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HomeMy WebLinkAbout2005-06-09 Council Packet - Special MeetingKenai City Council Special Council Meeting June 9, 2005 SOAR International Mini~trie~ AGENDA KENAI CITY COUNCIL- SPECIAL MEETING JUNE 9, 2005 6:00 P.M. KENAI i~ITY COUNCIL CHAMBERS http://www, ci.kenai, ak.us ITEM A: o ITEM B: . ITEM C: CALL TO ORDER Pledge of Allegiance Roll C~I Agenda Approval OLD BUSINESS Approval-- SOAR International Ministries, Inc. -- Lot 3, Block 1, General Aviation Apron a. Amendment to Lease Changing the Use b. Request to Sublease to Air Supply Alaska, Inc. ADJOURNMENT > ~~ ~~o 210 Fidalgo Avenue, Kcnai, Alaska 99611-7794 Telephone' 907-283-7535 /FAX' 907-283-3014 MEMORANDUM To: Mayor Porter & City Council Members From: Linda L. Snow, City Manager Date: June 6, 2005 RE: SOAR/Change of Use and Sublease to Air Supply Alaska, Inc.. III II At the City CounCil meeting on June 1 st, the approval of the sublease referenced above was amended to be contingent upon the administration being satisfied the sub lessee is appropriately insured for the activities he is going to conduct at the airport. It was stated during discussion that if pollution type insurance coverage is not available or is cost prohibitive, the administration should bring that information back to Council for its consideration, A meeting was held on Friday, June 3ra, with both SOAR and Air Supply Alaska, Inc. at Mayor Porter's request. Mayor Porter explained she thought it was not the city's intent to require additional insurance or other requirements above and beyond what has been required of other airport tenants in the past. SOAR doesn't have the additional insurance coverage, and neither does Air Supply Alaska, Inc. The representatives expressed concern that not only were other airport tenants not required to meet these requirements, but also the City itself did not meet them. The City of Kenai has fueling operations at the city dock and at the floatplane basin. An unadopted 2004 draft Environmental Emergency Plan for Spill Prevention, Control, and Countermeasure for the Kenai Municipal Airport describes many other fuel tanks as well. According to Finance Director Larry Semmens, the City's General Liability policy specifically excludes the airfield, and fuel spills are not covered (see attachment A). The airport General Liability policy does not cover fuel spill clean ups either (see attachment B). The Brown Agency confimaed with Mr. Semmens that large, fuel haulers like Alaska Oil Sales can buy pollution liability coverage and probably have it; however, while small operators could also buy coverage, it would be quite expensive. ; Also attached arc the lease pages from Yukon Fuel, the old Everett's Fuel lease, and the SOAR lease demonstrating the insurance requirements. While none are'required to have pollution type insurance, the SOAR lease has the highest General Liability requirement. o . . ,, ,, ,. For b~]ily i~j~ry or proper~ d~m~ge duC to an occurrence or loss du~ to a wrongful act which wOuld not hav~ occu~ed in whol~ or in p~ b~t for th~ actual, alleged or t~¢atCnCd discharge, dispersal, seepage, ruination, r~l~~ or esoap¢ of pollutants at any time; . For any loss, cost, or expense arising out of any: ao Request, demand or order that any insured or others test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of pollutants; or bo Claim or suit by, or on behalf of, a governmental authority for damages because of testing for, monitoring, cleaning up, removing, containing, treating, detoxifying or neutralizing, or in any way responding to, or assessing the effects of pollutants. However, 2.b. shall not apply to such loss, cost, or expense arising from any spill, release, or other hazardous condition at or fi'om the premises, equipment, or location(s) which you do not owx~, rent, control or occupy. However, this exclusion shall not apply to the following: Any liability arising out of bodily injury or property damage due to an occurrence or loss due to a wrongful act by you arising out of heat, smoke, or fumes from a hostile fire; oo Any liability arising out of explosion, lightning, windstorm, vandalism or malicious mischief, collapse, riot and civil commotion, flood, earthquake or collision, upset, or overturn of an automobile or equipment; iii. Any liability arising out of police use of mace, oleoresin capsicum (o.c.), pepper gas or tear gas; iv. Weed abatement or spraying; or Mo Any liability arising out 6'f the products-completed operations hazard. All bodily injury or property damage due to an occurrence or loss due to a wrongful act arising from i., ii., iii., iv., or v. above arising out of the same, interrelated, associated, repeated or continual discharge, dispersal, release or escape of pollutants shall be deemed one occurrence or wrongful act. The commencement of such discharge, dispersal, release or escape of pollutants shall be recorded and reported to the Risk Manager or designated Department Head within a seventy-two (72) hour period. r.~ ..,4 ~ · · ~ ' ...~ ~8" · '~'-'"~ '~ ~''-'''-~ - ~ ' ~'t' '~' /', c.~_,~ ~'. SECTION II- COMMON COVE~GE EXCLUSIONS All Coverages included in this policy are subject to the following exclusions. Noise and pollution and other perils. 1. This policy does not cover claims directly or indirectly occasioned by, happening through or in consequence of: (a) noise (whether audible tO the human ear or not), vibration, sonic boom and any phenomena associated therewith, ,------- (b)pollution and contamination of any kind whatsoever, (c) electrical and electromagnetic interference, (d) interference with the use of property; .~~ unless caused by or resulting in a crash fire explosion or collision or a recorded in-flight emergency causing abnormal aircraft operation. 2. With respect to any provision in the policy concerning our duty to investigate or defend claims, such provision shall not apply and we shall not be required to defend: (a) claims excluded by Paragraph 1; or (b) a claim or claims covered by the policy when combined with any claims excluded by Paragraph 1 (referred to below as "Combined Claims"). 3. In respect of any Combined Claims, we shall (subject to proof of loss and the LIMITS OF -- INSURANCE) reimburse you for that portion of the following items which may be allocated to the claims covered by the policy: (i) damages awarded against any insured; and (ii) defense fees and expenses incurred by any insured. 4. Nothing herein shall override any radioactive contamination or other exclusion clause attached to or forming part of this policy. B. War, h i-jacking and other perils. This policy does not cover claims caused by' (a) War, invasion, acts of foreign enemies, hostilities (whether war be declared or not), civil war, rebellion, revolution, insurrection, martial law, military or usurped power or attempts at usurpation of power. :' (b) Any hostile detonation of any weapon of war employing atomic or nuclear fission and/or fusion or other like reaction or radioactive'force or matter. Strikes, dots, civil commotions or labor disturbances. Any act of one or more persons, whether or not agents of a sovereign Power, for political or terrorist purposes and whether the loss or damage resulting therefrom is accidental or intentional. Any malicious act or act of sabotage. Confiscation, nationalization, seizure,..restraint,' detention, appropriation, requisition for title or use by or under the order of any Government (whether civil military or de facto) or public or local authority. (c) (d) (e) (0 AAP 202 (11-99) Page 11 of 23 Tlntotlty J. Rogers CITY OF KENA! 210 Fldalgo Kenai, Ala~.~ 9~11 283-3~1 FAX 283-3014 At each five (5) year interval, the City will ~ have the fair market value determined by a qualified independent appraiser. The redetermined lease rate, annual rent, under this provision shall be limited to a fifty percent (50~) increase in the prior lease rate until the 30th year anniversary of the lease after which the 50~ cad provision shall no longer apply and the lease rate shall be redetermined every five years on the basis of fair market evaluation as indicated above. 10. LEASE UTILIZATION- Leased-lands shall be utilized for purposes within the scope of the application (made a Dart of this Lease and attached hereto), the terms of the Lease, the terms of the deed under which the land was Granted to the City (and any releases pertinent thereto), in conformity with the ordinances of the City and BorouGh, with Kenai Airport ReGulations, and in substantial conformity with the comprehensive plan. Utilization or development for other than the allowed uses shall constitute a violation of the Lease and subject the Lease~ to cancellation at any time. Failure~ to substantially complete the development plan of the land, consistent with the proposed use and terms of the Lease, shall constitute grounds for cancellation. 11. CONDITION OF PREMISES- The premises demised herein are unimproved and are leased on an "as is, where is" basis. 12. UNDERLYING TITLE' The interests transferred, or conveyed by this Lease are subject to any and all of the covenants, terms, or conditions contained in the instruments conveying title or other interests to the City. 13. RIGHT OF. INSPECTION' City shall have rthe right at all reasonable times, to enter the premises, or any~ D~-~?~.~. thereof, for the DurDoses of insDection. 14. INDEMNZF!C~TI0~"AND'~, INSURANCE' Lessee covenants to save the City harmless from all actions, suits, liabilities, or damages resulting from or arising out of any acts of commission or omission by the lessee, his agents, employees, customers, invitees, or arising from or out of the Lessee's occupation, or use of the premises demised, or privileges. granted, and to pay a~k.costs connected therewith. Lessee, at the expense of Lessee, shall keep in force, during the term of this agreement, insurance issued~.by responsible insurance companies, authorized to do business'in Alaska, in forms, kinds and amounts as determined and directed Lessor: ~.essee: City Attorney CITY OF KENAI 210 Ftd=lg~ Kermi, AI&~t~ 08611 283-,3441 FAX 283-3014 03§9 ,. 698 by the City for the protection of City and/or Lessee. Insurance requirement hereunder shall be subject to the sole determination of the City. Said insurance may include, but need not be limited to insurance coverages commonly known as, or similar in kind to, public liability, products liability, property damage, cargo, aircraft, fire, workmen's compensation, comprehensive, builders risk, and such other insurance coverage as deemed required in the sole determination of the City. All policies or endorsements thereto shall in all cases where possible name City as Additional Named Insured thereunder and shall contain a waiver of subrogation against the City. Upon approval by City of all insurance required, in the forms, kinds and amounts directed to be procured, Lessee shall deliver all policy originals or duplicate originals and endorsements thereto to the City for incorporation within this agreement as attachment thereto. In any event, Lessee is not' to commence, to exercise any of the rights and privileges granted under this agreement until such time as all insurance directed and required to be furnished by Lessee is in full force and effect. Lessee expressly understands and agrees that any insurance protection furnished by Lessee hereunder shall in no. way limit its responsibility to indemnify and save harmless Lessor under the provisions of this agreement. No policy of insurance shall be cancelled or amended with respect to the City without thirty (30) days written notice by registered or certified mail to City by the insurance company. Until otherwise directed in writin~ b¥~ t~~=F Manager, Lessee shall provide certificates of insurance within thirty (30) days of the date hereof as follows- Comprehensive General Liability Combined Single Limit .(Bodily Injury and Property Damage')- $ 5 0 O,_O0~;~. Workmen'~:Compensation - Statutory Limits Notwithstanding anything to the contrary, if Lessee fails or neglects to secure required insurance or if said policy or policies are terminated, altered, or changed in any manner not acceptable to the City, then and in that event this lease may be cancelled and terminated, without penalty, on five (5) days written prior notice to Lessee. Lessor- ~~. Lessee - · 0 0 ~-~ TIM ROGERS C~TY ATTORNEY CITY OF KENAI PO BOX S~0 KENAI. ALASKA 99611 283-75,99 City (and any releases pertinent thereto), in cor. F.o~-~..tv '~_cn the ordinances of the City and Borough, and with Kenai A~rport Regulations, and in substantial conformity with the comprehensive plan. Utilization or development for other than the allowed uses shall constitute a violation of the Lease and subject the Lease to cancellation at any time· Failure to substantially complete the development plan of the land, consistent with the proposed use and terms of the Lease, shall constitute grounds for cancellation. 11. CONDITION OF PREMISES: The premises demised herein are unimproved and are leased on an "as is, where is" basis. 12. PROTECTION OF AIRCRAFT: No building or other permanent structure shall be pla~ed within fifty (50) feet of the property line fronting a landing strip, taxiway, or apron without the written approval of the City. This area shall be used for parking aircraft only. 13. UNDERLYING TITLE: The interests transferred, or conveyed by this Lease are subject to any and all of the covenants, terms, or conditions contained in the instruments conveying title or other interests to the City· 14. RIGHT OF INSPECTION: City shall have the rioht at all reasonable times to enter the premises, or any p~-- thereof, for the purposes of inspection. 15. INDEMNIFICATION AND INSURANCE: Lessee covenants to save the City harmless from all aC~'~ons, suits, iiabilities, or damages resulting From or arising out of any acts of commission or omission by the lessee, his agents, employees, customers, invitees, or arising from or out of the Lessee's occupation, or use of the premises demised, or priviIeges granted, and to pay all costs connected therewith. Lessee, at the expense of Lessee, shall keep in Force, during the term of this agreement, insurance issued by responsible insurance companies authorized to do business in Alaska, in forms, kinds and amounts as determined and directed by the City for the protection of City and/or Lessee. Insurance requirements hereunder shall be subject to the sole determination of the City. Said insurance may include, but need not be limited to, insurance coverages commonly known as, or similar in kind to, public liability, products liability, property damage, cargo, aircraft, fire, workmen's compensation, comprehensive, builders risk, and such other insurance coverage as deemed required in the sole determination of the City· Ail policies or endorsements thereto shall in all cases where possible name City as coinsured thereunder and shall contain a waiver of subrogation against the City. · Upon approval by City of ali insurance required, in the forms, kinds and amounts directed to be procedured, Lessee shall deliver all policy or.~i, ginals or duplicate originals and endorse- ments thereto to the Ci-t.y for incorporation within this agree- ment as attachment thereto, t'n any event, Lessee is not to commence to exercise any of the rights and privileges granted under this agreement until such time as all insurance directed and required to be furnished by Lessee is in full force and effect. LESSOR ~ESSF£: TIM ROGERS CITY ATTORNEY CITY OF KENAI ;, O. BOx ~0 KENAI, ALASKA 9q~l 28~7~19 Lessee expressly understands and agrees that any insurance protection furnished by Lessee hereunder shall in no way limit its responsibility to indemnify and save harmless Lessor under the provisions of this agreement. No policy of insurance shall be cancelled or amended with respect to the City without thirty (30) days written notice by registered or certified mailr to City by the insurance company. Until otherwise directed in writing by ..the City Manager, Lessee shall provide certificates of insurance within thirty (30) days of the date hereof as follows: Comprehensive General Liability Combined Single Limit (8odily Injury & Property. Oamage) . . . $1,000,000 Workmen's Compensation: Statutory limits Automobile Liability Combined Single Limit (Bodily Injury & Property Damage) . . . $1,000,000 Aircraft Liability Public liability and property damage (combined single limit) in the amount of $1,000,000 with no sub-limit for passenger liability Notwithstanding anything to the contrary, if Lessee fails or neglects to secure required insurance of if said policy or policies are terminated, altered, or changed in any manner not acceptable to the City, then and in that event this lease may be cancelled and terminated, without penalty, on five ~5) days written prior notice to Lessee. 16. COLLECTION ON UNPAID MONIES: Any or all rents, charges, fees, or o~er consideration Which are due and unpaid at the expiration of voluntary or involuntary termination or cancellation of this Lease, shall be a charge against the Lessee and Lessee's property, real or personal, and the City shall have such lien rights as are allowed by law, and enforcement by distraint may be made by the City or its authorized agent. 17. EASEMENT GRANTS RESERVED: City reserves the right to grant an~'cont'~'ol "eas'e~ent's i,n, or above the land leased. No such grant or easement will be made that will .unreasonably interfere with the Lessee's use of the land, and Lessee shall have free acces~:.and use:of any and all parking an~., loading rights, rights o¢ ingress., an.d...egress now or hereafter appertaining to the leased premises. -' 18. LEASE SUBORDINATE TO FINANCING REQUIREMENTS: Lessee agrees that' 'City may modi'?~ this 'Lease 'to "meet revised requirements for Federal or State grants, or to conform to the requirements of any revenue bond covenant. However, the modification shall not act to reduce the rights or privileges granted the Lessee by this Lease, nor act to, cause the Lessee financial loss. 19. SURRENDER,...ON TERMINATION: Lessee shall, on the last day of the t~'rm'of ~"hi's,Le~ae 'or upon any earlier ter- mination of this Lease, surrender and deliver upon the premises into the possession and use. of City without fraud or delay in good order, condition, and repair, except ?or reasonable wear and tear since the last necessary repair, replacement, restoration or renewal, free and clear of all lettings and occupancies unless expressly permitted by the City in writing, and free and clear of LESSOR LESSEE ..4 0 0 O O Regulations, and in substantial conformity with the comprehensive plan. Utilization or development for other than the allowed uses shall constitute a violation of the Lease and subject the Lease to cancellation at any time. Failure to substantially complete the development plan of the land, consistent with the proposed use and terms of the Lease, shall constitute grounds for cancellation. 11. CONDITION OF PREMISES' The premises demised herein are unimproved and are leased on an "as is, where is" basis. 12. LrNDERLYING TITLE' The interests transferred, or conveyed by this Lease are subject to any and all of the covenants, terms, or conditions contained in the instruments conveying title or other interests to the City. 13. RIGHT OF INSPECTION: City shall have the fight at all reasonable times to enter the premises, or any part thereof, for the purposes of inspection. 14. INDEMNIFICATION AND INSURANCE: Lessee covenants to save the City harmless from all actions, suits, liabilities, or damages resulting from or arising out of any acts of commission or omission by the lessee, his agents, employees, customers, invitees, or arising from or out of the Lessee's occupation, or use of the premises demised, or privileges ~anted, and to pay all costs connected therewith. _ Lessee, at the expense of Lessee, shall keep in force, during the term of this agreement, insurance issued by responsible insurance companies authorized to do business in Alaska, in forms, kinds and amounts as determined and directed by the City for the protection of City and/or Lessee. Insurance requirement hereunder shall be subject to the sole determination of the City. . Said insurance may include, but need not be limited to insurance coverages. commonly known as, or similar in kind to, public liability, products liability, property damage,,;. cargo, aircraft, fire, workmen's compensation, comprehensive, builders risk, and such other insurance coverage as deemed required in the sole determination of the City. All policies or endorsements thereto shall in all cases where possible name City as Additional .Named Insured thereunder and shall contain a waiver of subrogation against the City. All in.surance shall be by a company/corporation currently rated "A-" or better by A.M. Best. Upon approval by City of~atl insurance required; in the forms, kinds and mounts directed to be procured, Lessee shall deliver all pblicy originals or duplicate originals and endorsements thereto to the City for incorporation within this agreement as attachment thereto. In any event, Lessee is not to commence to exercise any of the fights and privileges granted under this agreement until such time as all insurance directed and required to be furnished by Lessee is in full force and effect. Lease of Airport Lands- Page 4 of 16 2004-0t2~ Lessee expressly understands and agrees that any insurance protection furnished by Lessee hereunder shall in no way limit its responsibility to indemnify and save harmless Lessor under the provisions of this agreement. ~ No policy of insurance shall be cancelled or amended with respect to the City without thirty (30) days written notice by registered or certified mail to City by the insurance company. Until otherwise directed in writing by the City Manager, Lessee shall provide certificates of insurance within thirty (30) days of the date hereof as follows: Comprehensive General Liability Combined Single Limit (Bodily Injury and Property Damage): $500,000 Workmen's Compensation- Statutory Limits · Notwithstanding anything to the contrary, if Lessee fails or neglects to secure required insurance or if said policy or policies are terminated, altered, or changed in any manner not acceptable to the City, then and in that event this lease may be cancelled and terminated, without penalty, on five (5) days written prior notice to Lessee. _ 15. COLLECTION ON UNPAID MONIES' Any or all rents, charges, fees, or other consideration which are due and unpaid at the expiration of voluntary or involuntary termination or cancellation of this Lease, shall be a charge against the Lessee and Lessee's property, real.or personal, and the City shall have such lien fights as are allowed by law. ,. 16. EASEMENT GRANTS RESERVED: City reserves the right to grant and control easements in, or above the land leased. No such grant or easement will be made that will unreasonably interfere with the Lessee's use of the land, and Lessee shall have free access and use of any and all parking and loading fights, fights of ingress and egress now or hereafter appertaining to the leased premises. 17. LEASE SUBORDINATE TO FINANCING .REQUIgEMENTS' Lessee agrees that City may modify this Lease to meet revised requirements for Federal or State gants, or to conform to the requirements, of any revenue bond covenant. However, the modification shall not act to reduce the fights or privileges granted the Lessee by this Lease, nor act to cause the Lessee financial loss. ' 18. SURRENDER ON TERMINATION: Lessee shall, on the last day of the term of this Lease or upon any earlier termination of this Lease, surrender and deliver upon the premises into the possession and use of City without fraud or delay in good order, condition, and repair, except for reasonable wear and tear since the last necessary repair, replacement, · Lease of Airport Lands - Page 5 of 16 . Lessor: ~ ~ Lessee: ~ Iii IIIIlll I lllllllllll ', 5 of 21 2004-012~1~) 210 Fidalgo Avenue, Kenai, Alaska 99611-7794 Telephone: 907-283-7535/FAX: 907-283-3014 www.ci.kenai.ak, us KENAL AI.ASKA Memorandum Date: 'Fo; From: May 26, 2005 Linda L. Snow, City Manager ~< Kim Howard, Assistant to the City Manager J~ ~ SOAR International Ministries, Inc. - Lot 3, Block 1, General Aviation Apron. (1) Amendment to Lease Changing the Use (2) Request to Sublease to Air Supply Alaska, Inc. SOAR International Ministries, Inc. wishes to sublease to Air Supply Alaska, Inc. A letter from ' Shane Bowlin with Air Supply Alaska, Inc. is attached providing details of their proposed operation. The lease states the use as "charter operations and operations and maintenance of aircraft used in scheduled commuter service." SOAR has made a request to change the use to "Hangar and office facility, air cargo services, maintenance and operation of aircraft, including fueling." Fueling has 'historically been a use on this property. Five underground fuel storage tanks were in service until they were removed May- June of 1994. An aboveground storage tank was used until 1999mad ha~ since been removed. Eric Mayer at SOAR stated that the area that Air Supply Alaska, Inc. intends to use is asphalt with the exception of a small area that is gravel - where the old tanks were pulled. He said that they could patch that area as recommended by the Airport Manager. For the safety and security of the airport, she has also asked that they provide a plan for public access to the building for her review. SOAR has met with the Fire Marshall r~garding the fueling and they have been provided a copy of fuel storage requirements. Also, SOAR will cox/tact the Building Official prior to installing the freight and hangar doors. All parties are in compliance with the Borough and City. The City Attomey has reviewed the doeumem~ and has no objections. If Council approves the amendment and sublease, an Amendment to Lease and Consent to Sublease can be prepared for your signature. Cc: SOAR International Ministries, Inc. Attachments From: Shane Bowlin Air Supply Alaska PO Box 874 Kenai, AK. 9961 ! To: Eric Mayer SOAR International Ministries 135 Granite Pt. Ct. Kenai, AK. 99611 Mr. Mayer, May 2, 2005 Upon agreement with SOAR International Ministries, and approv~ from the City of Kenai, it is our intention to headquarter and operate Air Supply Alaska from the hangar and office space located at 125 FBO Street, Lot 3, Block 1, Kenai, Alaska. Air Supply Alaska provides grocery, fuel, and air cargo services to communities in bush Ahlak~. We will rna!rain an inve~ of gt~:~y items and fuel on sight. o'ur activities will include the loading and off-loading of our airplanes.' We will also be fueling, main~g, and washing our airplmae~ and company vehicles. The fuel that we will have on sight will consist of 1 ea. 1000-gallon trailer - -mounted tank containing IOOLL Av-Gns, 1 ea. 15(XLgallon tanker truck containing Jet A fuel, and 1 ea. 2800-gallon tanker truck containing diesel, heating oil, and automotive fuel. It is our intention to store and handle this fuel in accordance with Fire Marshall recommendations. It is our intention to install freeze and chill units for food storage. We anticipate that an electrical system upgrade will be requixed to acc, omm~~ these uni~. We will incur the cost of this upgrade. We also anticipat~ a telephone sy~ upgrade and exlmat We unde~~ that it is SOAR's ~t~nfion to install a new fi~ght door on the rear of the building as soon as possible after signing the lease agreement with ASA, and we also understand that is is SOAR's intention to install a new hangar door on the front of the building by October l, 2005. · It is our intention to operate the above mentioned proPertY in a clean, safe, and well m____nintni _ned l~lll~r. Sinc~ly, Shane C. Bowlin Air Supply Alaska Inc. Page 1 of 1 Klm Howard From: Sent: To: Cc: James Baisden Wednesday, May 18, 2005 10:54 AM Rebecca Cronkhite Can/Graves; Klm Howard Subject: Air Supply Alaska Fueling Requirements DATE: 5-18-2005 TO' Rebecca Cronkhite, Airport Manager Klm Howard, Assistant to the City Manager From: Kenai Fire Department, Bureau of Fire Prevetion RE: SOAR Sublease to Air Supply Alaska (Fuel Storage Requirements) 1. All fueling operations must be lAW NFPA 407 standard for Aircraft fuel servicing 2001 edition. 2. A parking diagram should be provided that shows designated parking of fuel vehicles with distances to buildings. - 3. Fueling vehicles must have placards lAW DOT requirements. 4. Prior to the start of fueling operations at the Kenai Airport, the fire department will require an onsite inspection. 5. Provide a emergency plan of action for a fuel spill, and procedures for cleanup-of the spill. 6. Two 20-B:C portable fire extinguishers will be required for each fueling vehicle. If you haVe any additional questions or need further assistance, please contact this office at 283-7666 James C. Baisden Kenai Fire Marshal 5/18/2OO5 AMENDMENT TO I,EASE That certain lease between the City of Kenai and SOAR INTERNATIONAL MINISTRIES, INC. whose address is 135 Granite Point Court, Kenai, Alaska 99611, recorded September 4, 1985 at Book 269, Page 985, encompassing the following property located in the Kenai Recording District, Third Judicial District, State of Alaska: Lot 3, Block 1, General Aviation Apron, according to Plat No. 87-93 is hereby amended to reflect that the purpose for which the Lease is issued is for: Hangar and office facility, air cargo services, maintenance and operation of aircraft, including fueling. LESSOR: CITY OF KENAI By: Linda L. Snow City Manager LESSEE: SOAR INTERNATION~ MI~STRIES, INC. By: Sallie Title AMENDMENT TO LEASE - Page 1 of 3 (If Lessee is a Corporation) ATTEST: Name Title Approved as to form: Cary R. Graves City Attorney STATE OF ALASKA THIRD JUDICIAL DISTRICT ) )ss ) THIS IS TO CERTIFY that on this_ _ day of_ _, 2005, --- -, , Title, of SOAR INTERNATIONAL MI~STRIES, INC., being personally known to me or having produced satisfactory eviden¢, of identification, appeared before me and acknowledged the voluntary and authorized execution of the foregoing instrument on behalf of s.aid Corporation. Notary Public' for Alaska - My Commission Expires:_ AMENDMENT TO LEASE - Page 2 of 3 STATE OF ALASKA THIRD JUDICIAL DISTRICT ) )ss ) THIS IS TO CERTIFY that on this~ day of ,2005, LINDA L. SNOW, City Manager of the City of Kenai, Alaska, being personally known to me or having produced satisfactory evidence of identification, appeared before me and acknowledged the voluntary and authorized execution of the foregoing instrument on behalf of said City. Notary Public for Alaska My Commission Expires: City of Kenai 210 Fidalgo Ave. Kenai, AK 99611 AMENDMENT TO LEASE- Pa~e 3 of 3 SOAR International Ministries Lease Agreement This lease is made between SOAR .In.t~rnational M~istfi~, Inc. herein called Landlord. and Air Sutmly Aia$.i~_._ herein called Tenant. Tenant hereby offers to lease from Landlord the premises situated at 125 FBO Street Lot 3 BL. 1, described as Small Hanger 60x60 and o~ce approximately 20x20 and Tie- Down space for two aircraft 1. Term and Rent. Landlord leases the above premises for a term of One year commen~g Junel. 2005 and terminating on Junel, .2006.. The monthly rental of $ ~ Payable.. from lu~ .1, 2005 to. Novembv-r. 1, 2.~5. R~.ent in the ~mOn~_n_t_ Of' $'. mO ~nt!al. y will beg__~n December 1,. 2005_ to Sun_e 1.2006. Rent is payable in advance on the first day of each month, during the term of this lease. 2. Use. Tenant shall use and occupy the premises for commercial aviation operations. The premises shall be used for no other purpose without consem of the Landlord. The Lan~o~ represents that the premises may lawfully be ~ for such pm'pose. 3. Care and Maintmmnce of Premises. Tenant acknowledges that the premises ar~ in good order and repair, unless otherwise indicated at initial walkthrough. Tenant shall, at his own expense and at ail times, maintain the premises in good and safe condition and shall remm such in as good condition as received, normal wear and tear excepted, at the termination of the lease. Tenant shall be responsible for all janitoriaJ duties for the leased _ premises, including trash disposal and sludl be responsible for any damage caused to the premises by its employees or customers. Smoking is authorized only in authorized designated areas. Landlord shall maintain pavement and building stru~es including foundations and roofs. Tenant shall also maintain in good condition the approved parking area. Tenant will provide snow removal in front of the leased, hanger, office and tie down spaces. Tenant is responsible for ail movement of Tenant owned aircraR. 4. Alteration. Tenant shall not, without first obtaining'consent of Landlord, make any attetmiom, additions, or improvement, in, to or about the premises. Truant may, with Landlord approval, post the necessary signs and company logos on the premises in comm:tion with the conduct of its business in accordance with City, Borough and 5tat, requirements. 5. Ord~an¢_~_. Statutes and General Safety. Tenant shall comply with aH statut~ ordinances and requirements of aH municipal, state and federal at~orities now in force or which may hamtRer be in force, pertaining to the premises, occasioned by or affecting the use thereof by Tenant. Tenant shall conduct aH operations 'in a safe manner using all appropfi~ safety features and prot..ection. Tenant employees and contractors working on the premises shall comply with all environmm~ laws, regulations, and policies of Federal, 5tare, and Local Govmm~ents. Tenm shall take all actions necessm~ to prm'ent the releasz or spills of aircraR fluids or fuel on the premises and insure proper use, sto~ tremnem, or transportation of hazardous substances, 6. 5ecm~. Tenant shaH ensure the physical security of the above premises and notify the La~ord of any discrepancies. 7. Assignment and Subletting. Tenant shall not assign this lease or sublet any portion of the premises without prior consent of-the Landlord, and the City of Kenai which shall not be unreasonably withheld. Any such assignment or subletting without consent shall be void and, at the option of the Landlord, and~the City of Kenai may terminate this lease. Page 1 of 3 SOAR lnte ational Ministries Lease Agreement 8. Utilities. Tenant shall be responsible for gas and electrical and telephone services, including maimenance and repair of telephone systems. Landlord shall provide for water services. 9. Entry and Inspeetion. Tenant shall permit Landlord or Landlord's agents to enter upon the premises at reasonable times and upon reasonable notice, for the purpose of inspecting the same, and will permit Landlord at any time within sixty days prior to the expiration of this lease, to place upon the premises any usual "For Lease" signs, and permit persons desiring to lease the same to inspect the premises thereafter. 10. Indemnifitation of Landlord. Landlord shall not be liable for any damage or injury to Tenam, or any other person, or to any property, ocoming on the premises or any part thereot~ and Tenant agrees to hold Landlord harmless from any claims for damages, no matter how caused. 11. Insurance. The Tenant shall maintain ail applicable insurance. 12. Default of Lessee. Default by Tenant under this Lease shall include, but shall not be limited to, the following; a. Tenant shall fail to pay any installment of rent due, and such failure shall continue for & period of fifteen (15) days following written notice from E,mdlord. b. Tenant shall fail to perform any of its other obligations under this Lease, and such failure shall continue for a period of fifteen (15) days following written notice from Landlord specifying the nature of the default, unless such default cannot be fully cured within said period and Landlord promptly commences such cure and continues with due diligence. c. Tenant shall abandon the Premises and cease paying rent. d. Tenant shall become insolvent, or shall make a transfer in fraud of creditors, or shall make an assignment for the benefit of creditors. e. Tenant shall file or there shall be filed against Landlord a petition in bankruptcy or reorganization or for an arrangement for the benefit of creditors under any section or chapter of the United States bankruptcy laws or under any similar law or statue of any State and such petition is not withdrawn or denied within one hundred twenty (120) days~.~ 1;~. Lan~o~ Remedies. In the event of a default by Tenant under this Lease, Landlord-:~ may in addition to any other right or remedy which lamdlord may have at law or equity contirme this ~ in effect by not termin~g the Tenant's right to possession of the. Premises, in which event the Landlord shall be entitled to enforce all of its fights and remedies under this Le~e including the fight to recover the rent specified .in this ~.a~ it becomes due notwithstan&ng any conuary law, role, statute or regulation. Landlord shall be under the duty to mitigate its losses, including using its best efforts to relet the Premises, or part of it, and Landlord expre~y waive~ any such conuary law, nde, statu~. or regul~o~ 14. Surrender of l~remis~ Upon termination of this Lease, Tenant shall vacate the Premises and remm it in as good condition a~ received, the elements, camualty, acts of God, and ordinary wear and tear excepted. Tenant shall have th~ right to remove all articles of personal property in the Premises and any trade ftxmres, the removal of which will not cause substamial damage to the Premises, and Tenant shall make any repairs necessitated by such removal. Page 2 of 3 SOAR International Ministries Lease Agreement 1S. Attorney Fees. In the event either par~ commences any action or proceeding under this Lease to enforce any right or remedy hereunder, the prevailing party shall be entitled to recover its reasonable costs and attorney's fees. 16. Notices and Bills. All written notices required or permitted hereunder shall be deiivereci in person to the other par~, sent by facsimile or mailed First Class, postage fully prep&d, to the parties at the addresses set forth hereinafter or to such other address as either party may hereafter designate in writing and deliver as provided in this Paragraph. Landlord: SOAR International Ministries 135 Granite Pt. Ct. Kenai, AK 99611 Fax: 907-283-7761 Air Supply Alaska P.O. Box 847 Kenai AK 99611 17. Entire Agreement The foregoing constitutes the entire agreement between the -parties and may be modified only by a writing signal by both parties. Signed this day of 2005 By:. . Landlord By' Tenant Page 3 of 3 Discussion/Approval -- SOAR International Ministries, Inc.-- Lot 3, ]Block 1, General Aviation Apron: l) Amendment to Lease Changing the Use; and 2) Request to Sublease to Air Supply Alaska,. Inc. City Manager Snow reported, as the memorandum included in the packet indicated, SOAR International Ministries wishes to sublease to Air Supply Alaska, Inc. She noted, representatives from both organizations were in attendance, i.e. Eric Mayer (SOAR) and Shane Bol~ (Air Supply Alaska). Snow added, the lease currently states the use as charter operations and operations and maintenance of aircraft used in scheduled commuter service. She stated, SOAR is requesting the change of use to hangar and office facility, air cargo services, maintenance and operation of aircraft, including fueling. Snow added, the memorandum stated fueling had been a traditional use on the property and a description of the tanks in service and when they had been in service was included in the memo, along with a description of the area was also included in the memorandum. Snow added, SOAR met with the Fire Marshall and a letter from the Fire Marshall was included in the packet for council review. She noted, the proposal had been reviewed by the city attorney and he objections. Additionally, the parties are in compliance with the borough and the city. MOTION: Council member Moore MOVED for approval of the transfer of the lease and Council Member Ross SECONDED the motion. _ Moore stated concern of the significant change in the lease for the use of the area and noted the original lease with SOAR stated the tenant shall maintain all applicable insurance. He asked if the same verbiage relating to insurance would be included in the transfer, noting there would be additional liability with fuel tanks than just parking airplanes. City Attorney Graves explained, SOAR would have to continue with their current insurance requirements as required in their current lease. He added~ their lease would still be in effect and they would still have to provide that insur~ _ncc and provide the proof of insurance. Moore asked if that would include coverage~~~' storing on-site fuel/fuel tanks. He added, he thought it would probably be more expensive to store fuel on-site than to park airplanes. Graves explained, he would have to check their liability policy to see if it included an exclusion for fuel spills. He added, they have a general liability policy, but he was not aware if it would specifically exclude fuel spills as he had not seen the language of the policy. He added, the proof of insurance noted the coverage for ordinary liability. Moore asked Graves if he knew if the-new lessee would have insurance coveragefor storing fuel tanks. Graves answered, the c//y does not monitor the insurance requirements between the lessee and the sub-lessee. The city monitors insurance requirements between the city and the lessee. Council Member Gilman stated his understanding of general liability insurance coverage would be an absolute environmental exclusion as part of it so that if there was a spill, it would be very expensive to clean up and there should be the appropriate type of insurance in place to cover that type of risk. He added, before council does this, it should be confirmed that type of insurance policy is in place. He added, he did not believe the general liability policy being offered by the lessee would provide that type of coverage. He added, he would be surprised ff it did. Gilman stated, he did not believe it was a hypothetical risk, but a real risk that is out there. Ross requested the principles respond to the issue. Mike Kelly, 52590 Suzeanne, Nikiski. Kelly explained they would not be bringing any fuel tanks on site. He explained, they would have a fuel tank, which was there from the previous sub-lessee for jet fuel for one of their aircraft, and would also have a fuel Wailer on the airpo~ at a different location, with 100, to fuel small aircraft. Kelly stated, they would not be setting up a big fue1~g opera'hon. Referring to Shane Bolin's letter, the possibility of hauling fuel was mentioned because the aircraft they have has that capability. However, they were not certain they would be doing that because it is not a primaxsr focus of their business (this would be a fuel truck and not a tank). He added, in essence, they would be conducting a very typical fueling operation for anyone having an aircraft on the airport. Porter asked if they were planning on having a fuel truck and not storing fuel there. Kelly answered, the fuel truck would be on site as well as the fuel trailer. Gilman asked if a fuel spill occurred by the fuel truck on their property, would he have sufficient insurance coverage for that type of clean-up risk. Kelly answered no, they do not have that type of insurance for covering that kind of risk. He added, it was his understanding, as far as airport operations, he would be surprised that anyone out the[e .fueling aircraft would have that type of coverage. Member Ross asked if there was a requirement on the fuel tankers at the airport, that when they are parked they are in a containment area. Acting Fire Chief Tilly r~ferred to the memorandum included in the packet from Fire Marshall Baisden who indicated they follow the NFPA Standards 407 for aircraft fueling services. He added, he could not cite the particular reference, but from what he had seen on the airport, he had not noticed any fuel trucks being stored in a containment area. Buffer stated, typically when there is a fuel release a dam is not built around underneath it because o~:~ the volatile nature of the substance. He noted, he appreciated SOAR's intent, felt it was a great idea, and the airport is an important asset. The council with the Planning Commission tries to make things work there and have come to an interesting crossroads where they are learning about new risks and how businesses do things. He suggested administration work w/th~the parties to see if there is a way to identify something more specific than the language in No. 11 which states "The Tenant shall maintain ~ applicable insurance" and see if that applicable insurance could at least bring some level of pollution risk which would fall to the city if in the event there is a 1,000 release of fuel bn the ground out there. He added, he wanted to be sure council is communicating it and see this thing happen, but wants to make sure the council balances the risk as much as possible for the city. ITEM 1-4 KENAI CITY COUNCIL MEETING JUNE 1, 2005 PAGE 2 Moore stated he expected a.quick answer from the city attomey saying, yes it would be covered and then move on. He added, he was not aware if other lessees have to carry insurance for their fuel trucks and on-site storage. Moore stated he would amend his motion. : MOTION TO AMElVD: Council Member Moore MOVED to amend by approving the sublease contingent upon the administration's satisfaction that the sub-lessee is appropriately insured for the activities he's going to conduct at the airport. Council Member Ross SECONDED the motion. Kelly asked if council was proposing they carry the same insurance as comparable operators or something in addition to and above other'people who are operating at the airport. Porter stated, it was her understanding it would be at least the same as other people have currently at the airport or council would re-look at all of them. · Graves stated a lot of the airport leases would have to be reviewed because it was~ his understanding this would not be a type of coverage historically a lot of the operators have there.- Porter requested the motion to amend be re-read. City Clerk Freas noted she would have to listen to the tape for accuracy, but stated her notes indicated it was a motion to __amend and it was to approve it contingent upon the administration being satisfied that appropriate insurance coverage was available. Moore noted, "obtained for the activities to be conducted." Moore stated, some members of council had dealt with fuel contamination all over the city and the expense in cleaning it up. He added, he does not take it lightly and felt there was a potential liability for cleanup. Ross statedhe agreed with Moore's concerns, but noted, the cost of the insurance~-: could be prohibitive; He added, he understood Buffer's point-relating to containment: area and volatility, however containment area is used elsewhere in the industry for parking of tanker fuel trucks (on the Moose Range, U.S. Forest Service requires it) and it is an easier way to deal with it than trying to do it through insurance because it is almost impossible to acquire. Instead, bladder contahn_ment areas are used and is where the vehicle is stored overnight. He noted, it is an easier way-to deal with it, it is far less expensive, and is something a small operator can afford. Gilman stated he was concemed about the risk and did' not know what insurance was available or its cost and would be really coflcemed if the city's insurance would not.,: pick it up. He used an example: There's a spill at the site; their (SOAR) insurance does not cover it; they can't afford to pay for it because it's a $150,000 clean-up or something; and then the city goes to its insurance carrier and finds the city does. not , ITEM I-4 KENAI CITY COUNCIL MEETING JUNE 1, 2005 PAGE 3 have coverage either. He added, if that type of situation happens, the council needs to be apprised of it in order to make an acceptable decision of whether council wants to have that type of activity on the airport. .. Ross stated if the issue cannot be resolved related to the insurance, administration could come back to council with an alternative, i.e. bunkering for overnight, etc. He added, for the time being, he was satisfied Moore's motion would 'get the ball rolling' looking in the fight direction. He added, if it is found it is not the way to proceed, administration could come back to council and it was not a 'no' to the parties either, but saying council is willing to look at it. City Manager Snow requested clarification, i.e. if in the event administration finds it cannot be resolved in the way the motion is worded, but could be resolved by running it through the city's insurance company, relating to the requirements listed in Fire Marshall Baisden's memorandum which noted six requirements all regarding fuel containment and fuel storage, if those requirements are met and the city's insurance covers other kinds of operations on the airport, that could be brc. ~gl-.t ''~ :~ck to council for review. Several council members answered yes. Porter statea, it was her understanding the Fire Marshall set out the requirements. Kelly stated the fuel truck they were discussing is one that had been there with the previous lessee during their operation for the previous year and one-half. He added, the fuel trailer he is discussing is one for which they received approval (perhaps un_known to council) for fueling aircraft they currently have there. Kelly explained, what they were proposing for the two vehicles...if the city wants airplanes operating on the airport, they have to be fueled. He added, they appreciate and will be very good tenants as far as environmental risks, etc., however the reality is, if the city is going to run an airport and have airplanes on it, they have to have fuel. They are proposing is to run airplanes on the city's airport. Council Member Massie stated, apparently a similar fueling operation had been operating for several years and SOAR would not be doing anything, different.. He'. added, it may be good to find out what insurance coverage is available, but as far'-as. he was concerned, council could go ahead and pass it. Porter requested the vote on the motion. amendment to the motion. VOTE ON AMRNDMF.21T: Swarner ! Absent Gilman Yes Moore Yes Massie Buffer Freas noted, the Vote would be on the Yes I Ross Yes Yes Porter Yes MOTION PA88RD UNANIMOUSLY. ITEM 1-4 KENAI CITY COUNCIL MEETING JUNE 1, 2005 PAGE 4 Porter requested the main motion be reread. Freas noted, the main motion was to 'approve the transfer of the-lease.' Buffer requested a clarification the wording referred to "transfer" of the lease and not allowing the sublease. Freas stated she felt confident with the accuracy of her notes and had been a concern of hers at the time the motion was made as it did not refer to the amendment and the request to sublease. Moore stated he would accept that as a friendly amendment (to correct the wording of the motion to refer to the Amendment to Lease Changing the Use and 2) Request to Sublease to Air Supply Alaska, Inc.). The maker of the second, Ross, concurred. VOTE ON ~ AMENDED MOTION: Swarner i Absent Gilman Yes Moore Yes Massie Buffer Yes Yes Ross Porter Yes Yes MOTION PAS~F.,D UNANIMOUSLY. Porter thanked Kelly for attending the meeting and wished them good luck with their business as it all worked out. End of I-4. ITEM I-4 KENAI CITY COUNCIL MEETING JUNE 1, 2005 PAGE 5 ,~ AGENDA .~'[ '~KENAI CITY COUNCIL- SPECIAL MEETING //"j.,~~..,'~ JUNE 9, 2005 __ ~.~~~.. _~. 6'00 P M KEN~LASKA http://www.ci.kenai.ak.us ITEM A: CALL TO ORDER 1. Pledge of Allegiance 2. Roll Call 3. Agenda Approval ITEM B: OLD BUSINESS 1.----~ppro~ternational Minisitries, Inc.-- Lot 3, Block 1, General Aviation Apron a. Amendment to Lease Changing the Use b. Request to Sublease to Air Supply Alaska, Inc. ITEM C: ADJOURNMENT The public is invited to attend and participate. Additional information is available through the City Clerk's office at 210 Fidalgo Avenue, or visit our website at http://www.ci.kenai.ak.us. Carol L. Freas, City Clerk D/211