Item No.
1 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: OFFICE OF THE CITY MANAGER
BY: VANIAH DE ROJAS, ASSISTANT CITY MANAGER
D ATE: JUNE 27, 2023
SUBJECT: AMENDMENT TO THE LEASE AGREEMENT BETWEEN THE CITY OF
DOWNEY AND THE DOWNEY CITY EMPLOYEES FEDERAL CREDIT
UNION
EXECUTIVE SUMMARY
The City Council will consider approving an amendment to the Lease Agreement between the City of Downey and the Downey City Employees Federal Credit Union. Since 1993, the City of Downey has entered into a lease agreement with the Downey City Employees Federal Credit Union to provide employees with convenient access to banking services and assist in meeting employee financial needs.
RECOMMENDATION
That the City Council:
Approve the Lease Agreement Amendment No. 2 with the Downey City Employees Federal Credit Union for leasing space at Downey City Hall, for a two-year term beginning on July 1, 2023.
BACKGROUND
The City of Downey entered into its first lease agreement with the Downey City Employees Federal Credit Union in 1993 to provide employees with convenient access to banking services and assist in meeting employee financial needs.
The lease agreement has been renewed in 2007, 2009, and 2013. The 2013 agreement had two, two-year lease agreement extensions that were granted in 2015 and 2017.
On June 25, 2019, the lease agreement was renewed with two, two-year lease agreement extensions. On April 21, 2021, the City exercised the first of the two, two-year lease agreement extensions. The extension was from July 1, 2021 to June 30, 2023.
APPROVED BY
CITY MANAGER
LEASE AGREEMENT BETWEEN THE CITY OF DOWNEY AND THE
DOWNEY CITY EMPLOYEES FEDERAL CREDIT UNION
JUNE 27, 2023
PAGE 2
ANALYSIS
CalCom notified the City of its desire to continue its lease with the City through June 30, 2025 and exercise the second of its two, two-year lease agreement extensions. Staff prepared the attached lease agreement Amendment No. 2 between the City of Downey and Downey City Employees Federal Credit Union extending the lease through June 30, 2025.
As in the past, the credit union will be required to pay for its phone and Internet service.
CalCom has agreed to a lease rate increase according to the U.S. Bureau of Labor Statistics-February 2023 Federal Consumer Price Index for the Los Angeles-Long Beach- Anaheim area. The rate increase will be 5.1 percent, increasing the current lease amount of $4,527.88 to $4,758.80 a year ($396.57 a month) for the space they use in City Hall.
This new rental rate is also included in the agreement amendment.
CITY COUNCIL PRIORITIES
Fiscal Responsibility
FISCAL IMPACT
Approval of the recommended action will result in a revenue increase of $230.92 annually from July 1, 2023 to June 30, 2025 within the General Fund, Revenue Account No. 10-3- 4200.
ATTACHMENT
Attachment A – Lease Agreement Amendment No. 2 between the City of Downey And the Downey City Employees Credit Union (Division of CALCOM FCU).
Attachment B – February 2023 Federal Consumer Price Index - U.S. Bureau of Labor Statistics for the Los Angeles-Long Beach-Anaheim area.
AMENDMENT NO. 2 TO
PROFESSIONAL SERVICES AGREEMENT
THIS AMENDMENT No. 2 (“Amendment”) is entered into this 27 day of June, 2023, by and between the City of Downey, a California municipal corporation and charter city (“Lessor”) with its principal place of business at 11111 Brookshire Avenue, Downey, CA 90241 and Downey City Employees Credit Union (division of CalCom FCU), a tax exempt non-profit pursuant to section 122 of the Federal Credit Union Act (12 U.S.C. §1768), “Lessee”, with its principal place of business at 11111 Brookshire Avenue, Downey, CA 90241, 2nd Floor. Lessor and Lessee are sometimes individually referred to as the “Party” and collectively as the “Parties”.
WHEREAS, Lessor and Lessee entered into a Lease Agreement (“Agreement”) on July 1, 2019 as more specifically described in the Agreement; WHEREAS, Lessor and Lessee executed an Amendment No. 1 to the Lease Agreement (“Agreement”) on April 27, 2021;
WHEREAS, the parties desire to make certain amendments to the Agreement as set forth herein; and
WHEREAS, the Parties intend to be bound by the terms and provisions of the Agreement as it is amended herein.
NOW, THEREFORE, for and in consideration of the mutual covenants and conditions herein contained, the Parties agree as follows:
Section 1. AMENDMENT(S).
A. Lessor and Lessee hereby amend Section 3 of the Agreement to read as follows:
The term of this Lease shall be two (2) years commencing on July 1, 2023, and terminating on June 30, 2025.
B. Lessor and Lessee hereby amend Section 6 of the Agreement to read as follows:
The annual rent shall $ 4,758.80 (Four Thousand, Seven Hundred, Fifty Eight Dollars and Eighty Cents) payable monthly at the rate of $ 396.57 (Three Hundred, Ninety Six Dollars and Fifty Seven Cents) each month on the first day of each month. In the event that the Lessee has not paid the rent by the tenth day of the month, a five percent (5%) late penalty will be charged.
Section 2. The rights, obligations and fees of the Parties under the Agreement shall not otherwise be amended, altered or revised except as expressly provided for herein and all other terms of the Agreement shall remain in full force and effect.
Section 3. This Amendment may be executed in counterparts, each of which shall be deemed an original, but all of which, together, shall constitute one and the same instrument.
TO EFFECTUATE THIS AMENDMENT, the Parties have caused their duly authorized representatives to execute this Amendment to the Agreement on the dates set forth below.
ATTACHMENT A
6/15/23, 8:57 AM Consumer Price Index News Release - 2023 M02 Results https://www.bls.gov/news.release/archives/cpi_03142023.htm 14/36 Special aggregate indexes
Relative
importance
Jan.
2023
Unadjusted indexes
Unadjusted percent
change
Seasonally adjusted percent
change
Feb.
2022
Jan.
2023
Feb.
2023
Feb.
2022-
Feb.
2023
Jan.
2023-
Feb.
2023
Nov.
2022-
Dec.
2022
Dec.
2022-
Jan.
2023
Jan.
2023-
Feb.
2023
Other goods and services 2.673 496.045 521.433 526.196 6.1 0.9 -0.1 0.6 0.9 Personal care 2.180 252.862 265.504 267.871 5.9 0.9 -0.1 0.6 0.9 Footnotes
(1)Indexes on a December 1982=100 base.
(2)Indexes on a December 1997=100 base.
(3)Indexes on a December 1988=100 base.
Table 4. Consumer Price Index for All Urban Consumers (CPI-U): Selected areas, all items index, February 2023 [1982-84=100, unless otherwise noted]
Area
Pricing
Schedule(1)
Percent change to Feb. 2023 from: Percent change to Jan. 2023 from:
Feb.
2022
Dec.
2022
Jan.
2023
Jan.
2022
Nov.
2022
Dec.
2022
U.S. city average M 6.0 1.4 0.6 6.4 0.5 0.8
Region and area size(2)
Northeast M 5.9 1.2 0.5 6.0 0.6 0.7
Northeast - Size Class A M 6.3 1.4 0.6 6.1 0.8 0.8
Northeast - Size Class B/C(3)M 5.4 1.0 0.5 5.9 0.4 0.5
New England(4)M 5.1 1.1 0.2 5.5 0.4 0.9
Middle Atlantic(4)M 6.2 1.3 0.7 6.3 0.7 0.6
Midwest M 5.6 1.3 0.5 6.0 0.3 0.8
Midwest - Size Class A M 5.4 1.1 0.4 5.9 0.2 0.7
Midwest - Size Class B/C(3)M 5.7 1.4 0.5 6.1 0.4 0.8
East North Central(4)M 5.6 1.3 0.4 6.2 0.3 0.9
West North Central(4)M 5.4 1.2 0.7 5.6 0.3 0.5
South M 6.4 1.4 0.6 6.9 0.5 0.8
South - Size Class A M 6.4 1.3 0.7 6.9 0.3 0.6
South - Size Class B/C(3)M 6.4 1.5 0.6 6.9 0.6 0.9
South Atlantic(4)M 6.4 1.2 0.6 6.9 0.3 0.6
East South Central(4)M 6.5 1.8 1.0 6.6 0.8 0.8
West South Central(4)M 6.3 1.6 0.5 7.0 0.7 1.1
West M 6.0 1.4 0.5 6.3 0.5 0.9
West - Size Class A M 6.2 1.6 0.4 6.6 0.9 1.2
West - Size Class B/C(3)M 5.7 1.2 0.7 6.0 0.0 0.6
Mountain(4)M 6.7 1.3 0.7 7.2 0.3 0.5
Pacific(4)M 5.7 1.5 0.4 6.0 0.6 1.1
Size classes
Size Class A(5)M 6.1 1.4 0.5 6.4 0.6 0.9
Size Class B/C(3)M 6.0 1.3 0.6 6.4 0.4 0.8
Footnotes
(1)Foods, fuels, and several other items are priced every month in all areas. Most other goods and services are priced as indicated: M - Every month. 1 - January, March, May, July, September, and November. 2 - February, April, June, August, October, and December. (2)Regions defined as the four Census regions.
(3)Indexes on a December 1996=100 base.
(4)Indexes on a December 2017=100 base.
(5)Indexes on a December 1986=100 base.
(6)1998 - 2017 indexes based on substantially smaller sample. (7)Indexes on a December 2001=100 base.
(8)Indexes on a 1987=100 base.
NOTE: Local area indexes are byproducts of the national CPI program. Each local index has a smaller sample size than the national index and is, therefore, subject to substantially more sampling and other measurement error. As a result, local area indexes show greater volatility than the national index, although their long-term trends are similar. Therefore, the Bureau of Labor Statistics strongly urges users to consider adopting the national average CPI for use in their escalator clauses.
ATTACHMENT B
6/15/23, 8:57 AM Consumer Price Index News Release - 2023 M02 Results https://www.bls.gov/news.release/archives/cpi_03142023.htm 15/36 Area
Pricing
Schedule(1)
Percent change to Feb. 2023 from:Percent change to Jan. 2023 from:
Feb.
2022
Dec.
2022
Jan.
2023
Jan.
2022
Nov.
2022
Dec.
2022
Selected local areas
Chicago-Naperville-Elgin, IL-IN-WI M 5.0 1.2 0.4 5.4 0.0 0.9 Los Angeles-Long Beach-Anaheim, CA M 5.1 1.6 -0.3 5.8 1.3 1.9 New York-Newark-Jersey City, NY-NJ-PA M 6.0 1.2 0.4 6.0 1.0 0.8 Atlanta-Sandy Springs-Roswell, GA 2 7.2 1.5
Baltimore-Columbia-Towson, MD(6)2 6.1 1.2
Detroit-Warren-Dearborn, MI 2 7.0 1.9
Houston-The Woodlands-Sugar Land, TX 2 5.2 1.9
Miami-Fort Lauderdale-West Palm Beach, FL 2
Philadelphia-Camden-Wilmington, PA-NJ-
DE-MD 2 6.9 2.0
Phoenix-Mesa-Scottsdale, AZ(7)2 8.5 1.2
San Francisco-Oakland-Hayward, CA 2 5.3 1.8
Seattle-Tacoma-Bellevue, WA 2 8.0 1.4
St. Louis, MO-IL 2 5.9 0.8
Urban Alaska 2 4.3 0.1
Boston-Cambridge-Newton, MA-NH 1 6.4 1.1
Dallas-Fort Worth-Arlington, TX 1 7.5 0.8
Denver-Aurora-Lakewood, CO 1 6.4 0.9
Minneapolis-St.Paul-Bloomington, MN-WI 1 5.1 0.5
Riverside-San Bernardino-Ontario, CA(4)1 7.3 1.3
San Diego-Carlsbad, CA 1 6.4 1.8
Tampa-St. Petersburg-Clearwater, FL(8)1 8.9 1.7
Urban Hawaii 1 5.2 0.3
Washington-Arlington-Alexandria, DC-VA-
MD-WV(6)1 4.4 -0.3
Footnotes
(1) Foods, fuels, and several other items are priced every month in all areas. Most other goods and services are priced as indicated: M - Every month. 1 - January, March, May, July, September, and November. 2 - February, April, June, August, October, and December. (2) Regions defined as the four Census regions.
(3) Indexes on a December 1996=100 base.
(4) Indexes on a December 2017=100 base.
(5) Indexes on a December 1986=100 base.
(6) 1998 - 2017 indexes based on substantially smaller sample. (7) Indexes on a December 2001=100 base.
(8) Indexes on a 1987=100 base.
NOTE: Local area indexes are byproducts of the national CPI program. Each local index has a smaller sample size than the national index and is, therefore, subject to substantially more sampling and other measurement error. As a result, local area indexes show greater volatility than the national index, although their long-term trends are similar. Therefore, the Bureau of Labor Statistics strongly urges users to consider adopting the national average CPI for use in their escalator clauses.
Table 5. Chained Consumer Price Index for All Urban Consumers (C-CPI-U) and the Consumer Price Index for All Urban Consumers (CPI-U): U.S. city average, all items index, February 2023 [Percent changes]
Month Year
Unadjusted 1-month percent change Unadjusted 12-month percent change C-CPI-U(1)CPI-U C-CPI-U(1)CPI-U
December 2010 1.3 1.5
December 2011 2.9 3.0
December 2012 1.5 1.7
Footnotes
(1) The C-CPI-U is designed to be a closer approximation to a cost-of-living index in that it, in its final form, accounts for any substitution that consumers make across item categories in response to changes in relative prices. Since the expenditure data required for the calculation of the C-CPI-U are available only with a time lag, the C-CPI-U is issued first in preliminary form using the latest available expenditure data at that time and is subject to four revisions.
Indexes are issued as initial estimates. Indexes are revised each quarter with the publication of January, April, July, and October data as updated expenditure estimates become available. The C-CPI-U indexes are updated quarterly until they become final. January-March indexes are final in January of the following year; April-June indexes are final in April of the following year; July-September indexes are final in July of the following year; October-December indexes are final in October of the following year.