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HomeMy WebLinkAbout1998-07-20 City Council (11)City of Palo Alto City Manager’s Report TO:HONORABLE CITY COUNCIL FROM:CITY MANAGER DEPARTMENT:ADMINISTRATIVE SERVICES DATE:JULY 20, 1998 CMR:305:98 SUBJECT:AMENDMENT NO. 1 TO LEASE AND COVENANT NOT TO DEVELOP BETWEEN THE CITY OF PALO ALTO AND THE PALO ALTO UNIFIED SCHOOL DISTRICT AND APPROVAL OF A BUDGET AMENDMENT ORDINANCE IN THE AMOUNT OF $34,792 FOR THE PROVISION OF AN EXTENDED DAY CARE PROGRAM AT THE NEW HOOVER SCHOOL SITE RECOMMENDATION Staff recommends that Council: 1) authorize the Mayor to execute the attached amendment to the Lease and Covenant Not to Develop between the City of Palo Alto and the Palo Alto Unified School District (District); and 2) approve the attached Budget Amendment Ordinance (BAO) for $34,792 to cover the increase in the City’s annual rental payment to the District for extended day care sites. The amendment provides for the reopening of one of the covenanted sites, the "old" Ohlone site, and the substitution of two operating sites, Walter Hays and Juana Briones, for the covenanted site to be reopened. The BAO provides funds needed to pay the $34,792 annual rent to the District for the new extended day care site to be established at the reopened site. BACKGROUND ....... On SePtember 1, 1989, the City and the District entered into the Lease and Covenant Not to Develop (Lease and Covenant). Under this agreement, the City provides the District with annual revenue in exchange for the City receiving: 1) a covenant not to develop five neighborhood elementary school sites (Jordan, Jane Lathrop Stanford, Ohlone, Garland, and Greendell); 2) a lease on the former Cubberley High School site; and 3) an agreement that the District will provide space for extended day care at each of eleven remaining elementary school sites. The agreement is for 15 years, beginning January 1, 1990, with options to extend by both parties. CMR:305:98 Page 1 of 3 DISCUSSION The Lease and Covenant requires that if the District wishes to reopen any of the covenanted sites, it may do so upon written notice to the City and provided the City and District amend the agreement to include within the Covenalit Not to Develop two operating elementary school sites within the Palo Alto city limits. On March 12, 1998, the City received the District’s written notification that, due to recent growth in the student population, the District had chosen to reopen the Ohlone site at 445 Charleston Road as a Kindergarten-Grade 5 school and had designated the Walter Hays site at 1525 Middlefield Road and the Juana Briones site at 4100 Orme Street as the two operating school sites to be substituted for the "old" Ohlone site. The District intends to reopen the Ohlone site effective September 1, 1998 for the purpose of housing the alternative school program currently located at the Hoover School site, 800 Barron Avenue. The Hoover site will become the Barron Park School. In accordance with the Lease and Covenant, the City operates extended day care services at the eleven elementary school sites. The Lease and Covenant provides that in the event the District opens additional elementary school sites, the City may add additional child care spaces at those sites. Staff recommends establishing a twelfth extended day care program at the Ohlone site (now Hoover School). Staff has begun the process of selecting an operator for the new extended day care site, subject to Council approval of the attached amendment, in order to assure that the program will be ready to open in early September for the first day of school. Amendment The attached amendment to the Lease and Covenant deletes the Ohlone site as a covenanted site and substitutes the Walter Hays and Juana Briones sites. Accordingly, the City’s annual payment to the District for the Ohlone site ($204,742 in 1990; $261,046 in 1998) will become attributable to the Walter Hays and Juana Briones sites together. The amendment also provides for a twelfth extended day care site to be opened atthe new Hoover School by increasing the City’s annual payment to the District for extended day care by $34,792, the current annual rental for per extended day care site. RESOURCE IMPACT The attached BAO will transfer $34,792 from the General Fund Budget Stabilization Reserve to non-salary expenses in the General Fund to cover the annual rent for the extended day care site to be opened at the new Hoover School. The City’s annual payment to the District for the Lease and Covenant will be increased by $34,792. CMR:305:98 Page 2 of 3 POLICY IMPLICATIONS The recommendation is consistent with existing City policy and the terms of the Lease and Covenant: TIMELINE If Council approves the attached amendment and BAO, the new Hoover School and the extended day care program at the site will open September 8, 1998 for the upcoming school year. ENVIRONMENTAL REVIEW As the lead agency with respect to the reopening of the Ohlone site as a K-12 school, the District has filed a notice of exemption from the requirements of the California Environmental Quality Act (CEQA). Staff has determined that the extended day care project is exempt from CEQA, pursuant to Sections 15301 (Existing Facilities)and 15323 (Normal Operations of Facilities for Public Gatherings) oft he CEQA Guidelines. ATTACHMENTS Attachment A: Attachment B: Attachment C: Amendment #1 to Lease and Covenant Not To Develop Budget Amendment Ordinance March 12, 1998 Letter from District to City PREPARED BY: Janet Freeland, Senior Financial Analyst DEPARTMENT HEAD APPROVAL: CITY MANAGER APPROVAL: cc: Palo Alto Unified School District Director, Adrfiinistrative Services Assistant City Manager CMR:305:98 Page 3 of 3 ATTACI~MENT A AMENDMENT NO. 1 TO LEASE AND COVENANT NOT TO DEVELOP BETWEEN THE CITY OF PALO ALTO AND THE PALO ALTO UNIFIED SCHOOL DISTRICT THIS AMENDMENT to the Lease and Covenant Not to Develop ("Lease") between the City of Palo Alto ("City") and the Palo Alto Unified School District ("District"), dated September i, 1989, is made and entered into by City and District this ~day of , 1998. RECITALS: A. Pursuant to Section 4.1 of the Lease, District covenants with City and City ~covenants with District that, in order. to prevent further burden on City’s infrastructure and preserve a substantial amount of City’s remaining open space, certain school sites shall not be subdivided, sold or developed with additional square footage to be used for non-school district purposes. B. The "Covenanted Sites" are described in Exhibits B, C, D, E, F and G, which are made a part of the Lease by reference. One of the Covenanted Sites is the Ohlone site, commonly known as "old" Ohlone, and more recently renamed "Hoover School." C. Section 6.5.2(b) of the Lease provides that in the event District wishes to reopen, as an operating school, any of the Covenanted Sites described in Exhibits D, E, and F, it may do so upon written notice to City, provided that in such event, City and District shall amend the Lease to include within the Covenant Not to Develop two operating elementary school sites of District within the city limits of the City of Palo Alto. D. District has resolved to reopen the Ohlone site and to designate the Walter Hays site and the Juana Briones site, both sites being within the city limits of the City of Palo Alto, as the two operating school sites to be substituted for the Ohlone site. E. Pursuant to Section 5 of the Lease, City has operated extended day care services at eleven school sites described in Exhibit L; and City, at its sole discretion, may agree to operate an extended day child care program at additional elementary school sites. F. City believes that the public interest will be served by operating an additional extended day care program, at the Ohlone site, and therefore, agrees to do so. 980617 la~ 0031970 E. City and District desire to amend the Lease to provide for the reopening of the Ohlone site and the substitution of the Walter Hays site and the Juana Briones site within the Covenant Not to Develop, and to provide for City’s operation of an extended day care program at the Ohlone site. NOW, THEREFORE, in consideration of their mutual covenants and agreements, the parties hereto agree to amend the Lease as follows: follows: SECTION i.Paragraph 1.1.8 is hereby amended to read as "1.1.8 Covenanted Sites. The term ~Covenanted Sites" means all of that certain property situated in the City described in Exhibits B, C, D-I, D-2, E, F and G attached hereto and made a part hereof." SECTION 2. Paragraph 1.1.9 is hereby deleted. SECTION 3. Paragraphs 1.1.9.1 and 1.1.9.2, respectively, are hereby added to read as follows: "1.1.9.1 Walter Hays Site, The term ’Walter Hays Site’ means all of that certain real property situated in the City described in Exhibit D-I attached hereto and made a part hereof. "1.1.9.2 Juana Briones Site. The term ’Juana Briones Site’ means all of that certain real property situated in the City described in Exhibit D-2 attached hereto and made a part hereof." follows: SECTION~4.Paragraph 2.2 is hereby amended to read as ~Walter Hays Juana Briones Garland Greendell Jane Lathrop Stanford Jordan $204,742 $182,804 $182,804 $236,000 $164,000" (this amount attributable to both school sites together) follows: SECTION 5.Paragraph 2.3 is hereby amended to read as "2.3 Payment for Extended Day Care Spaces. As consideration for use of the eleven spaces pursuant to Section 5.0 of this agreement, City shall pay 980617 lac 0031970 follows: annually to District the sum of $300,000 or $27,273 per space. All payments to District by City shall be made in twelve (12) equal installments payable monthly commencing on January 31, 1990. ~As of September i, 1998, City’s annual payment to District shall be increased by the sum of $34,792 to reflect the operation by City of an extended day care program at the "old" Ohlone (now Hoover) school site. ~Payment for additional spaces shall be at the adjusted rate for child care space as provided for in Sections 2.3 and 2.7 of this agreement." SECTION 6. Section 4.1 is hereby amended to read as "4.1 District hereby covenants with City and City hereby covenants with District that, in order to prevent a further burden on the City’s infrastructure and in order to preserve a substantial amount of the City’s remaining open space, which contributes to the welfare of the City’s residents, the Covenanted Sites situated in the City of Palo Alto and described in Exhibits B, C, D-I, D-2, E, E and G attached hereto and made a part hereof, shall not be (i) subdivided, (2) sold or (3) developed with additional square footage to be used for non-school district purposes for the term of this Lease, for the consideration and upon all the~conditions set forth herein, provided that the district may add portable non-permanent structures totaling no more than 2,000 square feet per Covenanted Site. If the District adds such square ’footage on any Covenanted Site, it shall give written notice to the City within 30 days of such addition. Upon the expiration or earlier termination of this Lease, except as provided in Section 4.2, the City shall execute and deliver to District a quitclaim deed for~ the Covenanted Sites, unless otherwise agreed to by the parties." SECTION 7. Exhibit D to the Lease is deleted and replaced with Exhibits D-I and Exhibits D-2, respectively; and the Summary of Exhibits is amended accordingly. SECTION 8. As amended herein, the Lease dated September i, 1989 remains in full force and effect. In case of any conflict 980617 |a¢ 0031970 between any of the amendments made in this Amendment No. 1 and the remaining provisions of the Lease as entered into September I, 1989, the Lease shall be interpreted so as to give effect to the provisions of this Amendment No. i. IN WITNESS WHEREOF, the parties have caused this Amendment No. 1 to be executed by their respective officers as of the day and year first above written. ATTEST:CITY OF PALO ALTO, Lessee City Clerk Mayor APPROVED AS TO FORM: Senior Asst. City Attorney APPROVED : PALO ALTO UNIFIED SCHOOL DISTRICT, Lessor Board of Education Assistant City Manager APPROVED : Superintendent of Schools 980617 lac 0031970 4 CERTIFICATE OF ACKNOWLEDGEMENT (Civil Code S i189) On JLI~ 50 1998, before me, ~5t50o~ ~. ~6[/rt’& a Notary Public in and for said County and State, personally appeared ~515~’6 ~l’ch~d&o~ ~ [k>n P~u’i i1’ps , personally known to me person(s) whose name(s) ~e~are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in ,their authorized capacit~(ies), and that by ~their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Sigdature of ~otary Public 980617 lac 0031970 ATTACHMENT B ORDINANCE NO. ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING THE BUDGET FOR THE FISCAL YEAR 1998-99 TO PROVIDE AN ADDITIONAL APPROPRIATION OF $34,792 TO COVER THE INCREASE IN THE CITY’S ANNUAL RENTAL PAYMENT TO THE PALO ALTO UNIFIED SCHOOL DISTRICT FOR THE LEASE AND COVENANT NOT TO DEVELOP FOR AN EXTENDED DAY CARE CENTER AT THE NEW HOOVER SCHOOL SITE WHEREAS, pursuant to the provisions of Section 12 of Article III of the Charter of the City of Palo Alto, the Council on June 22, 1998 did adopt a budget for fiscal year 1998-99; and WHEREAS, On September i, 1989, the City and the Palo Alto Unified School District (District) entered into the Lease and Covenant Not to Develop; and WHEREAS, under this agreement, the City provides the District with annual revenue in exchange for the City receiving: i) a covenant not to develop five elementary school sites; 2) a lease on the former Cubberley High School site; and 3)an agreement that the District will provide spacefor extended day care; and WHEREAS, on March 12, 1998, the City received a written notification from the District that, due to recent growth in the student population, the District had chosen to reopen the old Ohlone School site at 445 Charleston as a Kindergarten-Grade 5 school; and WHEREAS, the District intends to reopen the oldOhlone School site effective September i, 1998 for the purpose of housing the alternative school program currently located at the Hoover School site, 800 BarronAvenue; and WHEREAS, the Lease and Covenant provides that in the event the District opens additional elementary school sites, the City may add additional child care at those sites; and WHEREAS, staff recommends establishing an extended day care program at the old Ohlone School site (which has been renamed Hoover School) serving children from the school’s population; and WHEREAS, as a result of providing this additional day care, the City’s annual rental obligation to the District will increase by $34,792; and WHEREAS, City Council authorization is needed to amend the 1998-99 budget as hereinafter set forth. NOW, THEREFORE, the Council of the City of Palo Alto does ORDAIN as follows: SECTION i. The sum of Thirty Four Thousand Seven Hundred Ninety Two Dollars ($34,792)is hereby appropriated to non-salary expenses in the General Fund, and the Budget Stabilization Reserve is correspondingly reduced. SECTION 2. This transaction will reduce the Budget Stabilization Reserve from $17,691,000 to $17,656,208. SECTION ~2. As specified in Section 2.28.080(a) of the Palo Alto Municipal Code, a two-thirds vote of the City Council is required to adopt this ordinance. SECTION 3. This project has been determined to be categorically exempt under Sections 15301 and 15323 of the California and Environmental Quality Act. SECTION 4 As provided in Section 2~04~350 of the Palo Alto Municipal Code, this ordinance shall become effective upon adoption. INTRODUCED AND PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST:APPROVED: City Clerk Mayor APPROVED AS TO FORM:City Manager Senior Asst. City Attorney Director, Administrative Services Department ATTACHMENT C PALO ALTO BUSINESS SERVICES 415/329-3735 UNIFIED SCHOOL DISTRICT 25 Churchill Avenue Palo Alto, CA 94306 FAX: 415/329-3803 March 12, 1998 City Clerk City of Palo Alto 250 Hamilton Avenue Palo Alto, CA 94301 Attention: Bill Fellman Manager, Real Property Dear Mr. Fellman: re: Reopening "Old" Ohlone as a public school Growth in the student population in the Palo Unified School District requires that the District reopen one of our closed sites as a Kindergarten - Grade 5 school. The District has chosen to reopen the Ohlone site situated at 445 E. Charleston Road in September 1998 for the purpose of housing the alternative school program currently located at the Hoover School Site, 800 Barron Avenue. As you know, under the September 1, 1989 Agreement between the City and School District, "old" Ohlone is one of the Covenanted Sites. Section 6.52(b) of that Agreement provides that if the District wishes to reopen any of the Covenanted Sites as an operating school, it may do so upon written notice to the City and upon the designation of two operating sites within the City which are to be substituted for the Covenanted Site to be reopened. The attached resolution approved by the Board of Education designates Walter Hays and Juana Briones School Sites as the two school sites to be substituted for "old" Ohlone. This substitution is become effective ~ September 1, 1998. It would be appreciated if you would confirm that the City has received this notice by signing the duplicate copy of this letter which is enclosed and returning it to me. Sincerely, Robert F. Golt6n Associated Superintendent, Business Services Encl.