Diking Improvement District Number 5 6/24/2025

2 E. Because the City will benefit from the Rehabilitation Work and the coordinated ownership and control of the flood control systems protecting and benefiting the lands and improvements on Smith Island, the City has agreed to reimburse the Diking District for its 20% share paid to USACE, up to an agreed upon maximum amount, as set forth below. The City has also agreed to reimburse the Diking District for the amounts incurred in acquiring WSDOT Easement Rights up to an agreed upon maximum amount, as set forth below. The purpose of this Interlocal Agreement is to formalize that reimbursement agreement, and make the Project budget neutral to the Diking District. The Diking District is not responsible for the culvert and/or tidegate under and through the dike in the Project area within the WSDOT Right of Way. The Project does not propose to do any work to the culvert and/or tide gate. F. The Diking District commissioners have had an opportunity to review and independently evaluate this Interlocal Agreement, and are satisfied that it is fair and equitable to the Diking District. G. Until the USACE Agreement is fully executed and the WSDOT Easement Rights are conveyed and recorded, the obligations of the parties hereto remain for any repairs of the levee and, in no way does this recital relieve WSDOT to the extent the law obligates the State, or any other potentially responsible entity for contributing. That is, the status quo with respect to any obligations does not change until the WSDOT Easement Rights are conveyed and recorded and the USACE Agreement is fully executed. AGREEMENT For good and valuable consideration, the receipt and sufficiency of which is acknowledged, the parties agree as follows: 1. Reimbursement Amounts. The City agrees to reimburse Diking District the following: A. Cost Share Reimbursement. After the USACE Agreement is fully executed and the Diking District has acquired the WSDOT Easement Rights, the City will reimburse the Diking District for amounts the Diking District pays to USACE under the USACE Agreement as the Diking District’s 20% share of “cost shared rehabilitation costs.” The maximum total reimbursement from the City for the 20% of “cost shared rehabilitation costs” is $300,000 unless otherwise approved in writing by the City’s Public Works Director or Designee. This reimbursement will include reimbursement for in-kind contributions provided by the Diking District at the amount assigned by the USACE for in-kind contribution. This reimbursement will not include reimbursement for in-kind contributions provided by the City. For example, if the Diking District’s 20% share is an $80,000 payment plus a USACE-valued $10,000 in-kind contribution provided by the Diking District plus a $15,000 USACE-valued in-kind contribution provided by the City, then the total reimbursement to the Diking District from the City would be $90,000. The City will reimburse the Diking District for reasonable attorney fees to negotiate and implement the USACE Agreement up to a maximum of $25,000. Fees above $25,000 in total for the USACE Agreement must be contained in a budget (or