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10a Police Station Bond MeasureMEMORANDUM TO: CITYCOUNCIL 93' FROM: STEVEN ADAMS, CITY MANAGER -i"C TERESA MCCLISH, DIRECTOR OF COMMUNITY DEVELOPMENT STEVEN ANNIBALI, POLICE CHIEF SUBJECT: ,CONSIDERATION OF POLICE STATION SITE ALTERNATIVES, CONCEPTUAL PLAN AND BOND MEASURE FOR JUNE 5, 2012 ELECTION DATE: FEBRUARY 14,2012 RECOMMENDATION: It is recommended the City Council: 1) select the city-dwned parcel atWest Branch Street and Old Ranch Road and proposed site plan as the preferred site and proposed project concept for the Police Station project; 2) adopt an Ordinance calling 'and giving notice of a Special Municipal Election on the proposition of whether bonds shall be issued and sold to finance a new Police Station and refinance the City's 2003 fire station bonds; ordering the submission of a bond measure; and establishing specifications for the election order; 3) adopt a Resolution approving the tax rate statement; 4) adopt a Resolution requesting consolidation of the Special Municipal Election with the Statewide Primary Election; 5) adopt a Resolution setting priorities for filing written arguments regarding the measure and directing the City Attorney to prepare an impartial analysis; 6) adopt a Resolution providing for the filing of rebuttal arguments; 7) approve the argument in favor of the bond measure; 8) authorize use of $30,000 from the Capital Improvement Project account for the election and public education efforts; 9) approve the Second Amendment to the Lease Agreement with the 5 Cities Community Service Foundation ("Foundation"); and 10) approve a Memorandum of Understandirlg ("MOU") with the Foundation regarding amendment of Development Agreement 09-002. IMPACT ON FINANCIAL AND PERSONNEL RESOURCES: The preliminary estimated cost of the project is approximately $7.5 million for the recommended alternative on the West Branch Street and Old Ranch Road property (Alternative 1). The cost to retire the fire station bonds is approximately $800,000, which would bring the total revenue needed to roughly $8.3 million. The architect has provided a cost range given the conceptual nature of the plans at this stage. Staff has used near the high end of the range for planning purposes. Agenda Item 10.a. Page 1 CITY COLlNClL CONSIDERATION OF POLICE STATION SITE ALTERNATIVES, CONCEPTUAL PLAN AND BOND MEASURE FOR JUNE 5,2012 ELECTION FEBRUARY 14,201 2 PAGE 2 The breakdown of projected expenses include the following: Construction Site Development Contingency Architectural and Engineering Fees Project Inspection Furniture and Equipment Total Project Cost Financing Fees Retirement of Fire Station Bonds Total Cost It is proposed to issue a maximum of $6.7 million in bonds. Revenues are proposed as follows: FY 201 1-12 Local Sales Tax Funds $530,000 FY 201 2-1 3 Local Sales Tax Funds $210,000 RDA Funds (previously allocated and under contract) $1 10,000 USDA Loan (General Obligation Bond) $6,700,000 Sale of Property $750,000 Total $8,300,000 The funding strategy is once again based on the ability to obtain financing of the bonds through the United States Department of Agriculture (USDA). Under their current interest rate, it would result in an annual payment of approximately $360,000. In order to avoid any increase in the tax rate, approximately $180,000 would be paid annually through the property tax assessment. The remaining annual amount of $180,000 would be paid from local sales tax funds programmed for this project. The estimated costs for Alternative 2, on the Ash Street property, are as follows: Construction Site Development Contingency Architectural and Engineering Fees Project Inspection Furniture and Equipment Total Project Cost Financing Fees Retirement of Fire Station Bonds Total Cost Agenda Item 10.a. Page 2 CITYCOUNCIL CONSIDERATION OF POLICE STATION SITE ALTERNATIVES, CONCEPTUAL PLAN AND BOND MEASURE FOR JUNE 5,2012 ELECTION FEBRUARY 14,2012 PAGE 3 This would require a bond measure of $12 million, which would result in a projected annual debt service of approximately $675,000. Therefore, the City would either have to propose an increase in the annual assessment rate or would have to divert funds from other higher priority projects, such as street improvements or the Brisco lnterchange project. The cost of placing the measure on the ballot is approximately $45,000 to $50,000. However, if it is accompanied with the State water ballot measure, the costs of the two measures can be shared. It is .proposed to fund this cost from the Capital Improvement Project account. It is also recommended that $5,000 be appropriated for public education. Therefore, the total cost impact of the election to this fund will be approximately $30,000. If the State water measure is delayed or abandoned, authorization of an additional $20,000 will be necessary. All costs associated with the recreation center (Alternative I-A) would still be funded by the non-profit Foundation. The project only includes site development costs necessary for the police building. BACKGROUND: The Police Department does not have adequate space for all personnel to perform necessary functions. The Police Station on North Halcyon Road was acquired from the phone company in 1973 and was last expanded in 1989. Staffing has grown to 36 full-time and 20 part-time employees from 12 full-time and 6 part-time since the facility began use as the Police Station and from 28 full-time and 15 part-time since the facility was last expanded. Key needs include space for the detective unit, the addition of an emergency operations center to coordinate citywide incident response activities in the event of a disaster, evidence storage, an adequate area to house- computer equipment, and expansion of the dispatch center. The City placed a bond measure on the June 2010 ballot to help fund a new station at the lot acquired from the County at West Branch Street and Rodeo Drive, which was narrowly defeated. That property has subsequently been determined as necessary to accommodate the proposed Brisco lnterchange improvements. Staff immediately began working on identifying alternative sites and strategies, which were reviewed by the City Council at the May 24, 201 1 meeting. Sites included: 1) an existing office building at 1303 East Grand Avenue; 2) a portion of the NKT vacant property at Courtland Street and East Grand Avenue; 3) the City-owned West Branch Street and Old Ranch Road property; and 4) a joint operation with the City's corporation yard at 1375 Ash Street. The City Council expressed the most interest in the 1375 Ash Street location at that time. Staff was directed to prepare a feasibility study and cost estimates. Due to Agenda Item 10.a. Page 3 CITYCOUNCIL CONSIDERATION OF POLICE STATION SITE ALTERNATIVES, CONCEPTUAL PLAN AND BOND MEASURE FOR JUNE 5,2012 ELECTION FEBRUARY 14,2012 PAGE 4 cost feasibility issues with that option, staff prepared an additional alternative concept utilizing the City-owned property at West Branch Street and Old Ranch Road for City Council consideration. At the January 241h meeting, staff presented preliminary recommendations regarding the bond measure. The City Council adopted a Resolution determining the need for the Police Station project and introduced an Ordinance to place the bond measure on the ballot at the June 5'h election. ANALYSIS OF ISSUES: Alternative 1 This alternative is located at West Branch and Old Ranch Road. This is the site of the previously approved 53,000 sq. ft. Recreation Center. The site is currently vacant. The project description for Alternative 1 is as follows: 1. Police Building ( 14,500 square feet) 1 -Story 2. Second phase potential Community Gym (approximately 16,500 square feet) to house two basketball courts, stands and restrooms and a storage building (1,800 square feet). This property is zoned Public Facility (PF), which allows police facility uses with approval of a conditional use permit (CUP). The bulk of the five-acre property is relatively flat. This is conducive to development of a single-story Police Station and all required parking (both public and secured). Alternative 1 will provide the Police Department with a new facility that addresses all identified deficiencies of the current facility. Alternative 2 Alternative 2 will place a new Police Station on City-owned property at 1375 Ash . . Street (also zoned PF), which is currently used exclusively as the city's corporation yard. There are three existing structures and various site improvements that would need to be removed as required for new construction and some existing corporation yard facilities will have to be rebuilt in order to accommodate both corporation yard and police facility uses on the property. The project description includes: 1. Maintenance Building (approx. 10,500 square feet.), 2-Story 2. Police Station Facility (approx. 15,000 square feet), 2-Story 3. Storage Building (approx. 8,000 square feet), 2-Story 4. Hazmat Storage Building (approx. 1,200 square feet), 1-Story 5. Parks & Recreation Covered Storage (approx. 3,000 square feet), 1-story 6. Associated site improvements. Agenda Item 10.a. Page 4 CITYCOUNCIL CONSIDERATION OF POLICE STATION SITE ALTERNATIVES, CONCEPTUAL PLAN AND BOND MEASURE FOR JUNE 5,2012 ELECTION FEBRUARY 14,2012 PAGE 5 As with Alternative 1, Alternative 2 addresses all identified deficiencies of the current facility. Site Constraints and Development Standards Both alternatives are located on land zoned Public Facility. However, size, topography and neighborhood characteristics vary. Below is a comparison of the two alternatives as well as the previously approved Police Facility at West Branch and Rodeo Drive that is now being utilized for the Brisco Interchange project. Standard Minimum Lot area Front building setback Interior side building setback Street side building setback Rear building setback Maximum lot coverage Maximum building height (Building Size) (Parking) Alternative' 2 3.4 acres of a 36 acre property inclusive of Soto FieldsElm St. Park; relatively flat approx. 100 ft. Approx. 35 ft. from residences to west - 0-5 ft. (storage building) 100 ft. (storage building) - 25% (all buildings) - 28-30 ft. - 15,000 SF (two-story) - 103 total (55 Allowed 25,000 SF 20' 10' 20' 10' 45% 45' (public buildings) Rodeo Drive site (for comparison purposes only) 1.47 acres; . sloped Approx. 50 ft. 10 ft. ft, 16% 32. ft 14,468 (split levell 47 (35 secured) Alternative 1 5 acres; relatively flat approx. 120 ft. approx. 45 ft. from Gym or Pad to east property line (Women's Center). 150 ft. from Police bldg. to east property line 150 ft. 90-120 ft. -1 5% (all buildings) 42 ft. (recreation center; previously approved) - 14,500 SF - 150 total Agenda Item 10.a. Page 5 CITY COUNCIL CONSIDERATION OF POLICE STATION SITE ALTERNATIVES, CONCEPTUAL PLAN AND BOND MEASURE FOR JUNE 5,2012 ELECTION FEBRUARY 14,2012 PAGE 6 Generally, costs increase when building on slopes and for construction of multiple stories. Alternative 1 is the most cost effective alternative due to the flat topography of the site and larger size that accommodates single-story construction. Alternative 2, though also flat, is much smaller; therefore creating the need for two-story structures. Addressinq Future Citv and Communitv Facilitv Needs It is important to compare sites in terms of assessing future facility needs. Both alternatives save some costs in shared parking, utilities and other infrastructure improvements. Standard Alternative 2 is advantageous in that the project description includes new maintenance, equipment and storage buildings for the City's dated Public Works Corporation Yard facilities. Alternatively, the City has budgeted limited funds for upgrading these facilities with a phased approach over time in the case that the site is not selected for the police building project. Importantly, the two-story construction for the maintenance building and storage areas increases costs for these facilities. In the event the site remains dedicated to the Public Works Corporation Yard, the upgrade of these facilities will be less costly, albeit less comprehensive. Finally, the City's consultant and staff have conducted several meetings with Corporation Yard staff to assess current and future facility needs for Alternative 2. Although the site could accommodate both Police and Corporation Yard functions over time, it does not leave a great deal of spare room for unanticipated facility.and storage needs or functions. The architect indicated there are risks involved with this site given the lack of space and conceptual nature of the design analysis. Refinements could lead to problems in the facility design. The architect has also indicated there would be additional costs and operational problems with this site due to the need to relocate operations during consiruction. Alternative 1 (42 secured) Allowed For Alternative 1, the project description does not improve or impact other City facilities with the exception that if the community gym is not co-located at the site, there is generous room for other public facilities to be co-located in the future. It should be noted that the solar orientation of the this site is conducive to the placement of solar panels on carport structures within the secured parking lot to provide to the police facility and/or the community gym the opportunity to reduce ongoing operational costs. Alternative 1 includes provision of the future sale of three residential lots located on Old Ranch Road that would contribute revenue to fund the Police Station project on that site. Alternative 2 secured) Rodeo Drive site (for comparison purposes only) Agenda Item 10.a. Page 6 CITY COUNCIL CONSIDERATION OF POLICE STATION SITE ALTERNATIVES, CONCEPTUAL PLAN AND BOND MEASURE FOR JUNE 5,2012 ELECTION FEBRUARY 14,2012 PAGE 7 Potential for Future Consolidation Both proposals include adequate size, parking and functionality in the event of consolidation of the Police Department with another jurisdiction. The Ash Street site is advantageous in its location irr~mediately adjacent to Grover Beach. . The West Branch Street site is also adequately located in terms of being sufficiently close to both adjacent cities to adequately provide joint .service and can better serve other potential regional services in the future. Traffic, Circulation and Parkin Alternative 1 is located signiica"tly further to the southeast towards East Grand Avenue than the prior proposal'at Rodeo Drive, thus placing it nearly equidistant from both the Brisco and East Grand Avenue interchanges. This alternative significantly decreases trips in comparison to the approved recreation facility. he proposal includes the same connectivity with adjacent facilities as the approved recreation center: utilization of the existing utility road to continue to provide City staff access to the water tank located to the north of the property and connection to the two upper levels of parking at the Wonien's Center. The proposal.will allow the construction of up to 13 additional parking spaces and an access/emergency access isle onto Old Ranch Road. The 150-parking spaces would potentially be phased with seventeen being built in conjunction with the Police Building in addition ta the 37-staff and 18- . police vehicle spaces. The Alternative 2 site lies over a mile from the freeway with the most direct access on Oak Park Boulevard. There are no anticipated impacts due to access onto Ash Street, even on weekends when the Soto fields are heavily used. Staff has looked at the possibility of an emergency connection from the south side of thk site to the . . parking lot for Don Robert's Field. However, it is likely that significant parking would be lost due to the grade difference between the field and the building site. Traffic generation related to Police Station uses is generally less than comparable sized office professional uses. The Police Department utilizes two shifts during each 24 hour period (6 AM - 6 PM and 6 PM - 6 AM). The day shiff utilizes approximately 20 employees, while 6 employees are assigned to the night shift. .Sari Diego Association of Governments (SANDAG) trip generation rates indicate 14 trips per 1,000 square feet for single tenant offices, which is estimated to generate 210 trips per day. It is anticipated that the addition of these trips onto West Branch Street and surrounding intersections for Alternative 1, or Ash Street and surrounding intersections for Alternative 2, would have a less than significant impact. Additionally, both sites provide adequate public and secured parking for current and potential consolidated uses. However, Alternative 1 provides far more parking and there may Agenda Item 10.a. Page 7 CITY COUNCIL CONSIDERATION OF POLICE STATION SITE ALTERNATIVES, CONCEPTUAL PLAN AND BOND MEASURE FOR JUNE 5,2012 ELECTION FEBRUARY 14,2012 PAGE 8 be some rr~inor impacts for Alternative 2 due to existing public parking deficiencies on weekends during sporting events. There are currently 35 spaces fronting the Corporation Yard facilities for staff and public use. As proposed, there would be 32 spaces for public use and 55 secured spaces (39 for staff use and 16 for vehicle storage). Remaining Soto Sports Complex parking would be unchanged. Viewshed and Land Use Compatibilih Considerations Both alternatives place the Police Station proximate to residential neighborhoods as well as other public facilities. Both alternatives preclude any public visibility of police transport of suspects or other secure functions. In order to address concerns from the adjacent school or neighborhoods for Alternative 1, or adjacent playing fields or neighborhoods for Alternative 2, the structure has been designed with a 'sally port' on the western side for Alternative 1 and southern side for Alternative 2, ensuring that detainees will not be visible from the schools, playing fields or neighborhoods (a sally . . port is essentially an enclosed, secured space - police cars would pull into the sally. port and secure the.exterior door before loadinglunloading detainees). Alternative 1 places the Police Station between the US Highway 101, the County Government Center and surrounding open space, Valley View Adventist Academy, the Women's Center and the Mercedes and Larchmont neighborhoods. The one- story design for both phases (Police Station and community gym) is significantly less imposing than the previously approved recreation center in both overall size ( 32,000 SF vs. 53,000 SF) and the lot coverage and massing is less imposing than the previously approved Police Station at Rodeo Drive. It also should be noted that the proposed solar panels would be located immediately adjacent to the north slope of the site and should not be easily seen from surrounding neighbors. The Alternative 2 site is surrounded on two sides by Ash Street residential neighborhoods and on two sides by the Soto Sports Complex. Although the structures are two-story, the sports fields and the width of Ash Street itself provide a large buffer. 'The only potential exception is the neighborhood to the west in Grover Beach that would be separated by approximately 35 fi. from the 2-story Police Station. However, those neighborhoods include two-story homes. It is anticipated that the location of both alternatives allow the structure(s) to be located without.any significant viewshed impacts from the surrounding areas. Finally, below are some policies in the General Plan relating to public facilities for the Commission's consideration of site selection. Additional review of policies will be necessary during conditional use permit review. LU9: Provide for appropriate maintenance, development and placement of Community Facilities (CF) relative to existing and planned land uses. Agenda Item 10.a. Page 8 CITY COUNCIL CONSIDERATION OF POLICE STATION SITE ALTERNATIVES, CONCEPTUAL PLAN AND BOND MEASURE FOR JUNE 5,2012 ELECTION FEBRUARY 14,2012 PAGE 9 LU9-1: The Community Facilities (CF) designation includes public or institutional uses that provide a community facility or service. The uses allowed in this designation include but are not limited to the following: cemeteries, churches, lodges, City Hall, city yard, fire and police stations, places of general public assembly, senior centers, women's centers, museums, other facilities that are primarily contained within a structure, and public or private schools, parks, playgrounds and sports complexes, South County regional center and other public agency facilities. LU9-3: Balance the supply and size of Community Facilities with the existing and planned demand for the services they provide based on the General Plan Land Use Element. Planning Comrrrission The Planning Commission considered this item at their Public Meeting on February 7, 2012 and recommended, by a 4-1 vote, that the City Council select Alternative 1. The Commission noted after questions and discussion with the Police Chief, Community Development Director and architectural consultant, and comment- from one member of the public, that the advantages of Alternative 2 included the adjacency to Grover Beach in the event of consolidation and the comprehensive upgrade of the City's Corporation Yard facility. The Commission noted that lot size was a concern for the proposed combined facilities of Alternative 2. Currently, impacted parking during sporting events at the Soto fields was also a concern although both facilities are parked according to new facility needs. Commissioner Keen voted in opposition to the Selection of the Alternative 1 site because it is located too close to the previous project site at Rodeo and.W. Branch Street. Based on his extensive discussions with members of the public after the June 2010 elections, he felt that its proposed location was the main reason that the bond measure was defeated. It should be noted that Alternative 1 differs greatly from the previous project at Rodeo in that the Alternative 1 project would not be two-stories, have prominent retaining walls, require grading or terracing of the site, be located immediately adjacent to school facilities and playing fields (Valley View Academy is located nearby, but out of viewing range the Police Station facility due to proximity and topography). Additionally, in comparison, Alternative 1 is approximately 1,500 feet southeast of the Brisco interchange. Although there are no potentially significant impacts from proximity to the Interchange at either location, there may have been a perceived problem of a Police facility being located immediately adjacent to Brisco on and off ramps. Agenda Item 10.a. Page 9 CITYCOUNCIL CONSIDERATION OF POLICE STATION SITE ALTERNATIVES, CONCEPTUAL PLAN AND BOND MEASURE FOR JUNE 5,2012 ELECTION FEBRUARY 14,2012 PAGE 10 Advantages of Alternative 1 that were identified by the Commission included: substantial cost savings; visibility of the station; the operational and safety benefits for a community gym to be co-located with the Police Station; proximity to the Women's Center; and a greater potential' that the site would meet current and future needs better than Alternative 2 based on the increased lot size for facilities. Although the Commission did not comment on a preferred elevation concept as a whole, Commissioner Barneich preferred the Scheme.B.elevations for Alternative 1. The Commission questioned what costs were budgeted for Corporation Yard repairs and maintenance independent of Alternative 2, what proportion of those costs are included in the revenues for Alternative 2, and how the Corporation Yard would be maintained and upgraded shol-~ld Alternative A be. selected. Additionally, the Commission inquired about the $750k revenue for Alternative 1. This figure is a conservative figure derived from the programnied lot sale of the existing Police Building, as well as the three residential lots on Old Ranch Road owned by the City. The Police Chief reiterated that both sites would work equally well in terms of providing Police services to the community, as well as adjacent communities in the event of consolidation. There was some comment from one member of the public and the Commission regarding a one-court gym plus other-type gym facility concept instead of the -two- court gym concept. However, that decision would be entirely up to the 5 Cities Community Services Foundation. There was concern expressed during public comment that funding for the community gym would be derived through the bond measure. Staff replied that only the Police Station facility would be eligible for funding. The gym construction costs will continue to rely entirely on fundraising efforts. Recommended Alternative Staff has deterrr~ined that Alternative 1 is the most cost effective and feasible alternative. However, this property has been reserved for a recreation center. The . - City Council previously approved a lease and development agreement with the 5 Cities Community Services Foundation to construct a recreation center to be funded through their private fundraising efforts. A feasibility study prepared by the Foundation has raised questions regarding the ability to fund the scale of project proposed. Therefore, to address and increase the feasibility of both projects, the proposed concept includes a joint.police building and scaled down recreation facility. The Foundation Board of Directors has agreed to allow the City to pursue the alternative proposed concept. Attached for City Council consideration is an amendment to the lease, which modifies the area provided for the recreation center. An MOU is also proposed, in which the parties agree to take the necessary steps to Agenda Item 10.a. Page 10 CITY COUNCIL CONSIDERATION OF POLICE STATION SITE ALTERNATIVES, CONCEPTUAL PLAN AND BOND MEASURE FOR JUNE 5,2012 ELECTION FEBRUARY 14,2012 PAGE 11 amend the development agreement by June 3oth. If the bond measure were to fail and the City does not approve other funding for the project to proceed by December 31, 2012, the development agreement and lease will revert back to the existing terms for the Foundation to continue pursuit of the recreation center project as currently entitled. By allowirlg the City to pursue the alternative police building concept, the Foundation is not committing to the scaled down recreation center alternative. They have expressed concerns regarding the City's ability to fund ongoing operations of the facility. The police building concept is designed to be a stand-alone project with the recreation center as a second phase. The area could be maintained for other future uses if the recreation center project does not proceed. Due to the project cost and budget constraints, staff has determined that a bond measure is necessary to fund a portion of the police building project costs without impacting funding for other high-priority capital improvement needs. Therefore, it .is recommended to place another Police Station bond measure on the June 5, 2012 ballot. Placing the measure on the June ballot will help avoid confusion for voters that would occur if the measure were included along with a long list of controversial State and Federal items anticipated for the November General Election ballot. Qualifying for USDA funding is a key component of the proposal to make the project cost feasible given the interest rates provided through their Community Facilities Program loan program. Based on feedback from representatives from the USDA, staff believes it is important to proceed as quickly as possible since the future availability of this program is unknown. The bond measure will require a 213 vote and would generate additional annual revenue of approximately $180,000. As with the first measure, this can be accomplished without raising the annual tax rate by proposing 30-year bonds that will also retire the 2003 Fire Station bonds; the balance of project costs would be paid with Local Sales Tax funds. It is recommended to allocate $5,000 for the distribution of public education materials to the public regarding the proposed measure. ALTERNATIVES: The following alternatives are presented for consideration: Approve staffs recommendations; . Delay the bond measure to the November 6, 2012 general election; Select the Ash Street Corporation Yard property as the preferred site and direct staff to pursue other funding strategies or prepare an alternative bond measure for the November election that would include an increase in the tax rate; Direct staff to not proceed with a bond measure or the project; Provide other direction. Agenda Item 10.a. Page 11 CITY COUNCIL CONSIDERATION OF POLICE STATION SITE ALTERNATIVES, CONCEPTUAL PLAN AND BOND MEASURE FOR JUNE 5,2012 ELECTION FEBRUARY 14,2012 PAGE 12 ADVANTAGES: Moving forward with a new police facility will help resolve critical operational needs of the Police Department by developing an effective emergency operations center, 91 1 and emergency communications, evidence and equipment storage and parking and by accommodating the ability to effectively provide joint dispatch services to the Five Cities area. After studying multiple options, this has been determined to be the most cost effective and only one feasible. Placing the bond measure on the June ballot will increase the likelihood of obtaining USDA financing and will avoid voter confusion with a long list of controversial items on the November ballot. DISADVANTAGES: There will be increased costs for placing the bond measure on the June ballot rather than waiting for November. Utilizing the West Branch Street and Old Ranch Road property will preclude the ability to pursue the size of recreation facility currently approved on that site. The ability to fund operation of a smaller facility has not been resolved. ENVIRONMENTAL REVIEW: Environmental review will be performed at the time a formal land use permit application is made. PUBLIC NO'TIFICA'TION AND COMMENTS: This is a non-public hearing item; therefore, no public notification is required. Staff sent out 99 postcard notifications to residents in the vicinity of the West Branch Street neighborhood for an evening meeting on January 31, 2012 to introduce the alternative site design on West Branch Street and Old Ranch Road (Alternative 1) since this is a new alternative. Llnfortunately, only two residents attended the meeting. However, as discussed above, staff believes Alternative 1 does address many of the concerns of the neighborhood raised during previous project consideration of the Police Station alternative at Rodeo Drive and the recreation center project. Attachments: 1. Draft Argument In Favor of Measure 2. Second Amendment to the Lease Agreement 3. Memorandum of Understanding 4. Site and elevation concept West Branch Street 5. Site concept Ash Street Agenda Item 10.a. Page 12 ORDINANCE NO. AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE, CALIFORNIA, CALLING AND GIVING NOTICE OF A SPECIAL MUNICIPAL ELECTION ON THE PROPOSITION OF WHETHER BONDS SHALL BE ISSUED AND SOLD TO FINANCE A NEW POLICE STATION AND REFINANCE THE CITY'S 2003 FIRE STATION BONDS, AND ORDERING THE SUBMISSION OF A MEASURE TO THE QUALIFIED VOTERS OF THE CITY AT A CONSOLIDATED SPECIAL MUNICIPAL ELECTION AND ESTABLISHING SPECIFICATIONS FOR THE ELECTION ORDER WHEREAS, the City Council of the City of Arroyo Grande, California (the "City") has determined that the present facility for the City's Police Department is inadequate to ensure the health and safety of the occupants and users of the facility and to enable the City's Police Department to provide increased safety and emergency response services to the residents of the City; and WHEREAS, the City Council has determined that the public interest and necessity deniand the construction of a new police station facility ("Police Station") and that it is advisable to provide the funding for the new Police Station by means of general obligation bonds; and WHEREAS, in conjunction with the funding of the construction of the new Police Station, the City Council also desires to refinance the City's outstanding General Obligation Bonds, Series A of 2003 (Fire Station Project) ("Fire Station Bonds") and utilize a portion of the general obligation bonds to call and redeem said Fire Station Bonds; and WHEREAS, the City Council desires to call and give notice of a Special Municipal Election on the proposition of whether bonds shall be issued and sold for the purpose of constructing a new Police Station and refinancing the Fire Station Bonds; and WHEREAS, Section l(b) of Article XlllA of the California Constitution excepts from the general one percent (1%) of full cash value limitation those ad valorem taxes used to pay for debt service of any bonded indebtedness for the acquisition or improvement of real property approved on or after July 1 , 1978, by two-thirds (213) of the votes cast by voters on the proposition; and WHEREAS, in the judgment of the City Council, it is advisable to call a Special Municipal Election on the .question of whether bonds shall be issued and sold and ad valorem taxes be levied for the purposes set forth below. Agenda Item 10.a. Page 13 ORDINANCE NO. PAGE 2 NOW, THEREFORE, THE ClTY COUNCIL OF THE ClTY OF ARROYO GRANDE, CALIFORNIA, DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1. The above recitals are true and correct. SECTION 2. Pursuant to the laws of the State of California, the City Council hereby calls a special election and orders the submission to the qualified voters of the City the question of: SECTION 3. The estimated cost of constructing a new Police Station and refinancing the Fire Station Bonds is $6,700,000, including costs authorized pursuant to California Government Code Section 43610.1(a) and (b) which may be paid from the proceeds of the sale of the Bonds. ClTY OF ARROYO GRANDE MEASURE - Shall the City of Arroyo Grande fund construction of a new Police Station and refinance the 2003 Fire Station bonds by issuing 30-year bonds not to exceed $6,700,000 provided that the tax rate is maintained at or below the existing tax rate for the Fire Station Bonds and a portion of the bond payments will be paid by revenues from the 2006 Local Sales Tax Measure? SECTION 4. The maximum amount of the Bonds shall not exceed $6,700,000. BONDS - YES BONDS - NO SECTION 5. The maximum number of years any series of Bonds shall run shall not exceed thirty (30) years. The maximum rate of interest to be paid on the Bonds shall not exceed six and one-half percent (6.5%) per annum. The actual rate of interest on any series of Bonds shall be determined at or prior to the time of the sale of such series. SECTION 6. The date of the Special Municipal Election shall be June 5, 2012. SECTION 7. The election shall be consolidated with such other elections to be held on June 5, 2012 under State law within the territory of the City, and shall be held and conducted, and all other proceedings incidental to and connected with the election, shall be regulated and done, in accordance with the provisions of law regulating regularly scheduled elections. 'The precincts, polling places for said precincts in the County of San Luis Obispo, and persons appointed and designated to serve as election officers for said election will be those determined, designated, and appointed pursuant to State law by the Registrar-RecorderlCounty Clerk of the County of San Luis Obispo (the "Registrar"). The City, by Resolution, has requested that the election be Agenda Item 10.a. Page 14 ORDINANCE NO. PAGE 3 consolidated with the Statewide Primary Election and that the Registrar conduct the election as well as perform various other services required by law on behalf of the City. SECTION 8. The Director of Legislative and Information ServicesICity Clerk is hereby designated the City's Elections Official for any and all purposes. SECTION 9. The City Elections Official shall, not later than 88 days prior to the date of the election, cause a certified copy of this Ordinance to be filed with the County Clerk-RecorderlRegistrar of Voters. SECTION 10. The City Elections Official is hereby directed to publish this Ordinance pursuant to California Government Code Section 4361 1. SECTION 11. Notice of the time and place of holding the election is given and the City Election Official is authorized, instructed and directed to give further or additional notice of the election, in time, form and manner as required by law. SEC'TION 12. In all particulars not recited in this Ordinance, the election shall be held and conducted as provided by law for holding municipal and general obligation bond elections. The City Elections Official shall make this Ordinance readily available for public inspection within thirty (30) days of the date this Ordinance is adopted. SEC'TION 13. Upon its second reading and adoption, the City Clerk shall certify to the adoption of this Ordinance and thenceforth and thereafter the same shall be in full force and effect. On motion of Council Member , seconded by Council Member , and on the following roll-call vote, to wit: AYES: NOES: ABSENT: the foregoing Ordinance was adopted this 14" day of February, 2012. Agenda Item 10.a. Page 15 ORDINANCE NO. PAGE 4 TONY FERRARA, MAYOR ATTEST: KELLY WETMORE, ClTY CLERK APPROVED AS TO CONTENT: STEVEN ADAMS, ClTY MANAGER APPROVED AS TO FORM: TIMOTHY J. CARMEL, ClTY ATTORNEY Agenda Item 10.a. Page 16 RESOLUTION NO. A RESOLUTION OF THE ClTY COUNCIL OF THE ClTY OF ARROYO GRANDE APPROVING THE TAX RATE STATEMENT TO BE MAILED TO VOTERS IN THE ClTY OF ARROYO GRANDE PURSUANT TO SECTION 9401 OF THE ELECTIONS CODE (JUNE 5, 2012 BOND ELECTION) WHEREAS, the City Council of the City of Arroyo Grande has adopted Ordinance No. , calling a special election in the City to be consolidated with the Statewide Primary Election as called for by Resolution No. , for the authorization of $6,700,000 of bonds; and, WHEREAS, pursuant to Sections 9400, et seq., of the State Elections Code, the City Council is required to prepare a tax statement which shall be included in the voter information and sample ballot sent to the voters in the City. NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Arroyo Grande as follows: 1. That the above recitals are true and correct. 2. That the best estimate of the tax rate for the issue of bonds: (i) during the first fiscal year after the first sale of the bonds; and, (ii) the highest tax rate in a fiscal year, will be as set forth in "Exhibit A", attached hereto and incorporated herein by this reference. 3. The City Clerk shall certify the adoption of this Resolution, and cause a certified copy to be filed with the County Clerk-Registrar of Voters. On motion of Council Member , seconded by Council Member , and on the following roll call vote, to wit: AYES: NOES: ABSENT: the foregoing Resolution was passed and adopted this 14" day of February, 2012. Agenda Item 10.a. Page 17 RESOLUTION NO. PAGE 2 TONY FERRARA, MAYOR ATTEST: KELLY WETMORE, CITY CLERK APPROVED AS TO CONTENT: STEVEN ADAMS, CITY MANAGER APPROVED AS TO FORM: TIMOTHY J. CARMEL, CITY ATTORNEY Agenda Item 10.a. Page 18 EXHIBIT A Tax Rate Statement City of Arroyo Grande An election will be held in the City of Arroyo Grande (the "City") on June 5,2012, to authorize the sale of up to $6,700,000 in bonds of the City to finance construction of a new Police Station and refinance the 2003 Fire Station bonds as described in the proposition. If the bonds are approved, the City expects to sell the bonds in single series in fiscal year 2012-2013. Principal of and interest on the bonds will be payable in part fiom the proceeds of tax levies made upon the taxable property in the City. The following information is provided in compliance with Sections 9400-9405 of the Elections Code of the State of California. 1. The best estimate of the tax which would be required to be levied to bd this bond issue during the first fiscal year after the sale of the bonds, based on estimated assessed valuations available at the time of filing of this statement, is .008 17 cents per $1 00 assessed valuation ($8.1 7 per $100,000) of assessed valuation in fiscal year 20 12- 13. 2. The best estimate of the highest tax rate which would be required to be levied to bd this bond issue, based on estimated assessed valuations available at the time of filing of hs statement, is .008 17 cents per $100 assessed valuation ($8.17 per $100,000) of assessed valuation in fiscal year 2012-1 3. Voters should note that it is the intention of the City to pay of a portion of annual bond payments with revenues fiom the 2006 Local Sales Tax Measure so as to maintain the tax rate at or below the existing tax rate for the Fire Station Bonds, which is currently .00817 cents per $1 00 assessed valuation. Voters should note that the estimated tax rates are based on the assessed value of taxable property on the official tax roles of the city, not on the property's market value. In addition, taxpayers eligible for a property tax exemption, such as the homeowner's exemption, will be taxed at a lower effective tax rate than described above. Property owners should consult their own property tax bills and tax advisors to determine their property's assessed value and any applicable tax exemptions. Attention of all voters is directed to the fact that the foregoing information is based on the City's current projections and estimates only. The actual tax rates and the years in which they will apply may vary from those presently estimated, due to variations fiom these estimates in the timing of the bond sale, the amount of bonds sold, interest rates at the time of bond sale, and actual assessed valuations over the term of repayment of the bonds. The date of sale and the amount of bonds,sold will be determined by the City based on need for construction bds and other factors. The actual interest rate at which the bonds will be sold, not to exceed 6.5% per mum, will depend on the bond market at the time of sale. Actual future assessed valuations will depend upon the amount of taxable property within the City as determined by the County Assessor in the annual assessment and the equalization process. Agenda Item 10.a. Page 19 RESOLUTION NO. A RESOLUTION OF THE ClTY COUNCIL OF THE ClTY OF ARROYO GRANDE, CALIFORNIA, REQUESTING THE BOARD OF SUPERVISORS OF THE COUNTY OF SAN LUIS OBlSPO TO CONSOLIDATE A SPECIAL MUNICIPAL ELECTION TO BE HELD ON JUNE 5, 2012, WITH THE STATEWIDE PRIMARY ELECTION TO BE HELD ON THE DATE PURSUANT TO 910403 OF THE ELECTIONS CODE WHEREAS, the City Council of the City of Arroyo Grande called a Special Municipal Election to be held on June 5, 2012, on the proposition of whether bonds shall be issued and sold to finance a new police station and refinance the City's 2003 fire station bonds; and WHEREAS, it is desirable that the Special Municipal Election be consolidated with the Statewide Primary Election to be held on the same date and that within the City the precincts, polling places and election officers of the two elections be the same, and that the county election department of the County of San Luis Obispo canvass the returns of the Special Municipal Election and that the election be held in all respects as if there were only one election. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Arroyo Grande as follows: I SECTION 1. That pursuant to the requirements of § 10403 of the Elections Code, the Board of Supervisors of the County of San Luis Obispo is hereby requested to consent and agree to the consolidation of a Special Municipal Election with the Statewide Primary Election on Tuesday, June 5, 2012, for the purpose of a bond measure to appear on the ballot as follows: ClTY OF ARROYO GRANDE MEASURE Shall the City of Arroyo Grande fund construction of a new Police Station and refinance the 2003 Fire Station bonds by issuing 30-year bonds not to exceed $6,700,000 provided that the tax rate is maintained at or below the existing tax rate for the Fire Station bonds and a portion of the bond payments will be paid by revenues from the 2006 Local Sales Tax Measure? BONDS - YES BONDS - NO Agenda Item 10.a. Page 20 RESOLUTION NO. PAGE 2 SECTION 2. That the County election department is authorized to canvass the returns of the Special Municipal Election. The election shall be held in all respects as if there were only one election, and only one form of ballot shall be used. SEC'TION 3. That the Board of Supervisors is requested to issue instructions to the County election department to take any and all steps necessary for the holding of the consolidated election. SEC'TION 4. That the City of Arroyo Grande recognizes that additional costs will be incurred by the County by reason of this consolidation and agrees to reimburse the County for any costs. SECTION 5. That the Director of Legislative and lnformation ServicesICity Clerk is hereby directed to file a certified copy of this Resolution with the Board of Supervisors and the County election department of the County of San Luis Obispo. SEC'TION 6. That the Director of Legislative and lnformation ServicesICity Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original resolutions. On motion by Council Member , seconded by Council Member , and on the following roll-call vote, to wit: AYES: NOES: ABSENT: the foregoing Resolution was passed and adopted this 14' day of February 2012. Agenda Item 10.a. Page 21 RESOLUTION NO. PAGE 3 TONY FERRARA, MAYOR ATTEST: KELLY WE'TMORE, CITY CLERK APPROVED AS TO CONTENT: STEVEN ADAMS, CITY MANAGER APPROVED AS TO FORM: TIMOTHY J. CARMEL, CITY ATTORNEY Agenda Item 10.a. Page 22 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE, CALIFORNIA, SElTING PRIORITIES FOR FILING A WRllTEN ARGUMENT REGARDING A CITY MEASURE AND DIRECTING THE CIN ATTORNEY TO PREPARE AN IMPARTIAL ANALYSIS WHEREAS, a Special Municipal Election is to be held in the City of Arroyo Grande, California, on June 5, 2012, at which there will be submitted to the voters the following measure: NOW, THEREFORE BE IT RESOLVED by the City Council of the City of Arroyo Grande as follows: CITY OF ARROYO GRANDE MEASURE Shall the City of Arroyo Grande fund construction of a new Police Station and refinance the 2003 Fire Station bonds by issuing 30-year bonds not to exceed $6,700,000 provided that the tax rate is maintained at or below the existing tax rate for the Fire Station bonds and a portion of the bond payments will be paid by revenues from the 2006 Local Sales Tax Measure? SECTION 1. That the City Council authorizes all members of the City Council to file a written argument in favor of or against the City measure not exceeding 300 words, accompanied by the printed names and signatures of the authors submitting it, in accordance with Article 4, Chapter 3, Division 9 of the Elections Code of the State of California and to change the argument until and including the date fixed by the City Elections Official after which no arguments for or against the City measure may be submitted to the Elections Official. The arguments shall be filed with the City Elections Official, signed, with the printed names and signatures of the authors submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers who is the author of the argument. The arguments shall be accompanied by the Form of Statement To Be Filed By Authors of Argument. BONDS - YES BONDS - NO SECTION 2. That the City Council directs the City Elections Official to transmit a copy of the measure to the City Attorney. The City Attorney shall prepare an impartial analysis of Agenda Item 10.a. Page 23 RESOLUTION NO. PAGE 2 the measure not exceeding 500 words showing the effect of the measure on the existing law and the operation of the measure. The impartial analysis shall be filed by the date set by the City Elections Official for the filing of primary arguments. SECTION 3. That the Director of Legislative and Information ServicesICity Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions. On motion by Council Member , seconded by Council Member , and on the following roll call vote, to wit: AYES: NOES: ABSENT: the foregoing Resolution was passed and adopted this 14' of February, 2012. Agenda Item 10.a. Page 24 RESOLUTION NO. PAGE 3 TONY FERRARA, MAYOR ATTEST: KELLY WETMORE, ClTY CLERK APPROVED AS TO CONTENT: STEVEN ADAMS, ClTY MANAGER APPROVED AS TO FORM: 'TIMOTHY J. CARMEL, ClTY ATTORNEY Agenda Item 10.a. Page 25 RESOLUTION NO. A RESOLUTION OF THE ClTY COUNCIL OF 'THE ClTY OF ARROYO GRANDE, CALIFORNIA, PROVIDING FOR THE FII-ING OF REBUTTAL ARGUMENTS FOR ClTY MEASURES SUBMITTED AT MUNICIPAL ELEC'I'IONS WHEREAS, Section 9285 of the Elections Code of the State of California authorizes the City Council by majority vote, to adopt provisions to provide for the filing of rebuttal arguments for City measures submitted at municipal elections. NOW, THEREFORE BE IT RESOLVED by the City Council of the City of Arroyo Grande as follows: SECTION 1: That pursuant to Section 9285 of the Elections Code of the State of California, when the City Elections Official has selected the arguments for and against the measure which will be printed and distributed to the voters, the City Elections Official shall send a copy of an argument in favor of the measure to the authors of any argument against the measure, and a copy of an argument against the measure to the authors of any argument in favor of the measure immediately upon receiving the arguments. The author or a majority of the authors of an argument relating to a city measure may prepare and submit a rebuttal argument not exceeding 250 words or may authorize in writing any other person or persons to prepare, submit, or sign the rebuttal argument. A rebuttal argument may not be signed by more than five authors. The rebuttal arguments shall be filed with the City Clerk, signed, with the printed name(s) and signature(s) of the author(s) submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers, not more than 10 days after the final date for filing direct arguments. The rebuttal arguments shall be accompanied by the Form of Statement To Be Filed By Author(s) of Argument. Rebuttal arguments shall be printed in the same manner as the direct arguments. Each rebuttal argument shall immediately follow the direct argument which it seeks to rebut. SECTION 2: That all previous resolutions providing for the filing of rebuttal arguments for City measures are repealed. SECTION 3: That the provisions of Section 1 shall apply only to the election to be held on June 5, 2012, and shall then be repealed. SECTION 4: That the City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions. Agenda Item 10.a. Page 26 RESOLUTION NO. PAGE 2 On motion of Council Member , seconded by Council Member , and on the following roll call vote, to wit: AYES: NOES: ABSENT: the foregoirlg Resolution was passed and adopted this 14' day of February, 2012. Agenda Item 10.a. Page 27 RESOLUTION NO. PAGE 3 TONY FERRARA, MAYOR ATTEST: KELLY WETMORE, ClTY CLERK APPROVED AS TO CONTENT: STEVEN ADAMS, ClTY MANAGER APPROVED AS TO FORM: TIMOTHY J. CARMEL, ClTY ATTORNEY Agenda Item 10.a. Page 28 ATTACHMENT 1 ARGUMENT IN FAVOR OF MEASURE Keeping people in the community safe is the most important function the City provides. To do this effectively requires not only dedicated personnel, but also adequate equipment and facilities. Your "YES" vote on Measure will provide funding to construct a much needed new Police Station on City-owned property at West Branch Street and Old Ranch Road. The Police Department has grown to meet the community's needs since the existing bl~ilding began housing the City's police force in 1973. As a result, space in the existing building is inadequate to enable performance of necessary functions. Additional space is vitally needed for an emergency operations center, evidence and computer storage, the 9-1-1 system, expansion of the dispatch center, detective offices, and employee parking. An independent study of multiple alternatives has determined the most cost effective site and design to meet these needs. Waiting would only increase costs and reduce the availability of Federal financing assistance. The City is acutely aware of the impacts the economy has had on its residents. Therefore, the proposed financing has been structured to fund the project without raising your annual tax rates. Approval of this measure will authorize the sale of bonds to fund the major portion of the project costs. .The bonds will be repaid without raising property tax rates by refinancing bonds issued in 2003 to expand the Fire Station. 'The balance of debt costs will be paid from local sales tax funds programmed for a new Police Station. Arroyo Grande citizens depend on the Police Department for protection and a safe community. Now Officers are depending on you to provide them with the facilities needed to do their job. Your City Council strongly urges you to vote "YES" on Measure Tony Ferrara, Mayor Tim Brown, Mayor Pro Tem Joe Costello, Council Member Jim Guthrie, Council Member Caren Ray, Council Member Agenda Item 10.a. Page 29 ATTACHMENT 2 SECOND AMENDMENT TO LEASE AGREEMENT This Second Amendment to Lease Agreement ("Second Amendment") is made and entered into on this - day of , 2012, by and between the CITY OF ARROYO GRANDE, a municipal corporation duly organized and existing pursuant to the Constitution and laws of the State of California ("City") and the 5 CITIES COMMUNITY SERVICE FOUNDATION ("5 Cities Foundation"), a California non-profit corporation. RECITALS WHEREAS, on November 14, 2006, the parties entered into a long-term Lease Agreement (the "Agreement") whereby the 5 Cities Foundation leases the City-owned real property commonly known as 400 West Branch Street in the City of Arroyo Grande, State of California (the "Original Leasehold Estate"); and WHEREAS, a legal description of the Original Leasehold Estate was included as Exhibit A to the Agreement; and WHEREAS, the 5 Cities Foundation entered into the Agreement for the purpose of developing community recreation facilities and related purposes; and WHEREAS, on March 23, 2010, the parties entered into a First Amendment to Lease Agreement ("First Amendment") which amended certain provisions of the Agreement related to the timelines for the commencement of construction and commencement of project improvements; and WHEREAS, City now has plans to construct a new Police Station facility and has designated a portion of the Original Leasehold Estate as a potential site for the facility; and WHEREAS, it is the intention of the parties by this Second Amendment to modify the size and description of the Original Leasehold Estate to exclude the property on which the City may construct the Police Station facility and to modify the date on which Five City Foundation's obligations to insure and indemnify commence. NOW, THEREFORE, in consideration of the mutual covenants and conditions set forth herein, the parties agree as follows: 1. Exhibit A of the Agreement is hereby deleted in its entirety and replaced with the Exhibit A attached hereto and incorporated herein by this reference. 2. Paragraph 1.7 of the Agreement is hereby amended in its entirety as follows: Agenda Item 10.a. Page 30 1.7 The Premises refers to the building and real property and any and all improvements located on that portion of the real property commonly known as 400 West Branch Street in the City of Arroyo Grande, State of California legally described in Exhibit A and which is the subject of this Lease. 3. The introductory section of Paragraph 7.2 of the Agreement is hereby amended in its entirety as follows: 7.2 Insurance. Should 5 Cities Foundation commence to improve, modify, alter or burden the Premises in any way whatsoever, 5 Cities Foundation shall procure insurance against claims for injuries to persons or damages to property which may arise from or in connection with Five Cities Foundation's operation and use of the Premises. 5 Cities Foundation shall maintain said coverage for the duration of the Lease. The cost of such insurance shall be borne by Five Cities Foundation. 4. Paragraph 7.2.l(a) of the Agreement is hereby amended in its entirety as follows: a. Commercial General Liability lnsurance using lnsurance Services Office "Cornmercial .General Liability* policy form CG 00 01 or the exact equivalent. Defense costs must be paid in addition to limits. 'There shall be no cross liability exclusion for claims or suits by one insured against another. Limits are subject to review, and revision in City's reasonable discretion, but in no event shall be less than $3,000,000 per occurrence. 5. Paragraph 7.2.5 of the Agreement is hereby amended in its entirety as follows: 7.2.5 Verification of Coverage. 5 Cities Foundation shall furnish the City with original endorsements effecting coverage required by this clause prior to the commencement of any construction on the Premises. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. All endorsements are to be received and approved by City before 5 Cities Foundation commences any construction on the Premises. As an alternative to City's forms, 5 Cities Foundation's insurer may provide complete, certified copies of all required insurance policies, including endorsements affecting the coverage required by these specifications. 6. Paragraph 7.3 of the Agreement is hereby amended in its entirety as follows: 7.3 Should 5 Cities Foundation commence to improve, modify, alter or burden the Premises in any way whatsoever, 5 Cities Foundation, its Board of Directors, and Agenda Item 10.a. Page 31 the directors individually, shall, at 5 Cities Foundation's sole expense, and with counsel reasonably acceptable to City, indemnify, defend and hold harmless the City and City parties from and against any and all claims from any cause, that arise out of, result from, or relate to the Lease, the tenancy created under this Lease, or the Premises, including the use or occupancy, or manner of use or occupancy, of the Premises by the 5 Cities Foundation parties; any negligent act of 5 Cities Foundation parties or any invitee, guest, or licensee of 5 Cities Foundation, or any other person authorized by 5 Cities Foundation to use the Premises or any portion thereof; 5 Cities Foundation's conducting of its business; any Improvements, activities, work, or things done, omitted, permitted, allowed, or suffered by 5 Cities Foundation parties in, at, to or about the Premises, including the violation of or failure to comply with any applicable laws and order in existence on the date of the Lease or enacted, promulgated, or issued after the date of the Lease; and any breach or default in the performance of any obligation of 5 Cities Foundation to be performed under this Lease, whether before or during the Lease term or after its expiration or earlier termination. 7. If the City does not approve the construction of the Police Station facility project on the modified leasehold estate described in Exhibit A and appropriate funding to fully fund the estimated construction costs by December 31, 2012, the parties shall rescind this Second Amendment. 8. Paragraph 15.1 of the Agreement is hereby amended to change the City's address as follows: City of Arroyo Grande Attn: City Manager 300 E. Branch Street Arroyo Grande, CA 93420 9. Except as modified herein, all terms and conditions of the Agreement and First Amendment shall remain in full force and effect. [Signatures on next page] Agenda Item 10.a. Page 32 IN WITNESS WHEREOF, this Second Amendment has been duly executed as of the date first set forth above. . CITY OF ARROYO GRANDE By: Tony Ferrara, Mayor ATTEST: Kelly Wetmore, City Clerk APPROVED AS TO FORM: Timothy J. Carrnel, City Attorney 5 CITIES COMMUNITY SERVICES FOUNDATION By: Its: Agenda Item 10.a. Page 33 ATTACHMENT 3 MEMORANDUM OF UNDERSTANDING REGARDING AMENDMENT OF DEVELOPMENT AGREEMENT 09-002 This Memorandum of Understanding Regarding Amendment of Development Agreement 09-002 ("Memorandum of Understanding") is made and entered into on this day of , 2012 by and between the CITY OF ARROYO GRANDE, a municipal corporation duly organized and existing pursuant to the Constitution and laws of the State of California ("City") and the 5 CI'TIES COMMUNITY SERVICE FOUNDATION ("5 Cities Foundation"), a California non-profit corporation. RECITALS WHEREAS, City is the owner of the property commonly known as 400 West Branch Street in the City of Arroyo Grande, State of California which is zoned Public Facilities (the "Property"); and WHEREAS, 5 Cities Foundation desires to build certain improvements on the Property, including a community center ("Project"); and WHEREAS, on or about November 14, 2006, the parties entered into a long-term Lease Agreement ("Lease Agreement',) to enable 5 Cities to Foundation to proceed with the Project; and WHEREAS, on or about March 23, 2010, the parties entered into Development Agreement 09-002 ("Development Agreement") f& the construction of the Project; and WHEREAS, City now has plans to construct a new Police Station facility and has designated a portion of the Property as a potential site for the facility; and WHEREAS, on or about I-I 2012, the parties entered into a Second Amendment to Lease Agreement modifying the size and description of the leasehold estate to exclude the property on which the City may construct the Police Station facility; and WHEREAS, as a result of the modification of the leasehold estate, the Project will need to be revised and the Development Agreement amended; and WHEREAS, it is the intention of the parties to memorialize their understanding that the Development Agreement must be timely amended to clearly define the reconceived Project. NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending t~ be legally bound hereby, it is hereby agreed by and between the parties as follows: Agenda Item 10.a. Page 34 1. Recitals. The above recitals are true and correct and are incorporated herein by this reference. 2. Amendment to Development Agreement. (a) The parties shall collaborate to redefine the Project consistent with the Second Amendment to Lease Agreement and shall execute a First Amendment to Development Agreement 09-002 (the "First Amendment") on or before June 30,2013. (b) The City shall pay any and all costs associated with preparing and processing the First Amendment, including, but not limited to, City fees and architectural and 1 or engineering costs necessary to complete the application for the revised Project. (c) The First Amendment shall include a provision stating that if the City does not approve the construction of the Police Station facility on the modified leasehold estate and appropriate funding to fully fund the estimated construction costs by December 31, 2012, the parties shall rescind said First Amendment. 3. Cancellation. In the event that the City decides for any reason not to use the Property for the Police Station, the City shall notify 5 Cities Community Foundation and this Memorandum of Understanding shall terminate either upon delivery of said notice or December 31, 201 2, whichever occurs first. Upon said termination, neither party shall have any further obligations hereunder. 4. Future Assurances. Each party hereto shall cooperate and take such actions as may reasonably be requested by the other party in order to carry out the provisions of this Memorandum of Understanding and the transactions contemplated herein. 5. Amendment. No modification of, deletion from or addition to this Memorandum of Understanding shall be effective unless made in writing and executed by both parties to this agreement. 6. Waiver. The failure by either party to enforce any term or provision of this Memorandum of Understanding shall not constitute a waiver of that term or provision, or any other term or provision. No waiver by either party of any term or provision of this Memorandum of Understanding shall be deemed or shall constitute a waiver of any other provision of this Memorandum of Understanding, nor shall any waiver constitute a continuing waiver unless otherwise expressly provided in writing. 7. Severability. In the event any clause, sentence, term or provision of this Memorandum of Understanding shall be held by any count of competent jurisdiction to be illegal, invalid or unenforceable for any reason, the remaining portions of this agreement shall nonetheless remain in full force and effect. Agenda Item 10.a. Page 35 8. Construction. The terms and provisions of this Memorandum of Understanding shall be liberally construed to effectuate its purpose. In determining the meaning of, or resolving any ambiguity with respect to, any word, phrase or provision of this agreement, no uncertainty or ambiguity shall be construed or resolved against either party under any rule of construction, including the party primarily responsible for the drafting and preparation of this Memorandum of Understanding. Each party acknowledges that it was represented by legal counsel in conjunction with 'this transaction. 9. Governing Law. This Memorandum of Understanding is made under and shall be construed in accordance with the laws of the State of California. 10. Notices. 'This Memorandum of Understanding shall be in writing, duly addressed to the parties below. By written notice in conformance herewith, any party may change the address to which notices to said party must be delivered. Any notice deposited with the United States Postal Service shall be deemed to have been duly given when so deposited certified or registered, postage prepaid, addressed as set forth below or as changed as set forth herein. Notice sent by another manner shall be effective only upon actual receipt thereof. City of Arroyo Grande: City of Arroyo Grande Attention: City Manager 300 East Branch Street Arroyo Grande, CA 93420 5 Cities Foundation: 5 Cities Community Service Foundation Attention: J Johnson P.O. Box 0 Grover Beach, CA 93483 11. Time of Essence. Time is of the essence with respect to the obligations of each party under this Memorandum of Understanding. 1 2. Headings. The headiqgs of this Memorandum of Understanding are for purposes of reference only and shall not limit or define the meaning of the provisions of this agreement. All uses of the words "Article(s)" and "Section(s)" in this Memorandum of Understandirrg are reference for articles and sections of this Memorandum of Understanding unless otherwise specified. 13. Authority. Each of the undersigned covenants, warrants and represents (a) that he or she has full authority to enter into this Memorandum of Understanding on behalf of the party for whom he or she is executing it; (b) that he or she has obtained Agenda Item 10.a. Page 36 any necessary approvals to do so from the party's governing board or other decision- making authority and (c) that the party on whose behalf he or she has executed this Memorandum of Understanding has full authority to carry out all of that party's duties and obligations pursuant to its terms. 14. Attorney's Fees. In the event that any action or proceeding is maintained to enforce the terms of this Memorandum of Understanding, by one party against the other party to, then the prevailing party shall be entitled to reasonable attorney's fees together with costs of suit. [Signatures to Follow on Next Page] Agenda Item 10.a. Page 37 IN WITNESS WHEREOF, the parties have executed this Memorandum of Understanding on the date and year first written above: CITY OF ARROYO GRANDE By: Tony Ferrara, Mayor ATTEST: Kelly Wetmore, City Clerk APPROVED AS TO FORM: Timothy J. Carrnel, City Attorney 5 CITIES COMMUNITY SERVICES FOUNDATION By: Its: Agenda Item 10.a. Page 38 I IB' CROUP Alternative Ag e n d a I t e m 1 0 . a . Pa g e 3 9 1 IBI ' Ag e n d a I t e m 1 0 . a . Pa g e 4 0 Ag e n d a I t e m 1 0 . a . Pa g e 4 1 Scheme B Ag e n d a I t e m 1 0 . a . Pa g e 4 2 Ag e n d a I t e m 1 0 . a . Pa g e 4 3 I Alternative #2 Ag e n d a I t e m 1 0 . a . Pa g e 4 4 GROUP Ag e n d a I t e m 1 0 . a . 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