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HomeMy WebLinkAboutRes2009-006Sponsored by: Oates CTTY OF SEWARD, ALASKA RESOLUTION 2009-006 A RESOLUTION OF THE CITY COUNCIL. OF THE CITY OF SEWARD, ALASKA, AUTHORIZING THF. CITY MANAGER TO ENTER INTO AN AMENDMENT TO THE AMENDF,D AND RESTATED AGREEMENT FOR LEASE OF TRACT 2A, Wr1TERFRONT TRACTS, AND ADJACENT TIDELANDS, AND THE LEASE, OPERA"TION AND MAINTENANCE OF THE ALASKA SEALIFF, CENTER WITH 'THE SEWARD ASSOCIATION FOR THE AllVANCEMENT OF MARINE SCIENCE, DB/A ALASKA SEALIFE CENTER WHEREAS, in ?006 the City of Seward ("City") and the Seward Association for the Advancement of Marine Science, d/b/a Alaska SeaLife Center ("SAAMS°') entered into an Amended and Restated Agreement for Lease of Tract 2A, Waterfront Tracts, and Adjacent Tidelands, and the Lease, Operation and Maintenance of the Alaska SeaLife Center (the "Lease"); and WHEREAS, the City and the Stale of Alaska Department of Fish and Game are parties to a Cooperative Agreement for the Construction, Operation, and Maintenance ofResearch InGastructure Improvements at the Alaska SeaLife Center, in Seward, Alaska executed in April l 995, as amended (the "Cooperative Agreement"); and WHEREAS, the City and SAAMS intended to transfer all of the obligations of the City under the Cooperative Agreement and the IJVOS Trustee Council Resolution adopted November 2, 1994 to SAAMS; and WHEREAS, the City has an obligation under the Cooperative Agreement to own, operate, and maintain the Alaska SeaLife Center for the practical life of the facility, and the practical Zile of the facility ends upon the occurrence of both of the following. (i) the City makes a reasonable determination, as verified by an independent financial consultant selected or approved by ADF&G, that the facility is not capable of generating revenues sufficient to cover the operating expenses and debt service of the facility, and (ii) while being operated in accordance with any recommendation from the independent financial consultant and in accordance with tenus and conditions of the agreetncnt during the two-year period following the City's determination, the facility does not generate revenues sufficient to cover the operating expenses and debt service of the facility, plus fund sufficient reserves for repairs and replacements in the facility; and WHF,REAS, if the City elects not to operate the facility, either because it has reached the end of its useful life or for any other reason, the City is obligated to continue operating the Sealife Ceutcr Ivor one year while ADF&G determines whether to exercise its option to enter and assume operation oCthe Sealife Center; and CITY OF SEWARD, ALASKA RESOLUTION 2009-006 WHEREAS, with the understanding that SAAMS would operate the SeaLifc Center during the one-year period in which ADF&G may exercise its option, and based on representations by SAAMS that the amount described to meet the City's obligations to ADF&G was $700,000 for fiscal year 2006, the City and SAAMS agreed in the Lease that SAAMS would maintain a Termination Fund in an amount of 5700,000 for fiscal year ending September 30, 2006 and increasing 3% each year; and WHEREAS, SAAMS is experiencing a temporary cash flow shortage and asks for a temporary one-year reduction in the amount to be held in the Termination Fund; and WHEREAS, SAAMS has provided sufficient documentation to explain the need for the proposed changes and its reasonable plan to eliminate the cash flow shortage and to frilly fund the Termination Fund by September 30, 2009; and WHEREAS, the City Council has determined that it is in the public interest to enter into an amendment to the Lease because of the public benefits provided by SAAMS to the Seward community. NO~i', THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, that: Section 1. For the reasons stated in the above recitals, which are incorporated herein by reference, it is in the public interest to enter into an Amendment to the Amendment and Restated Agreement for Lease of Tract 2A, Waterfront Tracts, and Adjacent Tidelands and the Lease, Operation and Maintenance of the Alaska SeaLife Center in substantially the form presented at this meeting. Section 2. The City Manager is hereby authorized to enter into the amendment in substantial form as presented at this meeting and incorporated herein by reference, and to make such changes as necessary to t7nalize the agreement between the parties but without changing the substantial terms and conditions as described therein. Section 3. This resolution shall take effect thirty (30) days after its adoption and posting. PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 26`'' day of.January, 2009. THE CITY OF SF.~YARD, ALASKA ~, :.. ~~. Willard Dunham, Vice Mayor ~" CITY OF SE~'~'ARD, ALASKA 1tESOLUTION 2009-006 AYES: NOES: ABSENT: ABSTAIN ATTEST: Valdatta, Smith, Keil, Dunham None Bardarson, Corbridge Kellar ~ ,,_ ,, Jear{~Lewis, CMC Cit}I Clerk -- e R~r"a if ~'91f}Iyd,b (C~ty Sear q,~ r t" ~~..,~„r `,yb s ~C na ~J ~H 4n~ -N t, vn li. '.. Y~ M 4 ", 4~~ •RS~ ~~nrw ,g`qe~ Oaa~ Council Agenda Statement Meeting Date: Monday, January 26, 2009 To: City Council Through: City Manager Phillip Oates From: Executive Liaison Anne BaileyA Agenda Item: Resolution 2009-~, Authorizing the City Manager to Enter Into an Amendment to the "Amended and Restated Agreement for Lease of Tract 2A, Waterfront Tracts, and Adjacent Tidelands, and the Lease, Operation and Maintenance of the Alaska SeaLife Center" with the Seward Association for the Advancement of Marine Science BACKGROUND & JUSTIFICATION• In 2006, the City of Seward ("City") and the Seward Association for the Advancement of Marine Science ("SHAMS") entered into an Amended and Restated Agreement for Lease of Tract 2A, Waterfront Tracts, and Adjacent Tidelands, and the Lease, Operation and Maintenance ofthe Alaska SeaLife Center (the "Lease"). The City and the State of Alaska Department of Fish and Game are parties to a Cooperative Agreement 1'or the Construction, Operation, and Maintenance of Research Inlcastrueture Improvements at the Alaska SeaLife Center, in Seward, Alaska executed in April 1995, as amended (the "Cooperative Agreement"). The City has an obligation under the Cooperative Agreement to own, operate, and maintain the Alaska SeaLife Center for the for the practical life of the facility, and the practical life of the facility ends upon the occurrence of both of the following: i. the City makes a reasonable determination, as verified by an independent financial consultant selected or approved by ADF&G, that the facility is not capable of generating revenues sufficient to cover the operating expenses and debt service of the facility, and ii. while being operated in accordance with any recommendation from the independent financial consultant and in accordance with terms and conditions of the agreement during the two-year period following the City's determination, the facility does not generate revenues sufficient to cover the operating expenses and debt service of the facility, plus fund sufficient reserves for repairs and replacements in the facility. If the Ciry elects not to operate the facility the City is obligated to continue operating the SeaLife Center for one year while ADF&G determines whether to exercise its option to enter and assume operation of the SeaLife Center. With the understanding that SAAMS would operate the SeaLife Center during the one-year period. in which ADF&G may exercise its option, and based on representations by SAAMS that the amount described to meet the City's obligations to ADF&G was $700,000 for fiscal year 2006, the City and SAAMS agreed in the Lease that SAAMS would maintain a Termination Fund in the amount of $700,000 for fiscal year ending September 30, 2006 and increasing 3% each year. SAAMS is experiencing a temporary cash Clow shortage and asks for a temporary one-year reduction in the amount to be held in the Termination Fund. SAAMS has provided sufficient documentation to explain the need for the proposed changes and its reasonable plan to eliminate the cash flow shortage and to fully fund the `termination Fund by September 30, 2009. City Council held work sessions on November 24, 2008 and January 19, 2009 to publically discuss SAAMS' proposed changes to its agreement with the City. Comments and suggestions provided by Council Members, City Staff, SAAMS, and members ofthe public were taken into consideration and incorporated in the Lease and Resolution. CONSISTENCY CHECKLIST: Where applicable, this resolution is consistent with the Seward City Code, Charter, Comprehensive Plans, Land Usc Plans, Strategic Plan and City Council Rules of Procedures. FISCAL NOTE: According to the terms of the Cooperative Agreement between the City of Seward and the State of Alaska Department of Fish & Game, the Ciry of Seward is required to ensure the availability of funds to satisfy the requirements of the Termination Fund and the Major Repair & Replacement Fund. To the extent that there are insufficient monies available in either or both of these funds in the i'uture, and in the event circumstances require the City to operate the facility until it is turned over to ADF&G, the Ciry will be required to pay whatever costs are necessary to cover the costs of termination and to provide for major maintenance and repairs. Given many of the City's current fiscal challenges, including its own inadequate level of General Fund reserves, the City must assess this risk very carefully, since passage of this resolution potentially shifts financial risks from SAAMS to the taxpayers of Seward. Approved by Finance Department: ~~~~~~, ~~~ __- 1 RECOMMENllATION• Council approve Resolution 2009-~, Authorizing the City Manager to Enter Into an Amendment to the "Amended and Restated Agreement for Lease of Tract 2A, Waterfront Tracts, and Adjacent 'tidelands, and the Lease, Operation and Maintenance ofthe Alaska SeaLife Center" with the Seward Association for the Advancement of Marine Science. 9