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HomeMy WebLinkAboutSublease agreement with Montana Rail Link for the Story Mill Spur TrailPage 1 of 2 Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Ryan McCarty, Assistant City Attorney Greg Sullivan, City Attorney SUBJECT: Authorize City Manager to enter into a temporary agreement not to exceed six months with Montana Rail Link for the public’s use of the Story Mill Spur Line Trail. MEETING DATE: March 25, 2013. AGENDA ITEM TYPE: Consent. RECOMMENDATION: We recommend the Commission authorize the City Manager to enter into an agreement in substantially the same form as Attachment B with Montana Rail Link for the Story Mill Spur Line trail for a period not to exceed six months for the continued use of the Story Mill Spur Line as a bicycle path/pedestrian trail. BACKGROUND: Over the course of the past 15 years, the Story Mill Spur Line trail has become a popular route for pedestrians, cyclists, commuters, and dog walkers and the bridge over the East Gallatin River is a popular a destination for swimming, fishing, and bird watching. And it provides a critical non-motorized trail connecting a growing part of the City (Bridger Creek, Headlands, and Legends neighborhoods) with the core of the City. We are not aware of any issues between the City and the Railroads regarding maintenance of the trail. On April 1, 1998, the City, and Montana Rail Link (MRL) and Burlington Northern and Santa Fe Railway Company (the “Railroads”) entered into a Bicycle Path/Pedestrian Walkway Term Sublease No. 500, 539 02 Bozeman. The sublease term was ten years and expired March 31, 2008. The sublease was extended in February of 2008 for a term of five years in a document entitled Exercise of Option to Renew Lease No. 500, 539. The current sublease extension expires March 31, 2013. These agreements are provided together as Attachment A. Knowing the current sublease is set to expire at the end of this month, the Gallatin Valley Land Trust approached the City in the summer of 2012 regarding the potential for working with MRL to “rail bank” the Story Mill Spur Line, or, in the alternative ensure the City and Railroads entered into another agreement for the continued use of the trail. Rail banking is a method by which railway corridors that would otherwise be abandoned can be preserved for future rail use through interim conversion to a trail. Established in 1983 as an amendment to Section 8(d) of the National Trails 7 Page 2 of 2 System Act, the rail banking statute allows a railroad to remove all of its equipment, with the exception of bridges, tunnels and culverts, from a corridor, and to turn the corridor over to any qualified private organization or public agency that has agreed to maintain it for future rail use. This property transfer precludes abandonment. For more information on railbanking see Attachment D. Last fall, we began discussions with the MRL about the possibility of rail banking the Story Mill Spur Line. See Attachment D. In December 2012, the MRL informed the City it had not previously entered into a rail banking agreement and that it would need additional time to determine its willingness to enter into such an agreement. MRL also informed the City that it did not anticipate having sufficient time to make a final decision on rail banking the Story Mill Spur Line before the expiration of the current sublease. However, the MRL did express its willingness to enter into an agreement to extend the current lease or enter into a new lease. UNRESOLVED ISSUES: As of the time of publishing this memorandum, we do not have a long term agreement to present to you. Because of the expiration of the lease prior to your next meeting we suggest that your action on this agenda item be to authorize the City Manager to enter into a temporary agreement with MRL for a period not to exceed six months in substantially the same form as presented in Attachment B. During the next several months we will work with the Railroads to develop a mutually acceptable long term agreement for the trail until such time as the trail can formally enter into rail bank status. ALTERNATIVES: None suggested at this time. FISCAL EFFECTS: First, the current sublease required no financial contribution from the City to the Railroads for the use of the trail. The temporary agreement does not require a financial contribution from the City to the Railroads for use of the trail. Second, according to Thom White, Superintendant of Parks and Cemetery, the Parks and Recreation Department spends a nominal amount of resources on maintenance of the Story Mill Spur Line each year. The trail is mowed and sprayed once or twice per year on an as needed basis. The Gallatin Valley Land Trust also participates in maintaining the trail including maintenance of the foot bridge over the East Gallatin River and periodically adding fines to the trail. Attachments: • Current lease agreement (Bicycle Path/Pedestrian Walkway Term Sublease No. 500, 539 02 Bozeman and Exercise of Option to Renew Lease No. 500, 539) (Attachment A); • Temporary Agreement for Signature (Attachment B); • Background information about railbanking (Attachment C); and • Letter requesting railbanking (Attachment D). Report compiled on: March 18, 2013. 8 9 10 11 12 13 14 15 16 MRL TARE Municipality November 2012 Page 1 of 3 TEMPORARY AGREEMENT COVERING ADVANCE RIGHT OF ENTRY AND OCCUPANCY NO. OF MONTANA RAIL LINK, INC. PROPERTY REF: 500,539 MONTANA RAIL LINK, INC. whose mailing address is Real Estate Department, PO Box 16624, Missoula, Montana 59808-6624 (hereinafter called “Railroad”), hereby grants permission to CITY OF BOZEMAN whose mailing address is: 411 EAST MAIN STREET PO BOX 411 BOZEMAN, MT 59715 hereinafter called “Permittee”, to enter upon its property for the purpose of continued use of a bicycle/pedestrian path as referenced above as Lease No. 500,539 at the City of Bozeman, County of Gallatin, State of Montana at Milepost 0+3678, Survey Station n/a as shown on the plat dated n/a a copy of which is attached hereto as Exhibit “A” and made a part hereof. As a material consideration of this Agreement, without which it would not be granted, Permittee agrees, to the fullest extent provided by law, to release Railroad and to defend, indemnify and hold Railroad harmless from and against any liability, claim, cost or damage on account of personal injury to or death of any persons whomsoever, or damage to or destruction of property to whomsoever belonging, without regard to whether it was caused by defective trackage, equipment, or track structures related to the Permittee’s negligent use of the Property. Nothing herein obligates Permittee to indemnify Railroad for Railroad's solely negligent acts or willful misconduct. This Agreement shall be and remain in full force and effect until a formal leasefor a period of six (6) months from the date of execution of this Agreement or until a new agreement, permit or license is entered into by and between the parties hereto covering occupancy of the property. Railroad reserves the right to cancel this agreement without cause upon ten (10) days' written notice by Railroad. Permittee acknowledges that as a condition of this Agreement, without which it would not be granted, Permittee shall enter into a formal lease, permit or license within thirty (30) days of presentation to Permittee by Railroad. If Permittee fails to execute said Agreement then Railroad reserves the right to cancel this Temporary Advance Right of Entry. However, cancellation thereof shall not operate to release Permittee of any liability assumed and/or incurred by Permittee hereunder. Failure to execute this agreement within sixty (60) days of the effective date shall terminate any rights Permittee may have under this agreement. However, such failure shall not operate to relieve Permittee of any liabilities assumed hereunder. There is a N/A Dollar ( N/A ) fee for this Agreement. Permittee shall have a copy of this Agreement at the job site. Permittee shall provide Railroad’s Roadmaster five (5) business days advance notice before entering upon Railroad’s property. Permittee shall conduct the work authorized by this Agreement in such a manner as not to interfere with the maintenance and operation of Railroad’s operations. Permittee shall, at its own expense, restore any facilities on the Railroad’s property which are in any way disturbed by Permittee’s work as authorized under this Agreement. A Flagman may be required at Permittee’s expense and it shall be in Railroad’s sole discretion as to whether flagging services are necessary. If Railroad determines that a Flagman is required, Permittee shall provide an advance deposit for the anticipated cost(s) of the flagging and shall reimburse Railroad for any remaining cost(s) within twenty (20) days after invoices are tendered. If Permittee requires any or all of the following work: removal and/or replacement of track or bridging; protection of track or other railway facilities by flagging; or engineering and/or supervision, such work is to be performed by Railroad employees or Railroad-authorized contractors and the cost shall be borne by Permittee. In the event of a default by Permittee, Railroad shall be allowed to recover one hundred percent (100%) of its costs or outstanding amounts owed, including any amount received by a collection agency in connection with pursuing any unpaid portion of rent or other amounts due under this Permit on Railroad’s behalf. 17 MRL TARE Municipality November 2012 Page 2 of 3 INSURANCE COVERAGE must be provided as follows: Permittee agrees to obtain and to keep in force and effect during the entire term of this Agreement, at Permittee’s own expense, the following insurance coverage: a. Commercial General Liability Insurance with limits as provided for under Montana Law Section 2-9- 108, MCA. b. Automobile Liability Insurance with limits as provided for under Montana Law Section 2-9-108, MCA. c. Worker's Compensation Insurance for those of its employees who are concerned in any way with Permittee's performance under this Agreement. d. Railroad Protective Liability Insurance naming only the Railroad as the Insured with coverage of at least the following: • Limits of $2,000,000 per occurrence and $6,000,000 general aggregate; • Endorsed to include the Pollution Exclusion Amendment; • Endorsed to include Evacuation Expense Coverage; • If coverage is not purchased under Railroad’s policy the original policy must be provided to the Railroad prior to performing any work or services under this Agreement. e. Permittee, as an option to the above referenced insurance coverages, excluding Railroad Protective Liability Insurance, may provide Railroad with a letter from Permittee’s Risk Management Division, or its respective Insurance Department, evidencing the necessary insurance coverages satisfactory to Railroad. If Permittee is a qualified self insurer, Permittee agrees to treat Railroad as an additional insured as if there was insurance and to be responsible for payment of any self insured retention or deductible. f. Railroad may require Permittee to obtain a surety bond guaranteeing all or part of the Agreement. The surety bond shall be issued by a surety licensed to do business in the state where the property is located and in a form and amount acceptable to Railroad. The surety shall also hold Certificates of Authority as an Acceptable Surety listed in the US Department of Treasury's Federal Register. g. Any Party performing any work related to this Agreement shall have a copy of the Agreement at the designated job site. Other requirements: All of the above except for • The definition of insured contract shall be amended to remove any exclusion or other limitation for any work being done within 50 feet of railroad property; Workers Compensation Liability Insurance shall contain the following endorsements, which shall be indicated on the certificate of insurance: • Shall release Railroad as to the payment of any earned premium; The furnishing of insurance required by this Agreement shall in no way limit or diminish the liability or responsibility of Permittee as provided under any section of the Agreement. The insurance certificate provided by Permittee must be satisfactory to the Railroad as to insurance carriers covering the risk. The parties have executed this Agreement in duplicate this 15th day of March, 2013 MONTANA RAIL LINK, INC. By: Printed Name: Title: CITY OF BOZEMAN By: 18 MRL TARE Municipality November 2012 Page 3 of 3 Printed Name: Title: 19 20 21 22 23 24 25 26 27 28 29