HomeMy WebLinkAboutA007 - Council Action Form dated May 28, 2019 ITEM # 34
Date: 05-28-19
COUNCIL ACTION FORM
SUBJECT: HEALTHY LIFE CENTER
CURRENT ESTIMATED COST OF PROJECT:
You will recall from the April 23, 2019 CAF that after increasing the project cost to
$50,648,000 to reflect 2020 dollars and subtracting $2,038,552 in recommended
savings in building costs, the new estimated cost for the total project is $48,609,448.
AMOUNT OF THE BOND ISSUE NEEDED:
As reflected in Table I below, the amount of bond revenue needed to fund the project
itself is $28,609,448. In addition, the City must size the bond issue to cover all of the
costs associated with issuing the bonds. In this case, our Finance Director is suggesting
we plan for issuance costs totaling $455,552 ($348,780 for the Underwriter's Discount,
$105,800 for Cost of Issuance, and $972 for rounding). Therefore, the bond
referendum should be set to authorize the City to issue up to $29,065,000 in G.O.
Bonds for the Healthy Life Center project.
Table I
Source Of Capital Funding Amount
Story County $2,000,000
Heartland Senior Services $3,500,000
Mary Greeley Medical Center $7,000,000
Donations $5,500,000
City of Ames Available Balances) $2,000,000
City of Ames G.O. Bonds For Construction $28,609,448'
TOTAL $48,609,448
City of Ames G.O. Bonds For Construction $28,609,448
City of Ames G.O. Bonds For Issuance Costs $455,552
Total Size Of Bond Issue Needed $29,065,000
AMOUNT OF PROJECTED ANNUAL DEFICIT:
Based on the estimates from our consultants, the first year operating deficit for the
Healthy Life Center is projected to be $404,561. Table II reflects how this estimate was
determined.
Table II
Expenses Expensesi $3,083,413
Revenuel $2,527,557
Operating Deficit $555,856
Additional Annual Subsidy:_
Story Count $100,000
MGMC ($50,318)
Additional$54,682 is directed for Tenant Space Costs)
Heartand Senior Services $977
City of Ames Property Taxes $404,561
PROPERTY TAX IMPACT FROM BOND ISSUE DEBT AND OPERATING DEFICIT:
It should be noted that the Finance Director had already included the impact of the
$455,552 issuance costs when previously calculating the estimated tax impact on our
property owners. Therefore, the estimated tax impact remains as previously
reported on April 23, 2019:
Current Plan
$28,609,448 Bond Issue + $404,561 In
Annual Operations Deficit
For Residential Property Per $100,000
Of Assessed Valuation:
Tax Rate Increase 78 cents
Property Tax Increase In Dollars $44.13
Property Tax Increase in % 7.73%
For Commercial & Industrial Property
Per $100,000 Of Assessed Valuation:
Tax Rate Increase 78 cents
Property Tax Increase In Dollars $69.79
Property Tax Increase in % 7.73%
BOND REFERENDUM WORDING:
The City's Bond Attorney has provided the following wording for the bond referendum
should the City Council decide to proceed with this project.
"Shall the City of Ames, in Story County, State of Iowa, enter into a loan
agreement and issue its general obligation bonds in an amount not exceeding the
amount of $29,065,000 for the purpose of paying the cost, to that extent, of
constructing, furnishing and equipping a Healthy Life Center, including an
aquatic center and therapy pool, exercise facilities, child care and activity areas,
physical therapy and medical rehabilitation facilities, facilities providing care
and services for senior citizens, and public meeting spaces and constructing
necessary public infrastructure improvements?"
TIMING OF THE BOND REFERENDUM:
The State Legislature recently passed a new law which changes the dates that local
governments can call for special elections, like the one contemplated for the Healthy
Life Center. According to the new law, if a city certifies a special election prior to July 1,
2019, a city will have the option to hold an election on August 6, 2019, or September 10,
2019. However, if the certification happens after July 1, 2019, the next possible date for
our special election will be on September 10, 2019. Given the fact that the
negotiation process with the other entities involved in this project has taken
longer than anticipated, it seems advisable to schedule the special election for
September 10, 2019, rather than on August 6, 2019, as originally planned.
This change in the date will be appreciated by those who are concerned that we were
planning to schedule this important election on August 6, 2019 which is a time when
many of our residents are out of town on vacation.
RISKS ASSOCIATED WITH PROCEEDING WITH THE PROJECT:
The Healthy Life Center project is a complex project involving contributions from four
governmental entities, Heartland Senior Services, and donations from more than
seventy private individuals/businesses. Because of its uniqueness, the project
involves a number of risks the City Council must clearly understand and be
willing to accept before proceeding further with this project.
• Three Year Pledges
Under the current scenario, many of the major contributions are pledged over a three-
year period. Therefore, the City Council will be asked to incur debt and obligate funds
for design and construction contracts prior to receiving all of the donations. While we
have the utmost confidence that the individuals who have made the pledges will
follow through with their promises, there is no guarantee that the City will receive
100% of the pledged amounts. Should there be any defaults of these pledges, the
City will have to identify additional funding to complete the project as planned.
The analysis provided in this report is based on donations totaling $5,500,000.
However, to date the City has received copies of pledges totaling $5,352,300 or
$147,700 less than first indicated. It is hoped that the written verification for this one
remaining pledge will be received by the May 28, 2019, Council meeting.
• Contract Duration
The City staff agreed to the Steering Team's request to consider assuming the
responsibility to own and operate the HLC based on the assumption that MGMC,
Heartland, and Story County would continue their financial support for the projected
operating deficit for as long as the facility is in operation.
As we began negotiations with the three entities to finalize formal contracts, we were
informed that the MGMC Board has indicated its willingness to guarantee financial
support for the operating expenses of the Healthy Life Center only for the initial 15 years
of its operation. Likewise, Story County is requiring a finite term for their obligation,
which has been set at 25 years. Therefore, should MGMC and/or Story County not
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agree to extend their contracts with the City past the initial term of their
agreements, the loss of these contributions will significantly impact the Ames
taxpayer who will be responsible for covering their share of the deficit.
• Deficit
It should be emphasized that the $404,561 stated annual operating deficit is only
an estimate and could end up to be greater than anticipated each year. With the
City being responsible for the variable of the deficit, additional property tax
obligation might be required.
In addition, with MGMC and Story County decisions to cap their annual
contributions, only Heartland (with a 10% obligation for the Non-Aquatics shared
space) remains responsible, along with the City, to finance any operational deficit
that might occur in excess of the RDG estimates.
• Future Capital Improvements
Rather than go back to each of the funders in the future to secure additional funding
when major capital improvements are needed to replace deteriorated
infrastructure/major equipment (windows, doors, roof, HVAC, etc.), a replacement
account will be established as an annual operating expense to cover these costs.
It is possible that sufficient funds will not have been accumulated in this
replacement account to pay for a needed replacement if some unplanned event
occurs. In this instance, the City will have to pay for the improvement out of other
city funds or we will have to delay a much needed improvement.
• State Legislature Action To Cap The City's Ability To Raise Property Taxes
As you are all aware, the State Legislature was considering a bill that would significantly
inhibit a city's ability to raise property tax revenues each year making it more difficult to
raise the operating revenue to cover the projected annual deficit for the Healthy Life
Center. Fortunately through the leadership of Mayor Haila, the law that was ultimately
passed is less onerous on cities. Attachment A is a memo from the Finance Director
summarizing the new law. There remains in Chapter 24 of the Iowa Code a provision to
protest a city's budget proposal which could be utilized more often than in the past as
the result of the new state law. (Attachment E)
• Authorization To Use The University Site On Ontario
President Wintersteen is in support of the University leasing their property at Ontario
and Scholl Road for the site of the Healthy Life Center. However, the ultimate approval
of this long-term lease must be granted by the Board of Regents. Unfortunately, the
proposed lease cannot be on the Board agenda any sooner than their August meeting.
While Dr. Wintersteen has indicated the Board does not normally overrule her
recommendation regarding this type of lease, it is possible that the Board would
not approve leasing the site.
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In the meantime, the staff has prepared a lease with similar terms that were approved
by the Board of Regents for the Furman Aquatics Center site. The University staff is
reviewing the proposed agreement.
• No Environment Study Performed On The Site
No environmental study has been performed on the site by the City. Therefore, we
have asked University officials to supply any copies of similar studies that have been
performed on the proposed site. Since the current estimates do not reflect any
additional costs to deal with environmental issues, the construction costs will increase
should any environmental issues be identified as we proceed with construction on the
site.
• Design Work
The three funding partners have agreed to transmit their contribution towards the cost to
construct the Healthy Life Center only after the City takes action to approve a contract
to construct the building. In order to take bids on the project, an
architectural/engineering firm will first have to create design plans. In the unlikely event
that the bids received exceed our construction budget by so much that a decision is
made not to proceed with the project, the City will be responsible for the total cost of this
design work.
PARTNER CONTRACTS:
The staff has prepared the attached contracts for MGMC (Attachment B), Story County
(Attachment C), and Heartland Senior Services (Attachment D) to approve. It is hoped
that they will be finalized by the May 28, 2019, Council meeting.
ALTERNATIVES:
1) The City Council can decide to move ahead with the Healthy Life Center project by
passing a resolution that allows the City to hold a referendum to enter into a loan
agreement and issue general obligation bonds in an amount not to exceed
$29,065,000 for the purpose of paying the cost for constructing and equipping the
Healthy Life Center, and setting the date of the bond referendum for September 10,
2019.
2) The City Council can decide to not move ahead with the Healthy Life Center at this
time because of the cost involved with the project and/or the risks identified above.
3) The City Council can decide to delay making a final decision to move ahead with the
project and attempt to renegotiate greater levels of support from the other funding
partners and/or request more private donations for the project to proceed.
MANAGER'S RECOMMENDED ACTION:
Assuming that the Healthy Life Center remains a top priority of the City Council, that
Council members are well informed as to the risks involved with moving ahead with this
complex project, and a determination has been made by the City Council that the
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benefits to the community outweigh the risks; it is the recommendation of the City
Manager that the City Council approve Alternative #1 as stated above.
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Ames MEMO
Caring People•Quality Programs•Exceptional Service
ATTACHMENT A
Date: May 23,2019
To: Steve Schainker,City Manager
From: Duane Pitcher,Finance Director
Subject: Property Tax Limitation Bill
Senate File 634 was signed into law by the Governor today and places some restrictions on our ability to
levy property taxes to provide services to our citizens. It also requires some additional steps to adopt the
City's budget. We will provide more information in the near future as the Iowa Department of
Management sets forth budget procedures under the new law. The new law will apply beginning with our
next budget year(FY 20/21). Below is a summary of the changes.
1. The deadline for certification of the budget is changed from March 15 to March 31.
2. Adoption of a budget with a property tax levy (excluding debt service) of greater than 102% of
the current year levy will require a two-thirds majority of the City Council.
3. There is an additional step in the process which involves a public hearing and the Council
adopting a "maximum levy" resolution. If the maximum levy resolution exceeds the amount of
the current year levy, a statement of the major reasons for the increase is required. If the
maximum levy exceeds the 102%described in number 2 above, a two thirds majority is required
for passage.
4. In all cases a second hearing is required to adopt the actual budget is required. This process is
similar to our current budget process and cannot exceed the amount of the maximum levy
resolution. A simple majority is required for final adoption.
Finance Department
515.239.5113 nwin 515 Clark Ave.P.O.Box 811
515.232.5120 fox Ames,IA 50010
www.C ityofAm es.of g
5. There some additional public notification steps required including posting on the City's internet
website and posting on the City's social media sites.
The deadline for citizen filing of a budget protest is extended to April 10 to correspond with the later
budget certification date.
Public hearings will continue to have the not less than 10 and not more than 20 day notice requirements
and with two hearings required this will obviously require some changes to our budget timeline. At first
review it appears that the biggest timing challenge would occur if Council does not pass the new
"maximum levy" resolution at the first public hearing. This would require a second "maximum levy"
hearing, With notice requirements it will make it difficult to meet the March 31 levy certification
deadline.
We will be providing additional information as we work through this new process. A copy of the tax
limitation bill and the Iowa Code Section on budget protests are attached for your reference.
cc: Nancy Masteller
MEMORANDUM OF AGREEMENT
BETWEEN THE CITYOF AMES
AND MARY GREELEY MEDICAL CENTER
REGARDING THE HEALTHY LIFE CENTER
WHEREAS The City, Story County, Heartland Senior Services,and Mary Greeley Medical Center
have been working together over the last three years to develop the concept of the Healthy Life Center
(HLC)that will help achieve the life-long goal of making healthy living accessible and enjoyable to people
of all ages and socio-economic status; and,
WHEREAS the City of Ames has agreed to construct, own,and manage the Healthy Life Center;
and,
WHEREAS the Healthy Life Center will help all employers in Story County recruit and retain
employees, reduce health care costs, and improve the overall health of everyone who lives within Story
County; and,
WHEREAS Mary Greeley Medical Center will be a tenant in the Healthy Life Center in which
approximately 3,221 square feet will be built to house their rehabilitation center; and,
WHEREAS user fees alone will not support the annual operating costs of the Healthy Life Center;
NOW Therefore,the City of Ames and Mary Greeley Medical Center agree to the following on this
day of 12019.
OBLIGATIONS OF MARY GREELEY MEDICAL CENTER
1. Mary Greeley Medical Center(hereinafter"MGMC")will pay to the City of Ames
(hereinafter"City") a total of$7,000,000 for construction of approximately 3,221 square
feet of MGMC tenant space for rehabilitation services,the therapy pool, and other shared
spaces within the Healthy Life Center. The obligation to pay$7,000,000 will become
effective only if the City Council enters into a contract to construct the Healthy Life Center.
The$7,000,000 payment will be due and payable to the City from MGMC as follows:
a. 30%due within 30 days after the award of the contract for construction of the
Healthy Life Center building.
b. 30%due within 30 days after the initial start of construction of the Healthy Life
Center building.
c. 30%due within 30 days after substantial completion of the construction of the
Healthy Life Center building.
d. 10%due immediately upon issuance of occupancy permit for the Healthy Life
Center building.
2. MGMC's tenant space shall be used only for rehabilitation services or any other programs
consistent with the vision of the Healthy Life Center.
3. MGMC will pay an annual amount to the City to cover a portion of the operating costs for
the Healthy Life Center as well as the annual operating deficit.The payment from MGMC to
the City will be as follows:
a. The first payment will be$105,000. Realizing that the City will need to expend funds
for the Healthy Life Center in advance of its opening,this first payment by MGMC
will be due 30 days after an individual, or entity, is hired to manage the facility.The
City will give a minimum of three months' notice as to when this payment will be
due.
b. Each succeeding fiscal year(July 1 to June 30),the annual payment to the City by
MGMC will be increased by 3%over the previous fiscal year(For example,Year 1-
$105,000,Year 2=$108,150,Year 3=$111,395,Year 4=$114,737,etc.).
c. After the initial payment, annual payments will be due each year from MGMC to the
City by the first day October of each year.
4. MGMC will be responsible to pay for any minor or major improvements to its tenant space
and purchase any equipment (movable or fixed)within MGMC's tenant space after the
Healthy Life Center construction is finalized. Improvements do not include maintenance
and repairs to its tenant space.
5. MGMC is responsible for 100%of its operating expenses (i.e.staffing,supplies, etc.).
OBLIGATIONS OF THE CITY
6. The City will construct,own, and manage the Healthy Life Center.
7. The City will construct, within the Healthy Life Center, approximately 3,221 square feet of
tenant space to be occupied by MGMC in accordance with the cost estimates contained in
the RDG HLC Planning Study.
8. In accordance with the recommended Replacement Fund reflected in the RDG HLC Planning
Study(pages 101-116),the City will be responsible for those associated costs.
9. The City will be responsible for the maintenance and repairs of MGMC's tenant space.
DURATION OF THE AGREEMENT
10. The term of this agreement shall commence on the effective day of this agreement and
end fifteen years after the Healthy Life Center has been open to the public.After this initial
term,the agreement can be extended or renegotiated by mutual consent of the parties.
The agreement will terminate should the City fail to construct the Healthy Life Center.
Within 30 days after the termination of this agreement, MGMC shall remove all of its
possessions and moveable equipment from its tenant space in the Healthy Life Center and
the City will have sole use of the tenant space, and the City will not be responsible to
reimburse or refund to MGMC for payments made under paragraphs 1 and 3.
HOLD HARMLESS
11. The parties do hereby covenant and agree to indemnify and hold harmless the other party,
its officers and employees,against any loss or liability whatsoever, including reasonable
attorney's fees, pertaining to any and all claims by any and all persons, resulting from or
arising out of the City's construction, location,operation,and maintenance of the Healthy
Life Center and MGMC's tenancy of the Healthy Life Center.
INSURANCE REQUIREMENTS
12. MGMC shall maintain:
Commercial General Liability (CGL) with limits of Insurance not less than $1,000,000 each
occurrence, and $2,000,000 Annual General Aggregate. The City of Ames, its officials,
employees and agents shall be included as insured on the CGL. This insurance for the
additional insured shall be as broad as the coverage provided for the named insured. It shall
apply as Primary Insurance before any other insurance or self-insurance, including any
deductible, maintained by, or provided to, the additional insured. To the fullest extent
provided by the laws of Iowa, the insurer shall agree to waive all rights of subrogation
against the City of Ames, its officials, employees, and volunteers for losses arising from
occupancy of the premises.
Workers' Compensation Insurance in accordance with state law and Employers Liability
Insurance limits of at least $500,000 each accident for bodily injury by accident and
$500,000 each employee for injury by disease. To the fullest extent provided by the laws of
Iowa, the insurer shall agree to waive all rights of subrogation against the City of Ames, its
officials, employees, and volunteers for losses arising from occupancy of the premises.
Each insurance policy required by this paragraph shall be endorsed to state that coverage
shall not be suspended, voided, canceled by either party, reduced in coverage or in limits
except after thirty days prior written notice. MGMC shall furnish the City with certificates of
insurance and with original endorsements effecting coverage required by this paragraph.
The certificates and endorsements for each insurance policy shall be signed by a person
authorized by that insurer to bind coverage on its behalf.The certificates and endorsements
shall be on standard insurance company forms and shall be received and approved by the
City before occupancy commences.The City reserves the right to require complete, certified
copies of all required insurance policies, at any time.
SUB-LEASE
13. MGMC shall not sub-lease their tenant space without prior written approval of the City
Council.
TENANT SPACE DESIGN
14. MGMC may configure its tenant space in any reasonable manner. However, the space shall
be designed without any interior load bearing walls if possible.
USE OF THE HEALTHY LIFE CENTER SHARED SPACE
15. MGMC may use the cardio/weight/walking track/therapy pool areas at no cost if the
activity is conducted one on one by a MGMC rehabilitation staff member with a patient.
16. If MGMC clients or staff wish to use the Healthy Life Center for personal use, the
individuals must pay all costs associated with that use of the facilities.
17. MGMC may use the meeting rooms in the Healthy Life Center at no cost based on terms
mutually agreeable to the parties. These terms will be determined prior to the Healthy Life
Center opening to the public.
USE OF MGMC'S TENANT SPACE
18. The City may use MGMC's tenant space during non-business hours for wellness related
activities at no cost based on terms mutually agreeable to the parties. These terms will be
determined prior to the Healthy Life Center opening to the public.
The parties hereby agree to the above:
CITY OF AMES, IOWA
By: Date:
John A. Haila, Mayor
Attest by:
Diane R. Voss, City Clerk
MARY GREELEY MEDICAL CENTER
By: Date:
Brian Dieter, President&CEO
MEMORANDUM OF AGREEMENT
BETWEEN THE CITY OF AMES, IOWA
AND STORY COUNTY, IOWA
REGARDING THE HEALTHY LIFE CENTER
WHEREAS The City, Story County, Heartland Senior Services, and Mary Greeley Medical Center
have been working together over the last three years to develop the concept of the Healthy Life Center
that will help achieve the life-long goal of making healthy living accessible and enjoyable to people of all
ages and socio-economic status,
WHEREAS the City of Ames has agreed to construct, own,and manage the Healthy Life Center;
and,
WHEREAS the Healthy Life Center will help all employers in Story County recruit and retain
employees, reduce health care costs, and improve the overall health of everyone who lives within Story
County; and,
WHEREAS, Story County sees benefit to the residents of the county by participating in and
supporting the Healthy Life Center; and,
WHEREAS user fees alone will not support the annual operating costs of the Healthy Life Center;
NOW Therefore,the City of Ames and Story County agree to the following on this day of
,2019:
OBLIGATIONS OF STORY COUNTY
Story County will have the following obligations:
1. Story County(hereinafter County)will pay to the City of Ames(hereinafter City)$2,000,000
towards the construction and equipping of the Healthy Life Center.The obligation to pay
$2,000,000 will be incurred only if City Council enters into a contract to proceed with the
construction of the Healthy Life Center. Payments from the County to the City will be as follows:
a. $666,666 on July 1, 2020, or 30 days after the City enters into a contract to proceed with
construction of the Healthy Life Center,whichever comes later
b. $666,667 on July 1, 2021
c. $666,667 on July 1, 2022
2. The County will pay an annual amount for operating expenses of the Healthy Life Center.The
payment from the County to the City will be as follows:
a. The first payment will be$100,000 and due 30 days following the opening of the
Healthy Life Center.
b. For each succeeding fiscal year(July 1 to June 30) in which the Healthy Life Center is in
operation,the annual payment due to the City will be increased by 3%from the
previous year. (For example: Year 1=$100,000,Year 2=$103,000,Year 3=$106,090,
Year 4=$109,273,etc.).
c. These succeeding annual payments will be due each year from the County to the City by
the first day of October of each year.
OBLIGATIONS OF THE CITY
3. The City will construct, own, and manage the Healthy Life Center.
4. All non-Ames residents that reside within Story County will be charged in accordance with the
same fee schedule that is applied to Ames residents for use of the facility. This constitutes part
of the consideration obtained by the County for contributing to the construction and ongoing
operation costs.
DURATION OF THE AGREEMENT
5. This agreement will endure for 25 years after the date the Healthy Life Center opens to the
public. The agreement may also be terminated at any time by mutual agreement of the parties.
In addition, the agreement will terminate should the City fail to construct the Healthy Life
Center. After this initial term, the agreement can be extended or renegotiated by mutual
consent of the parties. However, once the agreement is terminated, the City will no longer be
required to fulfill the obligation under paragraph 4.
The parties hereby agree to the above:
CITY OF AMES, IOWA
By: Date:
John A. Haila, Mayor
Attest by:
Diane R. Voss, City Clerk
STORY COUNTY
By: Date:
Linda Murken, Chair
Story County Board of Supervisors
MEMORANDUM OF AGREEMENT
BETWEEN THE CITY OF AMES
AND HEARTLAND SENIOR SERVICES
REGARDING THE HEALTHY LIFE CENTER
WHEREAS The City, Story County, Heartland Senior Services, and Mary Greeley Medical Center
have been working together over the last three years to develop the concept of the Healthy Life Center
(HLC)that will help achieve the life-long goal of making healthy living accessible and enjoyable to people
of all ages and socio-economic status; and,
WHEREAS the City of Ames has agreed to construct, own,and manage the Healthy Life Center;
and,
WHEREAS the Healthy Life Center will help all employers in Story County recruit and retain
employees, reduce health care costs, and improve the overall health of everyone who lives within Story
County; and,
WHEREAS Heartland Senior Services current facility has outlived its useful life and,therefore, is
in need of approximately 10,542 square feet of new space that is estimated to cost$3,500,000;and,
WHEREAS Heartland Senior Services will be a tenant in the Healthy Life Center and provide their
clients with an adult day center, nutrition, activities, and administrative services; and,
WHEREAS user fees alone will not support the annual operating costs of the Healthy Life Center;
NOW Therefore,the City of Ames and Heartland Senior Services agree to the following on this
day of , 2019:
OBLIGATIONS OF HEARTLAND SENIOR SERVICES
Heartland Senior Services(hereinafter"Heartland")will have the following obligations:
1. Heartland will pay to the City of Ames (hereinafter"City") $3,500,000 of the cost to construct
the Healthy Life Center.This obligation to pay the$3,500,000 will become effective only if the
City Council enters into a contract to construct the Healthy Life Center.This payment will be
due and payable to the City of Ames from Heartland 30 days after notice of the award of the
contract for construction of the Healthy Life Center building. Heartland will show proof of
available funds to pay the$3,500,000 upon entering into this agreement.
2. Heartland will be responsible each fiscal year(July 1 to June 30)to pay to the City:
a. 11%of the total annual operating costs of the HLC building and grounds as defined
in the RDG HLC Planning Study. The specific operating cost categories Heartland will
be required to pay a share of are generally defined on pages 65, 66, and 68 of the
RDG HLC Planning Study. However,the parties agree that other operating cost
categories, unforeseen at this time, may be added in the future.
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b. 10%of the deficit each fiscal year when expenditures exceed revenues associated
with non-aquatics portion of the building.
c. Expenditures and revenues used to determine the amount of payments required in
Paragraph 2.b will be allocated in accordance with the RDG HLC Planning Study and
include any other expenditure or revenue categories unforeseen at this time.
3. The City will invoice Heartland on a quarterly basis for its share of the operating costs required
in Paragraph 2. a. Heartland will then be required to pay the City this operating cost obligation
within 15 days of the invoice date.
4. The City will invoice Heartland for its deficit obligation for the non-aquatic space required in
paragraph 2. b. by August 31 following the end of each fiscal year. Payment will be required
within 30 day of the invoice date.
5. Heartland will be responsible to pay for any minor or major improvements to its tenant space
and purchase any equipment (movable or fixed)within Heartland's tenant space after the
Healthy Life Center construction is finalized. Improvements do not include maintenance and
repairs to its tenant space.
6. Heartland is responsible for 100%of its operating expenses (i.e. staffing, supplies,etc.).
7. Heartland's tenant space shall be used only for an adult day, nutrition, older adult activities,
administrative, and other related services consistent with the vision of the Healthy Life Center.
OBLIGATIONS OF THE CITY OF AMES
8. The City will construct,own, and manage the Healthy Life Center.
9. The City will construct,within the Healthy Life Center,approximately 10,542 square feet of
tenant space to be occupied by Heartland in accordance with the cost estimates contained in
the RDG HLC Planning Study.
10. In accordance with the recommended Replacement Fund reflected in the RDG HLC Planning
Study(pages 101-116),the City will be responsible for those associated costs.
11. The City will be responsible for the maintenance and repairs of Heartland's tenant space.
DURATION OF THE AGREEMENT
12. This agreement will endure until it is terminated by mutual consent of the parties or the City
fails to construct the Healthy Life Center.
HOLD HARMLESS
13. The parties do hereby covenant and agree to indemnify and hold harmless the other party, its
officers and employees, against any loss or liability whatsoever, including reasonable attorney's
fees, pertaining to any and all claims by any and all persons, resulting from or arising out of the
City's construction, location, operation, and maintenance of the HLC and Heartland's tenancy
of the Healthy Life Center.
INSURANCE
14. Heartland shall maintain:
a. Commercial General Liability (CGL) with limits of Insurance not less than $1,000,000 each
occurrence, and $2,000,000 Annual General Aggregate. The City of Ames, its officials,
employees and agents shall be included as insured on the CGL. This insurance for the
additional insured shall be as broad as the coverage provided for the named insured. It shall
apply as Primary Insurance before any other insurance or self-insurance, including any
deductible, maintained by, or provided to, the additional insured. To the fullest extent
provided by the laws of Iowa,the insurer shall agree to waive all rights of subrogation against
the City of Ames, its officials, employees,and volunteers for losses arising from occupancy of
the premises.
Workers' Compensation Insurance in accordance with state law and Employers Liability
Insurance limits of at least$500,000 each accident for bodily injury by accident and$500,000
each employee for injury by disease. To the fullest extent provided by the laws of Iowa, the
insurer shall agree to waive all rights of subrogation against the City of Ames, its officials,
employees,and volunteers for losses arising from occupancy of the premises.
Each insurance policy required by this paragraph shall be endorsed to state that coverage
shall not be suspended, voided, canceled by either party, reduced in coverage or in limits
except after thirty days prior written notice. Heartland shall furnish the City with certificates
of insurance and with original endorsements effecting coverage required by this paragraph.
The certificates and endorsements for each insurance policy shall be signed by a person
authorized by that insurer to bind coverage on its behalf.The certificates and endorsements
shall be on standard insurance company forms and shall be received and approved by the City
before occupancy commences. The City reserves the right to require complete, certified
copies of all required insurance policies, at any time.
SUBLEASE
15. Heartland shall not sub-lease its tenant space without prior written approval of the City
Council.
TENANT SPACE DESIGN
16. Heartland may configure its tenant space in any reasonable manner. However,the space shall
be designed without any interior load bearing walls if possible.
USE OF THE HEALTHY LIFE CENTER SHARED SPACE
17. Heartland may use the meeting rooms in the Healthy Life Center at no cost based on terms
mutually agreeable to the parties. These terms will be determined prior to the Healthy Life
Center opening to the public.
18. If Heartland clients or staff wish to use the Healthy Life Center for personal use,the individuals
must pay all costs associated with that use.
USE OF HEARTLAND'S TENANT SPACE
19. The City may use Heartland's tenant space during non-business hours for Healthy Life Center
related activities at no cost based terms mutually agreeable to the parties. These terms will be
determined prior to the HLC opening to the public.
The parties hereby agree to the above:
CITY OF AMES, IOWA
By: Date:
John A. Haila, Mayor
Attest by:
Diane R. Voss, City Clerk
HEARTLAND SENIOR SERVICES
By: Date:
Winnie Gleason, President