4.8. SR 07-07-2014 City of
Elk - Request for Action
River O.
To Item Number
Mayor and City Council 4.8
Agenda Section Meeting Date Prepared by
Consent July 7, 2014 Suzanne Fischer,Director CODD
Item Description Reviewed by
Revised Agreement with Tri-County Action Cal Portner, City Administrator
Program,Inc. (Tri-CAP) Reviewed by
Action Requested
Approve,by motion,the revised agreement with Tri-CAP for transit vehicle storage and maintenance.
Background/Discussion
City Council approved the original agreement with Tri-CAP at their June 2, 2014, meeting. Upon final
review by their Executive and Finance Directors, our contact,Linda Elfstrand shared two concerns.
The first being Tri-CRP's work comp limits are $500,000 and not$1,000,000 as stated in the
agreement. Ms. Elfstrand said the agency was not currently in a position to raise those limits and
requested they be reduced. Chris Smith,LMC Risk Management Attorney,was contacted and said this
was not an unreasonable request and$500,000 is the standard coverage level for this type of agreement.
The other request from Ms. Elfstrand was to remove the specific make, model, and VIN information of
the vehicles as they may change prior to their arrival or be exchanged with similar models during the term
of the agreement. Simply including three (3) transit vehicles would suffice.
The attached agreement was revised to reflect these issues.
Financial Impact
None
Attachments
■ Revised Tri-CAP agreement
P a w E A E U a r
Template Updated 4/14 INIM UREI
Contract/Agreement 14--071
Vehicle Storage and Maintenance Agreement by and Between City of
Elk River and Tri-County Action Program, Inc. (Tri-CAP)
This Agreement ("Lease") is made and entered into on the 2nd day of June, 2014, by and between the
City of Elk River ("Lessor"), and Tri-County Action Program,Inc. ("Lessee") a Minnesota non-
profit corporation,located at 1200 23rd Avenue South,Waite Park,MN 56387.
1. LEASE OF SPACE. Lessor agrees to lease to Lessee, at Lessor's Maintenance Facility
("Facility") located at 19000 Proctor Road,the following spaces:
a) Storage Space ("Storage Space") for storage of up to three (3) transit vehicles. The
Storage Space shall be within the facility in areas designated by Lessor. ffofm time to time and Imay
be used to park up to three (3) of the following vehicles: 2012 international 1C (VIN
5kv.1-EXW5KK2D14321646); 2012 international Goshen (VIN SWEASAAA19DJ154189); 2009
Chevfolet 5500 Star Trans (VIN 1GBG5V1919F408645), or 2008 Chevfolet 5500 Star Trans (VIN
b) Office Space ("Office Space"). Lessee will r furbish, furnish and lease approximately
246 square feet of space in the Facility Mezzanine for office and break room purposes. All work
shall be done by Lessee to Lessor's standards, but in compliance with all applicable building codes
and will be accomplishe „lzet�ze. :; the hours of 7:30 a.m.,., p.m.,Ttid will not interfere with any
City operations.
c) Employee Parking. In addition to Storage Space and Office Space,Lessee's drivers
may park personal vehicles outside the Facility=in areas designated by Lessor.
d) Access. Lessee's access to the Facility shall not include access to the front office,
maintenance garage, mechanic shop,Lessor's computer bay or any other area within the Facility
without approval by and supervision of Lessor's Streets Superintendent, Streets Lead or Fleet Lead.
e) Equipment. Lessee is responsible to provide their drivers with all electronic
equipment,materials and supplies required for their work.
2. TERM. The Lease shall commence on June 2, 2014 and continue for a base period ("Term") of
twenty four (24) months through May 31, 2016,unless terminated earlier. Either party may
terminate the lease earlier for any reason with a minimum of ninety (90) days written notice to the
other party.
3. OPTION TO EXTEND. Lessee may extend the lease for one (1) two (2) year period following
expiration of the initial term,by giving notice to Lessor at least six (6) months prior to the expiration
of the Term. In the event of extension,Lessor and Lessee shall agree on any change in the base rent
or conditions of this Lease. Changes to this Lease shall only be made by written amendment. In the
event Lessor and Lessee cannot agree on changes,Lessor may then notify Lessee in writing, a
minimum of ninety (90) days prior, that the Lease shall be terminated as specified.
1
4. RENT.
a) Storage Space. Lessee agrees to pay Lessor a minimum rent for Storage Space of
$6.00 per square foot per vehicle per month, for a maximum of three (3) vehicles with a vehicle
length no greater than thirty-six (36) feet, for the Term of this Lease
b) Office Space. Lessee agrees to pay Lessor a minimum rental rate of$184.50 per month for
the Office Space.
c) Administrative Fee. In addition,Lessee will pay a monthly administrative fee of
$125.00 for cleaning services,invoicing, reports (fuel, mileage, maintenance, and repair records) and
access cards. In the event Lessee requires IT services from the City,Lessee will be charged a rate of
$65.00 per hour and included in Lessee's monthly invoices.
d) Base Rent. Total rental for Storage Space, Office Space and Administrative Fees
("Base Rent") shall be $309.50 per month for the initial Term of this Lease, subject to Lessor's right
to review periodically and adjust with 90 day written notice to Lessee. Lessee shall pay Base Rent by
the 15"' of each month throughout the term of this Lease. Lessee and Lessor will meet on a
monthly basis and as needed to review itemized monthly charges to be billed to and paid by Lessee
the following month. Base Rent includes all utilities and public liability and property damage
insurance covering the Facility, but it does pg .nclude any liab; *ty property damage insurance on
Lessee property.
5. USE. The premises leased are to be use d"for vehic e storage and""ffice Space and shall be used
by the Lessee to serve the best interests and welfare of public. Lessee is responsible to maintain the
Storage Space and Office Space to acceptable standards and to properly dispose of trash in
receptacles. Lessee will not interfere with City equipment,materials or operations. The Leased
premises shall not be used for any unlawful purposes but in general may be used to carry on
business in connection with the aforementioned purpose and incident thereto not forbidden by the
laws of the State of Minnesota, or the ordinances of the city of Elk River.
6. BUILDING MAINTENANCE. Lessor agrees to maintain the structural soundness of the
Facility and to maintain the roof, outer walls,parking areas and interior common areas.
7. CASUALTY DAMAGE. If the Facility, or any portion thereof,including the areas leased to
Lessee, are,in Lessors sole discretion,rendered substantially unfit for occupancy and use,Lessor
may,in Lessor's sole discretion,restore the Facility or terminate this Lease effective as of the date
Lessor determines the Facility unfit for occupancy. In the event Lessor restores the Facility,Lessee
Base Rent shall abate during the time that Lessee is unable to use the Facility.
8. INSURANCES. In addition to liability insurance, the Lessee needs to maintain workers' comp
coverage on its employees, automobile liability insurance and property coverage on the busses and
any of its property in the building.
1. Commercial General Liability Insurance. Lessee is required to maintain insurance
protecting it from claims for damages for bodily injury and property damage,which may
arise from operations under the Agreement. Insurance minimum limits are as follows:
• $2,000,000—per occurrence
2
• $4,000,000—annual aggregate
• $4,000,000—annual aggregate—Products/Completed Operations
The following coverages shall be included: Premises and Operations Bodily Injury and
Property Damage; Personal and Advertising Injury;Blanket Contractual Liability Products
and Completed Operations Liability.
City must be named as an Additional Insured.
2. Workers' Compensation Insurance. Lessee must provide Workers' Compensation
insurance for all its employees doing work in the leased premises in accordance with the
statutory requirements of the State of Minnesota. The Workers Compensation Insurance
shall include Coverage B, Employer's Liability,with minimum limits as follows:
• $ 5000,000—Bodily Injury by Disease per employee
• $ 5000,000—Bodily Injury by Disease aggregate
• $ 5000,000—Bodily Injury by Accident
3. Commercial Automobile Liability Insurance. Lessee is required to maintain insurance
protecting it from claims for do'wages for bodily injury as well as from claims for property
damage resulting from the ownrship, operation,maintenance or use of all autos which may
arise from operations under this Agreement. Insurance minimum limits are as follows:
• $2,000,000—per occurrence Combined Single Limit for Bodily Injury and Property
Damage
In addition,the following coverages should be included: Owned,Hired, and Non-owned
Automobiles.
4. Property Coverage on Vehicles. Lessee shall procure and maintain in full force and effect
the proper insurance coverage throughout the term of this Agreement to protect Lessee and
Lessor against loss or damage to the motor vehicles caused by collision and other perils,
commonly referred to as comprehensive perils, that include but are not limited to fire,
windstorm,hail, malicious mischief,vandalism,glass breakage and theft. This insurance
shall waive subrogation against Lessor. This insurance shall be primary to any other
insurance available to Lessor and noncontributory to this other insurance. Lessee shall cause
the insurance company providing this insurance to endorse the policy to reflect the
requirements stated herein.
5. Personal Propertage. Lessee shall purchase at its own expense "all risk" fire and
extended coverage insurance insuring Lessee's personal property, furniture, fixtures and
business records against loss from all insurable events.
9. INDEMNIFICATION.
Indemnification by Lessee. Except to the extent limited by this Agreement,Lessee agrees to
defend,indemnify and hold harmless Lessor, and its employees, officials, and agents from and
against all claims, actions, damages,losses and expenses,including attorney fees, arising out of the
3
Lessee's negligence or Lessee's performance or failure to perform its obligations under this
Agreement.
Indemnification by Lessor. Except to the extent limited by this Agreement,Lessor agrees to
defend,indemnify and hold harmless Lessee, and its employees, officials, and agents from and
against all claims, actions, damages,losses and expenses,including attorney fees, arising out of the
Lessor's negligence or Lessor's performance or failure to perform its obligations under this
Agreement.
Risk of Loss and Destruction of Motor Vehicles and Personal Property. During the term of
this Agreement,Lessee assumes and bears the risk of loss for all motor vehicles and personal
property in or about the premises,regardless of cause. If the motor vehicles or equipment is
destroyed, damaged beyond repair, or is lost, stolen or co .versed T essee shall have no further rights
or claims against Lessor.
Risk of Injury to Employees. Lessor shall not be liable for any compensation or benefits to any
employee of Lessee for injury or sickness arising out of the employee's employment and Lessee
hereby agrees to hold Lessor harmless against any such claims.
10. COMPLIANCE WITH LAWS. Lessee will promptly comply with all applicable and valid laws,
ordinances and regulations of Federal, State, County,Munic ,al or other lawful authority pertaining
to the use and occupancy of the leased premises.
11. ASSIGNMENT AND SUBLETTI Lessees all not have the right to assign or sublease
any part or the whole of the demised premises.,,
12. DEFAULT. In the event Lessee shall default in the payment of the Base Rent as provided
herein,and fails to cure such default within 30 days after receipt of notice,-Lessor may,at the option
of the Lessor,terminate this Lease or enforce performance in any manner provided by law. Lessor
shall have the right without further notice to have all Lessee vehicles removed from the Lessor's
property without being deemed guilty of any manner of trespass and without prejudice to any
remedies for arrears of rent or breach of covenant. Lessor may resume possession of the property
and relet the same for the remainder of the term at the best rental such agency or attorney can
obtain for the account of Lessee,who shall pay any deficiency, and Lessor shall have alien as
security for such rental upon the fixtures and equipment belonging to Lessee which are on the
demised premises. In the event Lessee shall default in the performance of any of the terms or
provisions of this Lease other than the payment of monthly rent,Lessor shall promptly notify
Lessee in writing. If Lessee fails to cure such default within 30 days after receipt of such notice, or if
the default is of such character as to require more than 30 days to cure and Lessee fails to
commence to do so within 30 days after receipt of such notice and thereafter diligently proceed to
cure such default, then in either such event Lessor may terminate this Lease or cure such default and
such expense shall be added to the rent otherwise due.
13. VEHICLE MAINTENANCE. At the request of the Lessee,Lessor shall perform routine and
occasional major vehicle maintenance services on Lessee's transit vehicles at the rate of$100.00 per
hour for regular Preventative Maintenance (PM) work and $150.00 per hour for any emergency
services. Lessee shall communicate directly to the Lessor's Fleet Lead regarding vehicle maintenance
4
needs. The Fleet Lead shall determine those instances where outside, subcontract specialty work is
required or if city workload exceeds available service levels for the Lessee.
Lessor shall present to Lessee monthly, or at any time as requested by Lessee,printed invoice work
orders,maintenance history,and any other vehicle maintenance information generated by Lessors'
record keeping program. On or about the 1" of each month,Lessor shall present Lessee with the
prior month's invoice work orders,the sum of which shall be paid by Lessee by the 15th of that
month along with Base Rent.
Lessee shall reimburse the City for any E gie diagnostic software up to $1800 if required
to service the vehicles; Iflltef.,,6019a ,.. eks at,. cost of$18 ; any subsequent program updates at
$400 each and one (1) Tough Book laptop for the shop mechanics at$1300. Lessee shall reimburse
the City for any additional d*nostic software reqpfflfed trucks at a cost o
In addition to the vehicle maintenance service per"Aour a te there Nair'(" icle parts invento rY
mark-
up rate of 30% for parts purchased with Lessor's funds and stored in Lessor's premises, a$7 shop
supplies/materials per hour fee for full Preventative Maintenance (PM) activities (not applicable to
non PM repair activities and mini PM (oil change) activities). Lessor will utilize city staff to operate
wash bay equipment and wash buses at a rate of$25.00 each. Interior
cleaning is the responsibility of the Les ee,
Nothing within this Agreement prevents'Lessee for procuring vehicle maintenance services from an
outside maintenance vendor. In the event outside maintenance services are obtained,Lessor services
will continue on a requested basis and complete vehicle repair invoices from outside vendors shall
be copied and provided to Lessor's Fleet Lead.
The above vehicle maintenance service,vehicle parts inventory mark-up,PM flat supplies, and
vehicle wash rates shall be eligible for annual adjustments at the sole option of the Lessor. Said
adjustments shall take effect for one year periods and shall be communicated to Lessee by Lessor in
writing a minimum of ninety (90) days prior to the adjustment.
14. FUEL. Lessee will have access to Lessor's fuel island pump and will be charged the monthly
state rate per gallon plus 5%. This rate is the average monthly rate based on the daily current market
rate for fuel purchased through the state contract. Lessee's drivers are responsible for fueling
Lessee's vehicles.
15. LATE CHARGES. A late charge equal to ten percent (10%) of total monthly fees shall be
imposed if any sums due for Base Rent or the service of vehicles are not received by Lessee within
twenty (20) days of the prior month's billing.
16. HOURS OF OPERATION. Lessee will operate their business between the hours of 7:00 a.m.
to 5:00 p.m. Monday through Friday. Lessee has the option to extend their service hours from 6 a.m.
to 6 p.m. by providing written notice to Lessor thirty (30) days prior.Vehicles shall leave the storage
premises by 7:00 a.m. and return by approximately 5:00 p.m. Lessee is responsible to ensure that the
Facility is secured at the end of each business day. Lessee's use of Storage Space shall not to limit
Lessor's ability to efficiently access materials, supplies and equipment stored in same location.
Lessee's vehicles may be moved by Lessor if they limit or prevent Lessor from conducting normal
5
business operations. By prior appointment only,vehicles may be retrieved from or returned to
storage outside of regular business hours at the expense of the Lessee.
17. GENERAL. No hazardous or noxious materials may be stored in any vehicle. This Agreement
constitutes the entire agreement among the parties and supersedes all prior agreements or
understandings among the parties with respect thereto.All notices or other communications which
are required or permitted hereunder shall be in writing and delivered personally or sent by first class
mail to Lessor at the address of Lessor, and to Lessee at the address of Lessee. This Agreement shall
be governed by and construed in accordance with the laws of the State of Minnesota.All of the
terms and provisions of this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns. This Agreement shall not be assignable by any
party hereto without the consent of the other parties hereto ;, erson shall be a third party
beneficiary of this Agreement.
{,F
BY SIGNING THIS AGREEMENT LESSEE ACKNOWLEDGES HAVING READ AND
AGREED TO EACH AND EVERY TERM AND CONDITION OF THIS AGREEMENT.
Tri-COUNTY ACTION PROGRAM (LESSEE)
By:
Print Name:
CITY OF ELK RIVER (LESSOR)
By:
John J. Dietz,Mayor
By:
Tina Allard, City Clerk
6