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HomeMy WebLinkAboutMemorandum of Understanding with HRDC for Joint Development of LandCommission Memo – HRDC/City MOU Page 1 Commission Memorandum REPORT TO: Honorable Mayor and Commission Members FROM: Greg Sullivan, City Attorney Debbie Arkell, Director of Public Services Chuck Winn, Assistant City Manager SUBJECT: Memorandum of Understanding with HRDC for the Joint Development of City Land for the City of Bozeman Vehicle Maintenance and HRDC Bus Storage Joint Facility MEETING DATE: September 14, 2009 AGENDA ITEM TYPE: Action Item RECOMMENDATION: Authorize the City Manager to sign the Memorandum of Understanding with the Human Resources Development Council, Inc. (HRDC) for the Joint Development of City Land for the City of Bozeman Vehicle Maintenance and HRDC Bus Storage Joint Facility BACKGROUND: On March 23, 2009, the Commission authorized staff to "continue working on the proposal to construct a shared facility for city vehicle maintenance and the Streamline Bus Barn" and "to enter into a Memorandum of Understanding (MOU) with HRDC for the construction of a shared facility". On April 6, 2009, the Commission directed staff to bring back a lease agreement and to design and bid a joint vehicle maintenance building with HRDC/Streamline. Tonight you have two actions before you. First, under the previous agenda item, you were asked to consider approving an Ordinance authorizing the City Manager to enter into a 99-year ground lease with the HRDC. Second, under this staff report and agenda item, we request you approve a Memorandum of Understanding with HRDC which discusses the construction and operation of the joint project. The attached MOU was formatted from the previously approved MOU with Gallatin County for the joint 911/Fire Station 3 facility. The document outlines how costs will be allocated for the development and future operation and maintenance of the joint project. For example, it details how each party will be allocated costs associated with architectural services, construction, and utilities, outlines how change orders will be reviewed and approved, and requires each party to maintain insurance. The MOU specifies five contingencies (Section 6 on page 3 of the MOU) that must be completed in order for the project to proceed. The Contingency Removal Date is 389 Commission Memo – HRDC/City MOU Page 2 October 12, 2009, which is the day after the 60-day bid award period expires. The MOU allows this contingency date to be extended if the bid award date is extended. The MOU has been submitted to HRDC for their review, and upon their acceptance will be signed by their Chief Executive Officer. FISCAL EFFECTS: The MOU has no direct fiscal effects. The fiscal effects of the project as a whole have been discussed in previous Commission actions. ALTERNATIVES: As suggested by the City Commission. Attachments: Memorandum of Understanding Report compiled on: September 9, 2009 Cc: Lee Hazelbaker, Director, HRDC/Streamline/Galavan 390 HRDC/CITY MOU Page 1 MEMORANDUM OF UNDERSTANDING FOR THE JOINT DEVELOPMENT OF CITY LAND FOR CITY OF BOZEMAN VEHICLE MAINTENANCE AND HRDC BUS STORAGE JOINT FACILITY THIS AGREEMENT made this ____ day of September, 2009, by and between: CITY OF BOZEMAN, MONTANA (CITY), 121 North Rouse Avenue, P. O. Box 1230, Bozeman, MT 59771-1230; and HUMAN RESOURCE DEVELOPMENT COUNCIL INC., DISTRICT IX (HRDC), 32 South Tracy Avenue, Bozeman, MT 59715. RECITALS: WHEREAS, CITY has the need for a vehicle maintenance facility and HRDC has the need for a bus barn facility to accommodate the Streamline and Galavan public transportation operations; and WHEREAS, CITY and HRDC have a mutual interest in pursuing a joint facility for such operations; and WHEREAS, CITY owns certain real property which is appropriate to achieve mutual project goals; and WHEREAS, on March 23, 2009, the Bozeman City Commission authorized staff to enter into a Memorandum of Understanding (MOU) with HRDC for the construction of a shared city vehicle maintenance and Streamline bus barn facility; and WHEREAS, on April 6, 2009, the Bozeman City Commission directed staff to bring back a lease agreement and to design and bid a joint vehicle maintenance / Streamline bus barn facility with HRDC/Streamline; and WHEREAS, bids received for the project were within the budgets of both parties; and WHEREAS, CITY and HRDC seek to provide a mechanism to achieve the development of the joint project on CITY owned property. NOW, THEREFORE based on mutual consideration, it is understood and agreed that the above recitals are true and correct, and the parties agree to be bound in pursuit of the construction of a joint construction project as follows: 1. Project Description. The “Project” shall consist of the joint development of a 25,380+/- square foot vehicle maintenance shop and bus storage facility, with joint accessory offices, common areas, and vehicle wash station, along with all required 391 HRDC/CITY MOU Page 2 site improvements, on CITY owned property located at 1812 North Rouse Avenue, Bozeman, Montana (“Project Site”). The CITY’s vehicle maintenance facility shall consist of approximately 10,112 sq.ft. of building space; the HRDC’s bus storage facility will consist of approximately 10,040 sq.ft. of building space; the joint wash bay will consist of approximately 1,270 sq. ft. of building space; the joint common areas will consist of approximately 4,140 sq.ft. of building space. Driving aisles, parking areas, and landscaping and public access areas will be jointly used. 2. Mutual Project. Upon the satisfaction of the contingencies set forth in Section 6 below CITY and HRDC agree to the following mutually developed design, development and construction process for the Project. Allocations and costs of professional services for design and construction, project changes, insurance, utility extensions and long term operations and management are as follows: A. Architectural Services. Each party shall be responsible for their own architectural services and costs, as previously agreed. Each party’s Architect has entered into a separate agreement among themselves to develop the project as a team, and will hereinafter be referred to as the “Architect Team”. B. Construction Representatives. CITY and HRDC has appointed Construction Representatives who will serve as the principal point of contact for issues that arise during all stages of the planning, designing, bidding, and construction scheduling and building. James Goehrung, Facilities Director, will serve as the CITY representative. Lee Hazelbaker, Director of HRDC/Streamline/Galavan, will serve as the HRDC representative. C. Question Resolution. Questions that arise from the Architects or any contractor will first be brought to the attention of the construction representatives for answers. For items that have a potential impact on the operation or budget of either the vehicle maintenance facility or the bus storage facility, the item needing attention will be discussed with the City Manager and/or the HRDC Chief Executive Officer prior to issuing a directive. Should an issue require formal approval by the respective elected body and Board of Directors, the construction representatives will bring that information to their respective body for appropriate action. D. General Contractor. The joint project has been designed and bid as one project. The award of the contract for construction of the joint project will be awarded to the lowest responsive bidder, herein referred to as the “General Contractor”, upon mutual consent of both parties. E. Payments. During the construction phase of the project, the General Contractor will submit all payment requests to the Architect Team. The Architect Team will be responsible for assigning the invoices, or the appropriate portion of the invoices, to the CITY and HRDC for processing and payment. All costs directly associated with or attributable to the construction of the Vehicle Maintenance 392 HRDC/CITY MOU Page 3 facility will be directed to the CITY for payment at 100%. All costs directly associated with or attributable to the construction of the bus storage facility will be directed to HRDC for payment at 100%. All costs associated with common areas shall be divided between the CITY and HRDC on a 50/50 basis. Costs that are attributable to joint benefit but are related to a proportional split will be billed according to a cost per square foot price or a quantity price and billed accordingly to both parties. In the event of a dispute in assigning costs or the payment of claims, a committee of the Architect Team, General Contractor, Construction Representatives, City Manager (or designee), and the HRDC Chief Executive Officer (or designee) will be responsible for resolving the differences within 15 calendar days. F. Change Orders. Formal change orders shall be submitted to the Construction Representatives for appropriate action. G. Stimulus Funding. Each party has indicated they may utilize Federal or State Stimulus funding to fund a portion of the project. This funding has specific recording and reporting requirements. In addition, state and federal stimulus funding has specific requirements regarding wages, discrimination, and compliance with other laws. Each party shall be responsible for tracking, preparing, and submitting their own reports regarding the use of these funds and shall be solely responsible for complying with all federal and state requirements. 3. Lease of Land. HRDC shall execute a Lease for the lease of a portion of the Project Site prior to letting an award of the project. CITY shall give approval to final reading of Ordinance 1773 authorizing the City Manager to execute the Lease prior to letting an award of the project. 4. Insurance. HRDC shall acquire and maintain for the term of this Agreement and for the duration of all construction activity of any kind, liability insurance for personal injury including death, as well as third party property damage, in the amount of Seven Hundred Fifty Thousand and no 0/100 Dollars ($750,000.00) for each occurrence with One Million Five Hundred Thousand and no 0/100 Dollars ($1,500,000.00) umbrella coverage, and shall name the City as additional insured on the policy. The City will acquire and maintain comparable insurance through Montana Municipal Interlocal Authority, self-insurance fund, treating HRDC as an additional named insured. Each party shall, at all times during the term of this Agreement and the duration of all construction activity of any kind, and at each party's sole expense, keep all improvements which are now or hereafter a part of the premises insured against loss or damage by fire for one hundred percent (100%) of the full replacement value of such improvements, with loss payable to each party as their interests may appear. Any loss adjustment shall require the written consent of both City and HRDC. 393 HRDC/CITY MOU Page 4 5. Utilities. As outlined in the Lease, each party shall be responsible for the payment of electric and gas utility costs arising out of the construction, occupation and use of their respective facilities, along with a pro-rata share of the common area utilities. These costs shall be determined using a formula provided by the Project's mechanical engineer. As the electric and gas utility costs will be in the CITY's name, CITY will provide HRDC a copy of the bill with their pro-rata share on it no later than ten (10) days after the bill is received, and HRDC will submit their payment to the CITY no later than ten (10) days thereafter. Monthly water and wastewater costs will initially be split proportionately based on square footage. Water usage will be monitored and the pro-rate share adjusted if deemed necessary based on use. Each party will be responsible for their own telephone and electronic data services and bills. 6. Mutual Project Contingencies. The CITY’s and HRDC’s participation in the process of designing, developing and constructing the Project pursuant to Section 4 above is contingent upon the following: A. The ability of HRDC to secure a funding grant from the Federal Transit Authority through the Montana Department of Transportation. B. Final reading of Ordinance 1773 by the Bozeman City Commission and execution by HRDC of a Lease for HRDC’s portion of the Project Site. C. The completion of a final plan for a Subdivision for Sale or Lease. D. The award of a Final Site Plan approval by the City of Bozeman. E. The acceptance by both parties of a bid for the project. The CITY and HRDC shall diligently pursue resolving these contingencies upon execution hereof. The Contingency Removal Date shall be 5:00 p.m. October 12, 2009, which is the day after the 60-day bid award period expires, unless the bid award date is extended, then the Contingency Removal Date shall be one day after the extended date. If the contingencies are not resolved or waived on or before the above dates, or the dates as mutually extended by the parties in writing, this Agreement shall be void. 7. Notice. Any notice required or given under this Agreement shall be made by certified mail or personal delivery to the following: To CITY: To HRDC: City Manager Chief Executive Officer 121 N. Rouse Avenue 32 South Tracy Avenue PO Box 1230 Bozeman, MT 59715 Bozeman, MT 59771 394 HRDC/CITY MOU Page 5 8. Binding Effect; Amendment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. This Agreement shall be amended or modified only as expressly provided in a writing signed by the party against which enforcement of such amendment or modification is sought. 9. Remedies in Case of Breach. Except for disputes regarding payment of claims as provided for in Section 3.E, above, should either party alleged the other has failed to comply with the requirements of this Agreement, the party alleging a failure to comply may, after providing the other party a written notice and a fifteen (15) day opportunity to cure, take any action available at law or in equity to recover any funds expended, including the costs of staff time and attorney fees, to include in-house counsel and the City Attorney, in the course of mitigating the other party's failure to fulfill the obligations of this Agreement. Each party recognizes failure to comply with the terms of this Agreement will result in damages to the other party, including damages resulting from the delay in completion of the joint project including interest on any outstanding loan amounts and damages resulting from mitigating the breaching parties failure to comply including expenses related to completing construction and legal fees and costs. Each party recognizes and agrees that should it be determined it is in breach of any provision of this agreement, the breaching party will be responsible for the above described fees and damages that are directly attributable to its breach. Prior to bringing an action in law or equity, the parties must, after the period to cure described above enter into and attempt in good faith to resolve all disputes by non- binding mediation. 10. Captions. The captions or headings placed upon sections of this Agreement are for convenience only, do not constitute a part of this Agreement, and shall not limit or affect in any way the interpretation or construction of this Agreement. 11. Severability. If any part of this Agreement shall be found to be invalid or unenforceable, such finding shall not affect the validity or enforceability of any other provisions hereof which can be given effect in the absence of the parts determined to be invalid or unenforceable. 12. Governing Law. All matters relating to the making, enforcement and performance of this Agreement shall be governed by the internal laws of the State of Montana. 13. Time Is of the Essence. The time of complying with this Agreement is of the essence and a violation is a material breach. 395 HRDC/CITY MOU Page 6 14. Non-Waiver. A. The waiver or failure to enforce any provision of this Agreement shall not operate as a waiver of any future breach of any such provision or any other provision. B. No covenant, term, or condition of this Agreement shall be deemed waived by either party unless such waiver shall be reduced to writing and signed by the parties. 15. Entire Agreement. This document represents the entire and integrated Agreement between the CITY and HRDC and supersedes all prior negotiations, agreements or representations, either written or oral. This Agreement may be amended only by written instrument signed by both CITY and HRDC. 16. Non-Assignment. CITY and HRDC, respectively, bind themselves, their successors, assigns and legal representatives to the other party with respect to all covenants, terms, or conditions of this Agreement. Neither CITY nor HRDC shall assign this Agreement without the written consent of the other. 17. Execution of Agreement. The City of Bozeman Clerk will keep the original Agreement. An exact unaltered copy of the original Agreement has the same force and effect as the original. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered as of the day and year first above written. HUMAN RESOURCE DEVELOPMENT COUNCIL, INC., DISTRICT IX __________________________________ Jeffrey K. Rupp, Chief Executive Officer CITY OF BOZEMAN, MONTANA _________________________________ Chris A. Kukulski, City Manager ATTEST: _________________________________ Stacy Ulmen, City Clerk 396