dredge event is
necessary to prevent significant adverse impacts at the marinas, the
Project Manager shall provide DESC with a written dredge event
proposal. This proposal may be part of the Project Manager’s annual
report. The dredging proposal must describe the scope, timing and
order of magnitude cost of the dredge event with sufficient data and
information to allow the DESC to evaluate the proposal. The dredging
proposal must also confirm that State, Local, and marina funding is
available to meet funding obligations under this Agreement.

The Project Manager, in developing the dredge event proposal, shall

meet with the Port to determine whether dredging is also needed at
the Port. If dredging at the Port is needed, the Project Manager shall
include that information and a description of the coordination to the
DESC as part of a dredge proposal. The goal of this coordination is
reduce costs through efficient dredge implementation.

10.7. DESC Dredge Event Funding Approval

Within 30 days of receiving a written dredge event proposal, the DESC shall
meet to approve or reject the dredge event proposal. The DESC may reject the
Project Manager’s written dredge event proposal only on the following grounds:
(1) the data do not support a finding that the criteria for a dredge event have
been met; (2) adaptive management measures have not been sufficiently
considered or implemented; or (3) there are insufficient funds to pay for the
proposed dredge event. Unwillingness to expend funds from the Local Account,
by itself, is not a sufficient ground for objecting to a proposed dredge event.
The DESC may not reject a dredge event proposal if the failure to implement
the dredge event proposal would result in any Party being in violation of
applicable law, regulation, or valid order of an entity with authority to issue such
an order. A decision by the DESC shall be in writing and takes effect
11 business days after it is delivered to the Parties, unless objected to, in which
case the decision takes effect upon resolution of the objection in accordance
with Section 12. The Project Manager may revise and/or resubmit a rejected
dredge event proposal to the DESC at any time.

10.8. Objection to DESC Dredge Event Decision

If a Party objects to either the approval or rejection of a dredge event proposal

by the Project Manager, it must, within 10 days of the DESC’s decision to either

20
 accept or reject the dredge event as per Section 10.7, deliver a written objection
to the Project Manager with a copy to all Parties providing data and information
sufficient to allow the Project Manager and other Parties to evaluate the
objection. Upon receipt of a written objection the Parties shall meet and confer
and attempt to reach consensus regarding the objection. If the parties cannot
reach consensus, the dispute resolution procedures in Section 12
(Disputes/Enforcement) shall apply. An objection to a rejected dredge event
proposal made under this section does not preclude submission to the DESC
of a revised dredge event proposal.
10.9. Dredge Event Contract Approval

When a DESC decision to approve a dredge event becomes effective, the

Project Manager shall solicit, receive, and evaluate proposals for the dredge
event and shall select a preferred contractor(s) and/or consultant(s) in
accordance with applicable law. Each dredge event contract shall contain a ten
percent (10%) contingency and be within the DESC-approved amount.
10.10. Dredge Event Expenditure Process

When a DESC decision approving the dredge contract(s) becomes effective,

the State Finance Manager shall confirm to the Local Party Treasurer that State
Funds and marina funds sufficient to meet State and marina obligations for the
dredge event have been deposited in the State Account. Upon receipt of such
confirmation, the Local Party Treasurer shall transfer sufficient funds from the
Local Account to the State Account to meet the Local Parties’ obligations for
the dredge event.
When, and only when, the State Finance Manager has received into the State
Account sufficient State, Local, and marina funds to meet their respective
obligations, the Project Manager is authorized to execute the contract(s), and
the State Finance Manager is authorized to pay invoices for the contract(s) from
the amounts in the State Accounts allocated to the contract(s). All payments
shall be in arrears based on periodic invoicing.
10.11. Dredge Event Project Management

The Project Manager shall be responsible for managing dredge events and
the dredge event contracts for the marina and marina access area. The
Project Manager shall endeavor to manage costs within the approved
contract amount, but shall have authority to expend up to the 10 percent
contingency after notification to the DESC but without further DESC formal
action. DESC approval is required for expenditures exceeding the 10 percent
contingency amount.

21
 10.12. Dredge Event Reporting and Adjustments

After each dredge event, the Project Manager, the State Finance Manager, and
the Local Party Treasurer shall provide the Parties with a summary report for
the dredge event to include final costs with sufficient detail to enable the Parties
to consider alterations to the Sediment Management program and/or to
implement other adaptive management practices for future dredge events. This
summary may be provided in the Project Manager’s annual report to the DESC
for the following year. Adjustments to total Sediment Management costs and/or
annual payments will trigger the renegotiation rights described in Section 11
only if adjustments cause projected costs to increase above agreed-upon
allocations.

11. Termination, Withdrawal, and/or Renegotiation

11.1. Termination and Withdrawal for Project Delay

If removal of the 5th Avenue Dam is not completed within a reasonable time
frame, defined currently as prior to 2045, the DESC has the right to terminate
the Agreement and any Party has the right to require renegotiation of the terms
of the Agreement and the right to withdraw from the Agreement without further
financial obligations.

11.2. Withdrawal for Convenience/Non-Appropriation of Funds

11.2.1. A Party may withdraw from the Agreement for convenience at any time
upon written notice to the Project Manager and all Parties, provided
that before withdrawing, the withdrawing Party provides funds
sufficient to satisfy all financial obligations of the withdrawing Party for
the term of the Agreement in effect at the time of withdrawal, and the
withdrawing Party has satisfied all specific performance obligations
under the Agreement.

11.2.2. A Party, to include the State, may withdraw from the Agreement if its
governing body fails to appropriate and/or provide sufficient funds to
make required payments under this Agreement. A Party withdraws
due to non-appropriation of funds at the earlier of the Party providing
written notice to the Project Manager and all Parties of withdrawal due
to non-appropriation of funds, or two years after receiving notice from
the State Finance Manager and/or Local Party Treasurer of the failure
to make a payment required by this Agreement. A Party withdrawing
due to non-appropriation, to include the State, must satisfy all specific
performance obligations under the Agreement, to include subsidiary
agreements. However, the withdrawing party is no longer obligated,
indebted, or otherwise responsible to make an annual payment under

22
 Section 10 of this Agreement for the year of non-appropriation and all
remaining years under this Agreement.

11.2.3. Upon withdrawal for convenience or due to non-appropriation of funds,

the withdrawing Party is no longer a member of the DESC.

11.2.4. A Party withdrawing for convenience or due to non-appropriation of

funds shall not be entitled to a refund of any funds previously deposited
in Local Account, or any interest thereon.

11.3. Renegotiation.

If one or more of the following specific events occur, the Project Manager will
convene the DESC to consider modification of the Sediment Management
program to avoid significant impacts to navigation in West Bay through the
initial term of the Agreement:

11.3.1. Sediment Management costs increase to a degree that funds will be

exhausted prior to the expiration of the initial term of the Agreement
(2050).

11.3.2. The marinas fail to provide funding sufficient to meet their obligations
under a formal dredging program under the No Action Alternative (i.e.,
funding sufficient to dredge at the frequency needed to avoid significant
adverse impacts 5 and meet the terms of DNR leases if the 5th Avenue
Dam were left in place).

11.3.3. A withdrawal by a Party for convenience or due to non-appropriation

occurs.

11.3.4. Unforeseen environmental impacts (e.g., sea level rise, earthquake)

necessitate additional mitigation and/or costs that have not been
contemplated.

12. Disputes/Enforcement.

12.1. Each Party May Enforce

The Parties agree and recognize that this multi-party Agreement is the result
of complex negotiations among individual entities each with individual interests
and constituencies, and that the provisions of this Agreement are
interdependent and represent a balancing of those individual interests and
constituencies. Accordingly, the Parties agree that they each have authority to

5
Refer to Section 10.1.1 for a description of significant adverse impacts as it has been defined for this
Interlocal Agreement.

23
 enforce the obligations of each other Party under this Agreement, to include
requiring specific enforcement of such obligations.

12.2. Disputes

Any disputes among Parties under this Agreement shall be resolved, if

possible, by negotiation. If resolution cannot be reached, any Party may
declare an impasse by delivering written notification of impasse to the Project
Manager with a copy to each Party. Upon receipt of a notice of impasse, the
Project Manager shall confer with the Parties involved in the impasse on an
appropriate dispute resolution process, including, as a first preference, use of
a mediator or other facilitated negotiation. If the Project Manager determines
that the Parties cannot agree on a dispute resolution process, the dispute shall
be decided by a panel of three arbitrators, one appointed by the Party(ies)
initiating a notification of impasse, a second appointed by the Party(ies)
responding to the notification, and the third by the two appointed arbitrators. A
written decision by a majority of the arbitrators shall be the decision of the
arbitration panel. Hourly payments for the arbitrators’ time shall be in arrears
and the arbitrators may, in the arbitrator’s discretion, award costs and fees, to
include reasonable attorneys’ fees, to the prevailing Party/Parties. The
decision of the arbitration panel shall be binding, subject to judicial review. Any
dispute relating to the appointment of arbitrators shall be decided by petition
to the Superior Court for Thurston County, Washington.

12.3. Choice of Law/Venue

This Agreement and any dispute arising under this Agreement shall be
governed by the laws of the State of Washington. Venue for entrance of a
decision of the dispute resolution panel and for any other reason shall lie
exclusively in the Superior Court for Thurston County, Washington.

13. Administrative

13.1. Authority

This Agreement shall be executed on behalf of each Party by a duly authorized

signatory, and pursuant to an appropriate motion, resolution, or ordinance of
each Party. By executing below, each Party represents that it has authority to
enter into and be subject to the terms of this Agreement.

13.2. Public Records

The Project Manager is responsible for maintaining Sediment Management

records and responding to public records requests made to the DESC or
related to Sediment Management. Each Party shall cooperate with the Project
Manager and with other Parties in responding to any public records requests
related to Sediment Management. Notwithstanding the above, each Party

24
 shall be responsible for maintaining its own records and responding to public
records requests for that Party’s records.

13.3. Execution

This Agreement may be executed in counterpart and/or by electronically

transmitted signature (pdf or similar).

13.4. Contact Information/Notice

Each Party shall provide updated contact information of its representative to

the Project Manager and to all other Parties. Notice to the representative shall
constitute notice to a Party.

13.5. Filing

Upon execution by all Parties, this Agreement shall be filed as required by

RCW 39.04.040.

13.6. Entire Agreement/Amendments

This Agreement represents the entire and sole agreement of the Parties with
respect to the subject matter herein and may be amended or modified only by
written agreement of all affected Parties who are members of the DESC at the
time of the Amendment.

13.7. Assignment

This Agreement shall be binding on each Party and its successors and may not
be assigned in whole or in part without the written consent of all Parties.

13.8. No Third-Party Beneficiaries

This Agreement is not intended to create rights in, or to grant remedies to, any
third party as a beneficiary to this Agreement or any of its provisions.

13.9. Waiver

The failure to require cure of a breach of any provision of the Agreement shall
not be deemed a waiver of any subsequent breach, whether of the same or
different provision.

13.10. Force Majeure

If a Party, the Project Manager, the State Finance Manager and/or the Local
Party Treasurer, is or are rendered unable by Force Majeure to carry out, in
whole or part, obligations under this Agreement and gives notice and full details
of the event to the other Parties and Project Manager as soon as practicable
after the occurrence, then during the pendency of such Force Majeure event

25
 but for no longer period, the obligations affected by the event (other than the
obligation to make payments due for performance prior to the event) shall be
suspended to the extent required. Any entity claiming a Force Majeure event
shall remedy the event as soon as possible.

13.11. Severability

If any portion of this Agreement is adjudged to be invalid by a court of

competent jurisdiction, such adjudication shall not affect the validity of any
remaining section, part or provision of this Agreement.

Exhibits

Exhibit 1 Sediment Management Dredging Areas

Exhibit 2a Representative Annual Coordination Process & Marina Dredging

Coordination

Exhibit 2b Representative Annual Coordination Process for Port Vessel Berth

Dredging Coordination

Exhibit 3 Recommended Sediment Management Allocations

Exhibit 4 Estimated Annual Payment Schedule

Attachments

Attachment 1 Fifth Avenue Bridge and Infrastructure Agreement

Attachment 2 South Basin Boardwalk and Related Infrastructure Agreement

Attachment 3 Port of Olympia Dredging Addendum to ILA

Attachment 4 LOTT Utility Agreement

26
 Signatures

Tara C. Smith, Director Date

Department of Enterprise Services

Kris Peters, Chairman Date

Squaxin Island Tribe

Mark Barber, City Attorney Date

City of Olympia

Steven J. Burney, City Manager Date

City of Olympia

Debbie Sullivan, Mayor Date

City of Tumwater

Karen Kirkpatrick, City Attorney Date

City of Tumwater

Matthew J. Kennelly, Executive Director Date

LOTT
Tye Menser, Board President Date
LOTT

Alex Smith, Executive Director Date

Port of Olympia

Leonard Hernandez, Thurston County Manager Date

Thurston County
Exhibits
Representative Annual Coordination Process & Marina Dredging Coordination
Local Account Deschutes Estuary
Treasurer & State Project Manager Steering Committee
Finance Manager (DESC)
Annual Bathymetric Survey
JAN Provide Financial Reports
• Current account balances Review Coordinate Adaptive Mgmt.
• Records of receipts and with Marinas to Avoid or Delay
Against
FEB expenditures
• Assessment of relevant interest
Dredge
Triggers
Dredging, if possible, to:
• Reduce dredging costs for all
rates and market conditions • Reduce disruption for marinas

Prepare Annual Report

MAR • Bathymetric survey & dredge recommendation
• Adaptive management measures employed
• Annual financial reports
30-Day DESC Review Period
APR If dredging is not needed, the annual process stops here.
If dredging is needed, the process below is triggered. This
and Meeting to Discuss
Dredge Recommendation
is estimated to occur every 6 years, on average.
and Financials
PEAK SEASON FOR BOATING/DOWNTOWN TOURISM Prepare Bid Package
MAY Confirm Marina
• Determine dredge
quantity using
Funding for bathymetric survey
Dredging for bid form
• Include standard
JUN dredge design
• Use (10-year)
programmatic permits

JUL ANNUAL IN-WATER WORK WINDOW: July 16 – February 15 DESC Opportunity to Review
Bid Package
Authorize Account Spending
Per Dredge Recommendation
and Informed by Engineer’s
AUG Estimate in Bid Package
Advertise & Select Contractor
low bid public works

SEP Payment by Invoice from

Execute Dredge Contract &
State with Proportionate
Mobilize for Dredging
Contributions from:

OCT State, local, & marina funds

Note:
Contracting and construction Dredge Event
management is overseen by the • Continues as-needed into next
Project Manager. Conditions may
NOV change during dredging, and this could
change the estimated cost. The
year in-water work window
• Weekly meetings with the DESC
Project Manager has authority to • Payment to Contractor by
expend up to the 10 percent Project Manager, per invoices
contingency after notification to the • Subsequent annual report
DEC DESC. Detailed reporting will also be
provided in the Annual Report.
includes report of final payment
and new bathymetry
Representative Coordination Process for Port Vessel Berth Dredging
Local Account Deschutes Estuary
Treasurer & State Port of Olympia Steering Committee
Finance Manager (DESC)
Bathymetric
Survey Provide bathymetric
survey to Project
(as needed) Dredging Manager for inclusion
is not
in the next annual
Review Against triggered
report for ongoing
Dredge Triggers DESC awareness.
Dredging is triggered Process stops here.

Prepare Report
• Bathymetric survey & dredge recommendation
• Description of recent coordination with Project
Manager and determination of whether dredging could
be coordinated with marina dredge event for efficiency
• Estimated dredge cost

30-Day DESC Review Period

If dredge triggers are met and the
estimated dredge cost is
consistent with assumed spending
Authorize Account Spending at Port vessel berths in ILA, DESC
Per Dredge Recommendation must authorize dredge proposal.
and Informed by Engineer’s
Estimate in Bid Package
Advertise & Select Contractor
low bid public works

Payment by Invoice with

Proportionate Contributions Execute Dredge Contract &
from: Mobilize for Dredging
State & local funds, also including
baseline funding from Port
Note: Dredge Event
Contracting and construction • Continues as-needed into next
management will be overseen by the year in-water work window
Port of Olympia. Conditions may change
• Weekly meetings with the DESC
during dredging, and this could change
the estimated cost. The Port of Olympia
• Payment to Contractor by Port
has authority to expend up to the 10 of Olympia, per invoices
percent contingency after notification to • Subsequent annual report
the DESC. Detailed reporting will also be includes report of final payment
provided in the Annual Report. and new bathymetry

ANNUAL IN-WATER WORK WINDOW: July 16 – February 15

Exhibit 3. Recommended Sediment Management Allocations
The values in this table are based on planning-level cost estimates and are provided in 2022 dollars.
The allocations and associated cost estimates are provided for the term of the FGWG agreement only – through 2050.
This table of recommended allocations provides and equalizes the recommended allocations for Sediment Management across the FGWG. It recognizes that: (1) all parties benefit from estuary restoration
and/or Sediment Management and (2) that differences in the magnitude of benefits cannot be mathematically derived but that the Project would be beneficial to each entity. Importantly, the City of Olympia
is shown in an increased capacity from the remaining FGWG members given that the working waterfront and recreational boating infrastructure exists within the city limits and is adjacent to downtown
Olympia, and arguably, the City of Olympia may derive the most direct benefits.

Total Cost Estimate for

Allocation % for Maintenance Cost Estimate for Sediment Management
Dredging of Increased Cost Estimate for Maintenance Dredging of (No Action Alternative +
Sediment from Estuary Maintenance Dredging Increased Sediment from Increased Maintenance Estuary Construction + Allocation % Total
Alternative Equivalent to Estuary Alternative Dredging from Estuary Total Sediment (Estuary Construction +
Entity (i, ii) (above No Action Alternative) No Action Alternative (iii) (above No Action Alternative) (iv) Alternative) Management Sediment Management)
Olympia ~23.1% $0 $4,297,000 $4,297,000 $4,297,000 2%
LOTT ~15.4% $0 $2,865,000 $2,865,000 $2,865,000 1%
Port ~15.4% $362,000 $2,865,000 $3,227,000 $3,227,000 1%
Tumwater ~15.4% $0 $2,865,000 $2,865,000 $2,865,000 1%
Marinas 0.0% $5,800,000 $0 $5,800,000 $5,800,000 2%
Thurston County ~15.4% $0 $2,865,000 $2,865,000 $2,865,000 1%
State ~15.4% $0 $2,865,000 $2,865,000 $249,545,000 92%
Squaxin Island Tribe 0.0% $0 $0 $0 $0 0%
~100.0% $6,162,000 $18,622,000 $24,784,000 $271,464,000 100%

Notes:
i All values included in this table are represented in 2022 dollars and may use rounded values. An annual inflationary rate is to be included in each Party’s annual payment of allocated Sediment
Management funding; those inflation costs are not reflected in this table (refer to Exhibit 4). All values reflect planning-level cost estimates based on conceptual design (see Section 10). Parties shall
be responsible for their own overhead and “soft costs” associated with their obligations under this Agreement.

ii The total cost for Sediment Management represented in this table assumes removal of the 5th Avenue Dam occurs in 2033, which is the soonest that phased dam removal could begin—through 2050,
which is the end date of the existing agreement. Based on hydrodynamic and sediment transport numerical modeling conducted for the EIS, maintenance dredging is assumed to occur at an approximate
6-year frequency, resulting in an estimated three dredge events in the 18-year duration between 2033 and 2050. These planning level costs reflect these assumed dredging events.

Delays in 5th Avenue Dam removal would reduce the duration assumed by this Agreement within which sediment conditions in West Bay have changed from existing conditions. If removal of the
5th Avenue Dam is delayed (particularly if the delay is long enough to eliminate an assumed dredge event), the total cost estimates for Sediment Management provided herein could be adjusted. In that
scenario, adjustments in the total cost of Sediment Management will be reflected in the total costs allocated to each Party, but not the percentage allocation of each Party.

Each Party’s annual payment is determined by dividing the member’s total allocated Sediment Management costs (escalated) for the initial term of the Agreement by the number of years (partial years
count as a full year) remaining in the initial agreement term of the Agreement at the time of the payment's deposit. The number of years used to determine the annual payment is dependent upon the
State's receipt of construction funding to remove the 5th Avenue Dam. Each FGWG member is responsible for its annual allocated costs; however, they may divide over the initial term of the Agreement,
as is described in Section 10.2, Sediment Management Cost Allocation and Annual Payment Estimates, of the Agreement. These costs assume that the Port of Olympia (Port) will have already dredged
 existing contaminated sediment and has reestablished authorized depths in West Bay. That dredging of contaminated accumulated sediment is not associated with this Project, and those costs are not
included in the costs represented here. The planned Port dredging of contaminated sediments is also expected to allow the future dredged material to be disposed of in-water.

The planning-level costs presented herein assume in-water disposal of dredged material. The maintenance dredging costs would significantly increase if dredged material were determined not suitable
for in-water disposal.

Bathymetric surveys would be conducted to adjust dredging events to actual environmental conditions (surveys would occur annually at the marinas, at a minimum). These tables do not include costs
for the annual bathymetric surveys. Costs associated with design and permitting (and associated efforts) are not included in these tables either, and they are currently assumed to be an in-kind
contribution from the State as outlined in Table 1 of Section 8.3.

The last year of existing leases with the marinas in West Bay is 2050; these estimates align with that timeline and do not speculate about continued maintenance dredging past that time, potential new
funding sources or different shared agreements, or potential marina decisions to relocate.

iii This represents the estimated non-project costs associated with dredging impacted areas of West Bay based on sedimentation rates and patterns modeled for the No Action Alternative, assuming a
formal dredging program with the same dredging triggers as defined for the Estuary Alternative. Numerical modeling shows that approximately 65% of the sediment would be dredged from the Federal
Navigation Channel and turning basin; funding for that dredging is the responsibility of the U.S. Army Corps of Engineers (USACE). USACE-provided funding (for dredging equivalent to the No Action
Alternative, or for increased Sediment Management under the Estuary Alternative, as described below) has not been included in this table at the request of the Parties. USACE funding for dredging is
a critical component of maintaining navigation in West Bay.

iv These costs reflect the increased Sediment Management costs beyond those that would be incurred by others under the No Action Alternative to avoid significant impacts to navigation in West Bay.
Dredging in the FNC and turning basin, including additional dredging requirements resulting from the Project, is the responsibility of USACE and those costs are not included. Maintenance dredging
needs equivalent to the No Action Alternative in impacted areas of West Bay would continue to be the responsibility of the Port, the marinas, and USACE; additional dredging requirements shown in
this estimate resulting from the Project would be the shared responsibility of members of the Parties.
Exhibit 4. Estimated Annual Payment Schedule
Dredge Cost
(Escalated Thurston
at 4.5%) Year Olympia LOTT Port Tumwater Marinas County State c Squaxin
Allocation %
23.1% 15.4% 15.4% 15.4% 0.0% 15.4% 15.4% 0.0%
(Increased Sediment)a
Allocation % (Baseline +
17.3% 11.6% 13.0% 11.6% 23.4% 11.6% 11.6% 0.0%
Increased Sediment)b
1 2022
2 2023
3 2024
4 2025
5 2026
Payment begins 6 2027 $ 276,000 $184,000 $207,000 $184,000 TBD $184,000 $184,000 $0
7 2028 $ 288,000 $192,000 $217,000 $192,000 $192,000 $192,000
8 2029 $ 301,000 $201,000 $226,000 $201,000 $201,000 $201,000
9 2030 $ 315,000 $210,000 $237,000 $210,000 $210,000 $210,000
10 2031 $ 329,000 $219,000 $247,000 $219,000 $219,000 $219,000
11 2032 $ 344,000 $229,000 $258,000 $229,000 $229,000 $229,000
12 2033 $ 359,000 $240,000 $270,000 $240,000 $240,000 $240,000
13 2034 $ 376,000 $250,000 $282,000 $250,000 $250,000 $250,000
14 2035 $ 393,000 $262,000 $295,000 $262,000 $262,000 $262,000
15 2036 $ 410,000 $274,000 $308,000 $274,000 $274,000 $274,000
Dredge 1 16 2037 $ 429,000 $286,000 $322,000 $286,000 $286,000 $286,000
$12,099,000 17 2038 $ 448,000 $299,000 $336,000 $299,000 $299,000 $299,000
18 2039 $ 468,000 $312,000 $352,000 $312,000 $312,000 $312,000
19 2040 $ 489,000 $326,000 $367,000 $326,000 $326,000 $326,000
20 2041 $ 511,000 $341,000 $384,000 $341,000 $341,000 $341,000
21 2042 $ 534,000 $356,000 $401,000 $356,000 $356,000 $356,000
Dredge 2 22 2043 $ 558,000 $372,000 $419,000 $372,000 $372,000 $372,000
$33,761,000 23 2044 $ 583,000 $389,000 $438,000 $389,000 $389,000 $389,000
24 2045 $ 610,000 $406,000 $458,000 $406,000 $406,000 $406,000
25 2046 $ 637,000 $425,000 $478,000 $425,000 $425,000 $425,000
26 2047 $ 666,000 $444,000 $500,000 $444,000 $444,000 $444,000
27 2048 $ 696,000 $464,000 $522,000 $464,000 $464,000 $464,000
Dredge 3 28 2049 $ 727,000 $485,000 $546,000 $485,000 $485,000 $485,000
$20,518,000 29 2050 $ 760,000 $507,000 $571,000 $507,000 $507,000 $507,000
Estimated Total Escalated Contribution Through the ILA Termd

$66,374,000 $11,508,000 $7,673,000 $ 8,643,000 $7,673,000 $15,534,000 $7,673,000 $ 7,673,000 $0

Notes:
a/ This allocation percent reflects the distribution of maintenance dredging costs for increased sediment management above the No Action Alternative across ILA Parties, as shown in Attachment 1 to the MOU.
b/ This allocation percent reflects the distribution of total costs for managing sediment including the cost estimate for maintenance dredging equivalent to No Action Alternative and the cost estimate for
maintenance dredging costs for increased sediment management, above the No Action Alternative.
c/ The state may provide its payment as a lump sum contribution in the year of the dredge events, consistent with and not to exceed its allocated percent of actual costs.
d/ The estimated total escalated contribution is calculated in two steps. First the cost of each dredge event is escalated from 2022 dollars (as reported in the EIS) at 4.5% per year and then summed to arrive at the
total cost of sediment management over the ILA term. Annual payments are then calculated by apportioning the total escalated costs to each party using the allocation percentages that reflect baseline and
increased sediment management, as described in footnote b above.
Attachments
 ATTACHMENT 1

Fifth Avenue Bridge and Infrastructure Agreement

State of Washington and City of Olympia

This Fifth Avenue Bridge and Infrastructure Agreement (“5th Avenue Bridge Agreement”) is by
and between the State of Washington (State), acting by and through the Department of
Enterprise Services, (DES) and the City of Olympia (“Olympia”), and is subsidiary to the Interlocal
Agreement (ILA) entered into on Date of Last Signature, by DES, Olympia, the Squaxin Island
Tribe (Tribe), the County of Thurston (County), the City of Tumwater (Tumwater), the Port of
Olympia (Port), and the LOTT Clean Water Alliance (LOTT). Collectively, the parties to the ILA shall
be referred to as the “ILA Parties.” DES and Olympia shall be referred to herein using their defined
names.
Capitalized terms in this 5th Avenue Bridge Agreement shall have the meanings given to them in
the ILA.
RECITALS
A. In 2022, after approximately four years of study, DES issued a final Environmental Impact
Statement (EIS) identifying the Estuary Alternative as the preferred long-term plan for
management of the area of Capitol Lake. The Estuary Alternative involves removing the
existing 5th Avenue Dam, restoring tidal flats and marsh habitat in the Capitol Lake basin,
constructing and transferring physical assets to local entities, and long-term Sediment
Management of navigational areas in the West Bay of Budd Inlet. The work described in
the Estuary Alternative and the ILA is referred to as “the Project.”
B. The ILA Parties, acting pursuant to Chapter 39.34 RCW, the Interlocal Cooperation Act,
have entered into an ILA dated Date of Last Signature governing Sediment Management.
C. As recognized in the ILA, the State, acting through DES, shall fund, design, and construct
estuary restoration and specific physical assets, provided that DES will cooperate with
each entity receiving a specific physical asset in accordance with auxiliary agreements
between DES and each receiving entity.
D. Among the physical assets to be constructed and transferred as part of the Project is a
new 5th Avenue Bridge spanning the main channel of the Deschutes River immediately to
the south of the existing 5th Avenue Bridge, which will be removed. The new 5th Avenue
Bridge will connect to the existing 5th Avenue at Simmons Street NW on the east side of
the Deschutes River; on the western side, Olympic Street W will be reconfigured between
Deschutes Parkway SW and the existing roundabout at 4th Avenue. The reconfigured
roadway is part of the asset transfer to Olympia. All references to the new 5th Avenue
Bridge in this 5th Avenue Bridge Agreement includes the reconfigured roadway.
 E. This 5th Avenue Bridge Agreement is subsidiary to the ILA, and sets forth the agreement
between DES and Olympia regarding general principles related to design of the new 5th
Avenue Bridge, removal of the existing 5th Avenue Bridge and transfer of a new 5th Avenue
Bridge after construction.
F. DES and Olympia recognize that the new 5th Avenue Bridge is currently in preliminary
design stage, and that this 5th Avenue Bridge Agreement will be supplemented or
superseded by a subsequent conveyance agreement, consistent with the general
principles set forth herein, providing further details regarding the design, construction,
transfer and future operations of the new 5th Avenue Bridge.
AGREEMENT
In consideration of the mutual promises, covenants, and conditions in this 5th Avenue Bridge
Agreement and in the ILA, DES and Olympia agree as follows:
1. Intent.
DES and Olympia shall work together in good faith, with specific areas of responsibility
as outlined in this 5th Avenue Bridge Agreement, to design, build, and transfer the new
5th Avenue Bridge.
The new 5th Avenue Bridge shall be designed in accordance with the agreed design goals
that have been identified by DES and Olympia as set forth below in Table 1.
 Table 1—City of Olympia Design Goals

• Design for minimal maintenance • Design to reflect the grandeur

o Focus on a single bridge structure (not two structures or a of the Project, Capitol Campus
continuous separation, but a short separation for a small • Create opportunities to engage
portion of bridge is acceptable) with the natural environment
o Avoid designs with double-maintenance responsibilities (e.g., • Design elements to support
two continuous sets of railings, two sets of curbs.) natural resource function
• Prioritize pedestrian safety • Integrate Squaxin Island Tribal
o Maintain natural sight lines between vehicles and histories (through art,
pedestrians for improved safety and to avoid a pedestrian interpretive signage) and
experience of feeling isolated representation of other
o Create a meaningful buffer to separate pedestrians and histories where possible
vehicles. This can be through increased width of the • Create a cohesive experience
pedestrian space, physical barriers (like landscape buffers), with the area context
or raising/lowering elevations. The buffer reduces noise and (Downtown Olympia, Heritage
proximity to traffic. Park, Marathon Park, Capitol
• Create larger space for pedestrians/programming on south side Campus, etc.) – inform and be
of vehicular bridge informed by this area context
o Bump-out locations for pause, seating, viewing – supportive
of plaza idea, expansive space for programming
o Supportive of a design that is considered transformational
o Supportive of low-maintenance railing system that does not
impede views
• Provide some level of design consistency with the 4th Avenue
Bridge. Also, 5th Avenue can be a “continuation on the design
spectrum” but should have some similarities to 4th Avenue.
• Consider bridge affordability, which will require a design that is
inspiring enough to attract funding, but not so expensive that
the full funding can never be obtained.
* Bold font indicates elements included in both Olympia’s and DES’s Community design goals.

2. DES-Led Bridge Design and Community Involvement

a. DES shall be responsible for the design of the new 5th Avenue Bridge and shall
consult with representatives of Olympia throughout the design process to ensure
the new 5th Avenue Bridge meets the intent set forth above.
b. DES shall advance the 5th Avenue Bridge design from the concept drawing
provided to Olympia in July 2024 for review and comment.
c. DES shall be responsible for community involvement regarding the new
5th Avenue Bridge design and construction processes. DES shall consult with
Olympia in the development of the community engagement plan (the scope and
 included elements of which are tied to available funding), and the process
implemented by DES shall meet or exceed Olympia’s requirements regarding
community involvement for similar facilities and based on available funding. The
intent of the community engagement plan is to incorporate input from the
community into the bridge design, where appropriate, and to work toward a
community-supported bridge design.
d. After the community engagement activities regarding the 5th Avenue Bridge are
complete, DES shall report to Olympia the primary themes and requests from the
community and shall identify whether those requests meet the design goals as
provided in Table 1 above, and whether the requests can or should be
incorporated into the bridge design.
3. Olympia Coordination Responsibilities
Olympia shall remain integrated into the new 5th Avenue Bridge design process. At a
minimum, Olympia shall:
a. Participate in design meetings with DES, up to monthly throughout the design
process so that feedback can be received in real time.
b. Review the formal design deliverables concurrent with DES to ensure that bridge
design remains consistent with Olympia design standards and long-term
management and maintenance goals.
c. Provide design feedback through other channels, as needed. There are several
components of the bridge and roadway design that will benefit from a broad range
of Olympia input. For example, the bridge height above water will be determined
by design requirements for climate resiliency, clearance for recreational vessels
on the restored estuary, grade restrictions to support bike and pedestrian
movements in this corridor, etc. Olympia shall support coordination across city
departments, as needed, on these interdisciplinary design topics, and provide
timely input and responses back to DES.
4. Bridge Funding and Construction
a. DES shall be responsible for securing construction funding and overseeing
construction of the Project, including the new bridge and roadway. For this reason,
during the design process, DES shall have authority over decisions that materially
impact Project costs but will consider input from Olympia given that all design
decisions have a cost component. DES will seek to balance Olympia interests in
bridge type and aesthetics with likely funding outcomes.
b. DES and Olympia acknowledge that construction funding is not yet secured and
will require significant investment from the State and federal governments. DES
and Olympia commit to jointly pursuing State and federal grant funding, where
appropriate. Olympia shall also take all needed steps to support joint pursuit of
grant funding, including listing of the Project in its Capital Improvement Plans and
other long-range planning documents.
 c. DES and Olympia shall work together to determine the acceptable level of
construction-related disruption and shall receive input from the community
regarding these impacts. DES will implement reasonable avoidance or mitigation
measures, as agreed to with Olympia, to minimize impacts to the transportation
network as a result of construction.
5. DES shall be the contracting party for and shall manage all contracts related to removal
of the existing 5th Avenue Bridge and the design and construction of the new 5th Avenue
Bridge.
6. Bridge Turnover and Long-Term Maintenance and Operation
Upon completion, DES shall transfer ownership of the new 5th Avenue Bridge to Olympia
and Olympia shall accept such transfer. After transfer, Olympia shall bear all operation
and maintenance costs and responsibilities and shall be responsible for all risk of loss. The
transfer will be accomplished by subsequent legal instrument consistent with this
5th Avenue Bridge Agreement.
7. Replaced Olympia Utilities
a. Olympia owns and maintains utilities in the area expected to be affected by
construction of the Project. Any Olympia utilities affected by the Project, either
existing or new, will be replaced with the same service or better.
b. DES will consult with representatives of Olympia to ensure design and
replacement of Olympia’s utilities meet Olympia design requirements.
c. DES shall work in good faith with Olympia to minimize interruptions in service in
accordance with relevant Olympia guidance regarding timing and length of service
outages, and other agreements regarding allowable disruptions during
construction.
8. Funding
a. DES and the State shall provide all funding for design and construction of a new
5th Avenue Bridge.
b. After transfer of the new 5th Avenue Bridge to Olympia, Olympia shall provide all
funding for operation and maintenance of the new 5th Avenue Bridge.
c. DES and Olympia shall each be responsible for their own overhead and internal
costs related to carrying out their respective responsibilities under this 5th Avenue
Bridge Agreement.
9. Termination
This 5th Avenue Bridge Agreement may not be terminated by either party.
10. Section 12 (Administrative) of the ILA shall apply to the extent feasible.
SIGNATURES

Mark Barber, City Attorney Date

City of Olympia

Steven J. Burney, City Manager Date

City of Olympia
 ATTACHMENT 2

South Basin Boardwalk and Related Infrastructure Agreement

State of Washington and City of Tumwater

This Boardwalk and Related Infrastructure Agreement (“Boardwalk Agreement”) is by and

between the State of Washington (State) acting by and through the Department of Enterprise
Services, (“DES”) and the City of Tumwater (“Tumwater”), and is subsidiary to the Interlocal
Agreement (ILA) entered into on Date of Last Signature, by DES, Tumwater, the Squaxin Island
Tribe (Tribe), the County of Thurston (County), the City of Olympia (Olympia), the Port of Olympia
(Port), and the LOTT Clean Water Alliance (LOTT). Collectively, the parties to the ILA shall be
referred to as the “ILA Parties.” DES and Tumwater shall be referred to herein using their defined
names.

Capitalized terms not specifically defined in this Boardwalk Agreement shall have the meanings
given to them in the ILA.

RECITALS
A. In 2022, after approximately four years of study, DES issued a final Environmental Impact
Statement (EIS) identifying the Estuary Alternative as the preferred long-term plan for
management of the area of Capitol Lake. The Estuary Alternative involves removing the
existing 5th Avenue Dam, restoring tidal flats and marsh habitat in the Capitol Lake basin,
constructing and transferring physical assets to local entities, and long-term Sediment
Management of navigational areas in the West Bay of Budd Inlet. The work described in
the Estuary Alternative and the ILA is referred to as “the Project.”
B. The ILA Parties, acting pursuant to Chapter 39.34 RCW, the Interlocal Cooperation Act,
have entered into an ILA dated Date of Last Signature governing Sediment Management.
C. As recognized in the ILA, the State, acting through DES, shall fund, design, and construct
estuary restoration and specific physical assets provided that DES will cooperate with
each entity receiving a specific physical asset in accordance with subsidiary agreements
between DES and the receiving entity.
D. Among the physical assets to be constructed and transferred as part of the Project are
new boardwalks, pathways, and related infrastructure (collectively “South Basin
Boardwalks”) that will connect to and extend the existing trail system in Tumwater
Historical Park that is owned and maintained by Tumwater.
E. This Boardwalk Agreement is subsidiary to the ILA and sets forth the agreement between
DES and Tumwater as to general principles related to the design, construction, and
transfer of the South Basin Boardwalks.
 F. Tumwater and DES recognize that Project construction plans for the South Basin
Boardwalks are in a preliminary, conceptual design phase, and this Boardwalk Agreement
will be supplemented and/or superseded by a subsequent conveyance agreement,
consistent with the general principles set forth herein, providing details regarding the
design, construction, transfer, and future operations of the South Basin Boardwalks and
underlying real property.

AGREEMENT
In consideration of the mutual promises, covenants, and conditions in this Boardwalk Agreement
and in the ILA, DES and Tumwater agree as follows:
1. Intent.
DES and Tumwater shall work together in good faith, with specific areas of responsibility
as outlined in this Boardwalk Agreement, to design new boardwalks within the South
Basin of Capitol Lake, adjacent to the Tumwater Historical Park, in accordance with design
goals set forth in the June 2024 Basis of Design. The design goals were developed through
coordination and consultation between DES and Tumwater at the onset of the design
process.
2. DES-Led Boardwalk Design and Community Involvement
a. DES shall be responsible for the design of the South Basin Boardwalks.
b. At minimum, design of the South Basin Boardwalks shall be consistent with the
following:
i. Pedestrian facilities shall be enhanced from current conditions and shall
include links to existing and planned boardwalks, pathways, and other
infrastructure in Tumwater Historical Park.
ii. Recreational and viewing opportunities shall be enhanced and consistent
with the overall Project goals.
iii. The location, design, materials, construction, and specifications for the
South Basin Boardwalks shall meet or exceed all Tumwater requirements
applicable to such facilities.
c. DES shall be responsible for community involvement regarding the South Basin
Boardwalk design and construction processes. The community engagement
implemented by DES shall meet or exceed Tumwater’s requirements regarding
community involvement for similar facilities. The intent of community
engagement is to incorporate input from the community into the South Basin
Boardwalk design or layout, where appropriate. After community engagement
activities regarding the South Basin Boardwalks are complete, DES shall report to
Tumwater the primary themes and requests from the community and shall
identify whether or not those requests meet the design goals as outlined in the
 June 2024 Basis of Design, and whether or not the requests can or should be
incorporated into the boardwalk design.
3. Tumwater Coordination Responsibilities
Tumwater shall remain integrated into the South Basin Boardwalk design process in the
following ways, at minimum:
a. Participate in design meetings with DES, as needed, throughout the design process
so that feedback can be received in real time.
b. Review the formal design deliverables concurrent to DES to ensure that the South
Basin Boardwalk design is consistent with Tumwater design standards and long-
term management and maintenance goals.
4. Boardwalk Funding and Construction
a. DES shall be responsible for permitting and construction of the South Basin
Boardwalks.
b. DES shall be responsible for securing construction funding and overseeing design,
permitting and construction of the Project, including the South Basin Boardwalks.
For this reason, during the design process, DES shall have authority over decisions
that materially impact Project costs but will incorporate input from the Tumwater
given that all design decisions have a cost component that will impact not only
construction but operation and maintenance costs and longevity.
c. DES and Tumwater acknowledge that construction funding is not yet secured and
will require significant investment from the State and federal governments. DES
and Tumwater commit to jointly pursuing State and federal grant funding where
appropriate.
d. DES and Tumwater shall work together to determine the acceptable level of
construction-related disruption in Tumwater Historical Park, and if needed, can
receive input from the community regarding these impacts. DES shall take all
reasonable actions to minimize impacts and disruption to Park operations and
shall restore any Park facilities damaged by Project activities to a condition equal
to or better than those existing prior to commencement of the Project.
e. DES shall be the contracting party for and shall manage all contracts related to
design and construction of the South Basin Boardwalks. Each DES contract for
design and construction of the South Basin Boardwalks shall include a minimum
of one-year warranty from the design professional or contractor that meets all
DES and Tumwater contracting requirements and is consistent with similar
Tumwater projects that can and will be transferred to Tumwater.
5. Boardwalk Turnover
Upon completion, DES shall transfer ownership of the South Basin Boardwalks to
Tumwater, and Tumwater shall accept such transfer. Upon transfer, Tumwater shall have
exclusive control of the South Basin Boardwalks, shall bear all maintenance costs and
 responsibilities for the South Basin Boardwalks, and shall have all risk of loss related to
the South Basin Boardwalks. The transfer will be accomplished by subsequent legal
instrument acceptable to DES and to Tumwater consistent with this Boardwalk
Agreement.
6. Funding
As noted above, the following funding provisions shall apply:
a. DES, and the State, shall provide all funding for the design and construction of the
South Basin Boardwalks.
b. After transfer of the South Basin Boardwalks, Tumwater shall provide all funding
for operation and maintenance of the South Basin Boardwalks.
c. DES and Tumwater shall each be responsible for their own overhead and internal
costs related to carrying out their respective responsibilities under this Boardwalk
Agreement.
7. Termination
This Boardwalk Agreement may be terminated by Tumwater at any time prior to the
beginning of construction of the South Basin Boardwalks. After construction commences,
Tumwater shall be obligated to accept transfer of the South Basin Boardwalks; provided,
however, that upon transfer of the South Basin Boardwalks, Tumwater shall have
exclusive control over the Boardwalks, up to and including the authority at its own
expense to alter or remove the Boardwalks.
8. Section 12 (Administrative) of the ILA shall apply to the extent feasible.

SIGNATURES

Debbie Sullivan, Mayor Date

City of Tumwater

Karen Kirkpatrick, City Attorney Date

City of Tumwater
 ATTACHMENT 3

PORT OF OLYMPIA DREDGING ADDENDUM TO ILA

This Port of Olympia Dredging Addendum (“Port Addendum”) is incorporated into and part of the
Interlocal Agreement (ILA) by and among the State of Washington (State) acting by and through
the Department of Enterprise Services, (“DES”), the Squaxin Island Tribe (Tribe), the County of
Thurston (County), the City of Olympia (Olympia), the City of Tumwater (Tumwater), the LOTT
Clean Water Alliance (“LOTT”), and the Port of Olympia (Port). Collectively, the parties to the ILA
shall be referred to as the “ILA Parties.” DES and the Port shall be referred to herein using their
defined names.
Capitalized terms not specifically defined in this Port Addendum shall have the meanings given
to them in the ILA.
BACKGROUND
A. In 2022, after approximately four years of study, DES issued a final Environmental Impact
Statement (EIS) identifying the Estuary Alternative as the preferred long-term plan for
management of the area of Capitol Lake. The Estuary Alternative involves removing the
existing 5th Avenue Dam and Bridge, restoring tidal flats and marsh habitat in the Capitol
Lake basin, constructing and transferring physical assets to local entities, and long-term
Sediment Management of navigational areas in the West Bay of Budd Inlet. The work
described in the Estuary Alternative and the ILA is referred to as “the Project.”
B. The ILA Parties, acting pursuant to Chapter 39.34 RCW, the Interlocal Cooperation Act,
have entered into an ILA dated Date of Last Signature governing Sediment Management
in the West Bay of Budd Inlet.
C. As recognized in the ILA, the Port has independent authority and responsibility to conduct
dredging to maintain authorized water depths in the Port’s vessel berths and under this
ILA, is entitled to use funding from the ILA accounts (State and Local accounts, however
denominated). The Port is also the local sponsor for coordination with the U.S. Army
Corps of Engineers (USACE) for dredging in the Federal Navigation Channel (FNC) and
Turning Basin; dredging in the FNC and Turning Basin would be funded by USACE.
D. This Port Addendum to the ILA sets forth the responsibilities and processes related to the
Port’s maintenance dredging within the Port vessel berths.
 PORT VESSEL BERTH DREDGING

The review process for Port-led maintenance dredging in Port vessel berths using funding from
the ILA Parties, described below, is based on the following assumptions and agreements
regarding process:
1. Assumptions
a. Maintenance dredging equivalent to the EIS’ No Action Alternative in impacted areas
of the Port’s vessel berths will continue to be the responsibility of the Port; additional
dredging requirements resulting from the Project (above the No Action Alternative),
will be the shared responsibility of the ILA Parties (including the Port).
b. Based on numerical modeling completed for the Project, maintenance dredging
within the Port’s vessel berths is estimated to occur at a frequency of once every
12 years, which is expected to result in one dredge event during the term of the ILA.
2. Process and Responsibilities
The Port shall work in good faith with the Deschutes Estuary Steering Committee (DESC),
the Project Manager, the State Finance Manager, and the Local Party Treasurer to
coordinate dredging efforts at the marinas, if mutually desirable and feasible, and within
the Port’s vessel berths. As a condition of accessing ILA funds for dredging in Port’s vessel
berths, the Port agrees that it shall:

• Serve as project manager for maintenance dredging within the Port’s vessel berths.
• Be responsible for bathymetric survey, design, permitting, and contract management
for maintenance dredging within the Port’s vessel berths during the term(s) of the ILA
and provide the bathymetric survey results to the Project Manager and the DESC.
• Continue to serve as the local sponsor for USACE-funded maintenance dredging in the
federal navigation channel and turning basin.
• Report to the DESC when Port bathymetric survey(s) indicates significant adverse
impacts (i.e., dredge triggers, as defined in the ILA) are likely to occur and dredging
within the Port’s vessel berths is needed to avoid such significant adverse impacts.
• Prepare a Dredging Plan for DESC review, which must include but is not limited to the
following:
o Bathymetric survey results
o Dredge recommendations and summary descriptions indicating significant
adverse impacts are likely to occur and dredging within the Port’s vessel berths is
recommended to avoid such significant adverse impacts (i.e., dredge triggers, as
defined in the ILA)
o Adaptive management measures employed (if applicable)
 o Description of coordination with the DES Project Manager and determination of
whether dredging could be coordinated with a marina dredge event for cost
efficiency
o Estimated dredge cost to restore authorized dredge depths in the Port’s vessel
berths
• Organize and facilitate weekly meeting(s) with, or provide weekly updates to, the
Project Manager and/or the DESC during maintenance dredging within the Port’s
vessel berths. If and as applicable, notify the DESC of changed conditions that impact
cost or the maintenance dredging plan.
• Contract with and provide payment to the Contractor during maintenance dredging
of the Port’s vessel berths using authorized funding from the Local and State accounts
(which includes Port contribution for baseline dredging as would occur under a No
Action Alternative). Payment shall not exceed the base cost plus 10 percent
contingency without prior coordination and approval from the DESC.
• Prepare and submit to the DESC a post-dredging report after each Port dredge event
that includes a summary of final dredging cost to the Local Party Treasurer each year
(records of receipts and expenditures).
3. Funding
a. The estimated cost within the ILA to complete one maintenance dredging event
within the Port’s vessel berth (as assumed in the ILA) is $1,345,896. This includes
a contribution from the ILA Parties (including the Port) of $983,540 for increased
maintenance dredging that would occur as a result of DES implementing the
Estuary Alternative, and an additional contribution from the Port of $362,356 for
dredging costs that would have been incurred under the No Action Alternative.
The values provided herein are stated in 2022 dollars, consistent with Attachment
1 of the ILA, and have not been escalated.
b. A not to exceed amount of $1,345,896 (escalated as appropriate, consistent with
escalation applied across the ILA) shall be authorized to the Port from the total
funds available once the DESC authorizes the Dredging Plan for dredging in the
Port’s vessel berths (and as informed by the Engineer’s Estimate).
SIGNATURE

Alex Smith, Executive Director Date

Port of Olympia
 ATTACHMENT 4

LOTT Utility Agreement

State of Washington and LOTT Clean Water Alliance

This LOTT Utility Agreement (“Utility Agreement”) is by and between the State of Washington
acting by and through the Department of Enterprise Services, (DES) and the LOTT Clean Water
Alliance (“LOTT”), and is subsidiary to the Interlocal Agreement (ILA) entered into on Date of Last
Signature, by DES, LOTT, the Squaxin Island Tribe (Tribe), the County of Thurston (County), the
City of Olympia (Olympia), the City of Tumwater (Tumwater), and the Port of Olympia (Port).
Collectively, the parties to the ILA shall be referred to as the “ILA Parties.” DES and LOTT shall be
referred to herein using their defined names.
Capitalized terms not specifically defined in this Utility Agreement shall have the meanings given
to them in the ILA.
RECITALS
A. In 2022, after approximately four years of study, DES issued a final Environmental Impact
Statement (EIS) identifying the Estuary Alternative as the preferred long-term plan for
management of the area of Capitol Lake. The Estuary Alternative involves removing the
existing 5th Avenue Dam and Bridge, restoring tidal flats and marsh habitat in the Capitol
Lake basin, constructing and transferring physical assets to local entities, and long-term
Sediment Management of navigational areas in the West Bay of Budd Inlet. The work
described in the Estuary Alternative and the ILA is referred to as “the Project.”
B. The ILA Parties, acting pursuant to Chapter 39.34 RCW, the Interlocal Cooperation Act,
have entered into an ILA dated Date of Last Signature governing Sediment Management.
C. As recognized in the ILA, the State, acting through DES, shall fund, design, and construct
estuary restoration and specific physical assets; provided, that DES will cooperate with
each entity receiving a specific physical asset in accordance with auxiliary agreements
between DES and each receiving entity.
D. Any LOTT utilities affected by the Project, either existing or new, shall be collectively
referred to as “LOTT Utilities.” LOTT owns and maintains utilities in the area expected to
be affected by construction of the Project, including but not limited to:
a. 5th Avenue Corridor: 20-inch ductile iron sewer force main
b. Deschutes Parkway: 20-inch high-density polyethylene (HDPE) reclaimed water
line, 22-inch HDPE gravity sewer main, and 20-inch ductile iron sewer force main
c. Marathon Park Pedestrian Bridge: 12-inch ductile iron reclaimed water line,
24-inch ductile iron sewer force main, and three 4-inch polyvinyl chloride (PVC)
communication conduits
 E. This LOTT Utility Agreement is subsidiary to the ILA and sets forth the agreement between
DES and LOTT as to general principles related to LOTT Utility Construction and future
operations and maintenance.
F. LOTT and Olympia recognize that Project plans affecting LOTT Utilities are in a preliminary
design phase, and this LOTT Utility Agreement will be supplemented by a subsequent
agreement, consistent with the general principles set forth herein, providing details
regarding impacts to and transfer and future operations of the LOTT Utilities.

AGREEMENT
In consideration of the mutual promises, covenants, and conditions in this LOTT Utility
Agreement and in the ILA, DES and LOTT agree as follows:
1. Intent
DES and LOTT shall work together in good faith, with specific areas of responsibility as
outlined in this LOTT Utility Agreement, to design and construct replacement utilities that
will provide the same service or better. DES and LOTT shall work together to determine
allowable disruptions during construction, while balancing reasonable construction
means and methods with the need to minimize utility disruptions to service during that
process. DES acknowledges these disruptions may be subject to factors outside of LOTT’s
control, including, but not limited to weather-related flows. The removal of existing LOTT
Utilities and the design and construction of new LOTT utilities shall be collectively referred
to as LOTT Utility Construction.
2. DES Contracting and Project Management
a. DES shall be the contracting party for and shall manage all contracts related to
LOTT Utility Construction.
b. DES shall work in good faith with LOTT to minimize interruptions in service in
accordance with relevant LOTT guidance regarding timing and length of service
outages, and other agreements regarding allowable disruptions during
construction as may be made through the coordination facilitated through this
Utility Agreement.
c. DES shall ensure LOTT’s unrestricted access to the Capitol Lake Pump Station at all
times.
3. LOTT Utility Design
DES shall consult with representatives of LOTT to ensure replacement LOTT utilities meet
the intent set forth above and are consistent with the following standards:
a. Service shall be equal to or better than current service.
b. Replaced LOTT Utilities shall be designed to withstand river and tidal flows and
have a minimum expected service life of 50 years.
LOTT shall remain integrated into the LOTT Utility design process in the following ways, at
minimum:
a. Participate in design meetings with DES, as needed, throughout the design process
so that feedback can be received in real time.
b. Review the formal design deliverables concurrent to DES to ensure that LOTT
Utility design remains consistent with LOTT design standards and long-term
maintenance and maintenance goals. Any changes to material, size, or other
specification of existing LOTT Utilities must be submitted in advance to, and
approved by, LOTT.
4. Damage to LOTT Utilities Prior to Removal and Replacement
LOTT and Olympia shall endeavor to ensure continuous service and to minimize
interruptions to LOTT’s existing customers. To that end, if LOTT Utilities are damaged to
the extent that they are rendered inoperable or service is compromised or impaired by
the Project work recognized by this LOTT Utility Agreement in any way prior to their
scheduled removal and replacement, it shall be the sole responsibility of DES to repair or
restore LOTT Utilities to prior levels of functionality pending their removal and
replacement. DES shall not be responsible for repairing or restoring failures of LOTT
Utilities that occur prior to their scheduled removal and replacement that are not caused
by Project work recognized by this LOTT Utility Agreement.
5. Replaced LOTT Utilities Transfer, Long-Term Maintenance, and Operation
Upon completion of Project construction, DES shall transfer ownership of replacement
LOTT Utilities to LOTT, and LOTT shall accept such transfer. Upon transfer, LOTT shall bear
all maintenance costs and responsibilities for the replaced LOTT Utilities and shall be
responsible for all risk of loss. The transfer will be accomplished by subsequent legal
instrument consistent with this LOTT Utility Agreement.
6. Funding
a. DES, and the State of Washington, shall provide all funding for LOTT Utility
Construction.
b. DES and LOTT acknowledge that construction funding is not yet secured and will
require significant investment from the State and federal governments, and will
benefit all ILA Parties, including LOTT. DES and LOTT commit to jointly pursuing
State and federal grant funding when appropriate.
c. After transfer of the replaced LOTT utilities, LOTT shall provide all funding for
operation and maintenance of the replaced LOTT utilities.
d. DES and LOTT shall each be responsible for their own overhead and internal costs
related to carrying out their respective responsibilities under this LOTT Utility
Agreement.
 7. Termination
This LOTT Utility Agreement may not be terminated by either party.
8. Section 12 (Administrative) of the ILA shall apply to the extent feasible.

SIGNATURES

Matthew J. Kennelly, Executive Director Date

LOTT

Tye Menser, Board President Date

LOTT