Contract Agreement Salina Community Theatre I S ' , saline community theatre exl
r 4 RECEIVED
DEC 2 3 1988 / 0
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j .CITE' w1AIJAGEi'S OFFICE IT
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December 22 , 1988 N
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Mr. Dennis Kissinger N
City Manager \
City-County Building w
P.O. Box 736 w
Salina, Kansas 67402-0736
Re: Salina Community Theatre (SCT) Addition ( "Project" )
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Dear Dennis:
7
This correspondence will confirm our conference at your m
office on December 20, 1988, which was conducted in response to 3
City Attorney Greg Bengtson" s letter to me of December 9, 1988.
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Consistent with our discussion, could you please make U)
arrangements to place the Project on the City Commission' s agenda
(either for the pre-meeting or regular meeting) on January 9, N
1989, so that the bid process provided for under K. S.A. 13-1017 SI
can be initiated during January 1989 with a view to have a bid A
opening in late January or early February 1989. o
While members of our Building Expansion Committee were 10
disappointed at the outset of our discussion when you voiced some
concerns that might delay the Project, we were all much N
encouraged by your suggestions that the Project could be split w
into two phases, as a means to ensure the City' s compliance with O
K. S.A. 13-1017 and to enable the City to fund its $120, 000
contribution from Block Grant Funds in the 1990 capital QI
improvements budget.
ID
We understand your concerns to principally be twofold.
First, you want to ensure that cash is on hand in the City w
treasury in the entire contract amount before any contract is
awarded on the Project. This concern was articulated by Mr. m
Bengtson, City Attorney, who. was of the opinion that the language 10
of the statute, " [b]efore any type of public improvements is
( sic) commenced, the money to pay for the same must be available v
in the city treasury . . . " , requires an actual deposit of cash 1
in the amount of any project to be available in a special "Salina N
Community Theatre Expansion Account" . While we believe that the a
cash basis law could be satisfied by an irrevocable letter of N
In
. . .
Mr. Dennis Kissinger
December 22 , 1988
Page 2
credit, which would allow us to draw down on principal as needed,
and thus save interest on our interim financing costs, we
acknowledge the City' s concern of complying with the cash basis
law. Perhaps we can be of assistance in securing a favorable
Attorney General opinion that the statute can be complied with by
alternative financing arrangements.
Secondly, and perhaps more importantly from the City' s
perspective, we understand the City' s desire to defer its
contribution to the Project, $120,000, until the 1990 capital
improvements budget, which commences January 1, 1990, is based
upon the possibility that the City' s contribution can be obtained
from grant funds. While we had previously understood the City' s
commitment was budgeted in the 1990 budget, we did not understand
that it was the City' s intent to apply for Block Grant Funds for
such contribution in April of 1989, with the prospect of knowing
whether the grant would be funded by August of that year, or that
a condition of such grant is that the Project not be commenced
until the grant process is complete.
Consistent with your suggestions on ways to proceed with the
Project at this time, we have instructed Mr. Shaver to coordinate
with Messrs. Hoff and Peterson the preparation of bid documents
to provide for maximum bid and contracting flexibility.
Specifically, this will include breaking the Project down to two
phases: a Phase I for the office, scene shop and classroom
portion of the addition ( less elevator equipment, but including
shaft, etc . ) , and a Phase II , which constitutes the balance of
the Project and which principally involves public areas and
provisions for handicap accessibility, which may be funded by
grant money.
It would appear to us that the goals of the SCT and the City
with respect to the Project, which is a substantial improvement
to the City' s principal arts related resource include the
following:
1 . An early approval and finalization of Project
plans and bid documents with a view to obtaining City
Commission approval on January 9, 1989, and as quickly
thereafter as possible, advertising the Project for
contractor bids through the City Clerk in accordance with
the procedure outlined in K. S.A. 13-1017 ;
2 . A bid opening in late January or early February
1989 to take advantage of what is perceived to be an
excellent time to obtain a bid for the Project, hopefully at
a figure substantially under the architect' s estimate;
Mr. Dennis Kissinger
December 22 , 1988
Page 3
3 . Achieving maximum bid flexibility to allow the
City to defer its contribution to the Project to the 1990
capital improvements budget if possible to avail itself use
of block grant money, while allowing construction to begin
as quickly as possible on a Phase I , to enable the SCT to
make application for grant funds from the Kansas Arts
Commission; and
4. Providing for the creation and funding of a
"Salina Community Theatre Project" account in the name of
the City and under the City' s control, which at the time any
contract is entered into, contains actual cash funds or
equivalent in the amount of the relevant contract (Phase I ,
Phase II , or some combination or alternate thereof) .
We at the Salina Community Theatre will work toward
achieving and realizing these goals. We will have Mr. Shaver
coordinate the final preparation of plans and bid documents with
the City staff. We will also report to you and Mr. Bengtson
before the funding commitments that we are working on with local
financial institutions to satisfy the cash funding requirement of
K. S.A. 13-1017, as interpreted by the City Attorney, are
finalized. Moreover, we will work with Mr. Bengtson to determine
if the statute can be complied with by a letter of credit or
other arrangement that would save interim financing costs.
In closing, I would note that the only commitment that the
SCT has entered into with respect to the Project to date has been
the contract with our architect, John Shaver, a copy of which is
enclosed for your information and review. Inasmuch as the City
intends to treat the Project as one totally let by the City,
perhaps the contract should be amended to include the City of
Salina as the Owner and a party thereto. Presumably, Mr.
Shaver' s fees would be paid by the City out of the special
project account.
I am sending a copy of this letter, and the architect' s
contract, to Mr. Bengtson for his review, and to Mr. Shaver for
his information. If you or Mr. Bengtson have any questions at
this juncture, please give me a call .
Ver truly you ,
. Stan Sexton
JSS/cm
Mr. Dennis Kissinger
December 22 , 1988
Page 4
Enclosure
cc : Mr. Greg A. Bengtson
City Attorney
P.O. Box 380
Salina, Kansas 67402-0380
Mr. John A. Shaver
The Shaver Partnership
P.O. Box 1128
Salina, Kansas 67402-1128
Mrs. Janice Allen, President
Salina Community Theatre, Inc.
19 Crestview Drive
Salina, Kansas 67401
Mrs. Dorothy Lynch, Chairperson j
Finance Committee
Salina Community Theatre, Inc .
1855 Valley View Road
Salina, Kansas 67401
Mr. Douglas Exline, Chairperson
Fund Raising Committee
Salina Community Theatre, Inc.
c/o Exline, Inc.
P.O. Box 1487
Salina, Kansas 67402-1487
Mr. Kenneth Klostermeyer
Architect Committee
Salina Community Theatre, Inc.
656 South Santa Fe
Salina, Kansas 67401
Mr. Charles Kephart •
Managing Director
Salina Community Theatre
P.O. Box 2305
Salina, Kansas 67402-2305