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8.8 Agr for Building Authority CITY OF SALINA REQUEST FOR COMMISSION ACTION DATE TIME 01/08/98 4:00 P.M. AGENDA SECTION: ORIGINATING DEPARTMENT: APPROVED FOR NO. 8 City Manager AGENDA: ITEM NO. 8 BY: Dennis M. Kissinger BY: Item: Resolution 96-4968 A Resolution approving a Restatement of Agreement between the City of Salina, Saline County and USD #305 regarding the Saline County-City Building Authority. Background: The original city-county-school district interlocal agreement authorizing construction of the City- County Building and establishing the Building Authority was entered into in 1965. During 1995, the Board of Education relocated its administration offices to a former school building, thus vacating that space. This restatement of agreement is necessary to: 1. Adjust the Building Authority structure to replace the school board representative with a district court representative. 2. Clarify the rights responsibilities, financial obligations and equity interests of the parties. This agreement has been reviewed by the parties involved, their respective legal counsel and the Building Authority. Recommended Action: Consider adoption of Resolution No. 96-4968. RESTATEMENT OF SALINA INTERLOCAL COOPERATION AGREEMENT This Restatement of Agreement is made and entered into this day of January, 1996, by and between THE BOARD OF COUNTY COMMISSIONERS OF SALINE COUNTY, KANSAS (the "County"), THE CITY OF SALINA, KANSAS (the "City"), and THE BOARD OF EDUCATION OF U.S.D. #305, formerly known as the Board of Education of the City of Salina, (the "School District"). Recitals A. Pursuant to the Interlocal Cooperation Act of Kansas (K.S.A. 12-2901, et seq.) the County, the City, and the School District entered into the Salina Interlocal Cooperation Agreement dated March 22, 1965, (the "Agreement") to provide for the acquisition of land and the construction, equipping, operating, and maintenance of a building and parking area to house the county offices and courts, the city offices and courts, and the school district offices (the "Building"). B. By the Agreement the Saline County-City Building Authority (the "Building Authority") was established, with the respective shares of operation, maintenance, and administration costs of the project to be borne by the County, City, and School District, as determined by the Authority on the basis that actual use by each related to the aggregate total use. C. Title to the Building was vested in the Authority as Trustee for the County, the City, and the School District with the "beneficial ownership interest" of each to be in the proportion that its respective share of the cost of original acquisition bore to the aggregate cost of the original acquisition, as follows: County 47.17% City 41.51% School District 11.32% D. The School District has made alternative arrangements for the housing of its administrative offices, prompting the need for this Restatement of the Agreement in order to relieve the School District from any ongoing responsibility or expense relating to the Building, while preserving its beneficial ownership interest in the Building. THE PARTIES agree to this Restatement of the Agreement as follows: 1. Building Authority. Management, operation, and maintenance of the Building shall continue to be carried out by the Building Authority established by the Agreement. Title to the Building shall remain vested in the Building Authority as trustee for the County, the City, and the School District, and the respective beneficial ownership interests of the County, the City, and the School District shall remain as stated above. 2. Building Authority Structure. As provided in the Agreement, the management and administration of the Building Authority shall continue to be vested in a board of directors (the "Board of Directors"). The Board of Directors shall be restructured to include the following seven (7) members: a. the three (3) County Commissioners; b. two (2) City Commissioners; c. one (1)judge or member of the court staff appointed by the Administrative Judge of the Saline County District Court; and d. one (1) citizen of Saline County to be chosen by a majority of the six (6) members set out above at the annual organizational meeting of the Board of Directors. If the six members of the Board of Directors set out above are unable to choose this seventh member by a majority vote at the annual organizational meeting, this seventh member shall also be appointed by the Administrative Judge of the Saline County District Court. Each member shall hold office until that member's successor is appointed. In the event of a vacancy for any cause, a successor to fill the vacancy shall immediately be chosen in the same manner as the member whose position is vacant. 3. Building Authority Powers. The Board of Directors shall, by majority vote, have the power to: a. enter into contracts. b. equip, operate, and maintain the Building. c. prepare an annual budget. d. employ such professional consultants, legal counsel, and other personnel it deems necessary to carry out its responsibilities. 4. Release of School District. The County and the City release the School District from any and all further responsibility, liability, or expense associated with the ongoing operation and maintenance of the Building. In consideration for such release, the School District relinquishes any right of future use of the Building, while retaining its beneficial ownership interest for the limited purpose of sharing in the net sale proceeds if the Building is ever sold. 5. Indemnification of School District. From and after the date of this Restatement of the Agreement, the County and the City shall hold harmless and indemnify the School District, its agents and employees, against all liability, loss, damage, expense, and judgment, including attorneys' fees so incurred, relating to the use of the Building by the County and the City. In addition, such indemnity shall extend to any liability imputed to the School District resulting from the County's or the City's failure to comply with all federal, state, county, and city laws, ordinances and regulations, including but not limited to, the Americans with Disabilities Act and all environmental laws. Each party shall give immediate written notice to the other of all claims, actions, or proceedings brought against the party giving such notice. The County and the City agree to defend against all claims brought or actions filed against the School District with respect to the County's or the City's use of the Building, whether such claims are rightfully or wrongfully brought or filed. The School District agrees that the County and the City may employ attorneys of its own selection to appear and defend the claim or action on behalf of the School District, at the sole expense of the County and the City. The County and the City shall have control of the defense in any such lawsuit and negotiations relating to its settlement. The School District shall assist the County and the City as reasonably requested by the County and the City regarding such lawsuit. The County and the City agree to reimburse the School District for all expenses, costs, and attorneys' fees incurred by the School District in the enforcement of any part of the County's and the City's agreement to indemnify the School District. 6. Sharing of Operating Costs. The County and the City shall continue to share the cost of operating and maintaining the Building (the "Operating Costs"). The County's and the City's respective shares of the Operating Costs shall be determined by the Board of Directors on the basis of the ratio between each entity's allocated floor space in the Building and the total floor space allocated to both the County and the City. The County's allocated floor space for purposes of this Restatement shall include the floor space occupied by the Saline County District Court. [For example: If 60,000 square feet have been allocated to the County, 40,000 square feet to the City, and 20,000 square feet to common area; the County's share of the operating costs would be 60,000/100,000 or 60%, and the City's share would be 40,000/100,000 or 40%.] 7. Alterations, Improvements, or Fixtures. Any structural alteration of the Building must be pre-approved by the Board of Directors. Except for the cost of any labor performed by Building Authority personnel, the County or the City shall each pay the cost of any additions, alterations, improvements, fixtures, or capital outlays acquired or installed at its request for use in the floor space allocated to it. The cost of additions, alterations, improvements, fixtures, or capital outlays acquired or installed for the common use and benefit of the County and the City shall be shared on the same basis as Operating Costs as outlined in paragraph 5 above. 8. Allocation of Floor Space - Other Governmental Uses. The County and the City acknowledge that as of the date of this Restatement, all of the floor space in the Building has been allocated to either the County, the City, or common area. Any request by either the County or the City to alter the allocation of space within the Building shall be addressed in the following manner: a. Request for additional space. Either the County or the City may submit a request for an allocation of additional floor space to the Board of Directors. If the other entity consents to the request, the Board of Directors shall reallocate the floor space as requested. If the other entity objects to the request, the Board of Directors shall convene a hearing and after hearing presentations by the County and the City, shall allocate the floor space in question on the basis of the more compelling need. b. Request to decrease space. Either the County or the City may submit a request for a decrease in allocated floor space to the Board of Directors. If the other entity agrees to assume the additional floor space in question, the Board of Directors shall reallocate the floor space as requested. If the other entity does not wish to assume the floor space in question, the Board of Directors may either deny the request or designate the floor space in question as available for lease for other governmental uses. Following the designation of floor space as available for other governmental uses, the Board of Directors may then lease that floor space to any governmental tenant it deems appropriate and that will not disqualify the Building from real property tax exemption. Any rents received from leased space shall be treated as revenue to the Building Authority for purposes of its overall budget. Any expense associated with the leased space shall be treated as Operating Costs. 9. Annual Budget. No later than of each year, an annual budget of proposed expenditures for maintenance and operation of the Building shall be prepared by the Board of Directors and submitted to the County and the City for their approval. The budget shall set forth the estimated cost allocation of all budgeted items based upon the terms of this Restatement of Agreement. Following approval of the budget by both the County and the City, each entity shall appropriate funds necessary to pay its share of the budget requirements. 10. Sale of Building. The Building may be sold upon the joint resolution of the County, the City, and the School Board. If the Building is sold, the net proceeds shall be divided between the County, the City, and the School Board, as their beneficial ownership interests appear. The Building Authority will be dissolved following the closing on a sale of the Building. 11. Duration of Restatement. This Restatement of the Agreement shall remain in effect until either: a. its amendment, restatement, or termination in writing by agreement of the County, the City, and the School District; or b. the sale of the Building and dissolution of the Building Authority, at which time this Restatement of Agreement shall terminate. EXECUTED the day and year first above written. BOARD OF COUNTY COMMISSIONERS, SALINE COUNTY, KANSAS By: Gary Hindman, Chairman Attest: Shirley Jacques, County Clerk BOARD OF CITY COMMISSIONERS CITY OF SALINA, KANSAS By: John Divine, Mayor Attest: Judy D. Long, City Clerk BOARD OF EDUCATION - U.S.D. No. 305 By: Don G. Lamb, President Attest: Michael Soetaert, Clerk Approved this ~ day of , 1996, by the Attorney General of the State of Kansas. KANSAS ATTORNEY GENERAL Carla Stovall