REPORT TO THE CITY COUNCIL
DATE: Regular Meeting of May 9, 2023
TO: Mayor and Members of the City Council
VIA: Dante Hall, City Manager
SUBMITTED BY: Patrick Tang, City Attorney
SUBJECT: Consider and Approve an Amendment to Extend the Trailer Acquisition and Lease Agreement with the Hercules Historical Society (HHS) RECOMMENDED ACTION:
Adopt a Resolution authorizing the City Manager to execute an amendment to the Trailer Acquisition and Lease Agreement between the City of Hercules and the Hercules Historical Society (HHS), to continue the lease for an additional five (5) years with an option for a five (5) year extension. A lease provision providing for payment by HHS of an annual amount of $100 to cover utility costs is included as an option for Council to consider.
BACKGROUND:
On February 14, 2023, the City Council considered an extension of a Trailer Acquisition and Lease Agreement Between the City of Hercules and the Hercules Historical Society (the “Agreement”) for use of a surplus trailer located adjacent to City Hall. See Attachment 1, February 14, 2023 Staff Report, for details. The original Agreement was for five years, with a five-year extension, which expired February 14, 2023. The HHS has not been required to pay rent or utilities, but as reported to Council on February 12, 2013, HHS incurred the expense of acquiring the trailer from William Scotsman Inc., who originally leased the trailer to the City, thus relieving the City of its obligation to pay the monthly rent owed for the structure. HHS is also required to purchase and maintain liability insurance coverage naming the City as additionally insured.
At the February 14, 2023 meeting the Council deferred action on the proposed lease extension agreement. Instead, Council: 1) Directed staff return to Council with additional information regarding rental and/or lease arrangements with other non-profit groups using City property; 2) Discussed whether a nominal annual payment of $100 should be made by HHS to cover utility costs; and 3) Because the Original Agreement was set to expire, directed staff to enter into a temporary month-to-month lease agreement with HHS until the matter could be brought back to Council for further discussion.
DISCUSSION:
An interim month-to-month lease was entered into on or about February 23, 2023 per Council direction and is in now effect, see Attachment 2. Included with the agenda materials is a proposed lease extension agreement that provides an option for a $100 annual payment intended to compensate the City for utilities, see Attachment 3.
With respect to rental and/or lease arrangements with other non-profit groups for use of City property or facilities, according to Parks and Recreation Director Christopher Roke, the arrangements vary depending on circumstances. Currently there are 14 City Recognized Nonprofit Groups. City recognized non-profit groups receive two hours of facility space at no charge per week, or eight hours per month. The two hours a week of facility space is usually used for hosting regular meetings of the non-profit groups. Meetings must be off-peak hours and cannot displace a paid rental.
In addition, each recognized non-profit group must contribute 80 hours of volunteer time to the City per year. The City typically gets assistance from the non-profit groups at four annual events:
Cleanup Day
Fourth of July
Tree Lighting, and
Trunk or Treat
Those City recognized non-profits that have additional arrangements with the City for use of City space are as follows:
The Community Garden. Operates on City property within a fenced-in area at Ohlone Park. There is a water meter for the entire park but not specifically for the garden, so the cost of water used at the Community Garden is included in the usage for the entire park. No other utilities are used on the Garden property.
The Friends of the Hercules Library. This nonprofit has a room within the library dedicated for the sale of used books and does not pay rent for this use. All libraries in the County were built with a dedicated room (the size of a small office) to act as a bookstore. In the case of Hercules, the bookstore is staffed by volunteers from the Friends of the Hercules Library. They do not pay rent or any utilities. Additionally, the Friends of the Hercules Library hold a semi-annual book sales event and use the Large Library conference room for this event. They do not pay any fees for the use of the conference room for the book sale events.
The other City recognized nonprofits do not lease or occupy City property on an ongoing or continuing basis but do benefit from the reduced banner and facility rental fees afforded these recognized nonprofits. A brief description of nonprofit activities on City property follows:
Friends of Hercules Senior Center (FHSC) Runs up to 4 events a year at the Senior Center, and staffs the front desk with volunteers 5 days a week.
Bayfront Chamber - Banner & facility rentals at nonprofit rates. Holds events, City sponsored with special contract.
Boy Scouts: Troop 76 - 2hr/week meeting space.
Chinese Association - Mainly facility rental at nonprofit rates.
Democratic Club - No use yet (only 2 years as City Recognized Nonprofit group) Hercules Education Foundation (HEF) - Banner & facility rental at nonprofit rates. Holds fundraising events for schools.
Library Foundation – Takes donations, holds fundraisers, writes grants.
Sister City Association - Occasional banner space.
Rotary - Occasional banner space or meeting space.
Senior Citizens Club of Hercules - Mainly facility rental or meeting space West Contra Costa Youth Soccer League (WCCYSL) – Banner and field space rental at Hanna Ranch CONCLUSION:
Adopting a Resolution to continue the lease for an additional five (5) years with an option for a five (5) year extension will allow HHS to continue to store historically significant materials in a safe environment. The trailer facility is used for storage and is not a regular meeting place and is not otherwise staffed or open to the public, so utility usage is minimal. HHS is agreeable to paying an annual amount of $100 to cover utility costs, and this annual payment is included as an option in the draft lease terms for Council to consider.
FISCAL IMPACT:
There is no fiscal impact to the City in approving this Amendment.
ATTACHMENTS:
Attach1- February 14, 2023 Staff Report (with prior Attachments 1-4) Attach 2 - February 2023 Interim Month-to-Month Agreement Attach 3 - Revised Proposed First Amendment to the 2013 Agreement (5 years with 5 year option) with option for Utility Payment
Attach 4 - Resolution Authorizing Amendment to the Agreement