City Council - Special Meeting

Huh?

Yeah, she's still on the phone right now. She'll be right in.

Are we all set up? OK.

Yes, you already. So we are returning to open session and there are no actions that were taken in closed session so we're moving to item number six. Town Council to consider providing direction to the town manager regarding the execution of a lease and operating agreement with the Ross Valley paramedic authority documenting the terms for construction and tennis tendency of a paramedic facility to be located. at 33 Sir Francis Drake Boulevard in the Ross Civic Center, and to consider adoption of resolution number 2547 if the direction to the town manager is to execute the lease and operating agreement with Ross Valley Paramedic Authority. Town Manager Johnson, do you have a staff report?

Thank you, Mayor. Just have a little bit background for are members of the public that might be here or listening from home. The Ross Valley Paramedic Authority has operated one of its two paramedic ambulances out of the Ross Fire Station since the early 1980s via a series of leases between the town and the paramedic authority. I'll call them RVPA for short. um after approximately two years of study and community outreach the town council and town council discussion and deliberation back on march 11 2021 the rostown council voted 5-0 to rebuild the town's police paramedic and administrative buildings and move forward without a fire station in the master plan for the civic center Sarah Silver, Fast forward to June 15 2023 the Ross town Council adopted a master plan master facilities plan that included a new paramedic ambulance facility. Then on November 1 2024 and emergency services deployment and fiscal assessment review study was commissioned by the rvp a board. And it was completed by consultant city gate associates the study concluded that an ambulance owned by the rvp a should continue to be housed in the Ross civic Center because the location is economically and operationally well positioned to serve the Community. For over a year, since that November 1st meeting, for over a year, staff and attorneys for the Town of Ross and the RVPA have been diligently negotiating the terms of a new lease and operating agreement in conformance with the direction received from their respective governing bodies, who are the Ross Town Council and the RVPA Board of Directors. The final draft lease and operating agreement documents terms related to the construction of the facility, the shared facilities and tenant improvements, including the approximate date by which the work will be completed, as well as terms regarding the leasing and operation of the facility following its substantial completion. The lease and the operating agreement is attached to the staff report for this agenda item. In summary, the lease has a pre-occupancy period which continues the existing lease and holdover status until the new paramedic facility is constructed in early 2029. When completed, the lease will then, and the RVPA moves in, the lease has an eight-year term. Under the new lease, the RVPA will pay $75,000 a year in rent, and that will increase 2.5% each year. RVPA will also pay for half of the utilities consumed in the new facility, and the new facility will be separately metered from the rest of the Civic Center. The facility will be approximately 2,150 square feet, and that includes the Apparatus Bay. And its programming is based on the 2023 Facilities Master Plan. And that programming from the Master Plan is an exhibit to the lease document. And of course, during the design process for this facility, the RVPA will have input into the design of the facility, but the final decision for its design rests with the Ross Town Council. The lease describes the ways that the tenant, the RVPA, can get out of a lease and the one way the town can, which is if the construction bids come in 10% higher than the capped amount, which is that figure is located in the lease agreement. The town council can meet and discuss and can terminate the lease before any construction contract is awarded. Other terms are summarized and described in the staff report on pages 2 and 3 in the staff report. So, finally, it is recommended that the Town Council consider providing direction to the Town Manager regarding the execution of a lease and operating agreement with the Ross Valley Paramedic Authority documenting the terms for construction and tenancy of a paramedic facility to be located here at 33 Sir Francis Drake Boulevard in the Ross Civic Center, and then to consider adoption of resolution number 2547 if the direction to the town council is to execute the lease and operating agreement with the Ross Valley Paramedic Authority.

Thank you. Questions from council members? Matt?

So something I just noticed, what is the situation? This lease doesn't begin till the occupancy. What is the current lease covering till that point in terms of their commitment to being here? The current lease is called the pre-occupy period in the lease.

It's meant to address between now and when substantial completion occurs. And that's meant to address all the requirements of their current currently there for their existing rent that they've been paying, but they still have all the termination rights that are in the lease.

So sorry, so I see the rent, it says like pre-occupancy period rent, so it's clear about the rent, but what is their obligation to stay?

It's the same obligation that's in the existing lease. They have the same rights that are for termination for without cause in the lease in the pre-occupancy period and in the post-occupancy period.

Mayor Mrakas, So there's a period between this lease commences it says when. Mayor Mrakas, The buildings come substantially complete or that gets occupants no TCO.

Mayor Mrakas, that's the the new lease the new lease terms that these period commences at the either January of 2029 or the substantial completion whatever occurs earlier. City Council Chambers, City Council Chambers, up until that time is the rent is for the pre oxy period, and if we that goes until the substantial completion date and or January 1 2029 and once those dates occur once that date occurs gets triggered the new rent in the in the lease kicks in and. But all the other terms of the lease exists starting the effective date of this agreement, which is the day both parties approve it.

Okay, so if we sign this and they sign this, there's this pre-occupancy period is defined correct is that that that means the lease is this lease and the terms are effective as of that date correct okay and that's the rent but what about the reasons to terminate the lease are the same for that period as they are as the as the after period correct okay thank you any other questions so i have a question about the um

the RVPA leaving for cause. So it says a failure of the voters in any municipality that are members of the tenants' joint powers authority organization to renew the parcel tax. And then above that, it says that I guess if that happens, my question is, it's required that RVPA meets with Ross to discuss how can we make that work even if a parcel tax failed. Is that right? What page are you on, Elizabeth? Page 9, number 15. I just want to be sure we have it, you know, that it's, that we... That is correct.

There's a meet and confer procedure before they can terminate. Okay.

So it's not just the parcel tax that fails. Correct. Then we negotiate and can try to keep it going if even, because even if a single parcel tax fails.

Yes, tenants will have the right to terminate the lease by delivering 90 days written notice prior to exercising the right to terminate, the tenant and landlord shall meet and confer over a period of not less than 30 days and use good faith and commercially reasonable efforts to reach a mutually acceptable alternative to terminating the lease. So we have to go through that exercise before they can give their notice of termination. And they only can give their notice of termination in certain defined events, which is the 15 , , and . Okay, great, thanks.

I have another question.

City Council Chambers, Does anyone else have quest terrier bill, do you have questions okay go ahead matt.

City Council Chambers, So sorry we didn't talk about this item three on page 10 about the landlord if it's institutes or joins a party in any litigation. City Council Chambers, Against tenant or its staff members. City Council Chambers, Can you tell attorney comment on like how we could agree to potential litigation that may happen in the future or during this lease term. It's I'm on page 10. Item three. What's your question? My question is, how can we agree to not to be for a party of some potential litigation against a staff member or the member of the JPA? I've never seen that in a rental lease before. And we I would like an explanation of why we would agree to this.

They would they requested this term as a as a potential if we somehow decide to sue their agency or their board members or the individuals who work for that agency. And it doesn't require us not to sue them, it just means that then they have the right to terminate the lease.

So if there was an issue with it. Mayor Mrakas, The ambulance or somebody committed some some fraud or did something that was dangerous and we were to the town and the town needed to be a party in a lawsuit, we would be jeopardizing they could just walk out on the lease if that were to happen. Mayor Mrakas, they'd have the right to terminate correct Okay, have you ever seen that in a lease before that that assigned I mean you work with other towns, no, I have not. Have you town manager Johnson seen a term like that? I know you were at Windsor and you were in Laguna Beach?

No.

Any other questions for the staff? We'll open it up to public comment. Anyone in the chambers wish to make a comment? Anyone online, Cindy? No raised hands on line, Mayor. OK, we'll bring it back for discussion and a vote to provide direction. Any discussion, or can we just make a motion and vote?

Well, I'm just curious, actually, with the lawyers about that item, how you feel about item 3 of 10. I mean, you're both, particularly Bill has done leases, and you're both I actually value your opinions as lawyers of this potential item three. I'm troubled by it, but I'd love to hear your opinion as lawyers.

Julie, may I? I certainly wasn't in favor of this. We argued with them about it. They kept insisting it be in there. The one situation I was concerned about Was a multi party situation where our insurer wanted us to file a cross claim against them for negligence and I see now there is something in there about at the direction of an insurance carrier so that was the one concern I had met, I think I think it's been addressed well. You know, let's say that the ambulance goes out and runs over somebody. And so the injured party sues the town, sues the RVPA. And we didn't operate. We're not operating the ambulance. We're just the landlord. But if we're a party to a suit, we have to defend it. And normally, we would file a cross-complaint against the RVPA saying, well, you're primarily liable for this, whatever. It's been years since I've handled this kind of case, but whatever the current language is, it's your responsibility to take care of this, and you need to indemnify us for any loss. If this were a situation where the town's insurance covered us and the insurer said, as they probably would, you need to file a cross-complaint, then we can't without violating the lease. So, you know, Ben's our attorney, so I don't want to, you know, voice any opinion that's counter to what our council thinks. But that was my view.

Yeah, that's the carve-out under 3.3, responding to or complying with a validly issued legal process or direction from an insurance carrier with respect to an insurance claim.

And, of course, we can sue to enforce our own agreement because they breached it.

Sorry, I'm not a lawyer, but when you said that if that happened, so there was a cross-claim, there's a carve-out that says if the insurance company is doing it, they cannot leave the lease?

If it's per their direction, they want us to assert a cross-complaint, then that's not ground for them to terminate the lease. That's correct.

So if they, our insurance company, let's say we were insuring the bill, you know, the town has insurance and we're getting sued for this incident. And then our insurance company says, you know, we want to counter sue them because they did, they killed somebody and the town's now going to have to pay $2 million. And we want to get that from our VPA because we're just the landlord. Are we allowed to do that under this lease or would they say, okay, we can, then we're leaving?

Yes, we're allowed to do that. That was the point of that carve out so if the insurance company, if we have a personal injury claim. And we think it actually belongs with our vpn our insurance company, you know makes that determination. We have the ability to tender that claim to our vpn and either through a you know tender and acceptance or a cross complaint whatever the insurance company wants us to do. And most of these claims do go to insurance companies, the personal injury types if that's your concern.

And so the insurance, so they then sue RVPA. They tender the claim. If RVPA doesn't pick it up, then yes, they do a cross-complaint. And they would not be able to exit the lease. That is correct. If that happened. Okay, thank you.

I would like to... to be located at 33 Sir Francis Drake Boulevard in the Ross Civic Center and to adopt resolution number 2547 second

Mayor McMillan, yes. Councilmember Dowling, yes. Councilmember Kirchherr, yes. Councilmember Salter, no. Mayor Pro Tem Robbins, yes. With a vote of 4 to 1, the motion passes.

I just want to commend the staff and Ben and everyone involved in all the multiple iterations and negotiations. And I'm really happy for the town that we have reached this point. And I'm also optimistic that December 4th will go as well. Thank you. The meeting is adjourned.