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Home My WebLink AboutRes2009-137 Sponsored by: Oates Motion to Reconsider Failed 01/11/2010 12/14/2009 CITY OF SEWARD, ALASKA RESOLUTION 2009 -137 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, AUTHORIZING THE CITY MANAGER TO ENTER INTO A "SECOND AMENDED AND RESTATED AGREEMENT FOR LEASE OF TRACT 2A, WATERFRONT TRACTS, AND THE LEASE, OPERATION AND MAINTENANCE OF THE ALASKA SEALIFE CENTER" WITH THE SEWARD ASSOCIATION FOR THE ADVANCEMENT OF MARINE SCIENCE WHEREAS, in 2006 the City of Seward ( "City ") and the Seward Association for the Advancement of Marine Science ( "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 "SAAMS AGREEMENT "); and WHEREAS, the City and the State of Alaska Department of Fish and Game are parties to a Cooperative Agreement for the Construction, Operation, and Maintenance of Research Infrastructure Improvements at the Alaska SeaLife Center, in Seward, Alaska executed in April 1995, 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 EVOS 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 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; and WHEREAS, 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 CITY OF SEWARD, ALASKA RESOLUTION 2009 -137 ....1 Center for one year while ADF &G determines whether to exercise its option to enter assume operation of the SeaLife Center; and WHEREAS, with the understanding that SAAMS would continue to 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 needed to mothball the SeaLife Center for one (1) year was $700,000 for fiscal year 2006, the City and SAAMS agreed in the SAAMS AGREEMENT that SAAMS would maintain a Termination Fund in an amount of $700,000 for fiscal year ending September 30, 2006 and increasing 3% each year; and WHEREAS, in fall 2008, SAAMS experienced a temporary cash flow shortage and asked for a temporary reduction in the amount to be held in the Termination Fund; and WHEREAS, the City supports the mission of SAAMS and was willing to take on, for a limited period, the responsibility of funding the majority of the Termination Fund; and WHEREAS, at that time, SAAMS explained the need for the proposed changes and its plan to eliminate the cash flow shortage and to fully fund the Termination Fund by September 30, 2009; and WHEREAS, to assist SAAMS in managing its operating cash flow during the fall and winter months, a temporary amendment to the SAAMS AGREEMENT was approved in January 2009 by the City which granted the option to SAAMS to access up to a total of $500,000 from the Termination Fund from March 1, 2009 until September 30, 2009 and replenish the fund to the required level on that date; and WHEREAS, this summer and fall, SAAMS entered in a renegotiation of the SAAMS AGREEMENT with the City with four principal objectives which have been achieved in the new SAAMS AGREEMENT: 1) Eliminate the Tidelands lease and the accompanying $9,000 annual lease payment to the City; 2) Reduce the Termination Fund requirement; and 3) Eliminate the annual maintenance plan and remove certain language regarding facility maintenance; 4) Shift the burden of operations and maintenance to the City for the one year period required by the Cooperative Agreement following a decision to no longer operate the SeaLife Center. The City is obligated to operate the SeaLife Center to the standard of other well' maintained and well' operated marine research facilities throughout the United States. The SeaLife Center's obligation is limited to that of a mothballed facility; and WHEREAS, the City and SAAMS negotiated the following amendments: 1) Inserted "climate change and conservation" as use of the Improvements (Section 3.6.1); 2) Modified budget reporting requirements (Section 3.11); 3) Inserted the Bank Financial Statements requirement included in the CITY OF SEWARD, ALASKA RESOLUTION 2009 -137 January 2009 amendment (Section 3.11.3; 4) Changed the construction bonding requirement to projects where bonding is required by State Law or for construction requiring the City's approval under the Lease (Section 4.2.2); 5) Changed the Notice of Completion requirement to work exceeding $100,000 rather than for all construction regardless of price (Section 4.3.3); 6) Revised the definition of "major repairs and replacements" to mean a discrete repair expenditure greater than $50,000, or any repair or maintenance project that is outside the scope of the annual operating budget or annual maintenance plan. The current Lease restricts the use of the repair and replacement fund to projects costing more than $50,000 or outside the scope of the annual maintenance plan. The annual maintenance plan is deleted (Section 5.5); and 7) Changed SAAMS' obligation to operate the Center for one -year following SAAMS' election not to operate from the standards required of the City in the Cooperative Agreement to a standard of "closed to public access and to any research activity (Section 5.6); and WHEREAS, in addition to removing the tidelands area from the SAAMS AGREEMENT which will reduce City revenues approximately $9K annually, the new Agreement allows SAAMS to access up to $500K of the Termination Fund as necessary for cash flow as long as the Termination Fund is fully restored on one day each year (September 30th); and himp WHEREAS, to the extent that SAAMS fails to maintain the Termination Fund and Renewal and Replacement Fund as required in the agreement, and in the event circumstances require the City to operate the Center until it is turned over to ADF &G, the City will be required to pay whatever costs are necessary to cover the costs of termination and to provide for major maintenance and repairs; and WHEREAS, the City Council has determined that it is in the public interest to enter into an amendment to the SAAMS AGREEMENT because of the public benefits provided by SAAMS to the Seward community. NOW, 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 a "Second 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 ". Section 2. The City Manager is hereby authorized to enter into a second amendment in substantial form as presented at this meeting and incorporated herein by reference. CITY OF SEWARD, ALASKA RESOLUTION 2009 -137 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 14th day of December, 2009. THE CITY : - SEWARD, ALASKA illard E. I unham, Mayor AYES: Valdatta, Bardarson, Keil, Shafer, Amberg, Dunham NOES: None ABSENT: Smith ABSTAIN: None ATTEST: osai Jea► ewis, (MC Cit Clerk (City Seal) 4•4-k .. ••••. to : S",1 -. a � 14, 1 r