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HomeMy WebLinkAboutOrdinance No. 3232-2021KENAI CITY OF KENAI ORDINANCE NO. 3232-2021 Sponsored by: Administration AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, INCREASING ESTIMATED REVENUES AND APPROPRIATIONS IN THE GENERAL FUND AND KENAI FINE ARTS CENTER CAPITAL PROJECT FUNDS AND AMENDING THE LEASE FOR A PORTION OF LOT 3, BLOCK 17, ORIGINAL TOW NSITE OF KENAI FOR THE KENAI FINE ARTS CENTER TO PROVIDE ADDITIONAL FUNDING FOR IMPROVEMENTS AND MODIFICATIONS. WHEREAS, on May 23, 1995, the City entered into a lease with the Kenai Arts & Humanities Council for City -owned lands identified as A portion of Lot 3, Block 17, Original Townsite of Kenai and the building known as the Fine Arts Center (the Lease); and, WHEREAS, since May 23, 1995, the rights under the Lease have been assigned to the Peninsula Arts Guild and the Lease has been amended over the years to require the Lessee to submit to the City Council, for approval, any proposed construction plans for the property; and, WHEREAS, the premises under the Lease are leased at less than fair market value at a rate of $1 per year to provide a City -owned building to house the Fine Arts Center for the benefit of the local community on an "as is, where is" basis and requires the Lessee, at its own cost and expense to keep the leased premises, all improvements in good condition and repair during the term of the lease; and, WHEREAS, the Peninsula Art Guild completed numerous improvements to the facility at its sole expense, and Council approved two extensions to the term of the Lease to allow the Guild to justify future building maintenance and repair expenditures, satisfy multi-year grant funding requirements, and pursue future funding opportunities, and the Lease currently expires on December 31, 2035; and, WHEREAS, on August 16, 2017, the City Council passed Resolution 2017-58, authorizing a donation in the amount of $4,000 to the Peninsula Art Guild, Inc. for completion of preliminary design to renovate and remodel the Kenai Fine Arts Center for the purpose of soliciting grants for construction; and, WHEREAS, on August 5, 2020, the Council enacted Ordinance 3146-2020, appropriating $120,000 for the Kenai Fine Arts Center Improvement Capital Project Fund, restricted to the following: 1) If the engineer's estimate for the project exceeds $150,000, the appropriation should be brought back to the City Council for re -consideration. 2) The $120,000 appropriation must be committed or encumbered by November 10, 2021. 3) The $120,000 may only be used for construction at the Kenai Fine Arts Center. L, � I Ordinance No. 3232-2021 Page 2 of 3 WHEREAS, the Peninsula Arts Guild has provided information showing that $25,048.10 in funds have been donated and 350 volunteer hours have been contributed toward improvements to the Kenai Fine Arts Center, and the Guild is pursuing grant funding for additional necessary improvements to the Center; and, WHEREAS, on July 5, 2021, the Peninsula Arts Guild requested an additional $24,862.55 in funding to complete the remaining scope of work for the improvements to the Kenai Fine Arts Center; and, WHEREAS, an amendment to the Lease clarifying the maintenance and capital improvement responsibilities of the Peninsula Arts Guild as Lessee of the premises is necessary to clarify who is responsible for the funding of any projects in the future; and, WHEREAS, appropriation of additional funds and an amendment to the Lease to the Peninsula Arts Guild are in the best interest of the City and its residents. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, as follows: Section 1. That the estimated revenues and appropriations be increased as follows: General Fund: Increase Estimated Revenues — Appropriation of Fund Balance $24.862.55 Increase Appropriations — Transfer to Other Funds $24&62M Kenai Fine Arts Center Improvement Capital Project Fund: Increase Estimated Revenues — Transfer from General Fund $24 $52 Increase Appropriations — Construction $24.862.55 Section 2. That section 18 of the Lease is amended as follows: CARE OF PREMISES: Lessee, at its own cost and expense shall keep the leased premises, all improvements which at any time during the term of this Lease may be situated thereon, and any and all appurtenances thereunto belonging, in good condition and repair during the entire term of this [ease. The Citv is under no obligation to expend funds to improve or maintain the and/or permits required for making any alterations. New Text Underlined; [DELETED TEXT BRACKETED] Ordinance No. 3232-2021 Page 3 of 3 Section 3. Severability: That if any part or provision of this ordinance or application thereof to any person or circumstances is adjudged invalid by any court of competent jurisdiction, such judgment shall be confined in its operation to the part, provision, or application directly involved in all controversy in which this judgment shall have been rendered, and shall not affect or impair the validity of the remainder of this title or application thereof to other persons or circumstances. The City Council hereby declares that it would have enacted the remainder of this ordinance even without such part, provision, or application. Section 4. Effective Date: That pursuant to KMC 1.15.070(f), this ordinance shall take effect immediately upon enactment. ENACTED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 181 day of August, 2021. ATTEST: I /0* NA/ Heinz, Approved by Finance: dp ft Nei New Text Underlined; [DELETED TEXT BRACKETED] Introduced: August 4, 2021 Enacted: August 18, 2021 Effective: August 18, 2021 r1 FOURTH AMENDMENT TO LEASE THIS Second Amendment to Lease is made as of the day of 2021, by and between the CITY OF KENAI (City), a municipal corporation whose address is 210 Fidalgo Avenue, Kenai, Alaska 99611, and PENINSULA ART GUILD, INC. (Lessee), whose address is P.O. Box 703, Kenai, Alaska 99611-0703. WITNESSETH WHEREAS, on May 23, 1995, the City entered into a lease with the Kenai Arts & Humanities Council for City -owned lands identified as A portion of Lot 3, Block 17, Original Townsite of Kenai and the building known as the Fine Arts Center, which lease was recorded at Book 464 Pages 768-776 on June 13, 1995, in the Kenai Recording District, Third Judicial District, State of Alaska (the Lease); and, WHEREAS, since May 23, 1995, the rights under the Lease have been assigned to the Peninsula Arts Guild; and, WHEREAS, an Amendment to Lease recorded at Book 486 Pages 465-466 on June 13, 1996 extended the term of the Lease to June 30, 2015 and required the Lessee to submit to the City Council, for approval, any proposed construction plans for the property; and, WHEREAS, a Second Amendment to Lease recorded on December 26, 2013, under Document Number 2013-012032-0, extended the term of the Lease until December 31, 2020 and to amend the purpose to provide a building to house the Fine Arts Center for the benefit of the local community; and, WHEREAS, a Third Amendment to Lease recorded on January 30, 2017, under Document Number 2017-000659-0, extended the term of the Lease until December 31, 2035 to justify future building maintenance and repair expenditures, satisfy multi-year grant funding requirements, and pursue future funding opportunities; and, WHEREAS, the parties have agreed to amend the Lease to to clarify who is responsible for the funding of any projects in the future Third Amendment to Lease Page 1 of 3 Portion of Lot 3, Block 17, Original Townsite of Kenai and Fine Arts Center Building NOW THEREFORE, the parties agree as follows: Section 18 of the Lease is amended as follows: CARE OF PREMISES: Lessee, at its own cost and expense shall keep the leased premises, all improvements which at any time during the term of this Lease may be situated thereon, and any and all appurtenances thereunto belonging, in good condition and repair during the entire term of this lease. The City is under no obligation to expend funds to improve or maintain the building. Lessee is permitted to improve and alter the lease property in accordance with a scope of work prepared by a qualified engineer licensed to work in Alaska and accepted by the City Manager prior to the work being performed. Any changes to the scope of work must be provided to the City and accepted prior to work being performed. Lessee is responsible for all necessary licenses and/or permits required for making any alterations. 2. Except as expressly modified or stated herein, all other terms and conditions of the Lease (as amended) remain in full force and effect. CITY OF KENAI Bv: Paul Ostrander Its: City Manager PENINSULA ART GUILD By: Name: Its: Approved as to form: Scott Bloom City Attorney Third Amendment to Lease Page 2 of 3 Portion of Lot 3, Block 17, Original Townsite of Kenai and Fine Arts Center Building r -- State of Alaska ) ) ss Third Judicial District ) The foregoing instrument was acknowledged before me this day of , 2021, by Paul Ostrander, City Manager for the City of Kenai. Notary Public of Alaska My Commission Expires: State of Alaska ) ) ss Third Judicial District ) The foregoing instrument was acknowledged before me this day of 2021, by (Name), (Title), on behalf of PENINSULA ART GUILD, INC, a Alaska Corporation, on behalf of the Corporation. Notary Public of Alaska My Commission Expires: RETURN TO: CITY OF KENAI 210 Fidalgo Avenue Kenai, AK 99611-7794 Third Amendment to Lease Page 3 of 3 Portion of Lot 3, Block 17, Original Townsite of Kenai and Fine Arts Center Building KENAI City of Kenai 210 Fidalgo Ave, Kenai, AK 99611-77941907.283.7535 1 www.6naixity MEMORANDUM TO: Mayor Gabriel and Council Members FROM: Paul Ostrander, City Manager DATE: July 27, 2021 SUBJECT: Ordinance 3232-2021 — Peninsula Art Guild Appropriation and Lease Amendment At the August 5, 2020 meeting Council enacted Ordinance 3146-2020, appropriating $120,000 for the Kenai Fine Arts Center Improvement Capital Project Fund to remodel the Kenai Fine Arts Center. At the July 7, 2021 Council Meeting, Marion Nelson of the Peninsula Arts Guild asked for additional funds of $24,862.55 to pay for items that were not in their original contract with Polar North Construction to complete their remodeling efforts at the Kenai Fine Arts Center. Administration was tasked by Council with identifying a funding source to fulfill the request. This ordinance would appropriate the full amount from the General Fund, fund balance to complete the remodeling of the Center. The General Fund is the most appropriate source for this appropriation and the City will still be in conformance with our Fund Balance Policy. This ordinance also amends the lease to clarify that the Lessee is responsible for the funding of any projects in the future. From the inception of the lease on the property in 1995 until 2017, Section 18 of the lease was interpreted by the City to mean that the Lessee was responsible for all costs associated with alteration or improvement of the premises. The current Section 18 "Care of Premises" reads: "Lessee, at its own cost and expense shall keep the leased premises, all improvements which at any time during the term of this Lease may be situated thereon, and any and all appurtenances thereunto belonging, in good condition and repair during the entire term of this lease." The following list of actions taken by the City between 1995 and January of 2021 provides a historical context of how this lease has been managed. 5/23/1995 25 -year lease entered into between Kenai Arts & Humanities Council for Lot 3 Block 17, Original Townsite of Kenai and the building known as the Kenai Fine Arts Center. All rights under the lease were later assigned to the Peninsula Art Guild. 2003 Lessee requested City funding for boiler replacement at the facility. Request was i denied by City Manager Snow citing Section 18 of the lease. L r , 2009 Lessee requested City funding for roof repairs to prevent condensation. The request was denied, once again citing Section 18 of the lease. 2013 Peninsula Art Guild completed numerous improvements to the facility, at their sole expense, and requested a 5 -year extension to the lease in order to solicit grants for additional facility improvements. 2016 Peninsula Art Guild requested a lease extension until 12/31/2035 in order to pursue possible grants for repair and renovation of the facility. Extension was executed. 2017 Resolution 2017-58 provided $4,000 to the Peninsula Art Guild to assist in preliminary design costs for the purpose of identifying the scope of renovation and remodel and to provide cost estimates for the purpose of soliciting grants for construction. 2020 Ordinance 3146-2020 was amended by Council Member Navarre to include $100,000, later amended to $120,000, for upgrading the facility's bathroom, increasing the functionality of the back portion of the building, installation of new lighting and new windows. The maker of the amendment stated, "This amendment would commit $100,000 in City funds to the project with the intent of the Kenai Fine Arts Center being responsible for the remainder of costs." The Ordinance was subsequently amended to require encumbrance of the funds - by 11/10/21, use of funds was limited to construction at the Kenai Fine Arts Center, and required if estimated costs were to exceed $150,000, the appropriation should be brought back to the City Council for re -consideration. 1/20/21 A Council discussion item providing a remodel update was held. The original cost estimate exceeded $150,000. Council was provided a reduced scope of work to keep the project within the $120,000 appropriation and no additional funding was requested. Modifying Section 18 to clarify that the Lessee is responsible for all costs associated with the building will provide assurance that the Lease will be managed consistently going forward. This preserves what appears to be the original intent of Section 18 and will likely put the Peninsula Arts Guild, or future lessees in a more favorable position to receive grants for improvements to the facility. Page 2 of 2 The City of Kenai I www 6nai.city ff/Xr City of Kenai Scott Curtin Public Works Director 907283-8240 210 Fidalgo Ave. Kenai Alaska, 99611 Dear Scott, RECEIVED JUL 2 3 2021 Kenai City Cleric's Office Please see invoice p 2103-1 for the renovation work in the Kenai Fine Art Center, by Polar North Construction, totaling $120,000. City Council vote to award on IVS 2020. We appreciate the City of Kenai s support of the goals and programs of the Kenai Fine Art Center. We also appreciate the excellent work by Polar North Construction. Sin rely, a n K Nelson, President Leslie Morton, Vice President Abbey Ulen, Secretary Karen Fogarty, Treasurer Rachel Grossl Mick Wykis Susan Baraniecki P.O.Box 703 1816 Cook Street I Kenai, AK 99611 1 (907) 283-7040 1 www.KenaiFineArt.com I Find us on Facebook License: 38007 Polar North Construction, LLC PO Box 3926 Soldolna, AK 99669 Call (907) 393-0473 Email: alexapncalaska.com stephan iergpncalaska. c om Billed To: Kenai Fine Art Center 816 Cook Avenue Kenai, AK 99611 Due Date: 08/11/2021 Descrip 100% Complete Terms: 30DY Aservice charge of 18.00% per annum will be charged on all amounts overdue on regular statement dates. Thank you for your prompt payment! L Contract Invoice Invoice#: 2103-1 Date: 07/12/2021 Project: Kenai Fine Art Center 816 Cook Avenue Kenai, AK 99611 Order# Amount 120,000.00 Non -Taxable Amount: 0.00 Taxable Amount: 120,000.00 Sales Tax: 0.00 Amount Due 120,000.00 KENAI City, of Kenai 1210 Fidalgo Ave, Kenai, AK 99611-7794 1907.283.75351 wwwkenaixity TO: Mayor Brian Gabriel and Kenai City Council THROUGH: Paul Ostrander, City Manager DATE: August 13, 2021 SUBJECT: Ordinance 3232-2021 —Amendment to Peninsula Art Guild Appropriation and Lease Amendment Ordinance 3232-2021 included two blanks for information to be provided by the Peninsula Art Guild related to the actual funds donated and volunteer hours contributed toward improvements to the Kenai Fine Arts Center. This information was provided on August 13, and Administration recommends the following Amendment: Amend Ordinance 3232-2021 by replacing the first blank ["XX"] in the seventh WHEREAS with the number $17,798.10 and the word "in" and the second blank ["XX"] with the number 350 The amended WHEREAS would read: WHEREAS, the Peninsula Arts Guild has provided information showing that $17,798.10 in funds have been donated and 350 volunteer hours have been contributed toward improvements to the Kenai Fine Arts Center, and the Guild is pursuing grant funding for additional necessary improvements to the Center; and, Thank you for your consideration. U August 12, 2021 To Kenai City Council Members and Administration 210 Fidalgo Avenue, Kenai, AK 99611 To: City Manager Paul Ostrander, Mayor Brian Gabriel and City Council members, Scott Curtin, Please see the list of the various donations of time and materials for the remodeling of the back area of the Art Center, aka the "Workshop Room" and HA bathroom. Donated Services &Materials Architectural - $10,000. General contractor - $1200 Electrician - $1500 Carpenter -$600 (moretocome) Storage area rebuild. Carpenter Time & materials - $1000 Paint & painting supplies - $1065. Cement floor grinding 4100 Community volunteers. Donated time from Art Center Volunteers: Moving to U -Haul by a volunteers -120 hours @ $12 hr. value. $1440 Prep of Workshop Room: painting walls, floor & more - 200 hours -@ $12 hr. value $2400 Painting & building cold storage area - 30 hours. -$1000 Polar North Construction has been wonderful to workwith in every way. Since they cannot work in the building right now, the Art Center board voted to finish the storage/supply room next to the jail. We are also paying a contractor to install cove base in that storage room and the Workshop Room, finish one cement block wall and install the heat covers etc. Price not known at this time. Estimate- $800- $1000. Partial donation of carpenter time. Paid for off-site storage - U -Haul storage $233.10 (May have to rent an additional mo -$116.55) Van Rental: Remediation Evaluations- Paid by Art Center Anchorage engineers -. $2100. 1 am happy to answer your questions regarding this project. r Marion Nelsoni, ' �; v��//. .� President, BOD Ken a6 fn@ As CeVtr' enai Art Center) 907 398 8664 PO 8OX 703 1 616 COOK STREET I KENAI AK. 99611 1 (907) 283 7040 1 WWW.KENAIFINEART.COM I FIND US ON FACEBOOK