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HomeMy WebLinkAbout08-21-2018 Item 10 - Amendment to current Joint Construction and Financing costs for Animal Services Shelter Agreement Meeting Date: 8/21/2018 FROM: Greg Hermann, Interim Deputy City Manager Prepared By: Ryan Betz, Interim Assistant to the City Manager SUBJECT: AMENDMENT TO THE CURRENT AGREEMENT FOR JOINT CONSTRUCTION AND FINANCING COSTS FOR AN ANIMAL SERVICES SHELTER RECOMMENDATION Authorize the City Manager to approve Amendment #1 to the Agreement for Allocation o f Construction and Financing Costs for an Animal Services Shelter. DISCUSSION On February 7, 2017 the City Council approved a contract with the County of San Luis Obispo, and the Cities of Arroyo Grande, Atascadero, Grover Beach, Morro Bay, Pismo Beach and Paso Robles to jointly finance and construct a replacement of the County animal services shelter. The existing shelter was found not to conform to current industry standards and public expectations of animal shelters, as many of the shelter's original design features and characteristics are now outdated. In April 2015, the County Board of Supervisors concluded, based on the totality of factors, that remodeling the existing facility would be imprudent, therefore directed staff to pursue the development of a replacement facility. Under this service contract, all seven cities and the County share the cost of animal services based on a formula that factors the agencies' proportionat e use of field services and shelter services. The agreement provides a mechanism to: 1. Share costs based on proportionate use. 2. Clarifies service and shelter governance. 3. Contains mechanisms to control construction costs and is a more efficient way to construct a shelter consistent with state law and local service preferences and standards. Since that time, the costs for animal services increased with some partners considering withdrawal from the agreement . Those partners, the cities of Paso Robles and Atascadero, have since approved the Amendment with the County to continue their partnership for construction of the animal services shelter. Based upon additional collaboration efforts between the County and the participating cities, a contract amendment is being proposed that specifically addresses the increase in costs, adds clarity for shared governance, and a new service approach to the shelter operations. Contract Amendment This Amendment aims to keep the collaborative nature of the original agreement which will mutually benefit both the County and regional City partners. The proposed Amendment allows the County to move forward with the construction of the new animal services shelter, adopt Packet Pg. 365 Item 10 shared governance practices, and sets the stage for lower futu re costs by reducing animal intakes and overnight stays. Capital and Financing Costs The Project construction costs to be shared by the partners were estimated at $13,176,500 at the time the Agreement was signed. To combat rising costs of the project the County has committed to solely pay the first $1,000,000 of the joint project to construct and finance in the animal service shelter. The County's first $1,000,000 will thereby reduce the total shared contributions to $12,176,500. There are no additiona l financing costs to the cities from the County to complete this commitment and after completion of the project there are no expected additional capital costs for the cities for the joint use of the shelter. The City currently has an annual service agreement with the County that only covers the City’s share of operational expenses. Animal Shelter Operations As part of the agreement, an Operations Committee and an Executive Board will be formed to ensure that all shelter policies and operations equitably reflect and benefit the needs of all parties. The Operations Committee is comprised of the County’s Health Agency Director or his/her designee and a subset of City Managers or their designees. The Executive Board will be composed of the County Administrative Officer (CAO) and a subset of the City Managers or their designees (2-3) for each of the cities to consider significant policy or budget changes and make recommendations prior to policy implementation or budget adoption for the shelter. Any conflicts that cannot be successfully resolved by the Operations Committee or the Executive Board will be addressed by a five-person ad hoc committee, comprised of County Supervisors and City Mayors. The County agrees to adopt goals and take action steps to reduce animal intakes and total animal nights by an average of five percent (5%) per year for the next five years, in an attempt to reduce operation costs. The targeted reductions are to be accomplished primarily by reducing the need for services and the costs o f those services, not by reducing or denying needed services. The County agrees to undertake a cost/benefit analysis related to services and operations of the shelter and present the findings to the Operations Committee. Client Services Approach Working collaboratively with the Operations Committee and Executive Board, the County agrees to adopt a client -oriented services approach for shelter operations. Kennel Permits The County will not issue kennel permits inside city limits without written approval of that city. CONCURRENCES The cities of Arroyo Grande, Atascadero, Grover Beach, Morro Bay, Pismo Beach, and Paso Robles have either approved the MOA or are in the process of approving it. In addition to the cities listed above, the Police Department concurs with the proposed amendment to the existing agreement. Packet Pg. 366 Item 10 ENVIRONMENTAL REVIEW The County of San Luis Obispo is the lead agency under the California Environmental Quality Act (CEQA) and will complete all required environmental review for the project. The City, as a responsible agency, relies on the County’s environmental determination to meet the City’s statutorily required CEQA mandates. FISCAL IMPACT The Amendment does not result in a cost increase to the City. Under this amendment , the County is funding the first $1,000,000 in the joint partnership to move the animal shelter project forward. The additional construction costs identified in the MOU will be paid by the County in order to reduce the shared costs for the cities. As part of the original contract, the City Council approved an annual payment of approximately $100,000 to $130,000 for construction costs over the next 25 years. The County estimates that the first annual payment will be $124,100, which includes a n additional, one-time construction cost of $34,100, with an annual cost of $90,000 thereafter. This annual payment was approved as part of the 2017-19 Financial Plan and will be included in the proposed 2019-21 Financial Plan. ALTERNATIVE The City Council may choose not to approve this amendment. Per the original agreement , only through unanimous consent among the parties can the measure be amended. This is not recommended as an alternative because the amendment poses no additional costs to the City and will help to collaboratively address and resolve the issue of rising costs for animal services. Attachments: a - Animal Services Shelter MOA - Amendment 1 b - Animal Services Shelter MOA - Original Packet Pg. 367 Item 10 Page 1 of 4 AMENDMENT NUMBER 1 TO THE AGREEMENT FOR ALLOCATION OF CONSTRUCTION AND FINANCING COSTS FOR AN ANIMAL SERVICES SHELTER AT 865 OKLAHOMA AVENUE IN SAN LUIS OBISPO, CALIFORNIA, BETWEEN THE CITIES OF ATASCADERO, ARROYO GRANDE, GROVER BEACH, MORRO BAY, PASO ROBLES, PISMO BEACH, AND SAN LUIS OBISPO AND THE COUNTY OF SAN LUIS OBISPO THIS AMENDMENT (“Amendment”), dated for reference as of June 5, 2018, to the Agreement (defined below), is entered into by and between the COUNTY OF SAN LUIS OBISPO (the “County”), and the cities of ATASCADERO, ARROYO GRANDE, GROVER BEACH, MORRO BAY, PASO ROBLES, PISMO BEACH, AND SAN LUIS OBISPO (each, a “City,” and collectively, the “Cities,” and, together with the County, the “Parties”, or individually “Party”). RECITALS The County and each of the Cities previously entered into an Agreement (“Agreement”) for allocation of construction and financing costs for a new Animal Service Shelter at 865 Oklahoma Avenue in San Luis Obispo, California (“Shelter” or “Project”). The Agreement was dated as of February 1, 2017. The Parties acknowledge the benefit of collaborative and joint efforts in constructing, financing, and managing the Shelter. The Parties enter into this Amendment to memorialize changes regarding the Parties’ participation and corresponding obligations with regard to the management and allocation of construction and financing costs for the Shelter. This Amendment memorializes the Parties’ joint commitment to collaboratively address and resolve the issue of rising costs for animal services. The Parties recognize that the operating philosophy and operating model by which the shelter has been operated is not the model that will best serve the Parties going forward. The model going forward views all parties as partners, and is based on the needs of all Parties, with all Parties being incentivized to find creative ways to reduce the costs of those services. The model going forward also demonstrates the County’s commitment to seeking opportunities to be more nimble, and open to change. The Agreement and this Amendment represent the entire agreement between the Parties. NOW, THEREFORE, the Parties agree as follows: 1. Recitals. The above Recitals are true and correct. 2. Capital and Financing Costs a) The Project construction costs to be shared by the Parties were estimated at the time the Agreement was signed to be Thirteen Million One Hundred Seventy Six Thousand Five Hundred Dollars ($13,176,500). Pursuant to this Amendment, the County shall reduce the costs allocated to the Cities as follows: i. The County will solely pay the first one million dollars ($1,000,000) of the project, moving $1,000,000 in shared Estimated Project Construction Costs in Exhibit D to County-Only Costs. ii. The shared Estimated Project Construction Costs will thereby be reduced to Twelve Million One Hundred Seventy-Six Thousand Five Hundred Dollars ($12,176,500). Packet Pg. 368 Item 10 Page 2 of 4 b) The County further agrees to pass through any financing costs to the Cities with no additional points, administrative fees, or charges. c) After all construction and related financing costs are retired, the Parties then participating in the Shelter program may continue their joint use of the Shelter for the life of the building, at no additional capital or financing costs. 3. Animal Shelter Operations a) Shared Governance. The Parties agree that further clarification of the intended s hared governance model is appropriate. The intent of the Operations Committee and the Executive Board created by the Agreement is to ensure all Shelter policies and operations reflect the needs of all Parties and equitably benefit all Parties. The Operations Committee and the Executive Board are authorized to ensure the policies and operations of field services policies and operations also reflect the needs of all Parties and equitably benefit all Parties. Any conflicts that cannot be successfully resolved by the Operations Committee or the Executive Board will be addressed by a 5-person ad hoc committee, comprised of County Supervisors and City Mayors. b) Targeted Reductions in Operation Costs. The County agrees to adopt goals and take action steps to reduce animal intakes and total animal nights by an average of five percent (5%) per year for the next five (5) years. The resulting cost savings will be shared by all parties in accordance with the Animal Care and Control Services contract in place at the time. The targeted reductions are to be accomplished primarily by reducing the need for services and the costs of those services, not by reducing or denying needed services. Steps undertaken may include, but are not limited to: i. Targeted education campaigns ii. Pro-active and targeted programs such as catch, spay/neuter, and release programs iii. Pro-active licensing and licensing enforcement iv. Community-based approaches that involve the community in activities and donations v. Active pursuit of grants and donations vi. User fees set at a strategic level to minimize subsidy from general taxes. c) Cost Benefit Analysis. The County agrees to undertake a cost/benefit analysis related to services and operations of the Shelter and present the findings to the Operations Committee. The County will also propose needed actions to the Operations Committee and, as necessary, the Executive Board, and implement changes identified and agreed to by the Parties to achieve reductions in operating costs. 4. Client Services Approach a) Working collaboratively with the Operations Committ ee and Executive Board, the County agrees to adopt a client-oriented services approach for Shelter operations. Elements of this approach may include, but are not limited to: i. Mobile spay/neuter programs ii. Pet owner education programs iii. Outreach to constituents iv. Offering micro-chipping 5. Kennel Permits a) The County will not issue kennel permits inside city limits without written approval of that city. 6. In the event of a conflict between the terms of the Agreement and the Amendment, the terms of this Amendment shall prevail. Packet Pg. 369 Item 10 Page 3 of 4 IN WITNESS WHEREOF, by their execution below, the Parties agree to be bound by the provisions of this Amendment, and the Board of Supervisors of the COUNTY OF SAN LUIS OBISPO has authorized and directed the Chairperson of the Board of Supervisors to execute this Agreement for and on behalf of the County, and the Cities of ATASCADERO, ARROYO GRANDE, GROVER BEACH, MORRO BAY, PASO ROBLES, PISMO BEACH, AND SAN LUIS OBISPO have caused this Agreement to be subscribed by each of their duly authorized officers and attested by their Clerks. Dated: _______________ COUNTY OF SAN LUIS OBISPO _____________________ ____________________________ Clerk of the Board Dated: _______________ CITY OF ATASCADERO _____________________ ____________________________ City Clerk By: Dated: _______________ CITY OF ARROYO GRANDE _____________________ ____________________________ City Clerk By: Dated: _______________ CITY OF GROVER BEACH _____________________ ____________________________ City Clerk By: Dated: _______________ CITY OF MORRO BAY _____________________ ____________________________ City Clerk By: Dated: _______________ CITY OF PASO ROBLES _____________________ ____________________________ City Clerk By: Dated: _______________ CITY OF PISMO BEACH _____________________ ____________________________ City Clerk By: Packet Pg. 370 Item 10 Page 4 of 4 Dated: _______________ CITY OF SAN LUIS OBISPO _____________________ ____________________________ City Clerk By: Packet Pg. 371 Item 10 Page 1 of 12 AGREEMENT FOR ALLOCATION OF CONSTRUCTION AND FINANCING COSTS FOR AN ANIMAL SERVICES SHELTER AT 865 OKLAHOMA AVENUE IN SAN LUIS OBISPO, CALIFORNIA, BETWEEN THE CITIES OF ATASCADERO, ARROYO GRANDE, GROVER BEACH, MORRO BAY, PASO ROBLES, PISMO BEACH, AND SAN LUIS OBISPO AND THE COUNTY OF SAN LUIS OBISPO THIS AGREEMENT, dated for reference as of February 1, 2017 (the “Agreement”), is entered into by and between the COUNTY OF SAN LUIS OBISPO (the “County”), and the cities of ATASCADERO, ARROYO GRANDE, GROVER BEACH, MORRO BAY, PASO ROBLES, PISMO BEACH, AND SAN LUIS OBISPO (each, a “City,” and collectively, the “Cities,” and, together with the County, the “Parties”, or individually “Party”). RECITALS The County and each of the Cities are parties to a separate but similar Contract for Animal Care and Control Services (“Services Contract”) effective as of July 1, 2016 and expiring, unless sooner terminated, on June 30, 2019, pursuant to which the County provides animal control services throughout San Luis Obispo County, including within the jurisdictional boundaries of each of the Cities. In conjunction with and pursuant to the Services Contract, the County operates an existing Animal Services Shelter located at 885 Oklahoma Avenue in San Luis Obispo, California. Owing to the obsolescence of the existing shelter, it is necessary to construct a new Animal Services Shelter (“Shelter ” or “Project”) as generally described in Exhibit A, at an address preliminarily identified as 865 Oklahoma Avenue, and as generally depicted in Exhibit B (“Shelter Property”). The Parties acknowledge the benefit of collaborative and joint efforts in constructing the Shelter. The Parties enter into this Agreement to memorialize their participation and corresponding obligations with regards to the allocation and repayment of the construction and financing costs for the Shelter. NOW, THEREFORE, the Parties agree as follows: 1. Recitals. The above Recitals are true and correct. 2. Estimated Project Construction Costs. a) The Project construction costs, excluding the portion of the Oklahoma Ave./Utility Extension costs to be borne solely by the County, and excluding the County-only costs of the remaining depreciation valu e of the existing facility, demolition of the existing facility, and land costs, and ex cluding costs to be shared proportionally only by the Cities, for the Shelter are estimated at this time to be Thirteen Million One Hundred Seventy Six Thousand Five Hundred Dollars ($13,176,500) as shown in Exhibit D (the “Estimated Project Construction Costs”). The Estimated Project Construction Costs include expenses for soft costs, such as architectural and engineering services; County costs for administration, project management service, environmental review, planning and building fees, and inspections; and hard costs, such as actual construction costs. b) The Estimated Project Construction Costs shall only include those expenses and costs generally described above, which are incurred by the County specifically for the Shelter construction project. Notwithstanding anything to the contrary below, the total Project Costs, as defined in Paragraph 5(a) below shall not exceed Fourteen Million Five Hundred Thousand Dollars ($14,500,000) without a written amendment to this agreement signed by all Parties. Packet Pg. 372 Item 10 Page 2 of 12 c) The Project will be managed as a “Design / Build” project, as approved by the County of San Luis Obispo Board of Supervisors on April 12, 2016. 3. Excess Construction Costs a) Prior to Authorization for Construction to Begin (“Construction Contract”). (i) If the County receives information in the design or bidding process indicating that the Estimated Project Construction Costs for the Shelter will exceed $13,176,500 by less than ten percent (10%), the County shall provide written notice to each member of the Executive Board (as defined in Section 9(b) below) of the revised estimated construction costs within a reasonable period of time before such additional construction costs are incurred. The Executive Board shall either approve or disapprove the additional construction costs, if any, by written notice to the County, delivered within ninety (90) days after receipt of the County’s notice of the revised construction costs. If any Executive Board member fails to timely approve in writing, the Executive Board shall be deemed to have not approved and the County shall promptly confer with all Cities regarding the additional construction costs and any means by which such additional construction costs may be minimized. (ii) If the County receives information as part of the design or bidding process indicating that the Estimated Project Construction Costs for the Shelter will exceed $14,500,000, the County shall immediately provide written notice to each City of the revised estimated construction costs (“Excess Construction Costs”) and confer with the Cities as to whether to authorize the Construction Contract or reject all bids. Each City shall either approve or disapprove the Excess Construction Costs resulting in Estimated Project Construction Costs exceeding $14,500,000 by written amendment delivered to the County within ninety (90) days after receipt of the County’s written amendment. If the decision is to authorize the contract, the County shall prepare and deliver to the Cities a written amendment to this Agreement amending Section 2(b) to increase the not-to-exceed amount. If any City fails to timely approve in writing, the City shall be deemed to have disapproved. Should a City(ies) disapprove the Excess Construction Costs, the County will immediately confer with all Cities in an attempt to reconcile the disagreement. Should the Parties be unable to reach agreement, the measures shall be taken to reduce the costs below $14,500,000 and in no such event shall the Parties be liable for Excess Construction Costs absent a written amendment to this agreement. (iii) If a City chooses to not participate in the shelter construction at that time, the City is allowed to withdraw from this agreement and pay its proportionate share of all costs incurred as of the date of withdrawal. The date of withdrawal shall be defined as the date that written notice is received by the County of the City's desire to withdraw due to Excess Construction Costs beyond amounts previously agreed. The County will recalculate future payments of the remaining Parties using revised percentages of shelter use with the methodology in Section 6(a). b) Authorization for Construction to Begin (i) Upon County’s authorization for Construction to begin, total costs for the Project including any incurred or future hard costs, soft costs, contingencies, and other miscellaneous costs related to Shelter construction will be added to the estimated final co nstruction costs (“Estimated Final Construction Costs”). The Estimated Final Construction Costs will not exceed the Estimated Project Construction Costs (or Excess Construction Costs), unless agreed to in writing by all of the Parties in a written amendment to this Agreement. Should the Parties be unable to reach agreement, measures shall be taken to reduce the costs below $14,500,000 and in no such event Packet Pg. 373 Item 10 Page 3 of 12 shall the Parties be liable for Excess Construction Costs absent a written amendment to this agreement. (ii) If a City chooses to not participate in the shelter construction at that time, the City is allowed to withdraw from this agreement and pay its proportionate share of all costs incurred as of the date of withdrawal. The date of withdrawal shall be defined as the date that written notice is received by the County of the City's desire to withdraw due to Excess Construction Costs beyond amounts previously agreed. The County will recalculate future payments of the remaining Parties using revised percentages of shelter use with the methodology in Section 6(a). c) After Authorization for Construction to Begin (i) If the County becomes aware, after its authorization for Construction to begin, that the costs of construction will exceed the Estimated Final Construction Costs due to unforeseen or other conditions, the County shall provide written notice, to each City of the revised estimated construction costs within a reasonable period of time before such additional construction costs are incurred. Each City shall either approve or disapprove the additional construction costs, if any, by written notice to the County, delivered within ninety (90) days after receipt of the County’s notice of the revised construction costs. If any City fails to timely approve in writing, the City shall be deemed to have not approved and the County shall promptly confer with all Cities regarding the additional construction costs and any means by which such additional construction costs may be minimized. No additional construction costs shall be incurred that exceed $14,500,000 without a written amendment signed by all the Parties. Should the Parties be unable to reach agreement, measures shall be taken to reduce the costs below $14,500,000 and in no such event shall the Parties be liable for Excess Construction Costs absent a written amendment to this agreement. (ii) If a City chooses to not participate in the shelter construction at that time, the City is allowed to withdraw from this agreement and pay its proportionate share of all costs incurred as of the date of withdrawal. The date of withdrawal shall be defined as the date that written notice is received by the County of the City's desire to withdraw due to Excess Construction Costs beyond amounts previously agreed. The County will recalculate future payments of the remaining Parties using revised percentages of shelter use with the methodology in Section 6(a). 4. Financing a) County Advance of Funds. The County shall advance funds required to pay for the costs of construction of the Shelter. The County intends to finance the funds it advances, including County in house soft costs. i) County Sole Discretion as to Financing Terms. The Cou nty, at its sole discretion, shall determine financing terms based on market rates and terms available at the time of financing. The anticipated financing interest rate is estimated to be between 3.5%-5%, based on a 25-year term, see Exhibit D. The Count y may finance the Estimated Final Construction Costs (hard, soft, design, etc.) for the Shelter in addition to customary out of pocket costs to obtain financing, if any. The County may choose to provide in-house financing, provided the interest rate charged to the Cities does not exceed commercially available rates for like projects and terms of financing are equal to or more favorable to Cities than terms otherwise available to the County. (1) The County will provide notification to the Shelter Executive Boa rd of its intentions regarding external or in-house financing at least 30 days prior to taking action on Packet Pg. 374 Item 10 Page 4 of 12 financing. Said notification will include final estimates of financing costs and anticipated interest rates. (2) Should the Cities desire to have costs identified as “Costs Shared Proportionally by Cities Only” in Exhibit D included in any financing, the Cities shall provide written notification to the County by October 31, 2017. Should all Cities fail to provide written notice, the “Costs Shared Proportionally by Cities Only” will be proportionally allocated to each of the Cities as shown in Exhibit C and billed accordingly, with a payment due date of January 1, 2018. ii) Estimated Project Financing Costs. The financing costs are estimated to range from $7,556,392 to $11,618,328, as shown in Exhibit D, depending on the applicable interest rate and whether there are out of pocket costs to obtain financing (collectively “Estimated Project Financing Costs”). If the actual interest rate is higher or lower than that estimated on Exhibit D, the actual financing costs will vary. 5. Total Estimated Project Costs/Total Project Costs. a) The Estimated Final Construction Costs and the Estimated Project Financing Costs are jointly referred to as the Total Estimated Project Costs. Once the Shelter has been constructed and financed, the County will prepare a final cost summary of the actual construction and financing costs incurred by County in connection with the Shelter, excluding any costs that this Agreement expressly provides shall be excluded from the calculation, to establish the total project costs and annual repayment schedule based on the financing. Upon request, a City may review back up material for the summary. After review and adjustment (if any) of the final cost summary by all Parties, the approved final cost summary shall be known as the Total Project Costs. No City shall unreasonably delay or disapprove the Total Project Costs. 6. Allocation of Total Project Costs. a) Allocation Based on Percentage of Shelter Use. Each Party shall pay its share of the Total Project Costs, based on the annual repayment schedule associated with the financing. Each Party’s share shall be based upon that individual Party’s percentage of shelter use. Shelter use is defined as the number of shelter services (impounds, quarantines, animal surrenders, confiscations, euthanasia requests, etc.) originating from, or requested by, an individual Party’s jurisdiction and/or its residents. Each Party’s share shall be determined annually by the County as part of their normal record keeping processes. The individual Party’s shelter use percentage shall be calculated using the total number of shelter services allocated to an individual Party over the preceding three full fiscal year periods, divided by the total number of all shelter services provided to all Parties over the same preceding three full fiscal year periods. %𝑆�𝑒𝑙𝑟𝑒𝑟 𝑆𝑟𝑒=( 𝑃𝑎𝑟𝑟𝑦#𝑆�𝑒𝑙𝑟𝑒𝑟 𝑆𝑒𝑟𝑣�ℎ𝑐𝑒𝑟 𝑌𝑒𝑎𝑟1 +𝑃𝑎𝑟𝑟𝑦 #𝑆�𝑒𝑙𝑟𝑒𝑟 𝑆𝑒𝑟𝑣�ℎ𝑐𝑒𝑟𝑌𝑒𝑎𝑟 2 +𝑃𝑎𝑟𝑟𝑦 #𝑆�𝑒𝑙𝑟𝑒𝑟 𝑆𝑒𝑟𝑣�ℎ𝑐𝑒𝑟𝑌𝑒𝑎𝑟 3 ) (𝑆𝑜𝑟𝑎𝑙#𝑆�𝑒𝑙𝑟𝑒𝑟 𝑆𝑒𝑟𝑣�ℎ𝑐𝑒𝑟𝑌𝑒𝑎𝑟 1 +𝑆𝑜𝑟𝑎𝑙 #𝑆�𝑒𝑙𝑟𝑒𝑟 𝑆𝑒𝑟𝑣�ℎ𝑐𝑒𝑟𝑌𝑒𝑎𝑟 2 +𝑆𝑜𝑟𝑎𝑙 #𝑆�𝑒𝑙𝑟𝑒𝑟 𝑆𝑒𝑟𝑣�ℎ𝑐𝑒𝑟𝑌𝑒𝑎𝑟 3 ) Exhibit C indicates the percentage of each Party's actual use of the existing Animal Services shelter for the Fiscal Years 2013-14, 2014-15, and 2015-16. Adjustments to each Party’s annual allocation of Total Project Costs shall be adjusted annually based on the previous 3-year trailing average of the percentages of shelter use. b) Reallocation in the Event of Withdrawal or Termination. In the event that a Party withdraws or terminates under Section 8 below, the allocation of each Party’s share of Total Project Costs shall be adjusted upward for the remaining parties for the subsequent calendar year. The annual calculation and any associated adjustments shall be made by December 31st of each year and shall be due on July 1st of the next fiscal year. Packet Pg. 375 Item 10 Page 5 of 12 7. Use of Shelter a) The Shelter shall only be used as an Animal Services facility. No other County department or agency or other person or entity shall use any portion of the Shelter without the prior written consent of the Operations Committee (as defined in Section 9 (a) below). Such use shall be accompanied by the payment of an appropriate rental charge. 8. Termination and Withdrawal a) Withdrawal Prior to Authorization of Construction/Payment of Allocation of Soft Costs. i) Any Party may withdraw from this Agreement prior to County’s authorization of the Construction to begin by giving a minimum of one (1) year’s written notice to all Parties and by payment of its share, based on the allocation set forth in Section 6, above, of costs incurred by County prior to date of receipt of notice of withdrawal. Notice shall be deemed received on the date of personal delivery, or if mailed by U.S. mail, five (5) days after date of mailing. Such costs shall be reasonably determined by County and a majority of the Parties of the Executive Board, excluding any Party(ies) electing to withdra w. Any withdrawing Party shall pay its share by the effective date of its withdrawal. A withdrawing Party who withdraws prior to October 31, 2017 shall not be required to pay any portion of financing costs, regardless of whether outside financing or in -house County financing is ultimately provided. Any payment of soft or hard costs by a withdrawing Party shall be deleted from the amount to be financed. The County will recalculate future payments of the remaining Parties using revised percentages of shelter use with the methodology in Section 6 a). b) Withdrawal After Construction Begins /Payment of Allocation. i) Any Party may withdraw from this Agreement after the County’s authorization of construction begin, by providing a minimum of one (1) year’s written notice to all of the other Parties and prepaying its entire allocation of the Total Project Costs by the effective date of its withdrawal. If a Party withdraws from this Agreement prior to October 31, 2017, any estimated financing costs shall be deducted from the Total Project Costs before calculating the withdrawing Party’s Total Project Costs share. If County provides in-house financing, any finance or interest charge accruing or payable after the withdrawal shall be deducted from the Total Proj ect Costs before calculating the withdrawing Party’s share of the Total Project Costs. Withdrawal from the Agreement shall be effective as of December 31 of the year stated in the written notice. The County will recalculate future payments of the remaining Parties using revised percentages of shelter use with the methodology in Section 6 a). c) The County shall not terminate a City’s access to or use of the Shelter if the City is not in default of its payment obligations. For the purposes of this Agreement, a City shall be deemed to be in default if said City is sixty (60) calendar days or more in arrears on any payment required under this Agreement. (i) Should the County desire to terminate a City’s access or use of the Shelter for default of its payment obligations, the County shall include any non-defaulted Cities, at the non-defaulted Cities’ sole discretion, in negotiations with the defaulted City, prior to their termination. (ii) The County shall retain final decision authority to terminate any City’s access to or use of the Shelter for default of said City’s payment obligations. 9. Animal Shelter Operations a) An Operations Committee comprised of the County’s Health Agency Director or his/her designee and a subset of City Managers or their designees shall be formed. At their sole discretion, all Parties may be represented on the Operations Committee. Packet Pg. 376 Item 10 Page 6 of 12 b) An Executive Board composed of the County Administrative Officer (CAO) and a subset of the City Managers (2-3) for each of the three Cities, or their designees, shall consider significant policy or budget changes and make recommendations prior to policy implementation or budget adoption for the Shelter. c) The Executive Board meetings shall be held as needed and in conjunction with the existing monthly City Manager/CAO meeting. At a minimum, “Animal Services” shall be a standing item that is considered twice in a calendar year. While any Party may request that “Animal Services” be added to the agenda of any City Manager/CAO monthly meeting, it wi ll be the responsibility of the chair of the meeting to ensure Animal Services is placed on the agenda and satisfies the minimum number of meetings required by this Agreement. d) If the City Managers’ recommendation is different from that of the CAO on budget or policy matters, the County shall include the City Managers’ recommendation in any related staff report to the Board of Supervisors and provide a summary of the nature of any disagreement. e) Final policy and budgetary authority for Shelter operations reside with the County Board of Supervisors. f) Future Services Contracts shall be for 3-year terms. g) If a City chooses to provide its own field services, it must provide to all Parties, a one (1) year’s written notice of its intent to provide its own services and to terminate, or (if applicable) not to renew, its Services Contract with the County, except as otherwise expressly provided in its Services Contract with the County, h) Service Contracts shall be separate from the Parties’ obligations to finance and pay their proportional and allocated shares of Total Project Costs for the Shelter. i) The County’s repayment obligation of its share of the Total Project Costs shall not be included in the calculation of the Shelter’s operating costs. The County shall charge no rent for the Shelter or Shelter Property or otherwise attempt to obtain compensation from the Cities for those items identified in Appendix D as “County Only Costs”. j) Any City shall have the ability to provide its own separate field services. The costs for accessing the Shelter shall be reasonably determined by the County after consulting with the Executive Board and shall only be for the fair share reasonable operating costs for Shelter operations. k) Any City that elects to not participate in Shelter Total Project Costs shall immediately cease as a Party to this Agreement and the County shall not be required to provide any animal services to such City. Such City shall be required to provide its own animal services and shelter, in accordance with all applicable laws and statues, effective on a date mutually agreed to by the City and the County. If the City and the County are unable to mutually agree to a date, termination will be effective upon the expiration of the City’s existing Service Contract or the date a Certificate of Occupancy is issued for the new Shelter, whichever occurs first. 10. Animal Shelter Planning a) The Parties agree to form an ad-hoc value engineering team consisting of up to three (3) City representatives and a minimum of two (2) County representatives. City representatives shall fully participate with the County to assist with investigating and identifying the most effective and efficient methods to construct a Shelter that meets all Parties’ existing and fut ure animal service’s needs. The value engineering team shall meet as needed and provide input with architects, designers, construction managers, and engineers during the development of plans and specifications for the Shelter. b) Prior to the authorization of the Construction Contract, the Executive Board shall be presented project plans and estimated budgets, and provide a recommendation that will be included in the CAO staff report to approve the contract by the Board of Supervisors. Packet Pg. 377 Item 10 Page 7 of 12 11. Effective Date a) Except as set forth above, this Agreement shall be effective for the period from January 5, 2017 until each Party has made the last payment required under Section 6 or, if applicable, Section 8, of this Agreement 12. Entire Agreement a) This is the entire agreement among the Parties with respect to the Project and supersedes any prior written or oral agreements with respect to the Project. In the event of a conflict between the terms of this Agreement and the Services Contract, the terms of this Agreement shall p revail. 13. Assignability a) Except as otherwise expressly provided for herein, no Party shall assign any of its obligations or rights hereunder without the written consent of all Parties. 14. Notices a) Any notices required to be given pursuant to this Agreement shall be given in writing and shall be mailed to all Parties to the Agreement, directed to the County Administrative Officer and County Counsel, and to the City Manager or City Administrative Officer and City Attorney of each City. 15. Audit a) The Cities may inspect and/or audit all records and other written materials used by County in preparing the Total Project Costs and annual invoices to each City. 16. Good Faith Efforts a) The Parties shall each act in good faith in performing their respective obligations as set forth in this Agreement and shall work diligently to maintain their longstanding cooperative relationships. 17. Amendment a) This Agreement may only be amended in writing, signed by all Parties. IN WITNESS WHEREOF, by their execution below, the Parties agree to be bound to the obligations stated herein, and the Board of Supervisors of the COUNTY OF SAN LUIS OBISPO has authorized and directed the Chairperson of the Board of Supervisors to execute this Agreement for and on behalf of the County, and the Cities of ATASCADERO, ARROYO GRANDE, GROVER BEACH, MORRO BAY, PASO ROBLES, PISMO BEACH, AND SAN LUIS OBISPO have caused this Agreement to be subscribed by each of their duly authorized officers and attested by their Clerks. Dated: _______________ COUNTY OF SAN LUIS OBISPO _____________________ ____________________________ Clerk of the Board Dated: _______________ CITY OF ATASCADERO _____________________ ____________________________ City Clerk By: Packet Pg. 378 Item 10 Page 8 of 12 Dated: _______________ CITY OF ARROYO GRANDE _____________________ ____________________________ City Clerk By: Dated: _______________ CITY OF GROVER BEACH _____________________ ____________________________ City Clerk By: Dated: _______________ CITY OF MORRO BAY _____________________ ____________________________ City Clerk By: Dated: _______________ CITY OF PASO ROBLES _____________________ ____________________________ City Clerk By: Dated: _______________ CITY OF PISMO BEACH _____________________ ____________________________ City Clerk By: Dated: _______________ CITY OF SAN LUIS OBISPO _____________________ ____________________________ City Clerk By: Packet Pg. 379 Item 10 Page 9 of 12 EXHIBIT A Animal Services Facility The quantities listed below were derived from a review of the existing Animal Services facility, the 2010 "Needs Assessment, Feasibility, and Building Program Study" by Shelter Planners of America, and meetings with Animal Services Manager Eric Anderson. Building Floor Area: 16,000 square feet Outdoor Runs: 3,000 Incinerator, Cold Storage: 2,000 Sally Port, Truck Wash, Truck Parking (8 trucks): 4,200 Disaster Response Equipment: 1,200 Visitor Parking (15 spaces): 5,300 Staff Parking (20 spaces): 7,000 Large Animal Pens: 27,000 Subtotal: 65,700 Additional 20% for Circulation, Landscaping: 13,140 TOTAL: 78,840 square feet Packet Pg. 380 Item 10 Page 10 of 12 EXHIBIT B 865 Oklahoma Ave Packet Pg. 381 Item 10 Page 11 of 12 EXHIBIT C (Number of Shelter Service Provided) Cities City Name 2013-14 2014-15 2015-16 Total Percent Full Yr. Full Yr. Full Yr. 1 Arroyo Grande 286 7% 427 11% 291 8% 1,004 8.39% 2 Atascadero 476 12% 600 15% 643 17% 1,719 14.37% 3 Grover Beach 167 4% 142 4% 135 4% 444 3.71% 4 Morro Bay 126 3% 143 4% 118 3% 387 3.23% 5 Paso Robles 724 18% 734 18% 792 21% 2,250 18.81% 6 Pismo Beach 57 1% 61 2% 54 1% 172 1.44% 7 San Luis Obispo 482 12% 486 12% 479 12% 1,447 12.09% 99 Unincorporated 1,745 43% 1,464 36% 1,332 35% 4,541 37.96% 4,063 4,057 3,844 11,964 100.00% Packet Pg. 382 Item 10 Page 12 of 12 EXHIBIT D Packet Pg. 383 Item 10 Page intentionally left blank. Packet Pg. 384 Item 10